alam ar16.qxp layout 1 · annual report 2016 i corporatestatement managing today for tomorrow...

Annual Report 2016 I

CORPORATE STATEMENT

MANAGING TODAY

FOR TOMORROWannual report 2016

Alam AR16.qxp_Layout 1 5/4/17 9:59 AM Page I

MISSIONSTATEMENT• Promoting Health, Safety, Environment

and Security Practices• Developing Human Capital Capabilities• Delivering Operational Excellence• Practising Good Corporate Governance• Maximising Stakeholders’ Value

SHARED VALUESTRUSTAlways delivers the promise and commitment no matter towhom it is made.

TACTAbility to use skills and wisdom in dealing with different peopleand situations successfully without causing offence.

TEAMWORKWork closely and effectively together for common purposes.Collections of strong individuals with different backgrounds buthave a healthy sense of collegiality, mutual trust and respect foreach other’s performance.

TENACITYKeeps a firm hold of organisational goals and persistently exertsall efforts to bring about the desired results.

TRANSPARENCYClear, open and frank in all undertakings.

VISIONTo be the Preferred Offshore Services Partnerin Oil & Gas Industry

OLV

Ven

ture

1

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CONTENTS24568121424252634404860646667869297192195

Corporate Philosophy5-Year Group Financial HighlightsRevenue Breakdown for Financial Year 2016Our FleetUnderwater Major AssetsChairman’s StatementManagement Discussion & AnalysisCorporate InformationCorporate PolicyCorporate StructureProfile of DirectorsSenior Management TeamCorporate SustainabilityCorporate Social ResponsibilityList of HSE Awards & RecognitionsFinancial CalendarStatement of Corporate GovernanceBoard Audit Committee ReportStatement on Risk Management and Internal ControlFinancial StatementsAnalysis of ShareholdingsNotice of 12th Annual General Meeting

Form of Proxy

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corporate philosophy

INTEGRITYI act with honesty, am uprightwith high moral values

Integrity is about being ethically and morallycorrect in one’s personal and professionalconduct. It is to practise a high standard ofbehavior based on sound values in all aspectsof one’s job performance including interactionwith colleagues, customers, vendors,suppliers and other stakeholders.

COMPLIANCE TOREQUIREMENTSI perform and deliver the requiredresults with discipline

Compliance to Requirements is to producequality work and results as per set rules,regulations and standards premised oncustomers' requirements. It is to ensurecustomer satisfaction by adhering to standardoperating procedures and best practices. Thegoal is to meet and exceed customers' needsand to produce the best performance possibleto deliver confidence and assurance to bothinternal and external customers.

alam cultural beliefs

2 Alam Maritim Resources Berhad (700849-K)


Annual Report 2016 3

ENGAGEMENTI engage all levels and be committed in what I do

Engagement is to always seek out constructive feedback and input from others in an openmanner; to constantly engage in two-way communication to exchange ideas and opinions andto seek out the views of other process owners for an inclusive and more robust work result orsolution.

ACCOUNTABILITYI take full responsibility of theresults I produced

Accountability is to take full ownership ofone’s actions and decisions as per one’srole in the organisation. To eliminate aculture of blame and embrace a cultureof responsibility where and whenwarranted. Rather than who, to focus onwhy and how we can learn andcontinuously improve. This includes workperformance, instructions and informationrelayed to colleagues and stakeholders.

RIGHT RESULTSI plan and do my job correctly to avoidmistakes and repeat work

To obtain and deliver right results is to executeone’s work with perfection; to eliminate error andto avoid repeat work by delivering the mostaccurate and precise job output possible rightfrom the start. To ensure initial work produced hasthe highest degree of accuracy to facilitate betterdecision making and optimal productivity.

corporate philosophy


REVENUE(RM’000)

229,

480

2016

350,

222

2015

391,

584

2014

447,

397

2013

502,

390

2012

(148

,868

)20

16

(19,

818)

2015

66,6

3320

14

78,6

6120

13

55,9

1820

12

(142

,658

)20

16

45,8

1120

15

60,7

2920

14

74,5

0120

13

55,7

0820

12

737,

606

2016

878,

510

2015

830,

638

2014

607,

086

2013

527,

979

2012

(14.

9)20

16

4.90

2015

7.00

2014

9.40

2013

7.40

2012

0.80

2016

0.95

2015

0.90

2014

0.76

2013

0.67

2012

(LOSS)/PROFIT BEFORETAXATION(RM’000)

PROFIT AFTER TAXATION(RM’000)

NET ASSETS(RM’000)

BASIC EARNINGS PERSHARE(SEN)

NET ASSETS PER SHARE(RM)

5-YEAR GROUP FINANCIAL HIGHLIGHTS



REVENUE BREAKDOWN FOR FINANCIAL YEAR 2016


REVENUE BREAKDOWN FORFINANCIAL YEAR 2016

RM229,480

CHARTER HIRE

36%

OFFSHORE INSTALLATION& CONSTRUCTION

45% RM105,078

RM8,789

RM82,009

RM12,430

RM1,756

DIVING & SUBSEASERVICES

5%

VESSEL’S MANAGEMENT FEES

4%

SHIPCATERING

1%

RM1,463 RM17,9551% 8%

RENTAL OF EQUIPMENT

OTHER SHIPPINGRELATED INCOME


1MAS-300Type: Pipe-lay Accommodation Work BargeLength X Breadth X Depth (in metre): 111.56 X 31.7 X 7.31Accommodations: 300 berthsYear Built: 2010 Class: BV

OUR FLEET

MV SETIA LUHURType: Anchor Handling Tug Supply Vessel (DP 1)Length X Breadth X Depth (in metre): 59.25 X 14.95 X 6.10Accommodations: 42 berthsYear Built: 2010 Class: BV BHP: 5,150

SETIA STATION 1Type: Accommodation Work BargeLength X Breadth X Depth (in metre): 100.58 X 31.7 X 7.31Accommodations: 350 berthsYear Built: 2008 Class: BV

MV SETIA QASEHType: Anchor Handling Tug Supply Vessel (DP 1) Length X Breadth X Depth (in metre): 58.70 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2010 Class: BV BHP: 5,150

SETIA STATION 2Type: Accommodation Work BargeLength X Breadth X Depth (in metre): 111.56 X 31.7 X 7.31Accommodations: 402 berthsYear Built: 2009 Class: BV

MV SETIA TEGUHType: Anchor Handling Tug Supply Vessel (DP 1) Length X Breadth X Depth (in metre): 59.25 X 14.95 X 6.10Accommodations: 42 berthsYear Built: 2008 Class: BV BHP: 5,150

MV SETIA AMANType: Accommodation Vessel / WorkboatLength X Breadth X Depth (in metre): 78 X 20 X 6.5Accommodations: 180 berthsYear Built: 2009 Class: BV BHP: 5,220

MV SETIA WANGSAType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 59.25 X 14.95 X 6.10Accommodations: 42 berthsYear Built: 2007 Class: BV BHP: 5,150

MV SETIA SAKTIType: Accommodation Vessel / Workboat (DP2)Length X Breadth X Depth (in metre): 76 X 20 X 6.1Accommodations: 138 berthsYear Built: 2008 Class: BV BHP: 5,150

MV SETIA FAJARType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2005 Class: BV BHP: 5,150

MV SETIA ULUNGType: Accommodation Vessel / WorkboatLength X Breadth X Depth (in metre): 78 X 20 X 6.5Accommodations: 180 berthsYear Built: 2009 Class: BV BHP: 5,220

MV SETIA NURANIType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 59 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2005 Class: BV BHP: 5,150

MV SETIA HIJRAHType: Anchor Handling Tug Supply Vessel (DP 2) Length X Breadth X Depth (in metre): 76 X 18 X 8.0Accommodations: 50 berthsYear Built: 2013 Class: BV BHP: 12,240

MV SETIA PADUType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2006 Class: BV BHP: 5,150

MV SETIA JIHADType: Anchor Handling Tug Supply Vessel (DP 2) Length X Breadth X Depth (in metre): 76 X 18 X 8.0Accommodations: 50 berthsYear Built: 2013 Class: BV BHP: 12,240

MV SETIA RENTASType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2007 Class: BV BHP: 5,150

MV SETIA JAGUHType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 64 X 15 X 6.8Accommodations: 31 berthsYear Built: 1999 Class: BV BHP: 8,920

MV SETIA TANGKASType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2007 Class: BV BHP: 5,150

MV SETIA ERATType: Anchor Handling Tug Supply Vessel (DP 1)Length X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2010 Class: BV BHP: 5,150

MV SETIA UNGGULType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2007 Class: BV BHP: 5,150

MV SETIA IMANType: Anchor Handling Tug Supply Vessel (DP 1) Length X Breadth X Depth (in metre): 59.25 X 14.95 X 6.10Accommodations: 42 berthsYear Built: 2010 Class: BV BHP: 5,150

MV SETIA HEBATType: Anchor Handling Tug Supply Vessel (DP1) Length X Breath X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 50 berthsYear Built: 2008 Class: BV BHP: 5,000



OUR FLEET

MV SETIA TEGAPType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2008 Class: BV BHP: 5,000

MV SETIA WIRAType: Tug / Utility VesselLength X Breadth X Depth (in metre): 48 X 11.8 X 4.6Accommodations: 28 berthsYear Built: 2007 Class: BV BHP: 3,500

MV SETIA CEKAPType: Tug / Utility VesselLength X Breadth X Depth (in metre): 45 X 11 X 4.0Accommodations: 20 berthsYear Built: 2005 Class: BV BHP: 3,500

MV SETIA EMASType: Anchor Handling TugLength X Breadth X Depth (in metre): 48 X 13.2 X 5.2Accommodations: 24 berthsYear Built: 2004 Class: BV BHP: 4,750

MV SETIA YAKINType: Tug / Utility VesselLength X Breadth X Depth (in metre): 45 X 11 X 4.0Accommodations: 28 berthsYear Built: 2008 Class: NKK BHP: 3,200

MV SETIA DERASType: Crew / Utility VesselLength X Breadth X Depth (in metre): 40.38 X 7.80 X 3.40Seating: 80 paxYear Built: 2009 Class: BV BHP: 4,200

MV SETIA HANDALType: Supply Vessel / Towing TugLength X Breadth X Depth (in metre): 50 X 11.58 X 4.2Accommodations: 22 berthsYear Built: 2003 Class: BV BHP: 3,000

MV SETIA KILASType: Crew / Utility VesselLength X Breadth X Depth (in metre): 40.38 X 7.80 X 3.40Seating: 80 paxYear Built: 2009 Class: BV BHP: 4,200

MV SETIA BUDIType: Tug / Utility VesselLength X Breadth X Depth (in metre): 40 X 11.8 X 4.6Accommodations: 20 berthsYear Built: 2008 Class: NKK BHP: 2,400

MV SETIA GIGIHType: Supply Vessel / Towing TugLength X Breadth X Depth (in metre): 60 X 13.3 X 6.0Accommodations: 46 berthsYear Built: 2009 Class: BV BHP: 5,220

MV SETIA ZAMANType: Tug / Utility VesselLength X Breadth X Depth (in metre): 40 X 11.8 X 4.6Accommodations: 26 berthsYear Built: 2008 Class: NKK BHP: 2,400

MV SETIA KENTALType: Supply Vessel / Towing TugLength X Breadth X Depth (in metre): 60 X 13.3 X 6.0Accommodations: 46 berthsYear Built: 2009 Class: BV BHP: 5,220

ALAM 281Type: 280 ft Deck Cargo BargeLength X Breadth X Depth (in metre): 85.38 X 24.38 X 4.88Year Built: 2006 Class: BV

MV SETIA INDAHType: Supply VesselLength X Breadth X Depth (in metre): 57.5 X 13.8 X 5.5Accommodations: 42 berthsYear Built: 2005 Class: BV BHP: 4,750

ALAM 251Type: 250 ft Deck Cargo BargeLength X Breadth X Depth (in metre): 76.2 X 24.38 X 4.88Year Built: 2010 Class: ABS

MV SETIA GAGAHType: Supply Vessel / Towing TugLength X Breadth X Depth (in metre): 60 X 13.3 X 6.0Accommodations: 23 berthsYear Built: 2003 Class: NKK BHP: 4,750

ALAM 252Type: 250 ft Deck Cargo BargeLength X Breadth X Depth (in metre): 76.2 X 24.38 X 4.88Year Built: 2010 Class: ABS

MV SETIA KASTURIType: Supply Vessel / Towing TugLength X Breadth X Depth (in metre):60 X 13.3 X 6.0Accommodations: 24 berthsYear Built: 2005 Class: NKK BHP: 4,750

OLV VENTURE1Type: DP2 Diving Support & Maintenance VesselLength X Breadth X Depth (In Metre): 85 X 22 X 8Accommodation: 125 MenYear Built: 2016 Class: ABS BHP: 6000

MV SETIA LESTARIType: Anchor Handling Tug Supply VesselLength X Breadth X Depth (in metre): 58.7 X 14.6 X 5.5Accommodations: 42 berthsYear Built: 2005 Class: BV BHP: 4,750

MV SETIA AZAMType: Tug / Utility VesselLength X Breath X Depth (in metre): 45 X 11.8 X 4.6Accommodations: 20 berthsYear Built: 2007 Class: NKK BHP: 3,880



UNDERWATER MAJOR ASSETS

Type3,000m (TMS)

DimensionsLength x Width x Height3,100mm x 1,600mm x 2,000mm

TMS Diameter x Height1,800mm x 2,000mm

Weight in Air2,400kg

TMS2,400kg

PerformanceForward 700kgf 2.5 knotsLateral 550kgf 2.5 knotsVertical 500kgf 1.5 knots

Work Capabilities• Marine and subsea construction

support• Drilling, production & work-over

support• Facility inspection, maintenance and

repair support

PARI SERIES125HP Work-Class ROV

Type1500m (free swimming)

DimensionsLength x Width x Height2,500mm x 1,450mm x 1,800mm

Weight in Air2,400kg

PerformanceForward 700kgf 3.5 knotsLateral 550kgf 3.0 knotsVertical 500kgf 1.5 knots

Work Capabilities• Marine and subsea

construction/installation support• Drilling, production & work-over

support• Facility inspection, maintenance and

repair support

KINGFISHERINSPECTION AND LIGHT Work-Class ROV

Type300 meters

DimensionsLength x Width x Height1,400mm x 900mm x 1,100mm

Weight in Air500kg

PerformanceForward 110kgf 3.0 knotsReverse 77kgf 3.0 knotsLateral 73kgf 2.5 knotsVertical 55kgf 1.5 knots

Work Capabilities• Light construction support• Survey support• Seabed mapping/site survey

JERUNG SERIES (3000 MSW) C/W160HP Work-Class ROV




General Specification

The IMCA D023 DESIGN compliant air/mixed gas diving system comprises of three units:

• Control Van - a 20 footer air-conditioned container with lighting and power points, complete with Dive Supervisor’s desk, divecontrol panel, CCTV, video recorders, divers communication, umbilical and deck compression chamber.

• Machinery Van - a 20 footer container complete with hydraulic power pack, air/gas cylinders, air bank, a low pressurecompressor, a high pressure compressor and two exhaust fans.

• Launching and Recovery System - a skid mounted complete with a 2 tonne A-Frame, a dive stage, clump weight, man ridingwinch.

50M AIR/MIXED GAS DIVING SYSTEM




Classed Dive Spread (Air/Mixed Gas) System is offered in astandard 20FT ABS/DNV 2.7-1 Container Completes withOffshore Lifting Pad eyes and DNV certified 4 legged liftingslings with master link

• Insulated inside to 50mm with metal finishing.• Power rating 220V, 32 amp.• Contained 3 men air/mixed gas Dive Panel complete with

Analox 101D2 Oxygen analyzer.• Contained Amron Dive radios and Commax Master station

with six slave station communications.• Contained 1 unit of CCTV/underwaterTV System complete

with Flat 19" Flat Screen Monitors, 250 GB DVD Recorder,Quad splitter and Weather Proof Surveillance Camera.

• Contained 2 units of 18000 BTU220V 50/60Hz Recessedair-con split unit.

• Contained safety features such as DP alarm/light, first aidkit & fire emergency safety equipment.


• Insulated inside to 50mm with metal finishing• Power rating 220V, 32 amp.• Contained 1 unit of 60" Twin Lock Deck Decompression

Chamber with Double Medical Lock and interlockingcomplied with ABS, ASME VIII, PVHO code.

• Contained Deck Decompression Chamber Panel completewith Analox 101D2 Oxygen Analyzer.

• Contained 1 unit of Commax Slave station• Contained 2 unit of 18000 BTU220V 50/60Hz Recessed

air-con split unit.• Contained safety features such as DMAC 15 kit, first aid kit

& fire emergency safety equipment.

DIVE CONTROL CONTAINER Deck Decompression ChamberContainer





• Container comes with 440v Electrical junction box,440v/220v Step Down Transformer, Exhaust VentilationFan, First Aid Kit, and Fire Emergency safety equipment.

• Contained 2 units of 440v 50/60Hz electrical driven Quincy5120 LP Compressor with 120 gallons volume tank andHankison Filters.

• Contained 2 units of 440v 50/60Hz Electric driven BauerMariner 320 HP Compressor with output capacity of 11.3cfm.

• Contained 1 unit electric driven tooling hydraulic powerpack with capacity of 18-20 GPM.

This unit comprised of a steel base skid with flush mountedgrating, a hydraulically operated A-frame with sheavesmounted on the cross bar complete with DNV certified 4 leggedlifting slings with master link

• Contained A-Frame complete with 2 unit of hydrauliccylinder for A-Frame operation.

• Contained Diving stage with ABS approved EngineeringDesign for main & secondary lifting pad eyes complete withcertified 1.5 meter secondary recovery strops, 2 unit of50liters air cylinder with content indication as perIMCAD023, manifold and regulator.

• Contained 2 units of Man Riding Winch with capacity of1.4ton SWL complete with 160/100m non rotating wire(Galv Grade 1960 MPa).

• Contained 1 unit electric driven weather proof hydraulicpower pack complete with 42 gallons steel tank andaccumulator.

Machinery Container Launching And RecoverySystem (LARS) - 2 unit



“The Group remains committed toprotecting shareholder valuethrough effective implementation ofits business strategies; to replenishthe orderbook, optimise its cost baseand to enhance operationalefficiencies. In addition, the Boardcontinues to adhere to the higheststandards of corporate governanceand risk management.”

CHAIRMAN’S Statement

Dear esteemed shareholders,

On behalf of the Board of Directors, I hereby present the annualreport and audited financial statements of Alam MaritimResources Berhad (“The Group” or “AMRB”) for the financialyear ended 31 December 2016.

The year under review continued to see challenging conditionsfuelled by record low crude oil prices that averaged USD35-40per barrel and declining capital expenditure (“capex”) andoperational expenditure (“opex”) by oil and gas majors. DespiteAMRB’s position as one of the nation’s leading Offshore SupportVessels (“OSV”) players, the Group was also impacted by theensuing slow-down.

However, the scenario experienced in FY2016 was not new toAMRB. Since FY2015, we have made earnest efforts to preparethe Group to operate sustainably and responsibly within a lowoil price environment.

Despite facing a daunting business environment, AMRB hasremained well on track in becoming a capable and competitivefirst-tier service provider. Our commitment to quality service tomeet the requirements of the oil and gas majors has once againbeen clearly validated and strengthened in FY2016.

We managed to register encouraging business and operationalachievements, particularly with regards to reducing businessoperating costs and optimising overall operational productivitywhile paring down debts to strengthen our gearing position.

We intensified our efforts to unprecedented levels to deliverfurther operational excellence in every aspect of ourorganisational structure and operations.

Financial Performance

In FY2016, Group revenue was recorded at RM229 million, adecrease of 34% compared to FY2015’s RM350 million. TheGroup reported a net profit of RM46 million for financial year2015.

The Group remains committed to protecting shareholder valuethrough effective implementation of its business strategies; toreplenish the orderbook, optimise its cost base and to enhanceoperational efficiencies. In addition, the Board continues toadhere to the highest standards of corporate governance andrisk management. Notably, we continue to comply with thehighest standards as outlined by the Code of CorporateGovernance 2012. Above and beyond, the Board is guided bythe following internal company policies:

• Integrated Management System Policy• Stop Work Policy• Drug & Alcohol Policy• Whistle Blowing Policy

The Group’s philosophy, which is anchored to its Vision, MissionStatement, Shared Values and Cultural Beliefs, provide thefundamental guidance to our business conduct. The Vision,which sits at the pinnacle of our Corporate Agenda, representour aspiration as an organisation. The Mission Statementdefines the purpose of our existence and the Shared Values,together with our Cultural Beliefs, are the elements that shapesand govern our collective thoughts, actions and behaviours.

We believe our commitment to these elements and values willdrives us towards and sustain our operational excellence. Thisis the kind of work culture we will continue to embed deeply and




CHAIRMAN’S Statement

enhance among the workforce within the Group. In fact, this hasformed and essential part of our transformation plan in order tothrive in these tough target times.

A Year of Operational Improvement & Fiscal Consolidation

Continuing the momentum of our business transformation plan,AMRB continued to persevere in its strategies to harnessoperational and business excellence in FY2016. It has been achallenging even sometimes painful process but the journey hasbeen well worth it with many achievements coming to the foreduring the year under review.

We took full opportunity during the prevailing downturn toimplement asset and cost optimisation efforts, undertakebusiness restructuring exercises and to harness synergy withinthe Group. We actively sought to diversify our business byexpanding into the region and Middle East. We also looked togrow our other business divisions namely the Group’s OffshoreInstallation and Construction (“OIC”) and subsea operations tooffset the reduced demand for OSV.

Cumulatively, these measures tell a story of improvement,progress and success; of a business on the verge of greaterthings whether oil prices recover quickly or the present low oilprice environment persists.

The Board fully supports the various measures implemented bythe Senior Management to ensure that the Group realisessustainability strategy, to aggressively rebase its costs and tocontinue upholding the best interest of all stakeholders,especially our esteemed shareholders.

The emphasis here is on cash management, cost efficiency andproject execution - the three (3) areas to ensure our immediatesurvival and competitiveness. We also addressed longer termsustainability concerns, including talents management,technology and importantly culture. Our target for this year andbeyond is simple, and that is to endure the storm, and emergemuch stronger from it. This include realigning the organisationto provide clarity, focused business approach and optimizing theutilisation of the workforce through our corporate philosophywhich is anchored to our Vision, Mission and Shared Values andthe recently introduced Culture beliefs as a foundation to sustainour transformation and change initiatives to deliver our growthstrategies.

Today, AMRB is well regarded by oil and gas majors as one ofthe leaders for health and safety, and this has become acompetitive advantage for the Group. Moving forward, we willcontinue to drive our strategy of sustainability through safety andcost competitiveness as a means to strengthen our valueproposition within the local and international oil and gas sector.

Prospects & Outlook

The recent consensus by the Organisation of PetroleumExporting Countries (“OPEC”) and non-OPEC nations to cutback on production by some 1.8 million barrel per day is apositive sign and bodes well for the global industry. However,political considerations such as Brexit, the US presidentialelections, the lifting of Iranian Sanction and other developmentsmay impact the oil and gas sector, though at this point, it remainsuncertain.

Industry’s prospects will largely depend on not just recovery incrude oil prices but also the stability of prices as volatility willhamper any intention to increase capex. At present, weanticipate a slow start to FY2017 with some possibility of upwardmovement of oil prices during the third quarter of FY2017.

The key is to operate sustainably and responsibly, AMRB isequipped to do so regardless of the level of crude oil prices.AMRB is well oiled and primed to capitalise on emergingopportunities. We have the financial and technical capability, thebusiness acumen and competence, a sterling track record forexcellent performance, a growing profile for Quality, Health,Safety and the Environment and lastly, a proven reputation forreliability and professionalism as a preferred, tier-one OSVprovider.

We will continue to operate with prudence to ensure that anynew opportunities can be fully leveraged upon for optimalbenefit.

ACKNOWLEDGEMENTS

On behalf of the Board of Directors, I wish to firstly thank theManagement team and staff of AMRB, who during the mostchallenging year, have displayed a high level of professionalism,dedication and commitment during the year under review.

I also wish to convey my appreciation to my fellow members ofthe Board and the members of the Board Committees for theirastute leadership and counsel. I would like to acknowledge ourbusiness partners, clients, bondholders, various regulatory andgovernment authorities and bondholders for their continuedbelief and support in the Group. Last but certainly not least, Iextend my gratitude to our shareholders for their vote ofconfidence in the Group during the year under review.

FINA NORHIZAH BINTI HAJI BAHARU ZAMANCHAIRMAN



management discussion & analysis

OVERVIEW OF GROUP’S BUSINESS AND OPERATIONS

Alam Maritim Resources Berhad(“AMRB” or “the Group”) is a first-tier

service provider to the oil and gasindustry. The Group’s principal

business activities are provision ofoffshore support vessels (“OSV”) for

charter, provision of offshoreinstallation and construction (“OIC”)

services and subsea services.

The OSV segment provides vessels either on long term contractor call-out basis i.e. spot charter to support the requirements ofoil and gas players, particularly for the upstream segment of theindustry. The OSV division is able to provide vessel support fordevelopment, exploration, appraisal, decommissioning,production, operations and maintenance jobs.

AMRB is one of few OSV players in Malaysia that owns andoperates its own vessels. Vessels include anchor handling, tugsupply, utility, straight supply, diving support, workboat andmultipurpose support vessels and pipe lay barges.

Given the present downturn in the oil and gas industry, the OSVsegment saw contribution to Group revenue dipped to 53%.Despite this, the OSV segment remained the biggest contributorto Group revenue.

Subsea and OIC segments accounted for 47% of AMRB’sbusiness in FY2016. The segments are responsible for heavylifting works as well as the provision of pipeline laying servicesfor both offshore and onshore requirements. It also focusses onworks related to mooring & subsea facilities.

These activities include but are not limited to offshore facilitiesconstruction and installation services, such as marineconstruction related services; sub-sea engineering services andoffshore pipeline construction related services, and designing,manufacturing and operating of remotely operated vehicles. Thisalso includes provision of various diving services, remotelyoperated vehicles (“ROV”), saturation systems and other relatedsystems.

The Group advocates a synergising partnership among itsbusiness segments – tapping on their respective capabilities todeliver a comprehensive value proposition to oil and gas majors.This allows the Group to bid more competitively for contracts.Together with an exemplary track record for HSE andoperational excellence, the Group maintains a strongcompetitive positioning when bidding for contracts.




Given the nature of the Group’s business, AMRB is highly dependent on the upstream segment of the local oil and gas industry i.e.exploration and production activities. Hence, any macro-economic developments that influence upstream activities will consequentlyalso have a bearing on AMRB’s operations.

At present, Malaysia provides the bulk of the Group’s business. The Group continues to explore opportunities to expand operationsabroad. Targeted markets include South East Asia and the Middle East.

FINANCIAL HIGHLIGHTS

Our Business

The Group remains committed to operate a young, modern,environmentally safe and cost effective fleet in line with therequirements of oil and gas majors. Our fleet comprises of 20anchor handling tug and supply (“AHTS”) vessels which makeup 46% of our total fleet; three smaller anchor handling tug

(“AHT”) vessels; four straight supply vessels (“SSV”); twoplatform supply vessels (“PSV”); two Accommodation WorkBarge and one utility tug vessel (“UV”). This brings the fleet’stotal strength to 43 vessels.

(RM’000) FYE 31/12/2016 FYE 31/12/2015 FYE 31/12/2014 FYE 31/12/2013 FYE 31/12/2012

Revenue 229,480 350,222 391,584 447,397 502,390Operating profit/loss (72,807) 14,521 46,486 56,376 21,521Finance cost 9,151 12,346 24,006 30,238 27,075Net profit (142,658) 45,811 60,729 74,501 55,708Shareholders’ equity 737,606 878,510 830,638 607,086 527,980 Total assets 957,368 1,191,858 1,409,071 1,486,713 1,299,619Borrowings 154,761 194,029 320,418 562,343 560,312Debt/equity % 0.21 0.22 0.39 0.93 1.06Earnings per share (14.9) 4.90 7.00 9.40 7.40Net asset per share 0.80 0.95 0.90 0.76 0.67Market capitalization (as at the FYE) 295,827 406,763 582,410 1,258,037 535,302

OSV Market Demand Drivers

Higher demand for oil rigs

Higher demand for platforms

Higher demand for FPSOs

Higher demandfor OSVs

Higher demand tobuild OSVs

Increase in E&P planned activities

Strong demandfor oil

Increase in E&P activities

Increase in E&P spending

Source : Pareto Research




In FY2016, the Group registered revenue of RM229.48 millionagainst a backdrop of reduced charter and vessel utilisationrates amidst declining capital and operational expenditures byoil and gas majors largely due to the continued declined in crudeoil prices.

On the back of lower revenue, such as impairment of vessels(RM22.5 million), forex losses (RM9.2 million), provision fordoubtful debts (RM9.3 million), and impairment on investmentin JV/Associate companies of RM7.6 million, the Grouprecorded loss before taxation of RM148.9million.

The kitchen sinking exercise conducted in FY2016, whichincluded impairment of vessels and planned disposal of vesselsexceeding 15 years old was necessary for the Group goingforward. A downturn period is most opportune to undertake suchan exercise. While it impacts short-term fiscal performance, itstrengthens the company’s fundamentals and balance sheet inthe long run. This provides AMRB with a better footing uponwhich to operate on in FY2017 and beyond.

Management is in full agreement that the kitchen sinkingexercise was a right move to ensure the Group’s sustainabilityand ability to compete in the long-term, more so in the presentlow-oil price scenario.

The Group’s cost of sales decreased by 16% or RM45 milliondue to various cost-saving initiatives undertaken during the year.These included improved fuel consumption, the laying-up ofunutilised idle vessels. Administrative expenses also decreasedfrom RM45.1 million to RM41.8 million in FY2016 attributed toreduced payroll / headcount cost. As a result of our Sukukrepayment, finance cost was 25% lower compared to theprevious year.

CAPITAL STRUCTURE & SIGNIFICANT CHANGES TOASSETS

Due to lower vessel utilisation and reduced contribution from allbusiness segments, AMRB’s trade receivables reduced toRM55.9 million from RM101.07 million in FY2016. Tradepayables and other payables decrease to RM60.57 million dueto the increased on amounts owing to joint venture andassociated companies.

Capital Structure & Capital Resources:

The Group’s borrowings reduced by 20.2% to RM154.8 millioncompared to the previous year’s RM194.0 million. This is due tothe earlier mentioned term loan and Sukuk repaymentamounting to approximately RM51 million. As a result, theGroup’s debt to equity ratio improved further to 0.21 times as atyear ended 31 December 2016 compared to 0.22 times in theprevious financial year.

CASH FLOW, CASH AND BANK BALANCES

2016 2015 RM’000 RM’000

Net cash from operating (32,258,879) 43,920,709activities

Net cash (outflow) / inflow for (7,470,096) (29,742,211)investing activities

Net cash outflow for (31,271,406) (68,228,074)financing activities

Net increase/(decrease) in (71,000,381) (54,049,576)cash balance

Cash and bank balances 45,124,437 125,513,402

Cash and cash equivalents 79,435,811 139,664,619at the beginning of the year

Cash and cash equivalents at the end of the year 7,043,579 79,435,811

With the Group repaying 25% of its Sukuk commitment as wellas paying off a term loan amounting to RM51 million, bankbalances have dipped to RM45.1 million from the previousyear’s RM125.5 million.

The important note here is that we have reached the tippingpoint as far as cash reserves are concerned and the only wayforward without jeopardising the Group’s financial strength anyfurther is to cut - and cut big. However, we must ensure thatwhatever we cut today will not adversely impact ourdevelopment plans and earnings, and will also leave us in aposition to take advantage of future growth. This is a delicatebalance to achieve.

KNOWN TRENDS & EVENTS

As we faced another challenging year under review, AMRBdiligently pursued its strategy of business sustainability drivenby a strong focus on asset and cost optimisation, projectexecution excellence, financial prudence, operational synergy,cash and debt management. Equally important was ourintensified commitment on Health, Security, Safety andEnvironment (“HSSE”) and Quality towards building a robust,competitive and ultimately sustainable operation amidst a lowcrude oil price environment.




Our strategy was reflective of the external environment andmarket realities. Our aim was not to merely ride out the storm inthe short term, but to embrace the bigger challenge ofdeveloping a more resilient and robust AMRB that would operatecomfortably within the USD40-USD60 per barrel price range.This was necessary given that the new reality of lower oil pricesare likely to persist around this range over the next severalyears.

The industry has gone through a major structural shift during thelast few years and low oil prices are likely to persist for theforeseeable future. In fact, all oil and gas players across thevalue chain may need to adjust to the sobering reality that theprevious highs of USD100 per barrel oil prices may not bereached again, certainly not anytime soon.

As stated earlier, we may have to accept the fact that this is thenew normal. The confluence of world events presently occurringis likely to deliver a significant effect on the international andlocal oil and gas sector. The subsequent impact is the prolongingof the low oil price period at least in the near term.

The arrival of electric vehicles, the intense competition fromshale oil producers and various other geopolitical developmentshave fundamentally shifted the oil and gas landscape which inturn has impacted the supply and demand pattern for liquidcrude. The market will need to come to terms with the newreality.

We foresee generally reduced demand across the oil and gassector, which lead to a reduction in capital expenditure (“capex”)and operational expenditure (“opex”) by oil and gas producerswhen the reverse is required to stimulate activity within thesupply chain.

However, this is not entirely a negative scenario as opportunitiescontinue to abound for oil and gas players who adapt to the newnormal.

While the Group cannot control or influence macro-economicforces, we can certainly control how we manage businessoperations. AMRB will continue to drive its transformation effortstowards sustainability. We will continue to diligently adhere ourplans in FY2016 to improve our business model andorganisational structure.

In FY2016, the Group continued to pursue and realiseoperational, commercial and project delivery excellence.

ACHIEVEMENTS AMID ADVERSITY

Despite facing reduced industry demand, falling charter ratesand increasingly thinner contract margins, AMRB hassucceeded in delivering business value and remainingcompetitive. We continued to register various businesshighlights and achievements.

Internally, we continue to make good progress in deliveringsignificant cultural and mind-set change within the organisationamong our workforce. This was systematically introduced andimplemented with a good measure of success.

We continued to secure contracts and remained active inbidding for and winning of tenders. As at 31 December 2016,our order book stood at RM224 million, which is a decent sizeto keep the Group busy for the next two years, while providingrevenue visibility.

The Group now operates with greater synergy exemplified in theclose collaboration between its business divisions andsegments; and the sharing of resources and assets towardspresenting more competitive contract bids in FY2017 andbeyond.

Projects in hand were safely and successfully executed on time.As a result of this collaboration and working as one integratedcompany, we have successfully increased our safety record toan unprecedented level of 9.7 million man hours without a LossTime Injury (“LTI”) achieved in 31 March 2017 since 30 July2014. The Group will continue to close ranks among the variousdivisions and segments. In this respect, we need to think beyondour own spheres to consider what will be the best interest ofAMRB moving forward.

Sound Business Focus & Acumen

In FY2016, we responded pro-actively to the decline in demandfor OSV, by driving business development in our OIC andSubsea segments.

With integration, the Group managed to showcase its excellentoperational synergy between its multiple business divisions andsegments. For example, OIC works would utilise assets fromAlam Hidro while subsea segment utilises vessels and ROVoperated by the Group, to secure OSV contracts as vessels arerequired to support such works. The ensuing involvement of ourvessels and underwater assets allows AMRB to bidcompetitively for contracts.




In addressing the decreasing demand for OSV and reducedcharter rates, the Group actively shifted its strategy to achievea better mix of contracts. The Group looked for a moreproportionate balance between long term contracts that offeredsecured earnings (but with a longer completion period) withshort term contracts (spot charter) that offered quick revenueand turnaround but with higher earnings.

It must be noted that our immediate emphasis is on cashgeneration for immediate survival and competitiveness. In thisregards, we have improved our debtors’ collection period from90 days to 76 days which in turn has enhanced our cash flow.

Our recent meeting with bondholders to provide a transparentand detailed briefing of the Group’s business operations andfinancial health have resulted in them having strongerconfidence in the Group’s management and prospects goingforward. Importantly, they remain committed to the Group’sstrategic direction and remain steadfast in AMRB’s ability toservice its debt obligations and to weather the current low oilprice environment.

Organisational Realignment for Greater Efficiency

The Group initiated a list of key checkpoints to face the industrydownturn. These included short term and long term measures.Among these measures are organisational restructuring andalignment; cultural change, cost rationalisation and manpoweroptimisation.

Given the current scenario, a more dynamic Group structurewas warranted. The previous structure which served us wellduring the USD100 per barrel period is no longer effective tomeet the requirements of a low oil price environment.

Hence, AMRB in FY2016 began modifying its currenthierarchical system to minimise bureaucracy, segregatedportfolios and a silo-based working culture. Efforts were placedto eliminate duplication of roles and functions, multiple processowners and under-utilised functions which, have, inadvertently,resulted in value leaking out from numerous points of theorganisation; and that is money going out – money which wecannot afford to lose right now.

This exercise to change our operating model and organisationalstructure is not just about reducing headcount and savingmoney. It is about addressing the inefficiencies in how weconduct our business. This restructuring is to gain clear pointsof accountability, line of sight and faster decision making; clarityon roles demarcation; facilitate growth and sustainability; andprovides for centres of excellence for project delivery,engineering services, supply chain and risk management. Thisis a leaner, flatter and more efficient structure that is necessaryfor AMRB to be more agile to survive through this current storm

and is robust enough for us to bounce back to grow quickly whenoil prices recover with subsequent increase in oil production andexploration activities. This will create clear line of accountabilityto drive focus on the bottom line and project delivery.

Business Strategies – Vessel Utilisation & Asset Optimisation

As we looked to pare down operating cost and plan for thevessel readiness to be mobilized, the Group took effort to ensurethe optimal ratio of vessels placed under cold and warm lay-up.Having reviewed each vessel carefully on its potential to servicecontracts, we made prudent decisions on how best to structureand manage our fleet availability so as to ensure the best mixbetween vessel utilisation, productivity and operating cost.Additionally, several idle vessels unable to secure works in thecountry were used to service contracts outside of Malaysia. InFY2016, these included MV Setia Indah, MV Setia Lestari, MVSetia Emas and WBI Trinity.

Vessels placed under cold lay-up saw crews placed on relevanttraining to ensure their readiness if and when needed. Suchvessels only received essential maintenance to further reduceour maintenance bill. When vessels were not in operation,satellite communication was deactivated to reduce usage costs.

In addition, in FY2016, the Group managed for the most part toutilise its own vessels to service contracts without having toprocure or lease from external parties. This resulted in furthersavings in expenditure. Other benefits include showcasing thecapability and versatility of our fleet in servicing multi-taskedcontracts by the oil and gas majors.

An additional effort was to rationalise the number of crew onboard idle vessels as permitted by the authorities. Also withinthe OIC segment, we successfully reduced the operating costof our pipelay barge, 1-MAS 300 to a minimum by placing it onwarm-lay-up while on standby/non-utilisation.

On a separate note, the Group implemented various costoptimization initiatives across its operations such as manpowerand office space optimization, and revision of staff benefits.There have also been other measures taken to reduce cost. NotGroup-wide measures, but action initiated by different groups ofpeople across the business and functional units. These aresmall things but they add up.

Excellence in Service Delivery & Professionalism

I am proud to share that during these turbulent times, AMRBbolstered its unbroken track record for operational excellence.This was achieved by safely and successfully executing allprojects within scope and budget and at times, even exceedingclients’ expectations.




Some of these projects such as the PETRONAS Floating LNG-1 (“PFLNG”) and Lundin proved to be demanding with complexrequirements that only became apparent during the course ofexecution. However, by drawing from our extensive expertiseand experience and by collaborating with the oil and gas majorsand our vendors, we managed to deliver results and meet orsurpass expectations.

Effective project management and cost optimisation efforts werekey to outstanding level of contract execution. Good projectmanagement with sound project execution methodologyreduced project error and risk, eliminated unnecessary downtime and optimised the utilisation of Group’s assets andexpertise.

In this way, we have managed to shorten the turnaround timefor replacement vessels where needed, expedited projectexecution, repair and maintenance as well as crew mobilisation.We have also successfully reduced fuel consumption anddowntime performance.

Sustainability through Safety

We continued to focus on HSE as a key driver for businesssustainability. HSE is our license to operate and is viewed withincreasing importance as a pre-requisite for the awarding ofcontracts by the oil and gas majors. Hence, excelling in this areais key for business competitiveness and sustainability.

An excellent HSE track record has an advantage as it indicatesstrong operational excellence not just for operational aspects,but has an indirect impact on financial and businessperformance. Having built a sterling reputation as an industryHSE leader, we continued to maintain good HSE practices inevery aspect in our projects.

Going a step further, we have looked to bring the message ofsafety to our suppliers and contractors. This includes settingmore stringent standards for compliance. This is essential as weare only as good as our weakest link and all third party suppliersare a reflection of the AMRB brand and operational performanceand delivery.

Our ability to compete, operate and deliver is also impacted bythe capabilities and standards of our internal and external supplychain. Hence in FY2016, specific efforts were made to improvein this important business area.

The result of our efforts saw AMRB identifying a core number ofselected vendors who are well aligned to our own internalrequirements so that the Group may confidently leverage on thisselect group to deliver optimal performance, while extending ourstellar HSE record. The vendors are expected to comply withAMRB’s stringent HSE standards to ensure consistency acrossthe supply chain.

Risk Management, Assessment and Mitigation

FY2016 certainly had plenty of risk factors given the turbulentoil and gas sector during the year. But the Group has addressedthese in a professional manner and we have continued toprogress forward.

The Group’s approach to risk management and mitigation iscomprehensive. The first is to adopt a pro-active stance; torespond rather than to react towards risk or crises. The secondis to adopt an enterprise management approach to managingrisk and thirdly, to view risk from an organisational perspective;that is to involve staff in managing risk.

This is essential as operational risk can then be addressed,owned and managed by staff – freeing up the Board of Directorsand Senior Management to focus on more strategic and criticalrisk issues.

Through the use of our Business Assessment Risk Analysis(“BARA”) approach, we have successfully reduced our riskexposure – mitigating the various threats to our businesses.

BARA is an effective matrix based approach to increasingManagement’s visibility on risks and to empower better decisionmaking. It oversees financial, operational and other related risks.Further details on our Risk Policy are given in the SustainabilityStatement and the Statement of Risk Management & InternalControl of this Annual Report.

On a separate note, Risk is given oversight at the Board,Management and operational levels.

Management believes that the Group has mitigated its riskfactors well and the Group is well positioned to address suchchallenges as and when they occur. Importantly, the Group isplaced to avoid or prevent risk factors from occurring orescalating through various strategies put in place during thefinancial year under review.




Fleet Renewal Programme

We have continued to pursue our fleet renewal programme,given that during a downturn, significant savings can be reachedon vessel acquisition. Just as important, it is necessary to bringin new vessels while phasing out older ones in order to meet therequirements of the oil and gas majors. Newer vessels afford usthe advantage of greater efficiency, operational capacity andcapabilities; with reduced concern over maintenance costs. Newvessels also instil stronger confidence in the oil and gas majorsof our commitment and capability to service their projectseffectively and efficiently.

Contract Wins & Projects Executed

In February 2016, the OIC segment has secured a contract forprovision of marine vessel services for an accommodation workbarge to support the final hook-up and commissioning phase ofthe Floating LNG platform.

Subsequently, in Q2 FY2016, our OIC segment has successfullyperformed the final positioning and hook-up and pre-commissioning of the flexible riser for the mooring system ofPFLNG 1 Contract. Project work entailed mooring systeminstallation, final positioning, hook-up and pre-commissioning ofthe said flexible riser. This was the first project involving theinstallation of a mooring system using underwater piling and alarge sized chain (150 mm) which is currently the first andbiggest floating Liquefied Natural Gas (“LNG”) facility in theworld.

The synergistic capability of AMRB was clearly proven duringthis project. The confidence, cost savings and convenience thatwe offered by providing a one-stop, comprehensive solution tooil and gas majors was not only reflected in the above project,but also continued to strengthen our credibility with oil and gasmajors.

In addition, AMRB has received a total of 31 work orders inFY2016 for the Peninsular Malaysia Operation (“PMO”)provision of the Splash Zone Project – awarded in FY2015 fortwo (2) years with a provision for extension, which wereexecuted in the same year. This was a small-scale contract forstructural repair and maintenance of offshore jackets for PMO.

In February 2017, AMRB has also been awarded with a contractfor the provision of Offshore Construction Subcontractor for theFloating Production Storage Offloading, Perisai KamiliaDemobilisation (“the contract”). AMRB’s portion is fordemobilisation works with additional scope for water treatment.

Recently, AMRB has secured a contract for the Provision ofSubsea Inspection, Maintenance and Repair Services by anindependent oil and gas exploration and production company.This is a substantial award for a primary period of two (2) yearswith an option to extend for another year.

AMRB has also successfully secured a contract from PetronasMaritime Services Sdn Bhd for a provision of one unit of 40tonnes bollard pull utility boat for the Terengganu Crude OilTerminal operation. The contract is for a primary period of four(4) years and 211 days with an extension option for one (1) year.

The total value of contracts secured by the Group up to April2017 was approximately RM166 million which will contributepositively to the Group’s performance for FY2017 and beyond.

OUTLOOK FOR FY2017

Recent cutbacks in production and mutual agreements amongthe Organisation of the Petroleum Exporting Countries (“OPEC”)and Non-OPEC member countries, especially Russia to reduceoutput by 1.8 million barrels per day (“mbpd”) have injected freshoptimism into the oil and gas sector. Furthermore, oil producingnations have adhered to strict quota discipline of 94% which hasbeen unprecedented. These developments have stirredimproved sentiment resulting in oil prices appreciating to theUSD50-USD60 range. Barring any major geo-politicalcircumstances in FY2017, crude oil prices should remain stablewithin the given range. This should present viable opportunitiesfor oil and gas majors to re-invest, albeit gradually.

However, we must continue to be cautious.

Global demand for oil remains relatively weak, given the lack ofeconomic growth from the key markets of China, India, Russiaand the European Union. Industry fundamentals remain weak.Large stockpiles of inventory remain, there is the possibility ofshale oil flooding the market again as oil prices stabilise at levelswhich are profitable for shale.

The immediate concern would be the impact of Brexit and thepolicies of the new American President on a fragile globaleconomy which may slow down more than expected, affectingoverall demand and impacting the rebalancing of the oil and gasmarket.

We foresee FY2017 to be challenging but with rooms to improveour performance provided we strictly practise our cultural beliefin the way we do things.




GROUP PROSPECTS & STRATEGIES GOING FORWARD

While we hope for more favourable external conditions for theoil and gas sector of which beyond our control, AMRB believesthat we must rely more on our own strengths to remainsustainable.

We will have to continue driving efficiency in all business areasto further improve our performance. This will include projectmanagement, asset and cost optimisation, and cash flowmanagement. We will continue to not only perform at peak levelsbut to also push the bar up higher and continuously redefine ourpeaks in line with the changing environment. We will pursue ourgoal of business sustainability and growth in this new era of lowoil prices.

With regards to project management, we will continue toimprove our execution capability to ensure projects arecompleted ahead of time, where possible but at the requiredquality and HSE levels. This will enable the Group to reduce itsoperating cost.

In order to better manage and utilise our assets, we have settargets to increase vessel utilisation by 60% in FY2017 andachieve a vessel readiness rate of 80%, excluding laid-upvessels. For the subsea and OIC segments, we hope to achievea spread utilisation of 40% and 50% respectively.

In FY2017, we plan to further reduce vessel opex by 20%through asset optimisation and improved planning for hot / warm/ cold lay-up. The merger and centralisation of support servicefunctions across all business segments will further streamlineprocesses for greater efficiency.

In respect of cash management, the Group is embarking onvarious measures to improve its cash position such as improvingdebtors’ collection period, reducing the number of approvedvendors to 50, disposing of vessels over 15 years and above.We will also explore further restructuring of our loans and otherdebt commitments.

With regards to business development for the OSV segment,we aim to have our vessels operate in new markets across theGulf as well as across the ASEAN region. Such contracts,denominated in US dollars work are advantageous given thestrong valuation of the US currency. It will also reduce ourdependence on the domestic market. Naturally, we will continueto actively tender for contracts within Malaysia as well.

In the OIC segment, we foresee a growing trend fordecommissioning works where non-viable facilities are expectedto be removed. Currently, several FPSO, FSO and offshoreplatforms in Malaysia are likely to be decommissioned inFY2017 and AMRB is in a strong position to bid and win forthese contracts.

At the same time, we will continue to explore alternativebusiness activities such as dam diving and exposure todownstream activities. We will continue to develop our tenderand order books as we aggressively pursue contracts in theMalaysian and international markets.

In essence, while we look forward to a more positive scenariowithin the oil and gas industry, we will continue to focus on theinternal levers within our control to grow the Group.

Through the measures in FY2016 and the continued effort torestructure and revitalise the Group, we are quietly confident ofresponding positively to the present scenario. In summary, weneed to have strong cash management in our operations.Secondly, we must increase efficiency levels across the Group.And finally, we must execute projects on time, on budget andsafely. Simply put, it’s critical for us to arrest wastage andincrease efficiency to counter the reduced opportunities due tolower oil price, build organisation resilience and increasecompetitiveness and profitability. We need to go beyond whatwe do today and really push ourselves. Essentially, what AMRBis doing now is to manage today for tomorrow.

DATUK AZMI AHMADGROUP MANAGING DIRECTOR/GROUP CEO


INVESTING IN INNOVATION


We invest in state-of-the-art technologies to deliver topperformance at all times. By staying abreast oftechnological developments, we are able to achievetotal customer satisfaction.


BOARD OF DIRECTORS

Fina Norhizah binti Haji Baharu ZamanChairman/Independent Non-ExecutiveDirector

Datuk Azmi bin AhmadGroup Managing Director/ Group Chief Executive Officer/ Non-Independent Executive Director

Shaharuddin bin Warno @ RahmadGroup Chief Operating Officer/ Non-Independent Executive Director

Ahmad Hassanudin bin AhmadKamaluddinNon-Independent Executive Director

Dato’ Haji Ab Wahab bin Haji IbrahimIndependent Non-Executive Director

Ainul Azhar bin Ainul JamalIndependent Non-Executive Director

BOARD AUDIT COMMITTEE

Dato’ Haji Ab Wahab bin Haji Ibrahim(Chairman)

Fina Norhizah binti Haji Baharu Zaman

Ainul Azhar bin Ainul Jamal

BOARD RISK MANAGEMENTCOMMITTEE

Ainul Azhar bin Ainul Jamal(Chairman)

Fina Norhizah binti Haji Baharu Zaman

Dato’ Haji Ab Wahab bin Haji Ibrahim

Shaharuddin bin Warno @ Rahmad

Ahmad Hassanudin bin AhmadKamaluddin

Datuk Azmi bin Ahmad(Alternate member to Shaharuddin binWarno @ Rahmad)

BOARD NOMINATION &REMUNERATION COMMITTEE

Fina Norhizah binti Haji Baharu Zaman(Chairman)

Dato’ Haji Ab Wahab bin Haji Ibrahim

Ainul Azhar bin Ainul Jamal

Datuk Azmi bin Ahmad(Resigned on 19 December 2016)

Shaharuddin bin Warno @ Rahmad(Resigned on 19 December 2016)

COMPANY SECRETARIES

Nuranisma binti Ahmad, MIA, ACIS(MAICSA 7067610)(Appointed on 1 September 2016)

Nur Aznita binti Taip, ACIS(MAICSA 7067607)(Appointed on 8 March 2017)

Fatan Hamamah binti Khalid, ACIS(MAICSA 7039265)(Resigned on 30 December 2016)

REGISTERED OFFICE ANDCORRESPONDENCE ADDRESS

Alam Maritim Resources Berhad(Head Office)No. 38F, Level 3Jalan Radin AnumBandar Baru Sri Petaling57000 Kuala LumpurMALAYSIATel : +603-9058 2244Fax : +603-9059 6845Email : [email protected]

SHARE REGISTRAR

Tricor Investor & Issuing HouseServices Sdn Bhd (11324-H)Unit 32-01, Level 32, Tower AVertical Business Suite, Avenue 3 Bangsar South, No. 8, Jalan Kerinchi59200 Kuala LumpurMALAYSIATel : + 603-2783 9299Fax : + 603-2783 9222

AUDITORS

Ernst & Young (AF0039)Level 23A Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala LumpurTel : +603-7495 8000

LEGAL ADVISOR

Zul Rafique & PartnersD3-3-8 Solaris DutamasNo. 1 Jalan Dutamas 150480 Kuala Lumpur MALAYSIATel : +603-6209 8228

PRINCIPAL BANKERS

• Malayan Banking Berhad• Maybank International (L) Ltd

STOCK EXCHANGE LISTING

Listed on Main Market of BursaMalaysia Securities Berhad (635998-W)Sector : Trading/ServicesStock Name : ALAMStock Code : 5115

WEBSITE

www.alam-maritim.com.my


CORPORATE INFORMATION


INTEGRATED MANAGEMENTSYSTEM POLICY

ALAM MARITIM GROUP shall strive tocontinually deliver quality services andproducts that meet the stakeholders’requirements.

We shall consistently monitor and reviewour performance to improve our businessoperating culture and work processes inaccordance with Quality, Health, Safety &Environment Management System(“QHSEMS”) to become a preferredoffshore services partner in the Oil & GasIndustry.

In order to realise this, we shall provideoptimum resources to adopt theIntegrated Management Systemapproach while not neglecting addressingany potential adverse impact on humanhealth, safety and environment in allaspects of our activities and promotingcontinuous improvement as ALAM way oflife.

We shall ensure that this policy iscommunicated and inculcated throughoutthe organisation and to the stakeholders.

It is the responsibility of everyone inALAM MARITIM GROUP to applyQHSEMS in all work processes.

DRUG AND ALCOHOL POLICY

ALAM MARITIM GROUP strictly restrictthe consumption or being under theinfluence of intoxicating drugs and alcoholwhich would impair the performance ofwork and a serious threat to the Health,Safety and Environment at our businessoperations.

ALAM MARITIM GROUP wishes to ensurethat each employee is personallyresponsible not only to himself but also toothers and the Company in eliminatingthe usage of drug and alcohol across ourwhole business location. To ensure fullcompliance to our Policy on elimination ofalcohol and drug abuse, the followingmeasures are being implemented:

• Prior to employment with ALAMMARITIM GROUP, prospectiveemployees are to undergopreemployment medical screeningon drugs and alcohol;

• Continuously promote workingenvironment with zero tolerance onabuse of drugs and alcohol;

• Total prohibition of possession,distribution or sales of drugs oralcohol at every ALAM MARITIMGROUP work location;

• Random test on drugs and alcohol insituation where suspected drugs oralcohol abuse has occurred;

• Conducting comprehensiveinvestigation after occurrence of anincident or accident, whereby thepossibility of alcohol or drugs mighthave been a contributing factor;

• Unannounced periodic or randomtesting on employees to beconducted as deemed necessary bythe Company;

• Conduct lawful searches for alcoholand drug at any work area orlocation; and

• Employees found to be inpossession or under the influence ofdrugs and alcohol are subjected todisciplinary action that includesimmediate termination ofemployment with the Company.

STOP WORK POLICY

ALAM MARITIM GROUP believes that nowork to be performed by us in theexecution of our daily business operationis so urgent that we cannot take time todo it safely.

In the aspiration of the prevention of injuryto our people and damages to ourproperty as well as the environment, thefollowing STOP WORK POLICY shallprevail within the ALAM MARITIMGROUP under the followingcircumstances:

1. When work activities are imposingan Immediate Danger To Life andHealth (IDLH) to our personnelduring adverse weather conditionsor during hazardous or critical workoperations;

2. When action by an Individual or aTeam is in noncompliance with theset standards and procedures forperforming the job tasks;

3. When works to be performed is notin accordance with the agreed JobMethod Statement and the approvedJob Hazards/Safety Analysis (JHA/JSA) thus imposing unnecessaryrisks to the tasks performer.

Departmental, Line, Base Managers,Vessels Masters and Line Supervisorsare accountable and responsible inensuring that the STOP WORK POLICY isexercised accordingly under the abovecircumstances to ensure the ultimate goalof An Injury Free Work Place can beachieved across ALAM MARITIM GROUPwork locations.

ALAM MARITIM GROUP is totallycommitted to endeavour attaining anincident free and safe workingenvironment and achieve continualexcellence towards the protection ofHealth, Safety and Environment.


CORPORATE POLICY


100% ALAM-JV DP 1 [L] INC

75% EASTAR OFFSHORE PTE LTD

49% TH ALAM HOLDINGS [L] INC

40% GLOBE ALAM MARINE SERVICES CO

100% ALAM SUBSEA PTE LTD

100% ALAM-PE I [L] INC

100% ALAM-PE II [L] INC

10

100% ALAM MARITIM [L] INC100%

100% ALAM JV HOLDINGS [L] INC

50% WIDE GLOBAL [L] INC

10

10

10

10

51

60% WORKBOAT INTERNATIONAL DMCCO

100% ALAM-JV DP 2 [L] INC

60% ALAM FAST BOATS [L] INC

51% ALAM-PE HOLDINGS [L] INC

51% ALAM RADIANCE [L] INC

51% ALAM SWIBER DLB 1 [L] INC

50% TH ALAM MANAGEMENT [M] SDN BHD

100% ALAM-PE III [L] INC

100% ALAM-PE IV [L] INC

100% ALAM-PE HOLDINGS SDN BHD

100% ALAM-PE V [L] INC

51% ALAM BROMPTON [L] INC


CORPORATE STRUCTUREas at 31 march 2017


100% MDSV 1 [L] INC

100% OLV OFFSHORE SERVICES [M] SDN BHD

100% ALAM MARITIM INVESTMENTS I [L] INC

100% ALAM MARITIM INVESTMENT HOLDINGS [L] INC

100% ALAM MARITIM [M] SDN BHD 100% ALAM MARITIM GLOBAL I LTDS [L] INC

L [L] INC 100% ALAM HIDRO [M] SDN BHD

100% ALAM MARITIM INVESTMENTS II [L] INC

100% ALAM HIDRO [L] INC

100% ALAM MARITIM INVESTMENTS III [L] INC

100% ALAM MARITIM INVESTMENTS IV [L] INC

100% ALAM MARITIM INVESTMENTS V [L] INC

51% DEEPSEA LEADER VENTURE [L] INC

100% ALAM OFFSHORE LOGISTICS & SERVICES SDN BHD

100% ALAM FOOD INDUSTRIES [M] SDN BHD

100% ALAM MARITIM PROPERTIES [M] SDN BHD

60% ALAM EKSPLORASI [M] SDN BHD

60% ALAM SYNERGY I [L] INC

60% ALAM SYNERGY II [L] INC

60% ALAM SYNERGY III [L] INC

50% ALAM SWIBER OFFSHORE [M] SDN BHD

50% ALAM RADIANCE [M] SDN BHD

50% YSS ALAM ENERGY [M] SDN BHD




NO. COMPANY DATE & PLACE OF ISSUED AND EFFECTIVE PRINCIPAL ACTIVITY INCORPORATION FULLY PAID-UP EQUITY SHARE CAPITAL INTEREST (%)

1 Alam Maritim (M) Sdn Bhd (“AMSB”) 15.07.1996 RM20,000,000.00 100% Ship owning, ship managing, hiring, Malaysia chartering and other related services.

2 Alam Maritim (L) Inc (“AMLI”) 14.06.2004 F.T USD8,940,100.00 100% Investment holding and ship owning. Labuan, Malaysia

3 Alam Hidro (M) Sdn Bhd (“AHSB”) 05.02.1999 RM500,000.00 100% Offshore facilities construction and Malaysia installation and subsea services.

4 Alam Offshore Logistics 20.09.2000 RM300,000.00 100% Transportation, ship forwarding, & Services Sdn Bhd (“AOLS”) Malaysia shipping agency, ship chandelling and other related services.

5 Alam Food Industries (M) 14.04.2008 RM100,000.00 100% Catering and messing services. Sdn Bhd (“AFI”) Malaysia

6 Alam Maritim Properties (M) 04.09.2012 RM100,000.00 100% Property owner and management. Sdn Bhd (“AMP”) Malaysia

7 Alam Hidro (L) Inc (“AHLI”) 14.09.2016 F.T USD100.00 100% Offshore facilities construction, subsea Labuan, Malaysia engineering and underwater services.

8 Alam Subsea Pte Ltd (“ASPL”) 01.01.2008 SGD500,000.00 75% Rental of ROV and providing ROV Singapore services.

9 Eastar Offshore Pte Ltd 01.03.2006 SGD628,203.00 75% Designing, manufacturing and (“Eastar Offshore”) Singapore operating of remotely operated vehicle (ROV’s).

10 Alam Eksplorasi (M) Sdn Bhd (“AESB”) 21.11.2000 RM300,000.00 60% Ship owning, ship operating and Malaysia chartering.

11 Alam Synergy I (L) Inc (“AS I”) 18.09.2006 F.T USD1,050,000.00 60% Ship owning, operating and chartering. Labuan, Malaysia

12 Alam Synergy II (L) Inc (“AS II”) 18.09.2006 F.T USD1,050,000.00 60% Ship owning, operating and chartering. Labuan, Malaysia (OS) & USD603,227.00 (RPS)

13 Alam Synergy III (L) Inc (“AS III”) 18.09.2006 F.T USD2,795,000.00 60% Ship owning, operating and chartering. Labuan, Malaysia (OS) & USD2,500,000.00 (RPS)

14 Workboat International DMCCO (“WBI”) 03.05.2005 AED1,000,000.00 60% Ship management and operation, ship United Arab Emirates owning, ship maintenance and marine consultancy.

15 Alam Fast Boats (L) Inc. (“AFBLI”) 26.08.2008 F.T USD100.00 60% Ship owning, operating and chartering. Labuan, Malaysia

16 Alam Brompton (L) Inc. (“ABLI”) 15.06.2007 F.T USD1,350,000.00 51% Ship management & operation, Labuan, Malaysia ship owning, ship maintenance and marine consultancy

17 Alam Radiance (L) Inc. (“ARLI”) 28.05.2009 F.T USD3,500,000.00 51% Ship owning, ship management and Labuan, Malaysia ship operation.

18 Alam Swiber DLB 1 (L) Inc (“ASDLB1”) 14.09.2009 F.T USD10,250,000.00 51% Ship owning and ship chartering Labuan, Malaysia





19 YSS Alam Energy (M) Sdn Bhd (“YSS”) 24.05.2011 RM500,000.00 50% Ship management & operation, Malaysia offshore facilities, installation, subsea engineering and underwater services and other related services.

20 Alam Radiance (M) Sdn Bhd (“ARSB”) 30.11.2004 RM2.00 50% Ship owning, ship management, ship Malaysia operation, maintenance and consultancy.

21 Alam Swiber Offshore (M) 07.12.2009 RM4,392,962.00 50% Ship operator. Sdn Bhd (“ASOSB”) Malaysia

22 TH Alam Management (M) 04.05.2010 RM350,002.00 50% Transportation, installation and Sdn Bhd (“THAM”) Malaysia commissioning of offshore pipelines, structure and subsea equipment.

23 Alam-PE Holdings (L) Inc. (“APEHL“) 17.10.2008 F.T USD14,000,000.00 51% Investment holding. Labuan, Malaysia

24 Alam-PE I (L) Inc (“Alam-PE I”) 21.08.2008 F.T USD100.00 51% Ship owning, ship operating services & Labuan, Malaysia chartering.

25 Alam-PE II (L) Inc (“Alam-PE II”) 21.08.2008 F.T USD100.00 51% Ship owning, ship operating services & Labuan, Malaysia chartering.

26 Alam-PE III (L) Inc (“Alam-PE III”) 21.08.2008 F.T USD100.00 51% Ship owning, ship operating service & Labuan, Malaysia chartering.

27 Alam-PE IV (L) Inc (“Alam-PE IV”) 21.08.2008 F.T USD100.00 51% Ship owning, ship operating services & Labuan, Malaysia chartering.

28 Alam-PE V (L) Inc (“Alam-PE V”) 21.08.2008 F.T USD100.00 51% Ship owning, ship operating services & Labuan, Malaysia chartering.

29 Alam-PE Holdings Sdn Bhd (“APEHSB”) 16.09.2008, RM2.00 51% Ship Management. Malaysia

30 TH-Alam Holdings (L) Inc (“THAL”) 30.12.2009 F.T USD39,314,000.00 49% Investment holding. Malaysia

31 Alam-JV DP1 (L) Inc (“AJVDP1”) 02.07.2009 F.T USD1.00 49% Ship owning. Malaysia

32 Alam-JV DP2 (L) Inc (“AJVDP2”) 02.07.2009 F.T USD1.00 49% Ship owning. Malaysia

33 Globe Alam Marine Services Co 06.12.2011 SR500,000.00 40% Ship management & operation (“Globe Alam”) Kingdom of facilities, installation, subsea Saudi Arabia engineering and underwater services and other related services.

34 Alam Maritim Investment Holdings (L) 26.11.2014 F.T USD100.00 100% Investment holding and ship owning. Inc (“AMIH”) Labuan, Malaysia

35 Alam Maritim Investments I (L) Inc 27.11.2014 F.T USD100.00 100% Ship owning, operating and chartering. Labuan, Malaysia

36 Alam Maritim Investments II (L) Inc 27.11.2014 F.T USD100.00 100% Ship owning, operating and chartering. Labuan, Malaysia







37 Alam Maritim Investments III (L) Inc 27.11.2014 F.T USD100.00 100% Ship owning, operating and chartering. Labuan, Malaysia

38 Alam Maritim Investments IV (L) Inc 27.11.2014 F.T USD100.00 100% Ship owning, operating and chartering. Labuan, Malaysia

39 Alam Maritim Investments V (L) Inc 27.11.2014 F.T USD100.00 100% Ship owning, operating and chartering. Labuan, Malaysia

40 Deepsea Leader Venture (L) Inc 14.11.2014 F.T USD12,000,100.00 51% Ship management and operation, ship Labuan, Malaysia owning, ship maintenance and marine consultancy.

41 MDSV 1 (L) Inc 14.11.2014 F.T USD12,000,100.00 51% Ship owning, ship operating and Labuan, Malaysia chartering.

42 Alam JV Holdings (L) Inc 24.12.2014 F.T USD100.00 100% Investment holding and ship owning. Labuan, Malaysia

43 Wide Global (L) Inc 11.11.2014 F.T USD100.00 50% Management and consultancy. Labuan, Malaysia

44 Alam Maritim Global I Ltd 29.12.2014 USD100.00 100% Investment Holding. British Virgin Islands

45 OLV Offshore Services (M) Sdn Bhd 29.12.2014 RM4.00 51% Ship owning, ship operating and Malaysia chartering.

* F.T Labuan = Federal Territory of Labuan* RPS = Redeemable Preference Shares* OS = Ordinary Shares


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Our employees undergo constant training to upgrade their capabilities,and their motivation is boosted by their passion for success.

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PROFILE OF DIRECTORS

She served the Malaysian Attorney General’s Chambers asSenior Federal Counsel and Legal Advisor to the Ministry ofTransport Malaysia. She has also been admitted as an Advocateand Solicitor of the High Court of Malaya. Her entry into the oiland gas industry was with PETRONAS, in positions of variousseniority until her retirement as Head/ Senior General Managerof the Legal and Corporate Secretarial Affairs Division and theCompany Secretary of PETRONAS public listed subsidiary,Malaysia International Shipping Corporation Bhd.

Fina is also a director of BIB Insurance Brokers Sdn Bhd. Shedoes not have any family relationship with any other directorand/or major shareholder of the Company and has no conflictof interest with the Company. She has not been convicted of anyoffence within the past five (5) years.

FINA NORHIZAH BINTI HAJI BAHARU ZAMAN

Chairman, Independent Non-Executive Director, Female, Malaysian, 60 years old.

Fina Norhizah binti Haji Baharu Zaman, was appointed tothe Board of Alam Maritim Resources Berhad as anIndependent Non-Executive Director on 22 October 2010and was later appointed as Chairman on 21 August 2014.She has attended seven (7) of seven (7) board meetingsheld in the financial year 2016.

She also serves as a member of the Board Risk ManagementCommittee, the Board Audit Committee and is currently theChairman of the Board Nomination and RemunerationCommittee.

Fina holds a Bachelor of Law degree from the University ofMalaya and a Masters in Law (specialising in maritime andshipping) from the London School of Economics, University ofLondon. She also lectured at the International Islamic University,Malaysia in 1984 in the Kulliyah of Law.




Datuk Azmi bin Ahmad was appointed as Group ManagingDirector/Group Chief Executive Officer of Alam MaritimResources Berhad on 2 May 2006. He is also the Chairmanof the ESOS Committee as well as an alternate member toShaharuddin bin Warno @ Rahmad on the Board RiskManagement Committee. He has attended seven (7) ofseven (7) board meetings held in the financial year 2016.

Datuk Azmi holds an MBA from the University of Wales, Cardiff,UK as well as a Bachelor of Arts (Hons) in Accounting andFinance from the University of South Bank, UK. Prior to joiningthe corporate sector, Datuk Azmi had served as a LeftenanUdara with the Royal Malaysian Airforce before joining BankBumiputera Berhad as the Corporate Banking DivisionManager. He later moved into the maritime industry withNepline Berhad, a shipping company providing tankerservices, serving as General Manager, Finance Administrationand Human Resources Division before co-founding AlamMaritim (M) Sdn Bhd.

Datuk Azmi does not have any family relationship with anyDirector and/or major shareholder of the Company and has noconflict of interest with the Company, save as disclosed in theAnalysis of Shareholdings section of this Annual Report. He hasnot been convicted of any offence within the past five (5) years.

DATUK AZMI BIN AHMAD

Group Managing Director/Group ChiefExecutive Officer, Non-Independent Executive Director, Male, Malaysian, 58 years old.




SHAHARUDDIN BIN WARNO @ RAHMAD

Group Chief Operating Officer, Non-Independent Executive Director, Male, Malaysian, 49 years old.

As a measure of his business acumen, he was selected as oneof the top three finalists for the Ernst & Young Entrepreneur ofthe Year® Malaysia 2007, Master Category Award.

Shaharuddin does not have any family relationship with anyDirector and/or major shareholder of the Company and hasno conflict of interest with the Company, save as disclosed inthe Analysis of Shareholdings section of this Annual Report. He has not been convicted of any offence within the past five(5) years.

Shaharuddin bin Warno @ Rahmad was appointed as aDirector of Alam Maritim Resources Berhad on 2 May 2006.He is also the Group Chief Operating Officer and is amember of the Board Risk Management and ESOSCommittees. He has attended seven (7) of seven (7) boardmeetings held in the financial year 2016.

He is a member of The Association of International Accountants,UK since 1990 and has been accredited as a Fellow of TheSociety of International Accounting Technicians, UK since 2004.

Shaharuddin began his career in Mayban Finance Berhadbefore joining Faber Group Berhad as an Internal Auditor.Subsequently, he joined the International Marketing Division ofPETRONAS before moving on to join Maritime (M) Sdn Bhd asFinance Manager. Shortly after, in 1996, he co-founded AlamMaritim (M) Sdn Bhd.




AHMAD HASSANUDIN BIN AHMAD KAMALUDDIN

Non-Independent Executive Director, Male, Malaysian, 71 years old.

Ahmad Hassanudin bin Ahmad Kamaluddin, was firstappointed as a Director of Alam Maritim Resources Berhadon 6 December 2006. He presently serves as a Non-Independent Executive Director of the Company and is amember of the Board Risk Management Committee. He hasattended seven (7) of seven (7) board meetings held in thefinancial year 2016.

Ahmad holds a Bachelor of Economics (Analytical) from theUniversity of Malaya and has to-date attended a number ofbusiness and management courses, some of which were at therenown Harvard Business School, Oxford School of PetroleumStudies and Fletcher School of Law and Diplomacy, TuftsUniversity, USA.

His career in the oil and gas industry spans four decades,primarily with the national oil company, PETRONAS, where heserved in both the downstream and upstream businesssegments in various senior management positions such as theHead of Business Development under Corporate Planning,Head of Property in LNG Sdn Bhd, Deputy General Manager ofthe International Marketing Division in PETRONAS, ManagingDirector of PETRONAS Trading Corporation Sdn Bhd(“PETCO”), a wholly owned subsidiary of PETRONAS, SeniorGeneral Manager of the Malaysian Crude Oil Division inPETRONAS and CEO of Vinyl Chloride (Malaysia) Sdn Bhd.

He was also appointed to the Board of various PETRONASsubsidiaries and held an honorary position as Vice President ofthe International Fertiliser Association of East Asia as well asCEO of ASEAN Bintulu Fertiliser Sdn Bhd, a joint venturecompany between Malaysia (represented by PETRONAS),Thailand, Philippines and Singapore and Indonesia. Followinghis retirement, he joined Alam Maritim (M) Sdn Bhd in 2004.

He does not have any family relationship with any other directorand/or major shareholder of the Company and has no conflictof interest with the Company. He has not been convicted of anyoffence within the past five (5) years.




DATO’ HAJI AB WAHAB BIN HAJI IBRAHIM

Independent Non-Executive Director, Male, Malaysian, 66 years old.

Dato’ Haji Ab Wahab began his career with the national oil andgas company PETRONAS and worked his way in variousaccounting roles of increasing scope and responsibility. He alsoserved as Senior Manager and Joint Company Secretary whilstin PETRONAS Gas, a subsidiary of PETRONAS. Later, inanother subsidiary, OGP Technical Services, he assumed theposition of Finance Division Head.

Aside from Alam Maritim, Dato’ Haji Ab Wahab sits on the Boardof Uzma Berhad as their Audit Committee Chairman.

He does not have any family relationship with any other directorand/or major shareholder of the Company and has no conflictof interest with the Company. He has not been convicted of anyoffence within the past five (5) years.

Dato’ Haji Ab Wahab bin Haji Ibrahim was appointed to theBoard of Alam Maritim Resources Berhad as IndependentNon-Executive Director on 2 May 2006. He is the Chairmanof the Board Audit Committee, a member of the Board RiskManagement Committee and Board Nomination andRemuneration Committee. He has attended seven (7) ofseven (7) board meetings held in the financial year 2016.

Dato’ Haji Ab Wahab is a qualified Chartered Accountant and amember of the Malaysia Institute of Accountants. He obtainedhis Diploma in Accountancy and Degree in Accounting, bothfrom the MARA Institute of Technology, Malaysia. He holds anMBA (Management Studies) from Rock Hampton University ofUSA and was honoured with an Honorary Doctorate Degree inPublic Services, awarded by the Irish International University.




AINUL AZHAR BIN AINUL JAMAL

Independent Non-Executive Director, Male, Malaysian, 57 years old.

Ainul Azhar bin Ainul Jamal was appointed as IndependentNon-Executive Director of Alam Maritim Resources Berhadon 1 October 2014 and as the Chairman of the Board RiskManagement Committee on 1 March 2015. He is a memberof the Board Audit Committee, Board Risk ManagementCommittee and the Board Nomination and RemunerationCommittee. He has attended seven (7) of seven (7) boardmeetings held in the financial year 2016.

Ainul graduated from the University of Sussex, UK in 1983 witha Bachelor’s Degree in Electrical Engineering and from Daniel’sBusiness School, University of Denver, USA and the IMDBusiness School in Switzerland in 2007.

He is a member of a number of bodies, namely the Institute ofElectrical and Electronic Engineers, UK, the Malaysian Instituteof Electrical Engineers, the Society of Petroleum Engineers, theStudents’ Development Advisory Council of Universiti TeknologiPETRONAS, the Oil and Gas Advisory Council for Invest KL,the Industry Advisory for the Malaysian Petroleum ResourcesCorporation and the board of directors of InternationalConference & Exhibition Professional (iCEP).

Ainul began his career as an engineer at the Public WorksDepartment of the Malaysian Armed Forces. Subsequently, hejoined Schlumberger, focusing on land-based and offshore rigsin Australia and New Zealand and as a Training Instructor inIndonesia. He was also the Country Manager for Malaysia,Technical Engineer in France and General Manager in Canada.

Within Schlumberger, Ainul held various roles of increasingresponsibility, including Managing Director for SchlumbergerSouth East Asia, Global HR Director for Schlumberger’s seismicbusiness, WesterGeco and as Group HR Director based inLondon, UK, as well as Vice President of Global Accounts inAsia. Presently, Ainul presides as Chairman of SchlumbergerMalaysia.

He does not have any family relationship with any other directorand/or major shareholder of the Company. He has no conflict ofinterest with the Company and has not been convicted of anyoffence within the past five (5) years.



SENIOR MANAGEMENT TEAM

Datuk Azmi Bin Ahmad was appointed as GroupManaging Director/ Group Chief Executive Officerof Alam Maritim Resources Berhad on 2 May2006. He also serves on the Board of Directors ofthe Group as a Non-Independent ExecutiveDirector.

Dato Azmi obtained his Diploma in Accountancyfrom MARA Institute of Technology in 1990, andsubsequently, in 1992, graduated with a Bachelorof Arts (Hons) in Accounting and Finance from theUniversity of South Bank, UK. In 1998, hesecured his Masters of Business Administrationfrom University of Wales, Cardiff, UK. Dato Azmialso initially served in the military as a LeftenanUdara with the Royal Malaysian Airforce in 1978to 1992.

In 1992, Dato Azmi joined Bank BumiputeraBerhad as the Manager of its Corporate BankingDivision. His move into the maritime industrycame in 1994 when he joined Nepline Berhad, ashipping company providing tanker services. DatoAzmi served as Nepline’s General Manager of theFinance Administration and Human ResourcesDivision until 1999 before co-founding AlamMaritim (M) Sdn Bhd.

He has no directorships in other publiccompanies and listed issuers. He does nothave any family relationship with any otherdirector and/or major shareholder of theCompany. He does not have any conflict ofinterest with the Company and has noconvictions for any offences within the past five(5) years.

Shaharuddin Bin Warno @ Rahmad wasappointed as Group Chief Operating Officer on 2 May 2006. He is also sits on the Board ofDirectors and serves as a member of the BoardRisk Management and Employee Share OptionsScheme Committees.

A chartered accountant by training, Shaharuddinis a member of the Association of InternationalAccountants, UK and an Accredited Fellow of theSociety of International Accounting Technicians,UK.

His career has seen him serve with MaybanFinance Berhad, Faber Group Berhad andthereafter Petronas in various related capacities.In 1995, he joined Maritime (M) Sdn Bhd as its

Finance Manager, gaining exposure andexperience to the maritime industry, in particularthe operational and commercial aspects of theoffshore support vessel industry. In 2007, he co-founded Alam Maritim (M) Sdn Bhd. In 2007,Encik Shaharuddin was selected as one of the topthree finalists for the Ernst & Young Entrepreneurof the Year® Malaysia 2007, Master CategoryAward.

He has no directorships in other public companiesand listed issuers. He does not have any familyrelationship with any other director and/or majorshareholder of the Company. He does not haveany conflict of interest with the Company and hasno convictions for any offences within the past five(5) years.

DATUK AZMI BIN AHMAD

Group Managing Director / Group ChiefExecutive Officer.Male, Malaysian, 58 years old.(Key Personnel)

SHAHARUDDIN BINWARNO @ RAHMAD

Group Chief Operating Officer.Male, Malaysian, 49 years old.(Key Personnel)




Encik Ahmad Hassanudin Bin AhmadKamaluddin, was appointed as Non-IndependentExecutive Director on 6 December 2006. He alsoserves as on the Group’s Board of Directors as amember of the Board Risk ManagementCommittee.

Encik Ahmad holds a Bachelor of Economics(Analytical) from the University of Malaya. He alsoattended the renowned Harvard Business School,Oxford School of Petroleum Studies and FletcherSchool of Law and Diplomacy, Tufts University,USA.

His career in the oil and gas industry spans fourdecades, primarily with PETRONAS, where heserved as the Head of Business Developmentunder Corporate Planning, Head of Property in

LNG Sdn Bhd, Deputy General Manager of theInternational Marketing Division in PETRONAS,Managing Director of PETRONAS TradingCorporation Sdn Bhd (“PETCO”), Senior GeneralManager of the Malaysian Crude Oil Division inPETRONAS and CEO of Vinyl Chloride(Malaysia) Sdn Bhd. He was also appointed to theBoard of various PETRONAS subsidiaries.


Md Nasir Bin Noh was appointed as ChiefFinancial Officer on 2 January 2015. He isresponsible for Group Finance functions, and hebrought with him over 20 years of experience inthe areas of auditing, financial accounting andmanagement and corporate finance.

Prior to joining the Group, Md Nasir served indifferent financial related positions within thebanking, telecommunications, automotive,property and construction, aviation and maritimeindustries. He holds a professional accountingqualification from the Association of CharteredCertified Accountants, UK. He is a charteredaccountant registered with the Malaysian Instituteof Accountants.


AHMAD HASSANUDINBIN AHMADKAMALUDDIN

Non-IndependentExecutive Director.Male, Malaysian, 71 years old.(Key Personnel)

MD NASIR BIN NOH

Chief Financial Officer.Male, Malaysian, 50 years old.(Key Personnel)




NURANISMA BINTIAHMAD

Assistant GeneralManager, GroupAccounts & FinanceDivision & JointCompany Secretary.Female, Malaysian, 43 years old.(Key Personnel)

Nuranisma Binti Ahmad initial career as anaccountant commenced when she joined AMRBin 1998. Climbing through the ranks to herpresent position, Nuranisma was appointed asJoint Company Secretary on 1 September 2016.She is responsible for the financial operations,financial reporting, budgeting and forecasting,treasury, tax compliance and quality governancewithin the Group.

Nuranisma graduated with a Degree inAccountancy from Mara University of Technologyand is a Registered Chartered Accountant withthe Malaysian Institute of Accountants(membership number: 24553). She has wideexposures in various due diligence exercisesduring acquisitions, listing exercise on MainBoard, Bursa Malaysia and various road showsprior to listing.

Nuranisma acquired her MBA specializing inCorporate Governance from Putra BusinessSchool, University Putra Malaysia. Overseeingintegrity, financial risk, compliance managementand other corporate secretarial matters,Nuranisma is also a registered member of theMalaysian Institute of Chartered Secretaries andAdministrator (membership number MAICSA7067610).

She has no directorship in other public companiesand listed issuers. She does not have any familyrelationship with any other director and/or majorshareholder of the Company. She does not haveany conflict of interest with the Company and hasno convictions for any offences within the past five(5) years.

NUR AZNITA BINTI TAIP

General Manager, Group CorporateServices & JointCompany Secretary.Female, Malaysian,44 years old.(Key Personnel)

Nur Aznita Binti Taip was appointed as GeneralManager of Group Corporate Services in January2017 and Joint Company Secretary with effectfrom 8 March 2017.

Nur Aznita, graduated with a law degree fromUniversiti Kebangsaan Malaysia andsubsequently, was admitted as an Advocate andSolicitor of the High Court of Malaya. She startedher career with Public Bank Berhad and laterserved a legal firm prior to first joining AMRB in2008 as Group Legal Manager. She then movedto PETRONAS as Contract Specialist in a keyupstream project developed by PETRONASCarigali and Shell. She is also a member of theMalaysian Institute of Chartered Secretaries andAdministrators and had served Menteri BesarSelangor Inc. as Group Chief CompanySecretary. She has wide exposures in variouslegal aspects and jurisdiction, projectmanagement, risk management, compliance andcorporate governance matters.

She pursued an MBA majoring in CorporateGovernance from Putra Business School,Universiti Putra Malaysia with a thesis on “TheInfluence of Health, Safety and EnvironmentalPractices on Human Sustainability and EmployeeEngagement: A Study on the Oil and Gas Industryin Malaysia”.

She has no directorship in other public companiesand listed issuers. She does not have any familyrelationship with any other director and/or majorshareholder of the Company. She does not haveany conflict of interest with the Company and hasno convictions for any offences within the pastfive (5) years.




CAPTAIN ZAINOLABIDDIN BIN JOHARI

Chief Operating Officer, Offshore Support VesselBusiness Operator.Male, Malaysian, 54 years old.

Captain Zainol Abiddin Bin Johari wasappointed Chief Operating Officer, OffshoreSupport Vessel Business Operator on 1 February 2017. He also overlooks overseasbusiness opportunities and is lead Consultantfor the “LNG FSRU” Business Developmentteam. He is an industry recognised advisor forunderwater projects. Captain Zainol is aveteran mariner having served in a wide rangeof marine related capacities over the past 33years. Specifically, Captain Zainol has spentthe last 33 years working within the oil and gasindustry for Esso Malaysia Berhad, Murphy Oil,THHE, SAPKEN, NOBLE DENTON, ADNOCand others.

He is ranked a Master Mariner Class 1 (FG) byAkedemi Laut Malaysia and a MarineNavigational Aids Lecturer by Malaysia MaritimeAcademy Malaysia.


Noor Amran Abdul Manan was appointed ChiefOperating Officer of Subsea and UnderwaterBusiness Operations with effect from 1 March2017. He is responsible for the successful andeffective management of the awarded andassigned contracts to this division. Thesecompleted projects have garnered growth inprofits and revenue and good reputation withinthe industry.

Noor Amran Abdul Manan, has been in theUnderwater Industry since 2001. Havinggraduated with a Diploma in Computer Science,along with professional certified DivingSupervisor, Diver, underwater welder andinspector qualification, he pursued to work withAlam Maritim. His humble beginning as a BaseManager, MCOT Pipeline Project in Miri Sarawakleading up to now has built character, gainedexperienced, making him one of the longestserving proactive employee. He made his waysteadily within the company, both acknowledgingthe demand for this business within the industry.

He has almost 14 years of experience mainly inthe installation of oil and gas pipelines,FSO/FPSO, SBMs, direct involvement inunderwater diving and ROV works and repairmaintenance of oil and gas facilities servicingTOTAL Fina Min Hai, CUEL Thailand, Repsol,PCSB, SARAWAK SHELL, ESSO Malaysia,CHEVRON and others. In 2013, he was able tolead the division to winning the elite IRMCampaign and then once again this year in 2017.


NOOR AMRAN BIN ABDMANAN

Chief Operating Officer,Subsea and UnderwaterOperations.Male, Malaysian, 43 years old.




SAIFUL FAIZ BIN MOHD AZIZ @ AHMADLATFI

General Manager,Offshore Installationand Construction Business Operations.Male, Malaysian, 53 years old.

Saiful Faiz Bin Mohd Aziz @ Ahmad Latfiappointment as General Manager of OffshoreInstallation and Construction Business Operationswas with effect from 10 October 2016.

Prior to this, he served as Head of ProjectServices and later General Manager for AlamSwiber Offshore Sdn Bhd. His extensiveexperience for over 28 years in the Petrochemicaland oil and gas industries includes working onprojects execution for refineries, oil terminal, gasplant, fabrication of jackets and topside as well astransportation and installation works for offshorepipeline and platforms.

Saiful graduated from University Of TechnologyMalaysia in Diploma of Mechanical Engineering(Marine) Marine Engineering. He has previouslyworked for Malaysia Marine and HeavyEngineering, Crest Petroleum, TL Offshore SdnBhd and Sime Sembawang Engineering.


AZMI BIN ZAINALADNAN

General Manager,Executive Director’sOffice.Male, Malaysian, 46 years old.

Azmi Bin Zainal Adnan was appointed GeneralManager in the Executive Director’s Office on 1 February 2017. He is responsible foroverlooking the business development andexpansion via the Group’s foray into the OffshoreFacilities Decommissioning business as well asenhancing the Group’s Project ManagementSystem and optimisation of existing Group assetsand expertise.

Azmi brings over 22 years of invaluable relatedengineering and management experience to theGroup having worked in various capacities withmany reputable local and international oil and gasplayers, particularly in the Transportation &Installation of Offshore Platforms and Pipelinesindustry. These include PETRONAS, ExxonMobil,Technip, Petrofac, Nippon Steel Construction,SapuraKencana Petroleum and SapuraAcergy.

He holds a Bachelor of Science degree inPetroleum Engineering from the University ofMissouri-Rolla, USA (now known as MissouriUniversity of Science and Technology) and is aChartered Engineer with the UK EngineeringCouncil and registered Engineer with the Boardof Engineers, Malaysia. He is a Fellow of theInstitute of Marine Engineering, Science &Technology, UK and a graduate member of theInstitution of Engineers, Malaysia.





SUFAHMI HADI BINSJAFII

Chief Executive Officer - WorkboatInternational DMCCO.Male, Malaysian, 42 years old.

WU, QIONG

Managing Director.Eastar Offshore Pte Ltd.Male, Singaporean, 50 years old.

Sufahmi Hadi Bin Sjafii was appointed as ChiefExecutive Officer of Workboat InternationalDMCCO on 1st October 2015. He lends his long-standing expertise and experience in finance andadmin related matters for the Group. This includesbusiness analysis and strategy and fiscalreporting, as well as vessel rationalisation, costcontrol and other initiatives.

He brings more than 12 years of related industryexperience with several tenures in maritime andoil and gas companies. Sufahmi Hadi holds aMBA in Finance and Banking from LimKokWingUniversity of Creative Technology.


Wu Qiong brings over 21 years of maritimeindustry experience having served in varioustechnical and managerial capacities. In particularhe has undertaken extensive research anddevelopment work in the area of remote operatedvehicles.

He holds a M.Sc from the Department of Electrical& Computer Engineering, University of Calgary,Canada. He also graduated with a B.Sc from theDepartment of Engineering, Shanghai Jiao TongUniversity China. Wu Qiong also has a GraduateDiploma in Business Administration from theSingapore Institute of Management.





ROSMAN BIN NORDIN

Assistant GeneralManager, Group Internal Audit &Corporate RiskManagement.Male, Malaysian, 43 years old.

MOHD NOOR BINOSMAN

General Manager,Group HumanResource.Male, Malaysian,64 years old.

Rosman Bin Nordin’s appointment as AssistantGeneral Manager of Group Internal Audit was witheffect from 10 April 2017.

He has amassed close to 20 years of insights andstrong experience, covering a range of fields:Internal Audit Controls, Risk Management,Compliance, Finance, Projects, JV Accounting,Human Resource & and Strategic Planning.Predominantly, he acquired his experience fromhis 15 years of exposure in PETRONAS Carigaliwhere he was the Senior Audit Manager for theupstream & downstream ventures overseeingover 100 Blocks, covering domestic andinternational regions.

He has conducted numerous audits in most ofinternational major Oil & Gas companies, JointOperated Companies, Joint Operated Blocks,EPC Contractors and involved in several DueDiligence for new business, taker overs of theOperatorship, entities and equities. During tenurewith PETRONAS, he was also the Finance Headin Diyarbekir Oil & Gas project based inAshgabat,Turkmenistan from 2003 to 2006 wherehe led finance team during exploration andEPCIC phase until the 1st oil productioncommenced under the USD2 Billion of projectinvestment.

His commendable journey continued in ADCO,the prominent National Oil Company of UAEbased in Abu Dhabi as the Audit Senior for 2 years on onshore field environment before hejoined Puncak Oil and Gas Sdn Bhd as theirSenior Manager, Audit, Risk & Compliance for three years prior to joining Alam Maritim group ofcompanies.

He is also the trainer with PETRONAS LearningCentre where he has conducted finance and auditskill group training with several groups ofpersonnel within Finance fraternity.

Rosman qualified as an Accountant from theNorthern University of Malaysia in 1997 andacquired his MBA from the Open University ofMalaysia in 2015. He is a Chartered Accountantof the Malaysia Institute of Accountants and aMember of the Institute of Internal Auditors,United Arab Emirates.


Mohd Noor Bin Osman was appointed as GeneralManager – Group Human Resource on 21November 2010. He is responsible for managingoverall Human Resource and talent relatedinitiatives as well as supporting business planningand quality initiatives.

Mohd Noor has served previously in variousHuman Resource capacities for PETRONASincluding, but not limited to Senior Manager HRM& Admin PETRONAS GAS and General ManagerHRM & Admin PETRONAS CARIGALI.

He holds a Bachelor Degree in Economics fromUniversity of Malaya and Master of Science inHuman Resource from Strathclyde University,UK.





MUHAMAD ZAIRULBIN ISMAIL

Senior Manager,Health, Security,Safety andEnvironment andVessel Integrity(“QHSSE”).Male, Malaysian,46 years old.

Muhamad Zairul Bin Ismail was appointed GroupHead of QHSSE on 1 October 2014. He isresponsible for AMRB’s QHSSE ManagementSystem performance and the development ofIntegrated Security and Safety ManagementSystem.

Prior to joining the Group, he has served inQHSE, Marine Operations, Engineering andMarine Conversion capacities with MISC Berhad,Malaysia Marine and Heavy Engineering HoldingsBerhad, Boustead Naval Dockyard Sdn Bhd(formerly known as PSC Naval Dockyard SdnBhd), Global Carriers Berhad and TanjungOffshore Berhad.

His qualifications include: a Bachelor Degree inMarine Engineering by Accreditation forCertificate of Competency, COC of Marine

Engineer from Malaysia Marine Department,Diploma in Marine Engineering from Polytechnicof Ungku Omar and Executive Certificate inProject Management BATC UTM. Otherscredentials include Leadership in Age ofUncertainty for Emerging Leaders –Institute ofGovernance and Asian Strategy & LeadershipInstitute (INTAN) and HSEMS Tier 3 Assuranceby PETRONAS – Kingdom Management ofUnited Kingdom (PERMATA).




CORPORATE SUSTAINABILITY

Alam Maritim Resources Berhad (“AMRB”) continues toadvocate a strategy of sustainability to navigate through thischallenging period amid uncertainties and volatility of the currentlow oil price environment and to transform itself into a morerobust company that remains on track towards greater growthand success.

Over the years, we have pursued our sustainability agenda withconviction focussing on the continuous improvement of our HSEperformance, productivity and efficiency. Essentially, we arestriving for operational excellence. Operational excellence is ourpriority in ensuring full readiness and reliability of our fleet toperform its functions and to ensure we can stay competitive, andmore importantly, relevant, in this very tough and difficult period.Towards this direction, we have thus put special efforts to ensureour HSE performance remains the cornerstone of ouroperational strategy.

QHSE has provided the bedrock upon which we have built anddefined sustainability. In this regard, we have done well buildinga reputation not just in being a safe first-tier service provider, butalso in leveraging on QHSE as a competitive advantage for theGroup. Our efforts have been clearly recognised andacknowledged by industry peers and the oil and gas majorsalike.

In pursuing our sustainability strategy, we have taken severalinitiatives to ensure that our staffs adhere closely to theprinciples of quality work culture. Towards this end, then, it isimperative that we take steps to change the way we work tothrive in these tough times. The focus clearly is on our workculture – something we should embed in the way we do ourwork. In this respect, it is critical that our work culture be fullyinternalised and inculcated throughout the organisation in orderto get the desired results.

Additionally, we also need to address issues related to structuralproblem. We experienced duplication of roles and multipleprocess owners in carrying out our responsibilities – whichresulted in lack of accountability, resources and functions notfully optimised. Clearly, there is need to transform our currentstructure if we need to pursue seriously our sustainabilityobjective.

Sustainability Quality & HSE in FY2016 - Transformation

In FY2016, we identified two (2) key areas that we need to workon to support our sustainability agenda for the current year andbeyond. These were, firstly, enhancing the role of our workforceor enhancing our human capital management and thedevelopment of an organisational culture, and, secondly, torestructure the organisation to have a more focussed approachin managing our operations and business. We need to create aculture of ownership and accountability and delivering qualityproduct and services. In other words we need to focus ondelivering value as a Group. Ultimately, the Group will need theworkforce to deliver the results and the growth we planned. Thismeans, we need to ensure we are creating the right culture forthe workforce to deliver and sustain the growth plan through aleaner, flatter and more efficient structure.

So far our work culture has been based on our Vision, which is‘To be the Preferred Offshore Services Partner in the Oil andGas Industry’. Our Vision represents the goal of what we aspireto achieve as a service oriented organisation. It provides acommon reference throughout the Group to drive us towards ashared purpose. Our Vision, however, does not stand alone. Itis supported by our Mission Statement and Shared Values. Theyare all inter-related and clearly work in tandem with one anothertowards a common objective, i.e. they represent our aspirationas an organisation.

Lately, we have introduced another set of values, whichrepresent our beliefs that can transcend and reshape ourexisting work culture to make it more complete and transformthe way we do things and propel the Group to be a high-performance organisation. We believe these enhanced culturalbeliefs will translate into actions that can produce results wewould want to see now and in the future years. They will act asthe foundation to sustain all our change and transform initiatives.




Culture Drives Performance: ICARE

As we have iterated before, our people are our greatest assetand a potentially key competitive advantage, provided we candevelop a superior performance culture and positive mind-setwithin the organisation. Without the right culture, nothing we doto follow through is going to make any difference. The changeand transformation that we desire to see will not happen.

While we have developed the required processes, systems andstructure to drive sustainability within the organisation and havebeen relatively successful, perhaps the “soft factors” of cultureand mind-set change of our people must be brought up to par.It is the culture that drives performance, and, it needs to evolveto engender business transformation and move an organisationforward. The mind-set change is necessary to ensure theworkforce buys into and be committed to the culture. The buy-in must be total if we want the culture to work. After all there isa saying that goes by ‘none of us is as good as all of us’. If onlya percentage of the workforce change the way they think andbehave, then it is not going to bring about a cultural change weso desire to the whole organisation.

The present low-oil price environment necessitates an all-embracing change in terms of how we operate, and thus,engaging our people and encouraging them to develop a freshmind-set and be innovative is imperative towards long-termsuccess.

The first step in this long but worthwhile journey is the creationof a conducive business philosophy, supported by key attributesrequired from employees. Hence, the development of the ICAREcorporate beliefs, as expounded above, to serve as the guidingpost for all staff to acculturate and embrace. The key attributesof Integrity, Compliance to requirements, Accountability, Right

Results and Engagement state in a clear and purposeful mannerthe core behaviours wanted of AMRB staff. These are theprecepts that will create a high performance culture that willdrive productivity, efficiency, superior performance and outputacross the entire supply chain.

In essence iCARE governs and propagates excellence, whichfuels excellence in other areas of sustainability such as HSSE,Quality and Performance. The iCARE initiative is to function asthe enabler that drives all previous sustainability initiativestogether. It seeks to get the commitment of our people toperform to the best of their abilities. We need commitment ofevery single person to execute each task and job with fullownership and accountability.

If previously, efforts such as the 5S programmes, and all othersHSSE and work excellence related campaigns were stand-aloneefforts, these now will be driven by the iCARE work culture toensure Group-wide commitment. All such campaigns launchedtargeted at employees are supported by iCARE corporatebeliefs. Regardless of the objective of the campaigns andpromotions all of these ties back to our common credo thatresonates with all levels of the organisation.

Kick-starting iCARE – Challenges in Culture Change

However, in all honesty, we find people’s natural resistance tochange has been a key hindrance in the realisation of a highperformance and sustainability workforce. Thus, we will haveinstituted a process to internalise the new work cultural beliefsto ensure buy-in by the workforce. The buy-in must be pervasiveacross the organisation, and hence, we need to continue tostrive and seek ways to cascade iCARE beliefs to staff in waysthat would resonate with them.

The below graph depicts the new Cultural Beliefs we have recently launched.


We have adopted several initiatives to ensure that AMRB’s quality work culture philosophy can be fully internalised throughout theorganisation to obtain the desired results.

Building a Quality Organisation

At AMRB, the primary focus of quality management is to meet customer requirements and strive to exceed customer expectation.In this connection, the Group’s Integrated Management System (“IMS”) acts as the backbone of the Quality, Health, Security, Safetyand the Environment (“Q&HSSE”) which have been standardised and implemented throughout the organisation.

Our IMS sets out the framework whereby AMRB Group strives to continually deliver quality services and products premised onmeeting stakeholders’, especially the customers’, needs. Efforts have been put in to ensure we deliver products and servicesconforming to their requirements and provide the reliability they sought.

In 2016, we successfully underwent a first-year IMS re-certification audit by Bureau Veritas. Surveillance audits are ongoing periodicreviews of an organisation's quality management system, by a third party registrar (i.e. QAS). This is where an auditor from acertification body, Bureau Veritas will review all of our documentation, and compare it to the IMS standard requirements, to verifythat what we have documented and executed meet the requirements of the standard.

To benchmark this important exercise, we have invested time and effort to secure accreditation with international IMS standards ofISO 9001:2008 (Quality Management), ISO 14001:2004 (Environmental Management), OHSAS 18001:2007 (Occupational Healthand Safety Management) from Bureau Veritas, an internationally recognised classification body.

The diagram illustrates the IMS certification audit cycle:



DocumentationAudit

CertificationAudit

Year OneSurveillance

Audit

Year TwoSurveillance

Audit

Re-CertificationAudit

Towards A More Dynamic Organisation

Since the decline in our business activities in mid-2015 as aresult of the drop in oil and gas prices and subsequent reductionin oil and gas exploration an activities, we have taken deliberate,sequential steps in facing the downturn. The most significant ofthese transformation exercises, is our organisational alignment.We discover that through surveys undertaken, we have systemicissues which are barriers to success. They showed we havehierarchical and bureaucratic structures that impedes efficiency,promotes silos and segregated portfolios views and slowsdecision-making time. And, these affect efficiency andproductivity. So, the message was clear we need to transformour current structure. Thus, this restructuring exercise becomesone of the two key areas we have identified in 2016 fortransformation to support our sustainability efforts or agenda.

Whilst it is true that the decline in business activities resulted inreduction of our manpower through resignation and closure ofsome operating units, it also provided opportunities for thecompany to plan for the optimisation of our manpowerrequirement and right sizing for our operations. The point to notehere, however, is that changing our operating model andstructure is not just about reducing the head count and savingmoney, but it is more about addressing the inefficiencies in howwe conduct our business. Because of these issues such asduplication of roles and functions, bureaucratic process, workingin silos, value is leaking out from numerous points of theorganisation, and that is wastage which can be prevented if weare better organised and managed. It is critical for us to arrestwastage and increase efficiency to face the headwinds ofchallenges of the industry’s current environment, buildorganisation resilience and increase competitiveness andprofitability.




Thus, we believe, with this restructuring of our businessoperating model we can achieve clear line points ofaccountability, line of sight and faster decision making, clarity onroles demarcation, facilitate growth and sustainability, andtogether with our philosophy and cultural beliefs, provide thebasis for development of quality culture and operationalexcellence.

HSSE: Our Transformation, Challenges, Efforts andAspiration

Security

As part of the restructuring exercise, Security will merge withHSE to become Group Health, Safety, Security and Environmentfor stronger oversight on combined HSE and Security standardsfor more effective and efficient monitoring activities across theGroup.

As such, a security management system may be considered aspart of the overall management system that provides thestructure to enable identification of potential threats to anorganisation and which establishes, implements, operates,monitors, reviews and maintains all appropriate measures toprovide assurance of the effective management of theassociated security risks.

We are still in the midst of developing a comprehensive securityguideline but progress has already been made in both onshoreand offshore operational areas. For this purpose we are in theprocess of appointing a consultancy firm to help us in institutinga proper and effective security system in the organisation.

For offshore operation, we have taken measures to ensure ourvessels comply with The International Ship and Port FacilitySecurity (“ISPS”) Code. The ISPS is an amendment to theSafety of Life at Sea (“SOLAS”) Convention (1974/1988) onminimum security arrangements for ships, ports andgovernment agencies. Having come into force in 2004, itprescribes responsibilities to governments, shipping companies,shipboard personnel, and port/facility personnel to detectsecurity threats and take preventative measures against securityincidents affecting ships or port facilities used in internationaltrade.

In as far as onshore security is concerned, it has been given duediligence via several measures:

• The enhancement of IT system security within theorganisation to ensure data integrity and to prevent anyexternal attacks on our system.

• The appointment of a security officer to ensure the securityof our office premises.

• A continuous dissemination of security relatedcommunication to remind staff on the importance of beingalert and aware at all times to prevent untoward incidents.

In addition to the aforementioned, a session to better understandthe requirements for a robust company security managementsystem for offshore fleet management, offshore installation &construction and subsea is proposed. The session would coverthe development of management system manual, procedures &guidelines of the Group’s Security Risk Assessment.

Health Safety and Environment

Simultaneously, while developing the Group security manual,AMRB will continue to commit its resources to enhance its HSEperformance. It will continue to deliver its services responsiblyand safely, preventing harm to our employees, contractors, localcommunities and the environment. This has been and willcontinue to be the guiding principle in our operations.

As HSE performance significantly impacts the Company’soverall business performance, our employees play an importantrole in ensuring our continuous improvement and sustainedoperations, particularly during this tough business environment.

A systematic approach is in place for monitoring all HSE planswhich are discussed and documented through the Annual GroupHSE Plan (as illustrated in the Group HSE Plan FY2016 below)and its progress monitored and reported in the mandatorymeeting platforms such as Group HSE Practitioners Meeting,Group HSE Steering Committee Meeting and Group HSEWorking Committee Meeting.




Awareness on importance of HSE, its policies and processeshave been cascaded down to all corners of AMRB’s operationsand are stringently enforced.

Building a Safe Work Culture

Employee hazard recognition is a pressing HSE’s operationalissue which can be largely attributed to culture or mind set whichdictates our behaviour. This is reflected in the significant numberof incidents recorded brought about by failure to identify hazardsrelated to their work activities. In a move to mitigate theseissues, we continue to hold training sessions related to hazardand risk assessment to enhance and embed the importance ofidentifying risk associated with employees’ work activities.

The challenges once again are in cultural and mind set change.As much as policies and procedures are required, addressingthe human factor and the prevailing mind-set is equallyimportant.

This is evident given that complacency, which is more due toattitude rather than competence, is the second highest rootcause in AMRB’s accident analysis. Hence, it is all the moreessential for us to keep personnel focused on working safelyand overcoming complacency.

The key to organisational culture change is to enlighten staff onwhy the change is necessary; to help them internalise the needto cease conducting business as usual; and to embrace the newmind-set.

GROUP HSEPLAN FY

2016

POLICY ANDSTRATEGICOBJECTIVE

SUPPLIERS &CONTRACTORS

HSEMANAGEMENT

HAZARD ANDRISK

MANAGEMENT

PLANNING &PROCEDURE

IMPLEMENTATIONAND MONITORING

AUDIT

MANAGEMENTREVIEW

LEADERSHIPVISIBILITY &

COMMITMENT

ORGANIZATION,RESOURCES,COMPETENCY

&DOCUMENTATION



Details

Group Hand and Safety Campaign To enhance safety awareness of Alam Maritim Group’s staff on potential injury related to hand.

Anchor Health Inspection Campaign Designed to compile database of details of all anchors in use, determine root causes of loss and minimise the occurrence of missing anchor.

Lifting and Manual Handling Safety Campaign To enhance the Lifting and Manual Handling Safety awareness in enabling marine crew and office staff to understand better on lifting and manual handling techniques thus mitigate risk of incidents and injuries related from lifting activities.

1 Alam Northeast Wet Monsoon and Flood ZIZA Campaign 2016/ 2017 A campaign to remind and get our vessels and crew well prepared to work throughout the impending dangers associated with working at sea in the adverse weather condition.

Mentor-Mentee Programme

One key effort that has proven continuously effective in bridging the mind-set gap has been our mentor-mentee programme.

In FY2016, AMRB continued to drive this highly successful approach with selected onshore staff serving as mentors to offshorecrews. The Mentor-Mentee initiative is an excellent means to not only convey and cascade the Q&HSSE agenda, but also servesto build closer bonds between both communities; while also serving as an informal means for offshore crew to air their views orprovide feedback on how to improve working conditions while on board vessels and at sea.

We believe an effective engagement exercise can bring out the best from both the shore and offshore staff. It can create theconditions in which both the shore and offshore staff offer more of their capability and potential. They get committed to theorganisation’s goals and values and motivated to contribute to organisational success, with an enhanced sense of belonging andtheir own well-being. This in very much in line with Alam Cultural Beliefs (ICARE).

Driving HSE Mind-set Change via Senior Leadership’s Example

One of the most effective ways to affect culture change is to lead by example. In this regard, AMRB has done well with SeniorManagement walking the talk in driving HSE, even going on board vessels for visits and inspections.

The involvement of such officers at the highest management level conducting HSE inspections and field visits is a cleardemonstration to the general workforce of their seriousness and commitment to HSE. The coverage of such visits is not confinedsolely to HSE issues but also on matters of cleanliness, hygiene, Personal Protective Equipment and general conditions of thevessels and crews welfare.

Visits by Senior Management to the “shop floor” are now routinely accepted as a defining characteristic found in organisations witha more mature safety culture. The number of site visits completed by Senior Management has become a de facto HSE “leadingindicator” for safety culture in many organisations. Visible senior and line management commitment, leadership and involvementin improving health and safety performance is vital for building a positive safety culture. A total of 45 visits on board vessels wereconducted by Senior and Line Management Team in FY2016.

HSE INITIATIVES AND CAMPAIGNS IN FY2016

As we focussed on culture change, we continued to also implement various HSE related training programmes and initiatives asdetailed below:-





Details

Stairs are Healthy Campaign Launch at Alam Swiber to promote healthy lifestyle in one’s daily activity

1 Alam Health Day No. 1 Health program that aimed to reinforced a healthy lifestyle and raised awareness of global warming organised at Presint 2, Putrajaya with participations of AMRB employees and family members.

1 Alam Health Day No. 2 Outdoor exercise event held at Taman Botani Negara, Shah Alam, jointly organised by Corporate HSE and AMRB Sports, Recreation and Welfare Club

Marine Crew Engagement Session 2016/2017 - Maritime leadership in age of uncertainty for emerging leaders. 3 days 2 Night programme aim to improve and enhance the understanding of HSE requirements and expectations as well as bridging the gaps between management and marine crew.

Workplace Inspection Conducted at AMRB premises to identify potential hazards and protect against injury at workstations and surroundings.

Group Policy Refresher Briefing Briefing Conducted to ensure awareness of Group available policies and acknowledgement via internal portal.

Random Drug Test Ensure full compliance to Company’s Drug and Alcohol Policy during pre-employment, pre-deployment, pre-mob and on duty at Alam Maritim’s work-sites/onboard vessel.

Job Hazard Analysis (JHA) and Review Learn techniques of conducting JHA and understand key factors affecting this.

Management of Major Emergencies’ Training (MOME) Provide participants with knowledge and skills to manage emergencies.

Emergency Fire Drill To ensure that in the event of emergency, an appropriate and immediate response is triggered to either remove or reduce and if possible to eliminate any impacts on life, property and environment.

Contractor HSE Assurance Exercise To validate Contractor’s compliance with HSE requirements.

Floor Safety Refresher Briefing Conducted for all Floor Safety Managers and their assistants to refresh on the role and responsibilities in ensuring safe workplace.

HSE SUCCESS STORIES

In FY2016, we are proud to have recorded zero Lost Time Injury(“LTI”) – the second consecutive year that AMRB has recordedLTI free. This has further contributed to the Group chalking upan impressive 9.7 million manhours without LTI as at 31 March2017. This makes it the highest ever in the history of the entireAlam Group – reflecting 955 continuous days of having no LTI.

Not one to rest on our laurels, we have announced an ambitioustarget of achieving 10 million manhours without LTI.Programmes and initiatives are on-going to sustain a continuousawareness and engagement sessions with the workforce.




However, signalling even greater ambition, our ultimate aim isto attain Target Zero, which is to achieve zero non-compliances,no harm and incidents across all types of our operationsincluding zero machinery break-down. Target Zero firmlyepitomises the conviction and resolute commitment to aspiretoward this lofty target of absolutely no errors. It is a tangibleeffort to bring the importance of safety and quality across to thehearts and minds of our employees throughout every businessunit, every worksite and at every level within the organisation.Reflecting progress achieved in this area, FY2016 also showeda reduction in the number of incident/accident cases with acumulative of 35% reduction made as compared with theprevious year.

We are progressing in a new direction, providing constructiveinitiatives or improvement plans which aim to deliver a significantpositive impact in the areas of Health, Safety and EnvironmentManagement System elements in supplementing our efforts todevelop and effective generative HSE Culture.

HSE Awards & Achievements

Our steadfast commitment to the pillars of excellent HSEpractices, the reliability and integrity of our operations and ourcollaborative partnerships with all stakeholders including ourclients have resulted in AMRB being honoured with variousawards from our valued clients.

One of our notable clients, EMEPMI had awarded Alam Maritimwith two (2) awards in recognition of Marine Safety andPerformance for 2nd Quarter of FY2016. Awards were deliveredduring Senior Management Engagement Session on September2016. One of the award recognised Alam Maritim as BusinessPartner of the Quarter Award and the other one awarded to MVSetia Teguh who has been selected as Q2 Safety Quiz TopScorer.

Our marine crew is actively participating not only to company’sinternal campaign and program but also showing fullcommitment and dedication towards clients HSE Campaign.Two (2) of our vessels; MV Setia Unggul and Handal has beenawarded by Repsol Oil & Gas Malaysia Limited as winners forApril and June’s Marine Safety Campaign on managing goodhousekeeping and safe chemical management onboard.

Alam Maritim, through our business segment OffshoreInstallation & Construction (“OIC”), had received an appreciationfor completion of package two (2) PFLNG-1 Offshore Works,Mooring System installation without LTI & Best HSE practicesthroughout project executions. Additionally, they have also beenrewarded from PFLNG1 Project Sponsor and ManagementTeam for their contribution and dedication to ensure a safedelivery of the project in achieving one (1) million man hoursduring PFLNG 1 project commissioning'

The awards serve not just as a recognition for the Group, but isa reflection of stakeholder’s confidence in AMRB’s reputation asa leader in QHSE; a trusted and credible organisation whocontinues to stand tall and leading by example throughoperational excellence.

HSE: Preserving the Environment

Operating in a responsible manner and minimising impact onthe environment, is a crucial element of how business ismanaged at AMRB. This longstanding commitment towardsmitigating environmental impact is enshrined in AMRB’s missionstatement under ‘Promoting Health, Safety, Environment andSecurity Practices’ and in line with IMS-ISO 14001 requirement.

This commitment is further enhanced through the Group’sIntegrated Management System (“IMS”) and SafetyManagement System (“SMS”).

Waste management is governed by the Marine Pollution(“MARPOL”) 73/78, an International Convention for thePrevention of Pollution from Ships. Its objective is to minimisepollution of the oceans and rivers, including dumping, oil and airpollution. This convention mandates all vessels should have agarbage management plan for disposal of plastic, paper andglass.

In adhering to this and in line with AMRB’s environmentalperformance, efforts are captured via our Ship Energy EfficiencyManagement Plan (“SEEMP”) and raised accordingly throughour Offshore Support Vessel Business Operations (“OSVBO”)for supervision and monitoring. AMRB’s on-going efforts haveensured that all vessels are in compliance with SEEMPrequirements.

AMRB stands by its firm commitment to operate responsibly,striving for innovative and practical ways and means tocontribute towards preserving the environment.

One such measure is our endeavour to have 50% of our fleetswitch over to environmentally friendly laundry detergent by Q22017 and hence minimise harmful effluent into marine waters.This initiative is also one of the IMS–ISO 14001 targets for ourvessels. As simple as it appears though, the selection of asuitable laundry detergent will need to meet a series of stringentcriteria, including being:

1. 100% non-toxic and 100% biodegradable2. Green certified or eco-labelled3. Free from phosphate, sulphates and petrochemicals, and4. Wholly plant-based enzymes in content.




Other environmentally friendly measures include using lowsulphur fuel in vessels to help preserve the air quality. Fuelconsumption is also continuously monitored to ensure optimaluse of fuel in vessel operation. This is where Offshore SupportVessel Base Operation (“OSBVO”) team plays an integral role,diligently tracking the reduction of fuel, energy and waste usageon-board to ensure it meets the requirement. In this regard, theCompany works closely with the clients and the authorities toensure compliance.

At office, we continue to implement go-green initiatives such asenergy saving, 3R – Reduce, Reuse and Recycle Campaignand car-pooling.

Risk

In acknowledging that risk is a critical potential factor affectingoperations, AMRB has put in place a structured, robust andcomprehensive risk management system, aligning withinternationally accredited standards, to identify, mitigate andmanage potential risks.

There is need for a continuous risk assessment training toenhance employee awareness and understanding of riskassociated with their operational activities. The capability toidentify risk would guide employee towards taking adequate andcorrect mitigation measures to avoid or deal with any unwantedcircumstances.

Understanding the value of lessons learnt from pastexperiences, AMRB has incorporated an IncidentImplementation and Improvement Plan. This is essentially acomprehensive tracking and monitoring of each incident and therecommendation made. It ensures that corrective and preventiveactions are implemented to avoid future occurrence of a similarincident.

At AMRB, the Business Assesment Risk Analysis (“BARA”)system has been adopted which is a comprehensive system inassessing, analysing and mitigating all potential risk elementsthat the Group may face.

In essence, BARA is a matrix to define the various levels of riskbased on harm probability (the likelihood of this event / riskoccurring) against the harm severity (the potential impact if theincident occurs). It is a simplified but effective means to increaserisk visibility and to assist management in prioritising the mostmaterial risk matters and to then devise action plans to mitigatesuch risks.

Once the material risk matters are identified, mitigation stepssuch as root cause analysis can be performed to identifypreventive measures. Essentially, the BARA system is based onan Enterprise Risk Management (“ERM”) model where theGroup’s activities are planned, organised, led and controlled tominimize the effects of risk on AMRB’s capital and earnings. Theprocess is expanded to include operational, financial, strategicand other risks.

WORKFORCE DEVELOPMENT PROGRAMMES

Putting people first has always been more than a maxim atAMRB; it is based on the understanding that it is people whodrive processes, rather than the reverse. AMRB'scomprehensive HSE training programmes envelope allsegments of our workforce, onshore as well as offshore staff.

Progressive and Forward-Looking Leadership

In strengthening for the future, AMRB has fashioned a Self-Development Pipeline (“SDP”) to empower identified talents togrow across the organisation, eventually transitioning intoleadership positions within the organisation. Under thisapproach, AMRB provides the opportunities for careerdevelopment but the onus is on individuals to take the initiativeto move up the corporate ladder by leveraging on trainingopportunities, by seeking out mentors and leveraging on thelearning resources available within the organisation.

Essentially, the SDP framework helps talents progress on threecore competency areas: attitude, skills and knowledge via fourkey transitions, or “phases as given below:

Four Self Leadership Module Flag




In each phase, talents will go through six (6) transition objectives to help them progress across their learning experience:

Primary Transition Objective

DISCOVER potential challanges. Examine the internal and external drivers of the problem.1

DIAGNOSE potential learning need. Connect organisational challange with underlying issues.2

DESIGN potential learning solution. Draw the blueprint towards learning solution.3

DEVELOP the initiative. Build the learning solution to potential specification.4

DELIVER potential solution. Exceed the learning expectations.5

DISCERN the impact. Evaluate the impact and continuosly improve.6

In short, the SDP model enables AMRB to identify the appropriate talents i.e. team players, assess their learning style and impact,plan their next development agendas and measure the impact of program learning results. Simply put, we can use the model totrain the self-potentials to take the next step up towards team leadership ladder.

On a separate note, AMRB has started discussion with the Malaysian Maritime Academy (“MMA”) to provide a structured SeniorOfficers and Senior Engineers Leadership Assessment Programme. Designed as a series of comprehensive training sessions, thefirst pilot project will focus on, ‘Maritime Leadership in an Age of Uncertainty for Emerging Leaders’. To further augment the realityand practicality of this project, participants will be exposed to sessions using simulator equipment provided by the MMA.

Training & Development Programmes

Following is a comprehensive list of training and development programmes organised for staff in FY2016:

PROGRAM TITLE HEALTH, SAFETY, SECURITY AND ENVIRONMENT OHSAS 18001:2007 LEAD AUDITOR WORKPLACE INSPECTION FOR SAFETY & HEALTH AUDITORS BASIC CORROSION TECHNOLOGY & GOOD PAINTING PRACTICES DEFENSIVE DRIVING-FOUR & TWO WHEEL VEHICLE BASIC OCCUPATIONAL FIRST AID & CPR +AED JOB HAZARD ANALYSIS & REVIEW BASIC SAFE HANDLING OF FORKLIFT TRUCK SAFETY LEADERSHIP FOR SUPERVISOR BEHAVIOURAL BASED SAFETY TRIPOD BETA INCIDENT INVESTIGATION

INTERNAL AUDIT DEPARMENT AUDIT COMMITTEE CONFERENCE

CORPORATE SERVICES DEPARTMENT NEW COMPANY BILL-COMPANIES ACT 2016 ADVANCE COMPANY SECRETARIAL CORPORATE GOVERNANCE DIRECTOR DUTIES ON REGULATIONS 2016 MAICSA- A GUIDE OF CLOSURE COMPANY




PROGRAM TITLE CORPORATE SERVICES DEPARTMENT AMENDMENT TO BURSA LISTING MAICSA - ANNUAL CONFERENCE 2016 AUDIT COMMITTEE WORKSHOP DIRECTOR REMUNERATION UPDATES SURUHANJAYA SYARIKAT MALAYSIA CONFERENCE 2016 AMENDMENT TO BURSA LISTING IMPACT OF THE NEW COMPANIES ACT QUALIFIED RISK DIRECTOR SERIES 01-08 ROLE OF CHAIRMAN & DIRECTOR

ISM-ISPS INCIDENT COMMAND TRAINING (THEORY & SIMULATION) SAFE HANDLING FORKLIFT

RM BUSSINESS RISK ASSESSMENT TEMPLATE -3 SESSIONS T-BOSIET – 3 SESSIONS NAVIGATING UPDATES BUILDING LEADERS TALENT PROGRAM [ TEAM ALIGNMENT] -GROUP 01 & GROUP 02

QUALITY IMS PROCESS BASED ISO 5 S TRAINING

PROJECT & SERVICES DEPARTMENT DOMESTIC SHIPPING LICENSE KURSUS EJEN KASTAM

ICT COMMUNICATION SQL ADMIN SERVER DATABASE CCNA CERTIFICATION SMS AWARENESS & UNDERSTANDING

PROGRAM TITLE QUALITY UNDERSTANDING OF ISO 9001:2015 & ISO 14001:2015 MANAGEMENT SYSTEM

PROJECT & SERVICES DEPARTMENT BEST PRACTICE OF CARGO SECURING FOR OFFSHORE OPS

HEALTH, SAFETY, SECURITY AND ENVIRONMENT BEST PRACTICE OF CARGO SECURING FOR OFFSHORE OPERATIONS ROOT CAUSE ANALYSIS DEVELOPING EFFECTIVE HEALTH & SAFETY COMMITTEE

HUMAN RESOURCES DEPARTMENT LEADING TEAM THROUGH EMOTIONAL INTELLIGENCE

Thus far in FY2017, we have organised the following for staff:




Employee Engagement & Communication

We continued to actively engage with employees through various channels in FY2016. This includes face to face interactions suchas town halls, crew engagement sessions and video/teleconferences.

Notably in FY2016, we leveraged actively on our infotainment system – a series of electronic screens placed at strategic locationsacross our office. The screens are then used to disseminate key corporate messages, updates, announcements and relevantinformation.

The infotainment systems serves to reinforce key messages disseminated via other means. It is a simple and cost-effective meansto re-convey the desired message to employees. Repetition of messages broadcasted is also a key factor in effecting culture andmind-set change and the infotainment system complements our overall efforts. Given below is the type of content that was airedon our infotainment system:

NO DEPARTMENT INFORMATION DETAILS

1 HEALTH, SAFETY, SECURITY AND 1. HSSE PERFORMANCE UPDATES ENVIRONMENT 2. HSE CAMPAIGN 3. HSSE NEWSLETTER 4. SECURITY UPDATES 5. HSE ALERT 6. EVACUATION VIDEO

2 QUALITY 1. ISO REQUIREMENTS 2. 5S EDUCATION VIDEO

3 ISM 1. REQUIREMENT LEGAL REGISTER 2. PMS GUIDELINES 3. NCR SUMMARY

4 MANNING 1. INFO TO CREWS (MLC 2006 requirement)

5 JABATAN KEBAJIKAN DAN KEMASYARAKATAN 1. TAZKIRAH SEMASA 2. WAKTU SOLAT JAKIM 3. JADUAL KULIAH BULANAN

6 CORPORATE AFFAIRS 1. CORPORATE EVENT / CSR XTVT 2. CORPORATE VIDEO 3. VISION MISSION / SHARED VALUES

MOVING FORWARD

AMRB’s strong focus and commitment to corporatesustainability has brought about significant inroads andmilestone achievements in our journey thus far. In our currentchallenging environment, this has certainly provided theopportunity to re-look our organisational shape and keyprocesses to be more effective and efficient by realigning ourfunctions within the Group, tightening our internal controls andenhancing Standard Operating Procedures.

Working in tandem with this restructuring exercise is our initiativeto inculcate a cultural transformation across the organisation.This is an on-going effort from each and every one of us toensure the success of the current restructuring and futurechange initiatives. As stated earlier, without the right culture,nothing we do to follow through is going to make any difference.

If we do not buy into the culture beliefs as generated by ICAREthen change will not happen. We have to change ourselves firstto affect the desired change to the organisation and to deliveroperational excellence as we have envisioned. Sustainability ofthe organisation is dependent on the culture we nurture.

On the sound understanding that HSSE is the essential criteriato ensuring successful execution in any project, AMRB willunwaveringly continue to maintain good HSSE practices andrecords in every aspect in our project undertaking. Our ability toreduce downtime and avoid costly incidents is a value-add ofour services and provides a competitive edge in themarketplace. This, in return, brings benefit to both the Client andCompany, and is truly reflective of a symbiotic relationship.


Since its inception over a decade ago, Alam MaritimResources Berhad (“AMRB”) has always madeCorporate Social Responsibility (“CSR”) as part of theorganisation’s key responsibilities. Despite the challenging business scenario of FY2016, we continue to seek ways to reach out and make apositive difference to the community. While we do face constraints in our capabilities to offer materialassistance, our desire to extend a helping hand has only been strengthened during these difficult times.Throughout FY2016, the Management and employees of AMRB continued to organise and participate invarious CSR initiatives.

We believe that the Group should continue to adopt a holistic view in managing CSR programs. It should gobeyond financial performance and fully embrace its unique and privileged position to serve the community. Inthis way, we are able to deliver real value beyond fiscal metrics that will contribute to the development of abetter organisation, community and country. Thus the Group strives to make a positive impact on thecommunity and employees through its various activities and programmes undertaken every year.

Where possible, we have undertaken CSR activities also for our employees. Rather than material assistanceof charity, the CSR efforts for our staff are more focussed on maintaining their morale and motivation,especially for offshore crews on vessels. This include communication and dialogues, sharing of information,specific character building courses and other initiatives.


CORPORATE SOCIAL RESPONSIBILITY

1 Alam Health Day




Making a Positive Difference to the Community

During the holy month of Ramadhan, AMRB organised its first Jejak Muallaf programme on29 May 2016. Under this programme, a group of AMRB volunteers had traced and identifiedthe deserving candidates and visited them at their homes, delivering them with basic foodsupply and providing financial assistance.

Tracing the poor and pay Fidyah (rice) and contribute “infaq” as living assistance. Cashdonated from Surau Al-Husna box was used to purchase and provide them with otheressential and household items. Altogether, the team visited six homes and touched the livesof many underprivileged individuals and families. Their warmth and appreciation were deeplyfelt by our volunteers and served to strengthen their resolve to continue this uplifting initiative.

Also during Ramadhan, ‘Majlis Berbuka Puasa’ was held on 18 June 2016 at Pusat JagaanMahmudah Malaysia (“PJMM”), Sungai Purun, Semenyih. Essentially, the event saw AMRBstaff breaking fast with the centre’s 30 inmates, most of whom were needy old folks anddonating funds collected by our staff towards funding PJMM’s activities. Importantly, AMRBstaff participated in full force and played an active role in organizing the event, which includesuch activities as stage decoration, emcee and photographer.

With the arrival of Syawal, AMRB had its customary Hari Raya Aidilfitri gathering for staff.This year’s gathering saw staff undertaking potluck with attendees sharing delicacies witheach other; a pleasant difference that creates closer bonds of friendship and camaraderie.Shared food and communal gatherings provide an ideal occasion for staff to bond beyondthe office environment and work related matters, which in turns helps to build a strongerAMRB employee community.

In the month of February, AMRB organised the Kembara Rohani programme to reach out to100 school children from four schools as part of its ‘Kem Jatidiri dan Motivasi’ programme,targeted at students sitting for UPSR examinations. Six AMRB staff served as Master Trainerand facilitators to guide and assist the 12-year olds in preparing for their examinations.Consisting of both indoor and outdoor activities, the one-day course also focussed ondeveloping young leadership skills, providing mental and spiritual guidance. The event washeld at Taman Hutan Lagenda, Ledang, Johor.

Supporting Staff through Sports & Social Activities

AMRB continues to emphasise the importance of a healthy lifestyle. The Kelab SukanRekreasi and Kebajikan AMRB (“KSRK”) has long been driving this agenda through variousactivities and programmes for staff.

This year, KSRK, continued to hold its various sporting and wellness activities which includedregular aerobic, badminton, bowling and football sessions for staff. Besides the physicalworkout KSRK’s activities invariably serve to increase communication and networkingamongst staff from different departments as well.

Jejak Muallaf

Pusat Penjagaan Mahmudah

Kembara Rohani

KSRK




Group Inter-Department /Subsidiaries BowlingTournament

Gotong Royong.

LOOKING AFTERTHE SPIRITUALNEEDS OF OUR

EMPLOYEES, WECONTINUED TO

HOLD OURRELIGIOUS TALKS

BY OUR USTAZFOR THE BENEFIT

OF STAFF.

Naturally, the highlight is the annual Group Inter-Department / Subsidiaries BowlingTournament, this year held on 27 May 2016. Over 120 employees from 20 departmentsparticipated sportingly to vie for the title of AMRB bowling champion.

KSRK in collaboration with QHSE also held its 1 Alam Health Day on 16 January 2016 atPresint 2, Putrajaya, attended by 160 people. A follow up event was held on 22 October2016 at Taman Botani Negara, Shah Alam with participation of 130 attendees. Both eventshad a similar range of activities for employees and their family members to participate i.e.cycling, Zumba aerobics or jogging. The success of these events was not just thecamaraderie generated amongst colleagues from various departments, but the closer rapportof employees within their respective family units.

Given the large number of attendees and the outdoor location of the event, safety wasemphasised with the Lead Marshall providing a safety briefing to all participants prior toactivities commencing.

Taking CSR Offshore

CSR efforts were also extended to our offshore vessels where a gotong-royong (communalclean-up) activity was held aboard MV Setia Ulung (26-28 July 2016) and MV Setia Sakti(16-19 August 2016). Both vessels were in anchorage during the clean-up periods and allHSE rules were complied with to ensure a safe and secure environment.

Both events saw the involvement of senior management and representatives from alldepartments. AMRB’s Managing Director officiated the activity and personally led the clean-up effort on both vessels. On average, more than a hundred staff participated in each gotong-royong event.

The clean-up consisted of general cleaning of the vessels such as washrooms, messingroom, galley and re-arranging of vessel documents. The vessels were also repainted. Apartfrom clean-up work, the event also consisted of other activities such as religious talk andcongregational prayers.

For on-shore staff, spending a few nights on board was an experience for them. It providedfirst-hand exposure to the working environment of offshore crews and the challenges faceddaily. On the fun side, a barbecue dinner was held on-board the vessel. The event was wellreceived by all parties and was even commended by our clients as an exemplary initiative.




Looking after the spiritual needs of our employees on-shore, we continued to conduct our dailycongregational Zohor and Asar prayers and hold religious talks by internal and guest Ustaz for the benefitof staff. Such talks enable employees to deepen their religious knowledge. It also helps staff in the areasof character building, spiritual strength and to uplift their morale during a challenging year under review.The daily stresses of work and life can dampen the hearts of employees on occasion. Such talks serveto bolster their hearts and to renew their spirit.

Such CSR initiatives and sporting activities do not only increase the morale of the staff, but also inspirethem to organise similar initiatives within their own scope to assist others. AMRB is indeed committed tocontinue such CSR initiatives with the strong support of our passionate and caring employees.

Pusat Penjagaan Mahmudah


YEAR CERTIFICATE TITLE AWARDED BY

2016 THE MOST PERFORMED VESSEL IN 2015 SERVING AT PCSB- PMO WATER PETRONAS CARIGALI SDN BHD FOR MV SETIA YAKIN

2016 GOLD AWARD 2015 SAFETY RECOGNITION FOR HURT FREE OPERATIONS EXXONMOBIL EXPLORATION AND EXCEEDING 100,000 MANHOURS AWARDED TO PRODUCTION MALAYSIA INC ALAM MARITIM (M) SDN BHD

2016 IN RECOGNITION OF MARINE SAFETY AND PERFORMANCE FOR EXXONMOBIL EXPLORATION AND YEAR 2015 SPECIAL RECOGNITION AWARD OF THE YEAR PRODUCTION MALAYSIA INC ALAM MARITIM (M) SDN BHD

2016 CERTIFICATE OF APPRECIATION PRESENTED TO ALAM HIDRO LUNDIN PETROLEUM (M) SDN BHD IN RECOGNITION OF SAFE CONTRIBUTION FOR INTERVENTION CAMPAIGN FOR LUNDIN PETROLEUM PROVISION OF ROV AND DIVING SPREAD FOR SEARCH AND RESCUE OPERATION.

2016 CERTIFICATE OF RECOGNITION PRESENTED TO ALAM MARITIM (M) PETRONAS SDN BHD FOR COMPLETION OF PACKAGE 2 PFLNG-1 OFFSHORE WORKS, MOORING SYSTEM INSTALLATION WITHOUT LTI & BEST HSE PRACTICES THROUGHOUT PROJECT EXECUTIONS

2016 ACHIEVED ‘A’ RESULT FOR CONTRACTOR PERFORMANCE EVALUATION PETRONAS CARIGALI SDN BHD (CPE) REPORT CARD BASED ON BI-ANNUAL CPE JANUARY 2016 EXERCISE


LIST OF HSE AWARDS & RECOGNITIONS FOR FY2016



LIST OF HSE AWARDS & RECOGNITIONS FOR FY2016

YEAR CERTIFICATE TITLE AWARDED BY

2016 WINNER FOR APRIL’S MARINE SAFETY CAMPAIGN ON ‘MANAGING GOOD REPSOL OIL & GAS MALAYSIA HOUSEKEEPING’ AWARDED TO MV SETIA UNGGUL LIMITED

2016 WINNER FOR JUNE’S MARINE SAFETY CAMPAIGN ON ‘SAFE CHEMICAL REPSOL OIL & GAS MALAYSIA MANAGEMENT CATEGORY’ AWARDED TO MV SETIA HANDAL LIMITED

2016 IN RECOGNITION OF MARINE SAFETY AND PERFORMANCE FOR 2ND EXXONMOBIL EXPLORATION AND QUARTER OF 2016, SAFETY RECOGNITION AWARD, Q2 SAFETY QUIZ PRODUCTION MALAYSIA INC TOP SCORER AWARDED TO MV SETIA TEGUH

2016 IN RECOGNITION OF MARINE SAFETY AND PERFORMANCE FOR EXXONMOBIL EXPLORATION AND 2ND QUARTER OF 2016, BUSINESS PARTNER OF THE QUARTER AWARD PRODUCTION MALAYSIA INC

2016 RECOGNITION TO ALAM MARITIM (M) SDN BHD FROM PFLNG1 PROJECT DEVELOPMENT AND SPONSOR AND MANAGEMENT TEAM FOR CONTRIBUTION AND PRODUCTION PETRONAS DEDICATION TO ENSURE A SAFE DELIVERY OF THE PROJECT 'FOCUSED RECOGNITION FOR ACHIEVING ONE MILIION MAN HOURS DURING PFLNG SATU PROJECT COMMENSIONING'



FINANCIAL CALENDAR

28 APRIL 2016Notice of Eleventh Annual GeneralMeeting.

29 APRIL 2016Annual Report 2015.

24 MAY 2016First Quarter Report on consolidatedresults for the financial period ended 31 March 2016.

3 JUNE 2016Eleventh Annual General Meeting.

24 AUGUST 2016Second Quarter Report on consolidatedresults for the financial period ended 30 June 2016.

25 NOVEMBER 2016Third Quarter Report on consolidatedresults for the financial period ended 30 September 2016.

28 february 2017Fourth Quarter Report on consolidatedresults for the financial period ended 31 December 2016.

28 APRIL 2017Annual Audited Accounts for the yearended 31 December 2016.



STATEMENT OF CORPORATE GOVERNANCE

The Statement of Corporate Governance (“Statement”) of Alam Maritim Resources Berhad (“Alam Maritim” or “Company”) aims toprovide an insight of the Corporate Governance practices of the Company under the leadership of the Board of Directors (“Board”).

The Board remains fully committed to maintaining high standards of corporate governance and ensuring that the Company and itssubsidiaries’ (“Group”) business and affairs strictly adhere to the doctrine and principles of good corporate governance to safeguardthe Group’s assets, enable sustainable performance and ultimately enhance shareholders’ value.

The Board acknowledges the significance of maintaining good corporate governance practices and plays an active role in advising,reviewing and evaluating the Group’s governance framework and continues to reinforce the existing corporate governance practicesin order to remain relevant with developments in market practice and regulations.

The Group’s corporate governance framework is built on the following pertinent requirements and guidelines:-

• Companies Act, 1965 (“the Act”);• The corporate governance requirements of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities

Berhad (“Bursa Securities”);• The principles and recommendations of the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) issued by

Securities Commission Malaysia; • Corporate Governance Guide: Towards Boardroom Excellence, 2nd Edition issued by Bursa); and• Minority Shareholders Watchdog Group (“MSWG”)’s Malaysia-ASEAN Corporate Governance Scorecard.

Testament to the Group’s continuous commitment in advocating transparency, accountability and disclosure, the Group was rankedamongst the Top 100 Companies with Good Disclosures at the Malaysia-ASEAN Corporate Governance Transparency Index,Findings and Recognition 2016 organised by MSWG. The Group was also nominated for the Best Quality of Annual Reports/FormalDisclosure for all Malaysian Companies under the Investor Relations Awards 2016.

The Board is pleased to disclose the extent of the Group’s compliance with the principles and recommendations set out in theMCCG 2012 during the financial year ended 31 December 2016, as set out hereunder.

BOARD OF DIRECTORS

The Group continues to be led and controlled by an active, engaged and experienced Board. Throughout the year, the Boardcontinued to drive and effectively steer the Company with strategic direction through active engagement with the Management.

Board Charter

Since its adoption, Alam Maritim’s Board Charter (“Board Charter”) serves as a guide for good corporate governance within theGroup. The Board Charter provides reference for the Directors in relation to the Board’s role, powers, duties and functions and isset out not only in accordance with applicable rules and regulations but also guided by the MCCG 2012 and best practices. TheBoard Charter aims to ensure that Board members are aware of their roles and responsibilities and also serves as a clear sourceof reference to all stakeholders. The Board Charter covers inter-alia, the objectives of the Board, duties and responsibilities, powers,roles of the Chairman, Group Chief Executive Officer (“GCEO”), Non-Independent Executive Directors (“NIEDs”) and IndependentNon-Executive Directors (“INEDs”). It will be reviewed from time to time to ensure that it remains relevant and consistent to currentrules and regulations.

The Board Charter is accessible on the Company’s official website at www.alam-maritim.com.my


Roles and Responsibilities of the Board

The Board has the collective responsibility for the overall conduct and performance of the Group’s business and affairs bymaintaining effective control over management oversight, setting the strategic direction of the Group and promoting ethical conductin its business dealings. In discharging its roles and responsibilities, the Board is mindful of the need to safeguard the interests ofall stakeholders.

The Board assumes the following core responsibilities which serve as guiding principles:-

• Review and Adopt a Strategic Direction of the CompanyThe Board reviews and approves the proposed strategies and the annual budget for the ensuing year and sets the targetsand action plans for the Company which will be tabled and deliberated to the Board on quarterly basis. A periodic monitoringand reporting system is in place which highlights significant variances of key performance indicators against actual and budgetto monitor the Company’s performance.

A Board session with Senior Management was held in December 2016 for the Board to thoroughly review, deliberate on andapprove the FY2017 annual budget, financial targets and strategic direction on the Group.

• Oversee and Evaluate the Conduct of the Company’s businessesThe Board has empowered the Board Nomination and Remuneration Committee (“BNRC”) to deliberate on the results ofFY2016 Directors and Board Committees Performance Evaluation (“DBCPE”) before this is tabled for its approval during thefourth quarter financial results in February 2017.

Upon approval by the Board, the Group’s balance score cards were monitored on quarterly basis by the Executive Directorsat the Senior Management Meeting together with the Head of Business Units and Departments.

It is mandatory for the Business Performance Report to be presented to the Board at every Board meeting. Performance ismeasured and tracked against the approved annual budget.

• Identify and Manage Principal RisksThe Group Risk Management Working Committee (“GRMWC”) monitors any risk that the business of the Group as a wholemight face. The Board Risk Management Committee (“BRMC”) will then be updated on any risk issue that could jeopardisethe business, including corporate compliance matter. The Board, through the BRMC, ensures appropriate management ofrisks and constantly monitors the review and management of operational risks by evaluating the appetite and tolerance levelof the Group’s Top 5 Corporate Risks. This ensures the Company’s business sustainability.

Based on the results of FY2016 DBCPE, the Board recognises the need for a strong risk management discipline across theCompany to ensure risks are effectively measured and mitigated.

Details on the Company’s risk framework are set out in the Statement on Risk Management and Internal Control as well asthe Risk Management Report of this Annual Report.

• Monitor Succession Planning The BNRC is entrusted by the Board to ensure effective human capital development, talent retention and succession planningfor both the Directors and key management positions in the Company to ensure business continuity.

The BNRC also monitors the performance of the Board, reviews and evaluates the suitability of potential candidates and theirexperiences, to fill any gaps therein.

The succession planning is to ensure all candidates appointed to senior management positions possess the appropriate skills,capabilities and are of high quality. The Board had adopted a Succession Development Plan to ensure that there are platformsin place to provide for the orderly succession of senior management.

Based on the results of FY2016 DBCPE, the Board agreed that succession planning of the Board and Pivotal position is crucialmoving forward. The Board concurred to give more focus on the matter, and the BNRC is to deliberate on it accordingly.




• Monitor the Existence of Good Shareholder and Investor Relation (“IR”) StrategyThe Board recognises that a sound IR and shareholder strategy are vital in managing investors’ interest and perception of theCompany. As part of effective shareholder communications strategy, the Company maintains and keeps current its corporatewebsite and to be made available, via its IR webpage.

• Review the Adequacy and Integrity of the Company’s Internal Control Systems. The Board is ultimately responsible for the adequacy of the Company’s internal control system. Internal control systemsthroughout the Company are managed by the Group Internal Audit and Risk Management Department (“GIARM”). GIARMhas jurisdiction to audit any division or subsidiary of Alam Maritim and to report its findings directly to members of the BoardAudit Committee (“BAC”). Significant findings from the audit reports were highlighted and deliberated on at the BAC meeting.Details of the Company’s internal control system and the review of its effectiveness are respectively set out in the Statementon Risk Management and Internal Control and Risk Management Report of this Annual Report.

Beyond the main responsibility of maximising shareholders’ value, the Board has also taken into consideration the interests andvalues of its business partners and other stakeholders. The Board in ensuring sustainability of the business has been supportivetowards initiatives of the Government and business partners in promoting ethical business conducts and creating a businessenvironment that is free from elements of corruption. The Board urges that the Group's integrity is maintained in all businessconducts and interactions with its business partners, including the Government.

The Board emphasises on the importance of health, safety, security and employees' sustainability by ensuring that priority andsufficient resources are given to address their interests in addition to the focus on the bottom line figures. Further, the Board withfull commitment towards promoting the Health, Safety, Security and Environment (“HSSE”) in the Group's operations and businessactivities ensures that compliance to laws and regulations in relation to environmental protection is one of the items of review atthe BRMC. A more detailed report on the Group's Corporate Sustainability and Corporate Social Responsibility initiatives,involvements and activities are set out on page 48 to 63 of this Annual Report.

Separation of Power between the Board and the Management

The functions of the Board, the Chairman, the NIEDs and INEDs are distinguished to ensure the smooth running of the Company’sbusiness and operations. Although the respective principles, roles and responsibilities of the Chairman, NIEDs and INEDs aresegregated, their functions are mutually co-dependent, ensuring effective and efficient execution of their duties and responsibilities.INEDs play a leading role in the Board Committees, whilst Management and third parties are invited into the Board Committees asand when required.

In line with Recommendation 3.5 of the MCCG 2012, the Chairman of the Company is an INED who assumed the position asChairman on 21 August 2014. As the Chairman, Fina Norhizah binti Haji Baharu Zaman, is primarily responsible for ensuring theintegrity and effectiveness of the governance process of the Board and acts as a facilitator and consults the Board promptly overany matter that gives her cause for concern. The Chairman of the Board is responsible for representing the Board to theshareholders. The Chairman acts as a facilitator at Board meetings to ensure that no Board member, whether executive or non-executive, dominates the discussion. The Chairman also ensures that appropriate discussions take place and that relevant opinionsamong Board members are forthcoming. The Chairman further ensures that discussions result in logical and understandableoutcomes, which will lead to appropriate and considered decisions by the Board.

The Group Managing Director (“GMD”), Datuk Azmi bin Ahmad will assist the Chairman in the effectiveness of implementation ofBoard policies, making operational decisions and monitoring the day-to-day running of the business, including defining the limits ofthe Management's responsibilities.

Whereas, the NIEDs are responsible for the day-to-day operations of the Group whereby operational issues and problems arediscussed, major transactions and matters relating to the Group are reviewed and also to formulate operational strategies.

To facilitate the discharge of the Board’s responsibility and oversight role, the Board has delegated specific tasks to Board andManagement Committees which operates within defined terms of reference. These Committees have the authority to examineparticular issues and report to the Board on their proceedings and deliberations together with their recommendations.




All deliberations and decisions taken by the Board Committees are documented and approved by the respective Chairman of theCommittees prior to submission as agenda items for deliberation at the meetings of the Board. The ultimate responsibility for thefinal decision however lies with the Board.

The functions and power delegated by the Board to the Management to manage the daily business and operations of the Companyare spelt out in the Financial Limits of Authority (“FLOA”) adopted throughout the Group. The schedule of matters reserved for thecollective decision of the Board is also enshrined in the FLOA. The FLOA is reviewed from time to time to ensure that they arerelevant and up to date. The FLOA was last reviewed in January 2016.

In accordance with the FLOA, operational issues are delegated to the GCEO. The GCEO is accountable to the Board for the overallorganisation, management and staffing of the Group and for its procedures in financial and operational matters, including conductand discipline. The GCEO, supported by the Senior Management Team, implements the Group’s FLOA as adopted by the Boardof Directors, overseeing the operations as well as developing, coordinating and implementing business and corporate strategies.The GCEO is responsible for the stewardship of the Group’s direction and the day-to-day management of the Group.

Further delegation is cascaded by the GCEO to the Senior Management Team of the Group. At the Senior Management level,various working committees such as HSSE Working Committees, Management Committee, Credit Control Committee and GRMWC,are established to assist the Board and Board Committees in the Company’s decision making process, implementation and control.

Board Composition and Balance

Article 93 of the Company’s Articles of Association (“AOA”) states that the total number of Directors shall not be less than two (2) andnot more than twelve (12) Directors. The Board currently consists of six (6) members comprising of three (3) NIEDs and three (3)INEDs. Currently, 50% of the Board members are INEDs, complying with the Paragraph 15.02 of the MMLR of Bursa Securities.

The three (3) INEDS of the Company, namely Fina Norhizah binti Haji Baharu Zaman, Dato’ Haji Ab Wahab bin Haji Ibrahim andAinul Azhar bin Ainul Jamal were not former employees of the Company. They are independent from Management and are able toexercise independent judgement and participate positively in all the Board’s deliberations. They also play a pivotal role in corporateaccountabilities as they provide unbiased and independent views, advice, opinions and judgement at Board and Board Committeesdeliberations as well as safeguard the interests of other parties such as minority shareholders and other stakeholders. These valuesare most clearly illustrated in the Board Committees chaired by the INEDs, namely the BAC, BRMC and BNRC.

The INEDs are not involved in the day-to-day management of the Company and are not party to any business dealings or anyother relationship with the Group that could reasonably be perceived to materially interfere with their exercise of unfettered andindependent judgement.

The Board is of the view that the current composition is a mix of knowledge, skills and expertise relevant to the Company’s operationswhich provides strong and effective leadership, strategic direction and necessary governance to the Group. The profiles of therespective Directors are set out on pages 34 to 39 of this Annual Report.

Tenure of Independent Directors

The Company has not established term limits for the INEDs as the Board believes that term limit does not in any way interfere withtheir exercise of independent judgement and ability to act in the best interest of the Company. Moreover, the term limit has thedisadvantage of causing to lose the contributions of the INEDs.

Diversity

The Board acknowledges the importance of boardroom diversity as recommended by the MCCG 2012. The Board has alwaysbeen in support of non-discrimination in their selection of Directors and in the process of recruitment. Nevertheless, the Boardbelieves that the selection criteria of a Director, guided by the competencies, skills, experience and knowledge of the individualcandidate, still remain a priority as well as time commitment of the candidates in discharging their roles and responsibilities throughattendance at their respective meetings. The Board decides on the appointment of Directors and members to the Committees ofthe Board after considering the recommendations of the BNRC.




Currently, the Company has one female representation on the Board. The Board is committed in ensuring that its compositionreflects the diversity in line with Recommendation 2.2 of the MCCG 2012.

The presence of Fina Norhizah binti Haji Baharu Zaman on the Board since the year 2010, sends the message that the genderdiversity is welcomed and appreciated by the Board.

The Board is of the view that the current composition creates positive, value-relevant impact on the Company. While the Boardstrives to promote diversity, appointments of Directors are still premised on merit and the knowledge and expertise which must berelevant to the Company.

Independence of the Board of Directors

During the financial year under review, the Board of Directors assessed the independence of its INEDs based on criteria set out inParagraph 1.01 of the MMLR of Bursa Securities. To date, all three (3) INEDs satisfy the following independence criteria:-

• independence from Management and free from any business or other new relationship which could interfere with independentjudgement or the ability to act in the best interests of the Company;

• not involved in the day-to-day operations of the Company other than when collective Board approval is required. This mitigatesthe risk of undue influence from third parties and allows INEDs to exercise fair judgement; and

• declare their interest or any possible conflict of interest on any matter tabled prior to the commencement of the Board meetings.In the case of conflict of interest, Directors are required to recuse themselves and abstain from deliberation to allow unbiaseddiscussion and decision.

The INEDs’ respective backgrounds, experience and understanding of good governance enable them to exercise objectivejudgement. They are not easily influence by non-related matters and able to act in the best interest of the Company and safeguardthe stakeholders interests.

Apart from the above criteria, the independence of the all the Company’s Directors including the NIEDs is assessed annually throughthe DBCPE Survey. This exercise involves questionnaires that cover principles, perspective and personal insights of the respectiveDirectors and are completed by all Directors on themselves and on their peers.

The Board has taken note on the MCCG 2012's recommendations on the tenure of an independent director that should not exceeda cumulative term of nine (9) years. However, an INED may continue to serve the Board of Directors upon reaching the nine (9)year limit subject to the INED’s re-designation as a Non-Independent Non-Executive Director. In the event the Board of Directorsintends to retain the Director as Independent after the latter has served a cumulative term of nine (9) years, the Board of Directorsmust justify the decision and seek shareholders’ approval at general meeting.

In justifying the decision, the BNRC is entrusted to assess the candidate’s suitability to continue as an INED based on the criteriaon independence.

At the coming 12th Annual General Meeting (“AGM”), the Company will seek its shareholders’ mandate to retain Dato’ Haji AbWahab bin Haji Ibrahim as an INED of the Company. He has served the Company as an INED since 2 May 2006, for a cumulativeperiod of over nine (9) years.

The BNRC, as part of its Terms of Reference (“ToR”) has made the necessary assessment and recommended to the Board ofDirectors that Dato’ Haji Ab Wahab bin Haji Ibrahim be retained as an INED of the Company based on his ability to maintain hisindependence of judgment and to express and maintain unbiased views without any influence. Dato’ Haji Ab Wahab bin Haji Ibrahimhas a good understanding of the Company’s business, the challenges faced by the Company and the environment in which theCompany operates. The Board values his contribution to the Company and he is also committed in performing his functions andduties as the Chairman of the BAC, including but not limited to attendance at Board and Board Committees’ meetings. This proposedresolution is in line with the recommendation under the MCCG 2012 and this would allow him to continue to serve as Chairman ofthe BAC, pursuant to the requirement of Paragraph 15.10 of the MMLR of Bursa Securities.

INED seeking retention has abstained from all deliberations regarding his retention.




In line with the recommendations of the MCCG 2012, the BNRC has also performed an annual review of the independence ofINEDs. In assessing the independence of INEDs, the BNRC will consider whether the Director has met the independence guidelinesas set out in Paragraph 1.01 of the MMLR of Bursa Securities which includes a series of objective tests. The BNRC will also takeinto account if the Independent Director has or has had any relationship with the Company other than as a Director as well as theIndependent Director’s ability to exercise independent and objective judgement at all times and to act in the best interests of theCompany.

For the FY2016, the BNRC has assessed and concluded that none of the INEDs have any business or other relationship whichcould materially interfere with the exercise of independent judgement, objectivity or the ability to act in the best interests of theCompany. The BNRC will continue, on an annual basis, to assess the independence of the INEDs.

Fostering Commitment of the Board

The Board is of the opinion that the Board Members have no issue regarding their time commitment and attention to the affairs ofthe Company. Such is evidenced by the attendance of directors at Board and Committee meetings. These have demonstrated highlevel of commitment in Board members being able to accommodate the Company according to its needs.

The schedule for the Group’s Board meetings was formulated in December and shared with the directors before the beginning ofthe year to ensure the Directors’ time commitment.

A total of seven (7) meetings were held during the year: four (4) scheduled Board meetings to deliberate and decide on quarterlyfinancial results, performance reports, pertinent strategic matters, risk assessment and important issues raised that required theBoard’s input and approval and various other corporate matters based on predetermined agendas. Two (2) special meetings wereheld during the year; of which the adoption of audited accounts was held in March 2016, while a 2017 Proposed Budget was heldin December 2016. The Board has also attended one (1) meeting in May 2016 prior to AGM to deliberate on AGM’s matters.

The Board members have successfully attended all of the meetings during the financial year, thus have complied with the minimum50% attendance requirement in respect of Board meetings as stipulated by the MMLR of Bursa Securities. The attendance of themembers of Board at the Board meetings and 11th Annual General Meeting for the financial year ended 31 December 2016, are asfollows:-

Board of Directors Designation Board Meeting 11th AGM % of Attendance Attendance Attendance

Fina Norhizah binti Haji Baharu Zaman Independent 7/7 1/1 100%(Chairman) Non-Executive Director Datuk Azmi bin Ahmad Non-Independent 7/7 1/1 100% Executive Director

Shaharuddin bin Warno @ Rahmad Non-Independent 7/7 1/1 100% Executive Director

Ahmad Hassanudin bin Ahmad Kamaluddin Non-Independent 7/7 1/1 100% Executive Director

Dato’ Haji Ab Wahab bin Haji Ibrahim Independent 7/7 1/1 100% Non-Executive Director

Ainul Azhar bin Ainul Jamal Independent 7/7 1/1 100% Non-Executive Director




Paragraph 15.06 of Main LR provides that Directors of listed company may not hold more than five (5) directorship in listedcompanies. None of the Board members of the Company serve in more than five (5) listed companies.

The NIEDs of the Company also do not serve as a Director on other listed companies.

Annual Assessment of Directors

At the Board’s meeting on 25 February 2016, the BNRC tabled the results of the FY2016 DBCPE. The assessment considered thecontribution and performance of Directors as regards to their competency, time commitment, integrity and experience in meetingthe needs of the Group and suggestions to enhance board effectiveness. The evaluation process involved a peer and self-reviewassessment, where Directors assessed their own and also their fellow Directors’ performance and was led by the Chairman of theBNRC and supported by the Company Secretary. All assessments and evaluations carried out by the BNRC in the discharge of itsfunctions were properly documented. The overall results for the Board and Board Committees’ self-evaluation were positive andreceived highly satisfactory advisory ratings across all areas evaluated. The key areas of evaluation, amongst others, were:• independence;• mix of skills and experiences;• key strengths; and• areas of improvement.

The BNRC undertook gap assessment to identify the strengths and areas for improvement to further strengthen the Board and theBoard Committees.

The BNRC has adopted a questionnaire methodology for Board assessment. The criteria used, amongst others, for the assessmentof individual Directors include their contribution and performance, participation, quality of input, roles, competency and timecommitment whereas for the Board and Board Committees, evaluations are based on composition, functionality, mix of skills andknowledge, decision making, frequency of meetings, risk management and adequacy of information and processes.

The BNRC had also deliberated, reviewed and considered the size, structure and composition of the Board and the BoardCommittees, including the required mix of skills and experience, core competencies of the Directors for the effective and efficientfunctioning of the Board and the Board Committees and evaluated the effectiveness of each Director, Board Committee and Boardas a whole.

The BNRC was of the view that the current size, structure and composition facilitated good discussions and encouragedcontributions and participations from all the Directors. The BNRC had recommended to the Board for the Board composition to bemaintained, with the desire to achieve a balance board composition. From the assessment of the financial year under review, theBNRC is satisfied that there is an appropriate size and mix of skills, experience and core competencies in the composition of theBoard as well as a balance of INEDs and NIEDs.

A separate independence assessment was carried out by the BNRC by way of Director’s self and peer evaluation in order to ensurethat Independent Directors are able to continue to bring independent and objective judgment to the Board. Directors’ peer evaluationresult continued to be high in FY2016. This result indicates a positive level of Board dynamics for the Board to further drive itsperformance.

Overall, the results of FY2016 DBCPE indicate healthy Boardroom dynamics with good working relationships among the Boardmembers.

Based on the FY2016 DBCPE results, the Board will continue to focus on the followings to maintain Alam Maritim’s competitiveness:• expedite plan towards talent scouting and succession planning;• management of key risks;• management of human capital; and• performance of key business units.




Directors’ Remuneration

In line with MCCG 2012, the remuneration of Directors is determined at levels which enable the Company to attract and retainDirectors with the relevant experience and expertise to manage the Group effectively. In the Company, the determination ofremuneration packages of the Directors is a matter for the Board as a whole, whereas the BNRC deliberates, proposes and reviewsthe remuneration packages of Directors and key personnel.

The remuneration packages of both INEDs and NIEDs are drawn based on internal guidelines, considering the level ofresponsibilities, expertise and contribution to the Board and Board Committees. They are also benchmarked against the survey ofremuneration packages of other public listed companies in similar industry and within the same band of market capitalisation.

All Directors, executive and non-executive, are abstained from deliberations and voting on decisions in respect of their individualremuneration.

In the case of NIEDs, the level of remuneration reflects the experience and level of responsibilities undertaken by the particularNIED concerned. The remuneration of the NIEDs will be reviewed by the BNRC and recommended to the Board thereafter. AllNIEDs are paid Directors’ remuneration, taking into account any additional responsibilities undertaken such as a Director acting asChairman of a Board Committee and membership of Board Committees. In addition, meeting allowance is paid in accordance withthe number of Board and Committee Meetings attended by each of them. The Directors’ fees are approved by the shareholders atthe AGM in accordance with the Company’s AOA.

The remuneration of the NIEDs is structured to align with the business strategy and long-term objectives of the Company and tolink rewards to individual performance and performance of the Group. The BNRC and Board review the remuneration of the NIEDsannually whereby the respective NIEDs are required to abstain themselves from discussions and making decisions on their ownremuneration.

The aggregate remuneration of Directors for the financial year ended 31 December 2016 were approved by shareholders at the11th AGM on 3 June 2016 is as follows:-

Executive Non-Executive Description Directors Directors Total

Salaries and other emoluments 3,367,740 - 3,367,740Defined contribution plan 284,435 - 284,435Estimated money value of benefits in kind 144,000 - 144,000Fees and other emoluments - 348,000 348,000

Total 3,796,175 348,000 4,144,175

Remuneration Band Executive Non-Executive

RM100,000 - RM150,000 - 3RM900,000 - RM1,000,000 1 -RM1,000,000 - RM1,200,000 1 -RM1,200,000 - RM1,500,000 1 -

Appointment to the Board

The BNRC is entrusted with the role of proposing and recommending new candidates to the Board and Committees of the Board.In determining the suitability of candidates, various factors are considered including diversity of skills, expertise, experience,competencies and time commitment of the candidates in discharging their roles and responsibilities through attendance at theirrespective meetings. The Board decides on the appointment of Directors and members to the Committees of the Board afterconsidering the recommendations of the BNRC.




For new appointments of INED, the assessment on the independence of the proposed Director, which is carried out prior to theappointment, is ascertained in accordance with the criteria set out in the MMLR of Bursa Securities.

The Board is also mindful of Recommendation 3.2 of the MCCG 2012 that the tenure of an Independent Director shall not exceedaccumulative term of nine (9) years. An Independent Director may continue to serve the Board subject to the re-designation of theIndependent Director as a Non-Independent Director.

Re-Appointment and Re-election of Directors

The Board believes in having a healthy mix of age and experience and therefore does not impose a limit on the length of serviceof the INEDs as their attributes in terms of skills, experience, professionalism, integrity including core competencies in exercisingtheir objectivity and independent judgement to discharge their responsibilities in good faith in the best interest of the Company aremore critical in ascertaining the function and effectiveness of their independence than the number of years served on the Board.

The on-going evaluation also further ensure the effectiveness of the Board as a whole in discharging their duties and responsibilitiesdespite the duration of service for one (1) INED has exceeded nine (9) years.

In accordance with Article 100 of the Company’s AOA, all Directors who are newly appointed to the Board shall hold office until thenext AGM subsequent to their appointment and shall then be eligible for re-election but shall not be taken into account in determiningthe Directors who are to retire by rotation at that AGM. None of the Board members of the Company were appointed during theyear.

Article 94 states that one-third (1/3) of the Board of Directors for the time being, are subject to retirement by rotation at every AGMbut shall be eligible for re-election. The Directors to retire each year are the Directors who have been the longest in office sincetheir appointment or re-election. The Directors due for re-election by rotation pursuant to Article 94 of the AOA of the Company atthe forthcoming AGM are Dato’ Ab Wahab bin Ibrahim and Fina Norhizah binti Haji Baharu Zaman. Their profiles are set out onpages 38 and 34 of this Annual Report.

The contributions and performance of the Directors who are subject to re-appointment and re-election at the AGM are assessedby the BNRC whose recommendations are submitted to the Board for the Board’s decision on such proposed re-appointment andre-election of the Directors concerned, to be tabled for shareholders’ approval at the AGM.

The Directors standing for re-election, re-appointment and retention at the forthcoming AGM of the Company are as follows:-

Name Designation Relevant Provisions

Fina Norhizah binti Haji Baharu Zaman Independent Non-Executive Director Re-appointment pursuant to Article 94 of the Company’s AOA

Dato’ Haji Ab Wahab bin Haji Ibrahim Independent Non-Executive Director Retention under Recommendation 3.2 of the MCCG 2012

All of the above Directors have complied with the various statutory provisions and other regulatory matters and were recommendedfor re-election/re-appointment/retention by the BNRC and were subsequently approved by the Board pursuant to the respectiveArticles and Sections. Directors seeking re-election, re-appointment and retention have abstained from all deliberations regardinghis re-election, re-appointment and retention.

Information of each Director standing for re-election is set out on pages 34 and 38 of the Annual Report.




BOARD COMMITTEES

Article 134 of the Company’s AOA provides the Board the discretion to delegate its powers to its Committees. These committeeshave clear defined ToR to operate and conduct broad and in depth deliberation on issues before putting up recommendation to theBoard. The ToRs of the Board Committees are available on the Company’s official website at www.alam-maritim.com.my

The Company has established four (4) main Board Committees which are entrusted to carry out the Board delegated tasks, namelyBAC, BNRC, BRMC and Employees’ Share Option (“ESOS”) Committee.

The proceedings and deliberations of the Board Committees are reported to the Board at every Board Meeting. On matters reservedfor the Board and where the Board Committees have no authority to make decisions, recommendations are highlighted in theirrespective reports together with the Committee members comments and views for the Boards’ deliberation and approval.

(i) Board Audit Committee

The objective of the BAC is to assist the Board to review the adequacy and integrity of the Company’s and Group’s internalcontrol systems and management information systems. The composition, summary of activities and terms of reference of theBAC can be found in the Report from the BAC on pages 86 to 90 of this Annual Report.

The Board has identified an Internal Audit function that reports directly to the BAC. The functions of Internal Audit amongstothers include conducting regular reviews and appraisals of the effectiveness of the risk management and internal controlsand governance system in the Group. Further details of the Internal Audit function and activities are set out in the InternalControl Statement in this Annual Report.

(ii) Board Nomination and Remuneration Committee

The Company has a combined Nomination and Remuneration Committee for the purpose of expediency as the same membersare entrusted with the functions for both the Nomination and Remuneration Committees. Pursuant to the resignation of DatukAzmi bin Ahmad and Shaharuddin bin Warno @ Rahmad as the BNRC members on 19 December 2016, the BNRC is madeup exclusively of Independent Non-Executives Directors.

The BNRC ensures that prospective candidate has the required set of personal qualities and competencies to carry out dutiesand responsibilities as a Director. The incumbent's professionalism, integrity, skills and expertise must be seen to contributeand complement the Board existing strengths. For a good corporate governance practice, the BNRC agreed for each committeeto be chaired by different Independent Director.

The members of the BNRC are as follows:-

% of Board of Directors Designation Attendance Attendance

Fina Norhizah binti Haji Baharu Zaman Independent Non-Executive Director 3/3 100% (Chairman)

Dato’ Haji Ab Wahab bin Haji Ibrahim Independent Non-Executive Director 3/3 100%

Ainul Azhar bin Ainul Jamal Independent Non-Executive Director 3/3 100%

Datuk Azmi bin Ahmad Non-Independent Executive Director 3/3 100% (resigned w.e.f 19 December 2016) Shaharuddin bin Warno @ Rahmad Non-Independent Executive Director 3/3 100% (resigned w.e.f 19 December 2016)




Summaries of Activities

During the financial year ended 31 December 2016, the BNRC met three (3) times, and deliberated on the following keyactivities:-

• assessment on the effectiveness of the Board as a whole, Board Committees and contribution of individual Directors andrecommend improvement plans, where applicable;

• revised Terms of Service and Benefits of Executive Directors;• re-election/re-appointment and retirement of Directors at AGM;• appointment of Joint Company Secretary.• revised Employee Handbook

Reports/Minutes

The approved minutes of all BNRC meetings shall be tabled to the Board for notation and kept by the Secretary as evidencethat the BNRC has discharged its functions.

(iii) Board Risk Management Committee

In the Group, risk management is dealt with at two (2) levels. At the Board level, the BRMC is chaired by Ainul Azhar bin AinulJamal, INED and at the working level, GRMWC is chaired by Ahmad Hassanudin bin Ahmad Kamaluddin, NIED.

The BRMC is set to meet quarterly to review the effectiveness of the Group's Risk Management System.

The members of the BRMC are as follows: % of Board of Directors Designation Attendance Attendance

Ainul Azhar bin Ainul Jamal Independent Non-Executive Director 4/4 100% (Chairman) Fina Norhizah binti Haji Baharu Zaman Independent Non-Executive Director 4/4 100%

Dato’ Haji Ab Wahab bin Haji Ibrahim Independent Non-Executive Director 4/4 100%

Shaharuddin bin Warno @ Rahmad Non-Independent Executive Director 4/4 100%

Ahmad Hassanudin bin Ahmad Kamaluddin Non-Independent Executive Director 4/4 100%

Datuk Azmi bin Ahmad Non-Independent Executive Director 4/4 100% (Alternate member to Shaharuddin bin Warno @ Rahmad)

Good corporate governance and risk management rests firmly with the Board. Following this, the Group Risk ManagementDepartment has also arranged Risk Away Day meeting on 5 May 2016 which was attended by the Board together with theSenior Management team and being chaired by the Chairman of BRMC in deliberating Alam Maritim Group’s risk in detail.

GRMWC entrusted by the BRMC to develop & maintain the corporate and operational risks profiles of the Group for onwardapproval by the BRMC, and the update them on quarterly basis.

The Group adopts Business Assessment Risk Activity (“BARA”) as the Risk Management Framework and the Corporate RiskRegister as annually approved by the BRMC. The risk profiles and any other significant risks identified by GRMWC whichexposed to the Group shall be deliberated during BRMC. The agreed remedial actions and deadlines shall be acted by therespective Business Heads as the Risk Owners and update BRMWC and BRMC accordingly.




Reports/Minutes

The approved minutes of all BRMC meetings shall be tabled to the Board for notation and kept by the Company Secretary asevidence that the BRMC has discharged its functions.

(iv) Employee Share Option Committee

The ESOS Committee was established on 20 July 2016 comprising the following members:-

Name Designation

Datuk Azmi bin Ahmad Non-Independent Executive Director (Chairman) Shaharuddin bin Warno @ Rahmad Non-Independent Executive Director

Ahmad Hassanudin bin Ahmad Kamaluddin Non-Independent Executive Director

Md Nasir bin Noh Group Financial Controller

Nuranisma binti Ahmad Group Company Secretary (Appointed w.e.f. 1 September 2016)

Fatan Hamamah binti Khalid Group Company Secretary (Resigned w.e.f. 30 December 2016)

The functions of the ESOS Committee is to administer the implementation of the ESOS in accordance with the objectives andregulations set out in the By-Laws, make rules and regulations or impose such terms and conditions in such manner as itdeems fit and with such powers and duties as are conferred upon it by the Board.

The Company has one (1) ESOS in existence during the financial year. The ESOS was approved by the shareholders of theCompany at the Company’s Extraordinary General Meeting held on 3 June 2016. As at 31 December 2016, ESOS optionsover 80,549,000 new ordinary shares of RM0.25 each in the Company were granted to the employees of the Group (includingthe NIEDs) as follows:-

No. of ESOS options % granted as at No of ESOS No of ESOS granted as at 31 Dec 2016 of options options Category of employees 31 Dec 2016 total available* exercised outstanding

Executive Directors 27,244,000 29% - 27,244,000 Senior Management 14,865,000 16% - 14,865,000 Other employees 38,440,000 42% - 38,440,000

TOTAL 80,549,000 87% - 80,549,000

* As at 31 December 2016, the issued and paid up ordinary share capital of the Company comprised of 924,490,200 ordinary shares ofRM0.25 each. In accordance with the ESOS, the maximum number of shares to be offered for subscription and allotment shall notexceed in aggregate 10% of the issued and paid up share capital of the Company (excluding treasury shares) at any one (1) time orsuch other limit that may be permitted by Bursa Securities or any other relevant authorities from time to time during the duration of theESOS scheme.

The aggregate maximum allocation of the ESOS options applicable to the Directors and Senior Management is 50% andactual granted to the Directors and Senior Management since the announcement of the ESOS is 45%.




BOARD TRAINING AND KNOWLEDGE ACQUISITION

The Board is mindful of the importance for its members to undergo continuous training. The BNRC continues to evaluate anddetermine the training needs of the Directors to ensure continuous trainings and education in order for them to enhance theirbusiness acumen and professionalism in discharging their duties to the Group.

In addition, the Company Secretary also receives regular updates on training programmes from various organisations includingthe regulators. These updates are circulated to the Directors for their consideration. The Company Secretary will make the necessaryarrangements for the Directors to attend the trainings.

The external auditors also continuously brief the Board on any changes to the Malaysian Financial Reporting Standards that affectthe Group’s financial statements during the year.

Any Director appointed to the Board of Directors is required to complete the Mandatory Accreditation Programme (“MAP”) withinfour (4) months from the date of appointment.

In the quest for continuous learning and acquisition of relevant skills and knowledge to enhance their business expertise andprofessionalism, the Directors attended the following seminars, conferences and training programmes in FY2016:

Courses/Trainings Attended by

Alam Maritim Resources Berhad: Business Risk Assessment New Template Workshop FN DAW DAA SR AHK

Series 1 - Risk Oversight Practices FNSeries 2 - Corporate Culture and ERM

Navigating Updates - An Essential Guide for Listed Issuers FN SR

Corporate Governance, Director's Duties and Regulatory Updates Seminar 2016 FNRing the Bell for Gender EqualityAwareness on Sustainability ReportingUMW Oil & Gas Corporation Berhad: Briefing on Companies Act 2016

Impact of the New Companies Act 2015 on Directors and Shareholders FN SR

Audit Committee Conference 2016- Setting The Right Tone DAWQualified Risk Director Training 2016 - Series 3 (Risk Appetite, Tolerance and Board)Qualified Risk Director Training 2016 - Series 6 (The Role of Boards in Fraud Risk Management)

Qualified Risk Director Training 2016 - Series 8 (Board Masterclass Leadership During Crisis) DAW AAJ AHK




Courses/Trainings Attended by

Alam Maritim Resources Berhad: In-House Training On The Companies Act, 2016 DAW AAJ DAA SR AHK

Qualified Risk Director Training 2016 - Series 6 (The Role of Boards in Fraud Risk Management) AAJ

Amendments to Bursa's Listing Requirements – How to Rise Up to Meet Those Challenges AAJ DAA

Audit Committee Workshop E : Understanding Complex Financial Reporting under MFRS/IFRS AAJAudit Committee Workshop F : The Statement on Risk Management & Internal ControlLatest Updates on Directors' Remuneration Seminar 2016 Role of the Chairman & Independent Director DAA

Enhanced Understanding of Risk Management and Internal Control – “The Way Forward”Sustainability Reporting-How to Go about the Intricacies of Reporting AHK

FN - Fina Norhizah binti Haji Baharu Zaman DAA - Datuk Azmi Bin AhmadSR - Shaharuddin bin Warno @ RahmadAHK - Ahmad Hassanudin bin Ahmad KamaluddinDAW - Dato’ Haji Ab Wahab bin Haji IbrahimAAJ - Ainul Azhar bin Ainul Jamal

The Directors will continuously undergo other relevant training programmes and essential practices to further enhance their skillsand knowledge where relevant so as to enable the Directors to participate in deliberations and effectively discharge their duties.

BOARD ACCESS TO INFORMATION AND ADVICE

Access to Management

The Board recognises that the decision making process is highly contingent on the quality of information furnished. As such, themembers of the Board in the course of performing their duties, have unlimited access to all information about the Group's businessaffairs as well as to the advice and services of the Senior Management. The Board firmly believes that effective deliberation andits decision making process is highly dependent on the quality of information furnished by the Management.

From time to time, whenever the Board requires relevant information updates and clarifications, the relevant member of theManagement is invited to attend meetings of the Board and its Committees to present or seek recommendations for the Board’sconsideration on matters relating to their area of responsibility. The respective Senior Management and permanent invitees suchas the Head of HSSE Department, Group Financial Officer (“GCFO”) have been invited to Board Meetings during the presentationof quarterly performance reports for effective deliberation on the Group’s financial and safety performance.

The Board and the Board Committees receive timely and up-to-date information and the Company Secretary, under the directionof the Chairman, ensures a seamless flow of information is disseminated for decisions to be made on an informed basis for effectivedischarge of the Board’s responsibilities. Prior to the Board and Board Committee meetings, a formal and structured agenda,together with a set of Board and Board Committee papers, are forwarded to all Directors at least three (3) days prior to the Boardand Board Committee meetings, for the Directors to be prepared to deal with matters arising from such meetings and to enable theBoard and Board Committees to make decisions.




Minutes of proceedings and resolutions passed at each Board and Board Committee meetings are kept in the statutory books atthe registered office of the Company and are accessible to all Directors.

Access to Company Secretary

The Board is supported by the Company Secretary in discharging its duties and functions. The Directors have unrestricted accessto the advice and services of the Company Secretary to enable the Directors to discharge their duties effectively. The CompanySecretaries are responsible to provide support and appropriate guidance to the Board on the policies and procedures, rules andregulations and relevant laws as well as best practices on governance. The Company Secretary attends and ensures that all Boardand Committee meetings are properly convened and all deliberations and decisions made at the meetings are properly minutedand kept.

Access to External Experts

External advisers may also be invited to attend Board and Board Committee meetings, as the case may be, to provide additionalinsights and professional views, advice and clarifications on specific items on the meeting agenda. The Board has the same rightof access to all information within the Group and the duty to make further enquiries which they may require in discharging theirduties including seeking independent professional advice, if necessary, at the Company’s expense. During the year, no externalexpert was separately sources by the Board for advice.

BOARD CONDUCT

Conflict of Interest and Related Party Transactions

All directors are required to make declarations of their respective interest in transactions at every Board meeting to ensureaccountability and ascertain potential or actual conflict of interest in relation to every issue deliberated. The Directors concernedwill be advised to abstain from deliberating and voting in relation to relevant resolutions or transactions in which they have conflictof interest at the Board or any general meeting convened.

A register is maintained by the Company Secretary on Directors’ interests and directorships, including his/her related persons forthe purpose of monitoring.

Accordingly, our Directors have updated the Company Secretary on changes in their interest and status as and when these occurred.

The Group has established procedures regarding its related party transactions of which all related party transactions are requiredto be undertaken on an arm’s length basis and on normal commercial terms not more favourable than those generally available tothe public and other suppliers, and are not detrimental to the minority shareholders.

The Recurrent Related Party Transactions entered into by the Group with its related parties in FY2016 are set out on pages 178 to179 of this Annual Report.

Trading on Insider Information

Alam Maritim’s Directors and employees of the Group who have access to price sensitive information are prohibited from tradingin securities based on price sensitive information and knowledge which has not been publicly announced.

Directors and employees of the Group who do not have access to price sensitive information mentioned above can deal in thesecurities of the Company provided that the procedures set out in the Listing Requirements are strictly adhered to.

During the year, there were no cases reported on any breach of the prohibition.




Code of Ethics

The Directors and employees of Alam Maritim are expected to behave ethically and professionally at all times and to protect thereputation of the Company. The Group communicates its code of conduct to all Directors and employees upon their appointmentof employment through Board Charter and Employees Handbook respectively.

The conduct of employees is governed by Code of Ethics of employees which provide clear direction on conduct of business,dealing with stakeholders and general workplace behaviours. It includes guidance on disclosure of conflict of interests, practicesregarding gifts and entertainment, amongst others.

Whistle Blowing Policy

The Board acknowledges that misconduct such as violation of laws, rules, regulations, fraud, health and safety violations andcorruption are usually known first by the people who work in or with the Group. An early warning system such as whistle blowingpolicy and procedure can assist the Group to detect wrongdoings and alert the Group to take corrective actions before a problembecomes a crisis.

In order to achieve these standards, all employees and stakeholders (i.e. shareholders / suppliers / customers) are encouraged toreport genuine concerns about unethical behavior , malpractices, illegal acts or failure to comply with regulatory requirementswithout fear of reprisal should they act in good faith when reporting such concerns.

For this purpose, a whistle blowing hotline has been established to raise concern on any misconduct or misbehavior by KeyPersonnel/ Senior Management which should be reported to the Chairman of BAC, copied to GCEO of the Company using theCompany’s Whistle Blowing Form. Any concern in respect of other general staff should be reported to the Head of Group HumanResource Management Department.

All reports will be investigated promptly and the progress of investigation will be reported to the BAC at the following scheduledmeeting. The identity of the whistle blower is also safeguarded at all times. Upon completion of investigation, appropriate courseof action will be recommended to the BAC for their deliberation. Decision taken by the Board will be implemented immediately.Where possible, steps will also be implemented to prevent similar situation from arising.

STRENGTHEN RELATIONSHIP BETWEEN THE COMPANY AND ITS SHAREHOLDERS

The Company recognises the importance of an effective communication channel with stakeholders, institutional investors and theinvesting public at large to provide a clear picture of the Group’s performance.

Annual Report and Shareholder Participation at General Meeting

The Board acknowledges the significance of maintaining transparency and accountability to the Company’s shareholders. TheBoard ensures that all the Company’s shareholders are treated equitably and the rights of all investors including minorityshareholders are protected. Alam Maritim’s annual report contains invaluable information on the Company for the shareholdersand investors specifically and the public in general. As a key channel of communication between the Group and its stakeholders,it contains a report and disclosures on the Groups’ directions, key activities and financial performance, the contents of which arecontinuously enhanced to take into account the developments amongst others, in corporate governance.

A summary of annual report is published in a printed form and posted to shareholders in a CD ROM. An electronic version of thefull annual report is also available on the Company’s website for download. The complete printed version of the annual report isprovided to shareholders upon request.

The Company sends out the Notice of the AGM and related circular to shareholders at least 21 days before the meeting as requiredunder the Listing Requirements of Bursa, in order to facilitate full understanding and evaluation of the issues involved.




During the AGM, the GCEO or GCFO presents a review on the Group’s performance supported by a visual and graphic presentationof the key points and financial figures.

The Board recognises a two-way communication with its shareholders at general meetings and allocates time and welcomesquestions and feedback regarding directions, operations, financials and proposed resolutions from the shareholders at the generalmeeting. Questions raised by the MSWG are also addressed and shared with all shareholders during the AGM. A press conferenceis also held immediately after the AGM at which all the Board members and GCFO are present to clarify and explain issues raisedby the media.

In the past, about 80% of the shareholders of the Company had appointed proxies to attend and vote on their behalf at generalmeetings.

The outcome of the AGM is announced to Bursa on the same meeting day.

UPHOLD INTEGRITY IN FINANCIAL REPORTING

The Board is responsible for presenting a balanced, clear and comprehensive assessment of the Group's financial performanceand prospect through the quarterly and annual financial statements to shareholders. The Board with assistance from the BACundertakes detailed review of all financial statements prepared for statutory disclosures. The BAC shall ensure that the Group'sfinancial statements comply with applicable financial reporting standards. Details of the Company and the Group financial statementsfor the financial year ended 31 December 2016 are set out on pages 97 to 191 of this Annual Report.

The Board, through the BAC maintains a formal and transparent relationship with the External Auditors. The BAC had conductedthree (3) meetings with the External Auditors without the presence of Executive Directors and officers to discuss the audit findingsfor financial year ended 2016.

The Board’s obligation to establish formal and transparent arrangements in considering how it should apply financial reporting andinternal controls, and maintaining an appropriate relationship with the Group’s external auditors is met through the BAC.

An assessment of the objectivity, independence and quality of service delivery of the Group’s external auditors was conducted inMarch 2016, facilitated by the GIAD. There was no major gap identified.

The BAC has obtained the assurance from external auditors confirming their independence.

TIMELY AND QUALITY DISCLOSURE

The Board believes that transparent reporting and clear communication are integral to the success of the Group and strives toensure that its stakeholders are kept well informed of the Group's development and activities. In terms of preparing qualitydisclosures for the shareholders and other stakeholders, the Group uses the Corporate Disclosure Policy issued by Bursa MalaysiaSecurities Berhad and other standard imposed by governing bodies as the main guidance in preparing disclosure materials.

Dissemination of disclosure materials and market updates

Dissemination of disclosure materials as well as corporate and related market information to the shareholders are mainly by theinternet through Bursalink, Group's website, particularly the investor relation section as well as the printed media, such as theannual report and circulars or statements to the shareholders. All announcements and quarterly reports made by the Company toBursa Securities are on the Company’s corporate website, www.alam-maritim.com.my where shareholders can access informationunder the “Investor Relations” page.




As part of the Company’s commitment towards maintaining effective communication with shareholders and investors, experiencedmembers of the Executive Director and the Management Team are directly involved in the Company’s investor relations activities,whose details are as follows:-

Name : Shaharuddin bin Warno @ RahmadDesignation : Group Chief Operating OfficerEmail : [email protected]

Name : Md Nasir bin NohDesignation : Group Chief Financial OfficerEmail : [email protected]

The intranet and web portal are also being used in the Group as platforms to connect the employees and management, automateand increase efficiency in certain administrative processes and facilitate remote communication with staff who work offshore andin foreign waters.

While the Company endeavours to provide as much information as possible to its shareholders and stakeholders, the Board ismindful of the legal and regulatory framework governing the release of material and price sensitive information.

ADDITIONAL COMPLIANCE INFORMATION AS AT 31 DECEMBER 2016

Share Buy-back

There were no shares buy-back exercised by the Company during the financial year ended 31 December 2016.

Options, Warrants or Convertible Securities

Alam Maritim did not issue any options, warrants or convertible securities during the financial year ended 31 December 2016, saveand except for the options issued pursuant to the Employees’ Share Scheme.

Non-Audit Fees

There were non-audit fees amounting to RM32,000.00 payable to the External Auditors during the financial year.

Imposition of Sanctions and/or Penalties

There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management arisingfrom any significant breach of rules/guidelines/legislations by the relevant regulatory bodies during the financial year under review.

Variation in Results

There was no variation in results within 10% variance from any profit estimated forecast/projection of unaudited results announced.

Material Contracts

There were no material contracts entered into by the Company and its subsidiaries involving the Directors’ and/or majorshareholders’ interests, either still subsisting at the end of the financial year ended 31 December 2016 or, if not then subsisting,entered into since the end of the previous financial year.




Profit Guarantee

The Company did not make any profit guarantee during the financial year ended 31 December 2016.

Material Litigation

The Company did not have any material litigation during the financial year ending 31 December 2016.

COMPLIANCE STATEMENT BY THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE STATEMENT

The Board has deliberated, reviewed and approved this Statement. Pursuant to Paragraph 15.25 of the MMLR of Bursa Securities,the Board is pleased to report that the Board is satisfied that to the best of its knowledge, the Company has fulfilled its obligationsunder the MCCG 2012, the relevant chapters of the MMLR of Bursa Securities on corporate governance and all applicable lawsand regulations throughout the financial year ended 31 December 2016.

This statement was presented and approved at the meeting of the Board on 23 March 2017.




MEMBERSHIP AND MEETINGS

The Board Audit Committee (“BAC”) members and the record of their attendance at the Audit Committee meetings held during thefinancial year 2016 are as follows:

Member Number of Meetings Attended/ % of Meetings Meetings Held Attended

Dato’ Haji Ab Wahab bin Haji Ibrahim 5/5 100%Chairman(Independent Non-Executive Director and a Member of the Malaysian Institute of Accountants) Fina Norhizah binti Haji Baharu Zaman 5/5 100%(Independent Non-Executive Director)

Ainul Azhar bin Ainul Jamal 5/5 100%(Independent Non-Executive Director)

Composition

Conforming to the requirements of the Malaysian Code on Corporate Governance 2012 (MCCG 2012), majority of the BAC membersare Independent Non-Executive Directors (“INED”).

The BAC Chairman, Dato’ Haji Ab Wahab bin Haji Ibraim is a member of the Malaysian Institute of Accountants (“MIA”) therebycomplying with paragraph 15.09(1)(c)(i) of the Listing Requirements that requires at least one (1) member of the Audit Committeemust be a qualified accountant.

Attendance

In terms of attendance at the BAC meetings, the quorum requirement for all five (5) meetings held during FY2016 as indicated inthe table above was fulfilled. Upon invitation by the BAC, the Non-Independent Executive Directors, Group Chief Financial Officer(“GCFO”), Head Group Internal Audit (“GIA”) and representatives of the External Auditors attended all the meetings. Time was alsoset aside for the External Auditors to have private discussions with the BAC in the absence of Management. Three (3) separatesessions were held between the BAC and the External Auditors. Prior to the BAC Meetings, private sessions were also held betweenthe Chairman and the Head Group Internal Audit.

Minutes of each meeting shall be kept and distributed to each member of the Committee and of the Board. The Chairman of theCommittee shall report on each meeting to the Board. The secretary of the Committee shall be the Group Secretary.


BOARD AUDIT COMMITTEE REPORT


TERMS OF REFERENCE (“ToR”) OF BAC

The BAC shall be established to assist the Board in fulfilling its oversight responsibilities. The BAC shall review and ensure that theprocess of assessing risk, control and governance, including operational and financial controls, business ethics and compliance,are properly managed and monitored.

The ToR of the BAC is accessible on the Company’s official website at www.alam-maritim.com.my

(a) Composition

The BAC shall comprise at least three (3) Directors, the majority of whom are independent. The members of the BAC shall beappointed by the Board of Directors and all members of the BAC including the Chairman are INEDs.

All members of the BAC shall be financially literate and have the ability:

• To read and understand financial statements, including a company’s statement of financial position, statement ofcomprehensive income and statement of cash flows;

• To analyse financial statements and ask pertinent questions about the company’s operations against internal controlsand risk factors; and

• To understand and interpret the application of approved accounting standards.

At least one (1) member of the BAC shall be a member of the MIA or shall fulfill such other requirements as prescribed in theBursa Malaysia Listing Requirements.

No alternate director shall be appointed as a member of the BAC. The Board shall review the terms of office and performanceof the members of the BAC at least once every three (3) years to determine whether the members have carried out their dutiesin accordance with their ToR.

In the event of any vacancy in the BAC resulting in the non-compliance of subparagraph 15.09(1) of the Bursa Malaysia ListingRequirements, the Board shall fill the vacancy within three (3) months from the date of the vacancy.

(b) Chairman

An INED shall be the Chairman of the BAC.

(c) Meetings and Minutes

The BAC shall meet at least four (4) times annually. However, at least twice a year, the BAC shall meet with the ExternalAuditors without the Non-Independent Executive Directors (“NIED”) being present.

The GCFO and Head GIA will normally be in attendance at the meetings. Representatives of the External Auditors are to bein attendance at meeting where matters relating to the audit of the statutory accounts and/or External Auditors are to bediscussed.

Other directors, officers and employees of the Company and/or Group may be invited to attend, except for those portions ofthe meetings where their presence is considered inappropriate, as determined by the BAC.

The Company Secretary shall be the Secretary of the BAC and will record, prepare and circulate the minutes of the meetingsof the BAC and ensure that the minutes are properly kept and produced for inspection, if required. The BAC shall report to theBoard and its minutes tabled and noted by the Board.




(d) Quorum

A majority of the members in attendance must be INEDs in order to form a quorum for the meeting.

(e) Authority

The BAC is authorised by the Board to review any activity within the BAC’s ToR.

The BAC is authorised to seek any information the BAC requires from any Director or member of the Management and hasfull and unrestricted access to any information pertaining to the Group and the Management, and all employees of the Groupare required to comply with the requests made by the BAC.

The BAC is authorised by the Board to obtain external professional advice and secure the attendance of outsiders with relevantexperience and expertise if it considers this necessary, the expenses of which will be borne by the Company.

In the event that any member of the BAC shall need to seek external professional advice in furtherance of his duties, he shallfirst consult with and obtain approval of the Chairman of the BAC.

The BAC shall have direct communication channels and be able to convene meetings with the External Auditors without thepresence of Executive Directors and Management, whenever deemed necessary.

RESPONSIBILITIES AND DUTIES

The responsibilities and duties of the BAC are:

(a) Financial Reporting

• To review the quarterly, and annual financial statements of the Company, focusing particularly on:- any significant changes to accounting policies and practices;- significant adjustments arising from the audits;- compliance with accounting standards and regulatory requirements; and- the going concern assumption.

(b) Related Party Transactions

• To review any related party transactions and conflict of interest situations that may arise within the Group including anytransaction, procedure or course of conduct that raises questions of the Management integrity.

(c) Audit Reports

• To prepare the annual BAC report to the Board which includes the composition of the BAC, its terms of reference, numberof meetings held, a summary of its activities and the existence of an Internal Audit Department and summary of theactivities of that unit for inclusion in the Annual Report; and

• To review the Board’s statements on compliance with the MCCG 2012 for inclusion in the Annual Report.




(d) Risk Management and Internal Control

• To consider annually the Risk Management Framework adopted within the Group and to be satisfied that the methodologyemployed allows the identification, analysis, assessment, monitoring and communication of risks in a regular and timelymanner that will allow the Group to minimise losses and maximise opportunities;

• To ensure that the system of internal control is soundly conceived and in place, effectively administered and regularlymonitored;

• To cause reviews to be made of the extent of compliance with established internal policies, standards, plans andprocedures including for example, the Group Policies & Authorities;

• To obtain assurance that proper plans for control have been developed prior to the commencement of major areas ofchange within the Group; and

• To recommend to the Board steps to improve the system of internal control derived from the findings of the Internal andExternal Auditors and from the consultations of the BAC itself.

(e) Internal Audit

• To be satisfied that the strategies, plans, manning and organisation for internal auditing are communicated down throughthe Group specifically:- To review the Internal Audit plans and to be satisfied as to their consistency with the Risk Management Framework

used, adequacy of coverage and audit methodologies employed;- To be satisfied that the Internal Audit department within the Group has the proper resources and standing to enable

them to complete their mandates and approved audit plans;- To review status reports from Internal Audit and ensure that appropriate actions have been taken to implement the

audit recommendations. - To recommend any broader reviews deemed necessary as a consequence of the issues or concerns identified;- To review any appraisal or assessment of the performance of the members of the Internal Audit, approve any

appointment or termination of senior staff members of Internal Audit and inform itself of any resignations of staff ofInternal Audit and reasons thereof;

- To ensure Internal Audit has full, free and unrestricted access to all activities, records, property and personnelnecessary to perform its duties; and

- To request and review any special audit which it deems necessary.

(f) External Audit

• To review the External Auditors’ audit plan, nature and scope of the audit plan, audit report, evaluation of internal controlsand co-ordination of the External Auditors. The BAC will consider a consolidated opinion on the quality of external auditingat one of its meetings;

• To review with the External Auditors the Statement on Risk Management and Internal Control of the Group for inclusionin the Annual Report;

• To review any matters concerning the appointment and re-appointment, audit fee and any questions of resignation ordismissal of the External Auditors;

• To review and evaluate factors related to the independence of the External Auditors and assist them in preserving theirindependence;

• To be advised of significant use of the External Auditors in performing non-audit services within the Group, consideringboth the types of services rendered and the fees, such that their position as auditors are not deemed to be compromised;and

• To review the External Auditors’ findings arising from audits, particularly any comments and responses in managementletters as well as the assistance given by the employees of the Group in order to be satisfied that appropriate action isbeing taken.




(g) Other Matters

• To act on any other matters as may be directed by the Board.

SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR ENDED 31 DECEMBER 2016

During the year, the BAC carried out its duties in accordance with its terms of reference. Other main issues reviewed by the BACwere summarized as follows:

• Review of the Internal Audit Plans and scope for the Company and the Group prepared by the Internal Auditors and the ExternalAuditors respectively;

• Review of the reports for the Company and the Group prepared by Internal Auditors and the External Auditors and considerationof the major findings by the auditors and management’s responses thereto;

• Review of the quarterly financial results and Annual Reports of the Company and the Group prior to submission to the Boardof Directors for consideration and approval;

• Review the related party transactions entered into by the Company and the Group and the disclosure of such transactions inthe Annual Report of the Company;

• Meeting with the External Auditors without any executives present;• Review the performance of the external auditors and made recommendations to the Board for their re-appointment and

remuneration;• Review of the BAC Report, Statement on Risk Management and Internal Control and Corporate Governance Statement prior

to their inclusion in the Company’s Annual Report.• Approved Audit Plan & budget for 2017 to be conducted by Group Internal Audit Department (“GIAD”), which emphasizes on

the risk based and Committee of Sponsoring Organisation (“COSO”) approach.• Review the past audit results for lessons learnt and improvement to the future internal audit.• Established the Audit & Compliance Assurance Sub Committee (“ACA”) effective year 2017, to be held on quarterly basis.

The objective is to ensure internal audits & compliance activities within the Group are shared to all Business Units. This willprovide assurance to shareholders of Management accountability in effectively monitoring and implementing the auditrecommendations.

STATEMENT ON INTERNAL AUDIT FUNCTION

The GIAD is an integral part of the assurance structure of the Group. The department’s primary responsibility is to provide anindependent and reasonable assurance on the adequacy, integrity and effectiveness of the Group’s overall system of internalcontrol, risk management and governance process.

The Head, GIA reports directly to the BAC on functional basis and to the Group Managing Director/Group CEO administratively.The purpose, authority and responsibility of Internal Audit as well as the nature of assurance and consulting activities provided tothe Company and the Group is clearly articulated in the Internal Audit Charter that has been approved by the BAC.

The Head, GIA has direct access to the Chairman of the BAC on all matters of control and audit. Any inappropriate restrictions onaudit scope are to be reported to the BAC.

The Head, GIA is assisted by one audit executive. The BAC approves the Group Internal Audit’s annual audit plan, financial budgetand human resource requirements to ensure the function is adequately resourced by competent and proficient internal auditors.

During the FY2016, a total of approximately RM174,985 was incurred as part of resource allocation for the GIAD, covering mainlyon manpower and incidental costs such as travelling and training costs.




The GIAD has adopted a risk-based approach towards the planning and conduct of audits which is consistent with the Group’sestablished framework in designing, implementing and monitoring of its internal control systems. The audits completed includeCrew Payroll, Budget Preparation & Monitoring Process and Monitoring of Repair & Dry Docking and other related areas.

The main activities performed by the GIAD are as follows:

• Reviewing and appraising the soundness, adequacy and application of accounting, financial and other controls and promotingeffective control in the Group at reasonable cost;

• Ascertaining the extent of compliance with established policies, procedures and statutory requirements;• Ascertaining the extent to which the Group’s assets are accounted for and safeguarded from losses of all kinds;• Appraising the reliability and usefulness of information developed within the Group;• Recommending improvements to the existing systems of controls;• Carrying out investigations and special reviews requested by the Management and/or the BAC; and• Identifying opportunities to improve the operations and processes in the Company and the Group.

All findings resulting from the audits were reported to the BAC, the Senior Management and the relevant Management of theoperating units. The Management of the operating units is accountable to ensure proper handling of the audit issues andimplementation of their action plans within the timeframe specified. Actions taken by the operating units audited were followed upby GIAD and the status updated in the subsequent audits.

This report is made in accordance with a resolution of the Board dated 23 March 2017.




The Board of Directors of Alam Maritim Resources Berhad (“Board”) is committed to maintaining a sound risk management andinternal control system. Each business unit or functional group has implemented its own control processes under the leadership ofthe Group Managing Director (“GMD”) / Chief Executive Officer (“GCEO”), who is responsible for good business and regulatorygovernance. The Board is pleased to provide the following statement outlines the nature and scope of Alam Maritim ResourcesBerhad and its subsidiaries’ (“the Group”) risk management and internal control for the financial year ended 31 December 2016.

RESPONSIBILITY

The Board of Directors of Alam Maritim Resources Berhad (“Board”) asserts its overall responsibility for the Group’s system of riskmanagement and internal control and for reviewing the adequacy and integrity of the system. The system of internal control coversnot only financial controls but also controls relating to operational, governance, risk management, strategy, organisational andcompliance with applicable laws, regulations, rules, and guidelines. The Board, through the Board Audit Committee (“BAC”)recognises that this system is designed to manage, rather than eliminate, the risks of not adhering to the Group’s policies and toidentify, assess and respond to risks to achieve the organisation’s goals and objectives within the risk tolerance to as-low-asreasonably-practicable (“ALARP”) established by the Board and Management. Therefore, the system provides realistic approachand solution, but not absolute against nature or Act of God, assurance against the occurrence of any material testimonial, forfeitureor deception.

The Board confirms that there is a continuous process of reviewing and reporting the adequacy and integrity of the Group’s systemof risk management and internal control to provide reasonable assurance in safeguarding shareholders’ investments, Group’sassets and other stakeholders’ interests. The process is regularly reviewed by the Board through the BAC and accords with theguidelines for directors on internal control, the Statement on Risk Management and Internal Control: Guidelines for Directors ofListed Issuers. Minutes of the BAC meetings which recorded these deliberations were presented to the Board.

A Board Risk Management Committee (“BRMC”) was established and maintained in accordance with Section 22 of the CapitalMarkets and Services Act 2007 (“CMSA”) to provide risk oversight and ensure prudent risk management of Alam Maritim’ businessand operations. At its meetings in FY2016, the BRMC reviewed, deliberated and provided advice on matters pertaining to the keycorporate risks, risk assessment of projects and operations, and develop mitigation strategies and action plans.

Risk-related and internal control matters which warranted the attention of the Board were recommended by the BAC and BRMC tothe Board for its approval and matters or decisions made within the BAC and BRMC’s purview were updated to the Board for itsnotation.

KEY INTERNAL CONTROL PROCESS

In order to ensure Regulatory Compliance, Transparencies, prevent Conflict-of-Interest, Health, Safety, Security and EnvironmentProtection, the Group’s risk management framework and internal control system comprises the following key processes:

1. Control Environment

1.1 Board Committees

The Board acknowledges that ensuring sound governance requires effective and direct interaction among the Board,Management, Internal and External Auditors. The Board, in ensuring effective discharge of its responsibilities is assistedby the Board Committees namely the BAC, Board Nomination and Remuneration Committee (“BNRC”) as well as BRMC.

1.2 Independence of the Board Audit Committee

The BAC comprises non-executive members of the Board, all members being independent. The Committee has fullaccess to both Internal and External Auditors and it meets with the External Auditors without any executive present atleast twice a year.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


1.3 Operating structure with clearly defined lines of responsibility and delegated authority

The operating structure includes defined delegation of responsibilities to the committees of the Board and themanagement team.

2. Risk Management

2.1 Risk management is regarded by the Board to be an integral part of the business and operations. Management isresponsible for creating a risk awareness culture, educate with the necessary knowledge of risk management and reviseregularly of Risk tools and procedures. They also have the responsibility for managing risks and internal control associatedwith the operations and ensuring compliance with applicable Laws, Regulations and Requirements.

3. Board Risk Management Committees

3.1 The BRMC comprises six (6) members (including alternate member), majority main members are Independent Non-Executive members. The Group Chief Financial Officer, Head of Group Internal Audit and Head of Group RiskManagement attended BRMC meetings as invitees.

3.2 The BRMC delegates to the Group Risk Management Working Committee (“GRMWC”) the responsibility for creating arisk-aware culture and building the necessary knowledge for risk management at every level of management. TheGRMWC is responsible for ensuring the effective implementation of the Group Risk Management Framework and themanagement of risks and controls associated with Group operations as well as compliance to applicable Laws,Regulations and Requirements. The GRMWC is also responsible for periodical reporting of key risk exposures to theBRMC.

3.3 The GRMWC comprises the Group Managing Director, Group Chief Operating Officer, Group Executive Director, GroupChief Financial Officer, Head of Business Units, Head of Group Internal Audit, Head of Group Risk Management, Headof Group Legal & Insurance together with Heads of relevant Division and Departments as invitees.

4. Risk Management Framework (“RMF”)

4.1 The Group has put in place a Risk Management Framework with the aim of providing a consistent approach to risk andfacilitating a reasonably accurate perception of acceptable risk by all employees. The framework essentially outlines therisk management governance and structure, processes, accountabilities as well as responsibilities throughout theorganization.



First Line of Defense

HEAD OF DEPARTMENT

Second Line of Defense

GRMWC

Third Line of Defense

BRMC

Risk Management Framework


Under the Risk Management Framework, the Group adopts Business Assessment Risk Analysis (“BARA”) approach in identifying,evaluating and managing the significant risks faced by the company to achieve its corporate objectives and strategies based onrisk parameters i.e. likelihood and impact to the business, from internal and external factors, taking into account the level of internalcontrols or existing mitigation actions.

The deliverable of Risk Profiles based on BARA are as follows:

• Corporate Risk Register

The corporate risk which includes the Top 5 Corporate Risk is selected at the BRMC level to ensure the key corporate objectivesare achieved, where associated risk impact to the corporate objectives and internal controls are identified, monitored andaddressed by the risk owners to eliminate or minimise the identified risks on regular basis. The register is generated annuallyand reviewed on quarterly basis by the GRMWC and BRMC.

• Operational Risks Registers.

Risk profiles from the department levels i.e. core business divisions and key support services e.g. OSV, Subsea, OIC, Finance,HRM, Supply Chain, etc. The register is updated and monitored on quarterly basis by the GRMWC and BRMC.

• New Investment and proposed Bid

The proposal is deliberated at GRMWC and BRMC to assess the key associated risk and mitigations of a new project bid ora proposed new investment. This ad hoc register is prepared and monitored when a new bid proposal is escalated to theGRMWC and BRMC for endorsement.

Based on BARA approach, the Risk Matrix are assessed based on the HEAR risk dimensions i.e. Human, Environment, Asset &Reputation parameters as follows:

• Human- contributing factors such as the personality, attitude, values, competency, etc. • Environment – contributing factors from Health, Safety, Security and Environment issues as well the external factors such as

economics, social and political scenarios that may impact the Group’s market opportunity, competitiveness, ongoing concernof the Company, etc.

• Assets - contributing factors due to the performance of assets belongs to the Group in relation to warranties, reliabilities,maintenance, handling & operations, surrounding, expiry permit, warranties, licences, etc.

• Reputation - contributing factors in meeting regulatory and statutory requirement such as national & international laws, marineregulations and requirements, standards, classification societies, marine warranties, etc.

In enhancing the effectiveness of the Risk Management within the Group, BARA workshop was conducted in September 2016 toinculcate the awareness and understanding of the Board Risk Management Committee (“BRMC”) and the Senior Management in

adopting BARA effectively.

Risk Management Framework

5. Accountability and Tolerance for Risk Management

5.1 Managing risks is a shared responsibility and is integrated within the Group’s governance, business processes andoperations. Employees’ and Management’s commitment towards risk management process is constantly emphasizedand reinforced through the establishment of GRMWC and group discussion together with the monitoring and facilitationexercise by the Group Internal Audit and Risk Management department.

5.2 The Group level of risk tolerance is expressed through the use of a risk impact and likelihood matrix with an establishedrisk tolerance boundary demarcating those risks that are deemed to have “exceeded risk tolerance” and those whichhave not. A clear risk mitigation and action plan are identified and implemented to address the relevant risks level.




6. Risk Reporting

6.1 The RMF provides for regular review and reporting. On continuing basis, the Group Internal Audit and the Group RiskManagement department co-ordinates with all the operating units to regularly review and update the group risk register.Potential major risks and mitigation plans and action taken were discussed at GRMWC and are reported to the BRMCand the Board of Directors.

6.2 To ensure that RMF and processes remain sound and are in compliance with International recognised standards, TheGroup had improvised the Risk Matrix and renamed it to Business Assessment Risk Analysis (“BARA”) and will incorporateinto existing procedures.

CONTROL ACTIVITIES

1. Policies, Procedures and Limits of Authority

1.1 Well defined Financial Limits Of Authority (“FLOA”) on all financial commitments for each level of management within theGroup and clearly documented internal policies, standards and procedures are in place to ensure compliance with internalcontrols and relevant laws, Regulations and Requirements and regularly updated to reflect changing risks or resolveoperational deficiencies. Regular reviews are performed to ensure that documentation remains current and relevant.

Common Group policies are available on the Group’s intranet for easy access by employees. All policies and standardsare approved by the Board and cases of non-compliance are reported to the Board by exception.

2. Strategic Business Planning, Budgeting and Reporting

2.1 Regular and comprehensive information provided by management for monitoring of performance against strategic plan,covering all key financial, investment and operational indicators. On a quarterly basis, the Group Managing Directorreviews with the Board on all issues covering, but not restricted to, strategy, performance, resources and standards ofbusiness conduct; detailed budgeting process established requiring all business units to prepare budgets annually whichare discussed and approved by the Board; and effective reporting systems which expose significant variances againstbudgets and plan are in place to monitor performance. The Cost Optimisation Programme (“COP”) which has beenlaunched in FY2015, an initiative to capture key variances, take appropriate mitigation and report to the Board, is stillcontinuing

3. Insurance and Physical Safeguard

3.1 Adequate insurance and physical safeguard on major assets in place to ensure that the assets of the Group are sufficientlycovered against any liabilities that will result in material damage, claim or losses to the Group.

3.2 A yearly policy renewal exercise is undertaken by Management to review the coverage based on the current fixed assetregister and the prevailing market price for the same or similar item, where applicable. The underwriter also assists byconducting a risk assessment, which helps the Group to assess the adequacy of the intended coverage.

INFORMATION AND COMMUNICATION

1. Timely communication of relevant information such as the Group’s achievement and changes with regard to corporate andorganizational structure and policies and procedures, enabling employees to focus on and perform their responsibilitieseffectively.

2. The Heads of operating entities within the Group also participate in business dialogue programs with Senior Management ofthe Group to discuss on strategies and challenges faced towards achieving the business goals and objectives.




MONITORING

1. Management Visit

Directors and Senior Management conduct regular visits to marine vessels, branch offices, project sites, customers andbusiness partners’ offices to review the Group’s operations and gain better understanding to facilitate cognizant in decisionmaking capability.

2. Internal Audit Function

In order to ensure that the internal controls system is viable and robust, periodic examination of business process and theinternal controls procedures and processes by the Group Internal Audit function to monitor and review the effectiveness andefficiency of the system of internal control. Reports on the reviews carried out by the Internal Auditor are submitted on a regularbasis to the management and the BAC.

3. Performance Management

In order to nurture the quality and competencies of employees, continuing education, training, seminar and developmentprograms are emphasized to enable employees to discharge their duties effectively.

Progressively, employees’ performance are measured according to the sets of key performance indicators aligned to theirfunctions as assigned to them in which they are expected to accomplish.

REVIEW OF STATEMENT BY EXTERNAL AUDITORS

Pursuant to Paragraph 15.23 of the Bursa Malaysia Listing Requirements, the external auditors have reviewed this RiskManagement and Internal Control Statement. Their review was performed in accordance with the scope set out in theRecommended Practice Guide (“RPG”) 5 issued by the Malaysian Institute of Accountants.

Based on their review, the external auditor have reported to the Board that nothing has come to their attention that cause them tobelieve that this Statement is inconsistent with their understanding of the process the Board has adopted in the review of theadequacy and integrity of internal control of the Group.

RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, or to form an opinionon the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment andopinion by the Board and management thereon. The external auditors are also not required to consider whether the processesdescribed to deal with material internal control aspects of any significant problems disclosed in the annual report will, in fact, remedythe problems.

CONCLUSION

For the financial year under review, based on inquiry, information and assurance provided by the Group Managing Director and theGroup Chief Financial Officer, the Board is of the opinion and to the best of its knowledge that the system of internal controls andrisk management processes are adequate and sound to provide reasonable assurance in safeguarding the shareholders’investments, the Group’s assets and other stakeholders’ interests as well as in addressing key risks impacting the businessoperations of the Group. There was no major internal control weakness identified which may resulted in any material loss oruncertainty that would require disclosure in this annual report.

This Statement on Risk Management and Internal Control has been prepared in accordance to the Bursa Malaysia ListingRequirements and guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers.This Statement has been approved by the Board at its meeting on 23 March 2017.




as at 31 march 2017

FINANCIAL STATEMENTS98 Directors' Report102 Statement by Directors102 Statutory Declaration103 Independent Auditors' Report107 Statements of Comprehensive Income108 Statements of Financial Position110 Consolidated Statement of Changes in Equity111 Company Statement of Changes in Equity112 Statements of Cash Flows114 Notes to the Financial Statements

Alam Maritim - Accounts AR16 .qxp_Layout 1 5/4/17 10:08 AM Page 97

The directors hereby present their report together with the audited financial statements of the Group and of the Company for thefinancial year ended 31 December 2016.

Principal activities

The principal activity of the Company is investment holding.

The principal activities and other information relating to the subsidiaries, associates and joint ventures are disclosed in Notes 15,16 and 17 to the financial statements respectively.

Results

Group Company RM RM

Net (loss)/profit for the year (142,658,459) 4,404,224

Attributable to: Owners of the parent (137,502,551) 4,404,224 Non-controlling interests (5,155,908) -

(142,658,459) 4,404,224

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the statementsof changes in equity.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature except other than disclosed in thefinancial statements.

Dividend

The directors do not recommend payment of any dividend for the financial year ended 31 December 2016.

Directors

The names of the directors of the Company in office since the beginning of the financial year to the date of this report are:

Fina Norhizah binti Haji Baharu ZamanDato' Haji Ab Wahab bin Haji IbrahimDatuk Azmi bin AhmadShaharuddin bin Warno @ RahmadAhmad Hassanudin bin Ahmad KamaluddinAinul Azhar bin Ainul Jamal


Directors' report



Directors' report

Directors' benefits

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Companywas a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company orany other body corporate other than those arising from the share options granted under the Company's Employee Share OptionsScheme as further disclosed in Note 31 to the financial statements.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefitsincluded in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-timeemployee of the Company, as shown in Note 7 to the financial statements) by reason of a contract made by the Company or arelated corporation with any director or with a firm of which the director is a member, or with a company in which the director has asubstantial financial interest.

Directors' interests

According to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in shares andoptions over shares in the Company and its related corporations during the financial year were as follows:

Number of ordinary shares of RM0.25 each At 1.1.2016 Acquired Sold At 31.12.2016

Direct interest:

Dato' Haji Ab Wahab bin Haji Ibrahim 1,500 - - 1,500Datuk Azmi bin Ahmad 2,292,748 - - 2,292,748Shaharuddin bin Warno @ Rahmad 9,900 - - 9,900Ahmad Hassanudin bin Ahmad Kamaluddin 1,875 - - 1,875Fina Norhizah binti Haji Baharu Zaman 34,000 - - 34,000

Indirect interest:

Datuk Azmi bin Ahmad 330,581,061 - - 330,581,061Shaharuddin bin Warno @ Rahmad 330,415,436 - - 330,415,436Ahmad Hassanudin bin Ahmad Kamaluddin 123,750 - - 123,750

Number of options over ordinary shares of RM0.25 each At 1.1.2016 Expired Granted Exercised At 31.12.2016

Datuk Azmi bin Ahmad 3,309,900 (3,309,900) 924,000 - 924,000Shaharuddin bin Warno @ Rahmad - - 900,000 - 900,000Ahmad Hassanudin bin Ahmad Kamaluddin - - 900,000 - 900,000


Other statutory information

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company weremade out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision fordoubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had been madefor doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in theordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) it necessary to write off any bad debts or the amount of the provision for doubtful debts inadequate to any substantialextent; and

(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherenceto the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financialstatements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year whichsecures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelvemonths after the end of the financial year which will or may affect the ability of the Group or of the Company to meet theirobligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financialyear and the date of this report which is likely to affect substantially the results of the operations of the Group or of theCompany for the financial year in which this report is made.

Subsequent events

Details of subsequent events are disclosed in Note 40 to the financial statements.


Directors' report



Directors' report

Auditors

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 21 April 2017.

Dato' Haji Ab Wahab bin Haji Ibrahim Datuk Azmi bin Ahmad


We, Dato' Haji Ab Wahab bin Haji Ibrahim and Datuk Azmi bin Ahmad, being two of the directors of Alam Maritim Resources Berhad,do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 98 to 191 are drawnup, in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirementsof the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Companyas at 31 December 2016 and of their financial performance and cash flows for the financial year then ended.

The supplementary information set out in Note 41 to the financial statements on page 191 have been prepared in accordance withthe Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosurepursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, and thedirective of Bursa Malaysia Securities Berhad.

Signed on behalf of the Board in accordance with a resolution of the directors dated 21 April 2017.

Dato' Haji Ab Wahab bin Haji Ibrahim Datuk Azmi bin Ahmad

Statutory declarationPursuant to Section 169(16) of the Companies Act, 1965

I, Md Nasir bin Noh, being the officer primarily responsible for the financial management of Alam Maritim Resources Berhad, dosolemnly and sincerely declare that the accompanying financial statements set out on pages 98 to 191 are in my opinion correct,and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the StatutoryDeclarations Act, 1960.

Subscribed and solemnly declared by the abovenamed, Md Nasir bin Noh at Kuala Lumpur in the FederalTerritory on 21 April 2017. Md Nasir bin Noh

Before me,


Statement by directorsPursuant to Section 169(15) of the Companies Act, 1965



Independent auditors' reportto the members of Alam Maritim Resources Berhad (Incorporated in Malaysia)

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Alam Maritim Resources Berhad, which comprise the statements of financial positionas at 31 December 2016 of the Group and of the Company, and the statements of profit or loss and other comprehensive income,statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notesto the financial statements, including a summary of significant accounting policies, as set out on pages 107 to 136.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of theCompany as at 31 December 2016, and of their financial performance and cash flows for the year then ended in accordance withMalaysian Financial Reporting Standards ("MFRS"), International Financial Reporting Standards ("IFRS") and the requirements ofthe Companies Act, 1965 in Malaysia.

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 abasis 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' Codeof Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance withthe By-Laws and the IESBA Code.

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 of thefinancial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide aseparate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided inthat context.

We have fulfilled the responsibilities described in the Auditors' responsibilities for the audit of the financial statements section ofour report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, includingthe procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financialstatements.

Impairment of Group's vessels

As at 31 December 2016, the Group has RM443,644,103 million of property, vessels and equipment of which 90% relates to vesselsand diving equipment with a total carrying value of RM400,558,428 million, being one of the most significant assets of the Group.This is further detailed in Note 12 to the financial statements.

Due to the continued depressed oil and gas industry, the Group has recorded a decline in revenue for the current financial year,thereby indicating that the carrying amount of the vessels and diving equipment may be impaired. The Group had recognised animpairment amount of RM22,469,772 in the current financial year.

The recoverable amount are determined separately as each vessels and diving equipment is able to generate cash inflowsindependently. Accordingly, the Group estimated the recoverable amount of the vessels and diving equipment based on the higherof fair value less costs to sell and its value in use.


Key audit matters (cont'd.)

Impairment of Group's vessels (cont’d.)

The impairment review was significant to our audit because the assessment process is complex and is based on assumptions thatare highly judgmental.

Our audit procedures included, amongst others:

- assessed the methodologies used by external valuers to estimate the fair value of the vessels;- evaluated the external valuer's competency, capabilities and objectivity;- checked, on a sample basis, the accuracy and relevance of the input data provided by management to the external valuer;- evaluated management's cash flow forecasts where we compared these forecasts with the business plans and also compared

previous forecasts to actual results to assess the performance of the business and the accuracy of the forecasting; and- evaluated and challenged the assumption made on vessels' utilisation rate, daily charter rate, budgeted gross margins and

discount rate.

In addition, we also assessed the appropriateness of the disclosures in the audited financial statements in accordance with therelevant standards. We refer to Notes 3.2(c) and 12 in the notes to the financial statements.

Impairment of investments in associates and joint ventures

As at 31 December 2016, the carrying value of investments in associates and joint ventures are RM47,741,569 and RM210,040,405respectively. This is further detailed in Notes 16 and 17 to the financial statements.

The continued depressed oil and gas industry mentioned above has raised indication of possible impairment where the directorshave assessed the recoverable amount of the entities. The Group had recognised an impairment amount of RM7,570,161 in thecurrent financial year.

Our audit procedures included amongst others:

- evaluating the assumptions and methodologies used by the Group in performing the impairment assessment;- evaluated management's cash flow forecasts where we compared these forecasts with the business plans and also compared

previous forecasts to actual results to assess the performance of the business and the accuracy of the forecasting;- evaluated and challenged the assumptions made on forecasted revenue, budgeted gross margins and discount rate;- assessed the methodologies used by external valuers to estimate the fair value of the vessels, which is the most significant

assets of the entities;- evaluated the external valuer's competency, capabilities and objectivity; and- checked, on a sample basis, the accuracy and relevance of the input data provided by management to the external valuer.

In addition, we also assessed the appropriateness of the disclosures in the audited financial statements in accordance with therelevant standards. We refer to Note 3.2(d) in the notes to the financial statements.

Information other than the financial statements and the auditors' report thereon

The directors of the Company are responsible for the other information. The other information comprises the information includedin the annual report, but does not include the financial statements of the Group and of the Company and out 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, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regard.






Responsibilities of the directors for the financial statements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company thatgive a true and fair view in accordance with MFRS, IFRS and the requirements of the Companies Act, 1965 in Malaysia. Thedirectors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financialstatements of the Group and of the Company that 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 Group’sand 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 has 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, as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approvedstandards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonablybe 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 in Auditing, weexercise professional judgement and maintain professional skepticism throughout the audit. We also:

• 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 is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, orthe override of internal control.

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relateddisclosures made by the directors.

• 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 on theGroup’s and the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our auditors' report to the related disclosures in the financial statements of the Group and of theCompany or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However, future events or conditions may cause the Group or the Company tocease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, includingthe disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactionsand events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities and 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.


Auditors' responsibilities for the audit of the financial statements (cont’d.)

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant auditfindings, 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 consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal regulatory requirements

In accordance with the requirements of the Companies Act, 1965 ("Act") in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and itssubsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors' report of all the subsidiaries of which we have not acted asauditors, which are indicated in Note 15 to the financial statements, being financial statements that have been included in theconsolidated financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements ofthe Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financialstatements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not includeany comment required to be made under Section 174(3) of the Act.

Other reporting responsibilities

The supplementary information set out in Note 41 to the financial statements on page 190 is disclosed to meet the requirement ofBursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation ofthe supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and UnrealisedProfits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued bythe Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, thesupplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of BursaMalaysia Securities Berhad.

Other matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Nik Rahmat Kamarulzaman Bin Nik Ab. RahmanAF: 0039 No. 1759/02/18(J)Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia21 April 2017





Group Company 2016 2015 2016 2015 Note RM RM RM RM

Revenue 4 229,480,524 350,222,090 - -Cost of sales 4 (218,060,275) (286,904,376) - -

Gross profit 11,420,249 63,317,714 - -Other income 5 10,972,342 19,738,027 10,639,680 8,244,846Employee benefits expense 6 (26,322,906) (26,889,553) (382,760) (414,002)Other expenses (68,877,278) (41,644,716) (624,421) (950,827)

Operating (loss)/profit (72,807,593) 14,521,472 9,632,499 6,880,017Finance costs 8 (9,151,947) (12,345,609) (5,205,500) (7,550,483)Share of results of associates (30,454,322) 2,379,049 - -Share of results of joint ventures (36,454,136) (24,373,278) - -

(Loss)/profit before tax 9 (148,867,998) (19,818,366) 4,426,999 (670,466)Income tax credit/(expense) 10 6,209,539 65,629,571 (22,775) (107,907)

(Loss)/profit for the year (142,658,459) 45,811,205 4,404,224 (778,373)

Other comprehensive income:Other comprehensive income to be reclassified to profit or loss in subsequent period (net of tax):Foreign currency translation, representing other comprehensive income for the year, net of tax (353,045) 2,061,148 - -

Total comprehensive income for the year (143,011,504) 47,872,353 4,404,224 (778,373)

(Loss)/profit attributable to:Owners of the parent (137,502,551) 45,593,836 4,404,224 (778,373)Non-controlling interests (5,155,908) 217,369 - -

(142,658,459) 45,811,205 4,404,224 (778,373)

Total comprehensive income attributable to:Owners of the parent (136,926,411) 47,176,970 4,404,224 (778,373)Non-controlling interests (6,085,093) 695,383 - -

(143,011,504) 47,872,353 4,404,224 (778,373)

(Loss)/earnings per share attributable to owners of the parent: Basic (sen) 11(a) (14.9) 4.9 Diluted (sen) 11(b) (14.9) 4.9

Statements of comprehensive incomeFor the financial year ended 31 December 2016

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


Group Company 2016 2015 2016 2015 Note RM RM RM RM

Assets

Non-current assetsProperty, vessels and equipment 12 443,644,103 502,669,963 - -Investment properties 13 8,534,655 8,300,574 - -Intangible assets 14 - 1,559,512 - -Investments in subsidiaries 15 - - 100,303,120 100,303,120Investments in associates 16 47,741,569 79,431,906 - -Interests in joint ventures 17 210,040,405 253,652,117 - -Deferred tax assets 18 5,157,381 7,841,327 - -Trade receivables 20 581,965 581,965 - -

715,700,078 854,037,364 100,303,120 100,303,120

Current assetsInventories 19 2,066,265 2,629,730 - -Amounts due from subsidiaries 28 - - 366,934,663 402,087,637Trade receivables 20 55,303,574 100,484,306 - -Other receivables 21 132,925,189 105,054,822 192,776 28,811Tax recoverable 6,248,867 4,138,802 352,577 360,302Cash and bank balances 22 45,124,437 125,513,402 11,968,076 14,922,379

241,668,332 337,821,062 379,448,092 417,399,129

Total assets 957,368,410 1,191,858,426 479,751,212 517,702,249

Equity and liabilities

Current liabilitiesBorrowings 26 92,628,508 102,594,926 30,000,000 40,000,000Trade payables 29 47,732,118 81,247,255 - -Other payables 30 12,842,878 24,921,291 613,753 5,077,250Tax payable 256,501 351,771 - -

153,460,005 209,115,243 30,613,753 45,077,250

Net current assets 88,208,327 128,705,819 348,834,339 372,321,879


Statements of financial positionAs at 31 December 2016



Statements of financial positionAs at 31 December 2016

Group Company 2016 2015 2016 2015 Note RM RM RM RM Restated

Non-current liabilitiesBorrowings 26 62,132,470 91,434,191 45,000,000 75,000,000Deferred tax liabilities 18 4,169,191 12,798,980 - -

66,301,661 104,233,171 45,000,000 75,000,000

Total liabilities 219,761,666 313,348,414 75,613,753 120,077,250

Net assets 737,606,744 878,510,012 404,137,459 397,624,999

Equity attributable to owners of the parentShare capital 23 231,115,231 231,115,231 231,115,231 231,115,231Share premium 23 165,199,735 165,199,735 165,199,735 165,199,735Other reserves 24 704,248 (1,885,182) 2,108,236 94,946Retained earnings 345,098,729 482,506,334 5,714,257 1,215,087

742,117,943 876,936,118 404,137,459 397,624,999Non-controlling interests (4,511,199) 1,573,894 - -

Total equity 737,606,744 878,510,012 404,137,459 397,624,999

Total equity and liabilities 957,368,410 1,191,858,426 479,751,212 517,702,249



< Attributable to owners of the parent > < Non-distributable > Distributable Share Share Other Non- capital premium reserves Retained controlling Total (Note 23) (Note 23) (Note 24) earnings Total interests equity RM RM RM RM RM RM RM

Opening balance at 1 January 2016 231,115,231 165,199,735 (1,885,182) 482,506,334 876,936,118 1,573,894 878,510,012

Loss for the year - - - (137,502,551) (137,502,551) (5,155,908) (142,658,459)

Other comprehensive income - - 576,140 - 576,140 (929,185) (353,045)

Total comprehensive income 231,115,231 165,199,735 (1,309,042) 345,003,783 740,009,707 (4,511,199) 735,498,508

Expiry of employee share options - - (94,946) 94,946 - - -

Issuance of employee share options - - 2,108,236 - 2,108,236 - 2,108,236

Closing balance at 31 December 2016 231,115,231 165,199,735 704,248 345,098,729 742,117,943 (4,511,199) 737,606,744

Opening balance at 1 January 2015 231,115,231 165,199,735 (3,468,316) 436,912,498 829,759,148 878,511 830,637,659

Profit for the year - - - 45,593,836 45,593,836 217,369 45,811,205

Other comprehensive income - - 1,583,134 - 1,583,134 478,014 2,061,148

Closing balance at 31 December 2015 231,115,231 165,199,735 (1,885,182) 482,506,334 876,936,118 1,573,894 878,510,012


Consolidated statement of changes in equityFor the financial year ended 31 December 2016




Company statement of changes in equityFor the financial year ended 31 December 2016

< Non-distributable > Distributable Share Share Other Retained capital premium reserves earnings Total (Note 23) (Note 23) (Note 24) (Note 25) equity RM RM RM RM RM

At 1 January 2016 231,115,231 165,199,735 94,946 1,215,087 397,624,999

Total comprehensive income for the year - - - 4,404,224 4,404,224

Transactions with owners:Issuance of employee share options - - 2,108,236 - 2,108,236Expiry of employee share options - - (94,946) 94,946 -Total transactions with owners - - 2,013,290 94,946 2,108,236

At 31 December 2016 231,115,231 165,199,735 2,108,236 5,714,257 404,137,459

At 1 January 2015 231,115,231 165,199,735 94,946 1,993,460 398,403,372

Total comprehensive expense for the year - - - (778,373) (778,373)

At 31 December 2015 231,115,231 165,199,735 94,946 1,215,087 397,624,999



Group Company 2016 2015 2016 2015 RM RM RM RM

Operating activities(Loss)/profit before tax (148,867,998) (19,818,366) 4,426,999 (670,466)Adjustments for: Interest income (836,442) (3,475,745) (172,325) (689,795) Interest recharged to subsidiaries - - (5,205,500) (7,550,483) Property, vessels and equipment: - Depreciation (Note 12) 44,958,897 42,876,078 - - - Loss on disposal 60,994 3,176 - - - Written off (Note 12) 8,777 2,004 - - - Impairment (Note 12) 22,469,772 16,077,838 - - Finance costs 9,151,947 12,345,609 5,205,500 7,550,483 Trade receivables: - Impairment loss (Note 20) 9,343,523 12,378,295 - - - Reversal of impairment loss (Note 20) (3,025,000) - - - Amounts due from joint ventures: - Impairment loss (Note 21) 7,953,167 - - - Net unrealised foreign exchange loss/(gain) 9,292,038 (12,919,748) (5,261,668) - Intangibles assets: - Impairment loss (Note 14) 1,590,456 - - - Share of results of associates 30,454,322 (2,379,049) - Share of results of joint ventures 36,454,136 24,373,278 - - Gain on disposal of a subsidiary company (Note 15) (1,610,095) - - - Impairment loss on investments in associates (Note 16) 1,236,015 - - - Impairment loss on interests in joint ventures (Note 17) 6,334,146 840,967 - - Issuance of employee share options (Note 24) 2,108,236 - - -

Cash flow generated from/(used in) before working capital changes 27,076,891 70,304,337 (1,006,994) (1,360,261)

Operating cash flows before working capital changes 27,076,891 70,304,337 (1,006,994) (1,360,261)

Changes in working capital: Decrease in inventories 563,465 2,296,931 - - Decrease/(increase) in receivables 3,482,814 57,057,751 (163,965) 78,574 (Decrease)/increase in payables (52,054,064) (70,231,129) (4,463,497) 4,163,591

Total changes in working capital (48,007,785) (10,876,447) (4,627,462) 4,242,165Cash flows (used in)/generated from operations (20,930,894) 59,427,890 (5,634,456) 2,881,904Income tax (paid)/refund, net (2,176,038) (3,161,572) (15,050) 36,047Interest paid (9,151,947) (12,345,609) (5,205,500) (7,550,483)

Net cash flows (used in)/generated from operating activities (32,258,879) 43,920,709 (10,855,006) (4,632,532)


Statements of cash flowsFor the financial year ended 31 December 2016



Statements of cash flowsFor the financial year ended 31 December 2016


Investing activitiesPurchase of property, vessels and equipment (8,364,445) (33,217,956) - -Proceeds from disposal of property, vessels and equipment 57,905 - - -Proceeds from disposal of a subsidiary company 2 - - -Decrease in amounts due from subsidiaries - - 42,522,878 4,215,994Interest received 836,442 3,475,745 5,377,825 8,240,278

Net cash flows (used in)/generated from investing activities (7,470,096) (29,742,211) 47,900,703 12,456,272

Financing activitiesRedemption of Sukuk Ijarah Murabahah Term Notes ("MTN") (40,000,000) (115,000,000) (40,000,000) (115,000,000)Term loans: - Drawdown 5,634,843 2,734,901 - - - Repayment (10,798,490) (10,969,919) - -Revolving credits: - Drawdown 11,082,500 6,000,000 - - - Repayment (6,116,500) 9,200,000) - -Hire purchase and finance lease liabilities: - Repayment (1,418,925) (1,168,185) - -Decrease/(increase) in cash set aside for marginal deposit 9,176,416 (981,110) - -Net cash set aside for sinking fund 1,168,750 30,356,239 1,168,750 42,697,622Withdrawal in fixed deposit with maturity more than three months - 30,000,000 - -

Net cash flows used in financing activities (31,271,406) (68,228,074) (38,831,250) (72,302,378)

Net decrease in cash and cash equivalents (71,000,381) (54,049,576) (1,785,553) (64,478,638)Net foreign exchange difference (1,391,851) (6,179,232) - -Cash and cash equivalents at beginning of the financial year 79,435,811 139,664,619 2,234,872 66,713,510

Cash and cash equivalents at end of the financial year (Note 22) 7,043,579 79,435,811 449,319 2,234,872



1. Corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market ofBursa Malaysia Securities Berhad. The registered office of the Company is located at 38F, Level 3, Jalan Radin Anum, BandarBaru Sri Petaling, 57000 Kuala Lumpur.

The immediate holding company is SAR Venture Holdings (M) Sdn. Bhd., which is incorporated in Malaysia and is aninvestment holding company.

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 15.

There have been no significant changes in the nature of the principal activities of the Company and of its subsidiaries,associates and joint ventures during the financial year except for the discontinuance of the ship owning activity by Alam Maritim(L) Inc. as disclosed in Note 15 to the financial statements.

The financial statements were authorized for issue by the Board of Directors on 21 April 2017

2. Summary of significant accounting policies

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian FinancialReporting Standards ("MFRSs"), International Financial Reporting Standards ("IFRSs") and the requirements of theCompanies Act, 1965 in Malaysia.

At the beginning of the current financial year, the Group and the Company adopted new and revised MFRS, which aremandatory for the financial periods beginning on or after 1 January 2015 as disclosed in Note 2.2.

The financial statements have been prepared on a historical cost basis except as disclosed in this summary of significantaccounting policies.

The financial statements are presented in Ringgit Malaysia (''RM") except when otherwise indicated.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 January 2016, the Group and the Company adopted the following new and amended MFRSs mandatory for annualfinancial periods beginning on or after 1 January 2016.

Effective for annual periodsDescription beginning on or after

Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016Amendments to MFRS 101: Disclosure Initiatives 1 January 2016Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception 1 January 2016MFRS 14 Regulatory Deferral Accounts 1 January 2016


Notes to the Financial Statements31 December 2016




2. Summary of significant accounting policies (cont’d.)

2.2 Changes in accounting policies (cont’d.)

The nature and impact of the new and amended MFRS are described below:

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

The amendments clarify that revenue reflects a pattern of economic benefits that are generated from operating a business(of which the asset is part of the business) rather than the economic benefits that are consumed through the use of anasset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may onlybe used in very limited circumstances to amortise intangible assets.

The amendments do not have any impact to the Group as the Group has not used a revenue-based method to depreciateits non-current assets.

Amendments to MFRS 11 Joint Arrangements: Accounting for Acquisitions of Interests in Joint Operations

The amendments to MFRS 11 require that a joint operator which acquires an interest in a joint operations which constitutea business to apply the relevant MFRS 3 Business Combinations principles for business combinations accounting. Theamendments also clarify that a previously held interest in a joint operation is not remeasured on the acquisition of anadditional interest in the same joint operation while joint control is retained. In addition, a scope exclusion has been addedto MFRS 11 to specify that the amendments do not apply when the parties sharing joint control, including the reportingentity, are under common control of the same ultimate controlling party.

These amendments do not have any impact on the Group’s consolidated financial statements as there has been nointerest acquired in a joint operation during the year.

Amendments to MFRS 127: Equity Method in Separate Financial Statements

The amendments will allow entities to use the equity method to account for investments in subsidiaries, joint venturesand associate in their separate financial statements. Entities already applying MFRS and electing to change to the equitymethod in its separate financial statements will have to apply this change retrospectively. For first-time adopters of MFRSelecting to use the equity method in its separate financial statements, they will be required to apply this method from thedate of transition to MFRS.

These amendments do not have any impact on the Group’s and the Company’s financial statements.

Amendments to MFRS 101: Disclosure Initiatives

The amendments to MFRS 101 include narrow-focus improvements in the following five areas:

- Materiality;- Disaggregation and subtotals;- Notes structure;- Disclosure of accounting policies; and- Presentation of items of other comprehensive income arising from equity accounted investments.

The amendments do not have any impact on the Group’s and the Company’s financial statements.




Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception

The amendments clarify that the exemption from presenting consolidated financial statements applies to a parent entitythat is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. Theamendments further clarify that only a subsidiary that is not an investment entity itself and provides support services tothe investment entity is consolidated. In addition, the amendments also provides that if an entity that is not itself aninvestment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when applyingthe equity method, retain the fair value measurement applied by that investment entity associate or joint venture to theinvestment entity associate's or joint venture's interests in subsidiaries.

The amendments are to be applied retrospectively and are effective for annual periods beginning on or after 1 January2016, with early adoption permitted. These amendments will not have any impact on the Group's and the Company'sfinancial statements.

MFRS 14 Regulatory Deferral Accounts

MFRS 14 is an optional standard that allows an entity, whose activities are subject to rate-regulations, to continue applyingmost of its existing accounting policies for regulatory deferral account balances upon its first-time adoption of MFRS.Entities that adopt MFRS 14 must present the regulatory deferral accounts as separate line items on the statement offinancial position and present movements in the account balances as separate line items in the statement of profit orloss and other comprehensive income. The standard requires disclosures on the nature of, and risks associated with,the entity’s rate-regulation and the effects of that rate-regulation on its financial statements. Since the Group is an existingMFRS preparer, this standard does not apply.

Annual Improvements to MFRSs 2012–2014 Cycle

The Annual Improvements to MFRSs 2012-2014 Cycle include a number of amendments to various MFRSs, which aresummarised below. These amendments do not have a significant impact on the Group’s and the Company’s financialstatements.

MFRS 5 Non-current Assets Held for Sale and Discontinued Operations

The amendment to MFRS 5 clarifies that changing from one disposal methods to the other should not be considered tobe a new plan of disposal, rather it is a continuation of the original plan. There is therefore no interruption of the applicationof the requirements in MFRS 5.

The amendment also clarifies that changing the disposal method does not change the date of classification. Thisamendment is applied prospectively.

MFRS 7 Financial Instruments: Disclosures

The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financialasset. An entity must assess the nature of the fee and arrangement against the guidance for continuing involvement inMFRS 7 in order to assess whether the disclosures are required.

In addition, the amendment also clarifies that the disclosures in respect of offsetting of financial assets and financialliabilities are not required in the condensed interim financial report. This amendment is applied retrospectively.








MFRS 119 Employee Benefits

The amendment to MFRS 119 clarifies that market depth of high quality corporate bonds is assessed based on thecurrency in which the obligation is denominated, rather than the country where the obligation is located. When there isno deep market for high quality corporate bonds in that currency, government bond rates must be used. This amendmentis applied prospectively.

MFRS 134 Interim Financial Reporting

The amendment states that the required interim disclosures must either be in the interim financial statements orincorporated by cross-reference between the interim financial statements and wherever they are included within thegreater interim financial report (e.g., in the management commentary or risk report). The other information within theinterim financial report must be available to users on the same terms as the interim financial statements and at the sametime. This amendment is applied retrospectively.

2.3 Standards issued but not yet effective

The standards that are issued but not yet effective up to the date of issuance of the Group's and of the Company’sfinancial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable,when they become effective.

Effective for annual periodsDescription beginning on or after

Amendments to MFRS 107: Disclosure Initiative 1 January 2017Amendments to MFRS 112: Recognition of Deferred Tax for Unrealised Losses 1 January 2017Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018MFRS 15 Revenue from Contracts with Customers 1 January 2018MFRS 9 Financial Instruments 1 January 2018Amendments to MFRS 140 Transfers of Investment Property 1 January 2018MFRS 16 Leases 1 January 2019Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

Amendments to MFRS 107: Disclosure Initiative

The amendments to MFRS 107 Statement of Cash Flows requires an entity to provide disclosures that enable users offinancial statements to evaluate changes in liabilities arising from financing activities, including both changes arising fromcash flows and non-cash changes. On initial application of this amendment, entities are not required to providecomparative information for preceding periods. These amendments are effective for annual periods beginning on or after1 January 2017, with early application permitted. Application of amendments will result in additional disclosures to beprovided by the Group and the Company.



2.3 Standards issued but not yet effective (cont’d.)

Amendments to MFRS 112: Recognition of Deferred Tax for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits againstwhich it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendmentsprovide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxableprofit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, thechange in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or inanother component of equity, as appropriate), without allocating the change between retained earnings and othercomponents of equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after 1 January 2017 with early application permitted.If an entity applies this amendments for an earlier period, it must disclose that fact. These amendments are not expectedto have any impact on the Group and on the Company.

Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions

The amendments to MFRS 2 address three main areas:

(a) The effects of vesting conditions on the measurement of a cash-settled share-based payment transaction;(b) The classification of a share-based payment transaction with net settlement features for withholding tax obligations;

and(c) Accounting where a modification to the terms and conditions of a share-based payment transaction changes its

classification from cash settled to equity settled.

On adoption, entities are required to apply the amendments without restating prior periods, but retrospective applicationis permitted if elected for all three amendments and other criteria are met. The amendments are effective for annualperiods beginning on or after 1 January 2018, with early application permitted. The Group is assessing the potential effectof the amendments on the financial statements.

MFRS 15 Revenue from Contracts with Customers

MFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. MFRS 15will supersede the current revenue recognition guidance including MFRS 118 Revenue, MFRS 111 Construction Contractsand the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promised goods orservices to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchangefor those goods or services.

Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e when “control” ofthe goods or services underlying the particular performance obligation is transferred to the customer.

Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2018 withearly adoption permitted. The Directors anticipate that the application of MFRS 15 will have a material impact on theamounts reported and disclosures made in the Group’s and the Company’s financial statements. The Group is currentlyassessing the impact of MFRS 15 and plans to adopt the new standard on the required effective date.








MFRS 9 Financial Instruments

In November 2014, MASB issued the final version of MFRS 9 Financial Instruments which reflects all phases of thefinancial instruments project and replaces MFRS 139 Financial Instruments: Recognition and Measurement and allprevious versions of MFRS 9. The standard introduces new requirements for classification and measurement, impairmentand hedge accounting. MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early applicationpermitted. Retrospective application is required, but comparative information is not compulsory. The adoption of MFRS9 will have an effect on the classification and measurement of the Group’s financial assets, but no impact on theclassification and measurement of the Group’s financial liabilities.

Amendments to MFRS 140 Transfers of Investment Property

The amendments clarify that:

(a) when an entity should transfer property, including property under construction or development into, or out ofinvestment property;

(b) a change in use occurs when the property meets, or ceases to meet, the definition of investment property and thereis evidence of the change in use; and

(c) a mere change in management’s intentions for the use of a property does not provide evidence of a change in use.

The amendments are effective from 1 January 2018. The amendments will eliminate diversity in practice.

MFRS 16 Leases

MFRS 16 will replace MFRS 117 Leases, IC Interpretation 4 Determining whether an Arrangement contains a Lease, ICInterpretation 115 Operating Lease-Incentives and IC Interpretation 127 Evaluating the Substance of TransactionsInvolving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentationand disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar tothe accounting for finance leases under MFRS 117.

At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an assetrepresenting the right to use the underlying asset during the lease term. Lessees will be required to recognise interestexpense on the lease liability and the depreciation expense on the right-of-use asset.

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors will continueto classify all leases using the same classification principle as in MFRS 117 and distinguish between two types of leases:operating and finance leases.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted but not beforean entity applies MFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modifiedretrospective approach. The Group plans to assess the potential effect of MFRS 16 on its financial statements in year 2017.




Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associateor Joint Venture

The amendments clarify that:

(a) gains and losses resulting from transactions involving assets that do not constitute a business, between investorand its associate or joint venture are recognised in the entity’s financial statements only to the extent of unrelatedinvestors’ interests in the associate or joint venture; and

(b) gains and losses resulting from transactions involving the sale or contribution of assets to an associate of a jointventure that constitute a business is recognised in full.

The amendments are to be applied prospectively to the sale or contribution of assets occurring in annual periods beginningon or after a date to be determined by Malaysian Accounting Standards Board. Earlier application is permitted. Theseamendments are not expected to have any impact on the Group.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2016. Control is achieved when the Group is exposed, or has right, to variable returns from its involvementwith the investee and has the ability to affect those returns through its power over the investee.

Specifically, the Group control an investee if, and only if, the Group has:

(i) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of theinvestee);

(ii) Exposure, or rights, to variable returns from its involvement with the investee; and(iii) The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and whenthe Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant factsand circumstances in assessing whether it has power over an investee, including:

(i) The contractual arrangement(s) with the other vote holders of the investee(ii) Rights arising from other contractual arrangements(iii) The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changesto one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains controlover the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expensesof a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from thedate the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary,adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’saccounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactionsbetween members of the Group are eliminated in full on consolidation.







2.4 Basis of consolidation (cont’d.)

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss.Any investment retained is recognised at fair value.

2.5 Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as theaggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets.Acquisition-related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classificationand designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at theacquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of MFRS139 Financial Instruments: Recognition and Measurement, is measured at fair value with the changes in fair valuerecognised in the statement of profit or loss.

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amountrecognised for non-controlling interests and any previous interest held over the net identifiable assets acquired andliabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred,the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed andreviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment stillresults in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gainis recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose ofimpairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of theGroup’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets orliabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within that unit is disposedof, the goodwill associated with the disposed operation is included in the carrying amount of the operation whendetermining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relativevalues of the disposed operation and the portion of the cash-generating unit retained.



2.6 Economic entities in the Group

(a) Subsidiary companies

Investment in subsidiary companies are stated at cost less accumulated impairment losses. Where an indication ofimpairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverableamount. The accounting policy on impairment of non-financial assets is set out in Note 2.11.

A subsidiary is an entity over which the Group has all the following:

(i) Power over the investee (such as existing rights that give it the current ability to direct the relevant activities ofthe investee);

(ii) Exposure, or rights, to variable returns from its investment with the investee; and(iii) The ability to use its power over the investee to affect its returns.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost lessimpairment losses. On disposal of such investments, the difference between net disposal proceeds and their carryingamounts is included in profit or loss.

(b) Transactions with non-controlling interests

Non-controlling interests represent the equity in subsidiaries not attributable directly or indirectly, to owners of theCompany, and is presented separately in the consolidated statement of comprehensive income and within equity inthe consolidated statement of financial position, separately from parent equity attributable to owners of the Company.

Changes in the Company owner's ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any differencebetween the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid orreceived is recognised directly in equity and attributed to owners of the parent.

(c) Investment in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control overthose policies.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement haverights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of anarrangement, which exists only when decisions about the relevant activities require the unanimous consent of theparties sharing control.

The considerations made in determining significant influence or joint control are similar to those necessary todetermine control over subsidiaries.

The Group’s investments in its associate and joint venture are accounted for using the equity method.

Under the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carryingamount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate orjoint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the carryingamount of the investment and is not tested for impairment separately.







2.6 Economic entities in the Group (cont’d.)

(c) Investment in associates and joint ventures (cont’d.)

The statement of profit or loss reflects the Group’s share of the results of operations of the associate or joint venture.Any change in other comprehensive income of those investees is presented as part of the Group’s othercomprehensive income. In addition, when there has been a change recognised directly in the equity of the associateor joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes inequity. Unrealised gains and losses resulting from transactions between the Group and the associate or joint ventureare eliminated to the extent of the interest in the associate or joint venture.

The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face of thestatement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interestsin the subsidiaries of the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Group.When necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognise an impairmentloss on its investment in its associate or joint venture. At each reporting date, the Group determines whether thereis objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, theGroup calculates the amount of impairment as the difference between the recoverable amount of the associate orjoint venture and its carrying value, and then recognises the loss as ‘Share of profit of an associate and a jointventure’ in the statement of profit or loss.

Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures andrecognises any retained investment at its fair value. Any difference between the carrying amount of the associate orjoint venture upon loss of significant influence or joint control and the fair value of the retained investment andproceeds from disposal is recognised in profit or loss.

2.7 Foreign currencies

(a) Functional and presentation currency

The Group’s consolidated financial statements are presented in Ringgit Malaysia, which is also the Company’sfunctional currency. For each entity, the Group determines the functional currency and items included in the financialstatements of each entity are measured using that functional currency. The Group uses the direct method ofconsolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects theamount that arises from using this method.

(b) Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currencyspot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot ratesof exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss.



2.7 Foreign currencies (cont’d.)

(b) Transactions and balances (cont’d.)

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using theexchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreigncurrency are translated using the exchange rates at the date when the fair value is determined. The gain or lossarising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gainor loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss isrecognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

2.8 Property, vessels and equipment

All items of property, vessels and equipment are initially recorded at cost. The cost of an item of property, vessels andequipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the itemwill flow to the Group and the cost of the item can be measured reliably.

Subsequent to initial recognition, property, vessels and equipment are measured at cost less accumulated depreciationand accumulated impairment losses. When significant parts of property, vessels and equipment are required to bereplaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation,respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the vesselsand equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs arerecognised in profit or loss as incurred.

Vessels are depreciated in equal annual basis to reduce the cost of vessels to its residual value over their estimateduseful lives of 25 years.

Drydocking costs are capitalised and amortised over the period of the vessel's next drydocking cycle which rangeapproximately between 2.5 to 5 years.

Freehold land has an unlimited useful life and therefore is not depreciated.

Depreciation of property and other equipment is provided for on a straight-line basis to write off the cost of each asset toits residual value over the estimated useful life, at the following annual rates:

Long term leasehold land 99 yearsLeasehold building 2% to 3%Diving equipment 10%Equipment on vessel 10%Motor vehicles 20%Computers 33.3%Office equipment 10%Furniture and fittings 10%Renovations 10%

Assets under construction are not depreciated as the assets are not available for use.

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that theamount, method and period of depreciation are consistent with previous estimates and the expected pattern ofconsumption of the future economic benefits embodied in the items of property, vessels and equipment.







2.8 Property, vessels and equipment (cont’d.)

An item of property, vessels and equipment is derecognised upon disposal or when no future economic benefits areexpected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amountis recognised in profit or loss.

2.9 Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or both.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition,investment properties are carried at cost less any accumulated depreciation and impairment losses. The policy for therecognition and measurement of impairment losses in accordance with Note 2.11.

The residual values, useful lives and depreciation methods are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern ofconsumption of the future economic benefits embodied in the items of the investment properties.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawnfrom use and no future economic benefit is expected from their disposal. The difference between the net disposal proceedsand the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investmentproperty to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of changein use. If owner-occupied property becomes an investment property, the Group accounts for such property in accordancewith the policy stated under property, plant and equipment up to the date of change in use.

2.10 Intangible assets

(a) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulatedimpairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’scash-generating units that are expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit.Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss isrecognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit isdisposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operationwhen determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measuredbased on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.



2.10 Intangible assets (cont’d.)

(b) Other intangible assets

Costs directly attributable to the development of design for deep sea remotely operated subsea vehicles andperipherals are capitalised as intangible assets only when technical feasibility of the project is demonstrated, theGroup's intention to complete, its ability to use or sell the asset, how the asset will generate future economic benefits,and the costs can be measured reliably. Such costs include payroll-related costs of employees directly involved inthe project and other costs directly related to the project. Research costs are expensed as incurred.

Deferred development costs are subsequently carried at cost less accumulated amortisation and any accumulatedimpairment losses. These costs are amortised to the profit and loss account using the straight-line method over theirestimated useful lives of five years.

2.11 Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indicationexists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount.An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. Therecoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largelyindependent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds itsrecoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discountrate that reflects current market assessments of the time value of money and the risks specific to the asset. In determiningfair value less costs of disposal, recent market transactions are taken into account. If no such transactions can beidentified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quotedshare prices for publicly traded companies or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separatelyfor each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculationsgenerally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows afterthe fifth year.

Impairment losses of continuing operations are recognised in the statement of profit or loss in expense categoriesconsistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indicationthat previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Groupestimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if therehas been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment losswas recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount,nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss beenrecognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss.







2.12 Financial instruments - initial recognition and subsequent measurement

(a) Financial assets

(i) Initial recognition and measurement

Financial assets are recognised in the statements of financial position when, and only when, the Group andthe Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financialassets not at fair value through profit or loss, directly attributable transaction costs.

Purchases or sales of financial assets that require delivery of assets within a time frame established byregulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., thedate that the Group commits to purchase or sell the asset.

(ii) Subsequent measurement

The Group and the Company determine the classification of their financial assets at initial recognition. Financialassets with fixed or determinable payments that are not quoted in any active market are classified as loansand receivables. All financial assets of the Group and the Company are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effectiveinterest method. Gains and losses are recognised in profit or loss when the loans and receivables arederecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12months after the reporting date which are classified as non-current.

(iii) Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:

- The rights to receive cash flows from the asset have expired; or

- The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation topay the received cash flows in full without material delay to a third party under a ‘pass-through’arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset,or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,but has transferred control of the asset

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership.When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferredcontrol of the asset, the Group continues to recognise the transferred asset to the extent of its continuinginvolvement. In that case, the Group also recognises an associated liability. The transferred asset and theassociated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lowerof the original carrying amount of the asset and the maximum amount of consideration that the Group could berequired to repay.



2.12 Financial instruments - initial recognition and subsequent measurement (cont’d.)

(a) Financial assets (cont’d.)

(iv) Impairment of financial assets

The Group and the Company assess, at each reporting date, whether there is objective evidence that a financialasset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to beimpaired if there is objective evidence of impairment as a result of one or more events that has occurred sincethe initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimatedfuture cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidenceof impairment may include indications that the debtors or a group of debtors is experiencing significant financialdifficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcyor other financial reorganisation and observable data indicating that there is a measurable decrease in theestimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’scarrying amount and the present value of estimated future cash flows discounted at the financial asset's originaleffective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assetswith the exception of receivable, where the carrying amount is reduced through the use of an allowance account.When a receivable becomes uncollectible, it is written off against the allowance account.

If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be relatedobjectively to an event occurring after the impairment was recognised, the previously recognised impairmentloss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at thereversal date. The amount of reversal is recognised in profit or loss.

(b) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified according to the substance of the contractual arrangements entered into andthe definitions of a financial liability.

Financial liabilities are recognised in the statement of financial position when, and only when, the Groupbecomes a party to the contractual provisions of the financial instrument.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financialliabilities. The only category of the Group and of the Company is other financial liabilities.

(ii) Subsequent measurement

The Group’s and the Company's other financial liabilities include trade payables, other payables and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs andsubsequently measured at amortised cost using the effective interest method.







2.12 Financial instruments - initial recognition and subsequent measurement (cont’d.)

(b) Financial liabilities (cont’d.)

(ii) Subsequent measurement (cont’d.)

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measuredat amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities arederecognised, and through the amortisation process.

(iii) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or hasexpired. When an existing financial liability is replaced by another from the same lender on substantially differentterms, or the terms of an existing liability are substantially modified, such an exchange or modification is treatedas a derecognition of the original liability and the recognition of a new liability, and the difference in the respectivecarrying amounts is recognised in profit or loss.

(c) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial positionif there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle ona net basis, to realise the assets and settle the liabilities simultaneously.

2.13 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquidinvestments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changesin value. These also include bank overdrafts that form an integral part of the Group’s cash management.

Deposit with licensed banks and financial institutions with maturity profile above 3 months are excluded from cash andcash equivalents.

2.14 Construction contracts

Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs arerecognised as revenue and expenses respectively by using the stage of completion method. The stage of completion ismeasured by reference to the proportion of contract costs incurred for work performed to date to the estimated totalcontract costs.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extentof contract costs incurred that are likely to be recoverable. Contract costs are recognised as expense in the period inwhich they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as anexpense immediately.



2.14 Construction contracts (cont’d.)

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claimsand incentive payments to the extent that it is probable that they will result in revenue and they are capable of beingreliably measured.

When the total of costs incurred on construction contracts plus recognised profits (less recognised losses) exceedsprogress billings, the balance is classified as amount due from customers on contracts. When progress billings exceedcosts incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.

2.15 Inventories

Inventories are stated at lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for, as follows:

- Raw materials: purchase cost on a first-in/first-out basis- Finished goods and work in progress: cost of direct materials and labour and a proportion of manufacturing

overheads based on the normal operating capacity, but excluding borrowing costs

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

2.16 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, itis probable that an outflow of resources embodying economic benefits will be required to settle the obligation and areliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to bereimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but onlywhen the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit orloss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to thepassage of time is recognised as a finance cost.

2.17 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holderfor a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent toinitial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee.If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, isrequired to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised lesscumulative amortisation.







2.18 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes asubstantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All otherborrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs thatan entity incurs in connection with the borrowing of funds.

2.19 Employee benefits

(a) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which theassociated services are rendered by employees. Short term accumulating compensated absences such as paidannual leave are recognised when services are rendered by employees that increase their entitlement to futurecompensated absences. Short term non-accumulating compensated absences such as sick leave are recognisedwhen the absences occur.

(b) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it hasoperations. The Malaysian companies in the Group make contributions to the Employees Provident Fund ("EPF")in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes arerecognised as an expense in the period in which the related service is performed.

(c) Employee Share Options Scheme (“ESOS”)

The Company's Employee Share Options Scheme (“ESOS”), an equity-settled, share-based compensation plan,allows the Group’s employees to acquire ordinary shares of the Company. The total fair value of share optionsgranted to employees is recognised as an employee cost with a corresponding increase in the share option reservewithin equity over the vesting period and taking into account the probability that the options will vest.

The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditionsupon which the options were granted but excluding the impact of any non-market vesting conditions. Non-marketvesting conditions are included in assumptions about the number of options that are expected to become exercisableon vesting date. At each reporting date, the Group revises its estimates of the number of options that are expectedto become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in theprofit or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount isrecognised in the share option reserve until the option is exercised, upon which it will be transferred to sharepremium, or until the option expires, upon which it will be transferred directly to retained earnings. The proceedsreceived net of any directly attributable transaction costs are credited to equity when the options are exercised.

2.20 Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement atthe inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on theuse of a specific asset (or assets) and the arrangement conveys a right to use the asset (or assets), even if that asset is(or those assets are) not explicitly specified in an arrangement.



2.20 Leases (cont’d.)

(a) As lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantiallyall the risks and rewards incidental to ownership to the Group is classified as a finance lease.

Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leasedproperty or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned betweenfinance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remainingbalance of the liability. Finance charges are recognised in finance costs in the statement of profit or loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that theGroup will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimateduseful life of the asset and the lease term.

An operating lease is a lease other than a finance lease. Operating lease payments are recognised as an operatingexpense in the statement of profit or loss on a straight-line basis over the lease term.

(b) As lessor

Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset areclassified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are addedto the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.Contingent rents are recognised as revenue in the period in which they are earned. The accounting policy for rentalincome are set out in Notes 2.21(a) and 2.21(d).

2.21 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenuecan be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The followingspecific recognition criteria must also be met before revenue is recognised:

(a) Charter hire of vessels, ship catering and other shipping related income

Charter hire of vessels, ship catering and other shipping related income are recognised when the services arerendered and are computed at the contracted daily rate. In the event invoices are yet to be issued at year end, therevenue is accrued to the extent of the services rendered at the reporting date.

(b) Revenue from offshore installation and construction

Revenue relating to offshore installation and construction are recognised in accordance with the policy set out inNote 2.14.

(c) Diving and sub-sea services

The above revenue are recognised on accrual basis when the services are rendered.

(d) Rental of equipment

Rental of equipment is recognised on straight-line basis over the term of the lease.







2.21 Revenue recognition (cont’d.)

(e) Vessel's management fees

Management fees are recognised on accrual basis based on a predetermined rate.

(f) Sales of diving equipment

Revenue from the sales of diving equipment is recognised upon passage of title to the customer which generallycoincides with their delivery and acceptance.

(g) Interest income

Interest income is recognised on an accrual basis using the effective interest method.

(h) Dividend income

Dividend income is recognised when the Company's right to receive payment is established.

2.22 Income taxes

Income tax on profit or loss for the financial year comprises current and deferred tax.

(a) Current tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to thetaxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted orsubstantively enacted at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement ofprofit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in whichapplicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets andliabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in atransaction that is not a business combination and, at the time of the transaction, affects neither the accountingprofit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interestsin joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probablethat the temporary differences will not reverse in the foreseeable future.



2.22 Income taxes (cont’d.)

(b) Deferred tax (cont’d.)

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax creditsand unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will beavailable against which the deductible temporary differences, and the carry forward of unused tax credits and unusedtax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognitionof an asset or liability in a transaction that is not a business combination and, at the time of the transaction,affects neither the accounting profit nor taxable profit or loss.

- in respect of deductible temporary differences associated with investments in subsidiaries, associates andinterests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that thetemporary differences will reverse in the foreseeable future and taxable profit will be available against whichthe temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is nolonger probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that ithas become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when theasset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantivelyenacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax itemsare recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current taxassets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxationauthority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition atthat date, are recognised subsequently if new information about facts and circumstances change. The adjustmentis either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during themeasurement period or recognised in profit or loss.

2.23 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services whichare independently managed by the respective segment managers responsible for the performance of the respectivesegments under their charge. The segment managers report directly to the management of the Company who regularlyreview the segment results in order to allocate resources to the segments and to assess the segment performance.Additional disclosures on each of these segments are shown in Note 39, including the factors used to identify thereportable segments and the measurement basis of segment information.







2.24 Share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Companyafter deducting all of its liabilities. Ordinary shares are classified as equity.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinaryshares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.25 Contingent liabilities and contingent assets

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by uncertain futureevents beyond the control of the Group and the Company. The Group and the Company do not recognise contingentassets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

In the acquisition of subsidiary companies by the Group and the Company under a business combination, the contingentliabilities assumed are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interests.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

2.26 Current versus non-current classification

The Group presents assets and liabilities in statement of financial position based on current/non-current classification.An asset is current when it is:

(i) expected to be realised or intended to be sold or consumed in normal operating cycle;(ii) held primarily for the purpose of trading;(iii) expected to be realised within twelve months after the reporting period; or(iv) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months

after the reporting period.

All other assets are classified as non-current.

A liability is current when:

(i) it is expected to be settled in normal operating cycle;(ii) it is held primarily for the purpose of trading;(iii) it is due to be settled within twelve months after the reporting period; or(iv) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting

period.

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.



2.27 Fair value measurement

The Group measures financial instruments such as derivatives, and non-financial assets such as investment propertiesat fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. The fair value measurement is based on the presumption that thetransaction to sell the asset or transfer the liability takes place either:

(i) In the principal market for the asset or liability, or

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricingthe asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economicbenefit by using the asset in its highest and best use or by selling it to another market participant that would use the assetin its highest and best use.

The Group uses valuation techniques that are appropriate in circumstances and for which sufficient data are available tomeasure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised withinthe fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair valuemeasurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determine whethertransfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level inputthat is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group have determined classes of assets and liabilities on the basis of thenature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.






3. Significant accounting judgements and estimates

The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptionsthat affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimatescould result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in thefuture periods.

3.1 Judgements made in applying accounting policies

There are no critical judgements made by management in the process of applying the Group's and the Company'saccounting policies that have a significant effect on the amounts recognised in the financial statements.

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, thathave a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the nextfinancial year are discussed below:

(a) Depreciation of vessels and equipment on vessel

The cost of vessels and equipment on vessel are depreciated on a straight-line basis over the assets' useful life.Management estimates the useful lives of the Group's vessels to be 25 years and equipment on vessel to be 10years. These are common life expectancies applied in the shipping industry. Changes in the expected level of usagecould impact the economic useful lives and residual values of these assets, therefore future depreciation chargescould be revised. The carrying amount of vessels and equipment on vessel is disclosed in Note 12.

(b) Impairment of loans and receivables

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired.To determine whether there is objective evidence of impairment, the Group considers factors such as the Group'scontractual entitlement to a debt, the probability of insolvency or significant financial difficulties of the debtor anddefault or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated basedon historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’strade receivables at the reporting date is disclosed in Note 20.

(c) Impairment review of vessels' carrying value

The Group assesses at each reporting date whether there is any indication that the asset may be impaired. Todetermine whether there is objective evidence of impairment, the Group considers external and internal factors suchas the current economic outlook, average utilisation rate as well as ability of the entity to secure long term contract.Where there is objective evidence of impairment, the amount of impairment loss is measured at the differencebetween the asset’s carrying amount and the recoverable amount. The recoverable amount of an asset is a higherof the fair value less cost to sell and its value in use.

To determine fair value less cost to sell requires an estimation on price at which an orderly transaction to sell theasset would take place between market participants under current market condition. While to determine value inuse requires estimation on the future cash flows from the asset and choose a suitable discount rate in order tocalculate the present value of those cash flows. The amount of impairment on vessels, if any, is as disclosed in Note 12.


3. Significant accounting judgements and estimates (cont’d.)

3.2 Key sources of estimation uncertainty (cont’d.)

(d) Impairment of investments in subsidiaries, associates and joint ventures

The Group assesses whether there is any indication that an investment in subsidiaries, associates and joint venturesmay be impaired at each reporting date.

If indicators are present, these investments are subjected to impairment review. The impairment review comprisesa comparison of the carrying amounts and estimated recoverable amounts of the investments.

Judgements made by management in the process of applying the Group's accounting policies in respect ofinvestments in subsidiaries, associates and joint ventures are as follows:

(i) The Group determines whether its investments are impaired following certain indications of impairment suchas amongst others shortfall between Group's cost of investment and share of net assets, significant changeswith adverse effects on the investment and deteriorating financial performance of the investment due toobserved changes in the economic environment; and

(ii) Depending on their nature and the location in which the investments relate to, judgements are made bymanagement to select suitable methods of valuation such as, amongst others, discounted future cash flows orshare of net assets.

Once a suitable method of valuation is selected, management makes certain key assumptions concerning the futureto estimate the recoverable amount of the specific individual investment. These assumptions and other key sourcesof estimation uncertainty at the reporting date, may have a significant risk of causing material adjustment to thecarrying amounts of the investments within the next financial year. Depending on the specific individual investment,assumptions made by management may include, amongst others, assumptions on expected future cash flows,revenue growth, terminal value, discount rate used for purposes of discounting future cash flows which incorporatesthe relevant risks and expected future outcome based on certain past trends.

Sensitivity to changes in assumptions

The sensitivity tests indicated that with a decrease in the vessels’ utilisation rate or daily charter rate by 10%, therecoverable amount will be varied by approximately 18%.






4. Revenue and cost of sales

Revenue

Group 2016 2015 RM RM

Charter hire 82,011,350 177,200,040Offshore installation and construction 105,078,125 2,607,593Diving and sub-sea services 12,724,650 79,647,714Rental of equipment 1,172,482 22,828,190Other shipping related income 17,948,371 51,484,870Vessel's management fees 8,788,701 13,685,032Ship catering 1,756,845 2,768,651

229,480,524 350,222,090

Cost of sales

Cost of sales represents cost of services provided, labour cost related overheads, development cost, cost of goods sold, andcost of operation.

The following employee benefit expenses have been included in arriving at cost of sales:


Wages and allowances 16,256,428 48,569,476Contributions to defined contribution plan - EPF 868,232 1,258,900Social security contributions 80,539 95,627

17,205,199 49,924,003


5. Other income


Interest income 836,442 3,475,745 172,325 689,795Gain on foreign exchange: - Realised 1,623,002 564,759 - - - Unrealised - 12,919,748 5,261,668 -Rental of premises 258,744 348,666 - -Interest recharged to subsidiaries - - 5,205,500 7,550,483Reversal of impairment loss on trade receivables (Note 20) 3,025,000 - - -Gain on disposal of a subsidiary company (Note 15) 1,610,095 - - -Other income 3,619,059 2,429,109 187 4,568

10,972,342 19,738,027 10,639,680 8,244,846

6. Employee benefits expense


Salaries, bonuses and allowances 19,401,421 19,906,223 315,000 210,507Contributions to defined contribution plan 1,687,558 2,189,507 - -Social security contributions 347,601 113,549 - -Share options granted under ESOS (Note 24) 2,108,236 - - -Other staff related expenses 2,778,090 4,680,274 67,760 203,495

26,322,906 26,889,553 382,760 414,002Cost of sales (Note 4) 17,205,199 49,924,003 - -

43,528,105 76,813,556 382,760 414,002

Included in employee benefits expense of the Group is executive directors' remuneration amounting to RM3,796,175 (2015: RM3,895,629) as further disclosed in Note 7.






7. Directors' remuneration

The details of remuneration received/receivable by directors of the Group and of the Company during the year are as follows:


Executive:Salaries and other emoluments 3,367,740 3,437,194 - -Defined contribution plan 284,435 284,435 - -Estimated money value of benefits-in-kind 144,000 174,000 - -

Total executive directors' remuneration 3,796,175 3,895,629 - -

Non-executive:Fees and other emoluments 348,000 356,499 348,000 356,499Estimated money value of benefits-in-kind - 50,000 - 50,000

Total non-executive directors' remuneration 348,000 406,499 348,000 406,499

Total directors' remuneration 4,144,175 4,302,128 348,000 406,499

The number of directors of the Group and of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

Number of directors 2016 2015

Executive directors:RM900,001 - RM1,000,000 1 -RM1,000,001 - RM1,100,000 - 1RM1,200,001 - RM1,300,000 1 1RM1,501,001 - RM1,600,000 1 1RM1,901,001 - RM2,000,000 - -

Non-executive directors:RM100,001 - RM110,000 1 -RM110,001 - RM120,000 1 2RM120,001 - RM130,000 1 -RM170,001 - RM180,000 - 1


8. Finance costs


Interest expense on: Term loans 1,357,099 1,679,387 - - Hire purchase and finance lease liabilities 253,139 211,397 - - Sukuk Ijarah MTN 5,205,500 7,550,483 5,205,500 7,550,483 Revolving credits 1,967,499 2,527,747 - - Other borrowings 368,710 376,595 - -

9,151,947 12,345,609 5,205,500 7,550,483

9. (Loss)/profit before tax


Non-executive directors' remuneration (Note 7) 348,000 406,499 348,000 406,499Auditors’ remuneration: - Statutory audits 219,000 203,000 70,000 70,000 - Other services 30,000 32,000 - - - Other auditors 81,250 72,800 - -Operating leases payment: - premises 1,815,049 1,401,196 - - - third party vessels 3,270,648 32,581,545 - -Property, vessels and equipment: - Depreciation (Note 12) 44,958,897 42,876,078 - - - Loss on disposal 60,994 3,176 - - - Written off (Note 12) 8,777 2,004 - - - Impairment (Note 12) 22,469,772 16,077,838 - -Trade receivables: - Impairment loss (Note 20) 9,343,523 12,378,295 - - - Reversal of impairment loss (Note 20) (3,025,000) - - -Amounts due from joint ventures: - Impairment loss (Note 21) 7,953,167 - - -Intangible assets: - Impairment loss (Note 14) 1,590,456 - - -Net unrealised foreign exchange losses 9,292,038 - - -Impairment loss on investments in associates (Note 16) 1,236,015 - - -Impairment loss on interests in joint venture (Note 17) 6,334,146 840,967 - -






10. Income tax (credit)/expense

Major components of income tax expenses

The major components of income tax expenses for the years ended 31 December 2016 and 2015 are:


Statements of comprehensive income:

Current income tax: Malaysian income tax 599,175 1,615,213 - -

(Over)/underprovision in prior years: Malaysian income tax (628,472) 966,747 22,775 107,907 Foreign tax - 309,820 - -

(29,297) 2,891,780 22,775 107,907

Deferred tax (Note 18): Relating to origination and reversal of temporary differences (8,783,650) (69,663,693) - - Underprovision in prior years 2,603,408 1,142,342 - -

(6,180,242) (68,521,351) - -

Income tax (credit)/expense for the year (6,209,539) (65,629,571) 22,775 107,907

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2015: 25%) of the estimated assessable profitfor the year.


10. Income tax (credit)/expense (cont’d.)

Major components of income tax expenses (cont’d.)

A reconciliation of income tax (credit)/expense applicable to (loss)/profit before tax at the statutory income tax rate to incometax (credit)/expense at the effective income tax rate of the Group and of the Company is as follows:


(Loss)/profit before tax (148,867,998) (19,818,366) 4,426,999 (670,466)

Taxation at Malaysian statutory tax rate of 24% (2015: 25%) (35,728,320) (4,954,592) 1,062,480 (167,617)Different tax rates in other countries 1,741,971 (138,716) - -Different tax rates in other tax jurisdiction 6,220,015 1,278,174 - -Effect of changes in tax rate (125,998) (2,692,562) - -Effect of income not subject to tax (1,315,102) (6,276,743) - -Effect of share of results of joint ventures and associates 16,058,030 5,498,557 - -Expenses non-deductible for tax purposes 4,837,002 4,907,825 - 159,033Deferred tax assets not recognised on unutilised business losses 127,927 - (1,062,480) 8,584Deferred tax liabilities previously recognised on deductible temporary differences now unrecognised (Note 12) - (65,670,423) - -(Over)/underprovision of income tax in prior years (628,472) 1,276,567 22,775 107,907Underprovision of deferred tax in prior years 2,603,408 1,142,342 - -

Income tax (credit)/expense for the year (6,209,539) (65,629,571) 22,775 107,907






11. (Loss)/earnings per share

(a) Basic

Basic earnings per share amounts are calculated by dividing (loss)/profit for the year attributable to owners of the parentby the weighted average number of ordinary shares in issue during the financial year.

2016 2015 RM RM

(Loss)/profit attributable to owners of the parent of the Company (137,502,551) 45,593,836

Weighted average number of ordinary shares in issue 924,460,921 924,460,921

Basic (loss)/earnings per share (sen) (14.9) 4.9

(b) Diluted

For the purpose of calculating diluted earnings per share, the (loss)/profit for the year attributable to owners of the parentand the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutiveeffects of all potential ordinary shares such as share options granted to employees.

2016 2015 RM RM

(Loss)/profit attributable to owners of the parent of the Company (137,502,551) 45,593,836

Weighted average number of ordinary shares in issue 924,460,921 924,460,921

Effects of dilution from share options granted to employees - 419,152

Adjusted weighted average number of ordinary shares in issue and issuable 924,460,921 924,880,073

Diluted (loss)/earnings per share (sen) (14.9) 4.9


12.

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12. Property, vessels and equipment (cont’d.)

(a) Included in the Group's additions for the year are property, vessels and equipment of RM304,000 (2015: RM1,127,172)which were acquired by means of hire purchase and finance lease arrangements.

Net carrying amounts of property, vessels and equipment held under hire purchase and finance lease arrangements areas follows:


Motor vehicles 1,898,781 2,182,224Computers, office equipment, and furniture and fittings 841,835 1,441,963

Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 27.

(b) The net carrying amounts of property, vessels and equipment of the Group which are pledged as securities for borrowingsas disclosed in Note 26 are as follows:


Leasehold buildings 19,973,206 20,690,059Vessels 327,038,159 360,551,270

347,011,365 381,241,329

(c) In prior year, included in the carrying amount of property, vessels and equipment are vessels held under control transferbetween Alam Maritim (M) Sdn. Bhd. and Alam Maritim (L) Inc. The vessels were transferred at net book value ofRM274,976,920. Deferred tax liability arose from the temporary difference between the tax base and accounting baseamounted to RM65,670,423 (Note 10) was derecognised in full upon transfer due to different tax jurisdiction applied bythe transferee.

(d) The Group has performed a review of the recoverable amount of the Group's vessels and diving equipment also knownas Remotely Operated Vehicle ("ROV"). Impairment assessment review for each vessels and ROV were performed asthose assets are able to generate its own identifiable cash inflows. The review led to the recognition of impairment lossesof the Group's vessels and ROV amounting to RM22,469,772 (2015: RM16,077,838). The impairment recognised in thecurrent financial year was based on the recoverable amount of approximately RM397,746,805. The recoverable amountof the vessels and ROV were based on the higher of the assets' fair value less costs to sell and its value in use.






12. Property, vessels and equipment (cont’d.)

(d) (cont'd.)

Value in use ("VIU") calculations

Estimating the VIU of the vessels involves estimates made by the directors relating to the future cash inflows and outflowsthat will be derived from the vessels, and discounting them at an appropriate rate.

VIU was determined by discounting the future cash flows expected to be generated from the continuing use of the vesselsand ROV. The following describes each key assumption used:

(i) Revenue

Revenue are estimated based on existing order book and anticipated contracts, which affect the vessels' utilisationrate and daily charter rate.

(ii) Budgeted gross margins

Gross margins are estimated based on forecast margins for order book, management's expectation and pastexperience.

(iii) Discount rate

The discount rate reflects specific risk relating to the assets. The discount rate used is 11% (2015: 10%).

Valuation judgement by an independent professional valuer

External valuer were engaged to issue valuation reports on 9 group of vessels, which was classified based on similarspecification and characteristics. Further assessment performed to estimate the fair value of each vessels in referenceto the valuation reports, taking into consideration of significant factors (amongst others vessels' classification, age, yearbuilt and engine capacity).

The valuation were carried out by an independent professional valuer, Maphilindo-Insight Sdn. Bhd..

The valuation judgement by the independent professional valuer was derived using the following assumptions:

(i) The type, size, main and auxiliary machinery fitted on board and other specification of the vessels.(ii) The age of the vessels and its future economic life expectancy.(iii) The condition of the vessels' hull, machinery and equipment are consistent with its age as noted with the normal

wear and tear.(iv) The current supply and demand for vessels of this type and size in the sales and purchase market

Sensitivity to changes in assumptions

The sensitivity tests indicated that with a decrease in the vessels’ utilisation rate or daily charter rate by 10%, therecoverable amount will be varied by approximately 18%.


13. Investment properties


Cost

At 1 January 8,410,451 -Addition 354,661 -Transfer from property, vessels and equipment (Note 12) - 8,410,451

At 31 December 8,765,112 8,410,451

Accumulated depreciation

At 1 January 109,877 -Charge for the year 120,580 -Transfer from property, vessels and equipment (Note 12) - 109,877

At 31 December 230,457 109,877

Net carrying amount

At 31 December 8,534,655 8,300,574

The Group's investment properties consist of two units of office buildings. The fair value of the investment properties wereestimated at RM14,854,315 (2015: RM11,667,426) by the directors based on the market value for similar properties in thesame vicinity that have been transacted in the open market.

The fair value was based on level 2 of the fair value hierarchy: other techniques for which all inputs have a significant effecton the recorded fair value are observable, either directly or indirectly. Sale price of comparable property in close proximity isadjusted for differences in key attributes such as property size. The most significant input into this approach is price per squarefoot of comparable property. The investment properties are pledged as securities for borrowings granted to the Group asdisclosed in Note 26.






14. Intangible assets

Deferred Goodwill on development consolidation costs Total RM RM RM

Group

Cost

At 1 January 2016 1,743,390 755,586 2,498,976Exchange differences 30,944 178,161 209,105

At 31 December 2016 1,774,334 933,747 2,708,081

At 1 January 2015 1,529,140 661,775 2,190,915Exchange differences 214,250 93,811 308,061

At 31 December 2015 1,743,390 755,586 2,498,976

Accumulated amortisation and impairment

At 1 January 2016 183,878 755,586 939,464Impairment loss (Note 9) 1,590,456 - 1,590,456Exchange differences - 178,161 178,161

At 31 December 2016 1,774,334 933,747 2,708,081

At 1 January 2015 183,878 648,815 832,693Exchange differences - 106,771 106,771

At 31 December 2015 183,878 755,586 939,464

Net carrying amount

At 31 December 2016 - - -

At 31 December 2015 1,559,512 - 1,559,512

Deferred development costs represent costs incurred to develop remotely operated vehicles and peripherals.


14. Intangible assets (cont’d.)

Allocation of goodwill

The carrying amount of goodwill is allocated to the Group's cash-generating unit ("CGU") that the goodwill relates to, which isthe sub-sea service business.

Impairment test for goodwill

The Group undertook an annual impairment test for goodwill based on the recoverable amount of each CGU. The impairmenttest during the year has resulted in an impairment loss of RM1,590,456 (2015: RM nil) being booked for investment in a foreign subsidiary due to the projected recoverable amount being lower than the carrying amount of the goodwill relating tothe foreign subsidiary.

Assumptions and approach used

The recoverable amount of the CGU including goodwill in this test was determined based on the value in use calculation. Thisvalue in use calculation applies a discounted cash flow model using cash flow projections covering a five year period. Theprojections reflect the CGU's expectations of revenue growth, operating costs and margins based on past experience andexpectations of market growth and industry growth.

The following are the key assumptions used in the cash flow projections:

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is the average margins achieved in theyear immediately before the budgeted year increased for expected efficiency improvements.

(ii) Discount rate

The discount rates used are pre-tax and reflect specific risks relating to the relevant segment.

15. Investments in subsidiaries

Company 2016 2015 RM RM

Unquoted shares, at cost 100,303,120 100,303,120

The Company completed the following in the current financial year:

(a) On 31 March 2016, Alam Maritim (M) Sdn. Bhd., a wholly-owned subsidiary company of the Group, has completed thedisposal of 1,255,000 ordinary shares of RM1.00 each representing 84% of the issued and paid-up share capital of KJWaja Engineering (M) Sdn. Bhd. (“KJ Waja”) for a total cash sales consideration of RM2.00. As a result, KJ Waja shallcease to be a subsidiary company of the Group.

(b) On 14 September 2016, Alam Hidro (M) Sdn. Bhd., a wholly-owned subsidiary company of the Group, has incorporateda private company limited by shares known as Alam Hidro (L) Inc. (“AHLI”) with paid-up share capital of USD100,comprising 100 ordinary shares of USD1.00 each. As a result, AHLI has become an indirect wholly-owned subsidiary ofthe Group.






15. Investments in subsidiaries (cont’d.)

Details of subsidiaries are as follows:

Group's effective Country of interestName of subsidiaries incorporation Principal activities 2016 2015 % %

(i) Held by the Company:

Alam Maritim (M) Sdn. Bhd. Malaysia Ship owning, chartering and 100 100 ("AMSB") managing and other shipping related activities

Alam Maritim (L) Inc. Federal Territory of Investment holding and ship 100 100 ("AMLI") Labuan, Malaysia owning

Alam Maritim Investment Federal Territory of Investment holding and ship owning 100 100 Holdings (L) Inc. ("AMIH") Labuan, Malaysia

Alam JV Holdings (L) Inc. Federal Territory of Investment holding and ship owning 100 100 ("ALAM JV") Labuan, Malaysia

Alam Maritim Global I Ltd. British Investment holding 100 100 ("AMG") Virgin Islands

(ii) Held through AMSB:

Alam Hidro (M) Sdn. Bhd. Malaysia Offshore facilities construction and 100 100 ("AHSB") installation and sub-sea services

Alam Offshore Services & Malaysia Transportation, ship forwarding and 100 100 Logistics Sdn. Bhd. agent, ship chandelling and other ("AOLSB") * related activities

Alam Food Industries (M) Malaysia Catering and messing services 100 100 Sdn. Bhd. ("AFI") *

KJ Waja Engineering Sdn. Bhd. Malaysia Ship repair and maintenance, ship - 84 ("KJWE") * spare supply and other related services

Alam Maritim Properties (M) Malaysia Property owner and management 100 100 Sdn. Bhd. ("AMP")

(iii) Held through AHSB:

Alam Hidro (L) Inc. ("AHLI") Federal Territory of Offshore facilities construction and 100 - Labuan, Malaysia installation and sub-sea services

(iv) Held through KJWE:

KJ Waja Services Sdn. Bhd. Malaysia Ship spare supply and other related - 84 ("KJWS") * services


15. Investments in subsidiaries (cont’d.)

Group's effective Country of interestName of subsidiaries incorporation Principal activities 2016 2015 % %

(v) Held through AMLI:

Eastar Offshore Pte. Ltd. Singapore Designing, manufacturing and 75 75 ("EASTAR") * operating of remotely operated vehicles ("ROVs")

(vi) Held through EASTAR:

Alam Subsea Pte. Ltd. Singapore Rental of ROV and providing ROV 75 75 ("ASPL") * Services

(vii) Held through AMIH

Alam Maritim Investment I Federal Territory of Ship owning 100 100 (L) Inc. ("AMI I") Labuan, Malaysia

Alam Maritim Investment II Federal Territory of Ship owning 100 100 (L) Inc. ("AMI II") Labuan, Malaysia

Alam Maritim Investment III Federal Territory of Ship owning 100 100 (L) Inc. ("AMI III") Labuan, Malaysia

Alam Maritim Investment IV Federal Territory of Ship owning 100 100 (L) Inc. ("AMI IV") Labuan, Malaysia

Alam Maritim Investment V Federal Territory of Ship owning 100 100 (L) Inc. ("AMI V") Labuan, Malaysia

* Audited by firms other than Ernst & Young.

The subsidiaries do not have non-controlling interests that are material to the Group. Therefore, the summarised statementsof financial position, statements of comprehensive income and statements of cash flows of the subsidiaries with non-controllinginterests are not disclosed.






16. Investments in associates


Unquoted shares, at cost 61,699,516 61,699,516Share of post-acquisition reserves (12,721,932) 17,732,390

48,977,584 79,431,906

Less: Impairment loss (1,236,015) -

47,741,569 79,431,906

Summarised financial information in respect of each of the Group’s material associated company is set out below. Thesummarised financial information represents the amounts in the consolidated MFRS financial statements of the associatesand not the Group’s share of those amounts.

(i) Summarised consolidated statements of financial position

TH-Alam Holdings (L) Inc. 2016 2015 RM RM

Assets and liabilitiesNon-current assets 308,055,752 365,611,478Current assets 28,750,258 61,808,354

Total assets 336,806,010 427,419,832

Non-current liabilities 131,437,883 217,303,955Current liabilities 93,616,967 36,456,423

Total liabilities 225,054,850 253,760,378

Net assets 111,751,160 173,659,454


16. Investments in associates (cont’d.)

(ii) Summarised consolidated statements of comprehensive income


Revenue for the year 23,850,691 49,168,150Depreciation (18,033,376) (16,973,863)Impairment on property, vessels and equipment (45,547,368) -Interest income 338,472 457,981Interest expense (11,780,673) (14,268,731)Income tax expense (40,000) (40,000)(Loss)/profit for the year, representing total comprehensive income (62,151,678) 4,855,202

(iii) Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s investmentsin associates:


Net assets as at 31 December 111,751,160 173,659,454(Loss)/profit for the year, representing total comprehensive income (62,151,678) 4,855,202

Investments in associates 49% 49%

Carrying value of Group's investments in associates 54,758,068 85,093,132Group's share of results of associates (30,454,322) 2,379,049

Details of the associates are as follows:

Group's effective Country of interestName of associates incorporation Principal activities 2016 2015 % %

(i) Held through AMLI:

TH-Alam Holdings (L) Inc. Federal Territory of Investment holding 49 49 ("THAH") Labuan, Malaysia

(ii) Held through THAH:

Alam-JV DP1 (L) Inc. Federal Territory of Ship owning 49 49 ("AJVDP1") Labuan, Malaysia

Alam-JV DP2 (L) Inc. Federal Territory of Ship owning 49 49 ("AJVDP2") Labuan, Malaysia






17. Interests in joint ventures

The Group has 50% of the voting rights of its joint arrangements. Under the contractual arrangements, unanimous consent isrequired from all parties to the agreements for all relevant activities.

The joint arrangements are structured via separate entities and provide the Group with the rights to the net assets of theentities under the arrangements. Therefore these entities are classified as joint ventures of the Group.


Unquoted shares, at cost 93,134,378 93,134,378Share of post-acquisition reserves 118,499,054 155,776,620

211,633,432 248,910,998Redeemable preference shares 6,000,000 6,000,000Less: Impairment loss (7,593,027) (1,258,881)

210,040,405 253,652,117

Summarised financial information in respect of each of the Group’s material joint ventures is set out below. The summarisedfinancial information represents the amounts in the financial statements of the joint ventures and not the Group’s share ofthose amounts.

(i) Summarised statements of financial position

ALAM-PE (H) Group AS III ASDLB 1 ARLI RM RM RM RM

2016

Assets and liabilitiesNon-current assets 198,631,547 49,525,441 163,774,704 160,188,860Cash and cash equivalent 7,828,887 122,185 10,931,906 7,726,602Other current assets 51,507,083 3,197,334 9,062,239 28,386,923

Total assets 257,967,517 52,844,960 183,768,849 196,302,385

Non-current liabilities - 20,080,826 67,898,830 49,108,028Trade and other payables 33,294,427 1,446,249 49,247,012 26,347,642Other current liabilities 9,733,611 16,424,967 44,285,674 37,576,521


Net assets 214,939,479 14,892,918 22,337,333 83,270,194


17. Interests in joint ventures (cont’d.)

(i) Summarised statements of financial position (cont’d.):


2015

Assets and liabilitiesNon-current assets 215,218,117 63,825,095 199,360,608 168,447,585Cash and cash equivalent 24,384,653 56,534 8,867,928 6,398,542Other current assets 29,078,325 10,290,431 30,885,365 15,485,656

Total assets 268,681,095 74,172,060 239,113,901 190,331,783

Non-current liabilities 34,141,293 24,113,992 80,527,070 49,108,028Trade and other payables 9,652,678 9,801,157 94,970,456 15,375,407Other current liabilities 6,758,856 8,162,098 3,198,000 34,877,832


Net assets 218,128,268 32,094,813 60,418,375 90,970,516

(ii) Summarised statements of comprehensive income:


2016

Revenue 30,805,597 1,068,360 29,564,265 18,345,266Depreciation (13,537,494) (14,299,654) (37,821,322) (8,800,346)Impairment on property, vessels and equipment (4,457,712) (10,169,192) (28,395,564) -Interest income 56,708 - 1,245 -Interest expense (1,042,029) (1,080,463) (8,925,366) (5,350,425)Loss before tax (2,020,960) (17,201,894) (38,081,042) (7,864,734)Income tax credit/(expense) 341 - - (20,000)Loss for the year, representing total comprehensive income (2,020,619) (17,201,894) (38,081,042) (7,884,734)







(ii) Summarised statements of comprehensive income (cont’d.):


2015

Revenue 60,610,811 2,986,461 118,808,355 17,092,381Depreciation (12,430,584) (4,187,789) (9,425,759) (8,728,186)Interest income 105,232 - 825 7,538Interest expense (3,135,731) (1,091,790) (8,925,368) (6,126,047)Profit/(loss) before tax 25,396,457 (9,555,946) (13,637,087) (12,638,866)Income tax expense (102,288) (20,000) (20,000) (20,000)Profit/(loss) for the year, representing total comprehensive income 25,294,169 (9,575,946) (13,657,087) (12,658,866)

(iii) Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s interest injoint ventures:


2016

Net assets as at 31 December 214,939,479 14,892,918 22,337,333 83,270,194Loss for the year, representing total comprehensive income (2,020,619) (17,201,894) (38,081,042) (7,884,734)

Interests in joint ventures 51% 60% 51% 51%

Carrying value of Group's interests in joint ventures 109,619,134 8,935,751 11,392,040 42,467,799Group's share of results of joint ventures (1,030,516) (10,321,136) (19,421,331) (4,021,214)

2015

Net assets as at 31 December 218,128,268 32,094,813 60,418,375 90,970,516Profit/(loss) for the year, representing total comprehensive income 25,294,169 (9,575,946) (13,657,087) (12,658,866)

Interests in joint ventures 51% 60% 51% 51%

Carrying value of Group's interests in joint ventures 111,245,417 19,256,888 30,813,371 46,394,963Group's share of results of joint ventures 12,900,026 (5,745,568) (6,965,114) (6,456,022)



(iv) Aggregate information of joint ventures that are not individually material and not included in Note 17(iii) above:

2016 2015 RM RM

Loss for the year, representing total comprehensive income of joint ventures (4,308,747) (33,030,757)The Group's share of results, representing total comprehensive income (1,659,939) (18,106,600)

Carrying value of Group's interest in joint ventures 37,625,681 45,941,478

Details of the joint ventures are as follows:

Proportion of Country of ownership interestName of joint ventures incorporation Principal activities 2016 2015 % %

(i) Held through AMSB:

Alam Eksplorasi (M) Malaysia Ship owning, operating and 60 60 Sdn. Bhd. ("AESB") chartering

Alam Synergy I (L) Inc. Federal Territory of Ship owning, operating and 60 60 ("AS I") Labuan, Malaysia chartering

Alam Synergy II (L) Inc. Federal Territory of Ship owning, operating and 60 60 ("AS II") Labuan, Malaysia chartering

Alam Synergy III (L) Inc. Federal Territory of Ship owning, operating and 60 60 ("AS III") Labuan, Malaysia chartering

Alam Swiber Offshore (M) Malaysia Ship operator 50 50 Sdn. Bhd. ("ASOSB")

Alam Radiance (M) Sdn. Bhd. Malaysia Ship owning, ship management, 50 50 ("ARMSB") ship operation, maintenance and consultancy

YSS Alam Energy (M) Malaysia Ship owning, ship management, 50 50 Sdn. Bhd. ("YSS Alam") ship operation, maintenance and consultancy








(ii) Held through AMLI:

Workboat International United Arab Ship management and operation, 60 60 DMCCO ("WBI") Emirates ship owning, ship maintenance and marine consultancy

Alam Brompton (L) Inc. Federal Territory of Ship management and operation, 51 51 ("ABLI") Labuan, Malaysia ship owning, ship maintenance and marine consultancy

Alam Fast Boats (L) Inc. Federal Territory of Ship owning, operating and 60 60 ("AFBLI") Labuan, Malaysia chartering

Alam Swiber DLB 1 (L) Inc. Federal Territory of Ship owning and chartering 51 51 ("ASDLB1") Labuan, Malaysia

Alam Radiance (L) Inc. Federal Territory of Ship owning, operating and 51 51 ("ARLI") Labuan, Malaysia chartering

TH Alam Management (M) Malaysia Ship management and consultancy 50 50 Sdn. Bhd. ("THAM")

Alam-PE Holdings (L) Inc. Federal Territory of Ship management and operation, 51 51 ("ALAM-PE(H)") Labuan, Malaysia ship owning, ship maintenance and marine consultancy

Globe Alam Marine Offshore Saudi Arabia Offshore facilities construction and 40 40 Services Co. ("Globe Alam") installation services

(iii) Held through ALAM-PE(H):

Alam-PE I (L) Inc. Federal Territory of Ship owning, operating and 51 51 ("ALAM-PE I") Labuan, Malaysia chartering

Alam-PE II (L) Inc. Federal Territory of Ship owning, operating and 51 51 ("ALAM-PE II") Labuan, Malaysia chartering

Alam-PE III (L) Inc. Federal Territory of Ship owning, operating and 51 51 ("ALAM-PE III") Labuan, Malaysia chartering

Alam-PE IV (L) Inc. Federal Territory of Ship owning, operating and 51 51 ("ALAM-PE IV") Labuan, Malaysia chartering




(iii) Held through ALAM-PE(H) (cont’d.):

Alam-PE V (L) Inc. Federal Territory of Ship owning, operating and 51 51 ("ALAM-PE V") Labuan, Malaysia chartering

Alam-PE Holdings Sdn. Bhd. Malaysia Ship management 51 51 ("ALAM-PE(H)SB")

(iv) Held through AMIH:

Deepsea Leader Venture (L) Federal Territory of Ship management and operation, 51 51 Inc. ("DLV") Labuan, Malaysia ship owning, ship maintenance and marine consultancy

(v) Held through DLV:

MDSV 1 (L) Inc. ("MDSV") Federal Territory of Ship owning, ship operating and 51 51 Labuan, Malaysia chartering

OLV Offshore Services (M) Malaysia Ship management and operation, 51 51 Sdn. Bhd. ("OLV") ship owning, ship maintenance and marine consultancy

(vi) Held through Alam JV:

Wide Global (L) Inc. ("WG") Federal Territory of Investment holding and ship owning 50 50 Labuan, Malaysia

These joint ventures have the same reporting period as the Group and accounted for by using equity method.

The joint ventures have no other contingent liabilities or capital commitments as at 31 December 2016 and 31 December2015.






18. Deferred taxation


At 1 January 4,957,653 73,037,676Recognised in profit or loss (Note 10) (6,180,242) (68,521,351)Exchange differences 234,399 441,328

At 31 December (988,190) 4,957,653

Presented after appropriate offsetting as follows:

Deferred tax assets (5,157,381) (7,841,327)Deferred tax liabilities 4,169,191 12,798,980

(988,190) 4,957,653

The components and movements prior to offsetting of deferred tax liabilities and assets of the Group during the financial yearare as follows:

Deferred tax liabilities of the Group:

Accelerated capital allowances RM

At 1 January 2016 12,798,980Recognised in profit or loss (8,864,188)Exchange differences 234,399

At 31 December 2016 4,169,191

At 1 January 2015 80,079,674Recognised in profit or loss (67,722,022)Exchange differences 441,328

At 31 December 2015 12,798,980


18. Deferred taxation (cont’d.)

Deferred tax assets of the Group

Unutilised tax losses and unabsorbed Allowance for capital doubtful debts allowances Total RM RM RM

At 1 January 2016 (1,824,272) (6,017,055) (7,841,327)Recognised in profit or loss 1,248,027 1,435,919 2,683,946

At 31 December 2016 (576,245) (4,581,136) (5,157,381)

At 1 January 2015 (1,303,385) (5,738,613) (7,041,998)Recognised in profit or loss (520,887) (278,442) (799,329)

At 31 December 2015 (1,824,272) (6,017,055) (7,841,327)

19. Inventories


CostRaw materials 974,200 1,180,791Work-in-progress 483,826 848,230Spare parts 608,239 600,709

2,066,265 2,629,730

During the year, the amount of inventories recognised as an expense in cost of sales of the Group was RM176,756 (2015: RM3,330,566).






20. Trade receivables


CurrentThird parties 55,714,131 84,189,399Accrued charter hire income 6,567,747 16,954,688Less: Allowance for impairment (6,978,304) (659,781)

55,303,574 100,484,306

Non-currentThird parties 54,263,341 54,263,341Less: Allowance for impairment (53,681,376) (53,681,376)

581,965 581,965

Trade receivables, net 55,885,539 101,066,271

Trade receivables are non-interest bearing and are generally on 30 to 90 days (2015: 30 to 90 days) terms. They are recognisedat their original invoice amounts which represent their fair values on initial recognition.

Other information on financial risks of trade receivables is disclosed in Note 36.

Ageing analysis of trade receivables

The ageing analysis of the Group's trade receivables is as follows:


Neither past due nor impaired 22,143,233 62,944,7821 to 30 days past due not impaired 9,895,817 15,442,86731 to 60 days past due not impaired 5,743,837 7,354,77061 to 90 days past due not impaired 4,009,820 7,390,44991 to 120 days past due not impaired 9,384,518 6,013,833More than 121 days past due not impaired 4,708,314 1,919,570 33,742,306 38,121,489Impaired 60,659,680 54,341,157

116,545,219 155,407,428


20. Trade receivables (cont’d.)

Trade receivables that are neither past due nor impaired

As at 31 December 2016, the Group has trade receivables amounting to RM22,143,233 (2015: RM62,944,782) that wereneither past due nor impaired.

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Trade receivables that are past due but not impaired

As at 31 December 2016, the Group has trade receivables amounting to RM33,742,306 (2015: RM38,121,489) that are pastdue at the reporting date but not impaired.

At the reporting date, 47% (2015: 23%) of trade receivables that are past due but not impaired are amounts due fromestablished creditworthy major oil companies with minimum collection risk. The balance of receivables that are past due butnot impaired are unsecured in nature. The management is confident that the remaining receivables are recoverable as theseaccounts are still active.

Trade receivables that are impaired

Trade receivables that are individually determined to be impaired at the end of the reporting period relate to those debtors thatexhibit significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateralor credit enhancements.

The reconciliation of movement in the impairment loss of trade receivables is as follows:


At 1 January 54,341,157 41,962,862Charge for the year (Note 9) 9,343,523 12,378,295Reversal of impairment (Note 9) (3,025,000) -

At 31 December 60,659,680 54,341,157

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significantfinancial difficulties and have defaulted on payments.






21. Other receivables


Amounts due from related parties: - Joint ventures 134,983,392 88,124,647 - 19,496 - Associates 1,966,307 624 192,776 624

136,949,699 88,125,271 192,776 20,120Less: Impairment loss (7,953,167) - - -

128,996,532 88,125,271 192,776 20,120Deposits 1,070,957 1,181,978 - -Prepayments 2,655,035 11,253,551 - -Sundry receivables 202,665 4,494,022 - 8,691

Total other receivables 132,925,189 105,054,822 192,776 28,811

Add: Trade receivables (Note 20) 55,885,539 101,066,271 - - Cash and bank balances (Note 22) 45,124,437 125,513,402 11,968,076 14,922,379 Amount due from subsidiaries - - 366,934,663 402,087,637Less: Prepayments (2,655,035) (11,253,551) - -

Total loans and receivables 231,280,130 320,380,944 379,095,515 417,038,827

Amounts due from related parties are unsecured, non-interest bearing and repayable on demand.

The reconciliation movement in the impairment loss of other receivables is as follows:


At 1 January - -Charge for the year (Note 9) 7,953,167 -

At 31 December 7,953,167 -

Other information on financial risks of other receivables are disclosed in Note 36.


22. Cash and bank balances


Cash on hand and at banks 13,735,002 45,813,014 449,319 2,234,872Deposits with licensed banks (a) 31,389,435 79,700,388 11,518,757 12,687,507

Cash and bank balances 45,124,437 125,513,402 11,968,076 14,922,379

Less:Bank overdrafts (Note 26) (6,691,423) (4,342,990) - -Amounts set aside as sinking fund (b) (28,431,065) (29,599,815) (11,518,757) (12,687,507)Amounts set aside as margin deposits for bank guarantee facilities (2,958,370) (12,134,786) - -

Total cash and cash equivalents 7,043,579 79,435,811 449,319 2,234,872

(a) The weighted average effective interest rate per annum and the remaining maturity of deposits of the Group as at 31 December 2016 are 2.00% (2015: 2.80%) and 36 days (2015: 90 days) respectively.

(b) Amounts set aside as sinking fund are pledged to secure the borrowings as disclosed in Note 26.

Other information on financial risks of cash and bank balances are disclosed in Note 36.

The currency exposure profile of cash and bank balances as at end of the reporting period is as follows:


Ringgit Malaysia 43,250,477 118,075,118 11,968,076 14,922,379United States Dollar 1,061,441 6,036,770 - -Singapore Dollar 812,519 1,401,514 - -

45,124,437 125,513,402 11,968,076 14,922,379






23. Share capital and share premium

Number of ordinary shares of RM0.25 each Amount 2016 2015 2016 2015 RM RM

Authorised share capital

At 1 January/31 December 2,000,000,000 2,000,000,000 500,000,000 500,000,000

Number of ordinary shares of RM0.25 each < Amount > Share capital Share capital (issued and (issued and Share fully paid) fully paid) premium Total RM RM RM

At 1 January 2016/31 December 2016 924,460,921 231,115,231 165,199,735 396,314,966

At 1 January 2015/31 December 2015 924,460,921 231,115,231 165,199,735 396,314,966

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote pershare at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

24. Other reserves

Premium paid on acquisition Foreign of non- currency Employee controlling translation share option interests reserve reserve Total RM RM RM RM

Group

At 1 January 2016 (4,639,834) 2,659,706 94,946 (1,885,182)Foreign currency translation - 576,140 - 576,140Expiry of employee share options - - (94,946) (94,946)Issuance of employee share options - - 2,108,236 2,108,236

At 31 December 2016 (4,639,834) 3,235,846 2,108,236 704,248

At 1 January 2015 (4,639,834) 1,076,572 94,946 (3,468,316)Foreign currency translation, representing other comprehensive income - 1,583,134 - 1,583,134

At 31 December 2015 (4,639,834) 2,659,706 94,946 (1,885,182)


24. Other reserves (cont’d.)

Employee share option reserve/Total RM

Company

At 1 January 2016 94,946Pursuant to employee share options expired (94,946)Fair value of employee share options 2,108,236

At 31 December 2016 2,108,236

At 1 January/31 December 2015 94,946

The nature and purpose of each category are as follows:

(i) Foreign currency translation reserve

The foreign currency translation reserve represents exchange differences arising from the translation of the financialstatements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

(ii) Employee share option reserve

Employee share option reserve represents the equity-settled share options granted to employees as disclosed in Note 31. The reserve is made up of the cumulative value of services received from employees recorded over the vestingperiod commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of theshare options.

25. Retained earnings

The Company may distribute dividends out of its entire retained earnings as at 31 December 2016 and 31 December 2015under the single tier system.






26. Borrowings


Short term borrowings

Secured:

Bank overdrafts (Note 22) 6,691,423 4,342,990 - -Term loans 4,428,388 11,513,742 - -Sukuk Ijarah MTN 30,000,000 40,000,000 30,000,000 40,000,000Hire purchase and finance lease liabilities (Note 27) 542,697 738,194 - -

41,662,508 56,594,926 30,000,000 40,000,000

Unsecured:

Revolving credits 50,966,000 46,000,000 - -

92,628,508 102,594,926 30,000,000 40,000,000

Long term borrowings

Secured:

Term loans 15,303,362 13,381,655 - -Sukuk Ijarah MTN 45,000,000 75,000,000 45,000,000 75,000,000Hire purchase and finance lease liabilities (Note 27) 1,829,108 3,052,536 - -

62,132,470 91,434,191 45,000,000 75,000,000

Total borrowings

Bank overdrafts (Note 22) 6,691,423 4,342,990 - -Revolving credits 50,966,000 46,000,000 - -Term loans 19,731,750 24,895,397 - -Sukuk Ijarah MTN 75,000,000 115,000,000 75,000,000 115,000,000Hire purchase and finance lease liabilities (Note 27) 2,371,805 3,790,730 - -

154,760,978 194,029,117 75,000,000 115,000,000


26. Borrowings (cont’d.)

Maturity of borrowings (excluding hire purchase and finance lease liabilities):


Not later than 1 year 92,005,811 101,856,732 35,000,000 40,000,000Later than 1 year not later than 2 years 40,892,109 39,770,246 40,000,000 75,000,000Later than 2 years not later than 5 years 8,003,315 42,984,139 - -Later than 5 years 11,407,938 5,627,270 - -

152,389,173 190,238,387 75,000,000 115,000,000

The weighted average effective interest rates at the reporting date for borrowings, excluding hire purchase and finance leaseliabilities of the Group, are as follows:

Group Company 2016 2015 2016 2015 % % % %

Bank overdrafts 5.06 6.50 - -Term loans 5.94 6.10 - -Sukuk Ijarah MTN 5.40 5.60 5.40 5.60Revolving credits 3.64 5.69 - -

(a) Bank overdrafts:

The secured bank overdrafts of the Group are secured by deposits with licensed banks of the Group as disclosed in Note 22.

(b) Term loans

The term loans of the Group are secured by the following:

(i) First legal charge over the leasehold building, vessels and investment properties of certain subsidiaries as disclosedin Notes 12 and 13;

(ii) First preferred statutory mortgage on vessels of certain subsidiaries;

(iii) Legal assignments of charter proceeds of certain subsidiaries;

(iv) Debentures incorporating fixed and floating asset of certain subsidiaries;

(v) Corporate guarantees by the Company; and

(vi) Assignment of the insurance policy for vessels of certain subsidiaries.






26. Borrowings (cont’d.)

(c) MCP/MMTN and Sukuk Ijarah MTN Facility

The MCP/MMTN and Sukuk Ijarah MTN are secured by:

(i) a first legal charge over the designated accounts as defined in the Trust Deed;

(ii) third party second fixed legal charge over each of the Ijarah Assets/MCP/MMTN and Sukuk Ijarah MTN assets andassignment of all insurance thereon and charter contracts; and

(iii) sinking fund as disclosed in Note 22.

The features of the MCP/MMTN and Sukuk Ijarah MTN issued are as follows:

(i) The MCP/MMTN and Sukuk Ijarah MTN have a maximum principal limit of RM600,000,000.

The MCP/MMTN and Sukuk Ijarah MTN were constituted by a Trust Deed Program Agreement dated 6 July 2007between the Company and the financial institutions concerned in relation to finance the purchase of beneficial interestin the Ijarah Assets (Syariah Compliant) from subsidiaries.

(iii) The MCP/MMTN are issued at a discount with yield to maturity ranging from 3.78% to 3.85% per annum in prioryear. The Sukuk Ijarah MTN are issued with yield to maturity ranging from 5.2% to 5.9% per annum (2015: 5.2% to5.9% per annum).

(d) Revolving credits

The features of revolving credits issued are as follows:

(i) Unsecured over the non-current assets and contracts.

(ii) Required money pledged by way of sinking fund and corporate guarantee as disclosed in Note 22.

27. Hire purchase and finance lease liabilities


Future minimum lease payments:

Not later than 1 year 623,223 930,479Later than 1 year and not later than 2 years 808,325 972,861Later than 2 years and not later than 5 years 1,018,624 1,507,468Later than 5 years 123,508 683,344

Total future minimum lease payments 2,573,680 4,094,152Less: Future finance charges (201,875) (303,422)

Present value of finance lease liabilities (Note 26) 2,371,805 3,790,730


27. Hire purchase and finance lease liabilities (cont’d.)


Analysis of present value:

Not later than 1 year 542,697 738,194Later than 1 year and not later than 2 years 924,361 808,877Later than 2 years and not later than 5 years 783,709 1,375,100Later than 5 years 121,038 868,559

2,371,805 3,790,730Less: Amount due within 12 months (Note 26) (542,697) (738,194)

Amount due after 12 months (Note 26) 1,829,108 3,052,536

The Group's hire purchase and finance lease liabilities bear flat interest rates of 2.77% (2015: 2.87%) per annum.

Other information on financial risks of hire purchase and finance lease liabilities is disclosed in Note 36.

28. Amounts due from subsidiaries

Amounts due from subsidiaries are non-trade in nature, unsecured and repayable on demand except for an amount ofRM75,000,000 (2015: RM115,000,000) which bears interest rate between 5.2% per annum and 5.9% per annum (2015:between 4.58% per annum and 5.63% per annum).

Further details on related party transactions are disclosed in Note 34.

29. Trade payables


Third parties 25,783,361 56,268,452Joint ventures 21,948,757 24,978,803

47,732,118 81,247,255

Trade payables of the Group are non-interest bearing and the normal trade credit terms granted to the Group ranges from 30to 60 days (2015: 30 to 60 days).

Other information on financial risks of trade payables is disclosed in Note 36.






30. Other payables


Amounts due to related parties: - Joint ventures 3,016 22,500 - - - Associates 3,375,427 6,680,761 - -

3,378,443 6,703,261 - -

Accrued expenses 4,364,987 3,918,408 - 288,371Deposits from customers 537,094 514,940 - -Sundry payables 4,562,354 13,784,682 613,753 4,788,879

12,842,878 24,921,291 613,753 5,077,250

Add: Trade payables (Note 29) 47,732,118 81,247,255 - - Borrowings (Note 26) 154,760,978 194,029,117 75,000,000 115,000,000

Total financial liabilities carried at amortised costs 215,335,974 300,197,663 75,613,753 120,077,250

Amounts due to related parties are unsecured, non-interest bearing and repayable on demand.

Other information on financial risks of other payables is disclosed in Note 36.

31. Employee Share Options Scheme ("ESOS")

The Company's Employee Share Options Scheme ("ESOS") is governed by the by-laws approved by the shareholders at anExtraordinary General Meeting held on 3 June 2016. The ESOS was implemented on 21 July 2016 and is to be in force for aperiod of 5 years from the date of implementation.

(a) The number of shares comprised in the options to be offered under the ESOS shall not exceed in aggregate 15% of theissued and paid-up share capital of the Company at any point of time. On 21 July 2016, the total number of new sharesto be issued pursuant to the ESOS is 92,446,092.

(b) The exercise price shall be at the higher of the following:

(i) the weighted average market price of the shares for the five market days immediately preceding the date at whichoptions are granted subject to a discount of up to 10%; or

(ii) the par value of the shares.

(c) The new shares to be allotted upon any exercise of any option granted shall rank pari passu in all respects with theexisting shares provided always that the new shares so allotted will not be entitled to any dividends, rights, allotmentsand/or any distributions declared, made or paid to shareholders which record date thereof precedes the date of allotmentof the new shares and shall be subject to all provisions of the Articles of the Company.


31. Employee Share Options Scheme ("ESOS") (cont’d.)

(d) In the event of any alteration in the capital structure of the Company during the duration of the scheme, whether by wayof issue of new shares credited as fully paid up from capitalisation of profit or reserve, capitalisation issues, rights issues,reduction, subdivision or consolidation of capital or any other variation of capital:

(i) the Exercise Price; and/or

(ii) the number of new shares comprised in the Option so far as unexercised;

shall be adjusted accordingly.

The following table illustrates the number and movements in share options during the year:

< Number of share options > Outstanding Outstanding Exercisable at (Expired)/ at at 1 January additional 31 December 31 December

2016

2006 Options 8,782,269 (8,782,269) - -2007 Options 2,773,752 (2,773,752) - -2008 Options 3,384,000 (3,384,000) - -2009 Options 1,035,000 (1,035,000) - -2016 Options - 8,054,900 8,054,900 8,054,900

2015

2006 Options 8,782,269 - 8,782,269 8,782,2692007 Options 2,773,752 - 2,773,752 2,773,7522008 Options 3,384,000 - 3,384,000 3,384,0002009 Options 1,035,000 - 1,035,000 1,035,000

(i) Details of share options outstanding at the end of the year:

Weighted average exercise price RM Exercise period

20162020 Options 0.40 21.07.2020 to 20.07.20212019 Options 0.36 21.07.2019 to 20.07.20202018 Options 0.36 21.07.2018 to 20.07.20192017 Options 0.33 21.07.2017 to 20.07.20182016 Options 0.33 21.07.2016 to 20.07.2017

20152006 Options 0.47 20.07.2011 to 19.07.20162007 Options 1.15 20.07.2011 to 19.07.20162008 Options 1.20 20.07.2011 to 19.07.20162009 Options 1.00 20.07.2011 to 19.07.2016






32. Operating lease arrangements

(a) The Group as lessee

The Group has entered into non-cancellable operating lease agreements for the use of vessels and office premise. Leasesof the vessels and office premise have an average life of between 1 and 5 years. These leases have renewal but nopurchase option included in the contracts. There are no restrictions placed upon the Group by entering into these leases.

The future aggregate lease payments under non-cancellable operating leases contracted for as at the reporting date butnot recognised as liabilities are as follows:

2016 2015 RM RM

Future rental payments:Not later than 1 year 776,330 4,896,143Later than 1 year and not later than 5 years 17,714,645 16,989,022

18,490,975 21,885,165

The lease payments recognised in profit or loss during the financial year are disclosed in Note 9.

(b) The Group as lessor

The Group has entered into non-cancellable operating lease agreements on its vessels. These leases have remainingnon-cancellable lease terms of between 0.5 to 7 years.

The future lease payments receivable under non-cancellable operating leases contracted for as at the reporting date butnot recognised as receivables, are as follows:

2016 2015 RM RM

Not later than 1 year 45,595,450 78,609,578Later than 1 year and not later than 5 years 53,836,350 105,212,988Later than 5 years 4,112,014 10,215,482

103,543,814 194,038,048

Charter hire revenue earned from chartering the Group's vessels are recognised as revenue during the financial year asdisclosed in Note 4.

33. Corporate guarantee

At the reporting date, the Company has extended its corporate guarantees given to banks for credit facilities granted to varioussubsidiaries amounting to RM92,500,000 (2015: RM92,500,000).

The financial guarantee has not been recognised since the fair value on initial recognition was not material.


34. Related party disclosures

(a) Sales and purchase of goods and services

In addition to the transactions disclosed elsewhere in the financial statements, the Group and the Company had thefollowing transactions with related parties during the financial year.

Note 2016 2015 RM RM

Group

Joint ventures: Charter hire of vessels (i) 62,408,242 96,625,120 Vessel's management fees (ii) 8,788,700 9,198,249 Dividend income 2,550,000 -

Associates: Charter hire of vessels (i) 69,464,750 81,116,115

Company

Subsidiaries: Interest recharged to subsidiaries (iii) 5,205,500 7,550,483

(i) The charter hire expense and mobilisation fees paid to joint ventures and associates were made according to thepublished prices and conditions offered by these related parties to their major customers, except that a longer creditperiod of up to six months is normally granted.

(ii) The vessel's management fees received from joint ventures were made according to the published prices andconditions offered by these related parties to their major customers, except that a longer credit period of up to sixmonths is normally granted.

(iii) The interest recharged to subsidiaries on Sukuk Ijarah MTN by the Company were based on the issuance rate atrespective date.

Information regarding outstanding balances arising from related party transactions as at 31 December 2016 and 31December 2015 are disclosed in Notes 21, 28, 29 and 30.

The directors are of the opinion that the transactions have been entered into in the normal course of business and havebeen established on terms and conditions that are not materially different from that obtainable in transactions withunrelated parties.






34. Related party disclosures (cont’d.)

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year are as follows:


Short term employee benefits 6,465,573 6,848,008 348,000 406,499Contributions to defined contribution plan 580,739 567,101 - -

Included in the total key management personnel compensation are:


Directors' remuneration (Note 7) 4,144,175 4,302,128 348,000 406,499

In aggregate, executive directors of the Group and of the Company and other members of key management have beengranted a number of options under the ESOS as follows:

Group and Company 2016 2015 RM RM

At 1 January/31 December 42,109,000 39,880,840

35. Fair value measurement

Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonableapproximation of fair value

Group Carrying Fair amount value RM RM

2016

Financial liabilities:Loans and borrowings (non-current) - Term loans (15,303,362) (14,648,859) - Sukuk Ijarah MTN (45,000,000) (42,773,632) - Hire purchase and finance lease liabilities (1,829,108) (1,731,262)


35. Fair value measurement (cont’d.)

Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonableapproximation of fair value (cont’d.)

Group Carrying Fair amount value RM RM

2015

Financial liabilities:Loans and borrowings (non-current) - Term loans (13,381,655) (12,414,719) - Sukuk Ijarah MTN (75,000,000) (68,353,668) - Hire purchase and finance lease liabilities (3,052,536) (2,618,103)

The fair value of loans and borrowings is determined by discounting the expected future cash flows based on current rates forsimilar types of borrowing and leasing arrangement.

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonableapproximation of fair value:

Note

Trade receivables (current) 20Other receivables 21Cash and cash equivalents 22Borrowings (current) 26Trade payables 29Other payables 30

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near thereporting date.

The carrying amounts of the current portion of borrowings are reasonable approximations of fair values due to the insignificantimpact of discounting.






35. Fair value measurement (cont’d.)

Determination of fair value

The fair value measurement hierarchies used to measure assets and liabilities disclosed in the financial statements as at 31 December 2016 are as follows:

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directlyor indirectly.

Level 3 fair value

Level 3 fair value is estimated using inputs that are not based on observable market data.

Quantitative disclosures fair value measurement hierarchy for assets as at 31 December 2016 are as below:

Date of Level 2 Level 3 Total valuation RM RM RM

Group

Property, vessels and equipment (Note 12)- Vessels 31 Dec 2016 - 381,857,292 381,857,292

Investment properties (Note 13) 31 Dec 2016 14,854,315 - 14,854,315

Level 2 fair value

Level 2 fair values of the investment properties have been generally derived using the comparison method as described inNote 13.

Level 3 fair value

Level 3 fair values of the vessels have been generally derived using the method as described in Note 3.2(c).


36. Financial risk management objectives and policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments.The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executedby the various process owners. The Risk Management Committee provides independent oversight to the effectiveness of therisk management process.

It is the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriateand cost-efficient. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group’s and the Company’s exposure to the above-mentioned financialrisks and the objectives, policies and processes for the management of these risks.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on itsobligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables.For other financial assets (including cash and bank balances), the Group and the Company minimise credit risk by dealingexclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit riskexposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customerswho wish to trade on credit terms are subject to credit verification and evaluation procedures. In addition, trade receivablebalances are monitored on an ongoing basis in view of reducing the Group’s exposure to bad debts.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carryingamount of each class of financial assets recognised in the statements of financial position.

At the reporting date, approximately:

- 52.1% (2015: 44.7%) of the Group’s trade receivables were due from 10 (2015: 10) major customers who are locatedin Malaysia; and

- 68.0% (2015: 42.9%) of the Group’s trade and other receivables were due from related parties.

Financial assets that are neither past due nor impaired

Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 20. Deposits withbanks and other financial institutions that are neither past due or impaired are placed with reputable financial institutionswith high credit ratings.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 20.






36. Financial risk management objectives and policies (cont’d.)

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due toshortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of maturitiesof financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuityof funding and flexibility through the use of stand-by credit facilities.

The Group’s and the Company’s liquidity risk management policy is that not more than 60% of borrowings (includingoverdrafts) should mature in the next one year period, and to maintain sufficient liquid financial assets and stand-by creditfacilities with three different banks. At the reporting date, approximately 53% (2015: 58%) of the Group’s borrowings asdisclosed in Note 26 will mature in less than one year based on the carrying amount reflected in the financial statements.About 35% (2015: 50%) of the Company’s borrowings will mature in less than one year at the reporting date.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and of the Company’s liabilities at the reporting datebased on contractual undiscounted repayment obligations.

On demand or One to five Over five within one year years years Total RM RM RM RM

2016

Financial liabilities:

Group

Trade and other payables 60,574,996 - - 60,574,996Borrowings 92,628,508 55,291,121 17,400,201 165,319,830

Total undiscounted financial liabilities 153,203,504 55,291,121 17,400,201 225,894,826

Company

Other payables 613,753 - - 613,753Borrowings 30,000,000 46,407,500 - 76,407,500

Total undiscounted financial liabilities 30,613,753 46,407,500 - 77,021,253



(b) Liquidity risk (cont’d.)

Analysis of financial instruments by remaining contractual maturities (cont’d.)

On demand or One to five Over five within one year years years Total RM RM RM RM

2015

Financial liabilities:

Group

Trade and other payables 106,168,546 - - 106,168,546Borrowings 102,594,926 85,636,132 7,083,593 195,314,651

Total undiscounted financial liabilities 208,763,472 85,636,132 7,083,593 301,483,197

Company

Other payables 5,077,250 - - 5,077,250Borrowings 40,000,000 80,812,500 - 120,812,500

Total undiscounted financial liabilities 45,077,250 80,812,500 - 125,889,750

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group's and of the Company’s financial instrumentswill fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their borrowings. The Group doesnot hedge its interest rate but ensures that it has obtained borrowings at competitive interest rates under the mostfavourable terms and conditions.

The Group’s policy is to manage interest cost using a mix of fixed and floating rate debts. At the reporting date,approximately 74% (2015: 78%) of the Group’s borrowings are at fixed rates of interest.

Sensitivity analysis for interest rate risk

At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant, theGroup’s (loss)/profit before tax would have been RM41,544 (2015: RM46,291) higher/lower, arising mainly as a result oflower/higher interest expense on floating rate borrowings. The assumed movement in basis points for interest ratesensitivity analysis is based on the currently observable market environment.

Sources of interest rate risk

Interest rate risk arises on interest-bearing financial instruments recognised in the statements of financial position on the borrowings.







(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of the financial instrument will fluctuate becauseof changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currencyother than the respective currencies of Group’s entities, primarily United States Dollar (“USD”) and Singapore Dollar (“SGD”).

Approximately 4% (2015: 3%) of the Group’s sales are denominated in foreign currencies whilst almost 4% (2015: 100%)of cost are denominated in the respective functional currencies of the Group’s entities. The Group’s trade receivable andtrade payable balances at the reporting date have similar exposure.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group's (loss)/profit before tax to a reasonably possible changein the USD and SGD exchange rates against the respective functional currencies of the Group entities, with all other

variables held constant.

Group (Loss)/profit before tax

2016 2015 RM RM

Financial assets

USD/RM - strengthened 3% (2015: 3%) 6,729,012 61,164 - weakened 3% (2015: 3%) (6,729,012) (61,164)

Financial liabilities

USD/RM - strengthened 3% (2015: 3%) (251,136) (324,705) - weakened 3% (2015: 3%) 251,136 324,705SGD/RM - strengthened 3% (2015: 3%) (135,988) (5,917) - weakened 3% (2015: 3%) 135,988 5,917

37. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capitalratios in order to support its business and maximises shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintainor adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders orissue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2016and 31 December 2015.


37. Capital management (cont’d.)

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policyis to keep the gearing ratio not exceeding 75%. The Group includes within net debt, borrowings, trade and other payables,less cash and bank balances. Capital includes equity attributable to the owners of the parent less the fair value adjustmentreserve, if any.


Borrowings 154,760,978 194,029,117 75,000,000 115,000,000Trade and other payables 60,574,996 106,168,546 613,753 5,077,250Less: Cash and bank balances (45,124,437) (125,513,402) (11,968,076) (14,922,379)

Net debt 170,211,537 174,684,261 63,645,677 105,154,871

Equity attributable to the owners of the parent, representing total capital 742,117,943 876,936,118 404,137,459 397,624,999

Capital and net debt 912,329,480 1,051,620,379 467,783,136 502,779,870

Gearing ratio 18.7% 16.6% 13.6% 20.9%

38. Restatement

The Group's interest in its joint venture are accounted for using the equity method. During the financial year, the Group notedthat its cost of investment in a joint venture were recognised in other receivables. Accordingly, the interests in joint venturesand other receivables have been restated. The effects of this adjustment to the financial statements of the Group for the priorperiod are as follows:

As previously As stated Adjustments restated RM RM RM

Group

At 31 December 2015

Non-current assets Interests in joint ventures 227,376,117 26,276,000 253,652,117

Current assets Other receivables Amounts due from related parties: - Joint ventures 114,400,647 (26,276,000) 88,124,647






39. Segmental information

(a) Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and rates of returnare affected predominantly by differences in the products and services produced. The operating businesses are organisedand managed separately according to the nature of the products and services provided, with each segment representinga strategic business unit that offers different products and serves different markets.

The Group comprises the following two main business segments:

- Offshore support vessels and services

Provision of vessels for charter hire, assisting seismic operators in seismic survey related activities, transportationof crew and supplies, towing and mooring of rigs offshore, anchor-handling services and other support, repair andmaintenance services for the oil and gas industry.

- Sub-sea services

Provision of offshore facilities construction and installation services such as marine construction related services,sub-sea engineering services and offshore pipeline construction related services and designing, manufacturing andoperating of remotely operated vehicles.

(b) Business segments

Other business segments include investment holding and provision of transportation, ship forwarding and agent and shipchandelling to the subsidiaries, none of which are of a sufficient size to be reported separately.

The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of businessand have been established on terms and conditions that are not materially different from those obtainable in transactionswith unrelated parties.

(c) Geographical segments

Segmental reporting by geographical segments has not been prepared as the Group's operations are carried outpredominantly in Malaysia.

(d) Allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocatedon a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and expenses.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions withthird parties. Segment revenue, expenses and results include transfers between business segments. These transfersare eliminated on consolidation.


39. Segmental information (cont’d.)

Offshore support vessels Sub-sea and services services Others Adjustments Total RM RM RM RM RM

RevenueSales to external customers 110,505,267 118,975,257 - - 229,480,524Inter segment sales 45,620,641 21,334,641 3,475,142 (70,430,424) -

Total revenue 156,125,908 140,309,898 3,475,142 (70,430,424) 229,480,524

ResultsSegment results (31,833,180) (39,128,250) 804,634 (2,650,797) (72,807,593)Finance costs (8,392,471) (694,018) (488,014) 422,556 (9,151,947)Share of results of associates (30,454,322) - - - (30,454,322)Share of results of joint ventures (18,309,045) (18,145,091) - - (36,454,136)

Loss before tax (148,867,998)Income tax expenses 6,209,539

Loss for the year (142,658,459)

AssetsSegment assets 377,973,243 70,649,682 9,215,696 (5,659,863) 452,178,758Investments in associates 60,463,502 - - (12,721,933) 47,741,569Interests in joint ventures 89,251,959 - - 120,788,446 210,040,405Intangible assets - - - - -Unallocated assets 374,167,556 17,008,298 437,850,149 (581,618,325) 247,407,678

Total assets 901,856,260 87,657,980 447,065,845 (479,211,675) 957,368,410

Total liabilities 1,007,753,176 96,915,860 90,552,701 (975,460,071) 219,761,666

Other segment information:Capital expenditure 4,575,719 3,788,726 - - 8,364,445Depreciation 28,219,087 16,042,989 696,821 - 44,958,897Other significant non-cash expenses:Impairment loss on:- trade receivables 3,166,357 6,177,166 - - 9,343,523- amount due from a joint venture 6,434,233 1,518,934 - - 7,953,167- interests in an associate 1,236,015 - - - 1,236,015- interests in joint ventures 6,334,146 - - - 6,334,146Impairment of property, vessels and equipment 22,469,772 - - - 22,469,772Property, vessels and equipment written off 8,777 - - - 8,777






39. Segmental information (cont’d.)

Offshore support vessels Sub-sea and services services Others Adjustments Total RM RM RM RM RM

31 December 2015

RevenueSales to external customers 241,572,622 105,083,497 3,565,971 - 350,222,090Inter segment sales 57,114,562 47,463,452 3,208,028 (107,786,042) -

Total revenue 298,687,184 152,546,949 6,773,999 (107,786,042) 350,222,090

ResultsSegment results 15,875,786 (3,342,986) 7,468,190 (5,479,518) 14,521,472Finance costs (11,348,909) (576,394) (7,970,775) 7,550,469 (12,345,609)Share of results of associates 2,379,049 - - - 2,379,049Share of results of joint ventures (12,482,195) (11,891,083) - - (24,373,278)

Loss before tax (19,818,366)Income tax credit 65,629,571

Profit for the year 45,811,205

AssetsSegment assets 418,345,978 83,201,409 9,423,150 - 510,970,537Investments in associates 61,699,516 - - 17,732,390 79,431,906Interests in joint ventures 96,531,327 - - 157,120,790 253,652,117Intangible assets - 19,416 - 1,540,096 1,559,512Unallocated assets 256,465,453 32,120,598 460,126,404 (402,468,101) 346,244,354

Total assets 833,042,274 115,341,423 469,549,554 (226,074,825) 1,191,858,426

Total liabilities 449,049,620 94,351,671 167,855,444 (397,908,321) 313,348,414

Other segment information:Capital expenditure 6,519,967 23,158,513 4,666,648 - 34,345,128Depreciation 29,284,764 13,209,959 381,355 - 42,876,078Other significant non-cash expenses:Impairment loss of trade receivables 10,473,238 1,905,057 - - 12,378,295Impairment loss on interests in joint ventures 840,967 - - - 840,967Impairment of property, vessels and equipment 16,077,838 - - - 16,077,838Property, vessels and equipment written off 2,004 - - - 2,004


40. Subsequent events

(a) On 20 February 2017, the Group's wholly-owned subsidiary, Alam Maritim (M) Sdn. Bhd. has entered into a Sale andPurchase Agreement with a third party to dispose of a three storey shop lot building located at 1, 1-1 & 1-2, Jalan RadenBagus 5, Sri Petaling, 57000 Kuala Lumpur for a consideration of RM9 million.

(b) On 8 March 2017, the Group announced that its wholly-owned subsidiary, Alam Maritim (M) Sdn. Bhd., was recentlyawarded a contract for the Provision of Offshore Construction Subcontractor for FPSO Perisai Kamelia (“the Contract”)by a reputable contractor. The Contract is for a demobilisation works at a lump sum price of approximately RM34 millionwith an additional scope for water treatment at provisional sum of approximately RM1 million.

(c ) On 21 March 2017, the Group announced that its wholly-owned subsidiary, Alam Maritim (M) Sdn. Bhd., was recentlyawarded a contract for the Provision of Subsea Inspection, Maintenance and Repair (IMR) Services (“the Contract”) byan independent oil and gas exploration and production company. The Contract is for the primary period of two (2) yearswith an extension option of one (1) year. The Contract is for a value of up to approximately RM99.0 million.






41. Supplementary information – breakdown of retained earnings into realised and unrealised

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2016 into realised and unrealisedprofits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 andprepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Lossesin the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the MalaysianInstitute of Accountants.


Total retained earnings of the Company and its subsidiaries: - realised 637,211,670 672,707,205 12,566 1,220,541 - unrealised (353,544,250) (316,853,443) 5,701,691 (5,454)

283,667,420 355,853,762 5,714,257 1,215,087

Total share of retained earnings from associates: - realised (7,059,639) 23,173,268 - - - unrealised (63,012) 39,142 - -

Total share of retained earnings from joint ventures: - realised 119,576,296 157,351,063 - - - unrealised 13,298,810 14,507,325 - -

409,419,875 550,924,560 5,714,257 1,215,087Less: consolidation adjustments (64,321,146) (68,418,226) - -

Retained earnings as per financial statements 345,098,729 482,506,334 5,714,257 1,215,087



Authorised Share Capital : RM500,000,000Issued and Paid-Up Share Capital : RM231,115,230Class of Shares : Ordinary Shares of RM0.25 each fully paidVoting Rights : On a poll – One vote for every ordinary share heldNo. of Voting Shares : 924,460,921

DISTRIBUTION SCHEDULE OF SHAREHOLDERS

NO. OF NO. OF SIZE OF HOLDINGS HOLDERS % SHARES %

1 - 99 124 1.327 5,160 0.000100 - 1,000 553 5.919 418,093 0.0451,001 - 10,000 4,712 50.438 27,924,123 3.02010,001 - 100,000 3,414 36.544 118,410,237 12.808100,001 - 46,223,045(*) 536 5.737 355,322,172 38.43546,223,046 and above(**) 3 0.032 422,381,136 45.689

Total 9,342 100.00 924,460,921 100.000

Notes:(*) Less than 5% of issued shares(**) 5% and above of issued shares

DIRECTORS’ SHAREHOLDING

Name of Directors Direct Indirect No. Of No. Of Shares % Shares %

DATUK AZMI BIN AHMAD 2,292,748 0.248 330,581,061(1) 35.759SHAHARUDDIN BIN WARNO @ RAHMAD 9,900 (*) 330,415,436 (2) 35.741AHMAD HASSANUDIN BIN AHMAD KAMALUDDIN 1,875 (*) 123,750(3) 0.013FINA NORHIZAH BINTI HJ BAHARU ZAMAN 34,000 (*) - -DATO’ HAJI AB WAHAB BIN IBRAHIM 1,500 (*) - -AINUL AZHAR BIN AINUL JAMAL - - - -

SUBSTANTIAL SHAREHOLDERS

Name Direct Indirect No. Of No. Of Shares % Shares %

SAR VENTURE HOLDINGS (M) SDN BHD 330,415,436 35.741 - -LEMBAGA TABUNG HAJI 93,653,000(4) 10.13 - -POH YANG HONG 33,700,000 3.645 39,400,000(5) 4.262DATUK AZMI BIN AHMAD 2,292,748 0.248 330,581,061(1) 35.759SHAHARUDDIN BIN WARNO @ RAHMAD 9,900 (*) 330,415,436(2) 35.741

Analysis of Shareholdings as at 31 march 2017



Notes:(*) Shareholding of less than 0.01%(1) Deemed interested by virtue of his shareholding in SAR Venture Holdings (M) Sdn Bhd and the shareholding of his spouse in

AMRB pursuant to Section 8(4) and 59(11)(c) of the Companies Act 2016, respectively.(2) Deemed interested by virtue of his shareholding in SAR Venture Holdings (M) Sdn Bhd pursuant to Section 8(4) of the

Companies Act 2016.(3) Deemed interested by virtue of his spouse shareholding in AMRB pursuant to Section 59(11)(c) of the Companies Act 2016.(4) Held through Kenanga Islamic Investors Bhd for 1,687,300 ordinary shares of RM0.25 each in AMRB.(5) Deemed interested by virtue of his shareholding in Caprice Capital International Limited and Caprice Capital Holdings Limited

pursuant to Section 8(4) of the Companies Act 2016.

LIST OF TOP 30 HOLDERS

(Without aggregating securities from different securities accounts belonging to the same registered holder)

No Name Holdings %

1 SAR VENTURE HOLDINGS (M) SDN BHD 243,109,197 26.297

2 LEMBAGA TABUNG HAJI 91,965,700 9.948

3 SAR VENTURE HOLDINGS (M) SDN BHD 87,306,239 9.444

4 ASSETS NOMINEES (ASING) SDN BHD GUOLINE EQUITIES LIMITED 40,600,000 4.391

5 MAYBANK NOMINEES (ASING) SDN BHD 37,900,000 4.099 PLEDGED SECURITIES ACCOUNT FOR CAPRICE CAPITAL INTERNATIONAL LTD

6 MAYBANK NOMINEES (TEMPATAN) SDN BHD 33,700,000 3.645 PLEDGED SECURITIES ACCOUNT FOR POH YANG HONG

7 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 19,275,700 2.085 EMPLOYEES PROVIDENT FUND BOARD

8 HSBC NOMINEES (ASING) SDN BHD 6,306,300 0.682 EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING)

9 LEE KEK MING 5,500,000 0.594

10 AMANAHRAYA TRUSTEES BERHAD 5,000,000 0.540 AS 1MALAYSIA

11 ER SOON PUAY 4,035,500 0.436

12 CITIGROUP NOMINEES (ASING) SDN BHD 3,698,500 0.400 CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES

13 HSBC NOMINEES (ASING) SDN BHD 3,022,873 0.326 EXEMPT AN FOR CREDIT SUISSE (HK BR-TST-ASING)

14 CITIGROUP NOMINEES (ASING) SDN BHD 3,006,900 0.325 CBNY FOR EMERGING MARKET CORE EQUITY PORTFOLIO DFA INVESTMENT DIMENSIONS GROUP INC



No Name Holdings %

15 KENANGA NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR NG CHAI GO 2,980,900 0.322

16 TAN CHING LING 2,956,000 0.319

17 HSBC NOMINEES (ASING) SDN BHD 2,927,000 0.316 EXEMPT AN FOR BANK JULIUS BAER & CO. LTD. (SINGAPORE BCH)

18 PUBLIC INVEST NOMINEES (ASING) SDN BHD 2,881,100 0.311 EXEMPT AN FOR PHILLIP SECURITIES PTE LTD (CLIENTS)

19 CITIGROUP NOMINEES (ASING) SDN BHD 2,817,000 0.304 CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND

20 ESPLANADE LAND SDN.BHD. 2,799,000 0.302

21 AMSEC NOMINEES (TEMPATAN) SDN BHD 2,556,100 0.276 MTRUSTEE BERHAD FOR PACIFIC PEARL FUND (UT-PM-PPF)

22 TING CHEE MING 2,500,000 0.270

23 AZMI BIN AHMAD 2,278,487 0.246

24 ASSETS NOMINEES (ASING) SDN BHD 2,000,000 0.216 KWEK LENG SENG

25 RHB NOMINEES (TEMPATAN) SDN BHD 2,000,000 0.216 PLEDGED SECURITIES ACCOUNT FOR TAN CHONG JUN

26 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 1,687,300 0.182 KENANGA ISLAMIC INVESTORS BHD FOR LEMBAGA TABUNG HAJI

27 ANG CHIN WOI 1,500,000 0.162

28 KENANGA NOMINEES (TEMPATAN) SDN BHD 1,500,000 0.162 PLEDGED SECURITIES ACCOUNT FOR LEE TENG TIAN

29 MAYBANK NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR CAPRICE CAPITAL HOLDINGS LTD 1,500,000 0.162

30 NG CHAI GO 1,500,000 0.162





notice of 12th annual general meeting

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 December 2016together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors who retire pursuant to Article 94 of the Company’s Articles ofAssociation and being eligible, have offered themselves for re-election:

(i) Fina Norhizah binti Haji Baharu Zaman; and(ii) Dato’ Haji Ab Wahab bin Haji Ibrahim

3. To approve the payment of Directors’ Fees amounting to RM315,000 for the financial year ended31 December 2016.

4. To re-appoint Messrs Ernst & Young as Auditors of the Company until the conclusion of the nextAnnual General Meeting and to authorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS

To consider and, if thought fit, with or without modification, to pass the following resolutions which willbe proposed as Ordinary Resolutions:

5. Proposed Continuation in Office as Independent Non-Executive Director in accordancewith Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012:

“THAT subject to passing of Ordinary Resolution 2, approval be and is hereby given to retainDato’ Haji Ab Wahab bin Haji Ibrahim, who has served as an Independent Non-Executive Directorof the Company for a cumulative term of more than nine (9) years, be and is hereby authorisedto continue to act as an Independent Non-Executive Director of the Company and to hold officeuntil the conclusion of the next AGM of the Company.”

6. Authority to Issue Shares Pursuant to Section 75 and Section 76 of the Companies Act, 2016

"THAT pursuant to Section 75 and Section 76 of the Companies Act, 2016, the Company’sMemorandum and Articles of Associations, the Main Market Listing Requirements of BursaMalaysia Securities Berhad (Bursa Malaysia Securities) and the approvals of the relevantgovernmental and/or regulatory authority (if any), the Directors be and are hereby empowered toissue shares in the Company at any time at such price and upon such terms and conditions andfor such purposes and to such person or persons whomsoever as the Directors may, in theirabsolute discretion, deem fit provided that the aggregate number of shares so issued does notexceed 10% of the issued capital of the Company for the time being and the Directors be and arealso empowered to obtain the approval of the Bursa Malaysia Securities for listing of and quotationfor the additional shares so issued and that such authority shall continue in force until theconclusion of the next Annual General Meeting of the Company."

(Please refer to Note (i)of the ExplanatoryNotes on Ordinary

Businesses)

(Ordinary Resolution 1)(Ordinary Resolution 2)

(Ordinary Resolution 3)




NOTICE IS HEREBY GIVEN THAT the Twelfth Annual General Meeting of Alam Maritim Resources Berhad will be held on Friday,26 May 2017 at 10.00 a.m., at Technology Park Malaysia Corporation Sdn Bhd, Auditorium Enterprise 4, Lebuhraya Puchong-Sungai Besi, 57000 Bukit Jalil, Kuala Lumpur for the following purposes:-




7. Proposed renewal of authority for the Company to purchase its own shares of up to 10%of the issued and paid-up share capital of the Company.

“THAT subject to the Companies Act, 2016, the Company’s Memorandum and Articles ofAssociations, the Bursa Malaysia Securities and the approvals of the relevant governmentaland/or regulatory authority (if any), the Directors of the Company be and are hereby authorisedto make purchase(s) of ordinary shares of RM0.25 each in the Company’s issued and paid-upshare capital on Bursa Securities subject to the following:

i. the maximum number of shares which may be purchased and/or held by the Company shallbe equivalent to 10% of the issued and paid-up share capital of the Company (Shares) forthe time being;

ii. the maximum fund to be allocated by the Company for the purpose of purchasing the Sharesshall not exceed the aggregate retained profits and share premium account of the Company;

iii. the authority conferred by this resolution will commence immediately upon passing of thisordinary resolution and shall be in force until:

(a) at the conclusion of the next Annual General Meeting (AGM) of the Company; or

(b) upon the expiration of the period within which the next AGM is required by the law tobe held; or

(c) revoked or varied by an ordinary resolution passed by the shareholders of the Companyin general meeting,

whichever is earlier; and

iv. upon the completion of the purchase(s), the Directors are authorised to deal with the Sharesso purchased in the manner they may deem fit in the best interest of the Company;

AND THAT the Directors of the Company be and are hereby authorised to take necessarysteps to fully implement the purchase(s) of the Shares with full power to assent to anyconditions, modifications, variations and/or amendments as may be imposed by the relevantauthorities and to do all such acts and things as they may deem fit in the best interest of theCompany.”

8. To transact any other business of the Company for which due notice shall has been given inaccordance with the Companies Act, 2016 and the Company’s Articles of Association.

BY ORDER OF THE BOARD

NURANISMA BINTI AHMAD, MIA, ACIS (MAICSA 7067610)NUR AZNITA BINTI TAIP, ACIS (MAICSA 7067607) Company Secretaries

Kuala Lumpur28 April 2017





EXPLANATORY NOTES ON ORDINARY BUSINESSES:-

(i) Agenda Item No. 1 - Audited Financial Statements for financial year ended 31 December 2016 - is meant for discussion onlyas the provision of Section 340(1)(a) of the Companies Act, 2016 does not require a formal approval of shareholders for theAudited Financial Statements. As such, this item is not put forward for voting.

(ii) Ordinary Resolutions 1 and 2 - Re-election of Directors who retire by rotation pursuant to Article 94 Fina Norhizah binti Haji Baharu Zaman and Dato’ Haji Ab Wahab bin Haji Ibrahim are standing for re-election as Directors ofthe Company and being eligible, have offered themselves for re-election.

EXPLANATORY NOTES ON SPECIAL BUSINESSES:-

(i) Ordinary Resolution 5 - Proposed Continuation in Office as Independent Non-Executive Director in accordance withRecommendation 3.3 of the Malaysian Code on Corporate Governance 2012.

The proposed resolution is to seek shareholders’ approval to retain Dato’ Haji Ab Wahab bin Haji Ibrahim as an IndependentNon-Executive Director of the Company. He has served the Company as an Independent Non-Executive Director since 2 May2006 for a cumulative period of over nine (9) years. The BNRC has made the necessary assessment and recommended tothe Board of Directors that he be retained as an Independent Director of the Company based on his ability to maintain hisindependence of judgment and to express and maintain unbiased views without any influence. Dato’ Haji Wahab has a goodunderstanding of the Company’s business, the challenges faced by the Company and the environment in which the Companyoperates. The Board values his contribution to the Company and he is also committed in performing his functions and dutiesas the Chairman of the Board Audit Committee, including but not limited to attendance at Board and Board Committees’meetings. This proposed resolution is in line with the recommendation under the Malaysian Code on Corporate Governance2012 and this would allow him to continue to serve as Chairman of the Board Audit Committee, pursuant to the requirementof Paragraph 15.10 of the Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad.

(ii) Proposed Ordinary Resolution 6 is to seek a renewal of the general authority pursuant to Section 75 and Section 76 of theCompanies Act, 2016 and the MMLR for the issuance and allotment of new ordinary shares in the Company.

Proposed Ordinary Resolution 6, if passed, will enable Directors to issue and allot new ordinary shares up to an amount notexceeding ten per centum (10%) of the Company’s issued share capital from time to time pursuant to exercise of any optionsunder the Company’s ESOS as well as provide them the flexibility to raise funds, including but not limited to further placementof shares for purposes of funding future investment project(s), working capital and/or acquisitions without convening a generalmeeting which will be both time and cost consuming. This authority, unless revoked or varied at a general meeting, will expireat the next annual general meeting of the Company.

(iii) The proposed Ordinary Resolution 7, if passed, is to empower the Directors to purchase the Company’s shares of up to10% of the issued and paid-up capital of the Company by utilising the retained profits and the share premium reserve of theCompany.

Information on the Proposed renewal of authority for the Company to purchase its own shares is set out in the Statement toShareholders dated 28 April 2017 dispatched together with the 2016 Annual Report.



Statement Accompanying Notice of Annual General Meeting

PURSUANT TO PARAGRAPH 8.27(2) OF THE MAIN MARKET LISTING REQUIREMENTS

The details of Directors who are standing for re-election are as set out on page 34 and 38 of this Annual Report and the Directors’

interest in the securities of the Company and/or its related companies are disclosed on page 192 and 194 of this Annual Report.

Notes:

1. Only members registered in the Record of Depositors (ROD) as at 19 May 2017 shall be eligible to attend the AGM or appointproxy to attend and vote on their behalf.

2. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy.

3. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the Meeting provided that, where amember is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories)Act 1991 (SICDA), it may appoint up to two (2) proxies in respect of each Securities Account it holds with ordinary shares inthe Company standing to the credit of the said Securities Account.

4. Where a member appoints two (2) proxies, the appointment shall be invalid unless the proportion of the shareholdings to berepresented by each proxy is specified.

5. The instrument appointing a proxy/Proxy Form shall be in writing under the hand of the appointer or of his attorney dulyappointed under a power of attorney. Where the instrument appointing a proxy is executed by a corporation, it shall be executedeither under its common seal or under the hand of any officer or attorney duly appointed under a power of attorney.

6. A corporation which is a member may by resolution of its Directors or other governing body authorise such person as it thinksfit to act as its representative at the Meeting in accordance with Article 91 of the Company’s Articles of Association.

7. Duly completed Proxy Form must be deposited at Tricor Investor & Issuing House Services Sdn Bhd, Unit 32-01, Level 32,Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8 Jalan Kerinchi, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time set for the Meeting or no later than 24 May 2017 at 10.00 am.




NOTES TO VENUE :-

MAP TO TECHNOLOGY PARK MALAYSIA CORPORATION SDN BHD, AUDITORIUM ENTERPRISE 4

• Parking

Please park your vehicle at Multi-Storey Parking Building located infront of the Auditorium Enterprise 4 (follow signage) and kindly produceyour parking ticket during registration for validation.

1) Search “TechnologyPark Malaysia” inWaze

2) GPS Coordinate:3.0479, 101.689085


ASTRO

STADIUMBUKIT JALIL

PETRONAS

MALAYSIA SPORT SCHOOL

RESOURCECENTER

ENTERPRISE4

ENTERPRISE1

PARKING

TPM AUDITURIUMLEVEL 1, ENTERPRISE 4

TPM

PARKING

ROUNDABOUTENTERPRISE

SECURITY CHECK POINT

APARTMENTS

FROM PUCHONGPUCHONG - SG. BESI HIGHWAY

TO SEREMBAN


This page has been intentionally left blank


No. of Shares

CDS Account No.

NRIC/Company No.

Tel & Fax No.

form of proxyI/We ___________________________________________________________________________________________________

(Block Letters)

of ______________________________________________________________________________________________________

being a member of ALAM MARITIM RESOURCES BERHAD (AMRB) hereby appoint :-

Name/CDS Account No NRIC/Passport No No of shares %Proxy 1 or _____________________ ________________ ___________ _____ failing him/herProxy 2 or _____________________ ________________ ___________ _____ failing him/her

Total ___________100

THE CHAIRMAN OF THE MEETING as my/our* proxy(ies) to vote for me/us* and on my/our* behalf at the Twelfth Annual GeneralMeeting of the Company to be held at 10.00 a.m. on Friday, 26 May 2017 at the Technology Park Malaysia Corporation Sdn Bhd,Auditorium Enterprise 4, Lebuhraya Puchong-Sungai Besi, 57000 Bukit Jalil, Kuala Lumpur and at any adjournment thereof, in themanner indicated below:

No. Resolutions For Against

1

2

3

4

5

6

7

Please indicate with a check mark (“√”) in the appropriate box against the resolution how you wish your proxy to vote. In the absenceof specific instructions, the proxy will vote or abstain at his/her discretion.

____________________________ __________________________________Date Signature/Common Seal of Shareholder

Notes:

1. Only members registered in the Record of Depositors (ROD) as at 19 May 2017 shall be eligible to attend the AGM or appoint proxy to attend and vote on their behalf. 2. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy.3. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the Meeting provided that, where a member is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act 1991 (SICDA), it may appoint up to two (2) proxies in respect of each Securities Account it holds with ordinary shares in the Company standing to the credit of the said Securities Account. 4. Where a member appoints two (2) proxies, the appointment shall be invalid unless the proportion of the shareholdings to be represented by each proxy is specified. 5. The instrument appointing a proxy/Proxy Form shall be in writing under the hand of the appointer or of his attorney duly appointed under a power of attorney. Where the instrument appointing a proxy is executed by a corporation, it shall be executed either under its common seal or under the hand of any officer or attorney duly appointed under a power of attorney. 6. A corporation which is a member may by resolution of its Directors or other governing body authorise such person as it thinks fit to act as its representative at the Meeting in accordance with Article 91 of the Company’s Articles of Association.7. Duly completed Proxy Form must be deposited at Tricor Investor & Issuing House Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8 Jalan Kerinchi, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time set for the Meeting or no later than 24 May 2017 at 10.00 am. 8. Pursuant to Paragraph 8.29A of the Main Market Listing requirements, voting at the 12th Annual General Meeting of the Company will be conducted by poll rather than a show of hands. Independent scrutineers will be appointed to observe the polling process and verify the poll results.

To re-elect Fina Norhizah binti Haji Baharu Zaman pursuant to Article 94.

To re-elect Dato’ Haji Ab Wahab bin Haji Ibrahim pursuant to Article 94.

To approve the payment of Directors’ fees for the financial year ended 31 December 2016.

To re-appoint Messrs Ernst & Young as Auditors of the Company until the conclusion of thenext Annual General Meeting and to authorise the Directors to fix their remuneration.

Continuation in office of Dato’ Haji Ab Wahab bin Haji Ibrahim as Independent Non-ExecutiveDirector in accordance with Recommendation 3.3 of the Malaysian Code on CorporateGovernance 2012

To authorise the Directors to issue shares pursuant to Section 75 and Section 76 of theCompanies Act, 2016

To approve the proposed renewal of authority for the Company to purchase its own shares.


TRICOR INVESTOR & ISSUING HOUSE SERVICES SDN BHD(COMPANY NO. 11324-H)UNIT 32-01, LEVEL 32, TOWER A,VERTICAL BUSINESS SUITE, AVENUE 3,BANGSAR SOUTH,NO. 8, JALAN KERINCHI, 59200 KUALA LUMPUR

Fold this flap for sealing

1st fold here

2nd fold here

AFFIX STAMP

Alam Maritim

No. 38F, Level 3

Bandar Baru Sr

57000 Kuala Lu

+603 905

+603 905

info@alam

www.alam



Alam Maritim Resources Berhad (Co. No. 700849-K)

No. 38F, Level 3, Jalan Radin Anum,

Bandar Baru Sri Petaling,

57000 Kuala Lumpur.

+603 9058 2244

+603 9059 6845

[email protected]

www.alam-maritim.com.my


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