ARMADA Annual Report 2018

ANNUAL REPORT 2018
Bumi Armada Berhad is a Malaysia-based international

offshore energy facilities and services provider with
a presence in over 10 countries spread across three
continents, supported by over 1,500 people from over 38
nationalities.
We provide offshore services via two business units –

Floating Production & Operations (“FPO”) and Offshore
Marine Services (“OMS”) (encompassing the Offshore
Support Vessel (“OSV”) and the Subsea Construction (“SC”)
services).
Bumi Armada is one of the largest Floating Production

Storage Offloading (“FPSO”) players in the world and
an established OSV owner and operator, with extensive
experience across Asia, Europe, Africa and Latin America.
The Company was incorporated in December 1995 as

a public limited company (under the Companies Act,
1965), and the Bumi Armada group of companies include
diversified subsidiaries as well as joint venture companies.
2018 AT A GLANCE (as at 31 of December 2018)
Revenue Total Assets Net Loss Market Capitalisation

(RM) (RM) (RM) (RM)
2.42 bil 15.54 bil 2.32 bil 0.91bil

(2017: RM2.40bil) (2017: RM18.84bil) (Net Profit 2017: RM376.41mil) (2017: RM4.49bil)
FPSO Uptime Total Equity Firm Order Book Share Price Performance
(%) (RM) (RM) (% Year-on-year)
97.17% 3.37 bil 20.20bil -79.74%

(2017: ≥99%) (2017: RM5.52bil) (2017: RM22.25bil) (2017: 26.44%)
Lost Time Injury

(per 1 mil man-hours)
0.56
(2017: 0.45)
INSIDE THIS REPORT
AN OVERVIEW OF HOW WE ARE OTHER

01 03 05
BUMI ARMADA GOVERNED INFORMATION
About Bumi Armada Corporate Governance 28 Analysis of 228

Table of Contents Overview Statement Shareholdings
Vision, Mission and 2 - Board of Directors’ 31 Glossary of Technical 234

Core Values Profile and Other Terms
About This Report 3 - Senior Management 35

Team Profile ANNUAL GENERAL
Where We Operate 4 06
Statement on Risk 64 MEETING
Group Corporate 6 INFORMATION
Management and
Structure
Internal Control
Corporate Information 8 Notice of Annual 236
Directors’ Responsibility 74
General Meeting
Organisation Chart 9 Statement
Proxy Form
Five-Year Financial 10
Performance OUR
04
Share Performance 11 NUMBERS
Financial Statements 75
STRATEGY &
02 SUSTAINABILITY
Chairman’s Statement 12
Management Discussion 15
& Analysis
Sustainability Statement 20
Bumi Armada Berhad An Overview of Bumi Armada
WE STAY RESILIENT BY KEEPING TO OUR

VISION, MISSION AND CORE VALUES
VISION MISSION
To be the preferred provider • To operate and deliver on our commitments to the
of offshore production and satisfaction of our stakeholders, safely, on time and
support services to our clients. within budget.
• To add value by effectively managing risks through a
hands-on approach.
• To continuously improve our capabilities and to apply
the lessons learnt to the way we work.
• To ensure good governance in all our practices, reduce our
environmental footprint, support our local communities
and promote social sustainability awareness wherever
we operate.
S U R E
SAFE UNITED RESPONSIBLE EXCELLENT
We care for the safety We place a high We take responsibility We are driven by our
of each other and lead importance on in always delivering on ambition to continuously
by example. working as one team our promises and improve.
and want to pursue and we commit ourselves
We aim to take a achieve results together. personally in We seek to learn from
proactive approach adding value to our others, challenge others
in protecting the We seek the stakeholders. constructively and
environment, maintaining participation of others have the discipline to
our assets in resolving problems, We want to conduct make the extra effort
and safeguarding encourage mutual respect our business with good each time.
information. and always welcome governance and a
feedback. strong moral compass.
Annual Report 2018
ABOUT
THIS REPORT
Welcome to Bumi Armada’s 2018 Annual Report. As you read

through the following pages, you will find a comprehensive
review of our Group's performance, challenges and 01
opportunities during the financial year 2018.
SCOPE AND BOUNDARIES
This report covers the governance, the strategy, the financial performance and the prospects of the Group. Split into 6
sections, Sections 1-2 provide a narrative of our business whilst Sections 3-6 provide all the information believed to be
relevant to our stakeholders, including the consolidated annual financial statements.
GUIDELINES
The financial statements have been audited by our external auditors, PricewaterhouseCoopers PLT, and were prepared
in accordance with the Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards
and the requirements of the Companies Act 2016 (“CA 2016”) in Malaysia.
Other sections of this report have been prepared in accordance with the guidelines established by the Main Market Listing
Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Malaysian Code on Corporate
Governance 2017 (“MCCG”), Bursa Securities Sustainability Reporting Guidelines, and Corporate Governance Guide
(3rd Edition) (“CG Guide”).
ENQUIRY
In ensuring that we report on the issues that matter to our stakeholders, please provide any questions pertaining to this
report or questions that you would like answered at our upcoming Annual General Meeting to [email protected].
On behalf of the board:
TUNKU ALI REDHAUDDIN LEON ANDRE HARLAND

IBNI TUANKU MUHRIZ
WHERE WE OPERATE
as at 31 December 2018
FLOATING PRODUCTION &

OPERATIONS
The FPO business specialises in
engineering, procurement, construction,
commissioning, and the operations of
floating oil and gas facilities as per the
specific requirements of clients.
Bumi Armada currently operates the

following facilities:
• 5 wholly owned FPSOs.
• 3 jointly owned FPSOs.
• 1 Liquefied Natural Gas (“LNG”)
Floating Storage Unit (“FSU”). UNITED STATES
VENEZUELA
BRAZIL
OFFSHORE MARINE SERVICES

The OMS business runs a fleet of 47
vessels, comprising 44 OSVs and
3 SC vessels. The OSVs currently
operate in South East Asia, West
Africa, Latin America and 3 ice-
class vessels operate in the Russian
sector of the Caspian Sea. The SC
vessels operate in the Caspian Sea
and Indonesia, where we execute
installation of pipe lines and heavy lift
operations.
14 Shore Bases/Offices
The OMS business is responsible
for the chartering, scope planning,
logistics and full operations of the
vessels in its fleet. 44 Offshore Support Vessels
Annual Report 2018
WHERE WE OPERATE
Offshore
1,046 employees
Onshore
01
491 employees
Diversity
of employee
RUSSIA
nationalities
UNITED KINGDOM
NETHERLANDS
TURKMENISTAN 38countries
MALTA
INDIA
VIETNAM
GHANA
NIGERIA
MALAYSIA
ANGOLA SINGAPORE
INDONESIA
1 Floating Storage Unit
3 Subsea Construction Vessels
8 Floating Production Storage Offloading Units

GROUP CORPORATE STRUCTURE

49% less
1 share
ARMADA OYO LTD. (BVI)
ARMADA TGT LTD. (Marshall Islands)
BUMI ARMADA AUTOMATION INTERNATIONAL SDN. BHD. (Malaysia)
BUMI ARMADA CAPITAL MALAYSIA SDN. BHD. (Malaysia)
BUMI ARMADA CAPITAL OFFSHORE LTD (Labuan)
BUMI ARMADA ENGINEERING SDN. BHD. (Malaysia)
BUMI ARMADA HOLDINGS B.V. (Netherlands)
BUMI ARMADA HOLDINGS LABUAN LTD. (Labuan)
99%
BUMI ARMADA NAVIGATION SDN. BHD. (Malaysia)
BUMI ARMADA OFFSHORE HOLDINGS LIMITED (Marshall Islands)
BUMI ARMADA SINGAPORE HOLDINGS PTE. LTD. (Singapore)
BUMI ARMADA (SINGAPORE) PTE. LTD. (Singapore)
49% less
1 share
SHAPOORJI PALLONJI BUMI ARMADA OFFSHORE PRIVATE LIMITED (India)
49% less
1 share
SP ARMADA OIL EXPLORATION PRIVATE LIMITED (India)
Notes:
1
Notwithstanding the BAB Group is holding less than 50% equity interest, the investment in Angoil Bumi JV, Lda is classified as a subsidiary (not a joint
venture) due to the Group’s control pursuant to the Shareholders’ Agreement.
* All 100% owned unless stated otherwise.
The full list of Bumi Armada Group of Companies are stated on pages 154 to 163 and 164 to 165 of the Notes to the Financial Statements.
Annual Report 2018
GROUP CORPORATE STRUCTURE

BUMI ARMADA HOLDINGS BUMI ARMADA

NETHERLANDS B.V. (Netherlands) NETHERLANDS B.V. (Netherlands)
01
49% BUMI ARMADA NAVIGATION

ARMADA BALNAVES PTE. LTD. (Singapore) ANGOIL BUMI JV, LDA1 (Angola) LABUAN INTERNATIONAL
LIMITED (Labuan)
49% less
1 share BUMI ARMADA NAVIGATION
ARMADA CABACA LTD (Marshall Islands) ARMADA C7 PTE. LTD. (Singapore)
LABUAN LIMITED (Labuan)
ARMADA FLOATING GAS ARMADA FLOATING GAS BUMI ARMADA SHIP

STORAGE MALTA LTD (Malta) SERVICES MALTA LTD (Malta) MANAGEMENT SDN. BHD. (Malaysia)
49%
ARMADA MADURA
ARMADA KRAKEN PTE. LTD. (Singapore)
EPC LIMITED (Marshall Islands)
ARMADA OFFSHORE ARMADA OFFSHORE

OSV LIMITED (Marshall Islands) MPSV LIMITED (Marshall Islands)
99%
BUMI ARMADA UK BUMI ARMADA OFFSHORE
LIMITED (England and Wales) CONTRACTOR LIMITED (Marshall Islands) BUMI ARMADA CASPIAN LLC (Russia)
49% 99%
PT. ARMADA GEMA
NUSANTARA (Indonesia) BUMI ARMADA MARINE LLC (Russia)
ARMADA CONSTRUCTOR ARMADA MARINE CONTRACTORS ARMADA MARINE CONTRACTORS

PTE. LTD. (Singapore) CASPIAN LTD. (BVI) CASPIAN PTE. LTD. (Singapore)
ARMADA SHIP MANAGEMENT (S) BUMI ARMADA MARINE

PTE. LTD. (Singapore) NARYAN MAR PTE. LTD. (Singapore)
60%
BUMI ARMADA MARINE
BUMI ARMADA (LABUAN) LTD. (Labuan)
GHANA LIMITED (Ghana)
BUMI ARMADA MARINE BUMI ARMADA MARINE

POKACHI PTE. LTD. (Singapore) URAY PTE. LTD. (Singapore)
OFFSHORE MARINE
VENTURES SDN. BHD. (Malaysia)
Joint Venture (“JV”)

CORPORATE INFORMATION
BOARD OF DIRECTORS AUDIT COMMITTEE REGISTERED ADDRESS/HEAD OFFICE
Tunku Ali Redhauddin VU Kumar (Chairperson) Level 21, Menara Perak

Alexandra Schaapveld 24, Jalan Perak
ibni Tuanku Muhriz
50450 Kuala Lumpur, Malaysia
Chairman Maureen Toh Siew Guat
Tel : +603 2171 5799
Independent Non-Executive Director Fax : +603 2163 5799
Website : www.bumiarmada.com
REMUNERATION COMMITTEE
Alexandra Elisabeth Johanna Email : [email protected]
Maria Schaapveld (1)
Independent Non-Executive Director Alexandra Schaapveld (Chairperson) SHARE REGISTRAR
Maureen Toh Siew Guat
Uthaya Kumar VU Kumar Boardroom Share Registrars Sdn Bhd
a/l K Vivekananda (2) Level 6, Symphony House
Independent Non-Executive Director Pusat Dagangan Dana 1
NOMINATION & CORPORATE Jalan PJU 1A/46
GOVERNANCE COMMITTEE
Chan Chee Beng 47301 Petaling Jaya
Non-Independent Non-Executive Selangor, Malaysia
Tunku Ali Redhauddin Tel : +603 7849 0777
Director
ibni Tuanku Muhriz (Chairperson) Fax : +603 7841 8151/8152/8100
Maureen Toh Siew Guat Alexandra Schaapveld

Non-Independent Non-Executive Chan Chee Beng AUDITORS
Director VU Kumar
PricewaterhouseCoopers PLT
Gary Neal Christenson* Level 10, 1 Sentral
RISK MANAGEMENT COMMITTEE
Jalan Rakyat
Executive Director
Kuala Lumpur Sentral
VU Kumar (Chairperson) 50706 Kuala Lumpur, Malaysia
Leon Andre Harland* Tel : +603 2173 1188
Executive Director/ Fax : +603 2173 1288
Chief Executive Officer
STOCK EXCHANGE LISTING
COMPANY SECRETARIES
Bursa Malaysia Securities Berhad
Noreen Melini binti Muzamli (Main Market) Listed since 21 July 2011
(LS 0008290) Sector : Energy
Sub-sector : Energy Infrastructure Equipment
Noor Hamiza binti Abd Hamid & Services
(MAICSA 7051227) Stock Code : 5210
BOARD COMMITTEES
Nomination
& Corporate Risk
Audit Remuneration Governance Management
DIRECTORS Committee Committee Committee Committee
Tunku Ali Redhauddin ibni Tuanku Muhriz - - Chairperson -
Alexandra Schaapveld Member Chairperson Member -
VU Kumar Chairperson Member Member Chairperson
Chan Chee Beng - - Member -
Maureen Toh Siew Guat Member Member - Member
In the other sections of the Annual Report:

(1)
She is also referred to as Alexandra Schaapveld.

(2)
He is also referred to as VU Kumar.
* Leon Andre Harland's contract of employment as the Chief Executive Officer ("CEO") ends on 15 May 2019. Gary Neal Christenson will be appointed as
the CEO on 16 May 2019.
Annual Report 2018
ORGANISATION CHART
BOARD OF DIRECTORS
01
EXECUTIVE DIRECTOR/
CHIEF EXECUTIVE OFFICER
• Risk (Indirect to Board -
COSEC
Risk Management Committee)
Leon Andre Harland (Direct to Board)
• Internal Audit (Direct to Board -
Audit Committee)
CHIEF HUMAN GENERAL COUNSEL CHIEF FINANCIAL OFFICER

RESOURCES OFFICER
Karen Lawrie Luke Targett

Soorya Themudu
• Corporate Treasury
• Legal
• Cash Management
• HR Centre of Excellence • Contracts
• Financial Reporting
• HR Business Partners • Insurance
• Investor Relations,
• Shared Services • Compliance
Communications & Sustainability
• Admin
• Tax
• Information Services & Technology
HEAD OF HSSEQ • Project & Corporate Finance
• Joint Venture Management
Leong Wei Kit

HEAD OF OFFSHORE
• Health • Security • Quality MARINE SERVICES
• Safety • Environment
Megat Zariman bin Abdul Rahim
HEAD OF FPO TECHNOLOGY

• OSV
• Subsea Construction
Claude Verhoeven
• Project • Engineering • Supply Chain COMMERCIAL

Management Management
Leon Andre Harland (Interim)
SVP FLOATING, PRODUCTION & OPERATIONS • Sales & Business Development

• Proposal
James Ellis
• Operations • Fleet Asset • HSSEQ &

Integrity Regulatory
Compliance
CEO Dual Reporting/ Direct Reporting

Functional Reporting
Direct Reports to CEO

(Management Team)
10
FIVE-YEAR FINANCIAL
PERFORMANCE
REVENUE TOTAL ASSETS

(RM’000) (RM’000)
2018 2,418,739 2018 15,540,716
2017 2,402,130 2017 18,835,006
2016 1,317,389 2016 22,090,129
2015 2,179,734 2015 18,072,639
2014 2,397,339 2014 14,451,890
PROFIT/(LOSS) FOR THE FINANCIAL YEAR TOTAL EQUITY

(RM’000) (RM’000)
2018 (2,319,148) 2018 3,370,140
2017 376,407 2017 5,521,031
2016 (2,005,036) 2016 5,590,077
2015 (241,777) 2015 7,295,772
2014 224,365 2014 6,717,525
Financial Performance
(RM’000) 2014 2015 2016 2017 2018
Revenue 2,397,339 2,179,734 1,317,389 2,402,130 2,418,739
Profit/(Loss) for the

financial year 224,365 (241,777) (2,005,036) 376,407 (2,319,148)
Profit/(Loss) attributable to the

Owners of the Company 218,690 (234,566) (1,967,651) 352,247 (2,302,769)
Total assets 14,451,890 18,072,639 22,090,129 18,835,006 15,540,716
Total equity 6,717,525 7,295,772 5,590,077 5,521,031 3,370,140
More info: www.bumiarmada.com

Annual Report 2018
11
SHARE PERFORMANCE
MALAYSIAN STOCK MARKET AND economic performance. As a result, the FBM KLCI ended
BUMI ARMADA the year at a low of 1,690.58 points, losing up to 5.9%
of its gains from the start of the year and it was the worst
performance the index has had in over ten years.
The Malaysian stock market represented by the benchmark
FBM KLCI Index (FBM KLCI) had a strong start in 2018 and 01
For Bumi Armada, the share price started the year positively,
pushed the stock market to an all-time high of 1,895.18
on the back of a strong financial performance delivered in
points in the first quarter. This was driven by stronger year 2017’s full year results. The share price climbed to a high of
on year earnings reports, rallies in commodity prices and 94 sen in April before reacting negatively to the impairments
sturdy foreign investment in the lead up to the Malaysian taken against Armada Kraken FPSO in the second quarter
elections. of 2018. Further impairments made in the third and fourth
quarters of the year, due primarily to the OSV segment and
However, this all changed post elections with uncertainties Armada Kraken FPSO respectively, as well as uncertainties
for the Malaysian economy with the historic change of around corporate debt refinancing, resulted in a continued
government, major global policy and political shifts and decline, with the share price ending 2018 at 15.5 sen, a
increased global trade tensions. Additionally, supply decrease of 79.74% against the 76.5 sen at the end of
disruptions in the mining and agriculture sectors as well as 2017.
decreased commodity exports adversely affected Malaysia’s
Bumi Armada Share Price & Volume Performance Volume Price
1.0 350
300
0.8
250
0.6
200
Shares (mil)
(RM)
150
0.4
100
0.2
50
0 0
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sept-18 Oct-18 Nov-18 Dec-18
FBM KLCI Price & Volume Performance Volume Price
1950 900
1900 800
1850 700
1800 600
Volume (mil)
Index Pricing
1750 500
1700 400
1650 300
1600 200
1550 100
1500 0
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sept-18 Oct-18 Nov-18 Dec-18
Bumi Armada Berhad Strategy & Sustainability
12
CHAIRMAN’S STATEMENT
Dear Shareholders,
Before going into the review of 2018,

I would like to start by welcoming Gary
Christenson, who joined the Board of
Directors of the Company ("Board") in May
2018 as an Independent Non-Executive
Director and who will now be taking over
as the Chief Executive Officer (“CEO”), in
May 2019. I also welcome Luke Targett
who joined us in November 2018 as the
Chief Financial Officer (“CFO”) and Karen
Lawrie, our new General Counsel.
TUNKU ALI REDHAUDDIN IBNI TUANKU MUHRIZ

Chairman
THE GLOBAL ECONOMY OIL PRICES
Global economic growth was suppressed in 2018 due to Brent oil prices went through something of a rollercoaster
the trade war between China and the USA, lower than ride in 2018. Oil prices started the year in the mid-USD60
expected growth from key emerging economies, signs per barrel level before falling to USD60 per barrel in mid-
of impending interest rate increases and continuing geo- February. Prices then quickly strengthened to USD80 per
political tensions. The signs in the first quarter of 2019 are barrel in May before retracing to USD70 per barrel in mid-
that many of these factors will continue to dampen global August, which was followed by a move to high-USD80 per
growth, for at least the first half of the year. barrel in October. Concerns of a slowing global economy
however, raised concerns about the underlying demand for
oil in the medium term, causing oil prices to retract, ending
Real GDP Growth (% change) 2018 in the mid- to low-USD50 per barrel levels.
10
8 Brent Oil (USD/Barrel)

100
6
Emerging &
Developing 90
Economies 80
4
World 70
60
2 Advanced
USD
50
Economies
40
0
30
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
20
-2
10
0
-4 Jan - 16 Jan - 17 Jan - 18 Dec - 18
Source: IMF Source: Bloomberg

Annual Report 2018
13
THE GROUP IN 2018 unfortunately, the Armada Kraken continues to experience

some issues (highlighted in the Management Discussion &
OVERALL PERFORMANCE Analysis (“MD&A”) section) and we are doing all that we
can to rectify the situation as soon as possible.
2018 was a volatile year financially for the Group. In 02
the first quarter the Group delivered profits, before large OFFSHORE MARINE SERVICES
impairments were taken for the FPO and OMS businesses
in the remaining quarters, particularly on Armada Kraken. In the OMS business, the OSV segment remained extremely
difficult in 2018. Low vessel demand was reflected in our
However, whilst the impairments taken against the Kraken lower OSV fleet utilisation levels of 41% during the year,
were significant, we feel they were necessary, and we and charter rates continued to be soft. In view of continued
are working towards stabilising the crude production weakness in this segment, the Group has disposed of two
and availability level of the vessel. The OSV impairment vessels in 2018 as part of its asset monetisation plans.
was taken due to the decline in vessel utilisation and day Moving forward, the Group aims to dispose of more idle
rates, which have been seriously impacted by industry vessels.
oversupply.
In the SC sub-segment, we concluded our work under our
The Group also had to address the challenge of maturing long-term contract for PETRONAS in Turkmenistan, as well
corporate debt, which was primarily borrowed for the as wrapped up the work scope in the Russian sector for
expansion of the OMS business, before the oil prices Lukoil in 2018. In 2019, the SC segment is bidding on
and the market turned negative in 2014. This was settled new projects in the Caspian Sea for both the Armada
with the refinancing of the corporate debt, which was Installer and Constructor vessels. We are still awaiting a
announced to Bursa Securities on 24 April 2019. decision from the potential clients.
In light of the ongoing difficult financial situation, it was SAFETY

necessary to continue to reduce headcount in certain areas
and close non-essential offices as part of our continuing In Burmi Armada, we recognise safety as one of our
cost reduction programme. business priorities and this is reflected in our shared values.
The Group has setup controls in place based on industrial
FLOATING PRODUCTION & OPERATIONS standards to mitigate the identified risks in our operations.
Despite our efforts in 2018, the Group recorded three Lost
Overall, 2018 was a positive year for the FPO business. Time Injury (“LTI”) cases across its businesses. In the FPO
The Armada TGT 1 FPSO in Vietnam completed her seven- business, there was a Lost Workday case recorded due to
year firm charter period in August and secured a six-year a slip and trip incident, and there were two LTIs recorded in
and three-month contract extension. Our LNG FSU in the OMS business. In the first, a crew member was injured
Malta, Armada LNG Mediterrana, had a good year of during anchor handling activities; and in the second, a
operations and we also saw positive contributions from third-party contractor was injured during extreme weather
our joint venture FPSO units in India, the Armada Sterling conditions, resulting in the collapse of the jetty where our
and Armada Sterling II, as well as the Karapan Armada vessel was moored. Thankfully, the crew members have
Sterling III in Indonesia. We also completed the final recovered. The Group is committed to learning from these
acceptances of the Armada Olombendo FPSO in Angola cases and to further improve our processes and controls to
and the Armada Kraken FPSO in the UK North Sea. prevent recurrence.
Whilst the Armada Olombendo is performing strongly,
14
OUTLOOK IN CONCLUSION
Oil prices in early 2019 have rebounded slightly but are Whilst it has been a difficult year, cost reductions and
at risk of falling due to continued weakness in the global refinancing of the corporate debt will all serve to strengthen
economic outlook and tense geopolitical relations. The the Company moving forward.
current view is that these market conditions are unlikely to
change in the near term. The knock-on impact of this to the We need to ensure that all our assets operate safely and
offshore Oil & Gas (”O&G”) sector is that 2019 is likely as efficiently as possible and maximise their contribution
to be another year of selective capital expenditure. So far to the Group, and that each business unit can perform on
there has not been a significant increase in activity in the its own.
FPSO space; whilst OSV has seen some improvement in
utilisation, the sector remains volatile. It is clear what needs to be done in 2019. Under the
leadership of our new CEO, Gary Christenson, we will
On a positive note for the Group, most of our income is focus on improving the operational performance on
derived from our FPO business which is operating long- Armada Kraken, optimise value from the OSV segment and
term contracts, so our revenues in 2019, are predicted to further improve our balance sheet. By doing so, we will
be relatively stable. position ourselves for growth in the future.
We have also completed the refinancing of our corporate I would like to take this opportunity to thank Leon Harland
debt, which allows the Group to focus on operations and for his contributions during his three-year tenure as the
continuing structural improvements going forward. CEO, Pierre Savy (former Acting CFO) and Mimi Tahsin
(former General Counsel), and I wish them all the very best
KEY TARGETS FOR 2019 for the future. I would also like to thank all shareholders,
partners and other stakeholders of Bumi Armada for their
For 2019, the Group will continue to focus on the support during the year.
following areas:
TUNKU ALI REDHAUDDIN IBNI TUANKU MUHRIZ

• Ensure the safety of all employees, partners and
Chairman
assets;
• Improve operational performance on Armada

Kraken;
• Improve the balance sheet and increase cash

flows;
• Optimise cost; and
• Monetise assets that are unlikely to contribute

positively in the short-to-medium-term.
Annual Report 2018
15
MANAGEMENT DISCUSSION &

ANALYSIS
Dear Shareholders,
02
In this report, I shall provide an overview
of the strategy, operations and financial
performance of the Group in 2018. I will
highlight the areas that both positively
and negatively impacted us, as well as
the steps the Management has taken to
address the risks and other challenges that
were faced during the year under review.
LEON HARLAND
Executive Director/Chief Executive Officer
THE O&G SECTOR OBJECTIVES & STRATEGIES SAFETY
At the beginning of 2018, firmer The main objectives of the Group Front-line Safety
Brent oil prices buoyed expectations remain tied to the vision “To be
for oil companies to increase their the preferred provider of offshore During the year, the Group had
activities during the year and for production and support services to three safety incidents at our front-line
budgets to be increased for 2019. our clients” and to our core values operations that resulted in injuries.
However, global trade tensions, geo- of “Safe, United, Responsible and Thankfully, the crew members involved
political risks as well as slower growth Excellent - SURE”. have recovered. One of these incidents
in global emerging markets, raised occurred on our FPO, while the other
concerns about energy demand in the We remain one of the top FPO two occurred on our OSVs. All these
medium-term. As a result, a number of players in the industry and one of the incidents have been fully investigated
offshore O&G activities were stalled main OMS operators in both South- and appropriate improvements in our
or delayed further. East Asia and the Caspian Sea. processes have been introduced to
The main objectives of the Group avoid any recurrence.
This meant that there has been limited moving forward is to continue to be
decisions by clients in the projects that recognised as a top offshore O&G Across both the FPO and OMS
we are pursuing in the FPO business. services provider, to grow the FPO businesses, there have been sustained
In the OMS business, any chances business, to optimise OMS assets, safety activities during the year, all
of a recovery in OSV demand was and monetise unutilised vessels. with the predominant aim to reinforce
further delayed, while decisions on proactive safety awareness throughout
new work for the SC sub-segment all of the Group’s operations.
were deferred.
16
MANAGEMENT DISCUSSION & ANALYSIS
Positive Recognition
Throughout 2018, the Group received the following safety awards and milestones.
FPO Safety Milestones in 2018
Armada TGT I
• Achieved 7 Years of operations without a LTI on 18 July 2018.

• Received the Clients 2018 Safety Excellence Award.
Armada Sterling
• Achieved 5 Years of operations without a LTI on 22 April 2018.

• 2,000 Days without a LTI on 13 October 2018.
Armada Sterling II
• Achieved 3 Years of operations without a LTI on 11 March 2018.
Armada LNG Mediterrana
• Achieved 1 Year of operations without a LTI on 16 January 2018.

• Safely completed 8 Ship-to-Ship (“STS”) transfers.
Armada Olombendo
• Achieved 1st year of operations without a LTI on 8 February 2018.
Karapan Armada Sterling III
• Achieved 1 Year of operation without a LTI on 26 July 2018.
Armada Perdana
• Achieved 5 Years of operations without a LTI on 6 May 2018.

• 2,000 Days without a LTI on 27 October 2018.
OMS Safety Milestones in 2018
• ExxonMobil Exploration and Production Malaysia Inc. (”EMEPMI”)'s 2017 Chairman’s Safety Award - Recognition Award.
• 2017 Marine Safety and Operational Excellence by Repsol on 3 May 2018.
• Shell Malaysia’s 1000 Zero Day Goal.
• 2nd Runner up in Shell Malaysia’s SMEP Marine League Table.
• EMEPMI Gold Award for our HSE and operational excellence in 2018.
• Armada Installer achieved 5 Years of operation without a LTI in July 2018 from Lukoil.
Annual Report 2018
17
OVERVIEW OF BUSINESS & OPERATIONS Unutilised FPO Assets
FPO BUSINESS During 2018, as part of the Group’s asset monetisation

plan, we disposed of the Armada Ulysses, a tanker we
During 2018, we completed the final acceptances for our held as a conversion unit as we pursued new projects. 02
two largest units, Armada Olombendo in Angola, and We continue to assess options for the disposal of Armada
Armada Kraken in the North Sea. Our other operating Claire and Armada Perdana.
units in Vietnam and Malta plus those under our joint
ventures in India and Indonesia, continued to perform Litigation Against Woodside
well. The Armada TGT 1’s strong performance in Vietnam
resulted in the client extending its contract by six years and After nearly three years of document review and case
three months in August. This will see the unit on charter preparation, the litigation case between our wholly-owned
until November 2024. subsidiary Armada Balnaves Pte Ltd (“ABPL”) against
Woodside Energy Julimar Pty Ltd (“Woodside”) has
The overall performance of the FPO business was negatively commenced in the Supreme Court of Western Australia in
impacted in 2018 by two main issues: February 2019. We do not expect a quick resolution of
the dispute but hope to see some positive developments
by late 2019.
1
The on-going shut-in of the Armada Perdana FPSO OMS BUSINESS

in Nigeria. The client was declared bankrupt in the
US courts in Texas in 2018 and we are now working OSV Sub-Segment
with the other aggrieved parties to try and recover
as much proceeds from the sale of crude on-board In 2018 our OSV sub-segment faced many challenges.
the vessel, as well as extract ourselves and our vessel The lack of new exploration by oil companies on the back
from the current situation. of fluctuating oil prices resulted in fleet utilisation falling
to 41%, as compared to approximately 50% in 2017,
and charter rates remained extremely competitive. As a
2
proactive measure the business segment was re-organised
The on-going technical challenges around the Armada with a focus on cost optimisation and the re-assessment of
Kraken FPSO, which have negatively impacted the vessels utilisation. As a result, a number of vessels were put
unit’s up-time availability. on cold lay-up in 2018.
We did nevertheless manage to secure some new

All the other FPO units have performed well during 2018,
contracts towards the end of 2018 and into 2019, and
recognised by a long-term contract extension for Armada
predominately with large international oil companies.
TGT 1, annual safety milestones for LTI-free operations
Whilst most of the charters were for less than six months,
over the year, as well as more recently, recognition by
the business segment did secure two longer-term contracts
the British Safety Council (“BSC”) Awards for the Armada
- one in Malaysian waters with Sarawak Shell (2+1 Years
LNG Mediterrana in Malta, the Armada Olombendo FPSO
for the Armada Tuah 303) and the other for Eni in Congo
in Angola and the joint venture Karapan Armada Sterling
(3+2 Years for the Armada Hibiscus).
III FPSO in Indonesia. Even the Armada Perdana FPSO in
Nigeria secured a BSC award, which highlights our team’s
These are on top of our long-term charter contracts that
commitment to continue safe, professional and efficient
we have for the Ice Class Vessels in the Caspian Sea with
operations, even under difficult conditions.
Lukoil as well as with Shell Malaysia for Armada Tuah
300, the first diesel electric vessel in Malaysia.
18
The Armada KP1 in Indonesia

continued to pick-up pipe-line and
installation work over the course
of 2018 and into 2019. The efforts
that the business segment had put
into getting the vessel imported and
reflagged in Indonesia proved to
be valuable. Armada KP1 also has
unique advantages that will make
her very attractive among clients in
Indonesia.
2018 FINANCIAL RESULTS
The Group registered revenue of

RM2.4 billion in 2018 which was
similar to the revenue in 2017. There
was a change in the make up of the
revenue however, with FPO accounting
for 70.0% of Group revenue in 2018
versus 59.7% in 2017. Conversely,
the OMS revenue contribution to the
Group declined from 40.3% in 2017
to 30.0% in 2018.
As part of the on-going fleet contractual billings with PETRONAS
rationalisation exercise, we managed Turkmenistan. Following the closure of The main reason for the higher
to dispose of a number of vessels. Most these projects, the business segment revenue from the FPO business was
of these assets that were marked for has subsequently scaled down its that Armada Kraken and the Armada
disposal were assets that have been resources to minimise costs as much Olombendo FPSOs had their first
laid up for more than 2 years and as possible. The organisation is now full year of operations and earnings
would have been costly to reactivate. lean and resourced primarily with in 2018. In the OMS business, the
As a result of this exercise, we the core engineering and business SC sub-segment had lower revenue
achieved commercial arrangements to development people to prepare for in 2018 compared to 2017, as the
sell 6 OSVs of which 2 were actually bids. SC sub-segment contributions were
handed over in 2018. For 2019, we boosted by the additional work scope
are continuing to sell and hand over New bids were submitted for work under the supplemental agreement
more vessels. in 2019, as well as longer-term work with Lukoil in 2017.
for 2020 and beyond. 2019 will be
SC Sub-Segment the year for tendering and business Despite the stable revenue in 2018,
development. We have identified a the profitability of the Group was
In 2018, the SC’s vessels in the total combined contract value of RM3 negatively affected by impairments
Caspian Sea (the Armada Installer billion of work that we are bidding over the course of the year. Of the total
and the Armada Constructor) for in the Caspian area for project impairments of RM2.2 billion, RM1.6
completed works as planned execution between 2019 to 2025. billion was due to underperformance
in Turkmenistan for PETRONAS With the unique business value that and low up-time availability of
Turkmenistan, as well as in Russia our 2 vessels, Armada Installer and the Armada Kraken FPSO, while
for Lukoil on the Filanovsky field. The Armada Constructor have to offer, impairments at the OSV segment
business segment has also managed we expect that our operations in the accounted for RM586.5 million.
to close out the Lukoil contract with Caspian will secure work in the near
some positive variation orders as future.
well as to conclude the outstanding
Annual Report 2018
19
Information on Impairments in 2018 As a result, this underperformance is

having a significant negative impact
Q2 2018 Q3 2018 Q4 2018 on the Group. Needless to say that we
have been putting maximum efforts
The impairment was The impairment was The impairment was to improve the performance of the 02
mainly taken against taken against certain mainly taken against Armada Kraken FPSO and we expect
Armada Kraken OSVs, due to the Armada Kraken FPSO to see the results of these efforts come
FPSO based on the decline in vessel due to the lower than through gradually in to 2019.
amendment agreement utilisation and expected levels of
number 2 (“AA2”) day rates. production during Q4. We have established dedicated teams
with EnQuest Heather pursue these targets and the progress
Limited, EnQuest ENS is being closely monitored.
Limited and Nautical
Petroleum Limited. THANKS AND APPRECIATION
The Group’s financial performance was also affected by net allowance for As you may be aware, I have decided
impairment losses, higher financing costs due to the cessation of capitalisation for private reasons to not extend my
of borrowing costs related to the completion of certain FPO projects, as well as contract beyond the three-year term.
costs related to restructuring and reorganisation. Even though I wish to see for myself
that the above-mentioned targets are
The Group reported a net loss attributed to owners of RM2.3 billion for 2018, indeed being closed over the course
compared to a net profit of RM352.2 million in 2017. If the RM2.2 billion of 2019, I do leave the Group with
of impairments and net allowances for impairment losses of RM276.4 million the full confidence that this will be
were excluded, the Group would have registered a net profit to shareholders of achieved thanks to the dedication and
RM216.5 million in 2018. drive of the various talented people
within Bumi Armada.
KEY RISKS AND TARGETS GOING FORWARD
I would like to thank the shareholders
There are a handful of key areas for the Group to focus on in 2019 which are for their trust in having me lead the
also the key risks to the organisation. Group over the past three years. My
special thanks to the Board Chairman,
The Group has recently completed its refinancing of the corporate debt, split Tunku Ali, and the other directors for
into two tranches and repayable over the next two and five years respectively. their guidance and insight. To Gary
Following this, the Group must continue to focus on maximising its revenue Christenson, I wish you all the best
while continuing to manage its operational costs as well as finding additional in leading Bumi Armada into an
value via asset monetisation strategies. inspiring future. Finally, I would like to
thank everyone at the Group for their
This means that we will monetise our OMS assets together with idle FPSOs to support, friendship and enjoyable
aid in reducing our costs and repayment of our debt facilities. Every vessel that times over the last three years, and
is not generating cash, is a cost to either maintain or cold-stack. I remind everyone to be “SURE” in
everything you do.
Finally, there will be an ongoing focus to ensure safe and efficient operations on
all our assets. We do have strong performances throughout our fleet which are
recognised by various client awards throughout the year. However, the Armada LEON HARLAND
Kraken FPSO is the only unit where we have not consistently reached the Executive Director/
maximum potential, as demonstrated by the low availability levels of the unit. Chief Executive Officer
20
SUSTAINABILITY STATEMENT
Introduction
Welcome to the Group’s Sustainability Statement for 2018. This report will
update the reader on the key areas with regards to Bumi Armada’s approach
to safety, society and the environment, that the Group monitors and reports
on. It also covers the key Corporate Social Responsibility (“CSR”) initiatives
undertaken by the Group, as part of our commitment to maintain a sustainable
environment in the regions in which we operate.
OPERATING IN A HIGHLY REGULATED INDUSTRY For this reason, failure to meet the various regulatory
and certification requirements can be punitive, including
Bumi Armada is the owner and operator of various vessels, the disqualification or “black-listing” of the asset and/or
that cover the offshore Oil and Gas (“O&G”) services life operations. Our aim is to operate within, or better than, the
cycle. The industry is highly regulated with requirements for necessary “License-to-Operate” requirements. This includes
annual independent audits to be conducted for all of our in-country laws, regulations and compliance requirements
operations in order to be in compliance to in-country laws set by our clients, including meeting the relevant ISO
and industrial standards where HSSEQ is a key focus. The requirements.
scope of such “License-to-Operate” requirements span from
the condition of our assets to our operating procedures,
both offshore and at our onshore work sites.
Annual Report 2018
21
BAB remains a component member of the FTSE4Good Index.
Full Certification List

02
STANDARDS & QUALITY CERTIFICATIONS
• ISO 9001: 2015 (“Quality Management System”) • International Ship and Port Facility Security (“ISPS”)
• ISO 14001: 2015 (“Environmental Management System”) • Safety Management System (“SMS”)
• OHSAS 18001: 2007 (“Occupational Health and • Mobile Offshore Drilling Unit Code (“MODU”)
Safety Management System”)
• International Safety Management (“ISM”)
The critical areas that drive the Group’s ability to operate in the offshore O&G sector are also the key areas that make
up our top materiality issues, within the Group Materiality Matrix.
Important to External Stakeholders
Important to Internal Stakeholders
Not covered in this report Covered, but with less detail Covered, in this report
The Critical Material Issues referred to in the Group Materiality Matrix can be found within the Material Issues table below.
MATERIAL ISSUES
Critical Material Issues Addressed by:
Safety Health, Safety, Security, Environment and Quality (“HSSEQ”)
Ethical Operations Statement of Risk Management and Internal Control
Environmental Impact Environment Management
Business Performance Management Discussion & Analysis
People People
Operational Compliance Operational Compliance

22
HEALTH, SAFETY, SECURITY, ENVIRONMENT The Group also evaluates its practices related to the health
AND QUALITY and well-being of our employees through regular audits
on the relevant applicable procedures, including travel
As the Group operates on a daily basis in offshore vaccination, ergonomics, lighting, noise and hygiene
locations, we are subject to risks, especially in the areas conditions at work. This includes a review of appointed
of HSSEQ, that need to be managed and mitigated. In medical centres, health management procedures,
this environment, we continuously instil a Safety Culture including health risk assessment, pre-travel vaccination
behaviour and mindset that adheres to zero tolerance for and monitoring epidemiological situations in-country and
unsafe acts, unsafe conditions, as well as non-compliance overseas. Particular attention is given to the prevention
to HSSEQ procedures. Our Corporate HSSEQ department of non-communicable diseases and promotion of general
acts as the governing body that monitors the compliance health.
of the Group, against both internal, contractual and
international standards. Corporate Policies
In 2018, we introduced the HSSEQ Management Team Governance policies are in place to ensure we live up
Committee in order to strengthen HSSEQ governance to the HSSEQ standards set for the organisation. These
across the Group, along with performance standards include, amongst others:
and other controls. The committee is chaired by our CEO
and includes key Management Team members with the • Asset Integrity Management Policy
authority to influence HSSEQ related decisions and actions • Corporate Major Accident Prevention Policy
across the Group. (“CMAPP”)
• Drug and Alcohol Policy
Under the HSSEQ requirements, the Group is required to • Heath, Safety & Environmental Protection Policy
• Policy on the Wearing of Personal Protective
report its performances and establish a HSSEQ Strategy
Equipment
and Plan for continuous improvement and mitigation of
• Security Policy
its HSSEQ risks to As Low As Reasonably Practicable
• Stop Work Policy
(“ALARP”). To ensure we are aligned with the progression
• Smoking Policy
of international standards, we continue to be an active
• Quality Management Policy
member of the International Maritime Organisation
(“IMO”) and International Marine Contractors Association
Certification by Recognised Bodies
(“IMCA”), and leverage on international practices and
industrial lessons learnt for ongoing improvement initiatives.
To maintain our “License-to-Operate”, the Group is
required to comply to various industry specific regulatory
0.8 and operational standards in the countries where we
LTI BAB vs IMCA
operate. Our commitments to international standards are
0.6
demonstrated through our certifications with the ISO,
which is an independent, non-governmental international
organisation that facilitates development of International
0.4
Standards to ensure safety, reliable and good quality
services and products. In Bumi Armada, the Group's
0.2
business operations are certified with the following
standards:
0
2013 2014 2015 2016 2017 2018
• ISO 9001:2015 Quality Management System
BAB Lost Time Injury IMCA Lost Time Injury
Frequency (“LTIF”) Frequency (“LTIF”) • OHSAS 18001:2007 Occupational Health and
Safety Management Systems
• ISO 14001:2015 Environmental Management
System
Annual Report 2018
23
02
The ISO certifications reflect our commitment to ensure we • FPO LTI-Free Recognition Awards;
maintain high quality assets and services in the following • OMS HSSEQ Leadership Performance Awards; and
areas: • OMS Supplier HSE Recognition Awards.
• Management of Engineering; Coupled with commitments from our Leadership Team

• Design Consultancy; on conducting management visits to site, we observed
• Procurement, Construction, Commissioning and improvements in proactive reporting of Safety Observation
Operations of FPO; Frequencies and Near Miss Reporting Frequencies.
• Offshore Support/Transportation/Installation
Vessels; and Regretfully, in 2018, we recorded two LTI cases in OMS,
• Offshore Pipelines/Structures for the Offshore and where a crew member was injured during an anchor
Marine Industry including Ship Management and handling activity; and a third-party contractor was injured
Chartering Services. during extreme weather condition resulting in the collapse
of the jetty where our vessel was moored. For FPO, a
Personal Safety Lost Workday case involving a slip and trip incident was
recorded. We are committed to learn from these cases and
In 2018, we continued to drive HSSEQ initiatives to instill further strengthen our controls to prevent recurrence.
positive behavior and mindset among our employees with
the aim to enhance our HSE Culture. These included:
• Company-wide safety stand down for reflection of

lessons learns from the Piper Alpha incident;
• Monthly FPO HSE video sharing;
24
Year 2014 2015 2016 2017 2018

Leading Indicators (per 200,000 manhours)
Safety Observation Frequency 720.8 902.2 598.8 686.0 812.2
Near Miss Reporting Frequency 1.7 1.7 1.2 3.6 3.7
Management Visit Ratio 5.8 4.8 8.3 3.0 3.5
Lagging Indicators (per 1 million manhours)

Lost Time Injury Frequency 0.7 0.3 0.1 0.5 0.6
Total Recordable Injury Frequency 1.6 2.3 0.7 1.1 0.9
First Aid Case Frequency 2.8 2.8 1.5 1.8 1.9
The success of this approach has seen the organisation

completing operations securely throughout 2018.
ENVIRONMENTAL MANAGEMENT
As an organisation that operates in the offshore energy

sector across 10 countries globally, we are committed to
reducing the impact of our business on the environment.
This includes compliance with the requirements set by the
IMO on marine pollution.
This objective aims to prevent and minimise the pollution

Process Safety from ships – both incident related or from normal operations.
Our focus areas includes the reduction of greenhouse gas
In line with industrial standards, we measure and report
(“GHG”) emissions across our operations.
Process Safety Event (”PSE”) with Tier 1 as most significant.
In 2018, we have recorded five Tier 1 PSEs and two Tier
Spill Management
2 PSEs. Based on our key findings, we continue to work
closely with our asset integrity team to prevent reoccurrence
In 2018, we committed to achieve “Zero Oil Spill to the
across our fleet.
Sea”. We have recorded two cases of spills released to sea
by our FPSO fleet that was less than one barrel. The Group
Security
will continue to strive for its goal of “Zero Oil Spill to the
In accordance to the Company policy, security risks to our Sea” with continuous improvements from lessons learnt.
personnel are being managed through a diligent process
of onsite Security Risk Assessments (“SRA”). Through this Greenhouse Gas Reduction
process, identified risks are subsequently mitigated with
the implementation of bespoke procedures and robust In line with our long term ambition, we are committed to
physical controls. reducing the carbon footprint of our offshore operations,
as well as onshore worksite. In 2018, we observed an
Based on our risk assessments, or as required by local increase in GHG emissions as compared to 2017, which
laws, our security controls are further enhanced through were due to the growth of our operating fleet. To drive
the engagement and support provided by local security continuous improvement, we have focused on reducing our
companies and/or, Government Security Forces, in our GHG emissions by improving our operational control.
operational environments which have been rated as “High
Risk”.
Annual Report 2018
25
2014 2015 2016 2017 2018

Environment
Spill (Contained onboard) 5.0 5.0 6.0 10.0 12.0
Spills Released to Sea (Number)* 4.0 0.0 0.0 0.0 2.0 02
Greenhouse Gas Emissions (GHGs)
Scope 1 (’000 tonnes CO2 equivalent) 540.0 540.0 497.0 484.0 595.8
Scope 2 (’000 tonnes CO2 equivalent) 1.0 0.9 0.7 0.7 0.6
Bunker Fuel Consumption (Million litres) 139.0 96.0 67.0 58.0 41.6
Electricity Consumption (MWh) 1489.0 1425.0 1016.0 1101.0 902.6
Water Consumption - Vessels (thousand m ) 3
142.0 126.0 114.0 133.0 119.3
Note:
* Both cases of Spills Released to Sea (Number) recorded in 2018 are less than a barrel.
• Scope 1 (’000 tonnes CO2 equivalent) is based on consumption of bunker fuel, fuel gas and crude oil.
• Scope 2 (’000 tonnes CO2 equivalent) is based on electricity consumption from offices in Russia, Indonesia, Malaysia, and Singapore.
Environmental Awareness Campaign legal compliance, integrity in business dealings, illegal

payments, gifts and entertainment. The Group has a policy
We seek to maintain a strong belief in protecting the of zero tolerance for any corrupt practices. All employees
environment while operating in a responsible manner. are required to acknowledge their compliance with the
In 2018, Bumi Armada launched a series of initiatives Code which highlights amongst others, child labour and
during our “Environment Week Campaign” across our minimum wages.
organisation. The campaign included industrial training
by Institute of Marine Engineers, Science and Technology The Code governs our behaviour within the organisation,
on “Marine Pollution Preparedness and Response” and and the Group expects a similar level of ethical standards
a series of internal initiatives to elevate environmental from our business associates. Our suppliers are also
knowledge and awareness amongst our employees. required to abide by the standards laid out in the Code.
PEOPLE Human Rights & Diversity
The Group remains committed to providing an environment The Group’s human resource activities are based on a
for our employees to develop and excel. While the Group strong adherence to equal opportunities, to attract the best
works across multiple countries, we look to employ local talent across gender and culture. Our Employee Handbook
talent as this provides local knowledge and capability, states clearly “Employment decisions are based on merit
which is critical in countries where local content and business needs, and not on race, colour, citizenship
requirements are required. status, national origin, ancestry, gender, sexual orientation,
age, weight, religion, creed, physical disability, marital
Code of Business Conduct and Ethics status, veteran status, political affiliation, or any other factor
protected by law. Wherever possible we will endeavour to
The Group’s Code of Business Conduct and Ethics (“the reflect a country’s diversity in our staff strength.”
Code”) outlines professional and behavioural standards
that all employees are expected to adhere to. It covers
26
2018 Onshore Workforce Figures

Grand Total Headcount 491
8%
Malaysian Local
International 35% Nationality 65% 92% Employment Expat
Training Hours Per Employee
16
14
12
10
8
6
2013 2014 2015 2016 2017 2018
Female Onshore Population (%)

42
40
38
36
34
32
30
28
26
2013 2014 2015 2016 2017 2018
Voluntary Attrition Rate (%)

20
18
16
14
12
10
8
6
2010 2011 2012 2013 2014 2015 2016 2017 2018
Annual Report 2018
27
OPERATIONAL COMPLIANCE We continue to support the Forest Research Institute of

Malaysia (“FRIM”) under a programme that sponsors tree
Compliance to Vessel Classification and planting and educational activities that support GHG
Certification reduction activities and awareness.
02
In addition to our commitment to ISO certifications, the Society
Group’s vessels are also in compliance to international
marine regulations and codes, including the following: The CSR Committee also looks to provide support to other
social areas not covered directly by the Group. Under our
• International Safety Management (“ISM”); social initiatives, we cover a series of areas ranging from
• International Ship and Port Facility Security (“ISPS”); education, local community support and disaster relief. In
and 2018, some of the main initiatives supported were:
• Safety Management System (“SMS”).
Malaysia
The FPO business, while covered by the ISM and the ISPS • Rise Against Hunger, which provides disaster relief
codes, is also required to comply to the MODU Code, which pre-packed meals, which are distributed in areas that
covers requirements for Floating Production Units. are struggling from natural or other disasters
• Charity event to raise funds and non-financial donations
The Group is dedicated to ensure we remain in full for the Lotus orphanage and old-age home
compliance with all of these certificates, including • Blood donation drive with Malaysia’s National Blood
requirements on integrity, operational condition and Centre
specifications of assets.
United Kingdom
CORPORATE SOCIAL RESPONSIBILITY (“CSR”) • Cash for Kids, which is a charity event to raise funds
for the October 2018 Coat Appeal
The Group’s CSR programme is run by a committee of • Pound for Piper, a charity event organised by Graeme
volunteer employees (the “CSR Committee”) which looks Webster in commemoration of the 167 people who
to support various charitable organisations to mitigate our lost their lives in the 1988 Piper Alpha disaster in the
impact on the environment and have a positive impact on North Sea
society and communities. • Northsound Cash for Kids “Big Bake Day”, which
benefits local children and young people, alleviating
We look to provide long-term support to initiatives and disability, illness and improving quality of life
organisations that enhance the marine environment or help
to offset the Carbon Footprint from our businesses. All the Indonesia
Corporate CSR activities are selected based on benefits that
• PT. Armada Gema Nusantara (“AGN”) in collaboration
will bring a positive impact to regions that are close to our
with Dharma Camplong Elementary School students
operations.
held a “Clean Beach Campaign”. The campaign’s
main objectives were to:
We continue to be a long-term supporter of the Cherating
1. Communicate the importance of keeping the
Turtle Sanctuary (“CTS”) in Kemaman, Malaysia. The CTS
beach clean and educate locals on how it
works to study and increase the population of Asian sea turtles
benefits the community in Camplong, Sampang
via their hatchery and “tag and release programmes”. They
Regency, Madura
also run education programmes for schools and communities
2. Demonstrate AGN’s commitment to working
in the area on protecting sea turtles, especially turtle eggs,
together with the local community for mutual
which are often seen as a culinary delicacy in the region.
welfare
The Group also continues to support the Biosphere
Foundation (“Biosphere”), which undertakes marine
conservation activities near the Madura Island in Indonesia.
Biosphere operates a programme of coral reef protection,
rehabilitation as well as education programmes in the local
schools.
Bumi Armada Berhad How We Are Governed
28
HOW WE ARE
GOVERNED
Dear Shareholders,
It is of paramount importance to ensure that Bumi Armada is resilient and

agile and therefore able to deal with constant change and evolving economic
and geo-political situations. This can only be achieved with a skilled and
experienced Board and Management team, and an appropriate culture and
governance structure.
The Board believes strong Given the businesses undertaken by

governance, adapted to the Group’s the Group and the complex markets
needs, circumstances and business in which we operate, it is essential
model, is a source of competitive to understand the key risks faced
advantage. Bumi Armada is a large, by the organisation and to ensure
geographically diverse organisation, that the Company has appropriate
doing business in complex and policies, systems, processes and
sometimes sensitive environments. management action plans to mitigate
Sharing a common understanding of these risks to an acceptable level.
the Company’s purpose and values is The Board therefore maintains a Risk
essential. To promote this, the Board Management Committee (“RMC”),
continues to support the application in addition to the Audit Committee
of Bumi Armada values throughout the (”AC”), to provide the necessary focus
organisation. This culture is supported on risk management and mitigation.
by continuous monitoring, review
and promotion of the Group’s values, Further to reviews on the effectiveness
TUNKU ALI REDHAUDDIN
standards and policies. Directors of our Board Committees, the Board
IBNI TUANKU MUHRIZ
should be able to both support, and decided to discontinue the Executive
Chairman
constructively challenge Management Committee (“EXCO”) with effect from
where appropriate. 1 September 2018. The duties of the
EXCO were incorporated in the terms
With this in mind, we strive to foster of reference of the RMC, AC or the
open and effective communication Board, as deemed appropriate.
within the boardroom and with the
Management team. This process is
informed by best practices as well as
feedback received and views collated
from our key stakeholders.
Annual Report 2018
29
CORPORATE GOVERNANCE OVERVIEW STATEMENT
STRENGTHENING OUR CHANGES TO THE BOARD DRIVING GOVERNANCE

BOARD CHARTER AND BOARD
COMMITTEES' TERMS OF During the year under review, the Planning for the future requires us
REFERENCE Nomination & Corporate Governance to review the Board’s composition
Committee oversaw the process to regularly to ensure that it remains fit 03
As a Board, we continually look find a new non-executive director. to support the changing needs of the
towards strengthening our governance This led to the appointment of Group. Management development
practices where possible. During the Gary Christenson to the Board on and succession planning are also key
year under review, we made changes 2 May 2018. Gary Christenson was areas of interest for the Board. As
to our Board Charter to ensure it redesignated as Executive Director on Management implemented important
was aligned to the MCCG. These 27 March 2019 and he will assume organisational changes this year, and
changes included defining the role the role of CEO on 16 May 2019 we are also going through a CEO
and responsibilities of our Senior succeeding Leon Harland whose transition, it is critical for us to monitor
Independent Director, enhancing the contract is expiring on 15 May 2019. this.
role and responsibilities of the Board
and incorporating the duties of the The resultant Board would then consist Good corporate governance is critical
Company Secretary. Additionally, of 6 Directors, a third of whom are to building a successful, safe and
further enhancements were made to female. The Board views the current sustainable business and enabling
the Terms of Reference of the AC, composition of the Board as adequate us to create long-term value more
relating to the effectiveness and in the short term to ensure diversity, effectively. The focus on corporate
independence of the Internal Audit independent thinking and provide governance is continuously increasing
function, placing us in line with appropriate insights, but is actively and the Board is committed to
principle 8.2 of the MCCG. looking to augment the Board further, maintaining the highest standards of
in the medium term with at least one corporate governance as this is the
additional independent director. key to the continued long-term success
of the Group.
Good corporate
governance is critical to
building a successful, safe
and sustainable business
Tunku Ali Redhauddin
ibni Tuanku Muhriz
Chairman of the Board
and enabling us to create

long-term value more
effectively.
30
Our Corporate
Our Directors’ skills and experience, together
Governance structures
with their wide range of backgrounds, help
remain robust. In OUR DIRECTORS them constructively challenge Bumi Armada’s
this section of the Management and develop an effective strategy
for the future.
report, we will detail
how our Board and OUR
Our governance and internal control framework
Board Committees GOVERNANCE
helps the Board exercise proper oversight.
FRAMEWORK
operate, their role and
responsibilities and the
The Board has delegated certain authorities and
key governance focus responsibilities to four Board Committees, all of
OUR COMMITTEES
areas of the Board and which operate within their respective Terms of
Reference (“TOR”).
Management.
We remain committed to operating in accordance
with best practice in business integrity and
ethics and maintaining the highest standards of
financial reporting and corporate governance. The
Directors consider that Bumi Armada has generally
complied throughout the year with the provisions
OUR CORPORATE of the MCCG, save for what has been detailed in
GOVERNANCE the Corporate Governance Report. Bumi Armada
STATEMENT has also complied with the CA 2016 and MMLR
of Bursa Securities. In preparing this report,
the CG Guide issued by Bursa Securities was
referred to. Our Corporate Governance Overview
is to be read in conjunction with the Corporate
Governance Report, which is accessible online at
www.bumiarmada.com.
The MCCG issued in April 2017 is available on the Securities Commission website at www.sc.com.my and the CG Guide
is available on www.bursamalaysia.com.
CORE PRINCIPLES
RELATIONSHIP
LEADERSHIP & WITH
EFFECTIVENESS ACCOUNTABILITY STAKEHOLDERS
A strong, open Close scrutiny of Open engagement
and effective Board risks and controls with stakeholders
Refer to pages 31 to 54 Refer to pages 55 to 62 Refer to page 63

Annual Report 2018
31
LEADERSHIP & EFFECTIVENESS
Board of Directors’ Profile
Gender composition Tunku Ali Redhauddin

Board of Directors
ibni Tuanku Muhriz
Female 2
Chairman/Independent
Male 5
Non-Executive Director
Committee
03
Audit AC
Risk Management
RMC
Nomination & Corporate Governance

NC
Remuneration
RC
Experience
Government/Agency/Regulatory Bodies Chairperson NC
Private Enterprise
Country: Malaysia Age: 41 Gender: Male
Professional Services/Bodies
:
International Posting Date of Appointment:
Director – 17 January 2013
Industries
Chairman – 18 June 2013
Banking/Capital Markets
Qualifications:
Oil and Gas (Technical/Operations)
• BA (Hons) in History and Social & Political Sciences from the
Oil and Gas (General Management) University of Cambridge
Oil and Gas (Insurance) • Masters in Public Administration from the John F Kennedy
Marine & Shipping
School of Government, Harvard University
Telecommunications/IT Present Directorships:

Property Development/Real Estate Manufacturing
Listed Companies: Other Public Companies:
Investments
Nil • Bangkok Bank Berhad
Others • Sun Life Malaysia Assurance Berhad
Skills
Corporate Governance Tunku Ali Redhauddin ibni Tuanku Muhriz (“Tunku Ali”) brings with
him significant experience and knowledge in the global investment
Strategic Planning and Business Strategy
field, having been with Khazanah Nasional Berhad (“Khazanah”)
International Business Relations
from 2004 to 2010, where he was a director in the Investments
Banking, Finance & Investment Division.
Engineering & Geological
Linguistics & Negotiation

At Khazanah, he worked on a number of transformational projects
and new investments in Malaysia and throughout Asia. Prior to
Marketing
Khazanah, Tunku Ali gained international client service experience
Accounting
while serving in McKinsey & Company as a management consultant
Corporate Finance from 1998 to 2004 where he worked on corporate strategy,
Audit organisational and governance projects in Europe, North America
Risk Management
and Asia. In addition to Bumi Armada Berhad and other public
companies, Tunku Ali sits on the boards of several companies
Legal and Regulatory Compliance
including Themed Attractions Resorts and Hotels Sdn Bhd, Iskandar
Communication Malaysia Studios Sdn Bhd and Cardiac Vascular Sentral (Kuala
Human Resource Management Lumpur) Sdn Bhd. He is also a Senior Advisor to TPG Capital, a
Change Management global Private Equity firm. He is Chairman and Founding Trustee
of Teach For Malaysia, Chairman of WWF Malaysia, Chairman
Project Management
of the Board of Trustees of Yayasan Munarah, Royal Patron of
Notes: Enactus Malaysia Foundation, Chairman of the Board of Governors
1. None of the Directors have any family relationships with any directors and/or major
shareholders of the Company. of Marlborough College Malaysia and Pro-Chancellor of Universiti
2. None of the Directors have any conflict of interest with the Company. Sains Islam Malaysia.
3. None of the Directors have any convictions for offences within the past five years (other
than traffic offences, if any).
4. None of the Directors have any public sanctions and/or penalties imposed on them by
any regulatory bodies during the financial year ended 31 December 2018.
32
Alexandra Uthaya Kumar K

Schaapveld Vivekananda
Independent Independent
Non-Executive Director Non-Executive Director
Chairperson RC Chairperson AC RMC
Member NC AC Member NC RC
Country: Netherlands Age: 60 Gender: Female Country: Malaysia Age: 65 Gender: Male
Date of Appointment: 8 June 2011 Date of Appointment: 10 April 2017
Qualifications: Qualifications:
• Degree in Politics, Philosophy and Economics from Oxford • Fellow of the Institute of Chartered Accountants in
University, United Kingdom England & Wales
• Master in Development Economics at Erasmus University, • Chartered Accountant of Malaysian Institute of Accountants
Netherlands • Member of Malaysian Association of Certified Public
Accountants
Present Directorships:
Listed Companies: Other Public Companies: Present Directorships:
Nil Listed Companies: Other Public Companies:

• Vallourec S.A.
• Société Générale S.A. Nil Nil
Alexandra Schaapveld started her career at ABN AMRO Bank VU Kumar was with PricewaterhouseCoopers for nearly 35 years.
in 1984 in corporate banking and subsequently in investment He has led and worked on some of the most challenging and
banking: equity capital markets and mergers and acquisitions. complex assignments, both in Malaysia and globally, working
with multinational and blue-chip national clients in audit, business
She had always been a strong advocate of client relations at the advisory, mergers and acquisitions, valuations, privatisations,
Bank. In 2001, she was made Senior Executive Vice President IPOs and cross-border transactions.
responsible for sector expertise and in 2004 she became the
head of the global clients and investment banking units. After the
acquisition of ABN AMRO Bank by a consortium of banks, she
became head of Europe for Royal Bank of Scotland in 2008.
Annual Report 2018
33
Chan Chee Beng Maureen

Toh Siew Guat
Non-Independent
Non-Executive Director Non-Independent
03
Member NC Member AC RMC RC
Country: Malaysia Age: 63 Gender: Male Country: Malaysia Age: 53 Gender: Female
Date of Appointment: 2 June 2003 Date of Appointment: 23 April 2014
• Degree in Economics and Accounting from the University of • Bachelor of Law (LL.B) from University Malaya, Malaysia
Newcastle-upon-Tyne, United Kingdom • Master of Law (LL.M) from Harvard Law School,
• Fellow of the Institute of Chartered Accountants in England United States of America
and Wales
Present Directorships:
Present Directorships: Listed Companies: Other Public Companies:
Listed Companies: Other Public Companies: Nil
Nil
Nil • Maxis Communications Berhad Group
• Yu Cai Foundation Maureen Toh Siew Guat (“Maureen Toh”) has more than 20 years
of legal experience, primarily in corporate, commercial and
Chan Chee Beng has more than 39 years of experience in general banking matters and equity/capital markets, including stints with
and financial management, investment banking and accounting law firms in Kuala Lumpur and Singapore.
including stints with Ernst & Young and Morgan Grenfell & Co. Ltd
prior to joining the Usaha Tegas Sdn Bhd (“UTSB”) Group in 1992 She is a Director of Usaha Tegas Sdn Bhd (”UTSB”), which is
as Head of Corporate Finance. He is currently a Director of UTSB a Malaysian based investment holding company which has
Management Sdn Bhd. significant interests in companies operating across diverse
industries such as telecommunications, media and entertainment,
He serves on the boards of several other companies in which energy and real estate and leisure, including the following
UTSB has significant interests, such as Sri Lanka Telecom PLC, companies which are listed on Bursa Malaysia Securities Berhad
Binariang GSM Sdn Bhd and Maxis Communications Berhad – Maxis Berhad (integrated communications services group) and
(holding company of Maxis Berhad), having an operational base Astro Malaysia Holdings Berhad (integrated consumer media
in Malaysia. entertainment group). She was previously the Group General
Counsel of UTSB.
34
Gary Neal Leon Andre Harland

Christenson
Executive Director/
Executive Director Chief Executive Officer
Country: United States of America Age: 63 Gender: Male Country: Netherlands Age: 49 Gender: Male
Date of Appointment: 2 May 2018 Date of Appointment: 16 May 2016
• Stanford Executive Programme (SEP), Stanford University, • Master of Science Degree – Civil (Offshore) Engineering
United States of America (“USA”) from Delft University of Technology, Netherlands
• Ph.D. programme in Structural Geology (thesis not completed),
Cornell University, USA Present Directorships:
• Bachelor of Arts, Geology, Hamline University, USA
Listed Companies: Other Public Companies:
• United States Air Force (“USAF”) and USAF Reserve, Aircrew
Nil Nil
for C-130A Hercules aircraft
Present Directorships: Leon Andre Harland (“Leon Harland”) was appointed as an

Executive Director and Chief Executive Officer of the Company
Listed Companies: Other Public Companies: with effect from 16 May 2016. Leon Harland is responsible
Nil Black Platinum Energy Ltd for driving Bumi Armada’s short and long-term growth plans,
charting the strategic direction of the Company, leading the drive
Gary Neal Christenson (“Gary Christenson”) has over 35 years of to operational excellence, allocating capital as well as forming
technical and managerial experience in the petroleum exploration strategic partnerships with clients and stakeholders.
and production industry with a focus on South East Asia and
Africa. His experience includes management positions at Tenneco He brings with him more than 20 years of diverse experience in the
Oil E&P, British Gas Indonesia, Unocal Indonesia Co. (“Unocal”) oil and gas sector, especially in FPSO, Floating Liquefied Natural
and Santos Indonesia (“Santos”).
Gas (“FLNG”), Subsea Umbilical, Risers & Flowlines (“SURF”) and
At Unocal he was the Senior Vice President of Unocal E&P Transport & Installation segments. He was previously the Executive
Indonesia and President of Unocal Makassar and developed and Vice-President, Commercial & Technology at Heerema Marine
produced the West Seno field utilising a min-TLP, semisubmersible Contractors and a member of the Board of Directors, with joint
TAD and a barge hull FPU. At Santos he was the President of responsibility of building the company’s performance, and he was
Santos Indonesia and developed and produced the Maleo and directly responsible for all commercial, contracting, engineering
Oyang fields. He was the Chairman and CEO of Black Gold and innovation initiatives.
Energy in partnership with Goldman Sachs and Temasek.
He also worked at SBM Offshore where he held various positions
in engineering, project management and business development.
In 2004, he was tasked to start up and build their FLNG business.
Annual Report 2018
35
Senior Management Team Profile
Leon Andre Harland Please refer to his profile in the Board of

Director’s profile section.
Executive Director/
Chief Executive Officer
03
Luke C. Targett Country: Australia Luke C. Targett (“Luke”) is responsible for leading Bumi
Armada’s current operations and growth trajectory through
Chief Financial Officer Age: 53 Financial Management & Reporting, Corporate Strategy,
Budget, Treasury & Capital Management, Financial Risk
Date of appointment: Management, Investors Relations, Communications and
• 29 October 2018 Sustainability.
Qualifications: He has more than 30 years experience in financial advisory

• Bachelor of Commerce roles which include restructuring, mergers & acquisitions,
Degree from Melbourne pre-lending reviews, transaction advisory, independent
University business reviews and non-performing loan management
in numerous jurisdictions including London, Singapore,
Directorship in Listed Issuers Indonesia, Myanmar and Thailand.
and Public Companies:
Nil Luke started his career with Coopers & Lybrand, Melbourne in
1988 and subsequently spent more than 12 years at Ernst &
Young. In 2005, he joined Interra Resources Limited, a dual
SGX and ASX listed oil & gas producer and explorer as CEO
in Singapore for 4 years. Prior to joining Bumi Armada, he
was a Partner in Melbourne at Cor Cordis, an Australian
national business advisory firm.
He is a member of the Institute of Chartered Accountants

Australia and New Zealand and has also attained a Graduate
Diploma in Applied Finance and Investment.
36
Anusoorya Themudu Country: Malaysia Anusoorya Themudu (“Soorya”) is responsible for Bumi
Armada’s global workforce. Soorya is an experienced HR
Chief Human Resources Age: 46 leader with world class experience gained in a diverse range
Officer of bluechip companies, including Petrofac, GE and Eli Lilly.
Date of appointment:
• 3 August 2015 Soorya’s experience to date encompasses all aspects of the
HR agenda: Talent Acquisition, Reward Strategy, Performance
Qualifications: Management, Leadership Development, Organisational
• Bachelor of Science (Hons) Design, Cultural Change, Business Transformation, HR
in Biochemistry from Systems, Employee Relations and Stakeholder Engagement.
University Putra Malaysia
• Graduate of Experience HR She has a proven track record in developing and implementing
Leadership Program at GE best practices, along with experience in successfully creating,
Global Learning Center in implementing and sustaining leadership development
Crotonville programmes that attract and retain talent. In addition to her
• Attended a global work, she also championed the Diversity Initiative at Eli Lilly
leadership program hosted and General Electric.
by London Business School
for high performing leaders Prior to joining BAB, Soorya was the Regional HR Director
in Petrofac at Petrofac where she managed the HR function for the
SEA region.
Directorship in Listed Issuers
Nil
James Ellis James Ellis (“Jim”) is responsible for our FPO division, Fleet
Country: Ireland
Asset Integrity and Commercial activities group. He was the
Senior Vice President Floating Operations Director of SBM Offshore and was responsible for
Production & Operations Age: 57
the day to day operations of the global production fleet of
FPSOs, semi-subs, gas platform and FSOs, before joining Bumi
Armada.
• 1 July 2016
Jim has also worked at Excelerate Energy as Director
Qualifications:
of Floating Liquefaction and provided the technical and
• Class 1 (Deck), South
commercial guidance for Floating Liquefaction solutions and
Tyneside College, United
FEED execution plans for the company.
Kingdom
• Bachelor of Science (Hons)
He has held various management positions in the past including
from Open University
approximately 3 years as the President of BP Shipping (USA) as
• Graduate of the Ops
well as 4 years as the Global Fleet Manager for BP Shipping.
Academy at MIT USA
(Sloan School of Executive
Management)

Nil
Annual Report 2018
37
Megat Zariman Country: Malaysia Megat Zariman Abdul Rahim (“Megat”) is responsible for the
bin Abdul Rahim running of our OMS business which includes the OSV and SC
Age: 51 sub-segments.
Head of Offshore
Marine Services Date of appointment:
• 11 April 2013
He has held various positions within Bumi Armada for the last
five years with the scope of building, managing and growing
03
(Appointed as Senior the Company’s activities within Malaysia and the Asia Pacific
General Manager, Sales & region.
Marketing – Malaysia)
• 1 March 2018 Before joining Bumi Armada, Megat spent over 21 years
(Appointed as Head of with Schlumberger, in various technical, commercial, &
Offshore Marine Services) management roles globally.
Qualifications: Concurrently, Megat is also the Vice President in the Malaysian

• Bsc Electrical Engineering, Oil & Gas Service Council (“MOGSC”). MOGSC is a leading
Worcester Polytechnic nonprofit association, which promotes the interests of the
Institute, Worcester, Malaysian Oil & Gas service providers, with the mission
Massachusetts, USA to champion the Malaysian Oil & Gas services sector as a
regional hub and with the scope of aiding in the development
Directorship in Listed Issuers of the Malaysian Oil & Gas services sector.
Nil
Claude Verhoeven Country: Belgium Claude Verhoeven is heading the FPO Technology department,
which encompasses the project, procurement and engineering
Head Of FPO Technology Age: 43 activities for the FPSO EPC segment in Bumi Armada as well
as the fleet support for the existing assets.
• 1 December 2018 Claude has over 20 years’ experience of working in the oil
& gas industry. He started his career with Technip as process
Qualifications: engineer and held subsequently engineering and project
• Bsc in Chemical managers roles in Technip, Germanischer Lloyd and SBM
Engineering from Offshore.
University of Louvain,
Belgium Prior to joining Bumi Armada, Claude headed the
• Msc in Chemical Brownfield and Fleet support department of SBM Offshore in
Engineering from IFP Kuala Lumpur.
School, Paris

Nil
38
Leong Wei Kit Country: Malaysia Leong Wei Kit (“Gary”) is responsible for overseeing
Bumi Armada’s HSSEQ function as well as driving governance
Head of Health, Safety, Security, Age: 37 and assurance on HSSEQ matters related to projects and
Environment and Quality
operations across the organisation.
(HSSEQ) Date of appointment:
• 15 March 2018
Before joining the Company, Gary was the Head of Health,
Safety, Security & Environment (“HSSE”) Performance at
Qualifications:
• Bachelor (First Class), Group HSSE, PETRONAS where he was responsible for
Chemical Engineering with HSSE performance management, sustainability reporting,
Environmental Protection, digitalisation of HSSE performance management and C-level
Loughborough University reporting to PETRONAS Executive Leadership Team and
• Certified Sustainability Board.
Reporting Specialist (CSRS),
License No. TR114747 Gary has also worked with DuPoint and Accenture, where he
held various positions in driving HSSE excellence for clients in
the energy and mining industry. His experiences span across
strategy development, governance audits, risks assessment,
Nil
safety culture transformation, organisation improvement,
project management and performance improvement in the realm
of HSSE.
Sasha Vijayananthan Country: Malaysia Sasha Vijayananthan (“Sasha”) is responsible for all aspects
of Bumi Armada’s internal audit function which assists the
Head of Internal Audit & Age: 44 Group in accomplishing its goals by providing a systematic
Acting Head of Risk
and disciplined approach to evaluate the effectiveness of
various processes and controls within the Group.
• 1 March 2016
This would include detailed review and identification of areas

Qualifications:
• CPA Australia of improvement in matters related to internal controls and
• Bachelor of Commerce governance. In her role of Acting Head of Risk Management,
(Accounting), Monash she manages and oversees the risk management activities of
University, Australia Bumi Armada.
Directorship in Listed Issuers She has over 22 years’ experience in the Governance, Risk
and Public Companies: and Control space and was Vice President of Group Risk
Nil Management at Sime Darby Berhad, before joining Bumi
Armada.
Sasha was previously an auditor at Ernst & Young, starting as

an associate and working her way up to director level. She has
a wealth of experience, specialising in governance reviews,
financial control framework implementations, transformation
projects, internal and external auditing for a broad range of
industries including the oil and gas industry.
Annual Report 2018
39
Karen Lawrie Country: United Kingdom Karen Lawrie (“Karen”) is responsible for Legal, Contracts,
Insurance and Compliance related matters at Bumi Armada
General Counsel Age: 56 and its subsidiaries.
• 22 October 2018
She has over 29 years of extensive experience and has held
senior legal and executive roles in highly competitive and
03
regulated and non-regulated industries, including: Shipping,
Qualifications:
• B.A. Honors in French and Offshore Oil and Gas, Energy and Investment Banking.
History, Seattle University,
USA Before joining Bumi Armada, she was with AET Tankers as the
• M.A. Honours in Law from Global General Counsel where her responsibilities include all
Cambridge University, Legal matters, Compliance, Risk, Insurance and Governance.
United Kingdom
• Licensed attorney with the Prior to that, she was at Subsea 7 as the Deputy General
Texas Bar, solicitor and a Counsel, Vice President Legal Corporate.
member of the Law Society
of England and Wales.
Karen was also Head of Legal at EDF Energy and has held
Directorship in Listed Issuers senior roles at JP Morgan and State Street Bank.
Nil
Noreen Melini binti Muzamli Country: Malaysia Noreen Melini binti Muzamli (“Noreen”) is responsible for
ensuring the provision of effective corporate secretarial services
Joint Company Secretary/Head, Age: 42 at Bumi Armada and advising the Board and management of
Corporate Secretarial Services Bumi Armada on the compliance with relevant regulations and
Date of appointment: best practices on corporate governance.
• 1 September 2015
(joined Bumi Armada) She has more than 17 years of corporate secretarial experience
• 10 September 2015 in various sectors which included property development and
(appointed as Joint financial services. Prior to joining Bumi Armada, Noreen was
Company Secretary) attached to the Maybank Group for nine years and her last
position was as the Company Secretary of Maybank Investment
Qualifications: Bank Berhad and its group of companies, a position she held
• Bachelor of Laws (Hons) since November 2010.
from University of Bristol,
United Kingdom (1999) She was also Regional Head, Corporate Secretarial Services
• Certificate of Legal Practice of Maybank Kim Eng Group (“Group”), the investment banking
(2005) division of Maybank Group and was responsible for ensuring
• Company Secretary license the adoption of group policies and best practices on corporate
from the Companies governance in the 10 countries in which the Group operated.
Commission of Malaysia Before Maybank Group, she was with a public listed property
(since 2001) developer for more than 5 years and was assigned to its Legal
and Secretarial Department.
Nil
Notes:
1. None of the Management has any family relationships with any Directors and/or major shareholders of the Company.
2. None of the Management has any conflict of interest with the Company.
3. None of the Management has any convictions for offences within the past five years (other than traffic offences, if any).
4. None of the Management has any public sanctions and/ or penalties imposed on them by any regulatory bodies during the financial year ended
31 December 2018.
40
BOARD GOVERNANCE AND ACTIVITIES
BOARD OF DIRECTORS
A limit of nine years’ service is provided for under the criteria for independence in the
MCCG which has been incorporated in the Company’s Policy on Assessment of the
Independence of Directors. None of the Independent Directors have exceeded the limit of
nine years’ service. Although long tenure of an Independent Director may incline towards
TENURE OF
or be perceived as compromising independence, the Board will review its position and
INDEPENDENT
criteria from time to time. This is to ensure that Independent Directors who have the
DIRECTORS
necessary knowledge, skills and competencies, and who continue to exercise independent
and objective judgment, play their part effectively on the Board in the best interest of the
Company and satisfy the independence criteria, are not excluded based merely on the
nine-year tenure criteria.
Independence is determined by ensuring that, apart from receiving their fees for acting as
Directors, Non- Executive Directors (“NEDs”) do not have any other material relationship
or additional remuneration from, or transactions with, the Group, its promoters, its
management or its subsidiaries, which in the judgement of the Board may affect,
or could appear to affect, their independence of judgement. The Board has in place
policies, procedures and criteria for the assessment of the independence of Independent
DIRECTOR
Directors. The policy and procedure also provides for assessment to be undertaken
INDEPENDENCE
when new members are appointed to the Board in an independent capacity, prior to
their appointment. Confirmation is also required for disclosures for regulatory purposes.
However, the Independent Directors are expected to inform the Board, at any time when
circumstances arise which could interfere with their exercise of independent judgement,
and objectivity or their ability to act in the best interest of the Company. The policy and
criteria will be reviewed from time to time.
There are no actual or potential conflicts of interest between any duties owed by the
CONFLICTS OF Directors or senior management to the Company and their private interests or other
INTEREST duties. The Board will continue to monitor and review potential conflicts of interest
on a regular basis.
Ultimate responsibility for the management of the Group rests with the Board.
The Board focuses primarily on strategic and policy issues and is responsible for:
• leadership of the Group;
• implementing and monitoring effective controls to assess and manage risk;
BOARD
• supporting the senior leadership team to formulate and execute the Group’s strategy;
RESPONSIBILITY
• monitoring the performance of the Group; and
• setting the Group’s values and standards.
There is a specific schedule of matters reserved for the Board. These matters can be found
in our Board Charter which is accessible online at www.bumiarmada.com.
Annual Report 2018
41
ROLES AND RESPONSIBILITIES OF THE BOARD
ROLE RESPONSIBILITIES
Chairman The Chairman is responsible for creating the conditions necessary for overall Board and individual 03
Tunku Ali Director’s effectiveness, drawing on their respective knowledge, experience and skills.
His role includes:

• providing leadership at the Board level;
• setting the tone for the Board discussions and deliberations with a view to promoting effective
decision-making and performance monitoring to promote the success of the Group;
• setting the tone for the Company’s values and standards to ensure the obligations to its
shareholders and other stakeholders are understood and met;
• together with the Board, reviewing the organisational structure including the composition of
Board Committees to ascertain if it serves the needs of the Company and Board;
• setting the Board agenda with input and advice from the CEO (with primary focus on strategy,
value creation, governance and accountability) and the Company Secretaries and ensuring
timely flow of high quality supporting information;
• working together with the Board and based on the work of the Board Committees, determine
the nature and extent of risk appetite of the Group;
• working with the Board in ensuring there is a proper selection, assessment and training
programmes for the Directors;
• together with the other Board Members, monitoring the implementation of Board decisions and
directions and performance of Management;
• lead the Board in establishing and monitoring good corporate governance practices and
systems in the Company; and
• presiding over shareholder meetings and representing the Company at certain key events.
Chief Executive The CEO, who is an Executive Director (“ED”) on the other hand, has overall
Officer responsibilities over the following:
Leon Harland • the performance of the operational and business units and achievement of the corporate and
commercial objectives of the Group including managing the expansion and optimisation of
revenue and earnings of each of the business units and enhancing the capital value of the
Group;
• working with and advising the Board to define the strategic, corporate and commercial
objectives of the Group;
• preparing the Group's business and operational plans and seeing to their implementation as
well as the implementation of the policies, directives and decisions as approved by the Board;
and
• providing leadership to Management and having direct oversight for the financial performance
and organisational effectiveness of the Group which includes business operations, financial
management and controls, project execution, supply chain management, human resource
development, investor relations and building of brand equity, operational excellence, supporting
and managing the Company’s HSSEQ management system and quality performance initiatives
as well as commitment to Corporate Sustainability.
42
ROLES AND RESPONSIBILITIES OF THE BOARD
ROLE RESPONSIBILITIES
Senior The Board has nominated one of the Independent NEDs to act as Senior Independent Director.
Independent
Director She is responsible for:
Alexandra • being an alternative contact for shareholders at Board level other than the Chairman;
Schaapveld • acting as a sounding Board for the Chairman;
• if required, being an intermediary for NEDs’ concerns; and
• undertaking the annual Chairman’s performance evaluation.
Company The Company Secretaries support the Chairman on Board Corporate Governance matters.
Secretaries
Noreen Melini They are responsible for:
binti Muzamli (i) Corporate governance advisory
(Head, • ensuring that adequate processes and procedures are in place and adhered to for the effective
Corporate functioning of the Board;
Secretarial • advising the Board on various matters including Directors’ duties and disclosure obligations;
Services) • compliance with companies and securities laws, regulatory requirements and corporate
governance developments;
• assist the Board in applying governance practices to meet the Board’s needs and stakeholders’
Noor Hamiza
expectations; and
binti Abd
• facilitating training programme for Directors and induction programme for new Directors.
Hamid
(ii) Compliance advisory

• providing updates and assist the Board and Management with reviewing regulatory
requirements related to Company and securities regulations and listing requirements as well
as analysis of status of compliance and action plans;
• advising the Board on disclosure requirements relating to material information to shareholders
and regulators in a timely manner; and
• notifying the Board of any possible non-compliance issues.
(iii) Information flows and meetings

• setting the agenda, convening, facilitating proper conduct and recording proceedings and
decisions of the Board and Board Committees; and
• ensuring an appropriate level of communication between the Board and its Committees and
between senior management and the NEDs.
(iv) Regulatory compliance

• ensuring statutory and meeting records of the Company are properly maintained; and
• ensuring relevant disclosures, submissions and filings are made in a timely manner to the
regulators on behalf of the Company and the Board.
(v) Stakeholder communication

• managing processes pertaining to the annual shareholders meeting; and
• serve as a focal point for stakeholders’ communication and engagement on corporate
governance issues.
Annual Report 2018
43
YOUR BOARD IN 2018
During the year, the Board met on 14 occasions which included a 2-day meeting focused on strategy. There were 6
scheduled meetings, with the remaining being ad-hoc meetings convened by the Board to deliberate on matters requiring
the Board’s urgent decision. 03
Governance Framework
BUMI ARMADA SHAREHOLDERS
THE BOARD
NOMINATION &
RISK
AUDIT CORPORATE REMUNERATION
MANAGEMENT
COMMITTEE GOVERNANCE COMMITTEE
COMMITTEE
COMMITTEE
INTERNAL AUDIT RISK CHIEF EXECUTIVE OFFICER
MANAGEMENT
THE ROLE AND BUSINESS OF THE BOARD
The Board is actively engaged in developing and measuring the Company’s long-term strategy, performance and values. We
believe that it adds a valuable and diverse set of external perspectives and that robust, open debate about significant business
issues brings an additional discipline to major decisions.
The duties and responsibilities of the Board are stated in its TOR and Board Charter which includes setting the Company’s
strategic goals, ensuring the necessary financial and resources are in place for the Company to meet its goals, setting the
Company’s values and standards, and ensuring the obligations to shareholders and other stakeholders are understood and
met.
A schedule of formal matters reserved for the Board’s decision and approval is detailed in our Board Charter which is available
on our website, at www.bumiarmada.com. The last date of review of our Board Charter was in early 2019.
The key responsibilities of the Board include:
• Overall leadership of the Company and setting the Company’s values and standards.
• Determining the Company’s strategy in consultation with management, reviewing performance against it, and overseeing
management execution thereof.
• Major changes to the Company’s corporate, capital, management and control structures.
• Approval of all transactions or financial commitments in excess of the authority limits delegated to the CEO and other
executive management.
44
The Board receives timely, regular and necessary financial, management and other information to fulfil its duties. Board and
Board Committees' papers are circulated to Board and Committees' members in a timely manner before each meeting and
the Board receives regular reports from the CEO. In addition to meeting papers, a library of current and historical corporate
information is made available to Directors electronically to support the Board’s decision-making process. The Board has agreed
to a protocol for access to information pertaining to the Company and for seeking independent professional advice necessary
for the Board and Board Committees' members individually or collectively, to discharge their duties effectively. Any expenses
incurred in seeking independent professional advice are to be borne by the Company. Where the expenses exceed RM50,000,
the Chairman’s approval is required. All Directors have access to the advice and services of the Company Secretaries.
To the extent that Directors who are unable to attend scheduled meetings, or additional meetings called on short notice,
they will receive the papers in advance and relay their comments to the Chairman for communication at the meeting. The
Chairman, assisted by the Company Secretaries will follow up after the meeting in relation to both the discussions held and
decisions taken.
BOARD MEETING FOCUS DURING 2018
AREAS OF RESPONSIBILITY
GOVERNANCE • Identified principal risks relating to the business and operations and ensured the implementation
& RISK of appropriate internal controls and mitigation measures with overview from the RMC;
• Deliberated on litigation cases involving the Group and the strategies in managing these
cases;
• Maintained robust regulatory compliance at all times with overview from the AC;
• Strengthened the Company’s Integrated Management Systems with completion of the
accreditation process for OHSAS 18001:2007 (Occupational Health and Safety Management
System), ISO 14001:2015 (Environmental Management System) and ISO 9001:2015
(Quality Management System) across all wholly-owned assets and operations;
• Discussed on safety cases and matters at each Board meeting in demonstrating commitment
to safety culture at the Company; and
• Reviewed the proposed amendments to the Company’s Memorandum & Articles of Association
(“M&A”) and recommended to shareholders to adopt the proposed Constitution in place of
the M&A.
STRATEGY • Reviewed and approved the strategy and business plan of the Group for the FY2018 and
FY2019 based on input from the various heads of department and insights on market outlook
by an external consultant;
• Considered the strategy and business plans which were in line with the Company’s vision and
mission, reviewed the action plans, resource requirements and timelines for implementation of
the plans;
• Reviewed the operations of key assets including technical matters and collection;
• Discussed and approved the sustainability initiatives for FY2018 as recommended by the
Sustainability Committee; and
• Reviewed and approved the corporate simplification exercise which included the voluntary
liquidation and dissolution of inactive companies in BAB Group.
Annual Report 2018
45
AREAS OF RESPONSIBILITY
FINANCIAL • Reviewed and approved the budget for FY2019 with key assumptions based on the 2019
REPORTING strategy and business plan;
• Reviewed the corporate debt refinancing exercise and funding requirements of BAB Group; 03
• Reviewed proposals on new projects including JVs in line with the business plan as well as the
respective project financing;
• Reviewed quarterly operational review reports;
• Reviewed related party transactions which include proposed JVs for potential projects;
• Reviewed and approved the quarterly financial results for the FY2018 and the full year
financial results for financial year ended 31 December 2018 (“FY2018”) of the Group and
their release to Bursa Securities as recommended by the AC to the Board;
• Considered and approved the contents of the Company’s 2018 Annual Report, which
included AC Report, Corporate Governance Overview Statement, Corporate Governance
Report, Statement on Risk Management and Internal Control and Directors’ Responsibility
Statement; and
• Reviewed and approved the cost optimisation initiatives covering action plan, timelines and
the related internal resources and budget.
LEADERSHIP • Ensured that there are programmes in place for succession planning for senior management
& PEOPLE with monitoring from the NC as well as participated in interviews of potential candidates
for new independent directors and deliberated on the selection of the CFO and the General
Counsel;
• Deliberated on the annual remuneration of staff including management for FY2018 as per the
recommendation of the Remuneration Committee (“RC”);
• Deliberated and approved the offer, grant and/or allotment of shares to the ED pursuant to
the Management Incentive Plan (“MIP”) as per the recommendation of the RC, as well as
recommended the proposal to shareholders for approval; and
• Reviewed the progress of implementation of the action plans following the results of the
Employee Engagement Survey conducted in December 2017.
SHAREHOLDERS • Ensured effective implementation of shareholders and stakeholders communication which

& ENGAGEMENT enabled feedback received to be considered when making business decisions; and
• Ensured information used in communication material or statements is balanced and
representative of the Company’s performance.
46
BOARD ATTENDANCE
Directors are strongly encouraged to attend all Board and Committee meetings but in certain circumstances, such as due
to pre-existing business or personal commitments, Directors may be unable to attend. In these circumstances, Directors
receive relevant papers and, where possible, will communicate any comments and observations in advance of the
meeting for raising as appropriate during the meeting. They are updated on any developments after the meeting by
the Chairman of the Board or Committee, as appropriate. Individual attendance at Board and Committee meetings is
considered, as necessary, as part of the formal annual review of their performance.
The following table sets out the attendance of the Company’s Directors at Board and Board Committees’ meetings during
2018:
Attendance
Committee
Name of Board
Members Designation Board Executive AC RC NC RMC
Tunku Ali Chairman, Independent 12/14 5/5
- - - -
Non-Executive Director (86%) (100%)
Alexandra Independent 12/14 4/4 4/5 4/5
- -
Schaapveld Non-Executive Director (86%) (100%) (80%) (80%)
VU Kumar Independent 14/14 4/4 5/5 5/5 9/10
-
Non-Executive Director (100%) (100%) (100%) (100%) (90%)
Gary Neal Independent 9/12 2/3 8/8
- - -
Christenson@ Non-Executive Director (75%) (67%) (100%)
Chan Chee Beng Non-Independent 13/14 11/11 5/5
- - -
Non-Executive Director (93%) (100%) (100%)
Maureen Toh Non-Independent 14/14 11/11 4/4 5/5 10/10
-
Siew Guat Non-Executive Director (100%) (100%) (100%) (100%) (100%)
Leon Harland Executive Director/ 14/14 10/11
- - - -
Chief Executive Officer (100%) (91%)
Shaharul Rezza bin Executive Director/
0/1 2/2
Hassan* Head of Offshore Marine - - - -
(0%) (100%)
Services
* Resigned as a Director on 28 February 2018.

@
Appointed as an Independent Non-Executive Director on 2 May 2018, and redesignated as Executive Director on 27 March 2019.
SUCCESSION PLANNING
The Board considers oversight of succession planning not only at Board and Management level but for all key positions
throughout the business as one of its prime responsibilities, assisted by the NC. The Company has formal contingency
plans in place for temporary absence of the CEO for health or other reasons.
Annual Report 2018
47
BOARD EVALUATION
The Board undertakes a formal and objective annual evaluation to determine the effectiveness of the Board, its Committees
and each Director. The assessment criteria cover the Board’s duties and responsibilities (Part A), Board and Board
Committees’ composition and meeting processes (Part B) and observations by the EDs (Part C). Under Part B, the Board 03
Committees are also assessed on whether they have performed their duties as per their respective TORs during the year.
The Chairman also meets with each Director in one-on-one sessions for direct feedback.
The results of the assessment were presented to the NC and the Board and overall the Board and Committees have
performed according to its TOR with areas for improvement. The NC and Board approved the Actionable Improvement
Programme (“AIMP”) that identified certain areas for improvement. The areas for improvement included ensuring adequate
and complete information on operations (e.g. productivity and technology support) are provided prior to and during
board presentations to facilitate the Board in making informed decisions.
The AIMP sets out clear action plans and persons responsible for each plan and timelines which progress will be reviewed
by the Board on a half-yearly basis.
DIRECTORS’ TRAINING AND INDUCTION
New Directors receive an induction programme and a range of information about Bumi Armada when they join the Board.
This includes background information on Bumi Armada and details of Board procedures, Directors’ responsibilities and
various governance-related issues, including procedures for dealing in Bumi Armada shares and their legal obligations
as directors. The induction also typically includes a series of meetings with members of the Board, the Bumi Armada
executive and senior management, presentations regarding the business on Bumi Armada’s investor relations programme.
All Directors receive training in the form of presentations about the Company’s operations, through Board meetings
and by encouraging the Directors to visit local facilities and management as and when their schedule allows. The
Company Secretaries monitor legal and governance developments and update the Board on such matters as agreed
with the Chairman. The following table details both internal and external training programmes, briefings, conferences
and presentations relevant to the Director individually or to the Directors collectively. The table additionally includes the
professional training of the Company Secretaries.
Directors &
Company Company
Courses/Seminars/Programmes/ Secretaries’ Sponsoring/
Workshops/Conferences Attended Date Name Organiser
Changes in the Listing Requirements Post- 8 February 2018 NM Securities Industry

Companies Act 2016: What to Look Out For Development Corporation
Briefing on Malaysian Code on Corporate 22 February 2018 TA, AS, VU, Burmi Armada Berhad
Governance 2017 MT, LH, NM
MFRS Made Simple for Directors and 13 April 2018 NH Bursatra Sdn Bhd
Senior Management
Briefing Session on Compliance with Labuan 18 April 2018 NH Labuan Financial Services
Leasing Policy Authority
48
Directors &
Company Company
Courses/Seminars/Programmes/ Secretaries’ Sponsoring/
Workshops/Conferences Attended Date Name Organiser
Induction Programme for New Independent 28 May 2018 GC Bumi Armada Berhad
AML/CFT - Risk, Challenges & Vulnerabilities 20 June 2018 TA Bangkok Bank

towards Regulatory Compliance
Developing the Leader in You 18 & 19 July 2018 NH Bumi Armada Berhad
Advocacy Programme on CG Assessment 19 July 2018 NM Bursa Malaysia Berhad

using the revised ASEAN CG Scorecard
Methodology
The New FIDIC 19 July 2018 MT Messrs. Lee

Hishammuddin Allen &
Gledhill
Introduction to Malaysian Business Reporting 27 July 2018 NH Malaysian Institute of

System Chartered Secretaries
and Administrators
SSM National Conference 2018 14 & 15 August 2018 NM, NH Companies Commission
of Malaysia
Lesson Learnt On Reservoir Risk Management 30 August 2018 CCB, MT Bumi Armada Berhad
& What To Look Out For
Mandatory Accreditation Programme for 3 & 4 September GC The ICLIF Leadership and
Directors of Public Listed Companies 2018 Governance Centre
Deep Dive Into CG Cases In Malaysia: 7 September 2018 MT Securities Commission

What Went Wrong And What Could Malaysia
Be Done Better
Key Amendments to Listing Requirements 13 September 2018 NM, NH Bursa Malaysia Berhad
Arising from Companies Act, 2016
Briefing on UK HSE regulations 3 October 2018 TA, AS, VU, Bumi Armada Berhad
CCB, MT, GC,
LH, NM
Contract Law – What has changed and how 10 October 2018 MT Norton Rose Fulbright,
will it affect your contracts Singapore
AS - Alexandra Schaapveld MT - Maureen Toh Siew Guat VU - VU Kumar

CCB - Chan Chee Beng GC - Gary Christenson NM - Noreen Melini binti Muzamli
LH - Leon Harland TA - Tunku Ali NH - Noor Hamiza binti Abd Hamid
Annual Report 2018
49

Nomination & Governance Committee Report
Dear Shareholders,
As Nomination & Governance Committee Chair, I am pleased to present the

03
Committee’s Report for the period.
The role of the Committee is to establish formal, rigorous and transparent

procedures for the appointment of Directors to the Board and Senior Executive
Officers of the Company. In addition, we are responsible for reviewing the
succession plans for the Executive and Non-Executive Directors.
This involves the regular review of the structure, size and composition of the
Board to ensure it has the proper balance of skills, experience, independence
and diversity. It includes succession planning for Directors and senior executives
with a view to addressing the leadership needs of the Company to ensure that it
can continue to compete effectively in the market place. The Committee identifies
and nominates candidates to fill Board vacancies, and we review potential
conflicts of interests of Directors disclosed to the Company, and developing
appropriate processes for managing such conflicts where necessary.
During the year, one of the area of focus of the Committee was succession
planning within the Board and its leadership team. I have earlier detailed the
changes that were deliberated and approved, you will find their profiles on
More Committee information:
page 34. The Committee believes that the current composition of the Board
continues to allow for rigorous debate, and we have the appropriate level Read more:
Remuneration Committee page 52
of skills, diversity and experience to contribute meaningful dialogue to each Audit Committee page 55
meeting.
TUNKU ALI REDHAUDDIN IBNI

TUANKU MUHRIZ
Chairman of the Nomination &
Corporate Governance Committee
50

The Committee continues to play a vital role in ensuring the right individuals
are appointed to the Board and management and best practices on
corporate governance remains the foundation of the organisation.
2018 KEY ACTIVITIES COMMITTEE EVALUATION
The Committee has assisted the Board in reviewing the The annual evaluation of the Committee was undertaken
selection, assessment and nomination of new Independent together with the evaluation of the Board and other Board
Directors, the annual evaluation of the Board and Board Committees. Based on feedback from Committee members
Committees, reviewed the succession planning and talent as well as other Directors through a self-assessment
management for key positions and provided guidance on questionnaire, it was concluded that the Committee has
corporate governance matters affecting the Board and discharged its duties according to its TOR.
Company.
DIVERSITY AND INCLUSION
The Committee deliberated on the following matters during
2018: As a Committee we acknowledge the importance of
diversity, including gender, both on the Board and
• reviewed the Board and Board Committees’ composition throughout the organisation. The Board Diversity Policy
and the eligibility, skills, competencies and experience (“Policy”) provides that the Board shall comprise members
of new candidates nominated for appointment to the who collectively have the right mix of qualifications, skills
Board and those seeking election/ re-election to the and competencies and other complementary attributes that
Board; will best serve the needs of the Company. It identifies gaps
• reviewed the annual Board evaluation for FY2017 and in competencies, skills and diversity among members and
proposed AIMP; takes the necessary steps to remedy them to ensure they
• discussed on talent review and succession planning for can add value to the deliberations and decision-making
senior management and their direct reports and followed at the Board and Board Committee levels. The Policy
through on actions relating to succession planning for recommends and promotes gender and age diversity and
the key management team; aims to increase the representation of women on the Board.
• deliberated on changes to the position of the CEO, CFO
and General Counsel; Our aim is for the Board to consist of individuals with
• reviewed and recommended a new Independent Director diverse experience who can add real value to Board
who has been a Chief Executive and has qualifications debates, thereby supporting the achievement of our
in geology and experience in upstream industries to the strategic objectives. This includes diversity of industry
Board for approval; skills, knowledge and experience in addition to gender and
• reviewed the TOR of the Committee; ethnicity. We are always mindful of the recommendations
• set a timeline and facilitated the 2018 Board and Board in the appointments we make in ensuring any new
Committees assessment process including assessing, appointment is always based on merit whilst keeping in mind
reviewing, and reporting the findings and making the the corporate governance best practices recommendation
appropriate recommendations to the Board; for 30% women representation on Boards, in fulfilment of
• assessed the training needs of Directors further our role of ensuring the continued success of the Company.
to a formal analysis done and recommended the
Directors’ Training Plan 2018 which included
the continued practice of briefing to Directors
by reputable external experts on relevant topics
and vessel visits; and
• reviewed policies, initiatives, measures and procedures
to strengthen and give effect to matters pertaining to
corporate governance, having regard to provisions of
the MCCG and ASEAN CG Scorecard in line with best
practices.
Annual Report 2018
51

RE-ELECTION OF DIRECTORS Process for Board Appointment
The Board, on the recommendation of the Committee, When considering Board appointments, the Committee
is satisfied that Directors standing for re-election or election will draw up a specification for a Director, taking into
will continue to bring to bear their knowledge, experience consideration the balance of skills, knowledge and 03
and skills and contribute effectively to the Board’s experience of its existing Board members, the diversity
discussions, deliberations and decisions based on their of the Board, the independence of continuing Board
performance thus far or their skills and competence. members, together with the ongoing requirements and
strategic development of the Group. The search process
NC AT A GLANCE can then focus on appointing a candidate with a balance
of skills that will enhance the Board.
Committee Membership and Meeting Attendance
The NC Committee members and the number of meetings The Committee will, when appropriate, utilise the services
they each attended during the year were as follows: of an independent executive search firm to identify
appropriate candidates, ensuring that the search firm
Committee appointed does not have any other conflicts with the
Group. A list of potential appointees will then be reviewed,
Meetings
followed by the shortlisting of candidates for interview,
Attended in
based upon the objective criteria identified at inception.
Member 2018
Care is taken to ensure that all proposed appointees will
Tunku Ali have sufficient time to devote to the role and do not have
5/5
Independent NED (Chairperson) any conflicts of interest. The Committee will recommend
a preferred candidate and the members as well as other
Alexandra Schaapveld Directors will meet the candidate. Following these meetings,
4/5
Independent NED (Member) and assuming acceptance, the Committee will make a
formal recommendation to the Board on the appointment.
VU Kumar Wherever possible, the Committee will arrange for all
5/5
Independent NED (Member) Directors to meet the preferred candidate.
Chan Chee Beng The NC terms of reference can be found at

5/5
Non-Independent NED (Member) www.bumiarmada.com
The Chairman of the Committee is Tunku Ali, an Independent

NED. All of the Committee members are non-executive and
a majority of members are independent directors i.e. 3 out
of 4 members are independent.
Roles and Responsibilities
The Committee’s foremost priority is to advice the Board

on the Group’s leadership, and develop a clear plan
for both Executive and NED succession. Its prime focus
is, therefore, to concentrate on the strength of the Board,
for which appointments will be made on merit against
objective criteria, selecting the best candidate for the post.
The Committee advises the Board on these appointments,
and also on retirements and resignations from the Board,
and its other Committees.
The Committee will regularly review its succession planning

based on the Board’s balance of skills and overall diversity.
52

Remuneration Committee Report
Dear Shareholders,
On behalf of the Board and in my capacity as the Chairman of the

Remuneration Committee, I present to you the Remuneration Committee
report for the year under review.
The Remuneration Committee (“RC”) is responsible, on behalf of the Board, for

setting the senior executives’ remuneration policy and actual remuneration. The
Committee reviews the design of all share incentive plans for approval by the
Board and shareholders; approves the design of, and recommended targets
for any performance-related pay schemes the Company operates for senior
executives. Additionally, the Committee encourages dialogue with shareholders
and takes into account their views when setting the policy.
The objectives of the policy are to ensure that executive rewards are linked to
performance, to provide an incentive to achieve the key business aims, deliver an
appropriate link between reward and performance and to maintain a reasonable
relationship of rewards to those offered in other competitor companies in order to
attract, retain and motivate executives within a framework of what is acceptable
to shareholders. We maintain a strong focus on ensuring that executives are
incentivised to drive economic profit as well as being rewarded for creating
sustainable value.
ALEXANDRA SCHAAPVELD
Chairman of the
Remuneration Committee
Annual Report 2018
53

At Bumi Armada, we aim to operate a remuneration structure that is both

simple and transparent, which will deliver value to shareholders in the
medium to long-term. 03
2018 KEY ACTIVITIES
The Chairman of the RC is Alexandra Schaapveld, an
Independent NED. All of the Committee members are non-
The determination of the remuneration of Directors is a matter
executive and a majority of members are independent
for the Board as a whole based on the recommendation of
directors i.e. 2 out of 3 members are independent.
the RC. Individual Directors do not participate in decisions
regarding their own remuneration packages. ROLES AND RESPONSIBILITIES
The RC dealt with the following matters during 2018: The RC is charged with the following primary responsibilities:
• deliberated on the evaluation of performance of EDs for • recommend to the Board the policy and framework for
2017 and recommended the proposal to the Board; Directors’ remuneration as well as the remuneration and
• reviewed and recommended the proposal on the MIP for terms of service of the EDs;
allotment of shares to EDs which was approved by the • evaluate the annual performance and reward of the EDs;
shareholders at the Annual General Meeting (“AGM”) in • review Management remuneration policies and
May 2018; proposals; and
• setting of 2018 KPIs for key management team; • review and endorse broad parameters and criteria for
• reviewed the broad parameters and criteria for employee the determination of eligibility and basis and criteria for
increments and bonuses for FY2018; allocations and grant of options under the Company’s
• reviewed the remuneration framework for NEDs; and MIP.
• assessment of talent review for key positions and aligned
them towards the Company’s strategy and structure The RC’s TOR is posted on BAB’s website at www.bumiarmada.com.
including continuing with current practice of giving high
potential talents the exposure to the Board by making OVERVIEW OF OUR REMUNERATION POLICY
presentations.
The objective of the Group’s policy on Directors’ remuneration is to
RC AT A GLANCE
attract, retain and incentivise Directors with the right experience,
expertise and calibre needed to manage the Group successfully.
Committee Membership and Meeting Attendance
In this regard, the RC is responsible to review and recommend to
The RC members and the number of Committee meetings
the Board policy and framework for Directors’ remuneration as
they each attended during the year are as follows
well as the remuneration and terms of service of the EDs.
Committee Bumi Armada, as a Malaysian based company that competes

Meetings globally, needs to attract the right talent, including directors from
Attended in a global base and would benefit from having directors who have
Member 2018 international experiences. One way to achieve this is by offering
competitive remuneration packages.
Alexandra Schaapveld
4/5
Independent NED (Chairman) In the case of NEDs, their remuneration reflects their experience,
expertise and the level of responsibility and duties undertaken,
VU Kumar as well as the roles they are to play on the Board and Board
5/5
Independent NED (Member) Committees. The Board may draw advice from independent
consultants in determining remuneration.
5/5
Non-Independent NED (Member)
54

The policy on remuneration of Directors is stated under the Under the By-Laws of the MIP, the total number of shares
Explanatory Note 3 to the Notice of the 23rd AGM and posted which may be made available under the MIP shall not when
on BAB’s website. Briefly, the NEDs’ remuneration comprises fees aggregated with the total number of new shares allotted and
and meeting allowances. The Board Chairman receives a monthly issued under the ESOS exceed 10% of the issued and paid-
car allowance. up share capital of the Company (excluding treasury shares)
at any time during the duration of the MIP. In addition, the
The remuneration of the EDs is structured so as to link rewards total number of shares which may be made available under
to individual responsibilities and to corporate and individual the MIP to the EDs and senior management shall not exceed
performance. The EDs’ remuneration package comprises an all- in aggregate 50% of the total number of shares to be issued
in fixed component which includes a base salary, benefits- under the MIP and ESOS (“Total Permissible Allocation”).
in-kind/emoluments such as company car, driver, health
insurance premium coverage, and a variable component Since the commencement of the ESOS and the MIP up to
which includes short-term incentives in the form of a 31 December 2018, the options granted under the ESOS
performance-based bonus and long-term incentives in the and shares under the MIP which have been offered to
form of performance-based shares allotment. The EDs are the EDs and senior management were 9.85% of the Total
not entitled to receive any fees and meeting allowances for Permissible Allocation and 0.99% of the issued and paid-up
Board or Board Committee meetings that they attend. share capital of the Company.
The payment of directors’ fees and benefits requires the The Company is seeking shareholders’ approval on the
approval of shareholders at a general meeting in line with offer and grant of shares under the MIP to the ED at the
the CA 2016. The adoption of Constitution to be in line with forthcoming AGM.
the CA 2016 was approved by shareholders at the May
2018 AGM. REMUNERATION OF DIRECTORS
BAB has 2 share based incentive plan for employees, the The details of Directors remuneration (both Executive and
Employee Share Option Scheme (“ESOS”) and the MIP. Non-Executive) is shown under Note 7 of the Company’s
Under the By-Laws governing the ESOS, the total number audited financial statements for the FY2018 on pages 144
of new shares which may be issued under options granted to 146 of this Annual Report.
pursuant to ESOS shall not exceed 10% of the issued and
paid-up share capital of the Company at any time during
the subsistence of the ESOS. In addition, the total number
of shares which may be issued under options granted to the
EDs and senior management shall not exceed in aggregate
50% of the total number of shares to be issued under the
ESOS (“ESOS Permissible Allocation”).
Annual Report 2018
55
ACCOUNTABILITY
Audit Committee Report
Dear Shareholders,
On behalf of the Audit Committee (“AC”), I would like to present our annual
AC Report. As the AC, we assist the Board in fulfilling its statutory and fiduciary 03
responsibilities including under the CA 2016, the MMLR and the CG Guide issued
by Bursa Securities. The CG Guide has set out the following as the key roles and
responsibilities of the AC:
• Overseeing financial reporting of the AC. I also meet with the Head • Management of joint ventures
• Assessing the internal control of Internal Audit on a regular basis and resolution of joint venture
environment to deliberate on matters arising from issues
internal audits, investigative reviews
• Evaluating the internal audit • Dispute and litigation of
as well as to decide on the most
process effective way that we can enhance Armada Claire
• Evaluating the external audit the state of governance and internal • Control and process matters
process controls in the organisation.
• Reviewing conflict of interest As the Group is going through these
In 2018, the Group has encountered difficult times, the primary role of the
situations and related party
a myriad of business issues. These AC is to ensure that the significant
transactions issues had presented significant issues have been appropriately
challenges with ramification not only recorded in the financial statements.
In addition to the CG Guide, the AC to the financial situation of the Group The AC spends a significant amount
also monitors the Group’s management but also to controls and processes. of time with management, the EA and
of financial risk processes along with This has led to the AC focusing on key the IAD to ensure that proper work
its accounting and financial reporting areas such as: and appropriate judgement is applied
practices, reviewing the Group’s in the preparation of the financial
business processes and ensuring the statements and disclosures. In meeting
• Refinancing of high levels of
efficacy of the Group’s system of this role, the AC had to ensure that
internal controls. corporate debts
there was proper governance and
• Restructuring exercise at transparency within the organisation.
My role as AC Chairman includes the end of 2018 that saw Whilst I would like to look at the work
acting as a key contact between AC a reduction in headcount of the AC as having made progress
members and Board members, as and having a positive impact, there
and enhanced efficiencies in
well as key management, the Internal is still much improvement needed. As
Audit Department (“IAD”), and the operating expenses
such, instilling higher levels of order to
External Auditors (“EA”). During the • Assessment of impairment of
the house is daunting but nevertheless
year, I have held many meetings with Armada Kraken has to be done.
various key management to ensure • Assessment of impairment of the
that key matters are being highlighted OSV vessels
and actions to address them are
• Monitoring and actions for UTHAYA KUMAR
progressing and to understand and
assess the main areas in the Group dealing with high levels of VIVEKANANDA
that need the guidance and the focus receivables and payables Chairman of the Audit Committee
56
ACCOUNTABILITY
Roles and Responsibility

The AC is governed by its own TOR which is subject to annual review. The TOR
was reviewed and amended in February 2018 to reflect the changes in line with
the amendments to the MMLR, the MCCG, and the CG Guide.
The TOR is available on the Company’s website at www.bumiarmada.com
The function of the AC is to assist the Board in fulfilling its oversight responsibilities.
The AC has been tasked with reviewing the following:
i
The System of Internal Review Review systems
Control and Management systems of risk of internal
of Enterprise Risk management controls
ii
BAB Group’s Financial Review Review other Review Review conflict
Reporting Process financial accounting, related party of interest
statements audit and transactions situations
financial matters and internal
investigations
iii
The Audit Process Internal
Review Review internal Review internal
Audit independence of audit plans audit reports
internal auditors
Review Appointment/ Take cognisance Approve the

internal audit Termination of of Internal internal audit
departments Head of Internal Auditors charter
performance Audit or senior resignation
internal audit staffs
External
Appointment, Review Review external
Audit resignation and independence of audit plans
dismissal of external auditors
external auditors
Conduct of Review Review

external audits external audit recommendations
results of external
auditors
Review Verify the allocation

performance of under the Management
external auditors Incentive Plan
Annual Report 2018
57
ACCOUNTABILITY
iv
The Group’s Process for Review the process for monitoring
Monitoring Compliance compliance with legal, regulatory
with Law and Regulations and statutory requirements
and its Own Code of 03
Business Conduct
v
Other Matters Speak Up/ Group’s Efficiency Other matters
Whistleblowing statement on and efficacy as deemed
arrangements Internal Control of operations appropriate or
of the Group as defined by
and any other the Board
matters which
would improve
governance
COMPOSITION AND ATTENDANCE
The AC members at the end of 2018 and the number of meetings they each attended during the year were as follows:
Committee Meetings
Member Attended in 2018
VU Kumar
4/4
Independent NED (Chairperson)
Alexandra Schaapveld
4/4
Independent NED (Member)

4/4
Non-Independent NED (Member)
Gary Neal Christenson*

2/3
Independent NED (Member)
* Appointed as member on 2 May 2018. Resigned as a member on 27 March 2019 following his re-designation as an ED.
The AC presently comprises three members, all of whom are NEDs and majority are independent. The AC Chairman is
Mr VU Kumar, an Independent NED.
The current composition of the AC complies with Paragraph 15.09(1) of the MMLR which requires all members to be
NEDs, with a majority of them being independent and at least one member fulfilling the requisite qualification under
Paragraph 15.09(1)(c) of the MMLR.
58
ACCOUNTABILITY
THE AUDIT COMMITTEE REPORTING FRAMEWORK
An Audit Committee Reporting Framework is used in the Group to ensure that there are clear lines of accountability via our
various lines of defence. The Reporting Framework and the matters that are reported via this framework to the AC has been
mapped to the TOR of the AC to ensure that all areas of responsibility are covered and to enhance the quality of reporting.
THE AUDIT COMMITTEE
* VARIOUS RELEVANT MATTERS FOR REPORTING TO BE

PRESENTED
Senior Management
1st line 2nd line 3rd line 4th line

of defence of defence of defence of defence
• Financial
control
• Security
Internal • Risk
Management INTERNAL EXTERNAL
Control Management
Control CONTROL AUDIT
Measures • Quality
• Inspection
• Compliance
• Legal
Quarterly reporting to the Audit Committee:
1. Finance report on consolidated results • Limits of Authority 5. Joint Venture management report
of the Group • Contractual arrangements 6. Risk Management – finance process
2. External Auditors report – avoidable loss and financials
3. Internal Auditors report • Cash flow, debt, financing & 7. Compliance & General Counsel
4. Finance controls and compliance treasury matters report
report • Departures from procurement 8. Related Party Transactions
• Financial reporting process 9. CEO/ CFO representation
• Process • Tax compliance
• IT controls
The Agenda of all AC meetings is developed according to the matters listed above and presentations are done by the
management responsible for the respective area.
Annual Report 2018
59
ACCOUNTABILITY
SUMMARY OF THE WORK DONE BY THE AC FOR FY2018
Financial Reporting
• Reviewed the quarterly results for announcements to Bursa Securities before recommending the same for approval by 03
the Board. This was done upon being satisfied that the reporting has complied with the applicable approved MFRS
issued by the Malaysian Accounting Standards Board (“MASB”), MMLR and other relevant regulatory requirements.
• Reviewed the Company’s annual and quarterly management accounts.
• Reviewed the audited financial statements of the Group prior to submission to the Board for the Board’s consideration
and approval upon the AC being satisfied that, inter alia, the audited financial statements were drawn up in accordance
with the provisions of the CA2016 and the applicable approved MFRS issued by MASB.
• The AC also reviewed the status of accounting provisions and estimates, changes in accounting policies and significant
judgemental accounting matters affecting its interim and audited financial statements.
• Detailed review of the impairments that were made during the financial year.
The AC reviewed significant accounting and auditing matters with a focus on the following:
Liquidity position of The liquidity position of the Group and the underlying assumptions for the Group’s
the Group cash flow forecast for the next 12 months were presented and reviewed by the
AC in detail. The Group has just completed the refinancing of its Term Loan and
Revolving Credit corporate debt in order to better align the Group's corporate debt
profile with the cash flow profile of the Group's main FPO business.
The Group is also monitoring cash flows very closely to ensure that all obligations
can be met.
The Group has also embarked on an asset divestment plan of the OMS business.
The AC has considered the funding plans for the Group to meet its obligations
that are due in the next 12 months and agree that the assessments and plan of
management seem reasonable.
Assessment of The Group has assessed the recoverable amount of Armada Kraken based on the
Armada Kraken value-in-use (“VIU”) model. The VIU supports a lower recoverable amount as at
31 December 2018 which has resulted in an impairment charge of RM1,613.2
million for this financial year. Management provided estimates on vessel
availability, expected lease term and discount rates. These were reviewed by the
EA and presented to the AC who agreed with the assessment.
Impairment assessment of Due to the continued depressed market conditions that have resulted in continued
Offshore Marine Services low utilisation and day rates during the financial year, management has performed
(“OMS”) assets an impairment assessment. The recoverable amounts were determined based
on the expected recovery of the carrying amounts of the OSV assets which has
resulted in an impairment loss of RM586.5 million being recognised during the
financial year. For the SC assets, no impairment was recognised. This has been
reviewed by the EA and presented to the AC who agreed with the assessment.
60
ACCOUNTABILITY
Recoverability of trade Management has assessed the lifetime expected credit loss of trade receivables
receivables using the simplified approach incorporating credit rating buckets, expected loss
rates, forward looking information and probability weighted estimates. As at
31 December 2018, the Group’s total receivables prior to loss allowance was RM1.2
billion of which RM404.9 million has been provided for as loss allowance. Based
on presentation and information that have been provided to the AC by management
coupled with discussions with the EA, the AC is satisfied with the assessment of trade
receivables.
Recoverability of amount The material litigation is still on going. Management in consultation with external
in relation to the Armada counsel have considered the facts of the case at present and remain optimistic of a
Claire litigation favourable outcome of the litigation. The AC has discussed this issue in depth with
Management and the EA and is satisfied with this conclusion.
Recoverability of amounts No additional loss allowances were made during the financial year as management
due from subsidiaries expects that the subsidiaries can meet their obligations to repay balances based
and cost of investments in on the availability of net current assets as at the financial year end and/or that
subsidiaries there are sufficient future cash flows from the subsidiaries to settle the outstanding
balances. The EA has also evaluated these assumptions and cash flows. Based on
these reviews and representations the AC is satisfied with the reasonableness of the
residual cash flows.
Governance & Internal Controls
• Reviewed the effectiveness of the system of internal controls, taking account of findings from internal and external audit
reports as well as the reports of any investigative or special reviews.
• Reviewed and suggested improvements to the Group’s contractual governance process.
• Reviewed improvements on the procurement process and tracking the progress of these improvements.
• The management and the Company Secretary also presented to the AC for its review the status and changes in material
litigation, law and regulations, compliance with loan covenants and regulatory updates where applicable.
• Reviewed speak-up reports as presented by either the Head of Internal Audit or the General Counsel.
• Reviewed and made recommendations to the Board on proposed related party transactions to be entered into by the
Group.
• Reviewed the Statement on Risk Management and Internal Controls (”SORMIC”), which was supported by an independent
review by our EA.
Internal Audit
• Reviewed the annual internal audit plan for the year including its scope, basis for assessment and actions taken and
accountability assigned for actions to the relevant parties. In reviewing the audit plan, consideration was also given to
the risk ratings of the various auditable areas proposed in the plan.
• Reviewed and deliberated on reports of all audits that were conducted by the IAD.
• Provided oversight and guidance for all forensic, fraud or speak up investigation reviews led by the IAD.
• Reviewed all corrective actions on audit findings identified by the IAD via reporting done from the Internal Audit
Monitoring Mechanism developed by IAD during the year. This included the monitoring of all action items until resolution
and closure.
Annual Report 2018
61
ACCOUNTABILITY
External Audit
• Reviewed the EA’s audit strategy and scope for the quarterly and statutory audits of the Group’s financial statements for
FY2018.
• Reviewed with the EA the results of the statutory audit and the audit report.
• Reviewed and endorsed the proposed fees of the EA.
03
• Reviewed and approved the non-audit services provided by the EA while ensuring that there was no impairment of
independence or objectivity. This included monitoring the fee of the total non-audit work carried out by the EA so as not
to jeopardise their independence status.
• Reviewed the performance of the EA and their independence.
INTERNAL AUDIT
The internal audit process for the Group is conducted by its IAD which has been established by the AC. The IAD is
independent of the activities it audits and audits are performed with impartiality, proficiency, and due professional care.
Internal Audit Reports are tabled at the AC meeting. The AC will review, assess and approve the internal audit plans and
programs and provides guidance to the IAD as and when necessary. The AC also reviews and monitors the responsiveness
of the management to significant audit findings and the recommendations of the IAD. To ensure that management effectively
close out all significant audit findings in a timely manner, the AC has directed that part of the management’s annual key
performance indicators include the proper close out of key audit findings.
The IAD attempts to assist the Group in accomplishing its goals by bringing a systematic and disciplined approach to
evaluate and improve the effectiveness of the various processes and controls within the Group. The IAD maintains its
impartiality and proficiency and due professional care by having its plans and reports directly under the purview of the AC.
The Audits conducted for the BAB Group during the financial year under review were:
Audits conducted:
1. Human Resources
2. Vietnam Operations
3. Aberdeen Operations
4. Time Sheet review
5. Commercial – Proposals
6. Professional Fees analysis and review
7. Supply Chain
8. Kraken – specific financials review in relation to the bareboat charter contract and the operations and maintenance
contract
Apart from the audits that are listed above, there were ad-hoc reviews and investigative reviews that were conducted by
IAD throughout the year. An outcome from the planned audit and ad-hoc / investigative reviews performed were findings
around the areas of supply chain process governance and controls, documentation and contract management, financial
process improvements, improvements in CAPEX build up and gate reviews and inventory management. These areas are all
being monitored closely via the monitoring mechanism and improvements have already been noted.
The reports from any reviews performed by the IAD are also shared with the head of that BU, the CEO and CFO. Management
is responsible for ensuring that corrective actions are taken within the stipulated time frame and all outstanding/open items
are reported.
62
ACCOUNTABILITY
The IAD adopts the main standards and principles outlines in the International Professional Practices Framework of The
Institute of Internal Auditors and this has been incorporated in the practical IAD methodology that is used to guide the ways
of working of the IAD.
The IAD is staffed by 5 personnel and headed by the Head of Internal Audit. These personnel come from a diverse
background of audit, engineering and finance. The IAD undertakes to ensure that the staff are competent and adequately
equipped in carrying out their duties and responsibilities by providing them with the relevant training.
Total costs incurred in FY2018 for the Group’s internal audit function amounted to RM2.3 million.
EXTERNAL AUDITORS
During FY2018, the AC assessed the EA’s performance, independence, objectivity and terms of engagement before
recommending its reappointment and remuneration. The AC Chairman together with management did an evaluation
on the EA’s performance and effectiveness which was coordinated by the Company Secretary. The assessment which
covered independence, objectivity and professional scepticism, financial stability, risk and audit strategy, communication
and interaction, audit finalisation and level of knowledge, capabilities and experience and sufficiency of resources was
conducted in March 2018. In this current cycle, this evaluation was performed by the whole AC.
In addition, the AC also reviewed the EA’s representation on its quality control procedures with respect to engagement
performance which included the involvement of a quality review partner, access to the EA’s accounting technical support on
complex accounting matters, periodic assurance quality reviews by the EA’s Global Assurance Quality Review team, internal
guidance on accounting standards interpretation and application and International Standards of Auditing guidelines.
The AC also holds private sessions with the lead engagement partner from the EA every quarter, without the presence of
management. These sessions allow the AC and the EA to focus on areas that might not have been specifically addressed
as part of the audit and where the EA can provide additional confidential comments to the AC. Some of the matters
discussed include the EA’s assessment of the tone at the top, ethical values and integrity of management, quality of financial
management and reporting, existence of pressure to meet aggressive financial targets and profitability expectations and
cooperation from various levels of management and Internal Audit.
The AC remains satisfied with the level of independence of the EA and is of the view that they have not been impaired by
any event or services that give rise to conflict of interest. The amount of non-audit fees incurred for services rendered by the
EA to the Company and its subsidiaries for the financial year ended 31 December 2018 was RM1.3 million.
MOVING FORWARD – THE AC’S KEY FOCUS FOR 2019
For FY2019, the key priorities of the AC will continue to be focused on the integrity of the Group’s financial accounting and
reporting, including all the key financial indicators taking into consideration the challenging environment that the Group
continues to operate in.
Key areas of focus will include:
• Joint Venture management reporting

• Subsidiary reporting
• Management Information Systems
• Collection initiatives
• Cash management and monitoring
• Cost Optimisation
• Process and Controls
• External audit efficacy and efficiency
• Performance and financials of Armada Kraken
Annual Report 2018
63
RELATIONSHIP WITH STAKEHOLDERS
RELATIONSHIP WITH STAKEHOLDERS • Ensuring that information provided and distributed by

the Company to the investing public is in accordance
The Board encourages and supports constructive with the regulatory requirements.
communication with all investors and stakeholders and
recognises the importance of timely dissemination of
information to the investor community and shareholders.
The Investor Relations unit has frequent one-on-one and
group discussions, both domestically and internationally
03
The Board also recognises the importance of communicating with shareholders, analyst investors and potential investors
its business strategies, updates on the progress of the throughout the year to provide constant communications and
Group’s current business initiatives as well as its financial updates with the investment community. During 2018, apart
performance during the year. from the quarterly financial results briefings, the Company
met analysts and investors at conferences and meetings in
In addition to the required timely announcements and Malaysia, Singapore, UK and USA.
public statements made to Bursa Securities, the Company
issues media releases and conducts analyst briefings in Investors may direct their queries regarding the Group to
conjunction with the release of the Group’s quarterly and Jonathan Duckett, Senior Vice President, Investor Relations,
annual financial results. Communications & Sustainability, at his email address:
[email protected].
The Company maintains a corporate website at www.
bumiarmada.com which provides access to corporate VISIT BUMIARMADA.COM
information about the Group, including the Company’s
corporate profile, Directors’ and senior managements' • Investor relations information
profiles, share and dividend information, financial and • Company announcements and shareholder presentations
annual reports, announcements, press releases and investor • Past announcements and presentations on historical
presentations. financial performance
• Information about our businesses
The Company’s Annual Report provides a comprehensive
report of the Group’s operations, business and financial INVESTOR ENGAGEMENT
performance as well as corporate information.
At the AGM, all Directors attend and are allocated

responsibility to respond to questions that may be raised
by shareholders in accordance with their Board or Board
Committee roles. Directors are also encouraged to have
direct interaction with the shareholders before and after the
AGM.
The Group’s Investor Relations function plays an important

role in providing a direct communication channel to engage
with shareholders, investors and the investment community
broadly, both in Malaysia and internationally.
The Company has an Investor Relations Policy in place

providing for the following:
ADDITIONAL COMPLIANCE INFORMATION
• Timely, transparent, consistent and credible information
on corporate events, strategies, trends and financial Material contract
data to the investing public;
There were no material contracts entered into by the Group
• Attending to shareholders or investor enquiries or
involving the interest of Directors and major shareholders,
requests for information;
either still subsisting at the end of the financial year ended
• Attendance at investor presentations, conferences or
31 December 2018 or entered into since the end of the
other forums or meetings to ensure that the Company’s
previous financial year.
businesses and strategies are clearly and equally
understood by as wide an investor base as possible; and
64
STATEMENT ON RISK MANAGEMENT

AND INTERNAL CONTROL
The Board is pleased to provide this statement on Risk Management and

Internal Control which outlines the nature of risk management and internal
controls within the Bumi Armada Berhad Group for the financial year ended 31
December 2018.
The statement is made pursuant to Paragraph 15.26(B) of the MMLR where the
Board of Directors of Public Companies are required to publish a statement
about the state of internal controls.
BOARD’S RESPONSIBILITY
The Board acknowledges its responsibility for having sound risk management and strong internal controls. This responsibility
is addressed, managed and discharged by Board Committees namely the Risk Management Committee and the Audit
Committee. These Committees report to the Board who provide oversight on their performance.
The Group has in place an ongoing process for identifying, evaluating, monitoring and managing all significant risks
faced by the Group and continues to take measures towards enhancing the adequacy and effectiveness of the risk
management and internal control system.
There is a system of internal controls that is being applied by the Group. This system whilst addressing the inherent and
identified gaps only provides reasonable and not absolute assurance against material misstatement or losses or the
occurrence of unforeseeable circumstances.
RISK MANAGEMENT
Risk Management Committee
The RMC’s role is primarily to provide oversight and set the tone and culture towards managing key risks. The RMC
ensures that there is a Risk Management Framework which identifies significant risks and addresses them.
This Risk Management Framework includes the necessary policies and mechanisms to manage and monitor the overall
risk exposure of the Group including the need to establish a risk awareness and response culture. Additionally, the RMC
reviews the effectiveness of the Risk Management Framework and the results of risk assessments of the various business
units within the Group.
The Group has a Risk Management function which reports to the CEO and assists the RMC in discharging its responsibilities.
The BAB Group’s Enterprise Risk Management (“ERM”) Framework allows risk information flow for effective oversight of
risk management at all levels. Risks are reviewed at various levels namely the various shore base operations including
the joint ventures, Business Units (“BUs”) and the corporate departments and then at the CEO level from a collation of
Enterprise Risks standpoint before it is deliberated at the RMC and Board levels.
Annual Report 2018
65

The BAB Group’s ERM organisation structure is as depicted below:
BOARD OF DIRECTORS
03
At Board Level
RISK MANAGEMENT/AUDIT COMMITTEE

At Management Level
Risk Management
CHIEF EXECUTIVE OFFICER
Department
HEAD OF DEPARTMENT
At Operational Level
RISK OWNERS
(Subsidiaries, Joint Ventures, Projects, Business Units & Risk Focal Persons
Corporate Departments)
Enterprise Risk Management Framework
The Group has a risk management framework that is integrated and embedded into the day-to-day business activities
and management decision making of the various BUs and functions of the Group. The framework also aims to provide a
consistent approach for identifying, evaluating and managing the significant risks faced by the Group and facilitating a
reasonably accurate perception of the acceptable risks. Managing risks is a shared responsibility and is integrated within
the Group’s governance, business processes and operations.
The BAB ERM Framework as endorsed by the RMC contains the following key elements:
• Risk Representatives in each BU to spearhead the coordination of risk management activities. These Risk
Representatives are responsible for ensuring the timely updating of risks, controls, issues and action plans within
their own BUs. Their updates are then independently validated by the Risk Management Department.
• Specified roles and responsibilities at each level of management in the Group in relation to Risk Management.
• Guidance on risk reporting. Risk reports are prepared for the RMC and include an assessment of risk, actions to
mitigate the risk and its status.
66

The BAB ERM framework and an overview of how the steps in the Group’s ERM process interrelate to the Group’s
planning, reviewing and reporting cycle; risk governance components of the Framework; and the actions required from
the risk monitoring and reviewing process are as depicted below:
ERM FRAMEWORK
Strategic Plans Board Risk Management Committee

Provides independent risk management advice
- Establish and
maintain a
suitable system
of internal Senior Management
controls and risk Sets and reviews the strategic direction,
management priorities and performance of the organisation
Risk Monitoring & Review

Establish the Context
- Immediate action
Very High must be taken to
Senior Executives manage risk
Risks Assessment
& Management
Document & Communicate
Identity Risks - Integrate risk - Significant resources

management may have to be
Monitor & Review
within areas of allocated to reduce

responsibility the risk
High - Where the risk
Risk Register
Analyse Risks - Comply involves work in

with risk progress, urgent
management action should be
framework taken
Evaluate Risks and processes
including
- Efforts should
maintenance of
be made to
risk register
Moderate reduce the risks
provided this is not
Treat Risks disproportionate
- Risks at this level

Low should be monitored
Risk Management Process an reassessed at
appropriate level
Risk Reports (RMC paper, Risk dashboard etc.)

Annual Report 2018
67

Management Responsibilities
Management is responsible for implementing the approved frameworks, policies and procedures on risk management
and internal controls. Management acknowledges their responsibility to identify and evaluate the risks faced and to
monitor the achievement of business goals and objectives within the risk appetite parameters as discussed and approved 03
by the Board. In line with these, key Management responsibilities would include setting the right examples through
behaviours and actions, encourage, reinforce the importance of good business behaviours and apply the required rules
and regulations.
An overview of the ERM requirements for the BUs, Corporate functions and Projects is as depicted below:
PROPOSAL & PROJECT BUSINESS UNIT & CORPORATE

RISK MANAGEMENT PROCESS RISK MANAGEMENT PROCESS
Company’s Guidelines/
Business process
BUSINESS DEVELOPMENT
Invitation to Bid
Bid Proposal Risk Assessment at bis stage
Regular Gate reviews at

various levels
Bid Submission
• Bi-annual Risk
Continuous risk action

Assessment by Business
Units and Departments/
Contract Award Divisions
• Monthly discussions at
BU reporting meetings
Project Preparation and Planning
with CEO and CFO
Project Execution including Pre-Ops Monthly Project Risk Assessment
Handover of project risk

PROJECT CLOSE OUT & opportunity registers to
operations
Quarterly Risk Assessment at

Operations Phase
operations phase
Strategy & Budgets

DECOMMISSIONING
68

Key Risk Management Activities for FY2018
The following key activities pertaining to risk management were undertaken during the FY2018:
• Continued periodic risk assessment on all the BU’s within the company including the shore base locations and the
vessels.
• Continued risk assessments on commercial bids.
• Frequent RMC meetings with detailed risk presentation by the various BUs and departments within the organisation.
Despite the Risk Management Framework and mechanism that has been put in place, a number of key risks to the
organisation have been realised during the year due to either internal or external factors which has resulted in significant
issues to the Group. Below is the list of major risks realised or still in existence in the Group:
RISK CONTEXT CURRENT STATE & MITIGATION
Liquidity position of the Group Risk Realised

is key to continued successful High levels of corporate debt falling due which put the liquidity position of
operations. The Group has the Group at risk should these repayment obligations and other operating
had to deal with high levels of obligations not be met.
corporate debt falling due and
the risk of potential default Actions
The Group has just completed the refinancing of the Term Loan and Revolving
Credit corporate debts in order to better align the Group's corporate debt
profile with the cash flow profile of the Group's main FPO business.
The Group is also monitoring cash flows very closely to ensure that all
obligations can be met.
The Group has also embarked on an asset divestment plan of the OMS
business.
Maintaining the expected level Risk Realised

of performance for Armada Armada Kraken has faced various technical issues that have affected her
Kraken is crucial in order performance during the year thus affecting her ability to generate revenue
to secure revenue earning at the expected levels which in turn would lead to an inability to meet debt
capability service and contractual obligations.
Actions
Management is focused on resolving technical issues and is working
towards increasing the availability levels of the vessel to the required level.
During the year, significant estimates and judgement has been applied in
order to determine the recoverable value of Armada Kraken, the result of
which was an impairment charge of RM1,613.2 million during the year.
Annual Report 2018
69

The downturn in the OSV Risk Realised

business continues to Due to the continued depressed market conditions that have resulted in
negatively impact the Group continued low utilisation and day rates during the financial year, the 03
and continues to financially performance of the OSV business has been below expectations resulting in
drain funds from the corporate a negative financial impact to the Group.
level that is needed to support
the operations of the business Actions
unit Management has decided to restructure this business and are in the process
of divesting any non-value adding assets.
In addition, in the year, the recoverable amounts of this segment were

determined based on the expected recovery of the carrying amounts of the
OSV assets which has resulted in an impairment loss of RM586.5 million
being recognised.
Safety, security, reliability and Risk Realised

integrity in the delivery of In 2018, the Group experienced three LTI cases.
projects and operations are
key to our success Actions
The Group has thoroughly investigated and reviewed the LTI cases. The
Group has a Corporate HSSEQ plan in place, aimed at minimising HSE
incidents, and complies with the applicable HSE standards. In addition, the
Group has dedicated HSE teams at the operational BUs that set stringent
safety standards to be followed on all our vessels.
Having the right people in Risk Realised

the right positions is key for The Group’s resource capabilities need to be realigned to the strategy as
successful operations failure to do so would result in the inability to achieve the current strategic
objective and to continue to operate without interruption.
Actions
The Group is concentrating on two key areas given the state of the business
and in consideration of the strategy for moving forward, i.e. to retain the
right people and to optimise costs. The organisation needs are currently
being mapped against the strategy of the Group moving forward. A
restructuring exercise that saw a significant reduction of headcount and an
improvement in cost efficiencies was conducted in November 2018. The
Group continues to work on various people initiatives in order to ensure
that there is competent talent available to support the operations of the
Group and to steer the Group into the future.
Recoverability of amounts Risk Realised

in relation to termination of The termination of Armada Claire that has resulted in material litigation.
Armada Claire contract
Actions
The material litigation is still ongoing. Management in consultation with
external counsel have considered the facts of the case at present and
remain optimistic of a favourable outcome of the litigation.
70

An overview of other general material risks is as summarised below
Legal and Contractual Our charter contracts are broadly in line with industry practice. Key terms
requirements in our contracts of these charter contracts would include key milestones on the construction
are key drivers and delivery schedules, as well as operational performance of the facilities.
Failure to meet any key contract terms will expose the Group to potential
penalty payments, liquidated damages and in a worst-case termination of
contract. The Group has established “Golden Contracting Rules” which
set out the guiding principles to be adopted for contracts. Any deviations
from these rules will require Board approval. The Group Legal Department
will monitor all charter contracts to ensure that we are compliant with our
contractual obligations.
Access to capital, capital The Group very closely monitors our debt and repayment obligations. Cash
allocation and management flows are regularly reviewed by Management and the Board to ensure debt
of financial risks underpin our can be serviced and future funding requirements can be met. The Group
business performance also closely monitors our compliance with existing debt covenants.
The Group has refinanced its Term Loan and Revolving Credit corporate
debts in order to better align the Group's corporate debt profile with the
cash flow profile of the Group's main FPO business.
The Group is also monitoring cash flows very closely to ensure that all
obligations can be met.
A high level of operational The success of our operations is dependent on the operating efficiency and
performance and excellence is reliability of our vessels in terms of vessel performance, people capability
critical to our success as well as HSSEQ performance. The compromise of any of these could have
an adverse impact to the Group both monetarily and reputationally. The FPO
Business Unit continues to work via the shore base office and the offshore
crew in ensuring that the vessels are performing and that all technical issues
that arise are investigated and solutions developed for resolution.
Project Execution When there is project in progress, monthly project reviews are held
between Project Managers and Management to highlight risks and issues
that have arisen, so that they can be dealt with in a timely manner. We
have implemented robust processes which are applied at a very early
stage where proposals are made and where schedules and budgets are
developed. After contract award, the project team works accordingly and
follows through until the end of contract, where lessons learnt are identified
and recorded as feedback for any future contracts.
Compliance and integrity are The Group has in place a Compliance programme which includes the
key virtues to be upheld in the Code as well as a Speak Up Policy that has been rolled out throughout the
way we conduct business organisation.
Our business relies on The Group has a cyber security programme in place which ensures that
a variety of information controls are in place to mitigate any potential data breach vulnerabilities.
technology systems
Annual Report 2018
71

Plans for 2019
In 2019, the Group will continue to focus on the key risks that have been realised and the mitigation actions to ensure
that these risks are managed to acceptable levels. Key areas of focus will be on the Armada Kraken and her operations,
the operations of the other vessels in the fleet, the capability of people in line with the strategy of the Group and the 03
financial position of the Group. In addition, we will continue to enhance and instil a risk awareness culture that has
been made difficult by the constant changes to key management and the consolidation phase that the Group is currently
experiencing. The RMC is cognisant of this challenge and is taking steps to address this. A few of the improvements
expected in 2019 are:
• In depth discussions at the RMC level focused on the key risk areas mentioned above and the progress of the key
initiatives.
• Focus on initiatives to create risk awareness and a risk response culture within the Group.
• Closer monitoring of mitigations and actions coming out of risk reviews and ensuring that this is tracked to closure.
• Refined risk reporting processes to Management and the Board to including presentations by and discussions with
the business owners of those risk areas as to what mitigation plans were in place to manage the top risks.
INTERNAL CONTROL ENVIRONMENT
Board
The Board meets at least once a quarter, in order to maintain its full and effective oversight of the overall governance
of the Group. In arriving at any decisions, based on recommendations by Management, thorough deliberations and
discussion by the Board is a prerequisite. The Board reviews all significant issues arising from changes in the business or
operating landscape of the Group which may result in significant risks.
Audit Committee
The AC comprises wholly of NED, the majority of whom are independent Directors. The AC assists the Board in fulfilling
the Board’s responsibilities by focusing on the integrity of the Group’s financial reporting process, management of
governance, financial risks, internal control systems, external and internal audit processes, compliance with legal and
regulatory matters as well as the Code. The detailed activities of the AC are detailed in the AC Report.
Internal Audit
The Board recognises that the internal audit function is an integral part of the governance process of the Group. The
Internal Audit (“IA”) function provides independent assurance on the adequacy and effectiveness of the internal control
systems implemented by the Group and reports its findings directly to the AC. The IA function reviews the Group’s system
of internal controls, its operations and selected key activities based on the risk assessment and in accordance with the
annual audit plan that is approved by the AC.
The AC receives and reviews all IA reports including the agreed actions that are to be taken in order to mitigate and close
the highlighted control gaps. All issues raised and action plans to close gaps are monitored via the monitoring mechanism
that has been developed until closure and the status is reported on a quarterly basis to the AC. The key activities of the
IA function are as set out in the AC report section of this annual report.
External Auditors
The external auditors provide the AC with a report on the internal controls environment of the Group during the 3rd quarter
and the 4th quarter of the year under review. The external auditors are also continuously challenged by the AC to provide
value added recommendations around the area of internal controls and potential enhancements that could heighten the
level of governance in the Group.
72

Organisation Structure
The organisation structure of the Group defines the formal lines of responsibility and the lines of accountability of our
Management. The structure also defines the lines of authority that is in place to assist in implementing the Group’s
strategies and day-to-day business activities. The Group has a management team that meets bi-weekly to discuss pertinent
issues. There is no longer an EXCO. This has been replaced by the RMC which also serves this role in an advisory
capacity to the CEO in accomplishing the vision, mission, strategies and objectives that have been set for the Group.
Budgeting, Monitoring & Reporting
The various BUs and departments in the Group collaborate closely to prepare the Company’s budget on an annual
basis. The budget is then subject to a review process by CFO, CEO and the relevant management team members prior
to submission to the AC and the Board for approval. The Company’s approved budget is then monitored monthly against
the actual performance of the Company. A reporting system which highlights significant variances against the budget is
in place to track and monitor performance. On a quarterly basis, the results are presented to and reviewed by the AC
and Board to enable them to gauge the Group’s overall performance against the budget and prior periods.
Limits of Authority
A documented Limits of Authority (“LOA”) with clear lines of accountability and responsibility serves as a tool of reference
to identify the appropriate approving authority at various levels of management including matters that require the
approval of the RMC, AC and the Board. The LOA is reviewed and updated periodically to reflect business, operational
and structural changes and needs.
Health, Safety, Security, Environment and Quality
The Corporate HSSEQ Department is responsible for setting the overall direction on HSSEQ implementation within the
Group and drives strategies and monitors performance to ensure HSSEQ risks are managed to as low as reasonably
practicable. During the year, the Group recorded three LTI incidents. Investigations were conducted, and corrective
actions have been taken appropriately.
The overall management of Group security falls under the purview of the Head of HSSEQ. It is the policy of the Company
to ensure the protection of all Company related interests against negative security incidents that have the potential to
adversely impact the Group’s personnel, assets and the business. Such protective activities are conducted in a manner
which commensurates with international best practice and statutory compliance. The systems and processes adopted
promote compliance with local regulations and respect for local cultures. Ultimately, the Company considers security
a major business enabler, facilitating operational integrity and business continuity across the Group’s global portfolio.
Project Sales Tender Evaluation and Approval Policy
The Group has in place a Tender Evaluation and Approval Policy to ensure that all tenders participated in by the Group
for potential contracts and projects with clients have been reviewed and evaluated for appropriate balance in risk and
reward and is consistent with the Group’s strategy and risk profile. The policy provides guidelines to mitigate risks and
unplanned events which would jeopardise the successful execution and financial outcome of projects. All proposed
tenders are required to be comprehensively and thoroughly reviewed by Management at various phases via a gate review
process in order to make an early assessment of the merits of submitting a tender, assigning appropriate management
resources setting accountabilities, procuring timely approvals, and ensuring optimum project outcome. The Company’s
LOA specifies the various authority levels for approval, with the Board having the ultimate responsibility. However, at this
point in time, there is very selective participation in tenders.
Annual Report 2018
73

Code of Business Conduct and Ethics and Speak Up Policy
The Group has implemented the Code as well as the Speak Up Policy. These documents are made accessible to all
employees of the Group as well as to the public via the Group’s intranet and official website at www.bumiarmada.
com respectively. The Code places significant importance in upholding the principle of discipline, good conduct, 03
professionalism, loyalty and integrity that are critical to the success and well-being of the Group. The Code includes
policy statements on the standards of behaviour and ethical conduct expected of each individual to whom the Code
applies. The Group also expects that contractors, sub-contractors, consultants, agents and representatives and any other
entity or person performing work or services for or on behalf of any of the companies in the Group to comply with the
Code. The Code also expressly prohibits improper solicitation, bribery and other corrupt activity not only by employees
and directors but also by any third party that is performing work or services for or on behalf of any of the companies in
the Group.
In line with the Code, the Group has also revised the Speak Up Policy which provides a confidential and secure avenue
for employees and the public to disclose any improper conduct committed or about to be committed in accordance with
procedures as provided under the Policy. The Group has also implemented an independent external speak-up hotline to
receive any complaints.
ASSURANCE FROM MANAGEMENT
The CEO and CFO have provided their assurance to the RMC, the AC and the Board that the Group’s risk management
and internal control system is operating adequately and effectively in all material aspects, based on the risk management
and internal control system of the Group, for FY2018 and up to the date of approval of this statement. Based on
Management’s assurance as well as input from the relevant assurance providers, the Board is of the view that the Group’s
risk management and internal control system is operating adequately and effectively. There will also be continuous
improvement in this area and the systems and processes of the Group, as appropriate.
REVIEW OF THE STATEMENT BY THE EXTERNAL AUDITORS
As required by Paragraph 15.23 of the MMLR, the external auditors have reviewed this Statement on Risk Management
and Internal Control. Their limited assurance review was performed in accordances with Recommended Practice Guide
(“RPG”) 5 (Revised 2015) issued by the Malaysian Institute of Accountants. RPG 5 (Revised 2015) does not require the
external auditors to form an opinion on the adequacy and effectiveness of the risk management and internal control
systems of the Group.
CONCLUSION
For the year under review, and up to the date of approval of this Statement, based on inquiry, presentations during the
year and information and assurances provided by the CEO and CFO, the Board is of the view that the Group’s risk
management and internal control systems are operating adequately and effectively in all material aspects. There were no
significant internal control weaknesses that have not been reported based on the risk management and internal control
system of the Group and the internal control procedure of the Group will continue to be reviewed in order to improve and
strengthen the system to ensure adequacy, integrity and effectiveness to safeguard the Group’s assets and shareholders’
investments.
This statement is made in accordance with a resolution of the Board of Directors dated 23 April 2019.
74
DIRECTORS’ RESPONSIBILITY STATEMENT
Directors of the Company are required to prepare financial statements for each financial year in accordance with the requirements
of the Companies Act 2016, Malaysian Financial Reporting Standards and the International Financial Reporting Standards,
and to lay these before the company at its annual general meeting. In addition, the Main Market Listing Requirements of Bursa
Malaysia Securities Berhad requires that a listed issuer prepares the annual audited financial statements on a consolidated
basis.
Directors are also responsible to ensure that the financial statements provide a true and fair view of the financial position of
the Group and the Company as at the financial year ended 31 December 2018 and of their financial performance and cash
flows for the said financial year.
In preparing these financial statements, the Directors have:
• adopted appropriate accounting policies and applied them consistently;

• made judgements and estimates that are reasonable; and
• appropriately prepared the financial statements on a going concern basis.
The Directors are also responsible for taking reasonable steps to safeguard the assets of the Group to prevent and detect fraud
and other irregularities.
Incorporated on pages 76 to 227 of this Annual Report are the financial statements of the Group and the Company for the
financial year ended 31 December 2018.
This Statement is made in accordance with a resolution of the Board of Directors on 25 April 2019.
Our Numbers
Our
Numbers
Bumi Armada Berhad Our Numbers
76
DIRECTORS’
REPORT
The Directors hereby present their report to the members together with the audited financial statements of the Group and of the
Company for the financial year ended 31 December 2018.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and provision of management services. The principal activities
of the Group consist of provision of marine transportation, Floating Production Storage Offloading (“FPSO”) operations, vessel
construction and engineering and maintenance services to offshore oil and gas companies. Further details are provided in
Note 12 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
FINANCIAL RESULTS
Group Company
RM’000 RM’000
(Loss)/Profit for the financial year attributable to:
- Owners of the Company (2,302,769) 114,688
- Non-controlling interests (16,379) -
(2,319,148) 114,688
DIVIDENDS
No dividend has been paid or declared since 31 December 2017. The Board of Directors do not recommend any dividend to
be paid for the financial year ended 31 December 2018.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial year other than as disclosed in the
financial statements.
ISSUE OF SHARES
During the financial year, the Company issued 4,668,200 shares pursuant to Management Incentive Plan (“MIP” or “Plan”)
to eligible employees and the Executive Director of the Group. The salient features and other terms of the Plan are disclosed
in Note 37 to the financial statements.
MANAGEMENT INCENTIVE PLAN
On 23 May 2016, the Company’s shareholders approved the establishment of a MIP for eligible employees and the Executive
Director of the Company and its subsidiaries by the grant of shares which will be awarded annually and/or every 3-year
period. The Plan was effected on 10 October 2016 following the submission of the final copy of the by-laws governing the Plan
to Bursa Malaysia Securities Berhad, the receipt of all required approvals and compliance with the requirements pertaining to
the Plan by the Company.
The salient features and other terms of the Plan are disclosed in Note 37 to the financial statements.
Annual Report 2018
77
DIRECTORS’ REPORT
EMPLOYEE SHARE OPTIONS SCHEME
On 18 June 2011, the Company’s shareholders approved the establishment of an Employee Share Options Scheme (“ESOS”
or “Scheme”) to eligible employees of the Group, including Executive Directors of the Company for a period of 10 years from
28 June 2011 as part of the Company’s long-term plan to retain employees. 04
The salient features and other terms of the ESOS are disclosed in Note 36 to the financial statements.
With the establishment of the MIP, the Company has ceased awarding further options under the Scheme.
DIRECTORS
The Directors of the Company in office during the financial year and during the period from the end of the financial year to
the date of the report are as follows:
Tunku Ali Redhauddin ibni Tuanku Muhriz

Alexandra Elisabeth Johanna Maria Schaapveld*
Chan Chee Beng
Leon Andre Harland**
Uthaya Kumar K Vivekananda
Gary Neal Christenson (Appointed on 2 May 2018)
Shaharul Rezza bin Hassan (Resigned on 28 Feb 2018)
* She is also referred to as Alexandra Schaapveld in the other sections of this report and the financial statements.
** On 28 February 2019, the Company announced that Leon Andre Harland’s contract of employment as the Chief Executive Officer (“CEO”) would end
on 15 May 2019 and Gary Neal Christenson would be re-designated as an Executive Director effective 27 March 2019 and appointed as the CEO
on 16 May 2019. Accordingly, Leon Andre Harland will cease to be an Executive Director on 15 May 2019.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than benefits
as disclosed in Note 7 to the financial statements and the premium paid for the Directors and Officers Liability insurance for the
year 2018/2019 amounting to RM0.2 million with a coverage of RM250.0 million (2017/2018: premium paid amounted to
RM0.2 million with a coverage of RM250.0 million)) by reason of a contract made by the Company or a related corporation
with any Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
Neither during nor at the end of the financial year was the Company or any of its subsidiaries a party to any arrangements
whose object was to enable the Directors to acquire benefits by means of the acquisition of shares in, or debentures of, the
Company or any other body corporate other than shares granted under the MIP.
78
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS IN SHARES
According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act 2016, the
interests of the Directors in office at the end of the financial year, in shares and options over unissued shares in the Company
or its subsidiaries during the financial year are as follows:
In the Company - Direct Interests
Number of ordinary shares

As at As at
1.1.2018 Acquired Disposed 31.12.2018
Tunku Ali Redhauddin ibni Tuanku Muhriz (1) 20,000 - - 20,000
Alexandra Schaapveld (2)
900,000 - - 900,000
Chan Chee Beng (3)
2,511,200 - - 2,511,200
Leon Andre Harland - 2,137,800 - 2,137,800

(1)
Held through a nominee, namely Maybank Securities Nominees (Tempatan) Sdn Bhd.

(2)
Held through a nominee, namely CIMSEC Nominees (Asing) Sdn Bhd.

(3)
Held through a nominee, namely CIMSEC Nominees (Tempatan) Sdn Bhd.
Number of ordinary shares under the MIP

As at As at
1.1.2018 Granted Awarded Vested 31.12.2018
Leon Andre Harland (1)
2017 MIP
Annual grant up to 6,413,300 - 6,413,300 (2,137,800) 4,275,500
3-year grant * up to 8,551,000 - - - up to 8,551,000
2018 MIP
Annual grant * - up to 6,426,900 - - up to 6,426,900
* Offered and granted, but yet to be awarded.
(1)
The MIP Committee has approved the award of unvested MIP shares of 4,275,500 under the 2017 MIP Annual grant to Leon Andre Harland to be vested
by 15 May 2019. The MIP shares that have yet to be awarded (the 2017 MIP – 3-year Grant and 2018 MIP – Annual Grant) will be forfeited.
Save as disclosed above, no other Directors in office at the end of the financial year held any interest in shares or options over
shares in the Company or in its related corporations during the financial year.
Annual Report 2018
79
DIRECTORS’ REPORT
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for 04
impairment losses and satisfied themselves that all known bad debts had been written off and that adequate allowance
had been made for impairment losses; and
(b) to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business,
including the values of current assets as shown in the accounting records of the Group and of the Company had been
written down to an amount which the current assets might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amounts written off for bad debts or the amount of the allowance for impairment losses in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company
misleading; or
(c) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Company misleading or inappropriate.
OTHER STATUTORY INFORMATION
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months
after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the
Company to meet their obligations when they fall due.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which
secures the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial
statements of the Group and of the Company which would render any amount stated in the financial statements misleading.
In the opinion of the Directors:
(a) the results of the Group’s and of the Company’s operations during the financial year were not substantially affected by
any item, transaction or event of a material and unusual nature other than as disclosed in the financial statements; and
(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or of the
Company for the financial year in which this report is made.
80
DIRECTORS’ REPORT
SUBSEQUENT EVENTS
Subsequent to the balance sheet date, the Group obtained a waiver on the breach of financial covenants of the Sukuk
Murabahah, and has also signed a facility agreement for refinancing of certain unsecured term loans and revolving credit
facilities, the details of which are disclosed in the Preface to the Financial Statements Section E – Liquidity risk.
SUBSIDIARIES
Details of subsidiaries and subsidiaries’ holding of shares in other related corporations are set out in Note 12 to the financial
statements. The auditors’ reports on the financial statements of the subsidiaries were unqualified.
AUDITORS’ REMUNERATION
Details of auditors’ remuneration are set out in Note 5 to the financial statements.
AUDITORS
The auditors, PricewaterhouseCoopers PLT (LLP0014401-LCA & AF 1146), have expressed their willingness to accept
re-appointment as auditors.
This report was approved by the Board of Directors on 25 April 2019. Signed on behalf of the Board of Directors:
LEON ANDRE HARLAND UTHAYA KUMAR K VIVEKANANDA

DIRECTOR DIRECTOR
Kuala Lumpur
Annual Report 2018
81
PREFACE TO THE
FINANCIAL STATEMENTS
Sections A to E form part of the notes to the financial statements and provide the general information, basis of preparation and
underlying considerations used in preparing the financial statements of the Group and the Company.
A GENERAL INFORMATION
04
The principal activities of the Company are investment holding and provision of management services. The principal
activities of the Group consist of provision of marine transportation, Floating Production Storage Offloading (“FPSO”)
operations, vessel construction and engineering and maintenance services to offshore oil and gas companies. Further
details are provided in Note 12 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
The Company is incorporated and domiciled in Malaysia and is listed and quoted on the Official List of the Main Market
of Bursa Malaysia Securities Berhad.
The address of the registered office and principal place of business of the Company is as follows:
Level 21, Menara Perak

24, Jalan Perak
50450 Kuala Lumpur
Malaysia.
B BASIS OF PREPARATION
The financial statements of the Group and the Company have been prepared in accordance with the Malaysian Financial
Reporting Standards (“MFRS”), International Financial Reporting Standards and the requirements of the Companies Act
2016 in Malaysia.
The financial statements have been prepared under the historical cost convention, unless otherwise indicated in the
summary of significant accounting policies as stated in Section C.
The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of financial statements, and the reported amounts of revenue and expenses during the reported period. It
also requires Directors to exercise their judgement in the process of applying the Group’s and the Company’s accounting
policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and
actions, actual results may differ. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in Section D.
As at 31 December 2018, the Group’s current liabilities exceeded its current assets by RM6,092.7 million mainly due
to the following reasons:
(a) Re-classification of non-current borrowings for Armada Kraken Pte Ltd (“AKPL”) of RM1,782.9 million and Sukuk
Murabahah of RM1,499.4 million to current borrowings; and
(b) Current borrowings comprising Armada Floating Gas Storage Malta Limited (“AFGSML”) secured term loan of
RM186.5 million, unsecured term loans of RM1,578.0 million and revolving credit facilities of RM1,246.9 million.
These borrowings are expected to be refinanced via long term loans.
82
PREFACE TO THE FINANCIAL STATEMENTS
B BASIS OF PREPARATION (CONTINUED)
In assessing the appropriateness of a going concern basis to prepare the financial statements of the Group, the Directors
prepared a cash flow forecast for the next 12 months from the date of approval of the financial statements. Based on the
cash flow forecast (which is elaborated further in Section E - Liquidity risk), the Directors are of the view that the going
concern assumption is appropriate for the preparation of the financial statements.
(a) Standards, amendments to published standards and interpretations that are effective for the Group’s and the
Company’s financial year beginning on 1 January 2018:
• MFRS 9 “Financial Instruments”

• MFRS 15 “Revenue from Contracts with Customers”
• Amendments to MFRS 2 “Share-based Payment” – Classification and Measurement of Share-based Payment
Transactions
• Annual Improvements to MFRS Standards 2014 – 2016 Cycle: Amendments to MFRS 128 ”Investments in
Associates and Joint Ventures”
• IC Interpretation 22 “Foreign Currency Transactions and Advance Consideration”
The adoption of the above amendments and annual improvements to MFRS did not have any significant impact on
the financial statements of the Group and the Company, except as disclosed in Note 45.
(b) Standards, amendments to published standards and interpretations that have been issued but are not yet effective
(i) New MFRS, amendments to MFRS, annual improvements and interpretation which are applicable to the
Group effective for annual periods beginning on or after 1 January 2019:
• MFRS 16 “Leases”
• IC Interpretation 23 “Uncertainty over Income Tax Treatments”
• Amendments to MFRS 128 “Investments in Associates and Joint Ventures” – Long-term Interests in
Associates and Joint Ventures
• Amendments to MFRS 9 “Financial Instruments” – Prepayment Features with Negative Compensation
• Annual improvements to MFRS Standards 2015–2017 Cycle:
- Amendments to MFRS 3 “Business Combinations” - Previously Held Interest in a Joint Operation
- Amendments to MFRS 11 “Joint Arrangements” - Previously Held Interest in a Joint Operation
- Amendments to MFRS 112 “Income Taxes” - Income Tax Consequences of Payments on Financial
Instruments Classified as Equity
- Amendments to MFRS 123 “Borrowing Costs” - Borrowing Costs Eligible for Capitalisation
Annual Report 2018
83
B BASIS OF PREPARATION (CONTINUED)
(b) Standards, amendments to published standards and interpretations that have been issued but are not yet effective
(continued)
04
(i) New MFRS, amendments to MFRS, annual improvements and interpretation which are applicable to the
Group effective for annual periods beginning on or after 1 January 2019: (continued)
The adoption of the above new MFRS and interpretation did not have any significant impact on the financial
statements of the Group and the Company, except as set out below:
MFRS 16 “Leases”
MFRS 16 “Leases” (effective from 1 January 2019) supersedes MFRS 117 “Leases” and related interpretations.
Under MFRS 16, a lease is a contract (or part of a contract) that conveys the right to control the use of an
identified asset for a period of time in exchange for a consideration.
MFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities
for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is
required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease
liability representing its obligation to make lease payments.
The Group has assessed the effects of applying the new standard on the Group’s financial statements and
has identified that this will impact the Group’s non-cancellable operating lease commitments. The Group
expects to recognise right-of-use assets and corresponding lease liabilities. The right-of-use assets will be
depreciated in accordance with the principles in MFRS 116 “Property, Plant and Equipment” and lease
liabilities will be amortised over time with interest expense recognised in profit or loss, which will affect
the earnings before interest, taxation, depreciation and amortisation (“EBITDA”). Operating cash flows will
increase and financing cash flows will decrease as repayment of the principal portion of the lease liabilities
will be classified as cash flows from financing activities.
The Group does not expect the Group’s activities as a lessor to have any significant impact on the financial
statements. However, some additional disclosures will be required upon adoption of MFRS 16.
The Group intends to apply the simplified transition approach and will not restate comparative amounts for
the year prior to first adoption. Right-of-use assets for property will be measured on transition as if the new
rules had always been applied.
(ii) Amendments to MFRS and interpretation which are applicable to the Group effective for annual periods
beginning on or after 1 January 2020:
• Amendments to MFRS 2 “Share-Based Payment”

• Amendment to MFRS 3 “Business Combinations”
• Amendments to MFRS 101 “Presentation of Financial Statements”
• Amendments to MFRS 108 “Accounting Policies, Changes in Accounting Estimates and Errors”
• Amendments to MFRS 134 “Interim Financial Reporting”
• Amendment to MFRS 137 “Provisions, Contingent Liabilities and Contingent Assets”
• Amendment to IC Interpretation 19 “Extinguishing Financial Liabilities with Equity Instruments”
• Amendment to IC Interpretation 22 “Foreign Currency Transactions and Advance Consideration”
The adoption of the above amendments to MFRS and interpretation may result in a change in accounting
policy. The Group will quantify the effect of adopting these standards when the full standards are effective.
84
C SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the relevant activities of the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combination, except for the subsidiary as
disclosed in Note 12, where the Group applies predecessor accounting to account for business combination
under common control. Under predecessor accounting, assets and liabilities acquired are not restated to their
respective fair values. They are recognised at the carrying amounts from the consolidated financial statements
of the ultimate holding company of the Group and adjusted to conform with the accounting policies adopted
by the Group. The difference between any consideration given and the aggregate carrying amounts of the
assets and liabilities (as of the date of the transaction) of the acquired entity is recognised as an adjustment
to equity. No additional goodwill is recognised.
The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred,
the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent
consideration arrangement and fair value of any pre-existing equity interest in the subsidiary. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-
controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-
controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the carrying value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date, any gains or losses arising from
such remeasurement are recognised in profit and loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability
is recognised in accordance with MFRS 9 either in profit or loss or as a change to other comprehensive
income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement
is accounted for within equity.
Inter-company transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment
of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of income, statement of comprehensive income, statement of changes in equity and statement of
financial position respectively.
Annual Report 2018
85
C SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(a) Consolidation (continued)
(ii) Changes in ownership interests in subsidiaries without change of control 04

Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions
with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised in equity attributable to owners of the Group.
(iii) Disposal of subsidiaries
When the Group ceases to consolidate because of a loss of control, any retained interest in the entity is
remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value
becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other
comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of
the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss. Gains or losses on the disposal of subsidiaries include the carrying
amount of goodwill relating to the subsidiaries sold.
(iv) Joint arrangements
A joint arrangement is an arrangement in which there is contractually agreed sharing of control by the Group
with one or more parties, where decisions about the relevant activities relating to the joint arrangement
require unanimous consent of the parties sharing control. The classification of a joint arrangement as a joint
operation or a joint venture depends upon the rights and obligations of the parties to the arrangement. A joint
venture is a joint arrangement whereby the joint venturers have rights to the net assets of the arrangement. A
joint operation is a joint arrangement whereby the joint operators have rights to the assets and obligations
for the liabilities, relating to the arrangement.
The Group’s interests in joint ventures are accounted for in the consolidated financial statements using the
equity method. Under the equity method, the investment in a joint venture is initially recognised at cost, and
adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the joint venture
in profit or loss, and the Group’s share of movements in other comprehensive income of the joint venture
in other comprehensive income. Dividends received or receivable from a joint venture are recognised as a
reduction in the carrying amount of the investment. When the Group’s share of losses in a joint venture equals
or exceeds its interests in the joint venture, including any long-term interests that, in substance, form part of the
Group’s net investment in the joint venture, the Group does not recognise further losses, unless it has incurred
legal or constructive obligations or made payments on behalf of the joint venture.
The Group determines at each reporting date whether there is any objective evidence that the investment
in joint venture is impaired. An impairment loss is recognised in profit or loss for the amount by which the
carrying amount of the joint venture exceeds its recoverable amount.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the
Group’s interests in the joint ventures. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been
changed where necessary to ensure consistency with the policies adopted by the Group.
86
(a) Consolidation (continued)
(iv) Joint arrangements (continued)
When the Group ceases to equity account its joint venture because of a loss of joint control, any retained
interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit
or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for
the retained interest as an associate or a financial asset. In addition, any amount previously recognised in
other comprehensive income in respect of the entity is accounted for as if the Group had directly disposed
of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
If the ownership interest in a joint venture is reduced but joint control is retained, only a proportionate share
of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where
appropriate.
(v) Associates
An associate is an entity in which the Group is in a position to exercise significant influence. Significant
influence is the power to participate in the financial and operating policy decisions, but not control over those
policies.
The Group’s interests in associates are accounted for in the consolidated financial statements using the equity
method, similar to accounting policy Section C(a)(iv).
(b) Investments in subsidiaries, joint ventures and associates in separate financial statements
In the Company’s separate financial statements, investments in subsidiaries, joint ventures and associates are
carried at cost less accumulated impairment losses (see accounting policy Section C(h)). On disposal of investments
in subsidiaries, joint ventures and associates, the difference between disposal proceeds and the carrying amounts
of the investments are recognised in profit or loss.
The amounts due from subsidiaries of which the Company does not expect repayment in the foreseeable future and
has no contractual terms of repayment are considered as part of the Company’s capital contribution in subsidiaries
(net investments).
(c) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment
losses. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any
cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable
of operating in the manner intended by management, assets dismantling costs, and restoration costs for the site.
Costs also include borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset (see accounting policy Section C(i)).
Drydocking expenditures represent major inspection and overhaul costs and are depreciated to reflect the
consumption of benefits, which are to be replaced or restored by the subsequent drydocking generally performed.
The Group has included these drydocking costs as a component within vessel costs in accordance with MFRS 116
“Property, Plant and Equipment”.
Annual Report 2018
87
(c) Property, plant and equipment (continued)
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, 04
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are recognised as expenses in profit or loss during the financial period in which they are incurred.
Gains or losses on disposals are determined by comparing proceeds with carrying amount and are included in
profit or loss.
Property, plant and equipment are depreciated on a straight-line basis to allocate the cost to their residual values
over their estimated useful lives. Depreciation on assets under construction commences when the assets are ready
for their intended use. Vessels are depreciated on a systematic basis to reflect the pattern in which future economic
benefits are expected to be consumed over their estimated useful lives.
The estimated useful lives of the categories of property, plant and equipment are summarised as follows:
Building 50 years
Drydocking expenditure 2.5 to 5 years
Vessels 10 to 25 years
Equipment, furniture, fittings and office equipment 2 to 10 years
Spare parts 1 to 3 years
Motor vehicles 5 years
Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at the end of each reporting
period.
At the end of the reporting period, the Group assesses whether there is any indication of impairment.
If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully
recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see accounting policy
Section C(h)).
(d) Financial assets
(i) Classification
Accounting policies applied until 31 December 2017
The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans
and receivables and available-for-sale financial assets. The classification depends on the purpose for which
the financial assets were acquired. Management determines the classification at initial recognition and, in the
case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting period.
Financial assets at fair value through profit or loss (“FVTPL”)
The Group classifies financial assets at FVTPL if they are acquired principally for the purpose of selling in
the short-term, i.e. are held for trading. They are presented as current assets if they are expected to be sold
within 12 months after the end of the reporting period; otherwise they are presented as non-current assets.
Derivatives are also categorised as held for trading unless they are designated as hedges (see accounting
policy Section C(g)). Derivatives are classified as current assets if expected to be settled within 12 months;
otherwise they are classified as non-current assets.

88
(d) Financial assets (continued)
(i) Classification (continued)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. If collection of the amounts is expected in one year or less they are classified
as current assets; otherwise they are presented as non-current assets. The Group’s loan and receivables are
disclosed in Note 44 to the financial statements.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless the investment matures
or management intends to dispose of it within 12 months after the end of the reporting period.
Accounting policies applied from 1 January 2018
From 1 January 2018, the Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income or through
profit or loss); and
• those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in equity instruments that are not held for trading, this will depend
on whether the Group has made an irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income (“FVOCI”).
The Group reclassifies debt investments when and only when its business model for managing those assets
changes.
(ii) Recognition
Financial assets are initially recognised at fair value plus transaction costs that are directly attributable to the
acquisition of the financial asset for all financial assets not carried at FVTPL. Financial assets at FVTPL are
initially recognised at fair value, and transaction costs are expensed in profit or loss.
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the
Group commits to purchase or sell the asset.
Annual Report 2018
89
(iii) Measurement 04
Financial assets at FVTPL and available-for-sale financial assets are subsequently carried at fair value. Loans
and receivables are subsequently carried at amortised cost using the effective interest method.
Changes in the fair values of financial assets at FVTPL, including the effects of currency translation, interest
and dividend income are recognised in profit or loss in the period in which the changes arise.
Changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income,
except for impairment losses (see accounting policy Section C(d)(iv)) and foreign exchange gains and losses
on monetary assets (see accounting policy Section C(n)(ii)).
Dividends income on available-for-sale equity instruments are recognised in profit or loss when the Group’s
right to receive payments is established.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payment of principal and interest (“SPPI”).
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. There are three measurement categories into which the Group
classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent SPPI are measured at amortised cost. Interest income from these financial assets is included in
other operating income using the effective interest rate method. Any gain or loss arising on derecognition
is recognised directly in profit or loss and presented in the statement of profit or loss together with
foreign exchange gains and losses. Impairment losses are presented within the statement of profit or
loss.
• FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent SPPI, are measured at FVOCI. Movements in the carrying
amount are taken through other comprehensive income, except for the recognition of impairment gains
or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in other
comprehensive income is reclassified from equity to profit or loss. Interest income from these financial
assets is included in other operating income using the effective interest rate method. Foreign exchange
gains and losses are presented in administrative expenses and impairment expenses are presented
within the statement of profit or loss and statement of comprehensive income as applicable.
90
(iii) Measurement
Accounting policies applied from 1 January 2018 (continued)
Debt instruments (continued)
• FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL.
A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in profit or loss
and presented net within the statement of profit or loss in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has
elected to present fair value gains and losses on equity investments in other comprehensive income, there is
no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of
the investment. Dividends from such investments continue to be recognised in profit or loss as other income
when the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVTPL are recognised in profit or loss as applicable.
(iv) Impairment of financial assets
Assets carried at amortised cost
The Group assesses at the end of the reporting period whether there is objective evidence that a financial
asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and
impairment losses are incurred only if there is objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or “events”)
has an impact on the estimated future cash flows of the financial asset or group of financial assets that can
be reliably estimated.
Evidence of impairment may include indications that the debtors or a group of debtors are experiencing
significant financial difficulty, default or delinquency in interest and principal payments, the probability that
they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is
a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions
that correlate with defaults.
The amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted
at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the
amount of the loss is recognised in profit or loss. If “loans and receivables” has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective interest rate determined under the
contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair
value using an observable market price.
Annual Report 2018
91
(iv) Impairment of financial assets (continued) 04

Accounting policies applied until 31 December 2017 (continued)
Assets carried at amortised cost (continued)
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised, the reversal of the previously
recognised impairment loss is recognised in profit or loss.
When an asset is uncollectible, it is written off against the related allowance account. Such assets are written
off after all the necessary procedures have been completed and the amount of the loss has been determined.
Assets classified as available-for-sale
The Group assesses at the end of the reporting period whether there is objective evidence that a financial
asset or a group of financial assets is impaired.
For debt securities, the Group uses criteria and measurement of impairment loss applicable for “assets carried
at amortised cost” above. If, in a subsequent period, the fair value of a debt instrument classified as available
for sale increases and the increase can be objectively related to an event occurring after the impairment loss
was recognised in profit or loss, the impairment loss is reversed through profit or loss.
In the case of equity securities classified as available-for-sale, in addition to the criteria for “assets carried
at amortised cost” above, a significant or prolonged decline in the fair value of the security below its cost is
also considered as an indicator that the assets are impaired. If any such evidence exists for available-for-sale
financial assets, the cumulative loss that had been recognised directly in equity is removed from equity and
recognised in profit or loss. The amount of cumulative loss that is reclassified to profit or loss is the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognised in profit or loss. Impairment losses recognised in profit or loss on equity instruments
classified as available-for-sale are not reversed through profit or loss in subsequent periods.
Impairment for debt instruments
From 1 January 2018, the Group assesses on a forward-looking basis the expected credit losses (“ECL”)
associated with its debt instruments carried at amortised cost and at FVOCI. The impairment methodology
applied depends on whether there has been a significant increase in credit risk.
ECL represents a probability-weighted estimate of the difference between present value of cash flows
according to contract and present value of cash flows the Group expects to receive, over the remaining life
of the financial instrument. For financial guarantee contracts, the ECL is the difference between the expected
payments to reimburse the holder of the guaranteed debt instrument less any amounts that the Group expects
to receive from the holder, the debtor or any other party.
92
(iv) Impairment of financial assets (continued)
Impairment for debt instruments (continued)
The measurement of ECL reflects:
• An unbiased and probability-weighted amount that is determined by evaluating a range of possible

outcomes;
• The time value of money; and
• Reasonable and supportable information that is available without undue cost or effort at the reporting
date about past events, current conditions and forecasts of future economic conditions.
(a) Simplified approach for trade receivables, accrued lease rentals and contract assets
The Group applies the MFRS 9 simplified approach to measure ECL, which uses a lifetime ECL for trade
receivables, accrued lease rentals and contract assets.
(b) General 3-stage approach for all financial assets except trade receivables, accrued lease rentals and
contract assets
At each reporting date, the Group measures ECL through loss allowance at an amount equal to
12-month ECL if credit risk on financial instrument or a group of financial instruments has not increased
significantly since initial recognition. For all other financial instruments, a loss allowance at an amount
equal to lifetime ECL is required.
Section E – Credit risk sets out the measurement details of ECL.
Significant increase in credit risk
The Group considers the probability of default upon initial recognition of an asset and whether there has
been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess
whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the
asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available
reasonable and supportable forward-looking information, incorporating indicators such as significant
changes in the expected performance and behaviour of the debtor, including changes in the payment status
of debtor in the Group and changes in the operating results of the debtor.
A significant increase in credit risk is presumed if a debtor is more than 180 days past due in making a
contractual payment, which the Group determined based on historical repayment trends before risk of default
is heightened.

Annual Report 2018
93
(iv) Impairment of financial assets (continued) 04

Definition of default and credit-impaired financial assets
The Group defines a financial instrument as default, which is fully aligned with the definition of credit-
impaired, when it meets one or more of the following criteria:
(a) Quantitative criteria
The Group defines a financial instrument as default, when the counterparty fails to make contractual
payments within a year of when they fall due.
(b) Qualitative criteria
The debtor meets unlikeliness to pay criteria, which indicates the debtor is in significant financial
difficulty. The Group considers the following instances:
• The debtor is in breach of financial covenants;
• Concessions have been made by the lender relating to the debtor’s financial difficulty;
• It is becoming probable that the debtor will enter bankruptcy or other financial reorganisation;
• Continuous default in the repayment plan;
• The debtor is insolvent.
Financial instruments that are credit-impaired are assessed on an individual basis.
Groupings of instruments for ECL measurement
Financial assets are assessed on an individual basis for ECL measurement, as credit risk information is
obtained and monitored based on each debtor, joint venture and subsidiary.
Write-off
Financial assets are written off when the Group has exhausted all practical recovery efforts and has concluded
that there is no reasonable expectation of recovery. The assessment of no reasonable expectation of recovery
is based on unavailability of debtor’s sources of income or assets to generate sufficient future cash flows to
repay the amount.
Impairment losses are presented as net impairment losses within cost of sales in the profit or loss. Subsequent
recoveries of amounts previously written off are credited against the same line item.
94
(v) De-recognition
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or
have been transferred and the Group has transferred substantially all risks and rewards of ownership.
When available-for-sale financial assets are sold, the accumulated fair value adjustments recognised in other
comprehensive income are reclassified to profit or loss.
When financial assets at FVOCI are sold, the accumulated fair value adjustments recognised in other
comprehensive income are reclassified to profit or loss.
(e) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis,
or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency or
bankruptcy.
(f) Financial guarantee contracts
Financial guarantee contracts are contracts that require the Group to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the
terms of a debt instrument.
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued and the
liability is initially measured at fair value.
The fair value of financial guarantees is determined as the present value of the difference in net cash flows
between the contractual payments under the debt instrument and the payments that would be required without the
guarantee, or the estimated amount that would be payable to a third party for assuming the obligations.
Financial guarantee contracts are subsequently measured at the higher of the amount determined in accordance
with MFRS 137 “Provisions, Contingent Liabilities and Contingent Assets” and the amount initially recognised less
cumulative amortisation, where appropriate.
Financial guarantee contracts are subsequently measured at the higher of the amount determined in accordance
with the expected credit loss model under MFRS 9 “Financial Instruments” and the amount initially recognised less
cumulative amount of income recognised in accordance with the principles of MFRS 15 “Revenue from Contracts
with Customers”, where appropriate.
Annual Report 2018
95
(g) Derivative and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently 04
re-measured at their fair values at the end of each reporting period.
The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. Derivatives that do not qualify for hedge accounting are
classified as held for trading and accounted for in accordance with the accounting policy set out in Section C(d).
Derivatives that qualify for hedge accounting are designated as a cash flow hedge of a particular risk associated
with a recognised asset or liability or a highly probable forecast transaction.
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged
items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The
Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in
cash flows of hedged items.
The fair values of various derivative instruments used for hedging purposes are disclosed in Note 34. Movements
in the hedging reserve in shareholders’ equity are shown in the statement of changes in equity. Where a portion of
a derivative financial instrument is expected to be realised within 12 months after the end of the reporting period,
that portion should be presented as a current asset or liability, the remainder of the derivative financial instrument
should be shown as non-current asset or liability.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
is recognised in other comprehensive income and accumulated in reserves within equity. The gain or loss relating
to the ineffective portion is recognised immediately in profit or loss within finance cost.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects the
profit or loss. The gain or loss relating to the ineffective portion of interest rate swaps and cross currency interest
rate swaps hedging variable rate borrowings is recognised in profit or loss within finance costs.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for
hedge accounting, the accounting of any cumulative deferred gain or loss and deferred cost of hedging included
in equity depends on the nature of the underlying hedge transaction. For cash flow hedge which resulted in the
recognition of a non-financial asset, the cumulative amount in equity shall be included in the initial cost of the asset.
For other cash flow hedges, the cumulative amount in equity is reclassified to profit or loss in the same period
that the hedged cash flows affect profit or loss. When hedged future cash flows or forecast transactions are no
longer expected to occur, the cumulative gain or loss and deferred cost of hedging that was reported in equity is
immediately reclassified to profit or loss within finance costs.

96
(g) Derivative and hedging activities (continued)
Hedge documentation
The Group documented at the inception of the transaction, the relationship between hedging instruments and
hedged items and its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that
were used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair
values or cash flows of hedged items.
The Group documents at the inception of the hedge relationship, the economic relationship between hedging
instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected
to offset changes in the cash flows of hedged items. The Group documents its risk management objective and
strategy for undertaking its hedge transactions.
Costs of hedging requirements: Foreign currency basis spread of cross currency interest rate swap
When swaps are used to hedge forecast transactions, the Group generally designates only the change in fair value
of the swaps related to the spot component as the hedging instrument. Gains or losses relating to the effective
portion of the change in the spot component of the swaps are recognised in the cash flow hedge reserve within
equity. The change in the foreign currency basis spread of the swaps that relates to the hedged item (‘aligned
forward element’) is recognised within other comprehensive income in the costs of hedging reserve within equity.
The deferred amounts are reclassified to profit or loss in the same period that the hedged item affects profit or loss.
(h) Impairment of non-financial assets
Assets that have an indefinite useful life (e.g. goodwill) are not subject to amortisation and are tested annually
for impairment. Other assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs of disposal and value-in-use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash flows which are largely independent of the cash
inflows from other assets or groups of assets (“cash-generating units”). Assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at each reporting date.
The impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it is
charged to the revaluation surplus. Impairment losses on goodwill are not reversed. In respect of other assets, any
subsequent increase in recoverable amount is recognised in profit or loss unless it reverses an impairment loss on
a revalued asset in which case it is taken to revaluation surplus reserves.
Annual Report 2018
97
(i) Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently 04
carried at amortised cost; any difference between initial recognised amount and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it
is probable that some or all of the facility will be drawn down. In this case, the fee is capitalised as prepayment
until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will
be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the
facility to which it relates.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss within finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the end of the reporting period.
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,
are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale.
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.
(j) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost represents material and attributable cost
of acquisition and is determined using the first in, first out method.
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion
and the estimated costs necessary to make the sale.
(k) Non-current assets (or disposal groups) held-for-sale
Non-current assets (or disposal groups) are classified as assets held-for-sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is considered highly
probable. They are stated at the lower of carrying amount and fair value less costs to sell, except for assets such
as deferred tax assets and financial assets, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair
value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset
(or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date
of derecognition.
98
(k) Non-current assets (or disposal groups) held-for-sale (continued)
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they
are classified as held-for-sale. Interest and other expenses attributable to the liabilities of a disposal group classified
as held for sale continue to be recognised.
Non-current assets classified as held-for-sale and the assets of a disposal group classified as held-for-sale are
presented separately from the other assets in the statement of financial position. The liabilities of a disposal group
classified as held-for-sale are presented separately from other liabilities in the statement of financial position.
(l) Construction contracts and conversion work
A construction contract is a contract specifically negotiated for the construction of an asset or a combination of
assets that are closely interrelated or interdependent in terms of their design, technology and functions or their
ultimate purpose or use. Conversion work represents activities conducted to convert a vessel for its intended use in
accordance to the customers’ specifications.
When the outcome of a construction contract or conversion work can be estimated reliably, contract revenue
and contract costs associated with the construction contract or conversion works are recognised as revenue and
expenses respectively by reference to the stage of completion of the contract or conversion activity at the end of the
reporting period. When it is probable that total contract costs will exceed total contract revenue, the expected loss
is recognised as an expense immediately.
Variations in contract/conversion work, claims and incentive payments are included in contract revenue to the
extent agreed with the customer and are capable of being reliably measured.
The Group uses the “percentage-of-completion method” to determine the appropriate amount to recognise in a
given period. The stage of completion is measured by reference to the contract/conversion costs incurred up to the
end of the reporting period as a percentage of total estimated costs for each contract/conversion.
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to
the extent of contract costs incurred that is probable will be recoverable.
For conversion work in relation to vessels built to customers’ specifications, these are shown as vessel under
construction (under property, plant and equipment) during the conversion phase. Upon completion of the conversion
activities, these amounts are recognised as finance lease receivables when the lease commences. Contractual
milestone billings during the conversion phase are presented as advances from customers.
For construction contracts, the Group presents as an asset the gross amounts due from customers for contract work
for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceed progress
billings. Progress billings not yet paid by customers and retention are included within “trade receivables”. The
Group presents as a liability the gross amounts due to customers for contract work for all contracts in progress for
which progress billings exceed costs incurred plus recognised profits (less recognised losses).
Annual Report 2018
99
(m) Revenue recognition
Accounting policies applied until 31 December 2017 04

Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and services
in the ordinary course of the Group’s activities. Revenue is shown net of goods and services tax, value-added tax,
returns, rebates and discounts and amounts collected on behalf of third parties and after eliminating sales within
the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as
described below. The Group bases its estimates on historical results, taking into consideration the type of customer,
the type of transaction and the specifics of each arrangement based on contractual terms.
Revenue is recognised on the following basis:
(i) Vessel charter fees and support services
Vessel charter fees from FPSO contracts are recognised over the lease term based on classification of the
contracts as finance or operating lease determined at the inception of the lease (see accounting policy
Section C(o)). Charter hire income from other vessels is recognised upon rendering of services to customers.
Vessel sundry income, commission and agency income are recognised when services are rendered to the
customers and recognised on an accrual basis.
(ii) Vessel construction, conversion and engineering services
Revenue from construction contracts and conversion works in relation to vessels built to customers’ specifications
are accounted for under the percentage-of-completion method (see accounting policy Section C(l)).
(iii) Interest income
Interest income is recognised using the effective interest method. When a loan and receivable is impaired,
the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow
discounted at the original effective interest rate of the instrument and continues unwinding the discount as
interest income. Interest income on impaired loan and receivables are recognised using the original effective
interest rate.
(iv) Dividend income
Dividend income is recognised when the Group’s right to receive payment is established. This applies even
if they are paid out of pre-acquisition profits. However, the investment may need to be tested for impairment
as a consequence.
(v) Rental income
The Group earns rental income from the rental of premises to third parties. Rental income is recognised on
an accrual basis.
100
(m) Revenue recognition (continued)
Accounting policies applied until 31 December 2017 (continued)
(vi) Sale of goods
Sales are recognised upon delivery of products and customer acceptance, if any, or performance of services,
net of sales taxes and discounts, and after eliminating sales within the Group.
(vii) Central overhead fees
The Company earns central overhead fees from its subsidiaries and joint ventures. Central overhead fees are
recognised on an accrual basis.
(viii) Management fees
The Group earns management fees from its subsidiaries and joint ventures. Management fees are recognised
on an accrual basis.
(ix) Engineering services
Revenue represents the invoiced value for engineering services performed and cost recovery incurred less
discounts and rebates, of which engineering services and cost recovery are recognised on an incurred basis.
Revenue from contracts with customers
Revenue from contracts with customers is recognised by reference to each distinct performance obligation in the
contract with customers. Revenue from contracts with customers is measured at its transaction price, being the
amount of consideration which the Group expects to be entitled in exchange for transferring promised goods or
services to a customer, net of goods and service tax, value added tax, returns, rebates and discounts.
Revenue from contracts with customers is measured at its transaction price, which is allocated to each performance
obligation on the basis of the relative standalone selling prices of each distinct goods or services promised in the
contract. Depending on the substance of the contract, revenue is recognised when the performance obligation is
satisfied, which may be at a point in time or over time.
When there is a change order, variation or amendment to the contracts, the Group will account for it as a separate
contract if there is an increase in the scope of work with distinct performance obligations.
Annual Report 2018
101
Accounting policies applied from 1 January 2018 (continued) 04

Revenue from contracts with customers (continued)
The Group recognises revenue as follows:
(i) Vessel charter fees and support services
FPO segment
The Group is contracted to provide charter of vessels and support services such as operation and maintenance
of the vessels. Charter of vessels are accounted under the requirement of MFRS 117 “Leases” and disclosed
in Section C(o)(ii).
The contracts may include vessel demobilisation services and major maintenance works which are treated
as distinct performance obligations and will be satisfied in the period when the services are performed. The
transaction price of the contracts is allocated to these performance obligations based on its standalone selling
price, estimated by using the expected costs to be incurred and a rate of return which is applicable to the
individual performance obligation.
The contracts of the Group are negotiated separately for charter of vessels and for support services. The
Group treats vessel demobilisation services to be part of the contract for charter of vessels. The Group treats
major maintenance works to be part of the contract for support services. These performance obligations are
measured and recognised over time when the services are performed.
Any supplementary payments included in contracts are assessed as part of variable considerations and
adjusted to the transaction price of the contracts.
OMS segment
The Group is contracted to provide time charter services using offshore support vessels (“OSV”) fleets. Time
charter services relates to short-term vessel charter operated by the Group.
The Group determines time charter services as a single performance obligation. Other scope of work includes
meals, accommodation, ship management services, vessel sundry income, commission and agency services
which are considered as separate performance obligations and are recognised over time when services are
rendered to the customers. Transaction price is allocated to each performance obligation on the basis of the
relative standalone selling prices specific to each OSV fleet and is recognised on a straight-line basis over
the tenure of the contract.
102
The Group recognises revenue as follows: (continued)
(ii) Construction and vessel conversion works
The Group generates revenue from vessel conversion works when contracted to perform conversion works
whereby vessels are built to customers’ specifications which comprise multiple deliverables that form a
significant integration service.
The Group also enters into construction contracts with customers specifically negotiated for the construction
of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design,
technology and functions or their ultimate purpose for use.
The Group has regarded the construction contracts and vessel conversion works contracts to be single
performance obligation respectively. As one of the following criteria is met, the Group recognises revenue
from construction and vessel conversion works over time:
• the customer simultaneously receives and consumes the benefits provided by the entity’s performance
as the entity performs;
• the Group’s performance creates or enhances an asset (for example, work in progress) that the customer
controls as the asset is created or enhanced; or
• the Group’s performance does not create an asset with an alternative use to the Group and the entity
has an enforceable right to payment for performance completed to date.
The transaction price of the contracts will be recognised as revenue progressively based on the percentage
of completion determined by reference to the cost incurred to date relative to the total expected costs.
The Group provides warranties on completed projects against potential defects and do not treat these
warranties as a separate performance obligation.

(iii) Sale of goods
Sale of goods such as scraps are recognised at a point in time upon delivery of products and customer
acceptance, if any, or performance of services, net of sales taxes and discounts, and after eliminating sales
within the Group.
(iv) Central overhead fees
The Company earns central overhead fees from its subsidiaries and joint ventures. Central overhead fees are
recognised over time when services are rendered.
Annual Report 2018
103
Accounting policies applied from 1 January 2018 (continued) 04

The Group recognises revenue as follows: (continued)
(v) Management fees
The Group earns management fees from its subsidiaries and joint ventures. Management fees are recognised
over time when services are rendered.
(vi) Engineering services
Revenue represents the invoiced value for engineering services performed and cost recovery incurred less
discounts and rebates, of which engineering services and cost recovery are recognised over time when the
services are rendered.
Revenue from other sources
Specific revenue recognition criteria for other revenue and income earned by the Group are as follows:
(i) Rental income
The Group earns rental income from the rental of premises to third parties. Rental income is recognised on
a straight-line basis over the tenure under the lease arrangement. See accounting policy Section C(o) for the
accounting by lessor.
(ii) Dividend income
Dividend income is recognised when the Group’s right to receive payment is established. This applies even
if they are paid out of pre-acquisition profits. However, the investment may need to be tested for impairment
as a consequence.
(iii) Interest income
Interest income is recognised using the effective interest method.
Interest income from financial assets at FVTPL is recognised as part of other operating income in the statement
of profit or loss.
Interest income on financial assets at amortised cost and financial assets at FVOCI calculated using the
effective interest method is recognised in the statement of profit or loss as part of other income.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial
asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial
assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of
the loss allowance).
104
Contract assets and contract liabilities
Contract asset is the right to consideration for goods or services transferred to the customers. In the case of vessel
charter contracts and construction contracts, contract asset is the excess of cumulative revenue earned over the
billings to-date.
The impairment loss of contract asset is charged to profit or loss (see accounting policy Section C(d)(iv)).
Contract liability is the obligation to transfer goods or services to customer for which the Group has received
the consideration in advance or has billed the customer. In the case of vessel charter contracts and construction
contracts, contract liability is the excess of the billings to-date over the cumulative revenue earned.
Costs incurred in obtaining a contract
Prior to securing a contract with customers, the Group will undergo a project bidding process. Costs incurred
during the project bidding process are determined as costs to obtain a contract. Costs to obtain a contract that
would have been incurred regardless of whether the contract was obtained shall be recognised as an expense
when incurred, unless those costs are explicitly chargeable to the customer are recognised as an asset. The asset
recognised will be amortised on a systematic basis consistent with the transfer of goods or services to the customer
to which the asset relates.
(n) Foreign currencies
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (the “functional currency”). The financial
statements of the Group and the Company are presented in Ringgit Malaysia, which is the Company’s
functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. However,
exchange differences are deferred in other comprehensive income when they arose from qualifying cash flow
hedges or are attributable to items that form part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented
in profit or loss within finance costs.
Translation difference on non-monetary financial assets, such as equities classified as financial assets at
FVOCI, are included in other comprehensive income.
Annual Report 2018
105
(n) Foreign currencies (continued)
(iii) Group companies 04

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
• assets and liabilities for each statement of financial position presented are translated at the closing rate
at the date of that statement of financial position;
• income and expenses for each statement of income are translated at average exchange rates (unless
this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the rate on the dates of the
transactions); and
• all resulting exchange differences are recognised as a separate component of other comprehensive
income.
On consolidation, exchange differences arising from translation of any net investment in foreign entities and
of borrowings and other financial instruments designated as hedges of such investments are recognised in
other comprehensive income.
On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation or
a disposal involving loss of joint control over a joint venture that includes a foreign operation), all of the
exchange differences relating to that foreign operation recognised in other comprehensive income and
accumulated in the separate component of equity are reclassified to profit or loss, as part of the gain or
loss on disposal. In the case of a partial disposal that does not result in the Group losing control over a
subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences
is re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial
disposals (that is, reductions in the Group’s ownership interest in joint ventures that do not result in the
Group losing joint control), the proportionate share of the accumulated exchange difference is reclassified
to profit or loss.
Intercompany loans where settlement is neither planned nor likely to occur in the foreseeable future with no
contractual terms of repayment, are treated as part of the parent’s capital contribution in subsidiaries (net
investments). Translation differences arising therefrom are recognised in other comprehensive income.
106
(o) Leases
A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments,
the right to use an asset for an agreed period of time.
(i) Accounting by lessee
Finance leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of
ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement
at the lower of the fair value of the leased property and the present value of the minimum lease payments.
The corresponding rental obligations, net of finance charges, are included in other short-term and long-term
payables.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate
of interest on the remaining balance of the liability. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of
the useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain
ownership at the end of the lease term.
Initial direct costs incurred by the Group in negotiating and arranging finance leases are added to the
carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on
the same basis as the lease expense.
Operating leases
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessors
are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessors) are charged to profit or loss on a straight-line basis over the lease period.
Contingent rents are recognised as an expense in profit or loss when incurred.

Annual Report 2018
107
(o) Leases (continued)
(ii) Accounting by lessor 04

Finance leases
Leases where the Group has transferred substantially risks and rewards incidental to ownership of the leased
assets to the lessees, are classified as finance leases.
The leased asset is derecognised and the present value of the lease receivable (net of initial direct costs for
negotiating and arranging the lease) is recognised in the statement of financial position as “finance lease
receivables”. The difference between the gross receivable and the present value of the lease receivable is
recognised as unearned finance income.
Each lease payment received is applied against the gross investment in the finance lease receivables to
reduce both the principal and the unearned finance income. The finance income is recognised in profit or loss
on a basis that reflects a constant periodic rate of return on the net investment in the finance lease receivables.
Any direct costs incurred by the Group in negotiating and arranging finance leases are added to finance
lease receivables and recognised as an expense in profit or loss over the lease term on the same basis as the
lease income.
When there is change in estimates, renewal and modification of a lease agreement that does not result in
reclassification of the lease, the Group will apply the MFRS 9 derecognition guidance to decide whether the
lease receivable should be derecognised and the modified agreement accounted for as a new lease.
Operating leases
Leases where the Group retains substantially the risks and rewards incidental to ownership of the leased
assets are classified as operating leases. Rental income from operating leases (net of any incentives given to
the lessees) is recognised in profit or loss on a straight-line basis over the lease term.
Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the
carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on
the same basis as the lease income.
Contingent rents are recognised as income in profit or loss when earned.

108
(p) Current and deferred income tax
Tax expense for the period comprises current, withholding and deferred taxes. The income tax expense or credit
for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate
for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses. Tax is recognised in profit or loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive
income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Group’s subsidiaries and joint ventures operate and generate
taxable income.
The Group periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities. This liability is measured using the single best estimate of most likely outcome.
Deferred tax is recognised, using the liability method, on temporary differences arising between the amounts
attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred tax is also
not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax
is determined using tax rates (and tax laws) that have been enacted or substantially enacted by the end of the
reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax
liability is settled.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, unused tax losses or unused tax credits can be utilised.
Deferred tax liability is recognised for all taxable temporary differences associated with investments in subsidiaries
and joint ventures, except where the timing of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised on deductible temporary differences arising from investments in subsidiaries
and joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and
there is sufficient taxable profit available against which the deductible temporary difference can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred tax assets and liabilities relate to taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle
the balances on a net basis.
Annual Report 2018
109
(q) Employee benefits
(i) Short-term employee benefits 04

Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits that are expected to
be settled wholly within 12 months after the end of the reporting period in which the employees render the
related service are recognised in respect of employees’ services up to the end of the reporting period and
are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented
as other payables and accruals in the statement of financial position.
(ii) Defined contribution plan
The Group’s contributions to Employees Provident Fund, a defined contribution plan, are charged to profit
or loss in the period to which they relate. Once the contributions have been paid, the Group have no further
financial obligations.
(iii) Share-based payment
The Group operates two equity-settled share-based compensation plans (“Employee Share Options Scheme”
or “ESOS” and “Management Incentive Plan” or “MIP”) under which the Group receives services from
employees as consideration for equity options (“ESOS Options”) or shares granted (“MIP shares”) over
ordinary shares of the Company. The fair value of the ESOS options or the MIP shares granted in exchange
for the services of the employees are recognised as employee benefit expense with a corresponding increase
to share option reserve within equity. The total amount to be expensed is determined by reference to the fair
value of the ESOS options or MIP shares granted:
• excluding the impact of any service and non-market performance vesting conditions; and
• including the impact of any non-vesting conditions.
Non-market vesting conditions and service conditions are included in assumptions about the number of ESOS
options or MIP shares that are expected to vest.
The total expense is recognised over the vesting period, which is the period over which all of the specified
vesting conditions are to be satisfied. At the end of the reporting period, the Group revises its estimates of the
number of ESOS options or MIP shares that are expected to vest based on the non-market vesting conditions.
It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding
adjustment to share option reserve in equity.
110
(q) Employee benefits (continued)
(iii) Share-based payment (continued)
When the ESOS options are exercised, or when the MIP shares are issued, the Company issues new shares.
The proceeds received net of any directly attributable transaction costs are credited to share capital when the
ESOS options are exercised, or when the MIP shares are issued. When ESOS options are not exercised and
lapsed, the share option reserve is transferred to retained earnings. For MIP shares, the share option reserve
is transferred to retained earnings if the employment is terminated or ceased prior to the vesting date.

If the terms of an equity-settled amount are modified, at a minimum, an expense is recognised as if the terms
had not been modified. An additional expense is recognised for any modification that increases the total fair
value of the share-based payment arrangement or is otherwise beneficial to the employee, as measured at
the date of modification.
If an equity award is cancelled by forfeiture, when the vesting conditions (other than market conditions) have
not been met, any expense not yet recognised for that award, as at the date of forfeiture, is treated as if it
had never been recognised. At the same time, any expense previously recognised on such cancelled equity
awards are reversed from the accounts effective as at the date of forfeiture.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation
of earnings per share.
(iv) Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement
date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group
recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer
withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within
the scope of MFRS 137 and involves the payment of termination benefits. In the case of an offer made to
encourage voluntary redundancy, the termination benefits are measured based on the number of employees
expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period
are discounted to their present value.
Annual Report 2018
111
(r) Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of 04
business. Other receivables generally arise from transactions outside the usual operating activities of the Group.
If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are
classified as current assets. If not, they are presented as non-current assets.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment (see accounting policy Section C(d)(iv)).
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less loss allowance (see accounting policy Section C(d)(iv)).
(s) Goodwill
Goodwill arises from a business combination and represents the excess of the aggregate of fair value of
consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any
previous equity interest in the acquiree over the fair value of the net identifiable assets acquired and liabilities
assumed on the acquisition date. If the fair value of consideration transferred, the amount of non-controlling interest
and the fair value of previously held interest in the acquiree are less than the fair value of the net identifiable assets
of the acquiree, the resulting gain is recognised in profit or loss.
Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in
circumstances indicate that it might be impaired, and carried at cost less accumulated impairment losses. For
the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash
generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination.
Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which
the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.
The carrying value of goodwill is compared to the recoverable amount, which is the higher of value-in-use and the
fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not subsequently
reversed.
(t) Trade payables and accruals
Trade payables and accruals represent liabilities for goods or services provided to the Group prior to the end of
financial year which are unpaid. Trade payables and accruals are classified as current liabilities unless payment is
not due within 12 months after the reporting period. If not, they are presented as non-current liabilities.
Trade payables and accruals are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method.
112
(u) Provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result of past events,
where it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of
the amount can be made.
Where the Group expects a provision to be reimbursed by another party, the reimbursement is recognised as
a separate asset but only when the reimbursement is virtually certain. Provisions are not recognised for future
operating losses.
Provisions are measured at the present value of management’s best estimate of the expenditures expected to be
required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised
as finance costs.
(i) Provision for demobilisation costs
Provision for demobilisation costs is made based on the estimated cost of demobilising the vessels at the end
of the vessels’ useful lives. When this provision relates to an asset with sufficient future economic benefits, a
demobilising asset is recognised as property, plant and equipment and accounted for in accordance with the
accounting policy set out in Section C(c).
(v) Contingent assets and liabilities
The Group does not recognise contingent assets and liabilities, but disclose its existence in the financial statements,
if any.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present
obligation that is not recognised because it is not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in the extremely rare case where there is a liability that cannot
be recognised because it cannot be measured reliably. However, contingent liabilities do not include financial
guarantee contracts. A contingent asset is a possible asset that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the
Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic
benefits are probable, but not virtually certain.
(w) Cash and cash equivalents
For the purpose of the statement of cash flows, cash equivalents are held for the purpose of meeting short-term cash
commitments rather than for investment or other purposes. Cash and cash equivalents comprise cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of
3 months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
Annual Report 2018
113
(x) Share capital
(i) Classification 04
Ordinary shares are classified as equity. Other shares are classified as equity and/or liability according to
the economic substance of the particular instrument.
(ii) Share issue costs
Incremental costs directly attributable to the issue of new shares are shown as a deduction, net of tax, in
equity from the proceeds.
(iii) Dividends
Liability is recognised for the amount of any dividend declared, being appropriately authorised and no
longer at the discretion of the Group, on or before the end of the reporting period but not distributed at the
end of the reporting period.
(y) Earnings per share
Basic earnings per share (“EPS”) is calculated by dividing the Group’s profit attributable to owners of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year and excluding treasury shares.
Diluted earnings per share adjusts the figures in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares
and the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
(z) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Executive
Officer. The Chief Executive Officer, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified to make strategic decisions. Segment revenue and expenses are those
directly attributable to the segments and include any expenses where a reasonable basis of allocation exists.
114
D CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated by the Directors and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are
anticipated to have material impact to the Group’s results and financial position are tested for sensitivity to changes in
the underlying parameters. The estimates and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year are outlined below:
(a) Classification of lease contracts
The following are the areas of judgement applied in determining the classification of lease contracts between
finance lease and operating lease under MFRS 117 “Leases” to the recognition of revenue by the Group:
(i) Determination of lease term
The Group determines the lease term based on the “non-cancellable period” for which the Group has
contracted to lease the asset together with any further terms for which the lessee has the option to continue to
lease the asset, when at lease inception it is reasonably certain that the lessee will exercise the option.
(ii) Determination of purchase option
The lessee’s purchase option is considered in classifying the lease contract. At lease inception, if it is not
reasonably certain that the option will be exercised, the option will not be a part of the basis for classification.
If the lessee has an option to purchase the asset at a price that is expected to be sufficiently lower than fair
value at the date the option becomes exercisable, the exercise of the option is regarded as reasonably
certain. The evaluation of the term “reasonably certain” involves judgement.
(b) Revenue
Allocation of total consideration to performance obligation
Contracts for leasing and operation of vessels are usually negotiated together. As the consideration for the leasing
component and operation component of vessels are contracted together, they may not represent the fair value of
the individual component separately. The total consideration paid is allocated between each component based on
fair value of each component. This requires estimation based on expected costs to be incurred and a rate of return
which is applicable to the performance obligation to be determined at lease inception.
(c) Impairment of non-financial assets
Property, plant and equipment and non-current assets held-for-sale
The recoverable amount of each vessel is based on estimates and judgement with respect to key assumptions
such as utilisation rates, daily charter rates, discount rate and residual value. Several of the Group’s contracts
are long-term in nature and there can be no certainty that the continuity of these contracts will not be materially
affected by conditions such as a deterioration in the oil and gas market or a specific client’s financial condition.
Should the actual conditions be different to those in our assumptions, there may be an adverse effect on the
recoverable amount of non-financial assets or non-current assets held-for-sale.
Annual Report 2018
115
D CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(c) Impairment of non-financial assets (continued)
Investment in subsidiaries 04
The recoverable amounts of investment in subsidiaries have been determined based on value-in-use (“VIU”)
calculations, and is based on estimates and judgement with respect to key assumptions such as revenue growth,
ability to secure future contracts, funding requirements, exchange rates, and discount rate. The calculations of
projected future cash flows from the subsidiaries are inherently judgemental and susceptible to change from period
to period due to the assumptions stated above.
(d) Impairment of financial assets
The Group measures impairment of financial assets through the ECL model which incorporates elements of
probability-weighted amount that is determined by evaluating a range of possible outcomes, time value of money,
and information about past events, current conditions and forecasts of future economic conditions. The loss
allowance for financial assets are based on assumptions about risk of default and expected loss rates. The Group
uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the
Group’s past history, existing market conditions as well as forward looking estimates at the end of the reporting
period.
In assessing the ECL of amounts due from subsidiaries, the Group further considers recovery strategies of repayment
in the event if the amount is demanded to be repaid and expected future cash flows in the event the Group is not
expected to fully recover the amount outstanding. The calculations of projected future cash flows of the subsidiaries
are inherently judgemental and susceptible to change from period to period due to the assumptions made.
(e) Vessels’ useful lives and residual values
Depreciation depends on the estimated useful lives of the vessels and residual values at the end of their useful lives.
The estimated useful lives are based on previous experience, knowledge and condition of the vessels owned by
the Group and is normally equal to the design life of the vessel. Assumptions about residual value are based on
prevailing market conditions and expected value to be obtained for these vessels at the end of their useful lives in
the future. These assumptions by their nature may differ from actual outcome in the future.
(f) Current and deferred taxation
The Group is subject to income and withholding taxes in numerous jurisdictions in which the Group operates.
Significant judgement is required in determining the worldwide provision for these taxes based on interpretation
of current legislation. There are certain transactions and calculations for which the ultimate tax determination is
uncertain during the ordinary course of business. The Group recognises liabilities for tax based on estimates of
assessment of the tax liability due.
(g) Liquidated damages (“LD”) and supplementary payments
The Group is subject to LD and supplementary payments arising from delays in completion of the FPSO conversion
projects. The assessment of likelihood of LD requires significant judgement relating to the time of completion and
the contracted costs to be incurred upon finalisation of the projects and outcome of negotiation with customers.
116
D CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)
(h) Demobilisation costs
Demobilisation costs are capitalised as part of property, plant and equipment based on estimate of costs that are
expected to be incurred upon the end of the vessel’s useful life. Provisions for demobilisation costs are measured
at the present value of expected expenditures by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and risks specific to the obligation.
E FINANCIAL AND CAPITAL RISK MANAGEMENT OBJECTIVES AND POLICIES
This section presents information about the Group’s and the Company’s exposure to risks resulting from its use of
financial instruments, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s
management of capital.
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency exchange risk
and interest rate risk), credit risk and liquidity risk. The Group’s overall financial risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial
performance. The Board of Directors identifies and evaluates the financial risks in close co-operation with the Group’s
management.
Foreign currency exchange risk
The Group is exposed to various currencies, primarily, United States Dollar (“USD”) and Russian Ruble (“RUB”) (2017:
USD and RUB). The Group’s foreign currency exchange risk arises from the revenue recognised and purchases of
material, spares and services for maintenance of its vessels.
The objectives of the Group’s foreign currency exchange risk management policies are to allow the Group to effectively
manage the foreign exchange fluctuation that may arise from future commercial transactions and recognised assets
and liabilities. Foreign currency exchange forward contracts are used to manage foreign currency exchange exposures
arising from all known material foreign currency denominated commitments as and when they arise and to hedge the
movements in exchange rates by establishing the rate at which a foreign currency monetary item will be settled. Gains
and losses on foreign currency exchange forward contracts entered into as hedges of foreign currency monetary items
are recognised in the financial statements when the exchange differences of the hedged monetary items are recognised
in the financial statements. Cross currency interest rate swap contracts are also used to hedge the volatility in the
cash flows attributable to variability in the other currency denominated borrowings once identified to maturity of the
borrowings.
The Group’s exposure to foreign currency at the end of the financial year is as follows:
Denominated in currencies other

than functional currencies
United Denominated
States Russian in functional
At 31 December 2018 Dollar Ruble Others currencies Total
RM’000 RM’000 RM’000 RM’000 RM’000
Trade receivables 7,779 - - 747,504 755,283
Deposits, cash and bank balances 42,118 217,689 38,580 928,037 1,226,424
Trade payables and accruals (4,549) (2,432) (26,867) (529,679) (563,527)
45,348 215,257 11,713 1,145,862 1,418,180
Annual Report 2018
117
E FINANCIAL AND CAPITAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Foreign currency exchange risk (continued)
The Group’s exposure to foreign currency at the end of the financial year is as follows: (continued) 04
Denominated in currencies other
than functional currencies
United Denominated
States Russian in functional
At 31 December 2017 Dollar Ruble Others currencies Total
RM’000 RM’000 RM’000 RM’000 RM’000
Trade receivables 598 - 2,224 724,331 727,153
Deposits, cash and bank balances 99,364 298,811 23,602 1,424,337 1,846,114
Trade payables and accruals - - (40,155) (558,628) (598,783)
99,962 298,811 (14,329) 1,590,040 1,974,484
The sensitivity of profit or loss to changes in the exchange rates arises mainly from USD and RUB (2017: USD and RUB)
denominated balances as illustrated in the following table:
Impact on (loss)/profit
before taxation
[Increase/(Decrease)]
Currency Strengthened by 2018 2017
RM’000 RM’000
USD 10% (4,535) 9,996
RUB 10% (21,526) 29,881
The Company’s exposure to foreign currency at the end of the financial year is as follows:
Denominated in currencies
other than functional
currency
Denominated
United States in functional
At 31 December 2018 Dollar Others currency Total
RM’000 RM’000 RM’000 RM’000
Deposits, cash and bank balances 40,307 65 18,931 59,303
Denominated in currencies
other than functional
currency
Denominated
United States in functional
At 31 December 2017 Dollar Others currency Total
RM’000 RM’000 RM’000 RM’000
Deposits, cash and bank balances 45,015 65 18,326 63,406
118
Foreign currency exchange risk (continued)
The sensitivity of profit or loss to changes in the exchange rates arises mainly from USD (2017: USD) denominated
balances as illustrated in the following table:
before taxation
[Increase/(Decrease)]
Currency 2018 2017
Strengthened by RM’000 RM’000
USD 10% 4,031 4,502
A similar percentage decrease in the exchange rate would have an equal but opposite effect.
The Group and the Company are exposed to foreign currency exchange risk on intercompany balances, where the
balances are not denominated in functional currencies of the entities involved. Foreign currency exchange differences
arising from net investments in foreign operations are recognised in other comprehensive income of the Group.
Foreign currency exchange differences arising from translation of financial position of Group entities that has a functional
currency different from Ringgit Malaysia are also recognised as a separate component of other comprehensive income.
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to the Group’s borrowings with floating interest rates.
In respect of managing interest rate risks, the floating interest rates of certain long-term loans are hedged in accordance
with the Group’s policy by fixed rate swaps to mirror the maturity period. Short-term facilities which bear interest at
floating interest rates are not hedged.
The contractual interest rates on borrowings and derivative financial instruments are disclosed in Notes 33 and 34
respectively.
As at the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments is as follows:
Group 2018 2017

RM’000 RM’000
Variable rate instruments
Financial liabilities, comprising term loans and revolving credits 8,850,523 9,993,038
Less: Interest rate swap contracts (4,102,923) (4,373,867)
Less: Cross currency interest rate swap contract - (21,304)
Total variable rate instruments not hedged 4,747,600 5,597,867
Annual Report 2018
119
Interest rate risk (continued)
The sensitivity of the Group’s (loss)/profit before taxation for the financial year and equity to a reasonable possible 04
change in RM and USD interest rates with all other factors held constant and based on composition of liabilities with
floating interest rates as at the reporting date are as follows:
before taxation Impact on equity (1)
Group 2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
RM
- increased by 0.5% (2017: 0.5%) - 167 - -
- decreased by 0.5% (2017: 0.5%) - (167) - -
USD
- increased by 0.5% (2017: 0.5%) (24,140) (28,069) 20,515 21,449
- decreased by 0.5% (2017: 0.5%) 24,140 28,069 (20,515) (21,449)

(1)
Represents cash flow hedging reserve
The impact on (loss)/profit before taxation for the financial year is mainly as a result of interest expenses on floating
interest rate borrowings not in a designated hedging relationship. For borrowings in a designated hedging relationship,
as these are effectively hedged, the interest rate movements will not have any impact on profit or loss.
Credit risk
Credit risk arises from contractual cash flows of debt investment carried at FVOCI, favourable derivative financial
instruments and deposits with banks and financial institutions, as well as credit exposures to external customers and
related parties, including outstanding receivables.
The Group’s activities limit the exposure and credit risk concentration to a few major customers. The Group employs a
credit policy that ensures customers are subjected to credit checks and outstanding accounts are followed up on a timely
basis.
Several of the Group’s contracts are long-term. The Group’s credit risk continues for the entire contractual period. There
can be no guarantee that the financial position of the Group’s major customers will not materially change during the
contracted period. Given the limited number of major customers of the Group and the significant portion they represent
to the Group’s income, the inability of one or more of them to make full payment may have a significant adverse impact
on the financial position of the Group.
The carrying amount of each class of financial assets mentioned in Note 44 to the financial statements represents the
Group’s maximum exposure to credit risk.
The Company is exposed to credit risk arising from financial guarantee contracts given to banks for subsidiaries’
borrowings where the maximum credit risk exposure is the amount of borrowings utilised by the subsidiaries and the
interest charged on the borrowings.
120
Credit risk (continued)
Measurement of Expected Credit Loss (“ECL”) Model
The Group and the Company has the following financial assets that are subject to the ECL model:
• Finance lease receivables

• Accrued lease rentals
• Trade receivables
• Other receivables and deposits excluding prepayments
• Contract assets
• Amounts due from joint ventures
• Amounts due from subsidiaries
While deposits, cash and bank balances are also subject to the impairment requirements of MFRS 9, the identified
impairment loss was immaterial.
Simplified approach for trade receivables, accrued lease rentals and contract assets
Debtors are segregated into 5 credit ratings (A to E) based on financial position, expected risk of default on payments,
and receivables aging as at the reporting date. Accrued lease rentals and contract assets are similarly categorised
together with the debtors based on assigned credit ratings.
The expected loss rates are based on payment profiles over a period of 5 years before reporting date and the
corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect
current and forward-looking information on conditions specific to the debtors which may affect their ability to settle the
receivables.
The Group has considered expected oil price and geographical area which the debtor operates in and concluded that
the effect on expected changes in these factors do not significantly affect the historical loss rates. No significant changes
to estimation techniques or assumptions were made during the reporting period.
General 3-stage approach for all financial assets except trade receivables, accrued lease rentals and contract assets
For finance lease receivables and amounts due from joint ventures, the Group uses the following categories which reflect
their credit risk and how the loss allowance is determined for each of these categories.
Basis for
recognition of ECL
Category Definition of category provision
Performing Debtors have low risk of default and a strong capacity to meet contractual 12 month ECL
cash flows
Underperforming Debtors for which there is a significant increase in credit risk or significant Lifetime ECL
credit risk is presumed if repayments are 180 days past due
Non-performing Repayments are 365 days past due and there is evidence indicating the Lifetime ECL
asset is credit-impaired
Write-off There is evidence indicating that there is no reasonable expectation of Asset is written off
recovery based on unavailability of debtor’s sources of income or assets
to generate sufficient future cash flows to repay the amount
Annual Report 2018
121
Credit risk (continued)
Measurement of Expected Credit Loss (“ECL”) Model (continued) 04

General 3-stage approach for all financial assets except trade receivables, accrued lease rentals and contract assets
(continued)
Based on the above, loss allowance is measured on either 12 month ECL or lifetime ECL using a PD x LGD x EAD
methodology as follows:
• PD (“probability of default”) – the likelihood that the debtor would not be able to repay during the contractual period;
• LGD (“loss given default”) – the percentage of contractual cash flows that will not be collected if default happens; and
• EAD (“exposure at default”) – the outstanding amount that is exposed to default risk.
In deriving the PD and LGD, the Group considers historical data and assessed forward-looking macroeconomic data
which may be applicable to each debtor. The Group has considered expected oil price and geographical area which
the debtor operates in and concluded that the effect on expected changes in these factors do not significantly affect the
historical loss rates. Loss allowance is measured at a probability-weighted amount that reflects the possibility that a credit
loss occurs and the possibility that no credit loss occurs. No significant changes to estimation techniques or assumptions
were made during the reporting period.
For amounts due from subsidiaries which are repayable on demand, the ECL is based on the assumption that repayment
of the loan is demanded at reporting date. The Company assesses the recovery strategies of repayment from the
subsidiaries in the event if the amount is demanded to be repaid and if the Company is expected to fully recover the
amount outstanding, the ECL will be limited to the effect of discounting the amount due from the subsidiary at an effective
interest rate of 0% if the loan is interest free. Impairment would be recognised if the Company does not expect to fully
recover the amount outstanding.
Reconciliation of loss allowance
The loss allowance for trade receivables and accrued lease rentals as at 31 December 2018 which was assessed using
the simplified approach reconciles to the opening loss allowance as disclosed in Note 21 and Note 22 respectively.
The loss allowance for amounts due from joint ventures and other receivables and deposits, as at 31 December 2018
which was assessed using the general 3-stage approach is disclosed in Note 18 and Note 23 respectively.
122
Liquidity risk
As at 31 December 2018, the Group’s current liabilities exceeded its current assets by RM6,092.7 million due to the
following:
(i) Non-current borrowings for AKPL of RM1,782.9 million remains classified in current liabilities due to existing
non-compliances by AKPL under this loan, in particular the Armada Kraken FPSO project not achieving final
acceptance by the scheduled date, where project lenders currently have the right to issue, but have-to-date not
issued, a notice for full prepayment of the loan. Thus, AKPL did not have an unconditional right to defer payment
of the non-current borrowings for at least 12 months after the balance sheet date.
In view that the Armada Kraken FPSO has achieved final acceptance in September 2018, the Group is currently in
discussion with project lenders to remove the risk of having to prepay the loan as a result of existing non-compliances
by AKPL. The Group expects to alleviate such risk in 2019.
(ii) Reclassification of Sukuk Murabahah of RM1,499.4 million from non-current liabilities to current liabilities, as the
Group has not met the financial covenant of net debt over earnings before interest, taxation, depreciation and
amortisation (“EBITDA”) for the financial year ended 31 December 2018. This is mainly because the computation
includes non-cash impairment expenses recognised during the year.
In April 2019, the Group received a waiver on the covenant breach from the Sukuk holders. Accordingly, the
current liabilities will be reclassified to non-current liabilities in 2019.
(iii) Current secured term loan of AFGSML bridge loan amounting to RM186.5 million (USD45.0 million) is classified
as current liabilities, which is intended to be refinanced via long term financing. The lender had previously reserved
the right to issue a cancellation notice for full repayment of the loan, and extended the repayment date from
28 February 2019 to 12 April 2019.
In April 2019, the lender waived its right to issue a cancellation notice for full repayment of the loan and also
further extended the repayment date of the loan from 12 April 2019 to 11 October 2019.
The Group has identified alternatives to refinance the secured bridge loan via long term financing. As the asset
involved is in a long term secured charter with strong operational performance, the Directors believe that there is
a high likelihood of securing alternative financing.
(iv) The unsecured term loans with a carrying amount of RM1,578.0 million due within 12 months from the balance
sheet date are classified as current liabilities. The Group has not met the financial covenant of net debt over EBITDA
for the financial year ended 31 December 2018.
(v) The revolving credit facilities of RM1,246.9 million are due within 12 months from the balance sheet date and are
classified as current liabilities.
Annual Report 2018
123
Liquidity risk (continued)
In April 2019, the Group signed a facility agreement to refinance the unsecured term loans and revolving credit facilities 04
referred to in (iv) and (v) above (the “Facility Agreement”). The salient terms of the new unsecured term loans (the
“Loans”) are as follows:
(i) The Loans comprise a Tranche 1 facility of USD260.0 million and a Tranche 2 facility of USD400.0 million
repayable over 24 months and 60 months respectively, from the closing date of the Facility Agreement;
(ii) The OMS business together with certain FPO vessels which are idle will be disposed of assuming commercially
acceptable sale terms can be obtained;
(iii) Surplus funds from operations and part of the proceeds, from certain strategic initiatives including monetisation of
assets and new project financing will be used to repay the Loans; and
(iv) Closing date of the Facility Agreement is subject to the satisfaction of certain conditions precedent which are
procedural in nature and include approval from the central bank, the execution of certain documents, certificates,
resolutions, and legal opinions.
Based on the cash flow forecast for the next 12 months from the date of approval of the financial statements, the Group’s
obligations are expected to be funded by available cash balances and cash flows from the Group’s existing vessel
charter contracts and proceeds from asset monetisation of non-core assets which is expected to generate positive cash
flows. The Group also expects distribution from joint ventures.
In order to further manage and strengthen the cash flow position, the Group is taking the following measures:
(i) Pursue collections from customers; and

(ii) Optimise cost structure.
The Directors are of the opinion that the Group will be able to discharge its liabilities in the normal course of business
over the next 12 months from the date of approval of the financial statements.
124
The table below analyses the Group’s non-derivative financial liabilities and net settled derivative financial liabilities into
relevant maturity groupings based on the remaining period as at the reporting date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows:
More than More than

1 year and 2 years
Within within and within More than
Group 1 year 2 years 5 years 5 years Total
RM’000 RM’000 RM’000 RM’000 RM’000
At 31 December 2018
Borrowings – others 3,504,108 481,860 1,477,985 2,056,803 7,520,756
Borrowings – Armada Kraken Pte Ltd 2,332,805 - - - 2,332,805
Borrowings – Sukuk Murabahah 1,595,250 - - - 1,595,250
Amounts due to joint ventures 34,667 - - - 34,667
Net settled derivative financial
instruments
- interest rate swaps (71,141) (16,678) (31,349) (15,556) (134,724)
- cross currency interest rate swaps 513,042 - - - 513,042
Trade payables and accruals 563,527 - - - 563,527
Other payables and accruals 348,224 41,851 13,951 - 404,026
At 31 December 2017
Borrowings – others 3,264,328 1,564,025 1,594,757 4,055,621 10,478,731
Borrowings – Armada Kraken Pte Ltd 2,671,381 - - - 2,671,381
Amounts due to joint ventures 32,237 - - - 32,237
Net settled derivative financial
instruments
- interest rate swaps (42,712) (12,043) (34,225) (22,965) (111,945)
- cross currency interest rate swaps 10,300 8,313 33,649 523,017 575,279
Trade payables and accruals 598,783 - - - 598,783
Other payables and accruals 454,906 54,628 13,657 - 523,191
Annual Report 2018
125
All financial liabilities of the Company are assessed as current and correspondingly, no detailed maturity analysis is 04
deemed necessary.
Corporate guarantees are financial guarantees given to banks for credit facilities granted to subsidiaries. The maximum
amount of the financial guarantees issued by the Company to the banks for subsidiary companies’ borrowings is limited to
the amount utilised by the subsidiary companies and the interest charged on the borrowings, amounting to RM10,215.3
million as at 31 December 2018 (2017: RM11,728.5 million). The earliest period that the financial guarantees can
be called upon by the banks is upon an event of default which could not be remedied. The Company believes that the
liquidity risk in respect of the financial guarantees is minimal as it is unlikely that the subsidiary companies will not make
payment to the banks when due.
Capital risk management
The Group’s and the Company’s objectives when managing capital, are to safeguard the Group’s and the Company’s
ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and
to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain the capital structure, the Company may issue new shares or issue new debt and return capital to
shareholders or adjust the amount of dividends paid to shareholders.
The capital structure of the Group and the Company consists of borrowings (excluding cash and cash equivalents) and
total equity, comprising issued share capital, reserves and non-controlling interests as follows:
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Total borrowings 10,380,530 11,522,905 - -
Less: Cash and cash equivalents (1,226,424) (1,846,114) (59,303) (63,406)
9,154,106 9,676,791 (59,303) (63,406)
Total equity 3,370,140 5,521,031 5,045,255 4,930,115
12,524,246 15,197,822 4,985,952 4,866,709
The Group is required to maintain a certain ratio of total net debt to adjusted earnings before interest, taxation,
depreciation, amortisation and impairment, as defined in the facilities agreement. During the financial year, the Group
has complied with these requirements, except as disclosed in Section E - Liquidity risk.
126
STATEMENTS OF
INCOME
for the financial year ended 31 December 2018
Group Company
Note 2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Revenue 2 2,418,739 2,402,130 303,412 320,410
Cost of sales (1,917,530) (1,596,228) (139,500) (139,763)
Gross profit 501,209 805,902 163,912 180,647
Other operating income 3 65,483 177,903 621 1,479
Selling and distribution costs (29,955) (20,827) - -
Administrative expenses (234,801) (195,809) (31,188) (68,285)
Operating profit before impairment 301,936 767,169 133,345 113,841
Impairment 5 (2,242,908) (8,328) (18,332) -
Operating (loss)/profit (1,940,972) 758,841 115,013 113,841
Finance costs 4 (522,149) (430,958) - -
Share of results of joint ventures and
associate 13,14 166,249 164,347 - -
(Loss)/Profit before taxation 5 (2,296,872) 492,230 115,013 113,841
Taxation 8 (22,276) (115,823) (325) (1,494)
(Loss)/Profit for the financial year (2,319,148) 376,407 114,688 112,347
Attributable to:
Owners of the Company (2,302,769) 352,247
Non-controlling interests (16,379) 24,160
(2,319,148) 376,407
Earnings per share (sen) 9

- basic (39.23) 6.00
- diluted (39.23) 6.00
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Annual Report 2018
127
STATEMENTS OF
COMPREHENSIVE INCOME
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
(Loss)/Profit for the financial year (2,319,148) 376,407 114,688 112,347 04
Other comprehensive income/(expense):
Items that may be reclassified subsequently to
profit or loss:
- Fair value gain on cash flow hedges 61,091 86,282 - -
- Costs of hedging 32,814 (25,815) - -
- Foreign currency translation differences 142,333 (516,796) - -
- Share of other comprehensive income of
joint ventures 4,613 789 - -
Items that will not be reclassified to profit or loss:
- Financial assets at fair value through
other comprehensive income:
- (Loss)/Gain on fair value change (9,171) 3,072 - -
Other comprehensive income/(expense)
for the financial year, net of tax 231,680 (452,468) - -
Total comprehensive (expense)/income for
the financial year (2,087,468) (76,061) 114,688 112,347
Total comprehensive (expense)/income attributable to:

- Owners of the Company (2,066,205) (96,647)
- Non-controlling interests (21,263) 20,586
(2,087,468) (76,061)
128
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
Note 2018 2017

RM’000 RM’000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 11 6,692,694 9,235,066
Investment in joint ventures 13 1,022,870 668,967
Investment in an associate 14 5 -
Financial assets at fair value through other comprehensive income 15 15,158 -
Available-for-sale financial assets 16 - 16,498
Finance lease receivables 17 5,011,820 5,280,228
Other receivables 23 - 153,600
Contract assets 24 44,090 -
Amounts due from joint ventures 18 26,069 32,162
Derivative financial instruments 34 65,060 64,767
Deferred tax assets 19 21,660 7,295
TOTAL NON-CURRENT ASSETS 12,899,426 15,458,583
CURRENT ASSETS
Inventories 20 7,298 4,199
Finance lease receivables 17 156,639 53,961
Trade receivables 21 755,283 727,153
Accrued lease rentals 22 315,555 372,945
Other receivables, deposits and prepayments 23 58,810 68,249
Contract assets 24 5,574 -
Amounts due from customers on contract 25 - 8,745
Tax recoverable 19,734 -
Deposits, cash and bank balances 27 1,226,424 1,846,114
2,641,176 3,374,653
Non-current assets classified as held-for-sale 28 114 1,770
TOTAL CURRENT ASSETS 2,641,290 3,376,423
TOTAL ASSETS 15,540,716 18,835,006

Annual Report 2018
129
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note 2018 2017

RM’000 RM’000
LIABILITIES
LESS: CURRENT LIABILITIES

04
Trade payables and accruals 29 563,527 598,783
Other payables and accruals 30 492,897 454,906
Contract liabilities 24 26,635 -
Amounts due to joint ventures 18 34,667 32,237
Provisions 31 85,587 -
Lease liabilities 22 5,549 -
Hire purchase creditors 32 - 88
Borrowings – others 33 3,781,099 3,352,727
Borrowings – Armada Kraken Pte Ltd 33 1,782,895 2,145,196
Borrowings – Sukuk Murabahah 33 1,499,352 -
Taxation 35,467 52,309
TOTAL CURRENT LIABILITIES 8,733,974 6,648,085
NET CURRENT LIABILITIES (6,092,684) (3,271,662)
LESS: NON-CURRENT LIABILITIES

Contract liabilities 24 15,616 -
Provisions 31 - 106,921
Hire purchase creditors 32 - 198
Borrowings 33 3,317,184 6,024,982
Deferred tax liabilities 19 40,956 15,654
TOTAL NON-CURRENT LIABILITIES 3,436,602 6,665,890
NET ASSETS 3,370,140 5,521,031
CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE COMPANY
Share capital 35 4,314,815 4,311,294

Reserves 38 (951,578) 1,186,035
3,363,237 5,497,329
NON-CONTROLLING INTERESTS 6,903 23,702
TOTAL EQUITY 3,370,140 5,521,031
NET ASSETS PER SHARE (RM)* 0.57 0.94
* Based on 5,870,937,544 (2017: 5,866,269,344) ordinary shares in issue per the Companies Act 2016.
130
STATEMENT OF
FINANCIAL POSITION
Note 2018 2017

RM’000 RM’000
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 11 1,475 3,715
Investment in subsidiaries 12 4,511,584 3,949,387
Investment in joint ventures 13 101,979 131,565
Investment in an associate 14 16 -
Deferred tax assets 19 3,745 4,288
TOTAL NON-CURRENT ASSETS 4,618,799 4,088,955
CURRENT ASSETS
Other receivables, deposits and prepayments 23 6,161 6,516
Amounts due from subsidiaries 26 417,099 893,405
Tax recoverable 7,205 4,727
Deposits, cash and bank balances 27 59,303 63,406
TOTAL CURRENT ASSETS 509,297 986,896
TOTAL ASSETS 5,128,096 5,075,851
LIABILITIES
LESS: CURRENT LIABILITIES

Amounts due to subsidiaries 26 45,147 112,780
Amount due to a joint venture 18 1,217 -
TOTAL CURRENT LIABILITIES 82,841 145,736
NET CURRENT ASSETS 426,456 841,160
NET ASSETS 5,045,255 4,930,115
CAPITAL AND RESERVES ATTRIBUTABLE TO OWNERS OF THE COMPANY
Share capital 35 4,314,815 4,311,294

Reserves 38 730,440 618,821
TOTAL EQUITY 5,045,255 4,930,115
NET ASSETS PER SHARE (RM)* 0.86 0.84
* Based on 5,870,937,544 (2017: 5,866,269,344) ordinary shares in issue per the Companies Act 2016.
CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF
Attributable to Owners of the Company
Retained
Number Foreign Share earnings/ Non-
of Share exchange option Hedging Other (Accumulated controlling Total
shares capital reserve reserve reserve reserves losses) Total interests equity
2018 Note 35 35 38(b) 38(c) 38(d) 38(e)
’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 5,866,269 4,311,294 1,080,241 19,352 (40,257) 16,708 109,991 5,497,329 23,702 5,521,031
Effect on the adoption of
MFRS 9 45 - - - - - - (15,473) (15,473) - (15,473)
Effect on the adoption of
MFRS 15 45 - - - - - - (48,402) (48,402) - (48,402)
At 1 January (Restated) 5,866,269 4,311,294 1,080,241 19,352 (40,257) 16,708 46,116 5,433,454 23,702 5,457,156
Loss for the financial year - - - - - - (2,302,769) (2,302,769) (16,379) (2,319,148)
Other comprehensive income/
(expense) for the financial
year, net of tax - - 147,202 - 98,533 (9,171) - 236,564 (4,884) 231,680
Total comprehensive income/
(expense) for the financial
year, net of tax - - 147,202 - 98,533 (9,171) (2,302,769) (2,066,205) (21,263) (2,087,468)
Transactions with owners:
- Changes in non-controlling
interest - - 12,816 - (1) - (17,279) (4,464) 4,464 -
- Employee share options
forfeited 36 - - - (6,132) - - 6,132 - - -
- Call options forfeited - - - - - (6,239) 6,239 - - -
- Management incentive plan
granted 37 - - - 452 - - - 452 - 452
- Shares issued pursuant
to the management
incentive plan 37 4,668 3,521 - (3,521) - - - - - -
Annual Report 2018

At 31 December 5,870,937 4,314,815 1,240,259 10,151 58,275 1,298 (2,261,561) 3,363,237 6,903 3,370,140
131
04
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
132
Bumi Armada Berhad
Attributable to Owners of the Company
(Accumulated
Number Foreign Share losses)/ Non-
of Share Share exchange option Hedging Other Retained controlling Total
Shares capital premium reserve reserve reserve reserves earnings Total interests equity
2017 Note 35 35 38(a) 38(b) 38(c) 38(d) 38(e)
’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 5,866,269 1,173,253 3,137,730 1,593,424 19,928 (101,474) 13,947 (249,847) 5,586,961 3,116 5,590,077
Adjustments for effects
of the Companies Act
2016 (1) - 3,138,041 (3,137,730) - - - (311) - - - -
Profit for the financial
year - - - - - - - 352,247 352,247 24,160 376,407
Other comprehensive
(expense)/income for
the financial year, net
of tax - - - (513,183) - 61,217 3,072 - (448,894) (3,574) (452,468)
Total comprehensive
(expense)/income for
the financial year, net
of tax - - - (513,183) - 61,217 3,072 352,247 (96,647) 20,586 (76,061)
- Employee share
options granted 36 - - - - 266 - - - 266 - 266
- Employee share
options forfeited/
lapsed 36 - - - - (7,591) - - 7,591 - - -
- Management incentive
plan granted 37 - - - - 6,749 - - - 6,749 - 6,749
At 31 December 5,866,269 4,311,294 - 1,080,241 19,352 (40,257) 16,708 109,991 5,497,329 23,702 5,521,031

(1)
Effective from 31 January 2017, the new Companies Act 2016 (“the Act”) abolished the concept of authorised share capital and par value of share capital. Consequently, the credit balance of the share
premium and preference share redemption reserve becomes part of the Company’s share capital pursuant to the transitional provision set out in Section 618(2) of the Act. Notwithstanding this provision,
the Company may within 24 months from the commencement of the Act, use this amount for purposes as set out in Section 618(3) and 618(4) of the Act. The Board of Directors has elected not to apply
Section 618(3) and Section 618(4) on this amount. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition.
Our Numbers
Annual Report 2018
133
STATEMENT OF
CHANGES IN EQUITY
Share
Number Share option Other Retained
of shares capital reserve reserves earnings Total
2018 Note 35
’000
35
RM’000
38(c)
RM’000
38(e)
RM’000 RM’000 RM’000 04
At 1 January 5,866,269 4,311,294 19,352 6,239 593,230 4,930,115
Total comprehensive income for the
financial year, net of tax - - - - 114,688 114,688
- Employee share options forfeited 36 - - (6,132) - 6,132 -
- Call options forfeited - - - (6,239) 6,239 -
- Management incentive plan granted 37 - - 452 - - 452
- Shares issued pursuant to the
management incentive plan 37 4,668 3,521 (3,521) - - -
At 31 December 5,870,937 4,314,815 10,151 - 720,289 5,045,255
Share
Number Share Share option Other Retained
of shares capital premium reserve reserves earnings Total
2017 Note 35 35 38(a) 38(c) 38(e)
’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 5,866,269 1,173,253 3,137,730 19,928 6,550 473,292 4,810,753
Transfer to share capital (1)
- 3,138,041 (3,137,730) - (311) - -
Total comprehensive
income for the financial
year, net of tax - - - - - 112,347 112,347
- Employee share
options granted 36 - - - 266 - - 266
- Employee share
options forfeited/
lapsed 36 - - - (7,591) - 7,591 -
- Management incentive
plan granted 37 - - - 6,749 - - 6,749
At 31 December 5,866,269 4,311,294 - 19,352 6,239 593,230 4,930,115

(1)
Effective from 31 January 2017, the Act abolished the concept of authorised share capital and par value of share capital. Consequently, the credit balance
of the share premium and preference share redemption reserve becomes part of the Company’s share capital pursuant to the transitional provision set out
in Section 618(2) of the Act. Notwithstanding this provision, the Company may within 24 months from the commencement of the Act, use this amount for
purposes as set out in Section 618(3) and Section 618(4) of the Act. The Board of Directors has elected not to apply Section 618(3) and Section 618(4)
on this amount. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition.
134
STATEMENTS OF
CASH FLOWS
Group Company
Note 2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
OPERATING ACTIVITIES
(Loss)/Profit for the financial year (2,319,148) 376,407 114,688 112,347
Adjustments for non-cash items:

Share of results of joint ventures and associate (166,249) (164,347) - -
Depreciation of property, plant and equipment 5 499,350 575,350 2,070 6,460
Fair value through profit and loss on derivative financial
instruments 5 (1,869) (14,046) - -
(Gain)/Loss on disposal of property, plant and equipment
and non-current assets classified as held-for-sale 3,5 (14,823) (94,866) (38) 1,838
Impairment of:
- property, plant and equipment 5 2,199,735 - - -
- non-current assets classified as held-for-sale 5 43,173 - - -
- investment in subsidiaries 5 - - 18,332 -
- available-for-sale financial asset 5 - 8,328 - -
Bad debts written off 5 8,223 - 938 -
Net allowance for impairment losses
(2017: Net allowance for doubtful debts) 5 276,358 1,741 - -
Unrealised foreign exchange loss 5 17,436 48,598 (1,586) 1,818
Share-based payment 452 7,015 452 7,015
Interest income 3 (33,679) (39,575) (517) (849)
Interest expense 4 515,885 434,519 - -
Accretion of interest 4 8,133 10,485 - -
Dividend income 2 - - (147,197) (174,057)
Taxation 8 22,276 115,823 325 1,494
Operating profit/(loss) before changes in working capital 1,055,253 1,265,432 (12,533) (43,934)
Changes in working capital:

Inventories (3,041) 1,662 - -
Finance lease receivables 385,887 65,386 - -
Trade and other receivables (54,457) (238,663) 358 3,830
Trade and other payables 214,745 (54,984) 3,521 (15,370)
Intercompany balances - - 410,259 (71,435)
Joint ventures 9,637 13,792 - -
Cash from/(used in) operations 1,608,024 1,052,625 401,605 (126,909)
Interest paid (505,930) (453,629) - -
Tax paid (net) (34,728) (34,140) (2,260) (4,149)
NET CASH FLOWS GENERATED FROM/(USED IN)
OPERATING ACTIVITIES 1,067,366 564,856 399,345 (131,058)
Annual Report 2018
135
STATEMENTS OF CASH FLOWS

Group Company
Note 2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
INVESTING ACTIVITIES 04
Purchase of property, plant and equipment A (534,254) (1,815,963) (165) (433)
Proceeds from disposal of property,
plant and equipment and non-current assets
held-for-sale 85,779 139,660 373 234
Interest received 35,048 40,822 514 609
Additional investment in joint ventures (224,083) (30) - -
Proceeds from redemption of redeemable
preference shares B 33,467 40,628 29,334 20,395
Dividends received from subsidiaries - - 147,197 174,057
Dividend received from a joint venture 64,650 - - -
Repayments from/(advances to) joint ventures 183,511 26,135 (172) 26,135
Advances to subsidiaries - - (580,487) (94,657)
Investment in subsidiaries - - (42) (106)
NET CASH FLOWS (USED IN)/GENERATED
FROM INVESTING ACTIVITIES (355,882) (1,568,748) (403,448) 126,234
FINANCING ACTIVITIES
Proceeds from bank borrowings - 307,894 - -

Repayment of bank borrowings (1,366,713) (750,170) - -
Decrease in deposit pledged as security - 900 - 900
Repayment of hire purchase (“HP”) creditors (286) (88) - -
NET CASH FLOWS (USED IN)/GENERATED
FROM FINANCING ACTIVITIES (1,366,999) (441,464) - 900
NET DECREASE IN CASH AND CASH

EQUIVALENTS (655,515) (1,445,356) (4,103) (3,924)
CURRENCY TRANSLATION DIFFERENCES 35,825 276,516 - -
CASH AND CASH EQUIVALENTS AT
BEGINNING OF FINANCIAL YEAR 1,846,114 3,014,954 63,406 67,330
CASH AND CASH EQUIVALENTS AT END OF
FINANCIAL YEAR C 1,226,424 1,846,114 59,303 63,406
136

Notes to the statements of cash flows:
A Additions to property, plant and equipment (Note 11) which were acquired during the financial year were as follows:
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Cash 534,254 1,815,963 165 433
Movement in property, plant and
equipment creditors (354,252) (619,408) - -
Interest expense capitalised for
construction of vessels - 110,137 - -
180,002 1,306,692 165 433
B Redemption of redeemable preference shares
The Group redeemed RM33.5 million (2017: RM40.6 million) of redeemable preference shares in Armada D1 Pte Ltd and
Armada C7 Pte Ltd.
The Company redeemed RM29.3 million (2017: RM20.4 million) of redeemable preference shares in Armada D1 Pte Ltd.
C Cash and cash equivalents consist of:
Group Company
2018 2017 2018 2017
RM’000 RM’000 RM’000 RM’000
Deposits with licensed banks 1,029,016 1,670,465 49,568 61,292
Cash and bank balances 197,408 175,649 9,735 2,114
1,226,424 1,846,114 59,303 63,406
Annual Report 2018
137

Notes to the statements of cash flows: (continued)
D This section sets out an analysis of liabilities from financing activities for the financial year.
Liabilities from financing activities 04

HP HP
Borrowings Borrowings Derivative creditors creditors
due within due after financial due within due after
2018 1 year 1 year instruments 1 year 1 year Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Net liabilities from financing
activities as at 1 January 5,497,923 6,024,982 97,600 88 198 11,620,791
Interest expense/(income) 537,394 - (21,509) - - 515,885
Interest (paid)/received (524,529) - 18,599 - - (505,930)
Repayment of bank borrowings (1,366,713) - - - - (1,366,713)
Repayment of HP creditors - - - (88) (198) (286)
Fair value through profit or loss - - 21,149 - - 21,149
Foreign exchange adjustments 122,999 88,474 5,338 - - 216,811
Reclassification from
non-current to current 2,796,272 (2,796,272) - - - -
activities as at 31 December 7,063,346 3,317,184 121,177 - - 10,501,707
2017
activities as at 1 January 2,517,059 10,529,054 77,655 88 287 13,124,143
Interest expense 414,522 - 19,997 - - 434,519
Interest paid (432,592) - (21,037) - - (453,629)
Repayment of bank borrowings (750,170) - - - - (750,170)
Proceeds from bank borrowings 182,093 125,801 - - - 307,894
Repayment of HP creditors - - - (88) - (88)
Fair value through profit or loss - - 27,625 - - 27,625
Foreign exchange adjustments (186,885) (875,977) (6,640) - - (1,069,502)
Reclassification from
non-current to current 3,753,896 (3,753,896) - 88 (88) -
Other non-cash movements - - - - (1) (1)
activities as at 31 December 5,497,923 6,024,982 97,600 88 198 11,620,791
138
NOTES TO
THE FINANCIAL STATEMENTS
31 December 2018
1 SEGMENT INFORMATION
The Group is organised into 2 main business segments based on the type of operations carried out by its vessels and barges:
(i) Floating Production & Operations (“FPO”) – consists of Floating Production Storage Offloading (“FPSO”) and
Floating Gas Solutions (“FGS”)
• FPSO - own, operate and provide FPSO vessels that are used for receiving hydrocarbons sourced from oilfields.
• FGS - focus on innovative solutions for the offshore liquefied natural gas industry.
(ii) Offshore Marine Services (“OMS”) – consists of Offshore Support Vessel (“OSV”) and Subsea Construction (“SC”)
• OSV - own, operate and charter vessels to provide support for exploration, development and production
activities in the offshore oil and gas industry.
• SC - provision of conventional installation, floater installation and installation of umbilicals, risers and flexibles
as part of FPSO completion or as standalone SC projects.
The remaining operations of the Group are in “Corporate and others”. These operations comprise management and
other corporate support services provided to subsidiaries which are considered incidental to the Group’s operating
business.
The external revenue reported to the Chief Executive Officer is measured in a manner consistent with that in the Group’s
statement of income. The cost of sales and allocation of expenses attributable to each segment is based on management’s
internal allocation basis and may not individually be consistent with the Group’s statement of income. Inter-segment revenue
comprises mostly of engineering services provided to the marine charter hire companies and central overhead fees allocated
within the Group. These transactions are conducted based on terms and conditions negotiated with related parties.
Corporate
2018 FPO OMS and others Elimination Group
RM’000 RM’000 RM’000 RM’000 RM’000
Revenue 1,693,896 724,843 - - 2,418,739
Inter-segment revenue - - 101,986 (101,986) -
Total revenue 1,693,896 724,843 101,986 (101,986) 2,418,739
Results
Segment results 810,431 197,983 11,970 - 1,020,384
Depreciation and amortisation (282,094) (215,466) (1,790) - (499,350)
Bad debts written off (8,218) (5) - - (8,223)
Impairment (1,656,374) (586,534) - - (2,242,908)
Net (allowance for impairment losses)/
writeback of allowance for impairment losses (68,690) (207,690) 22 - (276,358)
Share of results of joint ventures and associate 166,566 (317) - - 166,249
Subtotal (1,038,379) (812,029) 10,202 - (1,840,206)
Other operating income 65,483

Finance costs (522,149)
Taxation (22,276)
Loss for the financial year (2,319,148)
Annual Report 2018
139
NOTES TO
31 December 2018
1 SEGMENT INFORMATION (CONTINUED)
Corporate
2017 FPO OMS and others Elimination Group
RM’000 RM’000 RM’000 RM’000 RM’000 04
Revenue 1,432,886 969,244 - - 2,402,130
Inter-segment revenue - - 145,021 (145,021) -
Total revenue 1,432,886 969,244 145,021 (145,021) 2,402,130
Results
Segment results 748,619 403,193 14,545 - 1,166,357
Depreciation and amortisation (319,940) (249,435) (5,975) - (575,350)
Impairment - - (8,328) - (8,328)
Net writeback of allowance for doubtful
debts/(allowance for doubtful debts) 2,687 (4,428) - - (1,741)
Share of results of joint ventures 163,048 1,299 - - 164,347
Subtotal 594,414 150,629 242 - 745,285
Other operating income 177,903

Finance costs (430,958)
Taxation (115,823)
Profit for the financial year 376,407
The Group is managed in Malaysia, and operates in the following main geographical areas:
• Asia (excluding Malaysia) and Australia, Africa, Europe and Latin America - mainly charter hire of vessels and
construction/conversion works.
• Malaysia - mainly charter hire of vessels, marine engineering and consultancy services.
Revenue by locations of the Group’s operations are analysed as follows:
Group
2018 2017
RM’000 RM’000
Malaysia 100,084 127,467
Asia (excluding Malaysia) and Australia 823,895 1,077,084
Africa 906,774 937,234
Europe 547,991 225,461
Latin America 39,995 34,884
2,418,739 2,402,130
140
NOTES TO
31 December 2018
1 SEGMENT INFORMATION (CONTINUED)
The Group’s largest customers (by revenue contribution) are in the FPO segment (2017: FPO segment). In 2018,
3 customers, on an individual basis, contributed revenue exceeding 15% of total revenue for the financial year,
amounting to RM865.4 million, RM491.6 million and RM472.9 million respectively. In 2017, 3 customers, on an
individual basis, contributed revenue exceeding 10% of total revenue for the financial year, amounting to RM749.8
million, RM560.9 million and RM322.5 million respectively.
2 REVENUE
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Revenue from contract with customers
Vessel charter fees and support services
rendered 714,670 900,844 - -
Construction and conversion work 404,829 456,851 - -
Central overhead fees - - 146,476 146,353
Management fee income - - 9,739 -
1,119,499 1,357,695 156,215 146,353
Finance lease income 779,974 613,684 - -
Operating lease income 519,266 430,751 - -
Dividend income - - 147,197 174,057
2,418,739 2,402,130 303,412 320,410
Disaggregation of the Group’s revenue from contracts with customers
The Group derives revenue by satisfying the performance obligation over time in the following segment:
2018 FPO OMS Total

RM’000 RM’000 RM’000
Vessel charter fees and support services rendered 379,839 334,831 714,670
Construction and conversion work 14,817 390,012 404,829
394,656 724,843 1,119,499
Timing of revenue recognition:

- Over time 394,656 724,843 1,119,499
Annual Report 2018
141
NOTES TO
31 December 2018
2 REVENUE (CONTINUED)
Disaggregation of the Group’s revenue from contracts with customers (continued)
During the financial year ended 31 December 2018, the Group has recognised revenue from contracts with customers 04
amounting to RM0.2 million that was included in contract liabilities at the beginning of the reporting period (Note 24).
The Group’s revenue from finance leases and operating leases falls within the scope of MFRS 117 “Leases”.
The Company recognises revenue over time.
3 OTHER OPERATING INCOME
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Gain on disposal of property, plant and
equipment and non-current assets classified
as held-for-sale 14,823 94,866 38 -
Interest income
- deposits with licensed banks 33,679 39,575 517 849
Accretion of interest 1,187 4,921 - -
Insurance claims 229 2,946 - 7
Management and engineering services
charged to joint ventures - 16,641 - -
Others 15,565 18,954 66 623
65,483 177,903 621 1,479
4 FINANCE COSTS
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Interest expense 515,885 434,519 - -
Accretion of interest 8,133 10,485 - -
Fair value gain on ineffective portion of cash
flow hedges (1,869) (14,046) - -
522,149 430,958 - -
142
NOTES TO
31 December 2018
5 (LOSS)/PROFIT BEFORE TAXATION
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
(Loss)/Profit before taxation is arrived at after
charging/(crediting):
Auditors’ remuneration:
- fees for statutory audit:
- PricewaterhouseCoopers Malaysia
- current year 1,819 1,769 208 228
- under accrual in respect of prior
financial year - 180 - -
- member firms of PricewaterhouseCoopers
International Limited 906 742 - -
- non-PwC member firms 645 374 - -
- fees for audit related services:
- PricewaterhouseCoopers Malaysia 365 380 365 380
- fees for non-audit services:
- PricewaterhouseCoopers Malaysia 805 451 805 451
- member firms of PricewaterhouseCoopers
International Limited 463 - - -
Impairment of:
- property, plant and equipment (Note 11) 2,199,735 - - -
- non-current assets classified as held-for-sale
(Note 28) 43,173 - - -
- investment in subsidiaries (Note 12) - - 18,332 -
- available-for-sale financial assets (Note 16) - 8,328 - -
Bad debts written off (Note 18) 8,223 - 938 -
Net allowance for impairment losses
(2017: Net allowance for doubtful debts)
- Trade receivables (Note 21) 101,494 1,741 - -
- Other receivables and deposits (Note 23) 141,234 - - -
- Amount due from a joint venture (Note 18) 33,630 - - -
(Gain)/Loss on disposal of property, plant and
equipment (14,823) (94,866) (38) 1,838
Depreciation of property, plant and equipment
(Note 11) 499,350 575,350 2,070 6,460
Annual Report 2018
143
NOTES TO
31 December 2018
5 (LOSS)/PROFIT BEFORE TAXATION (CONTINUED)
Group Company
2018
RM’000
2017
RM’000
2018
RM’000
2017
RM’000
04
Travel and freight 20,148 44,220 4,683 9,143
Repairs and maintenance 166,138 119,427 13,591 13,821
Management fees 15,544 6,982 6,721 6,293
Insurance 78,033 46,094 - -
Fuel and oil 37,712 36,795 - -
Staff costs (Note 6) 461,443 572,257 112,293 134,241
Other crew costs 111,529 118,024 - -
Rental of buildings 11,666 16,058 7,278 7,510
Hiring of equipment 55,142 5,991 - -
Fair value through profit and loss on derivative
financial instruments:
- interest rate swaps 7,185 (1,266) - -
- cross currency interest rate swaps (9,054) (12,780) - -
Net foreign exchange loss/(gain):
- realised 81,670 (1,214) 332 5,824
- unrealised 17,436 48,598 (1,586) 1,818
Maintenance and service costs 21,962 38,203 - -
Survey fees 9,979 18,471 - -
Consultancy fees 13,070 28,113 1,011 887
Communication expenses 16,404 13,184 114 19
6 STAFF COSTS
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Wages, salaries and bonuses 378,694 494,548 100,279 113,673
Defined contribution plan 12,381 15,646 5,164 5,660
Share-based payments 452 7,015 452 7,015
Termination benefits 11,288 5,025 2,789 971
Other staff related costs 60,744 55,854 3,609 6,922
Total staff costs 463,559 578,088 112,293 134,241
Executive Directors’ remuneration as disclosed in Note 7 is included in staff costs. Of the total staff costs incurred, RM2.1
million (2017: RM5.8 million) has been capitalised in the Group’s property, plant and equipment.
144
NOTES TO
31 December 2018
7 DIRECTORS’ REMUNERATION
The aggregate amounts of emoluments received and receivable by Directors from the Group and the Company during
the financial year were as follows:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Non-Executive Directors:
- fees 2,077 2,124 2,077 2,124
- allowances 756 596 756 596
Executive Directors:
- salaries, bonuses, allowances and other
staff related costs 12,039 8,038 10,004 7,258
- defined contribution plan 23 94 - -
- share-based payments (1)
1,364 4,249 1,324 4,249
16,259 15,101 14,161 14,227
(1)
Share-based payments for the Executive Directors are expenses recognised to the profit or loss over the vesting period for ESOS and MIP in
accordance with accounting policy Section C(q)(iii).
Benefits-in-kind (“BIK”) received by the Executive Directors from the Group and the Company amounted to RM35,877
(2017: RM62,300).
Non-Executive Directors’ remuneration

for financial year ended 31 December 2018
Other emoluments
Meeting Car
Fees allowance(1) allowance Total
RM’000 RM’000 RM’000 RM’000
Tunku Ali Redhauddin Ibni Tuanku Muhriz 488 90 144 722
Alexandra Schaapveld 330 140 - 470
Chan Chee Beng 290 61 - 351
Maureen Toh Siew Guat 364 81 - 445
Uthaya Kumar K Vivekananda 399 81 - 480
Gary Neal Christenson (2)
206 159 - 365
2,077 612 144 2,833
(1)
Meeting allowance includes the allowance for travel days to attend meetings.
(2)
Appointed on 2 May 2018.
The Non-Executive Directors do not receive any BIK during the financial year ended 31 December 2018.
Annual Report 2018
145
NOTES TO
31 December 2018
7 DIRECTORS’ REMUNERATION (CONTINUED)
Executive Director’s remuneration

Leon Shaharul
04
Andre Rezza bin
Harland Hassan(2) Total
RM’000 RM’000 RM’000
Salary 3,307 2,010 5,317
Bonus 4,476 - 4,476
Expense chargeable to income tax 383 - 383
Shares benefit under MIP 1,806 - 1,806
Company's contribution to provident fund - 23 23
BIK 31 5 36
10,003 2,038 12,041
(1)
The Executive Directors do not receive director’s fee and meeting allowances.
(2)
Resigned on 28 February 2018.
Non-Executive Directors’ remuneration

Other emoluments
Meeting Car
Fees allowance(5) allowance Total
RM’000 RM’000 RM’000 RM’000
Tunku Ali Redhauddin Ibni Tuanku Muhriz 488 60 144 692
Alexandra Schaapveld 330 155 - 485
Chan Chee Beng 330 30 - 360
Maureen Toh Siew Guat 384 42 - 426
Uthaya Kumar K Vivekananda (1)
282 20 - 302
Shapoorji Pallonji Mistry (2)
31 - - 31
Saiful Aznir bin Shahabudin (3)
150 18 - 168
Steven Leon Newman (4)
129 127 - 256
2,124 452 144 2,720
(1)
Appointed on 10 April 2017.
(2)
Resigned on 21 February 2017.
(3)
Retired on 30 May 2017.
(4)
Resigned on 6 June 2017.
(5)
Meeting allowance includes the allowance for travel days to attend meetings.
The Non-Executive Directors do not receive any BIK during the financial year ended 31 December 2017.
146
NOTES TO
31 December 2018
7 DIRECTORS’ REMUNERATION (CONTINUED)
Executive Director’s remuneration

Leon Shaharul
Andre Rezza bin
Harland Hassan Total
RM’000 RM’000 RM’000
Salary 3,519 780 4,299
Bonus 3,455 - 3,455
Expense chargeable to income tax 284 - 284
Company's contribution to provident fund - 94 94
BIK 31 31 62
7,289 905 8,194
8 TAXATION
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Income tax:
- Malaysian tax 180 958 (218) 177
- foreign tax 11,920 100,258 - -
Deferred tax (Note 19) 10,176 14,607 543 1,317
22,276 115,823 325 1,494
Income tax:
- current financial year 36,070 95,622 - 281
- (over)/under provision in respect of prior
financial years (23,970) 5,594 (218) (104)
12,100 101,216 (218) 177
Deferred tax:
- origination and reversal of temporary
differences (Note 19) 10,176 14,607 543 1,317
22,276 115,823 325 1,494
Annual Report 2018
147
NOTES TO
31 December 2018
8 TAXATION (CONTINUED)
The explanation of the relationship between Malaysian tax rate and average effective tax rate is as follows:
Group Company 04
2018 2017 2018 2017
% % % %
Malaysian tax rate 24 24 24 24
Tax effects of:
- exempt income 5 (28) (31) (37)
- difference in tax rates in other countries (11) (4) - -
- share of results of joint ventures and
associates 2 (8) - -
- withholding tax on foreign sourced income (1) (1) - -
- expenses not deductible for tax purposes (20) 29 6 4
- deferred tax assets not recognised (1) 14 2 10
- utilisation of previously unrecognised
deferred tax assets - (3) - -
- (over)/under provision in prior years 1 1 (1) -
(1) 24 0 1
The Group’s effective tax rate for the financial year ended 31 December 2018 was negative 1%, as compared to the
Malaysian statutory tax rate of 24%. The difference in the effective tax rate and the Malaysian statutory tax rate is mainly
due to a tax refund received arising from dividends declared by foreign subsidiaries and recognition of deferred tax
assets on potential tax refunds receivable from dividends to be declared by foreign subsidiaries.
The Company’s effective tax rate for the financial year ended 31 December 2018 was 1% compared to the statutory tax
rate of 24% as the Company’s income was mainly exempted from tax for the financial year.
148
NOTES TO
31 December 2018
9 EARNINGS PER SHARE
Basic
The basic earnings per share (“EPS”) is calculated by dividing the Group’s (loss)/profit attributable to the Owners of the
Company by the weighted average number of ordinary shares in issue during the financial year.
Diluted
Diluted EPS adjusts the figures used in the determination of basic EPS to take into account:
• the after income tax effect of interest and other financing costs associated with the ESOS and MIP; and
• the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares from the ESOS and MIP.
The MIP shares awarded were not dilutive for the financial year ended 31 December 2018 as there is one vesting
condition is expected to be satisfied before Quarter 2, 2019. Hence, the calculation of diluted earnings per share does
not assume the exercise of the MIP. The ESOS is not dilutive as the exercise price is higher than the current market price.
Basic Diluted
2018 2017 2018 2017
(Loss)/Profit attributable to the Owners of the
Company for the financial year ended
31 December (RM’000) (2,302,769) 352,247 (2,302,769) 352,247
Weighted average number/adjusted weighted
average number of ordinary shares in issue
for basic and diluted EPS (’000) 5,869,198 5,866,269 5,869,198 5,866,269
Basic and diluted EPS (sen) (39.23) 6.00 (39.23) 6.00
10 DIVIDENDS
The Board of Directors do not recommend any dividend to be paid for the financial year ended 31 December 2018.
11 PROPERTY, PLANT AND EQUIPMENT
Total vessel costs(2) Equipment,

furniture
Asset Vessels and fittings,
under and vessel Dry- Motor and office Spare
Group construction (1) equipment docking Total vehicles equipment parts Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2018
Net book value
At 1 January - 9,126,926 66,233 9,193,159 702 33,076 8,129 9,235,066
Additions 5,244 152,443 19,377 171,820 850 1,136 952 180,002
Disposal - (4,352) (55) (4,407) (244) (105) (153) (4,909)
Reclassification - 23,049 7,751 30,800 - (31,023) 223 -
Depreciation charge (Note 5) - (447,545) (40,560) (488,105) (218) (3,043) (7,984) (499,350)
Impairment - (2,156,430) (43,305) (2,199,735) - - - (2,199,735)
Transfer to non-current assets
classified as held-for-sale (net)
(Note 28) - (105,978) (67) (106,045) - - - (106,045)
Exchange differences - 75,923 8,371 84,294 4 2,980 387 87,665
At 31 December 5,244 6,664,036 17,745 6,681,781 1,094 3,021 1,554 6,692,694
At 31 December 2018
Cost 5,244 14,476,990 295,512 14,772,502 2,485 94,391 52,806 14,927,428
Accumulated depreciation - (4,045,741) (234,713) (4,280,454) (1,391) (91,370) (51,252) (4,424,467)

Accumulated impairment - (3,767,213) (43,054) (3,810,267) - - - (3,810,267)
Net book value 5,244 6,664,036 17,745 6,681,781 1,094 3,021 1,554 6,692,694
31 December 2018
Included in property, plant and equipment are assets amounting to RM360.0 million which have been fully depreciated.
Annual Report 2018

(1)
Addition to asset under construction is in relation to the cost of acquisition of office building by a subsidiary.
NOTES TO
(2)
The net book value of vessels at 31 December 2018 under operating lease agreements with charterers was RM3.8 billion.
149
04
11 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
31 December 2018
NOTES TO
150
Bumi Armada Berhad
Total vessel costs(1) Equipment,
furniture
Vessels and fittings,
under Dry- Motor and office Spare
Group construction Vessels docking Total vehicles equipment parts Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2017
Net book value
At 1 January 11,118,807 5,068,310 118,018 5,186,328 1,038 276,774 19,690 16,602,637
Additions 1,277,674 15,652 4,013 19,665 - 2,991 6,362 1,306,692
Disposal - (2,835) (694) (3,529) - (3,313) (547) (7,389)
Reclassification (11,490,193) 11,490,193 - 11,490,193 - - - -
Reclassification to other receivables (104,701) - - - - - - (104,701)
Depreciation charge (Note 5) - (459,406) (47,744) (507,150) (208) (51,288) (16,704) (575,350)
Transfer to finance lease
receivables - (5,885,964) - (5,885,964) - - - (5,885,964)
Transfer to non-current assets
classified as held-for-sale (net)
(Note 28) - (9,412) (230) (9,642) - (117) - (9,759)
Exchange differences (801,587) (1,089,612) (7,130) (1,096,742) (128) (191,971) (672) (2,091,100)
At 31 December - 9,126,926 66,233 9,193,159 702 33,076 8,129 9,235,066
At 31 December 2017
Cost - 14,096,981 257,545 14,354,526 2,393 315,634 78,604 14,751,157
Accumulated depreciation - (3,416,954) (191,312) (3,608,266) (1,691) (231,974) (70,475) (3,912,406)
Accumulated impairment - (1,553,101) - (1,553,101) - (50,584) - (1,603,685)
Net book value - 9,126,926 66,233 9,193,159 702 33,076 8,129 9,235,066
Included in property, plant and equipment are assets amounting to RM187.7 million which have been fully depreciated.
Our Numbers
(1)
The net book value of vessels at 31 December 2017 under operating lease agreements with charterers was RM5.4 billion.
Annual Report 2018
151
NOTES TO
31 December 2018
Office
equipment,
furniture and Motor 04
Company fittings vehicles Total
RM’000 RM’000 RM’000
2018
Net book value
At 1 January 3,403 312 3,715
Additions 165 - 165
Disposal (91) (244) (335)
Depreciation charge (Note 5) (2,003) (67) (2,070)
At 31 December 1,474 1 1,475
At 31 December 2018
Cost 73,188 19 73,207
Accumulated depreciation (71,714) (18) (71,732)
Net book value 1,474 1 1,475
2017
Net book value
At 1 January 11,402 412 11,814
Additions 433 - 433
Disposal (2,072) - (2,072)
Depreciation charge (Note 5) (6,360) (100) (6,460)
At 31 December 3,403 312 3,715
At 31 December 2017
Cost 73,120 511 73,631
Accumulated depreciation (69,717) (199) (69,916)
Net book value 3,403 312 3,715
(a) Fixed charges have been created over certain vessels of the Group with net book values amounting to approximately
RM3.1 billion (2017: RM11.1 billion) as security for term loans (Note 33).
(b) Included in vessels are borrowing costs amounting to RM Nil (2017: RM110.1 million) which were capitalised
during the financial year. In 2017, borrowing costs were capitalised at the weighted average of general borrowings
of 4.80%.
152
NOTES TO
31 December 2018
(c) The FPSO contracts include options for the charterers to purchase the respective FPSO vessels or to extend their
charter periods beyond the initial lease period. The purchase option values are based on declining agreed prices,
which are in excess of the current net book values of the FPSO vessels as at the reporting date.
(d) During the financial year ended 31 December 2018, an impairment charge of RM2,199.7 million for property,
plant and equipment has been recognised, of which RM1,613.2 million and RM586.5 million were charged for
Armada Kraken FPSO and certain OSV vessels respectively. The impairment assessment on Armada Kraken FPSO
was carried out as a result of lower availability since final acceptance in September 2018 and is assessed using
the terms stipulated in the amendment agreement to the charter agreement signed between AKPL with EnQuest
Heather Limited, EnQuest ENS Limited and Nautical Petroleum Limited on 27 August 2018. The impairment
assessment on OSV vessels was carried out as a result of the decline in vessel utilisation and day rates.
The Group considered each of these vessels as a cash-generating unit. However, they are grouped together for
disclosure purposes. The recoverable amount for these vessels of which an impairment charge was made during the
financial year was RM3,498.2 million, of which RM110.3 million was determined based on fair value less costs
of disposal (“FV”) and RM3,387.9 was determined based on value-in-use (“VIU”).
In addition, an impairment charge of RM43.2 million for non-current assets held for sale has been recognised
during the year. The recoverable amount for these vessels of which an impairment charge was made during the
financial year was RM77.8 million, which was determined based on FV.
(i) Recoverable amount determined based on VIU
The key assumptions used in VIU is based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
The following are key assumptions used in determining the VIU for the FPSO vessel:
• The cash flow projections are based on the expected contractual period of the vessel;
• Expected cash outflow on supplementary payments based on contractual agreements;
• Inflationary rate of 3% is applied;
• Charter rates are based on expected charter fees;
• Discount rate of 6.5% is applied; and
• Residual value of 10% of vessel cost at the end of its useful life.
The impairment recognised in respect of the FPSO vessel amounted to RM1,613.2 million.
Annual Report 2018
153
NOTES TO
31 December 2018
(d) (i) Recoverable amount determined based on VIU (continued)
The following are key assumptions used in determining the VIU for the OSV vessels: 04
• The cash flows projection is based on the remaining useful lives of the vessels;
• Revenue projection is based on historical margins and expected future contracts;
• Drydocking expenditure is based on historical trends;
• Inflationary rates of 3% on costs and 5% on charter rates are applied;
• Utilisation rates and charter rates are based on historical trends, existing charter contracts and future
intended use of vessel;
• Discount rate of 7.4% is applied; and
• Residual value of 10% of vessel cost at the end of its useful life.
The impairment recognised in respect of OSV vessels amounted to RM408.0 million.
The sensitivity of the key assumptions with all other variables being held constant to profit or loss is as follows:
(Decrease)/Increase in loss
before taxation
2018
RM’000
Utilisation rate increased by 1% (18,296)
Utilisation rate decreased by 1% 5,279
Charter rate increased by 2% (80,131)
Charter rate decreased by 2% 82,037
Discount rate increased by 1% 14,537
Discount rate decreased by 1% (14,907)
Residual value increased by 1% (10,448)
Residual value decreased by 1% 10,196
(ii) Recoverable amount determined based on FV
The FV of the vessels is estimated based on expected selling price less costs of disposal in the event the vessel
is expected to be sold on a willing buyer and willing seller basis.
The FV for the vessels is assessed based on the assumption that they are charter-free, free of encumbrances,
maritime liens and other debts, and is based on a willing buyer and willing seller basis in an acceptable
area.
The recoverable amount which is determined based on FV is classified as level 3 under the fair value hierarchy.
The impairment recognised in respect of OSV vessels is RM178.5 million, based on the recoverable amount
of RM110.3 million.
An impairment charge of RM43.2 million for non-current assets classified as held for sale has been recognised
during the year based on the FV of the assets, in accordance with MFRS 5 “Non-current Assets Held for Sale
and Discontinued Operations” based on the recoverable amount of RM77.8 million.
154
NOTES TO
31 December 2018
(e) For the current financial year, the Group revised the residual value of OSV vessels based on the prevailing market
conditions and the expected value to be obtained for these vessels at the end of their useful lives. The revision
was accounted for as a change in accounting estimate and was effected on 1 December 2018. As a result, the
depreciation charge for current and future periods will increase by RM1.7 million and RM20.7 million respectively.
12 INVESTMENT IN SUBSIDIARIES
Company
2018 2017
RM’000 RM’000
Unquoted shares, at cost 24,208 24,166

7% Cumulative Redeemable Preference Shares, at cost 16,000 16,000
Less: Accumulated impairment losses (18,332) -
21,876 40,166
Capital contribution in subsidiaries (2017: amounts due from subsidiaries)
(net investments) 4,489,708 3,909,221
4,511,584 3,949,387
The Group’s effective interest in its subsidiaries, their respective principal activities and country of incorporation are
shown below:
Group’s effective interest Country of

Name of company Principal activities 2018 2017 incorporation
% %
Direct subsidiaries:
Armada Floating Bareboat charter of a floating production 100 100 The British
Solutions Limited(3) storage and offloading unit Virgin Islands
Armada Oyo Ltd(3) Bareboat charter of a floating production 100 100 The British
storage and offloading unit Virgin Islands
Armada TGT Ltd(3) Ship owners, charterers, managers of 100 100 Republic of
ships and vessels, marine support and The Marshall
other services to offshore oil and gas Islands
companies
Armada Kamelia Dormant 100 100 Malaysia

Sdn Bhd
Annual Report 2018
155
NOTES TO
31 December 2018
12 INVESTMENT IN SUBSIDIARIES (CONTINUED)
shown below: (continued)
04
% %
(continued)
Bumi Armada Ship management and chartering 100 100 Singapore

(Singapore) Pte Ltd operation and maintenance of FPSO
(“BASPL”)(2)
Bumi Armada Provision of agency services to its holding 100 100 Malaysia
Automation company
International
Sdn Bhd (4)
Bumi Armada Provision of engineering consultancy 100 100 Malaysia

Engineering services
Sdn Bhd (5)
Bumi Armada Provision of marine transportation and 99 95 Malaysia

Navigation Sdn Bhd support services to offshore oil and gas
(“BAN”) companies
Bumi Armada Offshore Ship owners, charterers, managers of 100 100 Republic of
Holdings Limited ships and vessels, marine support and The Marshall
(“BAOHL”) (3) other services to offshore oil and gas Islands
companies
Bumi Armada Russia Dormant 100 100 Republic of

Holdings Limited (3) The Marshall
Islands
Tera Sea Limited (3) Dormant 100 100 Republic of

The Marshall
Islands
Bumi Armada Holdings Provision of loans, advances and other 100 100 Federal Territory
Labuan Ltd facilities, and cash and debt management of Labuan,
services, investment and financial Malaysia
risk management, and other treasury
management services to Bumi Armada
Group of companies
156
NOTES TO
31 December 2018

% %
(continued)
Bumi Armada Capital Obtaining non-ringgit financing and 100 100 Federal Territory
Offshore Ltd providing cash and debt management of Labuan,
services, investment and financial risk Malaysia
management services and other treasury
management services to the Bumi Armada
Group of companies
Bumi Armada Capital Providing and obtaining financing and 100 100 Malaysia
Malaysia Sdn Bhd other facilities, and providing cash
and financial management services,
investment and financial risk management
services and other treasury management
services to the Bumi Armada Group of
companies
Bumi Armada Marine Investment holding 100 100 The British

Holdings Limited Virgin Islands
(“BAMHL”) (3)
Bumi Armada Investment holding 100 100 Singapore
Singapore Holdings
Pte Ltd (“BASH”) (1)
Bumi Armada Holdings Investment holding 100 100 Netherlands

B.V. (“BAHB”) (2)
Annual Report 2018
157
NOTES TO
31 December 2018
04
% %
Subsidiaries of BAN:
Armada Indah Sdn Bhd Dormant 99 95 Malaysia

(In Members’ Voluntary
Liquidation) (6)
Armada Tankers Sdn Bhd Dormant 99 95 Malaysia

(“ATSB”) (In Members’
Voluntary Liquidation) (6)
Bumi Armada Ship Managers of ships and vessels, marine 99 95 Malaysia

Management Sdn Bhd support and other services to offshore oil
and gas companies
Bumi Care Offshore Dormant 59 57 Malaysia

Production Sdn Bhd
Bumi Armada Shipping on bare boat or time charter 99 95 Federal Territory

Navigation Labuan basis of Labuan,
Limited Malaysia
Bumi Armada Shipping on bare boat or time charter 99 95 Federal Territory

Navigation Labuan basis of Labuan,
International Limited Malaysia
Subsidiaries of BAOHL:
Armada TLDD Limited (3) Dormant 100 100 Republic of

The Marshall
Islands
Angoil Bumi JV, LDA(2) & (7) Service provider to the oil and gas industry, 49 49 Angola
especially for repair and maintenance of
FPSO and OSV companies
Bumi Armada Australia Ship management and chartering 100 100 Australia
Pty Ltd (2) operation and maintenance of FPSO
158
NOTES TO
31 December 2018

% %
(continued)
Bumi Armada Do Brasil Dormant 100 100 Brazil

Servicos Maritimos
Ltda (3) & (8)
Bumi Armada Offshore Ship owners, charterers, managers of 100 100 Republic of
Contractor Limited ships and vessels, marine support and The Marshall
(“BAOCL”) (3) other services to offshore oil and gas Islands
companies
Armada Offshore Ship owners, charterers, managers of 100 100 Republic of

OSV Limited (3) ships and vessels, marine support and The Marshall
companies
Armada Offshore MPSV Dormant 100 100 Republic of

Limited (3) The Marshall
Islands
Bumi Armada UK Offshore oil and gas marine services 100 100 The United
Limited (2) Kingdom
Armada Kraken Dormant 100 100 Republic of

Limited (3) The Marshall
Islands
Bumi Armada Ghana Provision of marine transportation, 60 60 Ghana

Limited (1) floating production storage and offload
and offshore supply vessels
Armada Kraken Ship owners, charterers, managers of 100 100 Singapore

Pte Ltd (2) ships and vessels, marine support and
other services to offshore oil and gas
companies
Annual Report 2018
159
NOTES TO
31 December 2018
04
% %
(continued)
Armada Cabaca Ltd (3) Ship owners, charterers, managers of 100 100 Republic of
ships and vessels, marine support and The Marshall
companies
Armada Etan Limited (3) Dormant 100 100 Republic of

The Marshall
Islands
Armada Regasification Dormant 100 100 Malta

Services Malta Ltd (1)
Armada Floating Gas Provision of services to oil and gas 100 100 Malta
Services Malta Ltd (1) companies to operate, maintain and
repair floating gas solution units
Armada Floating Gas Ship owners, charterers, manager of 100 100 Malta
Storage Malta Ltd (1) ships and vessels, marine support and
companies
Armada Balnaves Ship owners, charterers, managers of 100 100 Singapore

companies
Bumi Armada Americas Offshore oil and gas marine services 100 100 The
Corporation (9) United States
of America
Subsidiaries of BASPL:
Bumi Armada Nigeria Dormant 100 100 Federal

Limited (2) Republic
of Nigeria
160
NOTES TO
31 December 2018

% %
Subsidiary of ATSB:
Armada Alpha Sdn Bhd Dormant 99 95 Malaysia

(In Members’ Voluntary
Liquidation) (6)
Subsidiaries of BAOCL:
Bumi Armada Caspian Activities related to oil and gas industry 100 100 Russia
LLC (2)
Bumi Armada Marine Provision of marine support and other 100 100 Russia
LLC (3) services to oil and gas companies
Subsidiaries of BASH:
Armada Constructor Ship owners, charterers, managers of 100 100 Singapore

other services to oil and gas companies
Armada Mahakam Ship owners, charterers, managers of 100 100 The British
Limited (3) ships and vessels, marine support and Virgin Islands
companies
Armada Marine Investment holding 100 100 The British

Contractors Caspian Virgin Islands
Ltd (“AMCCL”) (3)
Bumi Armada Leasing of vessel on time charter basis 100 100 Federal Territory
(Labuan) Ltd of Labuan,
Malaysia
Annual Report 2018
161
NOTES TO
31 December 2018
04
% %
(continued)
Offshore Marine Provision of integrated service solutions for 100 100 Malaysia
Ventures Sdn Bhd the supply, operation and maintenance of
support vessels and logistics and maritime
transportation services to the oil and gas
industry
Armada Ship Ship owners, charterers, managers of 100 100 Singapore

Management (S) ships and vessels, marine support and
Pte Ltd (2) other services to offshore oil and gas
companies
Bumi Armada Marine Ship owners, charterers, manager of 100 100 Singapore
Naryan Mar Pte Ltd (1) ships and vessels, marine support and
companies
Pokachi Pte Ltd (1) ships and vessels, marine support and
companies
Uray Pte Ltd (1) ships and vessels, marine support and
companies
Armada Marine Angola Provision of management and consulting 100 100 Angola
(SU), Lda (3) services including human resources,
finance and other related support services
to companies in the Bumi Armada Group
operating in Angola
162
NOTES TO
31 December 2018

% %
(continued)
Bumi Armada Marine Provision of offshore support vessel 60 60 Ghana

Ghana Limited (1) services to oil and gas industry in Ghana
Subsidiary of AMCCL:
Armada Marine Chartering of ships, barges and boats 100 100 Singapore
Contractors Caspian with crew
Pte Ltd (2) & (10)
Subsidiary of BAHB:
Bumi Armada Holdings Investment holding 100 100 Netherlands

Netherlands B.V.
(“BAHNB”) (2)
Subsidiaries of BAHNB:
Bumi Armada Investment holding 100 100 Netherlands

Netherlands B.V.
(“BANB”) (2)
(1)
The financial statements of these companies are audited by firms other than member firms of PricewaterhouseCoopers International Limited.
(2)
These companies are audited by member firms of PricewaterhouseCoopers International Limited, which are separate and independent legal entities
from PricewaterhouseCoopers PLT, Malaysia.
(3)
These companies are not required by their local laws to appoint statutory auditors.
(4)
Consolidated using predecessor method of merger accounting.
(5)
Shares are held by the entity’s directors for the benefit of and on behalf of the Company.
(6)
On 26 February 2018, a Special Resolution was passed to give effect to the members’ voluntary winding-up of Armada Indah Sdn Bhd, Armada
Alpha Sdn Bhd and Armada Tankers Sdn Bhd pursuant to Section 439(1)(b) of the Companies Act 2016. Accordingly, a Liquidator was appointed
for the purpose of the winding-up of these subsidiaries.
(7)
Notwithstanding the Group is holding less than 50% equity interest, the investment in Angoil Bumi JV, LDA is classified as subsidiary (not a joint
venture) due to the Group’s control pursuant to the shareholders’ agreement governing the operations of this Company.
(8)
The effective equity interest of the Company is 99.99%.
(9)
Bumi Armada Americas Corporation has been dissolved on 18 February 2019 as stated in the Certificate of Fact from the Secretary of State of
Texas dated 13 March 2019.
(10)
Shares are held through a nominee, namely Malaysia Nominees (Asing) Sendirian Berhad.
Annual Report 2018
163
NOTES TO
31 December 2018
During the financial year ended 31 December 2018, an impairment charge of RM18.3 million for costs of investment in
subsidiaries has been recognised. The impairment assessment was carried out as a result of lower than expected returns
on investment from these subsidiaries. 04
The recoverable amount was determined based on VIU as at 31 December 2018. The key assumptions used in VIU
are based on estimates and judgement with respect to key assumptions such as revenue growth, ability to secure future
contracts, funding requirements, exchange rates and discount rate of 6.9%. As the Company projects that there are
no foreseeable returns on investments from certain subsidiaries, the costs of investment in these subsidiaries were fully
impaired during the financial year.
13 INVESTMENT IN JOINT VENTURES
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost 469,937 260,565 101,979 131,565
Share of net assets 583,317 439,391 - -
Unrealised profit on transactions with
joint ventures (30,384) (30,989) - -
Interests in joint ventures 1,022,870 668,967 101,979 131,565
During the financial year, the Group redeemed RM33.5 million (2017: RM40.6 million) of redeemable preference
shares in Armada D1 Pte Ltd and Armada C7 Pte Ltd.
During the financial year, the Company redeemed RM29.3 million (2017: RM20.4 million) of redeemable preference
shares in Armada D1 Pte Ltd.
164
NOTES TO
31 December 2018
13 INVESTMENT IN JOINT VENTURES (CONTINUED)
The joint ventures are private companies and there are no quoted market prices available for their shares.
Details of the joint ventures are as follows:

% %
Armada Century Ltd Ship owners, charterers, managers of 49 49 The British
ships and vessels, marine support and Virgin Islands
companies
Armada C7 Pte Ltd Ship owners, charterers, managers of 50 50 Singapore

ships and vessels, marine support and
companies
Armada D1 Pte Ltd Ship owners, charterers, managers of 50 50 Singapore

companies
Century Bumi Limited Oil and gas exploration, and product and 40 40 Federal
marine services Republic
of Nigeria
Shapoorji Pallonji Bumi Ship owners, charterers, managers of 50 50 India

Armada Offshore ships and vessels, logistics and maritime
Private Limited transportation services to the oil and gas
industry
Forbes Bumi Armada Ship owners, charterers, managers of 49 49 India

Limited ships and vessels, logistics and maritime
transportation services to the oil and gas
industry
PT Armada Gema Ship owner and operator 50 50 Indonesia

Nusantara
SP Armada Oil Marine support and other services to the 50 50 India

Exploration Private oil and gas industry
Limited
Annual Report 2018
165
NOTES TO
31 December 2018
Details of the joint ventures are as follows: (continued)
Group’s effective interest Country of 04

% %
SP Armada Offshore To provide marine support and other - 50 India
Private Limited (1) service to oil and gas industry and for
that purpose to purchase, erect, construct,
own, charter, manage vessels and rigs
Armada Madura EPC Ship owners, charterers, managers of 50 49 Republic of

Limited ships and vessels, marine support and The Marshall
other services to offshore oil & gas Islands
companies
Shapoorji Pallonji Bumi The contracting of the design, fabrication, 30 49 India

Armada Godavari installation charter, deployment,
Private Limited (2) operations and maintenance of an FPSO
facility
Armada 98/2 Pte. Ltd. Ship owners, charterers, managers of 49 49 Singapore

other services to offshore oil & gas
companies
Bumi Armada Shapoorji Floating, production, storage and 45 45 Ghana

Pallonji Ghana Limited offloading development
Karapan Armada To provide support and facilitate credit 49 - Singapore

Madura Pte Ltd (3) enhancement of an FPSO facility
(1)
SP Armada Offshore Private Limited has been struck off the registrar of companies in India and the said company is dissolved with effect from
1 June 2018.
(2)
On 4 October 2018, Shapoorji Pallonji Bumi Armada Godavari Private Limited (“SPBAG”) allotted additional shares to one of its corporate
shareholders, Sharpoorji Pallonji Oil and Gas Private Limited and diluted the effective interest of BAB Group in SPBAG to 30%. Accordingly, the
Group and the Company have reclassified the investment from a joint venture to an associate (refer Note 14).
(3)
On 20 December 2018, BAOHL and Shapoorji Pallonji Oil & Gas Pte Ltd (“SPOG”) entered into a shareholders’ agreement to jointly control
Karapan Armada Madura Pte Ltd (“KAMPL”). KAMPL, a private company limited by shares, was formed in Singapore with an issued and paid-up
capital of SGD20,000. BAOHL holds 49% less 1 share of equity interest in KAMPL. The remaining equity stake is owned by SPOG.
The principal activity of KAMPL is the provision of support to the Husky-CNOOC Madura Limited charter contract and facilitating credit enhancement
for the financing of the project.
In the opinion of the Directors, the joint ventures which are material to the Group are as follows:
• Armada D1 Pte Ltd (“Armada D1”)

• Armada C7 Pte Ltd (“Armada C7”)
• Armada Madura EPC Limited (“Armada Madura”)
• PT Armada Gema Nusantara (“PT AGN”)
166
NOTES TO
31 December 2018
Set out below are the summarised financial information of the material joint ventures and other joint ventures of the
Group:
Armada Armada Armada

Group D1 C7 Madura PT AGN Others Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2018
Current assets 267,392 262,636 30,746 348,403 251,856 1,161,033
Non-current assets 826,877 1,210,513 - 1,984,376 11,437 4,033,203
Current liabilities (203,942) (179,172) (10,926) (300,470) (147,567) (842,077)
Non-current liabilities (208,737) (614,395) - (1,421,887) - (2,245,019)
Net assets 681,590 679,582 19,820 610,422 115,726 2,107,140
The above net assets include

the following:
Cash and cash equivalents 159,419 92,043 30,746 173,700 42,322 498,230
Current financial liabilities
excluding trade and other
payables (184,203) (161,357) (4,623) (293,811) (98,178) (742,172)
Non-current financial liabilities
payables (208,737) (614,395) - (1,421,887) - (2,245,019)
Revenue 227,407 111,244 - 309,606 655,325 1,303,582

Other expenses (16,616) (4,557) 102,820 (90,241) (622,507) (631,101)
Interest income 290 3 326 398 - 1,017
Depreciation (78,652) - - - (291) (78,943)
Finance costs (16,032) (46,985) (9,943) (120,922) - (193,882)
Taxation (34,537) (3,191) - (25,718) (11,360) (74,806)
Profit after taxation 81,860 56,514 93,203 73,123 21,167 325,867
Other comprehensive
(expenses)/income (145) 9,371 - - - 9,226
Total comprehensive income 81,715 65,885 93,203 73,123 21,167 335,093
Annual Report 2018
167
NOTES TO
31 December 2018
Set out below are the summarised financial information of the material joint ventures and other joint ventures of the
Group: (continued)
04
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2017
Current assets 289,496 202,171 2,136,182 239,184 159,520 3,026,553
Non-current assets 895,540 1,307,351 - 1,927,508 97,736 4,228,135
Current liabilities (191,463) (141,020) (2,078,256) (2,123,336) (224,362) (4,758,437)
Non-current liabilities (357,771) (736,506) - - (42) (1,094,319)
Net assets 635,802 631,996 57,926 43,356 32,852 1,401,932
The above net assets include

the following:
Cash and cash equivalents 121,481 47,378 108,534 55,420 45,370 378,183
Current financial liabilities
payables (175,449) (125,990) (2,030,251) (2,111,040) (184,957) (4,627,687)
Non-current financial liabilities
payables (357,771) (736,506) - - (42) (1,094,319)
Revenue 264,979 198,896 (83,425) 148,154 727,522 1,256,126

Other expenses 10,484 (3,775) 91,131 (53,365) (685,257) (640,782)
Interest income - (2) 304 305 - 607
Depreciation (91,203) - - (1,442) (330) (92,975)
Finance costs (21,007) (51,068) (70,379) (3,412) - (145,866)
Taxation (36,256) (2,920) - - (13,732) (52,908)
Profit after taxation 126,997 141,131 (62,369) 90,240 28,203 324,202
Other comprehensive
income/(expenses) 1,754 (176) - - - 1,578
Total comprehensive
income/(expenses) 128,751 140,955 (62,369) 90,240 28,203 325,780
168
NOTES TO
31 December 2018
Reconciliation of financial information:

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2018
Net assets 681,590 679,582 19,820 610,422 115,726 2,107,140
Group share in % 50% 50% 49% 50%
Group share 340,795 339,791 9,712 305,211 57,745 1,053,254
Unrealised profit (2,080) (1,468) - (28,508) 1,672 (30,384)
Net carrying amount 338,715 338,323 9,712 276,703 59,417 1,022,870
2017
Net assets 635,802 631,996 57,926 43,356 32,852 1,401,932
Group share in % 50% 50% 49% 50%
Group share 317,901 315,998 28,384 21,678 15,995 699,956
Unrealised profit (1,718) (945) - (27,908) (418) (30,989)
Net carrying amount 316,183 315,053 28,384 (6,230) 15,577 668,967
The Group’s share of profit, total comprehensive income, dividend received and net assets of the joint ventures, after
adjustments for equity accounting are as follows:
Group
2018 2017
RM’000 RM’000
Profit for the financial year 166,249 164,347
Total comprehensive income for the financial year 170,862 165,136
Dividend received 64,650 -
Net assets 1,022,870 668,967
Annual Report 2018
169
NOTES TO
31 December 2018
14 INVESTMENT IN AN ASSOCIATE
Group Company
2018
RM’000
2017
RM’000
04
Unquoted shares, at cost 16 16
Share of net liabilities (11) -
Interest in an associate 5 16
Details of the associate are as follows:

% %
Shapoorji Pallonji Bumi The contracting of the design, fabrication, 30 49 India
Armada Godavari installation charter, deployment,
Private Limited (1) operations and maintenance of an FPSO
facility

(1)
On 4 October 2018, Shapoorji Pallonji Bumi Armada Godavari Private Limited (“SPBAG”) allotted additional shares to one of its corporate
shareholder, Sharpoorji Pallonji Oil and Gas Private Limited and diluted the effective interest of BAB Group in SPBAG to 30%. Accordingly, the
Group and the Company have reclassified the investment from a joint venture to an associate (refer Note 13).
15 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
Group
2018
RM’000
Quoted equity securities, outside Malaysia
At 1 January -
Financial assets previously classified as available-for-sale financial asset (Note 16) 16,498
16,498
Add: Fair value loss recognised in equity (Note 38(e)) (1,286)
Exchange differences (54)
At 31 December 15,158
The fair value of quoted equity securities is determined by reference to published price quotations.
The Group has irrevocably elected non-trading equity securities above at initial recognition to present its fair value
changes in other comprehensive income. The Group considers this classification to be more relevant as these instruments
are strategic investments of the Group and not held for trading purpose.
170
NOTES TO
31 December 2018
16 AVAILABLE-FOR-SALE FINANCIAL ASSETS
As at 31 December 2017, the investment in the quoted equity securities were classified as available-for-sale financial assets
as follows:
Group
2018 2017
RM’000 RM’000
Quoted equity securities, outside Malaysia
At 1 January 16,498 22,884

Effects on adoption of MFRS 9
Reclassification to financial assets at FVOCI (Note 15) (16,498) -
- 22,884
Less: Impairment (Note 5) - (8,328)
Exchange differences - (1,130)
- 13,426
Add: Fair value gain recognised in equity (Note 38(e)) - 3,072
At 31 December - 16,498
17 FINANCE LEASE RECEIVABLES
The finance lease receivables are expected to be invoiced to the lessee within the following periods:
Group
2018 2017
RM’000 RM’000
Within 1 year 857,464 733,983
Between 1 and 5 years 4,247,546 4,166,001
After 5 years 7,077,561 7,391,079
Gross receivables 12,182,571 12,291,063
Less: Unearned finance income (7,014,112) (6,956,874)
5,168,459 5,334,189
The unguaranteed finance lease receivables are subject to the following maturity period:
Current 156,639 53,961
Non-current 5,011,820 5,280,228
At 31 December 5,168,459 5,334,189
As at 31 December 2018, finance lease receivables are related to the finance lease of the following vessels:
(i) Armada LNG Mediterrana, which started production in January 2017 for a charter of 18 years; and
(ii) Armada Olombendo FPSO, which started production in February 2017 for a charter of 20 years.
The unguaranteed residual values included in the finance lease receivables as at 31 December 2018 amount to RM550.0
million (2017: RM538.8 million).
As at 31 December 2018, no allowances for uncollectible minimum lease payments were provided.
There was no contingent rent recognised during the financial year.

Annual Report 2018
171
NOTES TO
31 December 2018
18 AMOUNTS DUE FROM/(TO) JOINT VENTURES
Group Company
2018
RM’000
2017
RM’000
2018
RM’000
2017
RM’000
04
Non-current
Gross amounts due from joint ventures
- interest bearing 60,059 32,162 - -
Less: Loss allowance (33,990) - - -
Net amounts due from joint ventures 26,069 32,162 - -
Current
Gross amounts due from joint ventures
- interest bearing - 216,633 - -
- non-interest bearing 38,278 35,232 20,467 18,842
38,278 251,865 20,467 18,842
Less: Bad debts written off (8,223) - (938) -
Net amounts due from joint ventures 30,055 251,865 19,529 18,842
Current
Amounts due to joint ventures (34,667) (32,237) (1,217) -
21,457 251,790 18,312 18,842
The amounts due from joint ventures classified as current which are non-interest bearing are unsecured and have credit
terms ranging from no credit terms to 30 days (2017: no credit terms to 30 days). The amounts due from joint venture
classified as non-current are interest bearing and bear interest rate of 6%. As at the end of previous financial year,
the amounts due from joint ventures classified as current and non-current which are interest bearing bear interest rates
ranging from 5% to 6%.
172
NOTES TO
31 December 2018
18 AMOUNTS DUE FROM/(TO) JOINT VENTURES (CONTINUED)
During the financial year ended 31 December 2018, an impairment of RM33.6 million was provided for amount due
from a joint venture due to change in expected amount and timing of recovery from the joint venture.
The loss allowance for amounts due from joint ventures as at 31 December 2018 which was assessed using the general
3-stage approach is as follows:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
At 1 January - - - -
Increase in loss allowance recognised in
profit or loss during the year (Note 5) 33,630 - - -
Exchange differences 360 - - -
At 31 December 33,990 - - -
Amounts due from joint ventures of which loss allowance was recognised in profit or loss during the year are classified
within the Underperforming category.
The amounts due to joint ventures classified as current are repayable on demand.
19 DEFERRED TAXATION
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when deferred taxes relate to the same tax authority. The following amounts, determined after
appropriate offsetting, are shown in the statement of financial position:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Deferred tax assets 21,660 7,295 3,745 4,288
Deferred tax liabilities (40,956) (15,654) - -
Subject to income tax:

Deferred tax assets
- property, plant and equipment 932 - 932 -
- payables 3,119 5,156 2,813 4,327
- unutilised tax losses 2,505 1,210 - -
- unutilised capital allowance 12,716 17,476 - -
- dividend receivable 15,167 - - -
34,439 23,842 3,745 4,327
Offsetting (12,779) (16,547) - (39)
Deferred tax assets (after offsetting) 21,660 7,295 3,745 4,288
Annual Report 2018
173
NOTES TO
31 December 2018
19 DEFERRED TAXATION (CONTINUED)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when deferred taxes relate to the same tax authority. The following amounts, determined after
appropriate offsetting, are shown in the statement of financial position: (continued) 04
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Deferred tax liabilities
- property, plant and equipment (53,735) (32,201) - (39)
(53,735) (32,201) - (39)
Offsetting 12,779 16,547 - 39
Deferred tax liabilities (after offsetting) (40,956) (15,654) - -
The movements during the financial year relating to deferred taxation are as follows:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
At 1 January (8,359) 5,758 4,288 5,605
(Credited)/Charged to profit or loss (Note 8):

- property, plant and equipment (19,908) (15,539) 972 (698)
- receivables 15,241 1,552 - -
- payables (2,045) (1,830) (1,515) (619)
- unutilised tax losses (3,464) 1,210 - -
(10,176) (14,607) (543) (1,317)
Exchange differences (761) 490 - -
At 31 December (19,296) (8,359) 3,745 4,288
174
NOTES TO
31 December 2018
19 DEFERRED TAXATION (CONTINUED)
The amount of unabsorbed capital allowances and unutilised tax losses (which have no expiry date other than as
disclosed below) for which no deferred tax asset is recognised in the statement of financial position as it is not probable
that taxable profit will be available against which these temporary differences can be utilised are as follows:
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Unutilised tax losses 1,167,070 1,039,161 53,315 44,117
Unabsorbed capital allowances 31,679 29,452 16,979 15,026
Under the Malaysia Finance Act 2018 which was gazetted on 27 December 2018, the unutilised tax losses amounting
to RM291.1 million for the Group and RM53.3 million for the Company as at 31 December 2018, which is disclosed
as part of the table above, will be imposed with a time limit for utilisation. Any unutilised tax losses brought forward
from year of assessment 2018 can be carried forward for another 7 consecutive years of assessment (i.e. from year of
assessments 2019 to 2025).
20 INVENTORIES
Group
2018 2017
RM’000 RM’000
Fuel 7,298 4,199
Annual Report 2018
175
NOTES TO
31 December 2018
21 TRADE RECEIVABLES
Group
2018
RM’000
2017
RM’000
04
Trade receivables 1,160,163 1,021,907
Less: Loss allowance (2017: Impairment) (404,880) (294,754)
755,283 727,153
The trade receivables have credit terms ranging from 0 to 60 days (2017: 0 days to 60 days).
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.
During the financial year, trade receivables totaling to RM101.5 million (2017: RM1.7 million) were impaired and charged
to profit or loss. As at 31 December 2018, the amount of the provision was RM404.9 million (2017: RM294.8 million). The
individually impaired receivables mainly relate to a number of customers, which are in an unexpectedly difficult financial
position due to the current industry conditions and change in the expected timing and quantum of recovery of the trade
receivables which was not present as at 1 January 2018.
The loss allowance for trade receivables as at 31 December 2018 which was assessed using the simplified approach
reconciles to the opening loss allowance as follows:
Group
2018 2017*
RM’000 RM’000
At 1 January 294,754 401,580
Amounts restated through opening retained earnings 4,091 -
Opening loss allowance as at 1 January 2018 per MFRS 9 298,845 401,580
Increase in loss allowance recognised in profit or loss during the year (Note 5) 101,494 1,741
Receivables written off - (83,270)
Exchange differences 4,541 (25,297)
At 31 December 404,880 294,754
* Loss allowance disclosed in comparative period is based on MFRS 139’s incurred loss model.
176
NOTES TO
31 December 2018
21 TRADE RECEIVABLES (CONTINUED)
As at 31 December 2017, amounts that are past due but not impaired relate to a number of customers for whom there is
no recent history of default but remain slow paying. The ageing analysis of these receivables is as follows:
Group
2017
RM’000
Less than 30 days past due 69,252
Between 31 and 60 days past due 41,835
Between 61 and 90 days past due 23,742
Between 91 days and 1 year past due 55,984
More than 1 year past due 154,293
345,106
22 ACCRUED LEASE RENTALS/(LEASE LIABILITIES)
Group
2018 2017
RM’000 RM’000
Accrued lease rentals 327,182 372,945
Less: Loss allowance (11,627) -
315,555 372,945
Lease liabilities (5,549) -
The Group leases out its vessels under non-cancellable operating lease agreements. The future minimum lease payments
receivable on leases of vessels are as follows:
Group
2018 2017
RM’000 RM’000
No later than 1 year 903,659 197,408
Between 1 and 5 years 205,658 -
The Group leases vessels under various agreements which terminate in 2018. On 3 August 2018, the Group signed
an extension of charter of FPSO Armada TGT 1 from 27 August 2018 to 14 November 2024 for a contract value of
USD285.0 million.
No contingent rent is recognised during the financial year.

Annual Report 2018
177
NOTES TO
31 December 2018
22 ACCRUED LEASE RENTALS/(LEASE LIABILITIES) (CONTINUED)
The loss allowance for accrued lease rentals as at 31 December 2018 which was assessed using the simplified approach
reconciles to the opening loss allowance as follows:
04
Group
2018 2017
RM’000 RM’000
At 1 January - -
Amounts restated through opening retained earnings 11,382 -
Opening loss allowance as at 1 January 2018 per MFRS 9 11,382 -
Exchange differences 245 -

At 31 December 11,627 -
The loss allowance was based on the expected timing and quantum of recovery from the customers.
23 OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Non-current
Other receivables and deposits 146,944 153,600 - -
Less: Loss allowance (146,944) - - -
- 153,600 - -
Current
Other receivables 33,431 36,755 87 324
Deposits 8,432 4,386 2,299 2,157
Prepayments 16,947 27,108 3,775 4,035
58,810 68,249 6,161 6,516
The non-current other receivables relate to an amount due from a charterer and is not expected to be recovered within
the next 12 months. During the financial year, the amount was impaired and fully provided for as the charterer issued
a notice advising of a purported “Force Majeure Event” and requesting immediate, orderly shutdown of operations on
the Armada Perdana FPSO.
178
NOTES TO
31 December 2018
23 OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (CONTINUED)
The non-current deposits arise from costs incurred on construction of vessels which are expected to be utilised in the
next 3 years. During the financial year, the amount was impaired and provided for as the constructor is facing financial
difficulties arising from the current industry conditions.
Included in the current other receivables is the asset recognised from pre-contract costs incurred to obtain or fulfil a
contract with customers. The pre-contract costs as at 31 December 2018 is RM15.1 million (2017: RM29.2 million).
Other receivables and deposits are interest free, unsecured and have no fixed term of repayment.
The loss allowance for other receivables and deposits as at 31 December 2018 which was assessed using the general
3-stage approach is as follows:
Group
2018 2017
RM’000 RM’000
At 1 January - -
Increase in loss allowance recognised in profit or loss during the year (Note 5) 141,234 -
Exchange differences 5,710 -
At 31 December 146,944 -
Other receivables and deposits of which loss allowance was recognised in profit or loss during the year are classified
within the Non-performing category.
24 CONTRACT ASSETS/(LIABILITIES)
The Group has recognised the following assets and liabilities related to contracts with customers:
Group
2018
RM’000
Non-current contract assets
Construction and conversion work (Note (a)) 44,090
Current contract assets

Vessel charter fees and support services rendered 3,859
Construction and conversion work (Note (a)) 1,715
Total contract assets 49,664
Non-current contract liabilities

Vessel charter fees and support services rendered (15,616)
Current contract liabilities

Vessel charter fees and support services rendered (26,635)
Total contract liabilities (42,251)
Annual Report 2018
179
NOTES TO
31 December 2018
24 CONTRACT ASSETS/(LIABILITIES) (CONTINUED)
(a) Construction and conversion work
The construction and conversion work represents the construction and conversion contracts with customers where
there are timing differences in revenue recognition and the milestone billings. The milestone billings are structured
04
and/or negotiated with customers to reflect certain stages of physical completion of the contracts.
(b) Significant changes in contract assets/(liabilities)
The following table shows the movement of the contract assets/(liabilities) during the financial year:
Contract Contract
assets liabilities
RM’000 RM’000
Opening balance as at 1 January 2018 - -
Amounts restated through retained earnings 3,703 (11,854)
Contract assets previously classified as amounts due from customers on
contract (Note 25) 8,745 -
Opening balance as at 1 January 2018 as per MFRS 15 12,448 (11,854)
Increase as a result of performance obligation fulfilled but not yet billed 390,168 -
Decreases due to billing made during the financial year (359,968) -
Revenue recognised during the financial year that was included in the
contract liabilities balance at 1 January 2018 - 200
Increases due to billing made, excluding amounts recognised as revenue
during the financial year - (30,010)
Exchange differences 7,016 (587)
49,664 (42,251)
(c) Contract value yet to be recognised as revenue
Revenue expected to be recognised in the future relating to performance obligations that are unsatisfied (or partially
unsatisfied) at the reporting date, are as follows:
Group
More than More than
1 year and 2 years and
Within within within More than
1 year 2 years 5 years 5 years Total
RM’000 RM’000 RM’000 RM’000 RM’000
Vessel charter fees
and support
services rendered 342,615 625,153 952,267 1,259,210 3,179,245
The Group applied the practical expedient in MFRS 15 and did not disclose information about unsatisfied
performance obligation for certain contracts, where the transaction price corresponds directly with the Group’s
level of performance in the future.
180
NOTES TO
31 December 2018
25 AMOUNTS DUE FROM/(TO) CUSTOMERS ON CONTRACT
Group
2017
RM’000
Aggregate costs incurred 1,426,772
Profit recognised to-date 292,304
Cumulative contract revenue recognised 1,719,076
Less: Progress billings (1,710,331)
8,745
The amount due from customers on contract has been reclassified to contract asset subsequent to the adoption of
MFRS 15 on 1 January 2018 (Note 24).
26 AMOUNTS DUE FROM/(TO) SUBSIDIARIES
Company
2018 2017
RM’000 RM’000
Current
Amounts due from subsidiaries 417,099 893,405
Current
Amounts due to subsidiaries (45,147) (112,780)
371,952 780,625
The amounts due from subsidiaries are unsecured, interest free and have no fixed term of repayment. There was no
impairment on amounts due from subsidiaries.
All balances are non-trade in nature except for amounts of RM266.6 million (2017: RM376.5 million) due from
subsidiaries which are trade in nature.
The amounts due to subsidiaries classified as current are repayable on demand.

Annual Report 2018
181
NOTES TO
31 December 2018
27 DEPOSITS, CASH AND BANK BALANCES
Group Company
2018
RM’000
2017
RM’000
2018
RM’000
2017
RM’000
04
Cash and bank balances 197,408 175,649 9,735 2,114
Deposits with licensed banks 1,029,016 1,670,465 49,568 61,292
1,226,424 1,846,114 59,303 63,406
The weighted average interest rates per annum of deposits with licensed banks that were effective as at the reporting
date were as follows:
Group Company
2018 2017 2018 2017

% % % %
Deposits with licensed banks 3.06 2.06 1.63 0.90
Bank balances are deposits held at call with banks and earn interest ranging between 0% to 2.6% (2017: 0% to 2.6%).
Bank deposits are mainly deposits with banks which have high credit ratings as determined by international credit rating
agencies.
28 NON-CURRENT ASSETS CLASSIFIED AS HELD-FOR-SALE
The movements during the financial year relating to non-current assets classified as held-for-sale are as follows:
Group
2018 2017
RM’000 RM’000
Net book value
At 1 January 1,770 33,397

Transfer from property, plant and equipment (Note 11) 106,045 9,759
Impairment (Note 5) (43,173) -
Disposals (64,577) (38,132)
Exchange differences 49 (3,254)
At 31 December 114 1,770
182
NOTES TO
31 December 2018
29 TRADE PAYABLES AND ACCRUALS
Group
2018 2017
RM’000 RM’000
Trade payables 121,004 104,007
Trade accruals 442,523 494,776
563,527 598,783
The trade payables have credit terms ranging from 0 to 90 days (2017: 0 days to 90 days).
The following amounts were offset, and the net amount is reported in the consolidated statement of financial position
where the Group has a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a
net basis or realise the asset and settle the liability simultaneously.
Group
Gross before Net after
offsetting Offsetting offsetting
RM’000 RM’000 RM’000
Current assets
Trade receivables 1,179,336 (24,722) 1,154,614
Current liabilities
Trade payables 123,027 (2,023) 121,004
Other payables and accruals 515,596 (22,699) 492,897
30 OTHER PAYABLES AND ACCRUALS
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Current
Advances from customers 186,536 228,486 - -
Other payables 252,567 156,990 11,441 5,891
Accruals 53,794 69,430 25,036 27,065
492,897 454,906 36,477 32,956
Non-current
Advances from customers 55,802 68,285 - -
548,699 523,191 36,477 32,956
During the financial year, RM Nil (2017: RM643.7 million) advances from customers were reclassified upon first
production to finance lease receivables.
Annual Report 2018
183
NOTES TO
31 December 2018
31 PROVISIONS
Group
2018
RM’000
2017
RM’000
04
At 1 January 106,921 98,149
Additions - 8,502
Accretion of interest 8,133 10,485
Reversal during the financial year (31,745) -
Exchange differences 2,278 (10,215)
At 31 December 85,587 106,921
During the financial year, a reversal of provision was made due to a change in assumptions regarding demobilisation
costs.
The provision are subject to the following majority period:
Group
2018 2017
RM’000 RM’000
Current
Provision for demobilisation costs 85,587 -
Non-current
Provision for demobilisation costs - 106,921
Provision for demobilisation costs consists of the net present value of the estimated costs of demobilising a vessel at the
end of its useful life.
184
NOTES TO
31 December 2018
32 HIRE PURCHASE CREDITORS
Group
2017
RM’000
Analysis of hire purchase commitments:
- payable within one year 100
- payable between one and two years 100
- payable between two and five years 125
325
Less: Interest in suspense (39)
286
Representing hire purchase liabilities:

- due within 12 months 88
- due after 12 months 198
286
During the financial year, the Group has settled the hire purchase creditors balance.
Annual Report 2018
185
NOTES TO
31 December 2018
33 BORROWINGS
Group
2018
RM’000
2017
RM’000
04
Current
Term loans – secured – others 925,573 853,515
Term loans – secured – AKPL 1,782,895 2,145,196
Term loans – unsecured 1,577,959 1,448,169
4,286,427 4,446,880
Revolving credits – unsecured 1,246,912 1,020,389

Sukuk Murabahah – unsecured – current (1)
30,655 30,654
Sukuk Murabahah – unsecured – non-current (1)
1,499,352 -
7,063,346 5,497,923
Non-current
Term loans – secured 3,317,184 3,485,818
Term loans – unsecured - 675,766
Revolving credits – unsecured - 364,185
Sukuk Murabahah – unsecured (1) - 1,499,213
3,317,184 6,024,982
Total borrowings 10,380,530 11,522,905

(1)
The Sukuk Murabahah was issued by Bumi Armada Capital Malaysia Sdn Bhd under the Shariah principle of Murabahah (via a Tawarruq
arrangement) for the full aggregate nominal value of RM1.5 billion for a tenure of 10 years, at a profit rate of 6.35% per annum.
The weighted contractual interest/profit rates per annum of borrowings that were effective as at the end of the financial
year are as follows:
Group
2018 2017
% %
Revolving credits 4.83 3.58
Term loans 4.94 3.91
Sukuk Murabahah 6.35 6.35
33 BORROWINGS (CONTINUED)
31 December 2018
NOTES TO
186
Bumi Armada Berhad
Total Maturity profile
Currency carrying
Group Interest/profit rate terms exposure amount <1 year 1-2 years 2-5 years >5 years
RM’000 RM’000 RM’000 RM’000 RM’000
At 31 December 2018
Unsecured:
- term loans Floating rates vary based on London USD 1,577,959 1,577,959 - - -
Interbank Offer Rate (“LIBOR”)
- Sukuk Murabahah Fixed rate for a tenure of 10 years

- current RM 30,655 30,655 - - -
- non-current (1)
RM 1,499,352 1,499,352 - - -
- revolving credits Floating rates vary based on LIBOR USD 915,602 915,602 - - -
Floating rates vary based on cost USD 331,310 331,310 - - -
of funds (“COF”)
Secured:
- term loans Floating rates vary based on LIBOR
- others USD 3,833,738 516,554 332,656 1,128,514 1,856,014
- AKPL
- current USD 409,019 409,019 - - -
- non-current (1)
USD 1,782,895 1,782,895 - - -
10,380,530 7,063,346 332,656 1,128,514 1,856,014

(1)
As elaborated in Section E – Liquidity risk, the amounts due after one year from the reporting date of RM1,499.4 million and RM1,782.9 million are reclassified as current liabilities as the Group
has not met the financial covenant of net debt over EBITDA for the financial year ended 31 December 2018 and the project lenders of AKPL have the right to issue a cancellation notice for a full
prepayment of the loan.
Our Numbers
33 BORROWINGS (CONTINUED)
Total Maturity profile

Currency carrying
Group Interest/profit rate terms exposure amount <1 year 1-2 years 2-5 years >5 years
RM’000 RM’000 RM’000 RM’000 RM’000
At 31 December 2017
Unsecured:
- term loans Floating rates vary based on COF RM 92,527 92,527 - - -
Floating rates vary based on LIBOR USD 2,031,408 1,355,642 675,766 - -
- Sukuk Murabahah Fixed rate for a tenure of 10 years RM 1,529,867 30,654 - - 1,499,213
- revolving credits Floating rates vary based on LIBOR USD 979,924 615,739 364,185 - -
Floating rates vary based on COF USD 404,650 404,650 - - -

Secured:
- term loans Floating rates vary based on LIBOR
- others USD 3,939,458 453,640 256,969 1,036,647 2,192,202
- AKPL
- current USD 378,569 378,569 - - -
- non-current (1) USD 2,145,196 2,145,196 - - -
Floating rates vary based on COF RM 21,306 21,306 - - -

11,522,905 5,497,923 1,296,920 1,036,647 3,691,415

(1)
As elaborated in Section E – Liquidity risk, the amount due after one year from the reporting date of RM2,145.2 million is reclassified as current liabilities as the project lenders of AKPL have the
right to issue a cancellation notice for a full prepayment of the loan.
31 December 2018
Annual Report 2018

NOTES TO
187
04
188
NOTES TO
31 December 2018
34 DERIVATIVE FINANCIAL INSTRUMENTS
Group
2018 2017
Assets Liabilities Assets Liabilities

RM’000 RM’000 RM’000 RM’000
Derivatives used for hedging:
- Interest rate swaps 128,820 (7,643) 103,974 (1,040)
- Cross currency interest rate swaps 2,044 (425,700) 2,215 (460,649)
Total 130,864 (433,343) 106,189 (461,689)
Less: Non-current portion

Derivatives used for hedging:
- Interest rate swaps 65,060 (7,044) 63,205 -
- Cross currency interest rate swaps - - 1,562 (449,850)
65,060 (7,044) 64,767 (449,850)
Current portion 65,804 (426,299) 41,422 (11,839)
The fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the
hedged item is more than 12 months, and as a current asset or liability if the maturity of the hedged item is less than
12 months.
As at 31 December 2018, the net derivative financial liabilities of the Group amounted to RM302.5 million on remeasuring
the fair values of the derivative financial instruments. Of the decrease of RM53.0 million from the previous financial year
ended 31 December 2017, a net amount of RM40.9 million was included in the cash flow hedging reserve attributable
to the Group and non-controlling interests, and RM11.3 million was recycled to profit or loss within finance costs.
RM39.1 million was reclassified to the statements of profit or loss to offset the foreign exchange loss which arose from
the weakening of RM against USD, and RM18.5 million was recycled to profit or loss. This has resulted in a decrease
in the debit balance of the cash flow hedging reserve to a credit balance as at 31 December 2018 by RM98.5 million.
As at 31 December 2017, the Group recognised net derivative financial liabilities of RM355.5 million on remeasuring
the fair values of the derivative financial instruments. Of the decrease of the RM276.4 million from the previous financial
year, a net amount of RM261.7 million was included in the cash flow hedging reserve attributable to the Group and
non-controlling interests, and RM14.9 million was recycled to profit or loss within finance costs for cross currency interest
rate swaps and interest rate swaps.
The Group’s cash flow hedging reserve as at 31 December 2018 represents the effective portion of the deferred fair
value losses relating to the derivative financial instruments which qualified for hedge accounting. The gains and losses
recognised in the cash flow hedging reserve will be released to profit or loss within finance costs over the period of the
underlying borrowings.
Annual Report 2018
189
NOTES TO
31 December 2018
34 DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
(a) Cross currency interest rate swaps (“CCIRS”)
A subsidiary whose functional currency is in RM had entered into cross currency interest rate swaps to manage 04
forecasted USD receipts that are highly probable.
In the previous financial year, another subsidiary whose functional currency is in USD had entered into cross
currency interest rate swaps used to manage its floating interest rate term loans denominated in RM as disclosed
in Note 33.
As at 31 December 2018, the fixed interest was 2.85% per annum and the main floating rate was cost of funds
(“COF”) plus a margin of 1.75% per annum. The swaps matured on 24 May 2018.
The notional principal amounts of the outstanding cross currency interest rate swaps at 31 December 2018 were
RM1,500.0 million (2017: RM1,521.3 million).
(b) Interest rate swaps (“IRS”)
The notional principal amounts of interest rate swap contracts used to manage the floating interest rate risk arising
from term loans were RM4,102.9 million (2017: RM4,373.9 million). These interest rate swap contracts receive
fixed interest rate ranging from 1.19% to 2.97% (2017: 0.99% to 4.69%) per annum and they derived from the
underlying bank borrowings.
35 SHARE CAPITAL
Group and Company

Number of shares Share capital
2018 2017 2018 2017

’000 ’000 RM’000 RM’000
Issued and fully paid (1):
Ordinary shares
At 1 January 5,866,269 5,866,269 4,311,294 1,173,253
Transferred from share premium - - - 3,137,730
Transferred from preference share
redemption reserve - - - 311
Shares issued pursuant to the management
incentive plan 4,668 - 3,521 -
At 31 December 5,870,937 5,866,269 4,314,815 4,311,294
(1)
The new Companies Act 2016, which came into operation on 31 January 2017, abolished the concept of authorised share capital and par value
of share capital. Accordingly, the share capital of the Company no longer has a par value. This transition has no impact on the numbers of ordinary
shares in issue or the relative entitlement to the member as a result of this transition.
190
NOTES TO
31 December 2018
36 EMPLOYEE SHARE OPTIONS SCHEME
The Company implemented an Employees’ Share Options Scheme (“ESOS” or “Scheme”) which came into effect on
28 June 2011 for a period of 10 years to 27 June 2021. The ESOS is governed by the By-Laws which were approved
by the shareholders on 18 June 2011. The main features of the Scheme are as follows:
(a) An eligible employee shall pay a sum of RM1.00 as consideration for the acceptance of the share options offer. An
option shall be exercisable at a price which is the weighted average of the market price quotation of the shares for
the five (5) market days immediately preceding the date on which the options are granted, rounded to the nearest
sen, or the par value of the shares, whichever is higher.
(b) Unless otherwise determined by our Board (or such other committee appointed by our Board to administer the
ESOS), each option shall become exercisable, to the extent of one-third of the shares covered thereby, on each of
the first three (3) anniversaries of the date of grant, if the holder of such option shall have been in the continuous
service of the Company or its subsidiaries that are not dormant throughout such period. No options shall be
exercisable if the exercise of such options would violate any provision of applicable laws, nor shall any options be
exercisable more than ten (10) years from the date on which the Scheme became effective.
(c) No option shall be granted pursuant to the ESOS on or after the 10th anniversary of the date on which the Scheme
became effective.
(d) The new shares issued upon the exercise of an option will be subject to all the provisions of the Company’s
Memorandum and Articles of Association and the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad and shall rank pari passu in all respects with the then existing issued ordinary shares of the Company, save
that they will not entitle the holders thereof to receive any rights or bonus issue or dividends or distributions the
entitlement date of which precedes the date of the issue of such new shares.
(e) The total number of shares to be issued under the ESOS shall not exceed in aggregate 10% of the issued share
capital of the Company at any point of time during the tenure of the ESOS and out of which not more than 50%
of the shares shall be allocated, in aggregate, to Executive Directors and senior management of the Group. In
addition, not more than 10% of the shares available under the ESOS shall be allocated to any individual employee
or Executive Director who, either singly or collectively through persons connected with him/her, holds 20% or
more in the issued and paid-up capital of the Company. The Company is in compliance with the requirements with
regards to the options granted to the Executive Directors and senior management during the financial year.
Annual Report 2018
191
NOTES TO
31 December 2018
36 EMPLOYEE SHARE OPTIONS SCHEME (CONTINUED)
The fair value as at the grant date of share options granted in the previous financial year was determined using the Black
Scholes valuation model, taking into account the terms and conditions upon which the options were granted. The inputs
to the model used were as follows: 04
2014
Dividend yield (%) 0.78% to 1.66%

Expected volatility (%) 27.1% to 29.8%
Risk-free interest rate (%) 3.11% to 3.57%
Expected life of options (years) 1 to 4 years
Share price at date of grant (RM) 1.83 to 2.39
Exercise price of options (RM) 1.83 to 2.39
Fair value of options at date of grant (RM) 0.26 to 0.50
The expected average life of options is based on historical information, which may not necessarily be indicative of the
future exercise pattern that may occur. The expected volatility reflects the assumptions based on the historical volatility on
the assumptions that this is indicative of future trends which may also not necessarily be the actual outcome.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
2018 2017
Average Average
exercise price exercise price
per share Options per share Options
option (RM) (’000) option (RM) (’000)
At 1 January 2.32 30,423 2.31 46,067
Forfeited 2.26 (15,073) 2.29 (15,644)
At 31 December 2.39 15,350 2.32 30,423
Out of the 15,350,233 outstanding options (2017: 30,423,270 outstanding options), all were exercisable as at the
end of the reporting period.
There were no options exercised during the financial year ended 31 December 2018 and 31 December 2017.
192
NOTES TO
31 December 2018
36 EMPLOYEE SHARE OPTIONS SCHEME (CONTINUED)
Share options outstanding as at the end of the financial year have the following expiry dates and exercise prices:
Exercise price in
Grant/Vest Expiry date RM per share option Share options (’000)
2018 2017 2018 2017
2013/2013 2018 - 2.27/2.28 - 3,237
2013/2014 2018 - 2.27/2.28/2.43 - 3,237
2013/2015 2018 - 2.27/2.28/2.43 - 4,315
2014/2015 2019 2.39 1.83/2.39 4,605 5,890
2014/2016 2019 2.39 1.83/2.39 4,605 5,890
2014/2017 2019 2.39 1.83/2.39 6,140 7,854
15,350 30,423
With the establishment of the Management Incentive Plan which came into effect on 10 October 2016 (Note 37),
the Company has ceased awarding further options under the Scheme.
37 MANAGEMENT INCENTIVE PLAN
The Company established a Management Incentive Plan (“MIP” or “Plan”) which came into effect on 10 October 2016
for a period of 10 years to 9 October 2026 and is administered by the MIP Committee. The MIP is governed by the
By-Laws which were approved by the shareholders on 23 May 2016.
The main features of the Plan are as follows:
(a) The grant of shares is subject to certain vesting conditions and after fulfilment of certain performance targets and/or
other conditions as determined by the MIP Committee in accordance with the By-Laws. The MIP Committee may in
its absolute discretion permit the vesting of the unvested shares (or any part thereof) to the MIP participants subject
to such terms and conditions as may be prescribed notwithstanding that:
(i) The vesting date is not due or has not occurred; and/or
(ii) Other terms and conditions set forth in the grant have not been fulfilled/satisfied.
(b) In the event of termination or cessation of employment prior to the relevant vesting date, any unvested granted
shares shall forthwith cease to be capable of vesting.
(c) The new shares to be allotted and issued pursuant to the vesting of the grant under the MIP shall, upon allotment
and issuance, rank equally in all respects with the then existing issued shares. The new shares to be allotted and
issued pursuant to the vesting of the grant under the MIP shall not be entitled to any voting rights, dividends, rights,
allotments, distributions and/or any other entitlements, for which the entitlement date is prior to the date on which
the new shares are credited into the CDS Accounts of the respective grantees.
Annual Report 2018
193
NOTES TO
31 December 2018
37 MANAGEMENT INCENTIVE PLAN (CONTINUED)
The main features of the Plan are as follows: (continued)
(d) The maximum number of the Company’s shares which may be made available under the Plan shall not, when 04
aggregated with the total number of new shares allotted and issued and/or to be allotted and issued under the
existing ESOS, exceed 10% of the total number of shares of the Company (excluding treasury shares) at any point
of time within the duration of the MIP for a period of 10 years commencing from 10 October 2016 during the MIP
period (“Maximum Shares”).
(e) The maximum number of shares that are to be allocated to any one category or designation of selected employees
shall be determined by the MIP Committee from time to time. The allocation to any individual selected employee
who, either singly or collectively through persons connected with him/her, holds 20% or more of the total number
of shares of the Company (excluding treasury shares), shall not exceed 10% of the Maximum Shares.
2017 MIP Grant (“1st Grant”)
On 2 June 2017, the Company offered and granted 41,152,400 shares under the Plan, comprising of annual grant of
up to 26,237,800 shares and a 3-year grant of up to 14,914,600 shares.
The fair value as at grant date of the 1st Grant shares offered and granted under the Plan was RM0.7543 per share,
based on the Volume Weighted Average Price (“VWAP”) of the Company’s shares on the Main Market of Bursa Malaysia
Securities Berhad, on the grant date, as reported on Bloomberg.
Annual grant
During the financial year, 14,002,900 shares for annual grant were awarded to eligible employees and the Executive
Director of the Group upon fulfilment of certain performance targets and/or other conditions as determined by the MIP
Committee in accordance with the By-Laws. These shares will be vested annually over a period of 10 years and forfeited
in the event of termination or cessation of employment prior to the next vesting date.
The movement of the number of eligible shares for annual grant under 1st Grant during the financial year is as follows:
Group and Company

Number Number
of shares of shares
awarded awarded
as at as at 31
1 January Granted Awarded Vested Forfeited December
‘000 ‘000 ‘000 ‘000 ‘000 ‘000
2018
MIP 1st grant:
Annual grant - - 14,003 (4,668) (976) 8,359
3-year grant
As at 31 December 2018, the maximum number of eligible shares for the 3-year grant is 11,732,800 shares
(2017: 13,323,700 shares). The performance targets and vesting conditions for the 3-year grant were not fulfilled.
Hence, there were no shares awarded for the 3-year grant during the financial year.
194
NOTES TO
31 December 2018
37 MANAGEMENT INCENTIVE PLAN (CONTINUED)
2018 MIP Grant (“2nd Grant“)
On 4 June 2018, the Company further offered and granted an annual grant of 37,451,700 shares under the Plan. As
at 31 December 2018, the maximum number of eligible shares granted is 837,100 shares.
The fair value as at grant date of the 2nd Grant shares offered and granted under the Plan was RM0.7527 per share,
based on the Volume Weighted Average Price (“VWAP”) of the Company’s shares on the Main Market of Bursa Malaysia
Securities Berhad, on the grant date, as reported on Bloomberg.
Annual grant
As at 31 December 2018, the vesting conditions for the 2nd Grant shares were not fulfilled. Hence, there were no award
of 2nd Grant shares during the financial year.
38 RESERVES
(a) Share premium
Share premium of the Group and of the Company represents premium arising from the issuance of ordinary shares
of the Company at issue price above the nominal value.
Effective from 31 January 2017, the new Companies Act 2016 (“the Act”) abolished the concept of authorised
share capital and par value of share capital. Consequently, the credit balance of the share premium and preference
share redemption reserve (Note 38(e)) becomes part of the Company’s share capital (Refer to Note 35).
(b) Foreign exchange reserve
The foreign exchange reserve comprises all foreign exchange differences arising from the translation of the
financial statements of entities that have functional currency different from the Group’s presentation currency.
(c) Share option reserve
The share option reserve comprises the cumulative value of employee services received for the issue of share
options by the Company. The fair value, measured at grant date of the share options granted to these employees is
recognised as an employee expense in profit or loss and a corresponding increase in equity, over the period that
the employees become unconditionally entitled to the options.
Annual Report 2018
195
NOTES TO
31 December 2018
38 RESERVES (CONTINUED)
(d) Hedging reserve
The hedging reserve includes the cash flow hedge reserve and the cost of hedging reserve. 04
The Group defers the changes in the forward element of CCIRS in the costs of hedging reserve.
Cash flow hedge reserve

Cost of Spot Total
hedging component hedging
reserve of CCIRS CCIRS IRS reserve
RM’000 RM’000 RM’000 RM’000 RM’000
2017
At 1 January - - (199,440) 97,966 (101,474)
Effect on the adoption of MFRS 9 (73,301) (126,139) 199,440 - -
(73,301) (126,139) - 97,966 (101,474)
Other Comprehensive Income (“OCI”):

Change in fair value - 84,407 - 2,625 87,032
Costs of hedging deferred in OCI (25,815) - - - (25,815)
(99,116) (41,732) - 100,591 (40,257)
2018
At 1 January (99,116) (41,732) - 100,591 (40,257)
Other Comprehensive Income (“OCI”):

Change in fair value - 35,776 - 29,943 65,719
Costs of hedging deferred in OCI 32,814 - - - 32,814
Changes in non- controlling interest - - - (1) (1)
At 31 December (66,302) (5,956) - 130,533 58,275
196
NOTES TO
31 December 2018
38 RESERVES (CONTINUED)
(e) Other reserves
Other reserves represent the fair value change in financial assets at FVOCI amounting to RM1.3 million (2017:
RM3.1 million).
At the end of the previous financial year, other reserves include the fair value change of a call option granted to a
former Executive Director of RM6.3 million, which has been forfeited during the financial year.
During the previous financial year, the preference share redemption reserve for the Company and a subsidiary
amounting to RM0.3 million become part of the Company’s share capital subsequent to the new Act coming
into force.
39 COMMITMENTS
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
(i) Capital expenditure for property, plant
and equipment not provided for in
the financial statements:
- authorised and contracted 25,160 162,142 - 398
- authorised but not contracted 22,625 278,385 6,361 6,474
47,785 440,527 6,361 6,872
(ii) Commitments for amounts payable

under operating leases for rental of
premises:
- payable within one year 7,264 8,893 4,639 6,822
- payable later than one year and
no later than five years 8,547 10,185 1,751 9,665
- payable later than five years - - -
15,811 19,078 6,390 16,487
The Group and the Company have entered into lease arrangements (classified as operating leases) for office premises
with durations varying from 1 to 7 years and 1 to 3 years respectively (2017: 1 to 6 years and 1 to 2 years respectively).
Annual Report 2018
197
NOTES TO
31 December 2018
40 SIGNIFICANT RELATED PARTY DISCLOSURES
The related parties of the Group and the Company are:
(a) Subsidiaries 04
Details of the subsidiaries are shown in Note 12.
(b) Joint ventures
Details of the joint ventures are shown in Note 13.
(c) Associate
Details of the associate is shown in Note 14.
(d) Key management personnel
Key management personnel are defined as those persons having authority and responsibility for planning, directing
and controlling the activities of the Group and of the Company either directly or indirectly. The key management
personnel of the Group and of the Company include Directors of the Company and certain members of senior
management of the Group and of the Company.
Usaha Tegas Sdn. Bhd. (“UTSB”) is a party related to the Company by virtue of its substantial equity interest in Objektif
Bersatu Sdn. Bhd. (“OBSB”), a substantial shareholder of the Company. The ultimate holding company of UTSB is
PanOcean Management Limited (“PanOcean”). PanOcean is the trustee of a discretionary trust, the beneficiaries of
which are members of the family of Ananda Krishnan Tatparanandam (“TAK”) and foundations including those for
charitable purposes. Although PanOcean and TAK are deemed to have an interest in the shares of the Company through
UTSB’s deemed interest in OBSB, they do not have any economic or beneficial interest in such shares as such interest is
held subject to the terms of such discretionary trust.
198
NOTES TO
31 December 2018
40 SIGNIFICANT RELATED PARTY DISCLOSURES (CONTINUED)
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant
related party transactions. The related party transactions described below were carried out on terms and conditions
agreed with related parties.
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
(i) Transactions with UTSB Management
Sdn. Bhd. (1)
- management fees 6,905 6,241 6,905 6,241
(ii) Telecommunication expenses to Maxis
Broadband Sdn. Bhd. (2) 693 1,220 - 25
(iii) Rental to Malaysian Landed Property
Sdn. Bhd. (3) 7,690 7,890 7,690 7,890
(iv) Management and engineering
assistance services charged to joint
ventures
- revenue (11,351) (3,207) - -
- other operating income - (16,641) - -
(v) Management fees charged to
subsidiaries
- revenue - - (9,739) -
(vi) Transaction with key management:
Key management personnel
compensation:
- Non-executive Directors’ fees 2,077 2,124 2,077 2,124
- salaries, bonus, allowances and
other staff related costs 15,606 17,079 15,606 17,079
- defined contribution plan 280 822 280 822
- share-based payment 1,526 4,249 1,526 4,249
(vii) Central overhead fees charged:
- subsidiaries - - (146,476) (145,789)
- joint ventures - (564) - (564)
(viii) Payment on behalf of:
- subsidiaries - - 11,146 10,001
- joint ventures 3,197 11,076 741 10,857
(ix) Repayment on behalf by/(of)
subsidiaries - - 15,634 (49,840)

(1)
Subsidiary of UTSB, a substantial shareholder of the Company.

(2)
Subsidiary of a joint venture, in which UTSB has a significant equity interest.

(3)
Subsidiary of a company in which TAK has a 100% equity interest.
Annual Report 2018
199
NOTES TO
31 December 2018
41 FAIR VALUES
The carrying amounts of financial assets and financial liabilities of the Group as at the reporting date approximated their
fair values except as set out below:
04
Carrying amount Fair value
Group 2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Finance lease receivables 5,168,459 5,334,189 5,903,289 6,036,757
Amounts due from joint ventures 56,124 248,795 51,976 240,673
Fixed rate Sukuk Murabahah (Note 33) 1,530,007 1,529,867 1,500,230 1,505,313
The fair value of the finance lease receivables, amounts due from joint ventures and fixed rate Sukuk Murabahah are
within Level 3 of the fair value hierarchy.
The Group estimates the fair value of finance lease receivables, amounts due from joint ventures and the fixed rate Sukuk
Murabahah by discounting future contractual cash flows at the current market interest rate available to the Group for
similar financial instruments. The discount rates to determine fair value of finance lease receivables, amounts due from
joint ventures and the fixed rate Sukuk Murabahah range between 6.35% and 11.00% respectively (2017: 6.29% and
11.00% respectively).
The Group believes that its estimate of fair value is appropriate and the use of different methodologies or assumptions
could lead to different measurement of fair value.
42 CONTINGENT LIABILITIES
Group Company
2018 2017 2018 2017

RM’000 RM’000 RM’000 RM’000
Bank guarantees extended to third parties 149,162 387,707 95,972 387,707
200
NOTES TO
31 December 2018
43 MATERIAL LITIGATION
Save as disclosed below, as at 31 December 2018, neither the Company nor any of its subsidiaries were involved in any
material litigation, claims or arbitration, and the Company and its subsidiaries are not aware of any material litigation,
claims or arbitration pending or threatened against the Company and its subsidiaries:
In the Supreme Court of Western Australia between Armada Balnaves Pte Ltd and Woodside Energy Julimar Pty Ltd
The matter arose out of a dispute between Armada Balnaves Pte Ltd (“ABPL”), a wholly-owned subsidiary, and Woodside
Energy Julimar Pty Ltd (“WEJ”) in relation to a contract for the provision of floating production storage and offloading
services dated 30 September 2011 (“Contract”). On 4 March 2016, WEJ purported to terminate the Contract by issuing
a notice of termination to ABPL. ABPL considered this purported termination by WEJ tantamount to a cancellation for
convenience, or a repudiation of the Contract, either of which entitles ABPL to claim damages.

On 14 March 2016, ABPL filed a Writ of Summons in the Supreme Court of Western Australia (“Supreme Court”)
against WEJ for, inter alia, (i) a declaration that WEJ was in repudiatory breach of the Contract and (ii) damages for
WEJ’s breach of the Contract. Subsequently, on 20 April 2016, ABPL filed its Statement of Claim in the Supreme Court
against WEJ claiming for damages in general for WEJ’s repudiation of the Contract, and the amount of such damages
has been quantified by ABPL to include the sum of USD275,813,698.63 (being the amount of the termination payment
to which ABPL is entitled had the Contract been terminated without breach) plus any additional damages for loss of
bargain caused to ABPL as a consequence of WEJ’s repudiation of the Contract. ABPL is also claiming for the additional
sum of USD7,700,000.00 for work done and materials supplied pursuant to the Contract. WEJ had, on 2 June 2016,
filed its defence to ABPL’s Statement of Claim. The trial for this matter commenced at the Supreme Court on 18 February
2019 and the parties served written closing submissions and made closing oral submissions on 26 and 27 March 2019.
Judgment is expected around October to December 2019.
The Group is of the view that there are reasonable grounds to expect a favourable outcome in respect of ABPL’s claims
with regards to the said repudiation by WEJ of the Contract. Notwithstanding the foregoing, the award of damages in
the event of a favourable outcome is subject to final determination by the Supreme Court.
Annual Report 2018
201
NOTES TO
31 December 2018
44 FINANCIAL INSTRUMENTS BY CATEGORY
Analysis of the financial instruments for the Group is as follows:
Financial 04
assets Derivatives
at amortised used for
costs hedging FVOCI Total
RM’000 RM’000 RM’000 RM’000
At 31 December 2018
Financial assets:
Finance lease receivables 5,168,459 - - 5,168,459

Accrued lease rentals 310,006 - - 310,006
Derivative financial instruments - 130,864 - 130,864
Financial assets at fair value through other
comprehensive income - - 15,158 15,158
Trade receivables 755,283 - - 755,283
Other receivables and deposits excluding
prepayments 41,863 - - 41,863
Amounts due from joint ventures 56,124 - - 56,124
Deposits, cash and bank balances 1,226,424 - - 1,226,424
7,558,159 130,864 15,158 7,704,181
Other
financial
Derivatives liabilities at
used for amortised
hedging costs Total
RM’000 RM’000 RM’000
At 31 December 2018
Financial liabilities:
Trade payables and accruals - 563,527 563,527

Other payables and accruals excluding advances from
customers and statutory liabilities - 341,421 341,421
Borrowings - 10,380,530 10,380,530
Amounts due to joint ventures 34,667 34,667
Derivative financial instruments 433,343 - 433,343
433,343 11,320,145 11,753,488
202
NOTES TO
31 December 2018
44 FINANCIAL INSTRUMENTS BY CATEGORY (CONTINUED)
Analysis of the financial instruments for the Group is as follows: (continued)
Financial
assets Derivatives Available-
at amortised used for for-
costs hedging sale Total
RM’000 RM’000 RM’000 RM’000
At 31 December 2017
Financial assets:
Finance lease receivables 5,334,189 - - 5,334,189

Accrued lease rentals 727,153 - - 727,153
Derivative financial instruments - 106,189 - 106,189
Available-for-sale financial assets - - 16,498 16,498
Trade receivables 727,153 - - 727,153
Other receivables and deposits excluding
prepayments 194,741 - - 194,741
Amounts due from joint ventures 284,027 - - 284,027
Deposits, cash and bank balances 1,846,114 - - 1,846,114
9,113,377 106,189 16,498 9,236,064
Other
financial
Derivatives liabilities at
used for amortised
hedging costs Total
RM’000 RM’000 RM’000
At 31 December 2017
Trade payables and accruals - 598,783 598,783

Other payables and accruals excluding advances from
customers and statutory liabilities - 299,972 299,972
Hire purchase creditors - 286 286
Borrowings - 11,522,905 11,522,905
Amounts due to joint ventures - 32,237 32,237
Derivative financial instruments 461,689 - 461,689
461,689 12,454,183 12,915,872
Annual Report 2018
203
NOTES TO
31 December 2018
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been
identified as follows:
04
• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (that is, as price) or indirectly (that is, derived from prices).
• Level 3 - Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs).
The fair value of financial instruments traded in active market is based on quoted market price at the reporting date. This
instrument is included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques,
such as estimated discounted cash flows that are used to determine fair value for the derivative financial instruments.
The fair value of cross currency interest rate swaps and interest rate swaps are calculated as the present value of the
estimated future cash flows.
The following table presents the Group’s financial assets and liabilities that were measured at fair value as at
31 December 2018:
Level 1 Level 2 Level 3 Total

RM’000 RM’000 RM’000 RM’000
Financial assets:
Derivatives used for hedging

- Interest rate swaps - 128,820 - 128,820
- Cross currency interest rate swaps - 2,044 - 2,044
Financial assets at fair value through other
comprehensive income 15,158 - - 15,158

- Cross currency interest rate swaps - (425,700) - (425,700)
- Interest rate swaps - (7,643) - (7,643)
204
NOTES TO
31 December 2018
The following table presents the Group’s financial assets and liabilities that were measured at fair value as at
31 December 2017:
Level 1 Level 2 Level 3 Total

RM’000 RM’000 RM’000 RM’000
Financial assets:

- Interest rate swaps - 103,974 - 103,974
- Cross currency interest rate swaps - 2,215 - 2,215
Available-for-sale financial assets 16,498 - - 16,498

- Cross currency interest rate swaps - (460,649) - (460,649)
- Interest rate swaps - (1,040) - (1,040)
Analysis of the financial instruments for the Company is as follows:
2018 2017
RM’000 RM’000
Financial assets measured at amortised costs (2017: loans and receivables):
Other receivables and deposits excluding prepayments 2,386 2,481

Amounts due from subsidiaries 417,099 893,405
Amounts due from joint ventures 19,529 18,842
Deposits, cash and bank balances 59,303 63,406
498,317 978,134
Financial liabilities measured at amortised costs:
Other payables and accruals excluding statutory liabilities 26,524 27,709

Amounts due to subsidiaries 45,147 112,780
Amount due to a joint venture 1,217 -
72,888 140,489
The carrying amounts of financial instruments of the Group and of the Company with a maturity of less than one year at
the reporting date are assumed to approximate their fair values.
Annual Report 2018
205
NOTES TO
31 December 2018
45 ADOPTION OF MFRS 9 AND MFRS 15
This note explains the impact of the adoption of MFRS 9 and MFRS 15 from 1 January 2018 on the Group’s financial
statements for the financial year ended 31 December 2018. The summary of the impact to the Group’s retained earnings
as at 1 January 2018 is as follows: 04
Retained
Note earnings
RM’000
Opening as at 1 January 2018 109,991
Impact of adoption of MFRS 9

Accounting for ECL (a) (15,473)
Impact of adoption of MFRS 15

Accounting for additional performance obligation identified (b)(i) (21,029)
Accounting for costs incurred in obtaining a contract (b)(ii) (27,373)
46,116
(a) MFRS 9 “Financial instruments”
The Group has applied MFRS 9 with the date of initial application of 1 January 2018. The standard is applied
retrospectively. In accordance with the transitional provisions provided in MFRS 9, comparative information of
2017 was not restated and continued to be reported under the previous accounting policies governed under MFRS
139, with the exception of certain aspects of hedge accounting. The cumulative effects of initially applying MFRS
9 were recognised as an adjustment to the opening balance of retained earnings as at 1 January 2018.
The adoption of MFRS 9 resulted in changes in accounting policies and adjustments to the amounts recognised
in the financial statements. The new accounting policies are set out in Section C of the Preface to the Financial
Statements.
Classification and measurement
On 1 January 2018, the Group has assessed which business models apply to the financial assets held by the
Group and reviewed the classification of its financial instruments into the appropriate MFRS 9 categories. There
are no changes to the classification and measurement of the financial instruments except for reclassification of
available-for-sale financial assets to financial assets at FVOCI. See Note 15 and 16 for details.
206
NOTES TO
31 December 2018
45 ADOPTION OF MFRS 9 AND MFRS 15 (CONTINUED)
(a) MFRS 9 “Financial instruments” (continued)
Derivatives and hedging activities
The IRS and CCIRS in place as at 1 January 2018 qualified as cash flow hedges under MFRS 9. The Group’s
risk management strategies and hedge documentation are aligned with the requirements of MFRS 9 and these
relationships are therefore treated as continuing hedges.
Since the adoption of MFRS 9, gains or losses relating to the effective portion of the changes in fair value of CCIRS
(excluding foreign currency basis spread) are recognised in other comprehensive income and accumulated in cash
flow hedge reserve within equity. The Group recognises changes in the foreign currency basis spread of CCIRS in
the costs of hedging reserve within equity, resulting in a reclassification of a loss of RM73.3 million and RM126.1
million from cash flow hedge reserve to the costs of hedging reserve and spot component of CCIRS respectively as
at 1 January 2017. See Note 38 for details.
Impairment of financial assets
The Group has replaced its impairment methodology of financial assets with the forward-looking expected credit
loss (“ECL”) model. Under MFRS 9, loss allowances will be measured either via the simplified approach or the
general approach (incorporating 12-month ECL and Lifetime ECL). See Section E – Credit risk for the measurement
details of ECL.
The total impact on adoption of ECL model to the Group’s reserves as at 1 January 2018 is as follows:
Without With
adoption of Effect of adoption of
MFRS 9 MFRS 9 MFRS 9
RM’000 RM’000 RM’000
Consolidated Statement of Financial Position
as at 1 January 2018
Trade receivables 727,153 (4,091) 723,062
Accrued lease rentals 372,945 (11,382) 361,563
Reserves (1,186,035) 15,473 (1,170,562)
Annual Report 2018
207
NOTES TO
31 December 2018
(b) MFRS 15 “Revenue from Contracts with Customers”
The Group has applied MFRS 15 with the date of initial application of 1 January 2018 by using the modified 04
retrospective transition method. Under the modified retrospective transition method, the Group applies the
new policy retrospectively only to contracts that are not completed contracts at the date of initial application.
Accordingly, the 2017 comparative information was not restated and the cumulative effects of initial application of
MFRS 15 were recognised as an adjustment to the opening balance of retained earnings as at 1 January 2018.
The comparative information continued to be reported under the previous accounting policies governed under
MFRS 118 and MFRS 111.
In addition, the Group has elected the practical expedient not to retrospectively restate contracts that were modified
before the date of initial application.
The main changes arising from the adoption of MFRS 15 are as follows:
(i) Accounting for additional performance obligations identified
MFRS 15 requires the identification of performance obligations within a contract and to allocate the transaction
price to the performance obligation in an amount that depicts the amount of consideration to which the
entity expects to be entitled in exchange for transferring the promised goods or services to the customer.
In assessing the impact of MFRS 15, the Group has allocated the transaction price to each performance
obligation (or distinct good or service) by considering all information that is reasonably available to the
Group, as further elaborated in Section C(l). The point at which revenue is recognised for each performance
obligation may vary depending on when control of each good or service is transferred to the customer. The
assessment has been performed for the Group and joint ventures.
(ii) Accounting for certain costs incurred in obtaining a contract
Under MFRS 15, costs that are incremental to obtaining a contract shall be recognised as an asset if the
Group expects to recover those costs. Costs to obtain a contract that would have been incurred regardless of
whether the contract was obtained shall be recognised as an expense when incurred, unless those costs are
explicitly chargeable to the customer regardless of whether the contract is awarded to the Group.
208
NOTES TO
31 December 2018
(b) MFRS 15 “Revenue from Contracts with Customers” (continued)
The following table shows the adjustments recognised for each affected financial statement line item from the
adoption of the new MFRSs and the effect of each financial statement line item should the new MFRSs not be
adopted. Line items that were not affected by the changes have not been included. As a result, the sub-totals and
totals disclosed cannot be recalculated from the numbers provided.
Without
adoption of Effect of As
Note MFRS 15 MFRS 15 presented
RM’000 RM’000 RM’000
Consolidated Statement of Income for the financial
year ended 31 December 2018
Revenue (i) 2,431,859 (13,120) 2,418,739
Selling and distribution costs (ii) (21,990) (7,965) (29,955)
Share of results of joint ventures (i) 174,722 (8,473) 166,249
Loss for the financial year (2,289,590) (29,558) (2,319,148)
Consolidated Statement of Comprehensive Income

Foreign currency translation differences 144,169 (1,836) 142,333
Without
adoption of Effect of As
Note MFRS 15 MFRS 15 presented
RM’000 RM’000 RM’000
Consolidated Statement of Financial Position as at
31 December 2018
Investment in joint ventures (i) 1,044,686 (21,816) 1,022,870
Other receivables, deposits and prepayments (ii) 78,398 (19,588) 58,810
Contract assets (i) - 49,664 49,664
Amounts due from customers on contract (i) 45,805 (45,805) -
Contract liabilities (i) - (42,251) (42,251)
Reserves 871,782 79,796 (951,578)
Annual Report 2018
209
NOTES TO
31 December 2018
(b) MFRS 15 “Revenue from Contracts with Customers” (continued)
As explained above, MFRS 15 was adopted without restating the comparative information. The adjustments 04
arising from the adoption are therefore not reflected in the restated consolidated statement of financial position
as at 31 December 2017 but are recognised in the opening consolidated statement of financial position on
1 January 2018. The impact of MFRS 15 on the Group’s financial position as at 1 January 2018 is as follows:
Without With
adoption of Effect of adoption of
Note MFRS 15 MFRS 15 MFRS 15
RM’000 RM’000 RM’000
Consolidated Statement of Financial Position as at
1 January 2018
Investment in joint ventures (i) 668,967 (12,878) 656,089
Other receivables, deposits and prepayments (ii) 68,249 (27,373) 40,876
Contract assets (i) - 12,448 12,448
Amounts due from customers on contract (i) 8,745 (8,745) -
Contract liabilities (i) - (11,854) (11,854)
Reserves (1,186,035) 48,402 (1,137,633)
46 MATERIAL EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Subsequent to the balance sheet date, the Group obtained a waiver on the breach of financial covenants of Sukuk
Murabahah, and has also signed a facility agreement for refinancing of certain unsecured term loans and revolving
credit facilities, the details of which are disclosed in the Preface to the Financial Statements Section E – Liquidity risk.
47 APPROVAL OF FINANCIAL STATEMENTS
The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on
25 April 2019.
210
STATEMENT BY
DIRECTORS
Pursuant to Section 251(2) of the Companies Act 2016
We, Leon Andre Harland and Uthaya Kumar K Vivekananda, two of the Directors of Bumi Armada Berhad, state that, in our
opinion, the financial statements set out on pages 81 to 209 are drawn up so as to give a true and fair view of the financial
position of the Group and of the Company as at 31 December 2018 and financial performance of the Group and of the
Company for the financial year ended 31 December 2018 in accordance with the Malaysian Financial Reporting Standards,
International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors dated 25 April 2019.
LEON ANDRE HARLAND UTHAYA KUMAR K VIVEKANANDA

DIRECTOR DIRECTOR
Kuala Lumpur
STATUTORY
DECLARATION
Pursuant to Section 251(1) of the Companies Act 2016
I, Luke Christopher Targett, being the officer primarily responsible for the financial management of Bumi Armada Berhad,
do solemnly and sincerely declare that the financial statements set out on pages 81 to 209 are, in my opinion, correct and
I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory
Declarations Act, 1960.
LUKE CHRISTOPHER TARGETT
Subscribed and solemnly declared by the abovenamed Luke Christopher Targett in Kuala Lumpur on 25 April 2019, before me:
COMMISSIONER FOR OATHS

Annual Report 2018
211
INDEPENDENT
AUDITORS' REPORT
to the members of Bumi Armada Berhad
(Incorporated in Malaysia) (Company No. 370398-X)
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Our opinion
In our opinion, the financial statements of Bumi Armada Berhad (“the Company”) and its subsidiaries (“the Group”) give 04
a true and fair view of the financial position of the Group and of the Company as at 31 December 2018, and of their
financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting
Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
What we have audited
We have audited the financial statements of the Group and of the Company, which comprise the statements of financial position
as at 31 December 2018 of the Group and of the Company, and the statements of income, statements of comprehensive
income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year
then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages
81 to 209.
Basis for opinion
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on
Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the
financial statements” section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and other ethical responsibilities
We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and
Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance
with the By-Laws and the IESBA Code.
Our audit approach
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements of the Group and of the Company. In particular, we considered where the Directors made subjective judgements; for
example, in respect of significant accounting estimates that involved making assumptions and considering future events that are
inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including
among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due
to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial
statements as a whole, taking into account the structure of the Group and of the Company, the accounting processes and
controls, and the industry in which the Group and the Company operate.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our
audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
212
INDEPENDENT
AUDITORS' REPORT
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)
Key audit matters How our audit addressed the key audit matters
Impact of the signing of Amendment Agreement 2
("AA2") on the Armada Kraken FPSO
Refer to Preface to the financial statements section C –

Summary of significant accounting policies, Preface to the
financial statements section D - Critical accounting estimates
and judgements, Preface to the financial statements section
E – Financial and capital risk management objectives and
policies and Note 11 – Property, plant and equipment.
Armada Kraken Pte Ltd (“AKPL”), a subsidiary of the

Group signed an Amendment Agreement 2 (“AA2”) on
27 August 2018. The execution of AA2 allows AKPL
and the Charterer to progress the project towards final
acceptance. Subsequent to this, Final Acceptance was
achieved on 4 September 2018.
The following assessments were made by management

subsequent to signing of AA2 and achieving Final
Acceptance:
Assessment on recoverable amount of Armada Kraken Assessment on recoverable amount of Armada Kraken
AA2 contains clauses which requires AKPL to provide We evaluated the reasonableness of key assumptions used
supplementary payments to the Charterer as a result by management in arriving at the VIU (i.e. charter rates,
of delays in the Final Acceptance and non completion lease terms and discount rate) by performing the following:
of operational targets set under the charter contract. In
addition, the vessel achieved lower availability since Final • We read the terms of charter contract and the AA2
Acceptance in September 2018. to understand AKPL’s obligations to the Charterer
in relation to Armada Kraken and its impact in
determining the VIU;
Annual Report 2018
213
INDEPENDENT
AUDITORS' REPORT
("AA2") on the Armada Kraken FPSO (continued)
04
Assessment on recoverable amount of Armada Kraken Assessment on recoverable amount of Armada Kraken
(continued) (continued)
In accordance with the requirements under MFRS 136 • As the charter fees are dependent on the actual
“Impairment of Assets”, the Group had assessed the availability rate, we compared Armada Kraken’s
recoverable amount of Armada Kraken based on the value- expected availability against its historical performance
in-use (“VIU”) model. The VIU supports a lower recoverable and checked the reasons for the variances against
amount as at 31 December 2018 which resulted in an the planned performance to assess the reliability of
impairment charge of RM1,613.2 million during the management’s projections;
financial year.
• We held discussions with the Chief Executive Officer
We focused on this area as significant estimates and and Senior Vice President of Floating Production
judgements were applied in determining the recoverable Storage and Offloading (“FPSO”) Operations on
amount of Armada Kraken, namely on the vessel availability the achievability of the availability targets projected
post Final Acceptance, lease term and the discount rate. in conjunction with the maintenance plan to address
The details of the significant estimates and judgements used certain vessel requirements;
have been disclosed in Preface to the financial statements
section D – Critical accounting estimates and judgements • We checked management’s assessment of the lease
and Note 11 – Property, plant and equipment. term with firm and extension lease terms in the
charter contract and external reports on the expected
production level of Kraken field;
• We have compared the inputs used in the calculation of

the discount rate used by management to observable
market data of similar FPSO companies. The key
inputs are the risk-free rate, market risk premium and
debt/equity ratio; and
• We compared the basis of discount rate used by

management against other FPSO players within the
market.
We have checked the sensitivity of the key assumptions for

recoverable amounts of vessels by varying the expected
charter rates and the discount rate used in determining the
VIU.
The impact arising from our independent checks has been

considered by management. We found management’s
assessment to be materially in line with our expectations.
214
INDEPENDENT
AUDITORS' REPORT
("AA2") on the Armada Kraken FPSO (continued)
Assessment on classification of Armada Kraken under MFRS Assessment on classification of Armada Kraken under MFRS
117 “Leases” 117 “Leases”
During the financial year, the Group had assessed the We checked the reasonableness of the basis used in
classification of Armada Kraken under the requirement of determination of the lease terms and charter rates by
MFRS 117 “Leases”, resulting in its classification as an performing the following:
Operating Lease. Accordingly, Armada Kraken continues
to be classified as Property, plant and equipment in the • We read the terms of charter contract and the AA2
Group’s consolidated financial statements. to understand AKPL’s obligations to the Charterer in
relation to Armada Kraken;
We focused on this area as significant estimates and
judgements were applied in determining the lease • We checked management’s assessment on the lease
classification. Management judgement was exercised in term with contractual lease terms in the charter contract
determining the likelihood of lease extensions subsequent to and external reports on the expected production level
the non-cancellable lease period and expected availability of Kraken field;
of Armada Kraken. The details of the significant estimates
and judgement used by the management of the Group have • We checked the availability targets against its historical
been disclosed in Preface to the financial statements section performance and management’s plan in meeting the
D - Critical accounting estimates and judgements. target. We have also discussed with management on
the feasibility of meeting the availability targets; and
• We compared the present value of the minimum lease

payment against the fair value of Armada Kraken at
the inception of the lease.
Based on our procedures above, we found management’s

assessment to be materially in line with our expectations.
Annual Report 2018
215
INDEPENDENT
AUDITORS' REPORT
Liquidity position of the Group
04
Refer Preface to the financial statements section B – Basis of
Preparation, Preface to the financial statements section D –
Critical accounting estimates and judgements, Preface to the
financial statements section E – Financial and capital risk
management objectives and policies, Note 33 - Borrowings
As at 31 December 2018, the Group’s current liabilities We read the terms of the agreements and correspondences
position exceeded its current assets by RM6.1 billion mainly with the Lenders for the outstanding borrowings, including
due to the following reasons: the new Facility Agreement (“FA”) for refinancing of RM1.6
billion term loan and RM1.3 billion revolving credit facilities
• Re-classification of non-current borrowings for Armada dated 23 April 2019, to:
Kraken Pte Ltd (“AKPL”) of RM1.8 billion and Sukuk
Murabahah of RM1.5 billion; and • understand the obligations and undertakings of the
Group, including the CPs requirement; and
• Current borrowings comprising Armada Floating Gas
Storage Malta Limited (“AFGSML”) secured term loan • understand the rights of the lenders.
of RM0.2 billion, unsecured term loans of RM1.6
billion and revolving credit of RM1.3 billion classified We reviewed the undertakings made as part of the new FA
as current liabilities. to assess the impact of subsequent events after the financial
year end under the requirement of MFRS110 “Events after
the Reporting Period”.
We held discussions with the Chief Executive Officer, Chief

Financial Officer, Head of Treasury, Head of FPSO Projects
and Head of Legal to corroborate:
• management’s action plan in obtaining waiver from

AKPL’s Lenders;
• status of discussions with the Project Lenders on the

waivers including the likelihood of obtaining a waiver
from AKPL’s lenders; and
• likelihood of completion of the CPs under the new

FA within the next 12 months from the adoption of
216
INDEPENDENT
AUDITORS' REPORT
Liquidity position of the Group (continued)
In assessing the liquidity position of the Group, We have tested the key assumptions underlying the Group’s
management has considered the funding plan to meet the cash flow forecast for the next 12 months from the date
repayment obligation of its borrowings and other current of approval of the financial statements and assessed the
liabilities which are due in the next 12 months, taking into reasonableness of management’s assessment that the Group
consideration: has the ability to fund its obligations, whilst taking into
consideration sources of funding available to the Group as
• availability of cash flows over the next 12 months; and when they arise. In assessing the source of funding, we
have checked against management’s plan.
• ability of the Group to meet the Conditions Precedents
(“CP”) required under the Facility Agreement (“FA”); We have also independently performed a sensitivity analysis
of the Group’s key assumptions underlying its cash flow
• likelihood of AKPL’s lenders calling an Event of Default; position over the next 12 months and discussed the outcome
and of the sensitivity analysis with management. We checked the
compliance of debt covenants of the project financing and
• likelihood of additional project financing. borrowings to the relevant disclosures made in the financial
statements for consistency.
We gave audit focus on this as significant judgement and
estimates were made in arriving at the cashflow forecast We assessed the adequacy of disclosures made in the
for the next 12 months from the date of approval of the financial statements.
financial statements in assessing the ability of the Group to
meet its obligations as and when they arise. In addition, We did not identify any material exceptions to the procedures
management exercised judgment in assessing the likelihood performed above.
of meeting certain of the terms and conditions required by
the Lenders as part of the refinancing arrangement. The
details of the Group’s Liquidity Risk has been disclosed in
Preface to the financial statements section E – Financial and
capital risk management objectives and policies.
Annual Report 2018
217
INDEPENDENT
AUDITORS' REPORT
Impairment assessment
Services (“OMS”) assets
of Offshore Marine
04
Refer to the Preface to the financial statements section C
– Summary of significant accounting policies, Preface to
the financial statements section D – Critical accounting
estimates and judgements and Note 11 – Property, plant
and equipment.
Offshore Support Vessels (“OSV”) Offshore Support Vessels (“OSV”)
The continued depressed market condition resulting in the In relation to the fair value less costs of disposal for OSV
declining utilisation and day rates during the financial year assets that have been laid up, we have performed the
continues to be an impairment indicator. following:
Accordingly, the Group performed an impairment assessment • We discussed with management on the basis of the
on OSV assets in accordance with the requirement of MFRS expected selling price of the OSV assets and checked
136 “Impairment of Assets”. Each individual vessel was the estimated selling price with offers received from
concluded to be its own Cash Generating Unit (“CGU”). potential buyers, where available; and
The recoverable amounts for vessels that have been laid up • We compared the selling price of recent disposal of
are determined based on fair value less costs of disposal and the OSV assets against its net book value to assess the
for assets identified for continuing use, these are determined average loss rate on disposal of OSV assets.
based on VIU. An impairment loss of RM586.5 million was
recognised during the financial year. In relation to the VIU for OSV assets identified for continuing
use, we have performed the following:
• We evaluated the reasonableness of key assumptions

used by the management in arriving at the projected
cash flows (i.e. vessel utilisation rates, charter rates
and discount rates) by comparing to historical and
market data;
• We held discussions with management on future

prospects of the OSV business and industry outlook
on the OSV segment. We also compared the industry
outlook on the OSV segment with external industry
and market player information; and
218
INDEPENDENT
AUDITORS' REPORT
Impairment assessment of Offshore Marine
Services (“OMS”) assets (continued)
Offshore Support Vessels (“OSV”) (continued) Offshore Support Vessels (“OSV”) (continued)
We focused on this area as significant estimates and In relation to the VIU for OSV assets identified for continuing
judgements were applied in determining the recoverable use, we have performed the following: (continued)
amount of the OSV assets, namely the expected selling price,
utilisation rate and charter rate. The details of the significant • We have checked the sensitivity of the key assumptions
estimates and judgement used by the management of the for recoverable amounts of vessels by varying the
Group have been disclosed in Preface to the financial expected charter rates, utilisation rate and the discount
statements section D - Critical accounting estimates and rate used in determining the VIU.
judgements and Note 11 – Property, plant and equipment.
Based on our procedures, the key assumptions used in
determining the recoverable amounts were materially in line
with our expectations.
Subsea Construction (“SC”) assets Subsea Construction (“SC”) assets
The vessels and equipment of the SC business located in We held discussions with the Chief Executive Officer, Head
Russia have recently completed the Lukoil project. These of OMS and Vice President of SC to:
assets are currently idle and management is currently
pursuing new prospects. Nevertheless, there is a risk of • understand how the SC assets are used in generating
recoverability of the Group’s carrying amount of the SC the cash inflows for the SC business and managed
assets. on a daily basis. We have compared it with the
requirements of CGU determination under MFRS 136;
An assessment on whether there is an indication of and
impairment was carried out by management as at the year
end in accordance with the requirement of MFRS 136 • understand the likelihood of awards of future prospects
“Impairment of Assets” (“MFRS 136”). and checked the information with bidding documents,
correspondences with potential customers and scope
of work of similar projects performed by the Group.
Annual Report 2018
219
INDEPENDENT
AUDITORS' REPORT
Impairment assessment of Offshore
Services (“OMS”) assets (continued)
Marine
04
Subsea Construction (“SC”) assets (continued) Subsea Construction (“SC”) assets (continued)
Judgement was exercised by management in the We evaluated the reasonableness of key assumptions used
determination of the SC business in Russia as a CGU as by the management in arriving at the projected cash flows
opposed to the individual asset. This is consistent with (i.e. vessel utilisation rates and expected contract value) by
the business model that supports the continued use of the performing the following:
portfolio of assets as part of the SC business instead of being
the CGU. Consequently, the recoverability for the SC assets • we compared the expected scope of work to the
is based on the cash flows expected to be generated by the bidding documents (draft and submitted) and to
future contracts of the SC business in Russia as a whole. previous scope of work previously performed for a
potential customer;
Based on current financial performance of the SC business
in Russia and the expected order book, management • we compared the expected utilisation rate to bidding
concluded that there is no impairment indicator as at documents and historical utilisation rate in a similar
31 December 2018, as it does not indicate that the economic project; and
performance of the assets in supporting the SC business, are
or will be, worse than expected. • we compared the expected contract value to bidding
documents, project budgets and historical utilisation.
judgements were applied in arriving at the VIU calculations, Based on the procedures performed above, we did not find
primarily the determination of CGU and likelihood of award any material exceptions.
of new prospects which underlies the cash flow projections.
220
INDEPENDENT
AUDITORS' REPORT
Assessment on the impact of adoption of MFRS 15
“Revenue from Contracts with Customers”

financial statements section D – Critical accounting estimates
and judgements and Note 2 – Revenue.
Effective 1 January 2018, the Group has adopted MFRS 15 We assessed management’s identification of performance
“Revenue from Contracts with Customers” (“MFRS 15”). An obligations within a contract by performing the following:
opening balance adjustment of RM48.4 million reduction in
retained earnings on adoption of MFRS 15 was recognised • We read and understood the key terms and conditions
as at 1 January 2018. of significant contracts with customers on sampling
basis; and
The Group elected the modified retrospective transition
approach in adoption of MFRS 15. Significant effort was • We tested the operating effectiveness of controls
spent in assessing the impact of first time adoption of over management’s assessment of the allocation of
MFRS 15 as: the transaction price between various performance
obligations.
• Most of the contracts within the Group involve
multi-elements arrangement which would include We assessed management’s assumptions on the basis of
combinations of construction, conversion, engineering determination of standalone selling price by performing the
services, charter and other support services within one following:
contract. Where multiple contracts are signed for the
• We read revenue contracts on sampling basis and held
same project, these contracts are negotiated together
discussions with the Group to check the expected rate
and assessed together as one contract.
of return on each performance obligation identified;
• The transaction price is then allocated to each
• We tested the operating effectiveness of controls over
performance obligation on the basis of the relative
the approvals of customers contracts and budgets
standalone selling prices of each distinct goods
including the estimation of cost in determining the
or services promised in the contract. This requires
standalone selling price;
estimation of the expected costs to be incurred and a
rate of return at lease inception.
• We evaluated the expected costs identified by
management to be incurred in delivering the identified
performance obligation by comparing the information
judgements were applied in determining the performance
to the historical and market data; and
obligations and standalone selling price. The details
of the significant estimates and judgement used by the • We evaluated the basis of rate of return determined
management of the Group have been disclosed in Preface for each performance obligation with similar contracts
to the financial statements section D – Critical accounting within the Group and other market data.
estimates and judgements.
We evaluated the appropriateness and completeness of
management’s disclosures in the consolidated financial
statements in accordance with the requirements of MFRS 15.
Based on the procedures performed above, we did not find

any material exceptions.
Annual Report 2018
221
INDEPENDENT
AUDITORS' REPORT
Recoverability of trade receivables
04
and judgements, Preface to the financial statements section
E – Financial and capital risk management objectives and
policies and Note 21 – Trade receivables.
The Group adopted MFRS 9 “Financial Instruments” (“MFRS Upon the first time adoption of MFRS 9, we assessed the
9”) on 1 January 2018. MFRS 9 introduces an expected appropriateness of the Group’s loss allowance policy in
credit loss (“ECL”) impairment model, which requires the use accordance with the requirement under MFRS 9.
of significant assumptions about future economic conditions
and credit risk of the customers. An opening balance We evaluated management’s assumption on the opening
adjustment of RM15.5 million was made for additional loss balance adjustment to the Group’s retained earnings to
allowances as at 1 January 2018. confirm that adjustments are made without the use of
hindsight and ECL is recognised within the appropriate
Management has assessed the lifetime expected credit loss period.
of trade receivables amount using the simplified approach
incorporating credit rating buckets, expected loss rates, We checked the expected timing and quantum of receipts of
forward looking information and probability weighted trade receivables by comparing it to the historical payment
estimates. trend of individual customers and sighting of correspondence
between the Group and the customers.
As at 31 December 2018, the Group's trade receivables
prior to loss allowance was RM1.2 billion. Of this amount, We have assessed and considered the reasonableness of
RM404.9 million has been provided for as loss allowance. the forward looking information included in management’s
assessment.
We gave audit focus and attention to this area considering
the material amounts involved and significant management We held discussions with management to determine the
judgement required over the probability weighted estimates appropriateness of the ongoing negotiations on recovery
on receipts of trade receivables. The details of the significant of trade receivables to the assumptions included in the ECL
estimates and judgement used by the management of the model, namely on likelihood, quantum and timing of receipt
Group have been disclosed in Preface to the financial of the balances.
statements section D – Critical accounting estimates and
judgements. We found management’s assessment of its loss allowance
of trade receivables to be materially consistent with the
supporting information provided to us.
222
INDEPENDENT
AUDITORS' REPORT
Recoverability of amounts in relation to the
services agreement relating to the FPSO vessel
Armada Claire with Woodside Energy Julimar Pty
Ltd (“Woodside”)
Refer to Note 22 - Accrued lease rentals and Note 43 –

Material litigation.
In March 2016, Woodside, the charterer of a FPSO We held discussions with senior management personnel
vessel – Armada Claire terminated the services agreement and experts with direct knowledge of the matter and read
(“contract”) with a subsidiary of the Group, Armada Balnaves supporting documents provided to us by management
Pte Ltd (“ABPL”). The vessel was subsequently demobilised. to understand the latest status of proceedings and ABPL’s
The termination of contract was an indication of impairment position based on the contract. We also discussed with
to the carrying amount of the vessel, (which was impaired management the likely timing of the recovery of these
to its recoverable amount in 2016) and the recoverability of amounts based on the progress of the case and expected
the amounts in relation to the contract, by ABPL. resolution date based on the latest court timelines.
The Group, having evaluated its contractual position through We found the information provided and the discussions
independent due diligence review(s), has taken the view with the parties described above to be materially consistent
that the termination of the contract was unlawful and ABPL with management’s assessment of the recoverability of the
is therefore contractually entitled to compensation claims amount.
based on the contract. ABPL filed a Statement of Claim at
the Supreme Court of Western Australia on 20 April 2016
against Woodside and the trial commenced on 18 February
2019. The parties served written closing submissions and
made closing oral submissions on 26 and 27 March 2019
respectively and the Judgement is expected to be presented
between October to December 2019.
Management has assessed the lifetime ECL of the amount

by taking into consideration the probability-weighted
estimation of court’s judgement, timing of court’s judgement,
quantum of compensation claims and timing of receipt of
compensation claims.
We gave audit focus to this area in view of financial implication

and judgement involved surrounding the recoverability
of the receivables on the basis that the termination of the
contract was unlawful. The details of the significant estimates
and judgement used by the management of the Group have
been disclosed in Preface to the financial statements section
D – Critical accounting estimates and judgements.
Annual Report 2018
223
INDEPENDENT
AUDITORS' REPORT
Bumi Armada Berhad - Assessment of
recoverability of amounts due from subsidiaries
04
and cost of investments in subsidiaries

and judgements, and Note 12 – Investments in subsidiaries
and Note 26 – amounts due from subsidiaries.
As at 31 December 2018, the Company’s amount due from

subsidiaries and investments in subsidiaries amounted to
RM0.4 billion and RM4.5 billion respectively.
Amounts due from subsidiaries Amounts due from subsidiaries
An assessment on the recoverability of the amounts due from We evaluated the reasonableness of the key assumptions
subsidiaries were made based on the general 3-stage ECL that affected the amounts and timing of cash flows available
model requirement under MFRS 9 “Financial Instruments”. to the subsidiaries for repayments of the amounts due under
The ECL is made based on the contractual terms that the the ECL model. These key assumptions are contractual and
balances are repayable on demand as at the reporting date. estimated revenue, estimated utilisation and charter rates of
vessels and expected sale of vessels. These key assumptions
No additional loss allowance were made during the financial were checked against historical trends, contracts with
year as management expects that the subsidiaries are able customers and the expected fair value less costs of disposal
to meet their obligation to repay these balances based on of vessels.
the availability of cash flows as at the financial year end
and/or that there are sufficient future cash flows from the We held discussions with management to understand the
subsidiaries to settle the outstanding balances. underlying assumptions of the respective future cash flows
used to determine the recoverable amounts of the amounts
due from subsidiaries.
We have also considered other contractual obligations of

the subsidiaries to pay cash that have priority for repayment
over the amounts due.
224
INDEPENDENT
AUDITORS' REPORT
Bumi Armada Berhad - Assessment of
recoverability of amounts due from subsidiaries
and cost of investments in subsidiaries (continued)
Amounts due from subsidiaries (continued) Amounts due from subsidiaries (continued)
We gave audit focus and attention to this area considering Based on the above, our evaluation of the recoverability of
the material amounts involved and significant management the amounts due from subsidiaries is materially consistent
judgement required over the expected timing and quantum with management’s assessment.
of repayments from the subsidiaries. The details of the
significant estimates and judgement used by the management
of the Group have been disclosed in Preface to the financial
statements section D – Critical accounting estimates and
judgements.
Investments in subsidiaries Investments in subsidiaries
An assessment on the recoverability of the costs of investment In addition to the procedures mentioned under “Amounts
in subsidiaries were made based on the impairment due from subsidiaries” above on the future cash flows, we
assessment in accordance with the requirement under MFRS evaluated the reasonableness of repayment of amounts due
136 “Impairment of Asset”. from subsidiaries the estimated operational cash flows to
assess the cash flow available for dividends by the respective
The Company recognised an impairment loss on its subsidiaries.
investment in subsidiaries amounting to RM18.3 million
during the financial year as there are insufficient future cash Based on the above, our evaluation of the recoverability of
flows expected from the Company’s investment in these cost of investment is materially consistent with management’s
subsidiaries. assessment.
We focused on the impairment assessment of those balances

with impairment indicators, given the significant estimates
involved in determining the future cash flow from the
subsidiaries. The details of the significant estimates and
judgement used by the management of the Group have
been disclosed in Preface to the financial statements section
D – Critical accounting estimates and judgements.
Annual Report 2018
225
INDEPENDENT
AUDITORS' REPORT
Information other than the financial statements and auditors’ report thereon
The Directors of the Company are responsible for the other information. The other information comprises the Directors' Report 04
and Statement on Risk Management and Internal Control, but does not include the financial statements of the Group and of the
Company and our auditors’ report thereon.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial statements
of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial statements
The Directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company
that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting
Standards and the requirements of the Companies Act 2016 in Malaysia. The Directors are also responsible for such internal
control as the Directors determine is necessary to enable the preparation of financial statements of the Group and of the
Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Group and of the Company, the Directors are responsible for assessing the Group’s
and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
226
INDEPENDENT
AUDITORS' REPORT
Auditors’ responsibilities for the audit of the financial statements (continued)
As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing,
we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and of the
Company’s internal control.
(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the Directors.
(d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Group’s or on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the
Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the
Group or the Company to cease to continue as a going concern.
(e) Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company,
including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying
transactions and events in a manner that achieves fair presentation.
(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the
financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters.
We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Annual Report 2018
227
INDEPENDENT
AUDITORS' REPORT
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have 04
not acted as auditors, are disclosed in Note 12 to the financial statements.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act
2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERS PLT SUBATHRA A/P GANESAN

LLP0014401-LCA & AF 1146 03020/08/2020 J
Chartered Accountants Chartered Accountant
Kuala Lumpur
25 April 2019
Bumi Armada Berhad Other Information
228
ANALYSIS OF
SHAREHOLDINGS
as at 29 March 2019
Issued Shares : 5,870,937,544

Voting Right : One vote per ordinary share
ANALYSIS BY SIZE OF SHAREHOLDINGS BASED ON THE RECORD OF DEPOSITORS
No. of Shareholders No. of Issued Shares % of Issued Shares

Size of Shareholdings Malaysian Foreign Malaysian Foreign Malaysian Foreign
Less than 100 473 16 7,091 275 0.00 0.00
100 - 1,000 1,616 20 1,016,050 12,050 0.02 0.00
1,001 - 10,000 10,037 85 56,200,902 492,800 0.96 0.01
10,001 - 100,000 8,776 149 329,048,050 6,246,310 5.60 0.11
100,001 - 293,546,876* 2,004 193 2,028,541,124 558,334,492 34.55 9.51
293,546,877 and above** 3 - 2,891,038,400 - 49.24 -
Total 22,909 463 5,305,851,617 565,085,927 90.37 9.63
* Less than 5% of Issued Shares

** 5% and above of Issued Shares
ANALYSIS BY CATEGORY OF SHAREHOLDERS BASED ON THE RECORD OF DEPOSITORS
No. of Shareholders No. of Issued Shares % of Issued Shares

Category of Shareholders Malaysian Foreign Malaysian Foreign Malaysian Foreign
Individual 17,239 204 822,120,112 43,041,253 14.00 0.73
Banks/Finance Companies 36 2 838,032,475 3,120,000 14.27 0.05
Investment Trusts/ Foundation/ 1 - 270,000 - 0.00 -
Charities
Other Types of Companies 178 3 2,502,754,106 153,200 42.63 0.00
Government Agencies/ 2 - 825,000 - 0.01 -
Institutions
Nominees 5,453 254 1,141,849,924 518,771,474 19.45 8.84
Total 22,909 463 5,305,851,617 565,085,927 90.37 9.63
Annual Report 2018
229
ANALYSIS OF SHAREHOLDINGS
as at 29 March 2019
DIRECT AND DEEMED INTERESTS IN THE COMPANY AND/OR ITS RELATED CORPORATIONS
Direct and deemed Interests in the issued shares and options over unissued shares in the Company and in its related corporations
as at 29 March 2019 are set out below:
05
1. Directors
Direct Deemed
No. of Issued % of Issued No. of Issued % of Issued
Shares Shares Shares Shares
Tunku Ali Redhauddin ibni Tuanku Muhriz 20,000 (1)
0.000 - -
Alexandra Schaapveld 900,000 (2)
0.015 - -
Chan Chee Beng 2,511,200 (3)
0.043 - -
Leon Andre Harland 2,137,800 0.036 - -
(1)
Held through a nominee, namely Maybank Securities Nominees (Tempatan) Sdn Bhd
(2)
Held through a nominee, namely CIMSEC Nominees (Asing) Sdn Bhd
(3)
Held through a nominee, namely CIMSEC Nominees (Tempatan) Sdn Bhd

2. Senior Management
Direct Deemed
Leon Andre Harland 2,137,800 0.036 - -
Anusoorya Themudu 148,500 0.003 - -
James Oliver Ellis 106,100 0.002 - -
Megat Zariman bin Abdul Rahim 75,200 0.001 - -
The Senior Management have indirect interest in the securities of the Company by virtue of their shares under the
Management Incentive Plan ("MIP")
2017 Annual Grant (1) Grant over 3-year (2) 2018 Annual Grant (3)
Leon Andre Harland(4) 4,275,500 Up to 8,551,000 Up to 6,426,900
Anusoorya Themudu 297,000 Up to 1,590,900 Up to 1,060,200
James Oliver Ellis 212,100 Up to 1,590,900 Up to 1,060,200
Megat Zariman Bin Abdul Rahim 150,200 - Up to 1,060,200
Leong Wei Kit - - Up to 1,060,200

230
as at 29 March 2019

(1)
The 2017 Annual Grant has been awarded upon fulfillment of vesting conditions and individual performance target. One-third (1/3) of the
awarded MIP shares has been vested in May 2018. The remaining unvested shares have been parked under a "Bonus Bank" and one-third (1/3)
of the unvested shares will become vested annually. The next vesting will be occurring on or after 1 April 2019.

(2)
For the Grant over a 3-year period, the MIP Shares shall be vested entirely at the end of the 3-year period, with vesting occurring on or before
1 May 2020 subject to fulfillment of vesting conditions.

(3)
The 2018 Annual Grant, subject to vesting conditions and after fulfillment of performance target, will be awarded and parked under a “Bonus
Bank”, and one-third (1/3) to the granted shares in the “Bonus Bank’’ will become vested annually, with the next vesting occurring on or before
1 May 2019.

(4)
The MIP Committee has approved the awarded unvested MIP shares of 4,275,500 under the 2017 Annual Grant to Mr Leon Andre Harland be
vested by 15 May 2019. The MIP shares that have yet to be awarded (the 3-year Grant and 2018 Annual Grant) will be forfeited.
SUBSTANTIAL SHAREHOLDERS’ INTERESTS
The direct and deemed interests of the Substantial Shareholders in the shares of the Company as at 29 March 2019, based
on the Register of Substantial Shareholders of the Company are set out below:

Direct Deemed
Objektif Bersatu Sdn Bhd 2,048,288,000 34.89 - 0.00
AmanahRaya Trustees Berhad 502,305,000 8.56 - 0.00
Amanah Saham Bumiputera
Employees Provident Fund Board 417,043,900 7.10 - 0.00
Saluran Abadi Sdn Bhd - 0.00 360,002,600 (1)
6.13
Farah Suhanah binti Ahmad Sarji - 0.00 360,002,600 (2)
6.13
Mutu Saluran Sdn Bhd - 0.00 2,048,288,000 (3)
34.89
Usaha Tegas Sdn Bhd - 0.00 2,048,288,000 (4)
34.89
Pacific States Investment Limited - 0.00 2,048,288,000 (5)
34.89
Excorp Holdings N.V - 0.00 2,048,288,000 (6)
34.89
PanOcean Management Limited - 0.00 2,048,288,000 (6)
34.89
Ananda Krishnan Tatparanandam - 0.00 2,048,288,000 (7)
34.89

Annual Report 2018
231
as at 29 March 2019
Notes:
(1)
Deemed interest by virtue of its shareholdings in the Saluran Abadi Sdn. Bhd. (“SASB”) subsidiaries, Karisma Mesra Sdn.
Bhd., Wijaya Baiduri Sdn. Bhd. and Wijaya Sinar Sdn. Bhd. (collectively, “SASB Subsidiaries”) pursuant to Section 8 of
the Companies Act 2016 (“CA 2016”). The Shares held via the SASB subsidiaries are held under discretionary trusts for
Bumiputera objects. As such, SASB does not have any economic interest in the Shares held by the SASB subsidiaries, as 05
such interest is held subject to the terms of discretionary trusts.
(2)
Deemed interest by virtue of her shareholding in SASB pursuant to Section 8 of the CA 2016. However, she does not
have any economic interests in the Shares held via SASB Subsidiaries as such interest is held subject to the terms of
discretionary trusts for Bumiputera objects. See Note (1) above for SASB deemed interest in the Shares.
(3)
Deemed interest by virtue of its shareholding in Objektif Bersatu Sdn. Bhd. pursuant to Section 8 of the CA 2016.
(4)
Usaha Tegas Sdn. Bhd. (“UTSB”) is deemed to have an interest in all of the Shares in which Mutu Saluran Sdn. Bhd.
(“MSSB”) has an interest, by virtue of UTSB being entitled to exercise 100% of the votes attached to the voting shares of
MSSB. See Note (3) above for MSSB’s deemed interest in the Shares.
(5)
Pacific States Investment Limited (“PSIL”) is deemed to have an interest in all of the Shares in which UTSB has an interest,
by virtue of PSIL being entitled to exercise 99.999% of the votes attached to the voting shares of UTSB. See Note (4)
above for UTSB’s deemed interest in the Shares.
(6)
The shares in PSIL are held by Excorp Holdings N.V. which is in turn held 100% by PanOcean Management Limited
(“PanOcean”). See Note (5) above for PSIL’s deemed interest in the Shares. PanOcean is the trustee of a discretionary
trust, the beneficiaries of which are members of the family of Ananda Krishnan Tatparanandam (“TAK”) and foundations
including those for charitable purposes. Although PanOcean is deemed to have an interest in the Shares, it does not have
any economic or beneficial interest over such Shares, as such interest is held subject to the terms of the discretionary trust.
(7)
TAK is deemed to have an interest in the Shares, by virtue of his deemed interest in PanOcean. See Note (6) above for
PanOcean’s deemed interest in the Shares. Although TAK is deemed to have an interest in the Shares, he does not have
any economic or beneficial interest over such Shares, as such interest is held subject to the terms of the discretionary trust
referred to in Note (6) above.
232
as at 29 March 2019
TOP 30 SECURITIES ACCOUNTHOLDERS BASED ON THE RECORD OF DEPOSITORS
No. of Issued % of Issued

No. Name Shares Shares
1 Objektif Bersatu Sdn Bhd 2,048,288,000 34.89
2 AmanahRaya Trustees Berhad 502,305,000 8.56
Amanah Saham Bumiputera
3 Citigroup Nominees (Tempatan) Sdn Bhd 340,445,400 5.80
Employees Provident Fund Board
4 Karisma Mesra Sdn Bhd 236,278,650 4.02
5 CIMSEC Nominees (Tempatan) Sdn Bhd 110,106,300 1.88
CIMB Bank for Ombak Damai Sdn Bhd (PBCL-0G0080)
6 Citigroup Nominees (Asing) Sdn Bhd 103,649,750 1.77
Exempt AN for Citibank New York (Norges Bank 14)
Amanah Saham Malaysia 2 - Wawasan
8 Wijaya Sinar Sdn Bhd 78,759,550 1.34
Amanah Saham Malaysia
Amanah Saham Bumiputera 2
11 HSBC Nominees (Asing) Sdn Bhd 61,993,928 1.06
JPMCB NA for Vanguard Emerging Markets Stock Index Fund
12 Urusharta Jamaah Sdn Bhd 51,962,800 0.89
JPMCB NA for Vanguard Total International Stock Index Fund
14 Valuecap Sdn Bhd 48,282,025 0.82
Employees Provident Fund Board (CIMB Prin)
Annual Report 2018
233
as at 29 March 2019
No. of Issued % of Issued

No. Name Shares Shares
16 Wijaya Baiduri Sdn Bhd 44,964,400 0.77
17 Maybank Nominees (Tempatan) Sdn Bhd 34,044,400 0.58 05
Etiqa Life Insurance Berhad (Growth)
Exempt AN for Credit Suisse (SG BR-TST-Asing)
19 RHB Capital Nominees (Tempatan) Sdn Bhd 30,000,000 0.51
Pledged Securities Account for Fong Siling (CEB)
20 DB (Malaysia) Nominee (Asing) Sdn Bhd 27,528,800 0.47
SSBT Fund TCT9 for California State Teachers Retirement System
21 RHB Capital Nominees (Tempatan) Sdn Bhd 24,500,000 0.42
Pledged Securities Account for Lim Chai Beng (CEB)
Amanah Saham Malaysia 3
23 Dushyanthi Perera 20,000,000 0.34
24 Tan Yu Wei 18,450,000 0.31
CBNY for Dimensional Emerging Markets Value Fund
Employees Provident Fund Board (Aberdeen)
CBNY for Emerging Market Core Equity Portfolio DFA Investment Dimensions
Group Inc
28 Alliancegroup Nominees (Tempatan) Sdn Bhd 13,188,800 0.22
Pledged Securities Account for Shanmugam A/L Thoppalan (8069535)
29 Seng Siaw Wei 13,000,000 0.22
30 Tan Yu Yeh 13,000,000 0.22
234
GLOSSARY OF TECHNICAL
AND OTHER TERMS
Term Description
AC Audit Committee
AIMP Actionable Improvement Programme
Board Board of Directors
BAB Bumi Armada Berhad
BAN Bumi Armada Navigation Sdn Bhd
BSC British Safety Council
BU Business Unit
CA2016 Companies Act 2016
CG Guide Corporate Governance Guide 3rd Edition
EBITDA Earnings Before Interest, Taxes, Depreciation, Amortisation and Impairment
EMEPMI ExxonMobil Exploration and Production Malaysia Inc
ERM Enterprise Risk Management
EXCO Executive Committee
ED Executive Director
ESOS Employee Share Option Scheme
EA External Auditor
FPO Floating Production & Operations
FPSO Floating Production Storage Offloading
FSU Floating Storage Unit
FBM KLCI FTSE Bursa Malaysia Kuala Lumpur Composite Index
GHG Green House Gas
HSSEQ Health Safety Security Environment and Quality
IAD Internal Audit Department
IMCA International Marine Contractors Association
Annual Report 2018
235
GLOSSARY OF TECHNICAL AND OTHER TERMS
Term Description
IMO International Marine Organisation

JV
LOA
Joint Venture
Limits of Authority
05
LNG Liquified Natural Gas
LTI Lost Time Injury
Lukoil LUKOIL Nizhnevolzhskneft
MMLR Main Market Listing Requirement
MASB Malaysian Accounting Standard Board
MCCG Malaysian Code on Corporate Gov
MFRS Malaysian Financial Reporting Standards
MIP Management Incentive Plan
NC Nomination & Corporate Governance Committee
NED Non-Executive Director
OMS Offshore Marine Services
OSV Offshore Support Vessel
O&G Oil and Gas
PwC PricewaterhouseCoopers PLT
RC Remuneration Committee
RMC Risk Management Committee
SC Subsea Construction
TOR Terms of Reference
TRIFC Total Recordable Incident Frequency Rate
UNICEF United Nations Children Emergency Fund
VIU Value-In-Use
STS Ship to Ship
Bumi Armada Berhad Annual General Meeting Information
236
NOTICE OF
ANNUAL GENERAL MEETING
Date/Time : Tuesday, 28 May 2019 at 2.00 p.m.
Venue : Manhattan Ballroom, Level 14, Berjaya Times Square Hotel, 1 Jalan Imbi, 55100 Kuala Lumpur, Malaysia.
NOTICE IS HEREBY GIVEN that the Twenty-Third Annual General Meeting (“23rd AGM”) of Bumi
Armada Berhad (“Bumi Armada” or the “Company”) will be held at 2.00 p.m. on Tuesday, 28 May
2019 at Manhattan Ballroom, Level 14, Berjaya Times Square Hotel, 1 Jalan Imbi, 55100 Kuala
Lumpur, Malaysia for the following purposes:
AS ORDINARY BUSINESS
1. To consider the audited Financial Statements of the Company for the financial year
ended 31 December 2018 and the Reports of the Directors and Auditors thereon.
(Please see Explanatory Note 1)
2. To re-elect Ms Alexandra Schaapveld who retires by rotation in accordance with Resolution 1

Rule 131.1 of the Company’s Constitution, and who being eligible, offers herself for
re-election as a Director of the Company.
3. To re-elect Ms Maureen Toh Siew Guat who retires by rotation in accordance with Resolution 2
Rule 131.1 of the Company’s Constitution, and who being eligible, offers herself for
4. To approve the payment of fees and benefits to the Non-Executive Directors up to an Resolution 3
amount of RM3.2 million from 29 May 2019 until the conclusion of the next annual
general meeting of the Company to be held in 2020.
5. To re-appoint Messrs PricewaterhouseCoopers PLT as Auditors of the Company for the Resolution 4
financial year ending 31 December 2019 and to authorise the Directors to fix their
remuneration for that year.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following Ordinary Resolutions, with or without
modifications:
6. Authority to issue new ordinary shares pursuant to Section 75 and Section 76 of Resolution 5
the Companies Act, 2016 (“CA 2016”) and the Main Market Listing Requirements
(“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).
“THAT, the Directors be and are hereby empowered, pursuant to Sections 75 and 76
of the CA 2016, to issue and allot shares in the Company, at any time, to such persons
and upon such terms and conditions and for such purposes as the Directors may, in their
absolute discretion, deem fit including in pursuance of offers, agreements or options to
be made or granted by the Directors while this approval is in force and that the Directors
be and are hereby further authorised to make or grant offers, agreements or options in
respect of shares in the Company including those which would or might require shares
in the Company to be issued after the expiration of the approval hereof provided that
the aggregate number of shares to be issued pursuant to this approval does not exceed
10% of the total number of issued shares of the Company for the time being and that
the Directors be and are also empowered to obtain the approval for the listing of and
Annual Report 2018
237
NOTICE OF ANNUAL GENERAL MEETING
quotation for the additional shares so issued on Bursa Securities and that such authority
shall continue in force until the conclusion of the next annual general meeting of the
Company, subject always to the CA 2016, the Constitution of the Company, the MMLR
and the approvals of all relevant regulatory bodies being obtained (if required).”
(Please see Explanatory Note 5) 06

7.
Proposed offer, grant and/or allotment in respect of ordinary shares in the Company to Resolution 6
Mr Gary Neal Christenson, Executive Director pursuant to the Company’s Management
Incentive Plan (“MIP”)

“THAT authority be and is hereby given to the Directors of the Company to:
(i) make and/or award offers and grants to Mr Gary Neal Christenson, Executive
Director of the Company, at any time and from time to time, commencing from
the date of the shareholders’ approval (“Approval Date”) and expiring at the
conclusion of the annual general meeting of the Company commencing next after
the Approval Date or the expiration of the period within which the next annual
general meeting of the Company is required to be held (“Mandate Period”)
pursuant to the MIP, comprising such number of ordinary shares of the Company
(“Bumi Armada Shares”) equivalent to an amount of up to USD1,750,000
or its equivalent amount in Ringgit Malaysia (converted using the middle rate of
Bank Negara Malaysia foreign exchange) divided by the 5-day volume weighted
average market price of the Bumi Armada Shares preceding the date of the offer
as traded on Bursa Malaysia Securities Berhad (rounded up to the nearest 100
Bumi Armada Shares), subject always to the terms and conditions of, and/or any
adjustments which may be made pursuant to the provisions of the By-Laws of the
MIP;
(ii) issue and allot to him, such number of new Bumi Armada Shares (whether during
or after the Mandate Period) in respect of such Bumi Armada Shares comprised in
the offers and grants made and/or awarded to him during the Mandate Period;
and
(iii) take all such actions that may be necessary and/or desirable to give effect to this
resolution and to execute, sign and deliver on behalf of the Company, all such
documents as they may deem necessary, expedient and/or appropriate, with full
powers to assent to any condition, modification, variation and/or amendment
thereto as the Directors of the Company may deem fit and in the best interest of
the Company.”
By Order of the Board

Noreen Melini binti Muzamli
(LS0008290)
Noor Hamiza binti Abd Hamid
(MAICSA 7051227)
Joint Company Secretaries

Kuala Lumpur
30 April 2019
238
INSTRUCTIONS FOR APPOINTMENT OF PROXY
1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint one (1) or more proxies to
attend, participate, speak and vote for him/her subject to the following provisions:
(i) save as provided for in Note 2, the Companies Act, 2016 (“CA 2016”) and any applicable law, each member
shall not be permitted to appoint more than two (2) proxies; and
(ii) where a member appoints more than one (1) proxy, the appointment shall be invalid provided that he/she specifies
the proportion of the member’s shareholdings to be represented by each proxy.
2. For the avoidance of doubt and subject always to Note 1, the CA 2016 and any applicable law:
(i) where a member of the Company is an authorised nominee, it may appoint at least one (1) proxy in respect of
each securities account it holds to which ordinary shares in the Company are credited. Each appointment of proxy
by an authorised nominee shall be made separately or in one instrument of proxy which shall specify the securities
account number and the name of the beneficial owner for whom the authorised nominee is acting; and
(ii) where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple
beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies
which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
3. A proxy may but need not be a member of the Company. There shall be no restriction as to the qualification of the proxy.
4. The instrument appointing a proxy shall:
(i) in the case of an individual, be signed by the appointor or by his/her attorney; and
(ii) in the case of a corporation, be either under its common seal or signed by its attorney or by an officer on behalf
of the corporation.
5. The instrument appointing a proxy must be deposited at the office of the Company’s Share Registrars, Boardroom
Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46,
47301 Petaling Jaya, Selangor, Malaysia, not less than 24 hours before the time appointed for the taking of the
poll at the 23rd AGM (i.e. the proxy form needs to be deposited no later than 27 May 2019 at 2.00 p.m.) or adjourned
meeting. Otherwise, the instrument of proxy shall not be treated as valid and the person so named shall not be entitled
to vote in respect thereof. Faxed copies of the duly executed form of proxy are not acceptable.
6. The resolutions put to the votes at the 23rd AGM shall be determined by poll. A proxy may vote on a poll. If the form of
proxy is returned without an indication as to how the proxy shall vote on any particular matter, the proxy may exercise
his discretion as to whether to vote on such matter and if so, how. A proxy appointed to attend and vote at a meeting of
the Company shall have the same rights as the member to speak at the meeting and the instrument appointing a proxy
shall be deemed to confer authority to demand or join in demanding a poll.
7. The lodging of a form of proxy does not preclude a member from attending and voting in person at the meeting should
the member subsequently decide to do so.
Annual Report 2018
239
MEMBERS ENTITLED TO ATTEND
8. For the purpose of determining members who shall be entitled to attend the 23rd AGM, only the Company’s members
whose names appear in the Record of Depositors of the Company maintained by Bursa Malaysia Depository Sdn Bhd
on 17 May 2019 shall be entitled to attend the said meeting or appoint proxies to attend on their behalf. 06
EXPLANATORY NOTES
1) AUDITED FINANCIAL STATEMENTS AND THE REPORTS OF THE DIRECTORS AND AUDITORS THEREON
The audited Financial Statements and the Reports of the Directors and Auditors thereon for the financial year ended
31 December 2018, will be laid before the Company at the 23rd AGM for consideration of the members pursuant to the
Campanies Act, 2016 (“CA 2016”). There is no requirement for the members to approve them and hence, the matter
will not be put forward for voting.
2) RE-ELECTION OF DIRECTORS
Pursuant to Rule 131.1 of the Company’s Constitution, at least one-third (1/3) of Directors should retire by rotation or if
that number is not a multiple of three (3), then the number nearest to one-third (1/3) should retire. Further, any Director
of the Company appointed by the Board of Directors (“Board”) pursuant to Rule 116 of the Constitution shall not be
taken into account in determining the Directors who are to retire by rotation. Presently, we have seven (7) Directors on
the Board. Mr Gary Neal Christenson will be appointed as the Chief Executive Officer (“CEO”) of the Company effective
16 May 2019 in place of Mr Leon Andre Harland, the current CEO whose tenure will end on 15 May 2019. Mr Leon
Andre Harland was not taken into account in determining the two (2) Directors who will be up for retirement by rotation
pursuant to Rule 131.1 at the 23rd AGM. Ms Alexandra Schaapveld and Ms Maureen Toh Siew Guat, who are both
Non-Executive Directors, are due for retirement at the 23rd AGM, and being eligible, they have offered themselves for
re-election as Directors of the Company.
The performance of both the Directors was assessed based on the Board Annual Evaluation exercise for 2018.
Additionally, both of the Directors were also assessed following a one-on-one session with the Board Chairman.
In respect of the independence of Ms Alexandra Schaapveld, an Independent Director, she has provided her annual
declaration and confirmation on her independence.
Further to such assessment exercise, the Board is satisfied that the Directors standing for re-election have performed their
duties as per the Board Charter, demonstrated the qualities as outlined in Guidance for Practice 5.1 of the Malaysian
Code of Corporate Governance 2017 and has the character, experience, integrity, competence and time to effectively
discharge their role as Directors. In this regard, the Board is assured that the Directors standing for re-election will
continue to bring to bear their knowledge, experience and skills and contribute effectively to the Board’s discussions,
deliberations and decisions.
Based on the above, the Board approved the Nomination & Corporate Governance Committee’s (“NC”) recommendation
that the Directors who retire in accordance with Rule 131.1 of the Constitution are eligible to stand for re-lection. The
retiring Directors had abstained from deliberations and decisions on their proposed re-election at the respective NC and
Board meetings.
240
Both the Directors offering themselves for re-election have consented to the same.
For details of the Directors who are standing for re-election, Ms Alexandra Schaapveld and Ms Maureen Toh Siew Guat,
please refer to the Directors’ Profiles on pages 32 and 33 of the Annual Report 2018.
3) DIRECTORS’ REMUNERATION
Section 230(1) of the CA 2016 provides amongst others, that the fees of the directors and any benefits payable to the
directors of a listed company and its subsidiaries shall be approved at a general meeting. In this respect, the Board
agreed that the shareholders’ approval shall be sought at the 23rd AGM for the fees and benefits payable to the
Directors.
At the Company’s annual general meeting in May 2018, the shareholders had approved the payment of fees and
benefits to the Non-Executive Directors (“NEDs”) up to an amount of RM4.5 million from 31 May 2018 until the
conclusion of the forthcoming 23rd AGM. The payment of remuneration to the NEDs for the said period did not exceed
RM3.0 million. The details of the remuneration of Directors for FYE 31 December 2018 are disclosed on pages 144 to
146 of the Annual Report 2018.
The NEDs’ fees and benefits comprises fees, meeting allowances and other emoluments payable to the Chairman and
members of the Board and Board Committees. The NEDs’ current remuneration framework is as set out below which
came into effect on 1 July 2014. In the third quarter of 2018, the Board reviewed the Board Committees’ structure with a
view to ensuring continuing efficiencies in respect of its organisational and decision-making framework, following which
it decided to discontinue the Executive Committee (“EXCO”) effective 1 September 2018. The duties of the EXCO were
assumed by the Risk Management Committee (“RMC”) and following its enhanced duties, the fees for the Chairman
and members of the RMC were increased to be similar to that of the Chairman and members of the Audit Committee
(“AC”) with effect from 1 September 2018. The revised fees for the Chairman and members of the RMC were within the
shareholders’ mandate obtained at the annual general meeting in 2018:
Description Chairman NEDs

(i) Director Fee
• Monthly fixed allowance RM40,667 RM15,000
• Board Committees (AC and RMC) RM10,000 RM6,000
• Board Committees (Remuneration Committee and NC) RM4,000 RM2,500

Board Member Member
Chairman (based in (based outside
Malaysia) Malaysia)
(ii) Meeting allowance (per meeting day)*
• For meetings in Malaysia RM3,500 RM2,000 USD1,000
• For meetings outside Malaysia USD1,500 USD1,000 USD1,000
(iii) Other Benefits
Monthly car allowance RM12,000 - -
* The meeting allowance includes the allowance for travel days to attend meeting

Annual Report 2018
241
The proposed amount of RM3.2 million for the payment of directors’ fees and benefits for the period from 29 May 2019
to the next annual general meeting in 2020 comprise the estimated total fees of RM2.4 million and estimated total
benefits of RM800,000. The proposed amount of RM3.2 million has taken into account the potential appointment of a
new director in 2019.
06
The NEDs who are shareholders of the Company will abstain from voting on the proposed Resolution 3 and will ensure
that persons connected to him/her abstain from doing so.
4) RE-APPOINTMENT OF AUDITORS
Messrs. PricewaterhouseCoopers PLT, the auditors of the Company have expressed their willingness to continue in
office as auditors of the Company for the financial year ending 31 December 2019. The Board has approved the AC's
recommendation that they be retained after taking into account relevant feedback on their experience, performance and
independence following a formal assessment.
5) Authority to issue ordinary shares pursuant to Section 75 and Section 76 of the CA 2016 and the
Main Market Listing Requirements (“MMLR”)
Proposed Resolution 5 is to seek a renewal of the general authority pursuant to Section 75 and Section 76 of the CA
2016 and the MMLR for the issue and allotment of new ordinary shares in the Company.
As at 29 March 2019, the Company has not issued any new shares pursuant to the previous mandate.
Proposed Resolution 5, if passed, would enable Directors to issue and allot new ordinary shares up to an amount not
exceeding ten per centum (10%) of the Company’s issued share capital from time to time. This will, among others,
provide them the flexibility to raise funds, including but not limited to further placement of shares for purposes of funding
future investment project(s), working capital and/or acquisitions without convening a general meeting which will be both
time and cost consuming. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of
the next annual general meeting of the Company.
Should there be a decision to issue and allot ordinary shares after the said authority has been given, the Company
will make the appropriate announcement on the purpose and/or utilisation of proceeds arising from such issuance and
allotment.
6) Proposed offer, grant and/or allotment in respect of ordinary shares in the Company to
Mr Gary Neal Christenson, Executive Director pursuant to the Company’s Management Incentive
Plan (“MIP”)
Proposed Resolution 6 are to seek authority in respect of the proposed offer, grant and/or allotment in respect of ordinary
shares in the Company under the MIP to Mr Gary Neal Christenson (“Mr Christenson”), Executive Director.
On 23 May 2016, we had obtained your approval for the establishment of the MIP including the authority to offer, grant
and/or allot shares to employees and executive directors who fulfil the criteria of eligibility for participation in the MIP.
The proposed offer, grant and/or allotment in respect of ordinary shares under the Company’s MIP to Mr Christenson,
is intended to, amongst others, serve as a long term incentive plan that aligns the Executive Director’s interests with the
long term objectives and business strategies of our Group.
242
Proposed Resolution 6, if passed, would enable the Company to award annual Grants and Grants over a 2-year period
to Mr Christenson during the period from the 23rd AGM up to the conclusion of the next annual general meeting of the
Company, comprising such number of ordinary shares with a value up to the amounts set out below:
Amount of Amount of
annual Grant over a
Grant 2-year period Total amount
USD USD USD
Mr Gary Neal Christenson 750,000 1,000,000 1,750,000
1,750,000

The details on the MIP are set out in the Directors’ Report and Note 37 to the financial statements.
Mr Christenson will abstain from voting on the proposed Resolution 6 and will ensure that persons connected to him
abstain from doing so.
FORM OF PROXY
BUMI ARMADA BERHAD (370398-X)
(Incorporated in Malaysia)
*I/*We, _____________________________________ *NRIC No.(new and old)/ *Passport No./ *Company No._______________________
[FULL NAME IN BLOCK LETTERS] [COMPULSORY] [COMPULSORY]
of _____________________________________________________________________________ and telephone no._________________________

[ADDRESS]
being a member of Bumi Armada Berhad (the “Company”), hereby appoint ______________________________________________________
[FULL NAME IN BLOCK LETTERS] [COMPULSORY]
*NRIC No./*Passport No. _________________________________ of_____________________________________________________________

[COMPULSORY] [ADDRESS]
and/or ___________________________________________________________ *NRIC No./ *Passport No.______________________________

[FULL NAME IN BLOCK LETTERS] [COMPULSORY]
of_______________________________________________________________________________________________________________________
[ADDRESS]
or failing *him/*her, THE CHAIRMAN OF THE MEETING as *my/*our *proxy/*proxies to vote for *me/*us and on *my/*our behalf at
the Twenty-Third Annual General Meeting of the Company to be held on 28 May 2019 at 2.00 p.m. at Manhattan
Ballroom, Level 14, Berjaya Times Square Hotel, 1 Jalan Imbi, 55100 Kuala Lumpur, Malaysia and at any adjournment
thereof.
*I/*We indicate with an “X” in the spaces below how *I/*we wish *my/*our vote to be cast:
No. Resolutions For Against Abstain
Ordinary Resolutions
1 To re-elect Alexandra Schaapveld who retires by rotation in accordance with Rule

131.1 of the Company’s Constitution, and who being eligible, offers herself for
2 To re-elect Maureen Toh Siew Guat who retires by rotation in accordance with Rule
131.1 of the Company’s Constitution, and who being eligible, offers herself for
3 To approve the payment of directors’ fees and benefits to the Non-Executive Directors
up to an amount of RM3.2 million from 29 May 2019 until the conclusion of the next
annual general meeting of the Company in 2020.
4 To re-appoint PricewaterhouseCoopers PLT as Auditors of the Company for the

financial year ending 31 December 2019 and to authorise the Directors to fix their
remuneration for that year.
5 To authorise the Directors to allot and issue new ordinary shares pursuant to Section
75 and Section 76 of the Companies Act, 2016 and the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.
6 To offer, grant and/or allotment in respect of ordinary shares in the Company to

Gary Neal Christenson, Executive Director pursuant to the Company’s Management
Incentive Plan.
Subject to the above stated voting instructions, *my/*our *proxy/*proxies may vote or abstain from voting on any resolutions as
*he/*she/*they may think fit.
If appointment of proxy by an individual or No. of shares held: The proportions of *my/*our holding to be
a corporation is under hand Securities Account No.: represented by *my/*our *proxy/*proxies
(CDS Account No.) (Compulsory)
are as follows:
Signed by *individual member/*officer or Date:

First Proxy
attorney of member/*authorised nominee No. of shares:
of
Percentage: %
(beneficial owner)
Second Proxy
If appointment of proxy by a corporation is Seal
No. of shares:
under seal
Percentage:
%
The Common Seal of
No. of shares held:
Securities Account No.:
was hereto affixed in accordance with its (CDS Account No.)
(Compulsory)
Constitution in the presence of:-
Date:
Director *Director/*Secretary
in its capacity as *member/*attorney of

member/*authorised nominee of
(beneficial owner)
* Delete if inapplicable
NOTES :
1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint one (1) or more proxies to attend, participate, speak and vote for him/
her subject to the following provisions:
(i) save as provided for in Note 2, the Companies Act 2016 ("CA 2016") and any applicable law, each member shall not be permitted to appoint more than
two (2) proxies; and
(ii) where a member appoints more than one (1) proxy, the appointment shall be invalid provided that he/she specifies the proportion of the member’s shareholdings
to be represented by each proxy.
2. For the avoidance of doubt and subject always to Note 1, the CA 2016 and any applicable law:
(i) where a member of the Company is an authorised nominee, it may appoint at least one (1) proxy in respect of each securities account it holds to which ordinary
shares in the Company are credited. Each appointment of proxy by an authorised nominee shall be made separately or in one instrument of proxy which shall
specify the securities account number and the name of the beneficial owner for whom the authorised nominee is acting;
(ii) where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account
(“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
3. A proxy may but need not be a member of the Company. There shall be no restriction as to the qualification of the proxy.
4. The instrument appointing a proxy shall:

(i) in the case of an individual, be signed by the appointor or by his/her attorney; and
(ii) in the case of a corporation, be either under its common seal or signed by its attorney or by an officer on behalf of the corporation.
5. The instrument appointing a proxy must be deposited at the office of the Company’s Share Registrars, Boardroom Share Registrars Sdn Bhd at Level
6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor, Malaysia, not less than 24 hours before the
time appointed for the taking of the poll at the 23rd AGM (i.e. the proxy form needs to be deposited no later than 27 May 2019 at 2.00 p.m.) or adjourned meeting.
Otherwise, the instrument of proxy shall not be treated as valid and the person so named shall not be entitled to vote in respect thereof. Faxed copies of the duly
executed form of proxy are not acceptable.
6. The resolutions put to the votes at the 23rd AGM shall be determined by poll. A proxy may vote on a poll. If the form of proxy is returned without an indication as
to how the proxy shall vote on any particular matter, the proxy may exercise his discretion as to whether to vote on such matter and if so, how. A proxy appointed
to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting and the instrument appointing a proxy shall be
deemed to confer authority to demand or join in demanding a poll.
7. The lodging of a form of proxy does not preclude a member from attending and voting in person at the meeting should the member subsequently decide to do so.
8. Personal Data Privacy
By submitting the duly executed form of proxy, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by
the Company (or its agents) for all matters relating to or in connection with the AGM (including any adjournment thereof) and for the Company’s (or its agents’)
compliance with any applicable laws, rules or regulations and guidelines (collectively the “Purposes”); and (ii) warrants that the member has obtained the prior
consent of its proxy(ies) and/or representatives for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or
representative(s) for the Purposes.
This flap for sealing
STAMP
THE SHARE REGISTRARS OF

BUMI ARMADA BERHAD
(Company No.:370398-X)
Boardroom Share Registrars Sdn Bhd

Level 6, Symphony House
Pusat Dagangan Dana 1, Jalan PJU 1A/46
47301 Petaling Jaya
Selangor, Malaysia
1st fold here

www.bumiarmada.com
BUMI ARMADA BERHAD (370398-X)
Level 21, Menara Perak, 24, Jalan Perak, 50450 Kuala Lumpur, Malaysia
Tel +603 2171 5799 Fax +603 2163 5799

ARMADA Annual Report 2018

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ARMADA Annual Report 2018

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ANNUAL REPORT 2018

Bumi Armada Berhad is a Malaysia-based international

We provide offshore services via two business units –

Bumi Armada is one of the largest Floating Production

The Company was incorporated in December 1995 as

Revenue Total Assets Net Loss Market Capitalisation

2.42 bil 15.54 bil 2.32 bil 0.91bil

97.17% 3.37 bil 20.20bil -79.74%

Lost Time Injury

INSIDE THIS REPORT

AN OVERVIEW OF HOW WE ARE OTHER

About Bumi Armada Corporate Governance 28 Analysis of 228

Vision, Mission and 2 - Board of Directors’ 31 Glossary of Technical 234

About This Report 3 - Senior Management 35

WE STAY RESILIENT BY KEEPING TO OUR

Welcome to Bumi Armada’s 2018 Annual Report. As you read

SCOPE AND BOUNDARIES

On behalf of the board:

TUNKU ALI REDHAUDDIN LEON ANDRE HARLAND

FLOATING PRODUCTION &

Bumi Armada currently operates the

OFFSHORE MARINE SERVICES

1 Floating Storage Unit

3 Subsea Construction Vessels

8 Floating Production Storage Offloading Units

GROUP CORPORATE STRUCTURE

ARMADA OYO LTD. (BVI)

ARMADA TGT LTD. (Marshall Islands)

BUMI ARMADA AUTOMATION INTERNATIONAL SDN. BHD. (Malaysia)

BUMI ARMADA CAPITAL MALAYSIA SDN. BHD. (Malaysia)

BUMI ARMADA CAPITAL OFFSHORE LTD (Labuan)

BUMI ARMADA ENGINEERING SDN. BHD. (Malaysia)

BUMI ARMADA HOLDINGS B.V. (Netherlands)

BUMI ARMADA HOLDINGS LABUAN LTD. (Labuan)

BUMI ARMADA OFFSHORE HOLDINGS LIMITED (Marshall Islands)

BUMI ARMADA SINGAPORE HOLDINGS PTE. LTD. (Singapore)

BUMI ARMADA (SINGAPORE) PTE. LTD. (Singapore)

GROUP CORPORATE STRUCTURE

BUMI ARMADA HOLDINGS BUMI ARMADA

49% BUMI ARMADA NAVIGATION

ARMADA FLOATING GAS ARMADA FLOATING GAS BUMI ARMADA SHIP

ARMADA OFFSHORE ARMADA OFFSHORE

ARMADA CONSTRUCTOR ARMADA MARINE CONTRACTORS ARMADA MARINE CONTRACTORS

ARMADA SHIP MANAGEMENT (S) BUMI ARMADA MARINE

BUMI ARMADA MARINE BUMI ARMADA MARINE

Joint Venture (“JV”)

BOARD OF DIRECTORS AUDIT COMMITTEE REGISTERED ADDRESS/HEAD OFFICE

Tunku Ali Redhauddin VU Kumar (Chairperson) Level 21, Menara Perak

Maureen Toh Siew Guat Alexandra Schaapveld

Tunku Ali Redhauddin ibni Tuanku Muhriz - - Chairperson -

Alexandra Schaapveld Member Chairperson Member -

VU Kumar Chairperson Member Member Chairperson

Chan Chee Beng - - Member -

Maureen Toh Siew Guat Member Member - Member

In the other sections of the Annual Report:

CHIEF HUMAN GENERAL COUNSEL CHIEF FINANCIAL OFFICER

Karen Lawrie Luke Targett

Leong Wei Kit

Megat Zariman bin Abdul Rahim