listed companysealink.listedcompany.com/newsroom/SEALINK_ANNUAL_REPORT_… · The Sealink Group We are a Ship Owner / Charterer, Shipbuilder and Ship Repairer. Sealink Group builds,

The Sealink Group

We are a Ship Owner / Charterer, Shipbuilder and

Ship Repairer.

Sealink Group builds, owns and operates a diverse fleet of marine

support vessels, include serving the global

exploration and marine industry.

Our products and services are geographically spread

to over 20 countries across the world.

We are listed on the Main Market of Bursa Malaysia.

SEALINK INTERNATIONAL BERHADSEALINK INTERNATIONAL BERHAD(800981-X)

Our Vision• ALeadingIntegratedService

ProviderfortheMarineIndustry

Our Mission• ConstructingHighPerformance

WorldClassVessels• Establishing,Preservingand

IntegratingaNetworkofGlobalCustomers

• ContinuouslyAchieving InternationalAccreditation inMaritimeSafetyStandards• ContinuouslyImproving

ManagementandOperationalEfficiencyandOptimizationofSystems

• ZeroAccidentsandZeroPollution• ContinuouslyImprovingin

Health,Safety,Security,QualityManagementandCorporateSocialResponsibility

Our Goals• SatisfyingOurCustomers• ImprovingandSustainingOur

BusinessGrowthandMarketShare

• BuildingaStrongandMotivatedWorkforce

Our Values• QualityandExcellence• Integrity• CustomersandEmployees areOurCompany’sAssets• InternationallyCompetitive• EnvironmentalFriendly• SocialConsciousness• FlexibilityinBusinessOperations

1 Vision, Mission and Philosophy

2 Corporate Information

3 Group Structure

4 - 5 Notice of Annual General Meeting

6 - 8 Profile of Directors

9 - 10 Profile of Key Senior Management

11 - 14 Chief Executive Officer’s Message and Management Discussion & Analysis

15 - 16 Audit Committee Report

17 - 20 Statement on Risk Management and Internal Control

21 - 30 Corporate Governance Overview Statement

31 - 33 Sustainability Statement

34 Directors’ Responsibility Statement for the Audited Financial Statement

35 - 104 Financial Statements

105 - 106 Landed Properties

107 - 108 Analysis of Shareholdings

Form of Proxy Details of the Group – Places of Operations/Offices

Contents

Sealink International Berhad (800981-X)

2Annual Report 2017

Board Of Directors

Yong Foh Choi Non-Independent Executive DirectorManaging Director

Yong Kiam Sam Non-Independent Executive DirectorChief Executive Officer cum Deputy Managing Director Eric Khoo Chuan Syn @ Khoo Chuan SynIndependent-Non Executive Director Datuk Sebastian Ting Chiew Yew Independent-Non Executive Director Toh Kian Sing Independent-Non Executive Director Wong Chie Bin Independent-Non Executive Director

Audit Committee

ChairmanWong Chie BinMember Toh Kian Sing Eric Khoo Chuan Syn @ Khoo Chuan Syn Datuk Sebastian Ting Chiew Yew

Nominating Commitee

ChairmanEric Khoo Chuan Syn @ Khoo Chuan SynMember Toh Kian Sing Wong Chie Bin Datuk Sebastian Ting Chiew Yew

Remuneration Committee

ChairmanToh Kian SingMember Eric Khoo Chuan Syn @ Khoo Chuan Syn Wong Chie Bin Datuk Sebastian Ting Chiew Yew

Company Secretary

Yeo Puay Huang(LS0000577)

Registered Office and Corporate Office

Lot1035,Block4,MCLDPiasauIndustrialArea,98000Miri,SarawakTel:085-651778Fax:085-652480Email:[email protected]:www.asiasealink.com

Registrar

Securities Services (Holdings) Sdn Bhd(36869-T)Level7,MenaraMilenium,JalanDamanlelaPusatBandarDamansara,DamansaraHeights50490KualaLumpur,WilayahPersekutuanTel:03-20849000Fax:03-20949940

Auditors

Ernst & Young(AF:0039)4thFloor,Unit4.1,Lot698WismaYongLungPelitaCommercialCentre98000Miri,SarawakTel:085-423881Fax:085-413921

Principal Bankers

HongLeongBankBerhadAmBank(M)BerhadCIMBBankBerhadUnitedOverseasBank(Malaysia)BhdStandardCharteredSaadiqBerhadMalayanBankingBerhadDBSBankLtd

Stock Exchange Listings

Listed on Main Market of Bursa Malaysia Securities Berhad on 29 July 2008

Stock Code

5145

Stock Name

SEALINK

CorporateInformation

Sealink International Berhad (800981-X)Annual Report 2017

3

GroupStructure

S INTERNATIONAL BERHADEALINK

SINGAPORE LABUAN MALAYSIA

Chartering Shipbuilding and Repair

800981-X

SealinkOffshore (L) LtdLL06872

100%

Era SurewaySdn. Bhd.

687555-V

45%

Navitex ShippingSdn. Bhd.

620404-K

** 100%

SealinkManagement

Sdn. Bhd.250551-H

100%

Era SurplusSdn. Bhd.

648806-D

100%

SealinkResources

(L) LtdLL06873

* 100%

SealinkMarine (L) LtdLL06874

* 100%

SealinkAntarabangsa

LtdLL07806

100%

Perkasa AsiaCorporation

LtdLL07807

100%

Hanvoir (L) LtdLL09810

100%

Sea-GoodPte Ltd199707263C

100%

Seabright(Singapore)

Pte Ltd201001447E

100%

Sealink Sdn. Bhd.

20471-D

100%

SutherfieldResourcesSdn. Bhd.

467227-T

100%

Cergas MajusamaSdn. Bhd.

635714-U

100%

Midas Choice

Sdn. Bhd.646673-H

100%

Sea LegendShippingSdn. Bhd.

703278-W

100%

Mitra AngkasaSdn. Bhd.

974404-T

100%

LogistineSdn. Bhd.

896190-T

25%

EuroedgeSdn. Bhd.

571944-T

100%

Sealink Marine

Sdn. Bhd.226309-A

100%

GodrimajuSdn. Bhd.

535404-U

100%

SeabrightSdn. Bhd.

30204-K

100%

Sea AlphaSdn. Bhd.

886816-V

** 100%

Sealink Pacific

Sdn. Bhd.191968-H

100%

Bristal ViewSdn. Bhd.

253385-T

100%

SeastenSdn. Bhd.1054955-A

49%

Sealink Engineeringand Slipway

Sdn. Bhd.653820-H

100%

Baram MouldingIndustriesSdn. Bhd.

200873-D

100%

Sealink ShipyardSdn. Bhd.

195853-D

100%

Aliran SaksamaSdn. Bhd.

473205-H

100%

* Companystruck-offasat 6September2017** Companyappliedtostrike-

offon28December2017


4Annual Report 2017

NoticeofAnnualGeneralMeeting

NOTICE OF TENTH ANNUAL GENERAL MEETING (“10thAGM”)ofSealinkInternationalBerhad(“theCompany”)willbeheldattheMeetingRoom,1stFloor,AdminBlock,SealinkEngineeringandSlipwaySdnBhd,Lot816,Block1,KualaBaramLandDistrict,98100KualaBaramMiri,Sarawak,onTuesday,22May2018at11:00a.m.forthefollowingpurposes:

AS ORDINARY BUSINESS

1. ToreceivetheDirectors’ReportandAuditedFinancialStatementsforthefinancialyearended31December2017togetherwiththeReportoftheAuditorsthereon.

2. ToapprovethepaymentofDirectors’FeesamountingtoRM277,830.00perannumforNon-

ExecutiveDirectorsandRM39,690.00perannumforExecutiveDirectorsforthefinancialyearending31December2018.

3. Tore-electMrWongChieBinwhoshallretireinaccordancewithArticle89oftheCompany’s

ArticlesofAssociationand,beingeligible,hasofferedhimselfforre-election. 4. Tore-electMrTohKianSingwhoshallretireinaccordancewithArticle89oftheCompany’s

ArticlesofAssociationand,beingeligible,hasofferedhimselfforre-election.

5. Tore-appointMessrs.Ernst&YoungastheAuditorsoftheCompanyandtoauthorisetheDirectorstodeterminetheirremuneration.

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following ordinary resolutions :

6. ContinuationinofficeasIndependentNon-ExecutiveDirectors (i) “ThatsubjecttothepassingofResolution2,approvalbeandisgiventoMrWongChie

BinwhohasservedasanIndependentNon-ExecutiveDirectoroftheCompanyforaconsecutivetermofmorethannine(9)years,tocontinueinofficeasanIndependentNon-ExecutiveDirectoroftheCompany.”

(ii) “ThatsubjecttothepassingofResolution3,approvalbeandisgiventoMrTohKian

SingwhohasservedasanIndependentNon-ExecutiveDirectoroftheCompanyforaconsecutivetermofmorethannine(9)years,tocontinueinofficeasanIndependentNon-ExecutiveDirectoroftheCompany.”

7. TotransactanyotherbusinessofwhichduenoticeshallhavebeengiveninaccordancewiththeCompany’sArticlesofAssociationandtheCompaniesAct2016.

ByorderoftheBoard,

Yeo Puay Huang(f)CompanySecretary(LS0000577)Dated:23April2018

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)


5

Notice of Annual General Meeting (continued)

NOTES:

1. OnlyDepositorswhosenamesappearintheGeneralMeetingRecordofDepositorsasat16May2018beregardedasMembersandshallbeentitledtoattend,speakandvoteatthe10thAGM.

2. AMemberentitledtoattend,speakandvoteatthis10thAGMmayappointaproxytoattend,speakandvoteonhisbehalf.AproxyneednotbeamemberoftheCompany.

3. WhereamemberoftheCompanyisanexemptauthorizednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(omnibusaccount),thereisnolimittothenumberofproxieswhichtheexemptauthorizednomineemayappointinrespectofeachomnibusaccountitholds.

4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneydulyauthorizedinwritingoriftheappointorisacorporation,eitherunderitscommonsealorunderthehandofanofficerorattorneyofthecorporationdulyauthorized.

5. TheinstrumentappointingaproxymustbedepositedattheregisteredofficeoftheCompanyatLot1035,Block4,MCLD,PiasauIndustrialArea,98000Miri,Sarawak,notlessthan48hoursbeforethetimesetforthis10thAGMoranyadjournmentthereof.

6. PursuanttoParagraph8.29A(1)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,allresolutionssetoutinthisNoticewillbeputtovotebywayofpoll.

Explanatory Notes

1. TheAuditedFinancialStatementsarefordiscussiononlyastheydonotrequireshareholders’approvalpursuanttoSection340(1)oftheCompaniesAct,2016.Hence,thisAgendaitemwillnotbeputforvoting.

2. Re-electionofdirectors

MrWongChieBinandMrTohKianSingshallretireinaccordancewithArticle89oftheCompany’sArticles ofAssociationand,beingeligible,haveofferedthemselvesforre-election.

Theprofileofthedirectorswhoarestandingforre-electionarestatedonpages6to8oftheAnnualReport2017.

3. ContinuationinofficeasIndependentNon-ExecutiveDirectors

TheproposedResolutions5and6aretoseekshareholders’approvaltoretainMrWongChieBinandMrTohKianSingasIndependentNon-ExecutiveDirectors.TheyhaveservedtheCompanyasIndependentNon-ExecutiveDirectorssinceMay2008formorethannine(9)years.TheNominatingCommitteehaveassessedbothofthemandtherebyrecommendedthattheycontinueinofficeasIndependentNon-ExecutiveDirectorsoftheCompanybasedonthefollowingjustifications:

• TheyhavefulfilledthecriteriaunderthedefinitionofIndependentDirectorsasstatedintheMainMarketListingRequirementsofBursaSecurities;

• Theypossess vast commercial experienceand knowledge that complements theCompany’sboardcomposition,andcontinuetoprovidevaluableinsightsandcontributionstotheBoard;

• TheyhaveparticipatedinboarddiscussionsandtheyareabletobringindependentandobjectivejudgementstotheBoard.

TheproposedResolution5wouldalsoallowMrWongChieBintoserveasChairmanoftheAuditCommitteepursuanttotherequirementsofParagraph15.10oftheMainMarket ListingRequirements ofBursaMalaysiaSecuritiesBerhad.


6Annual Report 2017

ProfileofDirectors

Yong Foh ChoiManaging DirectorNon-Independent Executive Director

Nationality/Age/Gender:Malaysian/79/Male

Date of Appointment:28December2007

Academic/Professional Qualification(s):• FoundingmemberofBumiArmadaNavigationSdn

Bhd(BANSB)• FounderofSealinkGroupofCompanies• Prominentbusinessman

Working Experience:• VenturedSSB’sbusinessdirectionintocharteringOSVs

totheoffshoreoilandgasindustry(1997-present)• FormedSealinkSdnBhd (CompanyNo. 20471-D)

(SSB)toprovidecharteringservicesofmarinevesselstonon-oilandgasindustries(1993-1997)

• ManagingDirectorofBumiArmadaNavigationSdnBhd(BANSB)(1974-1993)

• DiversifiedYongFohChoi&SonsEnterpriseSdnBhd(CompanyNo.20716-P)intopropertydevelopment,shippingandoffshorelogisticssupportservices(Mid1970s)

• IncorporatedYongFohChoi&SonsEnterpriseSdnBhd(CompanyNo.20716-P)tospearheadhisownbusiness interest in timber extraction, imports andexports(Early1960s)

Present Directorship(s):ListedIssuer:SealinkInternationalBerhad

OtherPublicCompanies:NIL

PastDirectorship(s)and/orAppointment(s):NIL

Additional Information1.Anyfamilyrelationshipwithanydirectorand/ormajor

shareholderofthelistedissuer: ThefatherofYongKiamSam,whoisaDirectorand

also theChief ExecutiveOfficer (CEO) of SealinkInternationalBerhad(SIB).

2.Anyconflictofinterestswiththelistedissuer:NIL

3.Otherthantrafficoffences,thelistofconvictionsforoffenceswithinthepast5yearsandparticularsofanypublicsanctionorpenalty imposedby the relevantregulatorybodiesduringthefinancialyear2017:NIL

4.Thenumberofboardmeetingsattendedinthefinancialyear:6/6

Yong Kiam SamChief Executive Officer cum Deputy Managing DirectorNon-Independent Executive Director


Date of Appointment:28December2007

Academic/Professional Qualification(s):• Bachelor ofCommerce,University ofMelbourne,

Australia• MasterofBusinessAdministration,LondonBusiness

School,UnitedKingdom.

Working Experience:• DirectorofallthesubsidiariesofSealinkInternational

Berhad• Senior consultantwithErnst&YoungConsultants,

Singapore• AccountsExecutiveinLambirMyanmarInvestments

Ltd,Myanmar


OtherPublicCompanies:Nil

PastDirectorship(s)and/orAppointment(s):Nil


shareholderofthelistedissuer:

HeisthesonofYongFohChoi,whoisaDirectorofSealinkInternationalBerhad.

2.Anyconflictofinterestswiththelistedissuer:Nil

3.Otherthantrafficoffences,thelistofconvictionsforoffenceswithinthepast5yearsandparticularsofanypublicsanctionorpenalty imposedby the relevantregulatorybodiesduringthefinancialyear2017:Nil



7

Profile of Directors (continued)

Wong Chie BinIndependent Non-Executive DirectorChairman of Audit CommitteeMember of Nominating CommitteeMember of Remuneration Committee


Date of Appointment:20May2008

Academic/Professional Qualification(s):• MemberofCharteredAccountantsAustraliaandNew

Zealand• FellowmemberofCharteredTaxInstituteofMalaysia• MemberofMalaysianInstituteofAccountants• BachelorDegreeinCommerce,UniversityofOtago,

NewZealand

Working Experience:• SeniorPartner,CroweHorwath• Over30years’ experience inaccounting,auditing,

taxationandmanagementconsultancyservices





shareholderofthelistedissuer:NIL




Toh Kian SingIndependent Non-Executive DirectorChairman of Remuneration CommitteeMember of Nominating CommitteeMember of Audit Committee

Nationality/Age/Gender: Singaporean/53/Male

Date of Appointment: 23May2008

Academic/Professional Qualification(s):• BachelorofLaw,NationalUniversityofSingapore• BachelorofCivilLaw,UniversityofOxford

Working Experience:• Hehasvastexperienceasashippinglitigationand

arbitration lawyer, specialising incharterparty,billsof lading, ship sale and purchase, shipbuildingandmarine insurancedisputes. Healso handlescommoditytrading(particularlyoilandminerals)andlettersofcreditdisputes.

• He is a practising advocate and solicitor of theSupremeCourtofSingapore.

• HewasappointedaSeniorCounseloftheSupremeCourtofSingaporeinJanuary2007.

• HeisanarbitratorlistedinthepanelofarbitratorsoftheSingaporeInternationalArbitrationCentre,ChinaMaritime ArbitrationCommission, Kuala LumpurRegionalCentreforArbitration,SingaporeChamberofMaritimeArbitration,LondonCourtofInternationalArbitration,DIFC-LCIAArbitrationCentre, PacificInternationalArbitrationCenter (Vietnam),MemberoftheSouthChinaInternationalEconomicandTradeArbitrationCommission).



PastDirectorship(s)and/orAppointment(s):UTTrustPteLtd


shareholderofthelistedissuer:NIL





8Annual Report 2017

Eric Khoo Chuan Syn @ Khoo Chuan SynIndependent Non-Executive DirectorChairman of Nominating CommitteeMember of Remuneration CommitteeMember of Audit Committee



Academic/Professional Qualification(s):• Bachelor of Laws (LLB) Hons, University of

Wolverhampton,England,UnitedKingdom

Working Experience:• Practising Advocate and Solicitor, Khoo & Co

(1982-present)• Magistrate,JudicialDepartment(1979–1982)• Barrister-at-Law,Gray’sInn,London,England(1979)



PastDirectorship(s)and/orAppointment(s):Nil


shareholderofthelistedissuer:Nil




Datuk Sebastian Ting Chiew YewIndependent Non-Executive Director Member of Audit CommitteeMember of Nominating CommitteeMember of Remuneration Committee


Date of Appointment:20August2013

Academic/Professional Qualification(s):• BachelorofLaw(LLB)Hons(SecondClassUpper),

NorthLondonPolytechnic(nowknownasUniversityofNorthLondon)

• MasterofLaw(LLM),UniversityofCambridge(DarwinCollege)England

Working Experience:• Commissioner forNationalWaterCommission by

theMinisterofEnergyGreenTechnologyandWaterMalaysia(May2016–present)

• MemberofPiasauNatureReserveImplementationandEndowmentCommittee(February2015–present)

• Political Secretary toMinister of Energy GreenTechnologyandWaterMalaysia(April2009–2013)

• PoliticalSecretarytoMinisterofPlantationIndustriesandCommodities(May2004-April2009)

• Councillor,MiriMunicipalCouncil,MiriSarawak(1989-1999)

• Barrister-at-law,CouncilofLegalEducationLincoln’sInn,London,England(1983)





shareholderofthelistedissuer:Nil2.Anyconflictofinterestswiththelistedissuer:Nil3.Otherthantrafficoffences,thelistofconvictionsfor

offenceswithinthepast5yearsandparticularsofanypublicsanctionorpenalty imposedby the relevantregulatorybodiesduringthefinancialyear2017:Nil

4.Thenumberofboardmeetingsattendedinthefinancial

year:5/6

Profile of Directors (continued)


9

Lau Soo MoiGroup Director of the Subsidiaries of Sealink International Bhd

Nationality/Age/Gender:Malaysian/63/Female

Date of Appointment:4June2010

Academic/Professional Qualification(s):• Bachelor of Science, LondonUniversity, United

Kingdom• DiplomainShipManagement,NationalSeaTraining

Centre,UnitedKingdom(DistanceLearning)

Working Experience:• CompanyDirector,SubsidiariesofSealinkInternational

BerhadGroupintheMarineDivision(2010–Present)• GeneralManager,SealinkSdnBhd(2008-2010)• AssistantGeneralManager,SealinkSdnBhd(2002–

2008)• Operations,AdministrationandBusinessDevelopment

Manager,SealinkSdnBhd(1994–2002)• AdministrationManager,BumiArmadaNavigationSdn

BhdandSealinkSdnBhd(1985–1994)• Manager,LayangLayangServicesSdnBhd,aviation

branch(1981-Present)

Present Directorship(s):ListedIssuer:Nil





3.Otherthantrafficoffences,thelistofconvictionsforoffenceswithinthepast5yearsandparticularsofanypublicsanctionorpenalty imposedby the relevantregulatorybodiesduringthefinancialyear2016:

SaveforapenaltyimposedbySuruhanjayaSyarikatMalaysia(SSM)inDecember2016pertainingtotheinadvertent non-submission of Audited FinancialStatementsbyanassociateCompanyamountingtoRM4,000whichhassincebeenpaidinfull,therearenootheroffences(otherthantrafficoffences)withinthepastfiveyearsorhadbeenimposedanypublicsanctionorpenaltybytherelevantregulatorybodiesduringthefinancialyear.

Yong Kiam MiawGeneral Manager for Sealink Shipyard Sdn BhdProject Manager (Property Development) for Sealink Sdn Bhd


Date of Appointment:1September2014

Academic/Professional Qualification(s):• LicensedSecretary• BusinessAdministration

Working Experience:• GeneralManagerforSealinkShipyardSdnBhd• ManagerforLambirTimberSdnBhd• ManagerforSekiwaLoggingSdnBhd




shareholderofthelistedissuer: SonofMrYongFohChoi BrotherofMrYongKiamSam



ProfileofKeySeniorManagement


10Annual Report 2017

Capt. Bernard Anak IditHSE Manager Cum DPA



Academic/Professional Qualification(s):• Master of Foreign Going Ships – (COC, Class

1) – Mar i t ime Academy Malaysia (ALAM)(Degree in Nautical Science -World MaritimeUniversity/ALAM)

• SafetyAndHealthOfficerCertificate(NIOSH)• He isalsoaCertifiedSafetyandHealthofficerand

hasobtainedhisgreenbookin2008fromDepartmentofOccupationalSafetyandHealth(DOSH)Malaysia.RegisterSHO(DOSH)SHO-JKKPIS127/438/2/4992

• MemberofInstituteKelautanMalaysia(IKMAL)• MemberofNationalInstituteofOccupationalSafety

andHealth(NIOSH)

Working Experience:• Throughouthisseacareersince1990,hehadclocked

seaserviceofmorethan15yearssailingtoallpartsof theworldandservedonboardvariousMerchantShips.

• Hedecidedtoquitsailingin2005andworkedintheOilandGasCompanybasedinMiri.Duringhistenureas theHSEManager,hehasreceivedanumberofachievementsandawardsfromcharterers,authoritiesandprofessionalaffiliations.

• BorneoOccupationalSafetyandHealthPractitioners’Society(Boshps)servingasvicechairman.







Angelia Chong Pei ChengGeneral Manager, Group Finance

Nationality/Age/Gender:Malaysian/42/Female

Date of Appointment:1April2018

Academic/Professional Qualification(s):• BachelorofCommerceinAccountancy,Universityof

Canterbury,Christchurch,NewZealand• CharteredAccountantcertifiedbyTheAssociationof

CharteredCertifiedAccountants(ACCA,FCCA)• CharteredAccountantcertifiedbyMalaysianInstitute

ofAccountants(CA,MIA)

Working Experience:• GeneralManager,GroupFinance,SealinkInternational

Berhad(1April2018-Present)• Headof Treasury /CorporateCompliance,Sealink

InternationalBerhad(2016-March2018)• HeadofCompliance,Sealink InternationalBerhad

(2015)• SeniorFinanceManager,PetraResourcesSdnBhd,

Miri(2013-2015)• SeniorFinanceManager,SemuaShippingGroupof

Companies(2005-2013)• Auditor,KPMGSarawak(1998-2005)• AssistantBusinessAdvisor,KPMGAuckland,New

Zealand(1997)







Profile of Key Senior Management (continued)


11

Dear Valued Shareholders,

OnbehalfoftheBoardofDirectorsofSealinkInternationalBerhad(“theGroup”),IampleasedtopresenttoyouourAnnualReportforthefinancialyearended31December2017.Ithasbeenachallengingbutoptimisticyearforthemarineindustry,whichinevitablyimpactedourfinancialperformancefortheyearbutgivesrisetoconfidenceforthefuture.

Onanencouragingnote,theinitiativesandstrategiesundertakenhavebenefitedinreshapingandstrengtheningtheGroup,aswellasputusingoodsteadinwithstandingchallenges.Whiletheoilpriceandexternalenvironmentfactorsarebeyondourcontrol,wearefocusingondevelopingourstrengthsinordertomeetchallengesbetter.

MARKET OVERVIEW

TheMalaysiaoilandgasindustryhasahealthieroutlookin2018withBrentcrudeoilpricebreachingthekeypsychologicalmarkofUSD60perbarrel(bbl).Thisissupportedbyrobustoilconsumptiondemand,whichcoupledwithOPEC’sadherencetoproductioncutsandextensionoftheproductioncutsuntilend2018hasledtosteadyglobalinventorydrawdowns.Thisisapromisingsignalasfarasmarketrebalancingisconcernedandwillcontinuetosupportapositiveoilpricemovementhereon,aslongasthesupplysideiscappedbymarketparticipants.

Globalcapexbudgetsareexpectedtoremainresilientin2018andacceleratein2019albeitfromalowbaseasoilpriceaveragestotheUSD65/bblmark.Already,weareseeingsignsofrecoveryalongthevaluechainin2018forglobaloffshoreactivities.Oilandgasserviceproviderswithregionalorglobalfootprintarewellpoisedtocapitaliseonthistrend.

TheOrganizationofthePetroleumExportingCountries(“OPEC”)andnon-OPECoilproducersagreedon30November2017inViennatoextendthecurrentagreementofcuttingoiloutput.ThedecisionwastakenamidunprecedentedunanimitybetweenSaudiArabiaandRussia,twooftheworld’slargestoilproducers.ThedealalsoplacesproductioncapsforthefirsttimeonNigeriaandLibya,whichwereexemptfromthecutsandthishasresultedinanunexpectedsupplyglutintheearlypartof2017.Thus,fewersupplysidesurprisesareexpectedfromtheOPECandnon-OPECblocin2018.(Source: DBS Group Research report 2018)

Worldoildemandwouldgrowfasterthanexpectedin2018becauseofahealthyworldeconomy,addingatailwindtotheproducergroup’sefforttoremoveasupplyglutbycuttingoutput.Theglobalmarketisexpectedtoreturntobalanceonlytowardstheendof2018,noearlierthanpreviouslythought,ashigherpricesencouragetheUnitedStatesandothernon-memberproducerstopumpmore.Worldoildemandisexpectedtoriseby1.59millionbarrelsperday(bpd)thisyear,anincreaseof60,000bpdfromthepreviousforecast. (Source: OPEC)

DemandforOffshoreSupportVessels(OSV’s)isdrivenbyproductionsupport,rigsupportandtosomeextent,offshoreandsubseaconstructionsupport.ContinuousproductionsupportisbyfarthemostimportantdriverforOSV’s,whilerigsupportisthemaindriverfortheAnchorHandlingTugSupplysegment.

Withoilpricerecovering,webelievethatthedemandforoilserviceswillcomebackfirstfortheshallowwatersegments,asthesetypicallyhavealowerbreakevencost.ThiswillbebeneficialfortheGroupwhichhasthesevesseltypes.

OVERVIEW OF THE GROUP’S BUSINESS AND OPERATIONS

TheGroupisprincipallyinvolvedinthebusinessofcharteringofmarinevessels,shipbuildingandshiprepair.TheGroupbuilds,ownsandoperatesadiversefleetofmarinesupportvessels,whichservetheglobalexplorationandmarineindustry.

OurshipyardislocatedinKualaBaram,Miri,SarawakandtheworkshopinKrokop,Miri,Sarawak.Ourshipyardachievedthefirstmilestonein1999whenitdeliveredthefirstnewbuild,alandingcraftknownas“SealinkVictoria”.To-date,ourshipyardhasconstructedintotalsixtyeight(68)vessels(includingfabricationof2workbarges)withtotalvalueamountingtoaboutRM1.4billion.Armedwithtechnicalknowhowandmanagementcapabilities,ourGroupisabletoofferasophisticatedarrayofvesselsdesignedtomeetourcustomers’needs.TheGroup’sshipbuildingdivisionwillalsocontinueitsemphasisonshiprepair.ApartfromconstructionofOSVs,theGroupisdiversifyingintotheconstructionofharbortugsandothernon-oilandgasvessels.

ChiefExecutiveOfficer’sMessageandManagementDiscussion&Analysis



OVERVIEW OF THE GROUP’S BUSINESS AND OPERATIONS (continued)

OurshipoperationsarebasedinMiri,SarawakwithbranchofficeslocatedinLabuan,KemamanandSingapore.Theshippingdivisionhasafleetofthirtyfour(34)vesselsprovidingabroadrangeofservicestothemarinesectorwiththehigheststandardsofsafetyandtechnologyavailableintheindustry.

Asanintegratedserviceprovider,wehavefulldiscretionandcontroloverthedesignspecification,quality,costandtimelydeliveryofourvessels.Italsoprovidesuswiththeflexibilitytoeither“buildandsell”or“buildandcharter”ourvessels.Ourexperiencedmaintenanceteamcanrespondpromptlyandattendtoemergencyrepairsandwherenecessary,vessel(s)canbearrangedtobeupslippedinternallyatourslipwayinKualaBaramforvesselswithinthevicinity.ThisreducesourdependenceonotheryardsandprovidesourGroupwithadistinctcompetitiveadvantageovertheotherplayersinthemarket.

Overtheyears,theGrouphasestablishedareputationwithaproventrackrecordinbothofourcorebusinesses.Asatestimonytothis,ourclienteleincludesbothlocalandinternationalcompaniesfromtheUnitedStatesofAmerica,Australia,China,LatinAmerica,Europe,EastAfrica,SoutheastAsiaandtheMiddleEast.

TheGroupstrivestointensifyitseffortsandcommitmenttodeliverhighvalueproductsandserviceswithemphasisonsafeoperationsandtomaintainthegroup’spositionasoneoftheleadingintegratedserviceprovidersintheoffshoremarineservicessegment.

AsakeymeasuretomanagetheGroup’sexposuretothebusinessrisks,theGrouphascontinuedonthefollowinginitiativeswhichhavebeenreinforcedandcarriedforwardtothenextfiscalyear:

• Sustainablecostrationalizationandoptimizationofhumanresourceswhereonlycriticalpositionsarefilledwhenthe incumbents leave theGroup.Existingpersonnelare re-deployedwithin theGroup to takeonadditionalresponsibilitiesforbetterefficiencieswithoutimpairingtheadequacyofexistinginternalcontrolsystem;

• Closermonitoringof inventorymanagement,where stringent controls havebeendeployed toaccount forprocurementofgoodsandofservicesvis-à-visexistinginventorylevelstoconservecashflowsandminimizetheriskofinventoryobsolescence;

• Effectivecashflowmanagement.

Notwithstandingthechallengesfaced,theGroupisalwaysonthelook-outforstrategicallianceswithbusinesspartners,especiallythosewhichnicheexpertiseforbettermarketreach,allwiththeviewofenhancingshareholdervalue.Onthispremise,theGroupenteredintotwojointventureagreementsinNovember2017tohavedirectaccessandinvolvementwithnationalandinternationaloilmajorsandparticipateintheirtenderingexercisesdirectly.

Withtheongoinginitiativesinrationalizingandoptimizingcostsandexposures,webelievetheGroupwillbewellpoisedandpositionedtotideovertheprevailingbusinesschallenges.

OVERVIEW OF FINANCIAL PERFORMANCE

Financial results

TheGroup’sfinancialpositionhasimproveddespiteacontractioninearnings.Revenueforfinancialyear(“FY”)2017declinedbyRM48millionorby38%,primarilyduetoreducedcharterhireincome.Nevertheless,lossnetoftaxhasimprovedbymorethan10%orRM7million.Thisisinlinewiththeongoinginitiativesinrationalizingandoptimizingcostsandexposureswhichhavesignificantlyreducedourcostofsalesandotheroperatingexpenses&administrativeexpensesbyRM42millionandRM22millionrespectively.Financecostshavealsoreducedsubstantially,bymorethan20%,fromRM12.4milliontoRM9.5millionassomeloanshavebeencleared.

Chief Executive Officer’s Message and Management Discussion & Analysis (continued)


13

Liquidity and resources

DespitesufferingalossinFY2017,onapositivenote,netcashflowsfromoperatingactivitiesamountedtoRM27million.TheGroupmonitorsitscashflowsactivelyandensuresallobligationsaremetasandwhentheyfalldue.TheGroupactivelymanagesitsdebtmaturityprofile,operatingcashflowsandtheavailabilityoffundingastoensurethatallrepaymentsandfundingneedsaremet.

BorrowingsreducedsignificantlytoRM188millionfromRM252millionin2016,adropofmorethan25%.ThisspeakswellontheviabilityoftheGroup’sbusinessdespitethetoughconditionsinwhichitoperates.Atthesametime,withreducedgearingthegroupwillhaveastrongerbalancesheettotakeonadditionalfinancingtofundexpansionwhentheindustryturnsaround.

Capital Management

TheGroup’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sabilitytocontinueasagoingconcernandtomaintainanoptimalcapitalstructuresoastomaximizeshareholdersvalue.Inordertomaintainorachieveanoptimalcapitalstructure,theGroupmayadjustthedividendpayment,returncapitaltoshareholders,obtainnewfinancingfacilitiesordisposeofassetstoreduceborrowings.ManagementmonitorscapitalbasedontheGroup’sgearingratio.TheGroupisalsorequiredbycertainbankstomaintainagearingratioofnotexceedingacertainpercentagevaryingbetween100%and200%.TheGroup’sCompany’sstrategyistomaintaingearingratioofnotexceeding100%.Thegearingratioiscalculatedastotalloansandborrowingsdividedbyequitycapital.TheratiofortheGrouphasimprovedfrom55%in2016to49%in2017.

Dividend

ThedeclarationandpaymentofdividendwilldependupontheCompany’sfinancialperformance,cashrequirementsandissubjecttocertainlimitationsimposedundertheCompanyAct2016.Duetotheaforesaidlossesincurred,theBoarddoesnotrecommendanydividendfortheFY2017.

CORPORATE SOCIAL RESPONSIBILITY

TheGroupiscontinuouslycommittedtofulfillingourroleasaresponsiblecorporatesocialcitizen.ThemainfocusofourGrouponcorporatesocialinitiativesaretheWorkplace,theEnvironmentandtheCommunity,withtheviewofmaintainingasustainablevaluefortheGroupanditsshareholders.ActivitiesundertakeninthedischargeoftheGroup’scorporatesocialresponsibilitiesaresetoutseparatelyintheSustainabilityStatement.

CORPORATE GOVERNANCE AND INVESTORS’ RELATIONS

TheBoardbelieves inembeddingaculture in theGroupthatseekstobalancecompliancerequirementswiththeneed todeliver long-termstrategic value to shareholdersandstakeholders throughperformance,predicatedonentrepreneurship,controlandownership,andwithdueconsiderationtowardsethicsandintegrity.Assuch,theBoardstrivestoembracethesubstancebehindthePrinciplesandRecommendationsaspromulgatedbytheMalaysianCodeonCorporateGovernance2017andnotmerelytheform.

ApartfromthedisclosuresintheAnnualReport,theGrouphasalsoestablishedacorporatewebsiteatwww.asiasealink.comthathouses, inter-alia,documentationontheGroup’scorporategovernancepractices liketheBoardCharter,Whistle-BlowingPolicy,CodeofConductforDirectorsandemployeesoftheGroup,CorporateDisclosurePoliciesandProceduresandSustainabilityPolicythatareusefulforinvestorsaswellaspotentialinvestorstobeapprisedonhowtheBoardviewscorporategovernanceandengagementwithinvestors.




OUTLOOK AND PROSPECTS

Althoughmarketsentimentsarestillcautious,thereismoreoptimismoverprospectsfortheoilandgasindustryinlightofmoderateoilpricerecoverytrend.TheGroupwillcontinuetomanagecostsandincreaseefficiencyinthisturbulenteconomicclimate.Ridingonourstrongfoundation,weareconfidentthattheGroupwillachievegoodresultsgoingforward.

Basedonindustryanalystreports,oilpriceswillhoveraroundUSD50toUSD60perbarrelin2018ascrudepriceshaveralliedontheextensionofOPECandnon-OPECmembers’productioncuts,andthemarketcouldrefocusontherevivalofUSshalegasproduction.

According toKenangaResearch, tenderingactivitieshavebeenon theriseandoilmajorsarereviewingprojectssuggestingthattheyarerelativelymoreupbeatontheupstreamsectorfollowingthestabilisationofoilprices.

Petronas’ActivityOutlookfor2018-2020alsoindicatesmostupstreamsub-segments’activitiesin2018wererevisedhighercomparedtothepreviousreport.Researchindicatesthattheupwardrevisioncouldbeduetothedelayedworkorderslastyearbeingpushedto2018whichmaypotentiallyleadtobettercontractflowsandfurtherprovideorder-bookreplenishmentopportunitiesforthesupportingsectors.

TheGroupwillcontinueitsemphasisonitscoreactivitiesofshipbuilding,shipcharterandshiprepair.TheGroup’sshipbuildingdivisionwillbelookingtowardsbuildingvesselswhichhaveanichemarketaswellasenhancingitsdocking(shiprepair)facilities,whilstcontinuouseffortswillbetakentowardsoptimisingcapacityutilisationoftheGroup’svessels.TheGroupisalsolookingatbuildingnewvesselsthataremoreenergyefficientandenvironmentfriendly,inlinewithtighterenvironmentalregulationsinthemaritimeindustry.Withtheongoinginitiativesinsustainablecostrationalisationandexposures,webelievetheGroupwillbewellpositionedtotideoverthecurrentbusinesschallenges.

WiththeGovernmentlendingstrongersupporttothemaritimeindustrywiththerecentlaunchoftheMalaysiaShippingMasterplan,thecountryissettobecomeaself-sufficientandinternationallycompetitivenation,thatcanbenefitusalongthemaritimeindustrysupplychain.

Barringanyunforeseencircumstancesorevents, theBoard isoptimistic thatdemandforoffshoremarinesupportvesselswillimprovewithfurtherincreasedexpenditureinoffshoreoilfielddevelopmentandmaintenanceworkbytheoilmajors.Theoutlookseemstobeimprovinginanticipationofashippingrecovery.

NOTE OF APPRECIATION

Onbehalfof theBoardofDirectors, Iwish toconveyoursincere thanksandappreciation toallourstakeholders,beginningwithourshareholdersfortheirconfidenceandbeliefintheprospectsofourGroup.Toourclients,businesspartners,associatesandprincipals;fortheircontinuoussupportandbeliefinourcompetencies.ToourBankersandtheauthorities;fortheirvitalroleinourstrategicplanningandexecution.ToourcommittedanddedicatedManagementteam;fortheirhardwork,professionalismandtirelesseffortsinmaintainingourpositionasoneoftheleadingmarineoffshoresupportvesselprovidersandshipbuildersinMalaysia.

Toourdedicatedandloyalemployees;youreffortshavenotgoneunnoticed.Letusweatherthisdownturntogetherasoneteamwithourvaluesupheld,andcomeoutofthiswithmoreresilienceandfocus.Letusmaintainourcommitmenttosteertowardsgreaterheightsinthefuturetogether.

Lastbutnotleast,myspecialthankstomyfellowDirectorsontheBoardfortheirinvaluablesupportandguidancethroughoutthefinancialyear.

Thankyou.

YONG KIAM SAMChiefExecutiveOfficer



15

AuditCommitteeReport

1. COMPOSITION

TheAuditCommittee(the“Committee”),whichwasestablishedbytheBoard,comprisesthefollowingDirectorsasitsmembers:

Chairman : WongChieBin(IndependentNon-ExecutiveDirectorandmemberoftheMalaysianInstituteofAccountants)

Members : TohKianSing(IndependentNon-ExecutiveDirector) : EricKhooChuanSyn@KhooChuanSyn(IndependentNon-ExecutiveDirector) : DatukSebastianTingChiewYew(IndependentNon-ExecutiveDirector)

2. SUMMARY OF WORK UNDERTAKEN BY THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR

TheAuditCommitteehadfive(5)meetingsduringthefinancialyearended31December2017.

Audit Committee Member Attendance

WongChieBin 5/5 TohKianSing 4/5 EricKhooChuanSyn@KhooChuanSyn 4/5 DatukSebastianTingChiewYew 4/5

TheAuditCommitteememberswereservedwithadequatenoticeofmeetingbytheCommitteeSecretary,settingoutthemeetingagendaandrelevantpapers,whichweredistributedwellbeforethemeetingtoenablethemtogothroughthematterstobedeliberatedatthemeeting.TheCompanySecretaryistheCommitteeSecretary.Atthemeetings,ManagementpersonneloftheGroup,includingtheExecutiveDirectors,GeneralManagerGroupFinance,HeadofTreasury/CorporateComplianceandrepresentativesoftheexternalandinternalauditors,wereinvitedtobrieftheAuditCommitteeonmattersontheagendathatrequiredtheirinput.

DuringthefinancialyearunderreviewanduptothedateofthisReport,theAuditCommitteecarriedoutthefollowingworkwhichhasmetitsresponsibilities,basedonitstermsofreference:

• reviewedthequarterlyfinancialannouncementsoftheGroupbeforerecommendingthesamefortheBoardofDirectors’approval, focusingonchanges inor implementationofmajoraccountingpolicychanges,significantandunusualeventsandcompliancewithaccountingstandardsandotherlegalrequirements;

• reviewedtheauditplanoftheexternalauditors,includingtheareasofauditemphasisandsummaryofplannedauditproceduresandevaluatedtheinternalcontrolsystem;

• reviewedtheexternalauditors’reportsarisingfromtheauditandanyupdatesonnewfinancialreportingstandardsissuedbytheMalaysianAccountingStandardsBoard;

• reviewed theperformanceof the external auditors in termsof their capability, professionalism, andindependencebeforerecommendingthemtotheBoardtobeconsideredforre-appointmentattheAnnualGeneralMeeting;

• metwitharepresentativeoftheexternalauditorsintheabsenceofManagementtoassessiftherewereissuesofconcernsthattheexternalauditorsfacedincarryingouttheirwork;

• reviewedtheauditedannualfinancialstatementsoftheGroupandtheCompanybeforerecommendingthesametotheBoardforapproval;

• reviewedthereportonriskassessmentfortheyear2017tabledbytheRiskManagementCommittee,whichprovidedthetopfive(5)significantrisks,controlissuesandsummaryofriskassessment;

• reviewedtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunction.ThisincludesdeterminingwhethertheinternalauditfunctiondeploysinternalauditingstandardspromulgatedbytheInstituteofInternalAuditors,Inc.aglobalprofessionalbodyadvocatingstandardsfortheinternationalauditingprofession;



2. SUMMARY OF WORK UNDERTAKEN BY THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR (continued)

• reviewedtheinternalauditreportsandrecommendationsoninternalauditfindings,includingfollow-upbytheinternalauditfunctiononthestatusofManagement’simplementationofactionplanstoaddressissueshighlightedinpreviousinternalauditreports;

• reviewedrelatedpartytransactionsoftheGroupandanyconflictofinterestsituationthatmayarisewithintheCompanyandGroup,includinganytransaction,procedureorcourseofconductthatraisesquestionsofmanagementintegrity;

• revieweddormant/inactivecompaniestobewoundup/struckoff; • reviewedtheimpairmentofassetsoftheGroup; • reviewedthematerialbankreconciliationsoftheGroup; • reviewed theGroup’s trade receivables and tradepayables and sought relevant explanations from

Managementtobetterunderstandhowreceivablesandpayablesweremanaged; • reviewedtheCompany’sCorporateGovernanceStatement,AuditCommitteeReport,theStatementon

RiskManagementandInternalControlStatementandStatementonCorporateSocialResponsibility,beforerecommendingthemforapprovalbytheBoardforinclusionintheAnnualReport;and

• reportedtotheBoardonitsactivitiesandsignificantfindingsandresults.

TheAuditCommitteeisawareoftheimportanceforitsmemberstoundergocontinuousprofessionaleducationtostayappraisedofregulatorydevelopmentsthataffecttheCommitteeinthedischargeofitsresponsibilities.DetailsoftrainingcoursesandseminarsattendedbytheAuditCommitteemembersduringthefinancialyearunderreviewanduptothedateofthisReportaredisclosedintheCorporateGovernanceStatementincludedinthisAnnualReport.

3. SUMMARY OF WORK OF THE INTERNAL AUDIT FUNCTION

TheCompanyoutsourceditsinternalauditfunctiontoKPMG,anindependentprofessionalfirm,whichreporteddirectlytotheAuditCommittee.Uponexpiryandpendingrenewalofcontractattheendofthefinancialyear,theCommitteeshallevaluatetheperformanceoftheoutsourcedinternalauditserviceprovider.

Duringthefinancialyearunderreview,theInternalAuditorscarriedoutthefollowingwork:

• assistedtheAuditCommitteeinassessingtheadequacyandoperatingeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystems,basedonaninternalauditplan(IAP)approvedbytheAuditCommitteebeforeinternalauditworkcommenced.TheIAPsetsthedirectionandscopeoftheplannedinternalaudit;

• conductedtheauditworkaspertheIAP; • coveredthefollowingkeyprocessesstatedintheIAPwhichincludedfinancial,procurement,inventory,

regulatorycompliance(Safety,healthandenvironment)andinformationtechnology,fixedasset,humanresourcesmanagementandcorporategovernance;

• followeduponthestatusofManagement’simplementationofinternalauditrecommendationsandactionplansinprecedingauditcycles;

• consultedManagementonanyareasofconcerned; • arrangedforexitmeetingwiththerespectiveprocessowners; • issuedfinalreportandpresentedtotheAuditCommittee;and • engagedwithManagementandprovidedcontinuousimprovementtotheGroup.

Thescopeof internalauditcoveredkeyoperatingcompanies in theGroup,encompassing theshipbuildingandcharteringoperationsassetoutintheIAP.FurtherdetailsoftheinternalauditfunctionanditsactivitiesareprovidedintheStatementonRiskManagementandInternalControlincludedinthisAnnualReport.

ThisAuditCommitteeReportismadeinaccordancewiththeresolutionoftheAuditCommitteedated3April2018.

Audit Committee Report (continued)


17

INTRODUCTION

TheBoardofDirectors(the“Board”)ispleasedtopresenttheStatementonRiskManagementandInternalControl(the“Statement”),whichoutlinesthenatureandscopeoftheriskmanagementandinternalcontrolsystemintheGroup(comprisingtheCompanyanditssubsidiaries)forthefinancialyearended31December2017anduptothedateofapprovalofthisStatementforinclusionintheAnnualReportoftheCompany.

ThisisinlinewithParagraph15.26(b)oftheMainMarketListingRequirements(“MMLR”)ofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)whichstipulatesthatalistedissuermustensurethatitsBoardofDirectorsissuesastatementaboutthestateofriskmanagementandinternalcontrolofthelistedissuerasagroupandguidedbytheStatementonRiskManagementandInternalControl:GuidelinesforDirectorsofListedIssuers.

BOARD’S RESPONSIBILITY

TheBoardacknowledgesandaffirmsitsoverallresponsibilityfortheGroup’sriskmanagementandinternalcontrolsystemtosafeguardshareholders’investmentandtheGroup’sassets,includingreviewingtheadequacyandoperatingeffectivenessofthesysteminmeetingtheGroup’sobjectives.

TheBoardisassistedbythemanagementinimplementingtheBoard’spoliciesandproceduresonriskandcontrolbyidentifying,evaluatingandmanagingbusinessrisks,comprisingstrategic,financialandoperationalrisksaswellasasystemofinternalcontroltomitigatesuchrisks.

Inviewofthelimitationsinherentinanysystemofriskmanagementandinternalcontrol,thesystemisdesignedtomanage,ratherthantoeliminate,theriskoffailuretoachievetheGroup’sobjectives.Thesystemcan,therefore,onlyprovidereasonable,butnotabsolute,assuranceagainstanymaterialmisstatement,financiallossorfraudulentpractices.

KEY RISK MANAGEMENT AND INTERNAL CONTROL FEATURES AND PROCESSES

ThekeyfeaturesandprocessesthathavebeenestablishedtoensuretheadequacyandeffectivenessoftheGroup’sgovernance,riskmanagementandinternalcontrolsystemareasfollows:

1. Risk Management

TheBoardprovidesfullsupporttoimplementtheriskmanagementframeworkandprocesseswithanappropriateorganizational structureandensure that roles, responsibilitiesandaccountabilitiesareclearlydefinedandcommunicatedatalllevels.

TheGrouphasanongoing riskmanagementprocesswhich includes identifying,evaluatingandmanagingofsignificantrisksthatmayaffecttheachievementofGroupobjectives.Understandingtheriskswefaceandmanagingthemappropriatelywillenhanceourabilitytomakebetterdecisions,animprovedperformancetoachieveobjectivesandsubsequentlyassistinthecreation,protectionandmaximizationofvalue.ThiswillalsoassisttheBoardandManagementinmaintainingasoundinternalcontrolsystemwithintheGroupandsafeguardshareholders’investmentandtheGroup’sassets.

RiskmanagementisembeddedintheGroup’smanagementsystem.TheManagementandallheadsofdepartment/businessunitsoftheGroupareinvolvedintheidentificationandmanagementofsignificantrisks.ItisthegeneraldutyandresponsibilityofallpersonneloftheGrouptoadheretotheframeworkandatalltimesbeconsciousoftherisksrelatedtotheiractionsanddecisionsthatmayadverselyaffecttheoperations,reputationandassetsoftheGroup.ThisincludescarryingoutjobsinacarefulandconscientiousmannerthatcontributestothehighethicsandculturewithintheGroup.ThedeliberationsofrisksandrelatedmitigatingactivitiesarecarriedoutatregularmanagementmeetingoftheGroup.

StatementonRiskManagementandInternalControl



1. Risk Management (continued)

TheRiskManagementCommittee(RMC)wasestablishedtoprovideriskoversightandassessriskmanagementmattersrelatingtotheGroupprudently.ThecriticalrisksweredocumentedanddeliberatedattheRiskManagementCommittee(RMC)meetingforonwardreportingtotheAuditCommitteeandBoardfornotation,includinganyconcernsthatwereraisedforfollow-up.

2. Organizational and reporting Structure

TheGrouphasanestablishedorganizationalstructurewithclearlydefinedlinesofresponsibilitiesandappropriatelevelsofdelegationandauthority.Keydutiesaresegregatedamongstdifferentpersonnelofmajorbusinessdivisionsand keyprocesses, suchas shipbuildingandcharteringoperations, financialmanagement andreporting,treasury,capitalexpendituremanagement,humanresourcemanagementandinformationmanagement.SegregationofdutiesamongstdifferentpersonnelisinplacesuchthatnoonepersonnelisinvolvedintheentirebusinessoftheGroupfromrequisitionforgoodsorservices,orderingfromvendors,receivingorhavingcustodyofthegoodsorservices,recordingoftransactionsandapprovalofpayments.

Aprocessof hierarchical reporting isestablishedviaa structuredorganizationchart,whichprovides foradocumentedandauditabletrailofaccountabilityinrespectofdecisionsmadeandexecuted.Duringthefinancialyearunderreview,managementandoperationsmeetingsconductedbySeniorManagementwhichcomprisestheChiefExecutiveOfficer,Directoranddivisionalheads,wereheldtooverseethefinancialandoperationalperformanceoftheGroup,includingthediscussionofchallengesfacedinoperationsandactionplanstoaddresstheconcerns.Theproceedingsofsuchmeetingswererecordedbywayofminuteswhichweretrackedforfollow-upactionplans.

3. Group Limits of Authority

TheGrouphasanestablishedGroupLimitsofAuthority(“GLOA”)manualwhichsetsouttheauthorizationlimitsfortheGroup’smanagementandstaffandalsothosemattersrequiringBoardapprovaltoensureaccountability,segregationofdutiesandcontrolovertheGroup’sfinancialcommitments.TheGLOAmanualisreviewedandupdatedfromtimetotimetobealignedwithbusiness,operationalandstructuralneedsandchanges.

4. Policies and Procedures

Policiesandprocedurestoensurecompliancewithriskmanagement,internalcontrolsandrelevantlawsandregulationsaresetoutprogressivelyinthestandardoperatingproceduresofthedepartmentordivisions.TheGrouphasestablishedinternalpoliciesandprocedurescoveringkeybusinessunitsandoperationsincludingISOcertificationfortheGroup’sshipbuildingdivisionthatprovidesforanorderlyprocessesanddocumentationsystemonitsactivities.Thesepoliciesandproceduresarereviewedandrevisedperiodicallytoensureitsrelevancetoaddressthechangingenvironment,operationalrequirementandchangesofrisk.

5. Audit

InternalandexternalAuditareoutsourcedtoindependentprofessionalfirms,whichreportdirectlytotheAuditCommittee.

AuditengagementsarecarriedoutbasedontheannualauditplanapprovedbytheAuditCommitteeandtakeintoconsiderationfeedbacksfromtheManagement.InternalAuditassessestheselectedareasundertheauditscopewithregardtoriskexposures,compliancetowardstheapprovedpoliciesandproceduresandrelevantlawsandregulationsandalso,attimes,benchmarkagainstavailablebestpractices.

Statement on Risk Management and Internal Control (continued)


19

5. Audit (continued)

TheareascoveredbytheInternalAuditFunctionforthefinancialyearunderreviewencompassedkeyprocessessuchasfinancialandtreasurymanagement,fixedassetsmanagement,operations(coveringpurchasing,logistics,informationmanagement,inventorymanagement,humanresourcemanagement,safetyandsecurity,charteringandoperationsmanagement),regulatorycomplianceandgovernanceundertakenbysignificantcompaniesintheGroupinvolvedintheshipbuildingandcharteringoperations.

TherewasnorestrictionplaceduponthescopeoftheInternalAuditscopeofworkandrepresentativesoftheInternalAuditFunctionwereallowedunrestrictedaccesstotherecordsandrelevantpersonneloftheGroup.

Foranysignificantweaknessesorgapsidentifiedinthegovernanceprocesses,riskmanagementprocessesandcontrolsduringtheengagement,InternalAuditprovidesrecommendationstoManagementtoimprovetheirdesignandeffectivenessofcontrolswhereapplicable.AttheAuditCommitteemeetingswherethereportsoftheInternalAuditfindingsweretabled,pertinentclarificationweresoughtfromManagement,thusenabledtheAuditCommitteetoassessontheadequacyandoperatingeffectivenessoftheGroup’sriskmanagementandinternalcontrolsysteminmeetingthecorporateobjectives.TheAuditCommitteeinturnbriefedtheBoardonanycriticalissueshighlightedbytheInternalAuditors,includingremedialmeasurestobeimplementedbyManagement.

Inaddition,InternalAuditassessesandreportstheadequacyandeffectivenessoftheGroup’sgovernance,riskmanagementandinternalcontrolprocessesfortwo(2)cyclestotheAuditCommitteebasedontheengagementscarriedoutwithinthefinancialyearended31December2017.

ThecostsincurredontheInternalAuditFunctionforthefinancialyearunderreviewamountedtoapproximatelyRM72,080.

TheExternalAuditor’sannualplanwhichcomprisesplannedauditservices(inclusiveofthequarterlyreviewonthequarterlyfinancialresultsandotherregulatoryreportingrequirements),recurringnon-auditservicesandnon-recurringnon-auditservicesaretabledannuallytotheAuditCommitteefordeliberationandapproval.

Assurance by the Chief Executive Officer and General Manager, Group Finance on the adequacy and effectiveness of the risk management and internal control system

TheBoardhasreceivedassurancefromtheChiefExecutiveOfficerandGeneralManager,GroupFinancethattheGroup’sinternalcontrolandriskmanagementsystemisoperatingadequatelyandeffectively,inallmaterialaspects,forthefinancialyearunderreviewanduptothedateofapprovalofthisStatementforinclusioninthisAnnualReport.

Board’s comments on the adequacy and effectiveness of the Group’s risk management and internal control system

TheBoard,throughitsAuditCommittee,hasreviewedtheadequacyandoperatingeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystemandthatrelevantactionshavebeenorarebeingtaken,asthecasemaybe,toremedyinternalcontrolweaknessesidentifiedfromthereview,whichwaslargelybasedonobservationsraisedbytheInternalAuditorsandExternalAuditorsdirectlytotheAuditCommittee.

TheBoardisnotawareofanysignificantweaknessesintheriskmanagementandinternalcontrolsystemthathasresultedinmateriallosses,contingenciesoruncertaintiesthatwouldrequirementionintheCompany’sAnnualReport.Notwithstanding this, theBoard, throughManagement,continues to takemeasures tostrengthen theGroup’s riskmanagementandinternalcontrolsystemfromtimetotimebasedonrecommendationsoftheInternalAuditFunctionaswellastheExternalAuditors.




Review of Statement by the External Auditors

TheexternalauditorshavereviewedthisStatementonRiskManagementandInternalControlpursuanttothescopesetoutinAuditandAssurancePracticeGuide3,Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report(“AAPG3”)issuedbytheMalaysianInstituteofAccountants(“MIA”)forinclusionintheannualreportoftheGroupfortheyearended31December2017,andreportedtotheBoardthatnothinghascometotheirattentionthatcausethemtobelievethatthestatementintendedtobeincludedintheannualreportoftheGroup,inallmaterialrespectshasnotbeenpreparedinaccordancewiththedisclosuresrequiredbyparagraphs41and42oftheStatementonRiskManagementandInternalControl:GuidelinesforDirectorsofListedIssuers,orisfactuallyinaccurate.

AAPG3doesnotrequiretheexternalauditorstoconsiderwhethertheDirectors’StatementonRiskManagementandInternalControlcoversallrisksandcontrols,ortoformanopinionontheadequacyandeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystemincludingtheassessmentandopinionbytheDirectorsandmanagementthereon.Thereportfromtheexternalauditorswasmadesolelyfor,anddirectedsolelytotheBoardofDirectorsinconnectionwiththeircompliancewiththelistingrequirementsofBursaMalaysiaSecuritiesBerhadandfornootherpurposesorparties.TheexternalauditorsdonotassumeresponsibilitytoanypersonotherthantheBoardofDirectorsinrespectofanyaspectofthisreport.

This Statement is issued in accordance with a resolution of the Board dated 3 April 2018.



21

CorporateGovernanceOverviewStatement

TheBoardofDirectors(“Board”)ofSealinkInternationalBerhad(“SIB”)recognizestheimportanceofadoptinghighstandardsofcorporategovernance,notonlytosafeguardstakeholders’interestsbutalsotoenhanceshareholdervalueandinbuildingasustainablebusinessinthelongrun.

TheBoardbelieves inembeddingaculture in theCompanyand itssubsidiaries (“Group”) thatseeks tobalancecompliancerequirementswiththeneedtodeliverlong-termstrategicvaluetoshareholdersandstakeholdersthroughperformance,predicatedonentrepreneurship,control andownership,andwithconsideration towardsethicsandintegrity.Assuch,theBoardstrivestoembracethesubstancebehindcorporategovernancerecommendationsandnotmerelytheform.

Paragraph15.25of theMainMarketListingRequirements (“MMLR”)ofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)requirestheBoardtoprovideanoverviewoftheapplicationofthePrinciplessetoutintheMalaysianCodeonCorporateGovernance(“MCCG2017”)forthefinancialyearended31December2017.ThedetailedapplicationbySIBforeachpracticeassetoutintheMCCG2017duringthefinancialyear31December2017(“FY2017”)isdisclosedintheCorporateGovernanceReport(“CGReport”).

BOARD OF DIRECTORS

Board Charter

TheBoardCharter,whichservesasareferencepointfortheBoard’sactivitiestoenableDirectorstocarryouttheirstewardshiproleanddischargetheirfiduciarydutiestowardstheCompany,alsocontainsaformalscheduleofmattersreservedtotheBoardfordeliberationanddecision,forexamplediscussiononstrategicmatters,sothatthecontrolanddirectionoftheCompany’sbusinessesareinitshands.

TheBoardCharterissubjecttoperiodicreviewtoensureitcontinuestoberelevant,especiallywhenthereisaneedtorevisetheclausesintandemwithchangesinregulatoryrequirementswhichaffecttheBoard’srole.BriefingsbytheCompanySecretarytotheBoardonregulatorychangesisoneofthesourcestodetermineiftheCharterneedstoberevised.InlinewiththeMCCG2017,theCompanyhasuploadedtheBoardCharteronitswebsitewww.asiasealink.com.

Duties and Responsibilities of the Board

Inthedischargeofitsfiduciaryandstewardshiprole,theBoardhasassumedthefollowingprincipalresponsibilitiesinrelationtotheCompany:• reviewandadoptastrategicorbusinessplan,asdevelopedbyManagement,incorporatingthedevelopmentof

riskpolicy,annualbudgetsandlong-termbusinessplans,takingintoaccountthesustainabilityoftheCompany’sbusiness,withconsiderationgiventotheenvironmental,socialandgovernanceelementsofthebusiness;

• overseetheconductandgovernanceoftheGroup’sbusinessesandevaluatewhetherornottheyarebeingproperlymanagedtoachievecorporateobjectives–thisprocessisnormallycarriedoutatscheduledBoardmeetingswiththeproceedingsandoutcomethereofrecorded;

• identifyprincipalbusinessrisksfacedbytheGroup,andensuretheimplementationofappropriateinternalcontrolsandmitigatingmeasurestomanagesuchrisks;

• successionplanning-ensurethatallcandidatesappointedtoSeniorManagementandBoardpositionsareofsufficientcalibreandthatthereareprocessestoprovidefortheorderlysuccessionofSeniorManagementandmembersof theBoard. PositionsofkeypersonnelarenormallydiscussedbyDirectors,via theNominatingCommittee,whenevervacanciesarise,inparticularthepositionsofBoardChairmanandfemaleDirector;

• overseethedevelopmentandimplementationofashareholdercommunicationpolicy–apart fromtheusualengagementandcommunicationwithshareholdersviatheGeneralMeetingsandannouncementsuploadedintheCompany’swebsite,thisprocessisaugmentedbyaGeneralManagerwhooverseesinvestorrelations;



Duties and Responsibilities of the Board (continued)

• reviewtheadequacyandintegrityoftheGroup’smanagementinformationandinternalcontrolsystems,ensuringthereisasoundframeworkofreportinginternalcontrolandregulatorycomplianceissues;and

• overseetheGroup’sadherencetohighstandardsofconductandcorporatebehavior, includingtheCodeofEthicsforDirectorsoftheCompanyandEmployeeHandbookforemployeesoftheGroup.

Board Composition, Diversity

AtthedateofthisStatement,theBoardconsistsofsix(6)members,comprisingtwo(2)ExecutiveDirectorsandfour(4)IndependentDirectors.ThiscompositionfulfillstherequirementsassetoutunderMMLRofBursaSecurities,whichstipulatethatatleasttwo(2)Directorsorone-thirdoftheBoard,whicheverishigher,mustbeIndependent.TheprofileofeachDirectorissetoutinthisAnnualReport.Basedonanassessmentofitsskillsmatrix,theBoardisoftheviewthattheDirectors,withtheirdifferentbackgroundandspecializations,collectivelybringwiththemawiderangeofexperienceandexpertiseinareassuchasfinance;accountingandaudit;corporateaffairs;legal;andmarketingandoperations,whichareconsideredadequatefortheGroup’sneeds.

TheManagingDirectorandtheChiefExecutiveOfficeroverseetheday-to-dayoperationsoftheGroup’sbusiness.TheNon-ExecutiveDirectors,whichcompriseexclusively IndependentDirectors,providetherelevantchecksandbalancebyreviewingtheGroup’sperformanceagainstbudgetandinquiringoftheExecutiveDirectorsaswellasSeniorManagementpersonnelexplanations,asneeded,atscheduledBoardandAuditCommitteemeetings.Allthefour(4)IndependentDirectorssitonthethree(3)BoardCommittees,namelytheAuditCommittee,NominatingCommitteeandRemunerationCommittee–theExecutiveDirectorsareinvitedtoattendBoardCommitteemeetingstoproviderelevantinputandinsightstotheagendaitems.

Reinforce Independence of the Board

TheBoardisinthemidstofidentifyingaDirectortohelmtheBoardChairmanpositionsincethedemiseofitsformerChairman.AteachmeetingoftheBoard,theDirectorsappointfromamongstthemaDirectortochairthemeeting.FortheSix(6)meetingsconvenedduringthefinancialyearunderreview,theDirectorwhochairedthemeetingswasanIndependentDirector.ThecurrentcompositionofIndependentNon-ExecutiveDirectorsintheBoard,whichcomprisesamajorityofBoardmembers,providesforpertinentchecksandbalanceintheBoardsuchthatnooneDirectorhasunfetteredpowersindecisionmaking.

TheChairmanofthemeetingisresponsibleforensuringtheadequacyandeffectivenessoftheBoard’sgovernanceprocessandactsasafacilitatoratBoardmeetingstoensurethatcontributionsfromDirectorsareforthcomingonmattersbeingdeliberatedandthatnoBoardmemberdominatesthediscussions.WhilsttheChiefExecutiveOfficerimplementstheGroup’sstrategicinitiatives,policiesanddecisionadoptedbytheBoardandoverseestheoperationsandbusinessdevelopmentoftheGroup,theIndependentDirectorsbringtobearobjectiveandindependentviews,adviceandjudgmentoninterests,notonlyoftheCompany,butalsoofshareholdersandstakeholders.

IndependentDirectorsareessentialforprotectingtheinterestsofshareholdersandcanmakesignificantcontributionsto theCompany’sdecisionmakingbybringing in thequalityofdetached impartiality. TheBoard recognises theimportanceofestablishingcriteriaonindependencetobeusedintheannualassessmentofitsIndependentDirectors.ThedefinitiononindependenceaccordswiththeMMLRofBursaSecurities.Attheendofthefinancialyearunderreview,twooftheIndependentDirectors,namelyMrWongChieBinandMrTohKianSinghaveservedforacumulativeperiodexceedingnine(9)years.

Corporate Governance Overview Statement (continued)


23

Board Meetings and Supply of Information to the Board

Supply of, and access to, information

TheBoardissuppliedwithrelevantinformationandreportsonfinancial,operational,corporate,regulatory,businessdevelopmentandauditmatters,bywayofBoardreportsoruponspecificrequests,fordecisionstobemadeonaninformedbasisandforaneffectivedischargeoftheBoard’sresponsibilities.

Timelydisseminationofmeetingagenda,includingtherelevantBoardandBoardCommitteepaperstoallDirectorspriortotheBoardandBoardCommitteemeetingsrespectivelytogiveeffecttoBoarddecisionsandtodealwithmattersarisingfromsuchmeetings,isobserved.BoardmembersarefurnishedonatimelybasiswithpertinentexplanationsandinformationonrelevantissuesandrecommendationsbyManagement.TheissuesarethendeliberatedanddiscussedthoroughlybytheBoardpriortodecisionmaking,includingdecisionstodefercertainresolutionswhentheinformationneededtomakeinformeddecisionsareinadequate.

Inaddition,BoardmembersareupdatedontheCompany’sactivitiesanditsoperationsonaregularbasis,largelythroughscheduledBoardandBoardCommitteemeetings.AllDirectorshaveaccesstoCompanyinformationonatimelybasisinanappropriatemannerandqualitynecessarytoenablethemtodischargetheirdutiesandresponsibilities.

SeniorManagementoftheGroupandexternaladvisersareinvitedtoattendBoardand/orBoardCommitteemeetingstoprovideadditionalinsightsandprofessionalviews,adviceandexplanationsonspecificitemsonthemeetingagenda.BesidesdirectaccesstoManagement,DirectorsmayobtainindependentprofessionaladviceattheCompany’sexpense,ifconsiderednecessary,infurtheranceoftheirduties.ThisprocedureisformalisedintheCompany’sBoardCharter.

DirectorshaveunrestrictedaccesstotheadviceandservicesoftheCompanySecretarytoenablethemtodischargetheirdutieseffectively. TheBoard is regularlyupdatedandadvisedby theCompanySecretary,who isqualified,experiencedandcompetentonstatutoryandregulatoryrequirements,ontheresultantimplicationsofanychangesinregulatoryrequirementstotheCompanyandDirectorsinrelationtotheirdutiesandresponsibilities.TheCompanySecretary,whooverseesadherencetoBoardpoliciesandprocedures,briefstheBoardontheproposedcontentsandtimingofmaterialannouncementstobemadetoregulators,aswellasanychangestoregulatoryrequirementsthatmayaffecttheCompanyandtheBoard.TheCompanySecretaryattendsallBoardandBoardCommitteemeetingsandensuresthatmeetingsareproperlyconvened,andthataccurateandproperrecordsof theproceedingsandresolutionspassedaretakenandmaintainedaccordingly.TheremovaloftheCompanySecretary,ifany,isamatterfortheBoard,asawhole,todecide.

Board Meetings

TheBoardordinarilymeetsatleastfive(5)timesayear,scheduledwellinadvancebeforetheendoftheprecedingfinancialyeartofacilitatetheDirectorsinplanningtheirmeetingschedulefortheyear.Additionalmeetingsareconvenedwhenurgentandimportantdecisionsneedtobemadebetweenscheduledmeetings.BoardandBoardCommitteepapers,whicharepreparedbyManagement,providetherelevantfactsandanalysisforthereferenceofDirectorstoassisttheminmakinginformeddecisions.Themeetingagenda,relevantreportsandBoardpapersarefurnishedtoDirectorsandBoardCommitteememberswellbeforethemeetingstoallowtheDirectorssufficienttimetostudyforeffectivediscussionanddecisionmakingduringmeetings.AtthequarterlyBoardmeetings,theBoardreviewsthebusinessperformanceoftheGroupanddiscussesmajorstrategic,operational,complianceandfinancialissues.TheChairmanoftheAuditCommitteebriefstheDirectorsateachBoardmeetingthesalientmattersdeliberatedbytheAuditCommitteewhichrequiretheBoard’sattentionordirection,includingapproval,asthecasemaybe.AllpertinentissuesdiscussedatBoardmeetingsinarrivingatdecisionsandconclusionsareproperlyrecordedbytheCompanySecretarybywayofminutesofmeetings,whichareconfirmedbytheChairmanatthenextmeeting.




Board Meetings (continued)

TherewereSix(6)Boardmeetingsheldduringthefinancialyearended31December2017,withdetailsofDirectors’attendancesetoutbelow:

Name of Director Attendance

YongFohChoi 6/6 YongKiamSam 6/6 WongChieBin 6/6 TohKianSing 5/6 EricKhooChuanSyn@KhooChuanSyn 5/6 DatukSebastianTingChiewYew 5/6

ItisthepracticeoftheCompanyforDirectorstodevotesufficienttimeandeffortstocarryouttheirresponsibilities.Inaddition, theBoardCharter requiresDirectors tonotify theChairmanbeforeacceptinganynewdirectorship,notwithstandingthattheMMLRofBursaSecuritiesallowsaDirectortositontheboardsoffive(5)listedissuers.Suchnotificationisexpectedtoincludeanindicationoftimethatwillbespentonthenewappointment.

BOARD OF COMMITTEES

TheBoardhasestablishedseveralBoardCommitteewhosecompositionsandTermsofreferenceareinaccordancewithBursaandtheBestPracticesprescribedbyMCCGandspecifiedintheBoardCharter.

Audit Committee

TheAuditCommitee,establishedbytheBoardwithspecifictermsofreference,comprisesthefollowingmembersasatthedateofthisStatement,whoareexclusivelyIndependentDirectors:

• WongChieBin(Chairman);• TohKianSing;• EricKhooChuanSyn@KhooChuanSyn;and• DatukSebastianTingChiewYew.

Nominating Committee

TheNominatingCommittee, establishedby theBoardwith specific termsof reference,comprises the followingIndependentNon-ExecutiveDirectorsasitsmembers:

• EricKhooChuanSyn@KhooChuanSyn(Chairman);• TohKianSing;• WongChieBin;and• DatukSebastianTingChiewYew.

TheNominatingCommittee isprimarily responsible for recommendingsuitableappointments to theBoard, takingintoconsiderationtheBoardstructure,size,compositionandtherequiredmixofexpertiseandexperiencewhichtheDirectorshouldbringtotheBoard.ItassessestheeffectivenessoftheBoardasawhole,theBoardCommitteesandthecontributionofeachDirector.Whereconsideredappropriate,theNominatingCommitteeconsidersrecommendationofcandidatefordirectorshipbyshareholdersorexistingDirectors.Basedonitstermsofreference,theNominatingCommitteecarriesouttheassessmentprocessregardlessofwhetherthecandidate isfornewappointmentorre-appointment.



25

Nominating Committee (continued)

ThefinaldecisionontheappointmentofacandidaterecommendedbytheNominatingCommitteerestswiththeBoard.TheCompanySecretaryensuresthatallappointmentsareproperlymadeuponobtainingallnecessaryinformationfromtheDirector.DuringthefinancialyearunderreviewandasatthedateofthisStatement,theNominatingCommitteemettwice(2times),attendedbyallmembers.Duringthemeetings,theNominatingCommitteecarriedoutthefollowingactivitieswithinitstermsofreferenceandreportedtheoutcometotheBoard:

• reviewedanddiscussedtheexistingBoardDiversitypolicy;• reviewedtrainingundertakenbyDirectorsaswellasthosetrainingthatareavailableforDirectorsfortheensuing

year;• discussedthesearchforaBoardChairmanandfemaleDirector;• reviewedtheDirectors’EvaluationForm,BoardSkillsMatrixFormandBoard&BoardCommitteeEvaluationForm

usedintheannualassessmentandevaluationoftheBoard,BoardCommitteesandindividualDirectors.Theseevaluationformstookintoconsiderationthecompetency,experience,character,integrityandtimeavailabilityof theofficersconcernedaswell as theevaluationcriteria setout in the relevant exhibits of theCorporateGovernanceGuide–TowardsBoardroomExcellence2ndEditiononassessmentoftheBoard,BoardCommitteesandindividualDirectors.ForthepurposeofassessingtheindependenceofIndependentDirectors,thecriteriasetoutinParagraph1.01oftheMMLRofBursawereused;and

• followingtheassessmentoftheBoard,BoardCommitteesandindividualDirectors,recommendedfortheBoard’sconsiderationtomoveforshareholders’approvalthere-appointmentand/orre-electionofthoseDirectorsretiringattheforthcomingAnnualGeneralMeeting.InassessingwhetherornottorecommendretiringDirectorsforre-appointmentorre-electionbyshareholders,theNominatingtookintoconsiderationpertinentevaluationcriteriaprovidedintherelevantexhibitsofCorporateGovernanceGuide–TowardsBoardroomExcellence2ndEdition.

WhilstthereisaBoardDiversityPolicy,thereisnospecificpolicythereinonthediversityofitsmembersintermsofgender,ageorethnicityorsetatargettoachieveablendoftheseattributes.TheBoardbelievesthattheCompanyshouldbeappointingDirectorswhohavetherelevantskills,experienceandtimetocontributetowardsrealisingtheCompany’sobjectives.Assuch,infillingcasualvacanciesorappointingadditionalorre-appointingDirectors,theBoard,viatheNominatingCommittee,assessesthecompetency,experience,character,integrityandtimeavailabilityofthecandidatesinrelationtotheneedsoftheGroup.

Remuneration Committee

TheRemunerationCommittee,establishedby theBoardwithspecific termsof reference,comprises the followingmembersasatthedateofthisStatement,whoareexclusivelyIndependentDirectors:

• TohKianSing(Chairman);• WongChieBin;• EricKhooChuanSyn@KhooChuanSyn;and• DatukSebastianTingChiewYew.

TheRemunerationCommitteeisentrustedbytheBoardto:

• establishaformalandtransparentprocedureforsettingapolicyonremunerationofExecutiveDirectorsandSeniorManagementandforfixingtheremunerationpackagesofallDirectorsandSeniorManagementoftheGroup;and

• ensurethatthelevelsofremunerationarecommensuratewiththequalificationsofExecutiveDirectorsandSeniorManagementandaresufficienttoattractandretainthepersonnelrequiredtomanagetheCompany’sbusiness.




Remuneration Committee (continued)

During the financial yearunder review, theBoardapprovedaRemunerationPolicy, subject toannual review, torewardmembersoftheBoardandSeniorManagement.TheRemunerationCommitteerecommendstotheBoardtheremunerationofExecutiveDirectors,largelybasedontheirperformanceandalsotheGroup’sperformance.InthecaseofIndependentDirectors,thelevelofremunerationreflectstheexperienceandlevelofresponsibilitiesundertakenbytheIndependentDirectorsconcerned.Inallinstances,thedeliberationsareconductedwiththeDirectorsconcernedabstainingfromdiscussionsontheirindividualremuneration.Duringthefinancialyear,theCommitteemettwice(2)attendedbyallmemberstodeliberateandrecommendfortheBoard’sconsiderationonemployees’basicremuneration(includingbonuses),theremunerationandbonusesofExecutiveDirectorsandDirectors’fees.

DetailsofDirectors’ remuneration (includingbenefits-in-kind) foreachDirectorduring thefinancialyearended31December2017areasfollows:

Directors’ Fee Basic Benefits- Company Subsidiaries Salary in Kind Total (RM) (RM) (RM) (RM) (RM) Executive Director YongFohChoi 19,845 - 314,777 11,944 346,566YongKiamSam 19,845 - 579,570 7,000 606,415Non-Executive Director KhooChuanSyn@KhooChuanSyn 66,150 - - - 66,150TohKianSing 66,150 - - - 66,150WongChieBin 79,380 - - - 79,380DatukSebastianTingChiewYew 66,150 - - - 66,150

DIRECTORS’ TRAINING AND EDUCATION

TheBoardismindfuloftheimportanceforitsmemberstoundergocontinuoustrainingtobeapprisedofchangestoregulatoryrequirementsandtheimpactsuchregulatoryrequirementshaveontheGroupandDirectors.

AlltheDirectorsoftheCompanyhaveattendedtheMandatoryAccreditationProgrammeconductedbyBursaMalaysiaTrainingSdnBhdwithinthestipulatedtimeframerequiredbytheMMLRofBursaSecurities.

DetailsofthetrainingattendedbyDirectorsoftheCompanyforthefinancialyearunderreviewanduptothedateofthisStatementassetoutbelow:

Name of Director and designation Training topics and duration

YongFohChoi– Managing Director, • RecentAmendmentsToTheListingRequirementsArisingFromNon-Independent Executive Director CompaniesAct2016&DealingsInListedSecurities,ClosedPeriodAnd

InsiderTrading

YongKiamSam–Chief Executive • BIMCOShiptermSeminarOfficer cum Deputy Managing Director, • SeminaronStackedrigs&Vessels’ReactivationRisksNon-Independent Executive Director • TransferPricingBreakfastSeminar2017 • Joint ABS-AMSA-MPA-USCG-Singapore (Operating in Australian,

Singapore&USWaters) • 2017AsianOffshoreSupportJournal



27

DIRECTORS’ TRAINING AND EDUCATION (continued)

Name of Director and designation Training topics and duration

WongChieBin– Audit Committee • WithholdingTaxinMalaysia-PrinciplesandLatestDevelopmentsChairman, Independent Non-Executive • GST&CustomsHealthCheckfromLegal&OperationalPerspectiveDirector • KursusPeningkatanKualitiAuditKoperasi • CompanyLaw2016:TotalRevampwithHugeTaxPlanningOpportunities • NewPublicRulingsin2016andGuidelinesin2017 • NationalTaxConference2017 • AuditQualityEnhancementProgrammeforSMPs2017 • ImpactonAdoptionofMFRS9,15&16AuditIssuesArisingfromrecent

changes • CaseStudyWorkshopforIndependentDirectors • InternalAuditFunctionforAuditCommitteeWorkshop • NationalTaxSeminar2017 • PersidanganJuruauditKoperasi2017

TohKianSing–Remuneration Committee • TalkforChineseclientson“InternationalTradeContractPerformanceChairman, Independent Non-Executive andDisputeHandling”Director • TalkforJapanesefirmson“CulturalInfluenceonArbitration–ASingapore

Perspective” • TalkforAngangSteelCompanyLimitedon“InternationalTradeContract

PerformanceandDisputeSettlements” • Participated in theSingapore InsolvencyConferenceorganisedby

theLawSocietyofSingaporeasoneoftheFacilitators.TitleofTalk,“Restructuring&InsolvencyintheOffshoreOil&Gas&MarineSector”

• Participated in theMLAANZAnnualConference organisedby theMaritimeLawAssociationofAustraliaandNewZealand.TitleoftheTalk,“Admiralty:Singapore,NewZealand&Australia”

• TalkforChineselawyersandclientsinChongqing,titled“ExperiencesandLessonsofChineseLawyers’ParticipationinInternationalArbitration”

• ParticipatedinaSeminar,“OneBeltOneRoad”atShengzhen

EricKhooChuanSyn@KhooChuan • SeminarPercukaianKebangsaan2017Syn-Nominating Committee Chairman, • NationalSymposiumOnIslamicBankingAndFinance2018Independent Non-Executive DirectorDatukSebastianTingChiewYew- • InternationalICTInfrastructureandDigitalEconomicConferenceSarawakIndependent Non-Executive Director • ParliamentarianSeminar • ParliamentaryAffairsbytheInternationalCentreforParliamentaryStudies • TheArtOfDebatingAndQuestionsarrangedbyTheInternationalCentre

forParliamentaryStudiesinUnitedKingdom

TheDirectorsarenotifiedperiodicallyby theCompanySecretaryon the typesof trainingcoursesavailable in themarketthattheDirectorsmayconsiderattendinginordertoenhancetheirskillsandknowledgeinthedischargeoftheirstewardshiprole.

ACCOUNTABILITY AND AUDIT

Uphold integrity in financial reporting by the Company

ItistheBoard’scommitmenttopresentabalancedandmeaningfulassessmentoftheGroup’sfinancialperformanceandprospectsattheendofeachreportingperiodandfinancialyear,primarilythroughthequarterlyannouncementoftheGroup’sresultstoBursaSecurities,theannualfinancialstatementsoftheGroupandCompanyaswellastheChiefExecutiveOfficer’sMessageandmanagementdiscussionandanalysis(MD&A)intheAnnualReport.




Audit Committee

ThecompositionoftheAuditCommittee,includingitsrolesandresponsibilitiesenshrinedinitstermsofreferenceapprovedbytheBoard,aresetout intheAuditCommitteeReport includedinthisAnnualReport.OneofthekeyresponsibilitiesoftheAuditCommitteeinitstermsofreferenceistoensurethatthefinancialstatementsoftheGroupandCompanycomplywithapplicablefinancialreportingstandardsinMalaysia.SuchfinancialstatementscomprisethequarterlyfinancialreportannouncedtoBursaSecuritiesandtheannualstatutoryfinancialstatements.Indischargingthisrole,meetingsarescheduledwithformalitemsontheagendafocusingoninterimandyear-endfinancialreporting,theauditingprocessandrelatedpartytransactions.TherelevantpapersfortheagendaarefurnishedtoCommitteememberswellbefore themeetings. At suchmeetings,questions raisedbymembersof theCommittee tobetterunderstandtheGroup’sfinancialperformanceandsituationarerespondedbytheHeadofGroupFinancebeforetheCommitteerecommendedthefinancialperformanceandreportingtotheBoardforapprovaltoissuetoregulatorsand/orshareholders.

ThetermsofreferenceoftheAuditCommitteeincludeapolicyonthetypesandnatureofnon-auditservicespermittedtobeprovidedbytheexternalauditorsoftheCompanysoasnottocompromisetheirindependenceandobjectivity.Inassessingtheindependenceofexternalauditors,theAuditCommitteeobtainsassurancefromtheexternalauditors,confirmingthattheyare,andhavebeen,independentthroughouttheconductoftheauditengagementwiththeCompanyinaccordancewiththeindependencecriteriasetoutintheBy-LawsoftheMalaysianInstituteofAccountants(“MIA”).Forthefinancialyearunderreview,thisassurancewasprovidedbytheexternalauditorswhentheypresentedtheirauditplantotheAuditCommittee,confirmingthattheycompliedwiththeBy-LawsofMIAonprofessionalethics,conductandpracticewhichaddressed,amongstothers,thecriteriaon,andthreatsagainst,professionalindependence.

Duringthefinancialyearunderreview,theAuditCommitteeassessedtheperformanceoftheexternalauditorsandtheinternalauditfunctionlargelyintermsoftheirqualityandtimelinessofservicestotheGroupbeforerecommendingtoBoardforrenewalorterminationoftheirservices,asthecasemaybe.

Recognise and manage risks of the Group

TheBoardhasestablishedaRiskManagementCommitteewhichisentrustedtoformaliseariskmanagementprocesstoidentify,evaluate,control,reportandmonitorsignificantrisksfacedbytheGroup.Periodicreportingofrisksidentifiedandevaluated,whicharescoredfortheirlikelihoodofoccurrenceandtheimpactthereofbasedonpre-setriskmeasuringmetrics,includingmitigatingmeasures,ismadetotheAuditCommitteeaspartofaholisticapproachonriskmanagement,todevelopacomprehensiveEnterpriseRiskFrameworktoenhancetheGroup’sexistingriskmanagementactivitiesandinitiatives.PersonneloftheGrouphavebeentrainedtoperiodicallyidentifyandevaluaterisks,supportedbypertinentevidencecorroboratingtheriskprofilesofvariousbusinessunits,andultimatelytheGroupriskprofile, forupwardreportingtotheRiskManagementCommittee,whichischairedbytheChiefExecutiveOfficerhelmedbytheHeadofMarineDivision,HeadofShipbuildingDivision,HeadofGroupFinanceandtheHeadofCorporateCompliance.TheriskprofileoftheGroup,followingareviewbytheRiskManagementCommitteeistabledtotheAuditCommitteeandquestions,ifany,arefieldedbytheHeadofCompliance,whoalsoactsastheGroup’sRiskCoordinator.

TheinternalauditfunctionoftheGroupisoutsourcedtoanindependentprofessionalfirm,namelyKPMG,whoundertakesregularreviewsoftheadequacyandoperatingeffectivenessoftheGroup’ssystemofinternalcontrols.TheinternalauditfunctionreportsdirectlytotheAuditCommittee.

FurtherdetailsontheEnterpriseRiskManagementFrameworkandactivitiesoftheinternalauditfunctioncanbeseenintheStatementonRiskManagementandInternalControlincludedinthisAnnualReport.



29

INTERGRITY IN CORPORATE REPORTING WITH STAKEHOLDERS

Strengthen relationship between the Company and its shareholders

Shareholder participation at general meeting

TheAnnualGeneralMeeting(“AGM”),whichistheprincipalforumforshareholderdialogue,allowsshareholderstoreviewtheGroup’sperformanceviatheCompany’sAnnualReportandposequestionstotheBoardforclarification.AttheAGM,shareholdersparticipateindeliberatingresolutionsbeingproposedorontheGroup’soperationsingeneral.AtthelastAGM,aquestionandanswersessionwasheldwheretheChairmaninvitedshareholderstoraisequestionswithresponsesfromtheBoard.

TheNoticeofAGMiscirculatedatleasttwenty-one(21)daysbeforethedateofthemeetingtoenableshareholderstogothroughtheAnnualReportandpaperssupportingtheresolutionsproposed.ShareholdersareinvitedtoaskquestionsbothabouttheresolutionsbeingproposedbeforeputtingaresolutiontovoteaswellasmattersrelatingtotheGroup’soperationsingeneral.AlltheresolutionssetoutintheNoticeofthelastAGMwereputtovotebyshowofhandsanddulypassed.TheoutcomeoftheAGMwasannouncedtoBursaonthesamemeetingday.Goingforward,theBoardwilladoptpollvotingandwillappointascrutineertovalidatethevotescastattheAGM.

Communication and engagement with shareholders

TheBoard recognizes the importanceofbeing transparentandaccountable to theCompany’s investorsand,assuch,hasvariouschannelstomaintaincommunicationwiththem.ThevariouschannelsarethroughthequarterlyannouncementsonfinancialresultstoBursaSecurities,relevantannouncementsandcirculars,andwhennecessary,theAnnualandExtraordinaryGeneralMeetingsandthroughtheGroup’swebsitewhereshareholderscanaccesspertinentinformationconcerningtheGroup.

Code of Conduct

TheBoardrecognisestheimportanceofhavinginplaceaCodeofConduct,settingoutthestandardsofconductexpectedfromDirectorsandemployees,toengendergoodcorporatebehavior.TheBoardChartersetsoutaCodeofEthicstobeobservedbyDirectors.Asfortheconductofemployees,theBoardhasformalisedanEmployeeHandbooktobeobservedbyemployeesacrosstheGroup.TheBoardhasalsoadoptedWhistle-BlowingPoliciesandProcedures,whichoutlinewhen,howandtowhomaconcernmaybeproperlyraisedabouttheactualorpotentialcorporatefraudorbreachofregulatoryrequirementsinvolvingemployee,ManagementorDirectorintheGroup.ToassessadherencetotheCodeofConductandEmployeeHandbookbyDirectorsoftheCompanyandemployeesintheGrouprespectively,theCompanyappointedaComplianceOfficerwhoalsodoublesasaRiskCoordinatorfortheGroup’sriskmanagementinitiatives.TheCodeofConducthasbeenuploadedontotheCompany’swebsite.

Ensure timely and high quality disclosure

TheBoardisawareoftheneedtoestablishcorporatedisclosurepoliciesandprocedurestoenablecomprehensive,accurateandtimelydisclosuresrelatingtotheCompanyanditssubsidiariestobemadetotheregulators,shareholdersandstakeholders.Accordingly,theBoardhas,duringthefinancialyearunderreview,formalisedpertinentpoliciesandproceduresoncorporatedisclosurenotonly tocomplywith thedisclosure requirementsasstipulated in theMMLRofBursaSecurities,butalsoidentifythepersonsresponsibletoapproveanddisclosematerialinformationtotheregulators,shareholdersandstakeholders.TheCorporateDisclosurePoliciesandProcedures,whicharesubjecttoannualreview,setout,amongstothers,thetypesofactivities/transactionsthatrequireimmediateannouncementtotheregulators,protocolondisclosureofinformation,spokespersonfortheGroupandprocedurestobefollowedifissuedbyregulatorswithanoticeonunusualmarketactivities.

Toaugmenttheprocessofdisclosure,theBoardhasearmarkedadedicatedsectionforcorporategovernanceontheCompany’swebsitewhereinformationontheCompany’sannouncementstotheregulators,rightsofshareholders,theCompany’sAnnualReport,etc.,maybeaccessed.

This Statement is issued in accordance with a resolution of the Board dated 3 April 2018.




ADDITIONAL COMPLIANCE INFORMATION

Utilisation of ProceedsDuringthefinancialyear,therewerenoproceedsraisedfromanycorporateproposal.

Share BuybacksTheCompanydidnotcarryoutanysharebuy-backsduringthefinancialyear.

Options, Warrants or Convertible SecuritiesTherewasnoexerciseofOptionsorConvertibleSecuritiesorconversionofwarrantsduringthefinancialyear.

American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) ProgrammeTheCompanydidnotsponsoranyADRorGDRprogrammeduringthefinancialyear.

Imposition of Sanctions/PenaltiesTherewerenomaterialsanctionorpenaltiesimposedontheCompanyanditssubsidiaries,Directorsormanagementbytherelevantregulatorybodiesduringthefinancialyear.

Audit FeesTheamountofauditfeespaidandpayabletoexternalauditorsbytheCompanyandtheGroupforthefinancialyearended31December2017amountedtoRM55,000andRM242,244respectively.

Non-Audit FeesTheamountofnon-audit feespaidandpayabletoexternalauditorsbytheGroupfor thefinancialyearended31December2017amountedtoRM51,000.

Variation in ResultsThereisnomaterialvariancebetweenthefinancialresultsandtheunauditedresultspreviouslymadeforthefinancialyearended31December2017.

Profit GuaranteeTherewasnoprofitguaranteegivenbytheCompanyduringthefinancialyear.

Material ContractsTherewerenomaterialcontractsoutsidetheordinarycourseofbusinessenteredintobytheCompanyanditssubsidiariesinvolvingDirector’sandmajorshareholder’sinterestwhichwerestillsubsistingattheendofthefinancialyearorenteredintosincetheendofthepreviousfinancialyear.

Revaluation of Landed Properties TheCompanyanditssubsidiariesdidnotadoptanyrevaluationpolicyonlandedpropertiesduringthefinancialyear.

Profit Forecast VarianceTherewasnoprofitforecastissuedinrespectofthefinancialresultended31December2017.

Recurrent related Party TransactionsTherelatedpartytransactionsaredisclosedinpage94ofthisannualreport.



31

SustainabilityStatement

SealinkInternationalBerhad(“Company”)presentsitsfirstSustainabilityStatementpublishedinlinewithMainMarketListingRequirements(“MMLR”)ofBursaSecuritiesintheCompany’sannualreportforthefinancialyearended31December2017(“FYE2017”).TheCompanywillalsocomplywiththedetaileddisclosurerequirementsinPracticeNote9oftheMMLRintheCompany’sannualreportfromFYE2018onwards.Assuch,noseparatedisclosureoftheCorporateSocialResponsibilityStatementwillbemadefromFYE2017onwards.

TheBoardofDirectors(“Board”)ispleasedtodemonstrateourcommitmenttocreatelong-termsustainablevalueandbusinessgrowthtoachieveourstrategicobjectivesandenhanceshareholdersvalueinthelongterm.Weundertakedevelopmentsthataresocially,economicallyandenvironmentallyconduciveforasustainablelong-termfutureandthatarematerialtoourbusinessoperations.

STAKEHOLDERS’ ENGAGEMENT

Inbuildinglong-termbusinessgrowth,itisessentialtounderstandandberesponsivetothestakeholders’concernsorexpectationsoftheCompany.Wehaveidentifiedthekeystakeholdersrelevanttoouroperationsandthedifferentplatformsthatwillbeusedtoengagewithallthedifferentstakeholdergroups,asindicatedinthetablebelow.

Stakeholders Engagement Platforms

Shareholders • AnnualGeneralMeeting • QuarterlyReports • AnnualReport GovernmentandRegulators • Regulatoryrequirements Clients(Customers) • Survey • Customerengagement Management • Meetings Employees • Internalandexternalstafftrainings • Meetings • Performanceappraisalsystem • Health,SafetyandEnvironment’sDay Community • Donations • Companywebsite

ENVIRONMENT SUSTAINABILITY

WeareaccreditedbytheMarineDepartmentofMalaysiaandmaintainaSafetyManagementSystem(SMS)forrunningourMarineOperations.WestrictlycomplywithTheInternationalConventionforthePreventionofPollutionfromShips(MARPOL).TheSMSsystemensuresthat:

• allactivitiesarecompliantwiththelaw;• HSEmattersaremanagedasacriticalbusinessactivity;• HSEistheresponsibilityofallemployees(managersandindividuals);• anyonecan‘StopWork’orintervene,whereunsafeconditionsarepresentorunsafeactivitiesareobserved.

ItistheobligationofeveryonetoactimmediatelytocorrectanysituationthatdeviatesfromourpolicyorSMS.Wemustensurethatthesestandardsarenevercompromised.

Managementisminimisingtheuseofpaperinprintviascanningofdocumentsandonlyprintwhennecessary.TheGroup’senvironmentalpolicyto“go-green”iscarriedoutonanongoingbasistoavoidandreducewasteandusingrecyclingandenvironmentally-friendlydisposalmethodsinstead.



SOCIAL SUSTAINABILITY• Community RecognisingtheimportanceoftheCommunity,theGroup,duringthefinancialyearunderreview,hasdonated

fundstothoseinneed,namely,MiriPalliativeCareAssociationandotherdeservingorganizations.TheGroupalsoprovidesopportunities forundergraduatestudents togainexposureon realprojects through internshipprograms.Thetrainingprovidesthestudentspersonalgrowthandexposuretodifferentjobopportunitiesaspartofourinitiativeofgivingbacktothelocalcommunity.

• TrainingandDevelopment Werecogniseourpeople’sskills,professionalismandthevaluetheycontributetotheGroup.Wealsoinvestin

humanresourcecapitalthroughemployeetraininganddevelopmentsuchasOffshorePetroleumIndustryTrainingOrganization(OPITO)trainingandotherrelevanttraining.

• SafetyandHealth TheBoardismindfuloftheneedtoensureasafeworkingenvironmentforallemployees.Pertinentpolicieson

healthandsafetyhavebeenformalisedinwritinganddisseminatedtotheworkforceforcompliance.

Ourvisionis‘GoalZeroIncident’workenvironmentandouraspirationistobea‘valuecreatingpartner’toourclients(customers),shareholdersandcommunitieswhereweworkandlive.Toachieveourvisionandaspirations,theCompanycommittedtoaHSEpolicywherebywemanageHSEmattersasacriticalbusinessactivity,pursuethegoalof‘noharmtopeopleandprotecttheenvironment’.Inadditiontotheabove,weprovideandensuresafetyworkingenvironmentonboardshipbyestablishingandsafeguardingallidentifiedrisksandpromotesafetyconsciousattitudeamongalltheemployeesandalsocontinuouslyimprovetheirsafetymanagementskillsthroughtraining,meetings,forums,discussionsandtalks.

TheGroupwasproudlyawardedbyoilmajorsfortwocommendableachievements,ie,CarigaliHess,2016SafetyAwardForExcellence(S.A.F.E)forPlatinumCategory.WealsoreachedanothermilestoneasourteamachievedShellMalaysia2YearsGoalZeroDaysforyear2016.

TheGroup’soperationspersonnelaswellascontractworkersareprovidedwith,andarerequiredtowearpersonalprotectiveequipmentwhencarryingouttheirworkattheshipyard,onvesselsoratthewarehouseinordertoachievezerolosstimeinjuryorfatalityarisingfromworkplaceaccidents.Apartfromtheneedtobebriefedonsafetyissuesuponarrival,visitorstotheShipyardandvesselsarealsorequiredtoputonsafetyhelmetsandbootsbeforeventuringtothesites.

TheGrouphasalsoorganizedanin-houseHealth,SafetyandEnvironment(HSE)Daywhichcoversawarenessrelatingtohazardsattheworkplace,healthtalkandfiredrills,whichwasconductedincollaborationwithanoilmajor.

TheGrouphasaSafetyOfficer,whoisresponsibleforoverseeingmattersconcerningthesafetyandhealthofemployees.ASafetyandHealthCommitteehasalsobeenestablishedsince2005todeliberateonissuesrelatingtohazardsattheworkplacesothatappropriateremedialmeasuresmaybetakentoaddressanygaps,allwithaviewofsustainingasafeworkingenvironmentintheGroup.

RecognisingtheimportanceofHSEasoneoftheGroup’sbusinessstrategy,acopyof“Health,Safety,EnvironmentandSecurityPolicy”canbedownloadedfromtheCompany’swebsiteatwww.asiasealink.com.Throughthesepoliciesandguidelines,theGroupaimstofurtherimprovesafetyawarenessamongallemployees.

Sustainability Statement (continued)


33

ECONOMIC AND GOVERNANCE SUSTAINABILITY

Wefocusonbuildingsustainablerelationshipswithstakeholdersandutiliseourresourcestocontributetoeconomicgrowthandbringvaluetoourstakeholders.TheBoardplacesgreatimportanceoncorporategovernanceandbelievesinthecorrelationbetweengoodgovernanceandperformance.TheBoardhasformalizedinwritingaCodeofConductandanEmployeeHandbook thatemphasizes,amongstothers,zero tolerance forunethicalpractices.TheGroupconductsbusinessinanhonestandethicalwaytoprotectallourstakeholders.TheCodeofConduct,whichappliesalsotoDirectors,andtheGroup’swhistle-blowingpoliciesandprocedureshavebeenuploadedtotheCompany’swebsite.

TheGrouphasalsobeenprogressivelydevelopingpertinentpoliciesandproceduresaddressingitskeybusinessoperationstoensurethatbusinessisconductedaboveboardatalltimes.TheyguideandalignwithcorporateinitiativestheGrouphasimplementedtoaddressindustrychallengesandhelpusachieveoperationalexcellence.

Sustainability Statement (continued)



Directors’ResponsibilityStatementfortheAuditedFinancialStatementTheDirectorsarerequiredbytheCompaniesAct2016(CA)topreparethefinancialstatementsforeachfinancialyearwhichhavebeenmadeoutinaccordancewiththeapplicableMalaysianFinancialReportingStandards(MFRSs),theInternationalFinancialReportingStandards(IFRs)andtherequirementsoftheCAinMalaysia.

TheDirectorsareresponsibletoensurethatthefinancialstatementsgiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyattheendofthefinancialyear,andoftheresultsandcashflowsoftheGroupandoftheCompanyforthefinancialyear.

Inpreparingthefinancialstatements,theDirectorshave:

• Adoptedappropriateaccountingpoliciesandappliedthemconsistently;

• Madejudgmentsandestimatesthatarereasonableandprudent;and

• Preparedthefinancialstatementsonagoingconcernbasis.

TheDirectorsareresponsibletoensurethattheGroupandtheCompanykeepaccountingrecordswhichdisclosethefinancialpositionoftheGroupandoftheCompanywithreasonableaccuracy,enablingthemtoensurethatthefinancialstatementscomplywiththeCA.

TheDirectorsareresponsiblefortakingsuchstepsasarereasonablyopentothemtosafeguardtheassetsoftheGroupandoftheCompany,andtodetectandpreventfraudandotherirregularities.

36 – 38 Directors’ Report

39 Statement by Directors

39 Statutory Declaration

40 – 43 Independent Auditors’ Report 44 Statements of Profit or Loss and Other Comprehensive Income

45 Statements of Financial Position

46 – 47 Statements of Changes in Equity

48 – 49 Statements of Cash Flows

50 – 104 Notes to the Financial Statements

Financial Statementsand Reports



Directors’Report

TheDirectorshavepleasureinpresentingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31December2017.

Principal activities

TheCompanyisprincipallyengagedininvestmentholding.TheprincipalactivitiesofthesubsidiariesaredisclosedinNote15tothefinancialstatements.

Results

Group Company RM RM

Lossnetoftax (49,729,630) (1,303,670)

Lossattributableto:OwnersoftheCompany (49,729,630) (1,303,670)

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthandisclosedinthefinancialstatements.

IntheopinionoftheDirectors,theresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

Directors

ThenamesoftheDirectorsoftheCompanyinofficesincethebeginningofthefinancialyeartothedateofthisreportare:

YongFohChoiYongKiamSamWongChieBinEricKhooChuanSyn@KhooChuanSynTohKianSingDatukSebastianTingChiewYew

TheinformationofDirectorsofsubsidariesisavailableattheCompany’sregisteredofficeandthesaidinformationisdeemedincorporatedhereinbysuchreferenceandmadeaparthereof.

Directors’ benefits

Neitherattheendofthefinancialyear,noratanytimeduringthatyear,didtheresubsistanyarrangementtowhichtheCompanywasaparty,wherebytheDirectorsmightacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate.

Sincetheendofthepreviousfinancialyear,noDirectorhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsincludedintheaggregateamountofemolumentsreceivedordueandreceivablebytheDirectorsorthefixedsalaryofafull-timeemployeeoftheCompanyasshowninNote10tothefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwithanyDirectororwithafirmofwhichaDirectorisamember,orwithacompanyinwhichaDirectorhasasubstantialfinancialinterest,exceptasdisclosedinNote28tothefinancialstatements.


37

Directors’ Report (continued)

Directors’ interests

AccordingtotheregisterofDirectors’shareholdings,theinterestsofDirectorsinofficeattheendofthefinancialyearinsharesintheCompanyanditsrelatedcorporationsduringthefinancialyearwereasfollows:

Number of Ordinary Shares At At 1 January 31 DecemberThe Company: 2017 Acquired Sold 2017

Direct interestYongFohChoi 45,716,800 - - 45,716,800YongKiamSam 67,382,399 - - 67,382,399EricKhooChuanSyn@KhooChuanSyn 30,000 - - 30,000WongChieBin 90,000 - - 90,000DatukSebastianTingChiewYew 137,500 - - 137,500

Deemed interest through holding companyYongFohChoi 259,080,800 - - 259,080,800YongKiamSam 259,080,800 - - 259,080,800

Holding company:

Direct interestYongFohChoi 1,237,500 - (237,500) 1,000,000YongKiamSam 262,500 237,500 - 500,000

YongFohChoiandYongKiamSambyvirtueoftheirinterestinsharesintheCompanyarealsodeemedinterestedinsharesofalltheCompany’ssubsidiariestotheextenttheCompanyhasaninterest.

TohKianSingdoesnothaveanyinterestinsharesintheCompanyoritsrelatedcorporationsduringthefinancialyear.

Indemnification of directors and officers

Noindemnitieshavebeengivenorinsurancepremiumspaid,duringorsincetheendofthefinancialyear,foranypersonwhoisorofficeroftheCompany.

Other statutory information

a) BeforethestatementsofprofitorlossandothercomprehensiveincomeandstatementsoffinancialpositionoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablesteps:

i) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofprovisionfordoubtfuldebtsandsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebts;and

ii) toensurethatanycurrentassetswhichwereunlikelytorealisetheirvalueasshownintheaccountingrecordsintheordinarycourseofbusinesshadbeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.



Directors’ Report (continued)

Other statutory information (continued)

b) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichwouldrender:

i) theamountwrittenoff forbaddebtsor theamountof theprovision fordoubtfuldebts in thefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent;and

ii) thevaluesattributedtocurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.

c) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichhavearisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

d) Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorfinancialstatementsoftheGroupandoftheCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.

e) Atthedateofthisreport,theredoesnotexist:

i) anychargeontheassetsoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

ii) anycontingentliabilityoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyear.

f) IntheopinionoftheDirectors:

i) nocontingentorotherliabilityhasbecomeenforceableorislikelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhichwillormayaffecttheabilityoftheGrouporoftheCompanytomeettheirobligationswhentheyfalldue;and

ii) noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGrouporoftheCompanyforthefinancialyearinwhichthisreportismade.

Auditors

Theauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.Auditors’remunerationsaredisclosedinNote8tothefinancialstatements.

Totheextentpermittedbylaw,theCompanyhasagreedtoindemnifyitsauditors,Ernst&Young,aspartofthetermsofitsauditengagementagainstclaimsbythirdpartiesarisingfromtheaudit(foranunspecifiedamount).NopaymenthasbeenmadetoindemnifyErnst&Youngduringorsincethefinancialyear.

SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectorsdated3April2018

Yong Kiam Sam Yong Foh Choi


39

StatementbyDirectorsPursuant to Section 251(2) of the Companies Act 2016

We,Yong Kiam SamandYong Foh Choi,beingtwooftheDirectorsofSealink International Berhad,doherebystatethat,intheopinionoftheDirectors,theaccompanyingfinancialstatementssetoutonpages44to104aredrawnupinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31December2017andoftheirfinancialperformanceandcashflowsfortheyearthenended.

SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectorsdated3April2018

Yong Kiam Sam Yong Foh Choi

StatutoryDeclarationPursuant to Section 251(1)(B) of the Companies Act 2016

I,Angelia Chong Pei Cheng, being theOfficerprimarily responsible for the financialmanagement ofSealink International Berhad,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementssetoutonpages44to104areinmyopinioncorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

SubscribedandsolemnlydeclaredbytheabovenamedAngelia Chong Pei ChengatMiriintheStateofSarawakon3April2018.

Angelia Chong Pei Cheng(MIA19359)

Beforeme,

CommissionerforOathsPuk LiLi @ Puk Lee LinLicenseNo:Q024



IndependentAuditors’Reportto the Members of Sealink International Berhad– 800981-X (Incorporated in Malaysia)

Report on the Audit of the Financial Statements

Opinion

WehaveauditedthefinancialstatementsofSealinkInternationalBerhad,whichcomprisestatementsoffinancialpositionasat31December2017oftheGroupandoftheCompany,andthestatementsofprofitorlossandothercomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyfortheyearthenended,andnotestothefinancialstatements,includingasummaryofsignificantaccountingpolicies,assetoutonpages44to104.

Inouropinion,theaccompanyingfinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31December2017,andoftheirfinancialperformanceandtheircashflowsfortheyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.

Basis for Opinion

WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing.OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditors’ResponsibilitiesfortheAuditoftheFinancialStatementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

Independence and Other Ethical Responsibilities

WeareindependentoftheGroupandoftheCompanyinaccordancewiththeBy-Laws(onProfessionalEthics,ConductandPractice)oftheMalaysianInstituteofAccountants(“By-Laws”)andtheInternationalEthicsStandardsBoardforAccountants’CodeofEthics forProfessionalAccountants (“IESBACode”),andwehave fulfilledourotherethicalresponsibilitiesinaccordancewiththeBy-LawsandtheIESBACode.

Key Audit Matters

Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthefinancialstatementsoftheGroupandoftheCompanyforthecurrentyear.WehavedeterminedthattherearenokeyauditmatterstocommunicateinourreportonthefinancialstatementsoftheCompany.ThekeyauditmattersfortheauditofthefinancialstatementsoftheGrouparedescribedbelow.ThesematterswereaddressedinthecontextofourauditofthefinancialstatementsoftheGroupasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Foreachmatterbelow,ourdescriptionofhowourauditaddressedthematterisprovidedinthatcontext.

WehavefulfilledtheresponsibilitiesdescribedintheAuditors’responsibilitiesfortheauditofthefinancialstatementssectionofourreport,includinginrelationtothesematters.Accordingly,ourauditincludedtheperformanceofproceduresdesignedtorespondtoourassessmentoftherisksofmaterialmisstatementofthefinancialstatements.Theresultsofourauditprocedures,includingtheproceduresperformedtoaddressthemattersbelow,providethebasisofourauditopinionontheaccompanyingfinancialstatements.


41

Independent Auditors’ Report (continued)

Recoverability of carrying amounts of vessels

Inviewofthedepressedeconomicconditionsintheoffshoremarinesector,theGroupperformedanassessmentontherecoverableamountonthevesselsstatedatRM452,941,676asat31December2017whichrepresented89.42%oftheGroup’stotalassets,todeterminewhetherthecarryingvalueofthesevesselsarerecoverable.

Theestimatedrecoverableamountisdeterminedbasedonthehigherofanasset’svalueinuse(“VIU”)andfairvaluelesscoststosell(“FV”).Therecoverableamountwascomparedtothecarryingvalueofeachassetwithidentifiedimpairmenttriggers.If therecoverableamount is lower,thecarryingvalueoftheasset isreducedtoitsestimatedrecoverableamountandthedifferenceisregardedasanimpairmentloss.

TheGroupconsideredeachvesselasacash-generatingunit(“CGU”).ValueinuseisthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheCGU.TheFVrepresentsanestimateoftheamountreceivedintheeventthevesselissoldonawillingbuyerandawillingsellerbasis.TheFVonthevesselswasbasedonvaluationbyanindependentvaluer.

Basedontheoutcomeoftheimpairmentassessment,noimpairmentlossisrecognisedinthestatementsofprofitorlossandothercomprehensiveincomeastherecoverableamountofthevesselsarehigherthanthecarryingamount.

Theimpairmentassessmentofthevesselsissignificanttoourauditduetoitsmagnitudeandtheuseofsignificantestimatesindeterminingtherecoverableamount.Weevaluatedmanagement’sassessmentofimpairmentindicatorsforvessels.Ourauditproceduresincludedconsideringtheobjectivity,independenceandexpertiseoftheexternalvaluerandassessingthevaluationmodelandsignificantestimatesusedbytheexternalvaluer,includingcomparisonswithrecenttransactionsinvolvingothersimilarvessels.Inaddition,weevaluatedtheadequacyoftheGroup’sdisclosuresregardingtheimpairmentofthesevesselsasdisclosedinNote2.9,Note3(b)andNote13tothefinancialstatements.

Information Other than the Financial Statements and Auditors’ Report Thereon

TheDirectorsoftheCompanyareresponsiblefortheotherinformation.Theotherinformationcomprisestheinformationincludedintheannualreport,butdoesnotincludethefinancialstatementsoftheCompanyandourauditors’reportthereon.

OuropiniononthefinancialstatementsoftheGroupandoftheCompanydoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.

Inconnectionwithourauditof thefinancialstatementsof theGroupandof theCompany,our responsibility is toreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsoftheGroupandoftheCompanyorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.

If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.




Responsibilities of the Directors for the Financial Statements

TheDirectorsof theCompanyareresponsible for thepreparationoffinancialstatementsof theGroupandof theCompanythatgiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.TheDirectorsarealsoresponsibleforsuchinternalcontrolastheDirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsoftheGroupandoftheCompanythatarefreefrommaterialmisstatement,whetherduetofraudorerror.

InpreparingthefinancialstatementsoftheGroupandoftheCompany,theDirectorsareresponsibleforassessingtheGroup’sandtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheDirectorseitherintendtoliquidatetheGrouportheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.

Auditors’ Responsibilities for the Audit of the Financial Statements

OurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsoftheGroupandoftheCompanyasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditingwillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

AspartofanauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

• IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandoftheCompany,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

• Obtainanunderstandingof internalcontrolrelevanttotheaudit inordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sandtheCompany’sinternalcontrol.

• EvaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebytheDirectors.

• ConcludeontheappropriatenessoftheDirectors’useofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheGroup’sortheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditors’reporttotherelateddisclosuresinthefinancialstatementsoftheGroupandoftheCompanyor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditors’report.However,futureeventsorconditionsmaycausetheGrouportheCompanytoceasetocontinueasagoingconcern.


43

Auditors’ Responsibilities for the Audit of the Financial Statements (continued)

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandoftheCompany,includingthedisclosures,andwhetherthefinancialstatementsoftheGroupandoftheCompanyrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.

• Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithin theGrouptoexpressanopiniononthefinancialstatementsof theGroup.Weareresponsible for thedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.

WecommunicatewiththeDirectorsregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

WealsoprovidetheDirectorswithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.

FromthematterscommunicatedwiththeDirectors,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsoftheGroupandoftheCompanyforthecurrentyearandarethereforethekeyauditmatters.Wedescribethesemattersinourauditors’reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.

Other matters

ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection266oftheCompaniesAct2016inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

Ernst & Young Yong Nyet YunAF:0039 2708/04/18(J)CharteredAccountants CharteredAccountant

Miri,Malaysia3April2018




StatementsofProfitorLossandOtherComprehensiveIncomefor the financial year ended 31 December 2017

Group Company Note 2017 2016 2017 2016 RM RM RM RM

Revenue 4 75,184,805 122,901,656 2,498,822 3,577,821

Costofsales (85,623,770) (127,306,731) - - Gross (loss)/profit (10,438,965) (4,405,075) 2,498,822 3,577,821

Otherincome 5 4,641,228 9,775,394 221,363 -Administrativeexpenses (20,382,872) (26,200,700) (3,339,256) (4,320,355)Otherexpenses (15,488,384) (31,517,841) - -

Operating loss (41,668,993) (52,348,222) (619,071) (742,534)

Financeincome 6 3,028,575 2,695,583 1,619,951 1,085,684Financecosts 7 (9,523,990) (12,443,099) (2,304,550) (1,781,763)

Shareofresultsofajointventure (950,121) 391,017 - -Shareofresultsofanassociate (1,021,652) (1,370,159) - - Lossbeforetax 8 (50,136,181) (63,074,880) (1,303,670) (1,438,613)

Incometaxexpense 11 406,551 6,419,511 - 144,551Loss net of tax (49,729,630) (56,655,369) (1,303,670) (1,294,062)Other comprehensive income to be reclassified to profit or loss in subsequent periodsForeigncurrencytranslation,netoftax (19,588,334) 11,487,102 - - Other comprehensive income for the year, net of tax (19,588,334) 11,487,102 - - Total comprehensive income for the year, net of tax (69,317,964) (45,168,267) (1,303,670) (1,294,062)Loss attributable to:OwnersoftheCompany (49,729,630) (56,655,369) (1,303,670) (1,294,062)

Total comprehensive income attributable to:OwnersoftheCompany (69,317,964) (45,168,267) (1,303,670) (1,294,062)

Loss per share attributable to owners of the Company (sen per share):

Basic 12 (9.95) (11.33) Theaccompanyingaccountingpoliciesandexplanatorynotesformanintegralpartofthefinancialstatements.


45

StatementsofFinancialPositionas at 31 December 2017

Group Company Note 2017 2016 2017 2016 RM RM RM RMAssets

Non-current assets

Property,plantandequipment 13 506,551,704 609,228,055 2,207 3,360Landuserights 14 10,656,694 11,235,447 - -Investmentinsubsidiaries 15 - - 385,599,639 385,469,639Investmentinanassociate 16 3,795,158 4,724,774 - -Investmentinajointventure 17 6,738,552 7,539,563 - -Otherreceivables 19 394,251 4,991,935 - - 528,136,359 637,719,774 385,601,846 385,472,999

Current assets

Inventories 18 34,150,743 49,864,589 - -Tradeandotherreceivables 19 38,925,700 32,382,837 67,719,849 30,749,867Othercurrentassets 20 539,746 556,371 - 3,500Investmentsecurities 21 64,641 63,011 - -Taxrecoverable 827,407 1,310,407 38,360 117,580Cashandbankbalances 22 30,157,806 42,336,149 234,231 1,723,946 104,666,043 126,513,364 67,992,440 32,594,893 Total assets 632,802,402 764,233,138 453,594,286 418,067,892

Equity and liabilities

Current liabilities

Loansandborrowings 23 99,892,698 131,316,796 - 6,140,000Tradeandotherpayables 24 32,371,042 29,738,536 86,446,834 41,531,770Incometaxpayable 1,119,023 81,074 - - 133,382,763 161,136,406 86,446,834 47,671,770 Net current liabilities (28,716,720) (34,623,042) (18,454,394) (15,076,877)

Non-current liabilities

Loansandborrowings 23 87,844,931 120,268,959 - 1,945,000Deferredtaxliabilities 25 26,439,255 28,374,356 - - 114,284,186 148,643,315 - 1,945,000 Total liabilities 247,666,949 309,779,721 86,446,834 49,616,770Net assets 385,135,453 454,453,417 367,147,452 368,451,122 Equity attributable to owners of the Company

Sharecapital 26 329,086,883 250,000,000 329,086,883 250,000,000Sharepremium 26 - 79,086,883 - 79,086,883Retainedearnings 3,600,758 53,330,388 38,060,569 39,364,239Otherreserves 27 52,447,812 72,036,146 - - Total equity 385,135,453 454,453,417 367,147,452 368,451,122Total equity and liabilities 632,802,402 764,233,138 453,594,286 418,067,892 Theaccompanyingaccountingpoliciesandexplanatorynotesformanintegralpartofthefinancialstatements.



StatementsofChangesinEquityfor the financial year ended 31 December 2017

Attributable to Equity Holders of the Company Foreign currency2017 Equity, Share Share Retained translationGroup total capital premium earnings reserve Note RM RM RM RM RM

Openingbalanceat1January2017 454,453,417 250,000,000 79,086,883 53,330,388 72,036,146

Lossfortheyear (49,729,630) - - (49,729,630) -Othercomprehensiveincome 27 (19,588,334) - - - (19,588,334)Totalcomprehensiveincome (69,317,964) - - (49,729,630) (19,588,334)

TransferpursuanttoCompaniesAct2016(Note2.2(a)) - 79,086,883 (79,086,883) - -

Closingbalanceat31December2017 385,135,453 329,086,883 - 3,600,758 52,447,812

2016Group

Openingbalanceat1January2016 499,621,684 250,000,000 79,086,883 109,985,757 60,549,044

Lossfortheyear (56,655,369) - - (56,655,369) -Othercomprehensiveincome 27 11,487,102 - - - 11,487,102Totalcomprehensiveincome (45,168,267) - - (56,655,369) 11,487,102

Closingbalanceat31December2016 454,453,417 250,000,000 79,086,883 53,330,388 72,036,146

Theaccompanyingaccountingpoliciesandexplanatorynotesformanintegralpartofthefinancialstatements.


47

Statements of Changes in Equity for the financial year ended 31 December 2017 (continued)

Equity, Share Share Retained total capital premium earnings RM RM RM RM2017Company

Openingbalanceat1January2017 368,451,122 250,000,000 79,086,883 39,364,239

Lossnetoftax,representingtotalcomprehensiveincome (1,303,670) - - (1,303,670)

TransferpursuanttoCompaniesAct2016(Note2.2(a)) - 79,086,883 (79,086,883) -Closingbalanceat31December2017 367,147,452 329,086,883 - 38,060,569

2016Company

Openingbalanceat1January2016 369,745,184 250,000,000 79,086,883 40,658,301

Lossnetoftax,representingtotalcomprehensiveincome (1,294,062) - - (1,294,062)

Closingbalanceat31December2016 368,451,122 250,000,000 79,086,883 39,364,239




StatementsofCashFlowsfor the financial year ended 31 December 2017

Group Company Note 2017 2016 2017 2016 RM RM RM RMOperating activities

Lossbeforetax (50,136,181) (63,074,880) (1,303,670) (1,438,613)

Adjustmentsfor:Financeincome 6 (3,028,575) (2,695,583) (1,619,951) (1,085,684)Dividendincomefrominvestmentsecurities 5 (1,630) (1,658) - -Amortisationoflanduserights 14 578,753 578,765 - -Depreciationofproperty,plantandequipment 13 43,327,337 46,499,443 1,153 1,648Impairmentlossonamountduefromasubsidiary 8 - - 29,418 -Impairmentlossontradeandotherreceivables 8 629,324 89,998 - -Impairmentlossonproperty,plantandequipment 8 - 30,487,178 - -Financecosts 7 9,523,990 12,443,099 2,304,550 1,781,763Inventorieswrittenoff 8 106,648 543,670 - -Loss/(Gain)ondisposalofproperty,plantandequipment 5,8 13,411,305 (44,999) - -Gainondisposalofajointventure 5 (249,193) - - -Property,plantandequipmentwrittenoff 8 31,473 564,465 - -Reserveonconsolidation 5 - (1,011,604) - -Reversalofdepositwrittenoff 5 (186,000) - - -Reversalofinventorywrittendown 5,8 (7,750) (1,269,538) - -Reversalofimpairmentlossontradereceivables 5 (36,000) (295,599) - -Reversalofimpairmentonproperty,plantandequipment 5 - (6,154,500) - -Shareofresultsofajointventure 950,121 (391,017) - -Shareofresultsofanassociate 1,021,652 1,370,159 - -Unrealisedloss/(gain)onforeignexchange 514,553 1,049,676 2,429 (1,722)

Totaladjustments 66,586,008 81,761,955 717,599 696,005 Operating cash flows before changes in working capital 16,449,827 18,687,075 (586,071) (742,608)ChangesinworkingcapitalDecreaseininventories 16,735,868 36,987,378 - -(Increase)/Decreaseintradeandotherreceivables (1,349,128) 18,781,335 22,710 154,380(Increase)/Decreaseinothercurrentassets (9,701) 368,111 3,500 (3,500)(Decrease)/Increaseintradeandotherpayables (1,251,572) (16,519,731) 407,203 (108,599)Netchangeinholdingcompanybalances 4,000,000 - 4,000,000 -Netchangeinsubsidiariesbalances - - 3,485,751 39,668,210

Totalchangesinworkingcapital 18,125,467 39,617,093 7,919,164 39,710,491


49

Statements of Cash Flows for the financial year ended 31 December 2017 (continued)


Cash flows from operations 34,585,208 58,304,168 7,333,093 38,967,883

Interestreceived 3,028,575 2,695,583 1,619,951 1,085,684Interestpaid (10,649,374) (14,223,837) (2,304,550) (1,781,763)Incometaxpaid (407,452) (957,660) (10,030) (28,330)Incometaxrefunded 402,597 464,235 89,250 - Net cash flows fromoperating activities 26,949,640 46,282,489 6,727,714 38,243,474

Investing activitiesAcquisitionofasubsidiary,netofcash 15 - 711,698 - -Purchaseofproperty,plantandequipment (1,113,092) (770,836) - (2,069)Proceedsfromdisposalofproperty,plantandequipment 18,698,974 45,000 - -Acquisitionofadditionalsharesinasubsidiary - - (130,000) -Acquisitionofredeemableconvertiblepreferencesharesinsubsidiaries - - - (31,500,000)Acquisitionofredeemablepreferencesharesinajointventure (656,000) - - -Proceedsfromdisposalofredeemablepreferencesharesinajointventure - 1,200,000 - -Proceedsfromdisposalofordinarysharesinajointventure 756,000 - - -Dividendreceivedfromajointventure - 577,961 - -

Net cash flows from/(used in) investing activities 17,685,882 1,763,823 (130,000) (31,502,069)

Financing activities

Salesofinvestmentsecurities - 267,655 - -Proceedsofloansandborrowings 27,730,918 - - -Repaymentsofloansandborrowings (78,350,147) (79,250,667) (8,085,000) (6,140,000)Repaymentoffinanceleases (58,249) (52,478) - -Netmovementintradefinancing (8,200,000) (2,100,000) - -Netmovementinfixeddepositpledged 6,434,452 (357,132) - -Netmovementincashatbankrestrictedinuse 771,269 (851,033) - -

Net cash flows used in financing activities (51,671,757) (82,343,655) (8,085,000) (6,140,000)

Net (decrease)/increase in cash and cash equivalents (7,036,235) (34,297,343) (1,487,286) 601,405Effect of exchange rate changes on cash and cash equivalents (332,920) (209,681) (2,429) 1,722Cash and cash equivalents at1 January (3,898,434) 30,608,590 1,723,946 1,120,819

Cash and cash equivalents at 31 December 22 (11,267,589) (3,898,434) 234,231 1,723,946




NotestotheFinancialStatements– 31 DECEMBER 2017

1. Corporate information

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheMainMarketofBursaMalaysiaSecuritiesBerhad.TheregisteredofficeoftheCompanyislocatedatLot1035,Block4,MCLD,PiasauIndustrialArea,98000Miri,Sarawak.

TheimmediateandultimateholdingcompanyoftheCompanyisSealinkHoldingsSdn.Bhd.,whichisincorporatedinMalaysia.

TheCompanyisprincipallyengagedininvestmentholding.TheprincipalactivitiesofthesubsidiariesaredisclosedinNote15tothefinancialstatements.

Therehavebeennosignificantchangesinthenatureoftheprincipalactivitiesduringthefinancialyear.

2. Summary of significant accounting policies

2.1 Basis of preparation

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewithMalaysianFinancialReportingStandards(“MFRS”),InternationalFinancialReportingStandards(“IRFS”)andtherequirementsoftheCompaniesAct2016inMalaysia.

ThefinancialstatementsoftheGroupandoftheCompanyhavealsobeenpreparedonthehistoricalcostbasisexceptasdisclosedintheaccountingpoliciesbelowandarepresentedinRinggitMalaysia(“RM”).

On15September2016,theCompaniesAct2016(“NewAct”)wasenactedanditreplacestheCompaniesAct,1965inMalaysiawitheffectfrom31January2017.ThekeychangesoftheNewActonthefinancialstatementsaredisclosedinNote2.2.

2.2 Changes in accounting policies and regulatory requirements

(a) Changes in regulatory requirements

CompaniesAct2016(“NewAct”)

AmongstthekeychangesintroducedintheNewActwhichwillaffectthefinancialstatementsoftheCompanyuponthecommencementoftheNewActon31January2017are:

- theremovalofauthorisedsharecapital; - theordinarysharesoftheCompanywillceasetohaveparornominalvalue;and - theCompany’ssharepremiumwillbecomepartofsharecapital

(b) Changes in accounting policies

Theaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyearexceptasfollows:

On1January2017,theGroupandtheCompanyadoptedthefollowingnewandamendedMFRSsmandatoryforannualfinancialperiodsbeginningonorafter1January2017.

• AmendmentstoMFRS107:DisclosureInitiatives • AmendmentstoMFRS112:RecognitionofDeferredTaxAssetsforUnrealisedLosses

• AnnualImprovementstoMFRSStandards2014–2016Cycle:AmendmentstoMFRS12:DisclosureofInterestsinOtherEntities–ClarificationoftheScopeofDisclosureRequirementsinMFRS12

TheadoptionoftheabovenewMFRSs,AmendmentstoMFRSsandAnnualImprovementstoMFRSsdidnothaveanyeffectonthefinancialperformanceorpositionoftheGroupandoftheCompany.


51

Notes to the Financial Statements (continued)

2. Summary of significant accounting policies (continued)

2.3 Standards issued but not yet effective

ThestandardsandinterpretationsthatareissuedbutnotyeteffectiveuptothedateofissuanceoftheGroup’sandoftheCompany’sfinancialstatementsaredisclosedbelow.TheGroupandtheCompanyintendtoadoptthesestandards,ifapplicable,whentheybecomeeffective.

Effective for annual periods beginning

Descriptions on or after

AmendmentstoMFRS2:ClassificationandMeasurementofShare-based 1January2018PaymentTransactionsMFRS9:FinancialInstruments 1January2018MFRS15:RevenuefromContractswithCustomers 1January2018AmendmentstoMFRS140:TransfersofInvestmentProperty 1January2018AnnualImprovementstoMFRSStandards2014–2016Cycle(i) AmendmentstoMFRS1:First-timeAdoptionofMalaysianFinancial 1January2018 ReportingStandards(ii) AmendmentstoMFRS128:InvestmentsinAssociatesandJointVentures 1January2018ICInterpretation22:ForeignCurrencyTransactionsandAdvanceConsideration 1January2018AmendmentstoMFRS9:PrepaymentFeatureswithNegativeCompensation 1January2019MFRS16:Leases 1January2019AmendmentstoMFRS128:Long-termInterestsinAssociatesandJointVentures 1January2019AnnualImprovementstoMFRSStandards2015–2017Cycle(i) AmendmentstoMFRS3:BusinessCombination 1January2019(ii) AmendmentstoMFRS11:JointArrangements 1January2019(iii) AmendmentstoMFRS112:IncomeTaxes 1January2019(iv) AmendmentstoMFRS123:BorrowingCosts 1January2019AmendmentstoMFRS119:PlanAmendment,CurtailmentorSettlement 1January2019ICInterpretation23:UncertaintyoverIncomeTaxTreatments 1January2019MFRS17:InsuranceContracts 1January2021AmendmentstoMFRS10andMFRS128:SaleorContributionofAssetsbetween DeferredanInvestoranditsAssociateorJointVenture

(a) MFRS 9 Financial Instruments

MFRS9introducesnewrequirementsforclassificationandmeasurement,impairmentandhedgeaccounting.MFRS9iseffectiveforannualperiodsbeginningonorafter1January2018,withearlyapplicationpermitted.Retrospectiveapplicationisrequired,butrestatementofcomparativeinformationisnotcompulsory.During2017,theGroupandtheCompanyhaveperformedadetailedimpactassessmentofMFRS9onclassificationandmeasurement,andimpairment.TheGroupandtheCompanydonothaveanyhedgerelationships.TheassessmentisbasedoncurrentlyavailableinformationandmaybesubjecttochangesarisingfromfurtherreasonableandsupportableinformationbeingmadeavailabletotheGroupandtotheCompanyin2018whentheGroupandtheCompanyadoptMFRS9.

BasedontheanalysisoftheGroup’sandtheCompany’sfinancialassetsandliabilitiesasat31December2017onthebasisoffactsandcircumstancesthatexistatthatdate,theDirectorsoftheCompanyhaveassessedtheimpactofMFRS9totheGroup’sandoftheCompany’sfinancialstatementsasfollows:





2.3 Standards issued but not yet effective (continued)

(a) MFRS 9 Financial Instruments (continued)

(i) Classification and measurement

TheGroupandtheCompanydonotexpectasignificantimpactonitsfinancialpositionorequityonapplyingtheclassificationandmeasurementrequirementsofMFRS9.Itexpectstocontinuemeasuringatfairvalueallfinancialassetscurrentlyheldatfairvalue.

Loansandreceivablesareheldtocollectcontractualcashflowsandareexpectedtogiverisetocashflowsrepresentingsolelypaymentsofprincipalandinterest.TheGroupandtheCompanyanalysedthecontractualcashflowcharacteristicsofthoseinstrumentsandconcludedthattheymeetthecriteriaforamortisedcostmeasurementunderMFRS9.Therefore,reclassificationfortheseinstrumentsisnotrequired.

(ii) Impairment

TheGroupandtheCompanywillapplythesimplifiedapproachandrecordlifetimeexpectedlossesonalltradereceivables,whileforotherfinancialassets,theGroupandtheCompanywillapplythegeneralapproachindeterminingimpairmentamount.TheGroupandtheCompanyhavedeterminedthatnoadditionallossallowanceisnecessary.

(b) MFRS 15: Revenue from Contracts with Customers

MFRS15establishesafive-stepmodeltoaccountforrevenuearisingfromcontractswithcustomers.UnderMFRS15,revenueisrecognisedatanamountthatreflectstheconsiderationwhichanentityexpectstobeentitledinexchangefortransferringgoodsorservicestoacustomer.Anentityrecognisesrevenuewhen(oras)aperformanceobligationissatisfied,i.ewhen“control”ofthegoodsorservicesunderlyingtheparticularperformanceobligationistransferredtothecustomer.

TheGroupand theCompanyhaveperformedapreliminary impactassessmentofadoptingMFRS15basedoncurrentlyavailableinformation.ThisassessmentmaybesubjecttochangesarisingfromongoinganalysisuntiltheGroupandtheCompanyadoptsMFRS15in2018.

TheGroupandtheCompanyplantoapplythechangesinaccountingpoliciesretrospectivelytoeachreportingyearpresented,usingthefullretrospectiveapproach.

Basedonitsassessment,theDirectorsdonotexpectthattheapplicationofMFRS15willresultinsignificantimpactsonthefinancialstatementsoftheGroupandoftheCompanyotherthanadditionaldisclosurestobeprovided.

(c) MFRS 16: Leases

MFRS16willreplaceMFRS117Leases,ICInterpretation4DeterminingwhetheranArrangementcontainsaLease,ICInterpretation115OperatingLease-IncentivesandICInterpretation127EvaluatingtheSubstanceofTransactionsInvolvingtheLegalFormofaLease.MFRS16setsouttheprinciplesfortherecognition,measurement,presentationanddisclosureofleasesandrequireslesseestoaccountforallleasesunderasingleon-balancesheetmodelsimilartotheaccountingforfinanceleasesunderMFRS117.


53




(c) MFRS 16: Leases (continued)

Atthecommencementdateofalease,alesseewillrecognisealiabilitytomakeleasepaymentsandanassetrepresentingtherighttousetheunderlyingassetduringtheleaseterm.Theright-of-useassetisinitiallymeasuredatcostandsubsequentlymeasuredatcost(subjecttocertainexceptions),lessaccumulateddepreciationandimpairmentlosses,adjustedforanyremeasurementoftheleaseliability.Theleaseliabilityisinitiallymeasuredatpresentvalueoftheleasepaymentsthatarenotpaidatthatdate.Subsequently,theleaseliabilityisadjustedforinterestandleasepayments,aswellastheimpactofleasemodifications.

ClassificationofcashflowswillalsobeaffectedasoperatingleasepaymentsunderMFRS117arepresentedasoperatingcashflows,whereasunderMFRS16,theleasepaymentswillbesplitintoaprincipal(whichwillbepresentedasfinancingcashflows)andaninterestportion(whichwillbepresentedasoperatingcashflows).

LessoraccountingunderMFRS16issubstantiallythesameastheaccountingunderMFRS117.LessorswillcontinuetoclassifyallleasesusingthesameclassificationprincipleasinMFRS117anddistinguishbetweentwotypesofleases:operatingandfinanceleases.MFRS16alsorequireslesseesandlessorstomakemoreextensivedisclosuresthanunderMFRS117.

MFRS16iseffectiveforannualperiodsbeginningonorafter1January2019.EarlyapplicationispermittedbutnotbeforeanentityappliesMFRS15.Alesseecanchoosetoapplythestandardusingeitherafullretrospectiveoramodifiedretrospectiveapproach.TheGroupandtheCompanyplantoassessthepotentialeffectofMFRS16onitsfinancialstatementsinyear2018.

(d) IC Interpretation 22 Foreign Currency Transactions and Advance Consideration

Theinterpretationclarifiesthat,indeterminingtheexchangeratetouseoninitialrecognitionofanasset,expenseorincome,whenconsiderationforthatitemhasbeenpaidorreceivedinadvanceinaforeigncurrencywhichresultedintherecognitionofanon-monetaryassetornon-monetaryliability,thedateoftransaction is thedateonwhichanentity initially recognises thenon-monetaryassetornon-monetaryliabilityarisingfromtheadvanceconsideration.Iftherearemultiplepaymentsorreceiptsinadvance,thentheentitymustdeterminethetransactiondateforeachpaymentorreceiptofadvanceconsideration.

Entitiesmayapplytheamendmentseitherretrospectivelyorprospectively.Specifictransitionprovisionsapplytoprospectiveapplication.Earlyapplicationispermittedandmustbedisclosed.TheapplicationoftheseamendmentswillnothaveanimpactontheGroupandontheCompanyastheGroupandtheCompanyarealreadyaccountingfortransactionsinvolvingthepaymentorreceiptofadvanceconsiderationinforeigncurrencyinawaythatisconsistentwiththeamendments.

(e) MFRS 128 Long-term Interests in Associates and Joint Ventures

TheamendmentsclarifythatanentityappliesMFRS9FinancialInstrumentstolong-terminterestsinanassociateorjointventuretowhichtheequitymethodisnotappliedbutthat,insubstance,formpartofthenetinvestmentintheassociateorjointventure(long-terminterests).InapplyingMFRS9,anentitydoesnotaccountforanylossesoftheassociate,orjointventure,oranyimpairmentlossesonthenetinvestment,recognisedasadjustmentstothenetinvestmentintheassociateorjointventurethatarisefromapplyingMFRS128InvestmentsinAssociatesandJointVentures.






(e) MFRS 128 Long-term Interests in Associates and Joint Ventures (continued)

Entitiesmust apply theamendments retrospectively,withcertainexceptions.Earlyapplicationof theamendmentsispermittedandmustbedisclosed.Astheamendmentseliminateambiguityinthewordingofthestandard,theDirectorsoftheGroupandoftheCompanydonotexpecttheamendmentstohaveanyimpactontheGroup’sandtheCompany’sfinancialstatements.

(f) Annual Improvements to MFRS Standards 2014–2016 Cycle

TheAnnualImprovementstoMFRSStandards2014-2016CycleincludeanumberofamendmentstovariousMFRSs,whicharesummarisedbelow.TheseamendmentsdonothaveasignificantimpactontheGroup’sandtheCompany’sfinancialstatements.

Amendments to MFRS 128 Investments in Associates and Joint Ventures

Theamendmentsclarifythat:

- anentitythatisaventurecapitalorganisation,orotherqualifyingentity,mayelect,atinitialrecognition,onaninvestment-by-investmentbasis,tomeasureitsinvestmentsinassociatesandjointventuresatfairvaluethroughprofitorloss.

- ifanentity,thatisnotitselfaninvestmententity,hasaninterestinassociateorjointventurethatisaninvestmententity,theentitymay,whenapplyingtheequitymethod,electtoretainthefairvaluemeasurementappliedby that investmententityassociateor jointventure to the investmententityassociate’s or joint venture’s interests in subsidiaries. Thiselection ismadeseparately for eachinvestmententityassociateorjointventure,atalaterdateonwhich:

(i) theinvestmententityassociateorjointventureisinitiallyrecognised; (ii) theassociateorjointventurebecomesaninvestmententity;and (iii) theinvestmententityassociateorjointventurefirstbecomesaparent.

(g) Annual Improvements to MFRS Standards 2015–2017 Cycle

TheAnnualImprovementstoMFRSStandards2015-2017CycleincludeanumberofamendmentstovariousMFRSs,whicharesummarisedbelow.TheseamendmentsdonothaveasignificantimpactontheGroup’sandtheCompany’sfinancialstatements.

(i) Amendments to MFRS 3: Business Combinations

Theamendmentsclarifythat,whenanentityobtainscontrolofabusinessthatisajointoperation,itappliestherequirementsforabusinesscombinationachievedinstages,includingremeasuringpreviouslyheldinterestsintheassetsandliabilitiesofthejointoperationatfairvalue.Indoingso,theacquirerremeasuresitsentirepreviouslyheldinterestinthejointoperation.

Anentityappliestheseamendmentstobusinesscombinationsforwhichtheacquisitiondateisonorafterthebeginningofthefirstannualreportingperiodbeginningonorafter1January2019.Earlierapplicationispermitted.


55




(g) Annual Improvements to MFRS Standards 2015–2017 Cycle (continued)

(ii) Amendments to MFRS 11: Joint Arrangements

Apartythatparticipatesin,butdoesnothavejointcontrolof,ajointoperationmightobtainjointcontrolof the jointoperation inwhichtheactivityof the jointoperationconstitutesabusinessasdefinedinMFRS3.Theamendmentsclarifythatthepreviouslyheldinterestsinthatjointoperationarenotremeasured.

Anentityappliestheseamendmentstotransactionsinwhichitobtainsjointcontrolonorafterthebeginningofthefirstannualreportingperiodbeginningonorafter1January2019.Earlierapplicationispermitted.

(iii) Amendments to MFRS 112: Income Taxes

Theamendmentsclarifythattheincometaxconsequencesofdividendsarelinkedmoredirectlytopasttransactionsoreventsthatgenerateddistributableprofitsthantodistributionstoowners.Therefore,anentityrecognisestheincometaxconsequencesofdividendsinprofitorloss,othercomprehensiveincomeorequityaccordingtowheretheentityoriginallyrecognisedthosepasttransactionsorevents.

Anentityappliestheseamendmentsforannualreportingperiodsbeginningonorafter1January2019.Earlierapplicationispermitted.Whenanentityfirstappliestheseamendments,itappliesthemtotheincometaxconsequencesofdividendsrecognisedonorafterthebeginningoftheearliestcomparativeperiod.

(iv) Amendments to MFRS 123: Borrowing Costs

Theamendmentsclarifythatanentitytreatsaspartofgeneralborrowingsanyborrowingoriginallymadetodevelopaqualifyingassetwhensubstantiallyalloftheactivitiesnecessarytopreparethatassetforitsintendeduseorsalearecomplete.

Anentityappliestheseamendmentstoborrowingcosts incurredonorafter thebeginningof theannualreportingperiodsbeginningonorafter1January2019.Earlierapplicationispermitted.

(h) IC Interpretation 23 Uncertainty over Income Tax Treatments

TheinterpretationaddressestheaccountingforincometaxeswhentaxtreatmentsinvolveuncertaintythataffectstheapplicationofMFRS112anddoesnotapplytotaxesorleviesoutsidethescopeofMFRS112,nordoesitspecificallyincluderequirementsrelatingtointerestandpenaltiesassociatedwithuncertaintaxtreatments.

Theinterpretationspecificallyaddressesthefollowing: - whetheranentityconsidersuncertaintaxtreatmentsseparately; - theassumptionsanentitymakesabouttheestimationoftaxtreatmentsbytaxationauthorities; - howanentitydeterminestaxableprofit(taxloss),taxbases,unusedtaxlosses,unusedtaxcredits

andtaxrates;and - howanentityconsiderschangesinfactsandcircumstances.

Anentitymustdeterminewhethertoconsidereachuncertaintaxtreatmentseparatelyortogetherwithoneormoreuncertaintaxtreatments.Theapproachthatbetterpredictstheresolutionoftheuncertaintyshouldbefollowed.TheGroupandtheCompanywillapplytheinterpretationfromitseffectivedate.






(i) Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Theamendmentsclarifythat:

- gainsandlossesresultingfromtransactionsinvolvingassetsthatdonotconstituteabusiness,betweeninvestoranditsassociateorjointventurearerecognisedintheentity’sfinancialstatementsonlytotheextentofunrelatedinvestors’interestsintheassociateorjointventure;and

- gainsandlossesresultingfromtransactionsinvolvingthesaleorcontributionofassetstoanassociateorajointventurethatconstituteabusinessisrecognisedinfull.

TheamendmentsaretobeappliedprospectivelytothesaleorcontributionofassetsoccurringinannualperiodsbeginningonorafteradatetobedeterminedbytheMalaysianAccountingStandardsBoard.Earlierapplicationispermitted.TheseamendmentsarenotexpectedtohaveanyimpactontheGroup.

2.4 Basis of consolidation

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyanditssubsidiariesasatthereportingdate.ThefinancialstatementsofthesubsidiariesusedinthepreparationoftheconsolidatedfinancialstatementsarepreparedforthesamereportingdateastheCompany.Consistentaccountingpoliciesareappliedforliketransactionsandeventsinsimilarcircumstances.

TheCompanycontrolsaninvesteeifandonlyiftheCompanyhasallthefollowing:

(i) Powerovertheinvestee(i.eexistingrightsthatgiveitthecurrentabilitytodirecttherelevantactivitiesoftheinvestee);

(ii) Exposure,orrights,tovariablereturnsfromitsinvestmentwiththeinvestee;and(iii) Theabilitytouseitspowerovertheinvesteetoaffectitsreturns.

WhentheCompanyhas less thanamajorityof thevotingrightsofan investee, theCompanyconsiders thefollowinginassessingwhetherornottheCompany’svotingrightsinaninvesteearesufficienttogiveitpowerovertheinvestee:

(i) ThesizeoftheCompany’sholdingofvotingrightsrelativetothesizeanddispersionofholdingsoftheothervoteholders;

(ii) PotentialvotingrightsheldbytheCompany,othervoteholdersorotherparties; (iii) Rightsarisingfromothercontractualarrangements;and (iv) AnyadditionalfactsandcircumstancesthatindicatethattheCompanyhas,ordoesnothave,thecurrent

abilitytodirecttherelevantactivitiesatthetimethatdecisionsneedtobemade,includingvotingpatternsatpreviousshareholders’meetings.

Subsidiariesareconsolidatedwhen theCompanyobtainscontrolover thesubsidiaryandceaseswhen theCompanylosescontrolofthesubsidiary.Allintra-groupbalances,incomeandexpensesandunrealisedgainsandlossesresultingfromintra-grouptransactionsareeliminatedinfull.

Losseswithinasubsidiaryareattributedtothenon-controllinginterestsevenifthatresultsinadeficitbalance.


57



2.4 Basis of consolidation (continued)

ChangesintheGroup’sownershipinterestsinsubsidiariesthatdonotresultintheGrouplosingcontroloverthesubsidiariesareaccountedforasequitytransactions.ThecarryingamountsoftheGroup’sinterestsandthenon-controllinginterestsareadjustedtoreflectthechangesintheirrelativeinterestsinthesubsidiaries.TheresultingdifferenceisrecogniseddirectlyinequityandattributedtoownersoftheCompany.

WhentheGrouplosescontrolofasubsidiary,againorlosscalculatedasthedifferencebetween(i)theaggregate

ofthefairvalueoftheconsiderationreceivedandthefairvalueofanyretainedinterestand(ii) thepreviouscarryingamountoftheassetsandliabilitiesofthesubsidiaryandanynon-controllinginterest,isrecognisedinprofitorloss.Thesubsidiary’scumulativegainorlosswhichhasbeenrecognisedinothercomprehensiveincomeandaccumulatedinequityarereclassifiedtoprofitorlossorwhereapplicable,transferreddirectlytoretainedearnings.Thefairvalueofanyinvestmentretainedintheformersubsidiaryatthedatecontrolislostisregardedasthecostoninitialrecognitionoftheinvestment.

Business combinations

Acquisitionsofsubsidiariesareaccountedforusingtheacquisitionmethod.Thecostofanacquisitionismeasuredastheaggregateoftheconsiderationtransferred,measuredatacquisitiondatefairvalueandtheamountofanynon-controllinginterestsintheacquiree.

TheGroupelectsonatransaction-by-transactionbasiswhethertomeasurethenon-controllinginterestsintheacquireeeitheratfairvalueorattheproportionateshareoftheacquiree’sidentifiablenetassets.Transactioncostsincurredareexpensedandincludedinadministrativeexpenses.

Anycontingentconsiderationtobetransferredbytheacquirerwillberecognisedatfairvalueattheacquisitiondate.Subsequentchangesinthefairvalueofthecontingentconsiderationwillberecognisedinprofitorloss.However,ifthecontingentconsiderationisclassifiedasequity,itwillnotberemeasured.Subsequentsettlementisaccountedforwithinequity.

WhentheGroupacquiresabusiness,itassessesthefinancialassetsandliabilitiesassumedforappropriateclassificationanddesignationinaccordancewiththecontractualterms,economiccircumstancesandpertinentconditionsasattheacquisitiondate.Thisincludestheseparationofembeddedderivativesinhostcontractsbytheacquiree.

Ifthebusinesscombinationisachievedinstages,theacquisitiondatefairvalueoftheacquirer’spreviouslyheldequityinterestintheacquireeisremeasuredtofairvalueattheacquisitiondatethroughprofitorloss.

Goodwillisinitiallymeasuredatcost,beingtheexcessoftheaggregateoftheconsiderationtransferredandtheamountrecognisedfornon-controllinginterestsoverthenetidentifiableassetsacquiredandliabilitiesassumed.Ifthisconsiderationislowerthanfairvalueofthenetassetsofthesubsidiaryacquired,thedifferenceisrecognisedinprofitorloss.

2.5 Subsidiaries

AsubsidiaryisanentityoverwhichtheGrouphascontrolled.

In theCompany’s separate financial statements, investments in subsidiariesareaccounted forat cost lessimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.





2.6 Foreign currency

a) Functional and presentation currency

TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).TheconsolidatedfinancialstatementsarepresentedinRinggitMalaysia(RM),whichisalsotheCompany’sfunctionalcurrency.

b) Foreign currency transactions

TransactionsinforeigncurrenciesaremeasuredintherespectivefunctionalcurrenciesoftheCompanyand its subsidiariesandare recordedon initial recognition in the functional currenciesat exchangeratesapproximatingthoserulingatthetransactiondates.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedattherateofexchangerulingatthereportingdate.Non-monetaryitemsdenominatedinforeigncurrenciesthataremeasuredathistoricalcostaretranslatedusingtheexchangeratesasatthedatesoftheinitialtransactions.Non-monetaryitemsdenominatedinforeigncurrenciesmeasuredatfairvaluearetranslatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.

ExchangedifferencesarisingonthesettlementofmonetaryitemsorontranslatingmonetaryitemsatthereportingdatearerecognisedinprofitorlossexceptforexchangedifferencesarisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperations,whicharerecognisedinitiallyinothercomprehensiveincomeandaccumulatedunderforeigncurrencytranslationreserveinequity.TheforeigncurrencytranslationreserveisreclassifiedfromequitytoprofitorlossoftheGroupondisposaloftheforeignoperation.

Exchangedifferencesarisingonthetranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptforthedifferencesarisingonthetranslationofnon-monetaryitemsinrespectofwhichgainsandlossesarerecogniseddirectlyinequity.Exchangedifferencesarisingfromsuchnon-monetaryitemsarealsorecogniseddirectlyinequity.

c) Foreign operations

TheassetsandliabilitiesofforeignoperationsaretranslatedintoRMattherateofexchangerulingatthereportingdateandincomeandexpensesaretranslatedatexchangeratesatthedatesofthetransactions.Theexchangedifferencesarisingonthetranslationaretakendirectlytoothercomprehensiveincome.Ondisposalofaforeignoperation,thecumulativeamountrecognisedinothercomprehensiveincomeandaccumulatedinequityunderforeigncurrencytranslationreserverelatingtothatparticularforeignoperationisrecognisedintheprofitorloss.

Goodwillandfairvalueadjustmentsarisingontheacquisitionofforeignoperationsaretreatedasassetsandliabilitiesoftheforeignoperationsandarerecordedinthefunctionalcurrencyoftheforeignoperationsandtranslatedattheclosingrateatthereportingdate.

2.7 Property, plant and equipment

Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Thecostofanitemofproperty,plantandequipmentisrecognisedasanassetif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.


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2.7 Property, plant and equipment (continued)

Subsequent to recognition,plantandequipmentaremeasuredatcost lessaccumulateddepreciationandaccumulated impairment losses.When significantparts of property, plant andequipment are required tobereplacedin intervals, theGrouprecognisessuchpartsas individualassetswithspecificuseful livesanddepreciation,respectively.Likewise,whenamajorinspectionisperformed,itscostisrecognisedinthecarryingamountoftheplantandequipmentasareplacementiftherecognitioncriteriaaresatisfied.Allotherrepairandmaintenancecostsarerecognisedinprofitorlossasincurred.

Depreciationiscomputedonastraight-linebasisovertheestimatedusefullivesoftheassetsasfollows:

Leaseholdland 49-60years Buildingsandwharf 10-50years Vessels 8-20years Vesselequipment 1.5-10years Drydockingcost 2.5years Equipment,furnitureandfittings 1.5-10years Plantandmachinery 10years Motorvehicles 5years Assetsunderconstruction included inplantandequipmentarenotdepreciatedas theseassetsarenotyet

availableforuse.

Thecarryingvaluesofproperty,plantandequipmentarereviewedforimpairmentwheneventsorchangesincircumstancesindicatethatthecarryingvaluemaynotberecoverable.

Theresidualvalue,usefullifeanddepreciationmethodarereviewedateachfinancialyear-end,andadjustedprospectively,ifappropriate.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossonderecognitionoftheassetisincludedintheprofitorlossintheyeartheassetisderecognised.

2.8 Land use rights

Landuserightsareinitiallymeasuredatcost.Followinginitialrecognition,landuserightsaremeasuredatcostlessaccumulatedamortisationandaccumulatedimpairmentlosses.Thelanduserightsareamortisedovertheirleaseterms.

2.9 Impairment of non-financial assets

TheGroupassessesateachreportingdatewhetherthereisanindicationthatanassetmaybeimpaired.Ifanysuchindicationexists,orwhenanannualimpairmentassessmentforanassetisrequired,theGroupmakesanestimateoftheasset’srecoverableamount.

Anasset’srecoverableamountisthehigherofanasset’sfairvaluelesscoststosellanditsvalueinuse.Forthepurposeofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits(“CGU”)).





2.9 Impairment of non-financial assets (continued)

Inassessingvalueinuse,theestimatedfuturecashflowsexpectedtobegeneratedbytheassetarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsitsrecoverableamount,theassetiswrittendowntoitsrecoverableamount.ImpairmentlossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothoseunitsorgroupsofunitsandthen,toreducethecarryingamountoftheotherassetsintheunitorgroupsofunitsonapro-ratabasis.

Impairmentlossesarerecognisedinprofitorloss. Anassessmentismadeateachreportingdateastowhetherthereisanyindicationthatpreviouslyrecognised

impairment lossesmayno longerexistormayhavedecreased.Apreviously recognised impairment loss isreversedonlyiftherehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentlosswasrecognised.Ifthatisthecase,thecarryingamountoftheassetisincreasedtoitsrecoverableamount.Thatincreasecannotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,hadnoimpairmentlossbeenrecognisedpreviously.Suchreversalisrecognisedinprofitorloss.

2.10 Investments in associates and joint ventures

AnassociateisanentityinwhichtheGrouphassignificantinfluence.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontroloverthosepolicies.

Ajointventureisajointarrangementwherebythepartiesthathavejointcontrolofthearrangementhaverights

to thenetassetsof the joint arrangement. Joint control is thecontractuallyagreedsharingofcontrol of anarrangement,whichexistsonlywhendecisionsabouttherelevantactivitiesrequiretheunanimousconsentofthepartiessharingcontrol.

Onacquisitionofaninvestmentinassociateorjointventure,anyexcessofthecostofinvestmentovertheGroup’sshareofthenetfairvalueoftheidentifiableassetsandliabilitiesoftheinvesteeisrecognisedasgoodwillandincludedinthecarryingamountoftheinvestment.AnyexcessoftheGroup’sshareofthenetfairvalueoftheidentifiableassetsandliabilitiesoftheinvesteeoverthecostofinvestmentisexcludedfromthecarryingamountoftheinvestmentandisinsteadincludedasincomeinthedeterminationoftheGroup’sshareoftheassociate’sorjointventure’sprofitorlossfortheperiodinwhichtheinvestmentisacquired.

Anassociateorajointventureisequityaccountedforfromthedateonwhichtheinvesteebecomesanassociateorajointventure.

Undertheequitymethod,oninitialrecognitiontheinvestmentinanassociateorajointventureisrecognisedatcost,andthecarryingamountisincreasedordecreasedtorecognisetheGroup’sshareoftheprofitorlossandothercomprehensiveincomeoftheassociateorjointventureafterthedateofacquisition.WhentheGroup’sshareoflossesinanassociateorajointventureequalorexceedsitsinterestintheassociateorjointventure,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredlegalorconstructiveobligationsormadepaymentsonbehalfoftheassociateorjointventure.

ProfitsandlossesresultingfromupstreamanddownstreamtransactionsbetweentheGroupanditsassociateorjointventurearerecognisedintheGroup’sfinancialstatementsonlytotheextentofunrelatedinvestors’interestsintheassociateorjointventure.Unrealisedlossesareeliminatedunlessthetransactionprovidesevidenceofanimpairmentoftheassettransferred.


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2.10 Investments in associates and joint ventures (continued)

ThefinancialstatementsoftheassociatesandjointventuresarepreparedasofthesamereportingdateastheCompany.Wherenecessary,adjustmentsaremadetobringtheaccountingpoliciesinlinewiththoseoftheGroup.

Afterapplicationof theequitymethod, theGroupappliesMFRS139Financial Instruments:RecognitionandMeasurementtodeterminewhetheritisnecessarytorecogniseanyadditionalimpairmentlosswithrespecttoitsnetinvestmentintheassociateorjointventure.Whennecessary,theentirecarryingamountoftheinvestmentistestedforimpairmentinaccordancewithMFRS136ImpairmentofAssetsasasingleasset,bycomparingitsrecoverableamount(higherofvalueinuseandfairvaluelesscoststosell)withitscarryingamount.Anyimpairmentlossisrecognisedinprofitorloss.Reversalofanimpairmentlossisrecognisedtotheextentthattherecoverableamountoftheinvestmentsubsequentlyincreases.

IntheCompany’sseparatefinancialstatements,investmentsinassociatesandjointventuresareaccountedforatcostlessimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.

2.11 Financial assets

Financialassetsarerecognisedinthestatementsoffinancialpositionwhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsofthefinancialinstrument.

Whenfinancialassetsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseoffinancialassetsnotatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.

TheGroupandtheCompanydeterminetheclassificationoftheirfinancialassetsatinitialrecognition,andthecategoriesincludefinancialassetsatfairvaluethroughprofitandlossandloansandreceivables.

(a) Financial assets at fair value through profit or loss

Financialassetsareclassifiedasfinancialassetsatfairvaluethroughprofitorlossiftheyareheldfortradingoraredesignatedassuchuponinitialrecognition.Financialassetsheldfortradingarederivatives(includingseparatedembeddedderivatives)orfinancialassetsacquiredprincipallyforthepurposeofsellinginthenearterm.

Subsequenttoinitialrecognition,financialassetsatfairvaluethroughprofitorlossaremeasuredatfairvalue.Anygainsorlossesarisingfromchangesinfairvaluearerecognisedinprofitorloss.Netgainsornetlossesonfinancialassetsatfairvaluethroughprofitorlossdonotincludeexchangedifferences,interestanddividendincome.Exchangedifferences,interestanddividendincomeonfinancialassetsatfairvaluethroughprofitorlossarerecognisedseparatelyinprofitorlossaspartofotherlossesorotherincome.

Financialassetsatfairvaluethroughprofitorlosscouldbepresentedascurrentornon-current.Financialassetsthatareheldprimarilyfortradingpurposesarepresentedascurrentwhereasfinancialassetsthatarenotheldprimarilyfortradingpurposesarepresentedascurrentornon-currentbasedonthesettlementdate.

(b) Loans and receivables

Financialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasloansandreceivables.





2.11 Financial assets (continued)

(b) Loans and receivables (continued)

Subsequenttoinitialrecognition,loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Gainsand lossesarerecognised inprofitor losswhenthe loansandreceivablesarederecognisedorimpaired,andthroughtheamortisationprocess.

Loansandreceivablesareclassifiedascurrentassets,exceptforthosehavingmaturitydateslaterthan12monthsafterthereportingdatewhichareclassifiedasnon-current.

Afinancialassetisderecognisedwherethecontractualrighttoreceivecashflowsfromtheassethasexpired.Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthecarryingamountandthesumoftheconsiderationreceivedandanycumulativegainorlossthathadbeenrecognisedinothercomprehensiveincomeisrecognisedinprofitorloss.

Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsthatrequiredeliveryofassetswithintheperiodgenerallyestablishedby regulationorconvention in themarketplaceconcerned.All regularwaypurchasesandsalesoffinancialassetsarerecognisedorderecognisedonthetradedatei.e.,thedatethattheGroupandtheCompanycommittopurchaseorselltheasset.

2.12 Impairment of financial assets

TheGroupandtheCompanyassessateachreportingdatewhetherthereisanyobjectiveevidencethatafinancialassetisimpaired.

Trade and other receivables and other financial assets carried at amortised cost

Todeterminewhetherthereisobjectiveevidencethatanimpairmentlossonfinancialassetshasbeenincurred,theGroupandtheCompanyconsiderfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.Forcertaincategoriesoffinancialassets,suchastradereceivables,assetsthatareassessednottobeimpairedindividuallyaresubsequentlyassessedforimpairmentonacollectivebasisbasedonsimilarriskcharacteristics.ObjectiveevidenceofimpairmentforaportfolioofreceivablescouldincludetheGroup’sandtheCompany’spastexperienceofcollectingpayments,anincreaseinthenumberofdelayedpaymentsintheportfoliopasttheaveragecreditperiodandobservablechangesinnationalorlocaleconomicconditionsthatcorrelatewithdefaultonreceivables.

Ifanysuchevidenceexists,theamountofimpairmentlossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.Theimpairmentlossisrecognisedinprofitorloss.

Thecarryingamountofthefinancialassetisreducedbytheimpairmentlossdirectlyforallfinancialassetswiththeexceptionoftradereceivables,wherethecarryingamountisreducedthroughtheuseofanallowanceaccount.Whenatradereceivablebecomesuncollectible,itiswrittenoffagainsttheallowanceaccount.

Ifinasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedtotheextentthatthecarryingamountoftheassetdoesnotexceeditsamortisedcostatthereversaldate.Theamountofreversalisrecognisedinprofitorloss.


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2.13 Cash and cash equivalents

Cashandcashequivalentscomprisecashatbankandonhand,demanddeposits,andshort-term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.ThesealsoincludebankoverdraftsthatformanintegralpartoftheGroup’scashmanagement.

2.14 Construction contracts

Wheretheoutcomeofaconstructioncontractcanbereliablyestimated,contractrevenueandcontractcostsarerecognisedasrevenueandexpensesrespectivelybyusingthestageofcompletionmethod.Thestageofcompletionismeasuredbyreferencetotheproportionofcontractcostsincurredforworkperformedtodatetotheestimatedtotalcontractcosts.

Wheretheoutcomeofaconstructioncontractcannotbeestimatedreliably,contractrevenueisrecognisedtotheextentofcontractcostsincurredthatarelikelytoberecoverable.Contractcostsarerecognisedasexpenseintheperiodinwhichtheyareincurred.

Whenitisprobablethattotalcontractcostswillexceedtotalcontractrevenue,theexpectedlossisrecognisedasanexpenseimmediately.

Contractrevenuecomprisestheinitialamountofrevenueagreedinthecontractandvariationsincontractwork,claimsandincentivepaymentstotheextentthatitisprobablethattheywillresultinrevenueandtheyarecapableofbeingreliablymeasured.

Whenthetotalofcostsincurredonconstructioncontractsplusrecognisedprofits(lessrecognisedlosses)exceedsprogressbillings,thebalanceisclassifiedasamountduefromcustomersoncontracts.Whenprogressbillingsexceedcostsincurredplus,recognisedprofits(lessrecognisedlosses),thebalanceisclassifiedasamountduetocustomersoncontracts.

2.15 Inventories

Inventoriesarestatedatlowerofcostandnetrealisablevalue.

Costisdeterminedusingtheweightedaverageandonafirst-in-first-outbasis.Thecostofrawmaterialscomprisescostsofpurchase.Thecostsoffinishedgoodsandwork-in-progresscomprisecostsofrawmaterials,directlabour,otherdirectcostsandappropriateproportionsofmanufacturingoverheadsbasedonnormaloperatingcapacity.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.Inarrivingatthenetrealisablevalue,dueallowanceismadeforalldamaged,obsoleteandslowmovingitems.

2.16 Financial liabilities

Financialliabilitiesareclassifiedaccordingtothesubstanceofthecontractualarrangementsenteredintoandthedefinitionsofafinancialliability.

Financialliabilities,withinthescopeofMFRS139,arerecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsofthefinancialinstrument.Financialliabilitiesareclassifiedasotherfinancialliabilities.





2.16 Financial liabilities (continued)

Other financial liabilities

TheGroup’sand theCompany’s financial liabilities include tradepayables, otherpayablesand loansandborrowings.

Tradeandotherpayablesarerecognisedinitiallyatfairvalueplusdirectlyattributabletransactioncostsandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

Loansandborrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred,andsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.BorrowingsareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthereportingdate.

Forotherfinancialliabilities,gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognised,andthroughtheamortisationprocess.

Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisextinguished.Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasaderecognitionoftheoriginalliabilityandtherecognitionofanewliability,andthedifferenceintherespectivecarryingamountsisrecognisedinprofitorloss.

2.17 Financial guarantee contracts

Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpaymentstoreimbursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhendue.

Financialguaranteecontractsarerecognisedinitiallyasaliabilityatfairvalue.Subsequenttoinitialrecognition,financialguaranteecontractsarerecognisedasincomeinprofitorlossovertheperiodoftheguarantee.IfthedebtorfailstomakepaymentrelatingtofinancialguaranteecontractwhenitisdueandtheGroup,astheissuer,isrequiredtoreimbursetheholderfortheassociatedloss,theliability ismeasuredatthehigherof thebestestimateoftheexpenditurerequiredtosettlethepresentobligationatthereportingdateandtheamountinitiallyrecognisedlesscumulativeamortisation.

2.18 Borrowing costs

Borrowingcostsarecapitalisedaspartofthecostofaqualifyingassetiftheyaredirectlyattributabletotheacquisition,constructionorproductionof thatasset.Capitalisationofborrowingcostscommenceswhentheactivitiestopreparetheassetforitsintendeduseorsaleareinprogressandtheexpendituresandborrowingcostsareincurred.Borrowingcostsarecapitaliseduntiltheassetsaresubstantiallycompletedfortheirintendeduseorsale.

Allotherborrowingcostsarerecognisedinprofitorlossintheperiodtheyareincurred.BorrowingcostsconsistofinterestandothercoststhattheGroupandtheCompanyincurredinconnectionwiththeborrowingoffunds.


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2.19 Employee benefits

(a) Defined contribution plans

TheGroupparticipatesinthenationalpensionschemeasdefinedbythelawsofthecountryinwhichithasoperations.TheGroupmakescontributionstotheEmployeeProvidentFundinMalaysia,adefinedcontributionpensionscheme.Contributionstodefinedcontributionpensionschemesarerecognisedasanexpenseintheperiodinwhichtherelatedserviceisperformed.

(b) Short term benefits

Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichtheassociatedservicesarerenderedbyemployees.Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences.Shorttermnon-accumulatingcompensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.

2.20 Leases

As lessee

Financeleases,whichtransfertotheGroupsubstantiallyalltherisksandrewardsincidentaltoownershipoftheleaseditem,arecapitalisedattheinceptionoftheleaseatthefairvalueoftheleasedassetor,iflower,atthepresentvalueoftheminimumleasepayments.Anyinitialdirectcostsarealsoaddedtotheamountcapitalised.Leasepaymentsareapportionedbetweenthefinancechargesandreductionoftheleaseliabilitysoastoachieveaconstantrateofinterestontheremainingbalanceoftheliability.Financechargesarechargedtoprofitorloss.Contingentrents,ifany,arechargedasexpensesintheperiodsinwhichtheyareincurred.

Leasedassetsaredepreciatedovertheestimatedusefullifeoftheasset.However,ifthereisnoreasonablecertaintythattheGroupwillobtainownershipbytheendoftheleaseterm,theassetisdepreciatedovertheshorteroftheestimatedusefullifeandtheleaseterm.

Operatingleasepaymentsarerecognisedasanexpenseinprofitorlossonastraight-linebasisovertheleaseterm.Theaggregatebenefitofincentivesprovidedbythelessorisrecognisedasareductionofrentalexpenseovertheleasetermonastraight-linebasis.

2.21 Revenue

RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbereliablymeasured.Revenueismeasuredatthefairvalueofconsiderationreceivedorreceivable.

a) Rendering of services

Revenuefromservicesrenderedisrecognisednetofdiscountsasandwhentheservicesareperformed.

b) Sale of goods

Revenuefromsaleofgoodsisrecogniseduponthetransferofsignificantriskandrewardsofownershipofthegoodstothecustomer.Revenueisnotrecognisedtotheextentwheretherearesignificantuncertaintiesregardingrecoveryoftheconsiderationdue,associatedcostsorthepossiblereturnofgoods.





2.21 Revenue (continued)

c) Construction contracts

RevenuefromconstructioncontractsisaccountedforbypercentageofcompletionmethodasdescribedinNote2.14.

d) Rental income

Rentalincomeisrecognisedastherentalaccruedunlesscollectabilityisindoubt.

e) Dividend income

DividendincomeisrecognisedwhentheGroup’srighttoreceivepaymentisestablished.

f) Management fees

Managementfeesarerecognisedwhenservicesarerendered.

2.22 Income taxes

a) Current tax

Currenttaxassetsandliabilitiesaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantivelyenactedbythereportingdate.

Currenttaxesarerecognisedinprofitorlossexcepttotheextentthatthetaxrelatestoitemsrecognisedoutsideprofitorloss,eitherinothercomprehensiveincomeordirectlyinequity.

ForLabuantradingactivity,itsprofitswouldbesubjecttotaxunderLabuanBusinessActivityTax1990undertwooptions:

i) tobetaxedatrateof3%onauditedprofits;or ii) uponelection,topayaflattaxofRM20,000.

b) Deferred tax

Deferredtaxisprovidedusingtheliabilitymethodontemporarydifferencesatthereportingdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.

Deferredtaxliabilitiesarerecognisedforalltemporarydifferences,except:

- wherethedeferredtaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;and

- inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associates

andinterestsinjointventures,wherethetimingofthereversalofthetemporarydifferencescanbecontrolledanditisprobablethatthetemporarydifferenceswillnotreverseintheforeseeablefuture.


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2.22 Income taxes (continued)

b) Deferred tax (continued)

Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,carryforwardofunusedtaxcreditsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,andthecarryforwardofunusedtaxcreditsandunusedtaxlossescanbeutilisedexcept:

- wherethedeferredtaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;and

- inrespectofdeductibletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandinterestsinjointventures,deferredtaxassetsarerecognisedonlytotheextentthatitisprobablethatthetemporarydifferenceswillreverseintheforeseeablefutureandtaxableprofitwillbeavailableagainstwhichthetemporarydifferencescanbeutilised.

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassettobeutilised.Unrecogniseddeferredtaxassetsarereassessedateachreportingdateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxableprofitwillallowthedeferredtaxassetstobeutilised.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheyearwhentheassetisrealisedortheliabilityissettled,basedontaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedatthereportingdate.

Deferredtaxrelatingtoitemsrecognisedoutsideprofitorlossisrecognisedoutsideprofitorloss.Deferredtaxitemsarerecognisedincorrelationtotheunderlyingtransactioneitherinothercomprehensiveincomeordirectlyinequityanddeferredtaxarisingfromabusinesscombinationisadjustedagainstgoodwillonacquisition.

Deferredtaxassetsanddeferredtaxliabilitiesareoffset,ifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxesrelatetothesametaxableentityandthesametaxationauthority.

c) Goods and Services Tax (“GST”)

Revenues,expensesandassetsarerecognisednetoftheamountofGSTexcept:

- WheretheGSTincurredinapurchaseofassetsorservicesisnotrecoverablethetaxationauthority,inwhichcasetheGSTisrecognisedaspartofthecostacquisitionoftheassetoraspartoftheexpenseitemasapplicable;and

- ReceivablesandpayablesthatarestatedwiththeamountofGSTincluded.

ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartofothercurrentassetsorliabilitiesinthestatementsoffinancialposition.





2.23 Current versus non-current classification

TheGrouppresentsassetsand liabilities in thestatementoffinancialpositionbasedoncurrent/non-currentclassification.Anassetiscurrentwhenitis:

• Expectedtoberealisedorintendedtobesoldorconsumedinthenormaloperatingcycle • Heldprimarilyforthepurposeoftrading • Expectedtoberealisedwithintwelvemonthsafterthereportingperiod • Cashorcashequivalentunlessrestrictedfrombeingexchangedorusedtosettlealiabilityforatleast

twelvemonthsafterthereportingperiod

Allotherassetsareclassifiedasnon-current.

Aliabilityiscurrentwhen:

• Itisexpectedtobesettledinthenormaloperatingcycle • Itisheldprimarilyforthepurposeoftrading • Itisduetobesettledwithintwelvemonthsafterthereportingperiod • Thereisnounconditionalrighttodeferthesettlementoftheliabilityforatleasttwelvemonthsafterthe

reportingperiod

TheGroupclassifiesallotherliabilitiesasnon-current.

Deferredtaxassetsandliabilitiesareclassifiedasnon-currentassetsandliabilities.

2.24 Segment reporting

Formanagementpurposes,theGroupisorganisedintooperatingsegmentsbasedontheirproductsandserviceswhichareindependentlymanagedbytherespectivesegmentmanagersresponsiblefortheperformanceoftherespectivesegmentsundertheircharge.ThesegmentmanagersreportdirectlytothemanagementoftheCompanywhoregularlyreviewthesegmentresultsinordertoallocateresourcestothesegmentsandtoassessthesegmentperformance.AdditionaldisclosuresoneachofthesesegmentsareshowninNote36,includingthefactorsusedtoidentifythereportablesegmentsandthemeasurementbasisofsegmentinformation.

2.25 Share capital and share issuance expenses

AnequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheGroupandtheCompanyafterdeductingallofitsliabilities.Ordinarysharesareequityinstruments.

Ordinarysharesarerecordedattheproceedsreceived,netofdirectlyattributableincrementaltransactioncosts.Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.

2.26 Contingencies

Acontingentliabilityorassetisapossibleobligationorassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertainfutureevent(s)notwhollywithinthecontroloftheGroup.

ContingentliabilitiesandassetsarenotrecognisedinthestatementsoffinancialpositionoftheGroupandoftheCompany.


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2.27 Fair value measurements

TheGroupmeasuresfinancialinstrumentsatfairvalueateachreportingdate.

Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Thefairvaluemeasurementisbasedonthepresumptionthatthetransactiontoselltheassetortransfertheliabilitytakesplaceeither:

-Intheprincipalmarketfortheassetorliability,or -Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability TheprincipalorthemostadvantageousmarketmustbeaccessibletobytheGroupandtheCompany.Thefair

valueofanassetoraliabilityismeasuredusingtheassumptionsthatmarketparticipantswouldusewhenpricingtheassetorliability,assumingthatmarketparticipantsactintheireconomicbestinterest.

Afairvaluemeasurementofanon-financialassettakesintoaccountamarketparticipant’sabilitytogenerateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantthatwouldusetheassetinitshighestandbestuse.

TheGroupandtheCompanyusevaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.

Allassetsandliabilitiesforwhichfairvaluesinmeasuredordisclosedinthefinancialstatementsarecategorisedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementsasawhole:

Level1 - Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilitiesLevel2 - Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurement

isdirectlyorindirectlyobservableLevel3 - Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurement

isunobservable.

Forassetsandliabilitiesthatarerecognisedinthefinancialstatementsonarecurringbasis, theGroupandtheCompanydeterminewhether transfershaveoccurredbetweenLevels in thehierarchyby re-assessingcategorisation(basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole)attheendofeachreportingperiod.

Forthepurposeoffairvaluedisclosures,theGroupandtheCompanyhavedeterminedclassesofassetsandliabilitiesonthebasisofnature,characteristicsandrisksoftheassetsorliabilityandthelevelofthefairvaluehierarchyasexplainedabove.

3. Significant accounting judgements and estimates

ThepreparationoftheGroup’sfinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffectthereportedamountsofrevenues,expenses,assetsandliabilities,andthedisclosureofcontingentliabilitiesatthereportingdate.However,uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountoftheassetorliabilityaffectedinthefuture.




3. Significant accounting judgements and estimates (continued)

Key sources of estimation uncertainty

Thekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthereportingdatethathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.

a) Useful lives of property, plant and equipment

Thecostofproperty,plantandequipmentisdepreciatedonastraight-linebasisovertheassets’estimatedeconomicusefullives.Managementestimatestheusefullivesoftheseproperty,plantandequipmenttobewithin1.5to60years.Thesearecommonlifeexpectanciesappliedintheshipbuildingandshipcharteringindustries.Changes in theexpected levelofusageand technologicaldevelopmentscould impact theeconomicuseful livesand the residual valuesof theseassets. Therefore, futuredepreciationchargescouldberevised.ThecarryingamountoftheGroup’sproperty,plantandequipmentatthereportingdateisdisclosedinNote13.A5%differenceintheexpectedusefullivesoftheseassetsfrommanagement’sestimateswouldresultinapproximately4.32%(2016:3.69%)varianceintheGroup’slossfortheyear.

b) Impairment of vessels

Animpairmentexistswhenthecarryingvalueofanassetorcash-generatingunitexceedsitsrecoverableamount,whichisthehigherofitsfairvaluelesscoststosellanditsvalueinuse.Thefairvaluelesscoststosellcalculationisbasedonvaluationperformedbyindependentshipvaluers,availabledatafrombindingsalestransactionsinanarm’slengthtransactionofsimilarassetsorobservablemarketpriceslessincrementalcostsfordisposingoftheasset.Thevalueinusecalculationisbasedonadiscountedcashflowmodel.

TheGroupperformedareviewoftherecoverableamountofvesselswithindicatorsofimpairmentandconcludedthatnoimpairmentisrequiredduringthefinancialyear(2016:RM30,487,178).A5%differenceinthefairvaluelesscosttosale(“FVLCS”)ofvesselswouldresultinincrease/(decrease)intheGroup’slossfortheyearasfollows:

2017 2016 % %

IncreaseinFVLCS - (18.74) ReductioninFVLCS - 21.91

4. Revenue

Group Company 2017 2016 2017 2016 RM RM RM RM

Charterhirerevenue 53,318,084 61,949,393 - - Saleofvessels 19,350,000 58,181,592 - - Contractservices 2,516,721 2,602,671 - - Managementfee - - 2,498,822 3,577,821 Rentalincome - 168,000 - - 75,184,805 122,901,656 2,498,822 3,577,821


71


5. Other income


Dividendincomefrominvestmentsecurities 1,630 1,658 - - Gainondisposalofajointventure 249,193 - - - Gainondisposalofproperty,plant andequipment - 44,999 - - Rentalincome 458,000 - - - Reserveonconsolidation - 1,011,604 - - Reversalofinventorywrittendown 7,750 - - - Reversalofimpairmentonproperty,plant andequipment - 6,154,500 - - Reversalofimpairmentlossontrade receivables(Note19) 36,000 295,599 - - Reversalofdepositwrittenoff 186,000 - - - Sundryincomefromshipoperations 3,702,655 2,267,034 221,363 - 4,641,228 9,775,394 221,363 -

6. Finance income

Group Company 2017 2016 2017 2016 RM RM RM RM Interestincomefrom: -Currentaccount 59,489 72,887 13,804 - -Shorttermdeposits 428,575 580,016 - - -Associate 2,356,210 1,895,830 - - -Subsidiaries - - 1,606,147 1,085,684 -Others 184,301 108,293 - - -Redeemableconvertiblepreference sharesinterestfromajointventure - 38,557 - - 3,028,575 2,695,583 1,619,951 1,085,684

7. Finance costs

Group Company 2017 2016 2017 2016 RM RM RM RM Interestexpenseson: -Bankloans 6,832,055 7,959,199 - - -Bankoverdrafts 2,175,155 2,280,276 - - -Islamicloans 291,197 702,202 291,197 702,202 -Loanfromsubsidiaries - - 2,013,353 1,079,561 -Obligationsunderfinanceleases 4,807 7,378 - - -Revolvingcredits 2,642,794 3,274,782 - - -Redeemablepreferenceshares (1,296,634) - - - Carriedforward 10,649,374 14,223,837 2,304,550 1,781,763




7. Finance costs (continued)


Broughtforward 10,649,374 14,223,837 2,304,550 1,781,763

Less:Interestexpensescapitalisedin: -Vesselswork-in-progress (674,090) (1,780,738) - - -Completedvessel (451,294) - - - 9,523,990 12,443,099 2,304,550 1,781,763

8. Loss before tax

Group Company 2017 2016 2017 2016 RM RM RM RM Thefollowingitemshavebeenincluded inarrivingatlossbeforetax:

Employeebenefitsexpense(Note9) 18,900,971 21,035,193 2,586,579 3,620,486 Amortisationoflanduserights(Note14) 578,753 578,765 - - Auditors’remunerations -Currentyear 242,244 261,319 55,000 64,000 -Overprovisioninpreviousyears - (1,000) - - Charterexpenses 966,576 238,782 - - Depreciationofproperty,plantand equipment(Note13) 43,327,337 46,499,443 1,153 1,648 Impairmentlossonamountduefrom asubsidiary - - 29,418 - Impairmentlossontradeand otherreceivables 629,324 89,998 - - Impairmentlossonproperty,plant andequipment(Note13) - 30,487,178 - - Inventorieswrittenoff 106,648 543,670 - - Lossondisposalofproperty,plant andequipment 13,411,305 - - - Netlossonforeignexchange 485,425 1,392,421 5,280 1,334 Non-executiveDirectors’fees 303,230 307,412 277,830 257,830 Rentalofpremises 260,854 296,546 12,000 12,000 Reversalofinventorieswrittendown - (1,269,538) - - Property,plantandequipmentwrittenoff 31,473 564,465 - -


73


9. Employee benefits expense


Salariesandwages 16,913,525 18,802,588 2,301,743 3,207,785 Socialsecuritycontributions 166,906 183,517 15,561 31,371 Contributionstodefinedcontributionplan 1,708,173 1,945,695 269,275 381,330 Otherbenefits 112,367 103,393 - - 18,900,971 21,035,193 2,586,579 3,620,486 IncludedinemployeebenefitsexpenseoftheGroupandoftheCompanyaretheExecutiveDirectors’remuneration

amountingtoRM934,038(2016:RM1,034,365)andRM130,905(2016:RM70,718)respectivelyasfurtherdisclosedinNote10.

10. Directors’ remuneration

ThedetailsofremunerationreceivablebyDirectorsoftheCompanyduringtheyearareasfollows:

Group Company 2017 2016 2017 2016 RM RM RM RM Executive: Salariesandotheremoluments 819,509 923,000 84,637 35,797 Fees 39,690 32,075 39,690 32,075 Definedcontributionplan 74,839 79,290 6,578 2,846 TotalExecutiveDirectors’remuneration (excludingbenefits-in-kind) 934,038 1,034,365 130,905 70,718 Estimatedmoneyvalueofbenefits-in-kind 18,943 28,176 18,943 28,176 TotalExecutiveDirectors’remuneration (includingbenefits-in-kind) 952,981 1,062,541 149,848 98,894 Non-Executive: Fees 277,830 257,830 277,830 257,830 TotalDirectors’remuneration 1,230,811 1,320,371 427,678 356,724

ThenumberofDirectorsoftheCompanywhosetotalremunerationduringtheyearfellwithinthefollowingbandsisanalysedbelow:

Number of Directors 2017 2016 ExecutiveDirectors: RM350,001–RM400,000 1 - RM400,001–RM450,000 - 1 RM600,001–RM650,000 1 - RM650,001–RM700,000 - 1

Non-ExecutiveDirectors: RM50,001–RM100,000 4 4




11. Income tax expense

Major components of income tax expense

Themajorcomponentsofincometaxexpensefortheyearsended31December2017and2016are:

Group Company 2017 2016 2017 2016 RM RM RM RM Statements of profit or loss and other comprehensive income:

Currentincometax: Malaysianincometax 1,466,488 268,821 - - Under/(Over)provisioninrespect ofpreviousyears 61,979 (607,855) - (144,551) 1,528,467 (339,034) - (144,551)

Deferredincometax(Note25):

Reversaloftemporarydifferences (2,457,013) (6,293,730) - - Under/(Over)provisioninrespect ofpreviousyears 521,912 (155,665) - -

(1,935,101) (6,449,395) - - Shareoftaxofajointventure 83 368,918 - - Incometaxexpenserecognised inprofitorloss (406,551) (6,419,511) - (144,551) Reconciliation between tax expense and accounting loss

Thereconciliationbetweentaxexpenseandtheproductofaccountinglossmultipliedbytheapplicablecorporatetaxratefortheyearsended31December2017and2016areasfollows:


Lossbeforetax (50,136,181) (63,074,880) (1,303,670) (1,438,613) TaxatMalaysianstatutorytax rateof24%(2016:24%) (12,032,683) (15,137,971) (312,881) (345,267) Adjustments: Non-deductibleexpenses 11,269,333 23,093,816 312,604 345,545 Incomenotsubjecttotaxation (6,615,440) (14,860,613) - - Deferredtaxassetsnot recognisedduringtheyears 6,624,999 1,398,691 - - Reversalofdeferredtaxassets notrecognisedinpreviousyears (426,545) (1,041) - (278)


75


11. Income tax expense (continued)

Group Company 2017 2016 2017 2016 RM RM RM RM Reversalofdeferredtaxliabilities notrecognisedinpreviousyears 277 - 277 - EffectofGrouprelief 287,404 (548,106) - - Under/(Over)provisionofdeferred taxinpreviousyears 521,912 (155,665) - - Under/(Over)provisionofincome taxinpreviousyears 61,979 (607,855) - (144,551) Shareoftaxofajointventure 83 368,918 - - Singaporestatutorystepped incomeexemption (80,684) - - - Taxincentive (17,186) - - - Others - 30,315 - - Incometaxexpenserecognised inprofitorloss (406,551) (6,419,511) - (144,551)

Currentincometaxiscalculatedatthestatutorytaxrateof24%(2016:24%)oftheestimatedassessablelossfortheyear.

TheprofitarisingfromtheshippingoperationsofsubsidiariesinSingaporeispartialexemptedfromincometax.

Theabovereconciliationispreparedbyaggregatingseparatereconciliationsforeachnationaljurisdiction.

12. Loss per share

Basiclosspershareamountsarecalculatedbydividinglossfortheyear,netoftax,attributabletoownersoftheCompanybytheweightedaveragenumberofordinarysharesoutstandingduringthefinancialyear.

Thefollowingreflectthelossandsharedatausedinthecomputationofbasiclosspersharefortheyearsended31December:

2017 2016 RM RM

LossnetoftaxattributabletoownersoftheCompany (49,729,630) (56,655,369)

Numberofordinarysharesinissueduringtheyear 500,000,000 500,000,000

2017 2016 Sen Sen

Basiclosspershareforlossfortheyear (9.95) (11.33)

Therearenodilutivepotentialordinaryshares.AssuchthedilutedearningspershareoftheGroupisequivalenttobasiclosspershare.




13.

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77

Notes to the Financial Statements (continued)13

. P

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13. Property, plant and equipment (continued)

*Land, buildings and wharf

Workshop Wharf, Leasehold and yard and Group land renovation buildings Total RM RM RM RM Cost:

At1January2016 37,629,735 3,353,018 31,327,110 72,309,863 Additions 213,000 51,690 - 264,690 At31December2016and1January2017 37,842,735 3,404,708 31,327,110 72,574,553 Writtenoff - - (1,365) (1,365)

At31December2017 37,842,735 3,404,708 31,325,745 72,573,188 Accumulated depreciation and impairment loss:

At1January2016 6,278,349 2,168,955 13,829,512 22,276,816 Chargefortheyear 649,427 197,173 1,205,918 2,052,518 At31December2016and1January2017 6,927,776 2,366,128 15,035,430 24,329,334 Chargefortheyear 447,354 168,889 1,179,719 1,795,962 Writtenoff - - (341) (341) At31December2017 7,375,130 2,535,017 16,214,808 26,124,955

Net carrying amount:

At31December2016 30,914,959 1,038,580 16,291,680 48,245,219

At31December2017 30,467,605 869,691 15,110,937 46,448,233

Office Company Signboard equipment Total RM RM RM Cost:

At1January2016 7,390 6,981 14,371 Additions - 2,069 2,069 At31December2016,1January2017 and31December2017 7,390 9,050 16,440 Accumulated depreciation:

At1January2016 5,050 6,382 11,432 Chargefortheyear(Note8) 739 909 1,648 At31December2016and1January2017 5,789 7,291 13,080 Chargefortheyear(Note8) 739 414 1,153 At31December2017 6,528 7,705 14,233


79



Office Company Signboard equipment Total RM RM RM

Net carrying amount:

At31December2016 1,601 1,759 3,360

At31December2017 862 1,345 2,207 i) Assetsheldunderfinanceleases

Duringthefinancialyear,theGroupacquiredproperty,plantandequipmentwithanaggregatecostRM14,400(2016:Nil)bymeansoffinanceleases.Thecashoutflowsonacquisitionofproperty,plantandequipmentoftheGroupamountedtoRM1,113,092(2016:RM770,836).

Thecarryingamountofproperty,plantandequipmentheldunderfinanceleasesatthereportingdatewereasfollows:

Motor Group vehicles Total RM RM Net carrying amount

At31December2016 134,380 134,380 At31December2017 71,123 71,123 ii) Assetspledgedassecurity

Inadditiontoassetsheldunderfinanceleases,theGroup’svesselswithacarryingamountofRM260,819,892(2016:RM444,246,242)aremortgagedtosecuretheGroup’sbankloans(Note23).In2016,theGroup’splantandmachinerywithacarryingamountofRM5,739,826mortgagedtosecuretheGroup’sbankloan(Note23).

TheGroup’sleaseholdlandwithcarryingamountofRM25,759,893(2016:RM27,743,104)ismortgagedtosecuretheGroup’sbankloans(Note23).

Inviewofthedepressedeconomicconditionsintheoffshoremarinesector,theGroupperformedanassessmentduringthefinancialyearontherecoverableamountofthevesselstodeterminewhetherthecarryingvalueofthesevessels,whichareincharteringsegment,arerecoverable.ThereviewwascarriedoutinaccordancewithMFRS136“ImpairmentofAssets”.Theestimatedrecoverableamountisdeterminedbasedonthehigherofanasset’svalueinuse(“VIU”)andfairvaluelesscoststosell(“FV”).Therecoverableamountwascomparedtothecarryingvalueofeachassetwithidentifiedimpairmenttriggers.Iftherecoverableamountislower,thecarryingvalueoftheassetisreducedtoitsestimatedrecoverableamountandthedifferenceisregardedasanimpairmentloss.

TheGroupconsideredeachvesselasacash-generatingunit(“CGU”).However,theyaregroupedtogetherfordisclosurepurposes.ValueinuseisthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheCGU.TheFVrepresentsanestimateoftheamountreceivedintheeventthevesselissoldonawillingbuyerandawillingsellerbasis





TheGrouphasreviewedthecarryingvalueofallthevesselsownedbytheGroupandconcludedthatthereisnoimpairmentlossrequiredforyear2017.In2016,theGrouphadmadeanimpairmentchargeofRM30.5million.Theimpairmentlosswasrecognisedinthestatementofprofitorlossandothercomprehensiveincome.FVofthevesselsatRM258.1millionwasdeterminedusingthemarketcomparablemethod.Thevaluationshadbeenperformedbyan independentvaluerandwerebasedonproprietarydatabasesofpricesof transactionsforvesselsofsimilarnatureandcondition.TheFVisatLevel3ofthefairvaluehierarchy.

14. Land use rights Group 2017 2016 RM RM Cost:

At1Januaryand31December 16,686,200 16,686,200

Accumulated amortisation:

At1January 5,450,753 4,871,988 Amortisationfortheyear(Note8) 578,753 578,765

At31December 6,029,506 5,450,753

Net carrying amount 10,656,694 11,235,447

Amounttobeamortised: -Notlaterthanoneyear 578,753 578,753 -Laterthanoneyearbutnotlaterthanfiveyears 2,315,012 2,315,012 -Laterthanfiveyears 7,762,929 8,341,682

Landuserightspledgedassecurity

LanduserightswithanaggregatecarryingvalueofRM8,585,914(2016:RM7,035,915)arepledgedassecuritiesforbankborrowingsasreferredtoinNote23.

15. Investment in subsidiaries

Company 2017 2016 RM RM Unquotedshares,atcost: -Ordinaryshares 242,060,174 241,930,174 -Redeemableconvertiblepreferenceshares 167,845,750 167,845,750

409,905,924 409,775,924 Impairmentlosses (24,306,285) (24,306,285)

385,599,639 385,469,639


81


15. Investment in subsidiaries (continued)

Detailsofthesubsidiariesareasfollows: Percentage of Country of Principal equity held Name of subsidiaries incorporation activities 2017 2016 % %

CergasMajusamaSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 EraSurewaySdn.Bhd. Malaysia Charteringofmarinevessels 100 100 EraSurplusSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 MidasChoiceSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 GodrimajuSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 EuroedgeSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 NavitexShippingSdn.Bhd.** Malaysia Inactive 100 100

SeabrightSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 SealinkEngineeringAndSlipway Malaysia Shipbuilding 100 100 Sdn.Bhd.

SealinkManagementSdn.Bhd. Malaysia Inactive 100 100 SealinkMarineSdn.Bhd. Malaysia Inactive 100 100

SealinkPacificSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 SealinkSdn.Bhd. Malaysia Charteringofmarinevesselsand 100 100 lettingofproperties

SutherfieldResourcesSdn.Bhd. Malaysia Charteringofmarinevessels 100 100 SealinkShipyardSdn.Bhd. Malaysia Shipbuilding 100 100

Sea-GoodPteLtd.* Singapore Charteringofmarinevessels 100 100 SealinkOffshore(L)Ltd. FederalTerritory Investmentholding 100 100 ofLabuan, andcharteringof Malaysia marinevessels

SeaAlphaSdn.Bhd.** Malaysia Inactive 100 100

Seabright(Singapore) Singapore Shipowner 100 100 PrivateLimited*

Subsidiary of Sealink Shipyard Sdn. Bhd.

AliranSaksamaSdn.Bhd. Malaysia Lettingofproperties 100 100 andinvestmentholding





Detailsofthesubsidiariesareasfollows: Percentage of Country of Principal equity held Name of subsidiaries incorporation activities 2017 2016 % %

Subsidiary of Sealink Engineering And Slipway Sdn. Bhd.

BaramMouldingIndustries Malaysia Lettingofproperty 100 100 Sdn.Bhd. andinvestmentholding

Subsidiary of Sealink Pacific Sdn. Bhd.

BristalViewSdn.Bhd. Malaysia Propertyholding 100 100

Subsidiary of Midas Choice Sdn. Bhd.

SeaLegendShippingSdn.Bhd. Malaysia Investmentholding 100 100

Subsidiary of Sea Legend Shipping Sdn. Bhd.

MitraAngkasaSdn.Bhd. Malaysia Shipownerand 100 100 charteringofvessels

Subsidiaries of Sealink Offshore (L) Ltd.

SealinkResources(L)Ltd.# FederalTerritory Inactive 100 100 ofLabuan, Malaysia

SealinkMarine(L)Ltd.# FederalTerritory Inactive 100 100 ofLabuan, Malaysia

SealinkAntarabangsaLtd. FederalTerritory Charteringof 100 100 ofLabuan, marinevessel Malaysia

PerkasaAsiaCorporationLtd. FederalTerritory Charteringof 100 100 ofLabuan, marinevessel Malaysia

Hanvoir(L)Ltd. FederalTerritory Inactive 100 100 ofLabuan, Malaysia

* AuditedbyafirmotherthanErnst&Young.

** PursuanttoSection550oftheCompaniesAct2016,SeaAlphaSdn.Bhd.andNavitexShippingSdn.Bhd.haveappliedforstrikeofffromtheRegisteron28December2017.

# PursuanttoSection151(4)oftheLabuanCompaniesAct1990,SealinkResources(L)Ltd.andSealinkMarine(L)Ltd.hadon6September2017beenstruckofffromtheRegister.


83



Acquisition of a subsidiary

On30August2016,SeaLegendShippingSdnBhd,asubsidiaryofSealinkInternationalBerhadacquiredbyadditional499,999ordinarysharesand2,500,000redeemablepreferencesharesinMitraAngkasaSdn.Bhd.foratotalcashconsiderationofRM585,604.Consequently,MitraAngkasaSdn.Bhd.becomesawholly-ownedsubsidiary.

Thefairvaluesoftheidentifiableassetsandliabilitiesofsubsidiaryasatthedateofacquisitionwere:

Fair Value 2017 2016 RM RM

Property,plantandequipment - 14,573,905 Tradeandotherreceivables - 747,036 Inventories - 50,549 Cashandbankbalances - 1,297,302 - 16,668,792 Loansandborrowings - (6,903,000) Tradeandotherpayables - (6,571,376) - (13,474,376) Netidentifiableassets - 3,194,416 Less:Previouslyaccountedforasajointventure - (1,597,208) Netidentifiableassetsacquired - 1,597,208 2017 2016 RM RM Theeffectoftheacquisitionsoncashflowsisasfollows:

Totalcostofthebusinesscombination - (585,604) Less:Cashandcashequivalentsofsubsidiariesacquired - 1,297,302 Netcashinflowonacquisitions - 711,698 Reservearisingonacquisition

Group’sinterestinfairvalueofnetidentifiableassets - 1,597,208 Reserveonacquisition - (1,011,604) Costofbusinesscombination - 585,604 Impactofacquisitioninstatementsofprofitorlossandothercomprehensiveincome

Fromthedateofacquisition,MitraAngkasaSdn.Bhd.hadcontributedanetlossofRM434,915totheGroup’slossnetoftax.Ifthecombinationhadtakenplaceatthebeginningofthefinancialyear,theGroup’slossfromcontinuingoperations,netoftaxwouldhavebeenRM57,852,973andrevenuefromcontinuingoperationswouldhavebeenRM124,202,462.




16. Investment in an associate

TheGroup’s interest in theassociate isaccounted forusing theequitymethod in theconsolidatedfinancialstatements.Reconciliationwiththecarryingamountoftheinvestmentinconsolidatedfinancialstatementsissetoutbelow:

Group 2017 2016 RM RM

Unquotedshares,atcost 3,500,000 3,500,000 Shareofpostacquisitionreserves 295,158 1,224,774

3,795,158 4,724,774

Detailsoftheassociateareasfollows:

Percentage of Country of equity held Name of associate incorporation Principal activity 2017 2016 % %

LogistineSdn.Bhd.* Malaysia Providingoffshore 25 25 supportvessels,equipment andengineeringconsultation foroilandgasactivities

* AuditedbyafirmotherthanErnst&Young.

ThesummarisedfinancialinformationoftheassociatenotadjustedfortheproportionofownershipinterestheldbytheCompanyisasfollows:

2017 2016 RM RM

Assets and liabilities: Non-currentassets 49,188,483 51,591,775 Currentassets 4,205,434 5,819,440 Totalassets 53,393,917 57,411,215

Non-currentliabilities (3,559,871) (15,411,718) Currentliabilities (23,744,782) (16,821,308) Totalliabilities (27,304,653) (32,233,026) Results: Revenue 298,480 6,826,508 Lossfortheyear (4,086,609) (1,142,125)


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17. Investment in a joint venture

TheGroup’sinterestinthejointventureisaccountedforusingtheequitymethodintheconsolidatedfinancialstatements.Reconciliationwiththecarryingamountoftheinvestmentinconsolidatedfinancialstatementsissetoutbelow:

Group 2017 2016 RM RM Unquotedshares,atcost -Ordinaryshares 1,959,998 2,799,998 -Redeemablepreferenceshares 5,556,004 4,900,004 7,516,002 7,700,002 Shareofpostacquisitionreserves (777,450) (160,439)

6,738,552 7,539,563

Detailsofthejointventureareasfollows: Percentage of Country of equity held Name of joint venture incorporation Principal activities 2017 2016 % % Joint venture of Era Surplus Sdn. Bhd.

SeastenSdn.Bhd. Malaysia Vesselownerandoperator 49 70

ThesummarisedfinancialinformationofthejointventurenotadjustedfortheproportionofownershipinterestheldbytheCompanyisasfollows:

2017 2016 RM RM Assets and liabilities: Non-currentassets 8,945,859 9,753,646 Currentassets 2,398,482 2,293,654 Totalassets 11,344,341 12,047,300

Currentliabilities (1,936,271) (1,119,371) Totalliabilities (1,936,271) (1,119,371)

Results: Revenue 4,617,012 4,046,492 (Loss)/Profitfortheyear (1,519,859) 875,824




18. Inventories

Group 2017 2016 RM RM Cost Consumables 1,588,846 1,535,501 Machineryandequipment 1,461,855 1,574,095 Rawmaterials 11,563,331 12,462,764 Vesselpartsandmaterials 314,862 317,577 Vesselswork-in-progress - 33,974,652 Completedvessel 19,221,849 -

34,150,743 49,864,589

Includedincompletedvesselandvesselswork-in-progressare:

Interestexpense 451,294 1,525,621

19. Trade and other receivables

Group Company 2017 2016 2017 2016 RM RM RM RM Current

Trade receivables Thirdparties 15,418,716 16,212,724 - - Amountduefromajointventure 1,729,767 - - - Less:Allowanceforimpairmentof thirdparties (1,051,561) (497,443) - - Tradereceivables,net 16,096,922 15,715,281 - - Other receivables Refundabledeposits 725,806 951,204 2,000 2,000 Otherreceivables -Others 1,344,686 1,153,361 113,792 136,502 -Subsidiaries - - 840,671 880,371 Amountduefromanassociate 21,159,256 14,994,012 - - Amountduefromsubsidiaries - - 66,763,386 29,730,994 Amountduefromajointventure 135,184 355,810 - -

23,364,932 17,454,387 67,719,849 30,749,867 Less:Allowanceforimpairmentof otherreceivables (536,154) (786,831) - - 22,828,778 16,667,556 67,719,849 30,749,867 38,925,700 32,382,837 67,719,849 30,749,867 Non-current

Other receivables Amountduefromanassociate 394,251 4,991,935 - - Totaltradeandotherreceivables 39,319,951 37,374,772 67,719,849 30,749,867 Add:Cashandbankbalances(Note22) 30,157,806 42,336,149 234,231 1,723,946 Totalloansandreceivables 69,477,757 79,710,921 67,954,080 32,473,813


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19. Trade and other receivables (continued)

(a) Trade receivables

Tradereceivablesarenon-interestbearingandaregenerallyon30to60day(2016:30to60day)terms.Theyarerecognisedattheiroriginalinvoiceamountswhichrepresenttheirfairvaluesoninitialrecognition.Tradereceivablesarepartiallysecured.

Ageinganalysisoftradereceivables

TheageinganalysisoftheGroup’stradereceivablesisasfollows:


Neitherpastduenorimpaired 4,529,299 4,126,115 1to30dayspastduenotimpaired 4,731,831 4,239,499 31to60dayspastduenotimpaired 2,416,869 3,206,293 61to90dayspastduenotimpaired 1,931,696 1,261,755 91to120dayspastduenotimpaired 742,697 1,473,885 Morethan121dayspastduenotimpaired 1,744,530 1,407,734 11,567,623 11,589,166 Impaired 1,051,561 497,443

17,148,483 16,212,724 Receivablesthatareneitherpastduenorimpaired

TradeandotherreceivablesthatareneitherpastduenorimpairedarecreditworthydebtorswithgoodpaymentrecordswiththeGroup.

NoneoftheGroup’stradereceivablesthatareneitherpastduenorimpairedhavebeenrenegotiatedduringthefinancialyear.

Receivablesthatarepastduebutnotimpaired

TheGrouphastradereceivablesamountingtoRM11,567,623(2016:RM11,589,166)thatarepastdueatthereportingdatebutnotimpaired.

Thebalancesofreceivablesthatarepastduebutnotimpairedareunsecuredinnature.

Receivablesthatareimpaired

TheGroup’stradereceivablesthatareimpairedatthereportingdateandthemovementoftheallowanceaccountsusedtorecordtheimpairmentareasfollows:


Totalreceivables 1,051,561 497,443 Less:Allowanceforimpairment (1,051,561) (497,443)

- -




19. Trade and other receivables (continued)

(a) Trade receivables (continued)


Movementinallowanceaccounts: At1January 497,443 743,569 Chargefortheyear 608,508 49,473 Reversalofimpairmentlosses(Note5) (36,000) (295,599) Writtenoff (18,390) -

At31December 1,051,561 497,443 Tradereceivablesthatareindividuallydeterminedtobeimpairedatthereportingdaterelatetodebtors

thathavedefaultedonpaymentsandtherearedoubtsastotherecoverability.Thesereceivablesarenotsecuredbyanycollateralorcreditenhancements.

(b) Amount due from subsidiaries

Thisamountisunsecuredandisrepayableondemand.

IncludedintheamountduefromsubsidiariesisanamountofRM62,458,053(2016:RM16,809,530)whichbearsinterestchargeat3.53%(2016:3.52%-5.40%)perannum.

(c) Amount due from an associate


IncludedintheamountduefromanassociateisanamountofRM4,991,935(2016:RM12,747,063)whichbearsinterestchargeat6.95%(2016:6.95%)perannumandisfullyrepayableby2019.

(d) Amount due from a joint venture

Thisamountisunsecured,non-interestbearingandisrepayableondemand.

(e) Other receivables


20. Other current assets


Prepaymentforinsurance 195,147 288,668 - - Otherprepaidoperatingexpenses 344,599 267,703 - 3,500 539,746 556,371 - 3,500


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21. Investment securities

Group 2017 2016 RM RM Wholesalemoneymarketfund quotedinMalaysia,atmarketvalue 64,641 63,011

22. Cash and bank balances


Cashatbanksandonhand 17,974,007 20,890,920 234,231 1,723,946 Shorttermdepositswithlicensedbanks 12,183,799 21,445,229 - - Cashandbankbalances 30,157,806 42,336,149 234,231 1,723,946 DepositsoftheGroupwithlicensedbanksamountingtoRM12,183,799(2016:RM17,819,554)arepledgedto

banksforbankguaranteesissuedtothirdpartiesandforshorttermfacilitiesgrantedbythebankstotheGroup.

IncludedincashandbankbalancesisanamountofRM465,766(2016:RM2,072,999)whichisrestrictedinuseassetbyabankinordertomaintaintheliquidityrequirements.

TheeffectiveinterestratesandthematurityofdepositsoftheGroupasatthereportingdateareasfollows:

Interest rate Maturity 2017 2016 2017 2016 % % Days Days

Depositswithlicensedbanks 2.90 - 3.10 1.55-3.30 15 - 365 31-365

Forthepurposeofthestatementsofcashflows,cashandcashequivalentscomprisethefollowingasatthereportingdate:


Cashandbankbalances 30,157,806 42,336,149 234,231 1,723,946 Bankoverdrafts(Note23) (28,775,830) (26,342,030) - - 1,381,976 15,994,119 234,231 1,723,946 Cashatbankrestrictedinuse (465,766) (2,072,999) - - Shorttermdepositspledgedassecurity (12,183,799) (17,819,554) - - Cashandcashequivalents (11,267,589) (3,898,434) 234,231 1,723,946




23. Loans and borrowings

Group Company Maturity 2017 2016 2017 2016 RM RM RM RM Current Secured: Bankoverdrafts(Note22) Ondemand 28,775,830 26,342,030 - - Obligationsunder financeleases (Note29(b)) 2018 44,336 55,049 - - Revolvingcredits 2018 46,000,000 54,200,000 - - Islamicloans - 6,140,000 - 6,140,000 Termloans 2018 25,072,532 44,579,717 - - 99,892,698 131,316,796 - 6,140,000 Non-current Secured: Obligationsunder financeleases (Note29(b)) 2019-2020 41,223 74,359 - - Islamicloans - 1,945,000 - 1,945,000 Termloans 2019-2022 87,803,708 118,249,600 - - 87,844,931 120,268,959 - 1,945,000

Totalloansandborrowings 187,737,629 251,585,755 - 8,085,000

Theremainingmaturitiesoftheloansandborrowingsasat31Decemberareasfollows:


Ondemandorwithinoneyear 99,896,349 131,316,796 - 6,140,000 Laterthan1yearbutnot laterthan2years 39,455,438 72,337,873 - 1,945,000 Laterthan2yearsbutnot laterthan5years 48,385,842 47,931,086 - - 187,737,629 251,585,755 - 8,085,000

Bankoverdrafts

BankoverdraftsweresecuredbychargesoverleaseholdlandandbuildingsoftheGroup,legalmortgageonvesselandfixeddepositspledgedtothebank.

Obligationsunderfinanceleases

Thisobligationwassecuredbyachargeovertheleasedassets(Note13).

Revolvingcredits

Revolvingcreditsaresecuredbycorporateguaranteeby theholdingcompany,achargeover theGroup’sleaseholdlandandbuildings,fixeddepositspledgedtothebank,andafreeholdlandownedbyasubsidiary.


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23. Loans and borrowings (continued)

Islamicloans

Islamic loansare securedbycorporateguaranteeof three subsidiaries, fixeddeposits in thenameof thesubsidiaries,andthesubsidiaries’vessels.

Termloans

Theseloansaresecuredbylegalchargesovercertainvessels,assignmentoftimecharterproceedsandleaseholdlandandbuildingsoftheGroup,corporateguaranteebyholdingcompanyandachargeoverfixeddepositsofthesubsidiaries.

Theeffectiveinterestratesat31Decemberforloansandborrowingsareasfollows:

Group Company 2017 2016 2017 2016 % % % % Bankoverdrafts 7.15 - 8.29 6.65-8.31 - - Obligationsunderfinanceleases 4.55 - 4.81 4.55-4.81 - - Termloans -Floatingrates 4.74 - 6.72 2.72-6.72 - - Islamicloans - 5.94 - 5.94 Revolvingcredits 5.07 - 5.90 5.07-5.90 - -

24. Trade and other payables


Current Trade payables Thirdparties 8,323,812 9,120,654 - - Other payables Accruedoperatingexpenses 6,813,428 8,674,845 527,390 689,653 Depositsreceived 91,000 63,000 - - Otherpayables 13,142,802 11,850,037 574,394 4,928 Amountduetoholdingcompany 4,000,000 - 4,000,000 - Amounttoarelatedcompany - 30,000 - - Amountduetosubsidiaries - - 81,345,050 40,837,189 24,047,230 20,617,882 86,446,834 41,531,770 Totaltradeandotherpayables 32,371,042 29,738,536 86,446,834 41,531,770 Add:Loansandborrowings(Note23) 187,737,629 251,585,755 - 8,085,000 Totalfinanceliabilitiescarried atamortisedcost 220,108,071 281,324,291 86,446,834 49,616,770




24. Trade and other payables (continued)

(a) Trade payables

Theseamountsarenon-interestbearing.Tradepayablesarenormallysettledon30to90day(2016:30to90day)terms.

(b) Other payables

Theseamounts are non-interestbearing. Included in otherpayables of theGroup is an amount ofRM10,066,543 (2016:RM10,247,230)due tocompanies inwhichcertainDirectorsof theGrouphavesubstantialfinancialinterests.

(c) Amount due to holding company


(d) Amount due to subsidiaries


IncludedintheamountduetosubsidiariesisanamountofRM70,170,259(2016:RM14,089,223)whichbearsinterestatratesrangingfrom3.53%to5.71%(2016:3.52%to5.40%)perannum.

(e) Amount due to a related company


25. Deferred tax liabilities

Property, Unutilised Unabsorbed plant and tax capital equipment losses allowances Total Group RM RM RM RM

At1January2016 51,964,239 (10,119,849) (7,020,639) 34,823,751 Recognisedinprofitorloss(Note11) (1,935,089) (589,650) (3,924,656) (6,449,395) At31December2016and1January2017 50,029,150 (10,709,499) (10,945,295) 28,374,356 Recognisedinprofitorloss(Note11) (1,089,192) 863,417 (1,709,326) (1,935,101) At31December2017 48,939,958 (9,846,082) (12,654,621) 26,439,255 Unrecognisedtaxlossesandcapitalallowances

Atthereportingdate,theGrouphasunutilisedtaxlossesandunabsorbedcapitalallowancesofapproximatelyRM40,719,376andRM26,039,994respectively(2016:RM33,937,661andRM26,466,939)thatareavailableforoffsetagainstfuturetaxableprofitsofthecompaniesinwhichthelossesarose,forwhichnodeferredtaxassetisrecognisedduetouncertaintyofitsrecoverability.

Unutilisedtaxlossesandunabsorbedcapitalallowances

TheavailabilityofunutilisedtaxlossesandunabsorbedcapitalallowancesforoffsettingagainstfuturetaxableprofitsoftherespectivesubsidiariesinMalaysiaaresubjecttonosubstantialchangesinshareholdingsundertheIncomeTaxAct,1967andguidelinesissuedbythetaxauthority.


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26. Share capital and share premium

Amount Number of Share Share ordinary shares capital premium Total RM RM RM Issued and fully paid

Group/Company

Balanceasat1January2016, 500,000,000 250,000,000 79,086,883 329,086,883 31December2016and 1January2017 Transferfromsharepremium accountpursuanttothe CompaniesAct2016 - 79,086,883 (79,086,883) - Balanceasat31December2017 500,000,000 329,086,883 - 329,086,883

TheholdersofordinarysharesareentitledtoreceivedividendsasandwhendeclaredbytheCompany.AllordinarysharescarryonevotepersharewithoutrestrictionsandrankequallywithregardtotheCompanyresidualassets.

TheCompaniesAct2016(“Act”)whichbecameeffectiveon31January2017,abolishedtheconceptofauthorisedsharecapitalandparvalueofsharecapital.Consequently,theamountstandingtothecreditofthesharepremiumbecomespartoftheCompany’ssharecapitalpursuanttothetransitionalprovisionssetoutinSection618(2)oftheAct.Notwithstandingthisprovision,theCompanymaywithin24monthsfromthecommencementoftheAct,usetheamountstandingtothecreditofitssharepremiumofRM79,086,883forpurposesassetoutinSection618(3)oftheAct.Thereisnoimpactonthenumbersofordinarysharesinissueortherelativeentitlementofanyofthemembersasaresultofthistransition.

27. Other reserves

Foreign currency translation reserve Total Group RM RM

At 1 January 2016 60,549,044 60,549,044

Othercomprehensiveincome: Foreigncurrencytranslation 11,487,102 11,487,102

At 31 December 2016 and 1 January 2017 72,036,146 72,036,146

Othercomprehensiveincome: Foreigncurrencytranslation (19,588,334) (19,588,334)

At 31 December 2017 52,447,812 52,447,812

Foreign currency translation reserve

TheforeigncurrencytranslationreserverepresentsexchangedifferencesarisingfromthetranslationofthefinancialstatementsofforeignoperationswhosefunctionalcurrenciesaredifferentfromthatoftheGroup’spresentationcurrency.




28. Related party transactions

(a) Sale and purchase of goods and services

Inadditiontotherelatedpartyinformationdisclosedelsewhereinthefinancialstatements,thefollowingsignificanttransactionsbetweentheGroupandtheCompanyandrelatedpartiestookplaceattermsagreedbetweenthepartiesduringthefinancialyear:

Group Company 2017 2016 2017 2016 RM RM RM RM Transactionswithholdingcompany

Loansfromholdingcompany - - 4,000,000 - Transactionswithsubsidiaries Sundryincome - - (5,067) - Managementfee - - (2,498,822) (3,577,821) Interestincome - - (1,606,147) (1,103,984) Interestexpense - - 2,013,353 1,079,561 Loanstosubsidiaries - - 5,082,242 1,886,835 Transactionswitharelatedcompany

Rentalexpense 120,000 120,000 12,000 12,000 Transactionswithcompaniesin whichcertainDirectorshave substantialinterests Rentalexpense 94,644 90,217 - - Hiringcharges - 210,000 - - Legalandprofessionalfees 60,564 241,969 - - Salesofproperty,plantand equipment - (41,000) - - Manpowersupply (20,758) (7,481) - -

TransactionwithaDirector

Rentalexpense - 3,900 - - Relatedcompanies:

RelatedcompaniesarecompanieswithinSealinkHoldingsSdn.Bhd.group.

(b) Compensation of key management personnel

TheremunerationofDirectorsandothermembersofkeymanagementduringtheyearwasasfollows:


Short-termemployeebenefits 4,469,620 4,181,401 2,706,188 2,235,115 Definedcontributionplan 435,610 378,253 282,537 233,469 4,905,230 4,559,654 2,988,725 2,468,584


95


29. Commitments

(a) Capital commitments

Capitalexpenditureasatthereportingdateisasfollows:

Group 2017 2016 RM RM Capitalexpenditure Approvedbutnotcontractedfor: Property,plantandequipment 126,968,720 126,968,720

(b) Finance lease commitments

TheGrouphasfinanceleasesforcertainitemsofmotorvehicles(Note13).Theseleasesdonothavetermsofrenewal,buthadpurchaseoptionsatnominalvaluesattheendoftheleaseterm.

Futureminimumleasepaymentsunderfinanceleasestogetherwiththepresentvalueofthenetminimumleasepaymentsareasfollows:

Group 2017 2016 RM RM Minimum lease payments:

Notlaterthan1year 46,728 59,856 Laterthan1yearbutnotlaterthan2years 30,496 41,928 Laterthan2yearsbutnotlaterthan5years 11,991 36,087 Totalminimumleasepayments 89,215 137,871 Less:Amountsrepresentingfinancecharges (3,656) (8,463)

Presentvalueofminimumleasepayments 85,559 129,408

Present value of payments:

Notlaterthan1year 44,336 55,049 Laterthan1yearbutnotlaterthan2years 27,788 39,536 Laterthan2yearsbutnotlaterthan5years 13,435 34,823

Presentvalueofminimumleasepayments 85,559 129,408 Less:Amountduewithin12months(Note23) (44,336) (55,049)

Amountdueafter12months(Note23) 41,223 74,359

30. Fair value of financial instruments

(a) Fair values of financial instruments not carried at fair value Setoutbelow,isacomparisonofthecarryingamountsandfairvaluesoftheGroup’sfinancialinstruments,

byclass,otherthanthosewithcarryingamountswhicharereasonableapproximationsoffairvalues:




30. Fair value of financial instruments (continued)

(a) Fair values of financial instruments not carried at fair value (continued)

Carrying amount Fair value 2017 2016 2017 2016 RM RM RM RM Group Financial liabilities: Non-current: Interest-bearingloansandborrowings -Obligationsunderfinanceleases 41,223 74,359 41,165 74,219 Themethodsandassumptionsusedtoestimatethefairvaluesofthefinancialinstrumentsnotcarriedat

fairvalueareasfollows:

Loans,advancesandfinancing

Thefairvaluesoffixedrateloans/financingwithremainingmaturityoflessthanoneyearandvariablerateloans/financingareestimatedtoapproximatetheircarryingamounts.Forfixedrateloans/financingwithremainingmaturityofmorethanoneyear,thefairvaluesareestimatedbasedondiscountedcashflowsusingprevailingmarketratesofloans/financingofsimilarcreditrisksandmaturity.Thefairvaluesofimpairedloans/financingarerepresentedbytheircarryingamounts,netofanycollectiveandindividualassessmentallowances,beingtheexpectedrecoverableamount.

(b) Determination of fair value

Thefollowingareclassesoffinancial instruments thatarenotcarriedat fairvalueandwhosecarryingamountsarereasonableapproximationoffairvalues:

Note

Tradeandotherreceivables 19 Tradeandotherpayables 24 Loansandborrowings(currentandnon-current, 23 exceptnon-currentfixedratesloansandborrowings)

Thecarryingamountsofthesefinancialassetsandliabilitiesarereasonableapproximationoffairvaluesduetotheirshort-termnature.

Financial guarantees

Thefairvalueoffinancialguaranteesisdeterminedbasedontheprobabilityweighteddiscountedcashflowmethod.Theprobabilityhasbeenestimatedandassignedforthefollowingkeyassumptions:

- Thelikelihoodoftheguaranteedpartydefaultingwithintheguaranteedperiod;

- Theexposureontheportionthatisnotexpectedtoberecoveredduetotheguaranteedparty’sdefault;

- Theestimatedlossexposureifthepartyguaranteedweretodefault


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31. Fair value measurement

Fair value hierarchy

TheGroupclassifiesfairvaluemeasurementusingafairvaluehierarchythatreflectsthesignificanceoftheinputsusedinmakingthemeasurements.Thefairvaluehierarchyhasthefollowinglevels:

Level1- Quotedpricesinactivemarketsforidenticalassetsorliabilities;

Level2- InputsotherthanquotedpricesincludedinLevel1thatareobservablefortheassetorliability,eitherdirectlyorindirectly;and

Level3- Inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).

ThefollowingtableprovidesthefairvaluemeasurementhierarchyoftheGroup’sassetsandliabilities.

Quantitativedisclosuresfairvaluemeasurementhierarchyforassetsandliabilitiesasat31Decemberareasfollows:

Level 1 Level 2 Level 3 Total RM RM RM RM Group

At 31 December 2017

Assets measured at fair value: Wholesalemoneymarketfund 64,641 - - 64,641 Liabilities for which fair values are disclosed: (Note 30(a)) Interest-bearingloansandborrowings -Non-currentobligationsunder financeleases - 41,165 - 41,165

At 31 December 2016

Assets measured at fair value: Wholesalemoneymarketfund 63,011 - - 63,011

Liabilities for which fair values are disclosed: (Note 30(a)) Interest-bearingloansandborrowings -Non-currentobligationsunder financeleases - 74,219 - 74,219

TherehavebeennotransfersbetweenLevel1andLevel2duringthefinancialyear.

32. Financial risk management objectives and policies

TheGroupandtheCompanyareexposedtofinancialrisksarisingfromtheiroperationsandtheuseoffinancialinstruments.TheGroup’soverallfinancialriskmanagementstrategyseekstominimisepotentialadverseeffectsoffinancialperformanceoftheGroup.Thekeyfinancialrisksincludecreditrisk,liquidityrisk,interestrateriskandforeigncurrencyrisk.




32. Financial risk management objectives and policies (continued)

FinancialriskmanagementpoliciesareperiodicallyreviewedandapprovedbytheBoardofDirectorsandexecutedbythemanagement.TheauditcommitteeofSealinkInternationalBerhadprovidesindependentoversighttotheeffectivenessoftheriskmanagementprocess.

Itisandhasbeenthroughoutthecurrentandpreviousfinancialyear,theGroup’sandtheCompany’spolicythatnoderivativesshallbeundertaken.

ThefollowingsectionsprovidedetailsregardingtheGroup’sandCompany’sexposuretotheabove-mentionedfinancialrisksandtheobjectives,policiesandprocessesforthemanagementoftheserisks.

(a) Credit risk

Creditriskistheriskoflossthatmayariseonoutstandingfinancialinstrumentsshouldacounterpartydefaultonitsobligations.Atthereportingdate,theGroup’sexposuretocreditriskarisesprimarilyfromtradeandotherreceivables.TheCompany’sexposuretocreditriskarisesprincipallyfromloansandadvancestosubsidiariesandfinancialguaranteegiventobanksforcreditfacilitiesgrantedtosubsidiaries.

Financialassetsthatareneitherpastduenorimpaired

InformationregardingtradeandotherreceivablesthatareneitherpastduenorimpairedisdisclosedinNote19.Depositswithbanksandotherfinancialinstitutionsthatareneitherpastduenorimpairedareplacedwithorenteredintowithreputablefinancialinstitutionsorcompanieswithhighcreditratingsandnohistoryofdefault.

Financialassetsthatareeitherpastdueorimpaired

InformationregardingfinancialassetsthatareeitherpastdueorimpairedisdisclosedinNote19. (b) Liquidity risk

LiquidityriskistheriskthattheGrouportheCompanywillencounterdifficultyinmeetingfinancialobligationsduetoshortageoffunds.TheGroup’sandtheCompany’sexposuretoliquidityriskarisesprimarilyfrommismatchesofthematuritiesoffinancialassetsandliabilities.TheGroupadoptsaprudentapproachtomanagingitsliquidityrisk.TheGroupalwaysmaintainssufficientcashandcashequivalents,andhasavailablefundingthroughadiversesourceofcommittedanduncommittedcreditfacilitiesfromvariousbanks.

Analysisoffinancialinstrumentsbyremainingcontractualmaturities

ThetablebelowanalysesthematurityprofileoftheGroup’sandtheCompany’sfinancialliabilitiesbasedoncontractualundiscountedrepaymentobligations.

On demand or within One to one year five years Total RM RM RM Group

At 31 December 2017

Financialliabilities: Tradeandotherpayables 32,371,042 - 32,371,042 Loansandborrowings 106,488,906 93,862,579 200,351,485 Totalundiscountedfinancialliabilities 138,859,948 93,862,579 232,722,527


99



(b) Liquidity risk (continued)

On demand or within One to one year five years Total RM RM RM Group

At 31 December 2016

Financialliabilities: Tradeandotherpayables 29,738,536 - 29,738,536 Loansandborrowings 138,650,730 123,502,211 262,152,941 Totalundiscountedfinancialliabilities 168,389,266 123,502,211 291,891,477 Company At 31 December 2017

Financialliabilities: Tradeandotherpayables 86,446,834 - 86,446,834 Financialguaranteecontracts* 173,087,669 - 173,087,669 Totalundiscountedfinancialliabilities 259,534,503 - 259,534,503 At 31 December 2016

Financialliabilities: Tradeandotherpayables 41,531,770 - 41,531,770 Loansandborrowings 6,508,855 1,979,697 8,488,552 Financialguaranteecontracts* 221,501,367 - 221,501,367 Totalundiscountedfinancialliabilities 269,541,992 1,979,697 271,521,689

* Basedonthemaximumamountthatcanbecalledunderthefinancialguaranteecontracts.

(c) Interest rate risk

InterestrateriskistheriskthatthefairvalueorfuturecashflowsoftheGroup’sandtheCompany’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.

TheGroup’sandtheCompany’sexposuretomarketriskforchangesininterestratesariseprimarilyfromtheirloansandborrowings.

Sensitivityanalysisforinterestraterisk

Atthereportingdate,ifinterestrateshadbeenlower/higherby10basispointswithallothervariablesheldconstant,theGroup’slossnetoftaxwouldhavebeenRM160,013(2016:RM191,107)higher/lower,arisingmainlyasaresultoflower/higherinterestexpenseonfloatingrateloansandborrowings.Theassumedmovementinbasispointsforinterestratesensitivityanalysisisbasedonthecurrentlyobservablemarketenvironment.





(d) Foreign currency risk

Foreigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinforeignexchangerates.

TheGrouphastransactionalcurrencyexposuresarisingfromsalesandpurchasesthataredenominatedinacurrencyotherthantherespectivefunctionalcurrencyofGroupentities,primarilyRinggitMalaysia(RM),SingaporeDollar(SGD)andUnitedStatesDollars(USD).TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlySingaporeDollar(SGD),UnitedStatesDollars(USD),AustralianDollars(AUD)andBruneiDollar(BND).

TheGroupuses forwardcurrencycontracts tominimise theexposuresarising fromsalesaftera firmcommitmenthasbeenentered.ItistheGroup’spolicynottoenterintoforwardcontractsuntilfirmcommitmentisinplace.

Foreignexchangeexposuresintransactionalcurrenciesotherthanfunctionalcurrenciesoftheoperatingentitiesarekept toanacceptable level.TheGroupmaintainsanaturalhedge,wheneverpossible,byborrowingorholdingcashandcashequivalentsdenominatedinforeigncurrencies.

Sensitivityanalysisforforeigncurrencyrisk

Thefollowingtabledemonstratesthesensitivityof theGroup’s lossnetof taxtoareasonablypossiblechangeintheSGD,USDandBNDagainstRMexchangerate,RMandUSDagainstSGDexchangerateandSGD,RMandAUDagainstUSDexchangeratewithallothervariablesheldconstant.

Group Company Loss net of tax Loss net of tax 2017 2016 2017 2016 RM RM RM RM

SGD/RM-strengthenby5% 639,656 (475,241) 1,938 1,983 SGD/RM-weakenby5% (639,656) 475,241 (1,938) (1,983)

USD/RM-strengthenby5% (1,123,819) (833,115) 1,442 1,600 USD/RM-weakenby5% 1,123,819 833,115 (1,442) (1,600)

BND/RM-strengthenby5% (10,622) - - - BND/RM-weakenby5% 10,622 - - -

RM/SGD-strengthenby5% (365,493) 377,811 - - RM/SGD-weakenby5% 365,493 (377,811) - - USD/SGD-strengthenby5% (2,699,466) 1,208,782 - - USD/SGD-weakenby5% 2,699,466 (1,208,782) - - SGD/USD-strengthenby5% (51,946) (69,473) - - SGD/USD-weakenby5% 51,946 69,473 - - RM/USD-strengthenby5% (148,712) (589) - - RM/USD-weakenby5% 148,712 589 - - AUD/USD-strengthenby5% - 10,613 - - AUD/USD-weakenby5% - (10,613) - -


101


33. Capital management

TheGroup’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sabilitytocontinueasagoingconcernandtomaintainanoptimalcapitalstructuresoastomaximiseshareholdersvalue.Inordertomaintainorachieveanoptimalcapitalstructure,theGroupmayadjustthedividendpayment,returncapitaltoshareholders,obtainnewfinancingfacilitiesordisposeassetstoreduceborrowings.

Managementmonitorscapitalbasedon theGroup’sand theCompany’sgearing ratio. TheGroupand theCompanyarealsorequiredbycertainbankstomaintainagearingratioofnotexceedingcertainpercentagevaryingbetween100%and200%.TheGroup’sandtheCompany’sstrategiesaretomaintaingearingratioofnotexceeding100%.

Thegearingratioiscalculatedastotalloansandborrowingsdividedbyequitycapital.


Loansandborrowings 23 187,737,629 251,585,755 - 8,085,000

Totalequity 385,135,453 454,453,417 367,147,452 368,451,122

Gearingratio 48.75% 55.36% - 2.19%

34. Segment information

Formanagementpurposes,theGroupisorganisedintobusinessunitsbasedontheirproductsandservices,andhastworeportableoperatingsegmentsasfollows:

I. Shipbuilding

II. Charteringofvessels

III. Othersconsistofinvestmentholdingandlettingofproperties

Exceptasindicatedabove,nooperatingsegmentshavebeenaggregatedtoformtheabovereportableoperatingsegments.

Managementmonitorstheoperatingresultsofitsbusinessunitsseparatelyforthepurposeofmakingdecisionsaboutresourceallocationandperformanceassessment.Segmentperformanceisevaluatedbasedonoperatingprofitorlosswhich,incertainrespectsasexplainedinthetablebelow,ismeasureddifferentlyfromoperatingprofitorlossintheconsolidatedfinancialstatements.Groupfinancing(includingfinancecostsrecognisedinprofitorloss)andincometaxesaremanagedonagroupbasisandarenotallocatedtooperatingsegments.

Transferpricesbetweenoperatingsegmentsareonanarm’slengthbasisinamannersimilartotransactionswiththirdparties.




34

. S

egm

ent i

nfo

rmat

ion

(co

ntin

ued

)

Per

con

solid

ated

Adj

ustm

ents

and

fi

nanc

ial

Shi

pbui

ldin

g

C

hart

erin

g

Oth

ers

elim

inat

ions

sta

tem

ents

2017

20

16

2017

20

16

2017

20

16

2017

20

16

20

17

2016

RM

R

M

RM

R

M

RM

R

M

RM

R

M

Not

es

RM

R

M

Rev

enue

:

Externalcus

tomers

21,8

66,7

21

60,784

,263

53

,318

,084

62

,117

,393

-

--

-

75,1

84,8

05

122,90

1,65

6

Inter-s

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t3,

525,

610

5,50

1,55

414

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2,

576,

822

3,65

5,82

1(2

0,23

2,83

6)

(28,21

4,22

4)

A

--

Totalrev

enue

25

,392

,331

66

,285

,817

67

,448

,488

81

,174

,242

2,

576,

822

3,65

5,82

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2,83

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4,22

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2,90

1,65

6

Res

ults

:

Interestin

come

6,16

0,58

84,53

8,73

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431,

508

3,43

8,82

73,

309,

981

1,52

6,38

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(6,808

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)

3,02

8,57

52,69

5,58

3

Dep

reciationan

d

amortisation

4,24

5,52

95,41

7,96

442

,139

,796

44

,340

,780

36

7,365

32

7,97

0(2

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)

43,9

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90

47,078

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Othernon

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h

exp

ense

s13

1,47

9(527

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5,40

830

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,406

-

910

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2,46

0B

767,4

45

30,415

,773

Segm

entlos

s(1

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,385

)(8,608

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7,89

2,76

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(49,90

4,40

7)

(3,2

91,3

09)

(25,81

3,95

6)

2,42

9,27

721

,251

,489

C

(50,

136,

181)

(63,07

4,88

0)

Ass

ets:

Inve

stmen

tinan

assoc

iate

--

--

3,79

5,15

84,72

4,77

4-

-

3,79

5,15

84,72

4,77

4

Inve

stmen

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jointven

ture

--

6,73

8,55

2-

-7,53

9,56

3-

-

6,73

8,55

27,53

9,56

3

Add

ition

sto

non

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565,

348

42,486

14

,417

,744

36

,772

,554

-

215,06

9(1

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0,00

0)

(36,25

9,27

3)

D

1,11

3,09

277

0,83

6

Segm

enta

ssets

183,

329,

139

201,53

8,82

775

9,63

6,59

684

3,72

3,25

954

8,55

3,51

549

2,01

2,44

4(8

58,7

16,8

48)

(773

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)E

632,

802,

402

764,23

3,13

8

Segm

entliabilities

117,

194,

265

133,43

3,31

3 41

0,72

5,04

640

5,07

5,20

813

8,48

6,21

8 10

8,38

2,53

0 (4

18,7

38,5

80)

(337

,111

,330

)F

247,

666,

949

309,77

9,72

1


103


34. Segment information (continued)

A Inter-segmentrevenuesareeliminatedonconsolidation.

B Othermaterialnon-cashexpensesconsistofthefollowingitemsaspresentedintherespectivenotestothefinancialstatements:

2017 2016 Note RM RM

Inventorieswrittenoff 8 106,648 543,670 Property,plantandequipmentwrittenoff 8 31,473 564,465 Impairmentlossontradeandotherreceivables 8 629,324 89,998 Impairmentlossonproperty,plantandequipment 8 - 30,487,178 Reversalofinventorieswrittenoff 8 - (1,269,538) 767,445 30,415,773

C Thefollowingitemsareaddedto/(deductedfrom)segmentlosstoarriveat“Lossbeforetax”presentedintheGroup’sstatementsofprofitorlossandothercomprehensiveincome:

2017 2016 RM RM

Profitfrominter-segmentsales (6,811,474) (4,561,158) Financecosts 10,830,981 6,740,030 Shareofresultsofanassociate (1,021,652) (1,370,159) Shareofresultsofajointlycontrolledentity (950,121) 391,017 Unallocatedcorporateexpenses 381,543 20,051,759 2,429,277 21,251,489

D Additionstonon-currentassetsconsistof:

Property,plantandequipment 1,113,092 770,836

E Thefollowingitemsareaddedto/(deductedfrom)segmentassetstoarriveattotalassetsreportedintheGroup’sstatementsoffinancialposition:

2017 2016 RM RM

Investmentinsubsidiaries (395,763,173) (395,633,175) Investmentinanassociate 295,158 1,224,774 Investmentinajointventure (777,450) (160,439) Inter-segmentassets (462,471,383) (378,472,552) (858,716,848) (773,041,392)




34. Segment information (continued)

F Thefollowingitemsareaddedto/(deductedfrom)segmentliabilitiestoarriveattotalliabilitiesreportedintheGroup’sstatementsoffinancialposition:

2017 2016 RM RM

Deferredtaxliabilities 12,272,272 10,924,871 Inter-segmentliabilities (431,010,852) (348,036,201) (418,738,580) (337,111,330)

Geographicalinformation

Revenueandnon-current assets informationbasedon thegeographical locationof customersandassetsrespectivelyareasfollows:

Revenue Non-current assets 2017 2016 2017 2016 RM RM RM RM

Malaysia 71,776,956 52,993,771 491,052,621 563,494,137 Singapore 3,407,849 11,726,293 26,155,777 56,969,365 UnitedArabEmirates - 58,181,592 - - 75,184,805 122,901,656 517,208,398 620,463,502 Non-currentassets informationpresentedaboveconsist of the following itemsaspresented in theGroup’s

statementsoffinancialposition:

2017 2016 RM RM

Property,plantandequipment 506,551,704 609,228,055 Landuserights 10,656,694 11,235,447

517,208,398 620,463,502

35. Authorisation of financial statements for issue

Thefinancialstatementsfortheyearended31December2017wereauthorisedforissueinaccordancewitharesolutionoftheDirectorson3April2018.


105

LandedProperties

LandIdentification /Postal Address

Lot156,Block5,KualaBaramLandDistrict/[Lot156,KualaBaramIndustrialEstate,98100KualaBaram,Miri,Sarawak]

Lot816,Block1,KualaBaramLandDistrict(formerlyknownasLot1282,KualaBaramLandDistrict)/[Lot816,KualaBaramIndustrialEstate,98100KualaBaram,Miri,Sarawak]

Lot1341,MiriConcessionLandDistrict/[Lot1341,JalanCattleya1,Krokop/PiasauIndustrialEstate,98000Miri,Sarawak]

Lot2142,Block4,MiriConcessionLandDistrict/[Lot2142,JalanCattleya1,Krokop/PiasauIndustrialEstate,98000Miri,Sarawak]




Descriptionof Property

Vacantagriculture

land

Industriallandandbuilding




Vacantindustrial

land


ApproximateAge of theBuilding(Years)

N/A

10

9

9

48

N/A

38

Tenure/Dateof Expiry of

Lease

60years/Leasetermexpireson02.08.2071







Areamore or

less(sq m)

8,050

116,170

1,971

4,700

4,059

123,780

4,039

Net Book Value as at

31.12.2017(RM’000)

180

19,734

376

1,537

663

9,546

1,245

SEALINK SHIPYARD SDN BHD (195853-D)

Usage

N/A

Shipyard,slipwayand

fabricationyard

Vacantworkshopand

vacantworkersquarters

Shipyardwithone(1)detached

building(workersquartersand

vacantworkshop)

One(1)singlestoreyofficecumworkshop

N/A

Utilizeasashipyardwithone(1)detached

building(workshopandwarehouse)

SEALINK SENDIRIAN BERHAD (20471-D)



Landed Properties (continued)

LandIdentification /Postal Address

Lot482,Block4,MiriConcessionLandDistrict/[Lot482,Block4,MiriConcessionLandDistrict,98009Miri,Sarawak]

Lot8133,Block1,LambirLandDistrict(formerlyknownasLot1802,LambirLandDistrict)[2/10thundividedrighttitleshare&interest]/[2½Mile,Kilometre4,RiamRoad,Miri,Sarawak]

Lot323,Block1,KualaBaramLandDistrict(formerlyknownasProvisionalLeaseLot2040,KualaBaramLandDistrict)/[Lot323,KualaBaramIndustrialEstate,98100Miri,Sarawak]

Lot8139,DistrictofLabuan,WilayahPersekutuan(FormerlyknownasCountryLease205316669)/[JalanRancha-RanchaLama,KampungRancha-Rancha,87000Labuan,WilayahPersekutuan,Labuan]

Lot12039,DistrictofLabuan,WilayahPersekutuan(FormerlyknownasCountryLease205316669)/[JalanRancha-RanchaLama,KampungRancha-Rancha,87000Labuan,WilayahPersekutuan,Labuan]


Descriptionof Property

Vacantindustrial

land

Vacantagriculture

land


Vacantindustrial

land

Vacantindustrial

land

Industrialland

andbuilding

ApproximateAge of theBuilding(Years)

N/A

N/A

9

N/A

N/A

8

Tenure/Dateof Expiry of

Lease







Areamore or

less(sq m)

19,441

23,110

19,750

9,841

31,330

19,647

Net Book Value as at

31.12.2017(RM’000)

6,305

78

3,530

570

1,814

2,001

SEALINK SENDIRIAN BERHAD (20471-D)

Usage

N/A

N/A

Usedforthree(3)detached

buildingsutilizedasoffice,storage

yard&latheworkshop

N/A

N/A

Two(2)blocksofworkers

quarters

BARAM MOULDING INDUSTRIES SDN BHD (200873-D)

BRISTAL VIEW SDN BHD (253385-T)

ALIRAN SAKSAMA SDN BHD (473205-H)


107

AnalysisofShareholdingsas at 30 March 2018

Class of Equity Security

Issuedandpaidupcapital : RM250,000,000.00comprisingof500,000,000ordinaryshares

ClassofShares : Ordinaryshares

Votingrights : Onevoteperordinaryshare(onapoll)

Distribution of Shareholdings

No. of No. of Holders % Holdings %

1-99 5 0.17 204 0.00100-1,000 723 24.83 155,500 0.031,001-10,000 957 32.86 6,140,396 1.2310,001-100,000 1,004 34.48 37,339,600 7.47100,001-24,999,999* 220 7.55 84,184,301 16.8425,000,000andabove** 3 0.10 372,179,999 74.44

Total 2,912 100.00 500,000,000 100.00

Remark :*lessthan5%ofissuedholdings

:**5%Andaboveofissuedholdings

Directors’ Shareholdings

No. of Shares No. of SharesName Of Directors Direct % Indirect %

1. EricKhooChuanSyn@KhooChuanSyn 30,000 0.01 - 0.002. DatukSebastianTingChiewYew 137,500 0.03 - 0.003. TohKianSing - 0.00 - 0.004. WongChieBin 30,000 0.01 - 0.00 CIMSECNominees(Tempatan)SdnBhd - 0.00 60,000 0.01 CIMBBankForWongChieBin(M73031)5. YongFohChoi 45,716,800 9.14 326,463,199(a) 65.296. YongKiamSam 67,382,399 13.48 304,797,600(b) 60.96

Total 113,296,699 22.66 631,320,799 126.26

Note :(a)DeemedinterestbyvirtueofhissubstantialshareholdinginSealinkHoldingsSdnBhdandhisson,YongKiam

Sam’sshareholdingintheCompany(b)Deemedinterestbyvirtueofhisfather,YongFohCho’ssubstantialshareholdinginSealinkHoldingsSdnBhdand

alsohisfather’sshareholdingintheCompany

Substantial Shareholders

No. of Shares No. of SharesName Direct % Indirect %

SealinkHoldingsSdn.Bhd.(164959-P) 259,080,800 51.82 - -YongKiamSam 67,382,399 13.48 304,797,600 60.96YongFohChoi 45,716,800 9.14 326,463,199 65.29



Analysis of Shareholdings (continued)

Thirty (30) Largest Shareholders

No. Name Shareholdings %

1. SealinkHoldingsSdn.Bhd. 259,080,800 51.822. YongKiamSam 67,382,399 13.483. YongFohChoi 45,716,800 9.144. AffinHwangNominees(Tempatan)Sdn.Bhd. 6,832,900 1.37 Pledged Securities Account For Kong Sing Nguong (M05)5. TingHuaPing 3,392,500 0.686. YiiSiewSang 3,180,000 0.647. DataHasratSdnBhd 2,000,000 0.408. LaiChunLian 1,695,500 0.349. LeeCheeKeong 1,314,900 0.2610. KenangaNominees(Tempatan)SdnBhd 1,247,000 0.25 Pledged Securities Account For Ting Hua Kuok (ET) 11. HSBCNominees(Asing)SdnBhd 1,227,000 0.2512. AffinHwangNominees(Tempatan)Sdn.Bhd. 1,180,000 0.24 Pledged Securities Account For Teh Poo Seng (M02)13. TanCheowHo 1,100,000 0.2214. TengkuABMalekBinTengkuMohamed 1,100,000 0.2215. RHBNominees(Tempatan)SdnBhd 1,097,000 0.22 Pledged Securities Account For Lee Tian An16. AffinHwangNominees(Tempatan)Sdn.Bhd. 1,087,000 0.22 Pledged Securities Account For Chew Cheong Ber (M02) 17. GanLayHar 1,042,000 0.2118. LeasingCorporationSdnBhd 1,009,000 0.2019. PublicNominees(Tempatan)SdnBhd 921,600 0.18 Pledged Securities Account For Sin Huan Kwang (E-TWU)20. RHBCapitalNominees(Tempatan)SdnBhd 900,000 0.18 Pledged Securities Account For Teh Poo Seng (CEB)21. SPJutajayaSdnBhd 873,100 0.1722. LauKaTee 850,000 0.1723. AgrosegarSdnBhd 800,000 0.1624. BahteraOffshore(M)SdnBhd 800,000 0.1625. AMSECNominees(Tempatan)SdnBhd 750,000 0.15 Pledged Securities Account For Harold Tan Hong Lee 26. NgWanWa 750,000 0.1527. PublicNominees(Tempatan)SdnBhd 736,000 0.15 Pledged Securities Account For Voon Fook Soon (E-PDG/JPN)28. LeeCheeKok 720,000 0.1429. PublicInvestNominees(Asing)SdnBhd 705,000 0.14 Exempt An For Phillip Securities Pte Ltd (CLIENTS)30. AMSECNominees(Tempatan)SdnBhd 700,000 0.14 Pledged Securities Account For Kong Sing Nguong

Total 410,190,499 82.04

TotalIssuedShareholdings 500,000,000

S INTERNATIONAL BERHAD

(800981-X)

EALINK

I/We______________________________________________________NRICNo./CompanyNo._____________________________

of______________________________________________________________________________________________________being*amember/membersofSEALINK INTERNATIONAL BERHADherebyappoint______________________________________________________________________________________________NRICNo.________________________________

of______________________________________________________________________________________________________orfailinghim/her,_________________________________________________NRICNo._________________________________

of______________________________________________________________________________________________________orChairmanofthemeetingasmy/ourproxytovoteforme/usonmy/ourbehalf,attheTenthAnnualGeneralMeeting(“10thAGM”)oftheCompanytobeheldonTuesday,22May2018at11:00a.m.andatanyadjournmentthereoffor/against*theresolution(s)tobeproposedthereat.

NO. RESOLUTIONS FOR AGAINST

1. ToapprovethepaymentofDirectors’FeesamountingtoRM277,830.00perannumforNon-ExecutiveDirectorsandRM39,690.00perannumforExecutiveDirectorsforthefinancialyearending31December2018.

2. Tore-electMrWongChieBinasDirectoroftheCompany.

3. Tore-electMrTohKianSingasDirectoroftheCompany.

4. Tore-appointMessrsErnst&YoungastheAuditorsoftheCompanyandtoauthorisetheDirectorstodeterminetheirremuneration.

5. ContinuationinofficeofMrWongChieBinasIndependentNon-ExecutiveDirector.

6. ContinuationinofficeofMrTohKianSingasIndependentNon-ExecutiveDirector.

(Pleaseindicatewith(X)howyouwishyourvotetobecast.Ifnospecificdirectionastovotingisgiven,theproxywillvoteashethinksfitorabstainfromvotingathisdiscretion).Datedthis______dayofMay,2018.

_______________________________________SignatureofShareholder(s)/CommonSeal

NOTES:1. OnlyDepositorswhosenamesappearintheGeneralMeetingRecordofDepositorsasat16May2018beregardedasMembers

andshallbeentitledtoattend,speakandvoteatthe10thAGM.

2. AMembermayappointaproxytoattend,speakandvoteonhisbehalf.AproxyneednotbeamemberoftheCompany.

3. WhereamemberoftheCompanyisanexemptauthorizednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(omnibusaccount),thereisnolimittothenumberofproxieswhichtheexemptauthorizednomineemayappointinrespectofeachomnibusaccountitholds.

4. Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororofhisattorneydulyauthorizedinwritingoriftheappointorisacorporation,eitherunderitscommonsealorunderthehandofanofficerorattorneyofthecorporationdulyauthorized.

5. TheinstrumentappointingaproxymustbedepositedattheregisteredofficeoftheCompanyatLot1035,Block4,MCLD,PiasauIndustrialArea,98000Miri,Sarawak,notlessthan48hoursbeforethetimesetforthis10thAGMoranyadjournmentthereof.

6. PursuanttoParagraph8.29A(1)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,allresolutionssetoutinthisNoticewillbeputtovotebywayofpoll.

No. of Shares Held :

FormofProxy

Lot1035,Block4,MCLD,PiasauIndustrialArea,98000Miri,Sarawak

TheCompanySecretary

SEALINK INTERNATIONAL BERHAD (800981-X)

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DetailsoftheGroupPLACESOFOPERATIONS/OFFICES

HeadquartersLot 1035, Block 4, MCLD, Piasau Industrial Area, 98000 Miri, SarawakTel : 085-651 778Fax : 085-652 480

Other Places of Operations Lot 816, Block 1, Kuala Baram Land District, 98100 Kuala Baram Miri, Sarawak Tel : 085- 605 767Fax : 085- 605 428

Lot 1339, Jalan Cattleya 1, MCLD, Krokop, 98000 Miri, SarawakTel : 085-605 767Fax : 085-605 428

545 Orchard Road #09-07, Far East Shopping Centre, 238882 SingaporeTel : +65 6737 7911Fax : +65 6737 4889

Lot 20, Manmohan’s Warehouse,Jalan Patau Patau,87000 Wilayah Persekutuan LabuanTel : 087-581 686Fax : 087-582 686

Lot 18234 Ground Floor & First Floor,Jalan Air Putih, Kampung Jaya,24000 Chukai Kemaman,TerengganuTel : 09-850 4012 Fax : 09-850 4013

SINTERNATIONAL BERHAD

(800981-X)

EALINK

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listed companysealink.listedcompany.com/newsroom/SEALINK_ANNUAL_REPORT_… · The Sealink Group We are a Ship Owner / Charterer, Shipbuilder and Ship Repairer. Sealink Group builds,