AnnuAl repOrt 2013 - Siem Offshore · Siem OffShOre inc., AnnuAl repOrt 2013 2 Key Figures 3...

1 Siem OffShOre inc., AnnuAl repOrt 2013

AnnuAl repOrt 2013

2Siem OffShOre inc., AnnuAl repOrt 2013

Key Figures 3

Highlights 2013 5

New vessels Delivered in 2013 6

Newbuildings 8

Fleet List March 2014 10

Local presence in key markets 31.03.2014 12

This is Siem Offshore Inc. 14

Board of Director’s Report 16

Corporate Governance 22

Income Statements 26

Statements of Cash Flows 27

Statements of Financial Position – Assets 28

Statements of Financial Position – Equity and Liabilities 29

Statements of Changes In Equity 30

Notes to the Accounts 32

Corporate Social Responsibility 98

Auditor’s Report 100

Responsibility Statement 102

Board of Directors 103

Financial Calendar 104

cOntentS

KEY FIGURES

(Amounts in USD 1,000) CONSOLIDATED

INCOmE STATEmENTS Ref 2013 2012

Operating revenue 363,955 368,213

Operating margin (1) 122,663 110,597

Operating margin, % 34% 30%

Operating profit (2) 69,261 54,386

Operating profit margin, % 19% 15%

Net profit/(loss) attributable to shareholders 22,000 16,576

Net profit margin, % 6% 5%

Statements of Financial Position 12/31/13 12/31/12

Working capital (3) 21,112 43,611

Total assets 1,902,702 1,739,086

Shareholders' equity 774,749 749,423

Non-current liabilities 935,231 792,949

Statements of Cash Flows 2013 2012

Net cash flow from operations (4) 58,986 70,688

Net cash flow (4) -5,862 -29,567

Key Figures 2013 2012

Weighted average no. of outstanding shares (1,000) 389,078 395,665

Weighted average no. of diluted outstanding shares (1,000) 389,144 395,665

Earnings per share (USD) 0.06 0.04

Diluted earnings per share USD 0.06 0.04

Cash flow per share in USD (5) 0.15 0.18

Share price per year end (USD) 1.37 1.37

Share price per year end (NOK) 7.60 7.60

Price/earnings per share (P/E) (6) 24.15 31.30

Price/cash flow per share (P/CF) (7) 8.97 7.62

Book shareholders' equity per share (USD) (8) 2.00 1.90

Operating margin share (9) 0.32 0.28

Book equity ratio (10) 0.41 0.46

Liquidity ratio (11) 1.12 1.61

(1) earnings before interests, tax, depreciation and amortization (eBitDA)

(2) earnings before interests and taxes (eBit)

(3) total current assets less total cur-rent liabilities

(4) See Statements of cash flows for details

(5) net cash flow from operation divided on weighted average number of shares outstanding

(6) Stock exchange price on December 31 divided on earnings per share

(7) Stock exchange price on December 31 divided on cash flow per share

(8) Shareholders’ equity divided on number of outstanding shares

(9) Operating margin divided on weight-ed average number of outstanding shares

(10) Book equity divided on total assets(11) current assets divided on current

liabilities

27 TOTAL

34 TOTAL

32 TOTAL

40 TOTAL

44 TOTAL

42 TOTAL

45 TOTAL

31/12/2005

31/12/2006

31/12/2007

31/12/2008

31/12/2009

31/12/2010

31/12/2011

Newbuildings Vessels in operation

27 TOTAL

34 TOTAL

32 TOTAL

40 TOTAL

44 TOTAL

45 TOTAL

42 TOTAL

0-51% 100%

31/12/2012

31/12/2005

31/12/2006

31/12/2007

31/12/2008

31/12/2009

31/12/2010

31/12/2011

31/12/2012 47 TOTAL

47 TOTAL

VESSElS

OwnERShIp

31/12/2013 55 TOTAL

31/12/2013 55 TOTAL


REvENuE uSD 1,000

363 955PROFIT bEFORE TAx uSD 1,000

17 959EmPLOyEES

1 110vESSELS IN OPERATION

42CONTRACTS:

Nov. 13: Agreed a 5-year firm contract, with three annual options, for the third of the four Offshore Subsea construction Vessels (“OScVs”) under construction.

Nov. 13: Agreed a contract for the pSV “Siem Sasha” for a firm period of 1 year, with option for 1 year, for operations offshore nigeria.

Nov. 13: Agreed contracts for firm periods of 5 months for two AhtS vessels and one pSV for operations in the Kara Sea during 2014 and 2015, with options to extend the contracts for similar periods in 2016 and 1017.

Oct. 13: Agreed a letter of Award for the pSV “Siem louisa” for a firm period of 3 year, with 2 annual options, for operations offshore Angola.

Oct. 13: Agreed a contract for the pSV “Siem hanne” for a firm period of 1 year, with option for 1 year, for operations offshore equatorial Guinea.

Oct. 13: extended the contract for the mrSV “Siem marlin” by 1 year with commencement in April 2014 for operations offshore nigeria.

Oct. 13: Option to charter the large-size pSV “Siem Sailor” for one additional year declared, commencing in february 2014.

Sep. 13: Siem WiS entered into additional contract with m-i Swaco for the supply of its pressure control device (“pcD”) services to be used during operations for Statoil on the romeo and Julius project in the north Sea.

Sep. 13: Agreed a contract for the AhtS vessel “Siem Aquamarine” for a firm period of 4 wells with option for four additional wells for operations offshore morocco.

Sep. 13: Agreed a contract for the pSV “Sophie Siem” for a firm period of 18 months with options for 2 x 3 months for operation offshore equatorial Guinea.

Sep. 13: Agreed a 5-year firm contract with two yearly options for the second of the four Offshore Subsea construction Vessels (“OScVs”) under construction.

Sep. 13: Acquired 50% of the shares in Secunda canada lp, owner and operator of six offshore support vessels on canada’s east coast.

Jul. 13: Siem WiS entered into a contract with m-i Swaco for the supply of its pressure control device (“pcD”) services.

Jun. 13: extended firm contract for the scientific core-drilling vessel “Joides resolution” by one year following the charterer’s exercise of the first of ten annual options.

Jun. 13: Awarded a charter contract for a new dual fuel pSV to AS norske Shell, for a firm period of three years, with charterer’s options for additional 2x1 year periods.

may 13: Awarded a contract for one pSV, the “Siem carrier”, for a firm period of four years to petrobras in Brazil, with charterer’s options for additional 4x1 year periods.

Apr. 13: extended the firm contract for the mrSV “Siem marlin” by one year.

Feb. 13: Awarded a contract by enBW to the wholly owned subsidiary Siem Offshore contractors for the installation of the 33kV inner array grid cables for the Baltic 2 Offshore Wind farm.

vESSELS:

Dec. 13: Ordered four dual fuel large-size pSVs scheduled for delivery in second half of 2015 and first half of 2016.

Dec. 13: received delivery of the second of four OScVs ordered at anorwegian yard in 2012.

Aug. 13: received delivery of the first of four OScVs ordered at anorwegian yard in 2012.

Jul. 13: Ordered a dual fuel large-size pSV scheduled for delivery in 2015 to support the charter contract awarded by AS norske Shell.

may 13: received delivery of one large-size pSV built in Brazil.

Apr. 13: Ordered a cable lay Vessel (“clV”) scheduled for delivery in 2015.

Jan. 13: completed the sale and delivery of the mrSV “Seven Sisters”.

hiGhliGhtS 2013


– built by VArD Brattvaag, norway, delivered

30 Aug 2013

neW VeSSelS DeliVereD in 2013

– built by VArD Brattvaag, norway, delivered 13 Dec 2013


– built by VArD niterói, Brazil delivered 17 may 2013


neWBuilDinGS

Siem moxie delivery 2014

Design: SX 163 X-bow

type: iSV

Siem Spearfish delivery 2014

Siem Stingray delivery 2014

Design: StX 03

type: OScV

Siem Symphony delivery 2014

Siem Pride delivery 2015

Siem TbN delivery 2015




Design: VS 4411 Df

type: pSV

An extensive newbuilding programSiem Helix 1 delivery 2016

Siem Helix 2 delivery 2016

SAlt 307 WiV

WiV


Siem maragogi delivery 2014

Siem marataizes delivery 2014

Design: ulStein p801

type: OSrV

Siem Giant delivery 2014

Design: StX 09cD

type: pSV

Siem Aimery delivery 2015

Design: VArD clV 01

type: clV

1 0 Siem OffShOre inc., AnnuAl repOrt 2013

VeSSelS in OperAtiOn mArch 2014

Platform Support vessels (PSv)mid-size PSvs Large-size PSvs

Siem Atlas Siem Hanne Siem Louisa Sophie Siem Siem Sasha Siddis mariner Siem Pilot Siem Sailor Hugin Explorer Siem Supplier Siem Carrier

built: 2013 2007 2006 2006 2005 2011 2010 2007 2006 1999 1996

Design: StX pSV 4700 VS 470 mK ii VS 470 mK ii VS 470 mK ii VS 470 mK ii VS 485 VS 485 VS 485 cD mt 6000 mK ii mt 6000 VS 483

Dp Class: 2 2 2 2 1 2 2 2 2 2 2

LOA: 87.90 m 73.40 m 73.40 m 73.40 m 73.40 m 88.3 m 88.3 m 85.00 m 86.20 m 83.70 m 82.85 m

breadth: 19.00 m 16.60 m 16.60 m 16.60 m 16.60 m 20 m 20 m 20.00 m 19.70 m 17.70 m 19.00 m

Draught: 6.60m 6.42 m 6.42 m 6.42 m 6.42 m approx 7.0 m approx 7.0 m 7.00 m 6.18 m 6.10 m 6.30 m

Dwt: 4700 t 3570 t 3570 t 3570 t 3570 t 4500 t 4500 t 5000 t 3236 t 4250 t 4679 t

Accommodation: 34 34 34 34 34 64 64 50 56 20 23

Cargo Deck Area: 1000 m2 usable 680 m2 usable 680 m2 usable 680 m2 usable 680 m2 usable 970 m2 970 m2 1005 m2 935 m2 912 m2 840 m2

Ownership: 100% 100% 100% 100% 100% 51% 51% 51% 100% 100% 100%

Offshore Subsea Construction vessel (OSCv) & multipurpose field & ROv Support vessel (mRSv)

Anchor Handling Tug Supply vessels (AHTS)

Siem marlin Siem Stork Siem Daya 1 Siem Daya 2

built: 2009 2009 2013 2013

Design: mt 6017 mK ii mt 6017 mK ii StX OScV 11l StX OScV 11l

Dp Class: 2 2 2 2

LOA: 93.60 m 93.60 m 120.80 m 120.80 m

breadth: 19.70 m 19.70 m 22.00 m 22.00 m

Draught: 6.30 m 6.30 m 6.60 m 6.60 m

Dwt: 4500 t 4500 t 5000 t 5000 t

Accommodation: 68 68 110 110

Cargo Deck Area: 1046 m2 1046 m2 1300 m2 1300 m2

Crane: 100 t Offshore/Subsea crane 100 t Offshore/Subsea crane 250 t Offshore/Subsea crane 250 t Offshore/Subsea crane

Ownership: 100% 100% 100% 100%

Siem Amethyst Siem Opal Siem Garnet Siem Sapphire Siem Aquamarine Siem Topaz Siem Ruby Siem Diamond Siem Pearl Siem Emerald

built: 2011 2011 2010 2010 2010 2010 2010 2010 2009 2009

Design: VS 491 cD VS 491 cD VS 491 cD VS 491 cD VS 491 cD VS 491 cD VS 490 cD VS 491 cD VS 491 cD VS 491 cD

Dp Class: 2 2 2 2 2 2 2 2 2 2

LOA: 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m

breadth: 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m

Draught: 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m

Dwt: 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t

Accommodation: 60 60 60 60 60 60 60 60 60 60

Cargo Deck Area: 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2

bHP: 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000

bollard Pull: 297 te 297 te 282 te 301 te 284 te 306 te 310 te 284 te 285 te 281 te

Ownership: 100% 0% 0% 100% 100% 100% 100% 100% 100% 100%

1 1Siem OffShOre inc., AnnuAl repOrt 2013

Platform Support vessels (PSv)mid-size PSvs Large-size PSvs

Siem Atlas Siem Hanne Siem Louisa Sophie Siem Siem Sasha Siddis mariner Siem Pilot Siem Sailor Hugin Explorer Siem Supplier Siem Carrier

built: 2013 2007 2006 2006 2005 2011 2010 2007 2006 1999 1996

Design: StX pSV 4700 VS 470 mK ii VS 470 mK ii VS 470 mK ii VS 470 mK ii VS 485 VS 485 VS 485 cD mt 6000 mK ii mt 6000 VS 483

Dp Class: 2 2 2 2 1 2 2 2 2 2 2

LOA: 87.90 m 73.40 m 73.40 m 73.40 m 73.40 m 88.3 m 88.3 m 85.00 m 86.20 m 83.70 m 82.85 m

breadth: 19.00 m 16.60 m 16.60 m 16.60 m 16.60 m 20 m 20 m 20.00 m 19.70 m 17.70 m 19.00 m

Draught: 6.60m 6.42 m 6.42 m 6.42 m 6.42 m approx 7.0 m approx 7.0 m 7.00 m 6.18 m 6.10 m 6.30 m

Dwt: 4700 t 3570 t 3570 t 3570 t 3570 t 4500 t 4500 t 5000 t 3236 t 4250 t 4679 t

Accommodation: 34 34 34 34 34 64 64 50 56 20 23

Cargo Deck Area: 1000 m2 usable 680 m2 usable 680 m2 usable 680 m2 usable 680 m2 usable 970 m2 970 m2 1005 m2 935 m2 912 m2 840 m2

Ownership: 100% 100% 100% 100% 100% 51% 51% 51% 100% 100% 100%

Anchor Handling Tug Supply vessels (AHTS)

Siem Amethyst Siem Opal Siem Garnet Siem Sapphire Siem Aquamarine Siem Topaz Siem Ruby Siem Diamond Siem Pearl Siem Emerald

built: 2011 2011 2010 2010 2010 2010 2010 2010 2009 2009

Design: VS 491 cD VS 491 cD VS 491 cD VS 491 cD VS 491 cD VS 491 cD VS 490 cD VS 491 cD VS 491 cD VS 491 cD

Dp Class: 2 2 2 2 2 2 2 2 2 2

LOA: 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m

breadth: 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m

Draught: 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m

Dwt: 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t 3800 t

Accommodation: 60 60 60 60 60 60 60 60 60 60

Cargo Deck Area: 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2

bHP: 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000

bollard Pull: 297 te 297 te 282 te 301 te 284 te 306 te 310 te 284 te 285 te 281 te

Ownership: 100% 0% 0% 100% 100% 100% 100% 100% 100% 100%

Other

brazil 31.03.2014

Fleet of 9 vessels

Canada 31.03.2014

Fleet of 6 vessels

JOIDES RESOLuTION bIG ORANGE xvIII

OSrV/fcS/fSV AhtS/pSV/field support Scientific core Drilling Vessel

(ScDV)

Well Stimulation Vessel

(WSV)

100% owned 50% owned 100% owned 41.3% owned

Accra

Kristiansand (HQ)

Leer

Natal

Houston

Groningen

macaé Aracaju

Rio de Janeiro

lOcAl preSence in Key mArKetS 31.03.2014

Geographical footprint

Siem Offshore Offices:• Kristiansand (norway)• rio de Janeiro, macaé, natal,

Aracaju (Brazil)• leer (Germany)• Groningen, (the netherlands)• houston (uSA)• Accra (Ghana)• mumbai (india)• perth (Australia)

Secunda Canada LP offices (associated company):• -St John´s, halifax (canada)

St. John´s

Halifax


TOTAL EmPLOyEES

1110

TOTAL NumbER OF vESSELS

56vESSELS IN OPERATION

41PSvs: 11

AHTS: 10

OSCvs: 4

CANADIAN FLEET: 6

OTHER: 10

vESSELS uNDER CONSTRuCTION

15PSvs: 7

OSCvs: 2

WIvs: 2

OTHER: 4

mumbai

Perth



Siem Offshore owns and operates one of the world’s most modern fleet of offshore support vessels, equipped to meet the increased requirements from clients and demands from operation in the most harsh environments.

thiS iS Siem OffShOre inc.


Siem Offshore had 42 vessels in operation and 13 vessels under construction by year-end 2013. Vessels in operation included

two anchor handling, tug, supply vessels operated on behalf of a pool partner.

By end march 2014, the total fleet comprised of 56 owned vessels, including, among others, eighteen platform Supply Vessels (pSVs), six Offshore Subsea construction Vessels (OScVs), eight Anchor handling, tug, Supply vessels (AhtS vessels), two Well-intervention Vessels (WiVs) and six canadian flagged vessels comprising of both AhtS vessels and pSVs. During first quarter 2014, one pSV was sold. the fleet provides a broad spectrum of services offered by a highly experienced and competent crew with a strong focus on health, Safety, environment and Quality.

the company’s vision is to become the leading provider and the most attractive employer offering marine services to the offshore energy service industry. the company shall deliver quality and reliable contracted services in a timely manner by executing cost-efficient solutions developed in active collaboration and cooperation with our customers.

Siem Offshore commenced operations with effect from 1 July 2005. the company is registered in the cayman islands and is listed on the Oslo Stock exchange (OSe Symbol: SiOff). the company’s headquarters is located in Kristiansand, norway and additional subsidiary offices are located in Brazil, Germany, the netherlands, Ghana, uSA, india, poland and Australia. the company is tax resident in norway.

2005 61620 4802006

79 799200787 7382008

57 9342009

74 6412010

122 9522011

REvENuE

OPERATING mARGIN

2005 13 23373 5542006

159 3422007

192 7732008

183 5582009

228 302340 628

20102011

2005 3315272006

60020076422008

7622009

8282010

1 0732011

EmPLOyEES

Amounts in USD 1,000

Amounts in USD 1,000

110 3482012

368 2132012

1 0782012

363 9552013

122 6632013

1 1102013


The Company

All references to “Siem Offshore” and the “company” shall mean Siem Offshore inc. and its subsidiaries and associates un-less the context indicates otherwise. All references to “parent” shall mean Siem Offshore inc. as the parent company only.

Siem Offshore commenced opera-tions with effect from 1 July 2005. the company is registered in the cayman islands and is listed on the Oslo Stock exchange (OSe Symbol: SiOff). the company’s headquarters are located in Kristiansand, norway and additional subsidiary offices are located in Brazil, Germany, the netherlands, Ghana, united States, india, canada, poland and Aus-tralia. the parent company is registered at the cayman islands and is tax resident in norway.

the company’s primary activity is to own and operate offshore support vessels (“OSVs”) for the offshore energy ser-vice industry. the OSV fleet comprises platform supply vessels (“pSVs”), anchor-handling, tug, supply vessels (“AhtS vessels”), offshore subsea construction vessels (“OScVs”) and a variety of other service vessels. the company had a fleet of 42 vessels in operation at year-end 2013, including partly owned vessels and two AhtS vessels operated on behalf of a pool partner. these two AhtS vessels are sister vessels to eight similar vessels owned by the company and all ten ves-sels are operated in a pool. further, the company had placed orders for 13 ves-sels under construction at year-end 2013.

The Board of Directors of Siem Offshore Inc. (the “Board”) presents its report for the year ended 31 December 2013 together with the audited consolidated financial statements and the audited financial statements for the parent company. The financial statements and related notes were authorised for issue by the Board on 10 April 2014 and will be presented to the shareholders for approval at the Annual General Meeting (the “AGM”) to be held 2 May 2014.

BOArD Of DirectOrS’ repOrt

the vessels under construction include, among others, five additional dual-fuel pSVs and one cable-laying vessel (“clV”) ordered in 2013. During 2013, the company sold two pSVs and one OScV and received delivery of two new OScVs. Both of the new OScVs have commenced long term contracts upon delivery. During 2013, the total fleet of OSVs conducted operations in the north Sea, West Africa, middle east, india, the u.S. Gulf, canada and Brazil. the majority of the OSV fleet is employed on long-term contracts.

the company holds 100% ownership in the subsidiary Siem Offshore contractors (“SOc”). SOc performs contracting business within the submarine power cable installation, repair and maintenance segment and has successfully entered this market and been awarded three engineering, procurement, installation and commissioning (“epic”) contracts at an accumulated contract value of uSD180 million.

the company holds 60% ownership in the subsidiary Siem WiS AS. Siem WiS has developed a pressure control device (“Siem WiS pcD”) that enables new, in-novative and safe operations for managed pressure drilling (“mpD”) and under-bal-anced drilling (“uBD”) and it represents an additional barrier above the rig blow-out preventer (“BOp”). the Siem WiS pcD is based on a unique and patented sealing technology.

the company holds 100% ownership in the subsidiary Overseas Drilling limited (“ODl”), which owns the ocean drilling

research vessel JOiDeS resolution. the JOiDeS resolution is one of the primary research vessels used to drill core sam-ples in the ocean floor for an international research program.

in addition to the activities described above, the company’s Brazilian sub sidiary provides specialized engineering ser-vices to develop and implement combat management systems for vessels in the Brazilian navy. the activities and the relationship with the Brazilian navy dates back to more than 20 years.

the company acquired 50% of the owner-ship in Secunda holdings limited part-nership (“Secunda”) in the third quarter 2013. Secunda owns and operates a fleet of six OSVs offshore the coast of eastern canada.

Financial Results, Position and Risks

IFRS the financial statements for the company and the parent are prepared in accord-ance with the international financial reporting Standards (“ifrS”) as adopted by the european union.

Going Concernthe financial statements have been prepared under the assumption that the company and the parent are going-concerns. this assumption is based on the company’s level of cash and cash equivalents at year-end, forecasted cash-flows, available credit facilities and the market value of its assets.


Income Statementin 2013, the company recorded operating revenue of uSD 364.0 million (2012: uSD 368.2 million). the operating margin for 2013 was uSD 122.7 million (2012: uSD 110.6 million). net operating margin as a percentage of operating revenue was 34% in 2013 (2012: 30%).

the company’s operating profit for 2013 was uSD 69.3 million (2012: uSD 54.4 million) and includes depreciation and amortisation of uSD 75.8 million (2012: uSD 82.8 million). net currency exchange gains (losses) of uSD (7.8) million (2012: uSD 12.5 million) were recorded on for-ward contracts, of which uSD 12.2 million was unrealised. the net gain on sale of assets was uSD 29.8 million (2012: uSD 13.7 million).

the company’s net financial items were net expenses of uSD (53.4) million (2012: uSD (35.2) million) and includes a revaluation gain (loss) of non-uSD currency items of uSD (22.7) million (2012: uSD 2.9 million) due to stronger uSD dur-ing the period. non-uSD currency items are held to match short- and long-term liabilities, including off- balance sheet li-abilities, in similar currency.

the company’s net profit attributable to shareholders was uSD 22.0 million, or uSD 0.06 per share (2012: uSD 16.6 million, or 0.04 per share).

the Board has decided to propose to the AGm to be held 2 may 2014 that the company pay a dividend of nOK 0.10 per share for the fiscal year 2013. the net result after dividend is proposed to be allocated to retained earnings. As of 31 December 2013, the parent’s retained earnings were uSD 324.6 million.

Financial Position and Cash-Flowstotal equity for the company was uSD 794 million at year-end 2013 (2012: uSD

787 million), and the equity ratio was 42% (2012: 45%). Shareholders’ equity was uSD 757 million (2012: uSD 749 million), equivalent to uSD 1.95 per share (2012: uSD 1.90 per share).

the company acquired 1,799,897 of its own shares under the second share buy-back programme in market transactions during 2013. the second share buy-back programme commenced following the AGm held in may 2013. the total number of company shares issued and out-standing at year-end was 387,591,530. the current share buy-back programme expires on the date of the AGm in may 2014. All shares purchased under the buy-back programme will be cancelled.

the cash position at year-end was uSD 101 million (2012: uSD 107 million) and the working capital was uSD 21 million (2012: uSD 44 million). net cash flow from operations was uSD 59 million during 2013 (2012: uSD 71 million).

the company recorded uSD 329.4 million as gross capital expenditures in fixed assets during 2013, of which uSD 302 mil-lion relates to new vessels delivered from yards or vessels under construction, and uSD 27.4 million relates to project specific investments in vessels and capitalised dry-docking costs.

the company has secured debt- financing for 9 of the 13 vessels ordered and under construction at year-end. the debt-financing for the last four vessels will be negotiated and concluded prior to the vessel deliveries in 2015.

the gross interest-bearing debt and net interest-bearing debt at year-end were equivalent to uSD 961 million and uSD 860 million, respectively. the company made total drawings in the equivalent of uSD 320 million under credit facilities during the year. the weighted average

cost of debt for the company was ap-proximately 4.5% p.a. at year-end.

the company paid debt instalments in the equivalent of uSD 128.9 million during the year, of which uSD 41 million represents extraordinary repayments due to sale of vessels.

the future yard instalments for the 13 vessels under construction at year-end 2013 were uSD 701 million. Such future yard instalments are scheduled for pay-ment with uSD 394 million during 2014, uSD 220 million during 2015 and uSD 86 million during 2016.

the company’s cash-flows are primarily denominated in uSD and nOK, eur and Brl. During 2013, the uSD strengthened by 9.3% to the nOK, 15.4% to the Brl and weakened 4.5% to eur. the aver-age recorded exchange rates were nOK/uSD 0.1700, eur/uSD 1.33 and Brl/uSD 0.4621.

the company is exposed to changes in in-terest rates as approximately 35% of the interest-bearing debt is based on floating interest rates. the interest-bearing debt is primarily denominated in uSD and nOK. the average 3-month liBOr was 0.2672% p.a. during 2013 (0.43% p.a. in 2012) and the average 3-month niBOr was 1.75% p.a. during 2013 (2.24% p.a. in 2012). the company held uSD 288 million in interest rate swap (“irS”) agreements at year-end.

Financial Risks

Interest riskthe company is exposed to changes in interest rates as a portion of the long-term interest-bearing debt was subject to floating interest rates with the remaining amount subject to fixed interest rates.



Currency riskthe company is exposed to currency risk as revenue and costs are denominated in various currencies. the company is also exposed to currency risk due to future yard instalments in relation to ship-building contracts and long-term debt in various currencies. forward exchange contracts are entered into in order to reduce the currency risk related to future cash flows.

Liquidity riskthe company is financed by debt and equity. if the company fails to repay or refinance its credit facilities, additional eq-uity financing may be required. there can be no assurance that the company will be able to repay its debts or extend the debt repayment schedule through re-financing of credit facilities. there is no assurance that the company will not experience cash flow shortfalls exceeding the company’s available funding sources or to remain in compliance with minimum cash require-ments. further, there is no assurance that the company will be able to raise new equity or arrange new credit facilities on favourable terms and in amounts neces-sary to conduct its ongoing and future operations should this be required.

Yard riskthe process for construction of new vessels is associated with numerous risks. Among the most critical risk factors in relations to such construction is the risk of not receiving the vessels on time, at budget and with agreed specifications. in addition, there is the risk of yards expe-riencing financial or operational difficul-ties resulting in bankruptcy or otherwise adversely affecting the construction process. the company has obtained cer-tain guarantees of financial compensation including refund guarantees in case of de-lays and non-delivery. further, the com-

pany has the right to cancel contracts if delivery of vessels is significantly delayed. however, no assurance can be given that all risks have been fully covered.

Operations

Fleet, Performance and Employmentthe company had a fleet of 42 vessels in operation at year-end 2013, including partly owned vessels and two AhtS vessels operated on behalf of a pool partner. the fleet in operation included twelve pSVs, four OScVs, ten AhtS vessels, six OSVs in canada, eight crew/supply boats operated in Brazil, one well-stimulation vessel and one ocean drilling research vessel. the majority of the vessels are on long-term contracts.

the pSVs, consolidated on a 100% basis, earned operating revenues of uSD 94.6 million and had 83% utilisation (2012: uSD 91.4 million and 91%). the operating margin for the pSV fleet was uSD 42.9 million (2012: uSD 38.0 million) and the operating margin as a percentage of rev-enue was 45% (2012: 42%). the contract backlog at 31 December 2013 for the pSV fleet was 82% for 2014, 52% for 2015 and 30% for 2016.

the OScVs earned operating revenues of uSD 41.4 million and had 100% utilisation (2012: uSD 49.8 million and 100%). the operating margin for the OScV fleet was uSD 26.9 million (2012: uSD 28.5 million) and the operating margin as a percentage of revenue was 65% (2012: 54%). the con-tract backlog for the OScV fleet was 100% for 2014, 68% for 2015 and 50% for 2016.

the company’s relative portion of the AhtS pool earned operating revenues of uSD 131.9 million and had 86% utilisation (2012: uSD 115.0 and 77% utilization). the operating margin was uSD 67.9 million (2012: uSD 48.3 million) and the operating margin as a percentage of rev-

enue was 51% (2012: 42%). the contract backlog for the AhtS vessel fleet was 57% for 2014, 18% for 2015 and 5% for 2016.

the fleet of smaller Brazilian-flagged vessels earned operating revenue of uSD 24.1 million and had 92% utilisation (2012: uSD 29.1 million and 81%). the operating margin for the fleet was uSD 6.7 million (2012: uSD 5.7 million) and the operating margin as a percentage of rev-enue was 28% (2012: 20%). the contract backlog for the fleet of smaller Brazilian-flagged vessels was 75% for 2014, 50% for 2015 and 50% for 2016.

the “Joides resolution” recorded operating revenues of uSD 36.9 million (2012: uSD 59.1 million) with an operating margin of uSD 20.4 million (2012: uSD 30.4 million) and the operating margin as a percentage of revenue was 55% (2012: 51%).

the total contract backlog of firm contracts for all vessels at year-end 2013 was uSD 1.15 billion, including the one-year option for the “Joides resolution”, the 41%-ownership in the “Big Orange XViii”, the 50% ownership in Secunda can-ada lp and vessels under construction.

the total contract backlog is allocated with uSD 363 million in 2014, uSD 246 million in 2015 and uSD 541 million in 2016 and thereafter.

the total contract backlog of firm contracts within the submarine power cable segment at 31 December 2013 was uSD 173 million. the contract backlog was allocated with uSD 147 million in 2014 and uSD 26 million in 2015.

Newbuilding Programthe company had ten vessels under construction in norway and poland at the end of 2013, which includes two OScVs, one installation Support Vessel (“iSV”),


six dual-fuel pSVs and one cable lay Vessel (“clV”). the company has secured long-term employment for one OScV and for two dual-fuel pSVs under construc-tion. the clV and iSV will be utilised by the company’s wholly-owned subsidiary, Siem Offshore contractors, for project work within the submarine power cable installation, repair and maintenance seg-ment. the company is in discussions for long-term contracts for the OScV and for the four dual-fuel pSVs.

the company had three vessels under construction in Brazil at the end of 2013, which includes two Oil Spill recovery Vessels (“OSrVs”) and one large-size pSV. the two OSrVs have been significantly delayed and are currently scheduled for delivery in second quarter 2014 and fourth quarter 2014. Both vessels will commence eight-year firm contracts for petrobras with options for additional eight-year periods. the large-size pSV is scheduled for delivery in second quarter of 2014. the company is in discussions for long-term contracts for the pSV.

During first quarter 2014, the company entered into agreements with helix energy Solutions Group, inc. to provide two new well-intervention vessels. the two vessels shall be owned by the com-pany and chartered by helix for an initial period of 7 years, with options that can extend the charter periods up to 22 years. the two vessels will be constructed at the flensburger shipyard in Germany and will be based on a design developed by Salt Ship Design. the two vessels will be financed with a combination of bank and bond debt. Delivery of the two vessels is scheduled for the first and second quarter of 2016.

QHSEthe company’s target includes zero personal injuries, no damage to the environment and no damage to or loss of equipment and property.

the good QhSe performance continued in 2013 with no serious incidents throughout the fleet. the safety records for the full year report no serious injury to personnel or discharges to the environment.

Siem WISSiem WiS has designed and developed a pressure control device (“pcD”) which can improve managed pressure drilling (“mpD”) operations. Global energy demand growth, combined with the need for increased oil recovery and increased number of deep sea and high pressure high temperature (“hpht”) reservoirs, and greater emphasis on safety manage-ment will lead to increased demand for mpD services.

the market for the Siem WiS technology is developing positively and several operations is under preparation. two units have been ordered by m-i Swaco for the romeo and Julius wells currently planned to commence in June 2014. planning and preparation work is ongoing for the Gudrun and Valemon fields with estimated start up in fourth quarter 2014. One unit has been transferred to the uS and a contract negotiation for the first operation in the Gulf of mexico is ongoing.

Siem WiS has two new pcDs under construction with delivery in June 2014 and will then have in total 5 pcD units available. the main focus in 2014 is to perform safe and efficient operations, this will strengthen the company`s position and create new opportunities and poten-tially open the market for the technology.

Siem Offshore’s accumulated investment in Siem WiS totals uSD 20.2 million, whereof uSD 7.6 million is recorded as intangible assets in the consolidated accounts.

Siem Offshore Contractorsfollowing the successful awards of three submarine cable installation contracts

within the offshore renewable en-ergy market in 2012 and 2013, SOc has continued to increase its workforce and resources during the year with a signifi-cant increase in onshore-based person-nel. furthermore and during 4Q 2013 and into Q1 2014, the company has expanded its recruitment program in order to fill vacancies in the offshore-based teams to enable execution of projects scheduled simultaneously for 2014 and onwards.

in mid-2013, SOc successfully performed preparatory works as a part of the scope of contract for the Baltic 2 Offshore Wind farm project. pre-lay trenching works were performed utilizing the in-house AhtS vessel “Siem topaz” along with in-house personnel and subcontracted ploughing services. the scope of work included the pre-lay trenching of 86 submarine cable routes in challenging soil conditions. in 2013, SOc started its capital invest-ment plan to acquire and prepare the necessary equipment, material and tools to be available in time for completion of current and expected future projects. SOc constructed a new 750t modular Onshore Storage turntable (“mOSt”) for submarine cables during the year, which is currently rented to one of SOc’s clients in order to temporarily store submarine cables for the Amrumbank West Offshore Wind farm project to be executed in 2014. in first quarter 2014, SOc received delivery of a 750t mobile Offshore turn-table unit (“mOtu”) based on a similar DnV-Gl-approved and certified design. this turntable will initially be mobilized into the vessel “Siddis mariner” in 2014 to support the submarine cable installation works on the Amrumbank West Offshore Wind farm project.

client-induced delays to the start-up installation works on the Baltic 2 Offshore Wind farm project impacted SOc’s



financial results in 2013 as all previously scheduled cable installation works for fourth quarter 2013 had to be shifted to 2014. the contract variation has been mu-tually agreed and settled between SOc and its client without negative impact on SOc’s overall margin on the works.

furthermore, SOc has been advised by one of its clients that the installation of the export cable system, which is under-taken on a consortium basis with J-power Systems, is awaiting final investment decision from the project developer of the nordsee One OWf and might be delayed. the duration of the expected delay is cur-rently unknown and, in order to maximise flexibility for SOc and its client, all manu-factured components will be transported to a north european port for intermediate storage.

All three currently executed contracts in the offshore renewable energy sector show less than 25% completion status at year end 2013 and, therefore, no margin has been recorded in the income state-ment for 2013 on any of these contracts. Operating revenues on the projects are adjusted to reflect currently incurred operating expenses.

With respect to future project prospects, SOc continued to tender for several target offshore energy projects with a focus on both inner array grid as well as export cable system installations scheduled for the period from 2015 through to 2018, including final tender negotiations for certain projects. SOc also tendered other prospects in the offshore oil and gas industry as well as energy transmission sector for both medium and high voltage transmission systems.

Shareholders and corporate covernance Shareholder Informationthe company’s authorised share capital is uSD 5,500,000.00 divided into 550,000,000 ordinary shares of a nominal value of uSD 0.01 each. the issued share capital at 10 April 2014, based on the 387,591,380 company shares issued and outstanding, is uSD 3,875,913. the company had purchased a total of 6,333,456 of its own shares in 2013 of which 1,799,897 shares were purchased through 10 April 2014 in accordance with the second share buy-back programme which commenced in may 2013. the com-pany’s shares are listed on the Oslo Stock exchange with the ticker symbol SiOff. the largest shareholder of the company is Siem industries inc. with 34.2% of the shares at 10 April 2014. During 2013, the closing share price reached a high of nOK 10.00, a low of nOK 7.20, and closed at nOK 9.73 at year-end.

Corporate Governancethe company has implemented guidelines for corporate governance based on the recommendations and guidelines given by the Oslo Stock exchange. the purpose of these guidelines is to clarify the division of roles between shareholders, the General meeting, Board of Directors and day-to-day management beyond what follows from the legislation. A detailed summary of our corporate governance principles may be found in a separate section of the annual report.

The Working Environment And The Employees

the company seeks to provide a work-place with equal opportunities, and to treat current and prospective employees fairly with respect to salaries, promotions

and recruitment. the company offers its employees a sound working environment. We also give possibilities for professional development where men and women are treated equally and where there is no discrimination.

the sick leave for the onshore and offshore employees was 3.1% and 4.6%, respectively.

no incidents or work-related accidents resulting in significant material damage or personal injury occurred during the year.

the development of the onshore and off-shore organizations continues in order to prepare for increased future activities. the knowledge of the crew is vital for a safe and secure operation of any vessel. Such knowledge includes good seamanship and understanding of the demanding assign-ments to be executed. this knowledge of capabilities and limitations of the vessels and equipment, and respect of circum-stances that may affect a safe execution is vital.

Outlook

the overall market for OSVs improved during 2013 compared to the year before. the north Sea spot market for both pSVs and AhtS vessels was very volatile and especially for the AhtS vessel segment where rig moves had a tendency to pile up leading to periods where the market was sold out. During 2013, the market for pSVs and AhtS vessels where nearly in balance (supply and demand) and we have seen healthy signs for the first quarter of 2014, although with high volatility. the tender


Eystein Eriksrud Kristian Siem michael DeloucheChairman Director Director(Sign.) (Sign.) (Sign.)

John C. Wallace David mullenDirector Director(Sign.) (Sign.)

Terje SørensenChief Executive Officer(Sign.)

10 April 2014

activity in Africa remained high while the tender activity in Brazil was somewhat calm. We expect the tender activity in Brazil to increase and that some OSVs will leave the north Sea for operations in Brazil as a consequence. the number of new buildings entering the market was less than expected mainly due to delays at yards.

Going forward into 2014, it seems like oil companies will put more focus on cost cutting which might have implications for the OSV market. however, we expect oil prices to be the main driver, and we expect

high activity if oil prices remain stable. We have registered increased demand for OSVs in all geographic areas where we have operations.

the global demand for OScVs is expected to increase based on favourable market drivers such as strong growth in christmas tree awards and number of new and existing subsea projects. however there is also an increase in vessel supply which can put pressure on the vessel day rates going forward.

the market for pSVs and AhtS is expected to be healthy in 2014 as a result of seasonal projects in the northern regions (harsh and remote areas) and expected high level of activity in the north Sea and Africa. however, vessels currently operating or being under construction, in other regions may have a negative impact to the market balance in the north Sea if they are relocated to the north Sea.


Statement of Policy on Corporate Governance

The principles for corporate governance adopted by the Company are based on the

“Norwegian Recommendation for Corporate Governance” issued on the 23rd October

2012. The “Norwegian Recommendation for Corporate Governance” remain unchanged

for Financial year 2013.

cOrpOrAte GOVernAnce

As a company incorporated in the cayman islands, Siem Offshore inc. is an exempted company duly incorporated under the laws of the cayman islands and subject to cayman island laws and regulations with respect to corporate governance. cayman islands corporate law is to a great extent based on english law. in addition, due to the company’s listing on the Oslo Stock exchange, certain aspects of norwegian Securities law apply to the company and there is a requirement to adhere to the norwegian code of practice for corpo-rate Governance. the norwegian code of practice for corporate Governance is publicly available at www.nues.no in both norwegian and english languages. Due to new provisions implemented in the norwegian Accounting Act, compliance with the regulations for corporate Govern-ance reporting is now a legal requirement provided that it does not conflict with the cayman islands laws and regulations. the company endeavours to maintain high standards of corporate governance and is committed to ensuring that all sharehold-ers of the company are treated equally and the same information is communicat-ed to all shareholders at the same time.

corporate Governance is subject to an-nual assessment and review by the Board of Directors.

the Board of Directors has reviewed this statement. it is the opinion of the

Board of Directors that the company com-plies with the norwegian code of practice for corporate Governance.

this statement is structured in accord-ance with the norwegian code of practice for corporate Governance.

business

cayman islands laws and regulation do not require the objects clause of the com-panies memorandum and Articles of Asso-ciation to be clearly defined. the company has however adopted clear objectives and strategies for its business.

Siem Offshore aims to grow the company within offshore support vessels, both organically and through combination with other operators, in order to achieve economies of scale and stronger presence in the market.

Siem Offshore aims to become a preferred supplier of marine services to the energy industry based on quality and reliability and to provide cost-efficient so-lutions to its customers by understanding their operation and applying technology and experience.

the company builds its business around a motivated workforce with the ap-propriate technical solutions. this creates sustainable value for all shareholders.

reference is made to the Board of Directors report for detailed information.

Equity and Dividends

the priorities for the use of company funds are determined by the Board of Directors and recommendations of man-agement influenced by existing conditions. At present, priorities for use of funds in order of importance are investment opportunities in the business, repayment of debt and the return of capital to the shareholders in form of share buy-back or dividends.

the Board’s mandate to increase the company’s share capital is limited only to the extent of the authorized share capital of the company with certain pre-emption rights for shareholders and in accordance with the company’s memorandum and Articles of Association which comply with cayman island law.

under the Articles of Association, the Board can issue new shares, convertible bonds or warrants at any time within the limits of the authorized capital without the consent of the general meeting but with pre-emption rights for shareholders. A General meeting has further authorized the Board to issue new shares without pre-emption rights to all shareholders up to a limit of 50% of Siem Offshore’ shares at the time the authorization was given. the Board holds authorization from the Annual General meeting held on 10 may 2010 to issue 154,248,360 new shares.


the authority gives the Board flexibility to finance investments, acquisitions and other business combinations on short no-tice through the issue of shares or certain other equity instruments in the company. furthermore, the Board considers the granting of a new standing authority at the time of holding an Annual General meet-ing rather than convening an extraordi-nary General meeting at some future time to be in the best interests of the company, as this will result in cost savings and more effective time management for both the company’s senior management and its Shareholders.

Equal Treatment of Share-holders, Freely Tradable Shares and Transactions with Related Parties

the company is committed to ensuring that all shareholders of the company are treated equally and all the issued shares in Siem Offshore, at nominal value uS$ 0.01 each, are freely tradable and carry equal rights with no restrictions on voting.

Siem industries inc, which owns 34,4% of the company, is represented by its chairman, Kristian Siem, Deputy ceO, eystein eriksrud and president, michael Delouche, on the Board of Directors. the company pays an annual fee to Siem industries as compensation for director-ships, provision of an office and presence in the cayman islands, and other services. the fee is adopted by the annual general meeting based on a recommendation from the independent Board members. related party transactions are disclosed in the notes to the accounts.

Freely Negotiable Shares

All of the shares in the company carry equal rights and are freely negotiable. the shares are traded according to normal market practice and no special limitations on transactions have been laid down in the Articles of Association.

General meetings

the Annual General meeting of the company will be held at the registered office of the company on the cayman islands, 2 may 2014, at 9:30am cayman islands local time and Shareholders can be represented by proxy. notices of general meetings and related documents are made available to shareholders at the latest 17 days prior to meeting date. notice of attendance by proxy is to be provided to either (1) the offices of Siem Offshore AS at Sjølystveien 3, p.O. Box 425, Kristiansand 4664, norway, telefax no. +47.37.40.62.86 or (2) the company’s office at p.O. Box 10597, George town, Grand cayman Ky1-1005, cAymAn iSlAnDS, telefax no. +1.345.946.3342, no less than 24 hours prior to the stated time of the annual general meeting. Sharehold-ers are given the opportunity to vote on the election of board members.

Nomination Committee

the appointment of a nomination commit-tee is not a requirement under cayman islands law.

Corporate Assembly and board of Directors; Composition and Independence

in the nominations to the Board of Di-rectors, the Board consults with the com-pany’s major shareholders and ensures that the Board is constituted by Directors with the necessary expertise and capacity. there is no requirement under cayman islands law for the company to establish a corporate assembly.

each Board member is elected for a term of 2 years or such shorter term as shall be specified in the ordinary resolu-tion pursuant to which the Director shall be appointed. representatives of the executive management are not presently members of the company’s Board of Directors.

the Board of Directors as a group has extensive experience in areas which are important to Siem Offshore, including off-shore services, international shipping, ship broking, finance and corporate governance and restructuring.

Work of the board of Directors

the Board monitors the performance of management through regular meet-ings and reporting. the company has a compensation committee and an Audit committee.

the compensation committee consists of two Directors. the mandate of the committee is to review and approve the compensation of the ceO and any bonuses to all executive personnel. reference is also made to section 12, remuneration of the executive management.

the Audit committee consists of two Directors. the composition of the com-mittee meets the requirements of the norwegian code of practice for corporate Governance as regards independence. the committee’s mandate can be summarized as follows:

• Ascertain that the internal and external accounting reporting process are or-ganized appropriately and carried out efficiently, and are of high professional quality.

• monitor and assess the quality of the statutory audit of the company’s finan-cial statements.

• ensure the independence of the exter-nal auditor, including any additional services provided by the external auditor.


cOrpOrAte GOVernAnce

Risk management and Internal Control

Internal control

A prerequisite for the company’s system of decentralized responsibility is that the activities in every part of the company meet general financial and non-financial requirements, and are carried out in ac-cordance with the company’s common norms and values. the executive manage-ment of each subsidiary is responsible for risk management and internal control in the subsidiary with a view to ensuring 1) optimalisation of business opportunities, 2) targeted, safe, high-quality and cost-effective operations, 3) reliable financial reporting, 4) compliance with current legislation and regulations and 5) opera-tions in accordance with the company’s governing documents, including ethical and social responsibility standards. the company’s risk management system is fundamental to the achievement of these goals.

Financial reporting process

the company prepares and presents its financial statements in accordance with current iAS/ifrS rules. financial information from subsidiaries is received each month in a reporting package in a standard format accommodated nec-essary information for preparing the consolidated financial statement for the company. the reporting from the subsidi-aries is extended in the year-end reporting process to meet various requirements for supplementary information. there are established routines to check the financial data in the received reporting packages to ensure the best quality for the consoli-dated figures for the company.

training and further development of accounting experience within the com-pany is provided locally by participating

on various external courses on a regular basis.

Remuneration of the board of Directors

the remuneration of the Board members reflect their experience and responsibili-ties, and is adopted by the annual general meeting based on the recommendation from the Board. the Board members do not have share options or profit-based remuneration.

the responsibility statement of the Board of Directors in this report and the notes to the accounts include information about the remuneration of the Board of Directors.

Remuneration of the Executive management

the company has a compensation com-mittee which reviews and approves the compensation of the ceO and the bonuses to all executive personnel. the Articles of Association of the company permit the Board to approve the granting of share options to employees. A long-term share option program for 8 key employees of the company was introduced in Q1 2013. the remuneration of the ceO and the share option scheme are disclosed in the notes to the accounts.

Information and Communications

the company has a policy of treating all its shareholders and other market partici-pants equally, and communicates relevant and objective information on significant developments which impact the company in a timely manner.

the company also seeks to ensure that its accounting and financial report-ing are to the standards of our investors, and the company presents its financial

statements in accordance with the inter-national financial reporting Standards (ifrS). the Audit committee of the Board of Directors monitors the company’s reporting on behalf of the Board.

notices to the Oslo Stock exchange and placements of notices and other in-formation, including quarterly and annual reports, may be found on the company’s website (www.siemoffshore.com). the financial calendar for 2014 may be found on the company’s website under “investor relations”.

Take-overs

the shares in the company are freely tradable and the Articles of Association of the company does not hold specific defence mechanisms against take-over situations. in a take-over situation, the Board of Directors will comply with rel-evant legislation.

Auditor

the Auditor of the company is elected at the Annual General meeting which also approves its remuneration. Details of the company’s remuneration of the external auditor are given in the notes to the ac-counts.

the auditor reports to the Audit committee twice a year at a minimum, but more often if necessary. During the latter half of the year, the external audi-tor presents to the Audit committee his assessment of risks, internal controls, risk areas and improvement potential in control systems and his audit plan for the following year. the second report to the Audit committee is the presentation of year-end Audit. the external auditor presents a summary of the audit process, including comments on audited internal control procedures and key issue in the financial reporting.


the Audit committee also receives an annual independence reporting from the external auditor, confirming the external auditor’s independence with respect to the company, within the meaning of the norwegian Act on Auditing and Auditors. the confirmation also includes services delivered to the company other than mandatory audit.

chartering Department, Kristiansand, norwayphoto: Jan petter lehne


PARENT COmPANy CONSOLIDATED

2013 2012 (Amounts in USD 1,000) Note 2013 2012restated

10,953 13,583 Operating revenue 4,23 363,955 368,213

-18,774 -25,128 Operating expenses 8,18,19,20,23 -241,291 -257,615

-7,821 -11,545 Operating margin 122,663 110,597

-132 -1,024 Depreciation and amortization 4,5 -75,841 -82,749

- 12 Gain/(loss) on sales of assets 25 29,827 13,692

368 368 Gain on sale of interest rate derivatives (cirr) 12 368 368

- - Gain/(loss) on currency exchange forward contracts 28 -7,756 12,479

-7,584 -12,190 Operating profit 4 69,261 54,387

FInAncIAl IncOMe AnD expenSeS

9,586 8,752 financial income 3,21 5,434 4,161

-7,804 -1,456 financial expenses 3,21 -36,132 -42,302

1,219 1,283 net currency gain/(loss) 21 -22,651 2,916

3,001 8,579 Net financial items -53,349 -35,225

- - result from associated companies 7 2,046 463

-4,584 -3,611 Profit /(loss) before taxes 17,959 19,625

-261 -114 tax benefit/(expense) 11 3,585 -4,949

-4,845 -3,725 Net profit/(loss) 21,544 14,676

- - Attributable to non-controlling interest -456 -1,900

-4,845 -3,725 Attributable to shareholders of the Company 22,000 16,576

Weighted average number of outstanding shares (1,000) 389,078 395,665

Earnings per share: basic and Diluted 22 0.06 0.04

COmPREHENSIvE INCOmE STATEmENT


2013 2012 (Amounts in USD 1,000) Note 2013 2012 restated

-4,845 -3,725 net profit/(loss) 21,544 14,676

Other Comprehensive income

Items that will not be reclassified to profit or loss

- - pension remeasurement gain (loss) 1,155 4,589

Other Comprehensive income Items that will not be reclassified to profit or loss

- - currency translation differences -8,320 643

-4 845 -3,725 Total comprehensive income for the year 14,378 19,908

- - Attributable to non controlling-interest -373 -1,519

-4 845 -3,725 Attributable to shareholders of the Company 14,751 21,427

incOme StAtementS



2013 2012 (Amounts in USD 1,000) Note 2013 2012restated

CASH FLOW FROm OPERATIONS

-3,367 -5,990 profit/(loss) before taxes, excluding interest 30 49,205 48,192

-5,865 -1,430 interest paid -32,325 -36,653

-2,404 -5,416 taxes paid -9,832 -13,871

-3,777 - result from subsidiaries - -

- - result from associated companies 7 -2,046 -463

- -12 Gain/(loss) on sale of assets 25 -29,827 -13,692

132 1,024 Depreciation and amortization 5 75,841 82,749

3,125 - Value of employee services 31 3 125 -

- - effect of unreal. currency exchange forward contracts 28 12,200 -6,864

1,103 72,372 changes in short-term receivables and payables -17,536 22,690

-368 -368 cirr -368 -368

297 143 Other changes 10,549 -11,031

-11,125 60,324 Net cash flow from operations 58,986 70,688

CASH FLOW FROm INvESTmENT ACTIvITIES

5,760 587 interest received 5,339 4,293

-236 -895 investment in fixed assets 4,5 -329,413 -53,367

- 12 proceeds from sale of fixed assets 25 85,998 87,618

- 6,429 received from long-term loan - -

-6,000 -11,500 investments in subsidiaries - -

- - Dividend from associated companies 7 90 84

- - investments in associated companies 7 -14,406 759

-476 -5,367 Net cash flow from investment activities -252,392 39,386

CASH FLOW FROm FINANCING ACTIvITIES

- - proceeds from share issue in partly owned subsidiaries 657 3,456

-8,728 -2,699 Buyback of shares -8,728 -2,700

- - proceeds from bankoverdraft 962 2,566

109,277 - proceeds from new long-term borrowing 12 320,319 8,755

- - repayment of long-term borrowing 12 -128,833 -161,829

100,549 -2,699 Net cash flow from financing activities 184,378 -149,753

-14,150 1,510 effect of exchange rate differences 3,166 10,111

74,798 53,768 Net change in cash -5,862 -29,567

57,270 3,502 cash at bank as of 1 January 107,068 136,635

132,068 57,270 Cash at bank as of 31 December 101,206 107,068

StAtementS Of cASh flOWS


StAtementS Of finAnciAl pOSitiOnASSetS


12/31/2013 12/31/2012 (Amounts in USD 1,000) Note 12/31/2013 12/31/2012 restated

Non-current intangible assets

- - Deferred tax asset 11 11,770 6,885

- - intangible assets 5 29,737 30,020

- - Total non-current intangible assets 41,507 36,904

Non-current tangible assets

- - Vessels under construction 5,17 127,711 108,430

- 1,050 Vessels and equipment 5 1,440,332 1,260,118

- - capitalized project costs 5 11,027 12,153

- 1,050 Total non-current tangible assets 1,579,071 1,380,700

Non-current financial assets

752,155 700,684 investment in subsidiaries 6 - -

- - investment in associated companies 7 20,951 4,222

41,718 53,194 cirr loan deposit 12 41,718 53,194

47,094 90,043 long-term receivables 9,14,29 6,639 7,111

840,967 843,921 Total non-current financial assets 69,308 64,526

840,967 844,971 Total non-current assets 1,689,886 1,482,131

Current assets

3,447 6,739 Accounts receivable 2,29 53,198 44,221

7,340 4,030 Other short-term receivables 9,14,23,29 32,737 38,461

- 501 inventories 7,555 7,772

- - Derivative financial instruments 15,28,29 - 5,829

132,068 57,270 cash 2,10,29 101,206 107,068

142 854 68,540 Total current assets 194,696 203,351

- - Asset held for sale 24,25,29 18,121 53,604

983 821 913,511 Total assets 1,902,702 1,739,086



12/31/2013 12/31/2012 (Amounts in USD 1,000) Note 12/31/2013 12/31/2012restated

Equity

526,236 534,964 paid-in capital 526,236 534,964

-22,302 -22,302 Other reserves -19,769 -11,366

324,612 329,809 retained earnings 250,161 225,824

828 546 842,471 Shareholders' equity 26 756,628 749,423

- - non-controlling interest 37,260 36,975

828 546 842,471 Total equity 793,888 786,397

LIAbILITIES

Non-current liabilities

98,624 - Borrowings 2,12,14 863,074 714,699

41,718 53,194 cirr loan 12,29 41,718 53,194

4,885 4,885 tax liabilities 11 6,679 6,799

2,155 2,523 Deferred cirr 12 2,155 2,523

- - pension liabilities 8 2,778 742

- - Other non-current liabilities 14 18,826 14,992

147,381 60,601 Total non-current liabilities 935,231 792,949

Current liabilities

397 631 Accounts payable 2,29 16,253 5,377

- - Borrowings 2,12,14,29 98,426 82,287

- - Derivative financial instruments 15,28,29 11,085 12,339

-673 1,552 taxes payable 11 3,759 8,856

8,170 8,256 Other current liabilities 13,14,23 44,061 50,882

7,894 10,439 Total current liabilities 173,584 159,740

155,275 71,040 Total liabilities 14 1,108,815 952,689

983 821 913,511 Total equity and liabilities 1,902,702 1,739,086

- - Secured debt 12 968,868 802,751

- - Guarantees 16 154,317 51,390

StAtementS Of finAnciAl pOSitiOn eQuity AnD liABilitieS


StAtementS Of chAnGeS in eQuity

CONSOLIDATED

(Amounts in USD 1,000) Total no. of shares

Share capital

Share premium reserves

Exchange rate differences

Other reserves

Retained earnings

Shareholders' equity

Non-controllinginterest

Total equity

Equity as of December 31, 2011 395,951,640 3,960 533,704 17,147 -28,775 208,676 734,714 35,038 769,751

implementation of revised iAS19, restatement effect 2012 -4,018 -4,018 -4,018

Equity on 1 January 2012 Restated 395,951,640 3,960 533,704 17,147 -28,775 204,658 730,696 35,038 765,733

implementation of revised iAS19, restatement effect 2012 4,589 4,589 4,589

net profit to shareholders 16,576 16,576 -1,900 14,676

comprehensive income 261 261 381 643

Share issues in partially owned subsidiaries - 3,456 3,456

Buy-back of shares -2,026,804 -20 -2,679 -2,700 -2,700

Equity as of December 31, 2012 Restated 393,924,836 3,939 531,025 17,409 -28,775 225,824 749,423 36,976 786,397

change previous periods -1,943 -1,943 -1,943

net profit to shareholders 22,000 22,000 -456 21,544

Value of employee services 3,125 3,125 3,125

comprehensive income -8,403 1,155 -7,249 83 -7,166

Share issues in partially owned subsidiaries - 657 657



Share issues in partially owned subsidiaries 2012 2013

minority share of new equity Siem WiS AS 3,456 657

Total 3,456 657

PARENT COmPANy

Equity as of December 31, 2011 395,951,640 3,960 533,704 -100 -22,203 331,334 846,695

Other items 2,201 2,201

net profit -3,725 -3,725

Buy-back of shares -2,026,804 -20 -2,679 -2,700


Other items -352 -352

net profit -4 845 -4 845


Equity as of December 31, 2013 387,591,380 3,876 522,360 -100 -22,203 324 612 828 546


CONSOLIDATED

(Amounts in USD 1,000) Total no. of shares

Share capital

Share premium reserves

Exchange rate differences

Other reserves

Retained earnings

Shareholders' equity

Non-controllinginterest

Total equity


implementation of revised iAS19, restatement effect 2012 -4,018 -4,018 -4,018

Equity on 1 January 2012 Restated 395,951,640 3,960 533,704 17,147 -28,775 204,658 730,696 35,038 765,733

implementation of revised iAS19, restatement effect 2012 4,589 4,589 4,589

net profit to shareholders 16,576 16,576 -1,900 14,676

comprehensive income 261 261 381 643

Share issues in partially owned subsidiaries - 3,456 3,456


Equity as of December 31, 2012 Restated 393,924,836 3,939 531,025 17,409 -28,775 225,824 749,423 36,976 786,397

change previous periods -1,943 -1,943 -1,943

net profit to shareholders 22,000 22,000 -456 21,544

Value of employee services 3,125 3,125 3,125

comprehensive income -8,403 1,155 -7,249 83 -7,166

Share issues in partially owned subsidiaries - 657 657



Share issues in partially owned subsidiaries 2012 2013

minority share of new equity Siem WiS AS 3,456 657

Total 3,456 657

PARENT COmPANy


Other items 2,201 2,201

net profit -3,725 -3,725



Other items -352 -352

net profit -4 845 -4 845


Equity as of December 31, 2013 387,591,380 3,876 522,360 -100 -22,203 324 612 828 546


note 1 - Accounting principles

1.1 General

Siem Offshore Inc. was established on July 1, 2005 as an exempted company under the laws of the Cayman Islands and is listed on the Oslo Stock Exchange. All references to “Siem Offshore Inc.” and the “Company” shall mean Siem Offshore Inc. and its subsidiaries and associates unless the context indicates otherwise. All references to “Parent” shall mean Siem Offshore Inc. as a parent company only.

nOteS tO the AccOuntS


1.2 basis of preparationthe consolidated and parent company financial statements were prepared in accordance with international financial reporting Standards (“ifrS”) and ifrS interpretations committee (“ifric”) interpretations endorsed by the european union and the regulations of the Oslo Stock exchange. As of December 31, 2013, there were no differences relevant to the company between these standards and international financial reporting Standards, as issued by the international Accounting Standards Board, and the policies adopted by the company. the consolidated financial statements have been prepared under the historical cost convention, as modified by fair value of non-current assets held for sale, and financial assets, including derivative instruments at fair value through profit or loss. the financial statements have been prepared under the assumption that the company is a going-concern. A summary of the principal accounting policies applied in the preparation of these financial state-ments are set out below.

the financial statements are presented at and for the year ended December 31, 2013. All figures are in uSD thousands unless otherwise clearly stated.

the preparation of financial statements in conformity with ifrS requires the use of certain critical accounting estimates. it also requires management to exercise its judgment in the process of applying the company’s accounting policies. the areas involving a higher degree of judgment or complexity or areas where assump-tions and estimates are significant to the consolidated financial statements are disclosed under “critical accounting esti-mates and judgments” presented below.

1.3 Accounting policies(a) new and amended standards adopted by the companythe following standards have been adopted by the group for the first time for the financial year beginning on or after 1 January 2013 and have a material impact on the group: Amendment to iAS 1, ‘financial statement presentation’ regarding other comprehen-sive income. the main change resulting from these amendments is a requirement for entities to group items presented in ‘other comprehensive income’ (Oci) on the basis of whether they are potentially re-classifiable to profit or loss subsequently (reclassification adjustments). iAS 19, ‘employee benefits’ was revised in June 2011. the changes on the group’s accounting policies has been as follows: to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by ap-plying the discount rate to the net defined benefit liability (asset). See note 43 for the impact on the financial statements. Amendment to ifrS 7, ‘financial instru-ments: Disclosures’, on asset and liability offsetting. this amendment includes new disclosures to facilitate comparison between those entities that prepare ifrS financial statements to those that prepare financial statements in accordance with uS GAAp. ifrS 11, ‘Joint arrangements’ focuses on the rights and obligations of the parties to the arrangement rather than its legal form. there are two types of joint arrange-ments: joint operations and joint ventures. Joint operations arise where the investors have rights to the assets and obligations for the liabilities of an arrangement. A

joint operator accounts for its share of the assets, liabilities, revenue and expenses.

Joint ventures arise where the investors have rights to the net assets of the ar-rangement; joint ventures are accounted for under the equity method. proportional consolidation of joint arrangements is no longer permitted. See note 43 for the impact of adoption on the financial state-ments. ifrS 12, ‘Disclosures of interests in other entities’ includes the disclosure require-ments for all forms of interests in other entities, including joint arrangements, associates, structured entities and other off balance sheet vehicles.

ifrS 13, ‘fair value measurement’, aims to improve consistency and reduce complex-ity by providing a precise definition of fair value and a single source of fair value measurement and disclosure require-ments for use across ifrSs. the require-ments, which are largely aligned between ifrSs and uS GAAp, do not extend the use of fair value accounting but provide guid-ance on how it should be applied where its use is already required or permitted by other standards within ifrSs. Amendments to iAS 36, ‘impairment of assets’, on the recoverable amount disclosures for non-financial assets. this amendment removed certain disclosures of the recoverable amount of cGus which had been included in iAS 36 by the issue of ifrS 13. the amendment is not mandatory for the group until 1 January 2014, how-ever the group has decided to early adopt the amendment as of 1 January 2013.

(b) new standards and interpretations not yet adoptedA number of new standards and amend-ments to standards and interpretations



are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these consolidated financial statement. none of these is ex-pected to have a significant effect on the consolidated financial statements of the Group, except the following set out below:

ifrS 9, ‘financial instruments’, addresses the classification, measurement and rec-ognition of financial assets and financial liabilities. ifrS 9 was issued in november 2009 and October 2010. it replaces the parts of iAS 39 that relate to the clas-sification and measurement of financial instruments. ifrS 9 requires financial assets to be classified into two measure-ment categories: those measured as at fair value and those measured at amor-tised cost. the determination is made at initial recognition. the classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. for financial liabilities, the standard retains most of the iAS 39 requirements. the main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mis-match. the group is yet to assess ifrS 9’s full impact. the Group will also consider the impact of the remaining phases of ifrS 9 when completed by the Board. ifric 21, ‘levies’, sets out the accounting for an obligation to pay a levy that is not income tax. the interpretation addresses what the obligating event is that gives rise to pay a levy and when should a liability be recognised. the Group is not currently subjected to significant levies so the im-pact on the Group is not material.

there are no other ifrSs or ifric inter-pretations that are not yet effective that would be expected to have a material impact on the Group.

1.4 Consolidation (a) Subsidiaries Subsidiaries are all entities over which the company has the power to govern the financial and operating policies by control-ling more than one half of the voting rights in the relevant entity. the existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the company controls another entity. the company also assesses existence of con-trol where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the company’s voting rights relative to the size and dispersion of holdings of other shareholders give the company the power to govern the financial and operat-ing policies, etc.

Subsidiaries are fully consolidated from the date on which control is transferred to the company. they are deconsolidated from the date that control ceases.

the company applies the acquisition method to account for business combina-tions. the consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred and the liabilities assumed from to the former owners of the acquirer and the equity interests issued by the company. the consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrange-ment. identifiable assets acquired and li-abilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisi-

tion date. the company recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the rec-ognised amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred.

if the business combination is achieved in stages, fair value of the acquirer’s previ-ously held equity interest in the acquiree is remeasured to fair value at the acquisi-tion date through profit or loss.

Any contingent consideration to be trans-ferred by the company is recognised at fair value at the acquisition date. Sub-sequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with iAS 39 either in profit or loss or as a change to other comprehen-sive income. contingent consideration that is classified as equity is not remeasured and its subsequent settlement is account-ed for within equity.

Goodwill is initially measured as the ex-cess of the aggregate of the consideration transferred and the fair value of non-con-trolling interest over the net identifiable assets acquired and liabilities assumed. if this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

intercompany transactions, balances, income and expenses on transactions between group companies are eliminated. profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting


the following exchange rates are used in 2013:

Average 31.12.13

nOK (norwegian kroner) 0.1700 0.1644

eur (euros) 1.3300 1.3779

GBp (pound Sterling) 1.5699 1.6524

reAS (Brazilian reals) 0.4621 0.4269

policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the company.

(b) Associated companiesAssociates are all entities over which the company has significant influence but not control, generally accompanying a share-holding of between 20% and 50% of the voting rights. investments in associates are accounted for using the equity method of accounting and are initially recognized at cost. the company’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition. the share of earnings recorded in the consolidated financial statements are based on the after-tax earnings of the associates. in the income statement, the share of earnings from as-sociates is shown as a financial item.

the company’s share of its associates’ post-acquisition profits or losses is recognized in the income statement and its share of post-acquisition movements in reserves is recognized in reserves. the cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the company does not recognize further losses unless it has incurred obligations or made payments on behalf of the associ-ate.

unrealized gains on transactions between the company and its associates are elimi-nated to the extent of the company’s in-terest in the associates. unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of

associates have been reconciled where necessary to ensure consistency with the policies adopted by the company.

1.5 Classification of items in the financial statements Assets designated for long-term owner-ship or use and receivables due later than one year after drawdown have been recorded as non-current assets. Other assets are classified as current assets. receivables are stated at par value less provision for doubtful accounts. li-abilities due later than one year after the end of the accounting year are posted as non-current liabilities. Other liabilities are classified as current liabilities.

1.6 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operat-ing decision-maker. the chief operating decision-maker, who is responsible for allocating resources and assessing per-formance of the operating segments, has been identified as the steering committee that makes strategic decisions.

the company is organized into eight dif-ferent segments, platform supply vessels (“pSVs”), offshore subsea construction Vessel (“OScVs”) anchor-handling tug supply vessels (“AhtS vessels”), Brazilian vessels (consisting of fast crew vessels (“fcVs”), fast supply vessels (“fSVs”) and

oil spill recovery vessels (“OSrVs”)), com-bat management systems (“cmS”), cable installation, Scientific core-drilling and Other, in which the company operates.

1.7 Foreign currency translation (a) functional and presentation currency items included in the financial statements of each of the company’s entities are measured using the currency of the pri-mary economic environment in which the entity operates (the “functional currency”). the consolidated financial statements are presented in uSD, which is the company’s functional and presentation currency.

(b) transactions and balances foreign currency transactions are trans-lated into the functional currency using the exchange rates prevailing at the dates of the transactions. foreign exchange gains and losses resulting from the set-tlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denomi-nated in foreign currencies are recognized in the income statement.

(c) Group companies the results and financial position of all the group companies (none of which have the currency of a hyperinflationary economy) that have a functional currency differ-ent from the presentation currency are translated into the presentation currency as follows:



(i) assets and liabilities for each reporting presented are translated at the clos-ing rate at the date of that statement of financial position;

(ii) income and expenses for each income statement are translated at average ex-change rates (unless this average is not a reasonable approximation of the cumula-tive effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

(iii) all resulting exchange differences are recognized as a separate component of equity.

in consolidation, exchange differences arising from the translation of the net in-vestment in foreign operations is recorded over Other comprehensive income (Oci) and taken into shareholders’ equity. When a foreign operation is sold, exchange dif-ferences that were recorded over Oci are recognized in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments aris-ing on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

1.8 Fixed assets and mainte-nance costsVessels are measured in the consolidated statement of financial position at cost less accumulated depreciation and impairment loss. Depreciation is on a straight-line basis and determined by an estimate of the remaining useful economic life of the asset. estimated residual value is determined as the estimated sales price for steel less the costs associated with scrapping a vessel. the estimate is reas-sessed at each balance sheet date. the

vessels presently owned by the company are considered to have an economic life of 30 years. Some components of the ves-sels have a shorter economic life than 30 years. the vessels are decomposed into different components and amortized over estimated economic life time. for further information, see note 5. Other fixed assets are depreciated on a straight-line basis over the anticipated useful life.

each part of a fixed asset that is signifi-cant to the total cost of the asset is sepa-rately identified and depreciated over that component’s useful lifetime. components with similar useful lives will be included in one component. the company has identi-fied 7 significant components relating to its different types of vessels.

in accordance with iAS 16 and the cost model, dry-dock costs are considered a separate component of the ship’s cost at purchase with a different pattern of ben-efits and, therefore, need to be amortized separately.

Day-to-day maintenance costs are charged to the income statement during the financial period in which they are incurred. the cost of major renovations and periodic maintenance of vessels is capitalized as dry-docking costs and depreciated over the useful lifetime of the parts replaced. the useful life of the regular vessels dry-docking costs will be the period until the next docking, normally from 2 to 3 years.

the residual value and expected use-ful lifetime assumptions of fixed assets are reviewed at each reporting date and, where they differ significantly from previ-ous estimates, the rate of depreciation charges are changed accordingly.

certain vessel contracts require an invest-ment prior to commencing the contract to fulfil requirements set by the charterer. these investments are capitalized as pro-ject costs and are amortized over the term of the specific charter contracts.

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in operating profit. 1.9 Newbuild contracts instalments on newbuild contracts are recorded as non-current assets. costs re-lated to the on-site supervision and other pre-delivery construction costs are capi-talized per vessel. Borrowing costs related to newbuilding contracts commenced be-fore December 31, 2009 are recognized as an expense immediately. for newbuilding contracts where the commencement date for capitalization is on or after January 1, 2010, the company capitalizes borrowing costs directly attributable to the construc-tion as a part of the cost of the asset.

1.10 Impairment of fixed assets non-current assets are reviewed for potential impairment at each reporting date and whenever events or changes in circumstances indicate that the carry-ing amount may not be recoverable. the asset’s cash generating ability either through use or sale is reviewed and com-pared to the asset’s carrying amount in the statement of financial position. if the carrying amount is higher, the difference must be written off as an impairment loss. fair value reduced by estimated sales costs is the amount achievable on sale to an independent third party. the recover-able amount is established individually for all assets. in assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current


market assessments of the time and the risk specific to the asset that is considered impaired.

A previously recognized impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. reversal of previ-ously recognized impairment is limited to the amount that the carrying value of the asset would have been had the initial impairment charge not taken place.

1.11 Intangible assets intangible assets that are acquired sepa-rately are measured on initial recognition at cost. the cost of intangible assets acquired in a business combination is recognized at fair value at the date of acquisition. following initial recognition, intangible assets are carried at cost less any accumulated amortization and any ac-cumulated impairment losses. internally-generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is charged against profits in the year in which the expenditure is incurred. the useful lives of intangible assets are assessed to be either finite or infinite. intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indica-tion that the intangible asset may be impaired. the amortization period and the amortization method are reviewed at least at each financial year-end. changes in the expected useful life or the expected pat-tern of consumption of future economic benefits embodied in the asset is account-ed for by changing the amortization period or method, as appropriate, and treated as a change in accounting estimate. the amortization expense on intangible as-sets with finite lives is recognized in the income statement in the expense category consistent with the function of the intan-gible asset.

intangible assets with infinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are not amortized. the useful life of an intangible asset with an infinite life is reviewed annually to determine whether the infinite life as-sessment continues to be supportable. if not, the change in the useful life assess-ment from infinite to finite is made on a prospective basis. Goodwill arises on the acquisition of sub-sidiaries, associates and joint ventures and represents the excess of the consideration transferred over company’s interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

for the purpose of impairment testing, goodwill acquired in a business combi-nation is allocated to each of the cGus, or groups of cGus, that is expected to benefit from the synergies of the combina-tion. each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal man-agement purposes. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are un-dertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. the car-rying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed.

1.12 Financial assetsthe company classifies its financial as-sets in the following categories: financial assets at fair value through profit or loss, loans and receivables, and Available for

sale financial assets. the classification depends on the purpose for which the financial assets were acquired. manage-ment determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date. (a) financial assets at fair value through profit or lossfinancial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are clas-sified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

(b) loans and receivables loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an ac-tive market. they are included in current assets, except for those which maturities greater than 12 months after the reporting date. these are classified as non-current assets.

1.13 Inventorieslubricating oil and bunkers inventories are valued at the lower of historical cost and market value applying the fifO (first-in, first-out) principle. the company makes inventory provisions based on an assess-ment of excess and obsolete inventories.

1.14 Cash and cash equivalents cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabili-ties in the statement of financial position.



1.15 Accounts receivable Accounts receivable are reported at amortized cost. the interest factor is ignored as it is considered as insignificant. in the case of objective evidence of a fall in value, the difference between reported value and the present value of the future cash flow is discounted with the original effective interest rate for the receivable and reported as a loss.

provisions for losses are recognized when there are objective indicators that the company will not receive settlement in accordance with the original terms. Significant financial problems facing the customer, probability that the customer will go bankrupt or undergo financial restructuring, postponements and non-payment are regarded as indicators that the receivables from customers must be written-down. 1.16 Share capital Ordinary shares are classified as equity. incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. When the company purchases its own shares, the considera-tion paid, including any directly attribut-able incremental costs (net of income taxes), is deducted as appropriate from share capital and share premium reserve and the shares are cancelled.

1.17 borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred and are subsequently stated at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemp-tion value is recognized in the income statement over the period of the borrow-ings using the effective interest method.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

1.18 Commercial Interest Refer-ence Rate (CIRR) loanthe company has applied for three commercial interest reference rate (cirr) loans from the norwegian export credit Agency. the duration of the loans is 12 years and the cash proceeds from the loans have been deposited in fixed deposit account with a norwegian bank at the same interest rate as the loans. the agreed periods of the deposits are identi-cal with the periods of the loans.

1.19 Taxation tax expense/benefit includes current taxes and the change in deferred taxes. Deferred income tax is provided for all temporary differences between the book value and the tax basis of assets and liabilities and for tax losses carried forward. Deferred tax assets made prob-able through prospective earnings that can be utilized against the tax reducing temporary differences are recognized as intangible assets. Deferred tax assets and deferred tax liabilities are recognized inde-pendently of when the differences will be reversed and, as a rule, at nominal value. Deferred tax assets and tax liabilities are measured on the basis of estimated future tax rate.

part of the company’s activities under the norwegian subsidiaries are structured to be in compliance with the regulations for the norwegian tonnage tax regime. the company has estimated a tax rate of 0% for the companies subject to norwegian tonnage tax regime. financial income within the regime is taxable at a rate of 28%. for companies not included in the

tonnage tax regime, the company ap-plies a tax rate of 28%. the tax expense consists of tax payable and changes in deferred tax assets/liabilities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carry-ing amounts in the consolidated financial statements.

Deferred tax assets are recognized to the extent it is probable that future taxable profits will be generated to utilize the temporary differences forming basis for the deferred tax assets.

1.20 Pension costs and obliga-tions the company has a defined benefit plan for its employees in norway. the pension scheme is financed through contributions to insurance companies or pension funds. A defined benefit plan defines the amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

the liability recognized on the statement of financial position relating to defined benefit plans is the net present value for the defined benefits on the reporting date less the fair value of the pension fund assets adjusted for unrecognized estimate deviations and costs relating to pension benefits earned from prior periods. the pension obligations are calculated annual-ly by an independent actuary on the basis of a linear model. the net present value of the defined benefits is determined by dis-counting the estimated future payments based on the interest rate for norwegian government bonds. Since norwegian gov-ernment bonds are not issued for terms exceeding 10 years, a supplement to this


bond rate is calculated by means of esti-mation techniques to establish a discount rate that is approximately the same as the term of the pension obligation. 1.21 Contingent liabilities and provisions the company recognizes provisions for any environmental improvements and legal requirements when there is a legal or self-imposed obligation to do so as a result of earlier events, there is a prepon-derance of evidence that the obligation will be settled by a transfer of economic resources and the size of the obligation can be estimated with an adequate degree of reliability.

in cases where there are additional obliga-tions of the same nature, the probability that the litigation will be settled will be assessed for the company as a whole. provisions for the company are recog-nized even if the probability for settle-ment related to the company’s individual elements may be low. provisions are measured as the net present value of the expected payments to redeem the obliga-tion. A pre-tax discount rate is used that reflects the current market situation and risk specific to the obligation. An increase in the obligation as the result of a change in the time value is recognized as an interest cost.

At year-end 2013, no contingent liabili-ties are recognized in the Statements of financial position.

1.22 Financial derivatives the company enters into derivative instruments, primarily foreign currency contracts, and interest rate derivatives, to hedge the foreign currency rates and interest rate fluctuations. the criteria for qualifying as a hedge under ifrS are strict. the company’s foreign currency contracts do not qualify as hedging. the

fair market value of these contracts is re-corded as a receivable or liability and any change in the valuation is recognized in the profit and loss as operating expenses.

1.23 Revenue recognition the company’s activity is to employ dif-ferent types of offshore support vessels, including pSVs, OScVs, AhtS vessels, OSrVs, standby vessels and crew-boats and one scientific core-drilling vessel. in addition, the company holds inter-est in one limited liability partnership with ownership in one well-stimulation vessel. in one of the subsidiaries of the company, revenues are partly generated from income from construction contracts. revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the company’s activi-ties. revenue is shown net of value-added tax, withholding tax, returns, rebates and discounts and after elimination of sales within the company. revenue is recog-nized as follows:

charter rate contractscharter contracts are classified as operat-ing leases under iAS 17. revenue derived from charter contracts is recognized in the period over the lease term on a straight line basis. related services are recog-nized as revenue in accordance with the services being rendered.

revenues from time charters and bare-boat charters accounted for as operating leases are recognized over the rental periods of such charters, as service is performed on a straight line basis. certain contracts include mobilization fees pay-able at the start of the contract, and are recognized as revenue in the mobilization period until contract commencement. in cases where the fee covers specific up-grades or equipment specific to the con-tract, the mobilization fees are recognized

as revenue over the estimated contract period. the related investment is depreci-ated over the estimated contract period. in cases where the fee covers specific operat-ing expenses at the start of the contract, the fees are recognized in the same period as the expenses.

Vessels without signed contracts in place at discharge have no revenue before a new contract is signed. charter-related expenses incurred for vessels in the idle time are expensed.

construction contracts the company accounts for long-term construction, engineering and project management contracts on the percentage-of-completion basis as costs are incurred. under this method, when the outcome of a construction contract can be estimated reliably and it is probably that the contract will be profitable, contract revenue is rec-ognized over the period of the contract by reference to the stage of completion.

it is determined that profit on a contract is not able to be estimated reliably until pro-gress has reached at least 25% completion. contract costs are recognized as expenses by reference to the stage of completion of the contract activity at the end of the reporting period.

for projects that are expected to result in a loss, the total estimated loss is recognized immediately.

interest income interest income is recognized using the effective interest method. When a receivable is impaired, the company reduces the carrying amount to its recoverable amount, which is determined as the estimated future cash flow discounted at original effective interest rate of the instrument and continues unwinding the discount as interest income.



interest income on impaired loans is recognized using the original effective interest rate.

Dividend income Dividend income is recognized when the right to receive payment is established.

rendering of services Service revenue is generally recognized when a signed contract or other persua-sive evidence of an arrangement exists, the service has been provided, the fee is fixed or determinable and collection of resulting receivables is reasonably as-sured. Other services are recognized on percentage-of-completion basis.

1.24 use of estimates management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities. further information is set out in note 3.

1.25 Earnings per share earnings per share are calculated by divid-ing the net profit/loss for shareholders of the company by the weighted average number of outstanding shares over the period in question. Diluted earnings per share include the effect of the assumed conversion of potentially dilutive instru-ments such as stock options. the impact of share equivalents is computed using the treasury stock method for share op-tions.

1.26 Statements of Cash Flows the Statements of cash flows are prepared in accordance with the indirect method.

1.27 Related party transactions All transactions, agreements and business activities with related parties are deter-mined on an arm’s length basis in a manner similar to transactions with third parties.

1.28 Events after reporting date new information regarding the company’s financial position on the reporting date is included in the accounts. events occur-ring after the reporting date which do not impact the company’s standing on the re-porting date, but which have a significant impact on future periods, are presented in the notes to the accounts. 1.29 Government grants Grants relating to net wages arrangement in norway are recognized as a reduction of wage cost.

1.30 Exchange gain/ loss related to account receivables and ac-count payable All foreign exchange gains and losses re-lated to account receivables and account payable are recognized in the income statement under net currency items.

1.31 Operating leases leases for which most of the risk and return associated with the ownership of the asset have not been transferred to the company are classified as operating leases. lease payments are classified as operating costs and recognized in the income statement in a straight line during the contract period.

1.32 Share-based paymentsthe group operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity in-struments (options) of the group. the fair value of the employee services received in exchange for the grant of the options is recognised as an expense. the total amount to be expensed is deter-mined by reference to the fair value of the options granted:

- including any market performance condi-tions (for example, an entity’s share price);- excluding the impact of any service and non-market performance vesting condi-tions (for example, profitability, sales growth targets and remaining an em-ployee of the entity over a specified time period); and - including the impact of any non-vesting conditions (for example, the requirement for employees to save). non-market performance and service con-ditions are included in assumptions about the number of options that are expected to vest. the total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. in addition, in some circumstances em-ployees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the pur-poses of recognizing the expense during the period between service commence-ment period and grant date. At the end of each reporting period, the group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. it recognizes the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjust-ment to equity. each option gives the holder the right, but not the obligation, to acquire one share at the exercise price on the terms and subject to the conditions set out in the Stock Option plan. When the options are exercised, the company issues new shares. the proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.


Siem Daya 2photo: harald m Valderhaug

the grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution. the fair value of employee services received, measured by reference to the grant date fair value, is recognized over the vesting period as an increase to investment in subsidiary undertakings, with a corre-sponding credit to equity in the parent entity accounts.

the social security contributions payable in connection with the grant of the share options is considered an integral part of the grant itself, and the charge will be treated as a cash-settled transaction.


2.1 Financial risk factorsthe company is exposed to a variety of financial risks through its ordinary operations and debt financing. Such risks include foreign exchange risk, interest rate risk, credit risk and liquidity risk. to manage these risks, management reviews and assesses its primary financial and market risks. Once risks are identified,

appropriate action is taken to mitigate the identified risk. the company’s risk management is exercised in line with guidelines approved by the Board. 2.2 Foreign exchange risksuSD is the reporting currency for the company. functional currency for the parent company and vessel-operating

subsidiaries is uSD, except for the Brazilian subsidiary where Brl is the functional currency. remaining subsidiaries use nOK and eur as functional currency.the company operates internationally and is exposed to foreign exchange risks arising from various currency exposures primary with respect to nOK, GBp, eur and Brl.

CONSOLIDATED foreign exchange risk rate 10%

(Amounts in USD 1,000) +10% movements -10% movements

December 31, 2013Carrying

amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets

cash and cash equivalent 101,206 2,473 2,473 -2,473 -2,473

Derivatives - - - - -

Accounts receivable 53,198 2,653 2,653 -2,653 -2,653

Impact on financial assets before tax 154,404 5,126 5,126 -5,126 -5,126

Financial liabilities

Accounts payable 16,253 -1,966 -1,966 1,966 1,966

Derivatives 11,085 -33,797 -33,797 29,343 29,343

Borrowings 961,500 -36,253 -36,253 36,253 36,253

Impact on financial liabilities before tax 988,838 -72,016 -72,016 67,562 67,562

Income statement

Operating revenue 363,955 16,834 16,834 -16,834 -16,834

Operating expenses 241,291 -19,235 -19,235 19,235 19,235

Impact on operating result before tax 122,663 -2,401 -2,401 2,401 2,401

Total increase/decrease before tax -69,290 -69,290 64,836 64,836

Allocation per currency

nOK -60,250 -60,250 55,797 55,797

eur 2,079 2,079 -2,079 -2,079

GBp 450 450 -450 -450

Brl -11,569 -11,569 11,570 11,570

Total increase/ decrease before tax -69,290 -69,290 64,836 64,836

financial assets in 2013 include derivatives related to hedging of foreign exchange risks. the derivatives in the sensitivity table include pathdependent options in which the value of the derivatives is influenced when the underlying reaches or fluctuates within, below or above specific barrier levels. the change in value of these derivatives will impact the profit of the company. financial liabilities in 2013 consist of interest rate derivatives and are not influenced by movements in foreign exchange rates.


note 2 - Financial Risk Management


foreign exchange risks can be divided into transaction risk from paying and receiving foreign currency and translation risk due to recognizing assets and liabilities in uSD. the company had in 2013 and 2012 mainly uSD, nOK, GBp and Brl revenues, and mainly uSD, nOK, eur and Brl expenses.

At year end, the company had shipbuilding contracts with Brazilian yards for the construction of two OSrVs

and one large-size pSV, shipbuilding contracts with norwegian yards for the construction of two OScV’s, one pSV and one iSV and shipbuilding contracts with a polish yard for the construction of five pSVs and one clV. the contracts with Brazilian yards are in uSD, Brl and nOK, the contracts with norwegian yards are in nOK and the contracts with the polish yard are in eur. further information regarding these contracts is set out in note 2.5 and note 17.

the company is exposed to foreign exchange risk of its subsidiaries, including the development of the Brazilian real.

the following sensitivity table demonstrates the impact on the company’s profit and equity before tax from potential changes to the exchange rates, all other variables held constant.

note 2 - Financial Risk Management

CONSOLIDATED foreign exchange risk rate 10%




Financial assets


Derivatives 5,829 -2,853 -2,853 -8,211 -8,211

Accounts receivable 44,221 1,399 1,399 -1,399 -1,399



Accounts payable 5,377 -495 -495 495 495

Derivatives 12,339 - - - -

Borrowings 796,986 -20,182 -20,182 20,182 20,182


Income statement

Operating revenue 368,213 14,437 14,437 -14,437 -14,437


Impact on operating result before tax 625,828 -5,423 -5,423 5,423 5,423



nOK -15,937 -15,937 4,873 4,873

eur -1,196 -1,196 1,196 1,196

GBp 2,846 2,846 -2,846 -2,846

Brl -7,019 -7,019 7,019 7,019




PARENT COmPANy foreign exchange risk rate 10%




Financial assets


Accounts receivable 3,447 - - - -



Accounts payable 397 -19 -19 19 19


Borrowings 98,624 -14,034 -14,034 14,034 14,034


Income statement

Operating revenue 10,953 -2 -2 2 2


Impact on operating result before tax -7,821 -1,191 -1,191 1,191 1,191



nOK -7,324 -7,324 7,324 7,324

eur -10 -10 10 10

GBp 36 36 -36 -36



PARENT COmPANy foreign exchange risk rate 10%




Financial assets

cash and cash equivalent 57,270 -94 -94 94 94

Accounts receivable 6,739 - - - -

Impact on financial assets before tax 64,009 -94 -94 94 94


Accounts payable 631 -51 -51 51 51


Borrowings - - - - -

Impact on financial liabilities before tax 631 -51 -51 51 51

Income statement

Operating revenue 13,583 10 10 -10 -10


Impact on operating result before tax -11,545 -1,687 -1,687 1,687 1,687



nOK -1,869 -1,869 1,869 1,869

eur -2 -2 2 2

GBp 40 40 -40 -40



Trade and receivablesthe table below presents an aging analysis of the outstanding receivables at year end 2013 and 2012. Overdue receivables are followed up continually by management. the management considers the outstanding amounts to be recoverable.


uSD % of total (Amounts in USD 1.000) uSD % of total

Receivables on December 31, 2013

3,447 100% 1 to 5 largest 32,311 60.7%

- 0.0% 6 to 10 largest 17,978 33.8%

- 0.0% Others 2,909 5.5%

3,447 100% Total accounts receivables 53,198 100%

uSD % of total (Amounts in USD 1,000) uSD % of total

Receivables on December 31, 2012

6,739 100% 1 to 5 largest 27,245 61.6%

- 0.0% 6 to 10 largest 9,546 21.6%

- 0.0% Others 7,431 16.8%



2.3 Credit risksconcentration risksthe company’s credit risk is primarily attributable to its trade and other short-term receivables. the exposure to credit risk is measured on an ongoing basis and credit evaluations are performed for customers identified to be risky. the

company’s debtors are mainly major oil companies and offshore service companies, which are considered to be creditworthy third parties. historically, the loss percentage has been low. Ongoing provisions are made and, on December 31, 2013, the provision for certain accounts receivables which may

not be paid in full was uSD 7.0 million for the company (2012: uSD 7.8 million) and uSD 0K for the parent (2012: uSD 31K).

the table below presents the concentration risks for 2013 and 2012.


the maximum exposure to credit risk at the reporting date is the carrying value of each class of accounts receivables mentioned above.


uSD % of total (Amounts in USD 1.000) uSD % of total

Aging on December 31, 2013

- 0.0% not due 27,365 51.4%

- 0.0% Due up to 1 month 16,511 31.0%

- 0.0% Due 1-4 months 3,045 5.7%

3,447 100% Due more than 4 months 6,276 11.8%


uSD % of total (Amounts in USD 1,000) uSD % of total

Aging on December 31, 2012

1,365 20.3% not due 17,582 39.8%

1,321 19.6% Due up to 1 month 13,081 29.6%

4,052 60.1% Due 1-4 months 8,954 20.2%

- 0.0% Due more than 4 months 4,603 10.4%



2013 2012 (Amounts in USD 1.000) 2013 2012

Currency

3,447 6,739 uSD 26,670 30,234

- - nOK 10,123 6,886

- - eur 10,999 298

- - GBp 2,015 1,322

- - Brl 3,391 5,482

3,447 6,739 Total accounts receivables 53,198 44,221

the carrying amounts of the company’s and parent’s accounts receivables are denominated in the following currencies:


2.4 Cash flow, interest risk and fair valuethe company is financed by debt and equity. if the company fails to repay or refinance its loan facilities, additional equity financing may be required. there can be no assurance that the company will be able to repay its debts or extend re-payment schedules through re-financing of its loan agreements or

avoid net cash flow shortfalls exceeding the company’s available funding sources or comply with minimum cash requirements. further, there can be no assurance that the company will be able to raise new equity, or arrange new borrowing facilities, on favourable terms and in amounts necessary to conduct its ongoing and future operations, should this be required.

in the event of insolvency, liquidation or similar event relating to a subsidiary of the company, all creditors of such subsidiary would be entitled to payment in full out of the assets of such subsidiary before the company, as a shareholder, would be entitled to any payments. Defaults by, or the insolvency of, a subsidiary of the company could result in the obligation of the company


CONSOLIDATED interest rate risk (ir)

(Amounts in USD 1,000) -1% movements +1% movements



Financial assets

cash and cash equivalent 101,206 -1,012 -1,012 1,012 1,012

Impact on financial assets before tax 101,206 -1,012 -1,012 1,012 1,012


Borrowings 629,221 -3,886 -3,886 3,350 3,350



CONSOLIDATED interest rate risk (ir)




Financial assets




Borrowings 653,039 -15,057 -15,057 6,377 6,377




to make payments under parent company guarantees issued in favour of such subsidiary. the company is moreover exposed to changes in interest rates, which may affect the company’s financial results. these risks are mainly related to the company’s long term borrowings with floating interest rates.

further details of the company’s borrowings are set out in note 12. the company has no significant interest-bearing assets other than cash and cash equivalents and therefore the company’s income and operating cash flows are substantially independent of changes in market interest rates. cash and cash equivalents are invested for short

maturity periods, generally from 1 day to 3 months, which mitigates the potential interest rate risk.

the following sensitivity tables demonstrate the impact on the company’s profit before tax and equity from a potential shift in interest rates, all other variables held constant.

PARENT COmPANy interest rate risk (ir)




Financial assets




Borrowings 98,624 986 986 -986 -986

Impact on financial liabilities before tax 98,624 986 986 -986 -986

Total increase/decrease before tax -335 -335 335 335

PARENT COmPANy interest rate risk (ir)




Financial assets

cash and cash equivalent 57,270 -573 -573 573 573

Impact on financial assets before tax 57,270 -573 -573 573 573


Borrowings - - - - -

Impact on financial liabilities before tax - - - - -

Total increase/decrease before tax -573 -573 573 573


the company’s financial assets are classified into the categories: assets at fair value through the profit and loss, loans and receivables, and available for sale. financial liabilities are classified as liabilities at fair value through the profit and loss, and other financial liabilities. for further information about comparison by category, see note 29.

the value of forward exchange contracts is set by comparing forward exchange rate and the rate on the reporting date. the company’s following financial instruments are not evaluated at fair

value: accounts receivable, cash and cash equivalents, other short -term receivables, accounts payable and long-term liabilities with floating interest.

Because of the short term to maturity, the value of cash and cash equivalents entered into the Statements of financial position is almost the same as the fair value of these. Accordingly, the values of accounts receivables and accounts payables are almost the same as their fair values since they are entered on “normal” conditions.

the fair value of the company’s non-current liabilities subjected to fixed interest rates is calculated by comparing the company’s terms and market terms for liabilities with the same terms to maturity and credit risk.

the following tables display the booked value and the fair value of financial assets and obligations.

CONSOLIDATED

(Amounts in USD 1,000) 12/31/2013 12/31/2012

book value Fair value book value Fair value

Financial assets

cirr loan deposit 41,718 42,580 53,194 54,522

long-term receivables 6,639 6,639 7,111 7,111

Accounts receivables 53,198 53,198 44,221 44,221

Other short-term receivables 32,737 32,737 38,461 38,461

Derivative financial instruments - - 5,829 5,829

cash and cash equivalents 101,206 101,206 107,068 107,068

Total 235,498 236,360 255,884 257,212


Borrowings 961,500 970,585 796,986 813,565

cirr loan 41,718 42,580 53,194 54,522

Other non-current liabilities 18,826 18,826 14,992 14,992

Accounts payable 16,253 16,253 5,377 5,377

Derivative financial instruments 11,085 11,085 12,339 12,339

Other current liabilities 44,061 44,061 50,882 50,882

Total 1,093,443 1,103,390 933,770 951,677



PARENT COmPANy

(Amounts in USD 1,000) 12/31/2013 12/31/2012

book value Fair value book value Fair value

Financial assets

cirr loan deposit 41,718 42,580 53,194 54,522

long-term loan 47,094 47,094 90,043 90,043

Accounts receivable 3,447 3,447 6,739 6,739

Other short-term receivables 5,207 5,207 4,030 4,030

cash and cash equivalents 132,068 132,068 57,270 57,270

Total 229,533 230,396 211,276 212,604


cirr loan 41,718 42,580 53,194 54,522

Accounts payable 397 397 631 63,409

Other current liabilities 8,170 8,170 8,256 -

Total 50,285 51,147 62,081 117,931


2.5 Liquidity riskthe company monitors its cash flow from operations closely and optimizes the working capital level of the individual companies and the company as a whole. the company funds are used for investment opportunities in the business, yard instalments, scheduled repayments and repayments of debt and to general working capital purposes.

the company seeks to fix the majority of its fleet on long-term contracts. Vessels not fixed on long-term contracts are exposed to the volatility in the north Sea spot market. the company will from time to time require additional capital to take advantage of business opportunities. historically the company has managed

to obtain necessary financing in a timely manner on acceptable terms when needed. the tables below summarize the maturity profile of the company’s financial liabilities, and future commitments to the newbuilding program.

CONSOLIDATED

December 31, 2013Less than 3

months3 to 12

months1 to 5years

Thereafter Total

interest-bearing loans and borrowings 31,414 76,294 726,630 176,247 1,010,586

trade and other payables 16,253 - - - 16,253

Total 47,667 76,294 726,630 176,247 1,026,839

December 31, 2012

interest-bearing loans and borrowings 21,290 77,738 553,572 203,345 855,945

trade and other payables 5,377 - - - 5,377

Total 26,667 77,738 553,572 203,345 861,322

no yard instalments falling due for the parent company as there were no vessels under construction year-end 2013 and 2012.


CONSOLIDATED


months3 to 12

months1 to 5years

Thereafter Total

yard instalments falling due 71,271 323,225 306,473 - 700,969

December 31, 2012

yard instalments falling due 20,588 253,276 337,838 - 611,702

PARENT COmPANy


months3 to 12

months1 to 5years

Thereafter Total

interest-bearing loans and borrowings - 6,953 126,436 6,953 140,342

trade and other payables 397 - - - 397

Total 397 6,953 126,436 6,953 140,739

December 31, 2012

interest-bearing loans and borrowings - 7,599 30,397 15,198 53,194

trade and other payables 631 - - - 631

Total 631 7,599 30,397 15,198 53,825


2.6 Capital risk managementthe company seeks to obtain long-term financing supported by long-term contracts, in order to reduce the frequency and risk associated with the refinancing of loans. long-term charter parties will also enable a higher degree of debt-financing. the wholly-owned norwegian company, Siem Offshore rederi AS, has 10 vessels under construction in norway and poland at year end, which includes two OScV’s, one iSV, six dual-fuel pSVs and one clV. first 10% to 20% of contract price is or will be paid in accordance with agreed payment schedules and the remaining 80% to 90% will be paid at delivery. the company has secured long-term employment for one OScV and for two dual fuelled pSVs under construction. the clV and iSV will be utilised by the company’s wholly-owned subsidiary, Siem Offshore contractors, for project work within the submarine power cable installation, repair and maintenance segment. the company is in discussions

for long-term contracts for the OScV and for the four dual fuelled pSVs.

the wholly-owned Brazilian subsidiary, Siem Offshore do Brasil SA, has three vessels under construction in Brazil at year-end, which includes two OSrV’s and one large-size pSV. the two OSrV’s are scheduled for delivery in second- and fourth quarter 2014. Both vessels shall commence eight-year firm contracts for petrobras with options for additional eight-year periods. the large-size pSV is scheduled for delivery in second quarter 2014. the company is in discussions for long-term contracts for the pSV. Siem Offshore do Brasil SA has paid 20% of the cost price for the pSV under construction, 10% at contract signing and further 10% during 2010. the remaining 80% will be paid at delivery of the vessel, scheduled in 2014.

the company has secured debt-financing for nine of the thirteen vessels under construction at year-end.

2.7 Risks related to loan agreements, restrictions on dividends and distributionthe company’s loan agreements include terms, conditions and covenants which impose restrictions on the operations of the company. these restrictions may negatively affect the company’s operations including, but not limited to, the company’s ability to meet the fierce competition in the market in which it operates. 2.8 Risks related to possible tax liabilitiesthe company seeks to optimize its tax structure to minimize withholding taxes when operating vessels abroad, avoiding double taxation, and minimizing corporate tax paid by making optimal use of the shipping taxation rules that apply. it is, however, a challenging task to optimize taxation, and there is always a risk that the company may end up paying more taxes than the theoretical minimum, which may in turn affect the financial results negatively.

Girl power at workch. Off. merete Borgundvag pettersenA/B trainee Julie haaversen

What will the future bring?A/B trainee Julie haaversen


ifrS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as information on contingent assets and latent obligations on the reporting date, including income and expenses for the reported period. the final outcomes may deviate from the estimates. certain amounts included in, or that have an effect on, the accounts and the associated notes require

estimation, which in turn entails that the company must make assessments related to values and circumstances that are not known at the point in time when the accounts are prepared. A significant accounting estimate can be defined as an estimate that is important to provide a correct picture of the company’s financial position, which at the same time is the result of difficult, subjective and complex assessments performed

by the management. Such estimates are often uncertain by nature. management evaluates such estimates continuously based on historical data and experience, consultation with experts, trend analysis and other methods that are considered relevant for the individual estimate. estimates and assessments that can have a significant impact on the accounts are listed below.

note 3 - critical Accounting estimates and Judgements


Siem topaz – winter towing. photo: Steffen Voldsund


vessels economic lifethe level of depreciation is dependent upon the estimated economic life of the vessels. the estimate is based on historical data and experience related to the vessels that are included in the company. the estimate is reassessed annually. A change in the estimates will affect depreciation in future periods. residual value at the end of the economic lifethe level of depreciation is dependent on the estimated residual value on the reporting date. the anticipated residual value is based on knowledge of the scrap value of vessels. the scrap value estimates are dependent on the price of steel. the scrap value estimates is subject to an annual reassessment.

Write-downs On the reporting date, the company has assessed whether there are any indications that it may be necessary to write down a vessel. When such indications exist, the recoverable value of the vessel is estimated, and the vessel’s value is written down to the recoverable amount. the recoverable amount for vessels is estimated by means of broker estimates. if a vessel is fixed on a long contract, the broker also estimates an excess value of the charter party and this value is discounted based on an estimated discount rate. for vessels fixed on long contract, the recoverable amount constitutes of brokers estimates and discounted excess value.

Estimated impairment of goodwill and intangible assetsthe company tests whether goodwill and intangible assets have suffered any impairment in accordance with the accounting policy stated in note 1.11. the recoverable amounts of cash-generating unit have been determined based on value-in-use calculation. this calculation require the use of estimates (note 5).

market value of derivativesAll derivatives, are recognized in the statement of financial position at market value. the market value of derivatives is typically based on an expected future performance and is calculated by means of complicated valuation models. the estimates are based on the information available on the reporting date and will be influenced by changes in the interest rates, foreign currency exchange rates and other input for the calculations.

Recognition of purchase cost for new buildings in the statement of financial position Only purchase costs that are directly related to the asset under construction may be recognized in the statement of financial position. the term “directly related to” requires the use of judgement for several costs that are relevant to construction to determine whether costs shall be recognized in the statement of financial position or as an expense.

Consolidated accountsAll significant investments in shares and units must be classified as a subsidiary, joint venture or associated company in order to prepare the consolidated accounts. this classification is linked to the degree of control that the company has over the individual company. An evaluation of the degree of control requires the use of judgment for a number of parameters.

Tax legislationtax legislation is subject to varying interpretations. further information is set out in note 11.


(Amounts in USD 1,000) CONSOLIDATED

Operating revenue by business area 2013 2012

pSV 94,630 91,433

OScV 41,407 49,758

AhtS Vessels 131,894 114,978

Other Vessels in Brazil 24,103 29,084

combat management Systems 7,987 8,321

Submarine power cable installation 23,151 7,818

Scientific core-Drilling 36,898 59,070

Other 3,884 7,751

Total 363,955 368,213

Depreciation and amortisation by business area

pSV 21,288 21,713

OScV 7,072 8,648

AhtS Vessels 38,883 41,795


Submarine power cable installation 440 2,231


Other 1,904 1,381

Total 75,841 82,749

Operating profit/(loss) by business area

pSV 21,640 16,270

OScV 19,782 18,148

AhtS Vessels 29,023 6,544


combat management Systems 1,360 2,222

Submarine power cable installation 3,425 -3,990


Other -26,857 -13,964

Total 69,261 54,387

note 4 - Segment Reporting

for reporting purposes, the company is organised into seven segments, which are representative of its principal activities.



note 4 - Segment Reporting

(1) includes newbuilding program, in total: 301,520

Other operating profit/(loss) includes, among others, gain of sale of interest rate derivatives (cirr), gain/(loss) on currency exchange forward contracts and general andadministration expenses.

Capital expenditures by business area 2013 2012

pSV (1) 41,252 10,110

OScV (1) 204,786 18,001

AhtS Vessels 3,921 -349

Other Vessels in Brazil (1) 65,237 24,017

combat management Systems - -

Submarine power cable installation 4,113 346

Scientific core-Drilling 2,814 489

Other 7,289 752

Total 329,413 53,367

coffee break and discussions at Kristiansand Office, norwayphoto: Jan peter lehne



vessels under construction

vessels and equipment

Dry-docking (Amounts in USD 1,000)

Land and buildings


vessels and equipment Drydocking

Capitalised project cost

- - 2,110 purchase cost on January 1, 2012 4,508 105,199 1,585,828 34,782 21,504

- - 895 capital expenditure 175 42,397 1,797 4,872 3,652

- - - Additons from acquisition of companies - - - - -

- - - movements between groups 45 - -131 - -

- - - Vessels delivered in 2012 - -33,014 33,014 - -

- - - the year's disposal at cost - - -139,578 -5,670 -724

- - - effect of exchange rate differences 341 -6,152 11,153 138 -

- - 3,005 Purchase cost on December 31, 2012 5,069 108,430 1,492,084 34,121 24,433

- - -930 Accumulated depreciation on January 1, 2012 -177 - -188,230 -22,162 -7,934

- - -1,024 the year's depreciation -119 - -67,787 -8,950 -5,070

- - - movements between groups -13 - 49 - -

- - - the year's disposal of acc. depreciation - - 13,922 3,795 724

- - - effect of exchange rate differences -17 - -1,232 -236 -

- - -1,954 Acc. depreciation on December 31, 2012 -326 - -243,278 -27,552 -12,280

- - 1,050 Net book value on December 31, 2012 4,743 108,430 1,248,806 6,569 12,153



- - -1,154 movements between groups - - -18,068 - -

- - Vessels delivered in 2013 - -224,326 224,326 - -

- - -2,086 the year's disposal at cost - - -3,331 -4,779 -3,348

- - - effect of exchange rate differences -433 -11,124 -29,947 -848 -

- - - Purchase cost on December 31, 2013 4,853 127,711 1,725,682 38,445 24,764

- - -1,954 Accumulated depreciation on January 1, 2013 -326 -243,278 -27,552 -12,280

- - -132 the year's depreciation -118 - -63,406 -6,467 -4,804

- - - movements between groups - -18 - -

- - 2,086 the year's disposal of acc. depreciation - - 3,253 4,549 3,348

- - - effect of exchange rate differences 32 - 4,043 639 -

- - - Acc. depreciation on December 31, 2013 -412 - -299,405 -28,831 -13,736

- - - Net book value on December 31, 2013 4,441 127,711 1,426,277 9,615 11,027

note 5 - Vessels, equipment, project cost and Intangible Assets


Siem Opal in rough seas. photo: Kristian rønning, chief eng., Siem topaz.




vessels and equipment

Dry-docking (Amounts in USD 1,000)

Land and buildings


vessels and equipment Drydocking

Capitalised project cost



- - - Additons from acquisition of companies - - - - -

- - - movements between groups 45 - -131 - -

- - - Vessels delivered in 2012 - -33,014 33,014 - -

- - - the year's disposal at cost - - -139,578 -5,670 -724

- - - effect of exchange rate differences 341 -6,152 11,153 138 -

- - 3,005 Purchase cost on December 31, 2012 5,069 108,430 1,492,084 34,121 24,433

- - -930 Accumulated depreciation on January 1, 2012 -177 - -188,230 -22,162 -7,934

- - -1,024 the year's depreciation -119 - -67,787 -8,950 -5,070

- - - movements between groups -13 - 49 - -

- - - the year's disposal of acc. depreciation - - 13,922 3,795 724

- - - effect of exchange rate differences -17 - -1,232 -236 -

- - -1,954 Acc. depreciation on December 31, 2012 -326 - -243,278 -27,552 -12,280

- - 1,050 Net book value on December 31, 2012 4,743 108,430 1,248,806 6,569 12,153



- - -1,154 movements between groups - - -18,068 - -

- - Vessels delivered in 2013 - -224,326 224,326 - -

- - -2,086 the year's disposal at cost - - -3,331 -4,779 -3,348

- - - effect of exchange rate differences -433 -11,124 -29,947 -848 -

- - - Purchase cost on December 31, 2013 4,853 127,711 1,725,682 38,445 24,764

- - -1,954 Accumulated depreciation on January 1, 2013 -326 -243,278 -27,552 -12,280

- - -132 the year's depreciation -118 - -63,406 -6,467 -4,804

- - - movements between groups - -18 - -

- - 2,086 the year's disposal of acc. depreciation - - 3,253 4,549 3,348

- - - effect of exchange rate differences 32 - 4,043 639 -

- - - Acc. depreciation on December 31, 2013 -412 - -299,405 -28,831 -13,736

- - - Net book value on December 31, 2013 4,441 127,711 1,426,277 9,615 11,027

the balance of capitalized project costs relate to specific contracts. the costs are amortized over the term of the specific charter contracts.

note 5 - Vessels, equipment, project cost and Intangible Assets


the vessels are divided into the following components and economical lives:

Component: Percentage of total Economic life

hull 27.00% 30 years

cargo equipment 17.00% 30 years

marine equipment 10.00% 15 years

crew equipment 9.00% 15 years

engine 18.00% 30 years

engine system 6.00% 30 years

combined sewerage system 13.00% 30 years

Docking 2.5 years

equipment 3 years

On December 31, 2013, the company assessed, by means of broker estimates, the recoverable vessel values compared to the carrying amounts in the statement of financial position. the assessment provide support that there is no impairment loss for the vessels.

Intangible assets (Amounts in USD 1,000)Goodwill Research and

developmentTrademarks and

licencesTotal

Balance on January 1, 2012 18,433 2,363 9,728 30,524

moved from Vessel and equipment - 320 86 406

investments - 474 - 474

effect of exchange rate differences 355 196 51 602

Purchase cost on December 31, 2012 18,788 3,354 9,864 32,006

Accumulated depreciation on January 1, 2012 - -137 -946 -1,083

moved from Vessel and equipment - -11 -24 -36

the year's ordinary depreciation -718 -105 -823

effect of exchange rate differences - -16 -29 -45

Accumulated depreciation on December 31, 2012 - -883 -1,103 -1,986

Net book value on December 31, 2012 18,788 2,471 8,761 30,020



Goodwill was recorded following Siem Offshore’s purchase of Siem Offshore contractors Gmbh in 2011.

trademarks and licences refer to Siem WiS AS patented technology for the drilling industry. the figures include assets under development and developed assets, and the depreciation refers to developed assets that are not yet commercialized. Share issue in Siem WiS completed in 2013 appreciate the company’s 60% owner share to uSD 18,381. this value indicates that there is no impairment loss for the capitalized trademarks and licences.

Intangible assets (Amounts in USD 1,000)Goodwill Research and

developmentTrademarks and

licencesTotal

Balance on January 1, 2013 18,788 3,354 9,864 32,006

moved from Vessel and equipment - - -34 -34

investments - 216 - 216

effect of exchange rate differences 841 -291 -49 501

Purchase cost on December 31, 2013 19,629 3,279 9,781 32,689

Accumulated depreciation on January 1, 2013 - -883 -1,103 -1,986

moved from Vessel and equipment - - - -

the year's ordinary depreciation -941 -106 -1,047

effect of exchange rate differences - 50 31 82

Accumulated depreciation on December 31, 2013 - -1,774 -1,177 -2,951

Net book value on December 31, 2013 19,629 1,505 8,604 29,737

Impairment tests for goodwillmanagement reviews the business performance based on type of business and the segments are presented in note 4. Goodwill is monitored by the management at the operating segment level. All goodwill on 31 December is related to Siem Offshore contractors, the submarine power cable installation segment.

the recoverable amount of Siem Offshore contractors (the cash generating unit) has been based on value-in–use calculation. the calculation

is based on a 5-year budget period, approved by management, which includes the units projected operating cash flows after tax. cash flows beyond the budget period are included in a terminal value calculation based on a perpetuity growth model where a growth rate of 1% is applied. the projected cash flows are discounted with a discount rate of 11%. Budgeted margin in the budget period is determined by management based on their experience and expectations on market development, particularly in the renewables market. if the discount rate is increase with

2% from 11% to 13% the calculated recoverable amount would decrease by uSD 36,378. calculated recoverable amount will still exceed carrying value.

the recoverable amount from Siem Offshore contractors performed by management supports no impairment loss on the goodwill.


Company Registered office Ownership and voting share

Revenue Net profit Share capital book equity Cost price book value 12/31/2013

Siem Offshore AS Kristiansand, norway 100% 10,091 358 35 4,924 1,022 1,022

Siem Offshore invest AS Kristiansand, norway 100% 13,107 40,142 898 136,927 96,733 96,733

Siem Offshore rederi AS Kristiansand, norway 100% 129,944 37,010 6,175 642,772 583,396 583,396

Siem Offshore do Brasil SA rio de Janeiro, Brazil 100% 54,707 -17,262 72,124 14,873 68,164 68,164

Siem Offshore uS inc Delaware, uSA 100% - -34 - 5,327 - -

Siem AhtS pool AS Kristiansand, norway 100% 110,619 38 17 96 21 21

DSnD Subsea ltd london, uK 100% - -42 0 -192 18,352 0

Siem Offshore Services AS Kristiansand, norway 100% 5,933 557 18 663 292 292

Siem Offshore management AS Kristiansand, norway 100% 11,712 442 17 922 831 831

Siem Offshore management (uS) inc texas, uSA 100% 522 63 1 126 1 1

Siem Offshore crewing (ci) inc cayman islands 100% 342 290 50 757 50 50

Total value recorded in the statement of financial position of the parent company 807,194 768,863 750,511

the book value in Siem Offshore do Brasil SA is increased with uSD 6.0 million during 2013. the book value of Siem Offshore invest AS is increased with uSD 43.8 during 2013, as a result of converting long term debt into equity. the above companies are owned by the parent. in addition, the subsidiaries own the following companies:

Company Registered office Share and voting rights

consub Delaware llc Delaware, uSA 100%

Aracaju Serviços Auxiliares ltda rio de Janeiro, Brazil 100%

Siem Offshore crewing AS Kristiansand, norway 100%

Siem meling Offshore DA Stavanger, norway 51%

næringsbygg indrettsveien 13 DA fjell, norway 95%

Siem WiS AS Bergen, norway 60%

Siem Offshore maritime personnel AS Kristiansand, norway 100%

Siem Offshore contractors Gmbh leer, Germany 100%

Siem Offshore contractors epS BV Glimmen, the netherlands 100%

Ahmtec Gmbh leer, Germany 100%

Overseas Drilling ltd Groningen, the netherlands 100%

Siem Offshore canada inc halifax, canada 100%

Siem Offshore poland Sp.z.O.O Gdynia, poland 100%

Siem Offshore Australia perth, Australia 100%

note 6 - Investment in Subsidiaries



Company Registered office Ownership and voting share

Revenue Net profit Share capital book equity Cost price book value 12/31/2013

Siem Offshore AS Kristiansand, norway 100% 10,091 358 35 4,924 1,022 1,022

Siem Offshore invest AS Kristiansand, norway 100% 13,107 40,142 898 136,927 96,733 96,733

Siem Offshore rederi AS Kristiansand, norway 100% 129,944 37,010 6,175 642,772 583,396 583,396

Siem Offshore do Brasil SA rio de Janeiro, Brazil 100% 54,707 -17,262 72,124 14,873 68,164 68,164

Siem Offshore uS inc Delaware, uSA 100% - -34 - 5,327 - -

Siem AhtS pool AS Kristiansand, norway 100% 110,619 38 17 96 21 21

DSnD Subsea ltd london, uK 100% - -42 0 -192 18,352 0

Siem Offshore Services AS Kristiansand, norway 100% 5,933 557 18 663 292 292

Siem Offshore management AS Kristiansand, norway 100% 11,712 442 17 922 831 831

Siem Offshore management (uS) inc texas, uSA 100% 522 63 1 126 1 1

Siem Offshore crewing (ci) inc cayman islands 100% 342 290 50 757 50 50

Total value recorded in the statement of financial position of the parent company 807,194 768,863 750,511

note 6 - Investment in Subsidiaries

Anchor handling in fair weather.


figures for associated companies included in the consolidated accounts based on the equity accounting.

December 31, 2013 (Amounts in USD 1,000)

Company name PR Tracer Offshore

ANS

KS big Orange

xvIII

Rovde Ind.park

AS

SentosaOffshore

DIS

Secunda Holdingas

LP

Total

Profit and loss account

The year's net profit after tax 3,264 628 33 165 6,850 10,939

Siem Offshore´s share of net profit 1,349 259 17 8 3,425 5,058

Share of net result not included -2,564 -2,564

Adjustments consolidated accounts -328 - -13 - -111 -451

This year`s share of net profit after tax 1,021 259 4 8 750 2,043

Statement of financial position

Total assets 2,931 2,249 2,441 30,921 70,082 108,623

Equity 3,146 2,247 907 6,779 32,253 45,333

Total liabilities -216 2 1,534 24,142 37,828 63,290

Total equity and liabilities 2,931 2,249 2,441 30,921 70,082 108,623

Siem Offshore's share of booked equity 1,300 929 453 339 16,127 19,148

Added/reduced in the period

change of ownership% or sale

Adjustments ifrS and fair value in excess of book value for vessel and goodwill as of December 31 77 455 203 180 882 1,797

Net book value in Siem Offshore as of December 31 1,378 1 384 656 519 17,009 20,946

Ownership interest 41.33% 41.33% 50% 5.00% 50%

note 7 - Investment in Associated companies



note 7 - Investment in Associated companies


Company name PR Tracer Offshore

ANS

KS big Orange

xvIII

Rovde Ind.park

AS

SentosaOffshore

DIS

Secunda Holdingas

LP

Total

Specification of changes net book value in Siem Offshore's accounts

net book value as of January 1 1,615 1,239 713 655 0 4,222

investment in associated companies -1,113 - - - 15,519 14,406

this year's share of net profit 1,349 259 23 8 861 2,501

Adjustments consolidated accounts -328 0 -12 0 882 542

change of ownership% or sale - - - - - -

Dividends 0 0 0 -90 0 -90

effect of exchange rate differences -145 -114 -68 -54 -253 -635

Net book value as of December 31 1,378 1,384 656 519 17,009 20,946

Of which:

Adjustments ifrS and fair value in excess of book value for vessel and goodwill as of January 1 420 498 234 198 0 1,350

excess value 0 0 0 0 993 993

Adjustment for depreciation ifrS -328 - -12 - -111 -451

Amortisation of fair value in excess of book value for vessels and goodwill - - - - -

effect of exchange rate differences -15 -42 -20 -18 0 -94

Fair value in excess of book value for vessels and goodwill as of December 31 77 455 203 180 882 1,797

Company name Registered office Consolidated as Owner interest

voting rights

Paid in capital

Issued, not paid in

capital

pr tracer Offshore AnS lysaker, norway equity accounting 41.33% 41.33% 1,633 -

KS Big Orange XViii lysaker, norway equity accounting 41.33% 41.33% 8 5

rovde industripark AS Vanylven, norway equity accounting 50.00% 50.00% 222 -

Sentosa Offshore DiS Oslo, norway equity accounting 5.00% 5.00% 7,514 -

Secunda holdings lp halifax, canada equity accounting 50.00% 50.00% 15,519

Total 24,895 5



Company name PR Tracer Offshore ANS

KS big Orange xvIII

Rovde Ind.park AS

SentosaOffshore DIS

Total

Profit and loss account

The year's net profit after tax 2,276 634 -17 4,325 7,217

Siem Offshore´s share of net profit 940 262 -8 216 1,410

Share of net result not included -583 -14 -597

Adjustments consolidated accounts -338 - -13 - -351

This year`s share of net profit after tax 20 262 -35 216 463

booked Equity 2,891 1,793 958 9,152 14,794

Siem Offshore's share of booked equity 1,195 741 479 458 2,872

Added/reduced in the period

Adjustments ifrS and fair value in excess of book value

for vessel and goodwill as of December 31 420 498 234 198 1,349

Net book value in Siem Offshore as of December 31 1,615 1,239 713 655 4,222

Ownership interest 41.33% 41.33% 50% 5.00%

Specification of changes net book value in Siem Offshore's accounts

net book value as of January 1 2,141 897 696 483 4,218

investment in associated companies -759 - - - -759

this year's share of net profit 358 262 -22 216 813

Adjustments consolidated accounts -338 - -13 - -351

Dividends - - - -84 -84

effect of exchange rate differences 213 79 51 40 384

Net book value as of December 31 1,615 1,239 713 655 4,222



Anchor handling in Brazil photo: João paulo Wanderley Vidal, Siem Diamond

Working late nights photo: João paulo Wanderley Vidal, Siem Diamond


CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

The amount recognized in the income statement is as follows:

present value of current years benefit earned 2,688 3,457

interest expense 466 353

expected return on plan assets -378 -388

Administration cost 29 118

Social contribution 314 484

impact of curtailment/settlement -1,232 0

Net periodic pension cost (see Note 19) 1,887 4,024

The development in the defined benefit obligation is as follows:

Beginning of year 12,853 8,389

present value of current years benefits earned 2,688 3,457

interest expense 466 353

Aquisition (disposal) -2,350 -

payroll tax of employer contribution, assets -437 -

Benefits paid -386 -338

remeasurements loss/(gain) 840

exchange differences -763 992

End of year 12,911 12,853

The development in the fair value of plan assets is as follows:

Beginning of year 12,251 7,706

expected return on plan assets 378 388

Acquisition (disposal) -3,933 -

Administration cost - -118

employer contribution 3,536 2,703

payroll tax of employer contribution, assets -437 -

Benefits paid -297 -251

remeasurements loss/(gain) -423 1,233

exchange differences -942 590

End of year 10,133 12,251


note 8 - pension costs and Obligations


CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

present value of defined obligation 12,911 12,853

fair value of plan assets -10,133 -9,954

Present value of funded obligations 2,778 602

present value of unfunded obligations - 140

Liability in the statement of financial position 2,778 742

Financial assumptions:

Discount rate 4.00% 2.60%

expected return on funds 4.00% 4.10%

expected wage adjustment 3.75% 3.50%

Adjustm. of the basic national insur. amount 3.50% 3.25%

expected pension increase 0.60% 0.10%

note 8 - pension costs and Obligations


uSD 32,297 of the company’s cash balance was restricted funds of which uSD 2,300 was for tax withholdings and uSD 29,997 represented security for bank guarantees and loans.


12/31/2013 12/31/2012 (Amounts in USD 1,000) 12/31/2013 12/31/2012

LONG-TERm RECEIvAbLES

5,354 5,813 employee loans, see note 19 5,683 6,172

41,740 84,229 intercompany receivables - -

- - Other long term receivables 956 938

47,094 90,043 Total long-term receivables 6,639 7,111

OTHER SHORT-TERm RECEIvAbLES

2 241 prepaid expenses 9,253 7,242

- - unbilled revenue 11,719 16,311

- - Outstanding insurance claims (1) 4,898 2,745

- - prepaid income taxes and other taxes 4,264 5,724

107 - VAt 84 1,081

5,098 3,789 intercompany receivables - -

- - Other short-term receivables 2,519 5,358

5,207 4,030 Total other short-term receivables 32,737 38,461

(1) Outstanding insurance claims refer to breakdown expenses qualifying for insurance cover. the amount is less own deduction.


note 9 - Receivables

note 10 - Restricted cash


CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

Temporary differences

Deferred tax Time frame

participation in limited liability companies long - -

Operating assets long -39,922 23

Special tax account long - -

pension funds/obligations long -2,778 -532

Other short-term differences Short - -

Other long-term differences long -3,745 -

Net temporary differences as of December 31 -46,447 -510

tax loss carried forward -21,851 -21,832

basis for deferred tax (tax asset) -68,298 -22,342

Deferred tax (tax asset) norway -1,758 -6,256

Deferred tax (tax asset) holland -3,994

Deferred tax (tax asset) Germany -6,019 -

Deferred tax (tax asset) -11,770 -6,256

Deferred tax asset recognized in statement of financial position as of December 31 -11,770 -6,256

there are no tax assets in the parent company.Deferred tax assets are recognized as intangible assets as it is probable through prospective earnings that it can be utilized.

the company is subject to taxes in several jurisdictions, where significant judgment is required in calculating the tax provision for the com-pany. there are several transactions for which the ultimate tax cost is uncertain and for which the company makes provisions based on an as-sessment of internal estimates, tax treaties and tax regulations in countries of operation, and appropriate external advice. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such difference will impact the tax charge in the period in which the outcome is determined.

note 11 - Taxes


Total tax consolidated 12/31/2013

(Amounts in USD 1,000)Tonnage tax

regimeOther tax

regimeTotal tax

liabilities

long term tax liabilities falling due after 1 year - 6,679 6,679

payable taxes falling due within 1 year 39 3,721 3,759

Tax liabilities 39 10,400 10,439

Tax expense 2013

(Amounts in USD 1,000)Tonnage

tax regimeOther tax

regimeTotal tax expense

taxes payable 39 3,364 3,403

change in deferred tax/deferred tax asset - -5,650 -5,650

Over/under provisions in previous year - -1,337 -1,337

Total 39 -3,624 -3,585

Total tax consolidated 12/31/2012


tax regimeOther tax

regimeTotal tax

liabilities

long term tax liabilities falling due after 1 year - 6,799 6,799

payable taxes falling due within 1 year 964 7,892 8,856

Tax liabilities 964 14,691 15,655

Tax expense 2012


tax regimeOther tax

regimeTotal tax expense

taxes payable 32 4,678 4,710

change in deferred tax/deferred tax asset - -365 -365

Over/under provisions in previous year - -329 -329

Total 32 3,984 4,016

2013 2012

tonnage tax regime in subsidiaries, as of January 1 964 1,760

tax charge 39 32

paid -949 -933

effect of exchange rate differences -15 104

Total tonnage tax in subsidiaries, as of December 31 39 964


Overprovision in previous year relates to activity on Greenland for the subsidiary Overseas Drilling limited.Actual tax liability was decreased compared to budget taking into consideration local tax legislation.


Total tax parent company 12/31/2013 12/31/2012

(Amounts in USD 1,000)Other tax

regimeOther tax

regime

long term tax liabilities falling due after 1 year 4,885 4,885

payable taxes falling due within 1 year -673 1,552

Tax liabilities 4,212 6,437

Tax expense 2013 2012

taxes payable 261 114

Total 261 114

happy team on deck, Siem Opal


PARENT COmPANy (Amounts in USD 1,000) December 31, 2013 CONSOLIDATED

(uSD) Currency Committed Facility amount

Draw amount

currency

Drawn amount

uSD

Fair value Interest rate Duration Instalments

- uSD 90,437 90,437 90,437 90,437 floating 2017 Quarterly

- uSD 72,124 72,124 72,124 77,797 fixed and floating 2021 Semi annually

- nOK 1 609,207 - 264,511 264,511 floating 2015 Semi annually

- nOK 296,402 - 48,721 48,721 floating 2022 Quarterly

- uSD 21,000 21,000 21,000 21,000 floating 2019 Semi annually

- uSD 23,162 18,173 18,173 16,925 fixed 2027 monthly



- nOK 625,746 625,746 102,856 104,340 fixed and floating 2022 Semi annually

- nOK 5,250 5,250 863 928 fixed 2017 Quarterly

98,624 nOK 600,000 600,000 98,624 98,624 floating 2018 Bullet

- nOK 1,657,771 889,050 146,136 144,868 fixed 2018 Semi annually

- nOK 240,000 - - - fixed or floating 2019 Semi annually

98,624 Total secured debt 968,868 970,585

- fees and expenses -7,368 -7,368

98,624 Total 961,500 963,217

41,718 (cirr loan) nOK 253,800 253,800 41,718 42,580 fixed 2019 Semi annually

140,342 Total long-term debt including fees and expenses 1,003,218 1,005,797

2013

(1)

(1) under the uSD 72.1 million facility, part of the loan (uSD 34.9 million) is fixed for a 8-year term to average interest rate of 7.58%. under the nOK 625.7millon facility, part of the loan (equivalent to uSD 34.2 million) is fixed for an approximately 10-year term to average interest rate of 5.36%.

the company has a portfolio of bank loans secured with mortgage in vessels. the creditor and guarantors are in general first class commercial banks and state owned financial institutions with ratings on or above BBB+ and AAA. As of year end, the company had issued one high yield unsecured bond of nOK 600 million which is listed on Oslo Stock exchange. the bond has no amortization and matures in 2018.


note 12 - Borrowings

(1)



(uSD) Currency Committed Facility amount

Draw amount

currency

Drawn amount

uSD











- nOK 5,250 5,250 863 928 fixed 2017 Quarterly

98,624 nOK 600,000 600,000 98,624 98,624 floating 2018 Bullet

- nOK 1,657,771 889,050 146,136 144,868 fixed 2018 Semi annually

- nOK 240,000 - - - fixed or floating 2019 Semi annually

98,624 Total secured debt 968,868 970,585


98,624 Total 961,500 963,217


140,342 Total long-term debt including fees and expenses 1,003,218 1,005,797

note 12 - Borrowings


(1) under the uSD 81.5 million facility, part of the loan (uSD 39.5 million) is fixed for a 9-year term to average interest rate of 7.58%. under the nOK 688.2 millon facility, part of the loan (equivalent to uSD 41.3 million) is fixed for an approximately 11-year term to average interest rate of 5.36%.



(uSD) Currency Committed Facility

amount

Drawn amount

currency

Drawn amount

uSD






- GBp 6,010 6,010 9,713 9,713 floating 2013 Semi annually





- nOK 6,750 6,750 1,213 1,319 fixed 2017 Quarterly

- Brl 2,566

- Total secured debt 802,751 813,565


- Total 796,986 807,800


53,194 Total long-term debt including fees and expenses 850,180 862,322

2012

(1)

(1)

coffee break and discussions at Kristiansand Office, norwayphoto: Jan petter lehne



(uSD) Currency Committed Facility

amount

Drawn amount

currency

Drawn amount

uSD






- GBp 6,010 6,010 9,713 9,713 floating 2013 Semi annually





- nOK 6,750 6,750 1,213 1,319 fixed 2017 Quarterly

- Brl 2,566

- Total secured debt 802,751 813,565


- Total 796,986 807,800


53,194 Total long-term debt including fees and expenses 850,180 862,322


CIRR loan (both consolidated and parent company) 12/31/2013 12/31/2012

total cirr loan commitment 41,718 53,194

cirr loan drawn on 31.12 41,718 53,194

Commitment as of December 31 - -

prior to ordering vessels from norwegian yards, the company applied for fixed 12-year interest rate options related to the long-term financing of such vessels. the company was granted such options for each of the relevant vessel by the

norwegian export credit Agency. the company made certain sale of the right to exercise such options to a first class international bank (the “Bank”). long-term loans drawn from the norwegian export credit Agency are placed as

corresponding deposits in the Bank as financial security for the loans drawn. recognition of the gain, related to each option, is recorded over the term of any drawn loans.

the book value of mortgaged assets consist of non-current tangible assets and portion of the accounts receivables and amounts to uSD 1,446 million at year end.

there are various financial covenants related to the company’s debt agreements. the main prevailing covenants are:- equity ratio to total assets in excess of 30%- positive working capital- certain amount of freely available cash and bank deposit balance

the company and parent company are in compliance with the financial covenants as per December 31, 2013.

unearned CIRR 2013 2012

Beginning of the year 2,523 2,891

recognized in the profit and loss account -368 -368

paid-back cirr - -

Net unearned CIRR as of December 31 2,155 2,523


USD

Instalments per December 31, 2013 falling due over the next 5 years

mortgagedebt

Other interest bearing debt Total

- 2014 100,755 - 100,755

- 2015 291,145 - 291,145

- 2016 57,027 - 57,027

- 2017 102,122 - 102,122

- 2018 149,900 98,624 248,524

- thereafter 169,294 - 169,294

- Total 870,243 98,624 968,868




12/31/2013 12/31/2012 (Amounts in USD 1,000) 12/31/2013 12/31/2012

- - Social security etc. 5,428 6,439

- - unearned income 3,517 12,510

1,111 - Accrued interest 11,780 7,498

201 156 Other accrued cost, mainly regarding operating expenses vessels 5,133 8,241

6,858 8,100 Other current liabilities 18,203 16,195

8,170 8,256 Total other current liabilities 44,061 50,882

the company’s largest shareholder is Siem industries inc, with a holding of 34.39%, and is defined as a related party. the company is obligated to the main shareholder, Siem industries inc., for a fee of uSD 300 for 2013. this fee is the remuneration for the services of the two of the Board members. this fee also covers office in the cayman islands and administrative costs.

Details related to transactions, loans and remuneration to the executive management and the board of directors are set out in note 19. for parent, all subsidiaries in note 6 are also defined as related parties.

for other related parties, the following transactions were carried out:

Above service is provided to companies in which a Board member has an interest. Kristian Siem is the chairman of Siem industries inc., which is controlled by a trust whose potential beneficiaries include members of Kristian Siem’s immediate family. Siem industries holds an interest in Subsea 7. Both Siem Offshore rederi AS, and Siem Offshore Services AS, all 100% owned by the company, have charted vessels to Subsea 7 during 2013.

Other accrued cost includes accrued commission, purchase orders and other accrued cost. Other current liabilities includes accrued salaries and incentive program, provision for operating expenses and other short term liabilities.

CONSOLIDATED

Sales of services 2013 2012

(Amounts in USD 1,000)

Service to entity where director has ownership 2 796 20,290

Total 2 796 20,290

note 13 - Other current liabilities

note 14 - Related party Transactions


Service delivered from related parties is mainly cost for technical management, corporate management and delivered crew. the service is supported to Siem meling Offshore DA, 51% owned by the company, and is delivered by its partner in Siem meling Offshore DA.

Loans to related parties: CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

Loan to associates

At January 1 436 497

Drawings - -

instalments -94 -96

interest charged 11 16

interest received -11 -16

exchange rate variations -34 34

At December 31 308 436


CONSOLIDATED

Purchase of service 2013 2012


Service from related parties 14,098 14,501

Total 14,098 14,501

balance items following purchase and sale of service: CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

Accounts receivables 49 465

Accounts payable 2 9

in Q1 the vessel Seven Sisters was sold to related comapny Subsea 7.

CONSOLIDATED

Sale of vessel 2013 2012


Sale of vessel 84 200 -

Total 84 200 -


the company holds a long-term loan to rovde industripark AS. Siem Offshore invest AS owns 50% of rovde industripark AS.

Siem meling Offshore DA held uSD 7,057 as a long term-liability from its partner in Siem meling Offshore DA at 31 December 2013. the borrowing facility was on market terms of interest.

Service from subsidiaries consists of administrative and corporate services provided by Siem Offshore AS, Siem Offshore management AS and hire of vessels. the parent company hired the vessel “Siem Sasha”, on bareboat from Siem Offshore rederi AS. the costs of hiring the vessel was uSD 1,462. the vessel was on hire until September 2013. Services provided from associates are related to cost for hired crew. the services are delivered by companies owned by subsidiaries of the company. All terms used for above transactions are at arms’ length.

year-end balances arising from sales and purchases: PARENT COmPANy

(Amounts in USD 1,000) 2013 2012

receivables from related parties

Subsidiaries 1,714 128

Associates 708 1,117

Total 2,422 1,245

payables from related parties

Subsidiaries 8,948 6,384

Associates - 464

Total 6,848 6,848

following transactions with related parties were carried out for the parent company:

Liability to related parties: CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

Liability to related parties

At January 1 7,506 6,756

Drawings - -

instalments - -

interest expenses 315 348

interest paid -119 -124


At December 31 7,057 7,506

PARENT COmPANy

(Amounts in USD 1,000) 2013 2012

Service from subsidiaries 10,075 12,823

Service from associates 1,650 5,644

Total 11,725 18,467


the loan to subsidiaries is held against Siem Offshore do Brasil SA on 31 December 2013. the loan against Siem Offshore invest was converted into shares in the subsidiary at november 2013.

loan provided to associates is held against Siem Offshore contractors Gmbh, a company owned 100% by the subsidiary Siem Offshore invest AS.

All loans are on market terms of interest.

Loans to related parties: PARENT COmPANy

(Amounts in USD 1,000) 2013 2012

Loan to subsidiaries

At January 1 67,177 70,638

Drawings - -

converted to shares -45,353 -

instalments - -6,100

interest charged 2,076 2,442

interest received - -


At December 31 23,637 67,177

Loan to sub-subsidiaries

At January 1 17,052 16,434

Drawings - -

converted to shares - -

instalments - -328

interest charged 272 631


exchange rate variations 780 315

At December 31 18,104 17,052

Total loans to related parties

At January 1 84,229 87,073

Drawings - -

converted to shares -45,353 -

instalments - -6,429

interest charged 2,348 3,073


exchange rate variations 517 513

At December 31 41,740 84,229




12/31/2013 12/31/2012 (Amounts in USD 1,000) 12/31/2013 12/31/2012

- - currency options -6,810 28

- - interest rate swaps -4,275 -12,367

- - forward currency contracts - 5,829

- - Total derivative financial instruments -11,085 -6,510

unrealized gain/(loss) appears as current assets/(current liabilities) in the Statement of financial position. for further information regarding profit and loss effect on derivative financial instruments, please see note 28.

Forward currency contracts:the nominal principal amount of the outstanding forward currency contracts on 31 December 2013 were uSD 153.5 million (2012: 30.2 million) of which uSD 113.7 million refers to uSD/nOK contracts, uSD 28.2 million refers to eur/nOK contracts and uSD 1.0 million refers to GBp/nOK contracts. the forward currency contracts have been entered into in order to hedge future cash flows, including committments related to vessels under construction.

note 15 - Derivative Financial Instruments – Assets (liabilities)

Currency options:currency options have been entered into in order to hedge operational currency exposure.these options are typically path-dependent options which include features related to situations where the underlying reaches or fluctuates within specific barrier levels. this enables the company to hedge a range in the underlying currency rather than simply a level.

Interest rate swaps:the nominal amounts of the outstanding interest rate swaps contracts on 31 December 2013 were uSD 288.4 million (2012: uSD 292.2 million).

On 31 December 2013, the fixed rates entered into varied from 1.13% to 2.69%. the floating rate leg of the interest rate swaps are liBOr and niBOr. Gains and losses are recognised over the profit and loss.

unrealized gain/(loss) appears as current assets/(current liabilities) in the Statements of financial position. for further information regarding profit and loss effect on derivative financial instruments, please see note 28.


capital expenditures contracted for at the reporting date but not yet paid is as follows:

contractual guarantees to Brazilian navy are issued by Siem Offshore do Brasil SA.contractual guarantees provided by parent are security for one of the contracting parties of Siem Offshore contractors Gmbh.


note 16 - Guarantees


12/31/2013 12/31/2012 (Amounts in USD 1,000) 12/31/2013 12/31/2012

- - contractual guarantees to Brazilian navy 4,304 5,508

120,291 41,542 contractual guarantees other 150,014 45,881

120,291 41,542 Total guarantees 154,317 51,390

note 17 - commitments


12/31/2013 12/31/2012 (Amounts in USD 1,000) 12/31/2013 12/31/2012

- - Shipbuilding contracts with variation orders 828,680 720,133

- - instalments paid 127,711 108,430

- - unpaid instalments 700,969 611,702

PARENT COmPANy Instalments falling due over the next 3 years CONSOLIDATED

12/31/2013 12/31/2012 (Amounts in USD 1,000) 12/31/2013 12/31/2012

2014 394,496 273,864

- - 2015 220,117 337,838

2016 86,356

- - Total 700,969 611,702


CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

Personnel expenses (1)

Salaries and wages 91,362 92,139

Government grants - net wages arrangement in norway -5,762 -7,994

payroll tax 13,614 18,335

pension costs, see note 8 1,887 4,024

Other benefit 2,929 4,286

Total personnel expenses 104,030 110,790

(1) personnel expenses includes vessel crew expenses and part of general and administrative expenses, see note 18.

Government grants is a special norwegian seaman payroll and tax refund given to norwegian shipping companies.

the average number of employees in the company was 1 102 for 2013, including onshore and offshore employees.no employees are employed in the parent company.

note 18 - Operating expenses


2013 2012 (Amounts in USD 1,000) 2013 2012

1,675 5,961 Vessel crew expenses 113,945 137,128

7,007 8,752 Other vessel operating expenses 76,646 73,670

10,091 10,416 General and administration 50,701 46,817

18,774 25,128 Total operating expenses 241,291 257,615

note 19 - Salaries and Wages, number of employees


Payroll registered to the executive management: (Amounts in uSD 1,000) 2013 2012

Salary and other short term compensation 2,193 2,449

Total 2,193 2,449

employees included in the above payroll in 2013 were 5 (2012: 6).

Shares in the company held by members of corporate management in 2013 were 2,608,161 (2012: 2,568,161).

in the first quarter of 2013, the Board of Directors of Siem Offshore inc. has authorized the award of 14.000.000 Stock Options to eight key employees of the company. the exercise price is nOK 8.45 per share. See note 31 for more information.

Loan to executive management: (Amounts in uSD 1,000) 2013 2012

Balance January 1 4,723 4,350

changes in executive management - -

new loan raised 35 40

instalments - -

effect of currency differences -402 333

balance December 31 4,356 4,723

Loan on December 31, 2013:

(Amounts in USD 1,000) Amount interest terms

loan to executive management 4,356 - Share loan (1).

Total 4,356

Loan on December 31, 2012:

(Amounts in USD 1,000) Amount interest terms

loan to executive management 4,723 - Share loan (1).

Total 4,723


(1) Share loan: the loans are repayable by the employee when the employee’s shares in the company are realized or if the employee leaves the company. loans equivalent to uSD 4 million are secured by pledges in relevant shares.

the remuneration paid to the Board of Directors in 2013 was uSD 437K (2012: uSD 483K).

Auditor’s remuneration


2013 2012 (Amounts in USD 1,000) 2013 2012

103 79 Audit fee 579 471

51 20 Audit fee Other 139 129

- - tax/legal Assistance 127 55

- - Other consultants, fees 28 123

155 100 Total auditor’s remuneration 873 778


As of 31 December 2013, the company had some commitments relating to lease agreements which fall due as follows.

PARENT COmPANy Fall due CONSOLIDATED

- 2014 2,321

- 2015 1,449

- 2016 and thereafter 2,485

- Total 6,255

net present value of future commitments relating to lease agreements are calculated to be uSD 5,656 for the company.there are no lease agreement for the parent. the discount rate in the calculation of net present value is 5%.

the company has entered into different operating leases for office premises, office machines, and communication satellite equipment for the vessels. the leases also include a substitute vessel on a time charter party. the lease period for the lease agreements varies and most of the leases contain an option for extension.

the operating leases in the parent for 2013 are related to charter of vessels and satellite equipment. One of the chartered vessels, “Siem Sasha” has been chartered on bareboat agreements from the subsidiary Siem Offshore rederi AS. the contract was finished September 2013. the lease costs were as follows:


2013 2012 (Amounts in USD 1,000) 2013 2012

5,883 5,783 Annual lease payment on operational leases 8,763 5,261

note 20 - Operating leases as lessee


Option program to executive management, see note 19 and 31.

(Amounts in USD 1,000) 2013 2012

Earnings per share

Weighted average number of shares outstanding 389,078 395,665

Weighted average number of shares diluted 389,144 395 665

result attributable to shareholders 22,000 16,576

Earnings per share attributable to equity shareholders 0.06 0.04

Earnings per share diluted attributable to equity shareholders 0.06 0,04


2013 2012 (Amounts in USD 1,000) 2013 2012

Financial income

5,770 8,676 interest income 5,360 4,106

- 52 Gain intercompany closure - -

39 23 Other financial income 74 54

5,809 8,752 Total financial income 5,434 4,161

Financial expenses

-6,976 -1,430 interest expenses -32,823 -40,366

-828 -26 Other financial expenses -3,309 -1,936

-7,804 -1,456 Total financial expenses -36,132 -42,302

Other financial items

1,219 1,283 net currency gain/(loss) -22,651 2,916

1,219 1,283 Total other financial items -22,651 2,916

-777 8,579 Net financial items -53,349 -35,225

net currency gain/(loss) includes an unrealized loss of uSD 17,180 calculated on monetary items, and a realized loss of uSD 3,417 related to intercompany transactions.

the net currency gain/(loss) for the parent of uSD 1,219 includes an intercompany currency gain of uSD 0,082.


note 21 - Financial Items

note 22 - earnings per Share


contracts in progress refer to activity within the combat management Systems (cmS) and cable installation Segment, see note 4.

At year-end 2013, the activity within cmS had six projects in progress. the degree of completion varies from 32% to 100%. margin are calculated and included for all six projects. the activity within cable installation segment included three projects in progress at year-end 2013. these projects are in an early phase, and no margin is calculated on these projects for 2013. All projects in progress at year-end 2013 are estimated to generate a positive contribution over the total project period. there are no contracts in progress in the parent.

CONSOLIDATED

(Amounts in USD 1,000) Recognized 2013Accumulated per

12/31/2013

revenue 33,923 43,417

cost 32,564 39,452

Total 1,360 3,966

Assets / liabilities December 31, 2013

unearned revenue Accrued project cost unbilled revenue

revenue 8,608 - 2,473

cost 293 -

Total 293 2,473

(Amounts in USD 1,000) Recognized 2012Accumulated per

12/31/2012

revenue 9,494 26,767

cost 7,272 19,927

Total 2,222 6,840

Assets / liabilities December 31, 2012

unearned revenue Accrued project cost unbilled revenue

revenue 829 - 1,550

cost 1,439 -

Total 829 1,439 1,550

note 23 - contracts in progress


CONSOLIDATED

(Amounts in USD 1,000) 2013 2012

purchase cost per January 1 - -

moved from fixed asset 18,121 53,604

capital expenditure - -

the year's disposal at cost - -

effect of exchange rate differences - -

Purchase cost per December 31 18,121 53,604


2013 2012 (Amounts in USD 1,000) 2013 2012

- 12 Gain/(loss) on sale of assets, net 29,827 13,692

- - Gain/(loss) on sale of assets intercompany - -

- 12 Total 29,827 13,692

Booked value for the vessel “Siddis Skipper” was transferred from fixed assets to asset held for sale in December 2013.the vessel was sold on January 8, 2014.

there is no asset held for sale in the parent company.

the net gain for the company on sale of assets of uSD 29.8 million consist of gain from sale of the mrSV “Seven Sisters”, uSD 28.2 mil-lion, gain of sale of one of the old, smaller vessels in Brazil, 1.6 million, and a gain of uSD 0.03 million for other assets.


note 25 - Other Gain/(loss) on Sale of Assets

note 24 - Asset Held for Sale


the parent company has purchased 6,333,456 of its own shares through 31 December 2013. the purchased shares, under the cayman islands rules, cannot be reissued and will therefore be cancelled according to the share buy-back programme announced by the company on 4 September 2012. the purchased shares at year-end are included in the table above in the line for “Other shareholders”.

Siem industries inc. is the main shareholder of Siem Offshore inc. and is controlled by a trust whose potential beneficiaries include members of Kristian Siem’s immediate family. Kristian Siem, who is Director of the company, is also the chairman of Siem industries inc.

terje Sørensen is ceO of the company and held 1,950,000 shares on December 31, 2013.

SHAREHOLDER NumbER OF SHARES OWNER INTEREST

Siem inDuStrieS inc. 133,279,421 34.23%

Ace crOWn internAtiOnAl limiteD 76,780,808 19.72%

SKAGen KOn-tiKi 10,977,629 2.82%

fOnDSfinAnS SpAr 10,775,000 2.77%

mp penSJOn pK 9,816,313 2.52%

SKAGen VeKSt 8,036,317 2.06%

WAtermAn hOlDinG ltD 7,457,722 1.92%

VArmA mutuAl penSiOn inSurAnce 6,547,320 1.68%

nOrDeA BAnK nOrGe ASA mArKetS 5,063,985 1.30%

DAnSKe inVeSt nOrSKe inStit. ii. 4,915,671 1.26%

OJADA AS 4,213,000 1.08%

Jp mOrGAn cleArinG cOrp. 4,071,497 1.05%

BArclAyS cApitAl inc. 3,717,644 0.95%

DAnSKe inVeSt nOrSKe AKSJer inSt 3,559,700 0.91%

AltA inVeSt SA 3,123,151 0.80%

hOlBerG nOrGe 3,043,775 0.78%

pumpØS AS 3,017,574 0.77%

VerDipApirfOnDet DnB SmB 3,000,000 0.77%

rOVDefrAKt AS 2,750,000 0.71%

BerGen KOmmunAle penSJOnSKASSe 2,497,300 0.64%

Total 20 largest shareholders 306,643,827 78.75%

Other shareholders 80,947,553 21.25%

Total number of outstanding shares 387,591,380 100%

note 26 - listing of the 20 largest Shareholders as of December 31, 2013


Placement of new unsecured bond issueplacement of new unsecured bond issue A new unsecured bond issue of nOK 700 million was completed in march 2014. the maturity will be in 2019. An application will be made for the bonds to be listed on the Oslo Stock exchange. net proceeds from the new bond issue will be used to finance general corporate purposes.

Charter contracts for two Well-Intervention vessels Ordered two well-intervention vessels scheduled for delivery in first and third quarter 2016. the two vessels shall be built at the flensburger shipyard in Germany. Both vessels shall be chartered to helix energy Solutions Group. inc

further details related to the currency exchange forward contracts are set out in note 15.


2013 2012 (Amounts in USD 1,000) 2013 2012

- - unrealized gain/(loss) -12,200 6,864

- - realized gain/(loss) 4,444 5,614

- - Total -7,756 12,479


note 27 – Subsequent events

note 28 - Gain/(loss) on currency exchange Forward contracts

(“helix”). for a firm period of 7 years with options that can extend the charter period up to 22 years. helix has entered into agreements with petróleo Brasileiro S.A. (“petrobras”) to provide well-intervention services offshore Brazil for an initial period of 4 years with options to extend. the first vessel is expected to be in service for petrobras by mid-2016, with the second vessel to follow later the same year.

Sale of PSv “Siddis Skipper”the vessel “Siddis Skipper”, owned by Siem meling Offshore DA, was sold to an undisclosed buyer on January 15, 2014 at a price of uSD 24.5 million. A gain of approximately uSD 11 million million will be recorded in 1Q 2014. the

sales proceeds was partly allocated to repayment of mortgage debt of approximately uSD 13.5 million. Siem meling Offshore DA is 51% owned by Siem Offshore inc.

Charter contract for “Siem Atlas”the company and petrobras entered into a charter agreement for the platform Supply Vessel (“pSV”) “Siem Atlas”. the charter period commenced in 1Q 2014 and is for a firm period of two years. petrobras has an option to extend the charter for two additional years, upon terms to be mutually agreed.

the gross contract value for the firm period is approximately uSD 26 million.


Below is a comparison by category for carrying amounts and fair values of all of the company’s financial instruments.

CONSOLIDATED


December 31, 2013Loans and

receivables

Assets at fairvalue through the

profit and lossAvailable

for sale Total

Assets as per statement of financial position

trade and other instruments (1) 120,775 - - 120,775

cash and cash equivalents 101,206 - - 101,206

Total 221,981 - - 221,981

(1) prepayments do not qualify as a financial instrument and are not included in above amount. excluded prepayments amount to uSD 13,517, see note 9.

CONSOLIDATED



receivables

Assets at fair value through the


for sale Total


financial assets held for sale - - - -

Derivative financial instruments - 5,829 - 5,829



Total 237,089 5,829 - 242,918

CONSOLIDATED


December 31, 2013

Liabilities at fair value through the

profit and loss

Other financial

liabilities Total

Liabilities as per statement of financial position

Bank debts, bonds, loans and other payables (1) - 1,076,930 1,076,930

Derivative financial instruments 11,085 - 11,085

Total 11,085 1,076,930 1,088,015

(1) non-financial liabilities do not qualify as a financial instrument and are not included in above amount. excluded liabilities amount to uSD 22.161 consisting of uSD 10.438 in taxes payable, uSD 2.778 in pension liability, uSD 5.428 in Social Security payable and uSD 3.517 in unearned income. See note 13 for information about Social Security payable and unearned income.

(1) prepayments do not qualify as a financial instrument and are not included in above amount. excluded prepayments amount to uSD 12,966, see note 9.

note 29 - Financial Instrument by category


(1) prepayments do not qualify as a financial instrument and are not included in above amount. excluded prepayments amount to uSD 1.872, see note 9.

(1) non-financial liabilities do not qualify as a financial instrument and are not included in above amount. excluded liabilities amount to uSD 6,439, see note 13.


CONSOLIDATED


December 31, 2012

Liabilities at fair value through the profit and loss

Other financial

liabilities Total


Bank debts, bonds, loans and other payables (1) - 914,992 914,992

Derivative financial instruments 12,339 - 12,339

Total 12,339 914,992 927,331

PARENT COmPANy



receivables



for sale Total


Derivative financial instruments - - - -



Total 229,531 - - 229,531

PARENT COmPANy


December 31, 2013


profit and loss

Other financial

liabilities Total


Bank debts, bonds, loans and other payables - 140,739 140,739

Derivative financial instruments - - -

Total - 140,739 140,739



2013 2012 (Amounts in USD 1,000) 2013 2012

-4,845 -3,725 net profit/(loss) 21,544 14,676

6,976 1,430 interest expenses 36,607 32,673

-2,640 -3,055 intercompany interest - -

-3,119 -755 interest income -5,360 -4,106

261 114 tax expense -3,585 4,949

-3,367 -5,990 Profit before taxes, excluding interest 49,205 48,191

reconciliation of net profit for the financial year to profit/(loss) before taxes, excluding interest.

(1) prepayments do not qualify as a financial instrument and are not included in above amount. excluded prepayments amount to uSD 241, see note 9.

PARENT COmPANy



receivables



for sale Total


Derivative financial instruments - - - -



Total 211,035 - - 211,035

PARENT COmPANy


December 31, 2012


profit and loss

Other financial

liabilities Total


Bank debts, bonds, loans and other payables - 62,081 62,081

Derivative financial instruments - - -

Total - 62,081 62,081

note 30 – profit Before Taxes, excluding Interests


note 31 – Share-based payments

On the 13 january 2013, the company entered into a Share option agreement with selected employees. the Board of Directors of Siem Offshore inc. has authorized the award of 14.000.000 share options to eight key employees of the company. the exercise price is nOK 8.45 per share. the exercise price of the granted options is equal to the market price of the shares on the date of the grant. the Options can be exercised as follows: 2014:20% of the total number beginning on January 18th 2014.

2015:40% of the total number beginning on January 18th 2015, less any options previously issued.



2018:100% of the total number beginning on June 18th 2018, less any options previously issued.

the exercise period shall in no event be later than the date falling 10 years after the award date.

the group has no legal or constructive obligation to repurchase or settle the options in cash. no options were exercised during 2013. the weighted average fair value of options granted during the period determined using the Black-Scholes valuation model was nOK 3.72 per option.

the significant inputs into the model were weighted average share price of nOK 8.45 at the grant date, exercise price of nOK 8.45, volatility of 23%, dividend yield of 0%, an expected option life of 10 years and an annual risk-free interest rate of 4.13%.

the volatility measured at the standard deviation of continuously compounded share returns is based on statistical analysis of daily share prices over the last three years. See note 19 for the total expense recognised in the income statement for share options granted to certain employees.

Value of employee services as per December 31, 2013 are recognized under retained earnings at uSD 3,125.



Siem AhtS sisters working back-to-back


cOrpOrAte SOciAl reSpOnSiBility

Statement on Social Responsibility As a company incorporated in the Cay-man Islands, Siem Offshore Inc. (“The Company”) is an exempted company duly incorporated under the laws of the Cayman Islands and subject to Cayman Island laws and regulations with respect to corporate governance. Cayman Islands corporate law is to a great extent based on English Law. In addition, due to The Company being a Norwegian Tax Resident, the Norwegian Accounting law applies to The Company. According to the Norwegian Accounting Act $3-3c The Company should provide a statement on social responsibility. The statement should include which actions are taken by The Company to integrate human rights, employee’s rights and social conditions, external environment and the fight against corruption in its business strategies, daily operations and in relation to its interested parties. The Board of Directors has reviewed this

statement. It is the opinion of the Board of Directors that The Company complies with regulations in the Norwegian Accounting law with respect to Social Responsibility reporting.

Code of ConductThe Company has established a Code of Conduct policy expressing its non-tolerance on corruption as well as dealing with ethical principles of the Company. The Company is fully committed to perform its business with integrity and transparency throughout its global operations. As stated in the Code of Conduct Policy it is the poli-cy of the Company to conduct its business in accordance with all applicable laws and regulations and in an ethically responsible manner.

Protection of health, safety and the prevention of pollution to the environment are primary goals of The Company. All of our employees and representatives must conduct their duties and responsibilities

in compliance with The Company’s policy on Health, Safety and Environment, appli-cable law and industry standards relating to health and safety in the workplace and prevention of pollution to the environment.

The Company has implemented policies and control procedures to ensure that only proper transactions are entered into by The Company, that such transactions have proper management approval, that such transactions are properly accounted for in the books and records of The Company, and the reports and financial statements of The Company are prepared in a timely manner, understandable and fully, fairly and accurately reflect such transactions.

The Company observes fair employ-ment practices in every aspect of its busi-ness.

The Company conducts its business with honesty and integrity and competes fairly and ethically within the framework of the law. The Company has entered into agreements with well-known subcontrac-

happy Jaynii football team, Accra, Ghanaphoto: ellen Berchelmann


tors for the delivery of technical manage-ment and crew management services to some of the Company’s vessels. The Company has also entered into shipbuild-ing contracts with high standard shipbuild-ing yards in Norway, Poland and Germany. These subcontractors are subject to review on an ongoing basis. The Company expects that all of its business partners have the same approach to business dealing.

Improper paymentsThe Code of Conduct does also include policies on improper payments. The Com-pany does not tolerate any actions / pay-ments which could be viewed as improper payments.

No gift, hospitality or travel benefit may be offered to or requested or accepted from any third party if that benefit could be seen to be disproportionately generous or otherwise be seen as something which may induce or make the recipient feel obliged to reciprocate by way of improperly performing his or her function.

The Company and its directors, officers and employees will not accept any gift, hospitality or travel benefit either di-rectly or indirectly from business partners, against making commitment, recommend-ing or promoting a certain conduct or posi-tion by The Company or otherwise seek to gain personal benefit in relation to The Company’s business dealings.

Likewise, the Company does not itself offer inducements to anyone associated with business partners to promote a cer-tain conduct or position by such business partner.

The Company and any of its people shall not pay money or provide gifts, enter-tainment, hospitality or any other thing or service of value to any Government Official. This prohibition extends to payments to consultants, agents or other intermediar-ies when the payer knows or has reason to believe that some part of the payment will

be used to bribe or otherwise influence a public official. Political contributions are not authorized.

Corporate Social Responsibility The Company respects and promotes harmonious working relationship with the local communities where it operates, but refrains from participating in local politics. The Company seeks to foster a sustain-able business for its many stakeholders. The Company is fully committed to comply with local laws and regulations throughout its global operations.

The Company is committed to employ local staff where applicable and possible in all countries where it is operating and conducting business. The Company is committed to providing equal opportunity and fair treatment to all individuals on the basis of merit, without discrimination on the grounds of race, colour, religion, na-tional origin, sex, pregnancy, age, disability, marital status or other characteristics protected by applicable law.

The Company is dedicated in creating a high-quality working environment under which its people respect and trust each other such that everyone acts in an honest, friendly and proactive way with a responsi-ble attitude and high moral standards. The Company prohibits bullying and harass-ment in any form including sexual, racial, ethnic, and other forms of harassment.

At Christmas 2012 The Company do-nated funds to Jaynii Streetwise in Ghana. Jaynii Streetwise is a charity and non-gov-ernmental organization founded in Ghana by Jay Borquaye and Emmanuel (Nii) Quar-tey in the deprived area of Jamestown (Ac-cra) with the aim of improving the lives of children and youth. Jaynii Streetwise was born out of their Jaynii Cultural Troupe, a traditional music and dance group which has performed at countless functions lo-cally and internationally.

Over time, Jaynii has identified the need

to support ongoing efforts by government and civil society to keep children off the streets and in school. As a poor, marginal-ized and deprived area, many children are found walking on the beach and in the streets during school hours. Most of these children come from very deprived homes. So far Jaynii has identified fifty children aged between 4 to 16 years who have been enrolled into the Streetwise Project, based at Jaynii Beach, a small stretch of beach just below the Jamestown light-house which is now their centre.

These 24 girls and 26 boys, who were spending their childhood walking aim-lessly on the Jamestown Beach, are now enrolled at schools in the communities- Accra Sempe Primary School in Classes 1 to 6 and St. Thomas Day Care Centre. Jaynii, without assistance from parents, buys them school uniforms, shoes, bags and exercise books and registers them in school. After school hours, the children go to Jaynii Beach where they get fed as well as get extra classes, homework help and afternoon activities and entertainment.

During 2013 the Company has also donated funds for the funeral and family support of passed away gardener of the Company’s office in Ghana.

The Company has furthermore donated funds to Pro Criança Cardíaca in Rio de Ja-neiro, Brasil, a non-profit organization help-ing children with heart diseases. Pro Cri-ança Cardíaca is a hospital founded in 1996 by Cardiologist Doctor Celia Rose. The mission of the organization is to provide medical care to cardiac children focusing in cardiac surgery and any other procedure that requires high technology treatment to children. They have performed so far 14 surgeries, 1334 out-patient assistance and 802 echocardiography.

The Company has also made a donation to the Norwegian Salvation Army.

1 0 0 Siem OffShOre inc., AnnuAl repOrt 2013

n O t e S t O t h e A c c O u n t S

1 0 1Siem OffShOre inc., AnnuAl repOrt 2013


We confirm, to the best of our knowledge that the financial statements for the period 1 January to 31 December 2013 have been prepared in accordance with current applicable accounting standards, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the entity and the group taken as a whole. We also confirm that the Board of Directors’ Report includes a true and fair review of the development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties facing the entity and the group.

Eystein Eriksrud Kristian Siem John C. Wallace

Chairman Director Director

(Sign.) (Sign.) (Sign.)

michael Delouche David mullen

Director Director

(Sign.) (Sign.)

Terje Sørensen

Chief Executive Officer

(Sign.)

10 April 2014

reSpOnSiBility StAtement

1 0 3Siem OffShOre inc., AnnuAl repOrt 2013

pursuant to the company’s Articles of Association, the Board of Directors of Siem Offshore shall have from three to seven shareholder-elected members.

BOArD Of DirectOrS

eystein eriksrud (born 1970), chairman of the Board

mr. eriksrud is the Deputy ceO of Siem industries inc., the company’s main shareholder. prior to joining Siem industries in October 2011, he was partner of the norwegian law firm Wiersholm mellbye & Bech since 2005 working as a business lawyer with an internationally oriented practice in mergers and acquisitions, company law and securities law, particularly in the shipping, offshore and oil service sectors. he was Group company Secretary of the Kvaerner Group from 2000-2002 and served as Group General counsel of the Siem industries Group from 2002-2005. he has served on the boards of privatbanken ASA and tinfos AS as well as a number of other boards. eriksrud is a norwegian citizen.

Kristian Siem (born 1949), Board member

mr. Siem is chairman of Siem industries inc., Siem Shipping inc. and Siem industrikapital AB and a director of Star reefers inc. and north Atlantic Smaller companies investment trust plc. and vice-chairman of nKt holding AS. mr. Siem is a norwegian citizen.

michael Delouche (born 1957), Board member

mr. Delouche is the president and the secretary of Siem industries inc. and is in charge of the company’s operations at the head office in George town, cayman islands. he is a director of Siem Shipping inc. and a former director of Subsea 7 inc. mr. Delouche received degrees in civil engineering (structural) and business and was previously an audit manager with KpmG peat marwick llp. mr. Delouche is a uS citizen.

David mullen (born 1958), Board member

mr. mullen served as the chief executive Officer for Wellstream holdings plc until march 2011 following the acquisition of the company by General electric. prior Wellstream he was the chief executive officer of Ocean rig ASA and prior to working at Ocean rig, he was the Senior Vice president of transocean inc. where he was responsible for the worldwide marketing, corporate strategy and mergers and acquisitions activities.

Between 2001 and 2004, mr. mullen was the president of Schlumberger Oilfield Services, north and SouthAmerica. prior to this, mr. mullen served as vice president of human resources for transocean Sedco forex, inc. he has also been the director of personnel for Geco-prakla, managing director of Schlumberger (nigeria) ltd., and the district manager for eastern Venezuela, Wireline & testing. mr. mullen began his carreer with Schlumberger in 1983. mr. mullen holds a degree in geology from trinity college, Dublin, and a master degree in geophysics from the university college Galway, ireland. mr. mullen is an irish citizen.

John c. Wallace (born 1938), Board member John c. Wallace is a chartered Accountant having qualified with pricewaterhousecoopers in canada in 1963, after which he joined Baring Brothers & co., limited in london, england. prior to his retirement in 2010, he served for over twenty-five years as chairman of fred. Olsen ltd., a london-based corporation that he joined in 1968 and which specializes in the business of shipping, renewable energy and property development. he received his B. comm degree majoring in Accounting and economics from mcGill university in 1959. in november 2004, he successfully completed the international uniform certified public Accountant Qualification examination and has received a cpA certificate from the State of illinois. mr. Wallace also retired from the board of directors of Ganger rolf ASA and Bonheur ASA, Oslo, both publicly-traded shipping companies with interests in offshore energy services and renewable energy. he is a Director of callon petroleum co, uSA where he is chairman of the Audit committee. he was inducted as a 2011 industry pioneer by the Offshore energy centre in houston. mr. Wallace is a canadian citizen. the remuneration of the Board for 2013 is proposed as uSD 40,000 per year per Director. remuneration for the services of mr. Siem and mr. Delouche is included to the fixed fee of uSD 300,000 p.a. to Siem industries. this fee also covers office and administrative costs. the remuneration is subject to approval by the shareholders at the annual general meeting of the company to be held on may 2, 2014.


2014

Q1 2014 Monday 5 May

Q2 2014 Thursday 21 August

Q3 2014 Thursday 23 October

finAnciAl cAlenDAr

INN

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EN

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SIEM OFFSHORE INC., ANNUAL REPORT 2013

Siem Offshore Inc

c/o Siem Offshore ASSjølystveien 34611 KristiansandNorway

postal address:P.O. Box 425N-4664 Kristiansand S, Norway

Telephone: +47 38 60 04 00

Telefax: +47 37 40 62 86

E-mail: [email protected]

www.siemoffshore.com

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