UNFOLDING THE FUTURE - listed companyemasoffshore.listedcompany.com/misc/ar2014/ar2014.pdf · 55 independent auditors’ report ... our first fpso, perisai kamelia ... 10 emas offshore

E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4 1

U N F O L D I N GT H E F U T U R E

E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4



0 2 E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4

CONTENTS 04 CORPORATE PROFILE

06 CHAIRMAN’S MESSAGE

08 CORE VALUES

11 MISSION

12 BOARD OF DIRECTORS

14 MANAGEMENT TEAM

18 DIRECTORS’ AND MANAGEMENT REPORT

36 CORPORATE MILESTONES

38 CORPORATE STRUCTURE

40 CORPORATE DIRECTORY

42 CORPORATE GOVERNANCE REPORT

50 REPORT OF THE DIRECTORS

54 STATEMENT OF DIRECTORS

55 INDEPENDENT AUDITORS’ REPORT

56 STATEMENTS OF FINANCIAL POSITION

57 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

58 STATEMENTS OF CHANGES IN EQUITY

59 CONSOLIDATED STATEMENT OF CASH FLOWS

61 NOTES TO THE FINANCIAL STATEMENTS

107 STATISTICS OF SHAREHOLDINGS

108 NOTICE OF ANNUAL GENERAL MEETING

ATTENDANCE/PROXY FORM


E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4 0 5

Headquartered in Singapore, we are an established offshore oil and gas services provider which offers offshore support, accommodation and offshore production services to customers in the offshore oil and gas industry throughout the oilfield lifecycle, spanning exploration, development, production and decommissioning stages. Our business activities are carried out by two business segments, namely (i) Offshore Support and Accommodation Services division, and (ii) Offshore Production Services division.

Our operational footprint stretches from Brazil to Australia and we have significant experience in operating across key regions of exploration and production in Asia, including Brunei, India, Indonesia, Malaysia, the Philippines, Vietnam and Thailand. We believe our global operations provide us with a strategic advantage of being able to meet the needs of a diverse and global customer base which includes international, independent and national oil companies.

Our Offshore Support and Accommodation Services division specialises in the provision of offshore support and accommodation vessels for charter to service customers in the offshore oil and gas industry, with a focus on the development and production phases of the oilfield lifecycle. This division also provides ship management services for third-party vessels.

Our Offshore Production Services division specialises in the provision and operations of Floating, Production, Storage and Offloading vessel (“FPSO”) systems and related services which are key assets enabling the extraction, storage and offloading of crude oil and gas from offshore hydrocarbon reservoirs. In addition, our Offshore Production Services division provides engineering and project management services for the conversion of FPSOs and production facilities to third-party clients.

CORPORATE PROFILE

GOING FORWARD, THE GROUP HAS IDENTIFIED CLEAR GEOGRAPHICAL AND MARKET SEGMENTS WHERE WE WANT TO POSITION OURSELVES AND ACHIEVE LEADERSHIP.

MR LEE KIAN SOO

EXECUTIVE CHAIRMAN AND ADVISOR,EMAS OFFSHORE LIMITED BOARD


Dear Shareholders,

Over the financial year ended 31 August 2014 (“FY2014”), EMAS Offshore Limited (“EMAS Offshore” or “the Group”, formerly EOC Limited) has achieved significant milestones, including initiating the consolidation of EMAS Offshore and Ezra Holdings Limited’s (“Ezra”) Offshore Support Services (“OSS”) division. In October 2014, we successfully completed this consolidation, as well as the secondary listing of the Group on the Mainboard of the Singapore Exchange Securities Trading Limited (“SGX-ST”). EMAS Offshore is now dual-listed in Oslo, Norway and Singapore, allowing us to tap into both the Asian market, where the OSS business and EMAS brand is well appreciated, as well as more matured European markets. We are grateful to shareholders for making this milestone possible.

The business combination has transformed EMAS Offshore into one of the leading offshore services providers in the Asia Pacific region, with one of the youngest and largest fleet of deepwater offshore support vessels, where we are well-positioned to capture market opportunities across various business segments.

Going forward, the Group has identified clear geographical and market segments where we want to position ourselves and achieve leadership. Asia and Africa are key regions where we are targeting the offshore support, offshore accommodation and Maintenance Modification and Operations (“MMO”) markets. In particular, we will be looking to leverage our engineering and project management expertise to develop our capabilities in the MMO business segment.

For FY2014, EMAS Offshore reported a good set of results, with a 9% increase in revenues to US$47.0 million, and an almost four times increase in net attributable profit to US$54.5 million. We achieved improved utilisation for our accommodation and maintenance vessels, Lewek Conqueror and Lewek Chancellor, having secured new long-term contracts, as well as improved operational performance from our FPSO units.

Allow me to share with you some key highlights from FY2014.

Offshore Construction

The offshore support segments are driven by requirements from ongoing development and production activities – we see this in the ongoing demand for our Offshore Accommodation Vessel (“OAV”) fleet. In FY2014, the Lewek Chancellor and Lewek Conqueror commenced long-term charters with oil majors in Africa and Asia, respectively, in line with our business plan for longer

CHAIRMAN’S MESSAGE

term contracts. We also announced a US$200 million sale-and-leaseback arrangement for the Lewek Champion in February 2014 – this transaction allowed us to improve our financial position and strengthen our balance sheet.

In line with our focus on growing our offshore accommodation business, the Group acquired a new accommodation and support vessel, and announced that we will be adding two 239-men (upgradable to 300 men) and DP3 (Dynamic Positioning) accommodation/maintenance vessels to our fleet. The two OAV newbuilds are scheduled for delivery in 2016 and will further prepare us for opportunities in the global offshore accommodation segment.

Offshore Production

Earnings from our FPSO operations have contributed well to Group earnings in FY2014. Our first FPSO, Perisai Kamelia (previously Lewek Arunothai) was deployed on a fast-track gas production project in the North Malay Basin, Malaysia, where she has successfully completed start-up and commissioning since commencing charter in November 2013. Our second FPSO, Lewek EMAS, has also been operating successfully in the Chim Sao field in offshore Vietnam for over three years now, with good uptime and having maintained an excellent safety record.

EMAS Offshore Limited

With the formation of EMAS Offshore, our people are accompanying indispensable assets. I would like to congratulate Jonathan Michael Dunstan on his appointment as the Chief Executive Officer of the enlarged entity.

While there remains near-term headwind in the global oil and gas industry, we continue to believe that the long term fundamentals of the industry are sound, and offshore development and production activity will continue. We remain prudently optimistic about the future and look forward to your unwavering support, with the aim to build on EMAS Offshore’s reputation as a leading offshore support and accommodation services provider in the region.

MR LEE KIAN SOOEXECUTIVE CHAIRMAN AND ADVISOR,EMAS OFFSHORE LIMITED BOARD


VISION

CORE VALUES

TO BE THE TRUSTED PARTNER AND LEADER IN THE OFFSHORE OIL AND GAS INDUSTRY, WHEREVER WE OPERATE

INTEGRITY• Every EMAS employee will act with the highest level of business

ethics and integrity, in compliance with local and international rules and regulations

• No personal agenda, and our interest must be with our clients

SOCIAL RESPONSIBILITY AND MUTUAL RESPECT• We embrace social responsibility and value relationships with

Stakeholders and Communities, wherever we operate

• Our people all around the world work with different attitudes and cultures, understanding them is important

HEALTH, SAFETY AND ENVIRONMENT (“HSE”)• At EMAS, safety is a way of life. Our commitment to HSE is at the

heart of all our business activities

• Respect for our environment and future generations

• Safety of our employees

QUALITY AND OPERATIONAL EXCELLENCE• We are always determined to meet our delivery and execution

targets without compromising on quality and workmanship standards. At EMAS, we strive for excellence and pursue continuous improvement

• Building a quality culture and recognising the ultimate cost of poor quality is key

• Projects executed and delivered on time make money for our clients. When they make money, we make money too

TEAMWORK• We value teamwork and are dedicated to delivering successful

results together with our Clients, Vendors, Colleagues and Stakeholders

• Deliver solutions for our clients

• Deliver profit to our shareholders






MISSION

TOGETHER, WE ARE COMMITTED TO DELIVER SAFE, EFFECTIVE AND BEST VALUE SOLUTIONS TO OUR CLIENTS.


MR LEE KIAN SOO Executive Chairman and Advisor

Mr Lee, 69, is one of the founders of the Ezra Group (Ezra Holdings Limited) and is instrumental in bringing it to where it is today. With more than 40 years’ experience in the shipping and offshore support services industry, and as an Advisor to the Group, Mr Lee provides his wealth of experience and expertise to assist in building the business. He has been responsible for strategic planning, business development and marketing of the Ezra Group since its inception in 1992. Mr Lee is currently Non-Executive Chairman of Ezion Holdings Limited. Prior to the founding of Ezra Group, he worked in various shipyards. Mr Lee holds a Second Mate Certificate of Competency.

MR LEE CHYE TEK LIONEL Non-Executive Vice Chairman

Mr Lionel Lee, 41, is currently the Group CEO and Managing Director of Ezra Holdings Limited, having joined since 1995, he is responsible for Ezra’s management and operations, including formulating and implementing business strategies and policies, marketing and charting business growth. Mr Lionel Lee’s area of expertise extends to strategic planning, project and performance management. Under his tenure, Ezra has grown from an Asian ship charterer to a global offshore construction contractor. Mr Lionel Lee is also the Chairman and Non-Executive Director of Triyards Holdings Limited. Besides business interests, he is also the Patron of Boon Lay Citizens’ Consultative Committee and was awarded the Public Service Medal in 2011 for his work with underprivileged children in Singapore. Mr Lionel Lee holds a Graduate Diploma in Business Administration from the Western Sydney International College.

CAPTAIN ADARASH KUMAR A/L CHRANJI LAL AMARNATH Non-Independent Non-Executive Director

Captain Kumar, 54, has over 35 years’ experience in the marine industry. Captain Kumar started his career with Malaysian International Shipping Corporation in 1979 where he held various positions on board vessels while working for this company until 1992. He was Assistant General Manager at Bumi Armada Navigation Sdn Bhd, an offshore support services provider based in Malaysia, from 1993 to 2002 where he was responsible for its operations. In 2002, Captain Kumar joined Ezra and is currently Executive Director and Group Chief Operating Officer. He is a qualified Master Mariner and holds a Certificate of Competency as Master of a Foreign Going Ship issued by the Malaysian Marine Department.

BOARD OF DIRECTORS


MR CUTHBERT (CHAS) I.J. CHARLES Independent Non-Executive Director

Mr Charles, 72, has over 30 years of experience in the oil and gas (upstream) industry with experience in the United Kingdom, United States, Singapore and India. He joined Halliburton in 1975, where he worked at and retired in 2008. From 2001 to 2005, Mr Charles was Regional Vice President for Halliburton in Asia Pacific; from 2005 to 2008, he was Vice President for Halliburton in India, before his retirement in 2008. Mr Charles is a Chartered Mechanical Engineer (London) and a Fellow of Institute of Mechanical Engineers United Kingdom.

DR WANG KAI YUEN Independent Non-Executive Director

Dr Wang, 67, started his career as an engineer with Radio & Television, Singapore in 1972, before commencing on PhD studies at Stanford University. In 1978, Dr Wang joined SRI International, Menlo Park, as Senior Transportation Analyst. From 1982 to 1989, he was Deputy Director of the Institute of Systems Science where he led the research division. Dr Wang joined Xerox Singapore Software Centre in 1989 and his last role at Xerox Singapore Software Centre was Managing Director, before retiring in December 2009.

Dr Wang is an Independent Director of Cosco Corporation (Singapore) Limited; Matex International Limited; China Aviation Oil (Singapore) Corporation Ltd; Ezion Holdings Ltd; HLH Group Limited; ComfortDelgro Corporation Limited; and A-Sonic Aerospace Limited, all of which are companies listed on the Main Board of the SGX-ST. He holds a Bachelor of Engineering (Electrical Engineering) (Honours) from the University of Singapore; a Master of Science (Industrial Engineering); a Master of Science (Electrical Engineering); and a PhD (Engineering) from Stanford University. Dr Wang was formerly a Member of Parliament for Bukit Timah Single Member Constituency.

MR DALE BRUCE ALBERDA Independent Non-Executive Director

Mr Alberda, 69, brings with him a wealth of experience in the Finance and Maritime sectors, having spent more than 30 years in various roles within these industries. He graduated in 1973 with a Bachelor’s Degree in Business Administration from the Montana State University and commenced his career as a Staff Accountant in Marine Colloids, Inc. (now a division of FMC Corporation) where he became Corporate Controller in 1976. Mr Alberda’s most recent experience includes 11 years with Caterpillar Financial Services Corporation where he was a Sales Manager in its Marine Division, responsible for regional sales, as well as five years’ total experience with various banks namely: the Bank of America, Key Bank of Washington and Christiana Bank where he served as Vice President and was responsible for its marine lending portfolio.

Mr Alberda holds a Bachelor of Science from the Eastern Montana College. He is also Non-Executive Director of Triyards LLC, where he is a United States’ representative on Triyards LLC’s board.

BOARD OF DIRECTORS


MR JONATHAN MICHAEL DUNSTAN Chief Executive Officer

Aged 43. Mr Dunstan’s main responsibilities include business development, forming and the maintenance of strategic partnerships, as well as the execution of the Group’s strategic goals.

Mr Dunstan has more than 20 years of offshore industry experience and was the Managing Director of London Marine Consultants (“LMC”) prior to its acquisition by Ezra Holdings Limited. He began his career as a structural engineer designing fixed platforms and later worked with a specialist heavy-lift contractor. He joined LMC in 1998 where he was instrumental in expanding the firm’s range of capabilities and services. With his immense industry experience in FPSOs and extensive technical experience, as well as his prior involvement as a senior strategic consultant within the EMAS Group, Mr Dunstan plays a key role in the continued development of the Group’s business.

MR JASON GOH HSENG WEI Chief Financial Officer

Aged 38. Mr Goh is responsible for overall financial operations and the Group’s investor relations. Prior to joining EMAS Offshore, Mr Goh was the General Manager for Corporate Finance at Ezra, overseeing Ezra Group’s capital management activities and developing its funding strategy. Before joining Ezra in October 2009, he was Associate Director of Investment Banking at CLSA Merchant Bankers Limited, where he advised and executed transactions including initial public offerings, placements and corporate advisory services throughout South East Asia. Before CLSA Merchant Bankers Limited, Mr Goh was in legal practice with Stamford Law Corporation where his focus was on mergers and acquisitions, capital markets and corporate financial matters.

Mr Goh holds a Bachelor of Science Degree (with Double Honours) in Law (Second Upper) and Accounting (First Class) from the University of Southampton. He commenced his career as Management Associate at Citigroup’s Global Corporate and Investment Bank division.

MR DAVID MICHAEL WALLACE Chief Operating Officer

Aged 62. Mr Wallace is responsible for the Group’s operations. Mr Wallace has over 30 years of experience in the offshore oil and gas industry, prior to joining EMAS Offshore. He started his career in 1979 with Halliburton Geophysical Services where he was involved in two and three dimensional data processing and data acquisition in land, marine and transition environments. Between 1995 to 1999, Mr Wallace joined Tidewater Inc as Country Manager for the Venezuelan office; from 2000 to 2002, he was Vice President of Global Marine Logistics at Asco LLC, where he was responsible for business expansion; in 2006, Mr Wallace was with Eastern Marine Services, a joint venture of Trico Marine Group where he initiated the start-up and Trico Marine Group’s expansion into South East Asia; and from 2011 to 2013, he was Vice President of International Operations in Hornback Offshore.

Mr Wallace holds a Master of Business Commerce from the University of Pretoria in South Africa, as well as a Bachelor of Science Degree from Auburn University in Alabama, the United States.

MANAGEMENT TEAM


MANAGEMENT TEAM

MR RANJIT SINGH Chief Commercial Officer, Offshore Support & Accommodation Services

Aged 61. Mr Singh is responsible for business development and client relationship management of the Offshore Support & Accommodation Services division. From 1980 to 2013, he was with Swire Pacific Offshore where he held various posts and was responsible for business development and marketing vessels to offshore clients, monitoring Swire Pacific Offshore fleet, business expansion in new markets, among his other roles. From 1978 to 1980, Mr Singh was Operations Officer at Inchcape Shipping, venturing into agency support services for several shipping lines. He has more than 40 years of experience in the marine support operations industry, starting the first six years of his career as a naval communicator with the Republic of Singapore Navy.

Mr Singh owns a Certificate of Participation in Swire Management Programme and a Certificate of Participation in INSEAD-SIRE Advanced Management Programme from INSEAD Business School. He is also an Associate Member of the Singapore Instititute of Management.

MR JOSEPH AZRAN-ALEMBERG Chief Commercial Officer, Offshore Production Services

Aged 40. Mr Azran-Alemberg is responsible for business development and managing client-relationships for the Offshore Production Services division. Prior to being appointed in EMAS Offshore, he had been the General Director and Operations Manager of PVTrans Emas Co Ltd since 2010. Before PVTrans Emas Co Ltd, he was with Tanker Pacific from 2000 to 2010 where he occupied various positions – the last being the Corporate Controls & Services Manager of Tanker Pacific where he was responsible for handling all project services functions which include planning, estimation, cost control and project reporting. From 1995 to 2000, Mr Azran-Alemberg was with Layam Ship Supplies Ltd as a Sales & Marketing Manager where he was responsible for sourcing for new suppliers locally and overseas, among his other responsibilities. He has over ten years of experience in the FPSO industry.

Mr Azran-Alemberg holds a Master’s Degree in Business Management & General Administration from the University of Haifa, Israel and a Diploma in Business Marketing from the Israeli Centre for Management. He is also a Certified NICP Project Management Professional with the National University of Singapore and PMI Institute.



E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 41 8


DIRECTORS’ AND MANAGEMENT REPORT

COMPANY OVERVIEW

EMAS Offshore was incorporated in February 2007 and was a provider of offshore accommodation, construction and production vessels and services. It unfolded from Ezra, a leading global offshore contractor and provider of integrated offshore solutions to the oil and gas industry. EMAS Offshore was listed on the Oslo Børs since 2007.

On 10 July 2014, the Company entered into a Business Combination agreement with Ezra Holdings Limited (“Ezra”) (the “Business Combination Agreement”) in connection with the proposed acquisition. And on 3 October 2014, the Group completed its business combination with Ezra’s Offshore Support Services division and acquired 44 offshore vessels (comprising 24 anchor handling, towing and supply vessels, seven anchor handling tugboats and ten platform supply vessels, one offshore accommodation vessel and two barges). After the business combination, EMAS Offshore became an established offshore services provider offering offshore support services, accommodation, construction and production services to customers in the oil and gas industry throughout the oilfield lifecycle, spanning exploration, development, production and decommissioning stages. Headquartered in Singapore, EMAS Offshore holds a leading market position in Asia Pacific, with global operations across Latin America, Africa and Australia.

The Company was subsequently secondary-listed on the SGX-ST on 8 October 2014 and became a dual-listed company in both Norway and Singapore.

BUSINESS OVERVIEW

Prior to the Business Combination, the Group operates and owns interests in two accommodation and construction barges, two heavy-lift pipelay construction vessels and two FPSO systems. In addition, EMAS Offshore provides engineering, project management and installation services for production projects. EMAS Offshore’s core capabilities were in two main business segments, namely:

• Offshore Construction (“Construction”); and• Offshore Production (“Production”)

For the Construction Division, services include chartering and operation of offshore accommodation work barges, heavy-lift and related offshore support services as well as pipe-laying services. Under the Production Division, EMAS Offshore provides engineering, project management, installation and offshore and marine services in the fixed and floating production sectors, as well as provision and management of FPSO systems.


REVENUE

47.0US$MILLION

NET OPERATING PROFIT

42.6US$MILLION

NET PROFIT

54.5US$MILLION

FINANCIALHIGHLIGHTS


DIRECTORS’ AND MANAGEMENT REPORTFINANCIAL HIGHLIGHTS

REVENUE

Revenue for FY2014 was US$47.0 million, an increase of 9% or US$3.9 million from US$43.1 million in FY2013. The increase was mainly due to increased contribution from project management, engineering and procurement services and higher revenue contribution from higher charter rate from Lewek Conqueror on a new charter contract commencing in 3Q FY2014. Lewek Conqueror is engaged in the accommodation and support services for a project in South East Asia. The above increase is partly offset by lower revenue contributed by Lewek Chancellor due to the vessel transiting to a new charter.

GROSS PROFIT

Gross profit for FY2014 amounted to US$19.1 million, as compared to US$22.5 million in FY2013, a decrease of US$3.4 million. The decrease was mainly due to the change in cost structure resulting from a sale- and-leaseback transaction on Lewek Champion and lower revenue contribution from Lewek Chancellor due to the vessel transiting to a new charter. The above decrease was partially offset by the reduction in operating cost of Lewek Conqueror mentioned above.

OTHER OPERATING INCOME, NET

Other operating income, net for FY2014 amounted to US$33.8 million compared to US$4.4 million in FY2013, an increase of US$29.4 million. The increase was mainly due to a US$36.4 million gain recognised in connection with the sale-and-leaseback of Lewek Champion. The above increase is partially offset by the Business Combination transaction and secondary listing expense of US$1.8 million incurred in 4Q FY2014. The corresponding comparative year included a gain on divestment of a 51% stake in the FPSO, Perisai Kamelia of US$2.9 million.

ADMINISTRATIVE EXPENSE

Administrative expenses remain relatively unchanged compared to prior year.

FINANCIAL INCOME

Financial income relates mainly to interest income derived from loan to an associate as well as cash and fixed deposits placed with banks.

FINANCIAL EXPENSE

Financial expense refers to interest incurred on bank loans. The decrease in interest expense was in line with the repayment of bank loan upon the completion on sale of Lewek Champion.

SHARE OF PROFIT OF ASSOCIATES

The share of profit of associates represents the contribution from operations of Perisai Kamelia, Lewek EMAS and Enterprise 3. The increase was mainly due to the share of contribution from Perisai Kamelia for nine months and improved operating performance from Lewek EMAS. However, this was partially offset by the reactivation costs and operating loss incurred from Enterprise 3.

PROFIT BEFORE INCOME TAX

Profit before income tax for FY2014 amounted to US$54.7 million, an increase of 364% from US$11.8 million in FY2013. The increase was mainly due to the increase in other operating income and higher contributions from share of profit of associates. The increase was partially offset by the decrease in gross profit.

INCOME TAX

Income tax relates to the amount paid or expected to be paid to the respective tax authorities. The Group has exposure to income tax in various jurisdictions. The tax rates and tax laws used to compute the amounts are those that had been enacted or substantively enacted at the end of the reporting periods. The current year’s tax credit relates to an overprovision of tax by a subsidiary in prior years.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The discussion below refers to the financial position of the Group as at 31 August 2014 and 31 August 2013.

The Group’s total assets amounted to US$543.9 million as at 31 August 2014 and US$549.7 million as at 31 August 2013. The decrease is mainly due to the sale of Lewek Champion for US$111.3 million and usage of sale proceeds to repay a bank loan. The decrease is partially offset by the increase in investment in associates and joint ventures and acquisition of Lewek Alphard for US$32.5 million and two offshore accommodation vessels, which are currently under construction.

The Group’s total liabilities amounted to US$310.4 million as at 31 August 2014 and US$373.9 million as at 31 August 2013. The decrease was mainly due to the repayment of bank loans amounting to US$131.0 million which include the loan relating to Lewek Champion as mentioned above.


DIRECTORS’ AND MANAGEMENT REPORTFINANCIAL HIGHLIGHTS

REVENUE(US$ ‘000)

FY2014 46,974

58,113

65,088

49.04

FY2013 43,071

18,136

28,756

9.98

FY2012 132, 929

(1,654)

12,966

(11.34)

EBIT(US$ ‘000)

FY2014

FY2013

FY2012

EPS(US CENTS)

FY2014

FY2013

FY2012

EBITDA(US$ ‘000)

FY2014

FY2013

FY2012

20,000

10,000

10,000

10.00

(10,000)

(10.00)(20.00)

40,000

20,000

20,000

20.00

60,000

30,000

30,000

30.00

100,000

50,000

50,000

50.00

80,000

40,000

40,000

40.00

120,000

60,000

60,000

60.00

140,000

70,000

70,000

70.00





CORPORATE GOVERNANCE

EMAS Offshore is dual-listed on Oslo Børs and SGX-ST, with Oslo Børs as our primary exchange. As companies which are primary listed on the Oslo Børs are required to relate to the corporate governance standards of Norway or their countries of incorporation, our Company has elected to relate to the Norwegian standards, set out in the Norwegian Code of Practice for Corporate Governance (the “Code”). The Code is a non-binding recommendation as published by the Norwegian Corporate Governance Board. Being a company incorporated in Singapore and dual listed on Oslo Børs and SGX-ST, certain practices may deviate from certain recommendations of the Code due to different practices and principles observed by Singapore public listed companies.

The Company will provide explanations of non-compliance if the recommendations are not fully adhered to.

The Board of Directors agrees that the best interests of the Company and the Shareholders be regarded as a whole and is reflected through the company’s operations and strategies. In addition to commercial considerations, decisions taken by EMAS Offshore should be on the basis that the company is responsible for the general advancement of society as a whole, is obligated to maintain and where possible, preserve the environment for the benefit of the next generation, and is committed to the safety, well-being and development of its employees. This approach is encouraged in all employee dealings with existing clients, potential customers and suppliers, and which are in accordance with reasonable and fair market practices. EMAS Offshore, as part of the EMAS group of companies, is committed to the highest standards of corporate social responsibility (“CSR”). The four CSR focus areas of EMAS are: corporate governance, caring for its employees, environment sustainability and socially beneficial causes. EMAS is actively involved in environmental awareness activities such as Earth Hour, and is also engaged in various community support efforts. The Board and the executive management are committed towards preventing corruption in their dealings.

GOING CONCERN

Based on the Group’s financial position, its results and cash flows, the Board is of the opinion that there are reasonable grounds to believe that the Group is expected to operate on a going concern basis.

DIRECTORS’ ANDMANAGEMENT REPORT


• Changes in the Group’s operating expenses, including crew wages, insurance, dry-docking, repairs and maintenance

• Redeployment risks

The Group is exposed to a number of financial risks including but not limited to credit risk, liquidity risk, foreign currency risk and interest rate risks. It is the policy of the Group to continuously monitor and review these risks and take the necessary steps to minimise the potential effects of these risks on the Group’s performance.

Although some factors may be outside our control, as described above, the Group is actively managing any possible operational risk that could arise, through continuous improvements to the current business operational workflow, processes, practices and activities.

OTHER EVENTS DURING FY2014

In August 2014, EMAS Offshore agreed to acquire 50% of the entire issued share capital of Lewek Antares Shipping Pte Ltd, a special purpose entity which owns two offshore support

RISK

The Group is exposed to various known and unknown risks and uncertainties. These uncertainties and risks could develop into actual events that could materially and adversely affect our business or financial conditions, the results of our operations or our prospects. These uncertainties and risks could include, among others:

• Changes in financial markets • Changes in socioeconomic environments • The availability of substitute services• The competitive nature of the offshore oil and gas industry• Oil and gas prices• Oil and gas demand• Improvements in technology• Changes in local and foreign government regulations• Changes in economic conditions or political events• The inability of the Group to obtain financing for potential

new builds or to maintain existing assets on favourable financing terms

• Changes in the spending plans of our customers



vessels, namely the Lewek Atria, a 3,266 dwt Platform Support Vessel, and the Lewek Antares, a 2,900 dwt multi-purpose service vessel with a 60-tonne crane. During the financial year, we also commenced our newbuilding programme. We are currently building two new OAVs with Xiamen Shipbuilding Industry Co Ltd, a shipyard based in Xiamen, China, with options for a further two vessels. These are 239-men (upgradable to 300-men) OAVs with DP3 capability, and will significantly enhance our ability to compete in the accommodation segment when they are delivered in 2016.

EVENTS AFTER THE BALANCE SHEET DATE

On 10 July 2014, the Company entered into a Business Combination agreement with Ezra in connection with the proposed acquisition of following companies held by Ezra (the “OSS companies”):

(i) Aries Warrior AS;(ii) Aries Warrior DIS;(iii) Bayu Emas Maritime Sdn Bhd;(iv) Bayu Intan Offshore Sdn Bhd;(v) Emas Offshore (Labuan) Bhd;(vi) Emas Offshore (M) Sdn Bhd;(vii) Emas Offshore (Thailand) Ltd;(viii) Emas Offshore Pte. Ltd.;(ix) Emas Offshore Services (Australia) Pty Ltd;(x) Emas Offshore Services (B) Sdn Bhd;(xi) Emas Offshore Services (M) Sdn Bhd;(xii) Emas Offshore Services Nigeria Limited;(xiii) Emas Offshore Services Pte. Ltd.;(xiv) Genesis Offshore Sdn Bhd;(xv) Lewek Altair Shipping Private Limited;(xvi) Lewek Aries Pte. Ltd.;(xvii) Lewek Crusader Shipping Pte. Ltd.;(xviii) Lewek Ebony Shipping Pte. Ltd.;(xix) Lewek Ivory Shipping Pte. Ltd.;(xx) Lewek LB 1 Shipping Pte. Ltd.;(xxi) Lewek Robin Shipping Pte. Ltd.;(xxii) Lewek Shipping Pte. Ltd.;(xxiii) Lewek Ruby Shipping Pte. Ltd.;(xxiv) Tunis Oil Pte. Ltd.;(xxv) Lewek Antares Shipping Pte. Ltd.;(xxvi) Intan Offshore Sdn Bhd and its subsidiaries; and(xxvii) Emas Offshore Services (Philippines) Inc.


In exchange for the sale of the OSS Companies, the Company paid a consideration of US$520.0 million, satisfied via the followings:

• US$25.0 million, in cash;• US$370.0 million, satisfied by the allotment and issue by the

Group to Ezra for the consideration of shares based on the issue price of NOK 8.18 per share; and

• deferred cash payment of US$125.0 million (“Deferred Consideration”) over a period of 3 years (the “Payment Period”), with interest payable at the rate of 3.5% per annum on the outstanding principal amount of the Deferred Consideration in the second and third years of the Payment Period.

On 7 August 2014, the directors declared a conditional interim dividend of Norwegian Krone (“NOK”) 1.12 per share, conditional upon the fulfilment or waiver of the conditions precedent for completion of the business combination. On 29 September 2014, the Company announced that the condition for payment of the dividend had been fulfilled. The conditional dividend was paid on 9 October 2014.

The shareholders’ approval for the Business Combination Agreement was obtained in a shareholders’ Extraordinary General Meeting (“EGM”) held on 19 August 2014 and on 3 October 2014, the business combination was completed together with the Company’s secondary public offering of 48,585,000 shares on the SGX-ST.

The shareholders approved the change in name of the Company from “EOC Limited” to “EMAS Offshore Limited” in the EGM held on 15 September 2014.

On 8 October 2014, the Company was listed on the Main Board of SGX-ST, placing it as the first company to dual-list in Norway and Singapore for capital raising.

RESTRICTIONS ON TRADING

Ezra has agreed to certain lock-up restrictions for a period of 3 months commencing from the date of admission of the Company to the Main Board of the SGX-ST. The lock-up restrictions do not, however, apply to transactions made by Ezra pursuant to the sale of the Offering Shares under the Norwegian Retail Offering.


DIRECTORS’ AND MANAGEMENT REPORTOPERATIONS REVIEW

In December 2013, Perisai Kamelia (formerly Lewek Arunothai) - FPSO vessel that was deployed on a fast-track gas production project in the North Malay Basin, Malaysia – successfully completed start-up and commissioning and that the vessel’s charter has commenced in November 2013. The FPSO successfully completed her first offload of condensate and recently finished her first year of operation without any loss time injury. The contract is with Hess Exploration and Production Malaysia B.V. (Hess) and is to provide support for early production activities in the North Malay Basin. Signed in November 2012, the contract covers a three-year charter period valued at about US$272.1 million, with extension options that could add a further three years to the charter duration.

PERISAI KAMELIA

LEWEK CHAMPIONIn February 2014, EMAS Offshore successfully signed a US$200 million sale-and-leaseback arrangement for Lewek Champion with a unit of ICBC Financial Leasing Co. Ltd (part of the Industrial & Commercial Bank of China (ICBC) group). Under the terms of the deal, EMAS Offshore will leaseback the vessel on a ten-year bareboat charter basis with options to re-purchase from the end of the fifth charter year. The Lewek Champion is on a long term bareboat charter to EMAS AMC, the subsea services division of Ezra.

OVERVIEW FOR FY2014

During the financial year ended 31 August 2014 (“FY2014”), the Group continued to re-align its business strategy to achieve stronger growth momentum. As a result, EMAS Offshore reported net attributable profit of US$54.5 million for FY2014, a significant increase from US$11.1 million for the previous corresponding year. After adjusting for US$1.8 million in transaction expenses related to the business combination (as described below) and excluding a one-time gain of US$36.4 million relating to the sale-and-leaseback of Lewek Champion, the adjusted net profit was US$19.9 million, a testament to our strong operational performance for the financial year.

Critical to this growth was our ability to capitalise on opportunities in the accommodation segment of the market. The Group was awarded long-term charters from quality clients for our accommodation barges, Lewek Conqueror and Lewek Chancellor, as we continue to grow our base of recurring income. At the same time, the Group’s production assets demonstrated

stronger operational performance during FY2014, further contributing to the Group’s earnings.

We also completed the sale-and-leaseback transaction of the heavy lift and construction vessel, Lewek Champion in February 2014, recording a one-time gain of US$36.4 million. The sale-and-leaseback of Lewek Champion contributed to the reduction of our gearing ratio to 0.49 times as at 31 August 2014 from 1.02 times as at 31 August 2013. The improved financial position provides the Group with additional financial flexibility to pursue growth opportunities in the accommodation segment of the market, continuing our growth trajectory.

At the end of FY2014, EMAS Offshore’s operations were on a favourable footing, as vessels in both the Offshore Production and Offshore Accommodation and Construction business segments were deployed on long-term charters to oil majors and international oil companies in support of various key offshore projects globally.



In May 2014, Lewek Chancellor was awarded a charter by an oil major to provide accommodation and maintenance services for a project in Africa. The charter is worth in excess of US$40 million, including options, and is for a period of two years, with the option to extend for an additional one year. The vessel commenced work in the fourth quarter of FY2014.

LEWEK CHANCELLOR

The Group’s second FPSO, Lewek EMAS, is currently deployed in the Chim Sao field, Vietnam, she continues to display stabilised operational performance with operating uptime of over 90%. The vessel is currently on a six–year charter to Premier Oil Vietnam Offshore B.V., with extension option for an additional six years.

LEWEK EMAS

In March 2014, Lewek Conqueror was awarded a contract worth close to US$100 million, including options. Under this charter contract with an oil major, the accommodation and construction barge will provide accommodation and support services for a project in South East Asia, for a period of five years, with an option to extend the agreement for a further two years. The vessel commenced work in the third quarter of FY2014.

LEWEK CONQUEROR






INDUSTRY LEADING HSE PERFORMANCE

In January 2014, EMAS have successfully achieved renewal of the ISO 9001:2008 Certification without any non-conformance. The efficacy of our Quality Management System in managing quality throughout the organisation, responsibilities, processes, practices and continuous improvement have proved invaluable in winning clients, contributing to the Group’s overall revenue.

Throughout FY2014, HSE has continued its mission to prevent injuries and accidents at the workplace. Our FPSO Perisai Kamelia successfully completed her first year of operations without any lost time injury. The project was also awarded the HESS Global Safety Award for the execution phase. EMAS has in place, EMAS Safety Measures highlighting 12 safety areas which provide basic guidance to all crew. We are committed to the highest standards of care at all times, and in all circumstances. EMAS Offshore will continue to increase awareness among employees and crew in upholding core values in driving HSE as a core business activity in our daily operational activities.

We constantly seek to reinforce our business integrity every day by striving to improve the service that we provide, making responsible decisions in how we manage the business and actively managing the social and environmental impacts of what we do via various initiatives rolled out such as the EMAS Safety Measures. EMAS Offshore recognises diversity in a global environment and seeks employees of different backgrounds and perspectives irrespective of gender, nationality, culture or religion. We strive to create an environment where our employees are treated with respect and ensured of equal opportunity to grow and excel.

OUTLOOK FOR FY2015

With the transformation of EMAS Offshore after the business combination and the addition of EMAS Marine’s young fleet of deepwater capable offshore support vessels, the Group believes that it is now well-positioned to consolidate its leadership position in various markets, while expanding into new regions.

Looking ahead, the Group anticipates that the proportion of production activities in offshore deepwater fields to continue to increase, due to the gradual depletion of onshore and shallow water fields. This trend and expected growth in deepwater activity is likely to support continued demand for EMAS Offshore’s young technologically-advanced offshore support vessel fleet, capable of operating safely and efficiently in deepwater or remote harsh areas.

The Group also foresees there to be particular opportunities in the offshore accommodation and support segment of the market, driven by new and ongoing projects and an expected increase in maintenance, modification and operations activity on existing oil and gas infrastructure, as accommodation vessels are needed to support on-site workers. With the addition of two more OAV newbuilds to its accommodation fleet in 2016, and the option for a further two vessels, the Group will be looking to enhance its presence in this market segment.

While there have been recent headwinds in the (“O&G”) industry, the Group believes the long term fundamentals of the O&G industry will continue to support offshore development and production activity, as well as demand for offshore assets and accommodation and support services. Barring any prolonged weakness in the global economy and a decline in oil prices affecting the level of activity in the global offshore industry, the Group remains cautiously optimistic of its business prospects going forward.



In the opinion of the directors and the executive management,

i) The consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company as set out on pages 56 to 60 are drawn up in accordance with the provision of the Singapore Companies Act, Cap 50 and International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 August 2014, and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the financial year then ended.

ii) The directors’ and management report set out in the Annual Report include a true and fair review of information required under the Norwegian Securities Act Section 5-5 second paragraph.

ON BEHALF OF THE DIRECTORS

Mr Lee Kian Soo(Executive Chairman and Advisor)

ON BEHALF OF THE EXECUTIVE MANAGEMENT

Mr Jon Dunstan(Chief Executive Officer)




CORPORATE MILESTONES

Lewek Conqueror wins contract worth US$100 mil

Charter to provide accommodation and support services for project in South East Asia for 5 years (with an option to extend for further 2 years)

Entered a US$200 million sale-and-leaseback transaction with ICBC Financial Leasing for Lewek Champion, the Group’s DP2 pipe-lay and heavy lift construction vessel

Acquired an accommodation and support vessel

Lewek Chancellor Secures Award Worth Over US$40M

Full support in accommodation and maintenance services for a project in Africa for a period of 2 years, with an option to extend for an additional 1 year.

Acquired 49% of SJR Marine (L) Ltd from Perisai Petroleum Teknologi Bhd

Appointment of New Chief Financial Officer

Mr Jason Goh was appointed to take over the role of CFO from Mr Chan Eng Yew

26 Dec 19 Feb 5 Mar 6 May 10 Jul1 Feb

2013 2014


Entered into shipbuilding contracts with Xiamen Shipbuilding Industry Co., Ltd. for the two accommodation/maintenance vessels, with options for a further two similar specification vessels

EMAS Offshore announced completion of Business Combination and Singapore Offering

Appointment of New Chief Executive Officer

Mr Jon Dunstan was appointed CEO

EOC Limited was renamed to “EMAS Offshore Limited”

EMAS Offshore dual-lists on SGX-ST

EMAS Offshore Limited Lodged Preliminary Prospectus with Monetary Authority of Singapore

Acquired 50% of Lewek Antares Shipping Pte Ltd from Konquest Marine Pte Ltd

17 Jul 29 Aug26 Aug 15 Sep 1 Oct 3 Oct 8 Oct

Appointment of Director

Captain Adarash Kumar A/L Chranji Lal Amarnath was appointed as a Director of the Company


EMAS OFFSHORE LIMITED

Emas EOC Ventures Pte Ltd

Emas Offshore Production Services (Vietnam) Pte Ltd

Emas Victoria (L) Bhd

SJR Marine (L) Ltd

Lewek Canopus Shipping Pte Ltd

Lewek Champion Shipping Pte Ltd

Lewek Conqueror (BVI) Ltd

Lewek Evershine Shipping Pte Ltd

Lewek Chancellor Shipping Pte Ltd

Emas Offshore Construction and Production Pte Ltd

Lewek Eversure Shipping Pte Ltd

EOC Victoria Production Sdn Bhd

Victoria Production Services Sdn Bhd

Lewek Alphard Shipping Pte Ltd

Lewek Emerald Shipping Pte Ltd

Lewek Castor Shipping Pte Ltd

Emas OffshorePte Ltd

Emas Offshore Services Pte Ltd

Lewek Ebony Shipping Pte Ltd

Lewek Robin Shipping Pte Ltd

Lewek LB1 Shipping Pte Ltd

Emas Offshore (Thailand) Ltd

Emas Offshore (Labuan) Bhd

Tunis Oil Pte. Ltd.

Emas Offshore Services Nigeria Limited

Lewek Antares Shipping Pte Ltd

50%

100%

49%

41.7%

50%

49%

100%

100%

100%

100% 100%

100%

100%

100%

100%

100%

100%

100%

100%

99.9%

50%50%

100%

100%

100%

100%

49%

100%

100%

100%

CORPORATE STRUCTURE


100 % EMAS Holdings Pte. Ltd.

PV KEEZ Pte Ltd

PV Trans Emas Co Ltd

Lewek Altair Shipping Private Limited

E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4 3 9E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4 3 9

Emas Offshore (M) Sdn Bhd

Lewek Shipping Pte Ltd

Lewek Ivory Shipping Pte Ltd

Lewek Ruby Shipping Pte Ltd

Lewek Aries Pte Ltd

Lewek Crusader Shipping Pte Ltd

Bayu Emas Maritime Sdn Bhd

Emas Offshore Services (M) Sdn Bhd

Bayu Intan Offshore Sdn Bhd

Genesis Offshore Sdn Bhd

Intan Offshore Sdn Bhd

Sarah Pearl Shipping Pte Ltd

Lewek Eagle Offshore Sdn Bhd

Lewek Swift Shipping Pte Ltd

Jade Offshore Sdn Bhd

Intan Offshore (Labuan) Ltd

Lewek Mallard Offshore Sdn Bhd

100%

100% 100%

100% 100%

100%

100%

100%

100%

100%

100%

100%

100%

47.3%

100%

100%

100%

100%

100%

40%

100%

100%

1.7%

Emas Offshore Services (Aust) Pty Ltd

Emas Offshore Services (B) Sdn Bhd

EMAS Offshore Services (Philippines) Inc.

Aries Warrior AS

Aries Warrior DIS


DIRECTORS

MR LEE KIAN SOO Executive Chairman & AdvisorMR LEE CHYE TEK LIONEL Vice ChairmanMR CUTHBERT (CHAS) I.J. CHARLESMR DALE BRUCE ALBERDADR WANG KAI YUENCAPTAIN ADARASH KUMAR A/L CHRANJI LAL AMARNATH

COMPANY SECRETARY

MR YEO KENG NIEN

REGISTERED OFFICE

15 Hoe Chiang Road#28-01 Tower FifteenSingapore 089316Telephone: (65) 6349 8535Facsimile: (65) 6345 0139

AUDITORS

DELOITTE & TOUCHE LLP6 Shenton Way #32-00OUE Downtown 2Singapore 068809

PARTNER-IN-CHARGE

MR SANJAY SHARMA

PRINCIPAL BANKERS

CHINATRUST COMMERCIAL BANK CO. LTD8 Marina View, #33-01 Asia Square Tower 1 Singapore 018960

DBS BANK LTD12 Marina Boulevard, Lvl 46, DBS Asia CentralMBFC Tower 3Singapore 018982

DNB ASIA LTD8 Shenton Way#48-02Singapore 068811

NATIXIS, SINGAPORE BRANCH50 Raffles Place #41-01 Singapore Land TowerSingapore 048623

OVERSEA-CHINESE BANKING CORPORATION LIMITED65 Chulia Street OCBC CentreSingapore 049513

RHB BANK BERHAD90 Cecil Street #01-00 RHB Bank BuildingSingapore 069531

UNITED OVERSEAS BANK LIMITED80 Raffles Place UOB PlazaSingapore 048624

CORPORATE DIRECTORY

CORPORATEGOVERNANCE

42 CORPORATE GOVERNANCE REPORT

FINANCIALCONTENTS

50 REPORT OF THE DIRECTORS

54 STATEMENT OF DIRECTORS

55 INDEPENDENT AUDITORS’ REPORT

56 STATEMENTS OF FINANCIAL POSITION

57 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

58 STATEMENTS OF CHANGES IN EQUITY

59 CONSOLIDATED STATEMENT OF CASH FLOWS

61 NOTES TO THE FINANCIAL STATEMENTS

107 STATISTICS OF SHAREHOLDINGS

108 NOTICE OF ANNUAL GENERAL MEETING



CORPORATEGOVERNANCE

1 IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE

EMAS Offshore is dual-listed on Oslo Børs and SGX-ST, with Oslo Børs as our primary exchange. As companies which are primary listed on the Oslo Børs are required to relate to the corporate governance standards of Norway or their countries of incorporation, our Company has elected to relate to the Norwegian standards, set out in the Norwegian Code of Practice for Corporate Governance (the “Code”). The Code is a non-binding recommendation as published by the Norwegian Corporate Governance Board. Being a company incorporated in Singapore and dual listed on Oslo Børs and SGX-ST, certain practices may deviate from certain recommendations of the Code due to different practices and principles observed by Singapore public listed companies.

The Company will provide explanations of non-compliance if the recommendations are not fully adhered to.

The Board of Directors (“Board”) agrees that the interests of the Company and the Shareholders shall be regarded as a whole and shall be reflected through the Company’s operations and strategies. In addition to commercial considerations, decisions taken by EMAS Offshore should be made on the basis that the company is responsible for the general advancement of society as a whole, is obligated to maintain and where possible, preserve the environment for the benefit of the next generation, and is committed to the safety, well-being and development of its employees. This approach is encouraged in all dealings with employees, existing clients, potential customers and suppliers, which shall be in accordance with reasonable and fair market practices. EMAS Offshore, as part of the EMAS group of companies, is committed to the highest standards of corporate social responsibility (“CSR”). The four CSR focus areas of EMAS are: corporate governance, caring for its employees, environment sustainability and socially beneficial causes. EMAS is actively involved in environmental awareness activities such as Earth Hour, and is also engaged in various community support efforts. The Board and the executive management are committed towards preventing corruption in their dealings.

2 BUSINESS

The Company’s business objectives, vision and strategies are clearly defined in this Annual Report. The Group’s business is to own, operate and the leasing of offshore support, accommodation, pipe laying and construction, as well as floating production units and related services, targeted at the offshore oil and gas industry as defined in clause 3 of the Company’s Memorandum of Association (“MOA”).

The Company’s other business objectives which the Company does not currently perform are also defined in clause 3 of the Company’s MOA. The Company has decided to continue to maintain these activities within its objectives as it will allow the Company to have the required flexibility to capitalise on opportunities associated with the Group’s business.

3 EQUITY AND DIVIDENDS

The Company has an equity capital at a level appropriate to its objectives, strategy and risk profile. According to Article 121 of the Company’s Articles of Association, the Company may declare annual dividends with the approval of our Shareholders in a general meeting, but the amount of such dividends shall not exceed the amount recommended by our Directors. Our Directors may also declare an interim dividend without seeking Shareholders’ approval. According to Article of 122 of the Company’s Articles of Association, the possibility for our Directors to declare an interim dividend is not restricted and does not require any specific mandate from the general meeting. The Company has chosen to comply with normal practice in Singapore and accordingly deviates from the part of the Code section 3 stating that a proposed mandate to the board to declare dividend should be justified.

In considering the form, frequency and amount of future dividends, if any, our Directors will take into account various factors, including but not limited to:

• The level of our cash and retained earnings;• Our expected financial performance; and• The projected levels of capital expenditure and other investment plans.

Investors should note that the intention to recommend the aforesaid dividends should not be treated as a legal obligation by the Company. In determining dividends in respect of subsequent financial years, consideration will be given to maximise Shareholders’ value.


CORPORATEGOVERNANCE

3 EQUITY AND DIVIDENDS (CONT’D)

At every Annual General Meeting, the Company will seek the following mandate from Shareholders:

(i) To issue new shares at any time, and upon such terms and conditions, and for such purposes, and to such person, as the Directors may in their absolute description deem fit; provided that:

(a) The aggregate number of shares to be issued to new Shareholders does not exceed 20% of the issued share capital of the Company; and

(b) The aggregate number of shares to be issued on pro-rata basis to existing Shareholders does not exceed 50% of the issued share capital of the Company

(ii) To purchase ordinary shares of the Company not exceeding in aggregate 10% of the issued and paid-up capital of the Company, at such price as may be determined by the Directors of the Company from time to time, up to a maximum price in accordance with the Singapore Companies Act

These mandates, if approved by Shareholders, will be enforced until the conclusion of the next Annual General Meeting. The next Annual General Meeting is required by the Singapore Companies Act, Chapter 50, to be held once in every calendar year and not more than 15 months from the preceding Annual General Meeting. Singapore law does not require a Singapore company to have specific purpose limited authorisations to increase the share capital. The Company has chosen to comply with normal practice in Singapore and accordingly deviates from the part of the Code section 3 stating that mandates granted to the board to issue shares should be restricted to defined purposes. The Board will however on a case by case basis evaluate whether specific authorisation should be obtained where the circumstances surrounding the share capital increase would require extra attention from the shareholders.

4 EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH CLOSE ASSOCIATES

EMAS Offshore has only one class of shares. All the shares have equal voting rights. The Articles of Association place no restriction on voting rights.

Singapore company laws do not provide pre-emptive rights for shareholders in share capital increases. Accordingly no foundation for deviation from pre-emptive rights is required under the legal system which is applicable to the Company. To the extent that pre-emptive rights have not been given to the shareholder, no explanation has been given to this effect. The Company is accordingly not in full compliance with the Code section 4. The Company is however subject to the general principle of equal treatment of shareholders under the Norwegian Securities Trading Act section 5-14 and accordingly shall not treat its shareholders in a differential manner in breach of this regulation. Under Singapore law, any issuance of shares by the Directors requires the prior approval of the general meeting.

When carrying out transactions in the Company’s own shares, the Board will consider the equal treatment requirement under the Norwegian Securities Trading Act section 5-14 and also the recommendation in section 4 of the Code regarding carrying out the transactions through the stock exchange or at prevailing stock exchange prices if carried out in any other way.

In the event of material transactions between the Company and a director, officer, shareholder or any personnel related to the above mentioned, where it deems necessary, the Board will make arrangements to obtain a valuation of the contract object from an independent third party. Such transactions shall be duly disclosed in the notes to the financial statements.

The directors, officers and leading personnel of the company are instructed to notify the Board should there be any form of material direct or indirect dealings in the contracts that the Company is entering into, and directors are further required to declare any shareholding, directorship, executive position and interests, in other companies.

5 FREELY NEGOTIABLE SHARES

The Company’s shares are freely negotiable. The Articles of Association place no restriction on negotiability.


CORPORATEGOVERNANCE

6 GENERAL MEETINGS

At all times, the Board will disseminate the notice of a general meeting to all Shareholders, registered in the VPS (the Norwegian Central Securities Depository, “Verdipapirsentralen”) and the Central Depository of Singapore Exchange Securities Trading Limited, at least two weeks prior to the actual meeting in accordance with Article 51 of the Company’s Articles of Association. If a special resolution is to be passed at the meeting, then at least 21 days’ notice in writing is required. The Company is accordingly not in full compliance with the Code which recommends that the notice of the general meeting is made available no later than 21 days prior to the date of the general meeting. The notice is accompanied by explanatory statements in respect of the suggested resolutions. Forms for the appointment of a proxy and the relevant information on the procedure for representation will also be provided. To participate, a Shareholder is normally requested to notify DNB Bank ASA or Boardroom Corporate & Advisory Services Pte Ltd not less than 48 hours prior to the meeting. Shareholders may participate in person or through a proxy.

The Board and the chairperson of the meeting arrange for the general meeting to vote separately on each candidate nominated for election to the Company’s Board.

If the Annual General Meeting is to be held in Singapore or another predetermined country, the facilitation for teleconference or other electronic medium can be arranged upon request.

The Code recommends that the entire Board and nomination committee is present at the Annual General Meeting. It is the normal practice that majority of the Board will be present in the Annual General Meeting. This is due to practical reasons, and also due to the circumstance that the Company’s NC is organised as a sub-committee to the Board which will provide its recommendations to the Board, and it is therefore the Company’s view that any questions to the NC can be addressed by the members of the Board represented in the Annual General Meeting. The Company is accordingly not fully compliant with the Code. The Auditor will be present when the annual accounts are resolved.

The Chairman of the Board will preside over the general meeting in accordance with normal practice in Singapore. There is a preference by most shareholders for the Chairman to take charge of the meeting as the individual is deemed to be most well informed of the Company’s activities. In an event where an independent Chairman is preferred by the majority of shareholders, the Company will seek to re-evaluate its practice.

7 NOMINATING COMMITTEE

The Code recommends that the Company establishes an independent Nominating Committee which deviates from normal practice in Singapore. In accordance with Singapore practices, the Company has established a Nominating Committee (“NC”) as a sub-committee of the Board, comprising board members who are independent of the main Shareholders of the Company. Currently, the NC comprises of Mr. Dale Bruce Alberda as Chairman, Dr. Wang Kai Yuen and Mr Cuthbert (Chas) I.J. Charles as members. As such, the Board is of the view that the composition of the NC serves the interest of our Shareholders in general. The establishment of a NC is further not reflected in the Company’s Articles of Association as it is governed by the terms of reference of the NC. Nevertheless, the Company will make constant evaluations to the requirement of an independent NC.

The NC will execute the following:

• Make justified recommendations to the Board on all board appointments, including re-nominations, taking into consideration the director’s contribution and performance;

• Conduct regular evaluations on the structure, size, and composition of the Board, and make necessary adjustments if required;

• Identify and nominate candidates to fill Board vacancies when required and carefully map out succession plans, particularly, with regards to the Chairman and Chief Executive Officer;

• To conduct annual reviews of directors’ independence. If a director is found to have business dealings or relationships that could potentially interfere with his independent decision-making or judgment, when the business relationships are in fact considered independent, the NC should make full disclosure of the nature of the director’s relationship and assume responsibility for the concurrence of his independence;

• Make recommendations to the Board to determine the continuance of the services of a director who has reached the age of 70;• Ensure adherence to guidelines set to promote voluntary rotation by directors who are retiring. Directors are also encouraged

to submit themselves for re-election at least once every three years;


CORPORATEGOVERNANCE

7 NOMINATING COMMITTEE (CONT’D)

• Determine if a director’s performance is aligned with the Company’s policies and strategies and if the director has acted duly if he has multiple board representations;

• Establish procedures to determine the Board’s performance and propose a system to make evaluations and comparisons for the Board’s accomplishment against industry standards; and

• Coordinate all communications with the Board to produce the required report meant for the shareholders.

These guidelines have been adopted by the Company’s general meeting.

The Code recommends that the recommendation by the NC is made available for the shareholders prior to the Annual General Meeting. As the Company’s NC is organised as a sub-committee of the Board, the NC prepares its recommendation to the Board, and not the shareholders. The Company is therefore not compliant with the Code in relation to this recommendation.

The remuneration of the Board members is proposed by a separate committee, the Remuneration Committee (“RC”), and is accordingly not proposed by the NC to the shareholders as recommended by the Code. The RC is also a sub-committee of the Board, comprising Board members who are independent of the main Shareholders of the Company. Its functions are further described in Section 11 and 12.

8 CORPORATE ASSEMBLY AND BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE

Under Singapore law, there is no legal requirement for public companies to establish a corporate assembly, and accordingly no such assembly has been established for EMAS Offshore.

The Board of directors consists of six individuals, five of whom who are independent of the executive management duties of the Company. Three members are independent of the main Shareholders. As of the date of this annual report, the Board comprises of:

Mr. Lee Kian Soo (Chairman)Mr. Lee Chye Tek Lionel (Vice-Chairman)Mr. Cuthbert (Chas) I.J Charles (Director)Dr. Wang Kai Yuen (Director)Mr. Dale Bruce Alberda (Director)Capt. Adarash Kumar A/L Chranji Lal Amarnath (Director)

The Code recommends that the majority of the directors should be independent from material business contacts. Mr. Lee Kian Soo, Mr. Lionel Lee and Capt. Kumar are directors of Ezra, the controlling shareholder of our Company and a material business contact. The composition of the Board is accordingly not fully compliant with the Code. The Board will in its dealings with Ezra make relevant measure to ensure an independent consideration by the Board in accordance with the recommendation of the Code section 4.

Mr. Lee Kian Soo is an executive director and accordingly deemed part of the Company’s executive management. The appointment of Mr. Lee as an executive chairman has been made in order to tap on his expertise and experience in the offshore support services industry. This represents a deviation from the Code which recommends that no members of management should be represented on the Board.

For the financial year ended 31 August 2014, a total of four Board meetings were held.

Please refer to the table below for the attendance of the Board:

Name of Director Attendance In-Person TeleconferenceMr. Lee Kian Soo 3 0Mr. Lee Chye Tek Lionel 4 0

Mr. Cuthbert (Chas) I.J Charles 3 1Dr. Wang Kai Yuen 3 0Mr. Dale Bruce Alberda 1 2


CORPORATEGOVERNANCE

8 CORPORATE ASSEMBLY AND BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE (CONT’D)

Directors who are above the age of 70 are required under Section 153(6) of the Companies Act, Chapter 50 of Singapore (the “Companies Act”) to seek re-appointment at each Annual General Meeting.

The members of the Board may under Singapore law and the Articles of Association of the Company be elected by the Board or by Shareholders at the general meeting. This represents a deviation from the Code which recommends that directors are appointed solely by the general meeting. The Company has previously, and will from time to time elect to comply with normal practice in Singapore which allows for the Board to appoint its own directors. Article 91 of the Company’s Articles of Association states that all Directors will be have to be re-elected at least once every three years (the standard term for directors on the board of public listed companies in Singapore). The Chairman is elected by the Board in accordance with article 104(A) of the Company’s Articles of Association and the normal practice in Singapore. The Company is accordingly not in full compliance with the Code which recommends that the Chairman is elected by the general meeting. Furthermore, the Company is not in compliance with the Code which recommends that directors are appointed for a term of no more than two years. Taking into account the nature and scope of the Company’s operations, the Company will ensure through internal policies and the establishment of the NC that the Board will comprise of individuals from diverse backgrounds to provide efficient guidance and expertise to the Company.

Please refer to the Board of Directors section for the relevant background and proficiencies of each member of the Board.

9 THE WORK OF THE BOARD OF DIRECTORS

The Board will work together to provide direction for the Group and is principally responsible for the achievement of long term value and yield for Shareholders. The Board adopts an annual meeting and activity plan that covers strategic planning, business issues and oversight activities. The management team of the Company will pursue the goals and execute the plans and strategy set out by the Board.

The following describes the roles of the Board:

• Provide entrepreneurial leadership and ensure management team’s leadership is of the highest quality and intergrity;• Set, review, and approve corporate strategic aims, which involve financial objectives and directions of the Group, and ensure

that the necessary financial, human, and relevant resources are in place for the Group to meet its objectives;• Establish goals for management, review and monitor the performance, and achievement of these goals;• Establish a framework of prudent and effective controls which enables risk to be assessed and managed; and• Set the Group’s values and standards and ensure that the obligations to Shareholders and others are understood and met.

Internal guidelines for the executive management have also been put in place, inter alia with respect to ascertain issues which require Board approval. The Board has elected Mr. Lee Chye Tek Lionel as vice chairman who functions as chairman if the chairman is unable to function in his capacity.

The types of material transactions that require such approval from the Board are as follow:

• Approve annual budgets;• Approve major transaction proposals which include funding, merger, acquisition, incorporation of new subsidiaries and

disposal transactions;• Approve quarterly and annual results announcements and audited accounts;• Approve material announcement;• Convene meeting for shareholders; and• Declaration of interim dividends and proposed final dividends.

Since 2007, three sub-committees have been assisting the Board with the execution of its duties. The three sub-committees are namely: RC, NC, and Audit Committee (“AC”). These committees have their functions clearly defined by the Board and operating procedures are reviewed regularly. The role of the NC is described in Section 7.

All the members of the RC and the AC are board members considered to be independent of the Company’s Management and also meet the remaining requirements of the Code as regards independence.


CORPORATEGOVERNANCE

9 THE WORK OF THE BOARD OF DIRECTORS (CONT’D)

The RC reviews and recommends to the Board in consultation with the Chairman of the Board, a framework of remuneration and determines the specific remuneration packages and terms of employment for each of the Directors. The RC also recommends to the Board, the remuneration package and employment terms for the Management of the Company and other employees. These recommendations will then be approved by the Board.

The AC supervises the financial reporting process of the Company and also monitors the effectiveness of the Company’s internal control and risk management systems. The AC has regular contact with the external auditor regarding the annual accounts, and also reviews and monitors the independence of the external auditor.

New Directors appointed to the Board will be briefed on their duties and responsibilities. They are also advised on the Group’s business activities, its strategic direction, and regulatory environments in which the Group operates.

10 RISK MANAGEMENT AND INTERNAL CONTROL

The Board ensures that the Company has satisfactory internal control procedures to manage exposure to risks related to the conduct of the Company’s business, to support the quality of its financial reporting and to ensure compliance with laws and regulations. Such procedures and systems shall contribute to securing investment from Shareholders’ and funding from financial institutions for the expansion of the Group.

As part of the annual statutory audit on financial statements, the external auditors report to the AC, and the appropriate level of management on any material weaknesses in financial controls over the areas, which are significant to the audit. The Internal Audit function is managed jointly by an in-house Internal Audit Team and an outsourced service provider RSM Ethos Pte Ltd. They review the effectiveness of the key internal controls, including financial, operational, and compliance controls. Procedures are in place for internal auditors to report independently their findings and recommendations to the AC.

EMAS Offshore incorporates its corporate and social values into the framework of its business decision-making process, with a goal to achieve positive and sustainable outcomes towards business, environment and the community at large. Taking responsibility for HSE is a core value at EMAS Offshore, and our employees are trained in accordance to industry-wide safety systems. The safety of our crew is of utmost importance to us and all members are given full authority to stop and report any unsafe work. The Group continuously reviews and works to improve the business operational activities whilst managing the associated risks. This would consist of the continuous review of the processes and workflows that is applicable to, current industry and safety standards, management efficiency, and related resources. The Group also takes into consideration the various financial risks that may have an impact on the Company’s business activities. These risks are further elaborated in the Financial Risk Management section of the Annual Report. Once a year the Board reviews and discusses the company’s risks.

Whistle-blowing Policy

The Group is committed to a high standard of ethical conduct and has in place whistle-blowing procedures and arrangements by which employees may report and raise any concerns on possible wrongdoings such as suspected fraud, corruption, dishonest practices or other similar matters in good faith and in confidence. All concerns raised through the whistleblowing email account ([email protected]) are received by Internal Audit who will assess the actions required. All whistleblowing cases and their assessments are reported by Internal Audit to the AC Chairman and the Vice-Chairman of the Company. They will decide whether further action or review is required, and if so, whether this should be conducted by an internally appointed Board of Inquiry (BOI) or external authority. The whistle-blowing procedure is posted on the Company’s intranet for staff’s easy reference, and on an ongoing basis, the whistle-blowing procedure is covered during staff orientation as part of the Group’s efforts to promote fraud control awareness.

11 REMUNERATION OF THE BOARD OF DIRECTORS

The Company’s general meeting determines the Board’s remuneration on the basis of recommendations from the Company’s RC. Remuneration should be reasonable and based on the Board’s responsibilities, work, time invested, and the complexity of the business. The suggested remuneration to the Board in FY2014 will remain unchanged from the previous year.

None of the directors have taken specific assignments for the Company in addition to their board appointment.


CORPORATEGOVERNANCE

11 REMUNERATION OF THE BOARD OF DIRECTORS (CONT’D)

Section 11 of the Code recommends that the remuneration of the Board is not linked to the performance of the Group, and that options are not issued to the members of the Board. The Company has implemented a share option programme for the Board and the Management, and is accordingly not fully compliant with the Code section 11. The Company believes that remuneration for directors which is linked to the Group’s performance will provide an alignment of interests, which the Company believes are in the best interest of its shareholders.

12 REMUNERATION OF KEY MANAGEMENT

The main function of the RC is to determine the remuneration package and employment terms for the Management of the Company. The RC prepares guidelines for the remuneration for the management which are presented for the general meeting. In setting the remuneration package, the RC takes into consideration the wage and employment conditions within the industry and comparable companies. The Group may engage external remuneration specialists to study and recommend a comprehensive reward system for the Key Management, based on suitable benchmarks and practices, to ensure external competitiveness and alignment with the Company’s strategy and longer term plans.

As part of its review, the RC ensures that performance-related elements of remuneration form a significant part of the total remuneration package of the Key Management. The review is also designed to align the Key Management’s interests with those of Shareholders, and link rewards to Shareholder value creation over time, together with corporate and individual performance. The Code recommends that performance related remuneration should be limited to an absolute limit. Currently no such absolute limit has been put in place as the RC will consider the total effects of such remuneration when determining the remuneration package and the employment benefits. The RC will however seek to review the feasibility of implementing a cap on remuneration which is linked to the performance of the Company at a later stage.

Please refer to the following table for the remuneration package of the Key Management personnel for the financial year ended 31 August 2014:

Band Breakdown of the remuneration

Above US$500,000

US$250,001 to

US$500,000Up to

US$250,000

Salary & CPF

%Fee5

%Bonus

%

OtherBenefits

%Total

%

Name of Key ExecutiveMr. Jon Dunstan X 57.3 0.0 4.8 37.9 100.0Mr. Goh Hseng Wei, Jason1 X 74.5 0.0 14.3 11.2 100.0Mr. Chan Eng Yew2 X 87.2 0.0 0.0 12.8 100.0

Name of DirectorsMr. Lee Kian Soo X 0.0 100.0 0.0 0.0 100.0Mr. Lee Chye Tek Lionel X 0.0 100.0 0.0 0.0 100.0Mr. Cuthbert (Chas) I. J.

Charles X 0.0 100.0 0.0 0.0 100.0Dr. Wang Kai Yuen X 0.0 100.0 0.0 0.0 100.0Mr. Dale B. Alberda X 0.0 100.0 0.0 0.0 100.0Capt. Adarash Kumar A/L

Chranji Lal Amarnath3 Nil Nil Nil Nil Nil Nil Nil Nil

1 Appointed on 1 February 20142 Resigned on 1 February 20143 Appointed on 26 August 2014

The Code recommends that the guidelines are prepared as a separate document and presented to the shareholders for voting. The Company is not required under Singapore law to prepare remuneration guidelines to be approved by the shareholders, and the Company has in accordance with common practice in Singapore elected not to subject the guidelines to the approval of the shareholders. The Company is accordingly not compliant with the Code in relation to this item.


CORPORATEGOVERNANCE

13 INFORMATION AND COMMUNICATION

The Company places great emphasis on ensuring that Shareholders and the market receive rapid, relevant and, as objective as possible, information about the Company. Simultaneous notification is an important principle in our strategy for information dissemination. Our goal is for Shareholders to have a good understanding of the Company’s activities so that they are in the best possible position to evaluate the Company’s underlying value. The information is primarily disseminated via the Company’s quarterly and annual reports as well as various presentations for investors in general. Being accessible to analysts is one of the Company’s priorities. All reports, press releases, presentations and investor relations contact personnel are available on our website: www.emasoffshore-cnp.com. All investor-related queries can also be directed to [email protected]. The Company’s financial calendar is available on the website of the Company and the Oslo Børs.

14 TAKE-OVERS

The Board has not prepared general guidelines for how it will act in the event of a take-over, and is accordingly not in compliance with the Code section 14. As a dual listed company on Oslo Børs and the SGX-ST, the Company is subject to the rules of the Singapore take-over Code. If a take-over situation should arise, the Board will assess the situation on a case by case basis under due consideration of the recommendations of the Code and its other obligations towards its shareholders as a company listed both on Oslo Børs and the SGX-ST.

The Company will comply with all applicable statutory regulations should take-over bids occur and work to amalgamate the best interests of the Company and its Shareholders.

The Board is responsible for ensuring that all the Company’s shareholders are treated equally and that operations are not disrupted unnecessarily. The Board has responsibility to ensure that shareholders are given sufficient information and time to form a view of the offer. The Board will not seek to hinder or obstruct take-over bids for the Company’s activities or shares unless there are particular reasons for this.

15 AUDITORS

Deloitte & Touche LLP was appointed as the Company’s external auditor for the financial year ended 31 August 2014.

The AC will assist the Board in all matters relating to the audit.

As part of the audit, the auditor is required to submit audit plans, highlighting key risk areas, and any new and potential changes in the accounting principles to be reviewed by the AC. Subsequently, recommendations are made to the Board for approval.

The AC has met with the Management and the external auditor once annually to review the external audit plans submitted. Also, as part of its statutory audit on financial statements, the auditor reports to the AC as well as the appropriate Management personnel, any material weaknesses in the internal controls over areas which are significant to the audit. Based on the discussion with the auditor and the Management, the Board is satisfied with the internal controls of the Group throughout the financial year. As at the date of this report, the internal controls are adequate to safeguard its assets and ensure integrity of its financial statements.

The AC has met with the external auditor without the presence of the Key Management.

It is the policy of the Group to seek non-audit related services from a firm other than the Group’s auditor, except for instances whereby, the provision of services by the auditor is more cost-efficient, and timely, and also does not impair independence.

The AC has received annual written confirmation from the auditor that the auditor continues to satisfy the requirements for independence. In addition, the AC has reviewed the volume of non-audit services provided to the Group by the external auditor and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditor.

The auditor fees for FY2014 amounted to US$116,000. Non audit fees consisting of reporting accountant fees and tax compliance fees for FY2014 amounted to US$326,000.


The directors present their report together with the audited consolidated financial statements of the Group and statement of financial position and statement of changes in equity of the Company for the financial year ended 31 August 2014.

1 DIRECTORS

The directors of the Company in office at the date of this report are:

Mr. Lee Kian Soo (Executive Chairman) Mr. Lee Chye Tek Lionel (Non-executive Vice-Chairman) Dr. Wang Kai Yuen (Non-executive Director) Mr. Cuthbert (Chas) I.J. Charles (Non-executive Director) Mr. Dale Bruce Alberda (Non-executive Director) Capt. Adarash Kumar A/L Chranji Lal Amarnath (Appointed on 28 August 2014) (Non-executive Director)

2 ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate.

3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act except as follows:

Shareholdings registered in name of director

Shareholdings in which directors are deemed to have an interest

Name of directors and company in which interests are held

At beginning of year

At end of year

As at 21 September

2014At beginning

of yearAt end of year

As at 21 September

2014

The Company

Ordinary shares

Mr. Lee Kian Soo – – – 50,711,064 50,711,064 50,711,064

Mr. Lee Chye Tek Lionel – – – 50,711,064 50,711,064 50,711,064

Dr. Wang Kai Yuen 75,000 75,000 75,000 – – –

By virtue of Section 7 of the Singapore Companies Act, Mr. Lee Kian Soo and Mr. Lee Chye Tek Lionel are deemed to have an interest in all the related corporations of the Company.

4 DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning of the financial year, no director has received or become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except for salaries, bonuses and other benefits as disclosed in the financial statements.

REPORT OF THE DIRECTORS



5 SHARE OPTIONS

In 2007, the shareholders approved the EOC Employee Share Option Scheme (“EOC ESOS”) for the granting of non-transferable options that are settled by physical delivery of the ordinary shares of the Company, to directors and key employees of the Company.

The EOC ESOS will be administered by the EOC Remuneration Committee, or such other committee comprising directors duly authorised and appointed by the Board of Directors, which will decide the provisions and terms and condition of each grant. There are no share option schemes for other corporations in the Group.

(a) Options to take up unissued shares

During the financial year, no options to take up unissued shares of the Company were granted.

(b) Options exercised

During the financial year, there were no shares of the Company issued by virtue of the exercise of an option to take up unissued shares.

(c) Unissued shares under option

At the end of the financial year, there were no unissued shares of the Company under option.

6 EMPLOYEE SHARE PLAN

The Company implemented the Employee Share Plan (the “Plan”) with the approval of shareholders at the Extraordinary General Meeting held on 22 August 2014. The Plan shall continue to be in force up to a maximum of ten years from 22 August 2014. This Plan gives the flexibility to either allot and issue new shares or purchase and deliver existing treasury shares upon the vesting of awards.

Participants will receive fully paid shares free of charge, upon the Participant satisfying the criteria set out in the Plan. The vesting period for the shares granted is three years. The number of shares to be allocated to each participant will be determined at the end of the performance period based on the level of attainment of the performance targets and the prevailing market price of the Company’s share at grant date.

The Remuneration Committee is responsible for administering the share option and employee share plan. At the date of this report, the members of the Remuneration Committee are as follows:

Mr. Cuthbert (Chas) I.J. Charles (Chairman)Mr. Dale Bruce AlberdaDr. Wang Kai Yuen

As at date of this report, no shares have been granted under the Plan for performance period ended 31 August 2014.


7 AUDIT COMMITTEE

As at the date of this report, the Audit Committee (“AC”) comprises the following members:

Name of member Position held

Dr. Wang Kai Yuen Chairman Mr. Cuthbert (Chas) I.J. Charles Member Mr. Dale Bruce Alberda Member

The AC carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, including the following:

• Reviewed the audit plans of the external auditors of the Company and the co-operation given by the Company’s management to the external auditors;

• Reviewed the adequacy of the Group’s system of internal accounting controls;

• Reviewed the annual financial statements and the independent auditors’ report on the annual financial statements of the Group and the statement of financial position and statement of changes in equity of the Company before their submission to the Board of Directors;

• Met with the external auditors, other committees, and management in separate executive sessions to discuss any matters that these groups believe should be discussed privately with the AC;

• Met with the external auditors to discuss the results of their examinations;

• Reviewed legal and regulatory matters that may have a material impact on the financial statements, related compliance policies and programmes and any reports received from regulators;

• Reviewed the independence and objectivity of the external auditors;

• Reviewed the nature and extent of non-audit services provided by the external auditors;

• Recommended to the Board of Directors the external auditors to be nominated and reviewed the scope and results of the audit;

• Reviewed actions and minutes of the AC to the Board of Directors with such recommendations as the AC considers appropriate;

• Reviewed interested person transactions; and

• Reviewed the budget for the Group before its submission to the Board of Directors.

The AC held 4 meetings with the management during the financial year. The AC has been given full access to and obtained the co-operation of the Company’s management.

The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the nature and extent of such services would not affect the independence of the external auditors.

Pursuant to the completion of the Business Combination Agreement, the Audit Committee has recommended to the directors the nomination of Ernst and Young LLP for appointment as external auditors of the Group at the forthcoming AGM of the Company to be consistent with the appointment of auditors for the holding company, Ezra Holdings Limited. The recommendation was approved by the Board of Directors.



8 AUDITORS

The auditors, Deloitte & Touche LLP, have tendered its resignation letter. The Board of Directors have expressed its appreciation for the past service rendered by Deloitte & Touche LLP.


................................................Mr. Lee Kian Soo

................................................Dr. Wang Kai Yuen

Singapore1 December 2014



In the opinion of the directors, the consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company as set out on pages 56 to 106 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 August 2014, and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.


................................................Mr. Lee Kian Soo

................................................Dr. Wang Kai Yuen

Singapore1 December 2014

STATEMENT OF DIRECTORS


REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of EMAS Offshore Limited (the “Company”) and its subsidiaries (the ”Group”) which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 August 2014, and the consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows of the Group and the statement of changes in equity of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 56 to 106.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

OPINION

In our opinion, the consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 August 2014 and of the results, changes in equity and cash flows of the Group and changes in equity of the Company for the financial year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in the Republic of Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Deloitte & Touche LLPPublic Accountants andChartered AccountantsSingapore

1 December 2014

INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF EMAS OFFSHORE LIMITED (FORMERLY KNOWN AS EOC LIMITED)


STATEMENTS OF FINANCIAL POSITION

AS AT 31 AUGUST 2014

Group CompanyNote 2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

ASSETS

Current assetsCash and bank balances 6 53,370 60,647 120 118Trade receivables 7 4,873 3,970 – –Other receivables and deposits 8 52,940 95,023 65,051 67,991Prepayments 2,662 460 1,055 8Available-for-sale investment 9 63,082 59,887 63,082 59,887Total current assets 176,927 219,987 129,308 128,004

Non-current assetsProperty, plant and equipment 10 86,618 161,230 – –Investment in subsidiaries 11 – – 42,241 42,241Investment in associates 12 238,697 167,809 162,605 85,750Investment in joint ventures 13 19,033 638 18,251 – Long term receivable 14 22,589 – – –Total non-current assets 366,937 329,677 223,097 127,991

Total assets 543,864 549,664 352,405 255,995

LIABILITIES AND EQUITY

Current liabilitiesBank loans 15 70,297 101,737 – –Trade payables 16 39,819 51,137 – –Other payables and accruals 17 53,873 44,245 183,339 111,206Income tax payable 1,348 881 18 26Total current liabilities 165,337 198,000 183,357 111,232

Non-current liabilitiesBank loans 15 96,525 137,590 – – Other payables and accruals 17 48,081 37,800 37,800 37,800Derivative financial instruments 18 494 489 – – Total non-current liabilities 145,100 175,879 37,800 37,800

Capital and reservesShare capital 19 94,578 94,578 94,578 94,578Hedging reserves (494) (489) – – Fair value adjustment reserves 10,832 7,637 10,832 7,637Restructuring deficit 20 (31,191) (31,191) – – Accumulated profits 159,468 105,053 25,838 4,748Equity attributable to equity holders of the Company 233,193 175,588 131,248 106,963Non-controlling interests 234 197 – – Total equity 233,427 175,785 131,248 106,963

Total liabilities and equity 543,864 549,664 352,405 255,995

See accompanying notes to financial statements.


CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

YEAR ENDED 31 AUGUST 2014

GroupNote 2014 2013

US$’000 US$’000

Revenue 21 46,974 43,071

Cost of sales (27,895) (20,540)

Gross profit 19,079 22,531

Other operating income 22 36,423 4,362

Other operating expenses 23 (2,576) –

Administrative expenses (10,374) (10,251)

Profit from operations 42,552 16,642

Finance income 24 2,294 1,970

Finance costs 25 (5,752) (8,328)

Share of net profit of associates 12 15,417 1,306

Share of net profit of joint ventures 13 144 188

Profit before income tax 26 54,655 11,778

Income tax 27 (203) (686)

Profit for the year 54,452 11,092

Other comprehensive income, net of tax:

Items that may be reclassified subsequently to profit or loss:

Net loss on cash flow hedges (5) (489)

Net gain on fair value changes 9 3,195 7,637

Total comprehensive income for the year 57,642 18,240

Profit for the year attributable to:

Equity holders of the Company 54,415 11,074

Non-controlling interests 37 18


Total comprehensive income attributable to:

Equity holders of the Company 57,605 18,222

Non-controlling interests 37 18

Total comprehensive income for the year 57,642 18,240

Earnings per share (US cents)

- Basic and Diluted 28 49.04 9.98



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STATEMENTS OF CHANGES IN EQUITY



Group2014 2013

US$’000 US$’000

Operating activitiesProfit before income tax 54,655 11,778

Adjustments for:

Depreciation expense 6,975 10,620

Interest expense 5,752 8,328

Interest income (2,294) (1,970)

Gain on disposal of property, plant and equipment (36,394) (99)

Gain on disposal of non-current asset classified as held for sale – (2,940)

Share of net profit of associates (15,417) (1,306)

Share of net profit of joint ventures (144) (188)

Gain on fair value changes of derivative financial instruments – (814)

Operating cash flows before movements in working capital 13,133 23,409

Increase in trade receivables (903) (5,031)

Decrease/(increase) in other receivables, deposits and prepayments 12,114 (36,293)

(Decrease)/increase in trade payables (11,318) 16,297

(Decrease)/increase in other payables and accruals (19,599) 28,955

Cash (used in)/generated from operations (6,573) 27,337

Interest expense paid (5,752) (8,328)

Interest income received 1,956 1,970

Income tax received/(paid) 264 (407)

Net cash (used in)/generated from operating activities (10,105) 20,572

Investing activitiesDilution of interest in a subsidiary to associate, net of cash disposed – (2,478)

Purchase of property, plant and equipment (Note A) (51,075) (9,903)

Proceed from disposal of property, plant and equipment (Note B) 168,000 270

Non-current asset classified as held for sale (Note C) – (115,953)

Recoverable from associates 12,321 –

Investment in associate (Note D) (35,511) –

Investment in joint venture (18,251) –

Interest paid and capitalised as fixed assets (Note A) (151) –

Net cash generated from/(used in) investing activities 75,333 (128,064)

Financing activitiesDecrease/(increase) in restricted cash/charged accounts 9,926 (906)

Proceeds from bank loans 56,629 277,219

Repayment of bank loans (129,134) (170,731)

Net cash (used in)/generated from financing activities (62,579) 105,582

Net increase/(decrease) in cash and cash equivalents 2,649 (1,910)

Cash and cash equivalents at beginning of year 6,454 8,364

Cash and cash equivalents at end of year (Note 6) 9,103 6,454

CONSOLIDATED STATEMENT OF CASH FLOWS



NOTE A:

2014 2013US$’000 US$’000

Aggregate cost of property, plant and equipment acquired 43,705 17,424

Amount payable to a third party shipbuilder (included in other payables)

- remaining unpaid at the end of financial year – (7,521)

- opening balance paid during the financial year 7,521 –

Interest capitalised (151) –

Purchase of property, plant and equipment in cash 51,075 9,903

NOTE B:

The Group disposed certain property, plant and equipment on a sale and leaseback arrangement during the financial year. The proceeds received was calculated as follows:

2014US$’000

Carrying amount of the property, plant and equipment (Note 10) 111,342

Commitment for equipment upgrade and expenses* 44,515

Gain on disposal (Note 22) 36,394

Fair value of sale consideration 192,251

Deferred consideration at amortised cost (Note 14) (22,251)

Selling expenses (2,000)

Proceeds from disposal 168,000

* The commitment for equipment upgrade expenses amounting to US$38,776,000 (2013: US$Nil) remains outstanding as at the end of the reporting period and was included in other payables and accruals.

NOTE C:

These were the payment for the upgrade and modification of vessels in the previous financial year for a subsidiary which was subsequently diluted to an associate.

NOTE D:

Acquisition of SJR Marine (L) Ltd. amounting to US$41,345,000 was satisfied through amount due from a related company of US$37,000,000 and amount unpaid as at the end of the reporting period of US$4,345,000 (2013:US$Nil).


CONSOLIDATED STATEMENT OF CASH FLOWS


NOTES TO THEFINANCIAL STATEMENTS

31 AUGUST 2014


1 GENERAL

The Company (Registration No. 200702224N) is incorporated in the Republic of Singapore with its principal place of business and registered office at 15 Hoe Chiang Road, #28-01 Tower Fifteen, Singapore 089316. The Company is listed on the Oslo Børs, Norway and the Singapore Exchange Securities Trading Limited (“SGX-ST”). The financial statements are expressed in United States dollars and all figures are rounded to the nearest thousand.

The principal activities of the Company are those of investment holding and provision of ship management services.

The principal activities of the subsidiaries, associates and joint ventures are disclosed in Notes 11, 12 and 13 to the financial statements respectively.

The consolidated financial statements of the Group and statement of financial position as at 31 August 2014 and statement of changes in equity of the Company for the financial year ended 31 August 2014 were authorised for issue by the Board of Directors on 1 December 2014.

The name of the Company was changed from EOC Limited to EMAS Offshore Limited with effect from 15 September 2014.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING - The financial statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below, and are drawn up in accordance with provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is defined in Note 4 to the financial statements.

The consolidated financial statements have been prepared in accordance with FRS. The financial statements are also in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

ADOPTION OF NEW AND REVISED STANDARDS - In the current financial year, the Group has adopted all the new and revised FRSs and Interpretations of FRSs (“INT FRSs”) that are relevant to its operations and effective for annual periods beginning on or after 1 September 2013. The adoption of these new/revised FRSs, INT FRSs and amendments to FRSs does not result in changes to the Group’s accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, management has considered and anticipated that the adoption of the following FRSs, INT FRSs and amendments to FRS that were issued but not yet effective until future periods:

Amendments to FRS 32 Financial Instruments: Presentation Amendments to FRS 36 Impairment of AssetsINT FRS 121 LeviesAmendments to FRS 39 Novation of Derivatives and Continuation of Hedge AccountingFRS 115 Revenue from Contracts with CustomersIFRS 9* Financial Instruments

* IFRS 9 is issued by IASB and is not yet issued by Accounting Standard Council of Singapore.

Consequential amendments were also made to various standards as a result of these new/revised standards.

The management anticipates that the adoption of the above INT FRSs and amendments to FRS in future period will not have a material impact on the financial statements of the Group in the period of their initial adoption.

The Group has early adopted the following FRSs:

FRS 27 (Revised) Separate Financial StatementsFRS 28 (Revised) Investments in Associates and Joint VenturesFRS 110 Consolidated Financial StatementsFRS 111 Joint ArrangementsFRS 112 Disclosure of Interests in Other EntitiesAmendments to FRS 110 Consolidated Financial Statements – Investment EntitiesFRS 110, FRS 111, FRS 112 Transition Guidance


31 AUGUST 2014


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

There is no material impact on the amounts reported for the current or prior years upon the early adoption of these FRSs except for FRS 112.

FRS 112 is a new disclosure standard and is applicable to entities that have interests in subsidiaries, associates, joint ventures and/or unconsolidated structured entities. In general, the application of FRS 112 has resulted in more extensive disclosures in the consolidated financial statements (see Notes 11, 12 and 13).

BASIS OF CONSOLIDATION - The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

• Has power over the investee;

• Is exposed, or has rights, to variable returns from its involvement with the investee; and

• Has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

• The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• Potential voting rights held by the Company, other vote holders or other parties;

• Rights arising from other contractual arrangements; and

• Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interest of non-controlling shareholders that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured (at date of original business combination) either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another FRS. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.


31 AUGUST 2014



Changes in the Group’s ownership interests in existing subsidiaries

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable FRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 39, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

In the Company’s financial statements, investments in subsidiaries, associates and joint ventures are carried at cost less any impairment in net recoverable value that has been recognised in profit or loss.

BUSINESS COMBINATIONS – Acquisitions of all other subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred by the Group to the former owners of the acquiree, and equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with FRS 39 Financial Instruments: Recognition and Measurement, or FRS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS are recognised at their fair value at the acquisition date, except that:

• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with FRS 12 Income Taxes and FRS 19 Employee Benefits, respectively;

• liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are measured in accordance with FRS 102 Share-based Payment; and

• assets or disposals that are classified as held for sale in accordance with FRS 105 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.


31 AUGUST 2014



If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date and is subject to a maximum of one year from the acquisition date.

The accounting policy for initial measurement of non-controlling interests is described above.

FINANCIAL INSTRUMENTS - Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest basis for debt instruments other than those financial instruments recognised “at fair value through profit or loss”.

Financial assets

Investments are recognised and de-recognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value plus transaction costs, except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value.

Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss”, “loans and receivables” and “available for sale”. The classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition.

Financial assets at fair value through profit or loss (“FVTPL”)

Financial assets are classified as at FVTPL where the financial asset is either held for trading or it is designated as at FVTPL.

A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling in the near future; or• it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern

of short-term profit-taking; or• it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or• the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance

is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and FRS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.


31 AUGUST 2014



Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in “other gain and losses”. Fair value is determined in the manner described in Note 4 to the financial statements.

Cash and bank balances

Cash and bank balances comprise cash at banks and on hand and fixed deposits and are subject to an insignificant risk of changes in value.

Loans and receivables

Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial.

Available-for-sale financial asset

Certain shares held by the Group are classified as being available for sale and are stated at fair value. Fair value is determined in the manner described in Note 4 to the financial statements. Gains and losses arising from changes in fair value are recognised in other comprehensive income with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets which are recognised directly in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in other comprehensive income and accumulated in revaluation reserve is reclassified to profit or loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established. The fair value of available-for-sale monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at end of the reporting period. The change in fair value attributable to translation differences that result from a change in amortised cost of the asset is recognised in profit or loss, and other changes are recognised in other comprehensive income.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For available-for-sale equity instruments, a significant or prolonged decline in the fair value of the investment below its cost is considered to be objective evidence of impairment. For all other financial assets, objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 30 to 45 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.


31 AUGUST 2014



For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and other receivables where the carrying amount is reduced through the use of an allowance account. When a trade or other receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

In subsequent period, if the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss.

In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any subsequent increase in fair value after an impairment loss is recognised in other comprehensive income and accumulated under the heading of fair value adjustment reserves.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis.

Interest-bearing bank loans and overdrafts are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs (see below).

Financial guarantee contract liabilities are measured initially at their fair values and, if not designated as at FVTPL, subsequently at the higher of the amount of obligation under the contract recognised as a provision in accordance with FRS 37 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation in accordance with FRS 18 Revenue.


31 AUGUST 2014



Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired.

Derivative financial instruments and hedge accounting

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate risk associated with its variable rates borrowings. Further details of derivative financial instruments are disclosed in Note 18 to the financial statements.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

Hedge accounting

The Group designates certain hedging instruments as cash flow hedges. At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument that is used in a hedging relationship is highly effective in offsetting changes in cash flows of the hedged item.

Note 18 to the financial statements contain details of the fair values of the derivative instruments used for hedging purposes. Movements in the hedging reserves are also detailed in other comprehensive income.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss as part of other gains and losses.

Amounts recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognised in profit or loss in the same line of the statement of comprehensive income as the recognised hedged item. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any gain or loss accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss, such gains and losses are recognised in profit or loss, or transferred from equity and included in the initial measurement of the cost of the asset or liability as described above. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was accumulated in equity is recognised immediately in profit or loss.


31 AUGUST 2014



LEASES - Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Group as lessee

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost of property, plant and equipment, other than vessels and equipment under construction, over their estimated useful lives, using the straight-line method, on the following bases:

Motor vehicles - 5 yearsFurniture, fittings and office equipment - 3 yearsPlant and machinery - 5 yearsVessels - 20 to 25 yearsDry-docking costs - 5 years

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

Vessels and equipment under construction are stated at cost. These costs include all progress billings received in accordance with the construction contracts, equipment costs, installation costs and commissioning costs, interest charges arising from borrowings used to finance the construction and other direct costs. Vessels and equipment under construction are not depreciated until such time they are completed and available for operational use.

Dry-docking costs, when incurred, will be capitalised and amortised on a straight-line basis over the years to the next drydocking date.

Fully depreciated assets still in use are retained in the financial statements until they are no longer in use.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.


31 AUGUST 2014



IMPAIRMENT OF NON-FINANCIAL ASSETS - At the end of each reporting period, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit or loss.

ASSOCIATES AND JOINT VENTURES - An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with FRS 105. Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group’s share of losses of an associate or a joint venture exceeds the Group’s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the group’s net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.

The requirements of FRS 39 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with FRS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with FRS 36 to the extent that the recoverable amount of the investment subsequently increases.


31 AUGUST 2014



The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture, or when the investment is classified as held for sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with FRS 39. The difference between the carrying amount of the associate or joint venture at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate or joint venture on the same basis as would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.

The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes in ownership interests.

When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When a Group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group’s consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.

PROVISIONS - Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

REVENUE RECOGNITION - Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns and other similar allowances.

Chartering revenue

Revenue from charter hire is recognised on a time apportionment basis in accordance to the terms and conditions of the charter agreement.

Project management revenue

Revenue from project management is recognised when service is rendered.


31 AUGUST 2014



Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

BORROWING COSTS - Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

RETIREMENT BENEFIT COSTS - Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered the services entitling them to the contributions. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Group’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

EMPLOYEE LEAVE ENTITLEMENT - Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.

INCOME TAX - Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Company and its subsidiaries operate by the end of the reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be removed.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of each reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items credited or debited outside profit or loss (either in other comprehensive income or directly in equity), in which case the tax is also recognised directly outside profit or loss (either in other comprehensive income or directly in equity, respectively), or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.


31 AUGUST 2014



FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION - The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group are presented in United States dollars.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gain and losses are recognised directly in other comprehensive income. For such non-monetary items, exchange component of the gain or loss is also recognised in other comprehensive income.

In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. of associates or jointly controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities at the foreign operation and translated at the closing rate.

CASH AND CASH EQUIVALENTS IN THE CONSOLIDATED STATEMENT OF CASH FLOWS - Cash and cash equivalents comprise cash on hand and at banks, fixed deposits and short-term, highly liquid assets that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 2 to the financial statements, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

i) Critical judgements in applying the Group’s accounting policies

The following are critical judgements, apart from those involving estimations (see below), that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Accounting for sale and leaseback arrangements

At the inception of the sale and leaseback arrangements, the Group has evaluated the substance of the transactions in accordance with the requirements of FRS 17 Leases, and concluded that the sale and the leasebacks should be accounted for as operating leases.

Lease payments for the 1 (2013:Nil) vessel that is on sale and leaseback arrangements amounting to US$10,603,000 (2013:US$Nil) was recognised as expenses in the profit or loss during the financial year.


31 AUGUST 2014


3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONT'D)

ii) Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the financial year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Allowance for trade and other receivables

The allowance policy for doubtful debts of the Group is based on the ongoing evaluation of collectability and ageing analysis of the outstanding receivables and on management’s judgement. A considerable amount of judgement is required in assigning the ultimate realisation of these receivables, including creditworthiness and the past collection history of each customer. If the financial conditions of the customer of the Group were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

The carrying amounts of the trade and other receivables at the end of the reporting period are disclosed in Notes 7 and 8 to the financial statements, respectively.

Residual values and estimated useful lives of vessels

Vessels are depreciated on a straight-line basis over their estimated useful lives. The estimated useful lives reflect the management’s estimate of the periods that the Group intends to derive future economic benefits from the use of vessels. Changes in the business plans and strategies, expected level of usage and future technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of the Group’s vessels at the end of the reporting period is disclosed in Note 10 to the financial statements.

Impairment of property, plant and equipment

The Group assesses annually whether its property, plant and equipment exhibit any indication of impairment. In instances where there are indicators of impairment, the recoverable amounts of property, plant and equipment have been determined based on market valuations obtained from professional valuers or value-in-use calculations. The carrying amounts of the Group’s property, plant and equipment at the end of the reporting period are disclosed in Note 10 to the financial statements.

Impairments of investment in subsidiaries, associates and joint ventures

The Group assesses annually whether its investments in subsidiaries, associates and joint ventures exhibit any indication of impairment. In instances where there are indicators of impairment, the recoverable amounts of investment in subsidiaries, associates and joint ventures have been determined based on an estimation of the value in use of those investments. The value in use calculation requires the Group to estimate the future cash-flows expected from the cash-generating units and an appropriate discount rate in order to calculate the present value of the future cash flows. Management has evaluated the recoverability of those investments based on such estimates and is confident that the allowance for impairment, where necessary, is adequate. The carrying amounts of the investments in subsidiaries, associates and joint ventures at the end of the reporting period are disclosed in Notes 11, 12 and 13 to the financial statements, respectively.

Income taxes

The Group has exposure to income tax in numerous jurisdictions. Significant judgement is involved in determining the Group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the year in which such determination is made. The carrying amount of the Group’s tax payables as at the end of the reporting period was US$1,348,000 (2013:US$881,000).


31 AUGUST 2014


3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONT’D)

ii) Key sources of estimation uncertainty (cont’d)

Provision for commitment for equipment upgrade and expenses Significant assumptions are required to determine the variation works and the total estimated costs that will affect the commitment for equipment upgrade and expenses. The estimates are made based on past experience and knowledge of the project engineers. The carrying amount of accruals as at end of the reporting period is disclosed in Note 17 to the financial statements.

4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categoriesoffinancialinstruments

The following table sets out the financial instruments as at the end of the reporting period:

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

Financial assets

Available-for-sale investment 63,082 59,887 63,082 59,887

Loans and receivables (including cash and cash equivalents) 132,642 157,790 65,079 68,010

Total 195, 724 217,677 128,161 127,897

Financial liabilities

Amortised cost 308,595 372,509 221,139 149,006

Fair value through profit or loss 494 489 – –

Total 309,089 372,998 221,139 149,006

(b) Financialriskmanagementobjectivesandpolicies

The main risks arising from the Group’s financial instruments are credit risk, liquidity risk, interest rate risk and foreign currency risk. The Group’s practice is to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments such as interest rate derivative contracts to hedge underlying risk exposures and the transactions are not entered into for speculative purposes. The Group’s accounting policies in relation to the derivative financial instruments are set out in Note 2 to the financial statements.

There has been no change to the Group’s exposure to these financial risks on the manner in which it manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below:

(i) Credit risk management

Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations when due.

The Group has established credit limits for creditworthy customers. These debts are continually monitored and therefore, the Group does not expect to incur material credit losses. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures.


31 AUGUST 2014


4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (CONT'D)

(b) Financialriskmanagementobjectivesandpolicies(cont’d)

(i) Credit risk management (cont’d)

Receivables that are past due but not impaired

The Group has trade receivables amounting to US$4,189,000 (2013:US$1,837,000) that are past due at the end of the reporting period but not impaired. These receivables are unsecured and the analysis of their ageing at the end of the reporting period is as follows:

Group2014 2013

US$’000 US$’000

Trade receivables past due but not impaired:

Less than 60 days 18 1,666

61 to 120 days 330 8

121 to 365 days 3,797 112

1 year to 2 years 44 51

Total 4,189 1,837

Receivables that are past due and impaired:

Impaired receivables - collectively assessed 18 18

Less: Allowance for doubtful debts (18) (18)

– –

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Fixed deposits and cash and bank balances are placed with reputable financial institutions. Management believes that the financial institutions that hold the Group’s assets are sound and accordingly, minimum credit risk exists with respect to these assets.

Exposure to credit risk

At the end of the reporting period, the Group’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position.

There is no contingent liability recognised by the Group and Company as at the end of the reporting period (2013:US$Nil) for the corporate guarantees given to banks for banking facilities to associates as the Group and Company consider that there are low risk of default of the loans by the associates.


31 AUGUST 2014


4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (CONT’D)


(i) Credit risk management (cont’d)

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country of its trade receivables on an on-going basis. The credit risk concentration profile of the Group’s trade receivables at the end of the reporting period is as follows:

2014 2013US$’000 % of total US$’000 % of total

Singapore 728 14.9 1,413 35.6Brunei – – 1,674 42.2Malaysia – – 235 5.9Indonesia 4,145 85.1 500 12.6Others – – 148 3.7Total 4,873 100.0 3,970 100.0

The Group does not have significant concentration of credit risk for its other receivables and deposits at the end of the reporting period other than amounts due from associates of US$45,360,000 (2013:US$36,297,000). There is no significant change in credit quality and the amounts are still considered recoverable. Further information of the associates can be found in Note 12.

(ii) Liquidity risk management

Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.


31 AUGUST 2014




(ii) Liquidity risk management (cont’d)

Liquidity analysis

Non-derivative financial liabilities

The following table details the remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and Company can be required to pay. The table include future contractual interest cost of which the contracted rates are disclosed in Notes 15 and 17 to the financial statements, respectively.

Weightedaverageeffective

interest rate

Ondemand

or less than1 year

Within2 to

5 years

Morethan

5 years Total% US$’000 US$’000 US$’000 US$’000

Group

2014

Non-interest bearing – 93,692 10,281 – 103,973Fixed interest rate 6.00 300 5,000 – 5,300Variable interest rate 2.36 73,618 134,444 – 208,062Total 167,610 149,725 – 317,335

2013

Non-interest bearing – 95,382 – – 95,382Fixed interest rate 5.27 296 6,500 – 6,796Variable interest rate 2.82 107,584 181,098 – 288,682Total 203,262 187,598 – 390,860

Company

2014

Non-interest bearing – 183,339 – – 183,339Fixed interest rate 6.00 300 5,000 – 5,300Variable interest rate 1.76 577 32,800 – 33,377Total 184,216 37,800 – 222,016

2013

Non-interest bearing – 111,206 – – 111,206

Fixed interest rate 6.00 300 5,000 – 5,300

Variable interest rate 1.80 590 32,800 – 33,390

Total 112,096 37,800 – 149,896


31 AUGUST 2014




(ii) Liquidity risk management (cont’d)

Non-derivative financial assets

All loans and receivables of the Group and Company are on demand or due within one year and are non-interest bearing except for:

(i) cash and bank balances where interest earned is minimal; (ii) at Group level, long term receivable as disclosed in Note 14 to the financial statements.

Derivative financial instruments

The Group’s derivative instruments comprise interest rate cap contracts and swaps with estimated net cash outflows of US$494,000 (2013:US$489,000) due within 4 years (2013:5 years). Further details of these instruments can be found in Note 18 to the financial statements.

Management of liquidity risk

The Group’s cash and short term deposits, operating cash flows, availability of banking facilities and debt maturity profile are managed to ensure adequate working capital requirements and that repayment and funding needs are met. In addition, the Group monitors and maintains a level of cash and bank balances deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows.

On a strategic level, the Group managed the liquidity needs by matching the cash requirements for loan repayment and cash flow from operations, mainly from the Group’s two main operating divisions namely, construction division and production division. Typical terms of the Group’s charter may vary from few months to few years (as long as five years). These charter contracts also provide for an option for the Group’s customer to extend the charter term.

Corporate guarantees given by the Group will become due and payable when an event of default occurs. The maximum amount of the financial guarantee contracts are allocated to the earliest period which is within one year, in which the guarantee could be called.

The Group expects that the cash flow from operations, together with the banking facilities will be sufficient to fund the Group’s anticipated capital expenditure and working capital needs.

(iii) Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s interest rate exposure relates primarily to its floating rate interest bearing bank loans and advances from related parties as detailed in Notes 15 and 17 to the financial statements. The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debt. To maintain this mix in a cost effective manner, the Group primarily uses interest rate derivative contracts that have the effect of capping the interest rate for specific debt obligations of the Group. In negotiation for favourable pricing of these contracts, the Group may sell swaptions contracts to the counter party or the rate for such caps may be stepped up. Further information on interest rate derivative contracts are disclosed in Note 18 to the financial statements.

Additional information relating to the Group’s interest rate exposure is also disclosed below and in the notes relating to its borrowings.


31 AUGUST 2014




(iii) Interest rate risk management (cont’d)

Sensitivity analysis for interest rate risk

At the end of the reporting period, if USD interest rates had been 20 (2013:20) basis points lower/higher with all other variables held constant, the Group’s profit or loss for the year would have been better by/worse off by US$400,000 (2013:US$544,000), arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings from banks and related party.

(iv) Equity price risk management

The Group is exposed to equity risk arising from equity investment classified as available-for-sale. Available-for-sale equity investments are held for strategic rather than trading purposes. The Group does not actively trade available-for-sale investments. Further details on these equity investments can be found in Note 9 to the financial statements. Equity price sensitivity

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

In respect of available-for-sale equity investments, if the equity prices had been 10% higher/lower, the Group’s net profit for the year would have been unaffected. Other comprehensive income would have increased/decreased by US$6,308,000 (2013:US$5,989,000), holding other variables constant. The Group’s sensitivity to equity prices has not changed significantly from the prior year.

(v) Foreign currency risk management

The Group has exposure to foreign exchange risk as a result of transactions denominated in foreign currencies. It is the Group’s policy to hedge these risks through foreign currency forward exchange contracts, if material. The primary purpose of the Group’s foreign currency hedging activities is to protect against the volatility associated with foreign currency liabilities created in the normal course of business.

The Group is exposed to foreign currency risk on purchases that are denominated in a currency other than United States dollars. The currencies giving rise to this risk are primarily Malaysian Ringgit (“MYR”), Singapore Dollars (“SGD”), Great Britain Pounds (“GBP”) and Thai Baht (“THB”).


31 AUGUST 2014




(v) Foreign currency risk management (cont’d)

At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities except available-for-sale financial instrument dominated in currencies other than the respective Group entities’ functional currencies are as follows:

Group CompanyAssets Liabilities Assets Liabilities

2014 2013 2014 2013 2014 2013 2014 2013US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

SGD 2,232 1,707 19,863 23,250 194 100 229 5GBP 142 193 89 600 – – 88 – THB 1 9,880 112 213 – – – – MYR – – 79 108 – – – –Others 18 18 430 280 – – 80 2

Sensitivity analysis for foreign currency risk

The following table details the sensitivity to a 3% increase in the United States dollar against the relevant foreign currencies. 3% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items adjusted for their translation at the end of the reporting period for a 3% change in foreign currency rates. A positive number below indicates an increase in profit or loss where the United States dollar strengthens against the relevant currency.

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

SGD 529 646 1 (3)

GBP (2) 12 3 –

THB 3 (290) – –

MYR 2 3 – –

Others 12 8 2 –

For a 3% weakening of the United States dollar against the relevant currency, there would be an equal and opposite impact on the profit or loss.

At the end of the reporting period, available-for-sale financial instruments as disclosed in Note 9 to the financial statements are denominated in MYR (2013:MYR). If the foreign currency had been 3% higher/lower, the Group’s net profit for the year would have been unaffected and other comprehensive income would have increased/decreased by US$1,892,000 (2013:US$1,797,000), holding other variables constant.


31 AUGUST 2014




(vi) Cash flow hedge of interest rate risk

As at 31 August 2014, the Group held two (2013:two) interest rate derivative contracts, and both had been designated as cash flow hedges of the Group’s interest payments in respect of its bank borrowings with a notional value of US$29,000,000 (2013:US$29,000,000) undertaken by the Group.

As at 31 August 2014, the fair values of these derivative contracts amounting to US$494,000 (2013:US$489,000) were recorded as derivative liabilities in the statement of financial position of the Group.

The terms of these contracts have been negotiated to match the terms of the bank term loans.

(vii) Fair values of financial assets and liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of FRS 102, leasing transactions that are within the scope of FRS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in FRS 2 or value in use in FRS 36.

The management considers that the carrying amounts of cash and bank balances, trade and other current receivables and payables approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The management estimates that the fair value of the bank loans approximates their carrying value as the borrowings bear interest at floating rates or approximate floating rates. At the reporting date, the fair value of the long term receivable, US$5,000,000 fixed interest loan payable and US$10,281,000 non-trade payable is estimated to be US$22,589,000, US$5,178,000 and US$9,812,000 (2013: US$Nil, US$5,155,000, US$Nil) respectively by discounting expected future cash flows at the Group’s weighted average interest rate of floating rate loans of 2.36% (2013: 2.82%), which is representative of the market rate applicable to companies with similar risk profile.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

The Group’s available-for-sale investment and valuation technique is disclosed in Note 9 to the financial statements and is classified as Level 1. The Group’s long term receivable, US$5,000,000 fixed interest loan payable and US$10,281,000 non-trade payable and derivative financial instrument as disclosed in Notes 14 and 18 to the financial statements is classified as Level 2. There were no transfers between the different levels of the fair value hierarchy during the financial year.


31 AUGUST 2014



(c) Capitalriskmanagementpoliciesandobjectives

The primary objectives of the Group’s capital management are to maintain a healthy capital ratio in order to support its business and maximises shareholders value and to safeguard the Group’s ability to continue as a going concern.

The capital structure of the Group consists of net debts, which includes the borrowings less cash and bank balances and fixed deposits and equity attributable to equity holders of the Company, comprising share capital, hedging reserves, restructuring deficit and accumulated profits.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may issue new shares, buy back issued shares, obtain new borrowings or reduce its borrowings.

The Group’s management reviews the capital structure on an on-going basis. As part of this review, the management considers the cost of capital and the risks associated with each class of capital. The Group monitors capital using a gearing ratio as noted below, which is net debts divided by net capital, to comply with the loan covenants imposed by the banks. Net debt is defined as interest-bearing bank borrowings less cash and bank balance. Net capital includes equity attributable to owners of the Company and reserves. Based on the recommendations of the management, the Group will balance its overall capital structure through the payment of dividends and new share issues as well as the issue of new debt and repayment of existing debt.

The Group’s overall strategy remains unchanged from prior year.

Group2014 2013

Net debt (US$’000) 113,452 178,680

Net capital (US$’000) 233,193 175,588

Gearing ratio (times) 0.49 1.02

5 RELATED PARTY TRANSACTIONS

A related party is:

(i) a company or a subsidiary or an associate of a company or a company in which the director has interest in, which is related to the Group and Company that has significant influence over the Company; or

(ii) an associate or a joint venture of the Group or Company

Some of the Group’s transactions and arrangements are with related parties and the effect of these on the bases determined between the parties is reflected in the financial statements. The balances are unsecured, interest-free and repayable on demand unless otherwise stated.


31 AUGUST 2014


5 RELATED PARTY TRANSACTIONS (CONT’D)

(i) Significant related parties transactions:

Group2014 2013

US$’000 US$’000

Income to the Group

Charter revenue from related parties 36,515 32,153

Interest income from an associate 1,735 1,735

Project management fee income from an associate 3,115 3,136

Engineering services charged to related parties 673 –

Guarantee fee income from an associate – 1

Expenses to the Group

Charter expenses charged by related parties 130 1,804

Engineering service expenses charged by related parties 13,741 10,609

Insurance consultancy fee charged by a related company – 2,232

Interest charged by a related party 875 901

Management fees charged by related parties 1,887 3,246

Purchase of equipment/services from related parties 188 –

Rental expense charged by a related party 119 320

Vessel demobilisation expenses charged by a related party – 2,200

Vessel hook-up and installation expenses by related parties 12,983 35,898

Vessel operating expenses charged by related parties 6,926 4,113

Services rendered by a related party to the Group capitalised as assets

Dry docking costs charged by related parties 2,641 –

(ii) Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the financial year was as follows:

Group2014 2013

US$’000 US$’000

Short-term benefits 810 1,300

Post-employment benefits 11 9

Directors’ fees 181 180

Total 1,002 1,489


31 AUGUST 2014


6 CASH AND BANK BALANCES

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

Fixed deposits 30,562 30,408 – –

Cash and bank balances 22,808 30,239 120 118

Total 53,370 60,647 120 118

Less: Restricted cash/charged accounts (44,267) (54,193) – –

Cash and cash equivalents in the consolidated statement of cash flows 9,103 6,454 120 118

The fixed deposits earn interest at floating rates, based on daily bank deposit rates of 0.5% (2013:0.5% to 0.67%) per annum and a tenure of approximately 12 months (2013:12 months).

Bank balances and fixed deposits amounting to US$44,267,000 (2013:US$54,193,000), which are either restricted in use or charged over the monies held in the operating accounts, have been placed in connection with the credit facilities granted (Note 15).

7 TRADE RECEIVABLES

Group2014 2013

US$’000 US$’000

Outside parties 4,207 2,630

Related parties 684 1,358

Total 4,891 3,988

Less: Allowance for doubtful debts (18) (18)

4,873 3,970

Movement in allowance for doubtful debts:

Balance at beginning of year 18 343

Amounts written off during the year – (325)

Balance at end of year 18 18

The average credit period is 30 to 45 days (2013:30 to 45 days). No interest is charged on the outstanding trade receivables.

Trade receivables that are past due are provided for based on estimated irrecoverable amounts from the rendering of services, determined by reference to past default experience.

Included in the Group’s trade receivable balance are debtors with a carrying amount of US$4,189,000 (2013:US$1,837,000) which are past due at the end of reporting period for which the Group has not provided doubtful debts as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances.


31 AUGUST 2014


7 TRADE RECEIVABLES (CONT’D)

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. Accordingly, the management believes that no further allowance for doubtful debts is required.

The table below is an analysis of trade receivables as at the end of the reporting period.

Group2014 2013

US$’000 US$’000

Not past due and not impaired 684 2,133Past due and not impaired 4,189 1,837Total 4,873 3,970

8 OTHER RECEIVABLES AND DEPOSITS

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

Withholding tax receivable – 5,992 – –

Receivable from related parties 2,812 50,514 2,811 37,000Recoverable from an associate 45,360 36,297 11,292 – Goods and Services Tax receivables 1,130 1,850 92 99Deposits 768 160 – –Receivable from subsidiaries – – 50,854 30,885Others 2,870 210 2 7Total 52,940 95,023 65,051 67,991

The recoverable from an associate represents:

(i) advance payment for shipbuilding projects which are interest free, repayable on demand and unsecured; and

(ii) loans to an associate amounting to US$21,385,000 (2013:US$Nil) bears interest at 8% per annum (2013:Nil%), are unsecured and are repayable on demand.

9 AVAILABLE-FOR-SALE INVESTMENT

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

At fair value

Quoted equity shares 63,082 59,887 63,082 59,887

The fair values of these securities are based on the quoted closing market prices translated at closing rate on the last market day at the end of the reporting period. At the end of the reporting period, the Group and the Company recognised US$3,195,000 (2013:US$7,637,000) fair value gain in other comprehensive income.


31 AUGUST 2014


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31 AUGUST 2014


11 INVESTMENT IN SUBSIDIARIES

Company2014 2013

US$’000 US$’000

Unquoted equity shares, at cost 42,241 42,241

Details of the subsidiaries as at the end of the reporting period are as follows:

Name of entity

Country of incorporation/operation(if different)

Effectiveequity interest

and voting power Principal activities2014 2013

% %

Emas Offshore Constructionand Production Pte Ltd

Singapore 100 100 Provision of ship management services and ship and boat leasing with operator (including chartering)

Lewek Champion Shipping Pte Ltd Singapore 100 100 Ship owner and provision ofship chartering services

Lewek Chancellor Shipping Pte Ltd Singapore 100 100 Ship owner and provision ofship chartering services

Lewek Conqueror (BVI) Ltd British Virgin Islands/Singapore

100 100 Ship owner and provision of ship chartering services

Lewek Emerald Shipping Pte Ltd Singapore 100 100 Ship owner and provision ofship chartering services

Lewek Eversure Shipping Pte Ltd * Singapore 100 100 Investment holding

Lewek Evershine Shipping Pte Ltd * British Virgin Islands/Singapore

100 100 Ship owner and provision of ship chartering services

Emas Offshore ProductionServices (Vietnam) Pte Ltd

Singapore 100 100 Investment holding

Emas EOC Ventures Pte Ltd^ Singapore 50 50 Provision of management services

EOC Victoria Production Sdn Bhd* Malaysia 100 100 Investment holding

Lewek Alphard Shipping Pte Ltd** Singapore 100 – Ship owner and provision of ship chartering services

Lewek Castor Shipping Pte Ltd** Singapore 100 – Ship owner and provision of ship chartering services

Lewek Canopus Shipping Pte Ltd** Singapore 100 – Ship owner and provision of ship chartering services

EMAS Holdings Pte. Ltd.** Singapore 100 – Investment holding


31 AUGUST 2014


11 INVESTMENT IN SUBSIDIARIES (CONT’D)

Deloitte & Touche LLP Singapore is the auditor of all subsidiaries.

* Entity is inactive during the financial year.

** Entity is newly incorporated during the financial year.

^ Although the Company does not own more than 50% of the equity shares of Emas EOC Ventures Pte Ltd, and consequently it does not control more than half of the voting power of those shares, it has the power to appoint and remove the majority of the board of directors and control of the entity is by the board. As a result, Emas EOC Ventures Pte Ltd is controlled by the Company and is consolidated in these financial statements.

The amounts due from/(to) subsidiaries are unsecured, interest-free and repayable on demand unless stated otherwise.

Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in these financial statements.

12 INVESTMENT IN ASSOCIATES

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

Unquoted equity shares, at cost 189,705 148,360 162,605 85,750

Share of post-acquisition profit, net of dividend 16,416 1,172 – –

Additional investment in an associate 35,511 – – –

Deferred profit (2,935) (3,108) – –

Carrying amount of the Group’s interests in associates/ unquoted equity shares at cost 238,697 146,424 162,605 85,750

Loan to an associate – 21,385 – –

Total 238,697 167,809 162,605 85,750

The loan to associate was unsecured and bore interest at Nil% (2013:8.0% per annum).

Additional investment in an associate relates to additional costs incurred for the upgrade and modification of an associate’s vessel, which is borne by the Company under the relevant Shareholders’ Agreement.


31 AUGUST 2014


12 INVESTMENT IN ASSOCIATES (CONT’D)

Details of the associates as at the end of the reporting period are as follows:

Name of entity


Proportion of ownershipinterest and voting

power held Principal activities2014 2013

% %

PV KEEZ Pte Ltd* Singapore 41.7 41.7 Ship owner and provision ofship chartering services

Emas Victoria (L) Bhd** Malaysia 49.0 49.0 Ship owner and provision ofship chartering services

Victoria Production Services Sdn Bhd** Malaysia 49.0 49.0 Operation and maintenance of floating production storage and offloading unit

SJR Marine (L) Ltd** Malaysia 49.0 – Leasing of vessels, barges andequipment on bareboat basis

* Audited by Deloitte & Touche LLP, Singapore.** Audited by Baker Tilly Monteiro & Heng, Malaysia.

Summarised financial information in respect of each of the Group’s material associates is set out below. The summarised financial information below represents amounts shown in the associate’s financial statements prepared in accordance with FRSs.

PV KEEZ Pte Ltd 2014 2013US$’000 US$’000

Current assets 24,911 23,597Non-current assets 371,719 397,413Current liabilities (124,570) (75,523)Non-current liabilities (75,632) (164,629)Redeemable preference shares classified as equity (28,000) (28,000)

Revenue 97,974 75,369Profit for the year, representing total comprehensive income for the year from

continuing operations 15,621 3,129

Reconciliation of the above summarised financial information to the carrying amount of the interest in PV KEEZ Pte Ltd recognised in the consolidated financial statements:

2014 2013US$’000 US$’000

Net assets of the associate 168,428 152,858

Proportion of the Group’s ownership interest in PV KEEZ Pte Ltd 41.7% 41.7%

Carrying amount of the Group’s interest in PV KEEZ Pte Ltd 70,302 63,803


31 AUGUST 2014



Emas Victoria (L) Bhd 2014 2013US$’000 US$’000

Current assets 26,744 2,541

Non-current assets 426,410 443,545

Current liabilities (39,544) (33,094)

Non-current liabilities (213,355) (238,034)

Revenue 56,182 –

Profit for the year, representing total comprehensive income for the year from continuing operations 25,608 –

Reconciliation of the above summarised financial information to the carrying amount of the interest in Emas Victoria (L) Bhd recognised in the consolidated financial statements:

2014 2013US$’000 US$’000

Net assets of the associate 200,255 174,958

Proportion of the Group’s ownership interest in Emas Victoria (L) Bhd 49% 49%

Share of net assets of the associate 98,125 85,729

Deferred profit (2,934) (3,103)

Additional investment 35,511 –

Carrying amount of the Group’s interest in Emas Victoria (L) Bhd 130,701 82,621


31 AUGUST 2014



SJR Marine (L) Ltd 2014US$’000

Current assets 4,440

Non-current assets 71,534

Current liabilities (33,507)

Non-current liabilities (8,950)

Revenue –

Loss for the year, representing total comprehensive income for the year from continuing operations (4,246)

Reconciliation of the above summarised financial information to the carrying amount of the interest in SJR Marine (L) Ltd recognised in the consolidated financial statements:

2014US$’000

Net assets of the associate 33,517

Proportion of the Group’s ownership interest in SJR Marine (L) Ltd 49%

Share of net assets of the associate 16,423

Fair value on acquisition 21,721

Depreciation arising from fair value (1,016)

Carrying amount of the Group’s interest in SJR Marine (L) Ltd 37,128

Information of the associate that is not individually material 2014 2013US$’000 US$’000

The Group’s share of profit, representing total comprehensive income for the year from continuing operations 566 –

Aggregate carrying amount of the Group’s interest in the associate 566 *

* Less than US$1,000

13 INVESTMENT IN JOINT VENTURES

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

Unquoted equity shares, at cost 18,301 50 18,251 –

Share of post–acquisition profit 282 138 – –

Advance to joint venture

- deemed capital contribution 450 450 – –

Total investment 19,033 638 18,251 –

Advance to joint venture is deemed as part of the investment in joint venture.


31 AUGUST 2014


13 INVESTMENT IN JOINT VENTURES (CONT’D)

Details of the joint ventures as at the end of the reporting period are as follows:

Name of entity


Proportion ofownership interest

and voting power held Principal activity2014 2013

% %

PVTrans EMAS Co Ltd * Socialist Republic of Vietnam

50.0 50.0 Operation and maintenance of floating, production, storage and offloading unit

Lewek Antares Shipping Pte. Ltd. ** Singapore 50.0 – Ship owner and provision of ship chartering services

* Audited by Deloitte Vietname Company Ltd.** Audited by Ernst and Young LLP, Singapore.

Summarised financial information in respect of each of the Group’s material joint venture is set out below. The summarised financial information below represents amounts shown in the joint venture’s financial statements prepared in accordance with FRSs.

Lewek Antares Shipping Pte. Ltd. 2014US$’000

Current assets 843

Non-current assets 70,220

Current liabilities (11,107)

Non-current liabilities (31,535)

The above amounts of assets and liabilities include the following:

Cash and cash equivalents 700

Non-current financial liabilities (excluding trade and other payables and provisions) (31,535)

On 26 August 2014, the Group and the Company agreed to acquire 50% of the total issued share capital of Lewek Antares Shipping Pte. Ltd. from Konquest Marine Pte. Ltd. for a consideration of US$18,251,000. The acquisition was completed on 29 August 2014 and the joint venture did not generate any profit from the date of acquisition to the financial year ended 31 August 2014.

Reconciliation of the above summarised financial information to the carrying amount of the interest in Lewek Antares Shipping Pte. Ltd. recognised in the consolidated financial statements:

2014US$’000

Net assets of the joint venture 28,421

Proportion of the Group’s ownership interest in Lewek Antares Shipping Pte. Ltd. 50%

Share of net assets of joint venture 14,210

Goodwill 4,041

Carrying amount of the Group’s interest in Lewek Antares Shipping Pte. Ltd. 18,251


31 AUGUST 2014


13 INVESTMENT IN JOINT VENTURES (CONT’D)

Information of joint venture that is not individually material 2014 2013US$’000 US$’000

The Group’s share of profit, representing total comprehensive income for the year from continuing operations 144 138

Aggregate carrying amount of the Group’s interest in the joint venture 782 638

14 LONG TERM RECEIVABLE

The long term receivable relates to a deferred consideration of US$30,000,000 from the sale of a vessel. The fair value of the deferred consideration at initial recognition is estimated by discounting the expected future cash flows at the Group’s weighted average interest rate of floating rate loans of 3.03%.

Deferred consideration amounting to US$22,589,000 (2013:US$Nil) is carried at amortised cost discounted at an effective interest rate of 3.03% (2013:Nil%) as follows:

2014US$’000

Balance at beginning of year –Arising from disposal of property, plant and equipment 22,251Amortisation of interest income 338Balance at end of year 22,589

15 BANK LOANS

Group2014 2013

US$’000 US$’000

Secured bank loan 119,138 188,003Unsecured bank loan 47,684 51,324Total 166,822 239,327

Presentation on consolidated statement of financial position:

Current liabilities 70,297 101,737Non-current liabilities 96,525 137,590Total 166,822 239,327

Loans due after one year are estimated to be repayable as follows:

After one but within five years 96,525 137,590

Total 96,525 137,590


31 AUGUST 2014


15 BANK LOANS (CONT’D)

The secured bank loans are secured as follows (either single or combination of securities):

(i) mortgage over the vessels of the Group as disclosed in Note 10;(ii) assignment of equipment contract;(iii) assignment of swap agreement;(iv) assignment of rights in relation to the charter, guarantee, earnings, and insurances;(v) charge of bank accounts as disclosed in Note 6; and(vi) corporate guarantee from the Company and/or related party.

The Company and/or related party provides corporate guarantee for the unsecured bank loans.

As at the end of the reporting period, the effective interest rate of the bank loans are as follows:

Variable interest rates loans are based on LIBOR or SIBOR and were repayable in various tenor between 48 monthly repayments to 28 quarterly repayments with the earliest loan commencing on January 2009 and all loans would be fully repaid by June 2018. The effective interest rate ranges from 1.03% to 4.90% (31 August 2013:1.07% to 4.88%).

16 TRADE PAYABLES

2014 2013US$’000 US$’000

Related parties 35,601 49,138Outside parties 4,218 1,999Total 39,819 51,137

Trade payables principally comprise amounts outstanding for trade purchases.

The average credit period on purchases of goods is 30 to 60 days (2013:30 to 60 days).

17 OTHER PAYABLES AND ACCRUALS

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

Subsidiaries – – 177,034 101,511Related parties 61,904 54,405 42,191 46,242Outside parties 39,426 27,323 1,914 1,253Others 624 317 – –Total 101,954 82,045 221,139 149,006


31 AUGUST 2014


17 OTHER PAYABLES AND ACCRUALS (CONT’D)

Presentation on Statements of Financial Position:

Group Company2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000

Current liabilities 53,873 44,245 183,339 111,206Non-current liabilities 48,081 37,800 37,800 37,800Total 101,954 82,045 221,139 149,006

Included in payable to outside parties is an amount of US$39,426,000 (2013:US$14,358,000), which comprise accruals for ship owner’s insurance, capital expenditure on construction of vessels and operating expenses.

Included in the amount due to related parties of the Group and Company comprise of two (2013:two) tranches of loan payables amounting to US$37,800,000 (2013:US$37,800,000) and also a non-trade payable amount of US$10,281,000 (2013:US$Nil).

(a) The first loan payable, with principal of US$32,800,000, bears interest at 1.5% per annum above LIBOR. At the end of the reporting period, the effective interest is 1.76% (2013: 2.73%) per annum. The amount is unsecured and is not expected to be repaid within the next 12 months based on contractual terms. The amount is expected to be settled in cash.

(b) The second loan payable, with principal of US$5,000,000 bears fixed interest at 6% (2013:6%) per annum. The amount is unsecured and is not expected to be repaid within the next 12 months based on contractual terms. The amount is expected to be settled in cash.

(c) The non-trade payable is unsecured, interest free and is expected to be repaid in 2016.

18 DERIVATIVE FINANCIAL INSTRUMENTS

Group2014 2013

US$’000 US$’000

Interest rate cap contracts (i) 352 339

Interest rate swaps (ii) 142 150

Net liabilities 494 489

(i) The Group purchases interest rate cap contract to hedge the interest rate risk exposure arising from its variable rate bank loans (Note 15). As at the end of the reporting period, the Group has the following outstanding interest rate cap contract.

Year Notional amount Maturity Interest rate caps

2013/2014 US$18,000,000 2018 Cap 2.5%

The fair value of the contracts have been calculated using bank quotes and other inputs based on market related data and the rates quoted by the Group’s banks to terminate the contacts as at the end of the reporting period. As at the end of the reporting period, no (2013 : no) fair value adjustment for the interest rate cap contract has been recorded in profit or loss and an amount of US$13,000 (2013:US$339,000) of fair value adjustment loss was recognised in other comprehensive income.


31 AUGUST 2014


18 DERIVATIVE FINANCIAL INSTRUMENTS (CONT’D)

(ii) The Group enters into interest rate swaps to manage its exposure to interest rate movements on its bank borrowings by swapping a proportion of those borrowings from floating rates to fixed rates. As at the end of the reporting period, the Group has interest rate swap agreement with notional amount totalling US$11,000,000 (2013:US$11,000,000). Contracts require interest payments at fixed rate of 1.50% (2013:1.50%) per annum for periods up until 8 June 2018 (2013:8 June 2018).

The terms of these contracts have been negotiated to match the terms of the bank loans (Note 15). The fair values of the contracts have been calculated using bank quotes and other inputs based on market related data and the rates quoted by the Group’s banks to terminate the contracts as at the end of the reporting period.

As at the end of the reporting period, the fair value adjustment gain for the interest rate swap contract of amounting to approximately US$Nil (2013:US$814,000) has been credited to profit or loss and an amount of US$8,000 (2013:US$150,000) of fair value adjustment gain (2013:loss) recognised in other comprehensive income.

19 SHARE CAPITAL

Group and Company2014 2013 2014 2013

Number of ordinary shares US$’000 US$’000

Issued and paid-up:

At beginning and at end of the year 110,954,502 110,954,502 94,578 94,578

The Company has one class of ordinary shares with no par value. The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions.

20 RESTRUCTURING DEFICIT

The restructuring deficit pursuant to a restructuring exercise completed in 2007, also known as merger reserve, represents the differences between the nominal value of shares issued by the Company in exchange for the nominal value of shares acquired in respect of the acquisition of subsidiaries under common control. During the restructuring exercise, Ezra Holdings Limited, the former holding company, transferred its interest in 5 subsidiaries to the Company. The transaction was financed through the issuance of 59,061,111 ordinary shares in the Company, with total acquisition cost of US$60,720,006. The Company had accounted for this combination using the “pooling of interest” method.

21 REVENUE

Group2014 2013

US$’000 US$’000

Chartering revenue 39,803 40,122

Project management revenue 7,171 2,949

Total 46,974 43,071


31 AUGUST 2014


22 OTHER OPERATING INCOME

Group2014 2013

US$’000 US$’000

Net foreign currency exchange gain – 87

Gain on fair value changes of derivative financial instruments – 814

Gain on disposal of property, plant and equipment 36,394 99

Gain on disposal of non-current asset held for sales – 2,940

Others 29 422

Total 36,423 4,362

23 OTHER OPERATING EXPENSES

Group2014 2013

US$’000 US$’000

Net foreign currency exchange loss 757 –

Business combination transaction and listing related expenses 1,819 –

Total 2,576 –

24 FINANCE INCOME

Group2014 2013

US$’000 US$’000

Interest income from:

Associate 1,735 1,735

Amortisation of interest income 338 –

Banks 221 235

Total 2,294 1,970

25 FINANCE COSTS

Group2014 2013

US$’000 US$’000

Interest expense on bank loans 5,028 7,427

Interest expense charged by a related party 875 901

5,903 8,328

Included in cost of vessels under construction (Note 10) (151) –

Finance costs recognised in profit or loss 5,752 8,328


31 AUGUST 2014


26 PROFIT BEFORE INCOME TAX

This has been arrived at after charging:

Group2014 2013

US$’000 US$’000

Employee benefits expenses 3,141 2,682

Cost of defined contribution plan expenses included in employee benefits expenses 138 119

Directors’ fees 181 180

Audit fees paid to auditors of the Company 116 100

Fees for non-audit services paid to auditors of the Company 326 22

27 INCOME TAX

Group2014 2013

US$’000 US$’000

Current year 881 882

Overprovision of tax in prior years (678) (196)

Withholding tax * –

Income tax expense 203 686


Withholding tax relates to tax withheld on certain overseas revenue earned within South East Asia region for which no tax relief is available in Singapore as the income is tax exempt under Section 13A of the Singapore Income Tax Act.

No provision for tax has been made for the subsidiaries incorporated in the British Virgin Islands as the subsidiaries are tax exempt under the laws of the British Virgin Islands.

The total income tax for the year can be reconciled to the accounting profits as follows:

Group2014 2013

US$’000 US$’000

Profit before income tax 54,655 11,778

Tax expenses at domestic income tax rate of 17% 9,291 2,002

Expenses not deductible for tax purposes 258 557

Effects of results of associates and joint ventures presented net of tax (2,645) *

Tax exempted (6,023) (1,733)

Effect of tax losses forfeited – 34

Overprovision of tax in prior years (678) (196)

Others – 22

Income tax expense 203 686



31 AUGUST 2014


28 EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year.

The calculation for basic and diluted earnings per share is based on:

Group2014 2013

Profit attributable to shareholders (US$’000) 54,415 11,074

Weighted average number of ordinary shares (‘000) 110,955 110,955

Earnings per share (US cents)

- Basic and diluted 49.04 9.98

There is no dilution as the Company does not have any outstanding share options or dilutive warrants.

29 OPERATING LEASE ARRANGEMENTS

(a) The Group as lessee

The Group entered into leases for the rental of office premises and charter of vessels and equipment as a lessee. Operating lease payments recognised in the profit or loss during the financial year amounted to US$10,927,000 (2013:US$963,000).

Future minimum lease payments payable under non-cancellable operating lease as at 31 August, are as follows:

Group2014 2013

US$’000 US$’000

Not later than one year 21,259 315

Later than one year but not later than five years 82,754 421

Later than five years 92,773 –

Total 196,786 736

Included in the above figures are future minimum lease payments payable to related parties under non-cancellable operating lease as at end of the reporting period, are as follows:

Group2014 2013

US$’000 US$’000

Not later than one year – 315

Later than one year but not later than five years – 421

Total – 736


31 AUGUST 2014

1 0 0 E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4

29 OPERATING LEASE ARRANGEMENTS (CONT’D)

(b) The Group as lessor

The Group charters its vessels under operating leases. Charter revenue earned during the financial year was US$39,803,000 (2013:US$40,122,000).

At the end of the reporting period, the Group has contracted for the following future minimum lease receivable:

Group2014 2013

US$’000 US$’000

Within one year 50,417 25,618

In the second to fifth years inclusive 145,591 11,466

After the fifth year 103,572 –

Total 299,580 37,084

Included in the above figures are future minimum lease payments receivable from related parties under non-cancellable operating lease as at end of the reporting period, are as follows:

Group2014 2013

US$’000 US$’000

Within one year 50,417 24,703

In the second to fifth years inclusive 145,591 11,466

After the fifth year 103,572 –

Total 299,580 36,169

30 SEGMENTAL INFORMATION

Reporting format

The Group determines its operating segments based on internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance.

The Group’s primary format for reporting segment information is business segments, with each segment representing a strategic business segment that offers different products and services, based on which information is prepared and reported to the Group’s chief operating decision maker for the purposes of resource allocation and assessment of performance. In presenting information on the basis of geographical segments, segment revenue is based on the billing location of customers.

Segment accounting policies are the same as the policies described in Note 2 to the financial statements. The primary format, business segments, is based on the Group’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and expenses.


31 AUGUST 2014

E M A S O F F S H O R E L I M I T E D A N N U A L R E P O R T 2 0 1 4 1 0 1

30 SEGMENTAL INFORMATION (CONT’D)

Reporting format (cont’d)

(i) Business Segments

The Group is organised into two main operating divisions, namely Construction division and Production division.

Construction division is mainly engaged in the owning, chartering and management of construction and accommodation units with or without pipelaying capabilities, in serving the oil and gas, exploration and production activities. Production division is mainly engaged in owning, chartering and management of production units, serving the oil and gas production activities.

The following table represents revenue and results information regarding the Group’s business segments for the financial years ended 31 August 2014 and 2013:

Construction Production Total2014 2013 2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Revenue 39,774 39,432 7,200 3,639 46,974 43,071

Profit from operations 40,948 12,030 1,604 4,612 42,552 16,642

Allocated finance expense (1,728) (3,752) (878) (1,821) (2,606) (5,573)

Unallocated finance expense (3,146) (2,755)

Interest income 2,294 1,970

Share of net profit of associates 15,417 1,306

Share of net profit of joint ventures 144 188

Income tax (203) (686)



31 AUGUST 2014



Reporting format (cont’d)

(i) Business Segments (cont’d)

The following table presents assets, liabilities and other segment information regarding the Group’s business segments as at the end of the reporting period.

Construction Production Total2014 2013 2014 2013 2014 2013

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Assets

Segment assets 224,931 246,430 87,654 70,397 312,585 316,827

Jointly used* 240,665 213,974

Unallocated assets 161,743 252,365

Elimination (171,129) (233,502)

Total assets 543,864 549,664

Liabilities

Segment liabilities 93,814 158,862 50,208 52,670 144,022 211,532

Jointly used* 238,328 207,227

Unallocated liabilities 99,216 188,580

Elimination (171,129) (233,460)

Total liabilities 310,437 373,879

Other information

Capital expenditure 43,705 17,424 – – 43,705 17,424

Depreciation 6,975 10,620 – – 6,975 10,620

* Jointly used refers to assets and liabilities used by both Construction and Production segment.

Unallocated assets mainly represent cash and bank balances and related parties balances.

Unallocated liabilities mainly represent related parties balances and certain bank loans.


31 AUGUST 2014



(ii) Geographical Segments

The Group’s revenue from external customers and information about its non-current assets by geographical location are detailed below:

Revenue2014 2013

US$’000 US$’000

Based on location of customer

Brunei 2,889 7,278

Indonesia 4,917 –

Papua New Guinea – 118

Singapore 38,431 35,190

United Kingdom 533 –

Others (1) 204 485

Total 46,974 43,071

(1) Other countries includes Malaysia and Vietnam.

Non-current assets2014 2013

US$’000 US$’000

Based on location of companies that own those assets

Singapore 348,308 313,090

British Virgin Islands 18,629 16,587

Total 366,937 329,677

Information about major customers

As at the end of the reporting period, revenue from the Group’s largest customers per segment is as follows:

Group2014 2013

US$’000 US$’000

Construction division:

Customer 1 23,050 21,952

Customer 2 13,520 10,220

Customer 3 2,889 7,289

Production division:

Customer 1 4,917 –


31 AUGUST 2014


31 CORPORATE GUARANTEES

Group and Company2014 2013

US$’000 US$’000

Corporate guarantees given to banks for banking facilities granted to associates 180,918 332,671

Corporate guarantee given to suppliers of an associate for payment performance 68 68

Total 180,986 332,739

32 CAPITAL COMMITMENTS

Group2014 2013

US$’000 US$’000

Purchase of vessel equipment 38,531 –

Vessel purchase/newbuilds 71,976 –

Capital expenditure in respect of amounts committed for investment in an associate 985 37,000

Total 111,492 37,000

33 EVENTS AFTER THE REPORTING PERIOD

Payment of conditional dividend

On 7 August 2014, the directors declared a conditional interim dividend of Norwegian Krone (“NOK”) 1.12 per share, conditional upon the fulfilment or waiver of the conditions precedent for completion of the Business Combination Agreement. On 29 September 2014, the Company announced that the condition for payment of the dividend has been fulfilled. The conditional dividend of US$19,331,000 was paid on 9 October 2014.

Change of name

The shareholders approved the change in name of the Company from “EOC Limited” to “EMAS Offshore Limited” in the EGM held on 15 September 2014.


31 AUGUST 2014


33 EVENTS AFTER THE REPORTING PERIOD (CONT’D)

Business combination

On 10 July 2014, the Company entered into a business combination agreement with Ezra Holdings Limited (“Ezra”) (the “Business Combination Agreement”) in connection with the proposed acquisition of following companies held by Ezra (the “OSS companies”) :

(i) Aries Warrior AS;(ii) Aries Warrior DIS;(iii) Bayu Emas Maritime Sdn Bhd;(iv) Bayu Intan Offshore Sdn Bhd;(v) Emas Offshore (Labuan) Bhd;(vi) Emas Offshore (M) Sdn Bhd;(vii) Emas Offshore (Thailand) Ltd;(viii) Emas Offshore Pte. Ltd.;(ix) Emas Offshore Services (Australia) Pty Ltd;(x) Emas Offshore Services (B) Sdn Bhd;(xi) Emas Offshore Services (M) Sdn Bhd;(xii) Emas Offshore Services Nigeria Limited;(xiii) Emas Offshore Services Pte. Ltd.;(xiv) Genesis Offshore Sdn Bhd;(xv) Lewek Altair Shipping Private Limited;(xvi) Lewek Aries Pte. Ltd.;(xvii) Lewek Crusader Shipping Pte. Ltd.;(xviii) Lewek Ebony Shipping Pte. Ltd.;(xix) Lewek Ivory Shipping Pte. Ltd.;(xx) Lewek LB 1 Shipping Pte. Ltd.;(xxi) Lewek Robin Shipping Pte. Ltd.;(xxii) Lewek Shipping Pte. Ltd.;(xxiii) Lewek Ruby Shipping Pte. Ltd.;(xxiv) Tunis Oil Pte. Ltd.;(xxv) Lewek Antares Shipping Pte. Ltd.;(xxvi) Intan Offshore Sdn Bhd and its subsidiaries; and(xxvii) Emas Offshore Services (Philippines) Inc.


31 AUGUST 2014


33 EVENTS AFTER THE REPORTING PERIOD (CONT’D)

Business combination (cont’d)

In exchange for the sale of the OSS Companies, the Company will make pay a consideration of US$520.0 million to be satisfied via the followings:

- US$25.0 million, payable in cash;

- US$370.0 million, shall be satisfied by the allotment and issue by the Company to Ezra of the consideration shares based on the issue price of NOK 8.18 per share; and

- deferred cash payment of US$125.0 million (“Deferred Consideration”) over a period of 3 years (the “Payment Period”), with interest payable at the rate of 3.5% per annum on the outstanding principal amount of the Deferred Consideration in the second and third years of the Payment Period.

The shareholders’ approval for the Business Combination Agreement was obtained in a shareholders’ Extraordinary General Meeting (“EGM”) held on 19 August 2014 and on 3 October 2014, the Business Combination Agreement was completed together with the Company’s secondary public offering (“secondary public offering”) of 48,585,000 shares on the SGX-ST.

Upon completion the of Business Combination Agreement, Ezra became the holding company of EMAS Offshore Limited.

On 8 October 2014, the Company was listed on the Main Board of SGX-ST, placing it as the first company to dual list in Norway and Singapore for capital raising.

The provisional fair values of the identifiable assets and liabilities of the Company as at the date of acquisition were not disclosed as the initial accounting for the acquisition is incomplete at the date of the financial statements are authorised for issue.


STATISTICS OFSHAREHOLDINGS

TWENTY LARGEST SHAREHOLDERS AS OF 1 DECEMBER 2014

Name Holding Percentage Citizenship

EZRA HOLDINGS LIMITED 330,844,316 75.25 SGP

CLEARSTREAM BANKING 75,257,010 17.12 LUX

FRED OLSEN PRODUCTION 5,455,000 1.24 SGP

UBS AG A/C OMNIBUS-DISCLOSE 4,374,684 0.99 CHE

HYGROVE INVESTMENTS 4,208,000 0.96 VGB

MERRILL LYNCH PROF. MLPRO SEG 2,975,085 0.68 USA

JP MORGAN CLEARING C A/C CUSTOMER SAFE KE 2,025,855 0.46 USA

VPF NORDEA SMB C/O JPMORGAN EUROPE 816,000 0.19 NOR

CITIBANK, N.A. S/A EQUINITI FS LTD 550,435 0.13 GBR

MOLVÆR IVAR ARVID 500,000 0.11 NOR

NORDNET PENSJONSFORS 413,801 0.09 NOR

J.P. MORGAN CHASE BANK NORDEA 411,000 0.09 GBR

MAGNUS DEN GODE AS 382,108 0.09 NOR

ÅKRE OTTAR 377,775 0.09 NOR

SKANDINAVISKA ENSKIL 365,320 0.08 FIN

BNP PARIBAS SEC SER S/A BP2S 323,430 0.07 SGP

LANDRO KENNETH 270,000 0.06 NOR

CITIBANK, N.A. S/A MKES A/C CLIENTS 219,350 0.05 SGP

DEUTSCHE BANK AG CLIENTS ACCOUNT 211,750 0.05 DEU

EUROCLEAR BANK S.A. 205,838 0.05 BEL

430,186,757 97.85


NOTICE OFANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of EMAS Offshore Limited (the “Company”) will be held at Klapsons, The Boutique Hotel – eighteen.1 & 2 at Level 18, 15 Hoe Chiang Road, Tower Fifteen, Singapore 089316 on Tuesday, 30 December 2014 at 10 a.m. (Singapore time) for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the financial year ended 31 August 2014 together with the Auditors’ Report thereon. (Resolution 1)

2. To re-elect the following Directors, each of whom will retire by rotation pursuant to Article 91 of the Company’s Articles of Association and who, being eligible, will offer themselves for re-election:-

(a) Mr. Lee Kian Soo (Resolution 2)(b) Mr. Lee Chye Tek Lionel (Resolution 3)

3. To re-elect Capt. Adarash Kumar A/L Chranji Lal Amarnath, who will retire pursuant to Article 97 of the Company’s Articles of Association and who, being eligible, will offer himself for re-election. (Resolution 4)

4. To re-appoint Mr. Cuthbert Ignatious Jeyaretnam Charles* under Section 153(6) of the Companies Act, Chapter 50 of Singapore (the

“Companies Act”), to hold office from the date of this Annual General Meeting until the next Annual General Meeting. (Resolution 5)

* Mr. Cuthbert Ignatious Jeyaretnam Charles will, upon re-election as Director of the Company, remain as Chairman of the Remuneration Committee and a member of the Audit Committee and Nominating Committee.

5. To approve the payment of Directors’ fees of US$193,000 for the financial year ending 31 August 2015 (2014: US$180,000). (Resolution 6)

6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 7. To appoint Ernst & Young LLP, Singapore as the Company’s Auditors for the financial year ending 31 August 2015 in place of Deloitte

& Touche LLP, Singapore and to authorise the Directors to fix their remuneration.

[See Explanatory Note (i)] (Resolution 7)

8. Authority to allot and issue shares

That authority be and is hereby given to the Directors of the Company to:

(a) subject to paragraph (b) of this Ordinary Resolution:

(i) issue ordinary shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares and (notwithstanding that the authority conferred in sub-paragraph (a)(ii) of this Ordinary Resolution may have ceased to be in force) issue Shares in pursuance of any Instrument made or granted by the Directors while this Ordinary Resolution was in force,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit;



(b) provided that:

(i) the aggregate number of Shares to be issued to new shareholders pursuant to this Ordinary Resolution does not exceed twenty per cent. (20%) of the issued share capital of the Company (as calculated in accordance with subparagraph (iii) below);

(ii) the aggregate number of Shares to be issued on a pro-rata basis to existing shareholders of the Company does not exceed fifty per cent. (50%) of the issued share capital of the Company (as calculated in accordance with sub-paragraph (iii) below);

(iii) the percentage of outstanding share capital shall be based on the outstanding share capital of the Company at the time this Ordinary Resolution is passed, after adjusting for:

(1) new Shares arising from the conversion or exercise of any convertible securities or share options which are outstanding or subsisting at the time this Ordinary Resolution is passed; and

(2) any subsequent consolidation or subdivision of Shares;

(iv) in exercising the authority conferred by this Ordinary Resolution, the Company shall comply with the regulations of Oslo Børs ASA (the “OSE”) or any other stock exchange on which the Shares are quoted or listed and such other regulatory authorities as may be necessary, as well as the Articles of Association for the time being of the Company;

(v) (unless revoked or varied by the Company in general meeting) the authority conferred by this Ordinary Resolution shall continue in force until the conclusion of the annual general meeting commencing next after the date on which the approval is given, or the expiry of the period when the next annual general meeting is required by law to be held; and

(c) the Directors be and are hereby authorised to do any and all acts which they deem necessary and expedient in connection with paragraphs (a) and (b) above.

[See Explanatory Note (ii)] (Resolution 8)

9. Proposed renewal of share buyback mandate

That:

(a) for the purposes of the Companies Act (Chapter 50) of Singapore, the Directors be authorised and empowered to purchase or otherwise acquire the ordinary shares in the capital of the Company (“Shares”) not exceeding in aggregate the Prescribed Limit (as hereafter defined), at such price(s) as may be determined by the Directors of the Company from time to time up to the Maximum Price (as hereafter defined), whether by way of:

(i) on-market purchases (“Market Purchases”, and each, a “Market Purchase”), transacted on the OSE through the OSE’s trading system or, as the case may be, any other stock exchange on which the Shares may for the time being be listed and quoted, through one or more duly licensed stockbrokers appointed by the Company for the purpose, conducted in a manner complying with the provisions in the Norwegian Securities Trading Act, including but not limited to the prohibition on market manipulation and the duty of equal treatment of shareholders; and/or

(ii) off-market purchases (“Off-Market Purchases”, and each, an “Off-Market Purchase”) (if effected otherwise than on the OSE) in accordance with an equal access scheme(s) as may be determined or formulated by the Directors as they may consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act and the regulations of the OSE and the Norwegian Securities Trading Act or, as may be necessary, any other stock exchange on which the Shares are quoted or listed,

(the “Share Buyback Mandate”).


(b) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors of the Company pursuant to the Share Buyback Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the passing of this Resolution and expiring on the earlier of:

(i) the date on which the next annual general meeting of the Company (“AGM”) is held or required by law to be held;

(ii) the date on which the share buybacks are carried out to the full extent mandated; or

(iii) the date on which the authority contained in the Share Buyback Mandate is varied or revoked;

(c) in this Resolution:

“Prescribed Limit” means ten per cent. (10%) of the issued ordinary share capital of the Company as at the date of passing of this Resolution unless the Company has effected a reduction of the share capital of the Company in accordance with the applicable provisions of the Companies Act, at any time during the Relevant Period, in which event the issued ordinary share capital of the Company shall be taken to be the amount of the issued ordinary share capital of the Company as altered (excluding any treasury shares that may be held by the Company from time to time);

“Relevant Period” means the period commencing from the date on which the last AGM was held and expiring on the date the next AGM is held or is required by law to be held, whichever is the earlier, after the date of this Resolution; and

“Maximum Price” in relation to a Share to be purchased, means an amount (excluding brokerage, stamp duties, applicable goods and services tax and other related expenses) not exceeding:

(i) in the case of a Market Purchase : Not more than 10% discount from the Average Closing Price;

(ii) in the case of an Off-Market Purchase : Not more than 10% discount from the Highest Last Dealt Price, where

“Average Closing Price” means the average of the closing market prices of a Share over the last five market days, on which transactions in the Shares were recorded, preceding the day of the Market Purchase, and deemed to be adjusted for any corporate action that occurs after the relevant 5-day period;

“Highest Last Dealt Price” means the highest price transacted for a Share as recorded on the market day on which there were trades in the Shares immediately preceding the day of the making of the offer pursuant to the Off-Market Purchase; and

“day of the making of the offer” means the day on which the Company announces its intention to make an offer for the purchase of Shares from shareholders of the Company stating the purchase price (which shall not be more than the Maximum Price calculated on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase; and

(d) the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they may consider expedient or necessary to give effect to the transactions contemplated by this Resolution.

[See Explanatory Note (iii)] (Resolution 9)

By Order of the Board

Yeo Keng NienCompany Secretary

Singapore, 14 December 2014



Explanatory Notes:-

(i) The Ordinary Resolution 7 proposed in item 7 above, if passed, will enhance the efficiency of the audit as Ernst & Young LLP is the current auditors of Ezra Holdings Limited, the holding company of EMAS Offshore Limited.

(ii) The Ordinary Resolution 8 proposed in item 8 above, if passed, will empower the Directors from the date of this Meeting until the date of the next Annual General Meeting, or the date by which the next Annual General Meeting is required by law to be held, or when revoked or varied by the Company in general meeting, to issue Shares in the Company. The number of Shares that may be issued under this resolution on a pro-rata basis to existing shareholders of the Company would not exceed fifty per cent. (50%) of the issued share capital of the Company at the time of the passing of this resolution. For the issue of Shares to new shareholders, the aggregate number of Shares to be issued shall not exceed twenty per cent. (20%) of the issued share capital of the Company at the time of the passing of this resolution.

(iii) The Ordinary Resolution 9 proposed in item 9 above, if passed, will empower the Directors from the date of this Meeting until the date of the next Annual General Meeting, or the date by which the next Annual General Meeting is required by law to be held, or when revoked or varied by the Company in general meeting, or when share buybacks are carried out to the full extent mandated, to purchase its issued Shares.

The Company may use internal sources of funds or borrowings or a combination of both to finance the Company’s purchase or

acquisition of Shares pursuant to the Share Buyback Mandate. The amount of financing required for the Company to purchase or acquire its Shares, and the impact on the Company’s financial position, cannot be ascertained as at the date of this Notice of AGM as these will depend on, inter alia, the aggregate number of Shares purchased, whether the purchase is made out of capital or profits, the purchase prices paid for such Shares, the amount (if any) borrowed by the Company to fund the purchases or acquisitions and whether the Shares purchased or acquired are cancelled or held as treasury shares.

EMAS Offshore Limited is a public limited company subject to the rules of the Singapore Companies Act (Chapter 50). As of the date of this Notice, the Company has issued 439,672,754 Shares, each of which represents one vote. The Shares have equal rights also in all other respects. A Shareholder has the right to attend the Annual General Meeting either in person or through a proxy. A proxy need not be a Shareholder of the Company. Each Shareholder has the right to vote for the number of shares held by such member. Please refer to the notes below for the procedure to attend and vote at the Annual General Meeting.

Notes:

1. No Shareholder shall be entitled to attend and vote in person or by proxy unless Section 1 or Section 2 of the Attendance/Proxy Form, whichever is applicable, is completed, together with the power of attorney or other authority (if any) under which it is signed, or a notarially-certified copy of that power of attorney, is sent to the Depository Register by not less than 48 hours before the time for holding the Annual General Meeting (the “Meeting”).

2. A Shareholder entitled to attend and vote at the Meeting and who wishes to:

(a) be present in person to vote; or(b) appoint a proxy or proxies to be present in person to vote in his stead; or (c) appoint the Chairman of Meeting to vote in his stead,



at the Meeting should note the following:

Holders of Shares registered on the Oslo Børs Holders of Shares registered on the Singapore Exchange Securities Trading Limited

The Attendance/Proxy Form must be sent to DNB Bank ASA in either 1 of the 3 methods mentioned below not less than 48 hours before the time appointed for holding the Annual General Meeting, to obtain a Power of Attorney in connection with voting at the Meeting: Method 1

P.O. Box address (if mailing):DNB Bank ASARegistrars Dept./ Mr. Stig Tore StroemP.O. Box 1600, Sentrum, 0021 OsloNorway

Method 2

Street address (if by courier):DNB Bank ASARegistrars Dept./ Mr. Stig Tore StroemDronning Eufemias gate 300191 OsloNorway

Method 3

If by e.mail (to DNB Bank ASA):E.mail: [email protected]

The Attendance/Proxy Form must be deposited at the office of Boardroom Corporate & Advisory Services Pte Ltd located at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 not less than 48 hours before the time appointed for holding the Annual General Meeting.

3. A Shareholder entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. A proxy need not be a Shareholder of the Company.

4. A corporation which is a Shareholder may, by resolution of its directors, authorise any person to act as its representative at any

meetings of the Company, and such representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as if he had been an individual Shareholder.


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SECTION 1: PLEASE COMPLETE THIS SECTION IF YOU ARE ATTENDING THE MEETING IN PERSON

I/We, (Name) (NRIC/Passport no.) of

(Address)

being (a) holder(s) of _____ Ordinary Shares of EMAS Offshore Limited (the “Company”), hereby give such notice to DNB Bank ASA for me/us to attend the Annual General Meeting (the “Meeting”) to be held at the following venue: Klapsons, The Boutique Hotel – eighteen.1 & 2 at Level 18, 15 Hoe Chiang Road, Tower Fifteen, Singapore 089316 on Tuesday, 30 December 2014 at 10 a.m. (Singapore time) and at any adjournment thereof.

SECTION 2: PLEASE COMPLETE THIS SECTION IF YOU ARE APPOINTING PROXY/PROXIES TO ATTEND OR THE CHAIRMAN OF MEETING TO VOTE ON YOUR BEHALF

I/We, (Name) (NRIC/Passport no.) of

(Address)

being (a) holder(s) of _____ Ordinary Shares of EMAS Offshore Limited (the “Company”), hereby authorise DNB Bank ASA to constitute and appoint the following to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) to be held at the following venue: Klapsons, The Boutique Hotel – eighteen.1 & 2 at Level 18, 15 Hoe Chiang Road, Tower Fifteen, Singapore 089316 on Tuesday, 30 December 2014 at 10 a.m. (Singapore time) and at any adjournment thereof, on all matters coming before the Meeting: (please select one of the following with a tick [√] within the box provided.)

☐ I/We wish to appoint the following to attend the Meeting in person:

Name NRIC/ Passport Number Address No of Shares

and/or (delete as appropriate)

Name NRIC/ Passport Number Address No of Shares

☐ I/We appoint the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf.

I/We direct my/our proxy/proxies to vote for or against or abstain from the Resolutions proposed at the Meeting as indicated below. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” or “Abstain” with a tick [√] within the box provided.)

No. Resolutions relating to: For Against Abstain1. Adoption of Directors’ Report and Audited Accounts for the financial year ended 31 August 20142. Re-election of Mr Lee Kian Soo as a Director of the Company3. Re-election of Mr Lee Chye Tek Lionel as a Director of the Company4. Re-election of Capt Adarash Kumar A/L Chranji Lal Amarnath as a Director of the Company5. Re-appointment of Mr Cuthbert Ignatious Jeyaretnam Charles as a Director of the Company6. Approval of Directors’ fees for the financial year ending 31 August 20157. Appointment of Ernst & Young LLP, Singapore as the Company’s Auditors and to authorise the

Directors to fix their remuneration8. Authority to allot and issue new Shares9. Proposed renewal of the Share Buyback Mandate

COMPULSORY FOR ALL HOLDERS OF THE SHARES TO SIGN AND COMPLETE THE DATE

Signature(s)___________________________________________________ Date:_____________________Note: Please sign exactly as name appears above. Joint owners should each sign. When signing as attorney, executor, administrator or guardian, please give full title as such.


Notes :

1. Please insert the total number of Shares held by you in either Section 1 or Section 2 of the Attendance/Proxy Form, whichever is applicable. If no number is inserted, the Attendance/Proxy Form shall be deemed to relate to all the Shares held by you.

2. No Shareholder shall be entitled to attend and vote in person or by proxy unless Section 1 or Section 2 of the Attendance/Proxy Form, whichever is applicable, is completed, together with the power of attorney or other authority (if any) under which it is signed, or a notarially-certified copy of that power of attorney, is sent to the Depository Register by not less than 48 hours before the time for holding the Annual General Meeting (the “Meeting”).

3. A Shareholder entitled to attend and vote at the Meeting and who wishes to:

(a) be present in person to vote; or(b) appoint a proxy or proxies to be present in person to vote in his stead; or (c) appoint the Chairman of Meeting to vote in his stead,

at the Meeting should note the following:

Holders of Shares registered on the Oslo Børs Holders of Shares registered on the Singapore Exchange Securities Trading Limited

The Attendance/Proxy Form must be sent to DNB Bank ASA in either 1 of the 3 methods mentioned below not less than 48 hours before the time appointed for holding the Annual General Meeting, to obtain a Power of Attorney in connection with voting at the Meeting:

Method 1

P.O. Box address (if mailing):DNB Bank ASARegistrars Dept/Mr. Stig Tore StroemP.O. Box 1600, Sentrum, 0021 OsloNorway

Method 2

Street address (if by courier):DNB Bank ASARegistrars Dept/Mr. Stig Tore StroemDronning Eufemias gate 300191 OsloNorway

Method 3

If by e.mail (to DNB Bank ASA):E.mail: [email protected]

The Attendance/Proxy Form must be deposited at the office of Boardroom Corporate & Advisory Services Pte Ltd located at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 not less than 48 hours before the time appointed for holding the Annual General Meeting.

4. If a Shareholder nominates two proxies, then the Shareholder shall specify the number of his Shares to be represented by each such proxy, failing which the first named proxy shall be treated as representing one hundred per cent. (100%) of the shareholding and any second named proxy as an alternate to the first named.

5. The Attendance/Proxy Form appointing a proxy or proxies, in the case of an individual, shall be signed by the appointor or of his attorney and in the case of a corporation, shall be either given under common seal or signed on its behalf by an attorney or a duly authorised officer of the corporation.

6. Any corporation which is a Shareholder may, by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meetings of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of such corporation as the corporation could exercise if it were an individual Shareholder.

7. General: The Company shall be entitled to reject the Attendance/Proxy Form if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company shall be entitled to reject an instrument of proxy lodged by any Depositor whose name does not appear in the Depository Register as at forty-eight (48) hours before the appointed time of the Meeting.


15 Hoe Chiang Road#28-01 Tower Fifteen

Singapore 089316Telephone: (65) 6349 8535Facsimile: (65) 6345 0139 www.emasoffshore.com



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