1.Preheat oven to 180°C (160°C fan-forced). Grease a deep 20cm-round cake pan and line with baking paper.
2.Beat 125g of the butter, extract, sugar, eggs, sifted flour and cocoa, and the water in a large bowl with electric mixer on low speed until ingredients are combined. Increase speed to medium; beat about 3 minutes or until mixture is smooth and pale in colour.
3.Spread mixture into pan; bake about 1 hour. Stand cake in pan 5 minutes before turning, top-side up, onto wire rack to cool.
4.Meanwhile, to make chocolate icing, melt chocolate and remaining butter in a small heatproof bowl over small saucepan of simmering water (do not allow water to touch base of bowl). Gradually stir in sifted icing sugar and the water, stirring until icing is spreadable.
5.Spread cold cake with icing.