Eidesvik Offshore ASA

Transcription

1 Eidesvik Offshore ASA

2 CONTENTS ANOTHER SOLID BUSINESS YEAR 3 HSE REPORT 4 CORPORATE GOVERNANCE 7 REPORT OF THE BOARD OF DIRECTORS FOR ANNUAL CONSOLIDATED ACCOUNTS 17 NOTES ON THE CONSOLIDATED ACCOUNTS 22 ANNUAL ACCOUNTS PARENT COMPANY 62 NOTES - PARENT COMPANY 66 AUDITORS' REPORT 74 Page 2

3 YET ANOTHER SOLID BUSINESS YEAR Operating results for the year are the highest in the history of the company. In a market characterised by excess capacity and great uncertainty, it is an even greater delight to state that the company's long term contract philosophy has paid off in We took delivery of subsea vessel Viking Poseidon in January and supply vessel Lady Viking in April. Both vessels have helped to increase the operating result for the year. At the end of 2009 the newbuild programme consisted of two seismic vessels with X-bow design commanding a total value of around NOK 1.8 billion. Eidesvik will own 51% and our important customer CGGVeritas will own 49% of both vessels. The vessels will sail on 12 year contracts for CGGVeritas. The FellowShip project entered a new and exciting phase when a fuel cell was installed on board Viking Lady in September. The project has been highly successful thus far, and the cell is now producing energy more or less in line with expectations. On invitation from the City of Copenhagen, Viking Lady was moored in Copenhagen during COP15 and got to show off this ground-breaking project. Despite the lost time injuries suffered on board Viking Avant, Viking Energy and Veritas Vantage fortunately being minor, they are still three too many. We proved in 2008 that we are fully capable of running our business without suffering any lost time injuries. This is our foremost goal for There is still considerable uncertainty in the markets Eidesvik operates in, and it is therefore particularly reassuring that approximately 82% of our capacity is being chartered out for the coming year. The largest ship investments are secured by longterm contracts that give an even higher contract coverage calculated on the basis of ship values. I would like to warmly thank all my colleagues at Eidesvik for their wonderful efforts in 2009, and I see no reason why we will not continue to deliver the expected results in the future. Jan Fredrik Meling Managing director Page 3

4 HSE REPORT FOR The health, safety, environment and quality system is described in the "Eidesvik Management System". It is certified by DNV as satisfying the requirements laid down in ISM/ISO 9001:2000/ISO 14001: HEALTH, SAFETY AND ENVIRONMENTAL REPORTING Eidesvik had three lost-time injuries in These were fortunately not serious. They do show, however, that strong focus on preventive safety work will always be important. The statistics below show the frequency of personal injuries that resulted in absence in recent years in relation to the number of working hours. Lost-time injuries pr. mill hour In 2008 the business was run without any lost-time injuries. It is naturally an overall goal in Eidesvik to avoid such injuries. In order to prevent injuries, focus is placed on tools such as "safety observations", "safe job analyses", "toolbox meetings" and the "work permit system". WORKING ENVIRONMENT MEASURES In 2009 we continued to develop the company as an Inclusive Working Life company. Work is being done to improve the psychosocial working environment. This applies in particular to preventive measures on board, for example, prevention of bullying in the work place, and preventing and drawing attention to overexertion and stress on board. Rederihelsetjenesten (the Norwegian ship worker's occupational health service) has conducted internal health inspections on several of our vessels. Rederihelsetjenesten is available to all employees and their family members at no cost. Page 4

5 Several first aid courses have been organised focusing on heart trouble, including use of the defibrillator. All vessels in the fleet are now equipped with defibrillators. SICKNESS ABSENCE Absence due to sickness was 4.5% this year. This represents an increase from 3.5% in The company has worked systematically and continuously on sickness absence in line with the intentions of the IA agreement which Eidesvik is part of. Thorough cause analyses have been conducted and measures have been implemented to reduce sickness absence. These measures include: Focus on preventive measures to reduce strain injuries. Closer and earlier follow up of employees on sick leave. Increased use of alternative work. Active use of our occupational health service (Rederihelsetjenesten). Focus on preventive measures. Defibrillators have been installed on all our vessels as well as at the office. Everyone interested is given training on how to use the equipment. EXTERNAL ENVIRONMENT A summary of the company's environmental accounts for 2009 is presented below: Type of commodity Volume consumed Impact on the environment Marine diesel m 3 CO 2, NO x and SO 2 Natural gas m 3 CO 2, NO x Lubricating oils 667 m 3 CO 2, NO x and SO 2 Chemical agents (cleaning) 20 m 3 Low Coolant 2143 kg Freon Type Volume discharged to sea Impact Separated bilge water 4158 m 3 None Food waste 67 m 3 None Page 5

6 Type Volume delivered to land Treatment/Impact Waste 1232 m 3 None Paper and cardboard 1015 m 3 Recycled Wood 330 m 3 Recycled Metal 24 tonnes Recycled Plastic 424 m 3 Recycled Glass 3.8 tonnes Recycled Sludge 1379 m 3 Recycled Batteries tonnes Recycled Oil barrels 628 pieces Recycled Paint cans 698 kg Recycled Hazardous waste 7.8 tonnes Special treatment Incinerator ash 9.9 tonnes Special treatment Scrap steel 1.4 tonnes Recycled Paint 1.7 m 3 Special treatment First aid 172 kg Special treatment Volume Volume incinerated on board Impact Waste 1664 m 3 CO 2, NO x Sludge 204 m 3 CO 2, NO x, SO 2 Very small volumes have been reported as accidentally discharged. The most important measures Eidesvik employs for improving the environment: Type Impact on the Measures environment Exhaust gas Air pollution Install gas-powered engines in vessels Install exhaust catalysers Rebuild engines Optimise speed Optimise use of engines Improve maintenance Introduce fuel cell technology Incinerator Air pollution Increase deliveries to shore Improve maintenance Improve the design Boiler Air pollution Improve maintenance Replace with a better type Oil and chemicals Pollution of the sea Install oil boom equipment SOPEP equipment training The emphasis on environment-saving emissions from ships is carried over to new ships and will continue as such. Viking Lady was introduced in April/May and a fuel cell was later installed. This has been a project that has by all means met expectations of fuel cell technology. The fuel cell project has made 2009 a milestone year for the shipping company in the global context Page 6

7 EIDESVIK OFFSHORE ASA STATEMENT CONCERNING THE COMPANY'S CORPORATE GOVERNANCE FOR 2008 PRINCIPLES AND CORE VALUES FOR CORPORATE GOVERNANCE OF EIDESVIK OFFSHORE ASA The Board of Directors of Eidesvik Offshore ASA (the company) must ensure that the company adheres to the "Norwegian Code of Practice for Corporate Governance", dated 07 December 2004 and last amended on 12 April The group's adherence to (and any deviations from) this code of practice must be noted by the board in accordance with the specific section in the Norwegian Code of Practice for Corporate Governance, and must be made available to company stakeholders in connection with the company's annual report. The purpose of these guidelines concerning corporate governance within Eidesvik Offshore ASA is to clarify the distribution of roles between shareholders, the General Meeting, the board and management beyond that required by law. The principles and core values for corporate governance of Eidesvik Offshore ASA are stated in the following documents (the complete documents are available on the company's website). The annual statement by the Board of Directors concerning the company's corporate governance. Articles of association for Eidesvik Offshore ASA dated 09 June Instructions for the Board of Directors. Instructions for the Managing Director. Guidelines for planning and budgeting. Company's core standards and ethical guidelines. Guidelines for handling of price-sensitive information and insider training. Guidelines concerning stipulation of salary and other remuneration to management. Guidelines for using the auditor as an advisor to the company. Guidelines for information provided by the company. Activities should be based on open interaction and a sense of belonging between the company's shareholders, Board of Directors and management, as well as other stakeholders such as employees, customers, suppliers, creditors, public authorities and the general community. Eidesvik Offshore ASA's core values and ethical guidelines are stated in "Etiske retningslinjer og verdigrunnlag for Eidesvik Offshore ASA" ("Ethical guidelines and core values for Eidesvik Offshore ASA") NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance OPERATIONS The company's operations are stated in article 3 of the company's articles of association, while the Board of Directors determines the group's overall goals and strategy. The strategy plan is reviewed annually. The paragraph in the articles of association concerning the company's purpose, along with the company's goals and overall strategies, are stated in the company's annual report, which is also published on the company's website, NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance COMPANY CAPITAL AND DIVIDEND The Board of Directors must ensure that the company holds equity that is protected from risk involved in and to the extent of the company's operations; cf. Instructions for the Board of Directors. The authority of the Board of Directors to increase equity and acquire shares must be limited to defined purposes, and should not usually be granted for a period that extends beyond the next ordinary General Meeting. The Board of Directors determines the company's dividend policy and submits this, along with a proposed dividend, to the company's General Meeting. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance Page 7

8 EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS INVOLVING CLOSE ASSOCIATES Eidesvik Offshore ASA has only one class of shares. When equity is raised, the principle allowing equal rights to all shareholders when acquiring shares applies. Shares are acquired via the stock market at market rates. Guidelines for transactions between companies within the group are provided in "Instructions for the Board of Directors of Eidesvik Offshore ASA". An independent valuation must be carried out for significant transactions between the company and shareholders, board members, key employees or close associates of the latter. This does not apply if the General Meeting is to handle the issue in accordance with the regulations in the Norwegian Public Limited Companies Act. This also applies to transactions between companies within the group involving minority shareholders. The instructions for the Board of Directors, Instructions for the Managing Director and ethical guidelines contain rules regarding legal capacity. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance FREE TRANSFERABILITY Shares in the company are listed on the stock exchange and are freely transferable. No form of limitations on sale have been incorporated into the articles of association. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance GENERAL MEETING The company's General Meeting is called and implemented in accordance with the regulations laid down by the Norwegian Public Limited Companies Act as regards deadline and agenda. The registration deadline should be set as close to the meeting as is practically possible. Shareholders who are unable to attend in person may vote via a proxy. The meeting invitation, proposals for the agenda, proxy form, other related documents and information about shareholders' entitlement to have issues dealt with at the General Meeting are made available on the company's website as soon as they are produced. The Board of Directors and the person leading the meeting must emphasise that the General Meeting has an opportunity to vote on each one of the proposals up for voting within the body of the company. Minutes from the General Meeting are made available on the company's website quickly as possible NOTES 2009: Deviates from the Norwegian Code of Practice for Corporate Governance in that the meeting invitation and related documents are available on the Company's website, not 21 days before the General Meeting is held, but 14 days. In addition, the Chairman of the Board and auditor (but not the entire Board of Directors) are present at the General Meeting. The General Meeting follows the meeting regulations laid down in the Norwegian Public Limited Companies Act, and the Board of Directors has not set up different routines for leading the General Meeting. NOMINATION COMMITTEE NOTES 2009: Deviates from the Norwegian Code of Practice for Corporate Governance in that Eidesvik Offshore ASA does not have a nomination committee. This is due to the current shareholder structure, in which the main shareholder holds over 50% of the shares. CORPORATE ASSEMBLY AND THE BOARD OF DIRECTORS, COMPOSITION AND INDEPENDENCE The Board of Directors of Eidesvik Offshore ASA is composed in such a way that it can manage the interests of shareholders and needs of the company for skills, capacity and diversity. Consideration is given to the fact that the Board of Directors should function well as a collegiate body. The Board of Directors is composed in such a way that it can act independently of special interests. The majority of the shareholder-elected members have no connection with the company's management and major business associates. Page 8

9 At least two of the shareholder-elected members have no connection with the company's main shareholders. Representatives of the company's management are not members of the Board of Directors. The Chairman of the Board is elected by the Board of Directors in consequence of an agreement to the effect that the company should not have a corporate assembly. Board members are elected for two years at a time. The Board of Directors provides information in the annual report about circumstances that may highlight the expertise and capacity of board members, as well as those board members who are deemed independent. The provisions in the Norwegian Public Limited Companies Act regarding the employee's right to be represented in the Board of Directors and corporate assembly do not apply to companies operating foreign shipping; cf. Directive no dated 18 December 1998 concerning the employee's right to be represented in the Board of Directors and corporate assembly etc. of limited companies and public limited companies (the representation directive), para. 1, point 3 of article 3. Against this background, the company does not include employee representatives on the Board of Directors. Board members are encouraged to own shares in the company. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance THE WORK OF THE BOARD OF DIRECTORS Specific instructions have been produced for the Board of Directors of Eidesvik Offshore ASA. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance RISK MANAGEMENT AND INTERNAL CHECKS In accordance with the Instructions for the Board of Directors of Eidesvik Offshore ASA, the Board of Directors ensures that the company has good internal checks and appropriate risk management systems in place. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance REMUNERATION PAID TO THE BOARD OF DIRECTORS Remuneration paid to the Board of Directors does not depend on results and is determined by the General Meeting. Information regarding remuneration is provided in the annual report. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance REMUNERATION PAID TO KEY EMPLOYEES The Board of Directors has established guidelines for remuneration paid to key employees. These guidelines specify the guiding principles for the company's policy regarding management salaries. These are made available annually to the General Meeting. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance INFORMATION AND COMMUNICATION The Board of Directors has established guidelines regarding company contact with shareholders outside of the General Meeting. These are found in the Directors' Report. The company publishes a financial calendar annually, and all interim reports and presentations of results are made available on the company's website and via Oslo Børs. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance COMPANY TAKEOVER The Board of Directors has not established guiding principles as to how it should act in the event of a takeover offer. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance AUDITOR The Board of Directors has an annual plan for auditing and the auditors' attendance at board meetings to give the Board good insight into the work of auditors and to be able to benefit from the auditors' knowledge and skills in connection with the Board's treatment of the annual accounts. NOTES 2009: No deviations from the Norwegian Code of Practice for Corporate Governance Page 9

10 EIDESVIK OFFSHORE ASA BOARD MEMBERS Kolbein Rege (Chairman of the Board) is the Managing Director of Eidesvik Invest AS, which owns 67% of the shares in Eidesvik Offshore ASA. He is a lawyer by training, and has extensive experience in banking and in private practice as a lawyer. Rege is associated with the main shareholder. Borgny Eidesvik (Board member) is the owner and managing director of Bømmelfjord AS, which owns 55% of Eidesvik Invest AS. Eidesvik Invest AS owns 67% of Eidesvik Offshore ASA. Borgny Eidesvik is associated with the main shareholder within the company. Lars Eidesvik (Board member) is the owner of and Chairman of the Board for Evik AS, which owns 45% of Eidesvik Invest AS. Eidesvik Invest AS owns 67% of Eidesvik Offshore ASA. Lars Eidesvik is associated with the main shareholders within the company. Kjell E. Jacobsen (Board member) is a partner at Energy Ventures, an investment company specialising in oil and gas technology. He sits on the board of Seadrill Ltd and Seawell Ltd. He was educated at the Norwegian Naval Academy and has a degree in Economics from the Norwegian School of Economics and Business Administration. He was previously the Managing Director of Seadrill Management AS, and prior to this he worked for Smedvig ASA, Statoil and Citibank. Jacobsen is independent in relation to the majority in Eidesvik Invest AS. Monica Havskjold (Board member) is the co-owner and Chairman of the Board of Xrgia AS - analysis and consultancy. She has previous experience of sitting on the board of Enova SF. She has an MSc in civil engineering from the Norwegian Institute of Technology (NTH) (1986). Dr. Eng (1992) NTH Institute of Refrigeration Technology. MBA from the Norwegian School of Economics and Business Administration (NHH) (2005). Monica Havskjold has extensive experience of projects involving energy, including natural gas. Havskjold is independent in relation to the majority in Eidesvik Invest AS. Jakob Bleie (alternate member) has extensive experience of various directorships within Statoil and on the board of various companies. He is a trained geologist. Bleie is independent in relation to the majority in Eidesvik Invest AS. Page 10

11 ANNUAL REPORT 2009 Eidesvik Offshore ASA is an innovative company that delivers good seamanship. We will be a driving force for future-oriented and environmentally friendly shipping and operational solutions. Our goal is to increase and secure the company s long-term creation of value so as to ensure further growth, and to guarantee good workplaces for our employees and a good return for our owners. This is achieved by measures such as securing a great deal of long-term employment with solid customers for our vessels, thus securing predictable and long-term earnings in a traditionally volatile market. The Eidesvik Group continued to focus on the expansion and renewal of its fleet in In April 2009, the shipping company took delivery of Viking Lady, which is a gas-powered PSV of the Avant design (wheel house aft). On delivery, the vessel was employed on a three-year contract with Total. The ship is organised to produce parts of its own energy needs from fuel cells. A test cell was placed on board the vessel after delivery. Over a period of one year, this should clarify how well the fuel cells function in a marine environment on board a vessel in normal operations. OPERATIONS Eidesvik Offshore ASA is the parent company of the Eidesvik Group. The objective of the company according to its Articles of Association is "to operate shipping activities and everything related to shipping, including owning shares and interest in other companies that operate in a similar or related environment." This objective has been realised in 2009 by running 23 vessels, of which 18 are consolidated in the group, 1 was hired on a bareboat agreement, 1 was hired on a TC agreement and 3 were operated on management agreements. Eidesvik owns a 25% share in one of the vessels on a management contract. The vessels were primarily chartered on long-term contracts in the Supply, Seismic and Subsea segments. Eidesvik is participating in a joint venture with CGGVeritas which has two seismic vessels under construction at Ulstein Verft. The total price for construction of these vessels is around NOK 1,800 million. The vessels will be delivered in Q3 of 2010 and Q3 of 2011 respectively. Both vessels are ensured 12 year employment on completion. Eidesvik s operations are managed from the head office at Langevåg in Bømlo. The shipping activities are organised in accordance with tax regulations specifically laid down for shipping companies. Various shipping companies own interests in the vessels and Eidesvik AS is responsible for the business operation and general management, including hiring out the crew of the ship-owning companies. All the employees are employed by Eidesvik Offshore ASA, Eidesvik AS or Eidesvik Shipping Ltd. There were a total of 571 permanent employees in the group at the end of the year. Importance is attached to diversity, and we would like to see more women on board our vessels. The environment is organised to accommodate the needs of employees from other cultures in the shipping company. HEALTH, SAFETY AND THE ENVIRONMENT In 2009, the group focused on moving HSE work forward. The quality and safety system in the "Eidesvik Management System" has been certified by DNV to ensure that it satisfies the requirements of ISM/ISO 9001:2000/ISO 14001: The management performs continuous educational work in the HSE field and focuses in particular on the exchange of experience to facilitate continuous improvement. Absence due to sickness in 2009 was 4.5%. This represents an increase from 3.5% in Eidesvik suffered three lost time injuries in Eidesvik AS is continuing with its "Inclusive Working Life (IA)" agreement with the Norwegian National Insurance Service, which ensures close follow-up of absentees on sick-leave. The "Fatigue Management System", which aims to optimise the crew's sleep quality on board Eidesvik's vessels, will continue in Research results from the US Coast Guard indicate that this produces greater alertness, safety and an improved quality of life for our employees. In 2009, special focus was placed on the following in order to prevent injuries: Increase in incident reporting. Safe Job Analyses. "Toolbox" meetings. Page 11

12 Work on board is performed based on a "Work Permit System". Health inspections on vessels. All vessels in the fleet are now equipped with defibrillators. External environment Eidesvik pursues a conscious and goal-oriented environmental policy. Eidesvik has continued its work on developing environmentally friendly and energy-saving vessels. Viking Lady was introduced in April/May and a fuel cell was installed later in the year. This has been a project that has thus far confirmed the expectations of fuel cell technology. In that respect, 2009 has been a milestone year for the shipping company in a global environmental context. Our operations at sea comply with international and national laws and regulations. To reduce the risk of accidents, great importance is attached to preventative maintenance and ensuring that our vessels are crewed by highly qualified personnel. Eidesvik is constantly working to reduce the overall balance of emissions associated with operation of the vessels. Eidesvik's onshore operations do not pollute the external environment beyond what is normal for such operations. A separate HSE report has been prepared and is included in Eidesvik s annual report. SHAREHOLDERS, CORPORATE GOVERNANCE AND MANAGEMENT There were a total of 30,150,000 shares in the company at the end of the year. A total of 130,000 options have been allotted to the group's management. Options have not been allotted in There were a total of 819 shareholders at the end of the year. 26 of these were foreign shareholders owning 0.9% of the shares. The share traded at NOK at the end of the year. The Board of Directors has been authorised to buy back the company s own shares for a total nominal amount of NOK 150,000. However, the total nominal value of the shares held by the company may not exceed 10 per cent of the registered share capital at any given time. This authorisation lasts until the 2010 Ordinary General Meeting. The Board of Directors will propose that this authorisation be renewed for one year by the company s General Meeting. As of , the company did not own any of its own shares. All information must be disclosed in such a manner that the all shareholders are treated equally. Information will be distributed through company disclosures to the stock exchange, press releases and open presentations, and will simultaneously be made available on the Eidesvik website. The Norwegian Code of Practice for Corporate Governance has been used as the basis for the group s governance and management. Minor company-specific changes and adaptations have been made to this code. A separate statement has been made concerning this in the annual report and on the Eidesvik website. RESULTS, BALANCE SHEET AND FINANCIAL RISK The consolidated accounts have been prepared in accordance with the IFRS regulations. The parent company accounts have been prepared in accordance with generally accepted accounting principles in Norway. Results The consolidated operating revenues for Eidesvik were NOK million in 2009 (NOK million in 2008). This includes gains of NOK million from the sale of Viking Nereus. The vessel was delivered to the new owners in February The increase in freight income is due primarily to an increase in the number of vessels in operation. This is the result of two newbuilds delivered in the first half of 2009 and one vessel in retirement in the same period. The operating profit before depreciation (EBITDA) for 2009 was NOK million including a gain of NOK million (NOK million). The operating profit for the year has been somewhat affected by deteriorating market conditions in 2009, but due to the majority of the vessels being on fixed long-term contracts the fluctuations have had a limited impact. NOK million in depreciation was charged against income in 2009 (NOK million). Overall this produces an operating profit after depreciation of NOK million (NOK million). The net financial items for the year of NOK million (NOK million) were substantially Page 12

13 affected by the weakening of the USD exchange rate in relation to NOK throughout the year. As a result of this, the group has recognised significant unrealised gains on its debt obligations and derivatives denominated in USD. The annual profit before tax is NOK million (NOK million). The group s taxable income was NOK in This is due to the Supreme Court finding transition rules linked to phasing out of the previous special tax scheme for shipping companies to be unconstitutional, and all previous tax obligations connected with these transition rules that had previously been recognised as costs have been recognised as income. After this, the group's profit after tax was NOK 1,091.4 million (NOK million). Earnings (weighted) per share were NOK (NOK ). For the parent company Eidesvik Offshore ASA, the profit for the year after tax was NOK million (NOK 26.6 million). Balance sheet The group's book equity is NOK 1,901.5 million (NOK million in 2008). This represents 36.1% of the group's total capital. In the parent company, Eidesvik Offshore ASA, the equity was NOK million (NOK million). Vessels, including vessels held for sale and vessels under construction, have increased by NOK million during the year, while the group s current assets increased by NOK 35.8 million. The total assets were NOK 5,267.0 million (NOK 4,543.6 million), an increase of NOK million. Market valuations have been obtained for the vessels from three independent brokers. These brokers concluded that the total excess value of the vessels in relation to the book value was NOK 1,489 million on a contract-free basis. Due to the fact that some of the long-term contracts have rates that are lower than those that could be achieved in the short-term market, the actual excess value of the vessels is lower than that indicated by the broker estimates. Nevertheless, the Board of Directors finds that the vessels have significant excess value in relation to the book value. The group's current liabilities decreased by NOK million during the year to a total of NOK million (NOK million). This includes long-term bank debts that will mature within twelve months by NOK million. Long-term debt amounts to NOK 2,896.8 million, which represents a decrease of NOK million. Cash flow The group s cash and cash equivalents increased from NOK million at the end of 2008 to NOK million as of 31 December Net cash flow from operational activities was NOK million for 2008 (NOK million). The net negative cash flow in connection with investment activities of NOK -1,010.6 million (NOK million) is primarily due to the delivery of newbuilds Viking Poseidon and Viking Lady and to the sale of Viking Nereus. The group's net cash flow from financing activities of NOK million (NOK million) is primarily due to borrowing in connection with the delivery of newbuilds and ordinary repayment of interest and instalments on debt. Allocation of the profit The Board of Directors proposes that the annual result of NOK million for Eidesvik Offshore ASA be covered by transfer from other equity. The Board of Directors will propose to the company s General Meeting on 20 May 2010 that a dividend of NOK 0.50 per share be paid, totalling NOK 15.1 million. The amount will be taken from the company s distributable equity, which has previously been paid as a share premium. The dividend will therefore be regarded as the repayment of paid-up capital for tax purposes. The dividend will be distributed to the shareholders on record at the close of the day of the approval of the dividend. The payment will be made approximately 14 days after this date. The company's distributable equity is NOK million. Going concern The Board of Directors considers the financial position of the company and group to be sound. The prerequisites for continued operations have been met by the company and the annual accounts have been prepared accordingly. There were no post-balance sheet events that are likely to significantly affect the assessment of the company's financial position and results beyond the conditions reflected in the annual accounts. Page 13

14 Financial risks Foreign currency risk In 2009, the Eidesvik s income was in NOK (45%) and USD (55%). Operating expenses are primarily in NOK, while a significant portion of the debt is in USD. Eidesvik is exposed to fluctuations in foreign exchange rates, since a substantial portion of its income is in USD. To reduce the risk, cash flow hedging has been established for portions of the company's long-term financing established in USD. In addition, forward contracts have been entered into for portions of the group s operating revenues in USD. Contracts have been entered into to hedge a significant portion of Eidesvik's long-term debt. Credit risk Eidesvik s customers are primarily sound companies with good solvency. The risk that contracting parties do not have the financial capacity to fulfil their obligations is regarded as low. The company is vulnerable to customers defaulting because it has borrowed heavily against many long-term contracts. Liquidity risk The group is comfortable with its level of liquidity reserves as at the end of the year. For the two newbuilds due in 2010 and 2011, there is a pledge from Eksportfinans as well an accepted guarantee from a commercial bank. The Board of Directors therefore regards the group's liquidity as satisfactory. REGULATORY FRAMEWORK In our experience, Norwegian crews on our vessels enable us to deliver an optimum product, which in turn helps our customers achieve a better overall result. Eidesvik therefore employs a high proportion of Norwegian seamen and would like to be able to do so in the future as well. Using Norwegian seamen in the future is contingent upon a stable regulatory framework. The entire petro-maritime cluster, including oil companies, shipping companies, shipyards and other oil service companies, will also be reliant on maritime competence in their land organisations in the future. Eidesvik sees with dismay that net salaries is on the agenda again. The scope and prevalence of continuous and repeated discussions surrounding net salaries makes for difficulties in terms of strategy work for those players with a long-term perspective in terms of their business activities. Eidesvik actively markets careers in the maritime industry. In connection with this, it has established a scholarship scheme for young people undertaking maritime studies. In cooperation with other shipping companies and the maritime training office, Eidesvik has also established a guarantee scheme for new engineer and navigator graduates. On meeting the prerequisites, they are guaranteed trainee positions on vessels after they complete their training to obtain the requisite licences. Our experiences with the new shipping company taxation scheme, adopted by the Norwegian authorities in 2007, have not, in the estimation of the Board of Directors, been satisfactory for an international shipping operator with income, expenses and loans in various currencies. The taxation of temporary foreign currency changes seems to be so unreasonable and random that it may have consequences for the entire maritime industry in Norway. New rules for currency derivatives have been adopted and will be effective from These will serve to lessen the effects, but will not entirely eliminate them. Shipping companies such as Eidesvik, which build upon long-term strategies, will be hard hit by the new rules not being made effective for contracts entered into before After having won the case against the government concerning the transition rules in terms of the old scheme in the Supreme Court, proposals for new transition rules have now been put forward by the Ministry of Finance. So far, we only know what the overall principles for these rules are, and it seems as though the Ministry of Finance has partly met the demands of the industry. One can only hope that robust taxation schemes will be established, in order to provide a stable regulatory framework for the industry. BUSINESS AREAS AND OUTLOOK Eidesvik owns and operates vessels in the following three segments: Supply and Anchor Handling Eidesvik operates nine supply vessels and two anchor handling vessels. Most vessels are involved in long-term contracts, while Viking Thaumas and Viking Athene are spot-exposed for parts of North Sea: At the end of 2009, 235 (218) vessels operated in the North Sea, which corresponds to an increase of 8% from the previous year. There are 138 Page 14

15 vessels on long contracts, compared to 153 the previous year, representing a 10% decline. We have experienced a dramatic drop in both the usage level and day rates in The usage level for certain vessel types in the spot market has been below 50% and income has not covered operating expenses. Due to prevailing market conditions, the management in Viking Troll AS decided to lay up Viking Troll from November In recent years, Eidesvik has focused on the further development of vessels fuelled by LNG, which reduces emissions by around 90% (in the case of NOx) and around 20% (in the case of CO2). To further our environmental focus, a fuel cell was installed on board our vessel, Viking Lady, in So far the fuel cell has been in operation for six months and looks to be promising. Environmentally friendly, operationally secure vessels will always be attractive to operators, and Eidesvik will continue to develop and build vessels that are at the forefront of developments in these areas. The main cause of the current market conditions is not to be found on the demand side but rather in the large number of newbuilds being delivered. Nevertheless, we believe that the North Sea market will produce satisfactory earnings for quality vessels in the medium to long term. West Africa: We experienced a decline in the activity level in West Africa in Several rigs were laid up, and a constant influx of new vessels arriving in the area means that supply has increased. This has led to a substantial drop in rate levels during Brazil: Towards the end of 2009 this market saw a positive increase in activity; however, the steady increase in supply means that this market will prove a challenge in the next few years. Seismic The marine seismic market noted the effects of the finance crisis and the seismic industry has been through a turbulent year in Eidesvik owns and operates six seismic vessels within this segment. The five largest vessels are on long term contracts with CGGVeritas. Eidesvik has an additional two vessels under construction for delivery in July 2010 and September Both vessels will be on twelve-year contracts on completion. The customer for Geo Searcher went into liquidation in summer Due to prevailing market conditions, Eidesvik laid up the vessel. The seismic market is sensitive to the price of oil. This appears to have stabilised at an acceptable level in recent times. As a result of this, there have been signs of increased activity within the seismic segment. Eidesvik feels that there will still be a need for substantial efforts to locate new oil and gas deposits, and seismic activity is a necessary part of this work. We are therefore positive about this market in the medium to long term. Subsea Eidesvik currently has six vessels in the subsea segment and intends to develop further in this area. Based on activity relating to pipe-laying and installation of subsea equipment, we expect long term growth in this segment. These new projects are in addition to a large proportion of IMR (Inspection, Maintenance & Repair) work on existing infrastructure. The growth in IMR work relates to the age of existing offshore installations as well as increasing safety and environmental demands. We note that delays in major offshore construction projects have caused a slight decline in the demand for subsea vessels on a global scale. We believe that this is a temporary phenomenon, and look positively on this market in the future. Page 15

16 General Activities in the segments in which Eidesvik operates are affected by changes in the price of oil and the oil companies' search and development budgets. The price of oil seems to have stabilised at a level that gives reason to assume that the budgets of the oil companies will increase as a result of this. The market for offshore supply vessels is capital-intensive, and the financial crisis has brought newbuild orders almost to a halt, while there are reports of several cancellations of contracts that have already been entered into for vessels that are being built. This is positive in terms of reducing supply in the segments within which Eidesvik operates. Nevertheless, we feel that 2010 will prove to be a challenging year for the offshore market despite the positive signs of real increases in activity within certain segments. Given Eidesvik's long-term contract profile, we have relatively little exposure to shortterm fluctuations in the market. The objective is to have a clear preponderance of long-term contracts to ensure the long-term creation of value and growth for Eidesvik. Bømlo, Page 16

17 CONSOLIDATED PROFIT AND LOSS ACCOUNT (NOK 1 000) Note Freight income Other revenues Profit attributable to joint venture Profit attributable to associated companies Total operating revenues Payroll expenses Depreciation Other operating expenses Bareboat charter of vessels: Total operating expenses Operating profit Financial income Financial expenses Change in value of derivatives Net foreign exchange gains Net financial items Profit before tax Tax Profit for the year Attributable to: Shareholders Minority interests Earnings per share for the portion of the profit allocated to the company's shareholders: Earnings per share/non-diluted earnings per share 10 36,20-20,02 Comprehensive income Profit for the year Unrecognised items 0 0 Comprehensive incom after tax Overall profit allocated to: Shareholders Minority interests 0 0 Total profit for the year Comprehensive earnings per share 10 36,20-20,02 The notes on pages form an integral part of the consolidated accounts Page 17

18 CONSOLIDATED BALANCE SHEET (NOK 1 000) Note ASSETS Fixed assets Vessels Vessels under construction Buildings, land and other fixed assets Investments in associated companies Investments in joint ventures Derivatives Other long-term receivables Total fixed assets Current assets Receivables from customers Derivatives Vessels held for sale Other current assets Cash and cash equivalents Total current assets Total assets The notes on pages form an integral part of the consolidated accounts Page 18

19 CONSOLIDATED BALANCE SHEET (NOK 1 000) Note EQUITY AND LIABILITIES Equity Share capital Other paid-in equity Other unrecognised equity Other equity Total equity Liabilities Long-term liabilities Loans Derivatives Tax payable Pension obligations Total long-term liabilities Current liabilities Loans Derivatives Payables to suppliers Tax payable Other current liabilities Total current liabilities Total liabilities Total equity and liabilities The notes on pages form an integral part of the consolidated accounts Bømlo, 29. april 2009 Page 19

20 CONSOLIDATED CASH FLOW STATEMENT (NOK 1 000) Note Cash flows from operations Payments from customers Payments to suppliers and employees Interest income received Tax paid Net cash flows from operations Cash flow from investment activities Proceeds from sale of fixed assets Purchase of fixed assets Purchase of other investments Dividends received/repayment from shareholders Net cash flows used in investment activities Cash flows from financing activities Payments from minority interests Equity New debt Repayment of debt Interest expenses paid Realisation of forward exchange contracts originally intended for hedging drawn up debt Minority buy-out Equity Dividends paid to company s shareholders Net cash flow from financing activities Net effect of currency translation differences on cash and cash equivalents Net increase (reduction) in cash and cash equivalents Cash and cash equivalents at the start of the year Cash and cash equivalents at the end of the year The notes on pages form an integral part of the consolidated accounts Page 20

21 CONSOLIDATED EQUITY STATEMENT (NOK 1 000) Note Shareholders Minority interests Total equity Share Other Share premium unrecognis Other paidin Other capital reserve ed equity equity equity Total Equity as of 1 January 2008: Profit for the year Cash flow hedging Total recognised revenues and expenses for Dividends from Subsidiary establishment costs Called up and fully paid new equity Buy-out of minority shareholders Options Total other equity adjustments Equity as of Profit for the year Cash flow hedging Total recognised revenues and expenses for Dividends from Options Total other equity adjustments Equity as of The notes on pages form an integral part of the consolidated accounts Page 21

22 32 NOTES TO THE CONSOLIDATED ACCOUNTS NOTE 1 GENERAL INFORMATION Eidesvik Offshore ASA (the company) and its subsidiaries (the entire group) offer services in the maritime sector and have operations in a number of segments. The principal segments are seismic, subsea and platform vessel services. The group s vessels are located in many parts of the world. Eidesvik Offshore ASA is a public limited company registered in Norway, and its head office is located in Langevåg in the municipality of Bømlo. Eidesvik Offshore ASA is listed on Oslo Børs and subject to the provisions of the Norwegian Public Limited Companies Act relating to the limitation of the shareholders liability to the company s creditors. The annual accounts were approved for publication by the Board of Directors and Managing Director on 26 April The General Meeting adopts the final annual accounts and has the authority to demand changes to the accounts before they are approved. Summary of group companies: Company Business Office Ownership Interest Eidesvik Shipping AS Bømlo 100% Eidesvik AS Bømlo 100% Eidesvik Shipping Ltd England 100% Eidesvik MPSV AS Bømlo 100% Eidesvik Subsea AS Bømlo 100% Viking Troll AS Bømlo 100% Viking Surf AS Bømlo 100% Eidesvik Shipping International AS Bømlo 100% Eidesvik Subsea Vessels AS Bømlo 100% Eidesvik Seismic Vessels AS Bømlo 100% AS Langevåg Senter Bømlo 100% Eidesvik OCV AS Bømlo 100% Eidesvik OCV KS Bømlo 100% NOTE 2 ACCOUNTING PRINCIPLES The most important accounting principles used for preparation of the consolidated accounts are described below. These principles have been applied identically to all the periods that are presented, unless otherwise stated in the description. 2.1 Main principles The consolidated accounts for the Eidesvik Offshore Group were produced in accordance with International Financial The notes on pages form an integral part of the consolidated acconts. Page 22 Reporting Standards (IFRS) as adopted by the EU in combination with the Norwegian Accounting Act. The consolidated accounts have been prepared in accordance with the historical cost principle with modifications for the following: financial derivatives and financial assets measured at fair value through the profit and loss account.

23 An asset is classified as a current asset if it is expected to be realised within twelve months from the balance sheet date as part of the ordinary operations, if purchase or sale is the primary objective of the asset, or if the asset represents cash or a cash equivalent. Debts are classified as current liabilities if there is no unconditional right to postpone payment for at least twelve months from the balance sheet date, or if purchase or sale is the primary objective of the liability. Long-term liabilities that will not fall due for twelve months will be reclassified as current liabilities. The same applies to long-term liabilities that will mature within twelve months of the balance sheet date. Preparation of the accounts in accordance with IFRS requires the use of estimates, and the management must exercise judgment in the application of the group s accounting principles. The cash flow statement has been prepared in accordance with the direct method. All amounts are presented in Norwegian kroner (NOK) and rounded off to whole thousands unless otherwise stated. value of assets that are contributed as consideration for the acquisition, equity capital instruments that are issued, liabilities that are assumed upon the transfer of control and direct costs associated with the actual acquisition. Identifiable assets acquired and liabilities assumed are recognised in the accounts at fair value at the time of the acquisition, regardless of any minority interests. The portion of the historical cost that exceeds the fair value of identifiable net assets in the subsidiary is recognised on the balance sheet as goodwill. If the historical cost is lower than the fair value of the net assets in the subsidiary, the difference is recognised in the profit and loss account at the time of the acquisition. All intercompany transactions, outstanding accounts and unrealised earnings between group companies are eliminated. Unrealised losses are eliminated, but they are considered as an indicator of impairment in value in relation to the write-down of the asset transferred. The accounting principles in subsidiaries are changed as required to achieve compliance with the group s accounting principles. 2.2 Consolidation principles The consolidated accounts consist of the accounts for Eidesvik Offshore ASA and its subsidiaries as of 31 December each year. Interests in joint ventures and associated companies are recognised in the accounts in accordance with the equity method of accounting. a) Subsidiaries Subsidiaries are all the units in which the group has a controlling influence over the unit s financial and operational strategy, normally through ownership of more than half of the voting capital. In determining whether a controlling influence exists, the effect of potential voting rights that can be exercised or converted on the balance sheet date is included. Subsidiaries are consolidated from the point in time when control is transferred to the group and eliminated from consolidation when such control ends. The purchase method of accounting is used for the acquisition of subsidiaries. The historical acquisition cost is measured as the fair The notes on pages form an integral part of the consolidated acconts. Page 23 b) Joint ventures A joint venture is when the group has joint control over a company and not sole control. Joint ventures involve either 50% interest or more as well as company agreements that regulate the control of the company. Investments in joint ventures are recognised in the accounts in accordance with the equity method of accounting. Investments in associated companies are recognised in the accounts at the historical cost at the time of acquisition and include excess value related to identifiable assets and any goodwill (which is reduced by any subsequent write-downs). The group's share of profits or losses in associated companies is recognised in the profit and loss account and added to the carrying value of the investments together with a share of the unrecognised changes in equity. The group does not recognise its share of the losses if this entails that the carrying value of the investment becomes negative (including unsecured claims against the unit), unless the group has assumed liabilities or granted

24 guarantees for the associated company s liabilities. The group s share of unrealised gains on transactions between the group and its associated companies is eliminated. The same applies to unrealised losses unless the transaction indicates a write-down of the asset transferred. The accounting principles in subsidiaries have been changed as required to achieve compliance with the group s accounting principles. c) Associated companies Associated companies are units where the group has a significant, but not controlling, influence. A significant influence normally exists for investments where the group has between 20% and 50% of the voting capital. Investments in associated companies are recognised in accordance with the equity method of accounting. Investments in associated companies are recognised in the accounts at the historical cost at the time of acquisition and include excess value related to identifiable assets and any goodwill (which is reduced by any subsequent write-downs). The group's share of profits or losses in associated companies is recognised in the profit and loss account and added to the carrying value of the investments together with a share of the unrecognised changes in equity. The group does not recognise its share of the losses if this entails that the carrying value of the investment becomes negative (including unsecured claims against the unit), unless the group has assumed liabilities or granted guarantees for the associated company s liabilities. goodwill if the payment exceeds the minority's share of the amounts recognised in the balance sheet. If the minority share increases, a partial gain settlement is made. 2.3 Segment information A business segment is a portion of the business operations that delivers products or services that are subject to a risk and return that are distinct from that of other business areas. The group's primary reporting format is business areas. The business areas are divided into Platform Supply Vessels (PSV), Subsea and Seismic Vessels. 2.4 Foreign currency translation a) Functional and presentation currencies The accounts of the individual units in the group are measured in the currency that is primarily used in the economic area where the unit operates (functional currency). The consolidated accounts are presented in Norwegian kroner (NOK), which is both the functional and presentation currency for the parent company. b) Transactions and balance sheet items Transactions involving foreign currencies are translated into the functional currency using the exchange rates that are in effect at the time of the transactions. Foreign currency gains and losses that arise from the payment of such transactions and the translation of monetary items (assets and liabilities) in foreign currenciesat the rates in effect on the balance sheet date are recognised in the profit and loss account. Monetary items and obligations in foreign currencies are converted at the rate in effect on the balance sheet date. The group s share of unrealised gains on transactions between the group and its associated companies is eliminated. The same applies to unrealised losses unless the transaction indicates a write-down of the asset that was transferred. The accounting principles in subsidiaries have been changed as required in order to achieve compliance with the group s accounting principles. d) Transactions with minority interests Transactions with minority interests are dealt with as transactions with third parties. This means that minority buy-outs also include The notes on pages form an integral part of the consolidated acconts. Page 24 Foreign exchange gains/losses are included in the profit and loss specification as "Net foreign exchange gains/losses". 2.5 Tangible fixed assets Vessels, real estate and other fixed assets are recognised in the accounts at the historical cost less accumulated depreciation and writedowns. Each component of the fixed asset that has a significant value in relation to the total cost will be depreciated separately by the straight-line method over the useful life of the fixed asset. Components with the same useful life will be

25 depreciated as a single component. The depreciation period and method will be assessed on each balance sheet date to ensure that the method and period used are in accordance with the financial realities of the fixed asset. This applies correspondingly to the scrap value, which is subject to an annual review. When new vessels are delivered, an amount corresponding to the expected cost of the first ordinary classification/periodic maintenance is deducted and amortised over the period until the next docking. The costs associated with the subsequent periodic maintenance are capitalised and depreciated until the next periodic maintenance, normally over a period of 24 to 30 months. The carrying value of tangible fixed assets is assessed for depreciation when events or circumstantial changes indicate that the carrying value cannot be recovered. These indicators may include an observable drop in the market value, negative changes in technological, market, financial or legal circumstances, increases in discount rates arising from higher market interest, a lower market value for the company than the recognised equity, physical injuries, important changes with negative consequences, including plans for restructuring or discontinuation, and internal reports that indicate declining earnings. The test is performed at the lowest possible level of the fixed assets. The write-down amount is the difference between the recoverable amount and the carrying value. The recoverable amount is the higher of the sales price (less sales costs) of the fixed asset and the value of the fixed asset in use. The value of the fixed asset in use is the present value of future cash flows from the fixed asset. A write-down is reversed in subsequent periods if the recoverable amount is higher than it was at the time of the write-down. Estimated useful life: Vessels Real estate/fixtures Equipment years 5-20 years 3-5 years carrying value. Expenses for running maintenance and smaller repairs are charged against income when they are incurred. Vessels under construction are capitalised by the construction instalments and expenses directly related to the construction, such as construction supervision, other construction expenses and interest on financing in the construction period. The carrying value of vessels is reclassified when the vessel is delivered from the shipyard and the vessel is ready for use. Depreciation of the vessels starts from the same point in time. Periodic maintenance is capitalised and depreciated during the period until the vessel is next estimated to be docked/classified, which is normally after two and a half years. Financial lease agreements Financial lease agreements are agreements that transfer the majority of the financial risk and return to the lessee. The group presents financial lease agreements in the accounts as assets and liabilities at the lower of the fair value of the asset or the net present value of the lease agreement s cash flow. In calculating the net present value of the lease agreement, the implicit interest cost of the lease agreement will be used when it can be determined. If this cost cannot be determined, the company s marginal borrowing rate in the market will be used. Direct expenses related to the lease agreement are not included in the cost price of the asset. Monthly rent payments are split into an interest element and a repayment element. The interest cost is allocated to different periods so that the effective interest for the outstanding debt is the same in different periods. Assets included in a financial lease agreement will be depreciated. The depreciation period is consistent for equivalent assets that are owned by the group. If there is no guarantee that the company will take over the asset upon the expiration of the lease agreement, the asset will be depreciated over the shorter of the term of the lease agreement or the depreciation period for corresponding assets owned by the group. Gains and losses on sales are recognised in the profit and loss account and represent the difference between the sales price and The notes on pages form an integral part of the consolidated acconts. Page 25 If a "sale and leaseback" transaction results in a financial lease agreement, any gain will be

26 postponed and taken to income over the term of the lease. Operational lease agreements Lease agreements in which most of the risk is not transferred to the lessee are classified as operating lease agreements. The rent payments are classified as operating expenses and charged against income over the term of the agreement. acquired primarily with a view to profiting from short-term price fluctuations or if the management elects to classify it in this category. Derivatives are also classified as held for trading purposes unless they are part of a hedging scheme. Assets in this category are classified as current assets if they are held for trading purposes or if they are expected to be realised within 12 months of the balance sheet date. If a "sale and leaseback" transaction results in an operating lease agreement, and it is clear that the transaction has been effected at fair value, any gains or losses will be recognised in results when the transaction is carried out. If the sale price is less than fair value, any gain or loss will be recognised immediately, unless the situation entails future rent payments below the market price. In such cases the gain/loss is amortised over the term of the lease. If the sale price is more than the fair value, the excess price will be amortised over the estimated useful life of the asset. 2.6 Financial assets The group classifies financial assets into the following categories: at fair value with changes in value through the profit and loss account, loans and receivables. This classification is dependent on the purpose of the asset. The group uses the price on the settlement date for initial calculation of financial instruments. The group uses derivatives such as forward currency contracts and interest rate swaps to reduce the risks associated with foreign currency and interest rate fluctuations. The derivatives are presented as an asset if the value is positive and as a liability if the value is negative. For derivatives that do not qualify for hedge accounting, gains or losses due to fluctuations in value are recognised in the profit and loss account as a financial item. a) Financial assets at fair value over the profit and loss account This category has two subcategories: financial assets held for trading purposes, and financial assets that the management has initially chosen to classify at fair value through the profit and loss account. A financial asset is classified in this category if it has been The notes on pages form an integral part of the consolidated acconts. Page 26 Gains or losses resulting from changes in the fair value of assets that are classified as "financial assets at fair value through the profit and loss account", including interest income and dividends, are included in the profit and loss account under "change in value of derivatives" for the period in which they occur. b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed payments that are not traded in an active market. They are classified as current assets unless they mature later than 12 months after the balance sheet date. In this case they are classified as fixed assets. Loans and receivables are classified as receivables from customers and other receivables on the balance sheet. Ordinary purchases and sales of investments are recognised in the accounts on the date of the transaction. All financial assets that are not recognised at fair value through the profit and loss account are recognised initially on the balance sheet at fair value plus transaction costs. Financial assets that are recognised at fair value through the profit and loss account are recognised at fair value on their acquisition date and the transaction costs are recognised in the profit and loss account. Investments are eliminated from the balance sheet when the rights to receive cash flows from the investment expire or when these rights are transferred and the group has essentially transferred all the risk and entire potential for gains through ownership. Financial assets available for sale and financial assets at fair value through the profit and loss account are assessed at fair value after they are recognised initially on the balance sheet. Loans and receivables are recognised in the accounts at their amortised cost, as calculated by means of the effective interest rate method.

27 The carrying value of financial assets is assessed for depreciation when events or circumstantial changes indicate that the carrying value cannot be recovered. This may involve an observable drop in the market value in an active market, or in the form of requests from debtors in difficulties with payments, opening a composition with creditors or bankruptcy, or the debtor failing to settle when due. 2.7 Derivatives and hedging Derivatives are recognised on the balance sheet at fair value at the point in time when the derivative contract is entered into and then at fair value on an ongoing basis. The group has no derivatives that satisfy the documentation requirements for a bottom-line hedging transaction. The fair value of derivatives is classified as a current asset/liability or fixed asset/long-term liability on the balance sheet depending on the term of the contract. In the profit and loss account, unrealised changes in the value of derivatives are classified as financial items. 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 nonpayment is regarded as indicators that the receivables from customers must be written down. The provisions represent the difference between the nominal value and the recoverable amount, which is the net present value of the expected cash flows, discounted by the effective interest rate. Changes in the provisions are recognised in the profit and loss account as other operating expenses. 2.9 Cash and cash equivalents Cash and cash equivalents consist of cash, bank deposits, other short-term, readily negotiable investments with an original maturity of less than three months and drawdowns on bank overdraft facilities. Bank overdrafts are included in loans under current liabilities on the balance sheet Share capital and share premium Ordinary shares are classified as equity. Cash flow hedging Until 31 December 2005, portions of the group s debt in foreign currencies were defined as hedging instruments for probable receipts in the same currency (freight income). The group no longer satisfies the criteria for hedge accounting. The total gains or losses entered directly against equity when the hedging ends remain in the equity, and in future are recognised in the profit and loss account when the transaction that was originally hedged is recognised in the profit and loss account. If the transaction that was originally hedged is no longer expected to occur, any accumulated gains or losses previously entered directly against equity will be recognised in the profit and loss account immediately. 2.8 Receivables from customers Receivables from customers are recognised initially at fair value on the balance sheet. For subsequent measurements, receivables from customers are assessed at their amortised cost by means of the effective interest method, less provisions for losses that have incurred. Provisions for losses are recognised when there are objective indicators that the group will The notes on pages form an integral part of the consolidated acconts. Page 27 Expenses that are directly attributable to the issue of new shares or options less taxes are entered against the equity as a reduction in the proceeds (share premium) Payables to suppliers Payables to suppliers are measured initially at fair value on the balance sheet. Payables to suppliers are subsequently recognised at their amortised cost, as calculated by means of the effective interest rate method Loans Loans are recognised at the amount drawn when they are disbursed, less any transaction costs. In subsequent periods, loans are recognised at their amortised cost, as calculated by means of the effective interest rate. The difference between the loan amount disbursed (less transaction costs) and the redemption value are recognised in the profit and loss account over the term of the loan.

28 2.13 Pension obligations, bonus schemes and other compensation schemes for employees a) Pension obligations The companies in the group have different pension schemes. The pension schemes are financed primarily through contributions to insurance companies or pension funds. The group s pension schemes are defined benefit plans. A defined benefit plan is typically a pension scheme that defines the pension payments employees will receive when they retire. Pension payments are normally dependent on one or more factors such as age, years of service for the company and salary level. The liability recognised on the balance sheet relating to defined benefit plans is the net present value of the defined benefits on the balance sheet date less the fair value of the pension fund assets (in the cases where the scheme is insured), adjusted for unrecognised estimate deviations and costs relating to pension benefits earned from prior periods. The pension obligations are calculated annually by an independent actuary on the basis of a linear model. The net present value of the defined benefits is determined by discounting the estimated future payments based on the interest rate for Norwegian government bonds. Since Norwegian government bonds are not issued for terms exceeding 10 years, a supplement to this bond rate is calculated by means of estimation techniques to establish a discount rate that is approximately the same as the term of the pension obligation. Estimate deviations due to new information or changes in the actuarial assumptions in excess of 10% of the value of the pension fund assets or 10% of the pension obligations will be recognised in the profit and loss account over a period that corresponds to the employees' expected average remaining service lifetime. Changes in the pension plan benefits are recognised as income or expenses in the profit and loss account, unless the rights in accordance with the new pension plan are contingent on the employee remaining in service for a specified period of time (accrual period). In this case the cost related to the The notes on pages form an integral part of the consolidated acconts. Page 28 change in benefits is amortised linearly over the accrual period. b) Bonus agreements and severance pay In some cases, employment contracts are entered into that give entitlement to a bonus in relation to the fulfilment of defined financial and non-financial criteria, as well as contracts that give entitlement to severance pay upon the employer s termination of the employment. The group recognises provisions in the accounts in cases where there is a formal or informal obligation to make payments. c) Share-based compensation The group has a share-based reward system with settlement in shares. The value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount that is to be charged as an expense over the contribution period will be based on the fair value of the options allotted, less the effect of any contribution terms that are not market-based (such as profitability or sales growth goals). Contribution terms that are not market-based affect the assumptions through the number of options that can be expected to be exercised. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. The company accounts for any effect of the change in the original estimates in the profit and loss account with a corresponding adjustment against equity. The payments received in connection with the exercise of options, less directly attributable transaction expenses, are credited to the share capital (nominal value) and the share premium when the options are exercised Provisions The group recognises provisions for any environmental improvements and legal requirements when: there is a legal or selfimposed obligation to do so as a result of earlier events, there is a preponderance 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 obligations of the same nature, the probability that the

29 obligation will be settled will be assessed for the group as a whole. Provisions for the group are recognised even if the probability for settlement related to the group s individual elements may be low. Provisions are measured as the net present value of the expected payments to redeem the obligation. 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 recognised as an interest cost. The IFRIC interpretation "IFRIC interpretation 4: Determination whether an arrangement contains a lease" was published in This interpretation provides guidelines as to how lease agreements can be identified and how payment flows in combined agreements should be separated to isolate the actual lease agreement. The group has found that all of the company s TC agreements (see discussion above) represent in their entirety the leasing out of assets, and are thus categorised under IAS 17 Lease Agreements Revenue recognition Revenue from the sale of goods and services is assessed at the net fair value after the deduction of commissions, discounts and rebates. Intercompany sales are eliminated. Revenue is recognised in the profit and loss account as follows: a) Sale of services With the exception of two vessels, all of the group s vessels are chartered out on time charters (TC). This means that the freight is agreed as the rent for vessels with a crew. The charterer decides (within agreed limitations) how the vessel will be used. Time charters lapse during periods when the vessel is no longer operational (off hire), e.g. during repairs. The shipping company pays for the crew, supplies, insurance, repairs, administration, etc., while the charterer pays for the "travelrelated" expenses such as bunkers and port fees, as well as expenses for loading and unloading. In addition to chartering out vessels, there are in some instances agreements for additional services such as the hire of extra crew, sale of supplies and cover of other operating expenses. The rental income from chartering out vessels is recognised in the profit and loss account linearly over the period of the charter. The charter period begins from the point in time when the vessel is made available to the charterer and expires upon the agreed return of the vessel. Crewing and payment for covering other operating expenses are recognised as income linearly over the contract period. The notes on pages form an integral part of the consolidated acconts. Page 29 b) Interest income Interest income is recognised in the profit and loss account over time in accordance with the effective interest method. If receivables are written down, the carrying value of the receivables is reduced to the recoverable amount. The recoverable amount is the estimated future cash flow discounted by the original effective interest rate. After a writedown, interest income is recognised based on the original effective interest rate. 36 c) Dividend income Dividend income is recognised in the profit and loss account when the right to receive payment arises Public subsidies Subsidies concerning the net wage scheme and refund scheme for seamen are accounted for as a cost reduction ("payroll and other staff expenses") Dividends Dividend payments to the company s shareholders are classified as liabilities from the point in time when the dividend is approved by the General Meeting Events after the balance sheet date New information after the balance sheet date regarding the company s financial position on the balance sheet date has been incorporated into the annual accounts. Events after the balance sheet date that do not affect the company s financial position on the balance sheet date, but will affect the company s financial position in the future have been disclosed if they are material Earnings per share

30 The calculation of earnings per share is based on the profit attributable to the majority share by means of a weighted average number of outstanding shares throughout the year. The diluted earnings per share is based on the profit attributable to the majority share by means of an average number of outstanding shares and options Taxes Taxes are charged as an expense when they are incurred. The tax charge consists of the tax payable and change in deferred taxes. Deferred tax liabilities/assets on the balance sheet are calculated based on the liability method. Deferred tax liabilities/assets are determined based on the tax rates and tax laws that have been adopted or essentially adopted on the balance sheet date, which are assumed to apply when the deferred tax is settled. The deferred tax assets/liabilities are calculated for each tax area and the gross amount is presented on the balance sheet. Deferred tax assets are recognised on the balance sheet provided that future taxable income is probable and that the temporary differences can be offset against this income. For investments in associated companies that are independent taxpayers, the share of the profit/loss is after tax has been included. Most of the group s operations are organised within a special tax regime for the taxation of shipowning companies (shipowning company taxation). Under the aforementioned rules, only a tonnage tax is paid, regardless of the result. Only the net financial income is included in the current tax basis. The net financial income includes interest income, realised gains/losses on financial derivatives, foreign exchange gains on current assets and liabilities, and realised foreign exchange gains on long-term monetary items (based on the share of finance capital for debt assumed prior to 1 January 2005 and the foreign exchange gain amount for debt assumed after this same date). The companies under the shipping company taxation scheme are entitled to a deduction in the net financial income for interest expenses based on the share of finance capital (current assets/assets). The net operating profit in companies under the special taxation scheme for shipowning companies was only taxed when the profit was distributed to the owners from when the scheme was introduced until In connection with the transition to the new shipping company taxation regulations, transitional rules were introduced in 2007 for the companies that operated under the former scheme and adopted the new scheme in accordance with the new rules. The discontinuation of the former scheme entailed a tax charge of 28% of the difference between the carrying values of the equity and the company's accumulated untaxed capital as of 31 December Two-thirds of this tax shall be paid on a straight-line basis over the next 10 years, and the remaining third can be used for investments that protect the environment. Since there is no time limit associated with this investment policy, this is not recognised as a liability in the accounts. The payable share of the tax liability has been discounted. The new scheme entails that the company's operating profit will be excluded permanently from taxation, and the company's financial items will be taxed in accordance with rules corresponding to those of earlier years (see above). Tonnage tax is classified as an operating expense. The parent company and certain other companies in the group are subject to ordinary taxation. Deferred tax is calculated for these companies in full. Deferred tax is calculated in accordance with the debt method of accounting, where all temporary differences between the accounts and taxes, as well as tax loss carryforwards, are included. Deferred tax is measured at the tax rate that is expected to apply at the point in time when the temporary differences are expected to reverse, based on tax rates that have been, or essentially have been, adopted. Deferred tax liabilities/assets are recognised on the balance sheet at the nominal value. The carrying value of deferred tax associated with net temporary differences and the tax loss carryforward are assessed for each reporting date, and reduced accordingly if it is not The notes on pages form an integral part of the consolidated acconts. Page 30

31 probable that future profits will be able to utilise the deferred tax assets Newly adopted accounting standards The annual accounts have been prepared in accordance with IFRS standards and interpretations that are mandatory for annual accounts presented on Amendments and new published standards and interpretations that came into force in 2009: The following standards have been implemented in the annual accounts for 2009: IFRS 7 Financial instruments information (changed). The change demands additional information concerning measuring of fair value and liquidity risks, including information concerning the method of valuation used in measuring fair value. The change only affects the presentation and not the profit per equity certificate. IFRS 8, "Operating Segments" (comes into force from 1 January 2009). This standard replaces IAS 14 and coordinates segment reporting with the requirements in the US SFAS 131 standard, Disclosures about Segments of an Enterprise and Related Information. The new standard requires that the segment information that is presented is based on the management's approach to segment information in internal reporting. IAS 1 Presentation of financial accounts (revised). The revised standard requires that income and expense items which were previously entered directly against equity must now be presented in an expanded profit and loss account. In the equity statement, transactions with the owner and income and expense items are shown separately, both divided into equity category as was done previously. The comparison figures are changed so that they agree with the revised standard. The change only affects the presentation and not the profit per equity certificate. Loan charges for qualifying assets starting on 1 January 2009 or later are recognised in the balance sheet as part of the actual historical cost of the asset. This follows from the change in IAS 23 Borrowing Costs. The following standards, interpretations and amendments are mandatory for annual accounts that start on 1 January 2009 or later, but have been deemed irrelevant to the 2009 annual accounts: IFRS 2 Share-based payment (amended) The following interpretations of existing standards have been published and will be mandatory for the company and consolidated accounts that start on 1 January 2010 or later, but without the management having chosen early adoption. IAS 27 Consolidated accounts and financial accounts (revised) IFRS 3 Business combinations (revised) IAS 38 Intangible assets (amended) IFRS 5 Non-current assets held for sale and discontinued operations (amended) IAS 1 Presentation of financial accounts (revised) IFRS 2 (amended) Share-based payment (incorporation of previous IFRIC 8 and IFRIC 11) IFRS 9 Financial instruments (applies to annual accounts starting on or after 1 January 2013); replaces measurement rules in IAS 39 for financial assets IAS 24 (revised), Related party disclosures (applies to annual accounts starting on or after 1 January 2011) Amendment to IAS 32: Rights issues (applies to annual accounts starting on or after 1 February 2010) IFRIC 17 Distributions of non-cash assets to owners IFRIC 18 Transfers of assets from customers IFRIC 19 Extinguishing financial liabilities with equity The notes on pages form an integral part of the consolidated acconts. Page 31

32 2.22 Changes in accounting principles The group has made changes to the accounting principles employed in the periods that are presented. IAS 23 (amended) "Borrowing costs" The group has employed IAS 23 (amended) for recognition of interest charges for qualifying assets since 01 January Significant accounting estimates and important conditions relating to the uncertainty of estimates The preparation of accounts in accordance with applicable standards and practices requires that the management prepares estimates and make assessments that affect the recognised 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 group 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 group s financial position, which is at the same time the result of difficult, subjective and complex assessments performed by the management. Such estimates are often uncertain by nature. The management evaluates such estimates continuously, based on historical data and experience, and by consultation with experts, trend analyses 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. a) Vessels - Economic life The level of depreciation is dependant on 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 group. The estimate is reassessed annually. A change in the estimate will affect depreciation in future periods. Residual value at the end of the economic life The notes on pages form an integral part of the consolidated acconts. Page 32 The level of depreciation is dependant on the estimated residual value on the balance sheet date. The anticipated residual value is based on knowledge of the scrap value of vessels. The scrap value is dependent on the price of steel. The scrap value estimate is subject to an annual reassessment. - Write-downs On the balance sheet date, the group 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 from a third party or, if a vessel is fixed on a long-term contract, by calculating the discounted value of the vessel s cash flows based on an estimated discount rate. b) Lease agreements When a lease agreement is entered into, the agreement is classified either as an operating or financial lease. This classification is based on the following prerequisites: The lease period is defined as the noncancellable period when the lessee is obligated to lease the asset, with the possible addition of an extended leasing period (option), if, when the contract is entered into, it is already reasonably certain that the lessee will exercise this option. Whether or not the lessee has an option to purchase the asset is also taken into account when the lease agreements are to be classified. If it is considered to be reasonably certain that the option will be exercised, then the contract will be classified as financial. If a purchase option exists when the contract is entered into and the option price is expected to be considerably lower than the market value at the time it may be exercised, it will be considered as reasonably certain that the option will be exercised. For calculation of the net present value of the minimum lease payment to assess the relationship between the net present value of lease payments

33 and the market value of the asset, the group uses the implicit interest rate in the lease contract. The use of other interest rates could produce other conclusions for the classification of the lease agreement. The assessment of reasonably certain requires the use of judgment and estimates. The estimated economic life and residual values for assets, as described above, are also relevant to the classification of lease agreements. c) Market value of derivatives and financial assets available for sale. All derivatives, including financial assets available for sale, are recognised on the balance sheet at market value. The market value of derivatives is typically based on an expected future performance (for example interest rate curves or forward curves for foreign currencies) and is calculated by means of complicated valuation models. The estimates are based on the information available on the balance sheet date and will be influenced by changes in the interest rates, foreign currency exchange rates and other input for the calculations. d) Pension obligations The accounting of defined benefit plans is a complex area since it requires the preparation of estimates for both actuarial and economic assumptions. In addition, the liabilities are measured based on the present value since the benefits are paid out many years after the employees have made their contributions and earned their pension rights. The group uses the guidelines published in a discussion memo from the Norwegian Accounting Standards Board, November The calculation of pension obligations is mainly influenced by the discount rate assumed. The discount rate is based on a ten-year government bond in Norway and is adjusted for the length of the pension obligation. A 1% increase/reduction in the discount rate may entail a reduction/ increase in the present value of the obligation by around 20-25%. This will not entail an immediate change in the pension costs since the actuarial gains or losses (estimate deviations) are recognised in the profit and loss account over the remaining contribution period and only when the accumulated changes exceed 10% of the higher of the The notes on pages form an integral part of the consolidated acconts. Page 33 pension obligations or the pension fund assets at the beginning of the year. e) Acquisition of assets When multiple assets are acquired as a whole, their individual cost prices must be stipulated. The group uses valuation methods and thirdparty valuations to determine the fair value of the individual identified assets, and it allocates the total cost price in accordance with the individual values. f) Recognition of purchase cost for newbuilds on the balance sheet Only purchase costs that are directly related to the asset under construction may be recognised on the balance sheet. The term "directly related to" requires the use of judgment for several costs that are relevant to construction to determine whether costs shall be recognised on the balance sheet or as an expense. g) Consolidated accounts All 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 group has over the individual company. An evaluation of the degree of control requires the use of judgment for a number of parameters. h) Disputes, requirements and regulatory aspects.the group is a party to or affected by disputes, claims and regulatory matters where the outcome is essentially unknown. The management assesses issues such as the probability of an unfavourable outcome and the potential to estimate any losses. Unexpected events or changes in the assessed factors may entail an increase or reduction in the provisions. Correspondingly, it may be relevant to set aside provisions for situations that provisions were not set aside for previously, when it was not assessed as a probable outcome or where it was not possible to obtain reliable estimates. i) Income tax The group is taxed on income in many countries. Determining income tax for all the countries under one in the consolidated accounts requires substantial use of discretion and judgement. For many of the transactions

34 and calculations there will be a level of uncertainty associated with the final tax liability. The group recognises the tax liability associated with future decisions in tax/dispute cases based on estimates on whether additional income tax will accrue. If a considerable outcome in a case differs from the originally allocated amount, the variance will affect the tax expenses and deferred tax provisions recognised in the accounts during the period in which the variance is determined. NOTE 3: FINANCIAL RISK MANAGEMENT Financial risks The group s activities entail different types of financial risk: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The group s overall risk management plan focuses on the unpredictability of the capital markets and attempts to minimise the potential negative effects on the group's financial results. Elements that are included in the management of financial risk are the length of contracts for charter parties, use of foreign currency and interest rate instruments, as well as raising debt in the same currencies as the expected foreign currency receipts. The main focus for managing interest and foreign currency risk is to secure future cash flow. Hedging positions for cash flow are recorded in the accounts at market value on the balance sheet date, which exposes the accounts to fluctuations in the value of the hedging instruments. In Eidesvik Offshore ASA, risk management of reported accounting profit is subordinated to considerations of cash flow risk management. The Group's business involves a variety of financial risks: market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management program allows for the unpredictability of the financial markets and seeks to minimize the potential negative effects on the Group's financial results. Items included in the management of financial risk contract are lengths of charters, the use of currency and interest rate instruments, weighting of debt in the same currency as the expected payments in foreign currencies. The main focus being to hedge future cash flows. The hedged cash flow positions are entered at marked value on the account balance day; hence the accounts will be exposed for the fluctuations in the value of the hedging instruments. The risk management of the Eidesvik Offshore ASA formal reported accounts is secondary to the risk management of the cash flow. The group s management team is responsible for risk management based on the guidelines established by the Board of Directors. a) Market risk (i) Foreign currency risk (see also Note 24) The group operates internationally and is exposed to a foreign currency risk in several currencies. This risk is particularly relevant with respect to USD. The foreign currency risk is related to future transactions, in addition to assets and liabilities recognised on the balance sheet. To manage the foreign currency risk associated with future trade transactions and assets and liabilities recognised on the balance sheet, the group uses foreign currency derivatives and raises debt in the same currency as future foreign currency receipts. USD is the currency that the group is most exposed to. The group has high freight income, but low operating expenses in this currency. Fluctuations in this currency thus have an impact on the financial results, and an attempt is therefore made to reduce the fluctuations by loans and forward contracts for this currency. If USD/NOK had been NOK 0.50 higher/lower in 2009, and similarly higher/lower on the balance sheet date, and all else was equal, the profit before tax would have been NOK 105 million lower/higher. An increase of NOK 0.50 on the exchange rate throughout the year would increase income on operating profit items by NOK 38 million, and decrease income from financial items by NOK The notes on pages form an integral part of the consolidated acconts. Page 34

35 5 million. An increase in the exchange rate on the balance sheet date in isolation would result in NOK 38 million lower income related to financial balance sheet items. The contribution from operating profit items is primarily from freight income in USD. The contribution from financial items is primarily from interest on debts paid in USD. The contribution from balance sheet items is primarily from loans in USD and USD sold forward. (ii) Price risk The group is exposed to a price risk since the spot rates have been volatile historically. The group seeks predictability, and its strategy is therefore to have a contract portfolio consisting of long contracts with a practically fixed price. The group has very low exposure to price risk for equity invested in other companies and commodities such as bunkers. (iii) Interest rate risk (see also Note 24) The group's interest rate risk is associated with long-term loans and deposits of surplus liquidity. Loans with floating interest rates entail a risk to the group s cash flow. Fixed interest loans expose the group to a fair value interest rate risk. The interest rate risk is managed by the use of interest rate derivatives (swaps and options) within the limits established by the Board of Directors. Interest rate fixing options (CIRR) are routinely sought from Eksportfinans in connection with the contracting of newbuilds in Norway. Interest fixing options that are granted, but not exercised, are not recognised on the balance sheet. The effect of a change in the interest rate level is simulated to support decisions associated with entering into fixed interest rate contracts. The simulation illustrates the cash effect of interest rate fluctuations given the size of the loan and level of the existing interest rate hedging. A 1 per cent change in interest rate, all else being equal, would have reduced profit before tax by NOK 16 million. The group's loans are recognised at the carrying value and will thus have no effect in terms of change in value in the event of interest rate fluctuations. The change in the fair value of interest rate derivatives in the event of a change in the interest rate level is not currently simulated. (b) Credit risk The group has a concentration risk since charter parties are entered into with relatively few customers. However, the customers are international players with a high level of financial strength and good liquidity, so that the risk of credit losses is low. The following table classifies the group's receivables from customers according to the risk of failure to collect outstanding claims: Receivables from customers Group Group Group Total Group 1: Established customer relationship, good ability/willingness to pay Group 2: New customers, possibly slow collection Group 3: Established customer relationship, poorer ability/willingness to pay Most of Group 3 is related to customer receivables from Sonangol. The table shows the balance after the recognition of losses. The group is not aware of the existence of any contingent liabilities related to investments in associated companies. The notes on pages form an integral part of the consolidated acconts. Page 35

36 The maximum risk exposure is represented by the carrying value of the financial assets, including derivatives, on the balance sheet. Since banks are the contracting party in derivative trades the credit risk related to derivatives is deemed to be low. The tables below illustrate the creditworthiness of the other contracting parties (financial institutions) Currency derivatives Moody's rating Aa1 Aa A Total Interest rate derivatives Moody's rating Aa1 Aa2 649 Aa A1 405 Total Cash and cash equivalents Moody's rating Aa Aa Aa A Cash in hand Total Management of the liquidity risk entails maintenance of adequate liquid assets and credit facilities to service obligations and take advantage of market opportunities. The group s goal is to have flexible financing through established credit facilities, and to manage the cash flow from the operations through a focus on long-term charter parties with little price volatility. Surplus liquidity is placed primarily in bank deposits and time deposits. A liquidity budget is routinely prepared for the following year, as well as a 12-month liquidity forecast. Long-term liquidity forecasts are prepared for up to five years once a year and when entering into newbuild contracts. See also Note 21 for information concerning instalment profile/refinancing needs for long-term liabilities. Risk management of capital The notes on pages form an integral part of the consolidated acconts. Page 36

37 The group's goal with respect to the risk management of capital is to ensure long-term financing supported by long-term contracts. This should reduce the frequency of - and hence the risk associated with - refinancing the loans. Long-term charter parties permit higher borrowing since the revenues are considered to be secure for a long time in the future. The group's strategy is to follow a moderate dividend policy to maintain a relatively strong equity debt to equity ratio in relation to other companies in the industry to make it easier to raise capital for identified market opportunities. Assessment of fair value Effective 1 January 2009 the group implemented the amendments to IFRS 7 relating to financial instruments measured at fair value on the balance sheet date. The amendments require the presentation of fair value measurements per level with the following distribution of levels for measuring fair value: 1) Listed price in an active market for an identical asset or liability (level 1) 2) Valuation based on other observable factors either direct (price) or indirect (derived from prices) than the listed price (used in level 1) for the asset of liability, (level 2) 3) Valuation based on factors not obtained from observable markets (non-observable assumptions) (level 3) The following table presents the group's assets and liabilities measured at fair value as at Level 1 Level 2 Level 3 Total Assets Financial assets at fair value over the profit and loss account 0 - Derivatives held for trading purposes Securities held for trading purposes Derivatives held for hedging 0 Financial assets available-for-sale 0 - Equity capital instruments 0 - Debt instruments 0 Total assets Liabilities Financial liabilities at fair value over the profit and loss account 0 - Derivatives held for trading purposes Derivates used for hedging 0 Total liabilities The notes on pages form an integral part of the consolidated acconts. Page 37

38 The fair value of financial instruments that are traded in active markets is based on the market price on the balance sheet date. A market is regarded as active if the market prices are easily and regularly available from a stock exchange, broker, business group, price-setting service or other regulating authority, and if these prices represent actual and regularly occurring market transactions at arm's length distance. The market price used for financial assets is the current purchase price; for financial liabilities the current sale price is used. These instruments are included in level 1. Instruments included in level 1 comprise shares classified as held for trading purposes. Fair value of financial instruments not traded in an active market (for example certain OTC derivatives) is decided using valuation methods. These valuation methods maximise the use of observable data where available and bases itself as little as possible on the group's own estimates. If all the essential data required for determining fair value of an instrument is observable, the instrument is included in level 2. If one or more of the essential data is not based on observable market data, the instrument is included in level 3. Debt to credit institutions with floating interest is recognised on the balance sheet at the nominal value, and this is considered to approximate the fair value. Fixed interest loans (CIRR) are recognised on the balance sheet at the nominal value, and estimated fair values are reported in Note 24. The fair value of fixed interest loans is calculated by discounting the difference between the fixed interest and the market rate as of with a duration equal to the loan's duration. The Black-Scholes option pricing model is used to calculate the value of options granted to the management for the purchase of shares in EIOF. NOTE 4: SEGMENT INFORMATION The group s operations are divided into strategic business units in accordance with the nature of the vessels activities. The various business segments offer different vessel services aimed at different customer groups with different risk profiles. The group is divided into the following business segments: a. Seismic b. Subsea c. Platform supply/anchor handling d. Other The seismic segment provides vessel services to customers who produce seismic data. This market is characterised by relatively long contracts. The vessels belonging to this segment are not tied to any specific geographic areas and operate throughout the world according to the needs of the customers. The subsea segment provides vessel services for subsea work for the oil industry. The vessels are custom designed for underwater tasks such as inspection, maintenance and construction. The platform supply/anchor handling segment provides services for the oil industry offshore. The vessels deliver supplies to rigs, function as part of the platform supply/anchor handling segment provides services for the oil industry offshore. The vessels deliver supplies to rigs, function as part of the rig's preparedness, and can perform towing and anchor handling jobs. The vessels that belong in this segment are divided into two groups: those that operate in Northern Europe and those in West Africa (see the geographic segment section). The rest of the group s activities are presented under "other", which consists of projects and management. Income of activities that are recognised according to the equity method are allocated to The notes on pages form an integral part of the consolidated acconts. Page 38

39 income in the "other" segment. This involves 25% of the income in Viking Troll DIS, and 51% of the income in Eidesvik Seismic Vessels AS. Transactions between the segments have been eliminated. These are mainly administrative expenses that are charged to the individual segment. Long-term financial items have not been allocated, because a major portion of the company's debt is fleet financing. Current liabilities are allocated to the segments whenever possible. If they do not fall naturally under any of the segments, they are allocated to the "other" segment. (Amounts in NOK 1000) Business segment Seismic Subsea/cable PSV/AHTS Other Consolidated Revenues Freight income Gain on asset sales/other revenue Total revenues Operating expenses Depreciation Operating profit Net financial expenses Tax Profit for the year Segment assets Investments in associated Investment in joint ventures Unallocated assets (cash) Total assets Segment debt (current liabilities) Unallocated debt (long-term liabilities) Total liabilities Investments in fixed assets (e.g. periodic maintenance) Secondary segments are not reported. The business segments seismic, subsea and PSV/AHTS are the only group divisions reported internally. The vessels operate in various parts of the world, but mainly as a consequence of the customers' required area of operation, not necessarily based on a predetermined geographical target area. As a result there is no secondary division. NOTE 5: OTHER REVENUES Effect of cash flow hedging Gain on sale of vessels Other revenues The notes on pages form an integral part of the consolidated acconts. Page 39

40 NOTE 6: OTHER OPERATING EXPENSES Technical operation of vessels Insurance Communication expenses Administrative expenses Research and development Other expenses Other operating expenses The periodic maintenance of the group s vessels is included in technical operation. Administrative expenses consist primarily of travel, consulting, attorney, auditor, rental and other office expenses. Other expenses consist of costs associated with the purchase of bunkers, lubricating oils and port fees. NOTE 7: INVESTMENTS IN JOINT VENTURES AND ASSOCIATED COMPANIES Unit Country Industry Ownershi p/ voting share Carrying value Share of profit/loss 2009 Repaid capital contributions from limited partners Additions/ disposals Carrying value Eidesvik Seismic Vessels AS Norway Ship-owner 51,0 % Total Eidesvik Seismic Vessels AS is classified a joint venture company due to the share agreement that gives equal control of the company. Condensed financial information on the individual associated companies: Unit Assets Liabilities Equity Turnover Profit for the year Eidesvik Seismic Vessels AS The notes on pages form an integral part of the consolidated acconts. Page 40

41 Eidesvik Offshore ASA has the following investments in associated companies: Unit Country Industry Ownershi p/voting share Carrying value Share of profit/loss 2008 Repaid capital contributions from limited partners Additions/disposals Carrying value Omak Maritime Nigeria Agent and ship operator 40,0 % Norway Medical 30,0 % Norsk Rederihelsetjeneste AS services 0 72 Viking Innovation Partner AS Norway Maritime 30,0 % Viking Troll DIS Norway Ship-owner 25,0 % Skrog Invest AS Norway Ship-owner 25,0 % Resq AS Norway Training 22,3 % Total Unit Country Industry Ownershi p/voting share Carrying value Share of profit/loss 2009 Repaid capital contributions from limited partners Additions/disposals Carrying value Omak Maritime Nigeria Agent and ship operator 40,0 % Norway Medical 30,0 % Norsk Rederihelsetjeneste AS services 0 0 Viking Innovation Partner AS Norway Maritime 30,0 % Viking Troll DIS Norway Ship-owner 25,0 % Skrog Invest AS Norway Ship-owner 25,0 % Resq AS Norway Training 22,3 % Total * Net share of profit/loss is presented under operating revenues, since the company's activities are directly related to the group's core operations. None of the investments in associated companies has a functioning market for assessment of a fair value. Assessment of fair value is therefore based on a valuation of the assets in companies where this has been possible. This applies to shipping companies that have a valuation of vessels obtained from three independent brokers. Condensed financial information on the individual associated companies: Unit Assets Liabilities Equity Turnover Profit for the year Omak Maritime (1) Norsk Rederihelsetjeneste AS Viking Innovation Partner AS Skrog Invest AS Viking Troll DIS Resq AS Total (1) Refers to figures as of 31 December 2008 for which revised figures do not exist as of 31 December The investment in the company has been written down to zero based on an overall assessment. The notes on pages form an integral part of the consolidated acconts. Page 41

42 NOTE 8: NET FINANCIAL EXPENSES Interest income Other financial income Share dividends received Total financial income Interest expenses on loans Cost of interest rate derivatives Other interest expenses Interest expenses - discounting of shipping company tax liability Interest related to taxes Write-downs on other shares Loss on sale of shares Other financial expenses Total financial expenses Change in value of interest rate derivatives (see also Note 24) Realised foreign exchange gains (losses) Unrealised foreign exchange gains (losses) - associated with other items Unrealised foreign exchange gains (losses) - associated with forward exchange contracts Total foreign exchange gains Net financial expenses The notes on pages form an integral part of the consolidated acconts. Page 42

43 NOTE 9: TAX Tax payable in Norway and abroad Tax related to withdrawal from the old shipping company taxation scheme Change in deferred tax/tax assets Taxes in profit and loss Temporary diffrences: Reserve for accelerated depreciation Investments in shares Capital gain and loss account Receivables from customers Pension obligations Tax loss carryforward Total temporary differences Deferred tax assets - net 0 0 Tax rate applied 28 % 28 % Tax payable Tax related to withdrawal from the old shipping company taxation scheme, long-term portion Tax related to withdrawal from the old shipping company taxation scheme, short-term portion Tax payable for the year within the shipping company taxation scheme Other corporate tax payable in Norway and abroad Total tax payable Explanation of taxes in the profit and loss account: Profit before tax % tax Tax effect of: Permanent differences/profit subject to shipping company taxation/difference tax rate abroad Tax related to withdrawal from the old shipping company taxation scheme Correction in deferred tax/tax assets Estimated taxes for the year Group s effective tax rate -16 % -1 % The Norwegian shipping company taxation scheme was amended as of 1 January Settlement of tax payable from the previous shipping company taxation scheme was declared invalid by the Supreme Court in February Allocations made for this taxation of NOK 163,481 are reversed. Concurrently NOK 41,195 paid in 2008 and 2009 was recognised in the balance sheet as short-term receivables. The notes on pages form an integral part of the consolidated acconts. Page 43

44 NOTE 10 : EARNINGS PER SHARE Profit for the year attributable to holders of ordinary/diluted shares Profit for the year before discontinued operations Expanded profit and loss account Profit for the year attributable to holders of ordinary shares Average weighted number of outstanding shares as of 31 Dec Average weighted number of outstanding ordinary shares Average weighted number of issued share options Average weighted number of outstanding shares as of 31 Dec Non-diluted earnings per share 36,20-20,02 Diluted earnings per share 36,04-19,93 Expanded earnings per share 36,20-20,02 The average number of outstanding shares is weighted based on the number of days. See Note 17 for changes in number of shares. Dividends of NOK 15,075,000 were paid in 2009, NOK 0.50 per share. Share options were not allotted in 2008 and NOTE 11 : PAYROLL EXPENSES AND NUMBER OF EMPLOYEES Salary after new wage refund Shipping company bonus Cost of option programme (see Note 25 for details) Employer s National Insurance contributions outside the net wage scheme Pension cost of defined benefit plans (see also Note 19) Other personnel expenses Total payroll expenses Wages and employer s National Insurance contributions are presented after the deduction of the refund scheme for Norwegian seamen. Average number of man-years was: The notes on pages form an integral part of the consolidated acconts. Page 44

45 NOTE 12 : TANGIBLE FIXED ASSETS Operating equipment Total other Periodic fixed assets Vessels (*) maintenance Newbuild contracts Real estate Port facilities Sum vessels Historical cost 1 January Additions Disposals December Accumulated depreciation and write-downs Balance sheet as of 1 January 2008: Opening balance Depreciation for the year Disposals December Carrying value total Real estate Port facilities Operating equipment Total other Periodic fixed assets Vessels (*) maintenance Sum vessels Newbuild contracts Historical cost 1 January Additions Disposals December Accumulated depreciation and write-downs Balance sheet as of 1 January 2009: Opening balance Depreciation for the year December Carrying value total Interest of NOK 1.7 million was activated for newbuilds in Disposal for newbuild contracts is due to the transfer to joint venture business. (*) Disposals in 2008 concern Viking Nereus. After sale was agreed in July 2008, it was reclassified to "Vessels held for sale" and the sale was completed on 25/02/09 with an accounting profit in the first quarter of NOK 135 million. For information on mortgaged assets see Note 21 NOTE 13 : OTHER LONG-TERM RECEIVABLES Loans to associated companies Other loans Total other long-term receivables Several details concerning loans to employees are provided in Note 25. Loans to associated companies fall due on demand. Other loans are related to the Bømlo Sports Club. The loan is not interest-bearing and falls due at the same time as the payment of municipal funds and funds from Norsk Tipping. Based on a summary of outgoing payments from funds from Norsk Tipping administered by Bømlo kommune the loan is written down by NOK 186 in 2009, NOK 400 was received in January 2010; these funds are allocated as short-term items. See Note 15. The notes on pages form an integral part of the consolidated acconts. Page 45

46 NOTE 14 : CUSTOMER RECEIVABLES Customer receivables Customer receivables related parties Provisions for losses Customer receivables For outstanding receivables due from customers other than related parties the distribution is as follows: 0-3 months months months < Carrying value of the group's receivables from customers by foreign currency: USD NOK Sum Movement in provisions for the write-down of receivables from customers: As of 1 January Provisions for the write-down of receivables Receivables that are written off for losses during the year Previous provisions moved with receivables from customers to long-term receivables As of 31 December The notes on pages form an integral part of the consolidated acconts. Page 46

47 NOTE 15 : OTHER CURRENT ASSETS Inventory Other shares Outstanding value added tax Short-term loans associated companies Short-term loans close associates Short-term loans - joint ventures Payment of shipping taxation owed according to the transfer scheme of 01 January 2007 Insurance settlement owed Prepaid expenses Total other current assets Interest on loans: Loans to associated companies No interest is calculated on the receivables based on the associated company's financial situation. Loans to close associates Interest is calculated on receivables at NIBOR plus 1% based on the three-month NIBOR at the end of each quarter. Interest rates have been in the range of ,94 4,9% 6,88 8,69% Prepaid expenses include outlays for prepaid insurances, provisions for refund of crew expenses and other subsidies, un-invoiced outlays for customers and also loans to employees (see Note 25). NOTE 16: CASH AND CASH EQUIVALENTS Cash in hand and bank deposits Cash and cash equivalents on the balance sheet Cash and cash equivalents in the cash flow statement Of the total cash and cash equivalents, restricted tax withholding deposits accounted for NOK 5,269 (8.946). The notes on pages form an integral part of the consolidated acconts. Page 47

48 NOTE 17: SHARE CAPITAL AND SHARE PREMIUM No. of shares Share capital Share premium Ordinary shares Opening balance Reduction of capital Nominal value per share in Eidesvik Offshore ASA is NOK The Board of Directors has the authority to buy back up to 3,000,000 of the company s own shares. This authority is limited, however, to a maximum of 10% of the total number of outstanding shares. The company has not exercised this authority and holds none of its own shares as of 31 December Eidesvik Offshore ASA s 20 largest shareholders as of No. of shares Ownership interest Shareholder Country EIDESVIK INVEST AS Norway ,93 % NOR SKAGEN VEKST Norway ,30 % NOR PARETO AKSJE NORGE Norway ,41 % NOR PARETO AKTIV Norway ,75 % NOR ODIN OFFSHORE Norway ,32 % NOR KLP LK AKSJER Norway ,08 % NOR TVEITÅ, EINAR KRISTIAN Norway ,78 % NOR KLP AKSJENORGE Norway ,24 % NOR VPF PARETO VERDI Norway ,73 % NOR BANK OF NEW YORK MELLON SA/NV (NOM) Belgium ,53 % BLE TVEITÅ, OLAV MAGNE Norway ,47 % NOR JIMBA INVEST AS Norway ,44 % NOR PHAROS INVEST AS Norway ,44 % NOR LØREN HOLDING AS Norway ,37 % NOR MUSTAD INDUSTRIER AS Norway ,35 % NOR HUSTADLITT AS Norway ,33 % NOR SPAREBANKEN VEST Norway ,33 % NOR SKAGEN VEKST III Norway ,30 % NOR MELING, JAN FREDRIK Norway ,22 % NOR AMCAR VERKSTED AS Norway ,21 % NOR Others ,47 % ,00 % The company had 819 shareholders as of 31 December 2009, and a foreign ownership share of 0.87%. The notes on pages form an integral part of the consolidated acconts. Page 48

49 NOTE 18: EQUITY Cash flow hedging Total Balance sheet 01 January Cash flow hedging (against hedged item) Other reserves as of 31 December Cash flow hedging (against hedged item) Other reserves as of 31 December Dividends Dividends paid: The Board of Directors has proposed the distribution of a dividend for 2010 of NOK 0.50 per share. NOTE 19: PENSIONS AND OTHER LONG-TERM EMPLOYEE BENEFITS Defined benefit pension scheme All the employees in the group companies participate in a defined benefit pension scheme. The group has several agreements, and these agreements differ primarily according to whether the employee is employed on board a vessel (seaman) or in onshore operations. The main terms in all the agreements are a pension of approximately 60% of final salary and a contribution period of 30 years. The agreement that applies to maritime employees gives entitlement to an old-age pension from the age of 60. Other group schemes give entitlement to a pension from the age of 67. This scheme also includes a survivor's, disability and child's pension. The schemes had 569 (577) members as of 31 December The obligation has been calculated by means of a linear accrual formula. Unrealised gains and losses due to changes in the actuarial assumptions are accrued over the expected remaining average contribution period. The carrying value of an obligation is determined as follows: The notes on pages form an integral part of the consolidated acconts. Page 49

50 Present value of accrued pension obligations for benefit plans in fund-based schemes Fair value of pension fund assets Net pension obligations Unrecognised costs related to pension benefits earned in prior periods Net pension obligations on the balance sheet as of 31 December Changes in the defined benefit pension obligations during the year: Pension obligations as of 1 January Present value of current year s pension benefits earned Interest expenses National Insurance contributions on employer contributions Actuarial losses/(gains) Benefits paid Pension obligations as of 31 December Change in the fair value of the pension assets: Pension fund assets as of 1 January Expected return on pension fund assets Actuarial (gains)/losses Contributions from employer Benefits paid Pension fund assets as of 31 December Total cost recognised in profit and loss account: Cost of pension benefits earned in current period Interest expenses Expected return on pension fund assets Amortisation actuarial (gains)/losses Total, including payroll expenses (Note 11) The actual return on plan assets was NOK 3008 (NOK -689). Pension funds are through external insurance company placed in various investments. They administrate all transactions relating to pension schemes. The distribution of the investment categories as per. 31/12/1909 Shares 12 % Bonds 55 % Real Estate 16 % Money market 10 % Other 7 % The notes on pages form an integral part of the consolidated acconts. Page 50

51 The actual return on the pension fund assets was NOK -3,008 (NOK -689). The following assumptions have been used for calculation of the pension costs and net pension obligations: The actual return on the pension fund assets was NOK -3,008 (NOK - 689) ,50 % 3,80 % 5,70 % 5,80 % 4,50 % 4,00 % The following assumptions have been used for calculation of the pension costs and net pension obligations: Pension adjustment 1,50 % 1,50 % National Insurance basic amount (G) adjustment 4,25 % 3,75 % The mortality assumptions are based on published statistics. The group does not have any defined contribution pension schemes. One employee has entered into an agreement where the pension is financed through operations. The expected premium payment for 2010 is 8,835. NOTE 20: OTHER CURRENT LIABILITIES Public taxes and fees Salaries and holiday pay Accrued expenses Total other current liabilities Accrued expenses refer primarily to provisions for accrued shipyard repairs The notes on pages form an integral part of the consolidated acconts. Page 51

52 NOTE 21: LONG-TERM LIABILITIES Carrying value on Maturity Secured Mortgage loan (NOK) NIBOR loan June Mortgage loan (NOK) NIBOR loan October Mortgage loan (NOK) NIBOR loan June Mortgage loan (NOK) CIRR loan February Mortgage loan (NOK) NIBOR loan April Mortgage loan (NOK) NIBOR loan December Mortgage loan (NOK) NIBOR loan January Mortgage loan (NOK) NIBOR loan January Mortgage loan (NOK) CIRR loan January Mortgage loan (NOK) Debt certificate loan March Mortgage loan (NOK) NIBOR loan December Mortgage loan (NOK) Debt certificate loan January Mortgage loan (USD) LIBOR loan April Mortgage loan (USD) LIBOR loan December Mortgage loan (USD) LIBOR loan December Mortgage loan (USD) LIBOR loan April Mortgage loan (USD) LIBOR loan December Mortgage loan (USD) LIBOR loan May Mortgage loan (USD) LIBOR loan June Mortgage loan (USD) LIBOR loan June Mortgage loan (USD) LIBOR loan July Mortgage loan (USD) LIBOR loan June Mortgage loan (USD) LIBOR loan December Mortgage loan (USD) LIBOR loan June Building loan (USD) LIBOR loan June Loans to group companies Amortised charge Accrued interest Total interest-bearing longterm liabilities Total long-term liabilities year instalments on long-term liabilities and other current bank debt Total long-term liabilities excluding first year s instalments Loans short-term 1 year instalments on long-term liabilities Accrued interest Bank overdrafts and other long-term liabilities Total Carrying value of debt in foreign currency NOK USD Total The notes on pages form an integral part of the consolidated acconts. Page 52

53 Instalment profile for long-term liabilities Thereafter Total instalments Of the total long-term liabilities, NOK 3,098 million is secured by a mortgage on vessels with a carrying value of NOK 4,205 million. The following vessels are not mortgaged: Oceanic Viking and Geo Searcher. For assessment of fair value on long-term liabilities see Note 3. Covenants Most of the company s fleet is financed through mortgage loans, primarily a fleet loan. The most important financial covenants associated with this financing are: - Eidesvik Offshore ASA shall be listed on Oslo Stock Exchange. - The group's book equity shall be at least 25%, or the company shall have a cash flow from operation that exceeds the first year's instalments of long-term loans by 125% - Group's working capital shall be positive. NOTE 22: LONG PAYABLES TO SUPPLIERS Payables to suppliers Payables to close associates 0 0 TOTAL The notes on pages form an integral part of the consolidated acconts. Page 53

54 NOTE 23: LEASE AGREEMENTS Group as a lessee financial lease agreements The group has currently no financial lease agreements. Group as a lessee Operational lease agreements The group has lease agreements for two vessels, a lease agreement for offices and motor vehicle leasing. These lease agreements are not recognised on the balance sheet, but the rental expenses are recognised as they are incurred. Lease of vessels: Annual rent Start End Lease period Options Northern Crusader (*) 3 x months months Stril Odin 1 x months months and 3 x 12 months (*) Northern Crusader is in its third option period which runs until November This is the last option period. Other lease agreements Type Annual rent Start Lease period Options Langevåg Bygdatun Offices years x 5 years Stock years 10 x 5 years Motor vehicles months The lease agreements for offices and storerooms are regulated in accordance with the consumer price index. The leasing of motor vehicles is based on the development of interest rates and use beyond the agreement. They are normally entered into for a term of 36 months and are continuously renewed with new vehicles based on the current needs at any given time. Future minimum rent related to non-cancellable lease agreements falls due as follows: Next 1 year to 5 years After 5 years Future minimum rent The notes on pages form an integral part of the consolidated acconts. Page 54

55 The group as lessor The main business area of the group is the leasing of offshore ship tonnage. The vessels are mainly leased on long-term contracts. Contract expiration, Vessels, consolidated Contract type Customer Contract expiration, fixed charterer's option Viking Lady Time charter Total Q Q Viking Queen Time charter Statoil Q Q Viking Athene Spot Statoil Q Viking Avant Time charter Statoil Q Viking Energy Time charter Statoil Q Viking Thaumas Spot Sonangol Q Q Viking Surf Spot Kosmos Q Northern Crusader Time charter ConocoPhillips Q Q Viking Poseidon Time charter Veolia Q Q Acergy Viking Time charter Acergy Q Q Subsea Viking Time charter Subsea 7 Q Q Viking Forcados Spot RUE Q Q Oceanic Viking Bareboat P&O Maritime Services PTY Q Q2 Viking Vanquish Time charter CGGVeritas Q Viking Vision Time charter CGGVeritas Q Veritas Viking Time charter CGGVeritas Q Veritas Vantage Time charter CGGVeritas Q Viking II Time charter CGGVeritas Q Geo Searcher Store Vessels in joint ventures Contract expiration, Contract type Customer Contract expiration, fixed charterer's option TBN - XBow Seismic II Time charter CGGVeritas 2022 Q TBN - XBow Seismic I Time charter CGGVeritas 2023 Q Vessels in associated compcontract type Customer Viking Troll Store Contract expiration, fixed Contract expiration, Vessels with contracts of less than one year are classified as spot tonnage. NOTE 24: FINANCIAL INSTRUMENTS Financial instruments by category Assets Financial assets available-for-sale (shares SOFF) Currency derivatives, cash flow hedging Interest rate derivatives Customer receivables Cash and cash equivalents Total Liabilities Currency derivatives, cash flow hedging Interest rate derivatives Loans Total The notes on pages form an integral part of the consolidated acconts. Page 55

56 Foreign currency As of the group had entered into forward contracts as an element in the management of the group s foreign currency exposure. The terms in the contracts are as follows: Forward contracts Currency sold Amount Year of maturity Exchange rate (average) Fair value (MTM) Total forward contracts for cash flow hedging USD , As of : Currency sold Amount Year of maturity Exchange rate (average) Fair value (MTM) Forward contracts Total forward contracts for cash flow hedging USD , USD , USD , USD , USD , Total forward contracts for hedging vessel sales price USD , Total forward contracts for finance hedging USD , USD , All the forward exchange contracts are recognised at fair value. Up until 31 December 2005 the group practiced hedge accounting for very probable future receipts in USD. The company s debt in USD was designated as a hedging instrument for very probable future receipts. The instalment structure for the debt was adapted to the expected payment profile. Unrealised foreign exchange gains on the debt were entered directly against the equity (other unrecognised equity) on an ongoing basis until the very probable future cash flow was entered in the accounts. The effective portion of the hedging was entered in the accounts together with the transaction that it was supposed to hedge (income), while any ineffective portion of the hedging is accounted for as financial expenses. After the group discontinued hedge accounting the unrealised currency gain from previous periods is still presented as other unrecognised equity. This will be reduced gradually as the initial hedged cash flows are accounted for. The notes on pages form an integral part of the consolidated acconts. Page 56

57 Hedge accounting USD DEBT Maturity Less than 1 year years years years More than 5 years Interest The group makes use of several types of interest rate derivatives to hedge against profit fluctuations due to changes in the interest rate level. The group has the following interest swap agreements: As of Type Foreign currenc Floor Cap/Swap Maturity NOK principal Fair value (excl. accrued interest) reduction prior to maturity Swap USD 4,87 % None Collar USD 3,75 % 5,00 % None Cap NOK 5,00 % Swap NOK 4,01 % None Swap USD 2,29 % Swap USD 2,27 % Swap USD 2,41 % Swap* USD 4,50 % None Swap* USD 4,51 % None Swap* USD 4,40 % None Fixed interest loans NOK 4,09 % Fixed interest loans NOK 4,90 % Unhedged Total hedged and unhedged debt *) Other contracting party has an option to extend the term of the contract by three (3) years from maturity. Type Foreign currenc Floor Cap/Swap Maturity NOK principal *) Other contracting party has an option to extend the term of the contract by three (3) years from maturity. The notes on pages form an integral part of the consolidated acconts. Page 57 Fair value (excl. accrued interest) Annual reduction prior to maturity Swap NOK 3,15 % Swap USD 3,88 % None Swap USD 4,87 % None Collar USD 3,75 % 5,00 % None Swap NOK 4,01 % None Swap* USD 4,50 % None Swap* USD 4,51 % None Swap* USD 4,40 % None Fixed interest loans NOK 4,09 % Unhedged Total hedged and unhedged debt

58 As of 31 December 2009, 64% (43%) of the group s loans had fixed interest rates (see Note 21) Only one derivate (with a principal of NOK 242 million) for interest rate hedging as of had an amortization profile matching the instalments for long-term liabilities. See column for annual reduction. The company has the following unrecognised CIRR (interest rate options) from Exportfinans: Principal NOK interest rate GBP interest rate USD interest rate interest rate Term (years) NOK 504 million* 5,68 % 6,17 % 5,69 % 5,15 % <12 NOK 504 million* 5,68 % 6,17 % 5,69 % 5,15 % <12 *) There are also offers for terms of 5 and 8.5 years with other interest rates The group had two fixed interest loans, originally with a 12-year term (CIRR), which are recorded at nominal value in the balance sheet. Remaining term as of was 10.1 years for the first loan. The instalment profile of the loan results in a calculated weighted duration of 3.42 years. This gives a calculated fair value of 220,615 (including accrued interest), against the carrying value of 218,750. The other loan had a remaining term of 11.0 years and a calculated weighted duration of 4.04 years. This gives a calculated fair value of 304,326 (including accrued interest), against the carrying value of 291,333. See Note 21 for information on long-term loans and Note 20 for information on commitments in connection with financial lease agreements. Other note information No financial assets have been reclassified so that the valuation method has been changed from the amortised cost to fair value or vice versa. For assessment of fair value (MTM) see note 3. NOTE 25: TRANSACTIONS WITH CLOSE ASSOCIATES Transactions with associated companies The group has some transactions with close associates. This applies to crewing services and management services for the operation of vessels, in addition to business and accounting services. All transactions are based on the arm's length principle Sale of crewing and management services to Viking Troll AS Chartering of vessels to Omak Maritime Total The notes on pages form an integral part of the consolidated acconts. Page 58

59 The balance sheet includes the following amounts as a result of transactions with associated companies: Customer receivables Other current assets (see also Note 15) Payables to suppliers Total Shares owned/controlled by board members/key personnel: Eidesvik Invest AS (1) Kolbein Rege Jakob Bleie (Deputy board member) Jan Fredrik Meling Jan Lodden Svein Ove Enerstvedt (1) Controlled by Borgny Eidesvik, board member, with a 55% interest via 100% ownership of Bømmelfjord AS. The remaining 45% is owned by Lars Eidesvik, board member, via a 100% interest in Evik AS. Remuneration to key employees: Number allocated options Salary Benefits in kind Pension costs Jan Fredrik Meling CEO Jan Lodden COO Svein Ove Enerstvedt CFO Kolbein Rege Borgny Eidesvik Lars Eidesvik Kjell Jacobsen Monica Havskjold Jakob Bleie (Deputy board member) Loans to employees: The group previously granted loans of up to NOK 100 to employees at a fixed interest rate, which as of was 5% p.a. As of loans totalling NOK 65 (2008: NOK 210) had been granted to employees. The scheme was discontinued in 2008 and old loans are due for payment up to and including The notes on pages form an integral part of the consolidated acconts. Page 59

60 Auditor: Statutory auditing Other verification services Tax consulting Other services beyond auditing Total consulting NOTE 26: PURCHASE COMMITMENTS The group has the following commitments as the result of contracts for the purchase of vessels: Total As of there are 4 vessels on order: a PSV with delivery Q2 2009, a subsea vessel with delivery Q1 2009, and two seismic vessels with delivery Q and Q respectively. Eidesvik Offshore ASA has guaranteed for proper fulfillment of the construction contract to Ulstein Verft on behalf of the joint venture Eidesvik Seismic Vessels AS. NOTE 27: FOREIGN EXCHANGE RATES Average exchange rate 2008 Exchange rate Average exchange rate 2009 Exchange rate Euro 8,219 9,865 8,729 8,315 British Pounds 10,330 10,121 9,805 9,317 US Dollars 5,636 6,999 6,347 5,777 Nigerian Naira 0,048 0,051 0,050 0,038 The average exchange rate is taken from the accounts where the rate is updated on a weekly basis. The notes on pages form an integral part of the consolidated acconts. Page 60

61 NOTE 28: EVENTS AFTER THE BALANCE SHEET DATE The contract for seismic vessel Vanquish has been extended by five years from 2015 to In this regardthe vessel will be rebuilt in order to increase the capacity for seismic surveys. The period for rebuilding is estimated at 10 weeks from the beginning of May The lessee has a purchase option on the vessel when the contract expires in PSV Viking Surf has entered into a four year contract with the option of an additional four years with Petrobas, starting early August On 26 March 2010 the Ministry of Finance presented a new proposal of the transition scheme linked to untaxed capital as of This transition scheme, if adopted, entails a tax cost of NOK 74 million due on 1 March of each year from 2011 to The notes on pages form an integral part of the consolidated acconts. Page 61

62 32 ANNUAL ACCOUNTS FOR 2009 PARENT COMPANY PROFIT AND LOSS ACCOUNT Note Other operating income Total operating income Payroll expenses Depreciation Other operating expenses Total operating expenses Operating profit Income from investments in subsidiaries Interest income from group companies 8, Other interest income Other financial income Revaluation of financial assets Interest cost to group companies Other interest cost Other financial cost Profit before tax Tax Profit for the year Allocation of the profit for the yar Allocated to other reserves Transferred from other equity Total allocations Page 62

63 BALANCE SHEET PARENT COMPANY Note Fixed assets Tangible fixed assets Property and plant Equipment Operating equipment, tools, office machines Total tangible fixed assets Financial assets Investments in subsidiaries Loans to group companies Investments in associated companies Loan to associated companies Shares Total financial assets Total fixed assets Current assets Receivables Receivables from group companies Other receivables Total receivables Bank deposits, cash, etc Total current assets TOTAL ASSETS Page 63

64 BALANCE SHEET PARENT COMPANY EQUITY AND LIABILITIES Note EQUITY Paid-in capital Share capital Other paid-in capital Total paid-in capital Retained earnings Other reserves Total retained earnings Total equity LIABILITIES Provisions Pension obligations Total provisions Other Long-term liabilities Loans Loans to group companies Total other long-term liabilities Current liabilities Trade payables Taxes and dues Loans to group companies Other current libabilities Total current libabilities Total libabilities TOTAL EQUITY AND LIABILITIES Page 64

65 CASH FLOW STATEMENT PARENT COMPANY Note Cash flows from operations Payments to suppliers and employees Interest income received Net cash flows from operations Cash flow from investment activities Purchase of fixed assets Sale of fixed assets Purchase of other investments 0 0 Purchase of shares Sale of shares Net cash flows used in investment activities Cash flows from financing activities New debt Repayment of debt Interest expenses paid Loans to subsidiaries / associated companies Dividends paid to company s shareholders Repaid equity to minority interests 19 Net cash flows from financing activities Net effect of currency translation differences on cash and cash equivalents Net increase (reduction) in cash and cash equivalents Cash and cash equivalents at the start of the year Cash and cash equivalents at the end of the year Page 65

66 NOTES TO THE ACCOUNTS 2009 PARENT COMPANY Accounting principles The annual accounts have been prepared in accordance with the Norwegian Accounting Act of 1998 and the generally accepted accounting principles. Classification and valuation of balance sheet items Current assets and short-term liabilities include items that fall due for payment no later than one year after the balance sheet date. Other items are classified as fixed assets or long-term liabilities. Current assets are valued at the lesser of historical cost or fair value. Current liabilities are recognised on the balance sheet based on the nominal amount of the liability at the time it is established. Fixed assets are valued at historical cost, but they are written down to the fair value if the impairment in value is not expected to be of a temporary nature. Long-term liabilities are recognised on the balance sheet based on the nominal amount of the liability at the time it was established. Receivables from customers Receivables from customers and other receivables are recognised on the balance sheet at the nominal value, less a provision for estimated losses. Provisions for losses are made on the basis of an assessment of the individual receivables. In addition, unspecified provisions are made for other receivables from customers to cover any estimated losses. Foreign currency Foreign currency items are valued at the exchange rate in effect at the end of the financial year. Subsidiaries/associated companies Subsidiaries and associated companies are valued based on the cost method of accounting in the company s accounts. The investment is valued at the historical cost of the shares unless a write-down of the shares has been necessary. Group contributions to subsidiaries, less a deduction for taxes, are entered as an increased cost price for the shares. Dividends/group contributions are recognised as income the same year provisions are made in the subsidiary or associated company. When the dividends or group contributions significantly exceed the share of the retained earnings after the acquisition, the excess amount is regarded as repayment of invested capital and is deducted from the value of the investment on the balance sheet. Tangible fixed assets Tangible fixed assets are recognised on the balance sheet and depreciated over the economic life of the asset. Maintenance of fixed assets is charged against income on a current basis under operating expenses, while enhancements and improvements are added to the cost price of the fixed asset and depreciated in step with the fixed asset. The distinction between maintenance/improvements is made based on the condition of the asset when it is acquired. Taxes Tax in the profit and loss account encompasses both the tax payable for the period and the change in deferred taxes. Deferred tax assets are calculated at the rate of 28% on the basis of the temporary differences that exist between the financial accounting and tax-related values, in addition to the tax loss carryforward at the end of the financial year. Page 66

67 Negative and positive temporary differences that reverse or may reverse during the same period are offset and the net amount is entered. Pension obligations The company finances its pension obligations to employees through a group pension scheme. The accounting is performed in accordance with NRS 6, the accounting standard for pension costs. The pension obligations are calculated as the net present value of future pension benefits that are assumed to have been incurred on the balance sheet date, based on the employees earning pension rights gradually over the period they are employed. The pension fund assets are valued at fair value and are offset against the pension obligations for each pension scheme. The net pension fund assets are presented as long-term receivables under fixed asset investments. The net pension costs for the period are included in the wages and social benefits, and consist of the period's pension benefits earned, interest cost of the estimated pension obligations, expected return on the pension fund assets, effect of changes in the estimates and pension schemes recognised on the profit and loss account, deviation between the actual and estimated return recognised in the profit and loss account, as well as the accrued National Insurance contributions. The effect of changes in pension schemes are amortised over the average remaining contribution period. Estimate deviations that exceed the higher of 10% of the pension obligations or pension fund assets are distributed evenly over the average remaining contribution period for active members. Cash Flow Statement The cash flow statement has been prepared in accordance with the direct method. Cash and cash equivalents include cash, bank deposits and other short-term liquid investments that can be converted immediately without any significant exchange rate risk for a known cash amount, and the maturity date must be less than three months from the purchase date. Note 1 - Bank deposits (figures in 1000) Of bank deposits of NOK 7,144 (58,105), the restricted tax withholding deposits totalled NOK 295 (161). Note 2 - Investments in subsidiaries Company Registered office Company's interest/voting share No. of Nominal value Carrying value Eidesvik Shipping AS Bømlo % NOK Eidesvik AS Bømlo % NOK 1, Eidesvik Subsea AS Bømlo % NOK 1, Eidesvik Shipping Ltd Hook % Eidesvik Shipping Int. AS Bømlo % Eidesvik Subsea Vessels AS Bømlo % Langevåg Senter Bømlo % Ef Tech AS Bømlo % Eidesvik Management AS Bømlo % Norsk Rederihelsetjeneste AS Bømlo % Total Page 67

68 Note 3 - Investments in associated companies Company Registered office Company's share capital Ownership interest /voting share No. of Nominal value Cost price/ carrying value Resq AS Haugesund % NOK Viking Innovation Partner AS Bømlo % NOK Skrog Invest AS Bømlo % 100 NOK 1, Total 105 The company has granted NOK 710 in loans to Resq AS. Shares in Viking Innovation Partner AS were written down by NOK 34 to O in Note 4 - Investments in shares and units Company's Ownership interest Cost price/ carrying Company Registered office share capital /voting share No. of Nominal value value Haugaland Kunnskapspark AS Haugesund % 800 NOK 1, Note 5 - Summary of tangible fixed assets Furnishing Transport s and Non-depreciable equipment Residential property equipment fixed assets Total Historical cost as of 1 January Additions Disposals Historical cost as of 31 December Accumulated depreciation as of 1 January Depreciation for the year Accumulated depreciation as of 31 December Carrying value as of 31 December Depreciation rates 20 % 0 % 10 % 0 % Depreciation method Linear Linear Page 68

69 Note 6 - Taxes Tax charge for the year Tax payable: Profit before tax Permanent differences Recognised dividends from subsidiaries Change in temporary differences (A) Taxable income Of which tax payable 0 0 Change in deferred tax Tax charge for the year Explanation of taxes in the profit and loss account: Profit before tax % tax Tax effect of: Permanent differences Recognised dividends from subsidiaries Reversed deferred tax assets as of 01/01/ Unrecognised change in deferred tax assets this year Estimated taxes for the year Temporary differences Deferred taxes: Change Fixed assets Pension fund assets Customer receivables Total temporary differences (A) Basis for unused allowance Taxes loss carried forward Basis for deferred tax assets Total deferred tax assets, 28% Deferred tax assets not recognised. Page 69

70 Note 7 - Equity Share capital Other paid-in equity Other equity Total Equity as of 1 January Distribution to shareholders Profit for the year Other changes Equity as of 31 December Note 8 - Short-term intercompany balances Eidesvik AS (subsidiary) Skrog Invest AS (associated company) Eidesvik Seismic Vessels AS (subsidiary) Langevåg Senter AS (subsidiary) Eidesvik Shipping AS (subsidiary) Eidesvik MPSV AS (subsidiary) Ef Tech AS (subsidiary) Total Eidesvik AS (subsidiary) Total Interest will be charged on outstanding accounts that are not ordinary trading accounts on a quarterly basis at 3 months NIBOR + 1% margin. Receivables from customers were written down against Skrog Invest AS by NOK 424 in Note 9 - Long-term loans to subsidiaries Eidesvik Seismic Vessels AS Total Subsidiaries paid interest of 5% p.a. on loans. Note 10 - Long-term intercompany balances Eidesvik Invest AS Total Interest on intercompany balances is charged quarterly with 3 months NIBOR + 1% margin. Page 70

71 Note 11 - Share capital and shareholder information The company s share capital consists of 30,150,000 shares with a nominal value of NOK Eidesvik Offshore ASA s 20 largest shareholders as of : Shareholder Country No. of shares Ownership interest EIDESVIK INVEST AS Norway ,93 % SKAGEN VEKST Norway ,30 % PARETO AKSJE NORGE Norway ,41 % PARETO AKTIV Norway ,75 % ODIN OFFSHORE Norway ,32 % KLP LK AKSJER Norway ,08 % TVEITÅ, EINAR KRISTIAN Norway ,78 % KLP AKSJENORGE Norway ,24 % VPF PARETO VERDI Norway ,73 % BANK OF NEW YORK MELLON SA/NV (NOM) Belgium ,53 % TVEITÅ, OLAV MAGNE Norway ,47 % JIMBA INVEST AS Norway ,44 % PHAROS INVEST AS Norway ,44 % LØREN HOLDING AS Norway ,37 % MUSTAD INDUSTRIER AS Norway ,35 % HUSTADLITT AS Norway ,33 % SPAREBANKEN VEST Norway ,33 % SKAGEN VEKST III Norway ,30 % MELING, JAN FREDRIK Norway ,22 % AMCAR VERKSTED AS Norway ,21 % Others ,47 % ,00 % Shares owned/controlled by board members and the Managing Director: Eidesvik Invest AS (1) Kolbein Rege (2) Jakob Bleie (Deputy board member) Kjell Jacobsen 0 0 Monica Havskjold 0 0 Jan Fredrik Meling (3) (1) Controlled by Borgny Eidesvik, board memeber with 55% via 100% ownership in Bømmelfjord AS. Remaining 45% owned by Lars Eidesvik, board member, via 100% ownership in Evik AS. (2) Of which 10,000 shares are owned through Nieblok Invest AS (3) The Managing Director also has an option for 40,000 shares, which has a higher exercise price than the market price as of 31 December Page 71

72 Note 12 - Wages and salaries, number of employees, remunerations, loans to employees Payroll expenses Wages and salaries Employer s National Insurance contributions Pension costs Directors' fees Other benefits Total The company had 1 employee at the end of the year. A separate pension agreement has been entered into with the Managing Director; see Note 13. Remuneration to the Managing Director: Salary Other remuneration Total The Managing Director has an option for 40,000 shares, which has a higher exercise price than the market price as of 31 December NOK 113 was charged as an expense for the scheme in Remuneration to the Board of Directors: Kolbein Rege Borgny Eidesvik Lars Eidesvik Kjell Jacobsen Monica Havskjold Jakob Bleie (Deputy board member) Auditor Distribution of auditor's fees is as follows: - statutory auditing (including assistance with annual accounts) tax consulting (incl. technical assistance with tax papers) other accounting assistance Total auditor s fees, excluding VAT Page 72

73 Note 13 - Pension costs and obligations The company has pension schemes that cover the company s only employee. The schemes give entitlement to defined future benefits. These benefits are dependent on the number of years of service, salary level when reaching retirement age and the size of the National Insurance benefits. The obligations are covered through an insurance company Estimated obligations Value of pension fund assets Unrecognised change Estimated employer s National Insurance contributions 0 0 Under-funding Reconciliation of pension costs for the year Net present value of current year s accrued pension benefits Interest cost of pension obligations Expected return on pension fund assets Recognised estimate deviations 2 0 Accrued employer s National Insurance contributions 0 Net pension costs The following financial and actuarial assumptions have been made in the calculations: Discount rate 4,50 % 3,80 % Expected return on pension fund assets 5,70 % 5,80 % Expected wage inflation and National Insurance basic amount (G) adjustment 4,5%/4,25% 4,0%/3,75% Adjustment of pension during payment 1,50 % 1,50 % Note 14 - Long-term liabilities to credit institutions Long-term liabilities as of DnB Long-term liabilities as of Fokus Bank Total long-term liabilities to credit institutions Both loans are not secured and have a duration of 3 years. The loans are to be settled in March and December Page 73

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76 fleet list SEISMIC New B Q2-10 New B Q1-10 SUBSEA New B Q1-o Viking Poseidon Type: TYPE: OVC/IMR Vessel Built: 2008/2009 Class: DNV + 1a1,Sf,Eo,Dynpos-Autro,Naut-Osv,Opp-F, Crane,Clean,Comfv(3), Comfc(3),Dk(+),Helidk-Sh. Length: 130,2 m Draught: 7,0m Deadweight: Acergy Viking Type: TYPE: VS495 SV Built: 2007 Class: DNV + 1A1, SF, ICE 1c, Deice, Heldk SH, E O Dynpos AUTR, Clean Design, Comf-V(2) and Comf-C(3), Crane, Register notation DK (+) Length: 97,60 m Deadweight: Viking Forcados Type: Subsea Built: 2002 Class: Gl 100 A5 CLS DP2 Cable Lay Ship Mc-Aut24 Length: 81,24 m Draught: 3,29 m Beam: m Deadweight: Gross Tonnage: Subsea Viking Type: VS 4103 Multipurpose Subsea Support-Vessel Built: 1999 Umoe Sterkoder. Class: Det Norske Veritas +1A1 Supply Vessel, SF, Dynpos AUTRO, EO (LFL*), SMB Helidk-SH, dk(+). Length: 103 m Beam: 22 m Viking Forcados 81,24 m Draught: 9,6 m GRT: Deadweight: TBN XBow SX120 Type: Seismic Research Vessel Built: 2010 Viking Forcados Class: 81,24 m DNV Length: 106,0m Beam: 24/28m Draught: 8m Acergy Viking m GRT: Appr t Deadweight: Appr t 2010 TBN XBow SX120 Acergy Viking m Type: Seismic Research Vessel Built: 2010 Class: DNV Length: 106,0m Beam: 24/28m Draught: 8m Acergy Viking m GRT: Appr Deadweight: Appr Viking Vanquish Type: Seismic Research Vessel Built:1998 Rebuilt: 2007 Class: DNV + 1A1, SF, AUTR, EO, HELDK, DK+ Viking Poseidon XBow 120,20m Length: 93,36 Beam: 22,20 Draught: 6,85 GRT: Deadweight: Viking Vision Type: SEISMIC RESERCH VESSEL Built: 2007 Subsea Viking - Class: 103 m DNV 1A1, ICE-C SF, COMF-V(3), HELDK RP EO CLEAN Length: 105 m Beam: 24 m Draught: 8,50 m GRT: Deadweight: Veritas Vantage Viking Poseidon XBow 120,20m Viking Forcados 81,24 m Viking Poseidon XBow 120,20m Subsea Viking m Viking Poseidon XBow 120,20m Subsea Viking m Subsea Viking m Viking Forcados 81,24 m Viking Forcados 81,24 m Viking Poseidon XBow 120,20m Acergy Viking m Acergy Viking m Viking Forcados 81,24 m Subsea Viking m Viking Poseidon XBow 120,20m Viking Forcados 81,24 m Type: VS 492 Seismic Survey Vessel Built: 2002 Mjellem & Karlsen Verft Class: Det Norske Veritas +1A1 SF, EO Viking Poseidon XBow 120,20m HELDK, SMB Length: 93,35 m Beam: 22 m Draught: 7,05 m GRT: Deadweight: Acergy Viking m Viking Forcados 81,24 m 100m 100m 100m 100m 100m 100m 100m 100m 100m 0m 0m 0m 0m 0m 0m 0m 0m 0m Viking Forcados 81,24 m Viking Poseidon XBow 120,20m Acergy Viking m Subsea Viking m Viking Forcados 81,24 m Viking Poseidon XBow 120,20m Acergy Viking m Subsea Viking m Viking Vanquish - 93,35 m TBN XBow SX ,20m Viking Vanquish - 93,35 m TBN XBow SX ,20m Viking Vanquish - 93,35 m TBN XBow SX ,20m Geo Searcher - 69,2 m TBN XBow SX ,20m Veritas TBN XBow Vantage SX m 120,20m TBN XBow SX ,20m Veritas Viking m Geo Searcher - 69,2 m Veritas Viking ll m Geo Searcher - 69,2 m Viking Vanquish - 93,35 m Veritas Vantage m Veritas Viking Vision Vantage m m Viking Vanquish - 93,35 m Veritas Viking m TBN XBow SX ,20m Veritas Viking m Oceanic Viking - 105,60 m Veritas Viking ll m TBN XBow SX ,20m Veritas Viking ll m TBN XBow SX ,20m Viking Vision m Viking Vision m TBN XBow SX ,20m Viking Vanquish - 93,35 m Geo Searcher - 69,2 m Oceanic Viking - 105,60 m Oceanic Viking - 105,60 m Veritas Vantage m Geo Searcher - 69,2 m TBN XBow SX ,20m Viking Vanquish - 93,35 m Veritas Vantage m Veritas Viking m TBN XBow SX ,20m Viking Vanquish - 93,35 m Veritas Viking m Veritas Viking ll m TBN XBow SX ,20m 1999 Viking II Subsea Viking m Viking Poseidon XBow 120,20m Oceanic Viking - 105,60 m 100m 0m Subsea Viking m Type: VS 492 Seismic Survey Vessel Built: 1999 Mjellem & Karlsen Verft Class: Det Norske Veritas +1A1 SF, Geo Searcher EO - 69,2 m HELDK, SMB Length: 93,35 m Beam: 22 m Draught: 7,05 GRT: Deadweight: Acergy Viking m Viking Vision m Geo Veritas Searcher Viking - ll 69, m m TBN XBow SX ,20m Acergy Viking m TBN XBow SX ,20m Veritas Viking Vision Vantage m m TBN XBow SX ,20m Veritas Viking m Oceanic Viking - 105,60 m Subsea Viking m Veritas Vantage m Veritas Viking ll m Geo Searcher - 69,2 m 1998 Veritas Viking Veritas Viking m 100m 0m Type: VS 492 Seismic Survey Vessel Built: 1998 Mjellem & Karlsen Verft Class: Det Norske Veritas +1A1 SF, EO HELDK, SMB Length: 93,35 m Beam: 22 m Draught: 7,05 GRT: Deadweight: Veritas Viking Vision Vantage m m Veritas Viking ll m Veritas Viking m Oceanic Viking - 105,60 m Viking Vision m Veritas Viking ll m 1996 Oceanic Viking Type: Cable Layer Built: 1996 Flekkefjord Slip- og Maskinfabrikk, rebuilt 2000 Astilleros de Cadiz. Class: Det Norske Veritas +1A1 Cable Laying Vessel, EO, DynPos AUT, dk(+) Length: 105,60 m Beam: 22,0 m Draught: 6,83 m GRT: Deadweight: m 0m Oceanic Viking - 105,60 m Viking Vision m Oceanic Viking - 105,60 m

77 Viking Poseidon XBow 120,20m Viking Forcados 81,24 m TBN XBow SX ,20m Viking Vanquish - 93,35 m Viking Naurus m Viking Thaumas m Viking Surf - 70,40 m Acergy Viking m Viking Poseidon XBow 120,20m TBN XBow SX ,20m TBN XBow SX ,20m Viking Naurus m Viking Avant m Subsea Viking m Acergy Viking m Geo Searcher - 69,2 m TBN XBow SX ,20m Viking Surf - 70,40 m Subsea Viking m Viking Forcados 81,24 m 1982 Geo Searcher Veritas Vantage m Viking Avant m Viking Energy m Geo Searcher - 69,2 m Veritas Viking m 100m 0m Type: Seismic Survey Built: Th. Hellesøy 1982 Class: DnV, + 1A1, EO, Ice C Length: 69,2 m Draught: 5,25 Veritas Vantage m Viking Energy m Veritas Viking ll m m Beam: 12,8 m Deadweight: Gross Viking Vanquish - 93,35 Tonnage: m Northern Crusader - 73,60 m Viking Thaumas m Veritas Viking m Viking Vision m Viking Athene m Viking Poseidon XBow 120,20m Acergy Viking m Subsea Viking m Viking Forcados 81,24 m Viking Forcados 81,24 m Viking Poseidon XBow 120,20m Viking Poseidon XBow 120,20m Acergy Viking m Acergy Viking m Subsea Viking m Subsea Viking m Viking Forcados 81,24 m Acergy Viking m Viking Forcados 81,24 m Subsea Viking m Viking Poseidon XBow 120,20m Acergy Viking m Subsea Viking m Viking Forcados 81,24 m 2009 Viking Lady Viking Vision m Type: VS 493 AVANT LNG Clean Design Built: TBN XBow SX120 Westcon, 120,20m Yard No 30, 2009 Class: DNV 1A1, Supply Vessel, SF, E0, Dynpos AUTR, Gas Fuelled, LFL*, Oil Rec, Clean Design, Comfort-V (3), Ice C, NAUT OSV (A), Fi-Fi 1. Register Viking Queen m Viking Avant Lady m Oceanic Viking - 105,60 m notations DK (+) and HL (p) Length: 92,20 m Draught: 7,30 m Deadweight: Appr Viking Queen Type: VS 493 AVANT - LNG Built: 2008 Class: DNV +1A1, Supply Vessel,SF,E0,Dynpos- AUTR,Gas-Fuelled, Viking Troll m Veritas Viking m LFL*,Oil-Rec,Clean Design,Comfort-V(3), Ice-C, Reg.Not.DK(+) and HL(p) Compliance with NAUT- OSV Guidelines Length: 92,20 m Draught: Appr 7,60 m Deadweight: Appr Viking Athene Type: VS470 MK II Built: 2006 Class: DnV, +1A1 Length: 73,40 m Deadweight: Approx Viking Thaumas TBN XBow SX ,20m Type: VS470 MK2 Built: 2005 Class: Det TBN Norske XBow SX ,20m Veritas 1A1, SF-EO Length: 73,40 m Beam: 16,60 m Draught: 7,60 m GRT: Deadweight: Viking Avant Geo Searcher - 69,2 m Type: VS493 SUPPLY VESSEL Built: 2004 Class: Det Norske Veritas 1A1, Ice C, SF, EP. Dynpos Autr, LFL*, CLEAN, COMF-V (3) Standby Vessel, oilrec, deice comp with deice C,con-tainer, Reg. Notation DK(+) and HL(p) Veritas Vantage m Veritas Vantage m Length: 92,20 m Beam: 20,40 m Draught: 9,0 m GRT: Deadweight: Seabed Viking Veritas Viking ll m Type: Supply Vessel Built: 2010 Fjellstrand AS Class: Det Norske Veritas, 1A1 E0 SF Length: 78,60 m Beam: 17,60 m Draught: 6,60 m GRT: Viking Vision mdeadweight: Viking Energy Viking Vanquish - 93,35 m Type: VS 4403 Built: 2003 Kleven Verft Class: DnV +1A1, Supply Vessel, SF, E0, Dynpos AUTR, Gas Fueled, LFL*, Oil Rec, Clean Class, Comfort Class rating 3, Register notations DK (+) and HL (p) Length: 94,90 m Geo Searcher - 69,2 m Beam: 20,40 m Draught: 9,60 m GRT: Deadweight: Viking Surf Veritas Viking m Type: VS 470 Platform Supply Vessel Built: 2002 West Contractors Class: Det Norske Veritas +1A1 Supply Vessel E0-SF FI-FI I, Dynpos Aut, dk(+) Length: 70,4 m Beam: 16,6 m Draught: 6,5 m GRT: Veritas Viking ll m Geo Searcher - 69,2 m Deadweight: Viking Dynamic Viking Lady Naurus m m Veritas Oceanic TBN XBow Viking Viking SX m - 105,60 120,20m m Type: VS490 Platform Support Vesse Built: 2002 Aker Aukra Class: Det Norske Veritas +1A1, Supply Vessel, SF, E0, LFL*, Dynpos AUTR. Register notations DK (+) and HL (p) Clean Length: 90,2 m Beam: 19 m Northern Crusader - 73,60 m Veritas Viking ll m Viking Surf - 70,40 m Draught: 8,4 m GRT: Deadweight: Viking Troll Type: Anchor Handling Tug Supply Vessel (AHTS) Oceanic Viking - 105,60 mbuilt: 2000 Class: DNV 1A1 Tug Support Vessel, Length: 73,80 m Beam: 16,00 m Draught: 6,50 m GRT: Deadweight: Northern Crusader Veritas Viking ll m Viking Athene m Viking Vision m 100m 0m Viking Lady m Oceanic Viking - 105,60 m Viking Vanquish - 93,35 m Viking Thaumas m Viking Vanquish - 93,35 m Viking Thaumas m Viking Queen m 100m 0m Viking Surf - 70,40 m Viking Surf - 70,40 m TBN XBow SX ,20m TBN XBow SX ,20m Viking Avant m Viking Avant m 100m 0m Geo Searcher - 69,2 m Viking Vanquish - 93,35 m Viking Poseidon XBow 120,20m Viking Naurus m Viking Forcados 81,24 m Veritas Viking m Veritas Viking m TBN XBow SX ,20m Veritas Vantage m Northern Crusader - 73,60 m Northern Crusader - 73,60 m 100m 0m Viking Vision m Viking Poseidon XBow 120,20m Viking Naurus m Subsea Viking m Acergy Viking m Viking Forcados 81,24 m Acergy Viking m TBN XBow SX ,20m TBN XBow SX ,20m Geo Searcher - 69,2 m TBN XBow SX ,20m Oceanic Viking - 105,60 m Oceanic Viking - 105,60 m Veritas Vantage m Viking Vanquish - 93,35 m Veritas Viking m Veritas Viking ll m Viking Vision m Viking Lady m Viking Lady m Viking Surf - 70,40 m 100m 0m Viking Poseidon XBow 120,20m Viking Naurus m Subsea Viking m Viking Poseidon XBow 120,20m Acergy Viking m Subsea Viking m Northern Crusader - 73,60 m Viking Naurus m TBN XBow SX ,20m Veritas Viking ll m Viking Lady m Oceanic Viking - 105,60 m 100m 0m Viking Athene m Viking Surf - 70,40 m Geo Searcher - 69,2 m Viking Troll m Viking Queen m Veritas Vantage m 100m 0m Viking Energy m Veritas Viking ll m Viking Vanquish - 93,35 m TBN XBow SX ,20m TBN XBow SX ,20m 100m 0m TBN XBow SX ,20m TBN XBow SX ,20m Oceanic Viking - 105,60 m Geo Searcher - 69,2 m Viking Vanquish - 93,35 m Viking Vision m Veritas Vantage m Veritas Vantage m Veritas Viking m Veritas Viking ll m TBN XBow SX ,20m Viking Vision m Viking Vision m 100m 0m 100m 0m Geo Searcher - 69,2 m Oceanic Viking - 105,60 m Veritas Vantage m Veritas Viking m Veritas Viking ll m 100m 0m Type: ME 303 Mk II Anchorhandling Tug Supply Vessel Built: 1992 U.DLL., Singapore Class: Det Norske Veritas, +1A1 + MV, EO, tug/supply OIL REC Viking Length: Vision m 73,60 m Beam: 16,40 m Draught: 8 m GRT: Deadweight: Northern Crusader - 73,60 m Viking Troll Naurus m m Viking Naurus m Viking Thaumas m Viking Energy m Viking Energy m Viking Surf - 70,40 m Viking Thaumas m Viking Athene m Viking Athene m Viking Avant m Viking Energy m Viking Thaumas m Viking Thaumas m Viking Queen m Viking Queen m Viking Avant m Northern Crusader - 73,60 m Viking Troll m Viking Naurus m Viking Troll m Viking Athene m Viking Energy m Viking Surf - 70,40 m Viking Surf - 70,40 m Viking Lady m Viking Northern Avant Crusader m 73,60 m Viking Avant m Viking Queen m Viking Thaumas Athene mm Viking Energy m Viking Energy m Viking Troll m Northern Crusader - 73,60 m Viking Queen m Viking Athene m Viking Athene m Viking Avant m Viking Troll m Viking Lady m Viking Lady m Viking Energy m Viking Queen m Viking Queen m Viking Northern Troll Crusader m- 73,60 m Viking Troll m Viking Athene m New B Q1-o9 PSV AHTS Oceanic Viking - 105,60 m Viking Lady m Viking Queen m

78 Tradisjon for innovasjon Eidesvik er et kraftsenter for framtidsrettede skips og operasjonsløsninger Eidesvik is a driving force for future oriented shipping and operational solutions 1992 Geo Explorer: Første 3D Seismikkskip First 3D seismic vessel 1996 Viking Lady: Verdens største PSV Largest PSV in the World 1998 Viking Poseidon: Verdens første MPSV First Multi Purpose Vessel in the World 2003 Viking Energy: Verdens første LNG drevne PSV First LNG fuelled PSV in the World 2004 Viking Avant: Fullstendig nytt PSV design Totally new PSV design 2009 Viking Lady: Første skip med brenselcelle First vessel with fuel cell installed Eidesvik Offshore ASA N 5443 Bømlo