MISC Integrated Annual Report 2020

19. INVESTMENTS IN JOINT VENTURES Group Corporation 2020 2019 2020 2019 RM’000 RM’000 RM’000 RM’000 Unquoted shares in Malaysia, at cost 173,228 176,184 167,803 170,762 Unquoted shares outside Malaysia, at cost 221,280 176,124 24,195 24,622 394,508 352,308 191,998 195,384 Share of post-acquisition profits 423,035 450,736 – – Share of other post-acquisition reserves 132,731 201,819 – – 950,274 1,004,863 191,998 195,384 Less: Accumulated impairment loss (77,213) (79,148) – – Carrying amount of the investment 873,061 925,715 191,998 195,384 a) During the current financial year, the Corporation through its subsidiary, Asia LNG Transport Dua Sdn. Bhd. (“ALT Dua”), a 51%-owned subsidiary of the Corporation entered into a shareholders’ agreement with Mitsubishi Corporation (“MC”) and Nippon Yusen Kabushiki Kaisha (“NYK”) for the acquisition of shares in Diamond LNG Shipping 5 Pte. Ltd. (“DLS5”), a company incorporated in Singapore, from NYK for a cash consideration of RM35,103,000. Subsequent thereto, DLS5 became a 50%-owned joint venture company of ALT Dua and 25% owned by MC and NYK respectively. b) Pursuant to an Amended and Restated Shareholders’ Agreement entered into on 7 December 2020 between SBM Holding Inc. S.A. (“SBM”) and MISC Offshore Holdings (Brazil) Sdn. Bhd. (“MOHB”), a wholly-owned subsidiary of the Corporation, relating to the operation of joint venture companies for the ownership, conversion, chartering and operation of a Floating Production Storage and Offloading System “Espirito Santo” (“ FPSO Espirito Santo ”), a new company known as Brazilian Deepwater Production B.V. (“BDPBV”) was incorporated under the laws of The Netherlands. BDPBV is a 49%-owned joint venture company of MOHB and its principal activity is chartering of Floating Production Storage and Offloading System. BDPBV is to replace the original chartering joint venture company named Brazilian Deepwater Production Limited, to own and charter the FPSO Espirito Santo . The total investment in BDPBV by the Group amounts to RM24,000. c) During the current financial year, the Corporation had on 26 March 2020 completed the transfer of business from Diamond LNG Shipping 6 Ltd. (“DLS6 Bahamas”), a company incorporated in The Bahamas, to Diamond LNG Shipping 6 Pte. Ltd. (“DLS6 Singapore”), a company incorporated in Singapore. The business transfer is to align business ownership structure and optimise cost of operations. Subsequent thereto, DLS6 Singapore became a 50%-owned joint venture company of ALT Dua. The principal activity of DLS6 Singapore is owning and chartering of an LNG vessel. DLS6 Bahamas is to be dissolved thereafter. d) The Group has discontinued recognising its share of losses in a joint venture as the share of losses exceeds the Group’s interest in this joint venture. As such, the Group did not recognise its share of losses of this joint venture in the current year and the Group’s cumulative share of unrecognised losses in this joint venture amounting to RM24,377,000 (2019: RM4,244,000). e) In the previous financial year, the Corporation through its subsidiary, Asia LNG Transport Dua Sdn. Bhd. (“ALT Dua”), a 51%-owned subsidiary of the Corporation entered into a shareholders’ agreement with MC and NYK for the acquisition of shares in DLS6 Bahamas, a company incorporated in The Bahamas, from NYK for a cash consideration of RM15,949,000. Subsequent thereto, DLS6 became a 50%-owned joint venture company of ALT Dua and 25% owned by MC and NYK respectively. f) In the previous financial year, the Corporation entered into a shareholders agreement between the Corporation and Avenir LNG Limited (“Avenir”) to incorporate a joint venture company. Pursuant to that, Future Horizon (L) Pte. Ltd. (“Future Horizon”), then a wholly-owned subsidiary of the Corporation had increased its issued and paid up capital by the issuance and allotment of new ordinary shares to the Corporation and Avenir. Upon completion of the allotment of shares, Future Horizon became a 51%-owned joint venture company of the Corporation. The total investment in Future Horizon by the Corporation amounts to RM42,000. Details of the joint ventures are disclosed in Note 42. 19. INVESTMENTS IN JOINT VENTURES (CONT’D. ) The material joint ventures are Malaysia Deepwater Floating Terminal (Kikeh) Limited (“MDFT”) and Malaysia Vietnam Offshore Terminal (L) Limited (“MVOT”). The following tables summarise the financial information of the Group’s material joint ventures, as adjusted for any differences in accounting policies and reconciles the information to the carrying amount of the Group’s interest in joint ventures. The summarised financial information of the material joint ventures are as follows: MDFT MVOT RM’000 RM’000 As at 31 December 2020 Non-current assets 823,678 713,825 Current assets 2 114,200 Cash and cash equivalents 10,505 214,498 Non-current liabilities – (907) Current liabilities (39,741) (410,658) Net assets 794,444 630,958 Year ended 31 December 2020 Profit after taxation/total comprehensive income 196,479 65,471 Included in the total comprehensive income is: Revenue 403,806 301,542 Other income 74 209 Depreciation and amortisation (201,049) (248) Interest income 37 254 Interest expenses – (146) Income tax expense (5,991) (2,315) As at 31 December 2019 Non-current assets 1,034,353 274,491 Current assets 2 417,665 Cash and cash equivalents 227 51,065 Current liabilities (61,178) (165,022) Net assets 973,404 578,199 Year ended 31 December 2019 Profit after taxation/total comprehensive income 196,323 92,462 Included in the total comprehensive income is: Revenue 400,512 489,521 Other income – 65 Depreciation and amortisation (198,218) (564) Interest income 91 234 Income tax expense (6,073) (6,917) 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 31 December 2020 NOTES TO THE FINANCIAL STATEMENTS 10 398 10 399 /// Leadership / Governance / Financial Statements / Additional Information / Annual General Meeting ////// /// Leadership / Governance / Financial Statements / Additional Information / Annual General Meeting ////// Section Section MISC Berhad / Integrated Annual Report 2020 MISC Berhad / Integrated Annual Report 2020