T R A N S F O R M I N G
the way marine services are delivered
Annual Report
2022
Acknowledgement of Country
MMA Offshore acknowledges the Traditional Custodians of country throughout
Australia and their connections to land, sea and community. We pay our respects
to their Elders past and present and extend this respect to all Aboriginal and Torres
Strait Islander peoples today and to Indigenous peoples around the world.
Aberdeen
Delft
EUROPE
Houston
AMERICAS
AFRICA
Key
Office
Operational Facility
18
Vessels operating
internationally
MIDDLE EAST
Dubai
Taiwan
ASIA
Kuala Lumpur
Singapore
Batam
AUSTRALIA
Perth
0.28
TRCF per million
hours worked
1100+
Employees across
the globe
Contents
About Us
Our Purpose
Our Services
Our Markets
2022 Year in Review
Chairman’s Report
Managing Director’s Report
Sustainability Report
Risk
Board of Directors
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Directors’ Declaration
Financial Report 2022
2
3
4
5
6
8
10
17
32
34
36
40
57
58
63
65
Additional Securities Exchange Information
110
New Plymouth
NEW ZEALAND
MMA Offshore Limited | Annual Report 2022 1
A pioneering marine
services business.
About Us
MMA Offshore is a global provider of high-specification
vessels and a comprehensive suite of marine and subsea
services to the offshore energy sector, government and
defence 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
offices in Singapore and Aberdeen, provide technical support to our
vessels, subsea and project logistics operations. We also have local
offices in Malaysia, Taiwan, New Zealand, Dubai, the Netherlands 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
What we
believe
We are a
pioneering marine
services business.
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
Smarter
Together
Do What's Right,
Not What's Easy
Think
Bigger
Fail Fast
& Learn
Create
Tomorrow
Only by working
together can we solve
the biggest problems.
We have the courage to
do the right thing, even
when it’s hard.
We embrace big ideas
and challenge ourselves
to achieve big goals.
We back ourselves
to innovate and support
each other through
the process.
The future we want is
up to us to create.
2 MMA Offshore Limited | Annual Report 2022
2 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 3
Our Services
Vessel Services
As a global provider of offshore marine solutions,
MMA owns and operates a fleet of 18 offshore vessels
capable of servicing an extensive range of complex
marine projects. With an average age of nine years,
our fleet incorporates modern technology, efficient
propulsion systems and proven reliability to serve a wide
range of work scopes – from subsea construction and
maintenance, through to ongoing production support
and towing operations. MMA also maintains a global pool
of over 900 highly qualified offshore personnel capable of
executing the most challenging offshore projects.
Subsea Services
Combining state-of-the-art equipment and highly
experienced personnel, MMA provides an extensive
range of subsea services for our clients. As leading
experts in the delivery of survey, engineering, commercial
diving, ROV, environmental and stabilisation and
manufacturing assembly and test solutions, we are
capable of servicing a wide range of marine markets. By
delivering our services as either an integrated end-to-end
solution or as a singular service provision, we are able to
complement our clients’ execution preferences with our
in-house project management expertise.
Project Logistics
Managing complex marine logistics work scopes for
global construction projects is a key service provided by
MMA. Our bespoke services can be tailored specifically
to our clients’ requirements and include project managing
complex marine and vessel spreads, logistics to remote
greenfield sites, integrated marine logistics and marine
transportation services.
Solving the most demanding
marine challenges.
Our Markets
Oil & Gas
Supporting all phases of the oil and gas lifecycle, MMA
has extensive experience providing support to the oil and
gas industry. Our versatile fleet of vessels combined with
our world-class subsea expertise provides integrated
solutions to support offshore construction activities,
ongoing production support, inspection, maintenance
and repair operations, decommissioning works and
stabilisation requirements.
Offshore Wind
MMA is facilitating the global energy transition through
our comprehensive range of marine solutions for the
offshore wind industry. We provide vessel, subsea and
engineered solutions for field development, construction
support, inspection, maintenance and decommissioning
works, as well as specialised support services for cable
installation and management.
Government & Defence
MMA is 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. We also deliver a
range of services to government and defence contractors
including survey, bathymetry, vessels, ROVs, AUVs and
commercial diving services.
Coasts & Ports
MMA provides stabilisation, marine grouting and coastal
erosion solutions to ports and harbours, coastlines
and inland marine infrastructure. Our unique approach
of combining engineering with nature seeks to deliver
resilient coastal infrastructure.
Engineered Reefs
MMA’s newly acquired environmental and stabilisation
business, Subcon, are accomplished pioneers of
engineered reef solutions, with over 30 large scale reef
projects delivered globally to date. Our engineered
reefs provide solutions for fisheries enhancement, reef
restoration, coastal erosion control, offshore wind farm
ecology, decommissioning of oil and gas structures,
tourism and living harbours.
4 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 5
MMA Monarch departing Singapore for a campaign
off the north west coast of Australia.
2022 Year in Review
Revenue
EBITDA
NPAT
$283.8m
$32.3m
$33.8m
EBIT
$ 1.3m
Operating Cashflow
$ 15.2m
LVR
(Net Debt to Fixed Assets)
14%
Cash at Bank
$ 73.9m
NTA per Share
95c
6 MMA Offshore Limited | Annual Report 2022
Photo courtesy of Woodside.
MMA Offshore Limited | Annual Report 2022 7
Mermaid Cove providing production support services
to Woodside facilities in Australia's north west.
Chairman’s Report
MMA is in the process of transforming itself as a
business and has a clear strategy to achieve this.
Whilst we continue to progress our strategy
of diversifying our earnings base to more
environmentally sustainable sectors such
as offshore wind and government services,
we remain highly leveraged to oil and gas
activity which is seeing a recovery due to
rising energy security concerns prompted
by the Russia-Ukraine conflict. Demand
for alternative sources of oil and gas has
increased, which is leading to an increase
in offshore development activity to boost
production both to take advantage of the
current high oil and gas prices and as an
alternative to Russian supply in the medium
term. We are seeing this translate to an
improving market for vessels with utilisation
and rates beginning to improve across our
key markets as demand increases and the
market tightens.
Whilst oil and particularly gas is expected
to continue to be a vital part of the energy
mix for some time, the transition to
renewable energy remains in full swing with
offshore wind a key component of future
energy supply. MMA is ideally positioned
to service this rapidly growing industry with
our vessels, subsea and project logistics
capability directly transferable to offshore
wind.
We continue to solidify our position in
Taiwan with the acquisition of 49.9% of
Taiwanese survey company Global Aqua
Services during the year and the formation
of MMA Global Aqua to target the offshore
wind market with the benefit of local
ownership.
FY2022 continued to be challenged
by the COVID-19 pandemic,
however overall market sentiment
for the offshore services industry
has significantly improved in recent
months and we are seeing positive
momentum going into FY2023.
MMA delivered earnings in line with
expectations for the financial year. FY2022
Earnings before Interest, Tax, Depreciation
and Amortisation (“EBITDA”) were $32.3
million. On a like-for-like basis, this was a
9% improvement on FY2021 EBITDA of
$29.6 million after adjusting for the impact
of various one-off items and government
subsidies.
Importantly, MMA remained cashflow
positive throughout the COVID-19 trading
trough, and we closed the financial year
with cash at bank of $73.9 million.
FY2022 was also a milestone year in
terms of MMA’s Balance Sheet, with our
leverage ratios returning to acceptable
levels following a well-executed debt
reduction strategy. During the year we
completed our non-core vessel sales
program with approximately $37 million in
proceeds being used to pay down debt. In
addition, we made amortisation payments
of $15 million including a prepayment of
$2.5 million towards FY2023 scheduled
amortisation. We also entered into an
agreement to sell the Batam Supply Base
for US$15 million (A$21 million) which will
further reduce our net debt during the first
half of FY2023. Whilst our current facilities
are not due to expire until early 2025, our
improved balance sheet opens up more
flexibility within the terms of our current
debt facilities and will put us in a stronger
position when it comes to refinancing.
The outlook for offshore wind in South East
Asia remains extremely positive with over
3,000 turbines to be installed in the region
by 2026. MMA is focused on growing its
share of revenue from offshore wind over
the coming five years with a focus on
Taiwan, South Korea, Japan and Vietnam.
We are also committed to increasing
our revenue from the government and
defence sector predominantly through our
participation in the HydroScheme Industry
Partnership Program (“HIPP”), an extensive
program of nautical charting surveys
in Australian waters. To date we have
secured four scopes of work as part of the
program, the most recent to be delivered
in the Cape Leeuwin region of Western
Australia utilising the Mermaid Searcher
as the support vessel. With an extensive
future program of survey works planned
around Australia, we are keen to position
ourselves to grow this part of the business
and are currently investigating autonomous
technologies to enhance our capability in
this market.
MMA is in the process of transforming itself
as a business and has a clear strategy to
achieve this.
We expect improved market conditions
across oil and gas together with competing
demand from offshore wind to enable us
to release the latent operating leverage
in our core vessel and subsea business
as utilisation and rates on our vessel fleet
increase and we can generate higher
margins on our services. Whilst we
have reduced the size of the fleet to 18
vessels, we have disposed of the more
commoditised vessels and retained the
more specialised fleet with the greatest
potential for improved returns. We also plan
to supplement the owned fleet with third-
party chartered vessels to meet market
demand to increase our returns.
Our diversification strategy is starting to
bear fruit with over 20% of our revenue
generated from non-oil and gas sources
during FY2022.
In terms of extending our service offering,
we are performing more integrated work
scopes and further embedding ourselves
with our clients through our subsea
services division.
To further enhance our diversified service
offering, we recently announced the
acquisition of Subcon. Subcon provides
innovative stabilisation, coastal erosion
and engineered reef solutions to the oil and
gas, offshore wind, coastal infrastructure
and tourism sectors both in Australia and
internationally. The acquisition enhances
our service offering to our existing oil and
gas and offshore wind markets whilst
bringing a number of exciting new solutions
to expand our reach into coastal erosion
management, decommissioning and the
tourism sectors.
As a business we are committed to
sustainability and continue to make
progress on a variety of initiatives across
environmental, social and governance
areas. With vessel fuel technology being
our greatest opportunity to cut emissions
as an industry, we were proud to
collaborate with Fortescue Future Industries
on some exciting new research into
ammonia as an alternative fuel source for
the marine industry, with the MMA Leveque
(now FFI Green Pioneer) being used as a
prototype vessel. We also progressed a full
technical evaluation for the installation of
battery technology on one of our support
vessels. I encourage you to read our 2022
Sustainability Report which is included in
this Annual Report.
The health, safety and wellbeing of our
people remains a key priority. I am pleased
to say that we achieved our target of
improving our total recordable incident
rate by 50% during the year with our TRCF
currently sitting within the top quartile of our
industry peers. In a challenging year filled
with COVID-19 disruption, I am extremely
proud of our people for their ongoing focus
on keeping themselves and their colleagues
safe. Our Target 365 strategy is based
on the belief that we can all be safe 365
days of the year and our improved safety
performance during FY2022 is a testament
to the Target 365 safety culture being
embraced and lived by our people.
I would like to conclude by thanking my
fellow Board members for their valuable
stewardship of the business over the past
12 months.
I would also like to thank MMA’s senior
leadership team and staff for their
commitment to the business over the past
few years during what has been a very
challenging period for the industry.
I am optimistic that better times are ahead
and that we can look forward to strong
momentum as we deliver the strategy and
transform MMA into a business for the
future.
Ian Macliver
Chairman
8 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 9
Managing Director’s Report
Underpinning our strategy is the marine expertise
within our business which enables us to deliver
innovative solutions.
Offshore activity for the coming five years
is expected to be strong with an estimated
US$168 billion in new projects expected
to be sanctioned in MMA’s operating
regions between 2022 and 2026. The
oil price recovery continued through the
financial year with an average Brent oil
price of US$76/barrel during the first
half. Prices surged during the second
half averaging US$107/barrel following
the Russian invasion of Ukraine which
disrupted Russian supply. The Russian
conflict has prompted concerns about
energy security and resulted in a change
in sentiment towards new oil and gas
developments (particularly gas) to reduce
reliance on Russia as the world transitions
to renewable energy.
Offshore wind activity continues to grow
exponentially with over 3,000 turbines to be
installed and US$80 billion expected to be
spent on offshore wind farm developments
in Asia and Australia between 2022 and
2026. As a vessel intensive activity, offshore
wind is expected to drive significant
additional vessel demand over that period.
With the projected growth in demand
for vessels from both oil and gas and
renewables, the offshore vessel market
is expected to tighten significantly which
should drive utilisation and rates higher.
The market for subsea services is expected
to follow a similar trajectory.
We are also starting to see governments
increase their focus on decommissioning
requirements, which MMA is ideally
positioned to support, with our combination
of vessels, subsea and project logistics
expertise.
FY2022 continued to be impacted
by COVID-19, however we are
seeing positive momentum going
into FY2023.
MMA reported Revenue of $283.8 million
for the year, up 19.5% on the prior year.
EBITDA for FY2022 was $32.3 million
which was in line with expectations.
EBITDA improved 9% on the prior year after
adjusting for the impact of various one-off
items and government subsidies which
were included in the FY2021 result and not
repeated in FY2022.
Importantly, MMA remained cashflow
positive during the year generating
operating cashflow of $15.2 million and we
closed the financial year with cash at bank
of $73.9 million.
The financial result was significantly
impacted by COVID-19 which directly
affected our operations, resulting in vessel
downtime, project delays and increased
costs.
Market conditions improved during the last
quarter of the financial year with COVID-19
related restrictions easing combined with a
spike in oil and gas prices as a result of the
Russia-Ukraine conflict.
We finished the financial year on a
significantly more optimistic note, and we
see positive momentum going into FY2023.
Market Conditions
At a macro level, there are positive signs for
activity in both the oil and gas and offshore
wind sectors.
Offshore oil and gas sanctioning activity
picked up during the year with many
projects which had been delayed due
to COVID-19 achieving final investment
decision.
Strategy
Our strategy is focused on extracting the
maximum return from our core business,
leveraging the recovery in oil and gas
investment whilst continuing to diversify
and grow our presence in the offshore
wind and government services sectors,
transforming our business along with the
energy transition.
A key strategic focus is to continue to
leverage our skills and assets across
our vessels, subsea, project logistics
and engineering businesses to deliver
integrated project solutions for our clients
across all of our key target markets. We
have successfully delivered a number of
integrated projects over the past two years
in both oil and gas and offshore wind and
we will continue to refine 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 substantial number
of new offshore wind farms expected to
be developed in the Asia Pacific region
over the coming decade. Over the past
two years, MMA has supported a number
of offshore wind development projects in
Taiwan utilising our vessels and subsea
services to deliver a range of work scopes.
A key part of our renewables strategy has
been to establish local operating structures
to enable us to operate under local content
rules. We recently established a local entity
in Taiwan and acquired a 49.9% share in a
Taiwanese survey business to create a new
entity “MMA Global Aqua” to facilitate our
growth in that market. We also have a MOU
in place with Worley to provide integrated
inspection and maintenance services to the
offshore wind market in Southeast Asia. We
will look to establish similar structures in
South Korea, Japan and Vietnam as these
markets develop.
We continue to target the government
and defence sectors and are currently
active in delivering hydrographic survey
services to the Australian Navy as part of
the HydroScheme Industry Partnership
Program (“HIPP”). We have recently
secured our fourth hydrographic survey
scope and are investing in technology to
continue growing this part of the business.
Underpinning our strategy is the marine
expertise within our business which
enables us to deliver innovative solutions
to our clients to differentiate us from our
competitors. We will continue to build and
maintain this marine expertise to enable us
to deliver our strategy.
MMA derived 22% of its revenue from
non-oil and gas sources including 9% from
offshore wind and 6% from government
services with a further 7% from other
sources such as salvage, cable lay support
and marine infrastructure.
FY2022 Highlights
EBITDA
$32.3m
73%
73% Utilisation
Across the total fleet
Balance Sheet
repair completed
Net Debt $51.1m,
Cash at Bank $73.9m
Non-core vessel
sales completed
Proceeds $37m
Progressing
diversification strategy
22% of revenue from
offshore wind, defence and
other marine services
Offshore wind
Taiwan JV up and running,
secured first contract in
South Korea
Subcon acquisition
Expanding our capability into
new environmental sectors
Strong safety culture
TRCF improved to 0.28
Sustainability
Significant progress on
ESG strategy
Positive macro outlook
Positive outlook for oil and gas,
offshore wind and defence
activity, vessel market tightening
FY2023
H1 FY2023 expected to be
stronger than H2 FY2022
10 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 11
Subcon Acquisition
Sustainability
Asset Sales
In line with our strategy to diversify and
extend our service offering in a sustainable
manner, we recently completed the
acquisition of Subcon.
Established in 2011 and headquartered
in Perth, Subcon provides innovative
stabilisation, coastal erosion and
engineered reef solutions to the oil and
gas, offshore wind, coastal infrastructure
and tourism sectors both in Australia and
internationally.
The acquisition supports MMA’s growth
objectives and is expected to generate
a number of key strategic benefits,
enhancing our capability to service our
existing markets through the combination
of MMA and Subcon’s service offering
whilst enabling us to access new markets
with significant potential for growth
including oil and gas decommissioning
through Subcon’s rigs to reef offering,
attenuating reef systems to combat coastal
erosion, scour protection technology for
offshore wind farms and recreational reef
developments.
We are confident that the Subcon business
will thrive under MMA’s ownership
with increased access to capital and
complementary skills and assets to
accelerate growth. We look forward to
jointly developing and growing the business
with the Subcon team.
Integration of the business is underway with
the Subcon business to become a part of
MMA’s Subsea Services division.
We are committed to
growing our business whilst
achieving sustainable
outcomes for our people,
the environment and the
community.
Sustainability is integral to our overall
strategy and purpose as an organisation
and we are committed to growing our
business whilst achieving sustainable
outcomes for our people, the environment
and the community whilst operating with
strong ethics and governance. Further
information on our commitment to
sustainability and our progress on various
initiatives is included in our Sustainability
Report which forms part of this Annual
Report.
Balance Sheet
FY2022 was an important year for the
Company in terms of returning our Balance
Sheet to a position of strength.
Following a focused strategy of debt
reduction through non-core asset sales
over the past 12 months, MMA’s leverage
ratios have now returned to acceptable
levels with Net Debt / EBITDA of 1.6x and
Gross Debt / EBITDA of 3.9x at the end
of the financial year. Net Debt to Property,
Plant and Equipment was 14%.
As at 30 June 2022, MMA had cash at
bank of $73.9 million and total bank debt
including lease liabilities of $125.0 million
resulting in a net debt position of $51.1
million on approximately $370.3 million of
fixed assets.
During the year, we completed our
non-core vessel sales program with
approximately $37 million in proceeds
being used to pay down debt. In addition,
we made amortisation payments of
$15 million including a prepayment of
$2.5 million towards FY2023 scheduled
amortisation. We also entered into an
agreement to sell the Batam Supply Base
for US$15 million (A$21 million) which will
further reduce our net debt during the first
half of FY2023.
Whilst our current facilities are not due
to expire until early 2025, our improved
Balance Sheet metrics gives us additional
flexibility with regard to capital allocation
within the terms of the current facilities
and will position the Company well when it
comes to exploring refinancing alternatives.
As part of our core business strategy, we
continually review the composition of our
fleet and have been actively divesting a
number of our more commoditised vessels
where the returns are suboptimal and
where we see limited future upside.
During the year, we completed the sale of
seven vessels and two barges for a total
of approximately A$37 million with the
proceeds generally in line with the Assets
Held for Sale value on the Company’s
Balance Sheet.
Our Batam Supply Base tenant also
exercised their US$15.0 million purchase
option on the facility during the year with
completion expected by December 2022.
As MMA has ceased shipbuilding some
time ago, the sale of the yard is a sensible
strategic decision for the Company.
MMA has retained a portion of the yard
and waterfront to continue to service our
current Batam clients.
Cost Control
Cost control remains an ongoing key focus
for MMA.
The COVID-19 pandemic increased the
costs and complexity of our operations
and resulted in vessel down time and
project delays as well as increased costs
associated with moving crew and assets
across international and interstate borders
due to quarantine and border restrictions.
The unaudited estimated additional direct
cost to the business for the 2022 financial
year was in the range of $5.0-$6.0 million,
with indirect and lost opportunities further
compounding the commercial effect of
COVID-19. The impact of COVID-19 related
cost increases significantly reduced in the
fourth quarter as restrictions eased in a
number of locations.
Whilst we have stripped a significant
amount of overhead out of the business in
recent years, we continue to seek further
efficiencies in our existing business whilst
ensuring we invest in the development of
our new growth markets.
We expect global inflation levels to increase
our cost base over time, however at
this stage the overall impact has been
manageable.
Operational Update
Vessel Services
Vessel Services revenue for the year was
$177.3 million, up 7% on FY2021. Vessel
EBITDA was $34.2 million down from $38.2
million in FY2021. Our EBITDA margin was
impacted by increased costs and vessel
downtime due to COVID-19 as well as lower
overall utilisation on the MPSV vessels
which have higher holding costs when not
contracted.
The financial performance of the vessel
division was significantly impacted by
COVID-19 with vessel downtime resulting
from positive COVID-19 cases within our
crews, increased costs associated with
quarantine requirements and reduced
activity in South East Asia, particularly
Malaysia, as a result of projects being
deferred due to the pandemic. Market
conditions improved late in the last
quarter of the financial year as COVID-19
restrictions eased somewhat and a number
of deferred projects came back online,
increasing demand.
Average utilisation for the year across the
fleet was 73%, up from 53% in FY2021.
AHT utilisation was 87% (FY2021 80%),
PSV utilisation was 84% (FY2021 74%) and
MPSV utilisation was 60% (FY2021 70%).
Utilisation on the AHTS vessels improved
to 69% from 21% in FY2021 as a result of
selling a number of underutilised AHTS
vessels over the course of the past 18
months and Australian project logistics
scopes utilising a number of AHTS vessels
during the year.
As at 30 June 2022, MMA had a total of 18
vessels (17 owned, one chartered), having
sold seven vessels during the year. Of the
total fleet, 16 vessels were under contract
and working with the remaining two vessels
available for work in the spot market.
As at 30 June 2022, 49% of available
vessel days for FY2023 were contracted,
increasing to 60% taking into account
highly probable contract awards and
extension periods. This compares to 29%
and 43% at the same time last year. On a
revenue basis, 58% of our forecast revenue
is already under contract for FY2023, (70%
including highly probable) as compared to
46% and 69% at the same time last year.
MMA secured a number of new vessel
contracts during the year adding to our
baseload of contracted earnings for the
vessel business.
In January 2022, we secured a contract
renewal with Woodside for the Mermaid
Cove for a period of 3.5 years with a further
1.5 years in option periods. As part of the
contract MMA is working with our client on
a range of decarbonisation initiatives for the
vessel including exploring the viability of
battery technology to lower emissions.
In February 2022, we signed a five-year
contract renewal for the MMA Brewster to
provide production support services for
INPEX operated Ichthys LNG, with a further
five one-year extension options thereafter.
The MMA Brewster was specifically
designed for the INPEX Ichthys LNG Project
and has been successfully supporting
INPEX since 2017. We were pleased to
continue our positive working relationship
with INPEX and to continue supporting
them on their key Australian project.
We also signed a new contract for the
MMA Privilege to provide accommodation
and walk to work support services for
a long-term client in Côte d'Ivoire. The
contract is for a period of two years firm
and commenced in March 2022. This is an
important contract locking away one of our
larger vessels for a substantial period.
The MMA Pinnacle completed its three-
year contract with iTech 7, Subsea 7’s
Life of Field business unit and returned to
the MPSV fleet after its five-year docking.
Following this, it secured a significant
integrated contract with our Subsea
Services division in Qatar.
We also signed a one-year extension of the
MMA Inscription with Santos supporting
Bayu-Undan in the Timor Sea. The MMA
Inscription was previously modified
specifically for this project to provide dual
static tow and offtake support duties,
resulting in substantial cost savings for
the client. We were pleased to extend our
services on this project.
Subsequent to the financial year end, in
July 2022, we signed a contract with OMV
New Zealand for the platform supply vessel
MMA Leeuwin. The contract is expected to
commence in September 2022 with a firm
period of 200 days and a further 150 days
in extension options. This was a pleasing
development, expanding our operational
portfolio in the New Zealand region to two
vessels.
MMA continued to have a number of
vessels on longer-term contracts including
the MMA Plover which continues on a
two-year plus options contract with INPEX,
providing drilling rig support services for
the Ichthys LNG field.
We also have the MMA Vision supporting
OMV Limited in New Zealand on a three-
year contract with further options to extend.
Our strategy to relocate the MMA Vision
to the region has been successful and
having the vessel on location has meant
that we have managed to secure a number
of short-term work scopes for the vessel to
supplement the OMV contract, enhancing
our returns on this asset.
The Mermaid Searcher continued on
contract with UPS providing support
services for the Northern Endeavour FPSO
decommissioning project.
We continue to focus on increasing our
presence in offshore wind and had six
vessels, the MMA Prestige, MMA Coral,
MMA Leveque, MMA Responder, MMA
Crystal and MMA Pride all supporting
various wind farm developments and
maintenance activities in Taiwan during the
year.
MMA had a number of vessels supporting
our Project Logistics division’s contracts
with Subsea 7 and Technip for tug and
barge and other logistics support for
Julimar Stage 2 and Gorgon Stage 2.
The MMA Prestige completed a number of
subsea scopes in South East Asia including
support services for salvage operations in
Sri Lanka before being mobilised to Taiwan
for offshore wind support work.
The outlook for the vessel business is
looking more positive with recent contract
renewals locking in a firm baseload of
contracted earnings going forward.
Macro conditions are improving across
our markets with demand for vessels
increasing. Whilst the impacts of COVID-19
continue to be an ongoing challenge, the
situation has significantly improved since
the easing of restrictions in most of our
operating regions.
12 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 13
Growth Strategy
1
Maximise
Core Business
2
Grow New
Markets
3
Extend Service
Offering
Vessels
Subsea
Project Logistics
Engineering
Offshore Wind
Marine Expertise
Government/
Defence
Integrated Services
New Marine Markets
Partnerships &
Collaborations
Subsea Services
Subsea Services revenue was $70.8 million
for the year and Subsea EBITDA was $2.4
million, as compared to revenue of $70.6
million and an EBITDA loss of $(1.5) million
in the previous financial year.
Significant improvements have been made
in terms of business and operational
processes over the past 12 months
and we are starting to see this translate
into improved operational and financial
performance.
The subsea division continued to be
impacted by COVID-19 during the year
particularly in South East Asia and the
United Kingdom where activity was well
below average levels. Whilst the situation
improved in the last quarter of the financial
year, the pandemic caused project delays
and difficulties in mobilising personnel to
project locations, impacting our revenue
and costs for the majority of the year.
Notwithstanding the impacts of the
pandemic, the subsea business had a
positive year completing a number of
significant projects across renewables,
oil and gas and defence, reinforcing our
strategy around integrated services.
Innovation & Sustainability
In December 2021, MMA secured a
survey scope for the Marinus Link project
in Tasmania. The project scope involved
the acquisition and interpretation of
geotechnical data to assist with the cable
route feasibility assessment for the Marinus
Link interconnector project. Marinus Link
is set to play a critical role in unlocking
Tasmania’s renewable energy and storage
resources to deliver low-cost, reliable and
clean energy for customers in the National
Electricity Market. MMA was proud to
be involved in this project which is set
to play a critical role in supporting the
decarbonisation of Australia’s economy
and the country’s transition to renewable
energy.
MMA has continued to support the
Australian Government Department of
Defence through its involvement in the
HydroScheme Industry Partnership
Program. During the financial year, we
successfully completed two hydrographic
survey scopes including the Camden
Sound survey off Broome, Western
Australia and the Cape Barren to Babel
Island survey off the coast of Tasmania.
MMA also recently secured the contract for
the Cape Leeuwin survey region in Western
Australia which will be delivered in FY2023.
We are currently exploring a range of
autonomous technologies to enhance our
service offering and to position ourselves
to continue to support the government with
this extensive multi-year project.
We also conducted a number of integrated
work scopes utilising the MMA Prestige
and MMA Vigilant. We recently secured our
largest integrated services project to date,
supporting a pipeline installation campaign
in Qatar. The campaign commenced in
June 2022 and is expected to continue
until December 2022, generating estimated
revenue in the order of US$16.5 million
(A$23 million) for the firm contract period.
This project marks a major milestone for
MMA, securing a significant integrated
subsea services contract utilising one of
MMA’s flagship vessels, the MMA Pinnacle.
We continue to make inroads into the
offshore wind market and completed
a number of projects during the year
including a site investigation survey for
a major offshore wind development and
several smaller scopes. We also completed
the acquisition of 49.9% of a Taiwanese
survey company to form MMA Global Aqua,
to actively target opportunities with the
benefit of a local partner. The MMA Crystal
was recently fitted with a suite of subsea
equipment with the vessel reflagged to be
permanently located in Taiwan. We are
also actively developing inspection and
maintenance opportunities in collaboration
with Worley as part of our joint venture
agreement.
Rig positioning activity was strong during
the year with MMA supporting rig moves
for Woodside, INPEX, Beach Energy
and Santos under our long-term frame
agreements with these clients as well as for
Jadestone Energy.
Subsea stabilisation activity was also
strong with a number of large grouting
and scour protection projects undertaken
for Subsea 7, Technip and McDermott.
The recent acquisition of the Subcon
business will solidify our position in the
subsea stabilisation market and will bring a
number of exciting new capabilities under
our Environmental and Stabilisation service
offering.
The UK business experienced lower activity
due to COVID-19 but in recent months
the market has begun to pick up and a
number of sizeable work scopes have been
secured.
The macro-outlook for the subsea business
is improving and activity levels have picked
up in recent months.
Whilst COVID-19 continues to present
operating challenges, we expect the
performance of the subsea business to
continue to improve.
Project Logistics
The Project Logistics division generated
revenue for the year of $60.3 million up
from $16.5 million and EBITDA of $2.1
million, up from an underlying EBITDA of
$0.9 million.
The Project Logistics division had a busy
year with two major offshore construction
projects in the North West Shelf of Australia
being undertaken during the year.
The first project was a logistics scope
for Subsea 7 supporting the transport of
subsea equipment from South East Asia
to Australia for the Julimar 2 Project. The
vessel spread consisted of four tugs and
two barges with three of the tugs coming
from MMA’s fleet and the remainder
chartered in from third parties.
The second major project was a logistics
scope supporting Technip on a large
subsea installation project in the North
West Shelf with a 10-vessel spread (six
tugs and four barges). The project was
initially planned to commence in direct
continuation of Julimar 2 but was delayed
until the second half which reduced the
overall profitability of the project due to the
holding costs of the vessel spread between
the two projects.
We have also been successful in making
inroads into the South East Asian market
and completed logistics projects in the
Philippines and India which contributed to
the second half.
Activity in the project logistics arena is
lumpy and dependent on large project
construction scopes being undertaken.
Offshore construction activity in Australia
is expected to be lower in FY2023,
however, the longer-term outlook for
project logistics requirements in MMA’s
key regions is relatively strong, with a
number of large oil and gas projects
flagged for development between FY2024
to FY2026. Decommissioning projects are
also expected to take place in the same
timeframe with project logistics being a key
component of decommissioning offshore
infrastructure. Similarly, the outlook for
offshore wind is strong and will be a key
focus area for the Projects Logistics group
into the future.
The Batam Shipyard generated rental
income from the sublease to WASCO
during the first half. WASCO recently
exercised their purchase option on the
yard for US$15 million with the sale of the
yard to be completed by December 2022.
MMA has retained access to a portion
of the facility and waterfront for its own
operations.
MMA’s facility in Tuas, Singapore was
handed back to the Singapore Government
at the end of the lease period. MMA
secured laydown area, warehouse facilities
and wharf access at a state of the art third
party facility in Singapore for future vessel
mobilisations and maintenance as required.
The recent acquisition of Subcon
will bring a number of exciting new
capabilities under our Environmental
and Stabilisation service offering.
14 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 15
Our safety result for FY2022 is a
testament to our Target 365 safety
culture across the organisation.
Health & Safety
Keeping our people safe and healthy
remains fundamental to how we operate at
MMA.
We continue to live our Target 365
philosophy and believe that a Perfect Day is
possible 365 days a year. Our safety result
for FY2022 is a testament to our Target 365
safety culture across the organisation.
The COVID-19 pandemic presented an
enormous range of challenges for the
organisation which I am proud to say our
people continue to overcome with the
utmost professionalism and care.
We continue to implement an appropriate
level of control measures, protocols
and procedures to safely continue our
operations whilst protecting the health
and welfare of our people and the wider
community.
Whilst there was disruption during the year,
most of our people have now returned to
work in our office locations, which has been
positive for wellbeing and team morale.
We have introduced additional flexibility
for our teams which is also working well.
We sincerely appreciate the efforts of our
people in maintaining the high quality of our
operations throughout the pandemic.
During FY2022, we improved our safety
performance with a Total Recordable
Case Frequency (“TRCF”) per million hours
worked of 0.28 down from 1.13 at 30 June
2021 – a significantly better result than
the marine industry average of 2.0 for our
cohort as measured by the International
Marine Contractors Association (“IMCA”).
Notwithstanding our strong safety
performance, we operate in a high-risk
industry and will continue to strive for
continuous improvement and focus on
ensuring our people are safe each and
every day.
Outlook for FY2023
We are seeing positive momentum for
offshore services with an improved outlook
for oil and gas and offshore wind services.
The impacts of COVID-19 also appear to be
normalising with restrictions now eased in
most of our operating regions.
We are anticipating the first half of FY2023
will be stronger than the second half of
FY2022 and look forward to capitalising on
the continued upward momentum in the
industry.
David Ross
Managing Director
Sustainability
Report
2022
16 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 17
King Reef, Exmouth WA installed by Subcon in 2018 - a sustainable
solution for decommissioning oil and gas infrastructure.
Photo courtesy of Blue Media Photography.
Sustainability Report
Sustainability is at the core of
MMA’s purpose as an organisation
and is integral to our overall
strategy to grow the business
profitably.
During FY2022, we completed the roll out
of our purpose across the organisation.
Our core belief and the key premise
underpinning our purpose is that
“marine resources should be developed
sustainably” and this now drives our
strategic decisions. The articulation of our
purpose represents a key cultural shift as
we transition the business to better reflect
the changing world we live in.
Whilst MMA was originally established to
service the offshore oil and gas sector, our
marine based skills are transferable to other
sectors. Whilst oil and gas will continue
to be an important revenue source as
the world transitions to renewable energy
over time, our strategy is to diversify into
sectors which support the energy transition
along with other adjacent marine markets.
MMA is also ideally positioned to support
the decommissioning of oil and gas
infrastructure over time.
In July 2022, we completed the acquisition
of Subcon which brings some exciting new
environmental solutions to MMA’s portfolio
including artificial reefs, coastal erosion
solutions and wind farm ecology. We look
forward to growing this part of the business
under MMA’s ownership.
During FY2022, we made significant
progress on a number of elements within
our sustainability strategy including:
• Embedding sustainability as a key
strategic imperative across the
business through the roll out of our
purpose;
MMA’s ESG strategy continues to be
focused on the following key elements:
• Further developing and refining our
emissions reduction strategy;
Environment – how MMA performs as a
steward of nature.
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.
MMA’s key ESG initiatives are aligned with
several of the United Nations Sustainable
Development Goals, which address the key
challenges currently faced globally. MMA
is focused on Goals 3, 5, 7, 8, 10, 12, 13
and 14 which are the most relevant to our
operations.
• Progressed a full technical evaluation of
the installation of battery technology on
one of our vessels;
• Collaborating on ground-breaking
research into ammonia as an alternate
fuel for the marine industry on one of
our vessels, the MMA Leveque;
• Significantly improving our safety
performance;
• Enhancing our community and
employee engagement strategy
through the establishment of a
corporate volunteering program;
• Reinforcing our culture of diversity and
inclusion through several awareness
and inclusion events;
• Continuing to foster collaborative
and respectful relationships with the
Indigenous communities in which we
operate; and
• Significantly enhancing our
environmental service offering through
the acquisition of Subcon.
We believe marine
resources should be
developed sustainably.
ESG Strategy
Environment
Social
Governance
Environmental
Management System
Certified to ISO 14001:2015
Employee Health
and Safety
Target 365 culture, Critical Controls,
Safety Management System
Corporate Governance
Standards
Compliant with ASX 4th Edition
Corporate Governance Principles
Emissions Reduction
Developing strategies and
initiatives to reduce emissions
across our operations
Employee Wellbeing
Employee engagement, EAP,
mental health, flexible working,
parental support
Code of Conduct
Focus on working legally,
ethically and safely, Group
Whistleblower Policy
Supporting the
Energy Transition
Diversifying our services to support
the development of offshore wind
Training and
Development
Anti-Bribery
and Corruption
Employee support and training
Zero-tolerance approach
Supporting Healthy Oceans
Diversity and Inclusion
Human Rights
Engineered reefs, coastal erosion,
waste management and pollution
prevention
Awareness and inclusion events,
measurable objectives
Modern Slavery Statement,
Maritime Labour Convention
Sustainability Innovation
Community Support
Innovation program focused on
addressing key sustainability
challenges of our industry
Community sponsorship,
philanthropy and volunteering
Indigenous Engagement
Indigenous training programs,
collaboration initiatives
18 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 19
MMA Offshore Limited | Annual Report 2022 19
Environment
Environmental Management
System
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 FY2022 and
had no 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.
The MMA Pride operating in Taiwan.
Environmental Management
Standards
As an operator in the highly regulated
global maritime industry, MMA is
committed to 100% compliance with all
applicable international regulations and
conventions to protect the sensitive marine
environments in which we operate. These
include:
•
International Convention for the
Prevention of Pollution from Ships
(MARPOL 73/78);
• Technical Code on Control of Emission
of Nitrogen Oxides from Marine Diesel
Engines;
• MARPOL Chapter IV – Regulations
on Energy Efficiency for Ships –
Collection and Reporting of Ship Fuel
Consumption Data for >5000GRT
Vessels; and
•
International Ballast Water
Management and Performance
Standard (D2).
Emissions Reduction
• A more detailed Emissions Reduction
Strategy was developed with
recommendations with regards to
the timing of setting decarbonisation
targets, which was approved by MMA’s
Board of Directors;
• A comprehensive review of the offshore
vessel industry’s progress towards
net zero emissions and the status of
the various technology options was
undertaken; and
• We progressed the technical evaluation
for the installation of battery technology
for one of our support vessels.
MMA’s Emissions Reduction Working
Group, which includes technical,
operational and management experts from
across the business meets at bi-monthly
intervals to establish, pursue and track
initiatives to reduce emissions within our
operations.
The following key initiatives are currently
being pursued:
• Optimisation of fuel monitoring and
measuring systems onboard our
vessels. This is a key step in our fuel
consumption optimisation program
providing more accurate data to make
informed decisions towards fuel use
optimisation;
• Analysis of vessel operational
modes with a view to reduce fuel
consumption through operational
efficiencies. Detailed monitoring of
fuel consumption against engine
configuration and operational modes
will allow MMA to identify and
implement optimal modes of operation,
which have the potential to significantly
reduce fuel consumption and therefore
emissions;
• Engagement of crew in reducing
emissions through ongoing internal
marketing and incentive campaigns;
and
The vast majority (96%) of MMA’s emissions
are generated by the fuel burnt on our
vessels.
MMA’s vessels currently operate on marine
gas oil (MGO) which is a low sulphur fuel
compared to heavy fuel oil which is used
elsewhere in the shipping industry. In terms
of eliminating or materially reducing our
carbon emissions from marine gas oil, we
are limited to a large degree by the absence
of an alternative fuel to power vessels
at this point in time. Significant research
into alternative fuels such as ammonia,
hydrogen and methane is currently being
undertaken by the industry, however no
clear alternative has yet been proven.
MMA’s technology team continues to be at
the forefront of alternative fuel research and
has been deeply involved in a project to
convert one of our platform supply vessels
to run almost totally on ammonia.
Given the complexities involved, the
timeframe for commercialisation of any
alternative fuel technology is unclear. In the
meantime, MMA is focusing its efforts on
a range of operational initiatives to reduce
the overall fuel burn on our vessels, as well
as the installation of battery technology
on vessels where appropriate and
commercially viable.
During the year, we increased the
resourcing directed at emissions reduction
including establishing a new role within
the vessel management team of Project
Manager – Strategic Initiatives. We are also
appointing an Operational Improvement
Lead within the Vessel Services team
to drive operational improvements and
emissions reduction initiatives across the
fleet.
MMA progressed its emissions reduction
strategy during the year as follows:
• MMA collaborated on a project to gain
Gas Ready certification for one of our
platform supply vessels, the MMA
Leveque. This certification is the first
step towards certifying the vessel to
run on ammonia as an alternative fuel.
The vessel has subsequently been sold
to Fortescue Future Industries ("FFI")
and under its new name, “FFI Green
Pioneer”, will act as a technology
demonstrator for FFI. MMA continues
to manage the vessel operationally and
technically and will assist FFI during the
conversion;
• Relaunching our Hull Coatings
Management Project which will
continue to look at the investment
returns (with respect to emissions
reduction) in hull coating types and
hull cleaning at regular intervals. MMA
operates vessels in high hull growth
locations (such as the tropics), so
increased monitoring and frequent
cleaning will reduce fuel consumption
and hence lower emissions. The
key to this project will be how to
accurately capture these costs and
share these with our customers who
will mostly benefit from the ensuing fuel
consumption reduction. This will be
aided by our above-mentioned work
on refining and optimising our fuel
monitoring systems, as these will help
analyse the savings in fuel consumption
brought about by the hull initiatives.
Significant work was undertaken during the
year to determine whether MMA could set
and announce specific emission reduction
targets. MMA’s position is to ensure that
any targets set are realistic and achievable.
The commercialisation of zero emission
alternative fuels is a critical factor for
reducing emissions in the maritime industry,
however, the timeline for the maturation of
the required technology, the production
and supply of these fuels and the supply
chain to distribute them are all unknown at
this stage. The potential emissions savings
they offer cannot therefore yet be defined
and quantified. MMA stands ready to adopt
targets when this information becomes
available and will invest capital in these
areas when investment outcomes can be
quantified. In summary, MMA’s approach
is to actively pursue decarbonisation, but
to only announce specific targets once
more information on zero emission fuels
becomes available.
MMA is committed to
growing our business
in an ecologically
sustainable way.
20 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 21
FY2022 Emissions
Supporting the Energy Transition
A key part of MMA’s strategy is to diversify
our service offering using our skills and
assets to facilitate the global energy
transition.
Offshore Wind
During FY2022, we continued to execute
our strategy to grow our offshore wind
business. A number of key achievements
were made during the year including the
acquisition of 49.9% of Taiwanese survey
company, Global Aqua Survey Ltd, to form
a new operating entity in Taiwan – “MMA
Global Aqua.” With cabotage and local
ownership becoming increasingly important
in the Taiwanese market, MMA Global Aqua
will provide MMA with a local platform from
which to grow our offshore wind business.
As a key part of our offshore wind strategy,
during FY2022 we worked towards
reflagging the MMA Crystal to carry
the Taiwanese flag, with the process
completing in July 2022. This was a
significant milestone in the development of
our capability and assets in Taiwan whilst
simultaneously building a localised supply
chain. The reflagging followed a substantial
conversion program conducted on the
vessel in early 2022, which added a suite of
new subsea support services to the vessel
to enhance its capability in supporting
offshore wind development.
MMA has calculated our emissions for
our global operations for the financial year
ended 30 June 2022 with our 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 under MMA’s operational
control. Typically, once MMA’s vessels have
been contracted, fuel comes under the
client’s operational control and emissions
are classified as Scope 3. Vessels used
in our subsea operations are typically
classified as Scope 1 under the operational
control test.
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 for MMA's owned fleet as the fleet
size and utilisation fluctuates.
During the year, MMA engaged a third-
party consultant to review our emissions
modelling and calculations. The review
confirmed that our calculations were
materially accurate with some minor
recommendations which have since been
incorporated into our models.
Emissions for FY2022 increased in line
with increased utilisation of the vessels
for the financial year. Whilst a number of
vessels were sold, these were typically cold
stacked and not contributing to emissions
in the prior year. Emissions intensity also
increased due to increased movement of
our vessels between locations including
Africa, Europe, Asia and Australia.
During FY2022, we supported several
offshore wind development projects in
Taiwan with offshore wind representing 9%
of our total revenue for the year. This was
down from 16% in FY2021 as a result of
a number of scopes being delayed due to
COVID-19 during the year.
We recently secured our first offshore
wind survey scope in South Korea with
operations to commence in FY2023. This is
an exciting development for the Company,
opening up a new area of operation with
significant forecast activity.
Marinus Link
During the year, MMA was proud to play
a key role in supporting the Marinus Link
project, a 1,500MW capacity undersea
and underground electricity connection
between Tasmania and Victoria. Marinus
Link is set to play a critical role in unlocking
Tasmania’s renewable energy and storage
resources to deliver low-cost, reliable and
clean energy for customers in the National
Electricity Market. Marinus Link is a key
project facilitating Australia’s transition
towards renewable energy and is expected
to cut at least 140 million tonnes of CO2
equivalent by 2050, the equivalent of
removing more than a million combustion
engine cars from our roads.
During the year, MMA’s subsea team
successfully completed the marine
engineering field campaign to assist with a
cable route feasibility assessment for the
Marinus Link project.
Total Emissions (tCO2-e)
FY2022
FY2021
FY2020
Scope 1
Scope 2
Scope 3
TOTALS
32,845
1,367
107,175
141,387
21,186
1,210
98,729
121,125
17,971
1,467
132,949
152,387
MMA is passionate
about conserving and
protecting the oceans on
which we operate.
Emissions Intensity
FY2022
FY2021
FY2020
Total Emissions / Available Vessel Days
15.6
11.9
14.4
Note: FY2021 and FY2020 emissions restated following internal remodelling.
Supporting Healthy Oceans
As a marine services company, MMA
is passionate about conserving and
protecting the oceans on which we
operate. In addition to our ongoing
commitment to preventing marine pollution,
the recent acquisition of Subcon is an
exciting development in that it enables us to
make a much more significant contribution
to supporting healthy oceans.
Reefs
Subcon are accomplished pioneers of
engineered reef solutions with over 30
large scale reef projects delivered globally
to date. Subcon’s unique engineered reefs
increase fish life by six times and receive
positive engagement from tourists and
stakeholders.
Through its engineered reefs, Subcon
has delivered habitat solutions for
fisheries enhancement, reef restoration,
coastal erosion control, offshore wind,
decommissioning of oil and gas structures,
tourism and living harbour solutions.
During FY2022, Subcon completed a
number of key projects supporting healthy
oceans.
Coastal Erosion Prevention –
C.Y. O’Connor Beach
Tourism and Marine Habitat Creation –
Wonder Reef
Subcon recently completed the installation
of 135 wave attenuating reef modules
off C.Y. O’Connor Beach situated along
the coastline of Perth, Western Australia.
The beach has historically experienced
significant coastal erosion issues, with the
shoreline eroding by more than 50 metres
over the past 20 years. The installed reef
modules will help reduce energy from
ocean swell allowing coastal sand to fall
out of suspension and settle along the
coastline. The reefs will double as a local
tourism drawcard as the modules become
colonised by marine flora and fauna.
In 2019, a similar, larger scale reef was
installed by Subcon at Mon Choisy Beach
in Mauritius supported by the United
Nations Development Program, which
has seen excellent results in reducing the
impacts of coastal erosion to date.
The C.Y. O’Connor project will be monitored
over a three-year period by the University
of Western Australia to gauge the success
of coastal erosion mitigation and will serve
as a valuable example for national and
international government and commercial
organisations.
We see Subcon’s attenuating reefs as a
potential scalable solution to combat the
erosion of our coastlines globally as a
result of rising sea levels and more frequent
extreme weather events as a result of
climate change.
Subcon was instrumental in the design,
engineering and installation of the Wonder
Reef on Australia’s Gold Coast which was
opened to the public for dive tourism in
June 2022.
Recently featured in Australian Geographic,
Wonder Reef is the world’s first buoyant
reef consisting of nine enormous,
sculptured reefs suspended 22 metres
above the sea floor emulating a giant kelp
forest.
Using innovative technology, the sculptural
reef modules (designed by artist David
Templeman) were engineered by Subcon
to withstand cyclones and wave heights of
over 18 metres. Made from uncoated steel
to maximise marine growth, the structure
is protected from corrosion by anodes.
The reef has been purposely designed
to attract and sustain a variety of marine
life with significant environmental benefits
expected from the addition of 32,000 cubic
metres of new reef habitat on a previously
bare seabed. Less than 12 months after
its installation, the Wonder Reef is already
hosting over 100 fish species.
With declining fish stocks and coral reefs
under threat, artificial reefs such as the
Wonder Reef have an important role to
play and we look forward to leveraging
our experience at Wonder Reef on future
projects of this nature.
Subcon Acquisition
In June 2022, MMA entered into an agreement to acquire Subcon, a leading
provider of innovative stabilisation, coastal erosion and engineered reef solutions
in Australia and internationally. The acquisition brings an exciting new suite of
marine environmental services to MMA.
Subcon’s motto is “enabling ocean communities to thrive” and it was this
passion about being on the right side of history, enhancing ecosystems and
economies to enable thriving marine habitats that was a key factor in MMA’s
decision to acquire the business.
We completed the acquisition in July 2022, with the business set to be integrated
into MMA to form our Environmental and Stabilisation service offering.
22 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 23
The Wonder Reef, Gold Coast QLD - a tourism
and marine habitat creation by Subcon.
Marine Waste Mitigation
Sustainability Innovation
Employee Health and Safety
Social
At MMA, protecting the health, safety and
wellbeing 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.’
Underpinning our strong health and safety
performance was the delivery of a number
of key initiatives during the year, including:
• Development of an updated Target 365
leadership approach;
During the COVID-19 pandemic, the
health, safety and wellbeing of our people,
alongside that of our business partners
remains our primary focus. We have been
committed to stopping the virus from
reaching our sites, ensuring business
continuity so that our employees and
business partners can safely work in a
reduced risk environment.
In FY2022, our Total Recordable Case
Frequency (“TRCF”) performance improved
from 1.13 the previous year to 0.28 (per
million hours worked). We recorded one
medical treatment case which was from
a low-risk maintenance activity. Our
safety performance has been assessed
against our cohort of International Marine
Contractors Association ("IMCA") members,
placing MMA within the top quartile.
• A complete review of critical
operational risks; and
• Leadership engagement coaching
sessions for senior management.
With 100% implementation of safety key
performance indicators (KPIs) during the
year, our safety leadership team has been
instrumental in championing our Target 365
program which has resulted in a reduction
of injury and non-injurious events.
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 FY2022, we
achieved 344 (94%) perfect days – a 6%
improvement on the previous year.
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 Manhours)
1.13
0.53
0.54
0.28
0.28
18
19
20
21
22
MMA TRCF
IMCA Average
At MMA, one of the key pillars of our
Innovation Program is sustainability.
We continue to focus our efforts in
developing new ways of working around
the challenge of developing the marine
resources industry more sustainably.
We are working on internally generated
ideas as well as co-developing innovation
at an industry level.
Internal Initiatives
Internally, MMA focuses its efforts around
solving the key challenges that our clients
face. We are currently exploring concepts
around reducing offshore personnel and
enabling new ways of conducting offshore
inspections remotely, reducing the need
for travel.
3D Printing Pilot Program
Through our partnership with Wilhelmsen
and thyssenkrupp, MMA successfully
printed a seawater pump impellor using
3D technology. This successful use case
has laid the groundwork and learnings
to expand the program with the goal of
reducing spare part holding costs and lead
times whilst reducing the carbon footprint
by reducing logistics requirements through
localised printing.
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.
As part of our commitment to supporting
healthy oceans, 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 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.
MMA has established a Waste
Management Working Group to identify
and implement waste reduction and waste
management initiatives across our global
operations.
Initiatives in place include:
• Elimination of single use water bottles
onboard MMA vessels by 2024;
• Waste segregation onboard vessels
and in all shore-based facilities; and
• Use of recycled paper with a drive to
increase digital automation to reduce
paper use.
Initiatives under investigation include:
• E-Waste recycling initiatives and
options;
• Reduction in ballast waste through
improved treatment and segregation
systems; and
•
Improved accessibility to waste paper
recycling.
Protecting the health, safety
and wellbeing of our people is
fundamental to how we do business.
24 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 25
During FY2022, we continued to undertake
improvements in our HSEQ systems and
processes. Highlights for the year included:
• 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;
• Senior Management engagement
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;
• Mental health and wellbeing promotion
to better understand what is important
to our workforce;
• A major campaign which focused on
hand safety and the impacts of what a
permanent hand injury would have on
family and quality of life;
• Vessel safety case management in
both Australia and Brunei;
• Document of Compliance attainment
with the Republic of China Flag State
(Taiwan); and
• Comprehensive internal assurance
programme review to ensure our
controls are adequately robust
to prevent incidents, protect the
environment and maintain our licence
to operate.
During FY2022, we restructured our HSEQ
executive leadership role to include risk.
This provides a strengthened approach to
how MMA manages the HSEQ, compliance
and risk functions across our business
units.
MMA was again active in contributing to the
improvement of HSEQ management across
our industry. MMA’s Managing Director,
Mr David Ross, was the Co-Chair of the
Marine Working Group of Safer Together
(Western Australia and Northern Territory)
and was a member of the Safer Together
Safety Leaders Group. MMA’s Executive
General Manager Risk is also a member of
the IMCA Asia Pacific Committee.
Employee Wellbeing
At MMA, we are committed to fostering a
diverse, engaging and high-performance
workplace 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.
MMA has several mechanisms in place to
foster employee wellbeing, including:
• A culture of inclusive communication to
foster employee engagement including
regular Managing Director town hall
meetings, lunch and learn sessions and
company news updates;
• A calendar of regular employee
engagement events providing
opportunities to foster social
connections and a sense of belonging.
During FY2022, we also established
a volunteering program providing our
people with opportunities to give back
to the community or participate in
charity and community events;
• Specific wellbeing initiatives including
a “Mindful at MMA” photo competition
which was conducted during the year
to promote mindfulness and wellbeing
across our seagoing and office-based
staff;
• Flexible working arrangements
to facilitate personal and family
commitments including recently
formalising a Working from Home
policy for office-based staff;
• Generous parental support
and flexibility on return-to-work
arrangements to facilitate ongoing
participation;
• A Mental Health Policy enabling staff
to use personal leave for mental health
reasons; and
• An employee assistance program
which provides counselling and
wellbeing resources to staff globally
24/7.
Crew Engagement
MMA recognises the importance of
regularly engaging with our vessel crew
who due to the nature of their work at
sea, have limited opportunity to engage
with the business. In April 2022, we held
a conference in Perth, Western Australia
with several of MMA’s vessel masters,
chief engineers and integrated ratings
in attendance. Delivered by members of
MMA’s senior and executive leadership
teams, the event was an opportunity
to discuss a range of key topics as well
as a valuable face-to-face networking
opportunity following a lengthy period
of interstate travel restrictions due to
COVID-19.
Training & Development
Employee Training
MMA recognises that providing our people
with opportunities for training is key to their
career and individual development.
A total of 1,116 MMA employees accessed
training over the course of FY2022,
completing a total of 9,186 individual
training outcomes. The ongoing skilling
and competency of our workforce ensures
we are able to meet complex business
challenges for our clients in the future,
whilst developing our people to enhance
their career progression.
Industry Scholarships
MMA is proud to support the development
of the next generation of hydrographic
surveyors through the launch of the
MMA Offshore Hydrographic Surveying
Scholarship in conjunction with Curtin
University in February 2022.
The scholarship provides Bachelor of
Surveying (Honours) students in their final
year of study at Curtin University with
a monetary contribution towards their
educational related expenses as well as
the potential for vacation work, offering
a hands-on and immersive experience
alongside MMA’s team of experienced
surveyors. The scholarship also provides
students with the potential for employment
with MMA post-graduation.
With a shortage of skilled hydrographic
surveyors in Australia, providing support
and real-world experience to students is
critical to the development of Australia’s
hydrographic surveying industry.
Diversity & Inclusion
With over 1,100 employees located around
the world, MMA is proud to be a highly
culturally diverse organisation.
To assist with promoting our objective to
facilitate greater diversity and inclusion
at all levels within the Company, we have
a Diversity and Inclusion Committee
responsible for establishing and monitoring
strategies on promoting and maintaining
diversity and inclusion.
We also regularly review our remuneration
practices to ensure equality.
Employee Nationalities - Top Ten
15
Ukraine
33
Taiwan
43
New Zealand
55
United Kingdom
56
Singapore
71
India
85
Malaysia
150
Philippines
156
Indonesia
472
Australia
% of Women Employed
34.3
32.5
33.3
33.3
33.3
16.7
19.2
16.7
21
22
Total Organisation
(excluding offshore crew)
21
22
Board of
Directors
21
22
21
22
Executive
Management
Senior
Management
26 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 27
MSWA Ocean Ride. Photo courtesy of MSWA.
Diversity Measurable Objectives
Diwali
Annually, MMA develops a set of Diversity
Measurable Objectives, including
targets for female participation in senior
management positions.
Pleasingly, MMA’s percentage of women
employed at an executive leadership level
increased to 33.3% in FY2022, compared
to 16.7% in FY2021. We are also pleased to
maintain a diverse Board of Directors with
33.3% female Board representation.
We are still targeting 30% female
representation at the senior management
level but recognise that this may take
longer to achieve given the traditionally
male dominated nature of the offshore
marine and subsea industries. We have
extended our timeframe to achieve 30%
out to June 2025 and have set a new
target to increase the number of females
in technical positions to a minimum of 10%
by June 2025 which we hope will improve
the pipeline of internal candidates for senior
management positions which often require
a technical background.
Diversity Events
Promoting awareness and inclusion is the
second key focus of MMA’s Diversity and
Inclusion Committee. Our formal events
program has been in place since 2020
and has been an incredibly successful
component of MMA’s Diversity and
Inclusion strategy, fostering a greater
appreciation and understanding of the
cultures and backgrounds of our people as
well as diversity issues more broadly.
During FY2022, MMA employees came
together to recognise a range of events
including Diwali, Lunar New Year,
International Women’s Day, Ramadan,
Eid al-Fitr, the International Day for Women
in Maritime, Reconciliation Week and
NAIDOC Week.
28 MMA Offshore Limited | Annual Report 2022
MMA celebrated the Hindu holiday of Diwali
during November 2021, with our Diversity
and Inclusion Committee recognising the
week-long event and providing a selection
of traditional ‘mithai’ sweets to staff. One
of our staff members, who has since joined
the Diversity and Inclusion Committee,
shared his lived experience of Diwali and
the significance of the holiday in Hindu
culture. We also shared information on the
commonly practiced traditions of Diwali
through our internal communications
channels, which was well-received by staff
across our global locations.
Lunar New Year
Our Perth office celebrated the Lunar New
Year in February 2022, decorating the office
with a number of customary decorations
and serving a traditional morning tea
for staff. Local COVID-19 restrictions
unfortunately affected our ability to host
our annual celebration at our Singapore
office, however our team was able to gather
later in April once restrictions had lifted to
celebrate the opening of our new Singapore
office location.
International Women’s Day
In celebration of International Women’s Day,
MMA's Diversity and Inclusion Committee
shared a live-streamed presentation
across MMA’s global offices on the 2022
theme "Break the Bias" and the conscious
and unconscious biases that can occur
within a workplace environment. MMA
Non-Executive Director, Sue Murphy,
also shared an insight into her 40 years
of experience in the resources and
infrastructure industries and her early
experiences working in male-dominated
work sites as a civil engineer.
MMA also sponsored 10 employees
to attend the Perth Business News
International Women’s Day event, where the
team heard from prominent gender equality
advocates in the Western Australian
business community.
Ramadan & Eid al-Fitr
Throughout April and May 2022, MMA’s
Diversity and Inclusion Committee
recognised the Muslim tradition of
Ramadan, and produced a short film
featuring three onshore and offshore staff
members who shared unique insights into
their personal traditions undertaken during
Ramadan. At the completion of Ramadan,
MMA also came together to celebrate Eid
al-Fitr, with celebratory staff lunches held at
our Perth and Singapore head offices.
International Day for Women in
Maritime
On 18 May, MMA celebrated the inaugural
International Maritime Organization ("IMO")
event, the International Day for Women
in Maritime. In support of the day, MMA
sponsored 10 staff members to attend the
inaugural WA Women in Maritime panel and
networking event held in Fremantle, and
provided resources to staff, highlighting
past news stories about MMA women in
maritime.
MMA is committed
to supporting the
communities in
which we operate.
Reconciliation Week
Community Support
Christmas Food Donation Drives
From 27 May to 3 June, MMA recognised
Reconciliation Week by sharing dedicated
resources on our global internal news
channels and encouraging our Perth-
based staff to participate in a number of
locally held events. Our Perth staff also
joined members of the Western Australian
community on Whadjuk Noongar Boodjar
for the Walk for Reconciliation, where we
journeyed through Kaarta Koomba (Kings
Park) and reflected on Australia’s ongoing
journey towards reconciliation.
NAIDOC Week
MMA recently acknowledged and
celebrated NAIDOC Week, with our
teams around the world embracing the
opportunity to gain a greater understanding
of First Nations cultures and histories.
MMA’s Diversity and Inclusion Committee
unveiled an Acknowledgement of Country
plaque at our Perth office, designed and
produced by local Noongar artist, Jarni
McGuire. During the week, the Committee
also led a live-streamed presentation for
all staff sharing the experiences of MMA’s
survey team in collaborating with Traditional
Owner groups across Australia. Our
Perth team also enjoyed a special native
food-inspired morning tea supplied by an
Indigenous Australian-owned business. We
also provided comprehensive resources to
staff to encourage greater awareness and
understanding amongst our people and
provided resources on how to deliver an
Acknowledgement of Country at meetings.
At the completion of July, we also raised
funds for the Polly Farmer Foundation at
our monthly charity morning tea.
MMA is committed to supporting the
communities in which we operate by
making positive contributions and creating
mutual opportunities to support economic
growth and social wellbeing.
During FY2022, MMA and its employees
raised over $14,000 for local charities
and not-for-profit organisations. We also
commenced the rollout of our corporate
volunteering program in which MMA’s Perth
based employees participated in a number
of philanthropic activities totalling 125 hours
volunteered. Feedback on the program to
date has been very positive with our staff
appreciating the opportunity to get together
with colleagues from across the business
to give back to the community.
MSWA Ocean Ride
In November 2021, 16 MMA cyclists
participated in the MSWA Ocean Ride
in Perth, collectively cycling 1,300km
in support of Western Australians with
neurological conditions. MMA raised a
total of $7,639 for MSWA, placing us in fifth
place on the overall team fundraising leader
board.
Salvation Army Christmas Support
To assist the Western Australian Salvation
Army branch, MMA team members
from our Perth office volunteered during
November 2021 to help pack and prepare
Christmas presents to be dispatched to the
remote far-north Indigenous community of
Warmun. During December 2021, members
from our Perth office also spent a morning
volunteering at the Salvation Army’s
Northbridge branch, preparing a cooked
lunch for community members in need.
MMA team members in Perth and
Aberdeen provided much-needed food
donations to local families throughout
December 2021 in MMA’s annual Christmas
Food Donation Drive. Contributed by MMA
staff, food donations were provided to
Foodbank WA, as well as Aberdeen families
in need throughout winter.
Beach Clean Ups
During May 2022, members of MMA’s
Perth team joined Conservation Volunteers
Australia in a beach clean-up event at
Cottesloe Beach. Our team removed both
large litter items and smaller microplastics
from the shore, working together with the
community to preserve the natural marine
environment.
Foodbank Volunteering
In May 2022, teams from MMA’s Perth
office volunteered during a morning at
Foodbank WA to sort, pack and prepare
hampers containing essential food and
household goods to be distributed to
Western Australian families in need.
Charity Morning Teas
During FY2022, MMA’s Perth office held
its inaugural monthly morning tea in
order to raise donations for employee-
nominated charitable organisations, with
MMA matching all amounts raised. Since
the first event in 2021, MMA and our staff
have raised over $4,600 for charities and
organisations such as the Cancer Council,
Movember and UN Women Australia.
MMA Offshore Limited | Annual Report 2022 29
Target 365 Rewards
Through MMA’s Target 365 safety initiative,
MMA runs a rewards programme whereby
business units that achieve exceptional
safety performance are given the opportunity
to donate monetary rewards to registered
charities. In FY2022, a number of MMA
vessels nominated to donate their Target 365
rewards to charities including the Starlight
Children’s Foundation and Northern Territory
anti-bullying charity, the Dolly’s Dream
Foundation.
Blood Donation Drives
In November 2021, MMA’s Batam team and
their subcontractors participated in a local
blood donation drive in a collaborative effort
between the Batam Shipyard and Offshore
Association (BSOA) and the Indonesian
Red Cross Society. Members of MMA’s
Perth team also registered a regular blood
donation team with the Australian Red Cross
during FY2022, providing critical life-saving
resources to their local community.
Indigenous Engagement
MMA is committed to establishing
and fostering long-term relationships
and partnerships with the Indigenous
communities in which we operate.
Indigenous Training Programs
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 sea time, gaining
critical work skills and experience over a
period of 16 months.
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.
Traditional Owner Engagement
During FY2022, MMA was contracted by the Australian
Government Department of Defence through the
HydroScheme Industry Partnership Program ("HIPP") to
undertake a hydrographic survey of Camden Sound, located
in the Bonaparte Archipelago in Western Australia.
Having established a strong working relationship with
the Dambimangari People during a previous survey work
scope completed in FY2021, MMA again consulted the
Dambimangari Aboriginal Corporation (Traditional Owners)
in Derby to access the survey area and obtain the required
permits to survey the region. Two Traditional Owners also
joined the survey team during geodetic activities on Heywood
Island, Degerando Island, Booby Island, Vulcan Island and
Wailgwin Island. A Traditional Owner was also present
during offshore hydrographic survey activities, with a total
of nine Traditional Owners engaged offshore. As part of a
Commonwealth Marine Parks Permit to operate in the area,
Marine Mammal Observers (MMO) were required onboard the
survey vessels. MMA engaged Blue Planet Marine to provide
MMO training to members of the Dambimangari Community,
who formed part of the offshore team undertaking MMO
responsibilities.
During a second project for the Australian Government
Department of Defence, MMA was contracted to undertake
a bathymetric survey of Cape Barren to Babel Island located
off the east coast of Tasmania. Through early engagement
and effective stakeholder management, MMA successfully
sought permission from the team at the Tasmanian Aboriginal
Centre in order to access and perform works at the culturally
significant site of Babel Island.
Through the completion of the project, MMA also sourced and
enrolled two new Indigenous enterprises into the Company’s
supply chain (Marlu Resources Fabrication and Bunbara
Logistics). We also achieved our Australian Industry Capability
target of mirroring the Department of Defence’s own target
of allocating 1.5% of procurement spend with Indigenous
enterprises. These enterprises are now registered vendors in
MMA’s approved vendor register and are able to be engaged
by the wider MMA group.
Governance
MMA believes that high standards
of corporate governance are
paramount for sustainable long-
term performance and value
creation.
MMA 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 are currently in the process of
refreshing and updating the Code
of Conduct to incorporate our newly
articulated purpose, principles and
behaviours charter. The Code of Conduct
will be re-launched to the business and
used as an opportunity to engage with our
workforce on this important topic.
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 FY2022.
Further details of the Company’s Corporate
Governance Policies are available on
the Corporate Governance page of our
website.
Modern Slavery
MMA’s commitment to human rights is
supported by policies and processes that
mitigate the risks of slavery and human
trafficking within our own operations and in
our supply chain.
MMA assesses the risk of modern slavery
occurring within our own operations to be
extremely low.
All our seafarers are employed in line with
Australian and international labour laws
including the Maritime Labour Convention
(“MLC”), the International Labour
Organisation (“ILO”) and various flag state
requirements which stipulate the rights and
benefits of seafarers.
Our onshore personnel are engaged by
way of common law contract or enterprise
agreements which are underpinned by
labour laws and minimum standards in the
country of employment.
Within our supply chain, MMA conducts
extensive third-party due diligence on
prospective suppliers and contractors
and requires that new vendors abide by
the Modern Slavery Act and UN Global
Compact Principles. MMA’s Standard
Procurement Terms and Conditions also
require all contractors and suppliers to
comply with modern slavery legislation.
Where third party terms and conditions are
used, MMA will also endeavour to include
similar provisions into its contracts.
MMA’s processes and procedures include
a range of audits and inspections which
seek to ensure that all statutory and internal
compliance requirements are met. Through
the above, MMA is able to ensure that
any potential modern slavery practice or
risk is identified, assessed and actioned
appropriately.
MMA’s 2022 Modern Slavery Statement
can be found on the Australian
Government’s Modern Slavery Register at
modernslaveryregister.gov.au.
30 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 31
Risk
MMA recognises that risk is an
inherent part of its business.
Effectively identifying and
managing risk is critical to MMA’s
success.
MMA’s Integrated Business Management
System (IBMS) documents the risk
management framework MMA applies to
ensure that a comprehensive approach
to the identification, assessment and
treatment of risk is applied. The risk
framework is 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 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.
COVID-19
MMA continues to manage the impacts
of COVID-19 as the industry transitions
to a phase of operating in a world with
COVID-19 and as such has control
measures in place to minimise disruption as
a result of COVID-19 cases.
At the industry level, COVID-19 continues to
impact supply chain activities and current
work scopes through:
• 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
• Working from home and other
Government restrictions.
Dependence on Level of Activity in
the Offshore Oil and Gas Industry
The Company is dependent on the level of
activity in the offshore oil and 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
transition to renewable energy, 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:
• Diversifying its service offering into
alternative market sectors such as
offshore wind, government services
and other new marine markets;
• Differentiating itself though innovation
and operational excellence;
• Expanding its service offering to
include subsea and project logistics
services;
• Warm-stacking vessels to minimise
holding costs for vessels between
contracts;
• Providing an integrated marine and
subsea service to clients;
• Expanding its service offering into the
growing offshore wind sector; and
• Differentiating itself from its competitors
through operational excellence,
proactive and innovative solutions,
long-term customer relationships and
responsive account management.
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;
• Quarantine risks;
• Diversifying its contract portfolio
• Mental health risks;
across the exploration, construction
and production phases and by
providing maintenance/repair and
decommissioning services; and
• Diversifying its geographic footprint
across several key regional areas.
Competition, Vessel Oversupply
and Fleet Composition
Misalignment with Market Demand
Demand for MMA’s vessels is also affected
by the number of vessels available in the
market and the competitive landscape.
Any misalignment between vessel supply
and demand can lead to an increase in
competition which can adversely impact
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;
• 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;
• 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;
• Cyber security attacks;
• Kidnap and ransom;
• Fraud and theft;
•
Increases in input costs;
• Loss of key personnel; and
• Contractual assumptions of risk.
Cyber Security
MMA utilises sophisticated information
technology to deliver high-quality services,
interfaced with third-party information
technology systems. Instances of cyber
attacks have the potential to cause
disruption and/or financial and reputational
damage to the Company.
MMA has implemented a comprehensive
Information and Security Management
System to proactively identify, monitor,
mitigate and monitor information security
vulnerabilities, threats and risks in order to
protect MMA, its employees, customers,
assets and data.
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
The energy transition is impacting
MMA’s traditional oil and gas markets
and customers as the world moves to
renewable energy sources. Alternate
marine fuel technology, which is still under
investigation, will also affect MMA’s fleet
when the technology is developed and
marine assets transition to lower emissions
fuel sources.
MMA views the energy transition as both
a risk and an opportunity. MMA has
diversified its service offering into the
rapidly growing offshore wind market in
order to support the energy transition.
MMA is also collaborating on research
into alternate fuel technologies to power
existing and future assets. Sustainability is
a key strategic business imperative led by
an Executive Management team member
and reporting to the Board of Directors.
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 health safety and quality systems
and audits, information and security
management systems and mitigation
strategies, 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 and
Regulatory Factors
Our international operations are subject
to challenging geopolitical risks in 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. As MMA’s
operations have expanded into the offshore
wind sector in Taiwan, we continue to
monitor the geopolitical situation there and
official advice issued by governments and
marine risk insurers (including the Joint War
Committee).
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, Code of Conduct and
Group Whistle-blower Policy have been
implemented and are continually monitored
to try and combat these risks.
Debt Refinancing and
Covenant breaches
Any material reduction in profitability may
increase the risk of the Company failing to
comply with the covenants associated with
its Banking Facility or on the Company’s
ability to refinance at the end of facility term
in January 2025.
MMA seeks to manage these risks through
proactively engaging with its lenders and
the wider debt markets as well as actively
monitoring earnings and cash flows to
forecast covenant compliance.
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.
32 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 33
Board of Directors
Mr Ian Alexander Macliver
Mr David Colin Ross
Mr Chiang Gnee Heng
Mr Peter Kennan
Ms Susan Murphy AO
Ms Sally Langer
Chairman
– Appointed 28 January 2021
Managing Director
– Appointed 13 January 2020
Non-Executive Director
– Appointed 5 July 2012
Non-Executive Director
– Appointed 22 September 2017
Non-Executive Director
– 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 31 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 previously
held the roles of General Manager
Operations and Chief Operating Officer.
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 Group 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 and debt and equity
reconstructions.
Ian is currently a Non-Executive
Director of Sheffield Resources Limited
which is listed on the Australian
Securities Exchange.
Ian was previously Chairman of
Western Areas Limited, and a Non-
Executive Director of both 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, waste and
environment management businesses.
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 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 over 20 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 currently a Non-Executive
Chairman of Intelligent Monitoring Group
Limited.
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 Non-Executive
Director of Monadelphous Group
Limited, The West Australian Treasury
Corporation, and the 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 Fellow of the Institute
of Chartered Accountants and is a
graduate of the Australian Institute of
Company Directors.
Sally is 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.
34 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 35
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 2022, can be found on the Company’s website at www.mmaoffshore.com/investor-centre/corporate-governance.
The Company’s Corporate Governance Statement is current as at 25 August 2022 and has been approved by the Board.
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 2022. 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)
(b)
undertake appropriate checks before appointing a director or senior executive or putting someone forward
for election as a director; and
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)
(b)
have and disclose a diversity policy;
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.
B.
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
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
(a)
(b)
have and disclose a process for periodically evaluating the performance of the board, its committees and
individual directors; and
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)
(b)
have and disclose a process for evaluating the performance of its senior executives at least once every
reporting period; and
disclose for each reporting period whether a performance evaluation has been undertaken in accordance
with that process during or in respect of that period.
Principle 2: Structure the board to be effective and add value
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)
(b)
the names of the directors considered by the board to be independent directors;
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
2.6
(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.
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
36 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 37
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)
(b)
have and disclose a code of conduct for its directors, senior executives and employees; and
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)
(b)
have and disclose a whistleblower policy; and
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)
(b)
have and disclose an anti-bribery and corruption policy; and
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
38 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 39
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 2022.
Rights Granted to Directors and Senior Management
During and since the end of the financial year, an aggregate of 4,799,436 performance rights were granted to the following Director and to the
five highest remunerated senior officers of the Company as part of their remuneration:
Directors
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 34 to 35
(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.
Directorships of Other Listed Companies
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:
Name
Company
Mr I Macliver
Sheffield Resources Limited
Western Areas Limited
Otto Energy Limited
Period of Directorship
Since August 2019
October 2011- June 2022
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
Intelligent Monitoring Group Limited
Since November 2019
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
-
100,000
190,758
-
29,706,815
-
-
Performance
rights direct
-
4,871,501
-
-
-
-
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.
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 45 to 56. 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.
Name
Mr D Ross
Mr D Cavanagh
Mr T Muirhead
Mr S Edgar
Mr T Radic
Ms L Buckey
Company Secretary
Number of
rights granted
Number of ordinary
Issuing entity
shares under rights
1,691,229
MMA Offshore Limited
1,029,473
MMA Offshore Limited
387,903
MMA Offshore Limited
703,714
MMA Offshore Limited
680,104
MMA Offshore Limited
307,013
MMA Offshore Limited
0
0
0
0
0
0
Mr Tim Muirhead was appointed as Company Secretary on 10 January 2022 and held the position at the end of the financial year.
Mr Muirhead is an Australian qualified lawyer with over fifteen years’ experience in the provision of corporate and commercial legal advice and
advice of matters of governance and compliance.
Mr Muirhead joined the Company’s legal team in November 2009. Prior to joining the Company, Mr Muirhead commenced his career as a
corporate lawyer at a top tier Australian law firm, where he gained exposure to a broad range of corporate and commercial transactions.
Mr Muirhead has also been Senior Legal Counsel at another large ASX listed entity.
Mr Muirhead holds a Bachelor of Science and Bachelor of Law (with distinction) from the University of Western Australia and a Graduate
Diploma of Applied Corporate Governance and Risk Management from 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, subsea and project
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 8-16.
Changes in State of Affairs
The Chairman’s Address and the Managing Director’s Report (on pages 8-16) 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.
As announced to the ASX on 23 June 2022, the Company entered into an agreement to acquire Subcon International Pty Ltd (“Subcon"). The
completion of that acquisition occurred on 28 July 2022 and was announced to the ASX on that day. Subcon provides innovative stabilisation,
coastal erosion and engineered reef solutions to the oil and gas, offshore wind, coastal infrastructure and tourism sectors.
Future Developments
In general terms, the Chairman’s Address and the Managing Director’s Report (on pages 8-16) gives an indication of likely developments and
the expected results of those operations.
40 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 41
Environmental Regulations
Insurance and Indemnification of Directors and Officers
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 2022.
Dividends
In respect of the financial year ended 30 June 2021, 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 earnings to support business operations until market conditions improve.
This position remains the same in respect of the financial year ended 30 June 2022. Accordingly, no interim or final dividend has been
recommended, declared or paid for the 2022 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
MMA Offshore Limited
MMA Offshore Limited
MMA Offshore Limited
Number of unissued
shares under rights
1,000,180
1,667,588
5,327,976
4,616,666
1,518,829
2,050,414
1,750,001
Class of
shares
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Exercise price
of rights
Vesting date
$
0.00(a)
0.00(b)
0.00(c)
0.00(d)
0.00(e)
0.00(e)
0.00(f)
of rights
1 Jul 2022
1 Jul 2022
1 Jul 2023
1 Nov 2023
1 July 2024
1 July 2024
31 Dec 2023
(a) For senior managers who remained employed with the Company or a wholly owned subsidiary of the Company on 30 June 2022, their performance
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 for the 2022 financial year was 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
rights linked to the retention hurdle (totalling approximately 134,000) vested on 1 July 2022.
• There were no officers of the Company who were former partners or directors of Deloitte, whilst Deloitte conducted audits of the
(b) These performance rights vested for employees who remained employed by the Company or a wholly owned subsidiary of the Company on
30 June 2022.
(c) 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).
(d) 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).
(e) These performance rights vest on 1 July 2024 subject to the performance criteria as detailed in note 5.2 and have a two-year exercise period to
1 July 2026 (being the expiry date of the performance rights).
(f) These performance rights vest on 31 December 2023 subject to the employee remaining an employee of the Company (or a subsidiary of the
Company) as at 31 December 2023 and have a two-year exercise period to 31 December 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.
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.
Company.
Directors’ Meetings
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, seven
Board meetings, four Audit and Risk Committee meetings and three Nomination and Remuneration Committee meetings were held.
Name
Mr I Macliver
Mr D Ross
Mr CG Heng
Mr P Kennan
Ms S Murphy
Ms S Langer
Board of Directors
Audit and Risk Committee
Remuneration Committee
Held
Attended
Held
Attended
Held
Attended
Nomination and
7
7
7
7
7
7
7
7
7
7
7
7
4
4
4
4
4
4
4
4
4
4
4
4
3
3
3
3
3
3
3
3
3
3
3
3
Proceedings on Behalf of the Company
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).
42 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 43
Non-Audit Services
Remuneration Policy
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 $617,127 for the provision of audit services.
As 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 57 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.
Remuneration Report
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 2022.
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. During the financial year, following a review by the Company of its delegation of authority and internal approval practices, the Company
determined that, in addition to the Director, only the Chief Financial Officer and Company Secretary fall within definition of ‘key management
personnel’ and has therefore adjusted its Remuneration Report accordingly
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 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 2022 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 2022 were as follows:
Fixed Annual Remuneration (FAR)
• As announced to the ASX on 1 November 2021, as part of his relocation to Australia from Singapore, the Managing Director entered into
a new employment contract, the details of which are set out in the announcement. Recognising that the Managing Director had not had
an increase in fixed annual remuneration since FY2015 (and accepted a 10% decrease to his fixed annual remuneration in FY2018), the
Board determined to increase the Managing Director’s FAR to $720,000 per annum (including superannuation) on and from 1 November
2021. The increase considered Mr Ross’ appointment to the position of Managing Director (with no previous increase in this regard), the
non-monetary allowances he received in Singapore, and provided alignment with market remuneration for comparable roles in Australia.
• The Chief Financial Officer did not receive an increase in FAR for the 2022 financial year.
• The Company’s former Company Secretary (who ceased his appointment on 10 January 2022) received a 2.5% increase in FAR in line
with inflation and market conditions.
Short-term Incentive (STI)
• The Board exercised its discretion to maintain the STI component in relation to the Managing Director and other key management
personnel for the 2022 financial year.
• The new Company Secretary (Mr Tim Muirhead) received a cash bonus of $20,000 during the 2022 financial year. The bonus is
recoverable if the Company Secretary departs the business before 30 April 2023.
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 and for the 2022 financial year.
The Directors and other key management personnel of the consolidated entity during and at the end of the financial year were:
Remuneration Report 2021
Executive Director
Non-Executive Directors
Mr D Ross (Managing Director/CEO)
Mr I Macliver (Chairman)
Mr CG Heng
Mr P Kennan
Ms S Murphy
Ms S Langer
Other Key Management Personnel
Mr D Cavanagh (Chief Financial Officer)
Mr D Roberts (Executive General Manager Legal/Company Secretary)(1)
Mr T Muirhead (Executive General Manager Legal/Company Secretary)(2)
(1) Ceased as Company Secretary on 10 January 2022.
(2) Appointed as Company Secretary on 10 January 2022.
Apart from Mr Dylan Roberts and Mr Tim Muirhead (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.
MMA Offshore Limited’s Remuneration Report for the 2021 financial year was adopted at the Company’s Annual General Meeting on 10
November 2021 with a clear majority of 140,354,388 votes in favour of the motion (representing 99.07% of the votes received).
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 2022 financial year, there was no increase in Non-Executive Directors’ fees.
44 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 45
Other Key Management Personnel
Remuneration of the Managing Director and other 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.
3
No.
1
Remuneration Component
Details
Fixed Annual Remuneration
(FAR)
2
Short-term Incentive
(STI)
• 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.
• The Chief Financial Officer did not receive an increase in FAR for the 2022 financial year.
• With effect from 1 November 2021, the Managing Director’s FAR was increased to
$720,000 (including superannuation) as part of his relocation to Australia and recognising
that the Managing Director had not had an increase in fixed annual remuneration since
FY2015 (and had accepted a 10% decrease to his fixed annual remuneration in FY2018), the
non-monetary allowances he received in Singapore, and provided alignment with market
remuneration for comparable roles in Australia.
• The Company’s former Company Secretary (who ceased his appointment on 10 January
2022) received a 2.5% increase in FAR in line with inflation and market conditions.
FY2022 STI
• An annual “at-risk” component designed to reward performance against the achievement of
key performance indicators (KPIs) set by the Board.
• 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.
•
In order to retain and motivate the Managing Director, key management personnel and
other senior managers of the Company, the Board issued a FY2022 STI during the 2022
financial year.
• The FY2022 STI had a 12-month measurement period (i.e. from 1 July 2021 to 30 June
2022) and, if the performance conditions were met, was payable (either in cash or shares at
the absolute discretion of the Board) 12-months after end of the measurement period (i.e.
from 1 July 2023) and subject to the individual remaining employed by the Company on 30
June 2023.
• The performance hurdles under this FY2022 STI component related to identified Group
EBIT Targets (80% weighting) and identified Group Safety Targets (20% weighting).
• The Company’s performance against each of these metrics resulted in 94.5% of the total
2022 STI component vested.
• Having exercised its discretion, the Board has decided that the vested FY2022 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 2023).
•
If required, Shareholder approval will be obtained prior to the issue of any deferred rights to
the Managing Director under this FY2022 STI component.
FY2022 Cash Bonus
• The new Company Secretary (Mr Tim Muirhead) received a one-off cash bonus of $20,000
(which is repayable if the Company Secretary departs the Company prior to 30 April 2023).
The cash bonus was given in recognition of significant efforts involved in the Company's
asset divestments and acquisitions.
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 management personnel (in the interests of the Company
and all its shareholders), the Board has determined to continue the LTI component for the
Managing Director, key management personnel and other senior managers for the 2022
financial year.
FY2022 LTI Performance Rights
• The FY2022 LTI Performance Rights have a three-year performance period (commencing
1 July 2021 and ending on 30 June 2024).
• For the Managing Director and Chief Financial Officer, the FY2022 LTI Performance Rights
includes a single performance hurdle relating to a Share Price Target with:
– 0% vesting if Company’s share price is less than 65 cps at the end of the LTI
Performance Period.
– 50% vesting if Company’s share price is equal to 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 65
cps but less than 96 cps at the end of the LTI Performance Period.
– 100% vesting if Company’s share price is 96 cps or greater at the end of the LTI
Performance Period (Share Price Target).
• For other key management personnel, the FY2022 LTI Performance Rights include
performance hurdles relating to the Share Price Target (70% weighting) and a Retention
Hurdle (30% weighting).
• The Board obtained shareholder approval for the grant of the FY2022 LTI Performance
Rights at Company’s 2021 AGM.
FY2022 Retention Incentive Package
•
In addition, having considered the competitive employment market conditions in Australia
(and particularly in Western Australia), in order to retain and motivate key management
personnel to continue to work to deliver on the Company’s strategy, the Board determined
to issue a bonus retention package to key management personnel and other senior
management. The package comprised of deferred rights which shall convert into ordinary,
fully paid shares in the Company, subject to the key management personnel remaining
employed at the Company on 31 December 2023.
Allocation of Executive Remuneration between Fixed and Variable Remuneration
The allocation of total executive remuneration between fixed and variable remuneration for the 2022 financial year is as follows:
Managing Director
Other Executives (Max)
17%
25%
15.6%
11.9%
58%
72.5%
FAR
LTI
STIP
FAR
LTI
STIP
46 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 47
Relationship between the Remuneration Policy and Company Performance
(A)
Key Management Personnel Remuneration (Actual)
The table below summarises information about the Company’s earnings for the 2022 financial year and the Company’s earnings and
movements in shareholder wealth for the five years to 30 June 2022, which is a key factor in the Board’s decision to award the vested 2022
STI in the form of deferred rights (which shall convert into shares subject to continued employment on 30 June 2022) rather than cash for the
2022 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
3-year compound annual TSR(2)
30 June 2022
30 June 2021
30 June 2020
30 June 2019
30 June 2018
$’000
283,766
34,860
33,830
$0.425
$0.56
0cps
0cps
9.21 cps
8.91 cps
(32%)
$’000
237,507
3,362(3)
2,391
$0.065
$0.425(4)
0cps
0cps
0.87cps
0.86cps
(45%)
$’000
273,011
$’000
239,259
(93,657)(3)
(35,879)(3)
(94,187)
$0.18
$0.065
0cps
0cps
(10.44cps)
(10.44cps)
(24%)
(37,373)
$0.25
$0.18
0cps
0cps
(4.36cps)
(4.36cps)
(16%)
$’000
200,444
(27,376)(3)
(27,909)
$0.15
$0.25
0cps
0cps
(4.11cps)
(4.11cps)
(21%)
(1)
(2)
Franked to 100% at 30% corporate income tax rate.
TSR comprises share price growth and dividends.
(3) There was an impairment reversal against the carrying value of the Company’s assets as at 30 June 2022 of $35.3 million
[2021: nil; 2020: $57.7 million impairment charge; 2019: $10.4 million impairment charge].
(4)
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.
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 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 (three 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)
(B)
The actual remuneration of the Directors and other key management personnel of the Company for the 2022 financial year (i.e. the
actual “take-home” pay received by key management personnel for the 2022 financial year); and
The statutory presentation of the remuneration of the Directors and other key management personnel of the Company for the 2022
financial year and for the previous financial year based on the requirements of accounting standards.
Short-term employee benefits
Post-employment benefits
Salary &
Cash
Non-
fees
Bonus
monetary
Superannuation
Termination
Payout
Rights
2022
Directors
Mr I Macliver
Mr D Ross
Mr P Kennan
Mr CG Heng
Ms S Murphy
Ms S Langer
Key Management
Personnel
Mr D Cavanagh
Mr D Roberts(1)
2022
Directors
Mr I Macliver
Mr D Ross
Mr P Kennan
Mr CG Heng
Ms S Murphy
Ms S Langer
Key Management
Personnel
$
$
163,636
623,468
100,127
111,491
99,983
91,024
381,603
190,594
-
-
-
-
-
-
-
-
$
-
14,197
-
-
-
-
-
6,723
-
$
16,364
15,138
-
7,258
9,998
9,102
27,500
13,416
10,606
Share based
payments
Total
Annual/Long
Service Leave
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
$
-
$
180,000
96,544
749,347
-
-
-
-
100,127
118,748
109,981
100,127
48,505
457,608
80,526
-
291,259
-
13,814
180,980
80,526
158,863
2,288,178
Share based
payments
Total
Annual/Long
Service Leave
$
-
-
-
-
-
-
-
-
-
-
$
-
$
-
$
180,000
10,644
290,439
1,146,596
-
-
-
-
-
-
-
-
-
100,127
118,748
109,981
100,127
140,919
650,771
3,101
(47,338)
166,496
-
32,299
243,345
13,744
416,319
2,816,191
Mr T Muirhead(1)
136,560
20,000
Total
1,898,486
20,000
20,921
109,382
(1)
These salaries & fees are only for part of the financial year as Mr D Roberts ceased to be Company Secretary on 10 January 2022 and Mr T Muirhead
was appointed as Company Secretary on 10 January 2022.
(B)
Key Management Personnel Remuneration (Statutory Presentation)
Short-term employee benefits
Post-employment benefits
fees
STIP(3)
monetary
Superannuation
Termination
Payout
Rights(2)
Salary &
Non-
$
163,636
$
-
$
-
623,468
192,710
14,197
100,127
111,491
99,983
91,024
-
-
-
-
-
-
-
-
-
6,723
-
$
16,364
15,138
7,258
9,998
9,102
27,500
13,416
10,606
Mr D Cavanagh
381,603
100,749
Mr D Roberts(1)
190,594
-
Mr T Muirhead(1)
136,560
63,880
Total
1,898,486
357,339
20,921
109,382
48 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 49
Short-term employee benefits
Post-employment benefits
Share based
payments
Total
2021
Salary &
Non-
Long Service
fees
STIP
monetary
Superannuation
Termination
Leave
Rights(3)
$
Directors
Mr I Macliver
120,617
$
-
$
-
531,537
32,756
85,940
Mr D Ross
Mr P Kennan
Mr CG Heng
Ms S Murphy(1)
Ms S Langer(1)
Key Management
Personnel
100,127
112,807
14,680
11,958
-
-
-
-
Mr D Cavanagh
360,962
16,457
Mr D Roberts
328,306
11,429
Total
1,580,994
60,642
85,940
-
-
-
-
-
-
$
11,459
-
-
6,926
1,395
1,136
25,000
21,694
67,610
$
-
-
-
-
-
-
-
-
-
$
-
$
-
$
132,076
8,933
249,040
908,206
-
-
-
-
-
5,834
14,767
-
-
-
-
100,127
119,734
16,074
13,094
103,773
506,192
49,270
416,533
402,083
2,212,036
(1)
(2)
These salaries & fees are only for part of the financial year as 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 D Roberts ceased to be Company Secretary on
10 January 2022; and Mr T Muirhead was appointed as Company Secretary on 10 January 2022.
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. 3 years).
(3) 2022 STIP amounts are paid through performance rights
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 CG Heng
Mr P Kennan
Ms S Murphy
Ms S Langer
Executive Directors
Mr D Ross
Key Management Personnel
Mr D Cavanagh
Mr D Roberts(1)
Mr T Muirhead(2)
(1) Ceased on 10 January 2022
(2) Appointed on 10 January 2022
2022
100%
100%
100%
100%
100%
58%
63%
128%
60%
2021
100%
100%
100%
100%
100%
69%
76%
85%
-
2022
2021
0%
0%
0%
0%
0%
42%
37%
(28%)
40%
0%
0%
0%
0%
0%
31%
24%
15%
-
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 (Cash Bonuses)
During the financial year the new Company Secretary (Mr Tim Muirhead) received a cash bonus of $20,000 (which is repayable if the
Company Secretary departs the Company prior to 30 April 2023).
STI (Performance Rights)
As noted above, in order to retain and motivate the Managing Director, key management personnel and other senior personnel of the
Company, the Board maintained the STI component for the 2022 financial year.
The FY2022 STI had a 12-month measurement period (i.e. from 1 July 2021 to 30 June 2022) and, if the performance conditions were met,
was payable (either in cash or shares at the absolute discretion of the Board) 12-months after end of the measurement period (i.e. from
1 July 2023) and subject to the individual remaining employed by the Company on 30 June 2023.
The performance hurdles under this FY2022 STI component related to identified Group EBIT Targets (80% weighting) and identified Group
Safety Targets (20% weighting).
The Company’s performance against each of these metrics resulted in a 95.4% of the total 2022 STI vesting.
Having exercised its discretion, the Board has decided that the vested 2022 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
2023). If required, Shareholder approval will be obtained prior to the issue of any deferred rights to the Managing Director under this FY2022
STI component.
LTI (Performance Rights)
During the financial year key management personnel were issued with a bonus retention package comprising deferred rights which shall
convert into ordinary, fully paid shares in the Company, subject to the key management personnel remaining employed at the Company on 31
December 2023.
During the financial year the Managing Director and key management personnel were issued with the FY2022 LTI Performance Rights. Each
right under the FY2022 LTI converts to one ordinary share of MMA Offshore Limited on vesting. No amounts are paid or payable by the
recipient upon the grant of rights under the FY2022 LTI Plans. The rights carry neither a 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 2022 financial year under the FY2022 Plans.
(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 Target
Beginning 1 July
2021 and ending
30 June 2024
100%
0% vesting if Company’s share price
is less than 65 cps at the end of the LTI
Performance Period.
100%
50% vesting if Company’s share price
is equal to 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 65
cps but less than 96 cps at the end of the
LTI Performance Period.
100% vesting if Company’s share price
is 96 cps or greater at the end of the LTI
Performance Period.
(B)
Other Key Management Personnel
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 Target
Retention Hurdle
Beginning 1 July
2021 and ending
30 June 2024
Beginning 1 July
2021 and ending
30 June 2024
70%
30%
Same as Share Price Target for Managing
Director and Chief Financial Officer
(See (a) above).
100% vesting if the employee remains
employed by the Company on
30 June 2024.
100%
100%
50 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 51
LTI (Retention Performance Rights)
During the financial year key management personnel were granted one off deferred rights which, subject to the personnel remaining
employed at the Company on 31 December 2023, shall vest and convert into ordinary, fully paid shares in the Company.
Performance
Percentage of
LTI subject to
Percentage of
Performance Rights
Performance Criteria
Period
Performance Criteria
Performance Criteria Targets
which vest if Target met
Retention Hurdle
Beginning 1 July
2022 and ending
31 December
2023.
100%
100% vesting if the employee remains
employed by the Company on
31 December 2023.
100%
During the financial year, the following rights schemes were in existence:
Exercise
Fair value at
Expiry date
price
grant date
(for vested
Series
Number issued
Grant date
Vesting date
2018 Senior Management LTI
Performance Rights (a)
1,062,563
19 Oct 2018
Did not vest
2018 MD LTI Performance Rights (a)
258,144
21 Nov 2018
Did not vest
2019 Senior Management LTI
Performance Rights (b)
2019 Managing Director
Performance Rights (b)
2020 Senior Management LTI
Performance Rights (MD and CFO) (c)
2020 Senior Management LTI
Performance Rights (c)
2020 MD & CFO LTI
Performance Rights (d)
1,846,954
29 Nov 2020
1 Jul 2022
351,145
21 Nov 2019
Did not vest
1,758,356
28 Jan 2021
1 Jul 2023
4,905,329
28 Jan 2021
1 Jul 2023
4,616,666
28 Jan 2021
1 Nov 2023
2021 Staff STI Performance Rights (e)
329,000
30 Sept 2021
1 July 2022
2021 Senior Management STI
Performance Rights (f)
1,297,904
24 Sept 2021
1 July 2022
2021 MD STI Performance Rights (g)
172,400
10 Nov 2021
1 July 2022
2021 MD LTI Performance Rights (h)
1,518,829
10 Nov 2021
1 July 2024
2021 Executive Management LTI
Performance Rights (i)
2022 Senior Management Retention
Performance Rights (j)
2,050,414
23 Dec 2021
1 July 2024
1,750,001
30 May 2022
31 Dec 2023
$
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
$
0.11
0.10
0.16
rights)
N/A
N/A
1 Jul 2024
0.16
1 Jul 2024
0.14
1 Jul 2025
0.20
1 Jul 2025
0.17
1 Nov 2025
0.38
0.38
0.38
0.20
0.23
1 July 2024
1 July 2024
1 July 2024
1 July 2026
1 July 2026
0.56
31 Dec 2025
(a) 2018 Senior Management and MD LTI Performance Rights; The Board has determined that none of the performance rights vested on 1 July 2021
and, as such, as announced to the ASX on 13 December 2021, these performance rights lapsed in accordance with the terms of the MMA Offshore
Limited Performance Rights Plan – 2018.
(b) 2019 Senior Management and MD LTI Performance Rights; Issued 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 performance rights issued to
the Managing Director Key Management Personnel and other senior managers of the Company. For the Managing Director and Key Management
Personnel none of the performance rights vested and on 17 August 2022, as such, as announced to the ASX on 18 August 2022, 1,158,730
performance rights lapsed in accordance with the Performance Rights Plan. For Senior managers who remained employed with the Company or a
wholly owned subsidiary of the Company on 30 June 2022, a portion of the performance rights linked to the retention hurdle (totalling approximately
134,000) vested on 1 July 2022 and will be converted to ordinary shares in the Company in August or September 2022
(c) 2020 Senior Management LTI Performance Rights; 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 Key Management Personnel and 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.
(d) 2020 MD & CFO LTI Performance Rights; 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.
(e) 2021 Staff STI Equity Performance Rights; 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 STI Performance
Rights Retention only vest in favour of an employee subject to the employee remaining employed by the Company or a wholly owned subsidiary of the
Company on 30 June 2022 (100% Retention Hurdle).
(f) 2021 Senior Management STI Performance Rights; 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 STI
Performance Rights Retention only vest in favour of an employee subject to the employee remaining employed by the Company or a wholly owned
subsidiary of the Company on 30 June 2022 (100% Retention Hurdle).
(g) 2021 Managing Director STI Performance Rights; In accordance with the terms of the MMA Offshore Limited Performance Rights Plan – 2021 (as
approved by the shareholders at the Company’s Annual General Meeting on 10 November 2021) 100% of the STI Performance Rights vested on 1 July
2022 as the Managing Director continued to be employed by the Company or a wholly owned subsidiary of the Company on 30 June 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.
(h) 2021 Managing Director LTI Performance Rights; In accordance with the terms of the MMA Offshore Limited Performance Rights Plan – 2021 (as
approved by the shareholders at the Company’s Annual General Meeting on 10 November 2021) the number of LTI Performance Rights which will
vest in favour of the Managing Director on 1 July 2023 will depend on the Share Price Target (100% weighting) as set out in note 5.2 of the Financial
Statements. Subject to the performance rights vesting on 1 July 2024, the vested performance rights must be exercised within a two-year period from
the vesting date (i.e. by 1 July 2026) or such other time as determined by the Board in its sole and absolute discretion.
(i) 2021 Executive Management LTI Performance Rights; In accordance with the terms of the MMA Offshore Limited Performance Rights Plan – 2021
(as approved by the shareholders at the Company’s Annual General Meeting on 10 November 2021) the number of 2021 Executive Management LTI
Performance Rights which vest in favour of the Key Management Personnel and other Senior Managers on 1 July 2024 will depend on the Company
achieving the Share Price 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 2024, the vested performance rights must be exercised within a two-year period from the vesting date
(i.e. by 1 July 2026) or such other time as determined by the Board in its sole and absolute discretion.
(j) 2022 Senior Management Retention Performance Rights; In accordance with the terms of the MMA Offshore Limited Performance Rights Plan –
2021 (as approved by the shareholders at the Company’s Annual General Meeting on 10 November 2021) the Retention Incentive Performance Rights
were issued in order to motivate and retain senior management personnel within the Company. The Performance Rights only vest in favour of an
employee subject to the employee remaining employed by the Company or a wholly owned subsidiary of the Company on 31 December 2023 (100%
Retention Hurdle). Subject to the performance rights vesting on 31 December 2023, the vested performance rights must be exercised within a two-year
period from the vesting date (i.e. by 31 December 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.
The following share-based payments were granted as compensation to the Managing Director and key management personnel during the
current financial year:
Name
Mr D Ross
Mr D Cavanagh
Mr D Roberts(1)
Mr T Muirhead(2)
Performance
rights issued
10 Nov 2021
10 Nov 2021
24 Sept 2021
23 Dec 2021
30 May 2022
-
24 Sept 2021
23 Dec 2021
30 May 2022
Number
granted
172,400
1,518,829
86,616
675,000
267,857
-
17,874(3)
316,458
53,571
Number
vested
% of grant
% of grant
the year consisting of
vested
forfeited
share-based payment
% of compensation for
-
-
-
-
-
-
-
-
-
-
-
-
(1) Ceased on 10 January 2022 with the result that none of the performance rights issued will vest.
(2) Appointed on 10 January 2022.
(3)
Issued prior to appointment as Company Secretary.
During the financial year, no performance rights vested in favour of the Managing Director or other key management personnel.
52 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 53
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:
Name
Mr D Ross
Mr D Cavanagh
Mr D Roberts(1)
Mr T Muirhead(2)
Value of rights
granted at grant date
Value of rights at
vesting date
$
373,834
319,939
22,857
94,240
$
-
-
-
-
(1) Ceased on 10 January 2022 with the result that none of the performance rights issued will vest.
(2) Appointed on 10 January 2022.
The following table summarises the performance rights that lapsed during the financial year in relation to performance rights granted to key
management personnel as part of their remuneration:
Name
Mr D Ross
Mr D Cavanagh
Mr D Roberts(1)
Mr T Muirhead(2)
(1) Ceased on 10 January 2022
(2) Appointed on 10 January 2022
Key Management Personnel Equity Holdings
Financial year in which
No. of performance rights which
performance rights were granted
lapsed during the current year
2018
2018
2018
-
160,026
107,483
-
-
Details of the fully paid ordinary shares of the Company held by key management personnel are as follows:
2022
Mr I Macliver
Mr P Kennan
Mr CG Heng
Ms S Murphy
Ms S Langer
Mr D Ross
Mr D Cavanagh
Mr T Muirhead(1)
Balance at
Granted as
Received on vesting of
Net other
Balance at
Balance held
1 July 2021
compensation
Performance Rights
change
30 June 2022
nominally
100,000
29,706,815
83,157
-
-
475,593
6,521
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
-
-
-
-
100,000
-
29,706,815
29,706,815
83,157
100,000
-
475,593
6,521
-
-
-
-
-
-
-
(1) Appointed on 10 January 2022
2021
Mr I Macliver
Mr P Kennan
Mr CG Heng
Ms S Murphy
Ms S Langer
Mr D Ross
Mr D Cavanagh
Mr T Muirhead(1)
Balance at
Granted as
Received on vesting of
Net other
Balance at
Balance held
1 July 2020
compensation
Performance Rights
change
30 June 2021
nominally
-
18,240,815
20,000
-
-
153,157
2,100
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
(1) Appointed on 10 January 2022
During the financial year the Company developed a policy requiring Non-Executive Directors to accumulate a minimum shareholding in
the Company. Directors are expected accumulate (over a period of five years from their appointment date) shares in the Company equal in
value to the annual fees (excluding committee fees) payable by the Company to the Non-Executive Director. Notwithstanding the minimum
holding expectation, the policy is not intended to financially disadvantage Non-Executive Directors and it is recognised that exceptional
circumstances may require Non-Executive Directors to sell and hold less than the minimum requirement from time to time.
Details of the performance rights held by key management personnel are as follows:
Balance at
Granted as
change
Balance at
Vested but not
Rights vested
1 July 2021
compensation
Vested
(lapsed)
30 June 2022
exercisable
during year
Net other
5,031,527
1,691,229
Mr D Cavanagh
2,132,949
1,029,473
Mr T Muirhead(1)
-
370,029
-
-
-
160,026
6,562,730
107,483
3,054,939
-
543,209
Net other
-
-
-
-
-
-
Balance at
Granted as
change
Balance at
Vested but not
Rights vested
1 July 2020
compensation
Vested
(lapsed)
30 June 2021
exercisable
during year
2022
Executives
Mr D Ross
2021
Executives
Mr D Ross
-
-
-
-
-
-
5,031,527
2,132,949
-
-
-
-
-
-
-
511,171
4,520,356
Mr D Cavanagh
278,283
1,854,666
Mr T Muirhead(1)
-
-
(1) Appointed on 10 January 2022
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 2022 and 2021 financial years are contained in note 5.2 of the Financial
Statements.
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.
54 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 55
Auditor’s Independence Declaration
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 T Muirhead
Termination notice period
Termination benefits payable
6 months
12 weeks
12 weeks
Yes(1)
Yes(2)
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.
Loans to Key Management Personnel
There were no loans to key management personnel during the 2022 financial year.
Other transactions with Key Management Personnel
There were no other transactions with key management personnel during the 2022 financial year.
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, 24 August 2022
56 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 57
Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte Network. The Board of Directors MMA Offshore Limited 12 The Esplanade, Perth WA 6000 24 August 2022 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 2022, 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, 24 August 2022 Deloitte Touche Tohmatsu ABN 74 490 121 060 Brookfield Place Tower 2 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte Network. The Board of Directors MMA Offshore Limited 12 The Esplanade, Perth WA 6000 24 August 2022 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 2022, 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, 24 August 2022 Deloitte Touche Tohmatsu ABN 74 490 121 060 Brookfield Place Tower 2 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au 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 Network. The Board of Directors MMA Offshore Limited 12 The Esplanade, Perth WA 6000 24 August 2022 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 2022, 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, 24 August 2022 Deloitte Touche Tohmatsu ABN 74 490 121 060 Brookfield Place Tower 2 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au Independent Auditor’s Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2
Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Deloitte Touche Tohmatsu
Perth WA 6837 Australia
ABN 74 490 121 060
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2
Brookfield Place
Tower 2
123 St Georges Terrace
Brookfield Place
Perth WA 6000
123 St Georges Terrace
GPO Box A46
Perth WA 6000
Perth WA 6837 Australia
Tower 2
GPO Box A46
Brookfield Place
Perth WA 6837 Australia
Tel: +61 8 9365 7000
123 St Georges Terrace
Fax: +61 8 9365 7001
Perth WA 6000
Tel: +61 8 9365 7000
www.deloitte.com.au
GPO Box A46
Fax: +61 8 9365 7001
Perth WA 6837 Australia
www.deloitte.com.au
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
OOffffsshhoorree LLiimmiitteedd
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
Opinion
OOffffsshhoorree LLiimmiitteedd
OOffffsshhoorree LLiimmiitteedd
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the “Group”)
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff MMMMAA
which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
OOffffsshhoorree LLiimmiitteedd
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
Opinion
summary of significant accounting policies and other explanatory information, and the directors’ declaration.
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the “Group”)
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
including:
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the “Group”)
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of
Opinion
summary of significant accounting policies and other explanatory information, and the directors’ declaration.
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
We have audited the financial report of MMA Offshore Limited (the “Company”) and its subsidiaries (the “Group”)
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
summary of significant accounting policies and other explanatory information, and the directors’ declaration.
which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of
including:
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance
Basis for Opinion
including:
summary of significant accounting policies and other explanatory information, and the directors’ declaration.
for the year then ended; and
Opinion
for the year then ended; and
Basis for Opinion
for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
(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 our
for the year then ended; and
including:
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 APES
(i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance
110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
with the Code.
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
report. We are independent of the Group in accordance with the auditor independence requirements of the
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
Basis for Opinion
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
report. We are independent of the Group in accordance with the auditor independence requirements of the
with the Code.
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
report. We are independent of the Group in accordance with the auditor independence requirements of the
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
Key Audit Matters
with the Code.
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES
110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
the financial report for the current period. These matters were addressed in the context of our audit of the financial
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
with the Code.
Key Audit Matters
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
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.
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.
Key Audit Matters
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit 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.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
Liability limited by a scheme approved under Professional Standards Legislation.
58 MMA Offshore Limited | Annual Report 2022
the financial report for the current period. These matters were addressed in the context of our audit of the financial
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
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 Group’s
OOppeerraattiioonnss CCaasshh GGeenneerraattiinngg UUnniitt
consolidated statement of financial position at 30
June 2022 are non-current assets associated with
As disclosed in Note 3.7, included in the Group’s
the Vessel – Continuing Operations Cash
consolidated statement of financial position at 30
Generating Unit (“Vessel CGU”) of $361 million.
June 2022 are non-current assets associated with
The assessment of the recoverable amount of the
the Vessel – Continuing Operations Cash
Vessel CGU requires management to exercise
Generating Unit (“Vessel CGU”) of $361 million.
judgement and has been based on a Fair Value
The assessment of the recoverable amount of the
Less Cost of Disposal (“FVLCD”) approach.
Vessel CGU requires management to exercise
judgement and has been based on a Fair Value
The Group appointed external valuers to perform
Less Cost of Disposal (“FVLCD”) approach.
a valuation of the Vessel CGU.
The Group appointed external valuers to perform
Key assumptions used in assessing the
a valuation of the Vessel CGU.
recoverable amount include current and forecast
economic conditions including potential
Key assumptions used in assessing the
movements in the market as a consequence of
recoverable amount include current and forecast
commodity prices and the application of an ‘en
economic conditions including potential
bloc’ discount to the vessel fleet.
movements in the market as a consequence of
commodity prices and the application of an ‘en
CCaarrrryyiinngg vvaalluuee ooff tthhee SSuubbsseeaa CCaasshh GGeenneerraattiinngg
bloc’ discount to the vessel fleet.
UUnniitt
CCaarrrryyiinngg vvaalluuee ooff tthhee SSuubbsseeaa CCaasshh GGeenneerraattiinngg
As disclosed in Note 3.7, included in the Group’s
UUnniitt
consolidated statement of financial position at 30
June 2022 are non-current assets associated with
As disclosed in Note 3.7, included in the Group’s
the Subsea Cash Generating Unit (“Subsea CGU”)
consolidated statement of financial position at 30
of $15.9 million.
June 2022 are non-current assets associated with
the Subsea Cash Generating Unit (“Subsea CGU”)
Management undertakes an assessment as to
of $15.9 million.
whether any non-current asset or cash
generating unit may be impaired at balance date.
Management undertakes an assessment as to
whether any non-current asset or cash
The assessment requires significant judgement
generating unit may be impaired at balance date.
due to assumptions and estimates involved in
preparing a value in use model (‘VIU’) to estimate
The assessment requires significant judgement
recoverable amount, including:
due to assumptions and estimates involved in
preparing a value in use model (‘VIU’) to estimate
Forecast future cash flows; and
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
Our procedures included, but were not limited to:
MMaatttteerr
•
•
•
•
• Understanding the process management undertakes to
Our procedures included, but were not limited to:
evaluate the recoverability of the Vessel CGU;
Assessing management’s determination of the Vessel
•
• Understanding the process management undertakes to
CGU based on our understanding of the nature of the
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 adopted
external valuers;
and the assumptions used;
Evaluating the external valuations obtained by the
Comparing actual sales prices, including
Group by assessing the valuation methodology adopted
‘en bloc’ discounts, of vessels during and post the
and the assumptions used;
reporting period to evaluate the reasonableness of the
Comparing actual sales prices, including
valuation; and
‘en bloc’ discounts, of vessels during and post the
Assessing the appropriateness of the disclosures in Note
reporting period to evaluate the reasonableness of the
3.7 to the financial statements.
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:
• Obtaining management’s impairment assessment
carried out for the Subsea CGU, and assessing the work
performed against the requirements of the relevant
accounting standard;
carried out for the Subsea CGU, and assessing the work
In conjunction with our internal valuation specialists we
performed against the requirements of the relevant
specifically assessed the recoverable value modelling for
accounting standard;
the Subsea CGU, as it demonstrated characteristics
In conjunction with our internal valuation specialists we
suggesting impairment testing was required, by:
specifically assessed the recoverable value modelling for
Inquiring of management and the directors in
➢
the Subsea CGU, as it demonstrated characteristics
relation to forecasting assumptions within the VIU
suggesting impairment testing was required, by:
model and agreeing these to approved budgets;
Inquiring of management and the directors in
➢
➢ Assessing the mathematical accuracy and
relation to forecasting assumptions within the VIU
modelling integrity of the value-in-use (ViU) model;
model and agreeing these to approved budgets;
➢ Challenging the assumptions contained in the cash
➢ Assessing the mathematical accuracy and
flow forecasts, including the revenue and expense
modelling integrity of the value-in-use (ViU) model;
projections, forecast gross margins and capital
➢ Challenging the assumptions contained in the cash
expenditures including the impact of COVID-19 and
flow forecasts, including the revenue and expense
the outlook for easing of restrictions in relevant
projections, forecast gross margins and capital
regions; and
expenditures including the impact of COVID-19 and
➢ Performing sensitivity analysis on key assumptions
the outlook for easing of restrictions in relevant
within the model, including the expected revenues,
regions; and
margins, growth rates and discount rate.
➢ Performing sensitivity analysis on key assumptions
Assessing the appropriateness of the disclosures in Note
within the model, including the expected revenues,
3.7 to the financial statements.
margins, growth rates and discount rate.
Assessing the appropriateness of the disclosures in Note
3.7 to the financial statements.
•
•
•
•
MMA Offshore Limited | Annual Report 2022 59
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 2022 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
Other Information
report.
The directors are responsible for the other information. The other information comprises the information included in
Our opinion on the financial report does not cover the other information and we will not express any form of
the Group’s annual report for the year ended 30 June 2022 but does not include the financial report and our
assurance conclusion thereon.
auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor's
report.
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
Our opinion on the financial report does not cover the other information and we will not express any form of
obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
assurance conclusion thereon.
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.
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
Responsibilities of the Directors for the Financial Report
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
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
have nothing to report in this regard.
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
Responsibilities of the Directors for the Financial Report
view and is free from material misstatement, whether due to fraud or error.
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
view and is free from material misstatement, whether due to fraud or error.
alternative but to do so.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
Auditor’s Responsibilities for the Audit of the Financial Report
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
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
alternative but to do so.
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
Auditor’s Responsibilities for the Audit of the Financial Report
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
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
expected to influence the economic decisions of users taken on the basis of this financial report.
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
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise
maintain professional scepticism throughout the audit. We also:
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.
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
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
of the Group’s internal control.
intentional omissions, misrepresentations, or the override of 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
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
and related disclosures made by the directors.
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
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
future events or conditions may cause the Group to cease to continue as a going concern.
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
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
and whether the financial report represents the underlying transactions and events in a manner that
future events or conditions may cause the Group to cease to continue as a going concern.
achieves fair presentation.
•
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
and whether the financial report represents the underlying transactions and events in a manner that
activities within the Group to express an opinion on the financial report. We are responsible for the
achieves fair presentation.
direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit
opinion.
• 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
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
independence, and to communicate with them all relationships and other matters that may reasonably be thought
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
From the matters communicated with the directors, we determine those matters that were of most significance in
independence, and to communicate with them all relationships and other matters that may reasonably be thought
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
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
From the matters communicated with the directors, we determine those matters that were of most significance in
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
communication.
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
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
communication.
Opinion on the Remuneration Report
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
We have audited the Remuneration Report included in on pages 44 to 56 of the Directors’ Report for the year ended
30 June 2022.
Opinion on the Remuneration Report
In our opinion, the Remuneration Report of MMA Offshore Limited for the year ended 30 June 2022, complies with
We have audited the Remuneration Report included in on pages 44 to 56 of the Directors’ Report for the year ended
section 300A of the Corporations Act 2001.
30 June 2022.
In our opinion, the Remuneration Report of MMA Offshore Limited for the year ended 30 June 2022, complies with
section 300A of the Corporations Act 2001.
• 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.
60 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 61
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 1.1 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 1.2 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, 24 August 2022
62 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 63
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, 24 August 2022 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, 24 August 2022 Targeting a
perfect day,
every day.
Financial
Report
2022
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
Investment in Associate
Loan to Associate
3.10
Trade and Other Payables
3.11 Unearned Revenue
3.12 Borrowings
3.13
Lease Liabilities
3.14 Provisions
3.15 Deferred Tax Balances
4.
Capital Structure 9
4.1
4.2
4.3
4.4
Issued Capital
Reserves
Non Controlling Interests
Capital Risk Management 9
5. Other Notes 9
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
70
71
71
75
76
76
77
77
78
78
79
79
80
80
82
83
86
87
87
87
87
89
89
90
2
92
92
93
4
5
95
95
98
99
99
100
102
103
106
107
107
109
110
64 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 65
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended of 30 June 2022
Consolidated Statement of Financial Position
As at 30 June 2022
Revenue
Finance income
Other income
Share of results of associate
Vessel expenses
Subsea expenses
Project Logistics expenses
Administration expenses
Impairment reversal
Finance costs
Profit before tax
Income tax expense
Profit 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 income/(loss) for the Year
Profit/(loss) for the year attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive income/(loss) attributable to:
Owners of the parent
Non-controlling interests
Earnings per share
From continuing operations
Basic
Diluted
Note
2.1
2.2
3.8
3.7
2.2
2.5
2.3
2.3
4.3
4.3
2.4
2.4
2022
$’000
283,766
82
4,948
(248)
2021
$’000
237,507
99
23,678
-
(149,940)
(147,316)
(65,667)
(56,954)
(10,048)
35,304
(6,383)
34,860
(1,030)
33,830
21,228
-
(4,920)
16,308
50,138
33,393
437
33,830
49,712
426
50,138
(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)
Cents Per Share
Cents Per Share
9.29
8.91
0.87
0.86
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying
notes.
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
Investment in associate
Loan to associate
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
Accumulated losses
Equity attributable to owners of the company
Non-controlling interest
Total Equity
Note
2022
$’000
2021
$’000
3.1
3.2
3.3
3.4
3.5
3.6
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.12
3.13
3.14
3.15
4.1
4.2
4.3
73,864
63,536
1,696
8,166
-
147,262
370,338
9,520
1,782
6,515
560
388,715
535,977
43,136
12,256
12,500
3,055
14,431
305
85,683
102,919
6,455
31
140
109,545
195,228
340,749
742,265
141,484
(543,377)
340,372
377
340,749
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
742,247
124,105
(576,548)
289,804
(207)
289,597
66 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 67
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended of 30 June 2022
Consolidated Statement of Cash Flows
For the year ended of 30 June 2022
Year Ended
30 June 2022
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
Balance at 1 July 2021
742,247
3,949
(56,511)
176,667
(576,548)
289,804
(207)
289,597
Profit for the year
Other comprehensive
income/(loss) for the year
Total Comprehensive
Income/(Loss) for the Year
Share issue costs
Recognition of share-
based payments
Transactions with
non controlling interest
-
-
-
18
-
-
-
-
-
-
838
-
-
-
33,393
33,393
(4,920)
21,461
(222)
16,319
437
(11)
33,830
16,308
(4,920)
21,461
33,171
49,712
426
50,138
-
-
-
-
-
-
-
-
-
18
838
-
-
-
158
18
838
158
Balance at 30 June 2022
742,265
4,787
(61,431)
198,128
(543,377)
340,372
377
340,749
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
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
-
2,071
Non-controlling interest
(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
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
Provisional payment under arbitration award
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
Installment received in advance for disposal of subsidiaries
Deposit paid for business combination
Investment in associate
Loan to associate
Dividend received from associate
Investment in subsidiary
Net Cash Provided by Investing Activities
Cash Flows from Financing Activities
Repayment of borrowings
Payment for share issue costs
Payment of debt restructure costs
Proceeds from issue 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
2022
$’000
2021
$’000
292,128
249,761
Note
2.2
3.14
3.1
3.4
3.11
5.11
3.8
3.9
176
83
(260,070)
(10,520)
(599)
(6,040)
15,158
(12,751)
2,423
36,112
2,173
(4,200)
(2,075)
(6,515)
45
-
15,212
3.12
(53,001)
3.13
-
-
-
(3,862)
(56,863)
(26,493)
96,226
4,131
73,864
9,403
99
(222,019)
-
(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
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
68 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 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. 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.
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act
2001, Accounting Standards and other authoritative pronouncements issued by the Australian Accounting Standards Board (AASB), and
comply with other requirements of the law.
Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Consequently, this financial report
has been prepared in accordance with and complies with IFRS as issued by the IASB.
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
Useful lives of property, plant and equipment – refer note 3.5
Impairment of non-current assets – refer note 3.7
Provisions – refer note 3.14
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 (Board of Directors) 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 Board of Directors 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 Subsea Services
Project Logistics
Eliminations
Consolidated
2022
$’000
2022
$’000
2022
$’000
2022
$’000
2022
$’000
Revenue
External sales
External sales – Assets classified as
held for sale
Inter-segment sales
Total revenue
140,611
18,034
18,685
177,330
66,365
58,756
-
-
-
-
4,421
70,786
1,529
60,285
(24,635)
(24,635)
Inter-segment sales are charged at prevailing market prices
8,705
-
35,326
44,031
698
(248)
(22)
428
1,802
-
-
1,802
-
-
-
Result
Segment profit before impairment
Share of results of associate
Impairment reversal/(charge)
Segment profit after impairment
Finance income
Other income and expenses
Administration costs
Finance costs
Profit for the year before income tax
265,732
18,034
-
283,766
11,205
(248)
35,304
46,261
82
4,948
(10,048)
(6,383)
34,860
70 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 71
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 2.
Financial Performance (continued)
2.1 Segment Information (continued)
Vessels Services Subsea Services
Project Logistics
Eliminations
Consolidated
2021
$’000
2021
$’000
2021
$’000
2021
$’000
2021
$’000
Revenue
External sales
External sales – Assets classified as
held for sale
Inter-segment sales
Total revenue
134,099
25,675
6,064
165,838
63,039
-
7,511
70,550
14,694
-
1,755
16,449
-
-
(15,330)
(15,330)
211,832
25,675
-
237,507
Inter-segment sales are charged at prevailing market prices
Result
Segment profit/(loss) before impairment
Impairment charge
Segment profit/(loss) after impairment
12,458
-
12,458
(4,827)
-
(4,827)
(5,956)
-
(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
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 vessel hire, mobilisation and
demobilisation and fuel sales. 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 including mobilisation and demobilisation into these contracts. Revenue
is recognised over time based on the input method by reference to the period of time in which services are provided to the customer for
each contract.
Revenue from project logistics
Revenue from project logistics relates to project management of large marine spreads and complex marine logistics also including
mobilisation and demobilisation and fuel sales. 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:
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.
Vessel Services (i)
Subsea Services (i)
Project Logistics
Unallocated assets
Total (ii)
Revenue recognised over time:
Vessel hire
Vessel hire from vessels classified as held for sale
Equipment hire
Personnel
Mobilisation/Demobilisation
Project management
Fabrication
Materials
Mattresses
Facility lease
Other
Revenue recognised at a point in time:
Fuel sales
Total
2022
$’000
2021
$’000
126,657
129,750
17,671
13,023
10,922
31,176
56,942
8,579
1,253
727
2,048
4,369
273,367
10,399
283,766
25,675
21,636
14,557
11,356
8,871
9,324
2,383
2,053
-
9,595
235,200
2,307
237,507
(i)
Vessel and Subsea Services segments asset comparatives include assets classified as held for sale (refer note 3.4).
(ii) Segment assets are held in both A$ 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 positive movement in
the asset value of $30.1 million in A$ 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
2022
$’000
25,528
1,942
275
3,236
30,981
2021
$’000
25,739
3,291
458
3,246
32,734
2022
$’000
10,492
1,718
-
542
2021
$’000
8,641
2,208
642
2,902
12,752
14,393
72 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 73
2022
$’000
402,108
33,725
7,379
92,765
535,977
2021
$’000
387,250
30,581
2,761
106,652
527,244
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 2.
Financial Performance (continued)
2.1 Segment Information (continued)
Impairment reversals/(charge)
In addition to the depreciation charges reported above, the Group also recognised impairment reversals/(charge) (see note 3.7) in respect
of vessels and other assets as set out below:
Vessels held for continuing operations
Vessels classified as held for sale
Subsea Service assets classified as held for sale
Total
Geographical information
2022
$’000
35,435
(109)
(22)
35,304
2021
$’000
-
-
-
-
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.
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
2022
$’000
2021
$’000
170,963
121,244
69,463
22,125
21,215
67,160
22,952
26,151
283,766
237,507
Non-current assets
2021
$’000
138,724
137,357
37,788
30,233
344,102
2022
$’000
149,079
165,529
2,677
71,430
388,715
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 vessel revenues there are approximately $32.5 million (2021: $31.2 million) which arose from sales to the Group’s largest
customer, revenues of approximately $31.8 million (2021: $nil) which arose from sales to the Group’s second largest customer and
revenues of approximately $19.7 million (2021: $20.6 million) which arose from sales to the Group’s third largest customer.
2.
Financial Performance (continued)
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
Other
Total
2022
$’000
2021
$’000
176
8,251
(63)
156
4,375
-
-
-
304
4,948
(743)
137
1,973
14,757
(426)
(631)
360
23,678
(i)
The Group has received nil Government grants in Australia (2021: $7.3 million) and $0.2 million in Singapore (2021: $0.9 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 31 March 2021 onwards, the Group ceased to qualify for Australian government support. The
Group continues to qualify and receive Singaporean job support grants.
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
Impairment reversal 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
241
25,406
1,996
213
3,125
30,981
3,692
-
(35,326)
22
268
24,295
2,807
213
5,151
32,734
327
(1,434)
-
-
9,027
8,715
838
114,741
124,606
2,071
112,618
123,404
74 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 75
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 2.
Financial Performance (continued)
2.3 Other Income and Expenses (continued)
Finance Costs
Interest on borrowings
Interest on lease liabilities
Other
Total
2.3 Exchange rate movements
2022
$’000
6,022
343
18
6,383
2021
$’000
11,508
476
12
11,996
The AUD:USD exchange rate decreased significantly during the period, from $0.75 to $0.69. 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
The calculation of basic earnings per share is based on the following data:
Profit 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
The calculation of diluted earnings per share is based on the following data:
Profit for the year used in the calculation of diluted earnings per share
Weighted average number of ordinary shares used in the calculation of basic
earnings per share
2022
$’000
33,393
2022
No.’000
359,328
2022
$’000
33,393
2022
No.’000
359,328
2021
$’000
2,391
2021
No.’000
276,337
2021
$’000
2,391
2021
No.’000
276,337
Effect of dilutive potential ordinary shares
15,418
1,774
Weighted average number of ordinary shares used for purpose of diluted
earnings per share
374,746
278,111
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
Adjustment recognised in the current year in relation to tax provisions of prior years
Total income tax expense
The income tax expense for the year can be reconciled to accounting profit as follows:
Profit before tax
Income tax expense 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
2022
$’000
2021
$’000
550
480
1,030
34,860
10,458
(4,307)
1,906
-
1,183
(1,980)
(6,845)
135
550
480
1,030
579
392
971
3,362
1,009
(1,535)
6,083
-
566
(5,149)
(973)
578
579
392
971
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.
2022
$’000
47,589
2021
$’000
47,589
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 comparative period.
Adjusted franking account balance
76 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 77
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 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
Reconciliation of profit for the year to net cash flows from operating activities
2022
$’000
73,864
2021
$’000
96,226
Profit for the year
Depreciation of non-current assets
Impairment reversal of non-current assets
Gain on forgiveness of loan
Amortisation of borrowing costs
Gain on sale of property, plant and equipment
Gain on sale of assets classified as held for sale
Unrealised foreign exchange loss
Loss allowance on trade receivables
Equity settled share-based payment
Interest expense – leases
Share of results of associate
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
33,830
30,981
(35,304)
-
-
(156)
(4,375)
63
3,692
838
349
248
-
-
(14,756)
(4,487)
995
(937)
(8,787)
6,905
6,934
85
(960)
15,158
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
3. Assets and Liabilities (continued)
3.2
Trade and Other Receivables
Trade receivables (i)
Allowance for expected credit losses (i)
Other receivables (ii)
Total
2022
$’000
59,306
(3,678)
7,908
63,536
2021
$’000
66,409
(19,387)
2,842
49,864
(i) A review of long held trade receivables was undertaken during the year resulting in the write off of certain amounts as bad debts.
Expected credit loss provisions had been raised for all these amounts in previous years.
(ii) Other receivables includes an amount of $4.2 million paid as a deposit for the acquisition of the Subcon business. This transaction
settled after the end of the year and the deposit applied as part of settlement. Refer to note 5.11 for further details.
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”) using the simplified approach where
1. 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.
In cases where there is specific information available, the ECL 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 ageing of trade receivables to which these measures were applied were:
Trade receivables
Current
$’000
47,236
Over 30 days
$’000
Over 60 days
$’000
Over 90 days
$’000
3,840
1,603
6,627
Total
$’000
59,306
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 2021
Transfer to credit-impaired
Amounts written off
Foreign exchange gains and losses
Balance as at 30 June 2022
3.3
Inventories
Fuel – at cost
Consumables – at cost
Work in progress – at cost
Total
Inventories are stated at the lower of cost or net realisable value.
Collectively
Assessed
$’000
265
25
(265)
-
25
Individually
Assessed
$’000
19,122
3,667
(18,077)
(1,059)
3,653
2022
$’000
1,125
483
88
1,696
Total
$’000
19,387
3,692
(18,342)
(1,059)
3,678
2021
$’000
1,763
796
132
2,691
78 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 79
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 3. Assets and Liabilities (continued)
3.4 Assets Classified as Held for Sale
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 2022, the Group has completed its vessel disposal program with no remaining vessels classified as held for sale. Of the eight
vessels held for sale at the beginning of the year, seven have been sold with proceeds of $37 million applied to the repayment of the
Group debt facility. As a result of newly identified opportunities for the remaining vessel, it has been transferred back into the core fleet as
at 30 June 2022. In reassessing its recoverable value on the transfer, there was a $0.1 million reduction in its carrying value down to
$1.5 million.
3.5
Property, Plant and Equipment
Year ended 30 June 2021
At 1 July 2020
Gross carrying amount
Accumulated depreciation and impairment loss
Carrying amount
Additions
Disposals
Depreciation
Effect of foreign currency exchange differences
Total movement
Balance at 30 June 2021
Gross carrying amount
Accumulated depreciation and impairment loss
Carrying amount
Buildings and
Improvements
at cost
$’000
Vessels
at cost
$’000
Plant and
Equipment
at cost
$’000
16,739
(14,682)
2,057
-
-
(268)
(59)
(327)
15,370
(13,640)
1,730
687,527
(326,090)
361,437
7,475
(5)
(24,295)
(20,992)
(37,817)
654,494
(330,874)
323,620
17,165
(7,998)
9,167
1,915
(187)
(2,807)
(39)
(1,118)
19,397
(11,348)
8,049
Total
$’000
721,431
(348,770)
372,661
9,390
(192)
(27,370)
(21,090)
(39,262)
689,261
(355,862)
333,399
3. Assets and Liabilities (continued)
3.5
Property, Plant and Equipment (continued)
Year ended 30 June 2022
At 1 July 2021
Carrying amount
Additions
Disposals
Reclassified from held for sale
Depreciation
Impairment reversal recognised in profit and loss
Effect of foreign currency exchange differences
Total movement
Balance at 30 June 2022
Gross carrying amount
Accumulated depreciation and impairment loss
Carrying amount
Buildings and
Improvements
at cost
$’000
Vessels
at cost
$’000
Plant and
Equipment
at cost
$’000
Total
$’000
1,730
323,620
8,049
333,399
43
(670)
-
(241)
-
47
(821)
7,998
(766)
1,508
(25,406)
35,435
19,179
37,948
2,492
(826)
-
(1,996)
-
142
(188)
10,533
(2,262)
1,508
(27,643)
35,435
19,368
36,939
6,926
(6,017)
909
710,863
(349,295)
361,568
19,673
(11,812)
7,861
737,462
(367,124)
370,338
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 on the following bases,
Leasehold building & improvements
Vessels
Vessel refits
Plant & equipment
Key source of estimation uncertainty
10%
4%
20%
5%-50%
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 Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 81
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022
3. Assets and Liabilities (continued)
3.6
Right of use assets
Year ended 30 June 2021
At 1 July 2020
Gross carrying amount
Accumulated depreciation
Carrying amount
Additions
Depreciation
Other
Total movement
Balance at 30 June 2021
Gross carrying amount
Accumulated depreciation
Carrying amount
Year ended 30 June 2022
At 1 July 2021
Opening carrying amount
Additions
Depreciation
Other
Total movement
Balance at 30 June 2022
Gross carrying amount
Accumulated depreciation
Carrying amount
Buildings and
Improvements
at cost
$’000
Vessels
at cost
$’000
Plant and
Equipment
at cost
$’000
13,359
(4,295)
9,064
3,778
(3,392)
(31)
355
17,137
(7,718)
9,419
9,419
2,942
(2,892)
(24)
26
15,270
(5,825)
9,445
2,031
(1,779)
252
1,094
(1,310)
-
(216)
3,125
(3,089)
36
36
-
(59)
23
(36)
1,400
(1,400)
-
1,142
(341)
801
131
(449)
-
(318)
1,273
(790)
483
483
-
(174)
(234)
(408)
235
(159)
75
Total
$’000
16,532
(6,415)
10,117
5,003
(5,151)
(31)
(179)
21,535
(11,597)
9,938
9,938
2,942
(3,124)
(235)
(418)
16,904
(7,384)
9,520
The Group leases several assets including
• Subsea and operating premises at Welshpool, Australia which expires 30 April 2025, with an option to extend for two x five-year
terms.
• Current head office premises in Perth which expires 30 November 2026, with an option to extend for one x five-years was entered
into in the comparative financial year.
• Batam shipyard lease which expires in 2042.
• Various items of plant and equipment with an average lease term of five 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
2022
$’000
3,125
343
2,634
2021
$’000
5,151
479
357
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 carrying amount of the net assets of the Group is greater than the Company’s market capitalisation which is an indicator of
impairment at 30 June 2022. 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 reversals/(charges) included in profit or loss:
Segment/CGU
Class of asset
Vessels
Vessels
Subsea
Total
Property, Plant & Equipment
Assets classified as held for sale
Assets classified as held for sale
Method
FVLCOD
FVLCOD
FVLCOD
Impairment reversal/(charge)
2022
$’000
35,435
(109)
(22)
35,304
2021
$’000
-
-
-
-
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
Level 3(i)
$’000
360,758
Recoverable
Amount
$’000
360,758
(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. Due to the unobservable market data
and internal valuation components of the valuations, the inputs are considered Level 3.
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.
This financial year has seen improvements in overall market conditions in which the Group operates, evidenced by increases in the brent
oil price from a starting point of US$74 to a high of US$122 before settling at US$106 at the end of the year combined with the focus on
global energy security. As a result of the stronger price, there has been increased activity in offshore projects now and expected into the
future (new FID for large Gas projects, especially in Australia) increasing demand for the Group services in all segments. For the vessels
segment, this demand side pressure combines with a tightening supply of vessels in the offshore market resulting in improved prices in
the industry.
The offshore renewables market is also gathering pace with significant projects committed to and under construction with potential to
utilise the services of the Group.
Whilst COVID-19 continues to impact the world and the industry, the situation has improved significantly as a result of the lifting of
restrictions in our operating regions.
82 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 83
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 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)
Vessels
Subsea
A group of non-core vessels in the fleet were classified as being held for sale as at 30 June 2020 and continued at 30 June 2021. This
classification had 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.
Items of plant & equipment from the Subsea CGU were classified as being held for sale as at 30 June 2020 and continued at 30 June
2021. This classification had resulted in two separate recoverable value assessments, being for the ongoing business and the plant &
equipment that is held for sale.
Vessels - Continuing Operations
Subsea - 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. As a result of the improving market conditions discussed above, the vessel valuation report reflected
increases in values, leading to a partial reversal of prior year impairments.
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 Board have decreased this discount
to 15.0% for the current period. This rate is at the upper end of the range specified by the independent valuer. We are at the start of the
recovery and as we work our way through this and more data points become available to prove up the longevity and sustainability of the
recovery the Board will reassess and likely lower the en bloc discount over time. In the June 2021 impairment assessment, the company
used a discount of 15.8%.
The following factors were taken into account in determining this value:
•
•
•
•
the movement in the oil price during the period
increased activity in the offshore industry
tightening of supply in the offshore industry
the adopted % being within the range provided by the valuer
Consistent with previous periods, selling costs are also assumed to be 2% (2021: 2%) of the vessel sales value.
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
Vessels - Classified as Held for Sale
Rate used
15.0%
2.0%
Sensitivity
movement
2.5%
0.5%
Change in
carrying value
$’000
10,610
1,840
As described in Note 3.4, Assets Classified as Held for Sale, the Group has completed its vessel disposal program during the year. At 30
June 2022, one vessel had not been sold and it was transferred back into the core fleet. This vessel has now been valued under the same
methodology described above for Vessels – Continuing Operations. This has resulted in a $0.1m impairment charge on transfer.
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 material changes in the underlying assumptions used for the assessment as at 30 June 2021, except for expected future
cashflows 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
A discount rate of 11.3% (2021: 10.9%) has been used for ViU assessments.
In the budget approved by the board, forecast revenues have been increased for the FY2023 to FY2025 years to reflect the improving
market conditions. Nil revenue growth in FY2026 and FY2027 has been assumed, with terminal year growth of 2% (2021: 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
11.3%
2.0%
Sensitivity
movement
Increase/(Decrease) in
recoverable value
$’000
+0.5%
-0.5%
+0.5%
-0.5%
(3,433)
3,829
2,675
(2,403)
Subsea - Classified as Held for Sale
The remaining Subsea assets classified as held for sale were impaired to nil during the reporting period.
84 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 85
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 3. Assets and Liabilities (continued)
3.7
Impairment of Non-Current Assets (continued)
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 11.3% (2021: 10.9%) has been used for ViU assessments.
Total carrying value of the CGU is $2.0m with $0.8m being net working capital and $0.8m right of use asset resulting in low sensitivity to
changes in assumptions.
3.8
Investment in Associate
In November 2021, the Group acquired a 49.9% interest in Global Aqua Survey (GAS) Ltd, a subsea company operating in Taiwan. The
consideration for the investment was 42.5 million New Taiwan dollars ($2.1m). The investment is accounted for using the equity method in
these consolidated financial statements.
Name of Associate
Principal Activity
Principal place
of business
MMA Global Aqua Survey Ltd (GAS)
Subsea
Taiwan
Summarised financial information in respect of the associate is set out below:
Financial position:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Group’s share of associate net assets - 49.9%
Goodwill
Group’s carrying amount of the investment
Financial performance:
Total revenue
Total profit/(loss) before tax for the year
Group’s share of associate profit before tax
Group’s share of associate income tax expense
Group’s share of associate profit after tax
Proportion of ownership interest and
voting rights held by group
2022
49.90%
2021
-
2022
$’000
4,878
9,272
(6,098)
(5,453)
2,599
1,296
486
1,782
721
(496)
(248)
-
(248)
3. Assets and Liabilities (continued)
3.9 Loan to associate
A USD$4.25 million ($6.1 million) loan was made to our associate company, MMA Global Aqua Survey Ltd for the purchase of a vessel
from the Group.
The loan is for a five year term at an interest rate of 4.8% with 60 equal monthly repayments and is secured with a registered mortgage
over the vessel.
In addition, a 90 day working capital loan to the value of $0.4 million was provided in June 2022.
3.10 Trade and Other Payables
Trade payables
Other payables and accruals
Goods and services tax payable
Total
2022
$’000
12,086
30,090
960
43,136
2021
$’000
8,675
26,895
660
36,230
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.
3.11 Unearned revenue
Unearned revenue – operations
Instalment received in advance for disposal of subsidiaries (i)
Total
2022
$’000
10,083
2,173
12,256
2021
$’000
3,152
-
3,152
(i) During 2021 MMA granted WASCO an option to purchase the Group’s subsidiaries holding the interest in the Batam shipyard facility
for a purchase price of US$15 million. As part of this transaction they also entered in to an operating lease agreement for the facility.
Please refer to Note 5.9 for details of the lease.
In April 2022 the option to purchase was exercised and an instalment of US$1.5 million received under the sale contract. The
transaction has a number of conditions to be met prior to completion. As a result, control of the subsidiaries has not passed as at 30
June 2022 and the sale transaction has not completed.
3.12 Borrowings
Secured – at amortised cost
Current
Non current
Total
Summary of borrowing arrangements:
2022
$’000
12,500
102,919
115,419
2021
$’000
15,568
147,932
163,500
Repayments totalling $53.0 million were made during the year. Of this, $37.0 million was funded through the vessel disposal program,
$0.9 million from other asset disposals and $15.1 million from cash reserves.
In addition, it was agreed with the banking syndicate to waive the interest cover ratio and leverage ratio covenants for the period from
1 July 2021 until 31 March 2022. This waiver of these debt covenants was agreed on the basis of the challenging trading conditions
the offshore support vessel industry was facing due to the ongoing affects of the COVID-19 Delta variant. The covenant testing re-
commenced from 1 April 2022 and the Group is in compliance with all requirements.
The interest payable on the US$ denominated loan is currently linked to LIBOR, which is being phased out globally. As such, MMA has
engage with the banking syndicate to discuss the timeline for transition to a new interest rate mechanism to replace LIBOR and agreed to
delay the commencement of discussions until 31 December 2022. 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 covenants other than a change in reference rate.
86 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 87
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 3. Assets and Liabilities (continued)
3.12 Borrowings (continued)
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 $69.4 million and a US$ amount
of $31.8 million. The US$ 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.
Available borrowing facilities
Secured loan facilities with various maturity dates through to 2025 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:
2022
$’000
2021
$’000
115,419
163,500
-
-
115,419
163,500
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes.
2022
Balance at 1 July 2021
Repayment of loan
Non-cash foreign exchange movement
Balance at 30 June 2022
2021
Balance at 1 July 2020
Repayment of loan
Loan forgiveness
Non-cash foreign exchange movement
Amortised loan fees
Balance at 30 June 2021
Refer to note 3.13 for movements in lease liabilities.
Bank loans
$’000
Loan fees
$’000
163,500
(53,001)
4,920
115,419
Bank loans
$’000
273,404
(81,762)
(14,757)
(13,385)
-
-
-
-
Loan fees
$’000
-
-
-
Total
$’000
163,500
(53,001)
4,920
115,419
Total
$’000
(81,762)
(14,757)
(13,385)
2,827
-
2,827
163,500
-
163,500
(2,827)
270,577
3. Assets and Liabilities (continued)
3.13 Lease liabilities
Opening Balance
Additions
Repayments
Interest expense
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
2022
$’000
10,137
2,930
(3,862)
343
(38)
9,510
3,055
6,455
9,510
3,055
2,992
2,610
1,012
508
-
10,177
(667)
9,510
2021
$’000
10,893
5,003
(6,237)
478
-
10,137
3,502
6,635
10,137
3,723
2,227
2,150
1,868
567
340
10,875
(738)
10,137
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.
3.14 Provisions
Current
Ongoing legal claims
Employee benefits – annual leave
Employee benefits – long service leave
Total
Non-current
2022
$’000
2,064
6,370
5,997
14,431
2021
$’000
11,936
5,844
5,438
23,218
Employee benefits – long service leave
31
112
As disclosed by Australian Stock Exchange (ASX) announcement on 23 June 2021 and in the 2021 annual report, a final arbitration award
was made against a wholly owned subsidiary of MMA on 22 June 2021.
MMA appealed that decision to the High Court of Singapore, and as previously announced to the ASX:
•
the High Court of Singapore dismissed MMA’s appeal; and
• as a result of the dismissal MMA is required to pay S$11.7 million (S$10.2 million of which was paid during 2022, with the remaining
S$1.5 million due 22 June 2023).
MMA has lodged a final appeal against the decision of the High Court of Singapore.
Significant Estimates
In the current year, the Group has a total provision of $2.1 million (2021: $11.9 million) in relation to ongoing legal claims. This amount
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 Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 89
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 3. Assets and Liabilities (continued)
3.14 Provisions (continued)
3. Assets and Liabilities (continued)
3.15 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.
3.15 Deferred Tax Balances
Deferred tax assets/(liabilities) arise from the following:
2022
Gross deferred tax liabilities:
Property, plant and equipment
Inventory
Receivables
Other
Gross deferred tax assets:
Provisions
Unused tax losses and credits
Other
Total
2021
Gross deferred tax liabilities:
Property, plant and equipment
Inventory
Receivables
Other
Gross deferred tax assets:
Provisions
Unused tax losses and credits
Other
Total
Opening
Balance
$’000
Recognised in
Profit or Loss
$’000
Closing
Balance
$’000
(27,469)
(7,075)
(34,544)
(154)
3
(1,662)
(29,281)
2,024
24,585
2,616
29,225
(56)
64
-
1,640
(5,371)
2,064
3,885
(661)
5,287
(84)
(90)
3
(22)
(34,653)
4,088
28,470
1,955
34,513
(140)
(24,619)
(2,850)
(27,469)
(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)
(154)
3
(1,662)
(29,281)
2,024
24,585
2,616
29,225
(56)
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
2022
$’000
2021
$’000
75,039
19,034
-
86,798
19,727
4,474
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 Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 91
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 4. Capital Structure
4.1
Issued Capital
Fully Paid Ordinary Shares
Balance at beginning of financial year
Issue of shares
Share issue costs
Share consolidation
2022
No.’000
359,328
-
-
-
2022
$’000
742,247
-
18
-
2021
No.’000
925,730
2,667,570
-
(3,233,972)
2021
$’000
667,251
80,020
(5,024)
-
Balance at end of financial year
359,328
742,265
359,328
742,247
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Share Rights
As at 30 June 2022, executives and employees held rights over 20,596,998 ordinary shares (2021: 14,799,157).
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
2022
$’000
4,787
(61,431)
198,128
141,484
2021
$’000
3,949
(56,511)
176,667
124,105
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
Net Assets
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)
Non-controlling interest at beginning of year
Share of profit/(loss) for the year
Other
Non-controlling interest at end of year
2022
$’000
9,518
96
(3,946)
(3,731)
1,937
1,560
377
16,569
(14,378)
2,191
1,754
437
2,191
1,765
426
2,191
1,785
-
-
1,785
(207)
437
147
377
2021
$’000
2,747
89
(3,870)
-
(1,034)
(827)
(207)
10,958
11,113
(155)
(124)
(31)
(155)
(124)
(31)
(155)
929
-
-
929
(191)
(33)
17
(207)
92 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 93
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 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 2021
financial year.
The capital structure of the Group consists of net debt (borrowings as detailed in note 3.12 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. Refer to note 3.12.
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
(i) Debt is defined as gross long and short-term borrowings, as detailed in note 3.12.
(ii) Property, plant and equipment includes all fixed assets owned by the group, as detailed in note 3.5.
2022
$’000
115,419
(73,864)
41,555
370,338
11%
2021
$’000
163,500
(96,226)
67,274
364,080
18%
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
2022
$’000
398
2,458
2,856
2021
$’000
357
710
1,067
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
(8)
Issued 30 September 2021
329,000
30 Sep 2021
1 Jul 2024
(9)
Issued 24 September 2021
1,297,904
24 Sep 2021
1 Jul 2024
(10)
Issued 10 November 2021
172,400
10 Nov 2021
1 Jul 2024
(11)
Issued 10 November 2021
1,518,829
10 Nov 2021
1 Jul 2026
(12)
Issued 23 December 2021
2,050,414
23 Dec 2021
1 Jul 2026
(13)
Issued 30 May 2022
1,750,001
30 May 2022
31 Dec 2025
Exercise
price
$
Fair Value at
Grant date
$
0.00
0.00
0.00
0.00
0.00
0.00
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
0.38
0.38
0.38
0.20
0.23
0.56
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 comparative year.
2019 Issues
Performance Rights issued during the 2019 financial year as part of Series 1 and 2 did not meet the required vesting conditions and have
therefore lapsed in accordance with the terms of the plan.
94 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 95
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 5. Other Notes (continued)
5.2 Share Based Payments (continued)
2020 Issues
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.
None of Key Management Personnel or Managing Director performance rights (totalling 1,158,730) vested on 1 July 2022 and these
performance rights will lapse. The Board has determined that for senior managers who achieved the retention hurdle the performance
rights vested and therefore 133,993 of the performance rights vested on 1 July 2022 will be converted to ordinary shares.
2021 Issues
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.
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.
2022 Issues
Performance Rights issued during the 2022 financial year as part of Series 8 to 13 to executives and employees are subject to
achievement of a number of vesting targets.
The Series 8, 9 and 10 issues were short term incentive plans for the 2021 financial year. Performance conditions were met at 30 June
2021 with vesting subject to the employee remaining employed by the Group on 30 June 2022. These have all vested at the date of this
report.
For the Series 11 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 12 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 11.
The Series 13 issue is a Key Management Personnel retention plans and only vest subject to the employee remaining employed by the
Group on 31 December 2023.
Please refer to the Remuneration Report on pages 44 to 56 for further details of Performance Rights issued to executives and employees.
5. Other Notes (continued)
5.2 Share Based Payments (continued)
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 in Series 11 and 12 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 11
Series 12
$0.405
$0.00
65%
$0.405
$0.00
65%
2.64 years
2.64 years
Nil
0.71%
Nil
0.71%
The fair value of the other share rights issued during the year, being Series 8,9,10 and 13, were based on the share price at the date of
issuing, when all other vesting conditions had been met.
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.
Movement in share rights during the period
The following reconciles the outstanding share rights at the beginning and end of the financial year:
2022
2021
Employee Share Right Plans
Number of rights
Balance at the beginning of the financial year
14,799,157
Adjustment for share consolidation
Issued during the financial year
Expired during the financial year
Balance at the end of the financial year
Exercisable at end of the financial year
-
7,118,548
(1,320,707)
20,596,998
-
Weighted average
exercise price
$
0.00
-
0.00
0.00
0.00
-
Number of rights
35,188,068
(31,669,263)
11,280,352
-
14,799,157
-
Weighted average
exercise price
$
0.00
-
0.00
-
0.00
-
96 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 97
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 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
(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
(8)
Issued 30 September 2021
(9)
Issued 24 September 2021
(10)
Issued 10 November 2021
(11)
Issued 10 November 2021
(12)
Issued 23 December 2021
(13)
Issued 30 May 2022
Total
Exercise price
$
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Expiry Date
1 July 2024
1 July 2024
1 July 2025
1 July 2025
1 Nov 2025
1 July 2024
1 July 2024
1 July 2024
1 July 2026
1 July 2026
31 Dec 2025
Number
1,846,954
351,145
1,758,356
4,905,329
4,616,666
329,000
1,297,904
172,400
1,518,829
2,050,414
1,750,001
20,596,998
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
Share based payments
Total
2022
$
2021
$
2,276,746
3,279,417
109,382
13,744
416,319
183,141
32,938
612,072
2,816,191
4,107,568
During the financial year, following a review by the Company of its delegation of authority and internal approval practices, the Company
determined that in addition to directors, only the Chief Financial Officer and Company Secretary fall within definition of ‘key management
personnel’ and have therefore removed some employees from being identified as such.
5. Other Notes (continued)
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 (2021: Nil)
Other related party transactions and loan to associate
During the year, a Group entity disposed of a vessel to a 100% owned subsidiary of an associate company, MMA Global Aqua Survey Ltd
for USD$5.0 million.
As part of the sale, a Group entity also provided a loan to fund a portion of the sale. The loan value is USD$4.25 million with a five year
term and interest charged at 4.8% per annum and is to be repaid with 60 equal monthly repayments. The loan is secured with a registered
mortgage over the vessel.
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.
5.5
Remuneration of Auditors
Deloitte and related network firms
Audit or review of financial reports:
- Group
- Subsidiaries and joint operations
Other assurance and agreed-upon procedures under other legislation or contractual
arrangements
There were no non-audit services provided by the external auditor during the year.
2022
$
2021
$
278,865
338,262
617,127
-
617,127
254,625
324,571
579,196
4,860
584,056
98 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 99
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 5. Other Notes (continued)
5.6 Subsidiaries
The Group’s material subsidiaries at the end of the reporting period are as follows:
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
MMA Offshore Vessel Holdings Pte Ltd
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
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
Note
Country of
Incorporation
Ownership
Interest 2022
%
Ownership
Interest 2021
%
(i)
Australia
(ii) (iii)
(ii) (iii)
(ii) (iii)
(ii) (iii)
(ii)
(ii) (iii)
(ii) (iii)
(ii) (iii)
(ii) (iii)
(ii) (iii)
Australia
Australia
Australia
Singapore
Australia
Singapore
Malaysia
Singapore
Singapore
Singapore
Singapore
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
-
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
80
100
100
100
100
30
100
(i) MMA Offshore Limited is the ultimate holding company and head entity within the tax consolidated group.
(ii) These companies are members of the tax consolidated group at 30 June 2022.
(iii) Pursuant to ASIC Corporations (Wholly – owned Companies) Instrument 2016/785, 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.
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:
Statement of Comprehensive Income
Revenue
Finance income
Other losses
Vessel expenses
Subsea expenses
Project Logistics expenses
Administrative expenses
Impairment Reversal
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
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
2022
$’000
182,057
21
(5,546)
(103,731)
(42,794)
(41,787)
(3,170)
35,303
(6,317)
14,036
(478)
13,558
13,558
37,277
54,031
369
1,619
-
93,296
231,892
98,267
5,720
335,879
429,175
61,893
193
12,500
-
11,554
454
86,594
102,919
6,524
-
109,443
196,037
233,138
742,285
4,787
(513,934)
233,138
(527,492)
13,558
(513,934)
2021
$’000
149,201
17
15,765
(80,263)
(38,978)
(403)
(19,877)
(9,717)
(11,875)
3,870
2
3,872
3,872
22,429
69,487
582
1,714
4,605
98,818
256,149
87,258
7,834
351,241
450,059
48,558
305
15,568
2,101
10,187
238
76,958
147,932
6,303
112
154,347
231,304
218,755
742,298
3,949
(527,492)
218,755
(531,364)
3,872
(527,492)
100 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 101
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 5. Other Notes (continued)
5.6 Subsidiaries (continued)
The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling interests.
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
MMA Global Projects Limited
Singapore
2022
%
20
2021
%
2022
$’000
2021
$’000
2022
$’000
2021
$’000
20
437
(33)
377
(207)
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.
5.7 Parent Company Information
Statement of Financial Position
Assets
Current Assets
Non-Current Assets
Total 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
2022
$’000
2021
$’000
17,760
445,373
463,133
12,517
107,962
120,479
342,654
742,285
(513,893)
114,122
140
342,654
53,056
-
53,056
75,558
-
10,759
447,398
458,157
15,585
152,974
168,559
289,598
742,285
(566,949)
114,122
140
289,598
(12,544)
-
(12,544)
62,745
-
5. Other Notes (continued)
5.8 Financial Instruments
Categories of Financial Instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Loan to associate
Financial liabilities
Trade and other payables
Lease liabilities
Borrowings
2022
$’000
73,864
63,536
6,515
38,018
9,510
115,419
2021
$’000
96,226
49,864
-
30,318
10,137
163,500
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
British Pound Sterling
Malaysian Ringgits
New Zealand Dollars
Other
Liabilities
Assets
2022
$’000
63,063
1,705
2,902
103
963
107
2021
$’000
110,267
1,418
1,492
106
18
1,321
2022
$’000
62,091
2,072
8,555
7,837
2,229
2,661
2021
$’000
87,442
556
4,675
5,989
513
1,687
102 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 103
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 5. Other Notes (continued)
5.8 Financial Instruments (continued)
Foreign currency sensitivity analysis
The Group is mainly exposed to the currencies in the below table.
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
British Pound Sterling Impact
Malaysian Ringgit Impact
New Zealand Dollar Impact
Profit or Loss
Equity (i)
2022
$’000
(912)
45
2
-
(115)
2021
$’000
(645)
3
2
-
(45)
2022
$’000
1,000
(78)
(516)
(703)
-
2021
$’000
2,719
75
(288)
(535)
-
(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 decreased significantly during the period, from $0.75 to $0.69. 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 a decrease/increase in net profit of: $1,154,188 (2021: decrease / increase by $1,634,997). The
decrease in the exposure to interest rates on its variable borrowings is attributable to the $48m 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, renewables industries, governments and defence and across diverse geographical areas. Ongoing credit evaluation is
performed on the financial condition of trade receivables.
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 28% (2021:22%) 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)
59,306
(3,678)
55,628
(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 2022
Non-interest bearing
Variable interest rate instruments
Fixed interest rate instruments
Total
30 June 2021
Non-interest bearing
Variable interest rate instruments
Fixed interest rate instruments
Total
28,770
496
255
8,721
1,038
541
527
-
38,018
17,016
111,070
129,620
2,259
7,223
10,278
5.38
4.01
29,521
10,300
19,802
118,293
177,916
18,736
10,714
868
-
30,318
3.83
4.00
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
104 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 105
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 5. Other Notes (continued)
5.10 Contingent Liabilities
The Group has been in discussions regarding the interpretation of casual employee entitlement to long service leave (LSL) entitlements,
and in particular the years of service required to be able to access LSL. 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.
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 (2021: $20.0 million) with total drawn amounts of $2.0 million (2021:$2.8 million)
5.11 Events After the Reporting Period
Other than described below, 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.
Acquisition of Subcon International Pty Ltd
On 28 July 2022, the Group acquired 100% of Subcon International Pty Ltd which in turn owns all of the subsidiaries within the Subcon
group.
Established in 2011 and headquartered in Perth, Subcon provides innovative stabilisation, coastal erosion and engineered reef solutions to
the oil and gas, offshore wind, coastal infrastructure and tourism sectors both in Australia and internationally.
The acquisition is strongly aligned with the Group strategy to extend and diversify our service offering in a sustainable manner. It enhances
our service offering to our existing oil & gas and offshore wind markets by combining our capability, whilst Subcon also bring a number of
new solutions to expand our reach into coastal erosion management and the tourism sectors.
Issued capital (7,131,941 shares) in MMA Offshore Ltd
Cash (deposit paid June 2022)
$’000
4,350
4,200
8,550
The number and fair value of the ordinary shares issued as part of the consideration paid was determined based on the Volume Weighted
Average Price for the 60 days prior to completion of $0.589. The market value of the shares at completion date was $0.61.
Acquisition costs totalling $0.1 million have been excluded from the consideration transferred and have been recognised as an expense in
profit or loss in the half year, within the ‘Administration expenses’ line item.
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 2022
Non-interest bearing
Variable interest rate instruments
Fixed interest rate instruments
Total
30 June 2021
Non-interest bearing
Variable interest rate instruments
0.19
Total
Fair value of financial instruments
6,818
4,407
953
63,788
51,610
73,882
115
0.29
4.80
-
231
125,607
7,049
38,757
96,241
8,841
-
134,998
8,841
-
1,041
5,448
599
-
599
-
73,882
5,549
6,936
6,502
144,606
1,668
49,864
-
96,241
1,668
146,105
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 and sub lease of yard and office
facilities with lease terms of between one month to five years, with a range of one day to five years extension options.
During the comparative year the Group 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 was for a firm period of three years. The Group also granted WASCO an
option to purchase the interest in the Facility for a purchase price of US$15 million. When WASCO exercised the option in April 2022,
the terms of the lease were renegotiated with total rent payable under the sublease now being A$0.8 million. Please refer to Note 3.11
Unearned Revenue for further details. The sublease will terminate upon completion of the purchase.
Maturity analysis of operating lease receipts:
Year 1
Year 2
Year 3
Year 4
Year 5 and onwards
Total
2022
$’000
32,090
16,582
9,851
4,645
3,122
66,290
2021
$’000
39,159
11,766
4,793
-
-
55,718
106 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 107
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022 5. Other Notes (continued)
5.11 Events After the Reporting Period (continued)
Assets acquired and liabilities assumed at the date of acquisition
Current assets
Cash
Trade and other receivables
Inventories
Current tax asset
Other
Non-current assets
Property, plant and equipment
Right of use asset
Current liabilities
Trade and other payables
Employee entitlements
Lease liabilities
Non-Current liabilities
Lease liabilities
Total identifiable assets acquired and liabilities assumed
Goodwill
Total Consideration
$’000
1,600
1,286
74
600
530
352
848
(1,327)
(357)
(126)
(820)
2,660
5,890
8,550
The initial accounting for the acquisition has only been provisionally determined at the time of signing this report. The necessary review of
final balances and other calculations had not been finalised and the fair value of trade & other receivables, property plant and equipment
have therefore only been provisionally determined based on the directors’ best estimate of the likely fair value.
The Goodwill arising from the acquisition is considered to consist of the enhanced capability to service our existing markets through
combination of service offerings, access to new markets with significant potential for growth, benefits of market consolidation through the
combination of MMA’s existing subsea stabilisation business with Subcon and cost synergies arising.
The gross contractual value of receivables acquired was $1.3 million, with the full fair value amount expected to be collected.
The $4.2 million cash consideration was paid as a deposit on the transaction on 22 June 2022.
5. Other Notes (continued)
5.12 Other Accounting Policies
Adoption of New and Revised Accounting Standards and Interpretations
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 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. None of these had a material impact on the entity or
information to be disclosed.
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 2020-3 Amendment to AAS
– Annual improvements 2018-2020
and Other Amendments.
AASB1, Subsidiary as First Time Adopter
AASB3, Reference to Conceptual Framework
Effective
1 January 2022
AASB9, Fees in the’10 per cent’ test for Derecognition of Financial Liabilities
AASB116, Property Plant & Equipment: Proceeds before Intended Use
AASB137, Onerous Contracts – Cost of Fulfilling a Contract
AASB1141, Taxation in Fair Value Measurements
AASB 2020-1
Classification of Liabilities as Current or Non current
AASB 2021-2 Disclosure of
Accounting Polices and Definition
of Accounting Estimates
AASB 7 Financial Instruments
AASB 101 Presentation of Financial Statements
1 January 2023
1 January 2023
AASB 108 Accounting Policies
AASB 134 Interim Financial Reporting
AASB 2021-5
AASB 2014-10
AASB Practice Statement 2 Making Materiality Judgements
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
1 January 2023
Sale or Contribution of Assets between an Investor and its Associates or
Joint Venture
1 January 2025
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.
108 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 109
Notes to the Financial Statements For the year ended of 30 June 2022Notes to the Financial Statements For the year ended of 30 June 2022
Additional Securities Exchange Information
For the year ended of 30 June 2022
Additional Securities Exchange Information
For the year ended of 30 June 2022
Ordinary Share Capital (as at 16 August 2022)
366,460,176 fully paid ordinary shares are held by 3,568 individual shareholders. All issued ordinary shares carry one vote per share.
Unquoted Rights (as at 16 August 2022)
17,931,654 unlisted rights held by 191 individual rights holders.
Substantial shareholders (as at 16 August 2022)
Number of Shares % of Issued Capital
Distribution of Holders of unquoted Performance Rights (as at 16 August 2022)
Thorney Opportunities Ltd
Allan Gray Australia Pty Ltd / Orbis Group
Black Crane Asia Opportunities Fund
Halom Investments Pte Ltd
Wilson Asset Management Group
Total
50,071,891
44,083,775
29,706,815
29,248,195
28,095,635
13.93%
12.27%
8.27%
8.14%
7.67%
181,206,311
50.28%
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
Distribution of Holders of Ordinary Shares (as at 16 August 2022)
Unmarketable Parcels (as at 16 August 2021)
Number of performance right holders
0
124
3
37
28
192
Number of ordinary shareholders
The number of holders holding less than a marketable parcel of the Company’s shares is as follows:
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
421
1,527
546
897
177
3,568
Twenty Largest Shareholders (as at 16 August 2022)
Number of Shares % of Issued Capital
1 CITICORP NOMINEES PTY LIMITED
2 UBS NOMINEES PTY LTD
3 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
4 SANDHURST TRUSTEES LTD
5 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
6 NATIONAL NOMINEES LIMITED
7 SANDHURST TRUSTEES LTD
8 FIRST SAMUEL LTD ACN 086243567
9 BNP PARIBAS NOMINEES PTY LTD
10 BLOSSOMVALE INVESTMENTS PTE LTD
11 BNP PARIBAS NOMS PTY LTD
12 HISHENK PTY LTD
13 WILLOUGHBY CAPITAL PTY LTD
14 MATTINA INVESTMENTS PTY LTD
15 ORPHEO PTY LIMITED
16 MASFEN SECURITIES LIMITED
17 FLST PTY LTD
18 MR JOHN PATERSON
19 NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
20 MS JENNIFER ANN WEBER + MR JEFFREY ANDREW WEBER
97,580,710
48,620,904
46,112,103
15,741,714
13,109,649
10,692,653
9,785,738
6,994,291
6,955,984
5,887,840
4,874,795
4,460,000
4,340,000
2,987,845
2,303,666
1,753,508
1,410,789
1,400,000
1,189,989
1,184,942
26.63
13.27
12.58
4.30
3.58
2.92
2.67
1.91
1.90
1.61
1.33
1.22
1.18
0.82
0.63
0.48
0.38
0.38
0.32
0.32
Total
287,387,120
78.42
Minimum Parcel Size
Number of ordinary shareholders
Number of shares
827
314
79,831
Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes of shares, at a general meeting of shareholders, all
ordinary shares carry one vote per share (on a show of hands or a poll) and each shareholder entitled to vote may vote in person or by proxy. The
performance rights do not carry any right to vote.
Other
As at the date of this report 7,131,940 of the company’s securities are subject to voluntary escrow expiring on 28 July 2024.
The Company does not have a current on-market buy-back.
There are no securities approved for the purposes of item 7 section 611 of the Corporations Act which have not yet completed.
No securities were purchased on-market for the purposes of an employee incentive scheme during the reporting period.
Shareholder Enquiries
Shareholders can obtain information about their shareholding by contacting the Company’s share registry, and all registers of securities, registers
of depositary receipts and other facilities for registration or transfer are kept at:
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne
Victoria 3000 Australia
Enquiries:
1300 850 505
(within Australia)
61 3 9415 4000
(outside Australia)
Facsimile:
61 3 9473 2500
web.queries@computershare.com.au
www.computershare.com.au
Change of Address
Shareholders should notify the share registry immediately if there is a change to their registered address.
Stock Exchange Listing
Shares in MMA Offshore Limited are listed on the Australian Securities Exchange with the code MRM. The Company’s securities are not listed on
any other stock exchange.
Publications
The Annual Report is the main source of information for shareholders.
110 MMA Offshore Limited | Annual Report 2022
MMA Offshore Limited | Annual Report 2022 111
Delivering innovative,
fit-for-purpose
marine solutions.
Corporate Directory
Directors
Ian Macliver
Chairman
David Ross
Managing Director
Peter Kennan
Non-Executive Director
Chiang Gnee Heng
Non-Executive Director
Susan Murphy AO
Non-Executive Director
Sally Langer
Non-Executive Director
Company Secretary
Tim Muirhead
Registered Office
EQ12, Level 10
12-14 The Esplanade
PERTH WA 6000
Telephone: +61 8 9431 7431
www.mmaoffshore.com
Auditors
Deloitte Touche Tohmatsu
Chartered Accountants
Brookfield Place, Tower 2
123 St Georges Terrace
PERTH WA 6000
Telephone: +61 8 9365 7000
+61 8 9365 7001
Facsimile:
Solicitors
Thomson Geer
Exchange Tower, Level 27,
PERTH WA 6000
Telephone: +61 8 9366 8000
+61 8 9366 8111
Facsimile:
112 MMA Offshore Limited | Annual Report 2022
mmaoffshore.com
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