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Navigator HoldingsANNUAL REPORT
2021
TRANSFORMING THE WAY
MARINE SERVICES ARE DELIVERED
HIGH-SPECIFICATION VESSELS AND A COMPREHENSIVE
SUITE OF MARINE AND SUBSEA SERVICES
Aberdeen
EUROPE
AMERICAS
Houston
MIDDLE
EAST
AFRICA
Taiwan
ASIA
Singapore
Batam
Kuala Lumpur
Darwin
Perth
AUSTRALIA
CONTENTS
Overview
About Us
Our Purpose
Our Services
Our Markets
2021 Year in Review
Chairman’s Report
Managing Director’s Report
Sustainability Report
Risks
Governance
Board of Directors
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Directors’ Declaration
Financial Report 2021
2
3
4
5
6
8
10
16
28
30
34
38
55
56
62
64
Shareholder Information
Additional Securities Exchange Information 108
Melbourne
New Plymouth
NEW ZEALAND
KEY
Office
Operational Facility
25
Vessels operating
internationally
1100+
Employees across the globe
1.13
TRCF per million
hours worked
6
Global
operational
facilities
MMA Offshore Ltd | Annual Report 2021 1
ABOUT
US
At MMA Offshore, we specialise in
providing high-specification vessels
and a comprehensive suite of marine
and subsea services to the offshore
energy sector and wider maritime
industries.
Our combination of high-quality vessels,
specialised subsea services, strategically
located onshore facilities and in-house
technical marine expertise enables us to
partner with our clients to deliver innovative,
fit-for-purpose marine solutions.
Our head office, located in Perth, Western
Australia and our regional headquarters in
Singapore, provide technical support to our
vessels and subsea operations and a regional
presence in our key operating areas for our
clients. We also have operational facilities in
Melbourne, Darwin and Aberdeen and local
offices in Malaysia, Taiwan, New Zealand and
the United States.
The health and safety of our employees,
contractors, clients and stakeholders is core to
the way we do business. We pride ourselves
on the world class safety, quality and reliability
of our operations underpinned by our Target
365 safety culture which strives for “a Perfect
Day, Every Day”.
OUR
PURPOSE
At MMA Offshore, we have developed a vision for our
organisation that clearly articulates our purpose,
who we are and what motivates us.
WHY WE
MATTER
We solve the most
demanding marine
challenges.
WHAT
WE DO
We are a
pioneering
marine services
business.
WHAT
WE BELIEVE
We believe marine
resources should
be developed
sustainably.
WHERE
WE WANT
TO BE
We want to
transform the
way marine
services are
delivered.
HOW WE’LL
GET THERE
Our five principles are our
lines in the sand, and guide
how we think and act as an
organisation every day.
OUR PRINCIPLES
SOLVING THE MOST DEMANDING
MARINE CHALLENGES
SMARTER TOGETHER
Only by working together can
we solve the biggest problems.
DO WHAT’S RIGHT,
NOT WHAT’S EASY
We have the courage to do the
right thing, even when it’s hard.
THINK BIGGER
We embrace big ideas and challenge
ourselves to achieve big goals.
FAIL FAST AND LEARN
We back ourselves to innovate and
support each other through the process.
CREATE TOMORROW
The future we want is
up to us to create.
MMA Offshore Ltd | Annual Report 2021 3
TRANSFERABLE SKILLS,
CAPABILITIES AND SERVICES
ACROSS A RANGE OF MARKETS
OUR
SERVICES
VESSEL SERVICES
MMA owns and operates 25 offshore vessels
capable of supporting a range of offshore
marine, renewables and subsea projects.
Our assets have the capability to serve a
wide range of work scopes – from subsea
construction and maintenance, through to
ongoing production support and towing
operations.
SUBSEA SERVICES
Combining state-of-the-art equipment and
highly experienced personnel, MMA provides
a range of subsea services including survey,
geophysical and geotechnical services,
engineering services, commercial diving and
ROV operations, subsea stabilisation solutions
and manufacturing assembly and test
services, all managed by our in-house project
management and delivery expertise.
We deliver our services either as an integrated
end-to-end solution with our in-house project
management expertise, or as a singular service
provision to complement our clients’ execution
preferences.
Combined with our Vessel Services and
Project Logistics service offerings, we can
leverage MMA’s full capability in a single client-
facing solution.
PROJECT LOGISTICS
Supporting the marine logistics component
of global projects is a key service provided by
MMA. We deliver a range of services to our
clients including project managing complex
marine and vessel spreads, logistics to remote
greenfield sites, integrated marine logistics,
marine transportation services and onshore
construction support to the onshore, near-
shore and offshore construction market.
OUR
MARKETS
OIL & GAS
MMA has extensive experience providing offshore and onshore
operational support to the oil and gas industry.
Our services support all phases of the oil and gas lifecycle,
from FEED to construction delivery to maintenance and
decommissioning.
Our versatile fleet of offshore vessels combined with our
world-class subsea expertise provides integrated solutions to
support offshore construction activities, ongoing production
support services, inspection, maintenance and repair
operations and decommissioning works.
RENEWABLES
MMA delivers a range of marine solutions for the offshore wind
industry.
We provide services for field development, construction
support and inspection and maintenance works. We can also
provide specialised support services for cable installation,
management and maintenance.
INFRASTRUCTURE MAINTENANCE
MMA provides services to support construction, repairs and
maintenance works to nearshore marine infrastructure such as
ports, jetties, marine terminals and nearshore marine projects.
We work with engineering consultants and clients to optimise
scopes and support head contractors for new construction
and upgrade programs, as well as ongoing maintenance and
repair services to owners and operators.
GOVERNMENT & DEFENCE
MMA provides marine services to the government and defence
sectors. We are a panel member on the HydroScheme
Industry Partnership Program (HIPP), providing hydrographic
survey services to the Australian Government’s Department of
Defence as part of an extensive program to obtain high-quality
bathymetric coverage of Australia’s Exclusive Economic Zone
by 2050.
SCIENCE & RESEARCH
MMA has experience in supporting research voyages and
scientific missions through our marine capability and subsea
knowledge. With in-house assets and expertise, we can
partner with our clients to discover the unexplored.
4 MMA Offshore Ltd | Annual Report 2021
4 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 5
MMA Offshore Ltd | Annual Report 2021 5
2021
YEAR IN REVIEW
Revenue
EBITDA
$237.5m
$45.9m
EBIT
$13.1m
NPAT
$2.4m
Operating Cashflow
LVR (Net Debt to Fixed Assets)
$26.9m
18.5%
Cash at Bank
$96.2m
NTA per Share
80c
6 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 7
CHAIRMAN’S
REPORT
FY2021 was dominated by the global coronavirus
pandemic which severely impacted our business
both operationally and financially.
Notwithstanding the challenges presented by COVID-19, I am
pleased to report that MMA achieved a number of significant
milestones during the past financial year.
Earnings were in line with market guidance with the Company
reporting Earnings before Interest Tax and Depreciation
(“EBITDA”) of $45.9 million for the year. Reported EBITDA
included the impact of several one-off items including a $14.8
million debt forgiveness benefit (note 2.2), provision for legal
settlement costs of $6.4 million (note 3.11), doubtful debts
recovered of $1.3 million (note 3.2) and acquisition and debt
restructuring costs totalling $0.7 million (note 2.2).
Importantly, the Company remained cash positive and closed
the financial year with cash at bank of $96.2 million.
In November 2020, we successfully restructured our
balance sheet through an $80 million equity raising and debt
restructuring. As part of the debt restructuring MMA received
a $14.8 million debt concession from certain members of its
Banking Syndicate, with the total debt reduction amounting
to $91.9 million and the term of the facilities extended out to
January 2025. In addition, the syndicate reduced from seven
to four banks. The balance sheet restructure was a significant
milestone for the Company, bringing our leverage metrics
within a more appropriate range and enabling the business to
focus on delivering its growth strategy. Following the raising,
a 10 for 1 share consolidation was undertaken to reduce the
number of shares on issue and provide a more appropriate
capital structure for the Company going forward.
Whilst we are diversifying our earnings base to more
sustainable sectors such as offshore wind and government
services, at present we remain highly leveraged to oil and gas
activity which was significantly impacted by the pandemic.
Several projects were cancelled or deferred, reducing
demand for our vessels and services in that market.
MMA ACHIEVED A
NUMBER OF SIGNIFICANT
MILESTONES DURING
THE YEAR
FY2021 saw a number of changes to the
Board of Directors as part of our Board
renewal program. We farewelled two
of our long-standing Directors, Andrew
Edwards and Eve Howell, who retired
from the Board during the year. Andrew
served on the Board for 11 years, three
as Chairman and Eve served on the
Board for nine years including three as
Chair of the Audit and Risk Committee. I
would like to pay tribute to both Andrew
and Eve for their significant contribution to
the Company during this time. I am also
pleased to welcome two new directors,
Sue Murphy and Sally Langer, both
outstanding appointments to the Board
and I very much look forward to their
contribution and stewardship as we steer
the Company through the next phase of
our development.
I would like to conclude by thanking the
senior leadership and staff of MMA for
their perseverance and dedication to the
business in these challenging times. I
have been extremely impressed by how
our people have risen to the challenges
and increased operational complexity
presented by the pandemic and I thank
each of them sincerely for their efforts.
Whilst we are operating in uncertain and
rapidly changing times, I am confident in
our growth strategy to deliver improved
returns for you our shareholders.
Ian Macliver
Chairman
Whilst our operations have continued
successfully throughout the majority of
the pandemic, the recent Delta variant
has significantly increased the challenge.
Border restrictions and quarantine
requirements have intensified, making
vessel and personnel movements
far more difficult and costly and we
are beginning to see this impact the
timing of work scopes. The increased
transmissibility of the Delta strain is also
increasing the risk of our personnel being
infected in transit, which despite the most
robust testing protocols, can result in an
entire vessel being shut down and placed
in quarantine.
The pandemic has also elevated the
global focus on climate change and social
issues and has significantly accelerated
the pace of the energy transition. Whilst
MMA has always had a strong focus on
environmental, social and governance
issues, during the year we formalised
this at Board level expanding the remit of
the Audit and Risk Committee to include
sustainability issues. Our current focus is
on establishing systems and processes
to enable us to report in line with the
relevant voluntary frameworks and we
have included comprehensive detail on
our ESG activities in the Sustainability
section of this Annual Report.
The health and wellbeing of our people
has been a key priority during the
pandemic, and we have been particularly
conscious of mental health issues at this
time. During the year we launched a new
Employee Assistance Program which
provides 24/7 access to counselling
services for our staff both onshore and
onboard our vessels as well as a range of
other support services. We also signed
up to the Neptune Declaration to improve
the welfare of seafarers globally during the
pandemic.
Macro conditions for oil and gas improved
during the second half of the financial
year with the Brent oil price recovering
79% over the course of the year and
remaining above US$60 per barrel since
February 2021. This has brought a level
of confidence back into the market and
we have recently seen activity start to
increase including a number of major
LNG projects recently sanctioned for
development. Final investment decisions
on other key projects are also expected in
the short term.
Offshore wind activity has been buoyant
with construction of a number of offshore
wind farms in Taiwan driving activity for
MMA. We have seen significant growth in
that aspect of our business over the past
12 months with the sector representing
16% of our total revenue for FY2021.
The longer-term outlook for offshore wind
is extremely positive, with significant
new capacity to be installed in the Asia
Pacific region over the coming years.
A key part of our strategy is around
positioning ourselves to capitalise on
growth in that market. We recently signed
a memorandum of understanding with
Worley to jointly provide services to the
offshore wind sector in South East Asia
and we have established a local operating
structure and agreed a joint venture in
Taiwan to facilitate growth.
We also made good progress in the
government and defence sector
predominantly through our participation
in the HydroScheme Industry Partnership
Program, where we have been contracted
to undertake hydrographic surveys for
the Australian Department of Defence, as
part of an extensive program of nautical
charting surveys in Australian waters.
We continue to see the benefits of having
acquired the subsea business with our
enhanced service offering proving to be
valued by clients and resulting in higher
utilisation on a number of our vessels
during the year. We will continue to focus
on maximising the benefits of our broader
service offering and skill base within the
business, to drive growth in all market
sectors.
8 MMA Offshore Ltd | Annual Report 2021
8 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 9
MANAGING DIRECTOR’S
REPORT
REVIEW OF OPERATIONS
FY2021 operational earnings were in line with
expectations having regard to the impacts of
COVID-19 on the business.
MMA reported Revenue of $237.5 million, down 13% on the
prior year. Reported EBITDA for FY2021 was $45.9 million
inclusive of a number of one-off items including a
$14.8 million debt forgiveness benefit (note 2.2), provision
for legal settlement costs of $6.4 million (note 3.11), doubtful
debts recovered of $1.3 million (note 3.2) and acquisition
and debt restructuring cost totalling $0.7 million (note 2.2).
Excluding the impact of these one-off items EBITDA was
$36.9 million, in line with our earnings guidance range.
Importantly MMA remained cash positive during the year
generating operating cash flow of $26.9 million. Cash at
bank as at 30 June 2021 was $96.2 million, providing a
solid buffer in the current uncertain times.
MMA’s activities were impacted by COVID-19 throughout
the financial year both in terms of overall demand for our
assets and services and the increased complexity and costs
associated with operating assets and moving personnel
across borders in a global pandemic environment.
In recent months the COVID-19 challenge has escalated
significantly with the new highly infectious Delta variant
impacting our key operating regions. Within Australia,
interstate border restrictions and increased quarantine
requirements are increasing the costs associated with
changing crew on our vessels as well as our ability to source
personnel for new projects. Internationally, we are seeing
activity in some regions suspended and delays in project
timelines due to the inability to get project personnel across
borders. The new variant has also increased the risk of
our personnel being exposed to the virus during transit.
Whilst we have a robust suite of on-boarding and testing
procedures in place, a positive case can result in an entire
vessel being shut down and placed into quarantine which
has a significant impact on our business.
Market Conditions
MMA predominantly provides services to the offshore oil and
gas sector with a growing focus on the offshore wind and
government and defence sectors.
Market conditions for the offshore oil and gas sector were
extremely challenging during the year with the sector being
one of the worst hit by the COVID-19 pandemic. During
the first half of the financial year, we saw oil prices at below
US$40 per barrel as global demand for oil plummeted.
Macro conditions improved during the second half with the
oil price recovering almost 80% and remaining above US$60
per barrel (Brent) since February 2021. The market for LNG
held up well with overall demand increasing globally and
spot prices rising to record highs in 2021. We have seen
a resumption in activity in recent months with previously
cancelled projects resuming and a number of major projects
being sanctioned or moving into FEED.
Activity remains heavily impacted by the
pandemic and the ever-changing status
of border controls and lockdowns. At the
time of writing this report, some of our
key Asian markets, for example Malaysia,
are effectively closed due to the pandemic
with very limited oil and gas activity in
what is traditionally our busiest period of
the year. This is having an ongoing impact
on our business.
There have been some early signs of
rate increases for offshore vessels in
certain regional markets and segments,
however average rates are still down on
pre-pandemic levels and we continue to
see pressure from oil and gas companies
to reduce rates on existing contract
positions.
Activity in the offshore wind market has
remained buoyant with construction of
several wind farm projects in Taiwan
continuing through the pandemic. The
past 12 months has seen a significantly
increased focus on climate change with
the offshore wind industry projected
to grow exponentially over the coming
decade. As a vessel intensive industry
this market is a key focus area of
MMA’s longer-term growth strategy for
both the construction and longer-term
maintenance phases.
Other segments such as government
and defence and infrastructure have also
continued throughout the pandemic,
highlighting the benefits of a more
diversified revenue base.
Strategy
Our strategy is focused on maximising
the returns from our core oil and gas
business whilst further diversifying into
new markets such as offshore wind,
government services and infrastructure
maintenance, transforming our business
along with the energy transition.
A key strategic focus is to leverage our
skills and assets across our vessels,
subsea, project logistics and engineering
businesses to deliver integrated project
scopes for our clients across all markets.
We successfully delivered a number of
integrated projects in the oil and gas and
renewables sectors during the year. We
will continue to develop our integrated
service model with the aim of further
embedding our services with our clients.
Whilst we expect oil and gas will be a
fundamental part of the energy mix for
some time, the focus on climate change
has increased the pace of the transition
to renewable energy, including offshore
wind. We see renewables as a key future
market for MMA with a significant number
of new offshore wind farms expected to
be developed in the Asia Pacific region
over the coming decade. During the year,
MMA supported a number of offshore
wind development projects in Taiwan
utilising our vessels and subsea services
to deliver a range of work scopes. We
recently signed a memorandum of
understanding with Worley to provide
integrated services to the offshore wind
market and we have established an
operating platform in Taiwan to drive our
growth in this market.
We are also targeting the government
and defence sectors as well as select
infrastructure maintenance contracts to
further diversify our revenue base. We are
currently active in delivering hydrographic
survey services to the Australian Navy
and we are also engaged on a number
of infrastructure maintenance contracts
around Australia. We will continue building
upon both of these areas as part of our
strategy.
Underpinning the strategy is the marine
expertise within our business which
enables us to deliver innovative solutions
to our clients to differentiate us from our
competitors.
Our innovation program is focused on
finding better and more sustainable
ways to deliver marine services. We
are involved in a number of exciting
innovation initiatives including the
printing of 3D parts in collaboration with
Wilhelmsen and thyssenkrupp as well
as supporting the PIER71 Smart Port
Challenge in Singapore, aimed to facilitate
innovation within the maritime industry.
Sustainability
Sustainability is integral to our overall
strategy as an organisation and we are
committed to growing our business
whilst achieving sustainability outcomes
for our people, the environment and
the community whilst operating with
strong ethics and governance. Further
information on our commitment
to sustainability is included in our
Sustainability Report which forms part of
this Annual Report.
FY2021 HIGHLIGHTS
EBITDA
$45.9m before one-of items
$96.2M
Cash at Bank increased
by 11%
RESTRUCTURED
BALANCE SHEET
$80m equity raising
$91.9m debt reduction
68%
68% UTILISATION
Across Strategic Fleet
ASSET SALES
PROGRESSING
Four AHTS vessels sold
DELIVERING
INTEGRATED SERVICES
To both the oil & gas and
renewables sectors
PROJECT LOGISTICS
Secured key scopes in
Australia
16%
16% REVENUE FROM
OFFSHORE WIND
Establishing Taiwan
presence
NEW PARTNERSHIPS
Worley MOU and Taiwan
JV to target offshore wind
STRONG COVID-19
PROTOCOLS
In place to protect our people
and continue operations
REDUCED VISIBILITY
Into FY2022 due to impact of
Delta variant on operations
10 MMA Offshore Ltd | Annual Report 2021
10 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 11
Balance Sheet
MMA’s Cash at Bank as at 30 June 2021
was $96.2 million providing a strong
buffer against the current economic
uncertainty due to the ongoing impacts of
the pandemic.
During the financial year, MMA achieved
a significant milestone, completing a
Balance Sheet restructure in November
2020. The restructure was completed by
way of an $80 million equity raising, the
proceeds of which were used to reduce
debt. As part of the debt restructure,
MMA received a $14.8 million debt
concession resulting in a total debt
reduction of approximately $91.9 million.
The restructure has strengthened MMA’s
Balance Sheet with MMA’s Gross Debt
reducing to $163.5 million at 30 June
2021, down from $273.4 million in
June 2020 and Net Debt (Gross Debt less
Cash) at $67.3 million down from
$186.8 million. MMA’s key leverage
metrics have significantly improved with
Net Debt / EBITDA as at 30 June 2021
at 1.8x, down from 3.8x and Net Debt to
Property Plant and Equipment of 18.5%
down from 45.0%.
As part of the restructure, MMA’s debt
facilities were extended to January 2025,
a significant extension in the current
environment and the syndicate reduced
from seven to four banks.
In February 2021, MMA undertook a 1
for 10 share consolidation to reduce the
number of shares on issue and provide
a more appropriate and effective capital
structure for the Company going forward.
Asset Sales
As part of our core business strategy,
we continually review the composition
of our fleet and we are currently in the
process of divesting a number of our
more commoditised AHTS vessels, where
the returns are suboptimal and where
there is limited opportunity to differentiate
MMA on the basis of our service quality
and delivery.
During the year, we completed the sale of
four vessels for a total of approximately
A$7.5 million, and are continuing to
negotiate further sales. Sales values have
been generally in line with the assets held
for sale value on the Company’s balance
sheet.
We also entered into sub-lease
agreement for a substantial portion of our
shipyard facility in Batam, Indonesia and
granted the lessor an option to purchase
the yard for a total of US$15.0 million.
The option to purchase may be exercised
by the lessor any time up to 12 March
2024.
As MMA has ceased shipbuilding, the
sublease and potential sale of the yard
is a sensible strategic decision for the
Company.
Cost Control
Cost control remains an ongoing key
focus for MMA whilst ensuring we never
compromise on the quality or safety of
our operations.
The pandemic has increased the costs
and complexity of moving crew and
assets across international and interstate
borders whilst complying with rapidly
changing quarantine requirements.
Notwithstanding the increased
complexity, we remain focused on
closely managing our costs across both
overhead and direct operating costs.
Direct vessel operating costs are a
material component of our cost base and
the ability to flex these costs in line with
market demand is critical in the current
environment. We have a well-developed
system for switching our vessels into a
warm layup mode between contracts to
reduce operating costs whilst off-hire.
This has the benefit of minimising holding
costs whilst ensuring the vessels remain
in a well-maintained and operational
state, which enables them to be quickly
reactivated as new contracts present.
We have stripped a significant amount of
overhead out of the business in recent
years and continue to seek further
efficiencies in our existing business whilst
ensuring we invest in the development of
our new growth markets.
Operational Update
Vessel Services
Vessel revenue for the year was $165.8
million, down 27.6% on FY2020 and
vessel EBITDA was $38.2 million, down
19.7%.
Average utilisation for the year was 53%,
down from 64% in FY2020. Utilisation
for the more specialised vessels was
stronger, with the AHT, PSV and MPSV
segments all achieving over 70%
utilisation for the year. Utilisation of the
AHTS fleet, which is more commoditised
and generally operates in the construction
and exploration sectors was 19% for the
year, bringing down the overall average.
A number of the AHTS vessels were laid
up for most of the year and we continue
to progress our strategy to largely exit this
segment.
As at 30 June 2021, MMA had a total 25
vessels, having sold four AHTS vessels
and redelivered one chartered MPSV.
Of the total fleet, 18 vessels were under
short and long-term contracts with the
remaining vessels available for work in the
spot market. A total of 29% of available
vessel days for FY2022 were contracted,
increasing to 43% taking into account
highly probable contract awards and
extension periods. This compares to 32%
and 44% at the same time last year. On
a revenue basis, 46% of our forecast
revenue is already under contract for
FY2022, (69% including highly probable)
as compared to 61% and 79% at the
same time last year.
COVID-19 continues to have a twofold
impact on the vessel business, both
in terms of demand and increased
operational complexity and cost. We
continue to manage our operations safely
and effectively in the current environment.
RENEWABLES ARE A KEY FUTURE
MARKET FOR MMA
During the year, our vessels were active
on a number of key work scopes:
Long-term Contracts
The MMA Plover and MMA Brewster
continued on their long-term contracts
with INPEX supporting the Ichthys LNG
Project. The MMA Plover recently had
its contract extended to provide drilling
rig support for a further two-years with
additional option periods thereafter.
The Mermaid Strait and Mermaid Cove
continue to provide offtake support to
Woodside’s facilities in the North West
Shelf, with the contracts extended during
the year through to March 2022.
The MMA Inscription continues on
contract with Santos supporting the
Bayu-Undan Project and was recently
extended to February 2022.
The MMA Pinnacle continues on its
contract with iTech 7, Subsea 7’s Life of
Field business unit, performing a range of
work scopes and is currently operating
in the North Sea. The vessel is on a
three-year firm contract, which completes
in December 2021, with a further two
optional years if required.
In June 2021, we announced a new
contract with OMV New Zealand for
the MMA Vision to provide field support
duties for the Maari and Maui gas fields
in the Taranaki Basin. The contract is for
a period of three years firm, with a further
two one-year option periods. Expanding
our operational portfolio into New Zealand
is a key step for MMA and we will seek
to expand our footprint within the New
Zealand region as further opportunities
arise.
Walk to Work Services
We continue to differentiate ourselves
by providing value adding services
to our clients and have developed a
specialisation in providing offshore
accommodation and walk to work
solutions for offshore construction and
maintenance operations. During the year
we had three vessels engaged in walk to
work services. The MMA Pride supported
Shell Brunei as a walk to work vessel and
was awarded a number of service awards
from the client including “Best Performing
Vessel” and one of their top three “Best
Performing Maritime Business Partners”
during the year. The MMA Pride has since
relocated to Taiwan for a walk to work
project supporting wind farm construction
works.
The MWV Falcon completed a number of
accommodation and walk to work scopes
in India prior to being redelivered to its
owner early in the second half.
The MMA Privilege provided
accommodation and walk to work
services to support FPSO shutdown
operations for a long-term client in Côte
d’Ivoire, to be immediately followed by a
light construction and walk to work scope
for Shell Brunei, commencing in the first
quarter of FY2022.
We will continue to focus on expanding
our presence in this niche market.
Offshore Wind Support
We are focused on growing our offshore
wind support business and had a number
of vessels active in the offshore wind
sector during the year.
The MMA Prestige completed an
integrated survey scope, the MMA
Leveque supported a bubble curtain
noise mitigation scope and the MMA
Vigilant supported piling installation
works.
In March 2021, MMA announced three
further offshore wind contracts. The
MMA Pride was contracted to provide
accommodation and walk to work
services supporting turbine works for
offshore wind farm construction, the MMA
Crystal was contacted to support a pre-
installation noise mitigation survey for the
Formosa 2 Offshore Wind Farm project
and the MMA Responder was contracted
to support a bubble curtain noise
mitigation scope for turbine installation
works on the Changfang and Xidao Wind
Farm project. The MMA Pride and MMA
Crystal commenced in early April 2021
and the MMA Responder in June 2021.
Decommissioning
The Mermaid Searcher is currently on
contract with UPS providing support
services for the Northern Endeavour
FPSO which is currently being operated
and maintained in lighthouse mode for
the Australian Government pending
decommissioning.
With an increased focus on
decommissioning by governments and
regulatory authorities expected in the
coming years, MMA is well placed to
service and grow its services in this
market.
Integrated Subsea Work-Scopes
Following the acquisition of our subsea
business, we continued to grow our
integrated service offering delivering a
number of integrated work scopes to
clients during the year. The MMA Prestige
completed a six-month work scope
with MMA’s survey team supporting the
Formosa 2 Offshore Wind Farm project in
Taiwan and the MMA Leeuwin supported
Esso on an integrated vessel and subsea
services scope in the Bass Strait.
Providing integrated services enables
MMA to capture incremental margin and
enhance vessel utilisation improving the
returns on our assets and we continue
to focus on growing this aspect of our
business.
Subsea Services
The Subsea business has been
significantly impacted by COVID-19.
Revenue for the financial year was
$70.6 million and EBITDA was $(1.5)
million. Whilst still in a loss-making
position, the financial performance for the
second half was encouraging, with the
subsea business generating an EBITDA
improvement of $0.8 million half on half.
Whilst suppressed activity levels have
impacted demand for oil and gas related
subsea services, we were successful
in securing a number of work scopes
supporting large Engineering Procurement
and Construction (EPC) contractors on a
range of services including stabilisation,
grouting and survey. We continue to work
closely with EPC contractors as we look
to provide support services for larger
projects and grow the volume of work we
perform for these clients.
During the year the subsea business
was active on a number of key projects
including several rig positioning scopes
including for Woodside in Senegal,
an integrated inspection scope with
the MMA Leeuwin for Esso, a pipeline
inspection scope for Santos utilising
hybrid AUV technology and an air diving
scope for Woodside.
We have also made good progress on
our diversification strategy with a number
of projects delivered for the offshore wind
sector in Taiwan utilising a combination of
MMA and third-party vessels.
12 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 13
GROWTH STRATEGY
Our goal is to be the leading diversified marine services provider in the Asia Pacific region.
1
MAXIMISE CORE
BUSINESS
2
GROW NEW
MARKETS
3
EXTEND SERVICE
OFFERING
Vessels
Subsea
Project Logistics
Engineering
Offshore Wind
Marine
Infrastructure
Government /
Defence
New Marine
Markets
Partnerships &
Collaborations
Integrated
Services
Marine
Expertise
INNOVATION &
SUSTAINABILITY
Our primary rationale for acquiring
the subsea business was to broaden
our service base and enable MMA to
deliver an integrated offering to clients
capturing a greater proportion of the value
chain. With the subsea business now
embedded into MMA’s overall operations,
we are seeing traction in this area with
a number of integrated work scopes
completed during the year and multiple
bids submitted. We will continue to grow
our integrated service offering as well
as focus on improving the profitability of
the subsea business through improved
operational processes.
We are also focused on delivering value
through innovation and completed our
first remote survey scope during the
year. Under the project, MMA provided
survey and positioning services remotely
from our centre of excellence in Perth to
our subsea inspection vessel, the MMA
Leeuwin, operating in the Bass Strait.
We were also awarded a key contract to
bring a state-of-the-art hybrid AUV into
Australia for the execution of pipeline
inspection surveys in the second half.
The UK engineering and fabrication
businesses was impacted by COVID-19
during the year with significantly reduced
activity in the first half. Conditions
improved through the second half and the
UK group was successful in securing a
number of work scopes including a well
decommissioning scope for OMV New
Zealand. MMA’s UK-based engineering
team designed and developed a
number of custom designed engineered
connector recovery and wellhead cap
replacement components to replace the
existing capping mechanisms currently
in place on three wells with all equipment
designed, manufactured and tested at
MMA’s UK-based facilities.
FOCUSED ON
DELIVERING
VALUE THROUGH
INNOVATION
Responsibility for the renewables
business currently sits within the subsea
business unit and significant progress
has been made on our renewables
strategy during the year including the
establishment of a local entity and office
in Taiwan, recruitment of a local General
Manager, and agreeing a joint venture
arrangement with a local Taiwanese
survey company.
With renewables activity in Taiwan and the
wider South East Asian region forecast
to grow significatly, we are focused on
solidifying our position as a key service
provider to offshore wind developments in
the Asia Pacific region.
We are also building our government
services business and recently secured
our second hydrographic survey scope
for the Australian Navy under the
HydroScheme Industry Partnership
Program of which MMA Offshore is one of
seven panel members.
The subsea business was also
engaged on a number of infrastructure
maintenance scopes during the year
including a jetty refurbishment scope
for South32 on Groote Eylandt and an
inspection and maintenance contract
for Chevron on Barrow Island which has
recently concluded. We will continue
to selectively focus on key marine
infrastructure projects in Australia to grow
this segment of the business.
14 MMA Offshore Ltd | Annual Report 2021
Project Logistics
Health & Safety
The Project Logistics division was created
with the aim of targeting logistics scopes
associated with large LNG and offshore
wind projects in East Africa, Asia and
Australia, predominantly using third-party
assets.
The division generated revenue for the
year of $16.5 million and EBITDA of
$(5.5) million. Reported EBITDA included
the impact of a $6.4 million provision
raised for settlement costs in relation to a
historical shipyard legal dispute.
Project activity in Australia is ramping
up and MMA was recently successful in
securing three logistics scopes to provide
tug and barge services for major projects
in the region.
Commencing in September 2021, MMA
will support Subsea 7 with two tug and
barge sets and two assist vessels on the
Julimar 2 Project. The vessels will deliver
subsea spools from Indonesia to Dampier,
Western Australia and support installation
of the equipment.
Following the Julimar scope, MMA will
provide TechnipFMC with a fleet of four
tug and barge sets and two offshore
positioning tugs to support subsea
installation works on a major LNG project.
MMA will act as lead contractor and will
subcontract to other vessel operators to
provide the overall vessel requirements.
The contract is expected to commence in
October 2021 with a total contract value
in excess of A$20 million.
MMA has also secured a scope of
work on the Ichthys 2 Project which will
commence in 2022.
MMA’s operations in Mozambique are
currently winding down. A total of five
third-party landing craft have been on
charter supporting the construction of the
Mozambique LNG Project. In April 2021,
due to a serious escalation of insurgency
activity in the region, Total declared force
majeure and suspended the construction
of the project indefinitely. MMA had a
continued involvement in supporting the
demobilisation of construction activities
through the second half including
brokering an accommodation vessel
to support personnel as part of the
demobilisation activities.
MMA will continue to monitor the market
in Mozambique, however in the current
environment timelines for a resumption in
activity remain uncertain.
Keeping our people safe and healthy is
fundamental to how we operate at MMA.
The ongoing COVID-19 pandemic
continues to be a challenge for the
organisation in terms of managing our
operations and also for our people in their
daily lives.
We have implemented a range of control
measures, protocols and procedures
to safely continue our operations whilst
protecting the health and welfare of our
people and the wider community. Our
COVID-19 management team continues
to monitor the situation daily and work
to ensure the best practical practices are
deployed and vigilantly adhered to across
the business.
Several of our regional offices have
experienced long lockdowns during the
year with many of our people working
remotely for extended periods of time.
Our offshore personnel have had to adjust
to ever-changing quarantine requirements
and at times extended time away from
their families and friends due to border
restrictions. Our operational teams
are dealing with increased operational
complexity and logistical challenges
associated with the pandemic every
day. We sincerely appreciate the efforts
of our people in maintaining the high
quality of our operations through these
extraordinary times.
We are acutely aware of the impact the
ongoing pandemic can have on the
mental health and overall wellbeing of our
people. During the year we launched a
new Employee Assistance Program with
24/7 access to counselling services and
a range of other support services for our
staff across the globe both onshore and
offshore. We also signed the Neptune
Declaration on Seafarer Wellbeing which
aims to protect the welfare of seafarers
who have been unable to crew change off
vessels due to the pandemic.
During FY2021, we maintained an above
average safety performance with a Total
Recordable Case Frequency (“TRCF”)
per million hours worked of 1.13 as
compared to the marine industry average
of 1.53 as measured by the International
Marine Contractors Association (“IMCA”).
With the subsea business fully integrated
into our safety systems and processes
during the year we have consolidated the
safety statistics for the entire organisation.
Notwithstanding our relatively strong
safety record, we operate in a high-risk
industry which requires safety to be at
the forefront of each and every person’s
mind each and every day. To enforce our
commitment to safety we conducted a
“Stand Together for Safety” campaign
in June 2021, whereby all of our offices,
worksites and vessels paused work to
have a critical discussion about how we
can improve our safety performance.
We refuse to accept safety incidents and
continue to work hard to embed this
philosophy across the business as part of
our Target 365 “a Perfect Day, Every Day”
Program.
Outlook for FY2022
The medium-term outlook is positive
with increased project activity forecast
in our sectors and regions and our
diversification strategy beginning to
deliver results.
However, the short-term impacts of the
COVID-19 Delta variant are significantly
increasing costs and restricting our ability
to execute projects.
The first quarter of FY2022 is expected
to be soft with the remainder of FY2022
dependent on the ongoing impacts of
COVID-19.
David Ross
Managing Director
MMA Offshore Ltd | Annual Report 2021 15
SUSTAINABILITY
REPORT
WE BELIEVE MARINE
RESOURCES SHOULD BE
DEVELOPED SUSTAINABLY
Sustainability is at the core of MMA’s vision and is integral to our strategy as an organisation. MMA is
committed to achieving sustainable outcomes for the environment, our people and the community whilst
operating with strong ethics and governance.
During FY2021 MMA enhanced its
commitment to sustainability, formally
adding sustainability to the Board’s Audit
and Risk Committee agenda, forming a
Sustainability Committee and a number of
working groups to drive key sustainability
initiatives.
MMA’s corporate strategy embraces
sustainability and addresses both the
risks and opportunities arising as a result
of the transition to a net zero economy.
MMA is diversifying its business and
moving into greener sectors such as
offshore wind which are seeing rapid
growth as governments take steps
to reduce their emissions. We are
also looking at strategies to reduce
our emissions including emerging
technologies and innovations to address
industry wide challenges.
The importance of ESG issues to all
of our stakeholders has accelerated in
recent years and particularly since the
onset of the COVID-19 pandemic. MMA
is committed to helping address the key
issues of our time.
Sustainability Strategy
MMA’s ESG strategy is focused on the
following key elements:
Environment – how MMA performs as a
steward of nature.
MMA’s key ESG initiatives are focused on
a number of key issues as identified in the
United Nations Sustainable Development
Goals, adopted by all United Nations
Member States in 2015, and which
address the key challenges faced globally.
MMA’s 2021 Sustainability Report outlines
the key sustainability issues and initiatives
as they impact MMA. We are working
towards aligning our reporting to one of
the voluntary reporting frameworks as
part of our overall ESG strategy.
Social – how MMA manages its
relationships with employees, suppliers,
customers and the community.
Governance – how MMA is governed.
MMA is committed to being a good
corporate citizen and to ongoing
improvements in our performance across
all of our sustainability measures.
ESG STRATEGY
ENVIRONMENT
SOCIAL
GOVERNANCE
Environmental
Management System
Certified to
ISO14001:2014
Emissions Reduction
Developing strategies
and initiatives to reduce
emissions across our
operations, targets to be
set in FY2022
Supporting the
Energy Transition
Diversifying our
services to support the
development of Offshore
Wind
Supporting Clean
Oceans
Waste management and
pollution prevention,
plastics reduction
Sustainability
Innovation
Innovation program
focused on addressing
key sustainability
challenges of our
industry
Employee Health
and Safety
Target 365 culture,
Critical Controls, Safety
Management System
Employee Wellbeing
Employee engagement,
EAP, mental health,
flexible working, parental
support
Training and
Development
Employee support
and training
Diversity and Inclusion
Awareness and inclusion
events, measurable
objectives
Community Support
Community sponsorship,
philanthropy and
volunteering
Indigenous
Engagement
Indigenous training
programs, collaboration
initiatives
Procurement
Supporting local and
Indigenous businesses
Corporate Governance
Standards
Compliant with ASX
4th Edition Corporate
Governance Principles
Code of Conduct
Focus on working legally,
ethically and safely
Group Whistleblower
Policy
Anti-Bribery
and Corruption
Zero-tolerance approach
Human Rights
Modern Slavery
Statement
Maritime Labour
Convention
16 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 17
MMA Offshore Ltd | Annual Report 2021 17
ENVIRONMENT
MMA’s environmental management system is certified to ISO 14001: 2015 “Environmental Management
Systems” across our global operations. MMA maintained environmental certification and all licences required
during FY2021 and did not have any reportable or adverse environmental events.
Environmental Policy
MMA is committed to growing our
business in an ecologically sustainable
way. To support this goal MMA:
• Complies with relevant laws and
regulations and applies responsible
standards where laws and regulations
do not exist;
• Maintains a relentless focus on
environmental responsibility, risk
assessment and a culture of mutual
accountability;
• Commits to zero spills across land
and marine environments;
• Encourages all users of MMA’s
facilities to understand and adhere
to MMA’s environmental policies and
standards;
• Monitors environmental performance
to improve our policies, processes,
work practices and behaviours
promoting a cycle of continuous
improvement; and
• Promotes efficient use of materials
and resources (including energy,
water, raw materials and other natural
resources) through design and
operational procedures, wherever
practicable throughout our business.
Environmental Management
Standards
As an operator in the highly regulated
global maritime industry, MMA complies
with a number of international regulations
and conventions to protect the sensitive
marine environments in which we
operate, including:
•
International Convention for the
Prevention of Pollution from Ships
(MARPOL 73/78); and
• Technical Code on Control of
Emission of Nitrogen Oxides from
Marine Diesel Engines.
The International Maritime Organisation
“(IMO)” recently announced enhanced
provisions under MARPOL to reduce
greenhouse gas emissions from ships
including a requirement to calculate and
report a ships carbon intensity indicator
(CII) which will be implemented from
1 January 2023 and which MMA will
comply with.
Emissions Reduction
One of the most significant environmental
issues in relation to the shipping industry
is the emissions generated by heavy
fuel oil, particularly sulphur oxide. MMA’s
vessel fleet operates entirely on marine
gas oil (MGO) which is a low sulphur fuel
oil and considered to be a clean fuel used
on ships today.
Significant research into alternative fuels
such as LNG, hydrogen, ammonia and
methane is currently being undertaken
by the industry. MMA’s technology team
are at the forefront of new technologies
and are investigating (in conjunction with
our clients) the potential to introduce
alternative fuels as well as battery
technology on vessels to reduce the
overall carbon footprint of our clients’
operations and assist in meeting the
global goal of net zero emissions by
2050.
MMA is currently not required to report
its greenhouse gas emissions under
the National Greenhouse and Energy
Reporting Act 2007 in Australia as
its Australian emissions fall below the
reporting thresholds.
MMA’s has calculated its emissions for its
global operations for the financial years
ended 30 June 2021 and 30 June 2020,
with its Scope 1, Scope 2 and Scope 3
emissions outlined below.
Scope 1 reflects MMA’s direct fuel use
and associated emissions while our
vessels are off-hire and fuel is MMA’s
responsibility. Once MMA’s vessels have
been contracted, fuel comes under
the client’s control and emissions are
classified as Scope 3.
Fuel burn and total emissions are
correlated with vessel utilisation, with fuel
use considerably higher when vessels are
at work. To facilitate a comparison over
time we have used “available vessel days”
as a normalisation factor to calculate
emissions intensity as the fleet size and
utilisation fluctuates. MMA’s emissions
intensity reduced between FY2020 and
FY2021 and we are focused on achieving
further reductions through a range of
measures over time.
Total Emissions (tCO2-e)
Scope 1
Scope 2
Scope 3
TOTALS
Emissions Intensity
Scope 1 Emissions (tCO2e)/
Unutilised available vessel days
Scope 3 Emissions (tCO2e)/
Utilised available vessel day
Total Emissions (tCO2e)/
Total available vessel days
MMA has established an Emissions
Reduction Working Group to develop
out our strategy to reduce emissions
and set tangible targets for emissions
reduction between now and 2050.
MMA’s emissions reduction strategy
focuses on the following areas which
have the greatest potential to impact
emissions generated by our vessels:
• Developing marine solutions which
reduce the overall carbon footprint of
client operations;
• A culture of energy awareness on
board our vessels including the
monitoring of fuel consumption as
part of operational planning;
• Optimising hull maintenance
schedules to reduce fuel
consumption; and
•
Investigating alternative fuel sources
and the installation of battery
technology.
MMA has developed a number of
marine solutions for clients which have
materially reduced the emissions intensity
of the marine support operation. MMA
previously modified a platform supply
vessel to undertake static tow and offtake
duties, which eliminated the need for a
second support vessel. This significantly
reduced the carbon footprint of the
operations with the added benefit of
reducing cost. MMA has also introduced
unique vessel sharing arrangements
between clients which has reduced the
overall vessel requirement in a region.
FY2021
15,336
1,210
71,755
88,301
FY2021
3.37
12.80
8.69
FY2020
12,975
1,467
96,791
111,233
FY2020
3.70
13.68
10.51
COMMITTED TO
GROWING OUR
BUSINESS IN AN
ECOLOGICALLY
SUSTAINABLE WAY
18 MMA Offshore Ltd | Annual Report 2021
18 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 19
SUSTAINABILITY IS AT THE CORE OF
MMA’S PURPOSE AND IS INTEGRAL TO
OUR STRATEGY AS AN ORGANISATION
SUPPORTING
CLEAN OCEANS
In May 2021, MMA’s crew on the
Mermaid Searcher came to the
rescue of a stranded sea turtle.
Based in the Timor Sea, the
Mermaid Searcher crew spotted the
trapped turtle which had become
entangled in a pile of discarded
netting.
The vessel was maneuvered alongside,
and our crew worked with care to safely
disentangle the turtle from the netting.
Thanks to the quick actions of our crew,
the turtle was successfully freed and
swam back out to sea.
Our team then ensured all netting and
debris was removed from the location and
properly disposed of.
In leading by example, our crew on the
Mermaid Searcher were praised for their
teamwork, quick thinking and actions
to clean up our oceans and protect our
irreplaceable marine life.
Supporting the Energy Transition
Australian Hydrographic
Survey Program
MMA is also active in the hydrographic
survey market through the Australian
Government’s HydroScheme Industry
Partnership Program which seeks to
obtain full, high quality bathymetric
coverage of Australia’s waters for the
safety of ships navigating in Australian
waters. MMA is pleased to contribute to
this important program which will assist in
protecting Australia’s marine environment
from potential incidents.
Innovation Program
At MMA, one of the key pillars of our
Innovation Program is Sustainability.
We have tasked a multidisciplinary team
to address the challenge “How do we
develop the marine resources industry
more sustainably?”.
We are working on internally generated
ideas as well as co-developing innovation
at an industry level.
PIER71 Maritime
Innovation Program
MMA is a corporate partner of the PIER71
Smart Port Challenge which is aimed at
facilitating an eco-system for innovation
within the maritime industry. With
sustainability at the heart of the innovation
challenge we hope to participate in some
exciting developments at an industry
level.
3D Printing Pilot Program
MMA has partnered with Wilhelmsen and
thyssenkrupp to help develop and test
their 3D parts printing program. In April
2021, MMA participated in the recent
launch of the program which successfully
digitised, printed, tested and delivered a
3D printed cooling water pipe connector
by drone to the MMA Monarch which was
moored off the coast of Singapore.
MMA is excited to be involved in this
innovation which has the potential to
significantly improve the supply chain for
marine parts, making it more efficient and
sustainable.
A key part of MMA’s strategy is to
diversify our service offering to support
the rapidly growing offshore wind market,
thereby using our skills and assets to
facilitate the global energy transition.
During FY2021 MMA increased its share
of revenue from offshore wind to 16% of
total revenue and our strategy is focused
on significantly growing this part of our
business.
To support MMA’s goal to be a leader
in marine support for the renewables
sector, we have recently established
a local entity in Taiwan “MMA Clean
Energy” and agreed a joint venture with a
local Taiwanese company. We have also
signed a memorandum of understanding
with Worley to jointly service the offshore
wind sector in South East Asia.
Supporting Clean Oceans
Waste Management
MMA has a robust suite of policies and
procedures in place to ensure that we
do not inadvertently pollute the precious
marine environments in which we
operate.
MMA complies with a range of waste
management regulatory requirements and
international conventions across all of its
vessels and facilities including:
•
•
•
International Convention for the
Control and Management of Ships’
Ballast Water and Sediments;
International Convention for the
Control of Harmful Anti-fouling
Systems on Ships;
International Maritime Dangerous
Goods Code (IMDG Code); and
• The Hong Kong International
Convention for the Safe and
Environmental Recycling of Ships.
Plastics Reduction
As a Company, we are targeting the
elimination of single use water bottles
on our vessels by 2024 through the
deployment of new potable water
systems on our vessels and operational
sites.
To date, four of our larger vessels have
had systems installed to trial the use
of potable water systems. A Waste
Management working group has been
set up to manage the roll out of these
systems across the fleet.
20 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 21
SOCIAL
PEOPLE
Health & Safety
At MMA, protecting the health and safety
of our people is fundamental to how we do
business and is ingrained in our Target 365
culture which aims for ‘a Perfect Day, Every
Day’.
While the COVID-19 pandemic presented
significant logistical challenges, our
staff, crews, and project personnel have
successfully worked together to deliver
an above average health and safety
performance that is essential to the way
MMA does business.
In FY2021, our Total Recordable Case
Frequency (“TRCF”) increased from 0.54
the previous year to 1.13 (per million hours
worked). Whilst our TRCF increased on a
percentage basis, the absolute number of
lost time injuries was relatively low at four,
and our performance remains positive
as compared to the industry average as
measured by IMCA.
We were however, below our target of top
quartile IMCA TRCF performance for the
year and instigated a number of initiatives
to address the increase in lost time injuries
including a “Stand Together for Safety”
event held in June 2021, whereby all of
MMA’s offices, work sites and vessels
paused work over a two-day period to
have critical discussions about how we can
improve our safety.
We also use our internal measure of
“Perfect Days” to measure our safety
performance. As the key metric of our
Target 365 Program, we continually strive
for ‘a Perfect Day, Every Day’ with a perfect
day being a day free of recordable injuries
or material incidents. In FY2021, we
achieved 321 (88%) perfect days, a slight
reduction on the previous and below our
annual target of 92%.
We continually strive for improvements to
both leading and lagging measures in order
to achieve our Target 365 goal. We also
regularly conduct intervention and proactive
campaigns to address performance and
will continue to support our staff and
contractors in preventing injury and illness.
TOTAL RECORDABLE CASE FREQUENCY
(PER MILLION HOURS)
1.13
0.53
0.54
Australia and Brunei;
0.95
0.28
17
18
19
20
21
MMA TRCF
IMCA Average
In FY2021, we continued to undertake
improvements in our HSEQ systems and
processes.
Highlights for the year included:
• Achieved global certification for all
operations to ISO 9001: 2015, ISO
14001: 2015 and transitioned the
Company to ISO 45001: 2018;
• Completed Target 365 Leadership
Sessions across the business. The
sessions highlighted our strengths and
opportunities to improve our approach
to achieving our ‘Perfect Day, Every
Day’ aspiration;
• Continued to demonstrate the value
of Senior Management engaging
with front line crews and projects.
Senior management attended project
mobilisations, undertook vessel
voyages and spent time in operations
to gain a greater appreciation of
frontline operations and provide support
to achieve Target 365;
• Ran a major campaign promoting our
new Employee Assistance Program
which provides 24/7 counselling
support and a dedicated online portal
with tools designed to promote mental
health;
• Achieved our first certification for a Dive
Safety Management System under
the Australian Offshore Regulator.
This confirms MMA’s commitment
to managing risks associated with
potentially high-risk operations;
• Maintained vessel safety cases in both
• Completed a comprehensive internal
assurance programme to ensure
our controls are adequately robust
to prevent incidents, protect the
environment, and maintain our licence
to operate; and
• Continued to manage the challenges
brought by the unprecedented global
COVID-19 pandemic.
MMA was again active in contributing to the
improvement of HSEQ management across
our industry. MMA’s Managing Director,
Mr David Ross, is the Co-Chair of the
Marine Working Group of Safer Together
(Western Australia and Northern Territory)
and a member of the Safer Together
Safety Leaders Group. MMA’s Executive
General Manager of People and Safety
also continued as Chair of the International
Marine Contractors Association (IMCA)
Global Core HSSE Committee.
Employee Wellbeing
At MMA, we are committed to fostering a
diverse, engaging, and high-performance
workplace, one that supports individual
employees’ wellbeing and their journey
towards realising their full potential.
We aim to provide a healthy, safe and
inclusive workplace, free from harassment
and bullying. We foster an environment
where all our people feel safe to speak
up, and treat each other fairly, respectfully
and with dignity. We achieve this by
having several key processes and support
mechanisms in place.
Employee Assistance Program
(EAP)
In December 2020, MMA launched a new
Employee Assistance Program provider
across our entire business. Critical to
this change was the ability for multi-
channel access and 24/7 individualised
support across all of the Company’s
work locations. This support can be
accessed from any MMA site or vessel in
the world. Personal support services not
only include individual counselling, but
our employees can also access resources
for managers, information targeted at
individuals and their family members, as
well as general financial, mental health
and nutritional advice.
Employee Opinion Survey
Listening to our people is critical to the
company’s ongoing success. During the
past 12 months, MMA implemented our
third annual Employee Opinion Survey,
measuring key areas of our employees’
thoughts and perceptions about the
business. Target areas of improvement
have been identified with specific action
plans put in place.
HR Policies & Procedures
MMA has a number of policies and
procedures which are designed to foster
employee wellbeing.
These include:
•
Flexible working arrangements
to facilitate personal and family
commitments;
• Generous parental support
and flexibility on return to work
arrangements to facilitate ongoing
participation; and
• A Mental Health Policy enabling staff
to use their sick leave for mental
health reasons.
COVID-19 RESPONSE
MMA first responded to the COVID-19 pandemic in January 2020
by implementing our Prevention of Transmissible Disease and Crisis
Management procedures.
Throughout FY2021, the MMA Crisis Management Team held
meetings every two days in order to continually monitor changes
across our business. Our Crisis Management Team continues to
closely monitor the pandemic and routinely tests that our controls
are fit for purpose.
COVID-19 brought and continues to bring significant challenges
to our people, both personally and professionally. MMA’s vessel
crewing teams in Singapore and Australia worked relentlessly
to clarify and work with restrictions put in place around the
world. Mobilisation plans were regularly updated multiple
times per day to ensure our crew made it safely to vessels
and returned home safely COVID-free.
MMA’s strong investment in remote-working technology
over recent years ensured staff were able to work from
home with ease when required, connecting to critical
business systems and colleagues without any major
disruption to workflows.
MMA is incredibly proud of all employees’ efforts
throughout the pandemic. Our entire team was
able to ensure continuity of service to our
clients, while always maintaining a firm focus
on the safety and wellbeing of all employees
and stakeholders.
We continue to monitor and appropriately
adjust our response to this ongoing
situation with a view to always act in
the best interest of our people, our
stakeholders, our business and the
communities in which we operate.
22 MMA Offshore Ltd | Annual Report 2021
22 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 23
Training & Development
Diversity & Inclusion
Diversity Measurable Objectives
The key areas of training and competency
are two of the fundamental pillars of our
strategic Human Resources plan.
A total of 786 employees accessed
training during the past 12 months,
completing over 5,995 individual training
outcomes. The ongoing skilling and
competency of our workforce ensures
that we are able to meet complex
business challenges for our clients in our
future, whilst developing our people to
enhance their career progression.
With operational sites and locations
positioned around the world, MMA is
proud to be a highly culturally diverse
organisation. Celebrating our different
backgrounds and experiences is a major
focus for MMA’s Diversity and Inclusion
Committee, who organise and promote a
range of employee engagement activities
throughout the year.
We also regularly review our remuneration
practices to ensure equal pay across the
organisation.
To assist with promoting our objective to
facilitate greater diversity and inclusion at
all levels within our Company, we have
a Diversity and Inclusion Committee
responsible for:
• Assisting the Board with diversity and
inclusion issues;
• Establishing and monitoring strategies
on promoting and maintaining
diversity and inclusion;
•
Implementing the measurable
objectives set by the Board; and
• Reviewing achievements and
progress against these measurable
objectives and reporting this to the
Board.
Crew Welfare
Neptune Declaration
In February 2021, MMA was proud to
sign the Neptune Declaration – a global
call to action in support of seafarers
affected by the ongoing COVID-19
pandemic. As a vessel operator, MMA
recognised the necessity of industry
and governmental collaboration and
the shared responsibility we all have in
resolving the unique issues for maritime
crew presented by the pandemic.
Crew Engagement
MMA recognises the importance of
regularly engaging with our vessel
crew. During April 2021, members of
our Australian offshore crew gathered
in Perth, Western Australia for a day of
information, collaboration and networking
at MMA’s annual Crew Conference event.
The event was an important platform
for our offshore crew to have open
conversations with our senior leadership
team and provided a valuable networking
opportunity for our crew members across
MMA’s fleet of vessels to come together.
Enterprise Agreements
Industrially, MMA continued its operational
activity with zero interruptions resulting
from workplace disputes. The current
Enterprise Agreements covering
Australian marine personnel expired
in April/May 2021. High-level planning
involving key internal and external
stakeholders commenced in 2020 and is
ongoing.
10
Myanmar
6
Russian
Federation
5
Thailand
389
Australia
EMPLOYEES BY
NATIONALITIES
10
Timor-Leste
14
Ukraine
20
Taiwan
53
Singapore
63
United Kingdom
112
Philippines
127
Malaysia
155
India
139
Indonesia
% OF WOMEN EMPLOYED
34.3
33.3
29.4
16.7
16.7
16.7
15.6
14.3
20
21
Total
Organisation
(excluding
offshore crew)
20
21
Board of
Directors
20
21
20
21
Executive
Management
Senior
Management
International Women’s Day
In March 2021, MMA celebrated
International Women’s Day by taking
time to reflect on the Company’s
gender equality statistics, as well
as the broader gender equality
employment statistics of our major
operating regions. We were also
delighted to present a special video
interview with one of MMA’s female
employees who is engaged in the
non-traditional role of a Deck Officer
within our fleet.
Ramadan
During April and May 2021, MMA
recognised the Muslim holiday of
Ramadan. Throughout Ramadan,
we interviewed three of our staff
members via video link to share
insights into their personal practices
and family traditions. Our Perth office
was also able to come together in
May 2021 and enjoy a ‘breaking the
fast lunch’ in celebration of Eid al-Fitr.
Annually MMA develops a set of Diversity
Measurable Objectives, including
targets for female participation in senior
management positions and encouraging
training and development of high potential
women within the business.
Whilst MMA’s percentages of women
in senior management are below our
targets, pleasingly our percentage of
women on the MMA Board of Directors
has increased during the year to 33.3%
following the appointments of Ms Sue
Murphy and Ms Sally Langer.
Whilst the offshore marine and subsea
industries are traditionally predominantly
male dominated, MMA continues to focus
as a priority on promoting and supporting
women through the organisation through
both our recruitment and ongoing
employee development practices.
Diversity Events
During FY2021, MMA employees came
together to recognise a range of events
including NAIDOC Week, International
Women’s Day, Ramadan and Eid al-Fitr.
NAIDOC Week
In November 2020, MMA came together
to recognise the rich history, culture and
achievements of Aboriginal and Torres
Strait Islander peoples for NAIDOC Week.
At MMA’s Perth office, we were privileged
to hear from Ron Bradfield Jnr, a local
Indigenous storyteller, who shared his
own story growing up in the mid-west
region of Western Australia and the
experiences that shaped him. Ron also
provided our team members with the
opportunity to participate in an activity
aimed at exploring our own personal
stories and the shared experiences that
bring us together. We were also able to
share this invaluable presentation via
recorded video with our offices in Darwin,
Melbourne, Singapore and the United
Kingdom.
More recently, we conducted an
awareness campaign for NAIDOC
Week 2021 focusing on the theme
“Heal Country”. During the campaign
we shared insights into the history and
cultural traditions of the traditional owners
of MMA’s key operating regions around
Australia including Gumap (Elizabeth
Quay), Murujuga (Dampier), Garramilla
(Darwin) and Naarm (Melbourne). We
also made a donation to the Wirrpanda
Foundation supporting the provision of
education, employment and business
opportunities for Aboriginal and Torres
Strait Islander Australians.
TRADITIONAL
OWNER ENGAGEMENT
MMA is committed to the
development of long-term
relationships and partnerships
with the Indigenous communities
in which we operate.
From September to December
in FY2021, MMA completed
a survey work scope for the
Australian Department of Defence
as a part of the HydroScheme
Industry Partnership Program
(HIPP) at Mavis Reef, Western
Australia.
MMA’s Subsea Services team
engaged Indigenous rangers from the
Dambimangari Aboriginal Corporation
at the project outset and worked
cooperatively with the Corporation
throughout. As the Traditional Owners of
the area in which works were conducted,
the rangers joined our vessel throughout
the project and accompanied our team of
surveyors in accessing the land.
Through this process of engagement, MMA
developed a strong working relationship
with the Dambimangari People. MMA
looks forward to working further with the
Dambimangari Aboriginal Corporation on the
upcoming Camden Sound HIPP work scope
which is scheduled to begin during FY2022 and
covers twice the survey area of the Mavis Reef
work scope.
24 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 25
MMA Offshore Ltd | Annual Report 2021 25
Christmas Food Donation Drive
With 2020 having been an incredibly
challenging year for our communities,
MMA’s employees came together
during the holiday season to provide
their support towards the ongoing
humanitarian challenge of food insecurity
in our communities. Throughout
December, MMA employees across our
primary locations of Perth, Singapore
and United Kingdom worked together to
run an employee-led food donation drive
with all donations provided to Foodbank
Western Australia, Willing Hearts
Singapore and Instant Neighbour United
Kingdom.
Dress for Success
In March 2021, MMA celebrated and
acknowledged International Women’s
Day. In support of this, our Perth-based
team participated in a clothing donation
drive with all items donated to Dress
for Success Perth – a registered charity
which aims to provide local women
in need with work-appropriate attire,
mentoring and career workshops.
Epilepsy Western Australia
In June 2021, our Perth-based
employees supported Epilepsy Western
Australia through their participation in an
employee-led charity raffle and morning
tea with prizes generously donated
by one of MMA’s team members. Our
employees worked together to raise
much needed funds to provide support
services to Western Australians living
with and affected by epilepsy, with MMA
matching the total funds raised.
Modern Slavery
MMA is committed to ensuring that no
forms of slavery or forced labour occur
within its operations or supply chains.
MMA’s management of modern
slavery falls under its overall approach
to business as set out in its code of
conduct.
MMA has developed a strong supply
chain and a network of suppliers
and subcontractors to support its
operations. These suppliers include
marine spare parts original equipment
manufacturers, providers of logistics,
port and agency services and providers
of marine fuel, provisions, personal
protective equipment, uniforms and
consumables. We have established
multi-year relationships with a majority of
our suppliers. Approximately 40% of our
procurement is from Australian-based
companies, whilst 35% is from Singapore
and 25% from other areas (primarily
South East Asia).
MMA’s operations are also carried out
in accordance with the Maritime Labour
Convention 2006 (MLC) which provides
minimum standards and regulations
relating to employment, working and living
conditions.
MMA’s Modern Slavery Statement,
published in December 2020, reports on
how MMA assesses and addresses the
risks of modern slavery occurring within
its supply chains (whether in Australia
or internationally). MMA’s modern
slavery statement is a public document
which can be found on the Australian
Government’s Modern Slavery Register at
modernslaveryregister.gov.au.
GOVERNANCE
MMA believes that a high standard of
corporate governance is paramount for
sustainable long-term performance and
value creation.
MMA’s complies with the 4th Edition
of the Australian Securities Exchange’s
Corporate Governance Council’s
Corporate Governance Principles and
Recommendations (4th Edition ASX
Recommendations).
Code of Conduct
MMA has in place a Code of Conduct for
its Directors, Senior Management and
employees and places a strong focus on
working legally, ethically and safely.
We encourage the reporting of unlawful
and unethical behaviour, actively promote
and monitor compliance with the Code
of Conduct and protect those who report
breaches in good faith.
Under MMA’s Group Whistleblower Policy,
whistleblowers are protected from any
disadvantage, prejudice or victimisation
for reporting any breaches of the Policy or
the Corporations Act.
Anti-Bribery & Corruption
We have a zero-tolerance approach
towards bribery and corrupt conduct.
MMA and its personnel will not engage
in any form of bribery or other corrupt
conduct. The Company has an Anti-
Bribery and Anti-Corruption Policy for
preventing the offering or acceptance of
bribes and other unlawful or unethical
payments or inducements. MMA had no
known incidents of bribery or corruption
during FY2021.
Further details of the Company’s
Corporate Governance Policies are
available on the Corporate Governance
page of our website.
A STRONG FOCUS ON
WORKING LEGALLY,
ETHICALLY AND SAFELY
COMMUNITY
Training
MMA is committed to making a positive
contribution to the communities in which
we work by creating mutual opportunities
that support economic growth and social
wellbeing. To support our goal MMA will:
•
Invest in local community projects
that have a positive and sustainable
benefit;
• Seek business opportunities with
local suppliers and subcontractors;
• Strive to be good corporate citizens,
conducting business in an ethical
manner;
• Develop long term relationships
with local Indigenous communities
in order to increase Indigenous
participation within our workforce and
promote opportunities for training and
development; and
• Create and maintain cross cultural
awareness throughout the business.
By engaging with Indigenous communities
and the broader communities within our
areas of operation, we can contribute to a
safe, sustainable and rewarding future.
Veterans’ Employment Program
2021 saw MMA accepted into the
Australian Prime Minister’s ‘Veterans’
Employment Commitment Program’.
The Veterans’ Employment Commitment
is a public declaration regarding
MMA’s support of greater employment
opportunities for veterans.
MMA recognises the skills and value that
veterans can bring to the company and
our Human Resources team has updated
the Company’s recruitment processes to
reflect this commitment.
Over the past four years, MMA has
worked closely with our partners in Dili,
Timor Leste to provide Able Seafarer
trainee positions within our international
fleet. 12 individuals have been provided
the opportunity to gain an Able Seafarer
Certificate of Competency, with sea
time being completed on several of the
Company’s PSV and AHTS vessels.
Community Support
MMA recognises that supporting
community philanthropic endeavours,
either in kind or monetarily, is a
responsibility we have to the communities
in which we operate.
During FY2021, MMA and its employees
participated in a number of activities in
support of our local communities.
Indigenous Training Programs
Face Mask Donations for Batam
MMA continues to provide training
opportunities to Indigenous trainees and
Timor-Leste nationals in Able Seaman
roles.
Indigenous trainees are engaged on
our modern PSV vessels operating out
of Darwin and Broome. Candidates
complete face-to-face training within the
TAFE system, then go on to complete
qualifying seatime, gaining critical work
skills and experience, over a period of
16 months.
As a part of Indonesia’s annual ‘Heroes
Day’ events, MMA’s Batam office
was proud to support the Indonesian
government’s “five million masks for
Batam” initiative by donating around
4,000 face masks to their local
community. These face masks were
distributed to a range of areas across
Batam including housing communities,
police stations, churches, and mosques,
with our team promoting a critical
COVID-19 safety message: “be a hero by
using a mask.”
26 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 27
MMA Offshore Ltd | Annual Report 2021 27
RISKS
MMA recognises that risk is an inherent part of its business.
Effectively identifying and managing risk is critical to MMA’s success.
MMA operates an enterprise risk
management framework aligned to ISO
31000 (2018), the international standard
for risk management.
This section describes (in no order of
significance) the material risks that have
been identified and are being managed
in order for the Company to deliver
on its objectives. It is not intended to
be all encompassing, nor is any of the
information intended to be taken as a
statement of fact. These risks can be
affected by a variety of factors which
can, in turn, impact the Company’s
performance.
Dependence on Level of Activity
in the Offshore Oil & Gas Industry
The level of activity in offshore industries
may vary and be affected by, amongst
other things, prevailing or predicted future
oil and gas prices and macro conditions.
A number of other factors also affect
the offshore oil and gas industry,
including economic growth, energy
demand, the cost and availability of
other energy sources and changes in
energy technology and regulation. There
can be no assurance that the current
levels of offshore industry activity will be
maintained or increased in the future or
that offshore companies will not further
reduce their offshore activities and capital
expenditure. Any prolonged period of low
offshore activity or demand or changes in
energy technology will have an adverse
effect on MMA’s business.
The Company aims to mitigate the impact
of lower offshore investment and lower
offshore activity by:
• Differentiating itself though innovation
and operational excellence;
• Diversifying its contract portfolio
across the exploration, construction
and production phases and by
providing maintenance/repair
services;
• Diversifying its geographic footprint
across a number of key regional
areas;
• Expanding its service offering to
include subsea and project logistics
services; and
• Expanding its service offering into
alternative market sectors such
as offshore wind, government and
defence, infrastructure maintenance
and other new marine markets.
COVID-19
COVID-19 continues to have a significant
impact on the Company’s activity. As
a result of COVID-19, MMA has been
impacted by:
• Projects being delayed or cancelled,
and current work scopes being
suspended;
• Border closures and quarantine
restrictions affecting the movement
of our vessels, their crews and
equipment and spares to and from
our vessels;
• Additional cost of protecting and
quarantining personnel; and
Vessel Oversupply &
Market Demand
Demand for MMA’s vessels is also
affected by the number of vessels
available in the market and the
competitive landscape.
In the current market (which has been
exacerbated due to COVID-19), there
continues to be an oversupply of vessels
and a corresponding misalignment with
demand. This has led to an increase in
competition which adversely impacts
vessel utilisation, rates and contract
terms, thereby impacting MMA’s earnings
and profitability and increasing its risk
exposure.
MMA seeks to manage this risk by:
• Having a clear strategic plan,
including an ongoing review of its
asset mix and capability to meet
market demand;
• Working from home and other
Government restrictions.
•
Focusing on regional strategies
to position itself in the most
advantageous areas to operate (both
in terms of demand and clients)
and in emerging markets (such as
the offshore wind services sector in
Taiwan);
• Having an active lay-up programme
to minimise holding costs for vessels
between contracts with vessels
either cold or warm stacked –
predominantly at MMA’s land-based
facilities in Batam and Singapore to
minimise costs;
• Expanding its subsea services
business through the acquisition of
Neptune Marine Services - with the
combined service offering likely to
result in expanded vessel capability,
increased asset utilisation and an
enhanced return on assets;
• Expanding its service offering into
the growing offshore wind sector
(particularly in Taiwan); and
• Differentiating itself from its
competitors through operational
excellence, proactive and innovative
solutions, long-term customer
relationships and responsive account
management.
MMA has implemented the Company
Transmissible Disease (Prevention)
Plan and activated the Company Crisis
Management team led by executive
expertise and with assistance from
Company medical advisers to manage
the COVID-19 risk. MMA has also (where
possible) introduced specific COVID-19
or Force Majeure clauses in its contracts
to try and limit its liability for non-
performance due to COVID-19.
Debt Refinancing &
Covenant Breaches
Further decreases in industry activity or
a lack of recovery in industry activity (as
outlined above) may also increase the risk
of the Company failing to comply with the
covenants associated with its Banking
Facility.
MMA’s debt facility was extended to
January 2025 during the financial year as
part of the debt restructuring and capital
raising that was undertaken. In addition to
the extended term the syndicated facility
was reduced from seven to four lenders
along with gross debt reducing by over
A$90 million in FY2021.
MMA seeks to manage these risks
through proactively engaging with its
lenders and closely monitoring earnings
and cash flows monthly.
Operational Risks
The Company’s operations are subject
to various risks inherent in servicing
the offshore energy and wider marine
industry. Our international operations
broaden our risk exposure in terms of
both opportunities and threats.
Operational risks include (but are not
limited to):
• Health and safety incidents;
• Epidemics/pandemics;
• Domestic and International border
closures;
• Quarantine risks;
• Mental health risks;
• Outbreak of COVID-19 on board
vessel(s) or an on-shore site;
•
•
Loss of key customers/contracts;
Failure by customers to pay
for services contracted and/or
performed;
• Redeployment costs of assets that
are unable to be used in their current
geography for a period of time;
• Equipment damage, technical failures
or human error;
•
Industrial unrest;
• Capsizing, sinking, grounding,
collisions, fires and explosions, piracy,
vessel seizures or arrests and acts of
terrorism;
• Environmental pollution/contamination
and other related accidents;
• Regulatory and legislative non-
compliance;
• Kidnap and ransom;
•
•
•
Fraud and theft;
Increases in input costs;
Loss of key personnel; and
• Contractual assumptions of risk.
Potential consequences associated with
these risks include the loss of human life
or serious injury, pollution, environmental
damage, significant damage to or loss
of assets and equipment, business
disruption, client dissatisfaction, loss of
contracts, damage to our reputation and
legal and regulatory action, including
fines.
This could expose MMA to significant
liabilities, a loss of utilisation, revenue and/
or the incurrence of additional costs and
therefore may have a materially adverse
impact on the Company’s financial
position and profitability.
We employ a number of well executed
controls to manage these risks, including,
but not limited to, appropriate insurance
coverage, hazard and risk management
processes, crisis management processes,
certified quality systems and audits,
planned maintenance programmes,
compliance programmes, tender and
contract management processes, access
to in-house and external legal expertise,
industrial relations strategies, emergency
preparedness and contingency plans,
preferred supplier and subcontractor
processes, counterparty risk assessments
and a host of engineering and operational
controls.
Geopolitical, Government &
Regulatory Factors
Our international operations are subject
to more challenging geopolitical risks to
varying degrees.
Changes in the geopolitical climate in
our market areas, such as the outbreak
or resolution of war, nationalisation of
a customer’s oil and gas projects and
changes to industry related legislation,
protectionist measures, economic
sanctions and border closures or
restrictions (due to COVID-19) may
open up more advantageous areas to
operate or could require us to discontinue
operating in that area, leading to
corresponding impacts on vessel and
service utilisation.
MMA may face restrictions on its ability
to win work in certain countries due
to changing cabotage regulations or
COVID-19 controls and may be required
to form joint ventures in some countries
in order to access the local offshore oil
and gas markets. Joint ventures may
introduce a higher level of operational,
financial and counterparty risk. The
prevalence of bribery and/or corruption
in some foreign jurisdictions also limits
MMA’s ability to operate in these areas.
MMA’s strategic plan considers such
risks and operationally we risk assess
market areas and clients regularly to
limit negative and optimise positive
impacts. A comprehensive Anti-
Bribery and Corruption Policy and
Group Whistleblower Policy have
been implemented and are continually
monitored to try and combat these risks.
Foreign Exchange
The majority of MMA’s revenues are
paid in either Australian or US Dollars
and the Company’s operating costs are
primarily denominated in a combination
of Australian, Singaporean and US
Dollars, providing a natural hedge for our
activities. MMA also has a combination
of Australian Dollar and US Dollar debt.
Adverse movements in these currencies
may result in a negative impact on MMA’s
earnings.
MMA’s treasury policy and contract
management processes further mitigate
this risk. The Board also considers from
time to time whether to manage currency
fluctuation risk through appropriate
hedging.
Cyber Security
MMA utilises information technology
and sophisticated technology to deliver
high quality services in conjunction with
interfaces with third party information
technology systems. Instances of
cyber-attacks has the potential to
cause disruption and/or financial and
reputational damage to the Company.
MMA has adopted a suite of strategies
and security measures to prevent cyber-
attacks impacting the Company. The
Company cyber response is governed
by an Information and Communications
Technology (ICT) Steering Committee
which compromises ICT experts, access
to external expertise and Executive
Management representatives.
Climate Change
Any move from fossil fuel sources of
energy to renewables has the potential
to impact MMA’s traditional oil and gas
markets and customers. The move to
alternate fuels will also affect MMA’s
current assets as regulation and social
norms require less carbon intensive
operations.
MMA is diversifying its service offering
into alternative market sectors such as
offshore wind in order to support the
global emissions reduction targets. MMA
is also investigating alternate technologies
to power existing and future assets
and has elevated Sustainability as key
strategic business imperative led by an
Executive Management team member.
28 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 29
BOARD OF
DIRECTORS
Mr Ian Alexander Macliver
Mr David Colin Ross
Chairman
Managing Director
Mr Chiang Gnee Heng
Non-Executive Director
– Appointed 28 January 2021
– Appointed 13 January 2020
– Appointed 5 July 2012
Mr Peter Kennan
Ms Susan Murphy AO
Ms Sally Langer
Non-Executive Director
Non-Executive Director
– Appointed 22 September 2017
– Appointed 30 April 2021
Non-Executive Director
– Appointed 6 May 2021
Ian was appointed as a Director of the
Company on 20 January 2020 and as
Chairman of the Company on 28 January
2021.
David was appointed as CEO of
the Company on 1 July 2019 and
subsequently as Managing Director of the
Company on 13 January 2020.
David has spent more than 30 years
working in the maritime industry having
started his career as a seagoing marine
engineer and qualifying as an Engineer
Class 1 – Motor (Marine Chief Engineer)
in 1995.
In 1995, David moved to a shore based
marine career - initially at BHP Transport
in Melbourne and subsequently moving
to operational and strategic roles at BHP
Billiton freight group in the Netherlands.
David has extensive knowledge of
MMA’s operations, having held the
roles of General Manager Operations,
Chief Operating Officer and more
recently relocating to Singapore as Chief
Executive Officer to drive the Company’s
international growth.
David is currently a member of the
Board of Directors of Maritime Industry
Australia Limited (which represents the
collective interests of maritime businesses
in Australia) and director of all of the
Company’s international subsidiaries in
Singapore, UK, USA, Indonesia, Taiwan,
Malaysia and PNG.
As Managing Director of MMA, David
is responsible for the financial and
operational performance of all of the
Company’s business lines.
Ian is currently the Chairman of Grange
Consulting and Grange Capital Partners.
Prior to establishing Grange, Ian held
positions over nine years in a general
manager or executive director position
for various listed and corporate advisory
companies.
His experience covers all areas of
corporate activity including capital
raisings, acquisitions, divestments,
takeovers, business and strategic
planning, debt and equity reconstructions,
operating projects and financial reviews
and valuations.
Ian is currently Chairman of Western
Areas Limited and a Non-Executive
Director of Sheffield Resources Limited,
both of which are listed on the Australian
Securities Exchange.
Ian was previously a Non-Executive
Director of Otto Energy Limited and
Mount Gibson Iron Limited.
Ian holds a Bachelor of Commerce
from the University of Western Australia
and a Post Graduate Diploma from
the Securities Institute of Australia.
He is a Senior Fellow of the Financial
Services Institute of Australasia and a
Fellow of both the Institute of Chartered
Accountants in Australia and the
Australian Institute of Company Directors.
Ian is a member of both the Company’s
Audit and Risk Committee and
the Company’s Nomination and
Remuneration Committee.
Chiang Gnee graduated as a Marine
Engineer in July 1977 from the University
of Newcastle Upon Tyne (UK) and spent
almost 30 years working in Singapore
government linked companies and in
various industries including shipyards,
ordnance equipment manufacturing,
aircraft engine component manufacturing,
amusement and lifestyle businesses and
environment management.
In June 1989, Chiang Gnee attended
the Sloan School of Management at MIT
(USA) and graduated with a Masters
in Management in July 1990. He was
formerly the CEO of Sembawang
Shipyard for 10 years and CEO of
Sembcorp Environment Management
Pte Ltd for two years until August 2007.
Chiang Gnee was also formerly the
Executive Director of the Singapore
Maritime Institute (SMI) which focuses
on the development of the Singapore
maritime industry through research.
Chiang Gnee was engaged in workplace
health and safety management until 31
March 2018 and in vocational technical
education in Singapore. He was Chairman
of the Singapore Workplace Safety and
Health Council and Deputy Chairman
of the Institute of Technical Education
(ITE) Board of Governors until 30 June
2018. Chiang Gnee is also currently the
Chairman of the Board of ITE Education
Services Pte Ltd in Singapore.
Chiang Gnee is also a Director of MMA
Offshore Asia Pte Ltd (Singapore) and all
of its subsidiaries/related companies in
Singapore, Malaysia and Indonesia.
In addition, Chiang Gnee is Chair
of the Company’s Nomination and
Remuneration Committee.
Peter is the founder and CIO of Black
Crane Capital. He has 23 years of
corporate finance experience across a
diverse range of sectors and transactions
with Black Crane and previously with UBS
Asia and Australia.
The Black Crane Asia Opportunities Fund,
managed by Black Crane Capital, is a
major shareholder of MMA.
Peter founded Black Crane in 2009.
Prior to that, he was the Head of Asian
Industrials Group for UBS Asia, a
corporate finance sector team covering
energy, infrastructure, resources,
consumer/retail and general industrial
companies.
Peter was also the Head of Telecoms
and Media sector team for UBS Australia
specialising in M&A, advising on many
large, complex transactions. Prior to
UBS, Peter spent seven years with BP in
a variety of engineering and commercial
roles.
Peter graduated from Monash University
with a Bachelor of Engineering (Honours).
He also has completed a Graduate
Diploma in Applied Corporate Finance
with the Securities Institute of Australia.
Peter is a member of both the
Company’s Audit and Risk Committee
and the Company’s Nomination and
Remuneration Committee.
Sue has over 40 years of experience
in the resources and infrastructure
industries. Holding a Bachelor of Civil
Engineering from the University of
Western Australia, Sue commenced
as a Graduate Engineer with Clough
Engineering in 1980. She went on to
enjoy a 25-year career with Clough,
progressing through a wide range of
operational and leadership roles before
being appointed to the Board of Clough
Engineering Ltd in 1998.
After leaving Clough in 2004, she joined
the Water Corporation of Western
Australia as the General Manager of
Planning and Infrastructure, before being
appointed as Chief Executive Officer in
2008, a role she held for over a decade.
Sue has received many accolades
throughout her career including being
awarded the prestigious Sir John Holland
Civil Engineer of the Year Award and is an
Honorary Fellow of Engineers Australia.
In addition, she was won the International
Water Association’s 2014 Women in
Water award and was the 2018/19 West
Australian Business Leader of the Year at
the AIM WA Pinnacle Awards. In 2019,
Sue was made an Officer of the Order of
Australia.
Sue is currently a Director of
Monadelphous Group Limited, the
West Australian Treasury Corporation,
Fremantle Dockers Football Club, UWA
Business School and serves as a Senate
Member of the University of Western
Australia.
Sue is Chair of the Company’s Audit
& Risk Committee and a member
of the Company’s Nomination and
Remuneration Committee.
Sally has over 25 years’ experience in
professional services including as founder
and Managing Partner of management
consulting and executive recruitment
firm Derwent Executive - where she set
up and led the growth of the Perth office
servicing a wide range of clients both
locally and nationally and led the Mining
and Industrial Practice.
Prior to that, Sally was a Director at
international recruitment firm Michael
Page and a Chartered Accountant at
accounting and consulting firm Arthur
Andersen. During her career, Sally
has been responsible for strategy
development and execution with a strong
focus on profitable business growth,
supervising and coordinating large
teams and other management functions
including strategy, business development,
budgeting and human resources.
She has been a trusted advisor to
numerous Boards on recruitment, talent
management, culture and organisational
structure.
Sally holds a Bachelor of Commerce from
the University of Western Australia, is a
qualified Chartered Accountant and is
a graduate of the Australian Institute of
Company Directors.
Sally is also currently a Non-Executive
Director of Northern Star Resources Ltd,
Sandfire Resources Ltd and the Gold
Corporation/Perth Mint.
Sally is a member of both the
Company’s Audit and Risk Committee
and the Company’s Nomination and
Remuneration Committee.
30 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 31
32 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 33
A PIONEERING MARINE
SERVICES BUSINESS
CORPORATE
GOVERNANCE
Corporate Governance
4th Edition ASX Corporate Governance Principles and Recommendations
Comply
The Board of Directors (“Board”) of MMA Offshore Limited (“Company” or “MMA”) is responsible for the corporate governance of the
consolidated entity. The Board is a strong advocate of good corporate governance.
1.6
A listed entity should:
Compliance with Australian Corporate Governance Standards
The Board believes that the Company follows the 4th edition of the Corporate Governance Principles and Recommendations (“4th
Edition ASX Principles”) set by the ASX Corporate Governance Council, or where it does not, has sound reasons for not doing so as
explained in the Company’s Corporate Governance Statement.
Access to Corporate Governance Statement
The Company’s Corporate Governance Statement which outlines the Company’s corporate governance policies and practices for the
year ended 30 June 2021, can be found on the Company’s website at www.mmaoffshore.com/investor-centre/corporate-governance.
(a) have and disclose a process for periodically evaluating the performance of the board, its committees
and individual directors; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken in
accordance with that process during or in respect of that period.
1.7
A listed entity should:
(a) have and disclose a process for evaluating the performance of its senior executives at least once every
reporting period; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken in
accordance with that process during or in respect of that period.
The Company’s Corporate Governance Statement is current as at 30 August 2021 and has been approved by the Board.
Principle 2: Structure the board to be effective and add value
ASX Corporate Governance Council Recommendations Checklist
ASX Listing Rule 4.10.3 requires companies to disclose the extent to which they have complied with the 4th Edition ASX Principles and
the reason for any departure from the 4th Edition ASX Principles.
The table below lists each of the 4th Edition ASX Principles and the Company’s assessment of its compliance with these for the year
ended 30 June 2021. The Company’s Corporate Governance Statement and Annual Report set out in greater detail the Company’s
assessment of its compliance with the 4th Edition ASX Principles.
4th Edition ASX Corporate Governance Principles and Recommendations
Comply
Principle 1: Lay solid foundations for management and oversight
1.1
A listed entity should have and disclose a board charter setting out:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to management.
1.2
A listed entity should:
(a) undertake appropriate checks before appointing a director or senior executive or putting someone
forward for election as a director; and
(b) provide security holders with all material information in its possession relevant to a decision on whether
or not to elect or re-elect a director.
A listed entity should have a written agreement with each director and senior executive setting out the
terms of their appointment.
The company secretary of a listed entity should be accountable directly to the board, through the chair, on
all matters to do with the proper functioning of the board.
1.3
1.4
1.5
A listed entity should:
(a) have and disclose a diversity policy;
(b) through its board or a committee of the board set measurable objectives for achieving gender diversity
in the composition of its board, senior executives and workforce generally; and
(c) disclose in relation to each reporting period:
(1) the measurable objectives set for that period to achieve gender diversity;
(2) the entity’s progress towards achieving those objectives; and
(3) either:
A. the respective proportions of men and women on the board, in senior executive positions and
across the whole workforce (including how the entity has defined “senior executive” for these
purposes); or
B. (B) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s
most recent “Gender Equality Indicators”, as defined in and published under that Act.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
2.1
The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and.
(5) as at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings.
2.2
A listed entity should have and disclose a board skills matrix setting out the mix of skills that the board
currently has or is looking to achieve in its membership.
2.3
A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b) if a director has an interest, position or relationship of the type described in Box 2.3 but the board is
of the opinion that it does not compromise the independence of the director, the nature of the interest,
position or relationship in question and an explanation of why the board is of that opinion; and
2.4
2.5
(c) the length of service of each director.
A majority of the board of a listed entity should be independent directors.
The chair of the board of a listed entity should be an independent director and, in particular, should not be
the same person as the CEO of the entity.
2.6
A listed entity should have a program for inducting new directors and for periodically reviewing whether
there is a need for existing directors to undertake professional development to maintain the skills and
knowledge needed to perform their role as directors effectively.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
N/A
Yes
Yes
Yes
Yes
34 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 35
4th Edition ASX Corporate Governance Principles and Recommendations
Comply
4th Edition ASX Corporate Governance Principles and Recommendations
Comply
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
3.1
3.2
A listed entity should articulate and disclose its values.
A listed entity should:
(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that code.
3.3
A listed entity should:
(a) have and disclose a whistleblower policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported under
that policy.
3.4
A listed entity should:
(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that policy.
Principle 4: Safeguard the integrity of corporate reports
4.1
The board of a listed entity should:
(a) have an audit committee which:
(1) has a least three members, all of whom are non-executive directors and a majority of whom are
independent directors; and
(2) is chaired by an independent director who is not the chair of the board,
and disclose:
(3) the charter of the committee;
(4) the relevant qualifications and experience of the members of committee; and
(5) in relation to each reporting period, the number of times the committee met throughout the period
and the individual attendances of the members at those meetings.
4.2
The board of a listed entity should, before it approves the entity’s financial statements for a financial
period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity
have been properly maintained and that the financial statements comply with the appropriate accounting
standards and give a true and fair view of the financial position and performance of the entity and that the
opinion has been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
4.3
A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases
to the market that is not audited or reviewed by an external auditor.
Principle 5: Make timely and balanced disclosure
5.1
5.2
5.3
A listed entity should have and disclose a written policy for complying with its continuous disclosure
obligations under listing rule 3.1.
A listed entity should ensure that its board receives copies of all material market announcements promptly
after they have been made.
A listed entity that gives a new and substantive investor or analyst presentation should release a copy of
the presentation materials on the ASX Market Announcements Platform ahead of the presentation.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Principle 6: Respect the rights of security holders
6.1
6.2
6.3
6.4
6.5
A listed entity should provide information about itself and its governance to investors via its website.
A listed entity should have an investor relations program that facilitates effective two-way communication
with investors.
A listed entity should disclose how it facilitates and encourages participation at meetings of security
holders.
A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by
a poll rather than by a show of hands.
A listed entity should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
Principle 7: Recognise and manage risk
7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and;
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings.
7.2
The board or a committee of the board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be
sound and that the entity is operating with due regard to the risk appetite set by the board; and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
7.3
A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs.
7.4
A listed entity should disclose whether it has any material exposure to environmental or social risks and, if
it does, how it manages or intends to manage those risks.
Principle 8: Remunerate fairly and responsibly
8.1
The board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director,
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
(5) as at the end of each reporting period, the number of times the committee met throughout the
period and the individual attendances of the members at those meetings.
8.2
A listed entity should separately disclose its policies and practices regarding the remuneration of non-
executive directors and the remuneration of executive directors and other senior executives.
8.3
A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether through the use
of derivatives or otherwise) which limit the economic risk of participating in the scheme; and
(b) disclose that policy or a summary of it.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
36 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 37
DIRECTORS’
REPORT
The Directors of MMA Offshore Limited (“Company” or “MMA”) present their Directors’ Report (including the
Remuneration Report) together with the Financial Statements of the consolidated entity, being the Company
and its controlled entities, for the financial year ended 30 June 2021.
Rights Granted to Directors and Senior Management
During and since the end of the financial year, an aggregate of 7,916,189 performance rights were granted to the following Director and
to the five highest remunerated officers of the Company as part of their remuneration:
Directors
With the exception of Mr Hugh Andrew Jon (Andrew) Edwards (who ceased to be a Director on 28 January 2021) and Ms Eva Alexandra
(Eve) Howell (who ceased to be a Director on 30 April 2021), the names and particulars of the Company’s Directors in office during or
since the end of the financial year are set out on pages 30 to 31 (including their qualifications, experience and special responsibilities).
The above-named Directors of the Company held office during the whole of the financial year and since the end of the financial year,
except for:
• Mr A Edwards – who resigned on 28 January 2021;
• Mr E Howell – who resigned on 30 April 2021;
• Ms S Murphy – who was appointed on 30 April 2021; and
• Ms S Langer – who was appointed on 6 May 2021.
Directorships of Other Listed Companies
Name
Mr D Ross
Mr D Cavanagh
Mr D Roberts
Mr S Edgar
Mr D Thomas
Mr T Radic
Company Secretary
Number of
rights granted
Issuing entity
Number of ordinary
shares under rights
4,520,356
MMA Offshore Limited
1,854,666
MMA Offshore Limited
408,333
361,667
386,167
385,000
MMA Offshore Limited
MMA Offshore Limited
MMA Offshore Limited
MMA Offshore Limited
4,520,356
1,854,666
408,333
361,667
386,167
385,000
Dylan Darbyshire-Roberts, solicitor, held the position of Company Secretary of the Company at the end of the financial year.
Directorships of other listed companies held by the Directors in the three years immediately before and since the end of the financial year
are as follows:
Dylan joined the Company in May 2007 in the role of Commercial Manager and was appointed as Company Secretary of MMA Offshore
Limited on 19 August 2008.
Name
Company
Mr I Macliver
Western Areas Limited
Sheffield Resources Limited
Period of Directorship
Since October 2011
Since August 2019
Otto Energy Limited
January 2004 – November 2019
Ms S Murphy
Ms S Langer
Monadelphous Group Limited
Since June 2019
Northern Star Resources Limited
Since February 2021
Sandfire Resources Limited
Since July 2020
Gold Corporation/The Perth Mint
Since February 2021
Mr P Kennan
Threat Protect Australia Limited
Since July 2021
Directors’ Shareholdings
The following table sets out each current Director’s relevant interest in the securities of the Company as at the date of this report:
Directors
Mr I Macliver
Mr D Ross
Mr C G Heng
Mr P Kennan
Ms S Murphy
Ms S Langer
Fully paid ordinary
Fully paid ordinary
shares direct
shares indirect
-
284,835
83,157
-
-
-
100,000
190,758
-
29,706,815
-
-
Performance
rights direct
-
4,871,501
-
-
-
-
Previously, he was a Senior Associate with the law firm DLA Piper where he practised in the areas of insurance, corporate and marine
law. After obtaining a Bachelor of Commerce degree and a LLB degree at the University of Natal (PMB), Dylan qualified as a Solicitor in
South Africa, New South Wales and Western Australia. Dylan has worked in a legal capacity in all of these jurisdictions as well as the
UK over the past 23 years. He holds a Graduate Diploma of Applied Corporate Governance and is a Fellow of the Institute of Chartered
Secretaries and Administrators and a Fellow of The Governance Institute of Australia.
Principal Activities
The principal activities and operations of the consolidated entity during the financial year were the provision of vessels, marine and
subsea services to the offshore energy, renewables and wider maritime industries.
There were no significant changes in the nature of the activities of the consolidated entity during the financial year.
Review of Operations
A review of the operations of the consolidated entity during the financial year and the results of those operations are set out in the
Chairman’s Address and the Managing Director’s Report on pages 8 - 15.
Changes in State of Affairs
The Chairman’s Address and the Managing Director’s Report (on pages 8 - 15) sets out a number of matters which have had a
significant effect on the state of affairs of the consolidated entity. Other than those matters, there was no significant change in the state
of affairs of the consolidated entity.
Subsequent Events
There has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected,
or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity in future financial years.
The Directors do not have any interests in shares, options or rights of any related body corporate of the Company as at the date of this
report.
Future Developments
Remuneration of Key Management Personnel
Information about the remuneration of key management personnel is set out in the Remuneration Report section of this Directors’
Report on pages 42 to 54. The term ‘key management personnel’ refers to those persons having authority and responsibility for
planning, directing and controlling the activities of the consolidated entity (i.e. the MMA group), directly or indirectly, including any director
(whether executive or otherwise) of the consolidated entity.
In general terms, the Chairman’s Address and the Managing Director’s Report (on pages 8 - 15) gives an indication of likely
developments and the expected results of those operations.
Environmental Regulations
The Company continues to conduct its operations within the parameters of all applicable statutory and subsidiary legislative
requirements. There were no known reportable or adverse environmental events for the year ended 30 June 2021.
38 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 39
Dividends
Directors’ Meetings
In respect of the financial year ended 30 June 2020, as detailed in the Directors’ Report for that financial year, the Directors suspended
the payment of dividends (both interim and final) in order to retain cash to support business operations until market conditions improve.
This position remains the same in respect of the financial year ended 30 June 2021. Accordingly, no interim or final dividend has been
recommended, declared or paid for the 2021 financial year.
Unissued Shares under Rights
Details of unissued shares under rights as at the date of this report are:
Issuing entity
MMA Offshore Limited
MMA Offshore Limited
MMA Offshore Limited
MMA Offshore Limited
Number of unissued
shares under rights
1,846,954
351,145
6,663,685
4,616,666
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Exercise price
of rights
Vesting date
$
0.00(a)
0.00(a)
0.00(b)
0.00(c)
of rights
1 Jul 2022
1 Jul 2022
1 Jul 2023
1 Nov 2023
(a) These performance rights vest on 1 July 2022 subject to the performance criteria as detailed in note 5.2 and have a two-year exercise period to
1 July 2024 (being the expiry date of the performance rights).
(b) These performance rights vest on 1 July 2023 subject to the performance criteria as detailed in note 5.2 and have a two-year exercise period to
1 July 2025 (being the expiry date of the performance rights).
(c) These performance rights vest on 1 November 2023 subject to the performance criteria as detailed in note 5.2 and have a two-year exercise period
to 1 November 2025 (being the expiry date of the performance rights).
The holders of these performance rights do not have the right, by virtue of the issue of the performance right, to participate in any share
issue of the Company.
The following table sets out the number of Directors’ meetings (including meetings of Committees of Directors) held during the financial
year and the number of meetings attended by each Director (while they were a Director or Committee member). During the financial
year, 8 Board meetings, 4 Audit and Risk Committee meetings and 3 Nomination and Remuneration Committee meetings were held.
Name
Mr A Edwards(1)
Mr I Macliver
Mr D Ross
Ms E Howell(2)
Mr CG Heng
Mr P Kennan
Ms S Murphy(3)
Ms S Langer(4)
Board of Directors
Audit and Risk Committee
Remuneration Committee
Held
Attended
Held
Attended
Held
Attended
Nomination and
5
8
8
7
8
8
1
1
5
8
8
7
8
8
1
1
2
4
4
4
4
4
-
-
2
4
4
4
4
4
-
-
1
3
3
2
3
3
1
1
1
3
3
2
3
3
1
1
(1) Ceased as a Non-Executive Director on 28 January 2021
(2) Ceased as a Non-Executive Director on 30 April 2021
(3) Appointed as a Non-Executive Director on 30 April 2021
(4) Appointed as a Non-Executive Director on 6 May 2021
Proceedings on Behalf of the Company
Shares Issued on Vesting of Rights
No shares were issued during or since the end of the financial year as a result of the vesting of performance rights.
No proceedings have been brought on behalf of the Company, nor has any application been made in respect of the Company, under
section 237 of the Corporations Act 2001 (Cth).
Insurance and Indemnification of Directors and Officers
Non-Audit Services
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company
Secretary and all Executive Officers of the Company and of any related body corporate against a liability incurred in acting in their
capacity as a Director, Company Secretary or Executive Officer of the Company to the extent permitted by the Corporations Act 2001
(Cth). The relevant contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Company’s Constitution requires the Company, so far as permitted under applicable law and to the extent the person is not
otherwise indemnified, to indemnify each officer of the Company and its wholly owned subsidiaries, and may indemnify its auditors,
against a liability incurred as such by an officer or auditor to any person (other than the Company or a related body corporate) including
a liability incurred as a result of appointment or nomination by the Company or subsidiary as trustee or as an officer of another
corporation, unless the liability arises out of conduct involving a lack of good faith. The Company has entered into Deeds of Indemnity,
Insurance and Access with each of the Directors of the Company and its wholly owned subsidiaries in terms of the indemnity provided
under the Company’s Constitution.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or
agreed to indemnify an officer or auditor of the Company or of any related body corporate against any liability incurred in acting in their
capacity as such an officer of the Company.
No indemnity payment has been made under any of the documents referred to above during or since the end of the financial year.
Indemnification of Auditors
The Company’s external auditor is Deloitte.
The Company has agreed with Deloitte, as part of its terms of engagement, to indemnify Deloitte against certain liabilities to third parties
arising from the audit engagement. The indemnity does not extend to any liability resulting from the wilful misconduct or fraudulent act or
omission by Deloitte.
During the financial year:
• The Company has not paid, or agreed to pay, any premium in relation to any insurance for Deloitte or a body corporate related to
Deloitte;
• No indemnity payment has been made under any of the documents referred to above during or since the end of the financial year;
and
• There were no officers of the Company who were former partners or directors of Deloitte, whilst Deloitte conducted audits of the
Company.
40 MMA Offshore Ltd | Annual Report 2021
During the year, no amounts were paid or are payable to the external auditor (Deloitte) for the provision of non-audit services as outlined
in note 5.5 to the Financial Statements.
During the year, the Company:
• did not engage Deloitte to provide any non-audit services; and
• paid Deloitte and the sum of $584,056 for the provision of audit services.
A such, the Directors are satisfied that the independence of the external auditor is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001 (Cth).
Auditor’s Independence Declaration
The Auditor’s Independence Declaration is included on page 55 of this Annual Report.
Rounding Off of Amounts
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument
2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument, amounts in the Directors’ Report and the
Financial Statements are rounded off to the nearest thousand dollars, unless otherwise indicated.
MMA Offshore Ltd | Annual Report 2021 41
Remuneration Report (Audited)
Remuneration Policy
This Remuneration Report, which forms part of the Directors’ Report, sets out information about the remuneration of the Company’s key
management personnel for the financial year ended 30 June 2021.
The Company’s ‘key management personnel’ are those persons who have authority and responsibility for planning, directing and
controlling the activities of the consolidated entity, either directly or indirectly, including any Director (whether executive or otherwise) of
the consolidated entity.
The prescribed details for each person covered by this Remuneration Report are detailed below under the following headings:
• Key Management Personnel;
• Remuneration Policy;
• Relationship between the Remuneration Policy and Company Performance;
• Remuneration of Key Management Personnel; and
• Key Terms of Employment Contracts.
Key Management Personnel
The Directors and other key management personnel of the consolidated entity during and since the end of the financial year were:
Executive Director
Mr D Ross (Managing Director/CEO)
Non-Executive Directors
Mr I Macliver (Chairman)(1)
Mr CG Heng
Mr P Kennan
Ms S Murphy(2)
Ms S Langer(3)
Mr A Edwards(4)
Ms E Howell(5)
Other Key Management Personnel
Mr D Cavanagh (Chief Financial Officer)
Mr D Roberts (Executive General Manager Legal/Company Secretary)
Ms L Buckey (Executive General Manager Corporate Development)
Mr D Thomas (Executive General Manager People and Safety)
Mr R Furlong (Executive General Manager Operations)(6)
Mr S Edgar (Executive General Manager Vessel Services)(7)
Mr T Radic (Executive General Manager Subsea Services)
(1) Appointed as Chairman on 28 January 2021
(2) Appointed as a Non-Executive Director on 30 April 2021
(3) Appointed as a Non-Executive Director on 6 May 2021
(4) Ceased as a Non-Executive Director & Chairman on 28 January 2021
(5) Ceased as a Non-Executive Director on 30 April 2021
(6) Ceased as Executive General Manager Operations on 16 February 2021
(7) Appointed as Executive General Manager Vessel Services on 12 October 2020
Apart from Mr Macliver, Ms Murphy, Ms Langer, Mr Edwards, Ms Howell, Mr Furlong and Mr Edgar (who only held their respective
positions for part of the financial year), the above named persons held their current position for the whole of the financial year and since
the end of the financial year.
The Nomination and Remuneration Committee is delegated responsibility by the Board for reviewing the remuneration packages of all
Directors and key management personnel on an annual basis and making recommendations to the Board in this regard. The specific
responsibilities of the Nomination and Remuneration Committee are set out in the Committee’s Charter, which can be found on the
Corporate Governance page of our website at www.mmaoffshore.com/investor-centre/corporate-governance.
Remuneration packages are typically reviewed and determined with due regard to current market rates and are benchmarked against
comparable industry salaries and are adjusted to reflect changes in the performance of the Company.
Given current financial constraints, the Nomination and Remuneration Committee carried out an internal review of the remuneration
packages of the Managing Director and non-director key management personnel for the 2021 financial year, without engaging the
services of an independent remuneration consultant. The Board is satisfied that the remuneration recommendations made by the
Nomination and Remuneration Committee were free from undue influence by any member of the key management personnel to whom
the recommendations relate.
Key Remuneration Outcomes
Having regard to the overall performance of the Company and current market conditions, the key remuneration outcomes for the
Company’s key management personnel in 2021 were as follows:
Fixed Annual Remuneration (FAR)
• While the Managing Director and other Senior Management of the Company did not receive an increase in FAR for the 2021
financial year, the Chief Financial Officer did receive a $45,000 increase in FAR for the 2021 financial year.
Short-term Incentive (STI)
• The Board exercised its discretion to reinstate the STI component in relation to the Managing Director and other key management
personnel for the 2021 financial year.
Long-term Incentive (LTI)
• The Board exercised its discretion to maintain the LTI component in relation to the Managing Director and other key management
personnel for the 2021 financial year.
Remuneration Report 2020
MMA Offshore Limited’s Remuneration Report for the 2020 financial year was adopted at the Company’s Annual General Meeting on
28 January 2021 with a clear majority of 1,293,867,655* votes in favour of the motion (representing 99% of the votes received).
*
Please note that this number of shares is prior to the 1-for-10 share consolidation effected by the Company on 11 February 2021.
Non-Executive Directors’ Remuneration
Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool which is periodically recommended for approval by
shareholders. The maximum fees payable to Non-Executive Directors are currently $950,000 per annum in aggregate (as approved by
shareholders at the Company’s AGM on 22 November 2012).
Non-Executive Directors are paid fixed fees for their services in accordance with the Company’s Constitution. Fees paid to Non-
Executive Directors are set at levels which reflect both the responsibilities of, and time commitments required from each Non-Executive
Director to discharge their duties. Non-Executive Directors’ fees are reviewed annually by the Board to ensure they are appropriate
for the duties performed, including Board committee duties, and are in line with the market. Non-Executive Directors do not receive
performance-based remuneration. Other than statutory superannuation, Directors are not entitled to retirement allowances.
For the 2021 financial year, there was no increase in Non-Executive Directors’ fees.
42 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 43
Other Key Management Personnel
Remuneration of the Managing Director and other executive key management personnel generally comprises both a fixed component
and an incentive or “at-risk” component, which is designed to remunerate key management personnel for increasing shareholder value
and for achieving financial targets and business strategies set by the Board.
The remuneration of the Managing Director and other key management personnel has the following three components:
No.
1
Remuneration Component
Details
Fixed Annual Remuneration
(FAR)
• Comprising base salary and superannuation.
•
In setting FAR, consideration is given to current market rates and industry
benchmarking against appropriate comparator groups (including the median market
rates within the sector and industry peers), current market conditions, Company
performance and individual performance.
• While the Managing Director and other Senior Management of the Company did not
receive an increase in FAR for the 2021 financial year, the Chief Financial Officer did
receive a $45,000 increase in FAR during the 2021 financial year in line with the current
market rates for Chief Financial Officers of listed companies of comparable size.
2
Short-term Incentive
(STI)
• An annual “at-risk” cash component designed to reward performance against the
achievement of key performance indicators (KPIs) set by the Board.
No.
3
• The invitation to participate in the STI is at the absolute discretion of the Board and is
subject to such conditions which the Board may prescribe from time to time.
• As previously reported, in order to retain and motivate the Managing Director and
Senior Management of the Company, the Board reinstated the STI component for the
2021 financial year.
• The 2021 STI had a 12-month measurement period (i.e. from 1 July 2020 to 30 June
2021) and, if the performance conditions were met, was payable (either in cash or
shares at the absolute discretion of the Board) 24-months after the commencement of
the measurement period (i.e. from 1 July 2022);
• The performance hurdles under this 2021 STI component related to identified Group
EBITDA Targets (80% weighting) and identified Group Safety Targets (20% weighting);
• The Company’s performance against each of these metrics resulted in a 0% vesting
in relation to the identified Group Safety Targets and a 54% vesting in relation to the
identified Group EBITDA Targets. Overall, 37% of the total 2021 STI component
vested. Please note that in the calculation of the Group EBITDA Target, the impact of
Jobkeeper has been excluded. As such, the vesting under the Group EBITDA Target
has been met despite Jobkeeper;
• Having exercised its discretion, the Board has decided that the vested 2021 STI
award will take the form of deferred rights (which shall convert into ordinary, fully paid
shares in the Company) on completion of an additional 12-months of service by the
participant (i.e. on 1 July 2022); and
•
If required, Shareholder approval will be obtained prior to the issue of any deferred
rights to the Managing Director under this 2021 STI component.
Remuneration Component
Details
Long-term Incentive
(LTI)
• The Company grants rights over its ordinary shares under the LTI.
• The vesting of these rights is based on the achievement of stipulated performance
criteria targets over a three-year period.
• The LTI also aims to align executives’ long-term interests with those of shareholders
and to retain executives.
• As previously reported and recognising the need to retain and suitably incentivise the
Managing Director and other key personnel (in the interests of the Company and all
its shareholders), the Board has determined to continue the LTI component for the
Managing Director and other Senior Management for the 2021 financial year.
LTI Performance Rights
• The FY2021 LTI Performance Rights have a three-year performance period
(commencing 1 July 2020 and ending on 30 June 2023).
•
•
For the Managing Director and Chief Financial Officer, the FY2021 LTI Performance
Rights includes a single performance hurdle relating to Share Price / Net Tangible
Assets (NTA) with: (1) a 50% vesting if the Company’s share price is equal to 75%
of NTA or 65cps on 30 June 2023; (2) a 100% vesting if the Company’s share price
is equal to 110% of NTA or 96cps on 30 June 2023; and (3) a pro-rata vesting on a
straight line basis between (1) and (2) above (Share Price / NTA Target).
For other Senior Management of the Company, the FY2021 LTI Performance Rights
includes performance hurdles relating to the Share Price / NTA Target (70% weighting)
and a Retention Hurdle (30% weighting).
• The Board obtained shareholder approval for the grant of the FY2021 LTI Performance
Rights at Company’s 2020 AGM.
Retention Incentive Performance Rights
•
In addition, the Board has granted an additional “one-off” Retention Incentive
Performance Rights to the Company’s Managing Director and Chief Financial Officer to
both incentivise and retain the Managing Director and CFO and support MMA’s ability
to execute and deliver on the Company’s ongoing debt management plan and refined
strategy for growth.
• The FY2021 Retention Incentive Performance Rights have a 3-year performance
period (commencing 1 November 2020 and ending on 31 October 2023).
• The FY2021 Retention Incentive Performance Rights have performance hurdles
relating to a Share Price Hurdle (with 100% vesting if the Company’s share price is ≥
90cps on 31 October 2023) (70% weighting) and a Retention Hurdle (30% weighting).
• The Board obtained shareholder approval for the grant of the FY2021 Retention
Incentive Performance Rights at Company’s 2020 AGM.
• Board considers that the grant of the FY2021 LTI Performance Rights and the
grant of the FY2021 Retention Incentive Performance Rights (including the selected
performance hurdles) are appropriate to retain key management personnel within
the Company and to achieve the strategic objectives of the Company in the current
market conditions.
Allocation of Executive Remuneration between Fixed and Variable Remuneration
The allocation of total executive remuneration between fixed and variable remuneration for the 2021 financial year is as follows:
27%
MANAGING
DIRECTOR
69%
4%
21%
3%
OTHER
EXECUTIVES
(MAXIMUM)
76%
FAR
STI
LTI
FAR
STI
LTI
44 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 45
Relationship between the Remuneration Policy and Company Performance
(A) Key Management Personnel Remuneration (Actual Payments)
The table below summarises information about the Company’s earnings for the 2021 financial year and the Company’s earnings and
movements in shareholder wealth for the five years to 30 June 2021, which is a key factor in the Board’s decision not to grant any
increase in FAR to the Managing Director and other key management personnel (other than the Chief Financial Officer) for the 2021
financial year and to award the vested 2021 STI in the form of deferred rights (which shall convert into shares) rather than cash for the
2021 financial year.
Revenue
Net profit/(loss) before tax
Net profit/(loss) after tax
Share price at start of the year
Share price at end of the year
Interim dividend(1)
Final dividend(1)
Basic earnings per share
Diluted earnings per share
30 June 2021
30 June 2020
30 June 2019
30 June 2018
30 June 2017
$’000
$’000
$’000
$’000
$’000
237,507
273,011
239,259
200,444
256,396
3,362(3)
2,391
$0.065
$0.425(4)
0cps
0cps
(93,657)(3)
(35,879)(3)
(27,376)(3)
(379,791)(3)
(94,187)
(37,373)
(27,909)
(378,032)
$0.18
$0.065
0cps
0cps
$0.25
$0.18
0cps
0cps
$0.15
$0.25
0cps
0cps
$0.31
$0.15
0cps
0cps
0.87cps
(10.44cps)
(4.36cps)
(4.11cps)
(93.86cps)(5)
0.86cps
(10.44cps)
(4.36cps)
(4.11cps)
(93.86cps)(5)
3-year compound annual TSR(2)
(45%)
(24%)
(16%)
(21%)
(49%)
Franked to 100% at 30% corporate income tax rate.
TSR comprises share price growth and dividends.
There was no impairment charge against the carrying value of the Company’s assets as at 30 June 2021 [2020: $57.7 million impairment charge;
2019: $10.4 million impairment charge; 2018: $8.4 million impairment reversal; 2017: $312 million impairment charge].
The calculations of the 30 June 2017 basic and diluted earnings per share have been retrospectively adjusted to reflect the impact of the capital raising
during this reporting period.
Remuneration of Key Management Personnel
In this Annual Report, remuneration outcomes are presented based on the requirements of accounting standards (which has the benefit
of being readily comparable with other companies) rather than the actual “take-home” pay received by executive key management
personnel (being cash, other benefits and the value of equity vesting during the relevant financial year).
An example of this includes LTI awards which are recognised and accounted for over the performance period (3 years) based on their
assessed value when originally granted to the executive. This may be significantly different to their value, if and when the incentive vests
to that executive.
The following tables disclose:
(A) The actual remuneration of the Directors and other key management personnel of the Company for the 2021 financial year (i.e. the
actual “take-home” pay received by key management personnel for the 2021 financial year); and
(B) The statutory presentation of the remuneration of the Directors and other key management personnel of the Company for the 2021
financial year and for the previous financial year based on the requirements of accounting standards.
(1)
(2)
(3)
(4)
(5)
The share price at the end of the year is post the 1-for-10 share consolidation effected by the Company on 11 February 2021.
Total
3,096,968
Short-term employee benefits
Post-employment benefits
Share based
payments
Total
Salary &
fees
STIP
$
$
Non-
monetary(2)
$
Superannuation
Termination
Payout
Annual/Long
Service Leave
$
$
2021
Directors
Mr I Macliver(1)
Mr A Edwards(1)
Mr D Ross
Mr P Kennan
Ms E Howell(1)
Mr CG Heng
Ms S Murphy(1)
Ms S Langer(1)
Senior Management
Mr D Cavanagh
Mr D Roberts
Ms L Buckey(4)
Mr D Thomas
Mr R Furlong(1)
Mr S Edgar(1)
Mr T Radic
120,617
101,159
531,537
100,127
86,147
112,807
14,680
11,958
360,962
328,306
194,417
309,306
207,334
309,306
308,306
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
85,940
-
-
-
-
-
-
-
-
-
-
-
-
11,459
9,610
-
-
8,184
6,926
1,395
1,136
25,000
21,694
18,470
21,694
14,185
21,694
21,694
85,940
183,140
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
354
-
-
354
Rights(3)
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
132,076
110,769
617,477
100,127
94,331
119,734
16,074
13,094
385,962
350,000
212,887
331,000
221,873
331,000
330,000
3,366,402
(B) Key Management Personnel Remuneration (Statutory Presentation)
Short-term employee benefits
Post-employment benefits
Share based
payments
Total
Superannuation
Termination
Payout
Annual/Long
Service Leave
$
$
2021
Directors
Mr I Macliver(1)
Mr A Edwards(1)
Mr D Ross
Mr P Kennan
Ms E Howell(1)
Mr CG Heng
Ms S Murphy(1)
Ms S Langer(1)
Salary &
fees
STIP
$
120,617
101,159
$
-
-
Non-
monetary(2)
$
-
-
531,537
32,756
85,940
100,127
86,147
112,807
14,680
11,958
-
-
-
-
-
Senior Management
Mr D Cavanagh
360,962
16,457
Mr D Roberts
Ms L Buckey(4)
Mr D Thomas
Mr R Furlong(1)
Mr S Edgar(1)
Mr T Radic
328,306
11,429
194,417
6,794
309,306
10,808
207,334
-
309,306
10,182
308,306
8,082
-
-
-
-
-
-
-
-
-
-
-
-
11,459
9,610
-
-
8,184
6,926
1,395
1,136
25,000
21,694
18,470
21,694
14,185
21,694
21,694
Total
3,096,969
96,508
85,940
183,141
Rights(3)
$
$
-
-
132,076
110,769
$
-
-
8,933
249,040
908,206
-
-
-
-
-
-
5,834
3,472
5,517
3,515
5,667
-
-
-
-
-
100,127
94,331
119,734
16,074
13,094
103,773
506,192
49,270
416,533
29,287
252,440
46,597
393,922
34,900
259,934
44,842
391,691
-
54,363
392,445
32,938
612,072
4,107,568
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
46 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 47
Short-term employee benefits
Post-employment benefits
Superannuation
Termination
Leave
Long Service
2020
Salary &
fees
STIP
$
$
Directors
Mr I Macliver(1)
Mr A Edwards
Mr D Ross
Mr J Weber(1)
Mr P Kennan
Ms E Howell
Mr CG Heng
Senior Management
Mr D Cavanagh
Mr D Roberts
Ms L Buckey(4)
Mr D Thomas
Mr R Furlong
Mr S Edgar
Mr T Radic(1)
39,390
167,987
576,844
345,535
100,127
100,440
112,910
335,000
328,998
192,686
309,998
328,998
288,998
119,990
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-
monetary(2)
$
-
-
89,803
5,427
-
-
-
-
-
-
-
-
-
-
$
3,742
12,013
-
$
-
-
-
25,000
962,832
-
9,541
6,926
25,000
21,002
18,305
21,002
21,002
21,002
9,472
-
-
-
-
-
-
-
-
-
-
Share based
payments
Total
Rights(3)
$
$
-
-
43,132
180,000
$
-
-
8,933
5,729
204,894
880,474
13,314
1,357,837
-
-
-
-
5,834
3,472
9,654
5,578
4,736
-
-
-
100,127
109,981
119,836
108,682
468,682
65,438
421,272
38,897
253,360
61,886
402,540
64,359
419,937
56,144
370,880
-
49,747
179,209
Total
3,347,901
95,230
194,007
962,832
43,936
663,361
5,307,267
(1)
(2)
(3)
These salaries & fees are only for part of the financial year as Mr I Macliver was appointed as Chairman of the Company on 28 January 2021; Mr A
Edwards ceased to be a Non-Executive Director/Chairman of the Company on 28 January 2021; Ms E Howell ceased to be a Non-Executive Director
of the Company on 30 April 2021; Ms S Murphy was appointed as a Non-Executive Director of the Company on 30 April 2021; Ms S Langer was
appointed as a Non-Executive Director of the Company on 6 May 2021; Mr R Furlong ceased as the Executive General Manager Operations on 16
February 2021; Mr S Edgar was appointed to the position of Executive General Manager Vessel Services on 12 October 2020; Mr J Weber ceased to
be a Director of the Company on 21 November 2019; Mr I Macliver was appointed as a Non-Executive Director on 20 January 2020; and Mr T Radic
commenced employment with the Company on 3 February 2020.
These non-monetary benefits comprise the provision of housing, relocation costs, fuel, travel and other benefits, as applicable.
The value of the rights granted to key management personnel as part of their remuneration is calculated as at the grant date using the binomial pricing
model. The amounts disclosed as part of remuneration for the financial year have been determined by allocating the grant date value on a straight-line
basis over the period from the grant date to the vesting date (i.e. three years).
(4) Ms L Buckey (Executive General Manager Corporate Development) is employed on a part-time basis.
The table below sets out the relative proportions of the elements of statutory remuneration of key management personnel that are linked
to performance:
Fixed Remuneration
Remuneration linked to Performance
Non-Executive Directors
Mr I Macliver
Mr A Edwards(1)
Ms E Howell(2)
Mr CG Heng
Mr P Kennan
Ms S Murphy(3)
Ms S Langer(4)
Executive Directors
Mr D Ross(5)
Senior Management
Mr D Cavanagh
Mr D Roberts
Ms L Buckey
Mr D Thomas
Mr R Furlong(6)
Mr S Edgar(7)
Mr T Radic(8)
2021
100%
100%
100%
100%
100%
100%
100%
69%
76%
85%
85%
85%
87%
86%
84%
2020
100%
100%
100%
100%
100%
N/A
N/A
77%
77%
84%
85%
85%
85%
85%
72%
2021
2020
0%
0%
0%
0%
0%
0%
0%
31%
24%
15%
15%
15%
13%
14%
16%
0%
0%
0%
0%
0%
N/A
N/A
23%
23%
16%
15%
15%
15%
15%
28%
(1) Ceased on 28 January 2021
(3) Appointed on 30 April 2021
(5) Appointed on 13 January 2020
(7) Appointed on 12 October 2020
(2) Ceased on 30 April 2021
(4) Appointed on 6 May 2021
(6) Ceased on 16 February 2021
(8) Appointed on 3 February 2020
No key management personnel appointed during the period received a payment as part of his or her consideration for agreeing to hold
the position.
Bonus and Share-based payments granted as compensation for the current financial year
STI
As noted above, in order to retain and motivate the Managing Director and Senior Management of the Company, the Board reinstated
the STI component for the 2021 financial year.
The 2021 STI had a 12-month measurement period (i.e. from 1 July 2020 to 30 June 2021) and, if the performance conditions
were met, was payable (either in cash or shares at the absolute discretion of the Board) 24-months after the commencement of the
measurement period (i.e. from 1 July 2022).
The performance hurdles under this 2021 STI component related to identified Group EBITDA Targets (80% weighting) and identified
Group Safety Targets (20% weighting).
The Company’s performance against each of these metrics resulted in a 0% vesting in relation to the identified Group Safety Targets
and a 54% vesting in relation to the identified Group EBITDA Targets. Overall, 37% of the total 2021 STI component vested. Please note
that in the calculation of the Group EBITDA Target, the impact of Jobkeeper has been excluded. As such, the vesting under the Group
EBITDA Target has been met despite Jobkeeper.
Having exercised its discretion, the Board has decided that the vested 2021 STI award will take the form of deferred rights (which shall
convert into ordinary, fully paid shares in the Company) on completion of an additional 12-months of service by the participant (i.e. on
1 July 2022). If required, Shareholder approval will be obtained prior to the issue of any deferred rights to the Managing Director under
this 2021 STI component.
LTI (Performance Rights/Share Based Payments)
During the financial year:
• No performance rights granted to either the Managing Director or the other key management personnel as part of their
compensation in previous financial years vested;
• No share-based payments were granted as compensation to either the Managing Director or the other key management personnel;
and
• The Company reinstated the LTI remuneration component - being the “one-off” Retention Incentive Performance Rights granted
to the Company’s Managing Director and Chief Financial Officer (as detailed above) and the LTI Performance Rights granted to the
Managing Director and other Senior Management of the Company (as detailed above) (together the FY2021 LTI Plans).
48 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 49
Each right under the FY2021 LTI Plans converts into one ordinary share of MMA Offshore Limited on vesting. No amounts are paid or
payable by the recipient upon grant of the rights under the FY2021 LTI Plans. The rights carry neither the right to a dividend nor a voting
right. Please refer to the table below for details of the performance criteria for the rights granted during the 2021 financial year under the
FY2021 LTI Plans.
The table below sets out the relevant performance criteria for the performance rights granted to the Managing Director and other key
management personnel during the 2020 financial year:
LTI Performance Rights
(A) Managing Director and Chief Financial Officer
Performance
Percentage of
LTI subject to
Percentage of
Performance Rights
Performance Criteria
Period
Performance Criteria
Performance Criteria Targets
which vest if Target met
Share Price to Net
Tangible Assets
(NTA) Target - being
the Company’s
share price relative
to the Company’s
NTA immediately
following the
November 2020
Equity Raising of
87c per share*
Beginning
1 July 2020
and ending
30 June 2023
100% 0% vesting if Company’s share price is
less than 75% of NTA or 65 cps* at the
end of the LTI Performance Period.
100%
50% vesting if Company’s share price
is equal to 75% of NTA or 65 cps* at the
end of the LTI Performance Period.
Pro-rata vesting (on a straight-line
basis) if Company’s share price is
greater than 75% of NTA or 65 cps* but
less than 110% of NTA or 96 cps* at the
end of the LTI Performance Period.
100% vesting if Company’s share price
is 110% of NTA or 96 cps* or greater at
the end of the LTI Performance Period.
(B) Senior Management (i.e. other than the Managing Director and Chief Financial Officer)
Performance
Percentage of
LTI subject to
Percentage of
Performance Rights
Performance Criteria
Period
Performance Criteria
Performance Criteria Targets
which vest if Target met
Share Price to Net
Tangible Assets
(NTA) Target - being
the Company’s
share price relative
to the Company’s
NTA immediately
following the
November 2020
Equity Raising of
87c per share*
Beginning
1 July 2020
and ending
30 June 2023
70% 0% vesting if Company’s share price is
less than 75% of NTA or 65 cps* at the
end of the LTI Performance Period.
100%
50% vesting if Company’s share price
is equal to 75% of NTA or 65 cps* at the
end of the LTI Performance Period.
Pro-rata vesting (on a straight-line
basis) if Company’s share price is
greater than 75% of NTA or 65 cps* but
less than 110% of NTA or 96 cps* at the
end of the LTI Performance Period.
100% vesting if Company’s share price
is 110% of NTA or 96 cps* or greater at
the end of the LTI Performance Period.
Retention Hurdle
Beginning
1 July 2020
and ending
30 June 2023
30% 100% vesting if the employee remains
employed by the Company on
30 June 2023.
100%
*
Please note: the number of performance rights and share price hurdles have been adjusted to reflect the 1-for-10 share consolidation effected by the
Company on 11 February 2021.
Retention Incentive Performance Rights
(A) Managing Director and Chief Financial Officer
Performance
Percentage of
LTI subject to
Percentage of
Performance Rights
Performance Criteria
Period
Performance Criteria
Performance Criteria Targets
which vest if Target met
Share Price Hurdle
Retention Hurdle
Beginning
1 November 2020
and ending
31 October 2023
Beginning
1 November 2020
and ending
31 October 2023
70%
100% vesting if the Company’s share
price is ≥ 90 cps* at the end of the
Retention Incentive Performance Period.
30% 100% vesting if the Managing Director /
Chief Financial Officer remains employed
by the Company on 31 October 2023.
100%
100%
*
Please note: the number of performance rights and share price hurdles have been adjusted to reflect the 1-for-10 share consolidation effected by the
Company on 11 February 2021.
During the financial year, the following rights schemes were in existence:
Series
Number issued
Grant date
Vesting date
(1) 16 Nov 2018 (a)
1,062,563
19 Oct 2018
1 Jul 2021
(2) 2 Dec 2018 (a)
258,144
21 Nov 2018
1 Jul 2021
(3) 8 Jun 2020 (b)
1,846,954
29 Nov 2020
1 Jul 2022
(4) 8 Jun 2020 (b)
351,145
21 Nov 2019
1 Jul 2022
(5) 29 Apr 2021 (c)
1,758,356
28 Jan 2021
1 Jul 2023
(6) 29 Apr 2021 (c)
4,905,329
28 Jan 2021
1 Jul 2023
(7) 29 Apr 2021 (d)
4,616,666
28 Jan 2021
1 Nov 2023
Fair value at
Expiry date
Exercise price
$
grant date
$
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.11
0.10
0.16
0.16
0.14
0.20
0.17
(for vested
rights)
1 Jul 2023
1 Jul 2023
1 Jul 2024
1 Jul 2024
1 Jul 2025
1 Jul 2025
1 Nov 2025
(a)
(b)
(c)
(d)
In accordance with the terms of the MMA Offshore Limited Performance Rights Plan – 2018 (issued by the Board on 19 October 2018) and the MMA
Offshore Limited Managing Director’s Performance Rights Plan – 2018 (as approved by the shareholders at the Company’s Annual General Meeting
on 21 November 2018) the number of performance rights which vest on 1 July 2021 will depend on the Company achieving the specified Debt
Refinancing (25% weighting) targets, the specified Net Debt to EBITDA ratio (25% weighting) and the Total Shareholder Return (50% weighting) of the
Company relative to a selected peer group of companies as set out in note 5.2 of the Financial Statements. The Board has determined that none of
the performance rights vested on 1 July 2021 and, as such, these performance rights have lapsed in accordance with the terms of the MMA Offshore
Limited Performance Rights Plan – 2018.
In accordance with the terms of the MMA Offshore Limited Performance Rights Plan – 2019 (issued by the Board on 29 November 2019 and 19
May 2020) and the MMA Offshore Limited Managing Director’s Performance Rights Plan – 2019 (as approved by the shareholders at the Company’s
Annual General Meeting on 21 November 2019) the number of performance rights which vest on 1 July 2022 will depend on the Company achieving
the specified FY2022 EBITDA to Assets ratio (50% weighting) and the Total Shareholder Return (50% weighting) of the Company relative to a selected
peer group of companies as set out in note 5.2 of the Financial Statements. Subject to the performance rights vesting on 1 July 2022, the vested
performance rights must be exercised within a two-year period from the vesting date (i.e. by 1 July 2024) or such other time as determined by the
Board in its sole and absolute discretion.
In accordance with the terms of the MMA Offshore Limited Performance Rights Plan – 2020 (issued by the Board on 4 March 2021 and as approved
by the shareholders at the Company’s Annual General Meeting on 28 January 2021) the number of LTI Performance Rights which vest on 1 July 2023
will depend on: (A) in the case of the Managing Director and Chief Financial Officer:- the Company achieving the Share Price to Net Tangible Assets
(NTA) Target (100% weighting) as set out in note 5.2 of the Financial Statements; and (B) in the case of other Senior Management (i.e. other than the
Managing Director and Chief Financial Officer):- the Company achieving the Share Price to Net Tangible Assets (NTA) Target (70% weighting) and the
Retention Hurdle (30% weighting) as set out in note 5.2 of the Financial Statements. Subject to the performance rights vesting on 1 July 2023, the
vested performance rights must be exercised within a two-year period from the vesting date (i.e. by 1 July 2025) or such other time as determined by
the Board in its sole and absolute discretion.
In accordance with the terms of the MMA Offshore Limited Performance Rights Plan – 2020 (issued by the Board on 4 March 2021 and as approved
by the shareholders at the Company’s Annual General Meeting on 28 January 2021) the number of Retention Incentive Performance Rights which vest
in favour of the Managing Director and Chief Financial Officer on 1 November 2023 will depend on the Company achieving the Share Price Hurdle
(i.e. 100% vesting if the Company’s share price is ≥ 90 cps at the end of the Retention Incentive Performance Period) (70% weighting) and the
Retention Hurdle (30% weighting) as set out in note 5.2 of the Financial Statements. Subject to the performance rights vesting on 1 November 2023,
the vested performance rights must be exercised within a two-year period from the vesting date (i.e. by 1 November 2025) or such other time as
determined by the Board in its sole and absolute discretion.
There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date.
50 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 51
The following share-based payments were granted as compensation to the Managing Director and executive key management
personnel during the current financial year:
2020
1 July 2019
compensation
Performance Rights
change
30 June 2020
nominally
Balance at
Granted as
Received on vesting of
Net other
Balance at
Balance held
Performance
rights issued
Number
granted
Number
vested
% of grant
% of grant
the year consisting of
vested
forfeited
share-based payment
% of compensation for
Name
Mr D Ross
29 Apr 21
4,520,356
Mr D Cavanagh
29 Apr 21
1,854,666
Mr D Roberts
Mr D Thomas
Ms L Buckey
Mr R Furlong
Mr S Edgar
Mr T Radic
29 Apr 21
29 Apr 21
29 Apr 21
29 Apr 21
29 Apr 21
29 Apr 21
408,333
386,167
242,717
408,333
361,667
385,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
27%
21%
12%
12%
12%
13%
11%
14%
During the financial year, no performance rights vested in favour of the Managing Director or other key management personnel.
The following table summarises the value of performance rights to key management personnel which were granted or vested during the
financial year as part of their remuneration:
Mr I Macliver
-
Mr P Kennan
7,741,900
Mr CG Heng
Mr D Ross
Mr D Cavanagh
Mr D Roberts
Ms L Buckey
Mr D Thomas
Mr S Edgar
Mr T Radic(3)
20,000
153,157
2,100
-
147
-
2,470
-
(1) Appointed 30 April 2021
(2) Appointed 6 May 2021
(3) Appointed on 3 February 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,498,915
18,240,815
18,240,815
-
-
-
-
-
-
-
-
20,000
153,157
2,100
-
147
-
2,470
-
-
-
-
-
-
-
-
-
Value of rights
granted at
Value of rights at
grant date
vesting date
During the next 12 months, the Company will develop a policy regarding minimum shareholding requirements for its
Non-Executive Directors.
Details of the performance rights held by executive key management personnel are as follows:
Name
Mr D Ross
Mr D Cavanagh
Mr D Roberts
Mr D Thomas
Ms L Buckey
Mr R Furlong
Mr S Edgar
Mr T Radic
$
733,350
297,653
81,667
77,233
48,543
81,667
72,333
77,000
$
–
–
–
–
–
–
–
–
During the financial year, no performance rights (which were previously granted to key management personnel as part of their
remuneration) lapsed.
Key Management Personnel Equity Holdings
Details of the fully paid ordinary shares of the Company held by key management personnel are as follows:
2021
1 July 2020
compensation
Performance Rights
change
30 June 2021
nominally
Balance at
Granted as
Received on vesting of
Net other
Balance at
Balance held
Mr I Macliver
-
Mr P Kennan
18,240,815
Mr CG Heng
Ms S Murphy(1)
Ms S Langer(2)
Mr D Ross
Mr D Cavanagh
Mr D Roberts
Ms L Buckey
Mr D Thomas
Mr S Edgar
Mr T Radic
20,000
-
-
153,157
2,100
-
147
-
2,470
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
-
11,466,000
29,706,815
29,706,815
63,157
83,157
-
-
-
-
322,436
475,593
4,421
6,521
-
-
-
-
-
-
147
-
2,470
-
-
-
-
-
-
-
-
-
-
-
511,171
4,520,356
Mr D Cavanagh
278,283
1,854,666
2021
Executives
Mr D Ross
Mr D Roberts
Ms L Buckey
Mr D Thomas
Mr R Furlong(1)
Mr S Edgar
Mr T Radic
2020
Executives
Mr D Ross
Mr D Cavanagh
Mr D Roberts
Ms L Buckey
Mr D Thomas
Mr R Furlong
Mr S Edgar
Mr T Radic(2)
Balance at
Granted as
change
Balance at
Vested but not
Rights vested
1 July 2020
compensation
Vested
(lapsed)
30 June 2021
exercisable
during year
Net other
169,028
100,471
159,852
164,736
142,488
111,833
408,333
242,717
386,167
408,333
361,667
385,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,031,527
2,132,949
577,361
343,188
546,019
573,069
504,155
496,833
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
Granted as
change
Balance at
Vested but not
Rights vested
1 July 2019
compensation
Vested
(lapsed)
30 June 2020
exercisable
during year
Net other
160,026
107,483
50,417
29,968
47,680
46,125
37,433
-
351,145
170,800
118,611
70,503
112,172
118,611
105,055
111,833
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
511,171
278,283
169,028
100,471
159,852
164,736
142,488
111,833
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1) Ceased on 16 February 2021
(2) Appointed on 3 February 2020
All performance rights issued to key management personnel during the financial year were made in accordance with the terms of the
respective performance rights plans. As discussed above, no performance rights vested during the financial year.
Further details of the share based payment arrangements during the 2021 and 2020 financial years are contained in note 5.2 of the
Financial Statements.
52 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 53
AUDITOR’S INDEPENDENCE
DECLARATION
Share Trading Restrictions
The Company’s Share Trading Policy requires key management personnel proposing to enter into arrangements that limit the economic
risk of a vested holding in the Company’s securities to first obtain approval from the Chairman of the Board (for directors), approval of
the Chairman of the Audit and Risk Committee (for the Chairman of the Board), and approval from the Managing Director (for other
executives), and subsequently provide details of the dealing within five business days of the dealing taking place. Any breach of the
Share Trading Policy is taken very seriously by the Company and is subject to disciplinary action, including possible termination of a
person’s employment or appointment. A copy of the Company’s Share Trading Policy can be found on the Corporate Governance page
of our website at www.mmaoffshore.com/investor-centre/corporate-governance.
Key Terms of Employment Contracts
As at the date of this report, the Managing Director and other executive key management personnel are all employed by the Company
under an employment contract, none of which are of fixed-term duration.
These employment contracts may be terminated by either party giving the required notice and subject to termination payments as
detailed in the table below:
Name
Mr D Ross
Mr D Cavanagh
Mr D Roberts
Ms L Buckey
Mr D Thomas
Mr S Edgar
Mr T Radic
Termination notice period
Termination benefits payable
6 months
12 weeks
12 weeks
12 weeks
12 weeks
12 weeks
12 weeks
Yes(1)
Yes(2)
No
No
No
No
No
(1)
(2)
If the employee is made redundant as a result of a material diminution in the nature and level of responsibilities or functions of the employee’s position
including, without limitation, through a change in control of the Company, the employee will be entitled to an aggregate payment equivalent to the
maximum amount that may be paid to the employee under the Corporations Act and ASX Listing Rules without prior shareholder approval.
If the employee is made redundant as a result of a material diminution in the nature and level of responsibilities or functions of the employee’s position
including, without limitation, through a change in control of the Company, the employee will be entitled to a payment equal to 0.5 times the Fixed
Annual Remuneration in the relevant year (excluding any short-term incentives or long-term incentives).
Under these employment contracts, the remuneration package for the Managing Director and other key management personnel
consists of an annual base salary and statutory superannuation contributions. Participation in the Company’s incentive schemes is at the
absolute discretion of the Board.
This Directors’ Report is signed in accordance with a resolution of Directors made pursuant to section 298(2) of the Corporations Act
2001 (Cth).
On behalf of the Directors,
Ian Macliver
Chairman
Perth, 30 August 2021
54 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 55
Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Deloitte Touche Tohmatsu ABN 74 490 121 060 Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au The Board of Directors MMA Offshore Limited 12 The Esplanade, Perth WA 6000 30 August 2021 Dear Board Members AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo MMMMAA OOffffsshhoorree LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of MMA Offshore Limited. As lead audit partner for the audit of the financial report of MMA Offshore Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: •the auditor independence requirements of the Corporations Act 2001 in relation to the audit •any applicable code of professional conduct in relation to the audit. Yours faithfully DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU VViinncceenntt SSnniijjddeerrss Partner Chartered Accountants Perth, 30 August 2021 Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Deloitte Touche Tohmatsu ABN 74 490 121 060 Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au The Board of Directors MMA Offshore Limited 12 The Esplanade, Perth WA 6000 30 August 2021 Dear Board Members AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo MMMMAA OOffffsshhoorree LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of MMA Offshore Limited. As lead audit partner for the audit of the financial report of MMA Offshore Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: •the auditor independence requirements of the Corporations Act 2001 in relation to the audit •any applicable code of professional conduct in relation to the audit. Yours faithfully DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU VViinncceenntt SSnniijjddeerrss Partner Chartered Accountants Perth, 30 August 2021 Liability limited by a scheme approved under Professional Standards Legislation Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Deloitte Touche Tohmatsu ABN 74 490 121 060 Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au The Board of Directors MMA Offshore Limited 12 The Esplanade, Perth WA 6000 30 August 2021 Dear Board Members AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo MMMMAA OOffffsshhoorree LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of MMA Offshore Limited. As lead audit partner for the audit of the financial report of MMA Offshore Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: •the auditor independence requirements of the Corporations Act 2001 in relation to the audit •any applicable code of professional conduct in relation to the audit. Yours faithfully DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU VViinncceenntt SSnniijjddeerrss Partner Chartered Accountants Perth, 30 August 2021 Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
Deloitte Touche Tohmatsu
GPO Box A46
ABN 74 490 121 060
Perth WA 6837 Australia
Deloitte Touche Tohmatsu
Tower 2, Brookfield Place
ABN 74 490 121 060
Tel: +61 8 9365 7000
123 St Georges Terrace
Fax: +61 8 9365 7001
Perth WA 6000
Tower 2, Brookfield Place
www.deloitte.com.au
GPO Box A46
123 St Georges Terrace
Perth WA 6837 Australia
Perth WA 6000
Deloitte Touche Tohmatsu
GPO Box A46
ABN 74 490 121 060
Tel: +61 8 9365 7000
Perth WA 6837 Australia
Fax: +61 8 9365 7001
Tower 2, Brookfield Place
www.deloitte.com.au
Tel: +61 8 9365 7000
123 St Georges Terrace
Fax: +61 8 9365 7001
Perth WA 6000
www.deloitte.com.au
GPO Box A46
Perth WA 6837 Australia
INDEPENDENT AUDITOR’S
REPORT
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
OOffffsshhoorree LLiimmiitteedd
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
OOffffsshhoorree LLiimmiitteedd
OOffffsshhoorree LLiimmiitteedd
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Opinion
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
OOffffsshhoorree LLiimmiitteedd
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
Opinion
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
Opinion
including a summary of significant accounting policies and other explanatory information, and the directors’
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the
declaration.
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
including:
including a summary of significant accounting policies and other explanatory information, and the directors’
Opinion
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
declaration.
including a summary of significant accounting policies and other explanatory information, and the directors’
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
(i)
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the
declaration.
performance for the year then ended; and
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
“Group”) which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated
including:
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity
complying with Australian Accounting Standards and the Corporations Regulations 2001.
(ii)
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
and the consolidated statement of cash flows for the year then ended, and notes to the financial statements,
including:
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
(i)
including a summary of significant accounting policies and other explanatory information, and the directors’
Basis for Opinion
performance for the year then ended; and
declaration.
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
(i)
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
(ii)
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
including:
(ii)
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Basis for Opinion
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
(i)
Basis for Opinion
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
in accordance with the Code.
our report. We are independent of the Group in accordance with the auditor independence requirements of the
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
our report. We are independent of the Group in accordance with the auditor independence requirements of the
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
Basis for Opinion
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
the directors of the Company, would be in the same terms if given to the directors as at the time of this
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
auditor’s report.
in accordance with the Code.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
our report. We are independent of the Group in accordance with the auditor independence requirements of the
opinion.
the directors of the Company, would be in the same terms if given to the directors as at the time of this
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
auditor’s report.
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are
the directors of the Company, would be in the same terms if given to the directors as at the time of this
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
in accordance with the Code.
opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
opinion.
the directors of the Company, would be in the same terms if given to the directors as at the time of this
Liability limited by a scheme approved under Professional Standards Legislation
auditor’s report.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
Key Audit Matters
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
these matters.
of the financial report for the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
KKeeyy AAuuddiitt MMaatttteerr
CCaarrrryyiinngg vvaalluuee ooff tthhee VVeesssseell -- CCoonnttiinnuuiinngg
KKeeyy AAuuddiitt MMaatttteerr
OOppeerraattiioonnss CCaasshh GGeenneerraattiinngg UUnniitt
CCaarrrryyiinngg vvaalluuee ooff tthhee VVeesssseell -- CCoonnttiinnuuiinngg
As disclosed in Note 3.7, included in the
OOppeerraattiioonnss CCaasshh GGeenneerraattiinngg UUnniitt
Group’s consolidated statement of financial
position at 30 June 2021 are non-current assets
As disclosed in Note 3.7, included in the
associated with the Vessel – Continuing
Group’s consolidated statement of financial
Operations Cash Generating Unit (“Vessel
position at 30 June 2021 are non-current assets
CGU”) of $323 million. The assessment of the
associated with the Vessel – Continuing
recoverable amount of the Vessel CGU requires
Operations Cash Generating Unit (“Vessel
management to exercise judgement and has
CGU”) of $323 million. The assessment of the
been based on a Fair Value Less Cost of
recoverable amount of the Vessel CGU requires
Disposal (“FVLCD”) approach.
management to exercise judgement and has
been based on a Fair Value Less Cost of
The Group appointed external valuers to
Disposal (“FVLCD”) approach.
perform a valuation of the Vessel CGU.
The Group appointed external valuers to
Key assumptions used in assessing the
perform a valuation of the Vessel CGU.
recoverable amount include current and
forecast economic conditions including
Key assumptions used in assessing the
potential movements in the market as a
recoverable amount include current and
consequence of commodity prices and the
forecast economic conditions including
application of an ‘en bloc’ discount to the
potential movements in the market as a
vessel fleet.
consequence of commodity prices and the
application of an ‘en bloc’ discount to the
CCaarrrryyiinngg vvaalluuee ooff tthhee SSuubbsseeaa CCaasshh GGeenneerraattiinngg
vessel fleet.
UUnniitt
CCaarrrryyiinngg vvaalluuee ooff tthhee SSuubbsseeaa CCaasshh GGeenneerraattiinngg
As disclosed in Note 3.7, included in the
UUnniitt
Group’s consolidated statement of financial
position at 30 June 2021 are non-current assets
As disclosed in Note 3.7, included in the
associated with the Subsea Cash Generating
Group’s consolidated statement of financial
Unit (“Subsea CGU”) of $20.2 million.
position at 30 June 2021 are non-current assets
associated with the Subsea Cash Generating
Management undertakes an assessment as to
Unit (“Subsea CGU”) of $20.2 million.
whether any non-current asset or cash
generating unit may be impaired at balance
Management undertakes an assessment as to
date.
whether any non-current asset or cash
generating unit may be impaired at balance
The assessment requires significant judgement
date.
due to assumptions and estimates involved in
preparing a value in use model (‘VIU’) to
The assessment requires significant judgement
estimate recoverable amount, including:
due to assumptions and estimates involved in
preparing a value in use model (‘VIU’) to
Forecast future cash flows; and
estimate recoverable amount, including:
-
- Discount rates.
-
- Discount rates.
Forecast future cash flows; and
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Our procedures included, but were not limited to:
•
•
•
•
• Understanding the process management undertakes
Our procedures included, but were not limited to:
to evaluate the recoverability of the Vessel CGU;
Assessing management’s determination of the Vessel
•
• Understanding the process management undertakes
CGU based on our understanding of the nature of the
to evaluate the recoverability of the Vessel CGU;
Group’s business and the economic environment in
Assessing management’s determination of the Vessel
which the segments operate;
CGU based on our understanding of the nature of the
Assessing the objectivity and competence of the
Group’s business and the economic environment in
external valuers;
which the segments operate;
Evaluating the external valuations obtained by the
Assessing the objectivity and competence of the
Group by assessing the valuation methodology
external valuers;
adopted and the assumptions used;
Evaluating the external valuations obtained by the
Comparing actual sales prices, including
Group by assessing the valuation methodology
‘en bloc’ discounts, of vessels during and post the
adopted and the assumptions used;
reporting period to evaluate the reasonableness of
Comparing actual sales prices, including
the valuation; and
‘en bloc’ discounts, of vessels during and post the
Assessing the appropriateness of the disclosures in
reporting period to evaluate the reasonableness of
Note 3.7 to the financial statements.
the valuation; and
Assessing the appropriateness of the disclosures in
Note 3.7 to the financial statements.
•
•
•
•
•
Our procedures included, but were not limited to:
•
•
• Obtaining management’s impairment assessment
Our procedures included, but were not limited to:
carried out for the Subsea CGU, and assessing the
work performed against the requirements of the
• Obtaining management’s impairment assessment
relevant accounting standard;
carried out for the Subsea CGU, and assessing the
In conjunction with our internal valuation specialists
work performed against the requirements of the
we specifically assessed the recoverable value
relevant accounting standard;
modelling for the Subsea CGU, as it demonstrated
In conjunction with our internal valuation specialists
characteristics suggesting impairment testing was
we specifically assessed the recoverable value
required, by:
modelling for the Subsea CGU, as it demonstrated
Inquiring of management and the directors in
➢
characteristics suggesting impairment testing was
relation to forecasting assumptions within the
required, by:
VIU model and agreeing these to approved
Inquiring of management and the directors in
➢
budgets;
relation to forecasting assumptions within the
VIU model and agreeing these to approved
modelling integrity of the value-in-use (ViU)
budgets;
model;
modelling integrity of the value-in-use (ViU)
model;
➢ Assessing the mathematical accuracy and
➢ Assessing the mathematical accuracy and
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Liability limited by a scheme approved under Professional Standards Legislation
56 MMA Offshore Ltd | Annual Report 2021
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
MMA Offshore Ltd | Annual Report 2021 57
KKeeyy AAuuddiitt MMaatttteerr
CCaarrrryyiinngg vvaalluuee aanndd ccllaassssiiffiiccaattiioonn ooff aasssseettss hheelldd
ffoorr ssaallee
As disclosed in Note 3.4, included in the
Group’s consolidated statement of financial
position at 30 June 2021 are non-current assets
associated with non-core vessels classified as
assets held for sale of $30.7 million.
The assessment of the recoverable amount of
the assets held for sale requires management
to exercise judgement and has been based on a
Fair Value Less Cost of Disposal (“FVLCD”)
approach. A market based approach has been
used by the Directors, reflecting the value
which could be expected to be realised through
sales executed in the period to 30 June 2022.
In assessing the recoverable amount of these
non-core vessels, the Group has used internal
management valuations incorporating existing
industry knowledge including actual sales
achieved during the period, current discussions
with prospective purchasers and market sales
of similar vessels.
The Group has also appointed external valuers
to provide a comparative current market values
of these vessel for the purposes of assessing
appropriateness and reasonableness of the
valuations of these assets.
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
➢ Challenging the assumptions contained in the
cash flow forecasts, including the revenue and
expense projections, forecast gross margins and
capital expenditures including the impact of
COVID-19 and the outlook for easing of
restrictions in relevant regions; and
➢ Performing sensitivity analysis on key
assumptions within the model, including the
expected revenues, margins, growth rates and
discount rate.
•
Assessing the appropriateness of the disclosures in
Note 3.7 to the financial statements.
Our procedures included, but were not limited to:
•
•
•
•
•
• Understanding the process management undertakes
to evaluate the recoverability of non-core vessels;
Evaluating and challenging management’s conclusions
as to unsold non-core vessels to ensure they continue
to meet the definition of AASB 5 Held for sale assets;
Evaluating and challenging management’s
determination of the carrying values;
Assessing the objectivity and competence of the
external valuers;
In conjunction with our valuation specialists
evaluating the external valuations obtained by the
Group by assessing the valuation methodology
adopted and the assumptions used;
Comparing actual market sale prices of similar vessels
sold in the period to 30 June 2021 as indicated by the
Company’s external valuer and up to the date of the
financial statements; and
Evaluating successful disposals to 30 June 2021 and
current discussions and/or negotiations held with
prospective purchasers in respect of non-core vessels;
Evaluating management’s ability to forecast expected
carrying value through previously executed fleet sales;
Evaluating the appropriateness of classification and
presentation of these assets in the Consolidated
Statement of Financial Position as at 30 June 2021 and
the recognition and disclosure of the disaggregated
revenue generated from the non-core vessels during
the period in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income for the year
ended 30 June 2021; and
Assessing the appropriateness of the related
disclosures in Note 2.1, 3.4 and 3.7 to the financial
statements.
•
•
•
•
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Our procedures included, but were not limited to:
•
•
•
•
Assessing the terms and conditions under the new
Syndicated Facility Agreement;
Evaluating management’s treatment of the
restructure including recognition of a new financial
instrument, recognition of debt forgiveness and
treatment of unamortised borrowing costs against the
requirements of the relevant accounting standards;
Assessing the financial covenant calculations through
the period to 31 August 2022 to identify whether
potential breaches may occur; and
Assessing the appropriateness of the disclosures
included in Note 3.9 to the financial statements.
KKeeyy AAuuddiitt MMaatttteerr
DDeebbtt RReessttrruuccttuurree
As disclosed in Note 3.9 the Group restructured
its debt facility and entered into the seventh
amendment of the banking syndicate
agreement.
As part of the restructure, 3 of the banks exited
the facility and total debt was reduced by
approximately $91.9 million through
repayments totalling $67.3 million to the
exiting banks, repayments totalling $9.8 million
to the remaining banks and debt concessions
from the exiting banks totalling $14.8 million.
At the date of the restructure, $1.9 million of
remaining unamortised loan fees associated
with the extinguished finance facility were
amortised to nil.
The new terms of the syndicated facility have
extended the loan facility to January 2025.
The modification of the loan agreement has
been accounted for by management as an
extinguishment of the original financial liability
and the recognition of a new financial liability
due to the substantially different terms of the
revised agreement.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2021 but does not include the financial report
and our auditor’s report thereon. The annual report is expected to be made available to us after the date of this
auditor's report.
Our opinion on the financial report does not cover the other information and we will not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
58 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 59
In preparing the financial report, the directors are responsible for assessing the ability of the Group 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 to cease operations, or have no
realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s 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 the Australian Auditing Standards 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 this financial
report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, 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.
• 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 internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
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 ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report 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 auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
• 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 report. We are responsible
for the direction, supervision and performance of the Group’s 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, actions taken to eliminate threats
or safeguards applied.
60 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 61
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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. RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt Opinion on the Remuneration Report We have audited the Remuneration Report included in on pages 42 to 54 of the Directors’ Report for the year ended 30 June 2021. In our opinion, the Remuneration Report of MMA Offshore Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DDEELLOOIITTTTEE TTOOUUCCHHEE TTOOHHMMAATTSSUU VViinncceenntt SSnniijjddeerrss Partner Chartered Accountants Perth, 30 August 2021
TARGETING A
PERFECT DAY,
EVERY DAY
DIRECTORS’
DECLARATION
The Directors declare that:
(a)
(b)
(c)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
in the Directors’ opinion, the attached Financial Statements are in compliance with International Financial Reporting Standards, as
stated in note 5.12 to the Financial Statements;
in the Directors’ opinion, the attached Financial Statements and notes thereto are in accordance with the Corporations Act 2001
(Cth), including compliance with accounting standards and giving a true and fair view of the financial position and performance of
the consolidated entity; and
(d)
the Directors have been given the declarations required by section 295A of the Corporations Act 2001 (Cth).
At the date of this declaration, the Company is within the class of companies affected by ASIC Corporations (Wholly owned Companies)
Instrument 2016/785. The nature of the deed of cross guarantee is such that each company, which is party to the deed, guarantees to
each creditor payment in full of any debt in accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Corporations
(Wholly owned Companies) Instrument 2016/785 applies, as detailed in note 5.6 to the Financial Statements will, as a Group, be able to
meet any obligations or liabilities to which they are, or may become, subject because of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001 (Cth).
On behalf of the Directors,
Ian Macliver
Chairman
Perth, 30 August 2021
62 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 63
FINANCIAL
REPORT
2021
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
1. General Notes
1.1
1.2
1.3
Basis of Preparation
Going Concern
Critical Accounting Judgements and
Key Sources of Estimation Uncertainty
2.
Financial Performance
2.1
2.2
2.3
2.4
2.5
2.6
Segment Information
Other Income and Expenses
Exchange Rate Movements
Earnings per Share
Income Taxes
Dividends Provided for or Paid
3.
Assets and Liabilities
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
Cash and Cash Equivalents
Trade and Other Receivables
Inventories
Assets Classified as Held for Sale
Property, Plant and Equipment
Right of Use Assets
Impairment of Non-current Assets
Trade and Other Payables
Borrowings
3.10 Lease Liabilities
3.11 Provisions
3.12 Deferred Tax Balances
4. Capital Structure
4.1
4.2
4.3
4.4
Issued Capital
Reserves
Non-controlling Interests
Capital Risk Management
5. Other Notes
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
Commitments for Expenditure
Share Based Payments
Key Management Personnel Compensation
Related Party Transactions
Remuneration of Auditors
Subsidiaries
Parent Company Information
Financial Instruments
Operating Lease Arrangements
5.10 Contingent Liabilities
5.11 Events After the Reporting Period
5.12 Other Accounting Policies
Additional Securities Exchange Information
66
67
68
69
70
70
70
70
71
71
75
76
76
77
77
78
78
79
79
80
80
82
83
87
87
89
89
90
92
92
92
93
94
95
95
95
97
97
98
99
101
102
105
106
106
106
108
64 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 65
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Revenue
Finance income
Other income/(expenses)
Vessel expenses
Subsea expenses
Project Logistics expenses
Administration expenses
Impairment charges
Finance costs
Profit/(loss) before tax
Income tax expense
Profit/(loss) for the Year
Other Comprehensive Income, net of tax
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Share of other comprehensive income of associates
Gain/ (Loss) on hedge of net investment in a foreign operation
Other comprehensive income/(loss) for the year, net of tax
Total Comprehensive Loss for the Year
Profit/(loss) for the year attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
Earnings/ (Loss) per share
From continuing operations
Basic
Diluted
Note
2.1
2.2
2.1
2.5
2.3
2.3
2021
$’000
237,507
99
23,678
2020
$’000
273,011
823
4,474
(147,316)
(220,298)
(67,866)
(20,650)
(10,094)
-
(11,996)
3,362
(971)
2,391
(30,183)
289
12,912
(16,982)
(14,591)
2,424
(33)
2,391
(14,575)
(16)
(14,591)
(41,872)
(18,459)
(15,494)
(57,723)
(18,119)
(93,657)
(530)
(94,187)
7,518
-
(3,247)
4,271
(89,916)
(93,977)
(210)
(94,187)
(89,706)
(210)
(89,916)
Cents Per Share
Cents Per Share
2.4
2.4
0.87
0.86
(10.44)
(10.44)
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Assets classified as held for sale
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right-of-use assets
Intangibles
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Unearned revenue
Borrowings
Lease liabilities
Provisions
Current tax liabilities
Total Current Liabilities
Non-Current Liabilities
Borrowings
Lease liabilities
Provisions
Deferred tax liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
Accumulated losses
Equity attributable to owners of the company
Non-controlling interest
Total Equity
Note
2021
$’000
2020
$’000
3.1
3.2
3.3
3.4
3.5
3.6
3.8
3.9
3.10
3.11
3.9
3.10
3.11
3.12
4.1
4.2
4.3
96,226
49,864
2,691
3,679
30,682
183,142
333,399
9,938
765
344,102
527,244
36,230
3,152
15,568
3,502
23,218
1,242
82,912
147,932
6,635
112
56
154,735
237,647
289,597
86,637
52,429
2,216
2,822
41,961
186,065
372,661
10,117
977
383,755
569,820
41,879
538
12,739
3,729
15,815
2,684
77,384
257,838
7,164
256
57
265,315
342,699
227,121
742,247
124,105
(576,548)
289,804
(207)
667,251
139,305
(579,244)
227,312
(191)
289,597
227,121
66 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 67
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
FOR THE YEAR ENDED 30 JUNE 2021
Employee
Equity
Settled
Benefits
Reserve
$’000
Issued
Capital
$’000
Foreign
Currency
Translation
Reserve
$’000
Hedging
Reserve
$’000
Accumulated
Losses
$’000
Equity
Holders
of Parent
$’000
Non-
controlling
Interest
$’000
Total
$’000
Year Ended
30 June 2021
Balance at 1 July 2020
667,251
1,878
(69,423)
206,850
(579,244)
227,312
(191)
227,121
Profit for the year
Other comprehensive
income/(loss) for the year
Total Comprehensive
Income/(Loss)
for the Year
-
-
-
-
-
-
-
2,424
2,424
12,912
(30,183)
272
(16,999)
(33)
17
2,391
(16,982)
-
12,912
(30,183)
2,696
(14,575)
(16)
(14,591)
Issue of shares
75,014
-
Recognition of share
based payments
Non-controlling interest
arising on the acquisition
-
2,071
(18)
-
-
-
-
-
-
-
-
-
-
75,014
2,071
(18)
-
-
-
75,014
2,071
(18)
Balance at 30 June 2021
742,247
3,949
(56,511)
176,667
(576,548)
289,804
(207)
289,597
Employee
Equity
Settled
Benefits
Reserve
$’000
Issued
Capital
$’000
Foreign
Currency
Translation
Reserve
$’000
Hedging
Reserve
$’000
Accumulated
Losses
$’000
Equity
Holders
of Parent
$’000
Non-
controlling
Interest
$’000
Total
$’000
Year Ended
30 June 2020
Balance at 1 July 2019
654,735
621
(66,176)
199,332
(485,267)
303,245
-
303,245
Loss for the year
Other comprehensive
income/(loss)
for the year
Total Comprehensive
Income/(Loss)
for the Year
-
-
-
Issue of shares
12,516
-
-
-
-
Recognition of
share-based payments
Non-controlling interest
arising on the acquisition
-
-
1,257
-
-
-
(93,977)
(93,977)
(210)
(94,187)
(3,247)
7,518
-
4,271
-
4,271
(3,247)
7,518
(93,977)
(89,706)
(210)
(89,916)
-
-
-
-
-
-
-
-
-
12,516
1,257
-
-
12,516
1,257
-
19
19
Balance at 30 June 2020
667,251
1,878
(69,423)
206,850
(579,244)
227,312
(191)
227,121
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Cash Flows from Operating Activities
Receipts from customers
Government grants received
Interest received
Payments to suppliers and employees
Income tax paid
Interest and other costs of finance paid
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment
Proceeds from sale of assets classified as held for sale
Investment in subsidiary
Net cash inflow on acquisition of business
Net Cash Used in Investing Activities
Cash Flows from Financing Activities
Repayment of borrowings
Payment for share issue costs
Payment of debt restructure costs
Proceeds from issues of equity securities
Repayment of lease liabilities
Net Cash Used in Financing Activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on the balance of cash held in foreign currencies
Cash and Cash Equivalents at the End of the Financial Year
Note
2021
$’000
2020
$’000
249,761
285,230
9,403
99
2,819
823
(222,019)
(234,351)
3.1
5.6
3.9
3.10
(1,640)
(8,691)
26,913
(9,390)
2,701
7,524
(631)
-
204
(81,762)
(5,006)
(426)
80,020
(6,237)
(13,411)
13,706
86,637
(4,117)
96,226
(207)
(15,853)
38,461
(10,448)
1,414
-
-
(862)
(9,896)
(5,805)
-
-
-
(5,724)
(11,529)
17,036
70,155
(554)
86,637
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
68 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 69
1. General Notes
MMA Offshore Limited (MMA or the Company) is a for profit, listed public company incorporated in Australia. Its shares are traded on the
Australian Securities Exchange.
2.
Financial Performance
2.1 Segment Information
1.1 Basis of Preparation
The financial statements have been prepared on the historical cost basis, except for certain assets which have been impaired
and financial instruments that are measured at fair values. Historical cost is generally based on the fair values of the consideration
given in exchange for assets.
All amounts are presented in Australian dollars, unless otherwise noted. Transactions in foreign currencies are recognised at the
rates of exchange prevailing at the dates of the transactions. Monetary items denominated in foreign currencies at reporting date
are translated at the exchange rate prevailing at that date. Exchange differences are recognised in profit or loss in the period in
which they arise except for certain hedging transactions and translation of foreign operations as described in note 4.2.
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument
2016/191, dated 24 March 2016, and in accordance with this Corporations Instrument, amounts in the financial statements are
rounded off to the nearest thousand dollars, unless otherwise indicated.
1.2 Going Concern
The directors have, at the time of approving the financial statements, a reasonable expectation that the Group have adequate
resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
1.3 Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In the application of the Group’s accounting policies, the Directors are required to make judgements (other than those involving
estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about carrying
values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
Estimation of expected credit losses – refer note 3.2
Assets classified as held for sale – refer note 3.4
Useful lives of property, plant and equipment – refer note 3.5
Impairment of non-current assets – refer note 3.7
Provisions – refer note 3.11
An operating segment is a component of a group that engages in business activities from which it may earn revenue and incur
expenses and whose operating results are regularly reviewed by the Chief Operating Decision Maker (Managing Director) for the
purposes of resource allocation and assessment of segment performance. Information regarding the Group’s operating segments
is presented below. The accounting policies of the reportable segments are the same as the Group’s accounting policies.
Information reported to the Managing Director is focused on the category of services provided through the Groups operating
activities.
The group’s reportable segments are:
• Vessel Services – provision of specialised offshore support vessels; and
• Subsea Services – services to companies operating in subsea environments including inspection, maintenance and repair;
and
• Project Logistics – project management of large marine spreads and complex marine logistics.
Segment revenues and results
The following is an analysis of the Group’s revenue and results by reportable segment:
Vessel
Services
2021
$’000
134,099
25,675
Subsea
Services
2021
$’000
Project
Logistics
2021
$’000
Eliminations
Consolidated
2021
$’000
2021
$’000
63,039
14,694
-
-
-
-
211,832
25,675
6,064
7,511
1,755
(15,330)
-
165,838
70,550
16,449
(15,330)
237,507
Revenue
External sales
External sales –
Assets classified as held for sale
Inter-segment sales
Total revenue
Inter-segment sales are charged at prevailing market prices
Result
Segment profit/(loss) before
impairment
12,458
(4,827)
(5,956)
Impairment charge
-
-
-
Segment profit after impairment
15,857
(4,827)
(5,956)
Finance income
Other income and expenses
Administration costs
Finance costs
Profit for the year before income tax
-
-
-
1,675
-
1,675
99
23,678
(10,094)
(11,996)
3,362
70 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 71
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 2.
Financial Performance (continued)
2.1 Segment Information (continued)
Vessels
Services
Subsea
Services
Project
Logistics
Eliminations
Consolidated
2020
$’000
2020
$’000
2020
$’000
2020
$’000
2020
$’000
Revenue
External sales
External sales –
Assets classified as held for sale
Inter-segment sales
Total revenue
191,495
38,092
6,007
37,417
-
-
-
-
-
228,912
7,887
45,979
1,037
7,044
(8,924)
(8,924)
Inter-segment sales are charged at prevailing market prices
Result
Segment profit/(loss) before impairment
Impairment charge
Segment loss after impairment
Finance income
Other income and expenses
Administration costs
Finance costs
Loss for the year before income tax
8,614
(55,797)
(47,183)
(3,780)
(1,926)
(5,706)
(12,452)
-
(12,452)
-
-
-
235,594
37,417
-
273,011
(7,618)
(57,723)
(65,341)
823
4,474
(15,494)
(18,119)
(93,657)
Segment profit/(loss) represents the profit/(loss) earned by the Vessels, Subsea Services and Project Logistics segments without
allocation of finance income, other income, administration costs, finance costs and income tax expense. This is the measure
reported to the CODM for the purposes of resource allocation and assessment of segment performance.
Disaggregation of revenue
The Group derives its revenue from contracts with customers for the transfer of goods and services over time and at a point in
time in the following major product lines.
Revenue recognised over time:
Vessel hire
Revenue from vessels classified as held for sale
Equipment hire
Personnel
Mobilisation/Demobilisation
Project management
Fabrication
Materials
Mattresses
Other
Revenue recognised at a point in time:
Fuel sales
Total
72 MMA Offshore Ltd | Annual Report 2021
2021
$’000
2020
$’000
129,750
167,124
25,675
21,636
14,557
11,356
8,871
9,324
2,383
2,053
9,595
37,417
1,810
16,161
12,628
255
8,620
2,810
1,780
17,244
235,200
265,849
2,307
7,162
237,507
273,011
2.
Financial Performance (continued)
2.1 Segment Information (continued)
Revenue from charter of vessels
Revenue from the charter of vessels is an integrated service provided to customers and includes the charter of the vessel and
crew, mobilisation and demobilisation. Revenue is recognised over the period of time over which the customer utilises the vessel.
Where the entity supplies goods, such as fuel, to the customer as part of the contract, revenue is recognised at a point in time
when the customer obtains control of the goods.
Revenue from subsea services
Revenue from subsea services is derived from providing a variety of services to companies operating in subsea environments
including the inspection, maintenance and repair of facilities and equipment. Revenue is recognised over time based on the input
method by reference to estimates of work completed for each contract.
Revenue from project logistics
Revenue from Project Logistics relates to management of large marine spreads and complex marine logistics. Revenue is
recognised over time based on the input method by reference to estimates of work completed for each contract
The Group recognises other revenue as the promised goods and services are provided to customers in an amount that reflects
the consideration expected to be received in exchange for those goods and services.
Segment Assets
The following is an analysis of the Group’s assets by reportable segment:
Vessel Services (i)
Subsea Services (i)
Project Logistics
Unallocated assets
Total (ii)
2021
$’000
2020
$’000
387,250
444,646
30,581
2,761
106,652
527,244
30,963
1,895
92,316
569,820
(i)
(ii)
Vessel and Subsea Services segments assets include assets classified as held for sale (refer note 3.4).
Segment assets are held in both A$ and US$ denominated currencies. The US$ assets are translated into A$ using
exchange rates prevailing at the end of the reporting period. The movement in the exchange rate has resulted in an
unrealised negative movement in the asset value of $30.2 million in A$ terms. Offsetting the negative movement in asset
value was a reduction in the US$ debt of $12.9 million in A$ terms.
For the purposes of monitoring segment performance and allocating resources to a segment, all assets are allocated to a
reportable segment other than cash and central administration assets.
Other Segment Information
Vessel Services
Subsea Services
Project Logistics
Unallocated assets
Total
Depreciation and amortisation
Additions to non-current assets
2021
$’000
2020
$’000
25,739
38,940
3,291
458
3,246
3,091
1,007
2,754
2021
$’000
8,641
2,208
642
2,902
2020
$’000
10,793
1,007
-
187
32,734
45,792
14,393
11,987
MMA Offshore Ltd | Annual Report 2021 73
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 2.
Financial Performance (continued)
2.
Financial Performance (continued)
2.1 Segment Information (continued)
Impairment charges
In addition to the depreciation charges reported above, the Group also recognised impairment charges (see note 3.7) in respect
of vessels and other assets as set out below:
Vessels Service held for continuing operations
Vessels classified as held for sale
Subsea Services classified as held for sale
Total
Geographical information
2021
$’000
-
-
-
-
2020
$’000
-
55,797
1,926
57,723
The Group is based in two principal geographical areas – Australia (country of domicile) and Singapore. However, vessel services,
subsea services and project logistics are provided around the world mainly in Australia, South East Asia, Europe and other
locations.
During the year, the Group operated in a number of countries outside Australia. The Group’s revenue from external customers by
location of operations and information about its non-current assets by location of assets are detailed in the following table:
Location
Australia / New Zealand
Asia / South East Asia
Europe
Other
Total
Revenue from
external customers
2021
$’000
2020
$’000
121,244
143,572
67,160
22,952
26,151
69,635
14,281
45,524
Non-current assets
2021
$’000
138,724
137,357
37,788
30,233
2020
$’000
127,868
152,667
1,619
101,601
383,755
237,507
273,011
344,102
For the purposes of monitoring segment performance and allocating resources to a segment, all assets are allocated to
reportable segments other than cash and central administration assets.
Information about major customers for continuing operations
Included in revenues there are approximately $31.2 million (2020: $41.4 million) which arose from sales to the Group’s largest
customer, revenues of approximately $20.8 million (2020: $34.5 million) which arose from sales to the Group’s second largest
customer and revenues of approximately $20.7 million (2020: $27.8 million) which arose from sales to the Group’s third largest
customer.
2.2
Other Income and Expenses
Profit/(loss) for the year has been arrived at after recognising the following specific
amounts:
Other income and expenses:
Government grants (i)
Other gains and losses:
Net foreign exchange losses
Profit on disposal of property, plant and equipment
Profit on disposal of assets classified as held for sale
Debt forgiveness on banking facility
Debt restructure costs
Revalue contingent consideration liability [MGP]
Other
2021
$’000
2020
$’000
8,251
3,974
(743)
137
1,973
14,757
(426)
(631)
360
23,678
(569)
455
589
-
-
-
25
4,474
Total
(i)
The Group has received Government grants in Australia of $7.3 million (2020: $3.5 million) and in Singapore of $0.9 million
(2020: $0.5 million) to assist in dealing with the impact of the COVID-19 pandemic. This support has been accounted for
on a ‘gross’ basis with the income included in ‘Other income and expenses’ in the Statement of Profit & Loss. The related
employee expenses are recorded in their respective operating segment. From 1 January 2021 onwards, the Company
ceased to qualify for Australian government support, except for the Subsea operations, which ceased to be eligible from 31
March 2021.
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions
attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises
as expenses the related costs for which the grants are intended to compensate. Government grants that are receivable as
compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with
no future related costs are recognised in profit or loss in the period in which they become receivable.
Depreciation and amortisation:
Leasehold buildings and improvements
Vessels
Plant and equipment
Computer Software
Right-of-use assets
Total
Impairment and loss allowance charges:
Loss allowance on trade receivables
Reversal of loss allowance on trade receivable recovery (see note 3.2)
Impairment charge recognised on vessel services cash generating unit
Impairment charge recognised on subsea services cash generating unit
Employee benefits:
Post-employment benefits:
Defined contribution plans
Share based payments:
Equity settled share based payments
Other employee benefits
Total
268
24,295
2,807
213
5,151
94
36,772
2,298
213
6,415
32,734
45,792
327
(1,434)
-
-
13,158
-
55,797
1,926
8,715
9,525
2,071
112,618
123,404
1,257
106,698
117,480
74 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 75
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 2.
Financial Performance (continued)
2.3 Exchange rate movements
The AUD:USD exchange rate increased significantly during the period, from $0.69 to $0.75. This has resulted in the current
period having larger exchange movements on items within Other Comprehensive Income and Statement of Cash Flows.
2.4 Earnings per Share
2.
Financial Performance (continued)
2.5
Income Taxes
Income tax recognised in profit or loss
Tax expense comprises:
Current tax expense in respect of the current year
The calculation of basic earnings per share is based on the following data:
Adjustment recognised in the current year in relation to tax provisions of prior years
Profit / (Loss) for the year used in the calculation of basic earnings per share
Weighted average number of ordinary shares used in the calculation of basic earnings
per share
Weighted average number of ordinary shares
The calculation of diluted earnings per share is based on the following data:
Profit / (Loss) for the year used in the calculation of diluted earnings per share
Weighted average number of ordinary shares used in the calculation of weighted earnings
per share
2021
$’000
2,391
2020
$’000
(94,187)
2021
No.’000
2020
No.’000
276,337
901,886
-
-
276,337
901,886
2021
$’000
2,391
2020
$’000
(94,187)
2021
No.’000
2020
No.’000
276,337
901,866
Effect of dilutive potential ordinary shares
1,774
-
Weighted average number of ordinary shares used for purpose of diluted earnings
per share
278,111
901,886
The weighted average number of shares used for the purposes of calculating both basic and diluted earnings per share have
been adjusted to reflect the capital raising and subsequent share consolidation completed during the period.
Total income tax expense
The income tax expense for the year can be reconciled to accounting loss as follows:
Profit/(Loss) before tax
Income tax benefit calculated at 30%
Effect of revenue that is exempt from taxation
Effect of expenses that are not deductible in determining taxable profit
Effect of tax deductible items not included in accounting profit
Effect of foreign income taxable in Australia
Effect of tax losses utilised
Effect of unused tax losses and temporary differences not recognised as deferred
tax assets
Effect of different tax rates of subsidiaries operating in other jurisdictions
Adjustment recognised in the current year in relation to tax provisions of prior years
Total income tax expense
2021
$’000
2020
$’000
579
392
971
3,362
1,009
(1,535)
6,083
-
566
(5,149)
(973)
578
579
392
971
423
107
530
(93,657)
(28,097)
(801)
26,870
(273)
382
-
2,117
225
423
107
530
The tax rate used for the reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities on
taxable profits under Australian tax law.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the year in certain jurisdictions. Taxable profit differs from profit as
reported in the Consolidated Statement of Profit or Loss and Other Comprehensive Income because of items of income or
expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for
current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted by the reporting date.
2.6 Dividends Provided for or Paid
No dividends have been provided for or paid during the current year.
Adjusted franking account balance
2021
$’000
47,589
2020
$’000
47,589
76 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 77
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021
3.
Assets and Liabilities
3.1 Cash and cash equivalents
Reconciliation of cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand and in banks.
Cash and cash equivalents (i)
Reconciliation of profit/(loss) for the year to net cash flows from operating activities
Profit/ (loss) for the year
Depreciation of non-current assets
Impairment charge of non-current assets
(Gain) on forgiveness of loan
Amortisation of borrowing costs
(Gain) / Loss on sale of property, plant and equipment
(Gain) / Loss on sale of assets classified as held for sale
Unrealised foreign exchange gain
Reversal of loss allowance on receivables
Equity settled share-based payment
Interest expense - leases
Non-controlling interest earnout consideration
Debt restructure costs
Change in net assets and liabilities:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in prepayments
(Increase)/Decrease in inventories
Increase/(Decrease) in current tax balances
Increase/(Decrease) in provisions
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in unearned revenue
Increase/(Decrease) in deferred tax liabilities
Effect of foreign exchange on net assets and liabilities
Net cash flows Provided by operating activities
2021
$’000
2020
$’000
96,226
86,637
2,391
32,734
-
(14,757)
2,827
(137)
(1,973)
743
-
2,071
479
631
426
2,565
(857)
(475)
(1,442)
7,259
(5,649)
2,613
1
(2,537)
26,913
(94,187)
45,792
57,723
-
2,261
(455)
(589)
246
13,158
1,257
-
-
-
11,642
(741)
664
335
2,884
(1,204)
(311)
(14)
-
38,461
(i)
includes $3.1 million from sale of a vessel which was be remitted to the banking syndicate in July 2021.
3.
Assets and Liabilities (continued)
3.2
Trade and Other Receivables
Trade receivables
Allowance for expected credit losses
Other receivables
Total
2021
$’000
66,409
(19,387)
2,842
49,864
2020
$’000
73,537
(22,373)
1,265
52,429
During January 2021, the Group received a payment of US$1.0 million relating to a debtor balance that was fully provisioned
for credit loss as at 30 June 2020. The allowance for credit loss has been reversed with a decrease in ‘Vessel expenses’ in the
Consolidated Statement of Profit & Loss. The group continues to hold promissory notes to the value of US$ 5.1 million and is
enforcing payment of those in the relevant execution courts however the impact of the COVID-19 pandemic continues to affect
our ability to enforce the court orders.
The credit period for customers is negotiated individually on a case by case basis. An allowance has been made for estimated
irrecoverable trade receivable amounts arising from the past rendering of services.
The Group writes off a trade receivable when there is information indicating that the debtor is in significant financial difficulty
and there is no realistic prospect of recovery. Subsequent recoveries of amounts previously written off are credited against the
allowance account.
The Group measures the allowance for expected credit losses for trade receivables at an amount equal to lifetime expected credit
losses (“ECL”) in two categories.
1. Where there has been no significant increase in credit risk since initial recognition, ECL’s are collectively estimated using a
provision matrix based on the Group’s historical credit loss experience adjusted for factors that are specific to geographic
region, general economic conditions and an assessment of current and forecast conditions at reporting date. This has
resulted in ECL’s being applied to debtors aged over 60 days in our international business.
2. Where there has been a significant change in credit risk, ECL’s are individually estimated. This assessment is adjusted for
factors that are specific to the debtor including their financial capacity to make payment, discussions with the debtor on the
status of the receivable and any other information relevant to the assessment of the recoverability.
The following table shows the movement in lifetime ECL that has been recognised for trade receivables in accordance with the
simplified approach set out in AASB 9:
Balance as at 30 June 2020
Transfer to credit-impaired
Amounts recovered
Foreign exchange gains and losses
Balance as at 30 June 2021
3.3
Inventories
Fuel – at cost
Consumables
Work in progress
Total
Inventories are stated at the lower of cost or net realisable value.
Collectively
Assessed
$’000
Individually
Assessed
$’000
Total
$’000
290
22,083
22,373
-
-
(25)
265
327
(1,434)
(1,854)
327
(1,434)
(1,879)
19,122
19,387
2021
$’000
1,763
796
132
2,691
2020
$’000
1,085
998
133
2,216
78 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 79
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021
3.
Assets and Liabilities (continued)
3.4 Assets Classified as Held for Sale
3.
Assets and Liabilities (continued)
3.5 Property, Plant and Equipment (continued)
Non-current assets are classified as 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 measured at the lower of their carrying
amount or fair value less costs of disposal and no depreciation is recorded on these assets. An impairment loss is recognised
for any initial write-down of the asset to fair value less costs of disposal. Information regarding the assets held for sale in the
Statement of Financial Position is presented below.
At 30 June 2021, the Company holds eight (2020: 12) non-core vessels within the fleet to be disposed of. Refer to note 3.7 for
details of impairments recognised on the reclassification of these assets in the year 30 June 2020. No depreciation is recorded
on these assets.
The carrying value of assets classified as held for sale is as follows:
2021
$’000
30,662
20
30,682
2020
$’000
41,685
276
41,961
Vessels (i)
Subsea - ROV Equipment (ii)
Total
(i)
(ii)
(iii)
Decrease in carrying value for assets classified as held for sale is due to the disposal of four vessels with a total carrying
value of $8.7 million.
Decrease in the carrying value of ROV equipment held for sale is due to the disposal of assets with a carrying value of
$0.25 million.
The remainder of the decrease in the carrying value of vessels held for sale is due to the increase in the AUD: USD
exchange rate during the period from 0.69 to 0.75.
3.5 Property, Plant and Equipment
Year ended 30 June 2020
At 1 July 2019
Gross carrying amount
Buildings and
Improvements
at cost $’000
Vessels
at cost
$’000
Plant and
Equipment
at cost
$’000
Total
$’000
14,763
1,024,504
13,832
1,053,099
Accumulated depreciation and impairment loss
(13,576)
(545,922)
(12,360)
(571,858)
Carrying amount
1,187
478,582
1,472
481,241
Additions
Disposals
Acquisition of subsidiaries
Reclassified as held for sale
Depreciation
Impairment losses recognised in profit and loss
Effect of foreign currency exchange differences
Total
Balance at 30 June 2020
Gross carrying amount
-
(3)
1,043
-
(94)
-
(76)
870
9,639
-
-
(41,685)
(36,772)
(55,797)
7,470
(117,145)
809
(367)
11,618
(276)
(2,298)
(1,926)
135
7,695
10,448
(370)
12,661
(41,961)
(39,164)
(57,723)
7,529
(108,580)
16,739
687,527
17,165
721,431
Accumulated depreciation and impairment loss
(14,682)
(326,090)
Carrying amount
2,057
361,437
(7,998)
9,167
(348,770)
372,661
Year ended 30 June 2021
At 1 July 2020
Gross carrying amount
Buildings and
Improvements
at cost $’000
Vessels
at cost
$’000
Plant and
Equipment
at cost
$’000
Total
$’000
16,739
687,527
17,165
721,431
Accumulated depreciation and impairment loss
(14,682)
(326,090)
Carrying amount
2,057
361,437
(7,998)
9,167
1,915
(187)
-
-
(348,770)
372,661
9,390
(192)
-
-
7,475
(5)
-
-
(24,295)
(2,807)
(27,370)
-
(20,992)
(37,817)
-
(39)
(1,118)
-
(21,090)
(39,262)
-
-
-
-
(268)
-
(59)
(327)
Additions
Disposals
Acquisition of subsidiaries
Reclassified as held for sale
Depreciation
Impairment losses recognised in profit and loss
Effect of foreign currency exchange differences
Total
Balance at 30 June 2021
Gross carrying amount
15,370
654,494
15,128
684,992
Accumulated depreciation and impairment loss
(13,640)
(330,874)
Carrying amount
1,730
323,620
(7,079)
8,049
(351,593)
333,399
Leasehold buildings and improvements, vessels and plant and equipment are stated at cost less, where applicable, accumulated
depreciation and impairment losses. Cost includes expenditure that is directly attributed to the acquisition of the item.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives.
Buildings and improvements are depreciated over the period of the lease or estimated useful life using the straight-line method.
Key source of estimation uncertainty
The Group reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. At the
end of this reporting period, the Directors have determined that there was no adjustment required to the Group’s property, plant
and equipment’s useful lives.
80 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 81
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 3.
Assets and Liabilities (continued)
3.6 Right of use assets
Year ended 30 June 2020
At 1 July 2019
Gross carrying amount
Accumulated depreciation and impairment loss
Carrying amount
Additions
Acquisition of subsidiaries
Depreciation
Total
Balance at 30 June 2020
Gross carrying amount
Accumulated depreciation
Carrying amount
Year ended 30 June 2021
At 1 July 2020
Gross carrying amount
Accumulated depreciation
Carrying amount
Additions
Disposals
Depreciation
Other
Total
Balance at 30 June 2021
Gross carrying amount
Accumulated depreciation
Carrying amount
The Group leases several assets including
Buildings and
Improvements
at cost $’000
Vessels
at cost
$’000
Plant and
Equipment
at cost
$’000
5,002
-
5,002
264
8,093
(4,295)
4,062
13,359
(4,295)
9,064
13,359
(4,295)
9,064
3,778
-
(3,392)
(31)
355
17,137
(7,718)
9,419
795
-
795
1,236
-
(1,779)
(543)
2,031
(1,779)
252
2,031
(1,779)
252
1,094
-
(1,310)
-
(216)
3,125
(3,089)
36
441
-
441
39
662
(341)
360
1,142
(341)
801
1,142
(341)
801
131
-
(449)
-
(318)
1,273
(790)
483
Total
$’000
6,238
-
6,238
1,539
8,755
(6,415)
3,879
16,532
(6,415)
10,117
16,532
(6,415)
10,117
5,003
-
(5,151)
(31)
(179)
21,535
(11,597)
9,938
• Subsea and operating premises at Welshpool, Australia which expires 30 April 2025, with an option to extend 2 x 5-year terms.
• Current head office premises in Perth which expires 30 November 2026, with an option to extend for 1 x 5-years was entered
into in the current financial year.
• Batam shipyard lease which expires in 2042.
• Various items of plant and equipment with an average lease term of 5 years.
Amounts recognised in profit and loss
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Income from sub-leasing right-of-use assets
82 MMA Offshore Ltd | Annual Report 2021
2021
$’000
5,151
479
357
2020
$’000
6,415
600
68
3.
Assets and Liabilities (continued)
3.7
Impairment of Non-Current Assets
The Group performs a review of non-current asset values at each reporting period and whenever events occur or changes
in circumstances indicate that the carrying amount of an asset group may be impaired. Market conditions are monitored for
indications of impairment for all of the Group’s operating assets and where such indications are identified, a formal impairment
assessment is performed.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss
immediately.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss.
Impairment testing
The Group has identified the following indicators of impairment at 30 June 2021:
•
the carrying amount of the net assets of the Group is greater than the Company’s market capitalisation; and
• challenging market conditions in both Australia and internationally as the impact of the COVID-19 pandemic and lower oil
prices continue to impact across the industry.
As a result, the Group assessed the recoverable amounts of the Vessels, Subsea and Project Logistics Cash-Generating Units
(‘CGU’).
The assessment resulted in the following impairment charges included in profit or loss:
Segment/CGU
Class of asset
Property, Plant & Equipment
Assets classified as held for sale
Property, Plant & Equipment
Method
FVLCOD
FVLCOD
ViU
Assets classified as held for sale
FVLCOD
Property, Plant & Equipment
ViU
Vessels
Vessels
Subsea
Subsea
Project Logistics
Total
Impairment charge
2021
$’000
-
-
-
-
-
2020
$’000
-
55,797
-
1,926
-
57,723
The inputs used in deriving the recoverable amount of each CGU is categorised in accordance within the following levels of the
fair value hierarchy:
CGU
Vessels
Continuing operations
Classified as held for sale
Subsea
Continuing operations
Classified as held for sale
Project Logistics
Level 3(i)
$’000
323,508
30,662
20,230
20
4,507
Recoverable
Amount
$’000
323,508
30,662
20,230
20
4,507
(i)
Level 3 inputs are unobservable inputs used to measure fair value. In our Vessels calculations, the inputs used are based
on both observable and unobservable market data prepared by an independent valuation consultant together with
internally determined valuations. Due to the unobservable market data and internal valuation components of the valuations,
the inputs are considered Level 3.
In our Subsea and Project Logistics calculations, the inputs are based on unobservable market data and internal estimates
and assumptions resulting in the classification as Level 3.
MMA Offshore Ltd | Annual Report 2021 83
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 3.
Assets and Liabilities (continued)
3.
Assets and Liabilities (continued)
3.7
Impairment of Non-Current Assets (continued)
3.7
Impairment of Non-Current Assets (continued)
Inputs in determining the classification level within the fair value hierarchy are reassessed at each reporting period as part of the
impairment process. The inputs used within calculations are assessed and discussed internally to determine the extent to which
they can be compared to observable market information and classified accordingly.
Industry Conditions
This financial year has seen a decline in overall market conditions with two major factors contributing;
1. COVID-19
2. Oil Price
Firstly, the impact of the COVID-19 pandemic has created and continues to create uncertainty in world markets and the economy
broadly. In our industry specifically, the impact has led to our customers delaying and or cancelling projects resulting in a
reduction in revenue. In addition, the logistics of managing and crewing vessels and projects around the globe has become more
difficult due to various travel and movement restrictions. Please refer to the Review of Operations for a more detailed summary of
the impact.
During the reporting period the brent oil price remained stable around US$57 for the March 2021, and fluctuated in an upwards
range for the three months to 30 June 2021 with an end price of approximately US$77. While this upward trend is positive, there
is still some uncertainty as to the levels and timing of the price settling on a longer term basis.
Vessels
A group of non-core vessels in the fleet were classified as being held for sale as at 30 June 2020. This classification has resulted
in two separate fair value assessments for the fleet, being those core vessels used for continuing operations and those non-core
vessels that are classified as held for sale.
Vessels - Continuing Operations
The recoverable amount of the core vessels was determined using a market-based approach, reflecting the value which could be
expected to be realised through the disposal of the vessels, in an orderly market, on an “as is where is” basis between a willing
buyer and willing seller.
An independent valuation of the fleet was undertaken by a specialist marine valuation consultancy and shipbroking company. In
preparing their valuation report, some of the factors they considered include the current market conditions in which the vessels
operate, a review of recent market sales of similar vessels, consideration of the specification and earnings potential of each
vessel and the inherent value and replacement cost of each vessel.
A key input into the recoverable amount of the CGU was the application of a discount to the independent vessel valuation to
reflect the amount which would be achieved if the core fleet was disposed of in one single transaction. The report separately
considers the classified as held for sale fleet and core fleet and provides guidance on respective en bloc discounts. This results
in a lower % for the core fleet which is considered appropriate as it acknowledges the underlying differences in the fleets with the
held for sale fleet. The Board have decreased this discount to 15.8% for the current period. This specific rate has been used as it
falls within the range specified by the independent valuer and is the breakeven point at which there is nil impairment. In the June
2020 impairment assessment, the company used a discount of 19.6%, representing a combined discount for the entire fleet.
Consistent with previous periods, selling costs are also assumed to be 2% of the vessel sales value.
The following factors were taken into account in determining this value:
•
•
•
the movement in the oil price during the period
the continuing impact of the COVID-19 pandemic
the adopted % being within the range provided by the valuer
Key assumptions and sensitivity
The FVLCOD method requires an estimate of the current market value of the assets and the costs that would be associated
with a disposal of the assets. In estimating the current market value of the assets, the Group engaged experienced and qualified
valuers to perform valuations. Estimates have also been made on the discount to the independent vessel valuation to reflect the
amount which would be achieved if the fleet was disposed of in one single transaction, plus the selling costs associated with the
sale.
The following provides information on the assumptions made in determining the fair value of the vessels, together with a
sensitivity analysis showing the potential impact on the vessel carrying value based on the movement (increase or decrease) in
the assumption.
Assumption
En bloc discount
Selling costs
Sensitivity
movement
2.5
0.5
Change in
carrying value
$’000
9,609
1,651
Rate used
15.8%
2%
Vessels - Classified as Held for Sale
The recoverable amount of the non-core vessels was determined by the directors using a market based approach, reflecting the
value which could be expected to be realised through an accelerated sale program.
In assessing the fair value of the non-core vessels, the Company has taken into consideration the following factors:
•
•
•
•
the current market values assessed by the independent specialist marine consultancy and broking company
the recent market evidence of deemed distressed sales of vessels of similar age and classification
the forecast costs the Company would incur in holding the respective vessels
the accelerated timing in which the Company wants to complete the sales
In updating the values at 30 June, the Group also took into account current vessel sales contracts, marketing activities and
negotiations.
The price that would be expected to be received in these circumstances for these non-core vessels would be less than if sold in
an orderly transaction with no time restrictions to complete the sale
Key assumptions and sensitivity – Classified as Held for Sale assets
The FVLCOD method requires an estimate of the current market value of the vessels and costs that would be associated with
a disposal of the assets. In estimating the current market value of the vessels and the value to be achieved in an accelerated
sale, estimates have been made about the fair value to be realised. If the value to be realised was 5% higher or lower than the
impairment on these vessels would decrease or increase by $1.2 million.
Subsea
Items of plant & equipment from the Subsea CGU were classified as being held for sale as at 30 June 2020. This classification
has resulted in two separate recoverable value assessments, being for the ongoing business and the plant & equipment that is
held for sale at 30 June 2021 majority of the held for sale assets have been disposed.
Subsea - Continuing Operations
To assess the recoverable amount of the Subsea CGU, a ViU assessment was performed using five year cash flows and a
terminal value.
There were no changes in the underlying assumptions used for the assessment as at 30 June 2020, except for expected
cashflows for the 12 months to 30 June 2021 being updated to reflect recent forecasts. In determining the forecast revenues and
operating expenses, consideration has been given to the following:
• current and potential new contracts for the Subsea business
• current and expected tendering activities
• expected Subsea services activity in the region
• cost of running the business including labour and overheads
• project work has been budgeted by applying estimated gross margins, based on historical results, to the estimated revenues
of projects
•
in assessing future revenues, potential projects are identified with estimates of their total revenue. A likelihood of success % is
then applied to the revenue to reflect a risk weighted likely revenue amount
84 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 85
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 3.
Assets and Liabilities (continued)
3.7
Impairment of Non-Current Assets (continued)
A discount rate of 10.9% (2020: 10.6%) has been used for ViU assessments.
In the budget approved by the board, forecast revenues have been kept consistent for the FY22 year to reflect the continuing
impact of the COVID-19 pandemic. In FY23 and FY24, revenues are budgeted to increase on the assumption of an increase in
activity in these years. Nil revenue growth in FY25 and FY26 has been assumed, with terminal year growth of 2% (2020: 2%)
reflecting a long term inflation rate estimate.
Key assumptions and sensitivity
The recoverable value of the Subsea assets in the current year was assessed using a ViU approach.
The estimation of future cashflows has been prepared based on approved group budgets with estimates and assumptions
regarding future revenue growth rates, operating margins and discount rates.
The following provides information on the assumptions made in determining the recoverable value of the assets, together with
a sensitivity analysis showing the potential impact on the carrying value based on the movement (increase or decrease) in the
relevant estimate or assumption.
Assumption
Discount rate
Terminal year growth rate
Rate used
10.9%
2.0%
Sensitivity
movement
Increase/(Decrease)
in recoverable value
$’000
+0.5%
-0.5%
+0.5%
-0.5%
(2,391)
2,675
1,754
(1,569)
Further, assuming achievement of FY22 budgeted performance, unless an annual average revenue increase of 5% (2020: 5%)
p.a was achieved over the remaining balance of the five year period to 30 June 2025, then the carrying cost and value in use of
the relevant assets may need to be revisited.
Subsea - Classified as Held for Sale
The majority of Subsea assets classified as held for sale were disposed of during the reporting period. The remaining items are
still held at their expected recoverable value.
Project Logistics
To assess the recoverable amount of the Project Logistics CGU, a ViU assessment was performed using five year cash flows and
a terminal value.
In determining the forecast revenues and operating expenses, consideration has been given to the following:
• current and potential new contracts for the Project Logistics business
• current and expected tendering activities
• expected Project Logistics services activity in the region
• cost of running the business including labour and overheads
• project work has been budgeted by applying estimated gross margins, based on historical results to the estimated revenues
of projects
•
in assessing future revenues, potential projects are identified with estimates of their total revenue. A likelihood of success % is
then applied to the revenue to reflect a risk weighted likely revenue amount
A discount rate of 10.9% (2020: 10.6%) has been used for ViU assessments.
3.
Assets and Liabilities (continued)
3.8 Trade and Other Payables
Trade payables
Other payables and accruals
Goods and services tax payable
Total
2021
$’000
8,675
26,895
660
36,230
2020
$’000
14,447
26,416
1,016
41,879
The average credit period on purchases of all goods is 30 - 45 days. The Group monitors payments to ensure that payables are
generally paid within the credit time frame.
3.9 Borrowings
Secured – at amortised cost
Current
Bank loans(i)
Unamortised loan fees(ii)
Total
Non-Current
Bank loans(i)
Unamortised loan fees(ii)
Total
2021
$’000
2020
$’000
15,568
-
15,568
15,000
(2,261)
12,739
147,932
258,404
-
(566)
147,932
257,838
Summary of borrowing arrangements:
(i)
During the financial year and in conjunction with a capital raising, MMA restructured its syndicated debt facility. As part
of the restructure, three of the banks exited the facility and total debt was reduced by approximately $91.9 million with
repayments totalling $67.3 million to the exiting banks and $9.8 million to the remaining banks.
The three exiting banks also agreed to debt concessions of approximately $14.8 million. $0.4 million of refinancing costs
incurred on the refinancing have been offset against the debt concession amount and are reflected in ‘Other income’ in the
Consolidated Statement of Profit & Loss.
The new terms of the syndicated facility are:
• Extension of the loan facility to January 2025
• The fixed amortisation profile of the facility is now
• $12.5 million during FY22
• $15.0 million during FY23
• $15.0 million during FY24
• $7.5 million during FY25 and the outstanding balance on 31 January 2025.
• Additional variable amortisation of the facility occurs from
• proceeds from vessels classified as held for sale
• cash sweep of amounts above $70.0 million from December 2021 while the gross leverage ratio is above 3.5
• The interest rate payable is a base rate (LIBOR for US$ denominated loans, BBSY for A$ denominated loans plus a
margin calculated by reference to the groups leverage ratio as below:
Leverage ratio
<3.0
3.0-5.5
>5.5
Interest margin
3.00%
3.75%
4.00%
86 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 87
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 3.
Assets and Liabilities (continued)
3.9 Borrowings (continued)
3.
Assets and Liabilities (continued)
3.10 Lease liabilities
• The interest payable on the US$ denominated loan is currently linked to LIBOR, and this will be phased out globally
over the next few years. As such, MMA will engage with the banking syndicate to discuss the timeline for transition to
a new interest rate mechanism to replace LIBOR, which is not expected to happen until the company’s 2022 financial
year. At this time, the change in the interest rate benchmark is not expected to have any material effect on the loan
amount, classification of the loan or the covenant other than a change in reference rate.
• The group has the right to pay dividends /conduct share buybacks once the gross leverage is below 3.5x.
• Resetting the loan covenants to align with the outlook of the business in the context of COVID-19
The Facility is fully secured by fixed and floating charges given by certain controlled entities within the Group, registered
ship mortgages over a number of vessels owned by certain controlled entities and real property mortgages.
As at the end of the reporting period, the amounts owing under the facility comprises an A$ amount of $69.3 million and a
US$ amount of $70.5 million. The US$ amount qualifies as an accounting hedge of a net investment in a foreign operation
and the resulting foreign exchange movements are therefore included in Other Comprehensive Income offsetting the foreign
exchange movements in the US$ denominated entities.
(ii)
The debt restructure resulted in a substantial change to the terms and cashflows of the facility and as a result the
unamortised loan fees from the old facility were fully amortised during the financial year.
Available borrowing facilities
Secured loan facilities with various maturity dates through to 2021 and which may
be extended by mutual agreement:
Amount used
Amount unused
Total
There is no re-draw available on the existing facilities.
Reconciliation of liabilities arising from financing activities:
2021
$’000
2020
$’000
163,500
273,404
-
-
163,500
273,404
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash
changes.
2021
Balance at 1 July 2020
Repayment of loan
Loan forgiveness
Non-cash foreign exchange movement
Amortised loan fees
Balance at 30 June 2021
2020
Balance at 1 July 2019
Repayment of borrowings
Non-cash foreign exchange movement
Capitalisation of payment-in-kind interest
(from 2017)
Unamortised loan fees
Balance at 30 June 2020
Hire purchase
liability
$’000
-
-
-
-
-
-
$’000
4
(4)
-
-
-
-
Bank loans
$’000
273,404
(81,762)
(14,757)
(13,385)
163,500
$’000
270,634
(5,801)
3,243
5,328
-
273,404
Loan fees
$’000
Total
$’000
(2,827)
270,577
-
-
-
2,827
-
$’000
(5,088)
-
-
-
2,261
(2,827)
(81,762)
(14,757)
(13,385)
2,827
163,500
$’000
265,550
(5,805)
3,243
5,328
2,261
270,577
Opening Balance
Additions
Repayments
Interest expense
Acquisition of subsidiaries
Net currency exchange differences
Balance at end of financial year
Current
Non-current
Total
Maturity analysis:
Year 1
Year 2
Year 3
Year 4
Year 5
Onwards
Less: unearned interest
Balance at end of the year
2021
$’000
10,893
5,003
(6,237)
478
-
-
2020
$’000
6,238
1,539
(6,324)
600
8,842
(2)
10,137
10,893
3,502
6,635
10,137
3,723
2,227
2,150
1,868
567
340
10,875
(738)
10,137
3,729
7,164
10,893
4,224
3,231
1,610
1,607
1,382
-
12,054
(1,161)
10,893
The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the
Group’s treasury function.
3.11 Provisions
Current
Ongoing legal claims
Employee benefits – annual leave
Employee benefits – long service leave
Total
Non-current
2021
$’000
2020
$’000
11,936
5,844
5,438
23,218
5,602
5,112
5,101
15,815
Employee benefits – long service leave
112
256
The Group has various legal claims currently in progress relating to contractual disputes. As disclosed to the ASX on 23 June
2021, a final arbitration award was made a wholly owned subsidiary of MMA. The subsidiary is currently taking Singaporean legal
advice regarding next steps which may include applying to the Supreme Court of Singapore for orders setting aside the Final
Award.
Significant Estimates
In the current year, the Group has a total provision of $11.9 million (2020: $5.6 million), with an additional $6.4 million in provisions
raised during the year. These amounts have been estimated by the directors as a possible outflow that may be required to settle
these legal claims. As these legal claims have not been finalised, this provision is only an estimate and the actual liability may
differ depending on the outcome of these hearings.
88 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 89
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 3.
Assets and Liabilities (continued)
3.11 Provisions (continued)
3.
Assets and Liabilities (continued)
3.12 Deferred Tax Balances (continued)
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave in
the period the related service is performed.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration
rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured at the present value of the estimated future cash
outflows to be made by the Group in respect of services provided by employees up to reporting date.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at
reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using
the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
3.12 Deferred Tax Balances
Deferred tax assets/(liabilities) arise from the following:
2021
Gross deferred tax liabilities:
Opening
Balance
$’000
Recognised in
Profit or Loss
$’000
Recognised
in Equity
$’000
Acquisition of
Subsidiary
$’000
Closing
Balance
$’000
(27,469)
(154)
3
(1,662)
(29,281)
2,024
24,585
2,616
29,225
(56)
(312)
(24,766)
(117)
(3)
121
-
-
-
-
-
-
-
-
-
-
-
(375)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(147)
-
-
-
Property, plant and equipment
(24,619)
(2,850)
Inventory
Receivables
Other
Gross deferred tax assets:
Provisions
Unused tax losses and credits
Other
Total
2020
(117)
(3)
121
(24,618)
180
24,334
104
24,618
-
(36)
6
(1,783)
(4,663)
1,844
251
2,512
4,607
(56)
Gross deferred tax liabilities:
Property, plant and equipment
(19,729)
(4,515)
(312)
(118)
-
195
115
121
Inventory
Receivables
Other
Gross deferred tax assets:
Provisions
Unused tax losses and credits
Other
Total
(20,159)
(4,084)
(375)
(147)
(24,765)
40
19,440
679
20,159
-
140
4,477
(533)
4,084
-
-
417
(42)
375
-
-
130
(40)
90
(57)
180
24,464
64
24,708
(57)
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period(s) in which the liability is
settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting
date.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively.
Unrecognised deferred tax assets
Deductible temporary differences, unused tax losses and unused tax credits for which no
deferred tax assets have been recognised are attributable to the following:
Tax losses (revenue in nature)
Tax losses (capital in nature)
Deductible temporary differences
2021
$’000
2020
$’000
86,798
19,727
4,474
85,136
19,748
4,369
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the
head entity. Under the terms of the tax funding arrangement, MMA Offshore Ltd and each of the entities in the tax-consolidated
group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset
of the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the tax-consolidated group.
The tax sharing agreement entered into between members of the tax-consolidated group provides for the determination of the
allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations or if any entity
should leave the tax consolidated group. The effect of the tax sharing agreement is that each member’s liability for tax payable by
the tax consolidated group is limited to the amount payable to the head entity under the tax funding arrangement.
90 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 91
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 4.
Capital Structure
4.1
Issued Capital
Fully Paid Ordinary Shares
2021
No.’000
2021
$’000
Balance at beginning of financial year
925,730
667,251
Issue of shares
Share issue costs
Share consolidation
2,667,570
-
(3,233,972)
80,020
(5,006)
-
2020
No.’000
858,077
67,655
-
-
2020
$’000
654,735
12,516
-
-
Balance at end of financial year (i)
359,328
742,265
925,732
667,251
During the current reporting period the company completed a capital raising totalling $80.0 million resulting in the issuing of
2,667,570,000 additional shares. The proceeds were used for partial repayments of the group’s syndicated debt facility and
working capital.
A share consolidation was completed during February 2021 through the conversion of every ten shares held by a shareholder
into one share. This reduced the number of shares on issue by 3,223,972,000 shares.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
(i)
includes non-controlling interest equity balance of $0.018 million (2020: $0.019 million).
Share Rights
As at 30 June 2021, executives and employees held rights over 14,799,157 ordinary shares (2020: 35,188,068).
Share rights granted under the employee share rights plans carry no right to dividends and no voting rights.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
4.2 Reserves
Employee equity settled benefits
Hedging
Foreign currency translation
Balance at end of financial year
2021
$’000
3,949
2020
$’000
1,878
(56,511)
(69,423)
176,667
124,105
206,850
139,305
The employee equity settled benefits reserve arises on the grant of share rights to executives and employees under the
Company’s share rights plans. Amounts are transferred out of the reserve and into issued capital when the rights vest or expire.
The hedging reserve is used to record gains and losses on hedges designated as cash flow hedges including hedges of net
investments in a foreign operation. Gains and losses accumulated in the hedge reserve are taken to the profit or loss when the
hedged transaction impacts the profit or loss, or is included as an adjustment to the initial carrying amount of the hedged item.
For a net investment in a foreign operation any gains and losses are taken to profit or loss on disposal of the foreign operation.
The foreign currency translation reserve represents exchange differences relating to the translation from the functional currencies
of the Group’s foreign controlled entities into Australian Dollars.
The assets and liabilities of the Group’s foreign operations are translated into Australian Dollars using exchange rates prevailing
at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period.
Exchange differences arising, if any, are recognised through other comprehensive income and recognised in equity.
On the disposal of the foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation), all of the accumulated
exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss.
4.
Capital Structure (continued)
4.3 Non-controlling interests
Summarised financial information in respect of each of the Group’s subsidiaries that has material non-controlling interests is set
out below. The summarised financial information below represents amounts before intragroup eliminations.
MMA Global Projects Pte. Ltd
Current Assets
Non-current Assets
Current Liabilities
Non-current Liabilities
Equity attributable to owners of the Company
Non-controlling interests
Revenue
Expenses
Profit (loss) for the year
Profit (loss) attributable to owners of the Company
Profit (loss) attributable to the non-controlling interests
Profit (loss) for the year
Total comprehensive income attributable to owners of the Company
Total comprehensive income attributable to the non-controlling interests
Total comprehensive income for the year
Net cash inflow (outflow) from operating activities
Net cash inflow (outflow) from investing activities
Net cash inflow (outflow) from financing activities
Net cash inflow (outflow)
Balance at 1 July 2019
Share of profit/(loss) for the year
Non-controlling interests arising on the acquisition of MMA Global Projects Pte. Ltd
Balance at 30 June 2020
Balance at 1 July 2020
Share of profit/(loss) for the year
Balance at 30 June 2021
2021
$’000
2,747
89
(3,870)
-
(828)
(207)
10,958
11,113
(155)
(124)
(31)
(155)
(124)
(31)
(155)
929
-
-
929
2020
$’000
1,149
96
(2,199)
-
(763)
(191)
2,133
3,185
(1,052)
(842)
(210)
(1,052)
(842)
(210)
(1,052)
127
(96)
771
802
(210)
19
(191)
(16)
(207)
92 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 93
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 4.
Capital Structure (continued)
4.4 Capital Risk Management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns, while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains
unchanged from the 2020 financial year.
The capital structure of the Group consists of net debt (borrowings as detailed in note 3.9 offset by cash at bank balances) and
equity of the Group (comprising issued capital and reserves as detailed in notes 4.1 and 4.2 and accumulated losses).
The Group is not subject to any externally imposed capital requirements other than normal banking requirements.
Based on recommendations of management and the Board, the Group will balance its overall capital structure through new share
issues as well as the establishment of new borrowing facilities or repayment of existing facilities. The Group uses its leverage ratio
(measured as debt to property plant & equipment) to manage its capital. The ratio is monitored on a monthly basis by the Board
and management.
Leverage Ratio
The leverage ratio at the end of the reporting period was as follows:
Debt (i)
Cash and cash equivalents
Net debt
Property, plant & equipment (ii)
Leverage ratio
2021
$’000
2020
$’000
163,500
273,404
(96,226)
67,274
364,080
18%
(86,637)
186,767
414,622
45%
(i)
(ii)
Debt is defined as gross long and short-term borrowings, as detailed in note 3.9.
Property, plant and equipment includes all fixed assets owned by the group, as detailed in note 3.5.
The significant improvement in the capital ratio during the year is due to the proceeds from the capital raising being used to repay
a portion of the debt facility. In addition, as part of the debt restructure, A$14.8 million of debt concessions were obtained from
the banking syndicate, further reducing the Net debt amount.
5. Other Notes
5.1 Commitments for Expenditure
Capital expenditure commitments
Plant and Equipment
Vessels
Total
5.2 Share Based Payments
Share rights incentive plans
2021
$’000
357
710
1,067
2020
$’000
-
1,136
1,136
The Group has established ownership based compensation plans whereby executives and employees of the Group have been
issued rights over ordinary shares of MMA Offshore Limited.
Upon exercise, each share right, converts into one ordinary share of MMA Offshore Limited. No amounts are paid or are payable
by the recipient on receipt of the rights. The rights carry no entitlement to dividends and no voting rights. Holders of rights do not
have the entitlement, by virtue of the right, to participate in any share issue of the Company. The rights may be exercised at any
time from their vesting date to the date of their expiry. The rights are not quoted on the ASX.
The following share based payment arrangements were in existence during the current reporting period:
Series
Number issued
Grant Date
Expiry Date
(1) Issued 16 November 2018
1,062,563
19 Oct 2018
1 Jul 2023
(2) Issued 2 December 2018
258,144
21 Nov 2018
1 Jul 2023
(3) Issued 8 June 2020
1,846,954
29 Nov 2019
1 Jul 2024
(4) Issued 8 June 2020
351,145
21 Nov 2019
1 Jul 2024
(5) Issued 29 April 2021
1,758,356
28 Jan 2021
1 Jul 2025
(6) Issued 29 April 2021
4,905,329
28 Jan 2021
1 Jul 2025
(7) Issued 29 April 2021
4,616,666
28 Jan 2021
1 Nov 2025
Exercise
price
$
Fair Value at
Grant date
$
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.11
0.10
0.16
0.16
0.14
0.20
0.17
The number of rights issued in Series 1,2,3 and 4 have been adjusted to reflect the impact of the 1 for 10 share consolidation
undertaken during the year.
Performance Rights issued during the 2019 financial year as part of Series 1 and 2 to executives and employees are subject to
achievement of a number of vesting targets. 25% of the rights are subject to achieving a net debt to EBITDA ratio, 25% relate
to the Company securing refinancing of its existing debt facilities and the remaining 50% are subject to the Company’s Total
Shareholder Return percentile ranking relative to a selected Peer Group over the three-year vesting period.
Performance Rights issued during the 2020 financial year as part of Series 3 and 4 to executives and employees are subject to
achievement of a number of vesting targets.
For Key Management Personnel, 50% of the rights are subject to achieving a return on assets of greater than 10% at the end of
the three-year vesting period and the remaining 50% are subject to the Company’s Total Shareholder Return percentile ranking
relative to a selected Peer Group over the three-year vesting period.
For other employees, 40% of the rights are subject to achieving a return on assets of greater than 10% at the end of the three-
year vesting period, 20% relate to a retention hurdle with the participant required to be employed the Group at the end of the
three-year vesting period and the remaining 40% are subject to the Company’s Total Shareholder Return percentile ranking
relative to a selected Peer Group over the three-year vesting period.
Performance Rights issued during the 2021 financial year as part of Series 5,6 and 7 to executives and employees are subject to
achievement of a number of vesting targets.
94 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 95
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 5. Other Notes (continued)
5.2 Share Based Payments (continued)
For the Series 5 issue to Key Management Personnel, the number of rights vesting are subject to the company share price
reaching a minimum level of $0.65, with pro rata vesting on a straight line basis up to 100% vesting if the share price is $0.96 or
higher.
For the Series 6 issue to other employees, 30% relate to a retention hurdle with the participant required to be employed by the
Group at the end of the three-year vesting period and the remaining 70% are subject to the same share price hurdle as Series 5.
For the Series 7 issue to Key Management Personnel, 30% relate to a retention hurdle with the participant required to be
employed by the Group at the end of the three year vesting period and the remaining 70% vests if the share price is larger than
or equal to $0.90.
Please refer to the Remuneration Report on pages 42 to 54 for further details of Performance Rights issued to executives and
employees.
Fair value of share rights granted during the year
The weighted average fair value of rights issued during the year are detailed in the above table. The rights were valued using the
Monte Carlo simulation model.
Equity settled share based payments to employees are measured at fair value of the equity instrument at grant date.
The following shows the inputs into the valuation model for the rights granted during the year:
Inputs into the model
Grant date share price
Exercise price
Expected volatility
Life of rights
Dividend yield
Risk free rate
Series 5
Series 6
Series 7
$0.33
$0.00
60%
$0.33
$0.00
60%
$0.33
$0.00
60%
2.4 years
2.4 years
2.8 years
Nil
0.11%
Nil
0.11%
Nil
0.11%
Movement in share rights during the period
The fair value determined at the grant date of the equity settled share based payments is expensed on a straight-line basis over
the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in
equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest.
The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects
the revised estimate, with corresponding adjustment to the employee equity settled benefits reserve.
The following reconciles the outstanding share rights at the beginning and end of the financial year:
2021
2020
Employee Share Right Plans
Balance at the beginning of the financial year
Adjustment for share consolidation
Issued during the financial year
Expired during the financial year
Weighted
average
exercise price
$
Weighted
average
exercise price
$
Number of
rights
Number of
rights
35,188,068
(31,669,263)
11,280,352
0.00
13,207,075
-
-
0.00
21,980,993
-
-
-
0.00
-
0.00
-
0.00
-
Balance at the end of the financial year
14,799,157
0.00
35,188,068
Exercisable at end of the financial year
-
-
-
5. Other Notes (continued)
5.2 Share Based Payments (continued)
Share rights outstanding at the end of the year
The following share rights were outstanding at the end of the financial year:
Series
(1) Issued 16 November 2018
(2) Issued 2 December 2018
(3) Issued 8 June 2020
(4) Issued 8 June 2020
(5) Issued 29 April 2021
(6) Issued 29 April 2021
(7) Issued 29 April 2021
Total
Number
1,062,563
258,144
1,846,954
351,145
1,758,356
4,905,329
4,616,666
14,799,157
Exercise price
$
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Expiry Date
1 July 2023
1 July 2023
1 July 2024
1 July 2024
1 Jul 2025
1 Jul 2025
1 Nov 2025
5.3 Key Management Personnel Compensation
Please refer to the Remuneration Report for details of key management personnel.
The aggregate compensation made to the Directors and other key management personnel of the Company and the Group is set
out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share based payments
Total
2021
$
2020
$
3,279,417
3,443,131
183,141
32,938
-
612,072
194,007
43,936
962,832
663,361
4,107,568
5,307,267
5.4 Related Party Transactions
The immediate parent and ultimate controlling party of the Group is MMA Offshore Limited.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related
parties are disclosed below.
Trading transactions
During the year, the Group entities did not enter into any trading transactions with related parties that are not members of the
Group.
There were no outstanding balances due from related parties that are not members of the Group (2020: Nil)
Loans to related parties
There were no loans to related parties during the year.
Other related party transactions
Other transactions that occurred during the financial year between entities in the wholly owned Group were the charter of vessels
and subsea services. These are all provided at commercial rates.
96 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 97
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 5. Other Notes (continued)
5.5 Remuneration of Auditors
Deloitte and related network firms*
Audit or review of financial reports:
- Group
- Subsidiaries and joint operations
2021
$
2020
$
254,625
324,571
579,196
248,850
303,185
552,035
Other assurance and agreed-upon procedures under other legislation or contractual
arrangements
4,860
4,682
Other services:
- Other consulting services
- Tax compliance services
-
-
-
40,894
-
40,894
584,056
597,611
Following a detailed review by the Audit and Risk Committee of the nature of the non-audit services provided by the external
auditor during the year, the Board has determined that the services provided, and the amount paid for those services, are
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth) and that the
auditor’s independence has not been compromised.
5. Other Notes (continued)
5.6 Subsidiaries
The Group’s material subsidiaries at the end of the reporting period are as follows:
Note
Country of
Incorporation
Ownership
Interest 2021
%
Ownership
Interest 2020
%
Parent Entity
MMA Offshore Limited
Subsidiaries
MMA Offshore Vessel Operations Pty Ltd
MMA Offshore Charters Pty Ltd
MMA Offshore Supply Base Pty Ltd
MMA Offshore Asia Pte Ltd
MMA Subsea Services Pty Ltd
(i)
Australia
(ii) (iii)
(ii) (iii)
(ii) (iii)
(ii) (iii)
Australia
Australia
Australia
Singapore
Australia
MMA Offshore Vessel Holdings Pte Ltd
(ii)
Singapore
MMA Offshore Malaysia Sdn Bhd
MMA Offshore Shipyard and Engineering Services Pte Ltd
Airia Jaya Marine (S) Pte Ltd
MMA Offshore Asia Vessel Operations Pte Ltd
JSE Offshore Shipping Pte Ltd
JSE Offshore (Labuan) Pte Ltd
Concord Offshore (Labuan) Ltd
PT Jaya Asiatic Shipyard
MMA Subsea Services Pte Ltd
MMA Subsea Engineering Services Pte Ltd
Neptune Asset Integrity Services Pty Ltd
Neptune Subsea Engineering Pty Ltd
Neptune Geomatics Pty Ltd
Neptune Subsea Stabilisation Pty Ltd
Neptune Diving Services Pty Ltd
Neptune Offshore Services (PNG) Ltd
Neptune Subsea Stabilisation Pte Ltd
Neptune Marine Pacific Pte Ltd
Neptune Subsea Engineering Ltd
Neptune Offshore Services Ltd
Neptune Subsea Inc
MMA Global Projects Pte Ltd
Premium Project Services Pte Ltd
B&R Marine Pte Ltd
Premium Project Services Middle East LLC
Premium Project Services Limitada
MMA Offshore Services Malaysia Sdn Bhd
MMA Clean Energy Co Ltd
(iv)
(iv)
(iii)
(iii)
(iii)
(iii)
(iii)
Malaysia
Singapore
Singapore
Singapore
Singapore
Malaysia
Malaysia
Indonesia
Singapore
Singapore
Australia
Australia
Australia
Australia
Australia
PNG
Singapore
Singapore
UK
UK
USA
Singapore
Singapore
Singapore
UAE
Mozambique
Malaysia
Taiwan
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
30
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
30
-
(i)
(ii)
(iii)
MMA Offshore Limited is the ultimate holding company head entity within the tax consolidated group.
These companies are members of the tax consolidated group at 30 June 2021.
Pursuant to ASIC Class Order 98/1418, relief has been granted to these wholly owned controlled entities from the
Corporations Law requirements for preparation, audit and lodgement of the financial report. As a condition of the Class
Order, MMA Offshore Limited and the controlled entities entered into a Deed of Cross Guarantee on 15 February 2012
which was updated on 8 November 2019.
(iv)
These companies were wound up during the financial year.
98 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 99
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 5. Other Notes (continued)
5.6 Subsidiaries (continued)
5. Other Notes (continued)
5.6 Subsidiaries (continued)
The consolidated statements of comprehensive income and financial position of entities which are party to the deed of cross
guarantee are as follows:
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling interests.
Statement of Comprehensive Income
Revenue
Finance income
Other losses
Vessel expenses
Subsea expenses
Project Logistics expenses
Administrative expenses
Impairment charge
Finance costs
Profit/(Loss) before income tax expense
Income tax expense
Profit/(Loss) for the Year
Total Comprehensive Income/(Loss) for the year
Statement of Financial Position
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Assets classified as held for sale
Total Current Assets
Non-Current Assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Unearned revenue
Borrowings
Lease liabilities
Provisions
Current tax liabilities
Total Current Liabilities
Non-Current Liabilities
Other payables
Borrowings
Lease liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Accumulated losses
Accumulated losses at beginning of the financial year
Net profit/(loss)
Accumulated losses at end of the financial year
2021
$’000
149,201
17
15,765
(80,263)
(38,978)
(403)
(19,877)
0
(11,875)
13,587
2
13,589
13,589
22,429
69,487
582
1,714
4,605
98,818
265,866
87,258
7,834
360,959
459,776
48,558
305
15,568
2,101
10,187
238
76,958
-
147,932
6,303
112
154,347
231,304
228,472
742,298
3,949
(517,775)
228,472
(531,364)
13,589
(517,775)
2020
$’000
154,139
772
(3,989)
(100,100)
(26,537)
(706)
(16,611)
(76,556)
(17,812)
(87,400)
(59)
(87,459)
(87,459)
60,264
42,210
466
1,277
5,984
110,201
279,921
91,287
6,981
378,189
488,390
62,914
14
12,739
1,546
9,344
222
86,779
-
257,838
5,675
320
263,833
350,612
137,778
667,264
1,878
(531,364)
137,778
(443,905)
(87,459)
(531,364)
Name of Subsidiary
Principal place
of business
Proportion of
ownership interest
held by NCI
Profit/ (loss)
allocated to NCI
for the year
Non-controlling
interests
2021
%
2020
%
2021
$’000
2020
$’000
2021
$’000
2020
$’000
MMA Global Projects Limited
Singapore
20
20
(31)
(210)
(207)
(191)
The Group owns 80 percent of the equity shares of MMA Global Projects Pte Ltd and has the power to appointment and remove
the directors of the company. Therefore the directors of the Group concluded that the Group has control over MMA Global
Projects Pte Ltd, and the company is consolidated in these financial statements.
On acquisition of the company in December 2019, the transaction agreement included a contingent consideration arrangement
to pay the non-controlling interests up to an additional $0.8 million Singapore Dollars on achievement of gross margins in future
years. As the business was in the early stages of development with no assets or contracts at the time, the Group estimated the
fair value of this consideration to be nil.
During the year, the gross margins required to trigger the earn out were monitored and at June 2021 they were assessed to have
been met. As a result a liability with fair value of $0.6 million Singapore dollars was recognised in respect of cash payable to the
vendors based on the expected probable outcome, and this amount was paid in full in June 2021.
5.7 Parent Company Information
Statement of Financial Position
Assets
Current Assets
Non-Current Assets
Total Current Assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Retained earnings/(accumulated loss)
Profit reserve - 2016
Employee equity settled benefits reserve
Total Equity
Financial Performance
Profit/(loss) for the year
Other comprehensive gain
Total comprehensive gain/(loss)
Guarantees provided under the deed of cross guarantee
Commitments for the acquisition of property, plant and equipment by the parent entity
2021
$’000
2020
$’000
10,759
447,398
458,157
15,585
152,974
168,559
289,598
56,254
446,594
502,848
12,846
262,881
275,727
227,121
742,285
(566,949)
114,122
140
667,264
(554,405)
114,122
140
289,598
227,121
(12,544)
(88,640)
-
(12,544)
62,745
-
-
(88,640)
74,885
-
100 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 101
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 5. Other Notes (continued)
5.8 Financial Instruments
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Lease liabilities
Borrowings
2021
$’000
2020
$’000
96,226
49,864
30,318
10,137
86,637
52,429
33,704
10,893
163,500
270,577
The Group’s treasury function includes the management of the Group’s financial assets and commitments including ensuring
adequate procedures and controls are in place to manage financial risks. These risks include market risk (including currency and
interest rate risk), credit risk and liquidity risk.
A Treasury Policy has been approved by the Board and provides guidelines for conducting treasury activities. Compliance with
this Policy is monitored through internal audit procedures and subsequent reporting to the Audit and Risk Committee.
The Group seeks to minimise the effects of these risks, by using, where considered appropriate, derivative financial instruments
to hedge these risk exposures. The allowable financial derivatives and conditions for their use are documented in the Treasury
Policy. The Group does not enter into or trade financial instruments including derivative financial instruments for speculative
purposes.
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
Where required, the Group can enter into a range of derivative financial instruments to manage its exposure to these risks.
At a Group level, these market risks are managed through sensitivity analysis. There is no change in the manner in which these
risks are managed and measured in the current year.
Foreign currency risk management
The Group undertakes transactions denominated in foreign currencies. Consequently, exposures to exchange rate fluctuations
arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts,
when it is considered appropriate.
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the
financial year are as follows:
US Dollars
Singapore Dollars
Euro
British Pound Sterling
Other
Liabilities
2021
$’000
2020
$’000
Assets
2021
$’000
110,267
173,134
92,548
1,418
19
1,492
1,425
7,557
186
3,693
5,693
556
6
4,675
3,077
2020
$’000
45,899
3,883
7
3,055
2,910
5. Other Notes (continued)
5.8 Financial Instruments (continued)
Foreign currency sensitivity analysis
The Group is mainly exposed to US Dollars (USD), Singapore Dollars (SGD), Euro (EUR) and British Pound Sterling (GBP).
The following table details the Group’s sensitivity to a 10% increase in the Australian Dollar against the relevant foreign currencies.
The 10% sensitivity represents management’s assessment of the reasonably possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the
period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit or equity where
the Australian dollar strengthens 10% against the relevant currency. For a 10% weakening of the Australian Dollar against the
relevant currency, there would be an equal and opposite impact on the profit or equity.
US Dollar Impact
Singapore Dollar Impact
Euro Impact
British Pound Sterling Impact
Profit or Loss
Equity (i)
2021
$’000
(645)
3
2
(2)
2020
$’000
(325)
7
-
-
2021
$’000
2,255
75
-
(267)
2020
$’000
11,853
350
16
613
(i)
The current and comparative year USD impact relates to the translation from the functional currencies of the Group’s
foreign entities into Australian Dollars.
The AUD:USD exchange rate increased significantly during the period, from $0.69 to $0.77. This has resulted in the current
period having larger exchange movements on items within Other Comprehensive Income and Statement of Cash Flows.
Interest rate risk management
The Group is exposed to interest rate risk because it borrows funds primarily at floating interest rates. The risk is managed by the
Group by the use of interest rate swap contracts when considered appropriate. Hedging activities are evaluated regularly to align
with interest rate views ensuring the most cost-effective hedging strategies are applied, if required. At this point in the interest rate
cycle the Group is unhedged.
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management
section of this note.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the reporting period. For
floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period
was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to
key management personnel and represents management’s assessment of the reasonably possible change in interest rates.
At reporting date, if interest rates had been 100 basis points higher / lower and all other variables were held constant, the impact
on the net profit of the Group would be as follows:
• Net profit would decrease / increase by $2,705,774 (2020: decrease / increase by $2,705,774). The decrease in the
exposure to interest rates on its variable borrowings is attributable to the $91m reduction in the loan facility during the current
financial year.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The credit worthiness of each customer is assessed to ensure minimal default risk. The Group’s exposures to its counterparties
are continuously monitored by management. Where appropriate, the Group obtains guarantees from customers. Cash terms,
advance payments or letters of credit are requested from customers of lower credit standing.
Trade receivables consist of a large number of customers spread across the offshore oil and gas exploration, development and
production industries and across diverse geographical areas. Ongoing credit evaluation is performed on the financial condition of
trade receivables.
102 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 103
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED OF 30 JUNE 2021
5. Other Notes (continued)
5.8 Financial Instruments (continued)
Debtor concentration risk is low with the top three customers of the Group making up only 20% (2020:20%) of the total debtor
balance. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities.
The credit risk on the three largest receivables is managed through regular meetings with the customers, on-going contractual
arrangements and regular receipts for the balances outstanding.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit
ratings assigned by international credit rating agencies.
The carrying amount of financial assets recognised in the financial statements, which is net of impairment losses, represents the
Group’s maximum exposure to credit risk.
The table below details the credit quality of the Group’s financial assets.
Trade receivables (i)
Note
3.2
12-month or
lifetime ECL
Gross carrying
amount
Loss
allowance
Net carrying
amount
Lifetime ECL
(simplified approach)
66,409
(19,387)
47,022
(i)
For trade receivables, the Group has applied the simplified approach in AASB 9 to measure the loss allowance at lifetime
ECL (refer to note 3.2).
Liquidity risk management
The Group manages liquidity risk by maintaining adequate cash reserves, borrowing facilities, continuously monitoring forecast
and actual cash flows and managing credit terms with customers and suppliers.
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed
repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. To the extent
that interest flows are at floating rate, the undiscounted amount is derived from current interest rates at the end of the reporting
period.
Weighted
average effective
interest rate
%
Less than 1
month
$’000
1-3
months
$’000
3 months
to 1 year
$’000
1-5 years
$’000
Total
$’000
30 June 2021
Non-interest bearing
Variable interest rate instruments
Fixed interest rate instruments
Total
30 June 2020
18,736
10,714
868
-
30,318
4,021
457
1,047
793
17,067
152,458
174,593
2,472
7,153
10,875
23,214
12,554
20,407
159,611
215,786
Non-interest bearing
-
17,018
16,686
-
-
33,704
Variable interest rate instruments
Fixed interest rate instruments
4.17
5.99
953
574
1,903
977
23,363
261,117
287,336
2,674
7,830
12,055
Total
18,545
19,566
26,037
268,947
333,095
5. Other Notes (continued)
5.8 Financial Instruments (continued)
The following table details the Group’s expected maturity for its non-derivative financial assets. The table has been drawn up
based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets.
Weighted
average effective
interest rate
%
Less than 1
month
$’000
1-3
months
$’000
3 months
to 1 year
$’000
1-5 years
$’000
Total
$’000
30 June 2021
Non-interest bearing
Variable interest rate instruments
0.19
Total
30 June 2020
Non-interest bearing
Variable interest rate instruments
Total
Fair value of financial instruments
38,757
96,241
8,841
-
134,998
8,841
-
0.20
40,746
86,641
11,332
-
127,387
11,332
599
-
599
351
-
351
1,668
-
49,864
96,241
1,668
146,105
-
-
-
52,429
86,641
139,070
The Directors consider that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial
statements approximate their fair values.
The fair values of financial assets and financial liabilities are determined as follows:
• The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market prices.
• The fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis.
5.9 Operating lease arrangements
Operating leases, in which the Group is the lessor, relate to the hire of vessels owned by the Group with lease terms of between
one month to five years, with a range of one day to five years extension options.
During the year the Group has entered a contract to sublease a substantial portion of the Company’s shipyard facility in Batam,
Indonesia. The sublease commenced on 15 April 2021 and is for a firm period of three years (subject to the option to purchase
detailed below). The total rent payable under the sublease will total A$6.5 million should the lease continue for the full period.
Further, as part of the overall transaction, MMA has granted WASCO an option to purchase the Company’s interest in the Batam
Facility for a purchase price of US$15M. The option to purchase may be exercised by WASCO at any time up to 12 March
2024. WASCO will pay MMA a fee of US$1.5m in the event that WASCO does not exercise the option, and a bank guarantee for
US$1.5m has been received in relation to this non-exercise fee. This is subject to none of the waiver conditions being met. The
sublease will terminate upon exercise of the option.
Maturity analysis of operating lease payments:
Year 1
Year 2
Year 3
Year 4
Year 5 and onwards
Total
2021
$’000
39,159
11,766
4,793
-
-
2020
$’000
39,216
17,049
1,225
-
-
55,718
57,490
104 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 105
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 5. Other Notes (continued)
5.10 Contingent Liabilities
As previously reported, the Company advised that it was evaluating its casual employment arrangements to determine whether
the Company had any contingent liability arising out of the decision in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (“Rossato”).
Since then:
• The Federal Government has introduced legislation which defines a casual worker on the basis of their express contract of
employment rather than subsequent conduct and also enables employers to set-off any casual loadings paid to workers who
subsequently pursue claims that they are permanent employees [the Fair Work Amendment (Supporting Australia’s Jobs and
Economic Recovery) Act 2021 (Cth)]; and
• The High Court of Australia has overturned the Rossato ruling in its recent decision on 4 August 2021 [WorkPac Pty Ltd v
Rossato & Ors (2021) HCA 23].
Based on the above, the Company has assessed that it has no contingent liability in this regard.
In addition to the above, the Company has recently received a claim from a casual employee for long service leave (LSL)
entitlements whilst engaged under the terms of the MMA Offshore Vessel Operations Enterprise Agreement 2017 (“EBA”), who
is of the belief that their LSL entitlements lie with the Long Service Leave Act 1958 (WA) (“LSL Act”). The Company is resisting
the claim on the basis that the relevant casual employee’s prior periods of casual service would not be regarded as “continuous
service” for the purposes of the EBA nor “continuous employment” for the purposes of the LSL Act. The Company is currently
evaluating its long service leave arrangements for its casual employees to determine whether the Company has any contingent
liability in this regard, including any “claw-back” for the long service leave entitlements which have already been paid by way of
casual leave loading.
Guarantees given to third parties in respect of dealings, are in the normal course of business. Total amount of the guarantee
facility is $20.0 million (2020: $20.0 million) with total drawn amounts of $2.8 million (2020: $2.7 million).
5.11 Events After the Reporting Period
There has not been any matter or circumstance that occurred subsequent to the end of the financial year that has significantly
affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs
of the consolidated entity in future financial years.
5.12 Other Accounting Policies
Adoption of New and Revised Accounting Standards and Interpretations
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards
Board (the AASB) that are relevant to its operations and effective for the current year.
The accounting policies and methods of computation adopted in the preparation of the financial report are consistent with those
adopted and disclosed in the company’s 2021 annual financial report for the financial year ended 30 June 2021. The accounting
policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.
5. Other Notes (continued)
5.12 Other Accounting Policies (continued)
Other new and revised standards and amendments thereof and interpretations effective for the current year that are relevant to
the Group include:
New or revised requirement
Description
AASB 2018-7 Amendment
to Australian Accounting
Standards – Definition of
Material
These amendments are intended to address concerns that the wording in the definition
of ‘material’ was different in the Conceptual Framework for Financial Reporting, AASB
101 Presentation of Financial Statements and AASB 108 Accounting Policies, Changes in
Accounting Estimates and Errors.
The amendments address these concerns by:
• Replacing the term ‘could influence’ with ‘could reasonably be expected to influence’
•
Including the concept of ‘obscuring information’ alongside the concepts of ‘omitting’
and ‘misstating’ information in the definition of material
• Clarifying that the users to which the definition refers are the primary users of general-
purpose financial statements referred to in the Conceptual Framework
•
Aligning the definition of material across IFRS Standards and other publications.
Standards and Interpretations issued but not yet effective
At the date of authorisation of the financial statements, the Group has not applied the following new and revised Australian
Accounting Standards, Interpretations and amendments that have been issued but are not yet effective:
New or revised requirement
Description
AASB 2021-2 Amendment
to Australian Accounting
Standards – Disclosure of
Accounting Policies and
Definition of Accounting
Estimates
These amendments are intended to improve accounting policy disclosures so that they
provide more useful information to investors users of the financial statements and clarify the
distinction between accounting policies and accounting estimates. Specifically, AASB 2021-
2 amends:
•
•
•
•
•
AASB 7 Financial Instruments: Disclosures, to clarify that information about
measurement bases for financial instruments is expected to be material to an entity’s
financial statements
AASB 101 Presentation of Financial Statements, to require entities to disclose their
material accounting policy information rather than their significant accounting policies
AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors, to
clarify how entities should distinguish changes in accounting policies and changes in
accounting estimates
AASB 134 Interim Financial Reporting, to identify material accounting policy information
as a component of a complete set of financial statements
AASB Practice Statement 2 Making Materiality Judgements, to provide non-mandatory
guidance on how to apply the concept of materiality to accounting policy disclosures.
Except for the amendments to AASB Practice Statement 2 (which provide non-mandatory
guidance and therefore do not have an effective date), the amendments are effective for
annual periods beginning on or after 1 January 2023. The amendments to the individual
Standards may be applied early, separately from the amendments to the other Standards,
where feasible.
The directors of the Company do not anticipate that the amendments will have a material
impact on the Group, but may change the disclosure of accounting policies included in the
financial statements.
106 MMA Offshore Ltd | Annual Report 2021
MMA Offshore Ltd | Annual Report 2021 107
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED OF 30 JUNE 2021 ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE INFORMATION
FOR THE YEAR ENDED 30 JUNE 2021
FOR THE YEAR ENDED 30 JUNE 2021
Ordinary Share Capital (as at 23 August 2021)
Unmarketable Parcels (as at 23 August 2021)
359,328,236 fully paid ordinary shares are held by 3,308 individual shareholders. All issued ordinary shares carry one vote per share.
The number of holders holding less than a marketable parcel of the Company’s shares is as follows:
Substantial shareholders (as at 23 August 2021)
Thorney Opportunities Ltd
Black Crane Asia Opportunities Fund
Allan Gray Australia Pty Ltd / Orbis Group
Halom Investments Pte Ltd
Perennial Value Management Limited
Total
Distribution of Holders of Ordinary Shares (as at 23 August 2021)
Number of
Shares
% of Issued
Capital
50,071,891
13.93%
29,706,815
29,407,271
29,248,195
21,092,748
8.27%
8.18%
8.14%
5.87%
159,526,920
44.39%
Minimum Parcel Size
Number of ordinary shareholders
Number of shares
1,352
429
220,909
Voting Rights
All ordinary shares carry one vote per share without restriction.
Unquoted Rights (as at 23 August 2021)
14,799,157 unlisted rights held by 64 individual rights holders.
Shareholder Enquiries
Size of Holding
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Twenty Largest Shareholders (as at 30 July 2021)
1 CITICORP NOMINEES PTY LIMITED
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3 UBS NOMINEES PTY LTD
4 NATIONAL NOMINEES LIMITED
5 SANDHURST TRUSTEES LTD
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