THE ENERGY TRANSITION Thank You for All Your Efforts in 2020! Our People, Thank You Our Greatest Asset
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EMBRACING THE ENERGY TRANSITION Thank you for all your efforts in 2020! Our people, Thank you our greatest asset. CHAIRMAN’S LETTER TO SHAREHOLDERS DEAR SHAREHOLDERS, Thank you for your confidence and continuous interest in Sapura Energy Berhad (“Sapura Energy”). On behalf of the Board of Directors, it is my pleasure to invite you to join our Tenth Annual General Meeting (“10th AGM”) which will be held on a fully virtual basis on Tuesday, 27 July 2021 at 10.00 a.m. Enclosed herewith is a copy of the Annual Report 2021 inclusive of Audited Financial Statements of Sapura Energy for the financial year ended 31 January 2021 which also contains the Notice and Administrative Notes pertaining to the upcoming 10th AGM for your reference. The Annual Report 2021 and Audited to seek for re-election. The Directors remuneration payable for the Non- Financial Statements provide a standing for re-election under Article Executive Directors of Sapura Energy, and comprehensive statement of our strategic 80 at the 10th AGM, are as follows: re-appointment of the auditors, whereby direction, latest undertakings, achievements 1. Dato’ Mohammad Azlan Abdullah; brief explanations are also provided and awards, corporate responsibilities and under the “Explanatory Notes” for your and initiatives, as well as the Company’s 2. Datuk Muhamad Noor Hamid. understanding. financial disclosure for the shareholders’ attention and review. These documents can b) Article 85 of the Company’s Your Directors are of the view that all the also be accessed at the Company's website Constitution stipulates that any newly proposed resolutions as set out in the Notice at www.sapuraenergy.com. appointed Director shall hold office of the 10th AGM are in the best interest only until the next following AGM of of the Company and its shareholders, and At the 10th AGM, 10 Ordinary Resolutions the Company at which the Director is further recommend for you to vote in favour are proposed for consideration by the due for retirement under this Article, for all resolutions. shareholders. The purpose and reasons for when he shall retire but shall then be each resolution are explained under the eligible for re-election. The Directors Due to the Coronavirus (“COVID-19”) Explanatory Notes of the Notice of the 10th standing for re-election under Article outbreak and concern for the well-being and AGM. I hope that you will find the brief 85 at the 10th AGM, are as follow: safety of our shareholders, you are required explanation helpful in order to make an 1. Tan Sri Dato’ Seri Shamsul Azhar to attend the 10th AGM remotely and online informed decision. Abbas; through the Virtual Meeting Platform as 2. Datuk Mohd Anuar Taib; described in the Administrative Notes of the At the 10th AGM, the Board is recommending 3. Tan Sri Dato’ Megat Zaharuddin 10th AGM of the Company. for retirement and re-election of Directors Megat Mohd Nor; in accordance with the following Articles of 4. Bernard Rene Francois Di Tullio; I look forward to the 10th AGM to share the the Company’s Constitution: 5. Dato’ Azmi Mohd Ali; and latest updates and activities concerning the 6. Datuk Iain John Lo. Company. a) Article 80 of the Company’s Constitution expressly states that in I also believe that you should be able every subsequent AGM, at least one- to comprehend the rest of the agenda Yours sincerely, third (1/3) of the Directors for the and proposed resolutions which include, time being shall retire from office and amongst others, to receive the Audited Tan Sri Dato’ Seri Shamsul Azhar Abbas the retiring Directors shall be eligible Financial Statements, payment of Directors’ Chairman INSIDE THIS REPORT 04 Tribute to Tan Sri Dato’ Seri Shahril Shamsuddin CORPORATE 05 GOVERNANCE COVER RATIONALE OVERVIEW OF As fundamental shifts take place in the oil 01 SAPURA ENERGY 77 Corporate Governance and gas industry, Sapura Energy has kept Overview Statement pace with the changing times by forging 93 Statement on Risk Management and 06 Our Aspiration ahead with strategies to position ourselves Internal Control 06 Who We Are for long-term success. We are Embracing 95 Report of Board Audit Committee 06 Our Core Values the Energy Transition by focusing on gas as 99 Additional Compliance Information 07 Awards the transition fuel, and building a presence 100 Statement of Directors’ 07 Our Value Chain in the renewables space. Our people, Responsibility 07 Our Competitive Advantage capabilities and assets are keys to our 08 Facts at a Glance growth, setting us on a path of sustainable 10 Our Global Footprint OUR ECONOMIC, value-creation for Sapura Energy and our 12 Health, Safety and Environment 06 ENVIRONMENT stakeholders. AND SOCIAL 02 KEY JOURNEY (“EES”) Photo Acknowledgement MESSAGES The photographs contained in this Annual Report 101 Sustainability at Sapura Energy were submitted by our own employees from 102 Our Approach locations across the globe. 14 Chairman’s Statement 104 Stakeholder Engagement 20 Group Chief Executive Officer’s 106 Managing Our Sustainability Some photographs were sourced from our media Review library and were captured in previous years. Impacts 106 Environmental MANAGEMENT 116 Social 03 DISCUSSION 128 Governance AND ANALYSIS 136 Calendar of Events 10TH STRATEGY REVIEW FINANCIAL ANNUAL GENERAL 28 Our Operating Environment and 07 STATEMENTS MEETING Outlook 29 Key Risks and Mitigation 140 Financial Statements 33 Our Strategic Priorities Date: 27 July 2021, Tuesday 33 Strategic Performance Review 41 Our Financial Performance ADDITIONAL Time: 10.00 a.m. BUSINESS UNIT PERFORMANCE REVIEWS 08 INFORMATION 42 Engineering and Construction 48 Drilling Venue of the Meeting: 51 Exploration and Production 265 Analysis of Shareholdings https://web.lumiagm.com FINANCIAL REVIEW 273 Notice of Annual General Meeting (Virtual Meeting Platform) 54 5-Year Group Financial Highlights 276 Statement Accompanying Notice of Malaysia 55 5-Year Group Financial Summary Annual General Meeting 56 Financial Calendar 277 Administrative Notes – Tenth Annual General Meeting (Fully Virtual) OUR Proxy Form 04 LEADERSHIP 57 Group Organisational Structure Scan this QR code 58 Corporate Information to download our 60 Board of Directors Annual Report 2021 62 Profile of Board of Directors 73 Executive Committee Profile Words cannot begin to describe the significance of Tan Sri Shahril Shamsuddin’s contribution to Sapura Energy. Until his retirement in March 2021, Sapura Energy is synonymous with his name. As its founder, Tan Sri Shahril guided the Group every step of the way, playing an instrumental role in transforming us from a small local player into the global integrated energy solutions provider that we are today. Accomplishing this was by no means an easy task, and we have Tan Sri Shahril to thank, for his sheer determination, passion and perseverance in ensuring the Group’s success. His actions have certainly spoken louder than any words could, and all of us here have been inspired by his strong leadership and will continue to be driven by the legacy he leaves behind. Over the decades that he has helmed the Group, we have not only faced and overcome countless challenges but also proven our mettle time and again, competing head-to-head against the best on the global stage. Much of this has been due to Tan Sri Shahril's vision and strategy, which began at the Group’s inception and set us off on a journey built on solid foundations and a clear growth trajectory. His strategic premise, while simple, was indeed visionary as it centred on two main ideas – investing in people and assets. These were the basic building blocks that Tan Sri Shahril believed held the key to success in a highly competitive and dynamic industry. His intuition has served the Group well, as our technically robust teams continue to win accolade after accolade from the clients we work with in more than 20 countries. Backed by world-class assets that we have invested on, we are now sought after by the world’s top oil & gas companies to help them advance their own businesses. Combined with Tan Sri Shahril's entrepreneurial mindset and determination to succeed, the Group has also valued innovation, and this has clearly set us apart as we offer greater reliability and the ability to be more competitively priced. 4 Sapura Energy Berhad to Tan Sri Dato’ Seri Shahril Shamsuddin - Founder of Sapura Energy - While driving strategy has been an important The rest is history, as the saying goes. However, the component of the Group’s success, Tan Sri Shahril very real and positive impact on the nation’s economy was also cognisant that getting the buy-in of all cannot be ignored. Sapura Energy's multiplier effect on stakeholders was a critical ingredient in ensuring the Malaysian economy is an estimated RM89 billion that the best decisions were made. Thus, it was Tan over the last five years, including work worth billions Sri Shahril's natural ability to garner feedback and of ringgit awarded to Malaysian vendors. We created promote debate positively and openly that enabled thousands of jobs in Malaysia, providing exposure the best business decisions possible to further the to Malaysian talents internationally, and produced Group’s interest. We were given a common purpose leaders who now helm other Malaysian corporations. through this, as we built and cultivated trust among We also have more than 600 global employees who all of us here at Sapura Energy, a characteristic for are proud to be part of Sapura Energy. which the Group is well recognised. Not one to rest on his laurels, Tan Sri Shahril Throughout the Group’s journey, Tan Sri Shahril has continued looking ahead, setting Sapura Energy on also created many opportunities, purely based on a promising future growth trajectory by leveraging the hard work put in.