ANNUAL REPORT 2015

CONTENTS

Highlights 2015 1

Key Figures 2

New vessels delivered in 2015 4

Newbuildings 6

Fleet List 8

Local presence in key markets 10

This is Siem Offshore Inc. 12

Board of Directors Report 14

Corporate Governance 20

Income Statements 23

Statements of Financial Position Assets 24

Statements of Financial Position Equity and Liabilities 25

Statements of Changes In Equity 26

Statements of Cash Flows 29

Notes to the Accounts 30

Corporate Social Responsibility 94

Auditors Report 96

Responsibility Statement 98

Board of Directors 99

Financial Calendar 100

HIGHLIGHTS 2015

REVENUE USD 1,000 approved a USD100 million Rights Petrobras inability to obtain operating

422 449
Issue, which was subject to the approval
of an increase in the Companys share
capital by its Shareholders, as part of
its Finance Plan. The Companys largest
shareholder, Siem Europe S.a r.l., had
fully-underwritten the Rights Issue.
OPERATING MARGIN USD 1,000 Agreed a 6-month contract with options
license for the vessel.
Agreed with Petrobras to terminate the
contracts for three smaller Brazilian
flagged supply/crew vessels.
Extended contract for the R/V JOIDES
Resolution to Texas A&M Research
Foundation (TAMRF) until 30 September

118 548
for the PSV Siem Pilot.
Agreed sale of the PSV Siem Sasha
to Siem Offshore Ghana International
AS, a company owned 51% by Siem
Offshore.
Reached a new agreement with Daya
EMPLOYEES
Materials Berhad for the sale of the
2016. TAMRF has further options to
extend the charter until 30 September
2023 on an annual basis.
Siem Europe S.a r.l. announced a
mandatory offer to the shareholders
of the Company at an offer price of
NOK 1.80 per share.

949
Offshore Subsea Construction Vessel
(OSCV) Siem Daya 1 for USD120 HIGHLIGHTS FOR THE FOURTH
million and a profit-split limited to an QUARTER
additional USD10 million.
Entered into a 5-year charter for the Completed the sale and delivery of
VESSELS IN OPERATION OSCV Siem Marlin commencing in the offshore subsea construction

43
September 2015 with purchase options vessel (OSCV) Siem Daya 1 in
available after each of first 4 years and fourth quarter and a recorded a gain
a purchase obligation at end of charter. of USD16.6 million.
Conducted a review of vessel valuations Agreed 145-day term contracts with
and elected to record impairments of options for two Platform Supply Vessels
an aggregate USD56 million on certain (Siem Sasha and Sophie Siem) with
vessels. an international oil company.
HIGHLIGTS FOR THE FIRST Placed two AHTS vessels in lay-up at Agreed a 9-month term contract with
QUARTER the end of the second quarter. 2 x 6 month options for the AHTS
SOC was awarded a turnkey supply and vessel Siem Amethyst for operation
Contracts for four of the AHTS vessels installation contract for the inner array in Australia.
operating in Brazil were not renewed by grid cable system for the Veja Mate Agreed a 4-year bareboat contract for
the Petrobras Board. Offshore Windfarm project. The marine the vessel Siem Hanne for operation
Signed USD 350 million loan and installation works are scheduled to in Canada.
guarantee facility for two new commence in 2016. Placed two AHTS vessels into lay-up
well-intervention vessels (WIVs) in the quarter; the Company had five
under construction in Germany. HIGHLIGHTS FOR THE THIRD AHTS vessels and two large PSVs in
Agreed a one year contract with QUARTER lay-up at year end.
Petrobras for the PSV Siem Giant Conducted a review of vessel
with commencement latest The Board of Siem Offshore Inc. values, capitalized equipment and
September 2015. appointed Idar Hillersy as Chief investments in subsidiaries and
Debt financing obtained for the Executive Officer of the Company recorded impairments of an
three dual-fuelled PSVs under with effect from 1 August 2015. aggregate USD 111.6 million.
construction in Poland. USD 100 million Rights Issue success- Completed Rights Issue for USD100
The financial close for the Nordsee fully completed and new registered million in new equity.
One offshore wind farm was reached. share capital is USD 8,420,213.80, Recorded aggregate backlog for the
corresponding to a total of 842,021, Offshore Support Vessels (OSV)
HIGHLIGHTS FOR THE SECOND 380 shares with a nominal value of segment and the Industrial Segment
QUARTER USD 0.01 per share. for USD1.42 billion at the end of the
Received notice of early termination fourth quarter.
The Companys Board of Directors for the vessel Siem Carrier due to

SIEM OFFSHORE INC., ANNUAL REPORT 2015 1

 KEY FIGURES

(Amounts in USD 1,000) CONSOLIDATED

Income Statements Ref 2015 2014
Operating revenue 422,449 491,312
Operating expenses -303,901 -297,187
Operating margin (1) 118,548 194,125
Operating margin, % 28% 40%
Depreciation and amortization -107,025 -96,883
Impairment of vessels -159,465 -29,000
Impairment of intangibles -6,705
Gain/(loss) on sale of assets 16,317 18,728
Gain on sale of interest rate derivatives (CIRR) 368 368
Gain/(loss) on currency derivative contracts -30,775 -3,023
Operating profit (2) -168,735 84,316
Operating profit margin, % -40% 17%
Net financial items -21,384 -12,685
Result from associated companies -1,560 1,808
Profit /(loss) before taxes -191,679 73,439
Profit marging before taxes -45% 15%
Tax benefit/(expense) -4,737 -2,729
Net profit /(loss) -196,416 70,710
Minorities interest -9,729 12,563
Net profit/(loss) attributable to shareholders -186,687 58,147
Net profit margin, % -44% 12%
Statements of Financial Position 12/31/2015 12/31/2014
Non-current assets 1,766,916 1,995,809
Current assets 264,747 264,774
Working capital (3) 34,299 -17,419
Total assets 2,035,122 2,260,584
Shareholders equity 632,215 784,982
Non-current liabilities 1,139,165 1,154,742
Current liabilities 230,448 282,193
Total equity and liabilities 2,035,122 2,260,584
Statements of Cash Flows 2015 2014
Net cash flow from operations (4) 42,462 184,345
Net change in cash (4) 43,623 43,401

Key Figures 2015 2014

Weighted average no. of outstanding shares (1,000) 518,318 387,591
Weighted average no. of diluted outstanding shares (1,000) 757,123 389,144
Earnings per share (USD) -0.36 0.15
Diluted earnings per share (USD) -0.36 0.15
Cash flow per share in (USD) (5) 0.08 0.48
Share price per year end (USD) 0.16 0.46
Share price per year end (NOK) 1.40 4.04
Price/earnings per share (P/E) (6) -0.44 3.06
Price/cash flow per share (P/CF) (7) 2.00 0.96
Book shareholders equity per share (USD) (8) 0.75 2.03
Operating margin share (9) 0.23 0.50
Book equity ratio (10) 0.33 0.36
2
Liquidity ratio (11) 1.15 0.94
VESSELS

31/12/2015 51 TOTAL
31/12/2014 55 TOTAL
31/12/2013 55 TOTAL
31/12/2012 47 TOTAL
31/12/2011 45 TOTAL
31/12/2010 42 TOTAL
31/12/2009 44 TOTAL
31/12/2008 40 TOTAL
31/12/2007 32 TOTAL
31/12/2006 34 TOTAL
31/12/2005 27 TOTAL

Newbuildings Vessels in operation

OWNERSHIP

31/12/2015 51 TOTAL
31/12/2014 55 TOTAL

31/12/2013 55 TOTAL
31/12/2012 47 TOTAL
31/12/2011 45 TOTAL
31/12/2010 42 TOTAL
31/12/2009 44 TOTAL
31/12/2008 40 TOTAL
31/12/2007 32 TOTAL
31/12/2006 34 TOTAL
31/12/2005 27 TOTAL
0-51% 100%

Definitions
(1) Earnings before interests, tax, depreciation and amortization (EBITDA)
(2) Earnings before interests and taxes (EBIT)
(3) Total current assets less total current liabilities
(4) See Statements of Cash Flows for details
(5) Net cash flow from operation divided on weighted average number of shares outstanding
(6) Stock Exchange price on December 31 divided on earnings per share
(7) Stock Exchange price on December 31 divided on cash flow per share
(8) Shareholders equity divided on number of outstanding shares
(9) Operating margin divided on weighted average number of outstanding shares
(10) Book equity divided on total assets
3
(11) Current assets divided on current liabilities
 NEW VESSEL DELIVERED IN 2015

Siem Pride
Built by Remontova, Poland, delivered 5 November 2015

4 SIEM OFFSHORE INC., ANNUAL REPORT 2015

SIEM OFFSHORE INC., ANNUAL REPORT 2015 5
 NEWBUILDINGS

Siem Helix 1 delivery 2016

Siem Helix 2 delivery 2016
Design: SALT 307 WIV
Type: WIV

Newbuilding
program
Siem Harmony delivery 2016
Siem Melody delivery 2016
Siem Rhapsody delivery 2016
Design: VS 4411 DF
Type: PSV
Ownership: 100%

6 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 delivered Siem Aimery delivery 2016 Avalon Sea delivery 2016
Siem Marataizes
February 2016
Design: VARD CLV 01 Design: UT 782Wp
Design: ULSTEIN P801
Type: CLV Type: AHTS
Type: OSRV
Ownership 100%
Ownership 100% Ownership 50%

SIEM OFFSHORE INC., ANNUAL REPORT 2015 7

 VESSELS IN OPERATION 31 MARCH 2016

Platform Supply Vessels (PSV)

Siem Pride Siem Symphony Siem Atlas Siem Giant Siem Hanne Siem Louisa
Built: 2015 2014 2013 2014 2007 2006
Design: VS 4411 DF VS 4411 DF STX PSV 4700 STX PSV 4700 VS 470 MK II VS 470 MK II
Dp Class: 2 2 2 2 2 2
LOA: 89.20 m 89.20 m 87.90 m 87.90 m 73.40 m 73.40 m
Breadth: 19.00 m 19.00 m 19.00 m 19.00 m 16.60 m 16.60 m
Draught: 7.40 m 7.40 m 6.60m 6.60 m 6.42 m 6.42 m
Dwt: 5,500 t 5,500 t 4700 T 4,700 T 3570 T 3570 T
Accommodation: 28 25 34 34 34 34
Cargo Deck Area: 980 m2 980 m2 1000 m2 usable 1000 m2 usable 680 m2 usable 680 m2 usable
Ownership: 100% 100% 100% 100% 100% 100%

Anchor Handling Tug Supply Vessels (AHTS)

Siem Amethyst Siem Opal Siem Garnet Siem Sapphire Siem Aquamarine Siem Topaz
Built: 2011 2011 2010 2010 2010 2010
Design: VS 491 CD VS 491 CD VS 491 CD VS 491 CD VS 491 CD VS 491 CD
Dp Class: 2 2 2 2 2 2
LOA: 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m 91.00 m
Breadth: 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m 22.00 m
Draught: 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m 7.95 m
Dwt: 3800 T 3800 T 3800 T 3800 T 3800 T 3800 T
Accommodation: 60 60 60 60 60 60
Cargo Deck Area: 800 m2 800 m2 800 m2 800 m2 800 m2 800 m2
BHP: 28000 28000 28000 28000 28000 28000

Bollard Pull: 297 Te 297 Te 282 Te 301 Te 284 Te 306 Te

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

Offshore Subsea Construction Vessel (OSCV) & Multipurpose field & ROV Support Vessel (MRSV)

Siem Marlin Siem N-Sea Siem Daya 2 Siem Spearfish Siem Stingray
Built: 2009 2009 2013 2014 2014
Design: MT 6017 MK II MT 6017 MK II STX OSCV 11L STX OSCV 03 STX OSCV 03
Dp Class: 2 2 2 2 2
LOA: 93.60 m 93.60 m 120.80 m 120.80 m 120.80 m
Breadth: 19.70 m 19.70 m 22.00 m 23.00 m 23.00 m
Draught: 6.30 m 6.30 m 6.60 m 6.60 m 6.60 m
Dwt: 4.500 t 4.500 t 5.000 t 5.000 t 5.000 t
Accommodation: 68 68 110 110 110
Cargo Deck Area: 1046 m2 1046 m2 1300 m2 1,300 m2 1,300 m2
Crane: 100 t Offshore/Subsea crane 100 t Offshore/Subsea 250 t Offshore/Subsea 1 X 250 t AHC, 3,000 m 1 X 250 t AHC, 3,000 m
ROV Moonpool - - 7.2 X 7.2 7.2 X 7.2 m 7.2 X 7.2 m
Ownership: 100% 100% 100% 100% 100%

8 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Large-size PSVs

Sophie Siem Siem Sasha Siddis Mariner Siem Pilot Hugin Explorer Siem Supplier Siem Carrier
2006 2005 2011 2010 2006 1999 1996
VS 470 MK II VS 470 MK II VS 485 VS 485 MT 6000 MK II MT 6000 VS 483
2 1 2 2 2 2 2
73.40 m 73.40 m 88.3 m 88.3 m 86.20 m 83.70 m 82.85 m
16.60 m 16.60 m 20 m 20 m 19.70 m 17.70 m 19.00 m
6.42 m 6.42 m approx 7.0 m approx 7.0 m 6.18 m 6.10 m 6.30 m
3570 T 3570 T 4500 T 4500 T 3236 T 4250 T 4679 T
34 34 64 64 56 20 23
680 m2 usable 680 m2 usable 970 m2 970 m2 935 m2 912 m2 840 m2
100% 100% 51% 51% 100% 100% 100%

Siem Ruby Siem Diamond Siem Pearl Siem Emerald

2010 2010 2009 2009
VS 490 CD VS 491 CD VS 491 CD VS 491 CD
2 2 2 2
91.00 m 91.00 m 91.00 m 91.00 m
22.00 m 22.00 m 22.00 m 22.00 m
7.95 m 7.95 m 7.95 m 7.95 m
3800 T 3800 T 3800 T 3800 T
60 60 60 60
800 m2 800 m2 800 m2 800 m2
28000 28000 28000 28000

310 Te 284 Te 285 Te 281 Te

100% 100% 100% 100%

Installation Support Vessel (ISV) Other

Siem Moxie Brazil 31.03.2016 Canada 31.03.2016 JOIDES RESOLUTION BIG ORANGE XVIII
Built: 2014 Fleet of 8 vessels Fleet of 5 vessels
Design: SX 163 X-Bow OSRV/FCS/FSV AHTS/PSV/Field support Scientific Core Drilling Ves- Well Stimulation Vessel
Dp Class: 2 sel (SCDV) (WSV)
LOA: 74.00 m 100% owned 50% owned 100% owned 41.3% owned
Breadth: 17.00 m
Draught: 6.40 m
Dwt: 2.835 t
Accommodation: 60
Cargo Deck Area: 200 m2 usable
Ownership: 100%

SIEM OFFSHORE INC., ANNUAL REPORT 2015 9

 LOCAL PRESENCE IN KEY MARKETS 31 MARCH 2016

Geographical
footprint
Kristiansand (HQ)

Leer

Groningen
Gdynia
Halifax

St. Johns
Houston

Siem Offshore offices:

Accra

Kristiansand (Norway)
Rio de Janeiro, Maca, Aracaju (Brazil)
Leer (Germany) Maca
Aracaju
Groningen (The Netherlands)
Houston (USA) Rio de Janeiro
Accra (Ghana)
Perth (Australia)
Gdynia (Poland)

Secunda Canada LP Offices

(associated company):

St. Johns, Halifax (Canada)

10
10 SIEM
SIEMOFFSHORE
OFFSHOREINC.,
INC.,ANNUAL
ANNUALREPORT
REPORT2015
2015
 TOTAL EMPLOYEES

949
TOTAL NUMBER OF VESSELS

51
VESSELS IN OPERATION

44
PSVs: 13
AHTS: 10
OSCVs: 5
CANADIAN FLEET: 5
OTHER: 11

VESSELS UNDER CONSTRUCTION

7
Perth
PSVs: 3
AHTS: 1
WIVs: 2
OTHER: 1

SIEM OFFSHORE INC., ANNUAL REPORT 2015 11

 THIS IS SIEM OFFSHORE INC.

Deck Crew
Photographer: Tove Hertzberg

Siem Offshore owns and operates one of the worlds most

modern fleet of offshore support vessels, equipped to meet
the increased requirements from clients and demands from
operation in the harshest environments.

S
iem Offshore had 43 vessels in
operation and eight vessels under
construction by year-end 2015.
Vessels in operation included two
anchor handling, tug, supply vessels oper-
ated on behalf of a pool partner.
By end March 2016, the total fleet com-
prised of 51 vessels, including, among
others the following owned vessels,
sixteen Platform Supply Vessels (PSVs),
five Offshore Subsea Construction Ves-
sels (OSCVs), eight Anchor Handling, Tug,
Supply vessels (AHTS vessels), two Well-
Intervention Vessels (WIVs), one Installa-
tion Support Vessel (ISV), one Cable Lay
Vessel (CLV) and five Canadian flagged
vessels comprising of both AHTS vessels
and PSVs. The fleet provides a broad
spectrum of services offered by a highly
experienced and competent crew with a
strong focus on Health, Safety, Environ-
ment and Quality.
The Companys vision is to be the leading
provider and the most attractive employer
offering marine services to the offshore
energy service industry. The Company
shall deliver quality and reliable contract-
ed services in a timely manner by execut-
ing cost-efficient solutions developed in
active collaboration and cooperation with
our customers.Siem Offshore commenced
operations with effect from 1 July 2005.
The Company is registered in the Cayman
Islands and it is registered and resident
in Norway. It is listed on the Oslo Stock
Exchange (OSE Symbol: SIOFF). The
Companys headquarters is located in
Kristiansand, Norway and additional
subsidiary offices are located in Brazil,
Germany, the Netherlands, Ghana, USA,
India, Poland and Australia. The Company
is tax resident in Norway.

12 12 SIEMSIEM
OFFSHORE
OFFSHORE
INC.,INC.,
ANNUAL
ANNUAL
REPORT
REPORT
20152015
Our
REVENUE Amounts in USD 1,000

2015 422 449

2014 491 312

Values 2013 363955

2012 368213
2011 340628
2010 228302
We continuously work to 2009 183558
2008 192773
make the values part of the
2007 159342
daily life of the Company, 2006 73554
in particular in training of 2005 13233

leaders throughout the

OPERATING MARGIN Amounts in USD 1,000
organization. The values
2015 118 548
are established to support
2014 194 125
our present and future 2013 122663
business. 2012 110348
2011 122 952
2010 74641
2009 57934
2008 87738
2007 79799
2006 20480

CARING 2005 616

We encourage team spirit and knowledge
sharing. We strive to perform our daily
EMPLOYEES
work correctly, safely and without caus-
ing damage to people, environment and 2015 949
equipment. 2014 1 073
2013 1110
COMPETITIVE 2012 1078
We behave in a pro-active manner and
2011 1 073
we are innovative in our way of thinking.
Continuous improvement is our key to 2010 828
success. 2009 762
2008 642
COMMITTED 2007 600
We are driven by integrity. We step up 2006 527
and take charge to fulfil given promises.
2005 331

SIEM OFFSHORE INC., ANNUAL REPORT 2015 13

 THE BOARD OF DIRECTORS REPORT

The Board of Directors of Siem Offshore Inc. (the Board)

presents its report for the fiscal year ended 31 December
2015 together with the audited consolidated financial state-
ments and the audited financial statements for the parent
company. The financial statements and related notes were
authorised for issue by the Board on 11 April 2016 and will
be presented to the shareholders for approval at the Annual
General Meeting to be held 6 May 2016.

The Company
All references to Siem Offshore and the
Company shall mean Siem Offshore Inc.
and its subsidiaries and associates un-
less the context indicates otherwise. All
references to Parent shall mean Siem
Offshore Inc. as the Parent Company only.
Siem Offshore is registered in the Cay-
man Islands and is listed on the Oslo
Stock Exchange (OSE Symbol: SIOFF).
The Companys headquarters is located
in Kristiansand, Norway and additional
subsidiary offices are located in Bra-
zil, Germany, the Netherlands, Poland,
Ghana, USA, Canada, Cayman Islands and
Australia. The Company is tax resident in
Norway.
The Companys primary activity is to own
and operate offshore support vessels
(OSVs) for the offshore energy service
industry. The Company is also engaged as
a contractor within the European offshore
wind farm market through its subsidi-
ary, Siem Offshore Contractors with a
primary focus on installation, post-lay
trenching, termination and testing of
submarine composite cables.
The OSV fleet comprises platform supply
vessels (PSVs), anchor-handling, tug,
supply vessels (AHTS vessels), offshore
subsea construction vessels (OSCVs)
and a variety of other offshore service
vessels. The Company operated a fleet
of 43 vessels at year end, including
partly-owned vessels, seven vessels in
lay-up and two AHTS vessels operated
on behalf of a pool member. These two
AHTS vessels are sister vessels to eight
vessels owned by the Company, and all
ten vessels are operated in a pool. During
2015, the total fleet of OSVs conducted
operations in the North Sea, West Africa,
Middle East, Australia, the U.S. Gulf,
Canada and Brazil.
The Company holds 50% ownership in
Secunda Holdings Limited (Secunda).
Secunda owns and operates a harsh-
weather fleet of five offshore support ves-
sels and is a leader in support services for
platform supply, anchor handling, rescue
standby and towage in its primary area of
operation offshore Eastern Canada. Se-
cunda had, for its own account, one AHTS
under construction at year-end.
The Company holds a 60% ownership in
the subsidiary Siem WIS AS. Siem WIS
develops applications for managed pres-
sure drilling (MPD) based on a patented
sealing technology.
The Company holds 100% ownership in
Overseas Drilling Limited (ODL), which
owns the scientific ocean drillship JOIDES
Resolution. The JOIDES Resolution is one
of the primary research vessels used to
drill core samples in the ocean floor for
an international research program.
In addition to the ownership and opera-
tions of OSVs, the Companys wholly-
owned Brazilian subsidiary, Siem Offshore
do Brasil S.A., provides specialized
engineering to develop and implement
combat management systems for vessels
in the Brazilian navy. These activities were
part of Siem Offshore do Brasil when it
was initially acquired by the Company.

14 SIEM OFFSHORE INC., ANNUAL REPORT 2015

Financial results,
Position and Risks
IFRS
The financial statements for the Company
and the Parent are prepared in accord-
ance with the International Financial
Reporting Standards (IFRS) as adopted
by the European Union.
Going-Concern
The financial statements have been
prepared under the assumption that the
Company and the Parent are going-con-
cerns. This assumption is based on the
Companys level of cash and cash equiva-
lents at year-end, forecasted cash-flows,
available credit facilities and the market
value of its assets.
The Company has long lasting relation-
ships with its lenders and guarantors,
coupled with backing from a strong
majority owner Siem Europe S.a r.l., which
is 100% owned by Siem Industries Inc.
This underlines the limited uncertainty
about the financial position of the Com-
pany. The Company is working pro-active-
ly with its stakeholders to ensure a solid
platform through the downturn, including
items related to compliance with all loan
covenants.
Income Statement
The Company had 43 offshore vessels
in operation at year-end, including two
AHTS vessels owned by the Companys
pool partner and 5 vessels operated by
the associated company Secunda.
The Company had 8 vessels (including
one vessel for the 50%-owned Secunda)
under construction at the end of 2015,
of which five vessels were under con-
struction in Poland, two in Germany and
one in Brazil.
These eight vessels include one oil spill
recovery vessel (OSRV) scheduled for
delivery in 2016, three dual-fuel PSVs for
delivery in 2016, one Cable-Lay Vessel
(CLV) for delivery in 2016, one AHTS
vessel for delivery in 2016 and two Well-
Intervention Vessels (WIVs) for delivery
in 2016. The Company sold one OSCV
during 2015 and took delivery of one
PSV which has commenced a long-term
contract.
In 2015, the Company recorded operating
revenue of USD 422.4 million and a net
profit attributable to shareholders of USD
(186.7) million, or USD (0.36) per share,
compared to operating revenue of USD
491.3 million and a net profit attributable
to shareholders of USD 58.1 million, or
USD 0.15 per share, in 2014.
The Companys operating margin for
2015 was USD 118.5 million compared to
USD 194.1 million in 2014. Net operat-
ing margin as a percentage of operating
revenue was 28% in 2015 compared to
40% in 2014.
The Companys operating profit for 2015
was USD (168.7) million compared to
USD 84.3 million in 2014 and includes
depreciation and amortisation of USD
107.0 million (2014: USD 96.9 million).
The Company has conducted a review of
vessel valuations and has recorded im-
pairments of USD 166.2 million on certain
vessels and intangibles. Net currency
exchange (losses) of USD (30.8) million
(2014: USD (3.0) million) was recorded
on forward contracts, of which USD
32.8 million was unrealised. The net gain
on sale of assets was USD 16.3 million
(2014: USD 18.7 million).
The Companys net financial items
included net expenses of USD (21.4)
million (2014: USD (12.7) million) and a
revaluation gain of non-USD currency
items of USD 22.1 million (2014: USD 34.1
million) due to stronger USD during the
period. Non-USD currency items are held
to match short- and long-term liabilities,
including off-balance sheet liabilities, in
similar currency.
The Parent company is primarily a hold-
ing company owning shares in operating
subsidiaries.
The Board proposes that the net loss of
the Parent of USD (16.2) million for 2015
be allocated to retained earnings and that
no dividend to be paid for 2015. As of 31
December 2015 retained earnings were
USD 115.1 million (2014: 304.2 million).
Financial Position and Cash-Flows
Total equity for the Company was USD
666 million at year-end 2015 (2014: USD
824 million), and the equity ratio was 33%
(2014: 36%). Shareholders equity was
USD 632 million (2014:USD 785 million),
equivalent to USD 0.75 per share (2014:
USD 2.03 per share).
The cash position at year-end was USD
149 million (2014: USD 118 million).
The Company recorded USD 151 million
as gross capital expenditures in fixed as-
sets during 2015, of which USD 123 mil-
lion relates to new vessels delivered from
yards or vessels under construction, and
USD 28 million relates to project specific
investments in vessels and capitalised
dry-dockings.
The net interest-bearing debt at year-end
were equivalent to USD 1.0 billion (USD
1.1 billion in 2014). The Company made
total drawings of the equivalent of USD
110 million under credit facilities during
the year. The weighted average cost of
debt for the Company was approximately
4.3% p.a. at year-end (2014: 4.5% p.a.).
The Company paid debt instalments of
the equivalent of USD 183 million during
the year, of which USD 71 million repre-
sents extraordinary repayments due to
the sale of one vessel.
The gross project cost for the remain-
ing newbuilding program was USD 396
million at year-end 2015. Debt-financing
has been secured for the remaining com-
mitments. The total of such future yard
instalments are scheduled for payment
during 2016.
The Companys cash-flows are primar-
SIEM OFFSHORE INC., ANNUAL REPORT 2015 15
 BOARD OF DIRECTORS REPORT
ily denominated in USD, NOK, EUR and
BRL. During 2015, the USD strengthened
by 18.5% to the NOK, 47.0% to the BRL
and 10.2% to EUR. The average recorded
exchange rates were NOK/USD 0.1236,
EUR/USD 1.1134 and BRL/USD 0.3002
(2014: NOK/USD 0.1575, EUR/USD
1.3256 and BRL/USD 0.4240).
The Company is exposed to changes in
interest rates as approximately 34% of
the interest-bearing debt is based on
floating interest rates and primarily de-
nominated in USD and NOK. The average
3-month USD LIBOR was 0.31583% p.a.
during 2015 (0.2337% p.a. in 2014) and
the average 3-month NIBOR was 1.29%
p.a. during 2015 (1.70% p.a. in 2014). The
Company held USD 270 million in interest
rate swap agreements at year-end.
Financial Risks
Interest risk
The Company is exposed to changes in
interest rates as approximately 34% of
the long-term interest bearing debt was
subject to floating interest rates at year-
end 2015. The remaining part of the debt
is subject to fixed interest rates.
Currency risk
The Company is exposed to currency risk
as revenue and costs are denominated
in various currencies. The Company
is also exposed to currency risk due to
future yard instalments in relation to
shipbuilding contracts and long-term debt
in various currencies. Forward exchange
contracts are entered into in order to
reduce the currency risk related to future
cash flows.
Liquidity risk
The Company is financed by a combina-
tion of debt and equity. If the Company
fails to repay or refinance its credit facili-
ties, additional equity financing may be
required. There can be no assurance
that the Company will be able to repay
its debts or extend the debt repayment
schedule through re-financing of credit
16 SIEM OFFSHORE INC., ANNUAL REPORT 2015
facilities. There is no assurance that the
Company will not experience cash flow
shortfalls exceeding the Companys
available funding sources or to remain in
compliance with minimum cash require-
ments or other covenants. Further, there
is no assurance that the Company will
be able to raise new equity or arrange
new credit facilities on favourable terms
and in amounts necessary to conduct its
ongoing and future operations should this
be required.
Yard risk
The process for construction of new ves-
sels is associated with numerous risks.
Among the most critical risk factors in
relation to such construction is the risk
of not receiving the vessels on time, at
budget and with agreed specifications. In
addition, there is the risk of yards expe-
riencing financial or operational difficul-
ties resulting in bankruptcy or otherwise
adversely affecting the construction
process. The Company has obtained
certain guarantees of financial compen-
sation including refund guarantees for
vessel under construction in Poland in
case of delays and non-delivery. Further,
the Company has the right to cancel
contracts if delivery of vessels is signifi-
cantly delayed. However, no assurance
can be given that all risks have been fully
covered.
Operations
Fleet, Performance and Employment
The fleet in operation included thirteen
PSVs, five OSCVs, ten AHTS vessels of
which two are owned by a pool-partner,
a fleet of seven crew/supply vessels
operated in Brazil, one well-stimulation
vessel, one installation support vessel,
one scientific core drilling vessel and five
offshore support vessels in Canada in
Secunda the 50% owned company.
The PSV fleet earned operating rev-
enues of USD 76.5 million and had 75%
utilisation (2014: USD 104.4 million
and 94%). The operating margin before
administrative expenses was USD 38.7
million (2014: USD 58.9 million) and the
operating margin as a percentage of rev-
enue was 51% (2014: 56%). The contract
backlog at 31 December 2015 was 60%
for 2016, 31% for 2017 and 24% for 2018
(2014: 58% for 2015, 42% for 2016 and
25% for 2017).
The OSCV fleet earned operating
revenues of USD 111.3 million and had
94% utilisation (2014: USD 104.8 million
and 98%). The operating margin before
administrative expenses was USD 69.6
million (2014: USD 71.2 million) and the
operating margin as a percentage of rev-
enue was 63% (2014: 68%). The contract
backlog was 80% for 2016, 71% for 2017
and 40% for 2018 (2014: 88% for 2015,
83% for 2016 and 77% for 2017).
The ten AHTS vessels operated by the
Company earned operating revenues of
USD 53.6 million and had 55% utilisation
(2014: USD 142.5 and 84% utilization).
The operating margin before adminis-
trative expenses was USD (1.4) million
(2014: USD 77.5 million) and the operat-
ing margin as a percentage of revenue
was (3) % (2014: 54%). The contract
backlog was 11% for 2016, 0% for 2017
(2014: 15% for 2015, 5% for 2016 and 0%
for 2017).
The fleet of smaller Brazilian-flagged
vessels earned operating revenue of
USD 21.3 million and had 86% utilisation
(2014: USD 19.4 million and 91%). The
operating margin before administrative
expenses was USD 7.1 million (2014: USD
(3.5) million) and the operating margin as
a percentage of revenue was 33 % (2014:
(18) %). The contract backlog was 57%
for 2016, 57% for 2017 and 49% for 2018
(2014: 91% for 2015, 89% for 2016 and
89% for 2017).
The Joides Resolution recorded operat-
ing revenues of USD 26.2 million (2014:
USD 25.9 million) with an operating
margin before administrative expenses of
USD 14.5 million (2014: USD 12.9 million)
and the operating margin as a percentage
of revenue was 55% (2014: 50%).
Siem Offshore Contractors recorded
operating revenues of USD 132.3 million
(2014: 101.5 million). The projects within
SOC are accounted for using the percent-
age-of-completion method. Total project
margin before administrative expense of
USD 17.5 million (2014: USD 17.1 million)
was recognized on projects. Subject to
a forecasted positive margin, project
revenues are recorded at a similar figure
to project costs until the project has
reached minimum 25% completion. This
has an impact on the overall percentage
of operating margin for Siem Offshore on
a consolidated basis.
The total contract backlog of firm
contracts for all vessels at 31 December
2015 was USD 1.2 billion (2014: USD 1.55
billion), including the firm contract for
the JOIDES Resolution, the 41%-owner-
ship in the Big Orange XVIII, the 50%
ownership in Secunda and vessels under
construction.
The total vessel contract backlog is allo-
cated with USD 241 million in 2016, USD
228 million in 2017 and USD 736 million
in 2018 and thereafter.
The total contract backlog of firm con-
tracts for Siem Offshore Contractors at
31 December 2015 was USD 198 million
(2014: USD 118 million). The contract
backlog is allocated with USD 149 mil-
lion in 2016 and USD 49 million in 2017.
HSEQ
The Companys target includes zero
personal injuries, no harm to the environ-
ment and no damage to or loss of equip-
ment and property.
Following a slight setback at the begin-
ning of the year, the HSEQ performance
improved during 2015 with no Lost Time
Injuries throughout the fleet. Consider-
able efforts are made on various levels
to ensure this positive trend continues in
2016.
The number of safety reports is steady,
and it is believed that a planned training
in RCA will ensure more frequent and
better experience transfer to the fleet.
On board and ashore we believe that the
transfer of experience is an important fac-
tor to create a professional HSEQ culture
and continuously improve our HSEQ
performance.
By nature, anchor-handling is one of
the most demanding operations in the
offshore sector. Siem Offshore puts great
emphasis on a safe work environment
and appropriate time for adequate prepa-
rations for every job operation.
Siem Offshore Contractors
General
SOC is now an established prime contrac-
tor for the installation, post-lay trenching,
termination and testing of submarine
composite cables for the inner array grid
of offshore wind farms (OWF) and for
export to shore. SOC has been technically
successful in executing the works scope
by utilising the Companys fleet of large
and high quality DP-2 installation ves-
sels, in combination with its experienced
offshore and onshore organisations.
Safety & Environment
High safety and environmental standards
have been a first priority within SOC. Risk
and opportunity management processes
and personnel training ensures that inter-
nal personnel and subcontractors have a
common safety first mentality, which has
delivered zero loss time injuries this year.
Environmental impact is a key area of im-
portance in a market focussed on renewa-
ble energy. SOC has developed standards
to report and analyse the impact of cable
installation activities on the environment.
Positive feedback from clients on safety
planning and execution demonstrates
strength in this area. An effective lessons
learned process contributes to continual
improvement.
Projects
The Amrumbank West OWF project for
E.ON Kraftwerke GmbH involved the
installation, post-lay trenching, termina-
tion and testing of 86 inner array grid
submarine composite cables within the
German Bight sector of the North Sea.
SOC received the final taking over certifi-
cate in the second quarter of 2015. The
project produced a positive margin.
The Baltic 2 OWF project for EnBW Baltic
2 GmbH involved the installation, post-lay
trenching, termination and testing of 86
inner array grid submarine composite
cables within the German sector of the
Baltic Sea. In the second quarter of 2015
all cables were successfully installed.
By year-end, the taking over for the six
clusters (6) was achieved and the first
full load trial successfully completed. The
completion of the project is scheduled
within the second quarter 2016. A positive
margin was recorded on the project in
2015, and a positive margin is scheduled
to be recorded in 2016.
The Nordsee One OWF project for Nord-
see One GmbH is an EPIC-contract for the
supply and installation of 59 submarine
composite cables forming the inner array
grid of the Nordsee One OWF. The project,
which started in March 2015, involves the
supply of submarine composite cables
and related accessories as well as cable
installation, post-lay trenching, termina-
tion and testing works and remains on
track for mechanical completion by fourth
quarter 2016.
The Nordsee One OWF export cable
project for TenneT Offshore GmbH is a
contract for the Nordsee One export cable
installation in partnership with J-Power
Systems. Commencement of the offshore
installation works is expected to start in
the third quarter 2016, with completion
scheduled in fourth quarter 2016.
In April 2015, SOC was awarded the
contract by Veja Mate Offshore Project
SIEM OFFSHORE INC., ANNUAL REPORT 2015 17
 BOARD OF DIRECTORS REPORT
GmbH for the EPIC-supply and installation
of 73 submarine composite cables with
a total length of up to 97 km forming the
inner array grid of the 400 MW Veja Mate
OWF. The Veja Mate OWF is located ap-
proximately 115 km off the German coast
within the German Bight sector of the
North Sea. The project involves the supply
of submarine composite cables and re-
lated accessories as well as cable instal-
lation, post-lay trenching, termination and
testing works. The offshore installation is
scheduled to commence in third quarter
2016 with mechanical completion being
scheduled for second quarter 2017.
Market Outlook
The tendering activities increased dur-
ing the first quarter of 2016 and further
tenders are expected during 2016. SOC
has established itself as a reliable turnkey
contractor within the offshore renew-
able energy industry and further contract
awards are expected. Overall, the financial
year 2015 was a successful year for SOC
and this trend is expected to continue in
2016 and beyond.
SIEM WIS
Siem WIS has designed and developed
a pressure control device (PCD) which
can improve managed pressure drill-
ing (MPD) operations. Global energy
demand growth, combined with the need
for increased oil recovery and increased
number of deep sea and high pressure
high temperature (HPHT) reservoirs,
with emphasis on safety management is
expected to lead to increased demand for
MPD services.
The Managed Pressure Drilling (MPD)
operation on Gullfaks A commenced in
September 2015 and was successfully
completed in November 2015.
Siem WIS entered into an agreement with
Statoil in December 2015 for the delivery
of PCD services to its Gullfaks field. The
first call-off was issued early 2016 and
the operation has started on Gullfaks.
18 SIEM OFFSHORE INC., ANNUAL REPORT 2015
respectively.
Shareholders and Corporate
Governance The development of the onshore and off-
shore organizations continues in order to
Shareholder Information prepare for increased future activities. The
The Companys authorised share knowledge of the crew is vital for a safe
capital is USD 10,000,000 divided into and secure operation of any vessel. Such
1,000,000,000 ordinary shares of a nomi- knowledge includes good seamanship and
nal value of USD 0.01 each. The issued understanding of the demanding assign-
share capital at 11 April 2016, based on ments to be executed.
the 842,021,380 Company shares issued
and outstanding, is USD 8,420,213.80. Outlook
The Companys shares are listed on the There is a high focus on cost cutting
Oslo Stock Exchange with the ticker sym- among oil companies following the signifi-
bol SIOFF. The largest shareholder of the cant decline in the oil price. The number of
Company is Siem Europe S.a r.l., a wholly- vessels trading the North Sea spot market
owned subsidiary of Siem Industries Inc., has increased while the activity level has
with 83% of the shares at 11 April 2016. decreased. The negative impact on activity
During 2015, the closing share price is expected to last for some time.
reached a high of NOK 2.85, a low of NOK The financial pressure on the industry is
1.35, and closed at NOK 1.40 at year-end. likely to lead to fallouts and consolidation
of a fragmented section of the oil service
Corporate Governance industry.
The Company has implemented guidelines
for corporate governance based on the
recommendations and guidelines given by
the Oslo Stock Exchange. The purpose of
these guidelines is to clarify the division of
roles between shareholders, the General
Meeting, Board of Directors and day-to-
day Management beyond what follows
from the legislation. A detailed summary
of our corporate governance principles
may be found in a separate section of the
annual report.
The Working Environment
and the Employees
The Company provides a workplace with
equal opportunities. We treat current and
prospective employees fairly with respect
to salaries, promotions and recruitment.
The Company offers its employees a
sound working environment. We also give
possibilities for professional development
where men and women are treated equal-
ly and where there is no discrimination.
The sick leave for the onshore and
offshore employees was 1.9% and 5.4%,
11 April 2016

Eystein Eriksrud Kristian Siem Michael Delouche

Chairman Director Director
(Sign.) (Sign.) (Sign.)

John C. Wallace David Mullen

Director Director
(Sign.) (Sign.)

Idar Hillersy
Chief Executive Officer
(Sign.)

SIEM OFFSHORE INC., ANNUAL REPORT 2015 19

 CORPORATE GOVERNANCE
Statement of Policy on Corporate Governance
The principles for corporate governance adopted by the
Company are based on the Norwegian Recommendation for
Corporate Governance issued on the 30th October 2014.
As a company incorporated in the Cayman
Islands, Siem Offshore Inc. is an exempted
company duly incorporated under the
laws of the Cayman Islands and subject to
Cayman Island laws and regulations with
respect to corporate governance.
Cayman Islands corporate law is to a
great extent based on English Law. In
addition, due to the Companys listing on
the Oslo Stock Exchange, certain aspects
of Norwegian Securities law apply to the
Company and there is a requirement to
adhere to the Norwegian Code of Practice
for Corporate Governance. The Norwegian
Code of Practice for Corporate Govern-
ance is publicly available at www.nues.no
in both Norwegian and English languages.
Due to new provisions implemented in
the Norwegian Accounting Act, compli-
ance with the regulations for Corporate
Governance reporting is now a legal
requirement provided that it does not
conflict with the Cayman Islands laws and
regulations. The Company endeavours
to maintain high standards of corporate
governance and is committed to ensuring
that all shareholders of the Company are
treated equally and the same information
is communicated to all shareholders at
the same time.Corporate Governance is
subject to annual assessment and review
by the Board of Directors.
The Board of Directors has reviewed this
statement. It is the opinion of the Board of
Directors that the Company complies with
the Norwegian Code of Practice for Corpo-
rate Governance.
20 SIEM OFFSHORE INC., ANNUAL REPORT 2015
This statement is structured in accord-
ance with The Norwegian Code of Practice
for Corporate Governance.
Business
Cayman Islands laws and regulation do
not require the objects clause of the Com-
panies Memorandum and Articles of Asso-
ciation to be clearly defined. The Company
has however adopted clear objectives and
strategies for its business.
Siem Offshore aims to grow the company
within offshore support vessels, both
organically and through combination
with other operators, in order to achieve
economies of scale and stronger presence
in the market.
Siem Offshore aims to become a preferred
supplier of marine services to the energy
industry based on quality and reliability
and to provide cost-efficient solutions
to its customers by understanding their
operation and applying technology and
experience.
The Company builds its business around a
motivated workforce with the appropriate
technical solutions. This creates sustain-
able value for all shareholders.
Reference is made to the Board of Direc-
tors report for detailed information.
Equity and Dividends
The priorities for the use of Company
funds are determined by the Board of
Directors and recommendations of Man-
agement influenced by existing conditions.
At present, priorities for use of funds
in order of importance are investment
opportunities in the business, repayment
of debt and the return of capital to the
shareholders in form of share buy-back or
dividends.
The Boards mandate to increase the
Companys share capital is limited only to
the extent of the authorized share capital
of the Company with certain pre-emption
rights for shareholders and in accordance
with the Companys Memorandum and
Articles of Association which comply with
Cayman Island law. Under the Articles
of Association, the Board can issue new
shares, convertible bonds or warrants at
any time within the limits of the author-
ized capital without the consent of the
general meeting but with pre-emption
rights for shareholders. A General Meeting
has further authorized the Board to issue
new shares without pre-emption rights
to all shareholders up to a limit of 50%
of Siem Offshore shares at the time the
authorization was given. The Board holds
authorization from the Extraordinary
General meeting held on 14 August 2015
to issue 157,978,620 new shares.
The authority gives the Board flexibility
to finance investments, acquisitions and
other business combinations on short no-
tice through the issue of shares or certain
other equity instruments in the Company.
Furthermore, the Board considers the
granting of a new standing authority at the
time of holding an Annual General Meet-
ing rather than convening an Extraordi-
nary General Meeting at some future time
to be in the best interests of the Company,
as this will result in cost savings and more
effective time management for both the
Companys senior management and its
Shareholders.
An extraordinary general meeting was
held on 14th of August 2015 resolv-
ing as a Special Resolution that the
Company should increase the author-
ized share capital of the Company from
US$5,500,000- divided into 550,000,000
Common Shares of par value US$0.01
each to US$10,000,000- divided into
1,000,000,000 Common Shares of par
value US$0.01 each, by the creation of an
additional 450,000,000 Common Shares
of par value US$0.01 each which shall
rank pari passu in all respects with the
existing Common Shares.
The Board of Directors of the Company
resolved to issue 454,430,000 common
shares at a share price of NOK 1.80
in a Rights Issue.
Equal Treatment of
Shareholders, Freely Tradable
Shares and Transactions with
Related Parties
The Company is committed to ensuring
that all shareholders of the Company are
treated equally and all the issued shares
in Siem Offshore, at nominal value US$
0.01 each, are freely tradable and carry
equal rights with no restrictions on voting.
Siem Industries Inc, which owns 83% of
the Company, is represented by its Chair-
man, Kristian Siem, Deputy CEO, Eystein
Eriksrud and President, Michael Delouche,
on the Board of Directors. The Company
pays an annual fee to Siem Industries as
compensation for directorships, provision
of an office and presence in the Cayman
Islands, and other services. The fee is
adopted by the annual general meeting
based on a recommendation from the in-
dependent Board Members. Related party
transactions are disclosed in the notes to
the accounts.
Freely Negotiable Shares
All of the shares in the Company carry
equal rights and are freely negotiable. The
shares are traded according to normal
market practice and no special limitations
on transactions have been laid down in the
Articles of Association.
General Meetings
The Annual General Meeting of the Com-
pany will be held at the registered office
of the Company on the Cayman Islands,
6 May 2016, at 9:30am Cayman Islands
local time and Shareholders can be
represented by proxy. Notices of general
meetings and related documents are
made available to shareholders at the lat-
est 17 days prior to meeting date. Notice
of attendance by proxy is to be provided to
either (1) the offices of Siem Offshore AS
at Nodeviga 14, P.O. Box 425, Kristiansand
4664, Norway, telefax no. +47.37.40.62.86
or (2) the Companys office at P.O. Box
10597, George Town, Grand Cayman
KY1-1005, Cayman Islands, telefax no.
+1.345.946.3342, not less than 24 hours
prior to the stated time of the annual
general meeting. Shareholders are given
the opportunity to vote on the election of
board members.
Nomination Committee
The appointment of a nomination commit-
tee is not a requirement under Cayman
Islands Law.
Corporate Assembly and
Board of Directors;
Composition and Independence
In the nominations to the Board of Direc-
tors, the Board consults with the Com-
panys major shareholders and ensures
that the Board is constituted by Directors
with the necessary expertise and capacity.
There is no requirement under Cayman
Islands Law for the Company to establish
a corporate assembly.
Each Board member is elected for a term
of 2 years or such shorter term as shall be
specified in the ordinary resolution pursu-
ant to which the Director shall be ap-
pointed. Representatives of the Executive
Management are not presently members
of the Companys Board of Directors.
The Board of Directors as a group has
extensive experience in areas which are
important to Siem Offshore, including off-
shore services, international shipping, ship
broking, finance and corporate governance
and restructuring.
Work of the Board of Directors
The Board monitors the performance
of management through regular meet-
ings and reporting. The Company has a
Compensation Committee and an Audit
Committee. The Compensation Com-
mittee consists of two Directors. The
mandate of the committee is to review
and approve the compensation of the CEO
and any bonuses to all executive person-
nel. Reference is also made to section 12,
Remuneration of the Executive Manage-
ment. The Audit Committee consists of
two Directors. The composition of the
committee meets the requirements of the
Norwegian Code of Practice for Corporate
Governance as regards independence.
The committees mandate can be
summarized as follows:
Ascertain that the internal and external
accounting reporting process are
organized appropriately and carried out
efficiently, and are of high professional
quality.
Monitor and assess the quality of the
statutory audit of the Companys finan-
cial statements.
Ensure the independence of the exter-
nal auditor, including any additional ser-
vices provided by the external auditor.
Risk Management and
Internal Control
Internal control
A prerequisite for the Companys system
of decentralized responsibility is that the
SIEM OFFSHORE INC., ANNUAL REPORT 2015 21
 CORPORATE GOVERNANCE
activities in every part of the Company
meet general financial and non-financial
requirements, and are carried out in ac-
cordance with the Companys common
norms and values. The executive manage-
ment of each subsidiary is responsible for
risk management and internal control in
the subsidiary with a view to ensuring 1)
optimizing of business opportunities, 2)
targeted, safe, high-quality and cost-effec-
tive operations, 3) reliable financial report-
ing, 4) compliance with current legisla-
tion and regulations and 5) operations in
accordance with the Companys governing
documents, including ethical and social
responsibility standards. The Companys
risk management system is fundamental
to the achievement of these goals.
Financial reporting process
The Company prepares and presents its
financial statements in accordance with
current IAS/IFRS rules. Financial informa-
tion from subsidiaries is received each
month in a reporting package in stand-
ard format accommodated necessary
information for preparing the consolidated
financial statement for the Company.
The reporting from the subsidiaries
is extended in the year-end reporting
process to meet various requirements for
supplementary information. There are
established routines to check the financial
data in the received reporting packages
to ensure the best quality for the consoli-
dated figures for the Company.
Training and further development of ac-
counting experience within the Company
is provided locally by participating on vari-
ous external courses on a regular basis.
Remuneration of the
Board of Directors
The remuneration of the Board members
reflect their experience and responsibili-
ties, and is adopted by the annual general
meeting based on the recommendation
from the Board. The Board members do
not have share options or profit-based re-
muneration. The responsibility statement
22 SIEM OFFSHORE INC., ANNUAL REPORT 2015
of the Board of Directors in this report and
the notes to the accounts include informa-
tion about the remuneration of the Board
of Directors.
Remuneration of the
Executive Management
The Company has a Compensation Com-
mittee which reviews and approves the
compensation of the CEO and the bonuses
to all executive personnel. The Articles
of Association of the Company permit the
Board to approve the granting of share
options to employees. A long-term share
option program for 5 key employees of
the company was introduced in Q1 2013.
An additional share option program was
implemented in Q2 2014 for 7 key employ-
ees of the company. The remuneration of
the CEO and the share option scheme are
disclosed in the notes to the accounts.
The board of directors statement on the
remuneration of executive personnel
is presented as a separate appendix to
the agenda for the general meeting. The
remuneration statement clearly states
which aspects of the guidelines are
advisory and which, if any, are binding. The
general meeting will vote separately on
each of these aspects of the guidelines.
Information and
Communications
The Company has a policy of treating all
its shareholders and other market partici-
pants equally, and communicates relevant
and objective information on significant
developments which impact the Company
in a timely manner.
The Company also seeks to ensure that
its accounting and financial reporting are
to the standards of our investors, and the
Company presents its financial state-
ments in accordance with the Internation-
al Financial Reporting Standards (IFRS).
The Audit Committee of the Board of Di-
rectors monitors the companys reporting
on behalf of the Board. Notices to the Oslo
Stock Exchange and placements of notices
and other information, including quarterly
and annual reports, may be found on the
Companys website (www.siemoffshore.
com). The financial calendar for 2016 may
be found on the Companys website under
Investor Relations.
Take-overs
The shares in the Company are freely trad-
able and the Articles of Association of the
Company does not hold specific defence
mechanisms against take-over situations.
In a take-over situation, the Board of Direc-
tors will comply with relevant legislation.
Auditor
The Auditor of the Company is elected at
the Annual General Meeting which also
approves its remuneration. Details of the
Companys remuneration of the external
auditor are given in the notes to the ac-
counts.
The auditor reports to the Audit Commit-
tee twice a year at a minimum, but more
often if necessary. During the latter half
of the year, the external auditor presents
to the Audit Committee his assessment
of risks, internal controls, risk areas and
improvement potential in control systems
and his audit plan for the following year.
The second report to the Audit Committee
is the presentation of Year-End Audit. The
external auditor presents a summary of
the audit process, including comments on
audited internal control procedures and key
issue in the financial reporting.
The Audit Committee also receives an
annual independence reporting from the
external auditor, confirming the external
auditors independence with respect to
the Company, within the meaning of the
Norwegian Act on Auditing and Auditors.
The confirmation also includes services
delivered to the Company other than man-
datory audit.
INCOME STATEMENTS

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) Note 2015 2014
145 405 Operating revenue 4,23 422,449 491,312
-9,240 -12,521 Operating expenses 8,18,19,20,23 -303,901 -297,187
-9,095 -12,116 Operating margin 18 118,548 194,125
- - Depreciation and amortization 4,5 -107,025 -96,883
- - Impairment of vessels 4,5 -159,465 -29,000
- - Impairment of intangible assets 4,5 -6,705 -
- -49,000 Impairment of shares in subsidiaries 4,5,6 - -
- - Gain/(loss) on sales of assets 25 16,317 18,728
368 368 Gain on sale of interest rate derivatives (CIRR) 12 368 368
- - Gain/(loss) on currency derivative contracts 21,28 -30,775 -3,023
-8,727 -60,748 Operating profit 4 -168,735 84,316

FINANCIAL INCOME AND EXPENSES

3,491 4,162 Financial income 3,21 11,184 9,091
-12,225 -12,704 Financial expenses 3,21 -54,677 -55,868
1,265 4,842 Net currency gain/(loss) 21 22,110 34,092
-7,469 -3,700 Net financial items -21,384 -12,685
- - Result from associated companies 7 -1,560 1,808
-16,196 -64,448 Profit /(loss) before taxes -191,679 73,439
- - Tax benefit/(expense) 11 -4,737 -2,729
-16,196 -64,448 Net profit/(loss) 30 -196,416 70,710
- - Attributable to non-controlling interest -9,729 12,563
-16,196 -64,448 Attributable to shareholders of the Company -186,687 58,147
- - Weighted average number of outstanding shares (1,000) 518,318 387,591
- - Earnings per share: Basic (and Diluted) (1,000) 22 -0.36 0.15

COMPREHENSIVE INCOME STATEMENT

2015 2014 (Amounts in USD 1,000) Note 2015 2014
-16,196 -64,448 Net profit/(loss) -196,416 70,710
- - Other Comprehensive income - -
Items that will not be reclassified to profit or loss
- - Pension remeasurement gain (loss) -1,178 1,510
Items that may be subsequently reclassified to profit or loss
- - Cash flow hedges -51,245 -14,622
- - Currency translation differences -9,687 -11,100
-16,196 -64,448 Total comprehensive income for the year -258,526 46,498
- - Attributable to non controlling-interest -9,520 12,270
-16,196 -64,448 Attributable to shareholders of the Company -249,006 34,228

SIEM OFFSHORE INC., ANNUAL REPORT 2015 23

 STATEMENTS OF FINANCIAL POSITION
ASSETS

PARENT COMPANY CONSOLIDATED

12/31/2015 12/31/2014 (Amounts in USD 1,000) Note 12/31/2015 12/31/2014

NON-CURRENT INTANGIBLE ASSETS

- - Deferred tax asset 11 11,668 12,591
- - Intangible assets 5 16,849 25,937
- - Total non-current intangible assets 28,517 38,528

NON-CURRENT TANGIBLE ASSETS

- - Vessels under construction 5,17 185,064 130,515
- - Vessels and equipment 5 1,391,695 1,743,693
- - Capitalized project costs 5 5,381 10,965
- - Total non-current tangible assets 1,582,140 1,885,173

NON-CURRENT FINANCIAL ASSETS

768,127 741,348 Investment in subsidiaries 6 - -
- - Investment in associated companies 7 16,660 20,222
19,208 28,453 CIRR Loan deposit 12 88,002 28,453
25,867 30,053 Long-term receivables 9,14,29 51,598 23,432
813,202 799,854 Total non-current financial assets 156,260 72,108

813,202 799,854 Total non-current assets 1,766,916 1,995,809

CURRENT ASSETS
- - Accounts receivable 2,29 46,147 74,753
4,169 17,343 Other short-term receivables 9,14,23,29 60,657 63,877
- - Inventories 32 7,739 7,481
- - Derivative financial instruments 15,28,29 1,451 1,041
269,293 222,579 Cash 2,10,29 148,753 117,623
273,463 239,922 Total current assets 264,747 264,774
- - Asset held for sale 24,25,29 3,459 -
1,086,664 1,039,778 Total assets 2,035,122 2,260,584

24 SIEM OFFSHORE INC., ANNUAL REPORT 2015

STATEMENTS OF FINANCIAL POSITION
EQUITY AND LIABILITIES

PARENT COMPANY CONSOLIDATED

12/31/2015 12/31/2014 (Amounts in USD 1,000) Note 12/31/2015 12/31/2014

EQUITY
625,219 526,236 Paid-in capital 625,219 526,236
-22,303 -22,303 Other reserves -108,151 -45,491
249,671 258,675 Retained earnings 115,147 304,237
852,587 762,609 Shareholders equity 26 632,215 784,982
- - Non-controlling interest 33,293 38,666
852,587 762,609 Total equity 665,508 823,649

LIABILITIES
Non-current liabilities
207,852 174,881 Borrowings 2,12,14 1,007,925 1,087,757
19,208 28,453 CIRR Loan 12,29 88,002 28,453
4,258 4,885 Tax liabilities 11 5,483 6,368
1,418 1,786 Deferred CIRR 12 1,418 1,786
- - Pension liabilities 8 2,195 3,812
- - Other non-current liabilities 34,142 26,565
232,736 210,005 Total non-current liabilities 1,139,165 1,154,742

CURRENT LIABILITIES
144 53 Accounts payable 2,29 8,395 10,781
- - Borrowings 2,12,14,29 114,660 126,603
- - Derivative financial instruments 15,28,29 12,896 16,732
-150 -146 Taxes payable 11 3,496 5,005
1,347 67,255 Other current liabilities 13,14,23 91,001 123,072
1,341 67,162 Total current liabilities 230,448 282,193
234,077 277,167 Total liabilities 14 1,369,614 1,436,935
1,086,664 1,039,778 Total equity and liabilities 2,035,122 2,260,584

- - Secured debt 12 1,139,710 1,227,605

305,658 106,131 Guarantees 16 310,087 141,908

SIEM OFFSHORE INC., ANNUAL REPORT 2015 25

 STATEMENTS OF CHANGES IN EQUITY

CONSOLIDATED
Total no. Share Share premium
(Amounts in USD 1,000) of shares capital reserves
Equity as of December 31, 2013 387,591,380 3,876 522,361

Change previous periods

Net profit to shareholders
Value of employee services
Currency translation differences
Pension remeasurement
Share issues in partially owned subsidiaries
Cash flow hedge
Capital reduction in partially owned subsidiaries
Dividends paid
Share issue costs
Equity as of December 31, 2014 387,591,380 3,876 522,361

Change previous periods

Net profit to shareholders
Value of employee services
Currency translation differences
Pension remeasurement
Share issues in partially owned subsidiaries
Cash flow hedge
Reclassification to profit or loss
Capital reduction in partially owned subsidiaries
Impairment of excess value partially owned subsidiaries
Share issue in Siem Offshore Inc. 454,430,000 4,544 94,438
Equity as of December 31, 2015 842,021,380 8,420 616,799

Share issues in partially owned subsidiaries

Minority share of new equity Siem WIS AS
Minority share of new equity Siem Offshore Ghana International AS
Total

26 SIEM OFFSHORE INC., ANNUAL REPORT 2015

Exchange rate Other Retained Shareholders Non-controlling Total
differences reserves earnings equity interest equity
9,005 -28,775 250,161 756,628 37,260 793,888

- - -1,510 -1,510 - -1,510

- - 58,147 58,147 12,563 70,710
- - 2,462 2,462 - 2,462
-11,100 - - -11,100 -293 -11,393
- - 1,510 1,510 - 1,510
- - - - 1,336 1,336
- -14,621 - -14,621 - -14,621
- - - - -12,201 -12,201
- - -6,533 -6,533 - -6,533
- - - - - -
-2,095 -43,396 304,237 784,982 38,666 823,649

- - -869 -869 - -869

- - -186,687 -186,687 -9,729 -196,416
- -1,728 - -1,728 - -1,728
-9,687 - -2,711 -12,398 209 -12,189
- - 1,178 1,178 - 1,178
- - - - 6,276 6,276
- -65,866 - -65,866 - -65,866
- 14,621 - 14,621 - 14,621
- - - - -4,811 -4,811
- - - - 2,682 2,682
- - - 98,983 98,983
-11,782 -96,369 115,147 632,215 33,293 665,508

2015 2014
- - - - 1,336 590
- - - - 5,686 -
- - - - 1,336 6,276

SIEM OFFSHORE INC., ANNUAL REPORT 2015 27

 STATEMENTS OF CHANGES IN EQUITY

PARENT COMPANY
Share Exchange
Total no. of Share premium rate Other Retained Sharehold-
(Amounts in USD 1,000) shares capital reserves differences reserves earnings ers equity

Equity as of December 31, 2013 387,591,380 3,876 522,360 -100 -22,203 324,612 828,546
Other items, CIRR 368 368
Net profit -64,816 -64,816
Dividend paid -6,533 -6,533
Share option program 5,044 5,044
Share issue costs - -
Effect of exchange rate differences - -
Equity as of December 31, 2014 387,591,380 3,876 522,360 -100 -22,203 258,675 762,609

Change previous periods 8,410 8,410

Net profit -16,196 -16,196
Share option program -1,218 -1,218
Share issue 454,430,000 4,544 94,438 - - - 98,983
Effect of exchange rate differences - -
Equity as of December 31, 2015 842,021,380 8,420 616,799 -100 -22,203 249,671 852,588

28 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 STATEMENTS OF CASH FLOWS

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) Note 2015 2014

CASH FLOW FROM OPERATIONS

-7,477 -56,809 Profit/(loss) before taxes, excluding interest 30 -144,106 117,702
-12,129 -11,801 Interest paid -50,649 -46,362
- - Taxes paid -2,272 -8,957
- - Result from associated companies 7 1,560 -1,808
- - Gain/(loss) on sale of assets 25 -16,317 -18,728
- - Depreciation and amortization 5 107,025 96,883
- - Impairment of vessels 5 159,465 29,000
- - Impairment of intagible assets 5 6,705 -
- 49,000 Impairment of shares in subsidiares - -
-1,728 2,462 Stock option expenses 31 -1,728 2,462
- - Effect of unreal. currency exchange forward contracts 28 -2,074 5,612
11,255 -7,289 Changes in short-term receivables and payables -25,149 19,918
-368 -368 CIRR -368 -368
- Other changes 10,373 -11,010
-10,447 -24,805 Net cash flow from operations 42,462 184,345

CASH FLOW FROM INVESTMENT ACTIVITIES

3,491 4,162 Interest received 4,233 4,171
- - Investment in fixed assets 4,5 -149,631 -525,674
- - Proceeds from sale of fixed assets 25 122,193 76,290
- - Proceeds from sale of shares 2,620 -
13,319 -17,041 Received from long term loan - -
-22,071 - Investments in subsidiaries -2,510 -
- - Dividend from associated companies 7 1,355 278
- - Investments in associated companies 7 -3,576 -12,201
-5,261 -12,879 Net cash flow from investment activities -25,315 -457,136

CASH FLOW FROM FINANCING ACTIVITIES

- -6,533 Dividend payment - -6,533
98,983 - Proceeds from issue of new equity 98,983 -
- - Proceeds from share issue in partly owned subsidiaries - 1,336
- 60,000 Loan from shareholder - -
- - Contribution from non-controlling interests of consolidated subsidiaries 4,744 -
- - Proceeds from bankoverdraft -4,014 5,624
- 76,256 Proceeds from new long-term borrowing 12 109,583 447,701
-36,560 - Repayment of long-term borrowing 12 -182,820 -131,936
62,422 129,723 Net cash flow from financing activities 26,476 316,192
46,714 92,039 Net change in cash 43,623 43,401
222,579 132,068 Cash at bank as of 1 January 117,623 101,206
-1,529 Effect of exchange rate differences -12,494 -26,985
269,293 222,579 Cash at bank as of 31 December 148,753 117,623

SIEM OFFSHORE INC., ANNUAL REPORT 2015 29

 NOTES TO THE ACCOUNTS

Siem Marlin
Photographer: Jan Peter Lehne

Note 1 - Accounting Principles

Siem Offshore owns and operates a fleet of offshore support

vessels, including Platform Supply Vessels, Offshore Subsea
Construction Vessels, Anchor Handling, Tug, Supply Vessels
and Well-Intervention Vessels.

30 SIEM OFFSHORE INC., ANNUAL REPORT 2015

1.1 General
Siem Offshore Inc. was established on
July 1, 2005 as an exempted company
under the laws of the Cayman Islands and
is listed on the Oslo Stock Exchange. All
references to Siem Offshore Inc. and
the Company shall mean Siem Offshore
Inc. and its subsidiaries and associates
unless the context indicates otherwise. All
references to Parent shall mean Siem
Offshore Inc. as a parent company only.
1.2 Basis of preparation
The consolidated and parent company
financial statements were prepared in
accordance with International Financial
Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRIC)
interpretations endorsed by the European
Union and the regulations of the Oslo
Stock Exchange. As of December 31,
2015, there were no differences relevant
to the Company between these standards
and International Financial Reporting
Standards, as issued by the International
Accounting Standards Board, and the
policies adopted by the Company. The
consolidated financial statements have
been prepared under the historical cost
convention, as modified by fair value of
non-current assets held for sale, and
financial assets, including derivative
instruments at fair value through profit or
loss. The financial statements have been
prepared under the assumption that the
Company is a going-concern. A summary
of the principal accounting policies applied
in the preparation of these financial state-
ments are set out below.
The financial statements are presented
at and for the year ended December 31,
2015. All figures are in USD thousands
unless otherwise clearly stated.
The preparation of financial statements
in conformity with IFRS requires the use
of certain critical accounting estimates. It
also requires management to exercise its
judgment in the process of applying the
Companys accounting policies. The areas
involving a higher degree of judgment
or complexity or areas where assump-
tions and estimates are significant to the
consolidated financial statements are
disclosed under Critical accounting esti-
mates and judgments presented below.
1.3 Accounting policies
(a) New and amended standards
adopted by the Company
There are no new standards or amend-
ments to exisiting standards of relevance
for the Companys financial statement for
2015.
(b) New standards and interpretations
not yet adopted
IFRS 9 addresses the classification, meas-
urement and derecognition of financial
assets and financial liabilities and
introduces new rules for hedge account-
ing. In July 2014, the IASB made further
changes to the classification and meas-
urement rules and also introduced a new
impairment model. These latest amend-
ments now complete the new
financial instruments standard.
IFRS 15 Revenue from Contracts with
Customers
The IASB has issued a new standard
for the recognition of revenue. This will
replace IAS 18 which covers contracts
for goods and services and IAS 11 which
covers construction contracts. The new
standard is based on the principle
that revenue is recognised when control of
a good or service transfers to a customer
so the notion of control replaces the
existing notion of risks and rewards. The
standard permits a modified retrospective
approach for the adoption. Under this ap-
proach entities will recognise transitional
adjustments in retained earnings on the
date of initial application (eg 1 January
2017), ie without restating the compara-
tive period. They will only need to apply
the new rules to contracts that are not
completed as of the date of initial applica-
tion.
There are no other IFRSs or IFRIC inter-
pretations that are not yet effective that
would be expected to have a material
impact on the Group.
1.4 Consolidation
a) Subsidiaries
Subsidiaries are entities over which the
Company has the power to govern the
financial and operating policies by control-
ling more than one half of the voting rights
in the relevant entity. The existence and
effect of potential voting rights that are
currently exercisable or convertible are
considered when assessing whether the
Company controls another entity.
The Company also assesses existence of
control where it does not have more than
50% of the voting power but is able to gov-
ern the financial and operating policies by
virtue of de-facto control. De-facto control
may arise in circumstances where the size
of the Companys voting rights relative
to the size and dispersion of holdings of
other shareholders give the Company the
power to govern the financial and operat-
ing policies, etc.
Subsidiaries are fully consolidated from
the date on which control is transferred
to the Company. They are deconsolidated
from the date that control ceases.
The Company applies the acquisition
method to account for business combina-
tions. The consideration transferred for
the acquisition of a subsidiary is the fair
values of the assets transferred and the li-
abilities assumed from to the former own-
ers of the acquirer and the equity interests
issued by the Company.
The consideration transferred includes the
fair value of any asset or liability resulting
from a contingent consideration arrange-
ment. Identifiable assets acquired and li-
abilities and contingent liabilities assumed
in a business combination are measured
initially at their fair values at the acquisi-
tion date. The Company recognises any
non-controlling interest in the acquiree on
SIEM OFFSHORE INC., ANNUAL REPORT 2015 31
 NOTES TO THE ACCOUNTS
an acquisition-by-acquisition basis, either
at fair value or at the non-controlling
interests proportionate share of the rec-
ognised amounts of acquirees identifiable
net assets.Acquisition-related costs are
expensed as incurred. If the business com-
bination is achieved in stages, fair value
of the acquirers previously held equity
interest in the acquiree is remeasured to
fair value at the acquisition date through
profit or loss.
Any contingent consideration to be trans-
ferred by the Company is recognised at
fair value at the acquisition date. Sub-
sequent changes to the fair value of the
contingent consideration that is deemed
to be an asset or liability is recognised in
accordance with IAS 39 either in profit or
loss or as a change to other comprehen-
sive income. Contingent consideration that
is classified as equity is not remeasured
and its subsequent settlement is account-
ed for within equity.
Goodwill is initially measured as the ex-
cess of the aggregate of the consideration
transferred and the fair value of non-con-
trolling interest over the net identifiable
assets acquired and liabilities assumed.
If this consideration is lower than the fair
value of the net assets of the subsidiary
acquired, the difference is recognised in
profit or loss.
Intercompany transactions, balances,
income and expenses on transactions
between group companies are eliminated.
Profits and losses resulting from inter-
company transactions that are recognised
in assets are also eliminated. Accounting
policies of subsidiaries have been changed
where necessary to ensure consistency
with the policies adopted by the Company.
(b) Associated companies
Associates are entities over which the
Company has significant influence but not
control, generally accompanying a share-
holding of between 20% and 50% of the
voting rights. Investments in associates
are accounted for using the equity method
32 SIEM OFFSHORE INC., ANNUAL REPORT 2015
of accounting and are initially recognized
at cost. The Companys investment in
associates includes goodwill (net of any
accumulated impairment loss) identified
on acquisition. The share of earnings
recorded in the consolidated financial
statements are based on the after-tax
earnings of the associates. In the income
statement, the share of earnings from
associates is shown as a financial item.
The Companys share of its associates
post-acquisition profits or losses is rec-
ognized in the income statement and its
share of post-acquisition movements in
reserves is recognized in other compre-
hensive Income. The cumulative post-ac-
quisition movements are adjusted against
the carrying amount of the investment.
When the Companys share of losses in
an associate equals or exceeds its inter-
est in the associate, including any other
unsecured receivables, the Company does
not recognize further losses unless it has
incurred obligations or made payments on
behalf of the associate.
Unrealized gains on transactions between
the Company and its associates are elimi-
nated to the extent of the Companys in-
terest in the associates. Unrealized losses
are also eliminated unless the transaction
provides evidence of an impairment of the
asset transferred. Accounting policies of
associates have been reconciled where
necessary to ensure consistency with the
policies adopted by the Company.
1.5 Classification of items in the
financial statements
Assets designated for long-term owner-
ship or use and receivables due later
than one year after drawdown have been
recorded as non-current assets. Other
assets are classified as current assets.
Receivables are stated at par value less
provision for doubtful accounts. Liabilities
due later than one year after the end of
the accounting year are posted as non-
current liabilities. Other liabilities are
classified as current liabilities.
1.6 Segment reporting
Operating segments are reported in a
manner consistent with the internal
reporting provided to the chief operat-
ing decision-maker. The chief operating
decision-maker, who is responsible for
allocating resources and assessing per-
formance of the operating segments, has
been identified as the steering committee
that makes strategic decisions.
The Company is organized into eight dif-
ferent segments, platform supply vessels
(PSVs), offshore subsea construction
Vessel (OSCVs), anchor-handling tug
supply vessels (AHTS vessels), Brazilian
vessels (consisting of fast crew vessels
(FCVs), fast supply vessels (FSVs) and
oil spill recovery vessels (OSRVs)), com-
bat management systems (CMS), Cable
installation, Scientific core-drilling and
Other, in which the Company operates.
1.7 Foreign currency translation
(a) Functional and presentation
currency
Items included in the financial statements
of each of the Companys entities are
measured using the currency of the pri-
mary economic environment in which the
entity operates (the functional currency).
The consolidated financial statements are
presented in USD, which is the Companys
functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are trans-
lated into the functional currency using
the exchange rates prevailing at the dates
of the transactions. Foreign exchange
gains and losses resulting from the set-
tlement of such transactions and from the
translation at year-end exchange rates of
monetary assets and liabilities denomi-
nated in foreign currencies are recognized
in the income statement. The exchange
rates vs USD used in 2015 are shown in
the table below.
(c) Group companies
The results and financial position of all the
group companies (none of which have the
currency of a hyperinflationary economy)
that have a functional currency differ-
ent from the presentation currency are
translated into the presentation currency
as follows:
(i) assets and liabilities for each reporting
presented are translated at the clos-
ing rate at the date of that statement of
financial position;
(ii) income and expenses for each income
statement are translated at average ex-
change rates (unless this average is not a
reasonable approximation of the cumula-
tive effect of the rates prevailing on the
transaction dates, in which case income
and expenses are translated at the dates
of the transactions); and
(iii) all resulting exchange differences are
recognized as a separate component of
equity.
In consolidation, exchange differences
arising from the translation of the net in-
vestment in foreign operations is recorded
over Other Comprehensive Income (OCI)
and taken into shareholders equity. When
a foreign operation is sold, exchange dif-
ferences that were recorded over OCI are
recognized in the income statement as
part of the gain or loss on sale.
Goodwill and fair value adjustments aris-
ing on the acquisition of a foreign entity
are treated as assets and liabilities of the
foreign entity and translated at the closing
rate.
1.8 Fixed assets and
maintenance costs
Vessels are measured in the consolidated
statement of financial position at cost less
accumulated depreciation and impairment
loss. Depreciation is on a straight-line
basis and determined by an estimate of
the remaining useful economic life of the
asset. Estimated residual value is deter-
mined as the estimated sales price for
steel less the costs associated with scrap-
ping a vessel. The estimate is reassessed
at each balance sheet date.
The vessels presently owned by the Com-
pany are considered to have an economic
life of 30 years. Some components of the
vessels have a shorter economic life than
30 years. The vessels are decomposed
into different components and amortized
over estimated economic life time. For fur-
ther information, see Note 5. Other fixed
assets are depreciated on a straight-line
basis over the anticipated useful life.
Each part of a fixed asset that is sig-
nificant to the total cost of the asset is
separately identified and depreciated over
that components useful lifetime. Com-
ponents with similar useful lives will be
included in one component. The Company
has identified 7 significant components
relating to its different types of vessels.
In accordance with IAS 16 and the cost
model, dry-dock costs are considered a
separate component of the ships cost at
purchase with a different pattern of ben-
efits and, therefore, need to be amortized
separately.
Day-to-day maintenance costs are
charged to the income statement during
the financial period in which they are
incurred. The cost of major renovations
and periodic maintenance of vessels is
capitalized as dry-docking costs and
depreciated over the useful lifetime of
the parts replaced. The useful life of the
regular vessels dry-docking costs will be
the period until the next docking, normally
from 2 to 3 years.
The relevant exchange rates vs. USD are:
NOK (Norwegian kroner)
EUR (Euros)
GBP (Pound Sterling)
REAS (Brazilian Reals)
The residual value and expected use-
ful lifetime assumptions of fixed assets
are reviewed at each reporting date and,
where they differ significantly from previ-
ous estimates, the rate of depreciation
charges are changed accordingly.
Certain vessel contracts require an invest-
ment prior to commencing the contract to
fulfil requirements set by the charterer.
These investments are capitalized as pro-
ject costs and are amortized over the term
of the specific charter contracts.
Gains and losses on disposals are
determined by comparing the disposal
proceeds with the carrying amount and
are included in operating profit.
1.9 Newbuild contracts
Instalments on newbuild contracts are
recorded as non-current assets. Costs re-
lated to the on-site supervision and other
pre-delivery construction costs are capi-
talized per vessel. Borrowing costs related
to newbuilding contracts commenced be-
fore December 31, 2008 are recognized as
an expense immediately. For newbuilding
contracts where the commencement date
for capitalization is on or after January 1,
2009, the Company capitalizes borrowing
costs directly attributable to the construc-
tion as a part of the cost of the asset.
1.10 Impairment of fixed assets
Non-current assets are reviewed for
potential impairment at each reporting
date and whenever events or changes in
circumstances indicate that the carrying
amount may not be recoverable.
The assets cash generating ability either
through use or sale is reviewed and com-
2015 Average 31.12.15
0.1236 0.1135
1.1134 1.0920
1.5279 1.4839
0.3002 0.2561
SIEM OFFSHORE INC., ANNUAL REPORT 2015 33
 NOTES TO THE ACCOUNTS
pared to the assets carrying amount in
the statement of financial position. If the
carrying amount is higher, the difference
must be written off as an impairment loss.
Fair value reduced by estimated sales
costs is the amount achievable on sale to
an independent third party.
The recoverable amount is established
individually for all assets, except for AHTS
vessels which operates in a pool and is
considered as one cash generating unit.
In assessing value in use, the estimated
future cash flows are discounted to their
present value using a pre-tax discount
rate that reflects current market assess-
ments of the time and the risk specific to
the asset that is considered impaired.
A previously recognized impairment loss
is reversed if there has been a change
in the estimates used to determine the
recoverable amount. Reversal of previ-
ously recognized impairment is limited
to the amount that the carrying value of
the asset would have been had the initial
impairment charge not taken place.
1.11 Intangible assets
Intangible assets that are acquired sepa-
rately are measured on initial recognition
at cost. The cost of intangible assets
acquired in a business combination is
recognized at fair value at the date of
acquisition. Following initial recognition,
intangible assets are carried at cost less
any accumulated amortization and any
accumulated impairment losses.
Internally-generated intangible assets,
excluding capitalized development costs,
are not capitalized and expenditure is
charged against profits in the year in
which the expenditure is incurred. The
useful lives of intangible assets are
assessed to be either finite or infinite.
Intangible assets with finite lives are
amortized over the useful economic life
and assessed for impairment whenever
there is an indication that the intangible
asset may be impaired. The amortization
34 SIEM OFFSHORE INC., ANNUAL REPORT 2015
period and the amortization method are
reviewed at least at each financial year-
end. Changes in the expected useful life
or the expected pattern of consumption
of future economic benefits embodied in
the asset is accounted for by changing
the amortization period or method, as
appropriate, and treated as a change in
accounting estimate. The amortization ex-
pense on intangible assets with finite lives
is recognized in the income statement in
the expense category consistent with the
function of the intangible asset.
Intangible assets with infinite useful lives
are tested for impairment annually either
individually or at the cash-generating unit
level. Such intangibles are not amortized.
The useful life of an intangible asset
with an infinite life is reviewed annually
to determine whether the infinite life as-
sessment continues to be supportable. If
not, the change in the useful life assess-
ment from infinite to finite is made on a
prospective basis. Goodwill arises on the
acquisition of subsidiaries, associates and
joint ventures and represents the excess
of the consideration transferred over Com-
panys interest in net fair value of the net
identifiable assets, liabilities and contin-
gent liabilities of the acquiree and the fair
value of the non-controlling interest in the
acquiree.
For the purpose of impairment testing,
goodwill acquired in a business combi-
nation is allocated to each of the CGUs,
or groups of CGUs, that is expected to
benefit from the synergies of the combina-
tion. Each unit or group of units to which
the goodwill is allocated represents the
lowest level within the entity at which the
goodwill is monitored for internal man-
agement purposes. Goodwill is monitored
at the operating segment level.
Goodwill impairment reviews are un-
dertaken annually or more frequently
if events or changes in circumstances
indicate a potential impairment. The car-
rying value of goodwill is compared to the
recoverable amount, which is the higher of
value in use and the fair value less costs
to sell. Any impairment is recognised
immediately as an expense and is not
subsequently reversed.
1.12 Financial assets
The Company classifies its financial as-
sets in the following categories: Financial
assets at fair value through profit or loss,
Loans and receivables, and Available for
sale Financial assets. The classification
depends on the purpose for which the
financial assets were acquired. Manage-
ment determines the classification of its
financial assets at initial recognition and
re-evaluates this designation at every
reporting date.
(a) Financial assets at fair value
through profit or loss
Financial assets at fair value through
profit or loss are financial assets held for
trading. A financial asset is classified in
this category if acquired principally for
the purpose of selling in the short term.
Derivatives are also categorised as held
for trading unless they are designated as
hedges. Assets in this category are clas-
sified as current assets if expected to be
settled within 12 months; otherwise, they
are classified as non-current.
(b) Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an ac-
tive market. They are included in current
assets, except for those which maturities
greater than 12 months after the reporting
date. These are classified as non-current
assets.
1.13 Inventories
Lubricating oil and bunkers inventories
are valued at the lower of historical cost
and replacement cost as measurement of
net relisable value. The Company makes
inventory provisions based on an assess-
ment of excess and obsolete inventories.
1.14 Cash and cash equivalents
Cash and cash equivalents includes
cash in hand, deposits held at call with
banks and other short-term highly liquid
investments with original maturities of
three months or less. Bank overdrafts are
shown within borrowings in current liabili-
ties in the statement of financial position.
1.15 Accounts receivable
Accounts receivable are reported at
amortized cost. The interest factor is
ignored as it is considered as insignificant.
In the case of objective evidence of a fall
in value, the difference between reported
value and the present value of the future
cash flow is discounted with the original
effective interest rate for the receivable
and reported as a loss.
Provisions for losses are recognized
when there are objective indicators that
the Company will not receive settlement
in accordance with the original terms.
Significant financial problems facing the
customer, probability that the customer
will go bankrupt or undergo financial
restructuring, postponements and non-
payment are regarded as indicators that
the receivables from customers must be
written-down.
1.16 Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable
to the issue of new shares or options are
shown in equity as a deduction, net of tax,
from the proceeds. When the Company
purchases its own shares, the considera-
tion paid, including any directly attribut-
able incremental costs (net of income
taxes), is deducted as appropriate from
share capital and share premium reserve
and the shares are cancelled.
1.17 Borrowings
Borrowings are recognized initially at fair
value, net of transaction costs incurred
and are subsequently stated at amortized
cost. Any difference between the proceeds
(net of transaction costs) and the redemp-
tion value is recognized in the income
statement over the period of the borrow-
ings using the effective interest method.
Borrowings are classified as current
liabilities unless the Company has an
unconditional right to defer settlement of
the liability for at least 12 months after
the reporting date.
1.18 Commercial Interest
Reference Rate (CIRR) loan
The Company has applied for three Com-
mercial Interest Reference Rate (CIRR)
loans from the Norwegian Export Credit
Agency. The duration of the loans is 12
years from draw down and the cash pro-
ceeds from the loans have been deposited
in fixed deposit account with a Norwegian
bank at the same interest rate as the
loans. The agreed periods of the deposits
are identical with the periods of the loans.
1.19 Taxation
Tax expense/benefit includes current
taxes and the change in deferred taxes.
Deferred income tax is provided for all
temporary differences between the
book value and the tax basis of assets
and liabilities and for tax losses carried
forward. Deferred tax assets made prob-
able through prospective earnings that
can be utilized against the tax reducing
temporary differences are recognized as
intangible assets.
Deferred tax assets and deferred tax
liabilities are recognized independently
of when the differences will be reversed
and, as a rule, at nominal value. Deferred
tax assets and tax liabilities are measured
on the basis of estimated future tax rate.
Part of the Companys activities under the
Norwegian subsidiaries are structured to
be in compliance with the regulations for
the Norwegian Tonnage Tax Regime. The
Company has estimated a tax rate of 0%
for the companies subject to Norwegian
Tonnage Tax Regime. Financial income
within the regime is taxable at a rate of
27%. For companies not included in the
tonnage tax regime, the Company ap-
plies a tax rate of 27%. The tax expense
consists of tax payable and changes in
deferred tax assets/liabilities.
Deferred income tax is provided in full,
using the liability method, on temporary
differences arising between the tax bases
of assets and liabilities and their carry-
ing amounts in the consolidated financial
statements. Deferred tax assets are
recognized to the extent it is probable that
future taxable profits will be generated to
utilize the temporary differences forming
basis for the deferred tax assets.
1.20 Pension costs and
obligations
The Company has a defined benefit plan
for its employees in Norway. The pension
scheme is financed through contributions
to insurance companies or pension funds.
A defined benefit plan defines the amount
of pension benefit that an employee will
receive on retirement, usually dependent
on one or more factors such as age, years
of service and compensation.
The liability recognized on the statement
of financial position relating to defined
benefit plans is the net present value for
the defined benefits on the reporting date
less the fair value of the pension fund
assets adjusted for unrecognized estimate
deviations and costs relating to pension
benefits earned from prior periods.
The pension obligations are calculated
annually by an independent actuary on the
basis of a linear model.
The present value of the defined obliga-
tion is determined by discounting the es-
timated futrure cash outflows using inter-
est rates of high-quality corporated bonds
that are denominated in the currency in
which the benefits will be paid, and that
have terms to maturity approximately to
the terms of the related pension obliga-
SIEM OFFSHORE INC., ANNUAL REPORT 2015 35
 NOTES TO THE ACCOUNTS
tion. In countries where there is no deep
market in such bonds, the market rates on
government bonds are used.
1.21 Contingent liabilities
and provisions
The Company recognizes provisions for
any environmental improvements and
legal requirements when there is a legal
or self-imposed obligation to do so as a
result of earlier events, there is a prepon-
derance of evidence that the obligation
will be settled by a transfer of economic
resources and the size of the obligation
can be estimated with an adequate degree
of reliability. In cases where there are
additional obligations of the same nature,
the probability that the litigation will be
settled will be assessed for the Company
as a whole. Provisions for the Company
are recognized even if the probability
for settlement related to the Companys
individual elements may be low.
Provisions are measured as the net pre-
sent 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
recognized as an interest cost.
At year-end 2015, no contingent liabili-
ties are recognized in the Statements of
Financial Position.
1.22 Financial derivatives
The Company enters into derivative
instruments, primarily foreign currency
contracts, and interest rate derivatives,
to hedge the foreign currency and interest
rate fluctuations. The criteria for qualify-
ing as a hedge under IFRS are strict. The
Companys foreign currency contracts do
not qualify as hedging. The fair market
value of these contracts is recorded as a
receivable or liability and any change in
the valuation is recognized in the profit
and loss as operating expenses.
36 SIEM OFFSHORE INC., ANNUAL REPORT 2015
1.23 Revenue recognition
The Companys activity is to employ dif-
ferent types of offshore support vessels,
including PSVs, OSCVs, AHTS vessels,
OSRVs, standby vessels and crew-boats
and one scientific core-drilling vessel.
In addition, the Company holds interest
in one limited liability partnership with
ownership in one well-stimulation vessel.
In one of the subsidiaries of the Com-
pany, revenues are partly generated from
income from construction contracts.
Revenue comprises the fair value of the
consideration received or receivable for
the sale of goods and services in the
ordinary course of the Companys activi-
ties. Revenue is shown net of value-added
tax, withholding tax, returns, rebates and
discounts and after elimination of sales
within the Company. Revenue is recog-
nized as follows:
Charter rate contracts
Charter contracts are classified as operat-
ing leases under IAS 17. Revenue derived
from charter contracts is recognized in the
period over the lease term on a straight
line basis. Related services are recog-
nized as revenue in accordance with the
services being rendered.
Revenues from time charters and bare-
boat charters accounted for as operating
leases are recognized over the rental
periods of such charters, as service is
performed on a straight line basis. Certain
contracts include mobilization fees pay-
able at the start of the contract, and are
recognized as revenue in the mobiliza-
tion period until contract commence-
ment. In cases where the fee covers
specific upgrades or equipment specific
to the contract, the mobilization fees are
recognized as revenue over the estimated
contract period. The related investment is
depreciated over the estimated contract
period. In cases where the fee covers
specific operating expenses at the start
of the contract, the fees are recognized in
the same period as the expenses.
Vessels without signed contracts in place
at discharge have no revenue before a
new contract is signed. Charter-related
expenses incurred for vessels in the idle
time are expensed.
Construction contracts
The Company accounts for long-term
construction, engineering and project
management contracts on the percent-
age-of-completion basis as costs are
incurred. Under this method, when the
outcome of a construction contract can be
estimated reliably and it is probably that
the contract will be profitable, contract
revenue is recognized over the period of
the contract by reference to the stage of
completion. It is determined that profit
on a contract is not able to be estimated
reliably until progress has reached at
least 25% completion. Contract costs are
recognized as expenses by reference to
the stage of completion of the contract
activity at the end of the reporting period.
For projects that are expected to result in
a loss, the total estimated loss is recog-
nized immediately.
Interest income
Interest income is recognized using the ef-
fective interest method. When a receivable
is impaired, the Company reduces the car-
rying amount to its recoverable amount,
which is determined as the estimated
future cash flow discounted at original
effective interest rate of the instrument
and continues unwinding the discount
as interest income. Interest income on
impaired loans is recognized using the
original effective interest rate.
Dividend income
Dividend income is recognized when the
right to receive payment is established.
Rendering of services
Service revenue is generally recognized
when a signed contract or other persua-
sive evidence of an arrangement exists,
the service has been provided, the fee is
fixed or determinable and collection of
resulting receivables is reasonably as-
sured. Other services are recognized on
percentage-of-completion basis.
1.24 Use of estimates
Management is required to make esti-
mates and assumptions that affect the
reported amounts of assets and liabilities.
Further information is set out in Note 3.
1.25 Earnings per share
Earnings per share are calculated by divid-
ing the net profit/loss for shareholders
of the Company by the weighted average
number of outstanding shares over the
period in question. Diluted earnings per
share include the effect of the assumed
conversion of potentially dilutive instru-
ments such as stock options. The impact
of share equivalents is computed using
the treasury stock method for share
options.
1.26 Statement of Cash Flows
The Statements of Cash Flows are
prepared in accordance with the indirect
method.
1.27 Related party transactions
All transactions, agreements and busi-
ness activities with related parties are
determined on an arms length basis in a
manner similar to transactions with third
parties.
1.28 Events after reporting date
New information regarding the Companys
financial position on the reporting date is
included in the accounts. Events occur-
ring after the reporting date which do not
impact the Companys standing on the re-
porting date, but which have a significant
impact on future periods, are presented in
the notes to the accounts.
1.29 Government grants
Grants relating to net wages arrangement
in Norway are recognized as a reduction of
wage cost.
1.30 Exchange gain/ loss
related to account receivables
and account payable
All foreign exchange gains and losses re-
lated to account receivables and account
payable are recognized in the income
statement under net currency gain/(loss).
1.31 Operating leases
Leases for which most of the risk and
return associated with the ownership of
the asset have not been transferred to
the Company are classified as operating
leases. Lease payments are classified
as operating costs and recognized in the
income statement in a straight line during
the contract period.
1.32 Share-based payments
The group operates an equity-settled,
share-based compensation plan, under
which the entity receives services from
employees as consideration for equity in-
struments (options) of the group. The fair
value of the employee services received
in exchange for the grant of the options
is recognised as an expense. The total
amount to be expensed is determined by
reference to the fair value of the options
granted:
including any market performance
conditions (for example, an entitys share
price);
excluding the impact of any service
and non-market performance vesting
conditions (for example, profitability,
sales growth targets and remaining an
employee of the entity over a specified
time period); and
including the impact of any non-vesting
conditions (for example, the requirement
for employees to save).
Non-market performance and service con-
ditions are included in assumptions about
the number of options that are expected
to vest. The total expense is recognized
over the vesting period, which is the period
over which all of the specified vesting
conditions are to be satisfied.
In addition, in some circumstances em-
ployees may provide services in advance
of the grant date and therefore the grant
date fair value is estimated for the pur-
poses of recognizing the expense during
the period between service commence-
ment period and grant date. At the end of
each reporting period, the group revises
its estimates of the number of options
that are expected to vest based on the
non-market vesting conditions. It recog-
nizes the impact of the revision to original
estimates, if any, in the income statement,
with a corresponding adjustment to equity.
Each option gives the holder the right,
but not the obligation, to acquire one
share at the exercise price on the terms
and subject to the conditions set out in
the Stock Option Plan. When the options
are exercised, the company issues new
shares. The proceeds received net of any
directly attributable transaction costs are
credited to share capital (nominal value)
and share premium.
The grant by the company of options over
its equity instruments to the employees
of subsidiary undertakings in the group
is treated as a capital contribution. The
fair value of employee services received,
measured by reference to the grant date
fair value, is recognized over the vesting
period as an increase to investment in
subsidiary undertakings, with a corre-
sponding credit to equity in the parent
entity accounts.
The social security contributions payable
in connection with the grant of the share
options is considered an integral part of
the grant itself, and the charge will be
treated as a cash-settled transaction.
SIEM OFFSHORE INC., ANNUAL REPORT 2015 37
 NOTES TO THE ACCOUNTS

Note 2 - Financial Risk Management

2.1 Financial risk factors
The Company is exposed to a variety
of financial risks through its ordinary
operations and debt financing. Such risks
include foreign exchange risk, interest rate
risk, credit risk and liquidity risk. To man-
age these risks, management reviews and
assesses its primary financial and market
risks. Once risks are identified, appropriate
action is taken to mitigate the identified
risk. The Companys risk management is
exercised in line with guidelines approved
by the Board.
2.2 Foreign exchange risks
USD is the reporting currency for the
Company. Functional currency for the
Parent and vessel-operating subsidiaries
is USD, except for one of the Norwegian
subsidiary where NOK is the functional
currency, and the Brazilian subsidiary
where BRL is the functional currency.
Remaining subsidiaries use
NOK and EUR as functional currency.
The Company operates internationally
and is exposed to foreign exchange risks
arising from various currency exposures
primary with respect to NOK, GBP, EUR
and BRL.

CONSOLIDATED Foreign exchange risk rate 10%

(Amounts in USD 1,000) +10% movements -10% movements
December 31, 2015 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 148,753 7,839 7,839 -7,839 -7,839
Derivaties 1,451 - - - -
Accounts receivable 46,147 2,162 2,162 -2,162 -2,162
Impact on financial assets before tax 196,351 10,000 10,000 -10,000 -10,000

Financial liabilities
Accounts payable 8,395 -823 -823 823 823
Derivatives 12,896 14,093 14,093 -14,093 -14,093
Borrowings 1,122,585 -51,906 -51,906 51,906 51,906
Impact on financial liabilities before tax 1,143,877 -38,635 -38,635 38,635 38,635

Income statement
Operating revenue 422,449 23,242 23,242 -23,242 -23,242
Operating expenses 303,901 -24,224 -24,224 24,224 24,224
Impact on operating result before tax 118,548 -982 -982 982 982
Total increase/decrease before tax - -29,617 -29,617 29,617 29,617

Allocation per currency

NOK -33,637 -33,637 33,637 33,637
EUR 17,459 17,459 -17,459 -17,459
GBP 1,496 1,496 -1,496 -1,496
BRL -14,935 -14,935 14,935 14,935
Total increase/ decrease before tax -29,917 -29,917 29,617 29,617

Financial assets in 2015 and 2014 include derivatives related to hedging of foreign exchange risks. The derivatives in the sensitivity table
include path-dependent options in which the value of the derivatives is influenced when the underlying reaches or fluctuates within,
below or above specific barrier levels. The change in value of these derivatives will impact the profit of the Company.
Financial liabilities in 2015 and 2014 consist of interest rate derivatives and are not influenced by movements in foreign exchange rates.

38 SIEM OFFSHORE INC., ANNUAL REPORT 2015

Foreign exchange risks can be divided into
transaction risk from paying and receiving
foreign currency and translation risk due
to recognizing assets and liabilities in
USD. The Company had in 2015 and 2014
mainly USD, NOK, EUR, GBP and BRL
revenue and expenses.
At year end, the Company had one ship-
building contract with a Brazilian yard for
the construction of one OSRV, shipbuild-
ing contracts with a Polish yard for the
construction of three PSVs and one CLV
and shipbuilding contracts with a Ger-
man yard for construction of two WIVs.
The contract with the Brazilian yard is in
USD, BRL and NOK, the contracts with
the Polish- and German yards are in EUR.
Further information regarding these con-
tracts is set out in Note 2.5 and Note 17.
The Company is exposed to foreign
exchange risk of its subsidiaries, including
the development of the Brazilian Real.
The following sensitivity table demon-
strates the impact on the Companys
profit and equity before tax from potential
changes to the exchange rates, all other
variables held constant.

CONSOLIDATED Foreign exchange risk rate 10%

(Amounts in USD 1,000) +10% movements -10% movements
December 31, 2014 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 117,623 3,614 3,614 -3,614 -3,614
Derivatives 1,041 - - - -
Accounts receivable 74,753 1,292 1,292 -1,292 -1,292
Impact on financial assets before tax 193,417 4,907 4,907 -4,907 -4,907

Financial liabilities
Accounts payable 10,781 -1,583 -1,583 1,583 1,583
Derivatives 16,732 18,402 18,402 -21,016 -21,016
Borrowings 1,214,360 -51,399 -51,399 51,399 51,399
Impact on financial liabilities before tax 1,241,873 -34,580 -34,580 31,966 31,966

Income statement
Operating revenue 491,312 20,149 20,149 -20,149 -20,149
Operating expenses 297,187 -18,284 -18,284 18,284 18,284
Impact on operating result before tax 194,125 1,866 1,866 -1,866 -1,866
Total increase/decrease before tax - -27,807 -27,807 25,193 25,193

Allocation per currency

NOK -21,985 -21,985 19,371 19,371
EUR 10,274 10,274 -10,274 -10,274
GBP 440 440 -440 -440
BRL -16,537 -16,537 16,537 16,537
Total increase/ decrease before tax -27,807 -27,807 25,193 25,193

SIEM OFFSHORE INC., ANNUAL REPORT 2015 39

 NOTES TO THE ACCOUNTS

PARENT COMPANY Foreign exchange risk rate 10%

(Amounts in USD 1,000) +10% movements -10% movements
December 31, 2015 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 269,293 15,060 15,060 -15,060 -15,060
Accounts receivable - - - - -
Impact on financial assets before tax 269,293 15,060 15,060 -15,060 -15,060

Financial liabilities
Accounts payable 144 -14 -14 14 14
Derivatives - - - - -
Borrowings 207,852 -16,678 -16,678 16,678 16,678
Impact on financial liabilities before tax 207,996 -16,693 -16,693 16,693 16,693

Income statement
Operating revenue 145 15 15 -15 -15
Operating expenses 9,240 -885 -885 885 885
Impact on operating result before tax -9,095 -871 -871 871 871
Total increase/decrease before tax - -2,503 -2,503 2,503 2,503

Allocation per currency

NOK -6,181 -6,181 6,181 6,181
EUR 3,719 3,719 -3,719 -3,719
GBP -42 -42 42 42
Total increase/ decrease before tax -2,503 -2,503 2,503 2,503

40 SIEM OFFSHORE INC., ANNUAL REPORT 2015

PARENT COMPANY Foreign exchange risk rate 10%
(Amounts in USD 1,000) +10% movements -10% movements
December 31, 2014 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 222,579 15,217 15,217 -15,217 -15,217
Accounts receivable - - - - -
Impact on financial assets before tax 222,579 15,217 15,217 -15,217 -15,217

Financial liabilities
Accounts payable 53 -1 -1 1 1
Derivatives - - - - -
Borrowings 174,881 -20,334 -20,334 20,334 20,334
Impact on financial liabilities before tax 174,934 -20,334 -20,334 20,334 20,334

Income statement
Operating revenue 405 - - - -
Operating expenses 12,521 -1,156 -1,156 1,156 1,156
Impact on operating result before tax -12,116 -1,156 -1,156 1,156 1,156
Total increase/decrease before tax - -6,273 -6,273 6,273 6,273

Allocation per currency

NOK -8,212 -8,212 8,212 8,212
EUR 1,916 1,916 -1,916 -1,916
GBP 23 23 -23 -23
Total increase/ decrease before tax -6,273 -6,273 6,273 6,273

Photographer: Jan Peter Lehne

SIEM OFFSHORE INC., ANNUAL REPORT 2015 41

 NOTES TO THE ACCOUNTS

2.3 Credit risks, Concentration risks
The Companys credit risk is primarily
attributable to its trade and other short-
term receivables and asset derivative
positions. The derivative counterparties
are large established financial institutions,
and the counterparty risk for the asset de-
rivative positions are regarded as limited.
The exposure to credit risk for trade and
other short-term receivables is measured
on an ongoing basis and credit evaluations
are performed for customers identified
to be risky. The Companys debtors are
mainly major oil companies and offshore
service companies, which are considered
to be creditworthy third parties. Histori-
cally, the loss percentage has been low.
Ongoing provisions are made and, on 31
December 2015, the provision for certain
accounts receivable which may not be
paid in full was USD 13.4 million for the
Company (2014: USD 9.5 million) and USD
0.3 million for the Parent (2014: USD 0.7
million).

The table below presents the concentration risks for 2015 and 2014

PARENT COMPANY CONSOLIDATED

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

Receivables on December 31, 2015

1 to 5 largest - 0.0 % 38,217 82.8 %
6 to 10 largest - 0.0 % 10,869 23.6 %
Others - 0.0 % -2,939 -6.4 %
Total accounts receivable - 0% 46,147 100%

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

Receivables on December 31, 2014

1 to 5 largest - 0.0 % 50,454 67.5 %
6 to 10 largest - 0.0 % 16,279 21.8 %
Others - 0.0 % 8,020 10.7 %
Total accounts receivable - 0% 74,753 100%

Trade and receivables

The table below presents an aging analysis of the outstanding receivables at year end 2015 and 2014. Overdue receivables are fol-
lowed up continually by Management. The Management considers the outstanding amounts to be recoverable.

PARENT COMPANY CONSOLIDATED

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

Aging on December 31, 2015

Not due - 0.0 % 31,007 67.2 %
Due up to 1 month - 0.0 % 3,947 8.6 %
Due 1-4 months - 0.0 % 5,450 11.8 %
Due more than 4 months - 0.0 % 5,742 12.4 %
Total accounts receivable - 0% 46,147 100%

Aging on December 31, 2014

Not due - 0.0 % 28,392 38.0 %
Due up to 1 month - 0.0 % 14,823 19.8 %
Due 1-4 months - 0.0 % 12,409 16.6 %
Due more than 4 months - 0.0 % 19,128 25.6 %
Total accounts receivable - 0% 74,753 100%

42 SIEM OFFSHORE INC., ANNUAL REPORT 2015

The carrying amount of the Companys and Parents accounts receivables are denominated in the following currencies:

PARENT COMPANY CONSOLIDATED

(Amounts in USD 1,000) 2015 2014 2015 2014

Currency
USD - - 24,529 61,830
NOK - - 2,351 1,947
EUR - - 14,233 5,606
GBP - - 3,252 2,386
BRL - - 1,783 2,984
Total accounts receivable - - 46,157 74,753

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

2.4 Cash flow, interest risk
and fair value
The Company is financed by debt and
equity. If the Company fails to repay or
refinance its loan facilities, additional eq-
uity financing may be required. There can
be no assurance that the Company will
be able to repay its debts or extend re-
payment schedules through re-financing
of its loan agreements or avoid net cash
flow shortfalls exceeding the Companys
available funding sources or comply with
minimum cash requirements.
Further, there can be no assurance that
the company will be able to raise new eq-
uity, or arrange new borrowing facilities,
on favourable terms and in amounts nec-
essary to conduct its ongoing and future
operations, should this be required.
In the event of insolvency, liquidation
or similar event relating to a subsidiary
of the Company, all creditors of such
subsidiary would be entitled to payment
in full out of the assets of such subsidiary
before the Company, as a shareholder,
would be entitled to any payments.
Defaults by, or the insolvency of, a sub-
sidiary of the Company could result in the
obligation of the Company to make pay-
ments under parent company guarantees
issued in favour of such subsidiary.
The Company is moreover exposed to
changes in interest rates, which may af-
fect the Companys financial results.
These risks are mainly related to the
Companys long term borrowings with
floating interest rates.
Further details of the Companys borrow-
ings are set out in Note 12.
The Company has no significant interest-
bearing assets other than cash and cash
equivalents and therefore the Companys
income and operating cash flows are
substantially independent of changes
in market interest rates. Cash and
cash equivalents are invested for short
maturity periods, generally from 1 day to
3 months, which mitigates the potential
interest rate risk.
The following sensitivity tables demon-
strate the impact on the Companys profit
before tax and equity from a potential
shift in interest rates, all other variables
held constant.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 43

 NOTES TO THE ACCOUNTS

CONSOLIDATED Interest rate risk (IR)

(Amounts in USD 1,000) -1% movements +1% movements
December 31, 2015 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 148,753 -1,488 -1,488 1,488 1,488
Impact on financial assets before tax 148,753 -1,488 -1,488 1,488 1,488

Financial liabilities
Borrowings 657,617 5,782 5,782 -5,770 -5,770
Impact on financial liabilities before tax 657,617 5,782 5,782 -5,770 -5,770
Total increase/decrease before tax - 4,294 4,294 -4,282 -4,282

CONSOLIDATED Interest rate risk (IR)

(Amounts in USD 1,000) -1% movements +1% movements
December 31, 2014 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 117,623 -1,176 -1,176 1,176 1,176
Impact on financial assets before tax 117,623 -1,176 -1,176 1,176 1,176

Financial liabilities
Borrowings 668,772 2,689 2,689 -2,320 -2,320
Impact on financial liabilities before tax 668,772 2,689 2,689 -2,320 -2,320
Total increase/decrease before tax - 1,513 1,513 -1,144 -1,144

Borrowings in the tables above (both for 2015 and 2014) include only borrowings with floating interest.
Above movements also include the effect of interest rate swaps entered into in order to hedge the floating interest risk. Market-to-mar-
ket effects in relation to the interest rate swaps impacts the profit and loss following a change of +/- 1% in the interest rate.
For more details, see Note 12.

44 SIEM OFFSHORE INC., ANNUAL REPORT 2015

PARENT COMPANY Interest rate risk (IR)
(Amounts in USD 1,000) -1% movements +1% movements
December 31, 2015 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 269,293 -2,693 -2,693 2,693 2,693
Impact on financial assets before tax 269,293 -2,693 -2,693 2,693 2,693

Financial liabilities
Borrowings 207,852 2,079 2,079 -2,079 -2,079
Impact on financial liabilities before tax 207,852 2,079 2,079 -2,079 -2,079
Total increase/decrease before tax - -614 -614 614 614

PARENT COMPANY Interest rate risk (IR)

(Amounts in USD 1,000) -1% movements +1% movements
December 31, 2014 Carrying amount Profit/(loss) Equity Profit/(loss) Equity

Financial assets
Cash and cash equivalent 222,579 -2,226 -2,226 2,226 2,226
Impact on financial assets before tax 222,579 -2,226 -2,226 2,226 2,226

Financial liabilities
Borrowings 174,881 1,749 1,749 -1,749 -1,749
Impact on financial liabilities before tax 174,881 1,749 1,749 -1,749 -1,749
Total increase/decrease before tax - -477 -477 477 477

SIEM OFFSHORE INC., ANNUAL REPORT 2015 45

 NOTES TO THE ACCOUNTS

The Companys financial assets are
classified into the categories: assets at
fair value through the profit and loss,
loans and receivables, and available for
sale. Financial liabilities are classified as
liabilities at fair value through the profit
and loss, and other financial liabilities.
For further information about compari-
son by category, see Note 29.
The value of forward exchange contracts
is set by comparing forward exchange
rate and the rate on the reporting
date. The Companys following finan-
cial instruments are not evaluated at fair
value: accounts receivable, cash and cash
equivalents, other short-term receivables,
accounts payable and long-term liabilities
with floating interest.
Because of the short term to maturity, the
value of cash and cash equivalents entered
into the Statements of Financial Position
is almost the same as the fair value of
these. Accordingly, the values of accounts
receivable and accounts payable are almost
the same as their fair values since they are
entered on normal conditions.
The fair value of the Companys non-
current liabilities subjected to fixed
interest rates is calculated by comparing
the Companys terms and market terms
for liabilities with the same terms to
maturity and credit risk.
The following tables display the booked
value and the fair value of financial as-
sets and liabilities.

CONSOLIDATED
(Amounts in USD 1,000) 12/31/2015 12/31/2014
Book value Fair value Book value Fair value

Financial assets
CIRR loan deposit 88,002 92,159 28,453 30,114
Long-term receivables 51,598 51,598 23,432 23,432
Accounts receivable 46,147 46,147 74,753 74,753
Other short-term receivables 60,657 60,657 63,877 63,877
Financial assets held for sale 3,459 3,459 - -
Derivative financial instruments 1,451 1,041 1,041 1,041
Cash and cash equivalents 148,753 148,753 117,623 117,623
Total 400,066 403,814 309,179 310,840

Financial liabilities
Borrowings 1,122,585 1,162,291 1,214,360 1,250,847
CIRR loan 88,002 92,159 28,453 30,114
Other non-current liabilities 34,142 34,142 26,565 26,565
Accounts payable 8,395 8,395 10,781 10,781
Derivative financial instruments 12,896 12,896 16,732 16,732
Other current liabilities 91,001 91,001 123,072 123,072
Total 1,357,022 1,400,884 1,419,963 1,458,111

46 SIEM OFFSHORE INC., ANNUAL REPORT 2015

PARENT COMPANY
(Amounts in USD 1,000) 12/31/2015 12/31/2014
Book value Fair value Book value Fair value

Financial assets
CIRR loan deposit 19,208 20,215 28,453 30,114
Long-term loan 25,867 25,867 30,053 30,053
Accounts receivable - - - -
Other short-term receivables 4,169 4,169 17,343 17,343
Cash and cash equivalents 269,293 269,293 222,579 222,579
Total 318,538 319,544 298,429 300,089

Financial liabilities
CIRR loan 19,208 20,215 28,453 30,114
Accounts payable 144 144 53 53
Other current liabilities 1,347 1,347 67,255 67,255
Total 20,698 21,706 95,761 97,422

2.5 Liquidity risk
The Company monitors its cash flow
from operations closely and optimizes
the working capital level of the individual
companies and the Company as a whole.
The Company funds are used for invest-
ment opportunities in the business, yard
instalments, scheduled repayments and
repayments of debt and for general
working capital purposes.
The Company aims to fix the majority of
its fleet on long-term contracts. Vessels
not fixed on long-term contracts are
exposed to the volatility in the North Sea
spot market.
The Company will from time to time re-
quire additional capital to take advantage
of business opportunities.
Historically the Company has man-
aged to obtain necessary financing in a
timely manner on acceptable terms when
needed.
The tables below summarize the maturity
profile of the Companys financial liabili-
ties including interests, and future com-
mitments to the newbuilding program.

Siem Marlin
Photographer: Jan Peter Lehne

SIEM OFFSHORE INC., ANNUAL REPORT 2015 47

 NOTES TO THE ACCOUNTS

CONSOLIDATED
Less than 3 3 to 12 1 to 2 2 to 5
(Amounts in USD 1,000) months months years years Thereafter Total

December 31, 2015

Interest-bearing loans and borrowings 32,670 187,734 256,406 722,220 209,856 1,408,886
Trade and other payables 8,395 - - - - 8,395
Total 41,065 187,734 256,406 722,220 209,856 1,417,281

December 31, 2014

Interest-bearing loans and borrowings 23,085 291,508 99,623 675,463 166,379 1,256,058
Trade and other payables 10,781 - - - - 10,781
Total 33,866 291,508 99,623 675,463 166,379 1,266,839

CONSOLIDATED
Less than 3 3 to 12 1 to 2 2 to 5
(Amounts in USD 1,000) months months years years Thereafter Total

December 31, 2015

Yard instalments falling due 3,650 392,250 - - - 395,900

December 31, 2014

Yard instalments falling due 39,262 202,800 308,408 - - 550,470

PARENT COMPANY
Less than 3 3 to 12 1 to 2 2 to 5
(Amounts in USD 1,000) months months years years Thereafter Total

December 31, 2015

Interest-bearing loans and borrowings 2,776 12,956 141,472 95,182 - 252,386
Trade and other payables 144 - - - - 144
Total 2,920 12,956 141,472 95,182 - 252,530

December 31, 2014

Interest-bearing loans and borrowings - 5,691 5,691 191,952 - 203,334
Trade and other payables 53 - - - - 53
Total 53 5,691 5,691 191,952 - 203,387

No yard instalments falling due for the parent company as there were no vessels under construction at year-end 2015 and 2014.

48 SIEM OFFSHORE INC., ANNUAL REPORT 2015

2.6 Capital risk management
The Company seeks to obtain long-term
financing supported by long-term con-
tracts, in order to reduce the frequency
and risk associated with the refinancing of
loans. Long-term charter parties will also
enable a higher degree of debt-financing.
The wholly-owned Norwegian company,
Siem Offshore Rederi AS, has 6 vessels
under construction in Poland and Ger-
many at year end, which includes three
dual-fuel PSVs, one CLV and two WIVs.
First 10% to 20% of contract price is or
will be paid in accordance with agreed
payment schedules and the remaining
80% to 90% will be paid at delivery.
The Company has secured long-term
employment for the two WIVs under
construction. The CLV will be utilised by
the Companys wholly-owned subsidiary,
Siem Offshore Contractors, for project
work within the submarine power cable
installation, repair and maintenance seg-
ment. The Company is in discussions for
vessels-under-constructions contracts
for the the three dual fuelled PSVs.
The wholly-owned Brazilian subsidiary,
Siem Offshore do Brasil SA, has one
OSRV under construction in Brazil at year-
end. The OSRV is scheduled for delivery
in first quarter 2016. The vessel shall
commence an eight-year firm contract
for Petrobras with options for additional
eight-year periods. The company has se-
cured debt-financing for all of the seven
vessels under construction at year-end.
2.7 Risks related to loan agreements,
restrictions on dividends and distribu-
tion
The Companys loan agreements include
terms, conditions and covenants which
impose restrictions on the operations of
the Company. These restrictions may
negatively affect the Companys opera-
tions including, but not limited to, the
Companys ability to meet the fierce com-
petition in the market in which it operates.
See note 12.
changes to the percentage of comple-
2.8 Risks related to possible
tax-liabilities
The Company seeks to optimize its tax
structure to minimize withholding taxes
when operating vessels abroad, avoiding
double taxation, and minimizing corporate
tax paid, by making optimal use of the
shipping taxation rules that apply. It is,
however, a challenging task to optimize
taxation, and there is always a risk that
the Company may end up paying more
taxes than the theoretical minimum,
which may in turn affect the financial
results negatively.
2.9 Long term contracts
The Company uses the percentage-of-
completion method in accounting for its
fixed price construction contracts related
to the segment Submarine Power Cable
Installation. Significant estimates are the
percentage of complete and the overall
margin.
The following sensitivity table demon-
strates the impact on the Companys
profit and equity before tax from potential
tion and margin, all other variables held
constant.

CONSOLIDATED
(Amounts in USD 1,000) Long-term contracts
+1% movements -1% movements
December 31, 2015 Estimated total revenue Profit/(loss) Equity Profit/(loss) Equity
Total value of contracts 334,093
Progress reporting, effect from movement - 3,341 3,341 -3,341 -3,341
Margin estimate, effect from movement - 3,341 3,341 -3,341 -3,341

CONSOLIDATED
(Amounts in USD 1,000) Long-term contracts
+1% movements -1% movements
December 31, 2014 Estimated total revenue Profit/(loss) Equity Profit/(loss) Equity
Total value of contracts 150,166
Progress reporting, effect from movement - 1,502 1,502 -1,502 -1,502
Margin estimate, effect from movement - 1,502 1,502 -1,502 -1,502

SIEM OFFSHORE INC., ANNUAL REPORT 2015 49

 NOTES TO THE ACCOUNTS
Note 3 - Critical Accounting Estimates and Judgements
IFRS requires management to make
estimates and judgments that affect the
reported amounts of assets and liabilities,
as well as income and expenses in the
financial statements. The final reported
outcomes may deviate from the original
estimates.
Certain amounts included in, or that have
an effect on, the accounts and the as-
sociated notes require estimation, which
in turn entails that the Company must
make assessments related to values and
circumstances that are not known at
the point in time when the accounts are
prepared.
A significant accounting estimate is an
estimate that is important to provide a
complete picture of the Companys finan-
cial position, which at the same time is the
result of difficult, subjective and complex
assessments performed by the manage-
ment. Such estimates are often uncertain
by nature.
Management evaluates such estimates
continuously based on historical data and
experience, consultation with experts,
trend analysis and other factors that are
relevant for the individual estimate, in-
cluding expectations of future events that
are believed to be reasonable under the
circumstances.
Estimates and assumptions that have
a significant risk of causing a material
adjustment to the carrying amounts of as-
sets and liabilities within the next financial
year, as well as judgments made by man-
agement, in the process of applying the
Companys accounting policies, that have
the most significant effect on the amounts
recognized in the financial statements, are
discussed below.
50 SIEM OFFSHORE INC., ANNUAL REPORT 2015
Revenue recognition
percentage-of-completion
off-shore cable contracts
The Company uses the percentage-of-
completion method in accounting for its
fixed price construction contracts related
to the segment Submarine Power Cable
Installation.
One significant estimate is an estimate
of the percent complete. Management
estimates completion based on an as-
sessment of certain technical criteria in
the project execution plan that have to
be met in order to achieve a certain level
of percentage of completion, as opposed
to using costs incurred as a measure of
completion.
The primary risk in the execution of
projects relates to the offshore instal-
lation phase. Hence, profit margin is not
recorded until the progress of the project
has reached a stage of minimum 25 per-
cent technical completion.
The project shall need to progress into the
cable-laying phase before the minimum
25 percent age of technical completion is
reached. Prior to reaching a progress of
minimum 25 percent technical comple-
tion, and subject to a foreseen positive
project margin, project revenue is accrued
to match the actual costs incurred at the
estimated stage.
Periodic project margin is only recorded
when the overall project margin is
forecasted to be positive, and when the
execution of the project has reached such
level of technical completion beyond 25
percent that the management is comfort-
able to assess the financial outcome of
the project.
The sensitivity of the recorded revenue on
long-term construction contracts would
be +/- USD 8.9 million in 2015 (2014: USD
14.9 million) if management had estimat-
ed a 10% better/worse progress on the
contracts ongoing at year-end 2015.
Vessels
Economic useful life
The level of depreciation expense is
dependent, in part, upon the estimated
useful life of the vessel. The useful life is
estimated based on historical data, experi-
ence related to the vessel and similar
vessels. The estimate is reviewed and up-
dated annually. A change in the estimate
will affect depreciation prospectively in
current and future reporting periods.
Residual value
The level of depreciation expense is
dependent, in part, upon the estimated
residual value. Management estimates a
vessels residual value using their knowl-
edge of the scrap value of vessels.
The scrap value estimates are depend-
ent on the price of steel. The scrap value
estimate is based on the expected value
at the end of the useful life of the vessel.
Management performs an annual review
and assessment of the vessel scrap value
estimates. Residual value is subject to an
annual reassessment.
Impairment of vessels
On the reporting date, the Company has
assessed whether there are any indica-
tions that it may be necessary to write
down a vessel. Indicators include external
broker estimates, significant changes in
charter hire contracts, day rates, operat-
ing costs or adverse market conditions.
When such indications exist, an impair-
ment test is performed in accordance with
Company policy.
The recoverable value of the vessel is
estimated, and if the recoverable amount
is less than the current carrying value,
an impairment loss is recognized in the
amount of the difference between carry-
ing value and net realizable value.
The recoverable amount for vessels is
estimated by means of broker estimates
and value in use calculations based on
projected discounted cash flows for the
remaining charter hire period or over the
next four years if no charter contract
exists, together with an assumption of a
terminal value of the vessel.
The value in use calculation for tangible
assets and goodwill are based on a Dis-
counted Cash Flow model (DCF-model),
using a pre-tax discount rate that reflects
current market assessments of the time
value of money and the risk specific to the
asset. The cash flows are derived from
the budget for the next four years. The
recoverable amount is sensitive to the
discount rate used for the DCF-model as
well as the expected future cash-inflows
and the principles used for calculating
the terminal value. These estimates are
most relevant to goodwill and value in use
calculations for vessels.
The market for offshore service vessels
is expected to remain weak for several
years. For vessels fixed on firm contracts
during the period from 2016 until 2019,
the assumption is that the contract
remains unchanged during the remaining
contract period, and that the rate level is
reduced thereafter until the end of 2019.
Options included in charter hire agree-
ments are not considered in the value in
use calculations.
The key assumptions used to determine
the recoverable amount for the different
CGUs, including a sensitivity analysis, are
disclosed and further explained in Note 5.
Impairment of goodwill
The Company tests whether goodwill
and intangible assets have suffered any
impairment in accordance with the ac-
counting policy stated in note 1.11. The
recoverable amounts of cash-generating
unit have been determined based on
value-in-use calculation. This calculation
requires the use of estimates (Note 5).
Impairment of intangible assets
The Company tests whether intangible
assets have suffered any impairment in
accordance with the accounting policy
stated in note 1.11. The recoverable
amounts of a cash-generating unit have
been determined based on an estimate of
fair value less cost of disposal under level
3 in the fair value hierarchi of IFRS. The
calculation require the use of estimates.
Hedge accounting
The Company uses hedge accounting for
the Brazilian subsidiary, which has a func-
tional currency of BRL. The designated
cash-flow hedge is a foreign currency ex-
posure of future USD charter hire revenue
as the hedged item and USD long-term
debt the designated hedging instrument.
Designation of the hedged item requires
significant judgment in defining the
future charter contract revenue as highly
probable. Contracts have been written
for vessels still under construction, and
sometimes the delivery date of the vessel
is delayed. Contracts have been agreed
for a specific time period (e.g. four to five
years) and have a renewal option.
Highly probable future charter revenue
has been determined by management
to include the renewal option period,
based on the frequency of similar past
transactions and for the contracts to be
included in the designated hedge from
the date of signing, even though the
vessels are under construction.
Siem Offshore has defined an effective
hedge to be when the cash flows of the
highly probable future transactions are
higher than the cash flows of the hedging
instrument for the same period. Effective-
ness testing is performed using the Dollar
Offset Method. See note 12 for additional
information.
SIEM OFFSHORE INC., ANNUAL REPORT 2015 51
 NOTES TO THE ACCOUNTS

Note 4 - Segment Reporting

The Company identifies its reportable
segments and disclose segment inform-
ation under IFRS8 Operating Segments
which requires Siem Offshore Inc to
identify its segments according to the
organization and reporting structure used
by management. Operating Segments are
components of a business that are evalu-
ated regularly by the chief operating deci-
sion maker for the purpose of assessing
performance and allocating resources.
The Companys chief operating decision
maker is the management board, com-
prised of the CEO, CFO, COO, and CCO.
Generally, financial information is required
to be disclosed on the same basis that is
used by the chief operating decision mak-
er. The Companys operating segments
represent separately managed business
areas with unique products serving dif-
ferent markets. The reportable business
areas are OSV with the segments PSV,
OSCV, AHTS Vessels and Other Vessels in
Brazil, and Industrial with the segments
Combat Management Systems, Subma-
rine Power Cable Installation, Scientific
Core Drilling and Siem WIS
The PSV segment includes 12 Platform
Supply Vessels. The OSCV segment in-
cludes four Offshore Subsea Construction
Vessels and two Multipurpose field and
ROV Support Vessels. The ATHS segment
includes ten Anchor Handling and Tug
Supply Vessels. The Segment of Other
Vessels in Brazil consists of one Oilspill
Recovery Vessel and eight smaller Plat-
form Supply Vessels. Combat Manage-
ment Systems is the activity of supplying
software for a management system to
the Brazilian Navy.
Submarine Power Cable Installation com-
prises the activities of installation and
maintenance of subsea power cables for
offshore windfarms. Scientific Core-Drill-
ing is comprised of the activity of a scien-
tific drillship which performs coredrilling.
The segment Other is comprised of the
ownership of Siem WIS that develops
applications for managed pressure drilling
(MPD), and certain other activities.
Siem Offshore Inc uses three measures
of segment results, Operating Revenue,
Operating Margin and Net Profit.
Intersegment sales and transfers reflect
arms length prices as if sold or trans-
ferred to third parties at the time of incep-
tion of the internal contract, which may
cover several years. Transfers of business
or fixed assets within or between the seg-
ments are reported without recognizing
gains or losses. Results of activities not
considered part of Siem Offshore Inc.s
main operations as well as unallocated
revenues, expenses, liabilities and assets
are reported together with Other under
the Caption Other and eliminations
The following tables include information
about the Companys operating segments.

CONSOLIDATED
(Amounts in USD 1,000) 2015 2014

Operating revenue by business area

PSV 76,455 104,423
OSCV 111,315 104,844
AHTS Vessels 54,692 142,480
Other Vessels in Brazil 21,326 19,351
Other/Intercompany elimination -9,323 -15,854
Operating revenue OSV segment 254,465 355,244

Combat Management Systems 4,741 6,075

Submarine Power Cable Installation 132,307 101,479
Scientific Core-Drilling 26,164 25,914
Siem WIS 4,773 2,601
Other - -
Operating revenue Industial segment 167,984 136,069
Total 422,449 491,312

52 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 CONSOLIDATED
(Amounts in USD 1,000)

Depreciation and amortization by business area 2015 2014

PSV 28,169 23,434
OSCV 24,744 23,121
AHTS Vessels 40,534 38,230
Other Vessels in Brazil 3,579 2,864
Other 3,199 2,574
Depreciation and amortization OSV segment 100,225 90,223

Submarine Power Cable Installation 1,601 1,530

Scientific Core-Drilling 3,538 3,490
Siem WIS 1,660 1,639
Depreciation and amortization Industial segment 6,800 6,660
Total 107,025 96,883

Impairment by business area 2015 2014

PSV (1) 39,507 -
OSCV (1) 24,849 -
AHTS Vessels 95,109 -
Other Vessels in Brazil (1) - 29,000
Impairment OSV Segment 159,465 29,000

Siem WIS 6,705 -

Impairment Industrial Segment 6,705 -
Total 166,170 29,000

Operating profit/(loss) by business area 2015 2014

PSV -28,980 35,437
OSCV 19,998 48,073
AHTS Vessels -134,230 39,232
Other Vessels in Brazil 3,478 -35,343
Other -3,413 2,521
Operating profit OSV segment -143,147 89,919

Combat Management Systems -208 -8

Submarine Power Cable Installation 15,856 15,581
Scientific Core-Drilling 10,709 9,429
Siem WIS 720 355
Operating profit industrial segment 27,076 25,357

Administration expenses -38,575 -47,033

Sale assistance, CIRR, Currency derivative contracts -14,089 16,074
Total -168,735 84,316

SIEM OFFSHORE INC., ANNUAL REPORT 2015 53

 NOTES TO THE ACCOUNTS

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

Capital expenditures by business area (Amounts in USD 1,000) 2015 2014

PSV (1) 60,872 85,269
OSCV (1) 330 282,786
AHTS Vessels 18,079 11,856
WIV (1) 58,354 57,356
Other Vessels in Brazil (1) 11,257 79,944
Other 1,407 3,949
OSV Segment 150,299 521,159
Combat Management Systems - -
Submarine Power Cable Installation 168 1,452
Scientific Core-Drilling 306 271
Siem WIS 142 2,791
Industrial Segment 616 4,514
Total 150,915 525,674

(1) Includes newbuilding program, in total: 122,614 337,157

Book value by business area (Amounts in USD 1,000) 2015 2014

PSV (1) 405,391 385,870
OSCV (1) 357,596 569,040
AHTS Vessels 557,679 664,385
WIV (1) 115,710 57,356
Other Vessels in Brazil (1) 41,274 105,880
Other 81,838 54,906
OSV Segment 1,559,488 1,837,437
Combat Management Systems - -
Submarine Power Cable Installation 3,483 15,310
Scientific Core-Drilling 14,761 26,567
Siem WIS 4,408 5,859
Industrial Segment 22,652 47,736
Total 1,582,140 1,885,173

54 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 5 - Vessels, Equipment, Project Cost and Intangible Assets

CONSOLIDATED
Land and Vessels under Vessels and Capitalised
(Amounts in USD 1,000) buildings construction equipment Drydocking project cost

Purchase cost on January 1, 2014 4,853 127,711 1,725,682 38,445 24,764

Capital expenditure 156 290,367 206,281 22,284 6,567
Movements between groups - -4,073 24,918 - -
Vessels delivered in 2014 - -263,723 263,723 - -
The years disposal at cost - - -79,952 -4,894 -13,733
Effect of exchange rate differences -881 -5,268 -56,558 -981 -
Purchase cost on December 31, 2014 4,128 145,015 2,084,094 54,855 17,597

Accumulated depreciation on January 1, 2014 -412 - -299,405 -28,831 -13,736

The years depreciation -110 - -79,604 -9,359 -6,629
Impairment - -14,500 -14,500 - -
The years disposal of accumulated depreciation - - 19,666 4,894 13,733
Effect of exchange rate differences 90 - 7,462 727 -
Accumulated depreciation on December 31, 2014 -433 -14,500 -366,382 -32,569 -6,632

Net book value on December 31, 2014 3,695 130,515 1,717,712 22,285 10,965

Purchase cost on January 1, 2015 4,128 145,015 2,084,094 54,855 17,597

Correction opening balance January 1, 2015 - - 3,656 2,669 1,821
Capital expenditure 63 122,614 8,282 19,495 461
Movements between groups - - 1,024 - -1,024
Vessels delivered in 2015 - -62,970 62,970 - -
The years disposal at cost -3,805 - -151,452 -4,032 -6,179
Effect of exchange rate differences -75 -12,095 -78,085 -1,001 -
Purchase cost on December 31, 2015 310 192,563 1,930,488 71,986 12,676

Accumulated depreciation on January 1, 2015 -433 - -351,882 -32,569 -6,632

Accumulated impairment on January 1, 2015 - -14,500 -14,500 - -
Correction opening balance January 1, 2015 - - -1,501 - -687
The years depreciation -2 - -84,954 -16,318 -4,813
Impairment - - -159,465 - -
Movements between groups impairment - 7,000 -7,000 - -
The years disposal of accumulated depreciation 410 - 43,186 3,722 4,836
Effect of exchange rate differences 5 - 9,611 603 -
Accumulated depreciation on December 31, 2015 -20 -7,500 -566,506 -44,563 -7,296

Net book value on December 31, 2015 291 185,064 1,363,982 27,422 5,381

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

SIEM OFFSHORE INC., ANNUAL REPORT 2015 55

 NOTES TO THE ACCOUNTS

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

Component Percentage of total Economic life

Hull 27.00% 30 years
Cargo equipment 17.00% 30 years
Marine equipment 10.00% 15 years
Crew equipment 9.00% 15 years
Engine 18.00% 30 years
Engine system 6.00% 30 years
Combined sewerage system 13.00% 30 years
Docking 2.5 years
Equipment 3 years

Research and Trademarks

Intangible assets (Amounts in USD 1,000) Goodwill development and licences Total
Balance on January 1, 2014 19,628 3,278 9,782 32,688
Investments - 19 - 19
Effect of exchange rate differences -2,310 -594 -98 -3,002
Purchase cost on December 31, 2014 17,318 2,704 9,684 29,705

Accumulated depreciation on January 1, 2014 - -1,773 -1,177 -2,951

The years ordinary depreciation - -1,074 -90 -1,163
Effect of exchange rate differences - 260 87 346
Accumulated depreciation on December 31, 2014 - -2,588 -1,180 -3,768

Net book value on December 31, 2014 17,318 116 8,503 25,937

56 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Research and Trademarks
Intangible assets (Amounts in USD 1,000) Goodwill development and licences Total
Balance on January 1, 2015 17,318 2,704 9,684 29,705
Movement between groups - 9,240 -9,240 -
Investments - 561 7 568
Effect of exchange rate differences -1,763 -480 -69 -2,312
Purchase cost on December 31, 2015 15,555 12,025 380 27,961

Accumulated depreciation on January 1, 2015 - -2,588 -1,180 -3,768

Movement between groups - -777 841 64
The years ordinary depreciation - -932 -9 -941
Impairment of intangibles - -6,705 - -6,705
Effect of exchange rate differences - 239 - 239
Accumulated depreciation on December 31, 2015 - -10,764 -347 -11,112

Net book value on December 31, 2015 15,555 1,261 33 16,849

Trademarks and licences refer to Siem WIS AS patented technology for the drilling industry. The figures include assets under develop-
ment and developed assets, and the depreciation refers to developed assets that are not yet commercialized.
Impairment of intangibles relates to Siem WIS AS and was recognized at USD 6,705 in 2015.

Impairment
In light of the turmoil in the oil service
industry impairment tests have been per-
formed for all vessels and equipment and
intangible assets and the company has
identified possible impairment for such
assets. Each vessel constitutes a cash
generating unit and is tested separately
for impairment except for AHTS vessels
which operates in a pool and is consid-
ered as one cash generating unit.
Valuation has been received from ac-
credited brokers for all vessels. Due to
a limited number of sale and purchase
transactions in the current market,
there is a large uncertainty related to
the received broker estimates. Value-
in-use calculations have therefore been
performed for all vessels to compare with
brokers values.
Value-in-use calculations have been
based on conservative terminal amounts.
The discount rate used in the value-in-use
calculation is a real average cost of capi-
tal after tax ranging from 7.59%-9.62%.
Impairment for certain Brazilian flagged
vessels of USD 29,000 made at year end
2014 has been reallocated at year end
2015 to reflect updated value-in-use cal-
culations made as per end of 4th quarter
2015. Such reallocations have a zero
effect on the total impairment recorded
in 2015.
If the pre-tax discount rate applied to the
cash flow projections of this CGU had
been 1% higher than managements esti-
mates (8.59% - 10.62% instead of 7.59%
- 9.62%), the group would have had to
recognzse an impairment against vessels
of USD 167,9 million.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 57

 NOTES TO THE ACCOUNTS

Note 6 - Investment in Subsidiaries

Company (Amounts in USD 1,000) Registered office Ownership and voting share

Siem Offshore AS Kristiansand, Norway 100%

Siem Offshore Invest AS Kristiansand, Norway 100%
Siem Offshore Rederi AS Kristiansand, Norway 100%
Siem Offshore Construction Vessels AS Kristiansand, Norway 100%
Siem Offshore do Brasil SA Rio de Janeiro, Brazil 100%
Siem Offshore US Inc. Delaware, USA 100%
Siem AHTS Pool AS Kristiansand, Norway 100%
DSND Subsea Ltd London, England 100%
Siem Offshore Services AS Kristiansand, Norway 100%
Siem Offshore Management AS Kristiansand, Norway 100%
Siem Offshore Management (US) Inc Texas, USA 100%
Siem Offshore US Holding AS Kristiansand, Norway 100%
Siem Offshore Crewing (CI) Inc Cayman Islands 100%
Total value recorded in the statement of financial position of the parent company

The book value in Siem Offshore do Brasil SA was increased with USD 22.9 million, Siem Offshore Management AS reduced with USD
1.0 million and Siem Offshore Invest AS increased with USD 0.2 million in 2015.

The above companies are owned by the Parent Company. In addition, the subsidiaries own the following companies:

Company Registered office Share and voting rights

Consub Delaware LLC Delaware, USA 100%

Aracaju Servios Auxiliares Ltda Rio de Janeiro, Brazil 100%
Siem Offshore Crewing AS Kristiansand, Norway 100%
Siem Meling Offshore DA Stavanger, Norway 51%
Siem WIS AS Bergen, Norway 60%
Siem Offshore Maritime Personnel AS Kristiansand, Norway 100%
Siem Offshore Contractors GmbH Leer, Germany 100%
Siem Offshore Contractors EPS BV Glimmen, The Netherlands 100%
Overseas Drilling Ltd Groningen, The Netherlands 100%
Siem Offshore Canada Inc Halifax, Canada 100%
Siem Offshore Poland Sp.z.O.O Gdynia, Poland 100%
Siem Offshore Australia Pty Ltd Perth, Australia 100%
Siem Real Estate GmbH Leer, Germany 100%
Siem Offshore Contractors UK Ltd London, UK 100%
Siem Offshore Ghana International AS Kristiansand, Norway 51%
Siem Offshore LLC Delaware, USA 100%

58 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Revenue Net profit Share capital Book equity Cost price Book value

7,484 91 35 7,367 7,597 8,943

25,408 -15,085 898 64,395 97,117 77,277
122,288 -141,318 6,175 614,247 583,396 583,396
4,729 -10,027 4 -10,024 4 4
42,969 -21,630 116,789 -48,985 120,026 90,661
- -7 5 -52 - -
50,984 -1,075 17 5,494 21 21
- -13 - -222 18,352 -
16,699 168 18 1,734 292 1,637
9,285 443 17 631 5,127 5,459
355 79 1 253 1 1
- -528 5 -52 5 678
320 275 50 1,302 50 50
636,088 831,989 768,127

Engine Crew
Photographer: Tove Hertzberg

SIEM OFFSHORE INC., ANNUAL REPORT 2015 59

 NOTES TO THE ACCOUNTS

Note 7 - Investment in Associated Companies

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

December 31, 2015

Company name PR Tracer KS Big Rovde Sentosa Secunda
(Amounts in USD 1,000) Offshore ANS Orange XVIII Ind.park AS Offshore DIS Holdings LP Total

Profit and loss account

The years net profit after tax 964 449 92 180 -978 707

Siem Offshores share of net profit 398 186 46 9 -489 150

Share of net result not included - - - - - -
Adjustments consolidated accounts - - -9 - -1,701 -1,710
This year`s share of net profit after tax 398 186 37 9 -2,190 -1,560

Statement of financial position

Total assets 3,248 682 1,643 13,328 57,472 76,373
Equity 3,132 682 781 662 22,459 27,715
Total liabilities 116 - 862 12,667 35,013 48,658
Total equity and liabilities 3,248 682 1,643 13,328 57,472 76,373

Siem Offshores share of booked equity 1,294 282 390 33 11,229 13,229
Added/reduced in the period
Change of ownership% or sale
Adjustments IFRS and fair value in excess of book value
for vessel and goodwill as of December 31 - 314 123 120 2,874 3,431
Net book value in Siem Offshore as of 1,294 596 513 153 14,103 16,660
December 31
Ownership interest 41.33% 41.33% 50% 5.00% 50% -

60 SIEM OFFSHORE INC., ANNUAL REPORT 2015

Company name PR Tracer KS Big Rovde Ind. Sentosa Secunda
(Amounts in USD 1,000) Offshore ANS Orange XVIII park AS Offshore DIS Holdings LP Total

Specification of changes net book value in Siem Offshores accounts

Net book value as of January 1 1,651 1,339 550 257 16,426 20,222
This years share of net profit 398 186 46 9 -489 150
Adjustments consolidated accounts - - -9 - 1,701 -1,710
Capital increase, correction previous year - - - - 2,427 2,427
Dividends -513 -797 - -77 - -1,387
Effect of exchange rate differences -241 -131 -74
2,427 -35 -2,560 -3,041
Net book value as of December 31 1,295 596 513 153 14,103 16,660

Of which:
Adjustments IFRS and fair value in excess of book value
for vessel and goodwill as of January 1 - 373 157 144 482 1,156
Capital increase, correction previous year - - - - 2,427 2,427
Adjustment for depreciation IFRS - - -9 - -274 -283
Amortization of fair value in excess of -1,443 -1,443
book value for vessels and goodwill
Effect of exchange rate differences - -59 -25 -24 1,682 1,574
Fair value in excess of book value for ves- - 314 123 120 2,874 3,431
sels and goodwill as of December 31

Registered Owner Voting Paid in Issued, not

Company name office Consolidated as interest rights capital paid in capital
PR Tracer Offshore ANS Lysaker, Norway Equity accounting 41.33% 41.33% 1,633 -
KS Big Orange XVIII Lysaker, Norway Equity accounting 41.33% 41.33% 8 5
Rovde Industripark AS Vanylven, Norway Equity accounting 50.00% 50.00% 222 -
Sentosa Offshore DIS Oslo, Norway Equity accounting 5.00% 5.00% 7,514 -
Secunda Holdings LP Halifax, Canada Equity accounting 50.00% 50.00% 15,519 -

SIEM OFFSHORE INC., ANNUAL REPORT 2015 61

 NOTES TO THE ACCOUNTS

December 31, 2014

Company name PR Tracer KS Big Rovde Sentosa Secunda
(Amounts in USD 1,000) Offshore ANS Orange XVIII Ind.park AS Offshore DIS Holdings LP Total

Profit and loss account

The years net profit after tax 1,666 591 43 1,546 2,349 6,196

Siem Offshores share of net profit 689 244 21 77 1,174 2,205

Adjustments consolidated accounts -77 - -17 - -304 -398
This year`s share of net profit after tax 612 244 4 77 871 1,808

Statement of financial position

Total assets 3,753 2,338 1,894 16,993 76,031 101,009
Equity 3,994 2,338 775 2,263 31,887 41,256
Total liabilities -241 - 1,119 14,731 44,143 59,752
Siem Offshores share of booked equity 1,651 966 388 113 15,944 19,061
Added/reduced in the period
Adjustments IFRS and fair value in excess of book value
for vessel and goodwill as of December 31 - 373 163 144 482 1,161
Net book value in Siem Offshore as of 1,651 1,339 550 257 16,426 20,222
December 31 2014
Ownership interest 41,33% 41,33% 50% 5,00% 50% -

Specification of changes net book value

in Siem Offshores accounts
Net book value as of January 1 1,378 1,384 656 519 17,009 20,946
Investment in associated companies - - - - - -
This years share of net profit 689 244 21 77 1,174 2,206
Adjustments consolidated accounts -77 0 -17 0 -304 -398
Dividends 0 0 0 -278 0 -278
Effect of exchange rate differences -339 -289 -112 -61 -1,454 -2,255
Net book value as of December 31 2014 1,651 1,339 548 258 16,426 20,222

62 SIEM OFFSHORE INC., ANNUAL REPORT 2015

Joides Resolution, aerial view

SIEM OFFSHORE INC., ANNUAL REPORT 2015 63

 NOTES TO THE ACCOUNTS

Note 8 - Pension Costs and Obligations

CONSOLIDATED
(Amounts in USD 1,000) 2015 2014

The amount recognized in the income statement is as follows:

Service cost 2,491 2,535
Interest expense 285 93
Administration cost 21 25
Social contribution 269 266
Impact of curtailment/settlement -889 -768
Net periodic pension cost (see Note 19) 2,177 2,151

The development in the defined benefit obligation is as follows:

Beginning of year 12,546 12,911
Current service cost 2,491 2,535
Interest expense 285 506
Aquisition (disposal) - -
Payroll tax of employer contribution, assets -296 -315
Benefits paid -319 -350
Remeasurements loss/(gain) -1,889 42
Exchange differences -2,002 -2,783
End of year 10,817 12,546

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

Beginning of year 8,735 10,133
Expected return on plan assets 196 413
Acquisition (disposal) - -
Administration cost - -
Employer contribution 2,393 2,548
Payroll tax of employer contribution, assets -296 -315
Benefits paid -317 -303
Remeasurements loss/(gain) -493 -1,803
Exchange differences -1,596 -1,938
End of year 8,622 8,735

64 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 CONSOLIDATED
(Amounts in USD 1,000) 2015 2014
Present value of funded obligations 10,817 12,546
Fair value of plan assets -8,622 -8,735
Social contribution - -
Unrecognized net actuarial loss/(gain) - -
Present value of funded obligations 2,195 3,812
Present value of unfunded obligations - -
Liability in the statement of financial position 2,195 3,812

Financial assumptions:
Discount rate 2.70% 2.30%
Expected return on funds 2.70% 2.30%
Expected wage adjustment 2.50% 2.75%
Adjustment of the basic National Insurance amount 2.25% 2.50%
Expected pension increase 0.00% 0.00%

Development last two years 2015 2014

December 31
Present value of defined benefit obligation 10,817 12,546
Fair value of plan assets 8,622 8,735
Deficit in the plan 2,195 3,812
Experience adjustments on plan liabilities, gain/(loss) - -
Experience adjustments on plan assets, gain/(loss) - -

SIEM OFFSHORE INC., ANNUAL REPORT 2015 65

 NOTES TO THE ACCOUNTS

Note 9 - Receivables

PARENT COMPANY CONSOLIDATED

12/31/2015 12/31/2014 (Amounts in USD 1,000) 12/31/2015 12/31/2014

Long-term receivables
3,997 3,807 Employee loans, see Note 19 3,997 4,076
21,870 26,246 Intercompany receivables - -
- - Loan to Group of Parent Company 17,069 18,278
- - Other long term receivables 1,462 1,078
- - Convertible Loan to customer (1) 29,070 -
25,867 30,053 Total long-term receivables 51,598 23,432

12/31/2015 12/31/2014 Other short-term receivables 12/31/2015 12/31/2014

4 3 Prepaid expenses 18,387 29,150
- - Unbilled revenue 11,549 8,214
- - Outstanding insurance claims (2) 7,438 9,476
- - Prepaid income taxes and other taxes 2,571 3,755
- - VAT 565 242
-1,620 17,340 Intercompany receivables - -
5,786 - Other short-term receivables 20,148 13,039
4,169 17,343 Total other short-term receivables 60,657 63,877

(1) The sale of Daya1 was partly financed by a Sellers credit from Siem Offhsore Inc. in the form of a Convertible Bond with
four years duration.
(2) Outstanding insurance claims refer to breakdown expenses qualifying for insurance cover. The amount is less own deduction.

Note 10 - Restricted Cash

USD 16.7 million of the Companys cash balance at year end was restricted funds of which USD 1.4 million was for tax withholdings
and USD 15.3 million represented security for bank guarantees and loans.

66 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 11 - Taxes

CONSOLIDATED
(Amounts in USD 1,000) 2015 2014

Temporary differences
Deferred tax Time frame
Participation in limited liability companies Long -2,701 -
Operating assets Long -34,497 -37,921
Special tax account Long - -
Pension funds/obligations Long -2,601 -3,812
Other short-term differences Short - -
Other long-term differences Long 4,605 2,352
Net temporary differences as of December 31 -35,194 -39,381

Tax loss carried forward -31,091 -30,265

Basis for deferred tax (tax asset) -66,286 -69,646

Deferred tax (tax asset) Norway -8,137 -2,604

Deferred tax (tax asset) Holland -3,415 -3,785
Deferred tax (tax asset) Germany -115 -6,203
Deferred tax (tax asset) -11,668 -12,591
Deferred tax asset recognized in statement of financial
position as of December 31 -11,668 -12,591

Deferred tax assets are recognized as intangible assets as it is probable through prospective earnings that it can be utilized.

The Company has decided to exit from the Norwegian Tonnage Tax Regime effective 1 January 2015. Formally the decision is be-
ing made as part of filing of the 2015 corporate tax return. The decision is being made to ensure that the Company is fully capable of
complying with current legislation. Additionally, exiting the Norwegian Tonnage Tax Regime will provide more flexibility to the Company.
The Norwegian Tonnage Tax Regime is a Ring-fence regime which is not flexible with regards to which assets and activities that can be
operated under the regime.

Tonnage tax in subsidiaries, as of December 31

(Amounts in USD 1,000) 2015 2014
Tonnage tax regime in subsidiaries, as of January 1 22 39
Tax charge -4 2
Paid -16 -15
Effect of exchange rate differences 4 -4
Total tonnage tax in subsidiaries, as of December 31 5 22

SIEM OFFSHORE INC., ANNUAL REPORT 2015 67

 NOTES TO THE ACCOUNTS

12/31/2015
Total tax CONSOLIDATED
(Amounts in USD 1,000) Tonnage tax regime Other tax regime Total tax liabilities
Long term tax liabilities falling due after 1 year - 5,483 5,483
Payable taxes falling due within 1 year 5 3,491 3,496
Tax liabilities 5 8,974 8,979

Tax expense 2015

(Amounts in USD 1,000) Tonnage tax regime Other tax regime Total tax expense
Taxes payable -4 -4,506 -4,510
Change in deferred tax/deferred tax asset - -227 -227
Over/under provisions in previous year - - -
Total -4 -4,733 -4,737

Overprovision in previous year relates to activity on Greenland for the subsidiary Overseas Drilling Limited.
Actual tax liability was decreased compared to budget by taking into consideration local tax legislation.
There is no tax amount related to the items under Other Comprehensive Income.

12/31/2014
Total tax CONSOLIDATED
(Amounts in USD 1,000) Tonnage tax regime Other tax regime Total tax liabilities
Long term tax liabilities falling due after 1 year - 6,368 6,368
Payable taxes falling due within 1 year 22 4,983 5,005
Tax liabilities 22 11,351 11,373

Tax expense 2014

(Amounts in USD 1,000) Tonnage tax regime Other tax regime Total tax expense
Taxes payable 2 3,939 3,941
Change in deferred tax/deferred tax asset - -1,179 -1,179
Over/under provisions in previous year - -33 -33
Total 2 2,726 2,729
PARENT COMPANY
Total tax 12/31/2015 12/31/2014
(Amounts in USD 1,000) Other tax regime Other tax regime
Long term tax liabilities falling due after 1 year 4,258 4,885
Payable taxes falling due within 1 year -150 -146
Tax liabilities 4,108 4,738

Tax expence 2015 2014

Taxes payable - -
Total - -

68 SIEM OFFSHORE INC., ANNUAL REPORT 2015

Siem N-Sea
Photographer: Antonio Mladinov

SIEM OFFSHORE INC., ANNUAL REPORT 2015 69

 NOTES TO THE ACCOUNTS

Note 12 - Borrowings

PARENT COMPANY
(Amounts in USD 1,000) December 31, 2015
Committed Drawn Drawn
(USD) Currency Facility amount amount currency amount USD

- USD 56,722 56,722 56,722

- USD 53,458 (1) 53,458 53,458
- NOK 1,794,615 - 203,725
- NOK 331,082 - 37,585
- USD 16,800 16,800 16,800
- USD 17,091 17,091 17,091
- USD 104,495 104,495 104,495
- USD 51,745 46,888 46,888
- NOK 345,667 (1) 345,667 39,240
- NOK 3,675 3,675 417
- NOK 2,379 2,379 270
- NOK 9,795 9,795 1,112
68,112 NOK 600,000 600,000 68,112
- NOK 1,880,953 - 203,545
- NOK 220,000 220,000 24,974
- NOK 204,250 (1) 193,500 21,966
- NOK 435,000 - -
- NOK 354,000 354,000 40,186
- EUR 49,770 49,770 54,346
- EUR 250,000 - -
79,464 NOK 700,000 700,000 79,464
60,000 USD 60,000 60,000 -
- USD 9,311 9,311 -
207,576 Total secured debt 1,139,710
420 Fees and expenses -17,125
207,996 Total 1,122,585

19,208 (CIRR loan) NOK 169,200 169,200 19,208

- (CIRR loan) USD 68,794 68,794 68,794
226,784 Total long-term debt including fees and expenses 1,214,467

(1) Under the USD 53.4 million facility, part of the loan (USD 25.6 million) is fixed for a 6-year term to average interest rate of 7.58%.
Under the NOK 345.7 million facility, part of the loan (equivalent to USD 19.9 million) is fixed for an approximately 8-year term to
average interest rate of 5.36%.
Under the NOK 204 million facility a majority of the loan is fixed for a 4-year term to an average interest of 4.18%.

70 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 CONSOLIDATED

Fair value Interest rate Duration Instalments

56,722 Floating 2017 Quarterly

56,743 Fixed and floating 2021 Semi annually
203,725 Floating 2018 Semi annually
37,585 Floating 2022 Quarterly
16,800 Floating 2019 Semi annually
17,113 Fixed 2027 Monthly
107,276 Fixed 2028 Monthly
50,132 Fixed 2031 Monthly
41,602 Fixed and floating 2023 Semi annually
417 Floating 2019 Quarterly
270 Floating 2019 Monthly
1,112 Floating 2019 Monthly
68,112 Floating 2018 Bullet
210,987 Fixed 2018 Semi annually
24,974 Floating 2019 Semi annually
23,320 Fixed 2019 Semi annually
- Fixed or floating 2028 Semi annually
40,714 Fixed 2028 Semi annually
54,346 Floating 2016 Bullet
- Fixed or floating 2028 Semi annually
79,464 Floating 2019 Bullet
60,000 Floating 2017 Bullet/Revolving Credit
9,311 Floating 2020 Quarterly
1,160,678
-13,245
1,147,433

20,215 Fixed 2019 Semi annually

71,944 Fixed 2025 Semi annually
1,239,592

The Company has a portfolio of bank loans secured with mortgage in vessels. The creditor and guarantors are in general first class
commercial banks and state owned financial institutions with ratings on or above BBB- and AAA.
As of year end, the Company had issued two high yield unsecured bonds of NOK 600 million and NOK 700 million respectively. The high
yield unsecured bonds are listed on Oslo Stock Exchange, have no amortization and matures in 2018 and 2019.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 71

 NOTES TO THE ACCOUNTS

December 31, 2014

PARENT COMPANY (Amounts in USD 1,000)
(USD) Committed Drawn amount Drawn
Currency Facility amount currency amount USD

- USD 79,132 79,132 79,132

- USD 62,791 (1) 62,791 62,791
- NOK 1,740,247 (2) - 234,118
- NOK 320,762 - 43,153
- USD 19,600 19,600 19,600
- USD 16,482 16,482 16,482
- USD 114,085 114,085 114,085
- USD 54,598 49,740 49,740
- NOK 365,137 (1) 365,137 49,123
- NOK 4,655 4,655 626
- NOK 3,060 3,060 412
- NOK 12,364 12,364 1,663
80,719 NOK 600,000 600,000 80,719
- NOK 2,351,700 2,197,333 295,611
- NOK 240,000 240,000 32,288
- NOK 222,167 207,833 27,960
- NOK 435,000 - -
- NOK 360,000 - -
- EUR 49,770 21,330 25,931
94,172 NOK 700,000 700,000 94,172
174,891 Total secured debt - - 1,227,605
-10 Fees and expenses - - -13,245
174,881 Total - - 1,214,360

28,453 (CIRR loan) NOK 211,500 211,500 28,453

203,334 Total long-term debt including fees and expenses 1,242,813

1) Under the USD 62.8 million facility, part of the loan (USD 30.2 million) is fixed for a 7-year term to average interest rate of 7.58%. Un-
der the NOK 365.1millon facility, part of the loan (equivalent to USD 25.0 million) is fixed for an approximately 9-year term to average
interest rate of 5.36%.

Under the NOK 222 million facility a majority of the loan is fixed for a 5-year term to an average interest of 4.18%.

(2) The USD 234.1 million facility has a balloon repayment in 2015. The term for this debt facility shall either be renegotiated or auto-
matically extended subject to certain requirements regarding vessel employment.

72 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 CONSOLIDATED

Fair value Interest rate Duration Instalments

79,132 Floating 2017 Quarterly

67,251 Fixed and floating 2021 Semi annually
234,118 Floating 2015 Semi annually
43,153 Floating 2022 Quarterly
19,600 Floating 2019 Semi annually
16,310 Fixed 2027 Monthly
115,824 Fixed 2028 Monthly
52,980 Fixed 2031 Monthly
51,811 Fixed and floating 2023 Semi annually
626 Floating 2019 Quarterly
412 Floating 2019 Monthly
1,663 Floating 2019 Monthly
80,719 Floating 2018 Bullet
305,205 Fixed 2018 Semi annually
32,288 Floating 2019 Semi annually
29,653 Fixed or floating 2019 Semi annually
- Fixed or floating 2027 Semi annually
- Fixed or floating 2027 Semi annually
25,931 Floating 2016 Bullet
94,172 Floating 2019 Bullet
1,250,847
-13,245
1,237,602

30,114 Fixed 2019 Semi annually

1,267,716

SIEM OFFSHORE INC., ANNUAL REPORT 2015 73

 NOTES TO THE ACCOUNTS

Instalments per December 31, 2015 falling due over the next 5 years
PARENT COMPANY CONSOLIDATED
Other interest
(Amounts in USD 1,000) Mortgage debt bearing debt Total
- 2016 152,999 - 152,999
60,000 2017 197,290 - 197,290
68,112 2018 367,904 68,112 436,016
79,464 2019 72,893 79,464 152,357
- 2020 41,890 - 41,890
- Thereafter 159,158 - 159,158
207,576 Total 992,134 147,576 1,139,710

The book value of mortgaged assets consist of non-current tangible assets and portion of the accounts receivable and amounts to USD
1,623 million at year-end.

There are various financial covenants related to the Companys debt agreements. The main prevailing covenants are:
- Free cash in excess of USD 50 million
- Fleet Value Adjusted Equity Ratio in excess of 30%
- Book equity in excess of USD 200 million
- Certain ratio of Interest Coverage
- Certain ratio of FInancial Indebtedness to EBITDA

The amount of Financial Indebtednes shall be calculated by allocating new Financial Indebtedness to be incurred by the Company for
the long term debt financing of each future newbuilding on an accumulating basis by 1/12 each month after delivery of each such new-
building. The Fleet Value Adjusted Equity Ratio shall be based on broker estimates.

The Company and Parent Company are in compliance with the financial covenants as per December 31, 2015.
Based on Brokers estimates applied by the Company, the Free Value Adjusted Equity Ratio is 35 %.

CIRR loan (Both Consolidated and Parent Company) 2015 2014

Total CIRR loan commitment 88,002 28,453
CIRR loan drawn on 31.12 88,002 28,453
Commitment as of December 31 - -

Prior to ordering vessels from Norwegian yards, the Company applied for fixed 12-year interest rate options related to the long-term
financing of such vessels. The Company was granted options for each of the relevant vessels by the Norwegian Export Credit Agency
and the Company sold the rights to exercise such options to a first class international bank (the Bank).

Proceeds from the long-term loans drawn from the Norwegian Export Credit Agency were placed as corresponding deposits in the
Bank as financial security for the loans. The recognition of gains related to the sold options is recorded over the term of the respective
drawn loans.

In relation to the sale of a vessel in 2015 that had a fixed 12-year USD interest rate associated with its mortgage debt financing, pro-
ceeds from the sale, which were equivalent at that date to the remaining outstanding long-term loan from the Norwegian Export Credit
Agency, were placed on deposit as security for the Bank. The loan will continue until maturity and related interest and instalment pay-
ments will be serviced by the amount on deposit in the Bank according to the initial 12-year amortization profile.

Unearned CIRR
(Amounts in USD 1,000) 2015 2014
Beginning of the year 1,786 2,155
Recognized in the profit and loss account -368 -368
Net unearned CIRR as of December 31 1,418 1,786

74 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 13 - Other Current Liabilities

PARENT COMPANY CONSOLIDATED

12/31/2015 12/31/2014 (Amounts in USD 1,000) 12/31/2015 12/31/2014
- - Social security tax, etc. 3,552 3,960
- 60,158 Loan from related party - 60,158
- - Unearned income 35,793 7,264
723 926 Accrued interest 15,016 13,869
80 80 Other accrued cost, mainly regarding operating expenses vessels 3,655 6,103
544 6,091 Other current liabilities 32,984 31,718
1,347 67,255 Total other current liabilities 91,001 123,072

Other accrued cost includes accrued commission, purchase orders and other accrued cost includes accrued commission cost and cost
related to purchase orders. Other current liabilities includes accrued salaries and incentive program, provision for operating expenses
and other short-term liabilities.

Note 14 - Related Party Transactions

The Companys largest shareholder, Siem Europe S.a r.l, with a holding of 83 %, and its parent company, Siem Industries Inc.,
are defined as a related parties. The Company is obligated to Siem Industries Inc., for a fee of USD 300,000 for 2015 (2014
USD250,000). This fee is the remuneration for the services of the two of the Board members. This fee also covers office in the
Cayman Islands and administrative costs.

Details related to transactions, loans and remuneration to the executive Management and the board of directors are set out in Note
19. For the Parent, all subsidiaries listed in Note 6 are also defined as related parties.

For other related parties, the following transactions were carried out:

Sales of services CONSOLIDATED

(Amounts in USD 1,000) 2015 2014
Service to entity where director has ownership 21,493 8,556
Total 21,493 8,556

Above service is provided to companies in which a Board member has an interest. Kristian Siem is the Chairman of Siem
Industries Inc., which is controlled by a trust whose potential beneficiaries include members of Kristian Siems immediate family.
SiemIndustries holds an interest in Subsea 7.

Siem Offshore LLC, 100% owned by the Company, has charted vessel to Subsea 7 during 2015.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 75

 NOTES TO THE ACCOUNTS

Purchase of service CONSOLIDATED

(Amounts in USD 1,000) 2015 2014
Service from related parties 66,484 11,351
Total 66,484 11,351

Service delivered from related parties consist of instalments according to shipbuilding contracts with Flensburger Schiffbau
Gesellschaft and cost for technical management, corporate management and delivered crew from O.H. Meling & Co AS. Siem
Offshore Rederi AS has two vessels under construction at Flensburger Schiffbau Gesellschaft, a company 100% owned by Siem
Europe S.a r.l. Management service and crew service are supported to Siem Meling Offshore DA, 51% owned by the Company, by
O.H. Meling & Co AS , owning 49 % of Siem Meling Offshore DA.

Sale of Vessel CONSOLIDATED

(Amounts in USD 1,000) 2015 2014
Sale of vessel - 47,447
Total - 47,447

In Q3 2014, the vessel Siem Sailor was sold to a company controlled by O.H. Meling & Co AS at a price of NOK 295 million. The
purchaser of the vessel is the 49% owner of Siem Meling Offshore DA, and is controlled by O.H Meling & Co AS.

Balance Sheet items following purchase and sale of service: CONSOLIDATED

(Amounts in USD 1,000) 2015 2014
Accounts receivables 2,081 2,102
Accounts payable 250 250

Loans to related parties: CONSOLIDATED

(Amounts in USD 1,000) 2015 2014

Loan to associates
At January 1 233 308
Drawings 18,278 -
Instalments -51 -22
Interest charged 511 8
Interest received -4 -8
Exchange rate variations -1,897 -53
At December 31 17,069 233

The Company holds a long-term loan to Rovde Industripark AS and a long-term loan to Siem Industries Inc. Siem Offshore Invest AS
owns 50% of Rovde Industripark AS.

76 SIEM OFFSHORE INC., ANNUAL REPORT 2015

Liability to related parties: CONSOLIDATED
(Amounts in USD 1,000) 2015 2014

Long-term liability to related parties

At January 1 - 7,057
Reclassification from short-term loan 60,158 -
Drawings - -
Instalments - -6,982
Interest expenses 2,081 53
Interest paid -1,956 -53
Exchange rate variations - -75
At December 31 60,284 -

Liability to related parties: CONSOLIDATED

(Amounts in USD 1,000) 2015 2014

Short-term liability to related parties

At January 1 60,158 -
Reclassification to long-term loan -60,158 -
Drawings 6,984 60,000
Instalments - -
Interest expenses 106 158
Interest paid - -
Exchange rate variations - -
At December 31 7,090 60,158

Short-term loan
End of 2014 a short-term loan of USD 60 million was drawn by Siem Offshore Inc. under a credit facility provided by Siem Industries
Inc. In 2015 the parties agreed to change the terms of the loan from a short-term loan to a long-term loan. This is reflected in the
tables above as reclassification.The loan is on market term of interest.

In 2015 Siem Industries Inc. provided a short-term loan to Research Developement & Financial Consultant Ltd. The borrower is the 49%
owner of Siem Offshore Ghana International AS. The loan is on market term of interest.

Following transactions with related parties were carried

out for the parent company: PARENT COMPANY
(Amounts in USD 1,000) 2015 2014
Service from subsidiaries 7,415 10,086
Service from associates - -
Total 7,415 10,086

Service from subsidiaries consists of administrative and corporate services provided by Siem Offshore Management AS. All terms used
for above transactions are at arms length.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 77

 NOTES TO THE ACCOUNTS

Year-end balances arising from sales and purchases: PARENT COMPANY

(Amounts in USD 1,000) 2015 2014

Receivables from related parties

Subsidiaries 1,129 18,598
Associates 522 1,975
Total 1,651 20,573

Payables from related parties

Subsidiaries 4,576 5,737
Associates - -
Total 4,576 5,737

Loans to related parties: PARENT COMPANY

(Amounts in USD 1,000) 2015 2014

Loan to subsidiaries
At January 1 21,748 23,637
Drawings - 2,500
Converted to shares - -4,412
Instalments - -
Interest charged 502 555
Interest received - -
Exchange rate variations -380 -532
At December 31 21,870 21,748

Loan to tiered subsidiaries

At January 1 4,498 18,104
Drawings 143 4,619
Converted to shares - -
Instalments -4,761 -18,176
Interest charged 61 299
Interest received -61 -
Exchange rate variations 121 -347
At December 31 - 4,498

Total loans to related parties

At January 1 26,246 41,740
Drawings 143 7,119
Converted to shares - -4,412
Instalments -4,761 -18,176
Interest charged 563 854
Interest received -61 -
Exchange rate variations -259 -879
The loan to subsidiaries is held against Siem Offshore do Brasil SA on 31 December 2015.
Loan provided to associates, Siem Offshore Contractors GmbH, a company owned 100% by the subsidiary Siem Offshore Invest AS,
was repaid during 2015. All loans are on market terms of interest.

78 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 15 - Derivative Financial Instruments Assets (Liabilities)

PARENT COMPANY CONSOLIDATED

12/31/2015 12/31/2014
12/31/2015 12/31/2014 (Amounts in USD 1,000) Assets Liabilities Assets Liabilities
- - Forward currency contracts - cash flow hedges 1,286 4,170 - 2,325
- - Currency options - - - 10,292
- - Interest rate swaps 106 2,021 - 4,115
- - Cross currency swaps 59 6,705 1,041 -
- - Total derivative financial instruments 1,451 12,896 1,041 16,732

Forward currency contracts Currency options

The nominal principal amount of the
outstanding forward currency contracts
on 31 December 2015 were USD 162.9
million (2014: USD 122.5 million) of which
USD 151.1 million refers to EUR/USD con-
tracts, USD 7.0 million refers to USD/NOK
contracts, USD 1.5 million refers to EUR/
NOK contracts and USD 3.3 million refers
to GBP/NOK contracts.
Of the USD 54.0 million under the USD/
NOK contracts, two USD 20.0 million
positions are offsetting, such that the net
position is USD 14.0 million.
Currency options have been entered into
in order to hedge operational currency
exposure.These options are typically path-
dependent options which include features
related to situations where the underly-
ing reaches or fluctuates within specific
barrier levels. This enables the Company
to hedge a range in the underlying cur-
rency rather than simply a level. Gains
and losses are recognised in the profit and
loss. For further information regarding
profit and loss effect on forward currency
contracts and currency options, please
see Note 28.
At 31 December 2015, the fixed rates vary
from 1.13% to 2.29%. The floating rate
leg of the interest rate swaps are LIBOR.
Gains and losses are recognised in the
profit and loss under financial expenses.
Cross currency swaps
Cross currency swaps have been entered
into in order to hedge both interest and
principal payments on long term debt
financings denominated in other curren-
cies than USD.

The forward currency contracts have been

entered into in order to hedge primarily
operating expenses in foreign currencies
and committments related to vessels
under construction.
Interest rate swaps
The nominal amounts of the outstand-
ing interest rate swaps contracts on 31
December 2015 were USD 270.0 million
(2014: USD 270.0 million).

SIEM OFFSHORE INC., ANNUAL REPORT 2015 79

 NOTES TO THE ACCOUNTS

Note 16 - Guarantees

PARENT COMPANY CONSOLIDATED

12/31/2015 12/31/2014 (Amounts in USD 1,000) 12/31/2015 12/31/2014
- - Contractual guarantees to Brazilian Navy 1,681 593
Guarantees related to tax-disputes, Brazil 2,748 -
305,658 106,131 Contractual guarantees Power cable segment 305,658 141,315
305,658 106,131 Total guarantees 310,087 141,908

Contractual guarantees to Brazilian Navy are issued by Siem Offshore do Brasil SA.
Guarantees related to disputes and ongoing tax-cases have been raised per request from Brazilian tax authorities.
Contractual guarantees provided by Parent are security for clients of Siem Offshore Cotractors GmbH.

Note 17 - Commitments

Capital expenditures contracted for at the reporting date but not yet paid are as follows:

PARENT COMPANY CONSOLIDATED

12/31/2015 12/31/2014 (Amounts in USD 1,000) 12/31/2015 12/31/2014
- - Shipbuilding contracts with variation orders 596,594 678,076
- - Instalments paid 200,694 127,606
- - Unpaid instalments 395,900 550,470

PARENT COMPANY Instalments falling due over the next 3 years CONSOLIDATED
12/31/2015 12/31/2014 (Amounts in USD 1,000) 12/31/2015 12/31/2014
2015 - 242,062
- - 2016 395,900 308,408
- - 2017 - -
- - Total 395,900 550,470

80 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 18 - Operating Expenses

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) 2015 2014
-267 - Vessel crew expenses 105,457 124,451
-10 769 Other vessel operating expenses 63,678 35,523
- - Power Cable project expenses 96,191 90,179
9,516 11,752 General and administration 38,575 47,033
9,240 12,521 Total operating expenses 303,901 297,187

Note 19 - Salaries and Wages, Number of Employees

Personnel expenses (1) CONSOLIDATED

(Amounts in USD 1,000) 2015 2014
Salaries and wages 69,982 95,421
Government grants - net wages arrangement in Norway -4,801 -5,457
Payroll tax 9,740 14,309
Pension costs, see Note 8 2,177 2,151
Other benefit 5,178 4,147
Total personnel expenses 82,276 110,571

(1) Personnel expences are partly included in the Vessel Crew Expences and partly in the General and Administrative Expences, see
Note 18.

Government grants is a special Norwegian seaman payroll and tax refund given to Norwegian shipping companies. The average number
of employees in the Company was 949 for 2015 (2014: 1,073), including onshore and offshore employees.

No employees are employed in the parent company.

Payroll registered to the executive management:

(Amounts in USD 1,000) 2015 2014
Salary and other short term compensation 1,860 2,421
Total 1,860 2,421

Employees included in the above payroll in 2015 were 6 (2014: 5).

SIEM OFFSHORE INC., ANNUAL REPORT 2015 81

 NOTES TO THE ACCOUNTS

Corporate management salaries and other benefits are presented in the table below:

Name Salary paid Pension premium Other benefits Share options held

2015 (Amounts in USD 1,000)

CEO Idar Hillersy 1) 237.2 28.0 1.9 -
CEO Terje Srensen 1) 379.6 33.1 39.7 -
CFO Dagfin B. Lie 211.2 21.3 10.2 2,400,000
COO Svein Erik Mykland 2) 263.7 35.6 6.9 -
CCO Bernt Omdal 260.2 26.1 2.5 2,400,000
HR Tore B. Johannessen 268.0 31.4 3.0 2,400,000

1) Idar Hillersy replaced Terje Srensen as CEO with the effect from August 2015.
2) COO Svein Erik Mykland left the Company with the effect from December 2015.

Shares in the Company held by members of corporate management in 2015 were 1,538,161 (2014: 2,618,161).

2014 (Amounts in USD 1,000)

CEO Terje Srensen 610.6 33.8 55.9 3,600,000
CFO Dagfin B. Lie 310.5 31.1 12.5 2,400,000
COO Svein Erik Mykland 452.4 40.6 9.0 2,400,000
CCO Bernt Omdal 391.3 37.2 3.1 2,400,000
HR Tore B. Johannessen 388.6 41.0 3.7 2,400,000

The Board of Directors of Siem Offshore Inc. has authorized the award of two programs of Stock Options ten to seven
key employees of the Company. The total cost for the two programs is USD 2,527 for 2015. See Note 31 for more information.

Loan to executive management:

(Amounts in USD 1,000) 2015 2014
Balance January 1 3,331 4,356
Changes in executive management -2,760 -
New loan raised 227 40
Instalments - -310
Effect of currency differences -83 -755
Balance December 31 716 3,331

Loan on December 31, 2015 (Amounts in USD 1,000) Amount Interest Terms
Loan to executive management 716 - Share loan (1).
Total 716 - -

Loan on December 31, 2014 (Amounts in USD 1,000) Amount Interest Terms
Loan to executive management 3,331 - Share loan (1).
Total 2,306 - -

82 SIEM OFFSHORE INC., ANNUAL REPORT 2015

(1) Share loan: The loans are repayable by the employee when the employees shares in the company are realized or if the employee
leaves the Company. Loans equivalent to USD 0.7 million are secured by pledges in relevant shares.

The Remuneration paid to the Board of Directors in 2015 was USD 430K (2014: USD 440K).

Auditors remuneration
PARENT COMPANY CONSOLIDATED
2015 2014 (Amounts in USD 1,000) 2015 2014
96 99 Audit Fee 484 528
101 60 Audit Fee Other 226 202
11 21 Tax/Legal Assistance 41 116
6 - Other consultants, Fees 259 56
214 180 Total auditors remuneration 1,010 902

Note 20 - Operating Leases as Lessee

The Company has entered into different operating leases for office premises, office machines and communication
satellite equipment for the vessels. The leases also include a substitute vessel on a time charter party.
The lease period for the lease agreements varies and most of the leases contain an option for extension.

The lease costs were as follows:

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) 2015 2014
- - Annual lease payment on operational leases 2,985 4,020

As of 31 December 2015, the Company had some commitments relating to lease agreements which fall due as follows:

PARENT COMPANY Fall due CONSOLIDATED

- 2016 1,618
- 2017 1,062
- 2018 1,122
- Total 3,802

Net present value of future commitments relating to lease agreements are calculated to be USD 3,473 for the Company There are no
lease agreement for the Parent. The interest rate in the calculation of net present value is 5 %.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 83

 NOTES TO THE ACCOUNTS

Note 21 - Financial Items

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) 2015 2014

Financial income
3,491 4,162 Interest income 4,223 4,188
- - Other financial income 6,961 4,903
3,491 4,162 Total financial income 11,184 9,091

Financial expenses
-12,210 -11,801 Interest expenses -51,149 -48,451
- - Loss intercompany closure - -5,063
-16 -903 Other financial expenses -3,529 -2,354
-12,225 -12,704 Total financial expenses -54,677 -55,868

Other financial items

- - Loss on FX contracts -30,775 -3,022
1,265 4,842 Net currency gain/(loss) 22,110 34,092
1,265 4,842 Total currency gain/(loss) -8,665 31,070

Net currency gain/(loss) includes an unrealized gain of USD 27,675 calculated on monetary items, and a realized
loss of USD 11,935 related to intercompany transactions.

The net currency gain/(loss) for the Parent of USD 1,265 includes an intercompany currency loss of USD 1,379.

Note 22 - Earnings per Share

(Amounts in USD 1,000) 2015 2014

Weighted average number of shares outstanding (1,000) 518,318 387,591

Weighted average number of shares diluted (1,000) 757,123 389,144
Result attributable to shareholders -186,687 58,147
Earnings per share attributable to equity shareholders -0.36 0.15
Earnings per share diluted attributable to equity shareholders -0.36 0.15

Option program to executive management, see note 19 and 31.

84 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 23 - Contracts in Progress

CONSOLIDATED
Recognized Accumulated per
(Amounts in USD 1,000) 2015 12/31/2015
Revenue 120,890 233,680
Cost 93,670 173,461
Total 27,220 60,219

Assets / liabilities December 31, 2015

Prepaid project cost Unearned revenue Accrued project cost Unbilled revenue
Revenue - 28,378 - 3,510
Cost 14,918 - 9,867 -
Total 14,918 28,378 9,867 3,510

Recognized Accumulated per

(Amounts in USD 1,000) 2014 12/31/2014
Revenue 105,789 148,755
Cost 94,261 132,612
Total 11,528 16,143

Assets / liabilities December 31, 2014

Prepaid project cost Unearned revenue Accrued project cost Unbilled revenue
Revenue - 21,549 - 14,918
Cost - - 22,521 -
Total - 21,549 22,521 14,918

Contracts in progress refer to activity within the Power Cable Installation Segment and Combat Management Systems
(CMS), see Note 4.

The activity within Power Cable installation segment included six projects in progress at year-end 2015. These projects
are in an various phases, and margin for 2015 is recognized only on projects with progress exceeding 25 %.

At year-end 2015, the activity within CMS had five projects in progress. The degree of completion varies from 13% to
94%. Margin for 2015 is recognized only on projects with progress exceeding 25%.

All projects in progress at year-end 2015 are estimated to generate a positive contribution over the total project period.
There are no contracts in progress in the Parent Company.

See note 2.9 for analysis of sensitivity.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 85

 NOTES TO THE ACCOUNTS

Note 24 - Asset Held for Sale

CONSOLIDATED
(Amounts in USD 1,000) 2015 2014
Purchase cost per January 1 - 18,212
Moved from Fixed asset 3,459 -
The years disposal at cost - -18,212
Purchase cost on December 31 3,459 -

Booked value for the vessel Siddis Skipper was transferred from fixed assets to asset held for sale in December 2013.
The vessel was sold on January 8, 2014.
Booked value for the vessel Siem Carrier was transferred from fixed assets to asset held for sale in December 2015.

Note 25 - Other Gain/(Loss) on Sale of Assets

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) 2015 2014
- - Gain/(loss) on sale of assets, net 16,317 18,728
- - Total 16,317 18,728

2015
The net gain for the Company on sale of asses of USD 16.3 million consist of gain from the sale of the MRSV Daya 1 by USD 16.6 million, and a
loss on sale of other equipment of USD 0.3 million.

2014
The net gain for the Company on sale of assets of USD 18,7million consist of gain from the sales of the PSV Siem Skipper, Siem Sailor by USD
17,9 million and other USD 0,7 million.

86 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 26 - Listing of the 20 Largest Shareholders as of December 31, 2015

SHAREHOLDER NUMBER OF SHARES OWNER INTEREST

SIEM EUROPE S.a r.l. 699,110,008 83.03%
ACE CROWN INTERNATIONAL LIMITED 76,848,751 9.13%
WATERMAN HOLDING LTD 13,500,000 1.60%
EGD CAPITAL AS 6,000,000 0.71%
SRENSEN, TERJE 4,404,442 0.52%
MERRILL LYNCH,PIERCE,FENNER&S. INC 3,727,644 0.44%
ROVDEFRAKT AS 2,550,000 0.30%
DG-INVEST AS 1,538,161 0.18%
TONGA INVEST AS 1,500,000 0.18%
SMY INVEST AS 1,350,000 0.16%
FORSVARETS PERSONELLSERVICE 953,976 0.11%
CORTEX AS 952,000 0.11%
OSLOKANALEN AS 850,000 0.10%
OPSAHL, STIAN 786,103 0.09%
BRUUN, LARS 699,656 0.08%
TIMUCUAN FUND LTD. 646,268 0.08%
BARRUS CAPITAL AS 515,697 0.06%
LEROLI AS 500,000 0.06%
ESPEDAL, HARALD 500,000 0.06%
KEBI AS 499,763 0.06%
Total 20 largest shareholders 817,432,469 97.08%
Other shareholders 24,588,911 2.92%
Total number of outstanding shares 842,021,380 100.00%

Siem Europe S.a r.l. is the main shareholder of Siem Offshore Inc. and is controlled by a trust whose potential beneficiaries include
members of Kristian Siems immediate family. Kristian Siem, who is Director of the Company, is also the Chairman of Siem Industries
Inc., who is the parent compay of Siem Europe S.a r.l.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 87

 NOTES TO THE ACCOUNTS

Note 27 Subsequent Events

Charter contract for Siem Topaz in Australia

A 18 months charter contract for the AHTS vessel Siem Topaz has been agreed with Woodside Energy Ltd. for operation in Australia.
Commencement is expected to be in May 2016, the firm period is for 18 months plus options.

Award of contract for Bard Offshore 1 wind farm

Siem Offshore Contractors GmbH was awarded a contract for the provision of a walk-to-work (W2W) service operations vessel by
Ocean Breeze Energy GmbH & Co. KG for the Bard Offshore 1 wind farm within the German Bight sector of the North Sea.
The contract will involve the deployment of the OSCV Siem Marlin followed by the PSV Siddis Mariner in W2W mode.
The firm charter period is 700 days c/w options to extend the charter period by up to three additional years.

Termination of charter contract

Terminated the 5-year charter party for the OSCV Siem Marlin due to non-performance of the charterers obligations.

Charter contract for Siem Pilot

Siem Meling Offshore DA and Justis & Beredskapsdepartementet ( Ministry of Justice and Public Security) have entered into a
Charter agreement for the Multipurpose Platform Supply Vessel Siem Pilot.
The vessel is currently involved with border control, search and rescue operations in the Mediterranean under the joint operation
Triton and will continue with the same operations under the new Charter agreement.

The contract period is for 6 months firm plus options and will commence in direct continuation from present contract.

Charter contact for a Dual Fuel PSV in Australia

SIEM OFFSHORE, through its fully owned subsidiary SIEM OFFSHORE Australia Pty Ltd, has been awarded a charter contract for a Dual
Fuel (LNG/MGO) PSV of design VS4411 by Woodside Energy Limited, Australia.

The duration of the charter is for a term of five years plus options of 2 x 1 year, expected to commence in early 2017.
The vessel will operate as part of the Woodside Integrated Fleet working offshore Dampier, Western Australia.

Note 28 - Gain/(Loss) on Currency Derivative Contracts

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) 2015 2014
- - Unrealized gain/(loss) 2,074 -5,612
- - Realized gain/(loss) -32,849 2,590
- - Total -30,775 -3,023

Further details related to the currency derivative contracts are set out in Note 15.

88 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 Note 29 - Financial Instrument by Category

Below is a comparison by category for carrying amounts and fair values of all of the Companys
financial instruments.

CONSOLIDATED
(Amounts in USD 1,000) Loans and Assets at fair value through Available for
December 31, 2015 receivables the profit and loss sale Total

Assets as per statement of financial position

Derivative financial instruments - 1,451 - 1,451
Accounts receivable 46, 147 - - 46, 147
CIRR Loan deposit 88,002 - - 88,002
Long term receivables 51,598 - - 51,597
Cash and cash equivalents 148,753 - - 148,753
Total 334,500 1,451 - 335,951

(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments amount to
USD 32,905, see Note 9.
CONSOLIDATED
(Amounts in USD 1,000) Liabilities at fair value Other financial
December 31, 2015 through the profit and loss liabilities Total

Liabilities as per statement of financial position

Accounts payable - 8,395 8,395
Borrowings - 1,122,585 1,122,585
CIRR Loan - 88,002 88,002
Other non-current liabilities - 34,142 34,142
Other current liabilities - 91,001 91,001
Adjustment for liabilities that do not qualify as a financial instrument - -41,604 -41,604
Derivative financial instruments 12,896 - 12,896
Total 12,896 1,302,521 1,315,417

(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded liabilities amount
to USD 12,802 consisting of USD 3,496 in Taxes Payable, USD 2,258 in Pension Liability, USD 3,552 in Social Security Payable and
USD 3,496 in Unearned Income. See Note 13 for information about Social Security Payable and Unearned Income.
CONSOLIDATED
(Amounts in USD 1,000) Loans and Assets at fair value through Available for
December 31, 2014 receivables the profit and loss sale Total

Assets as per statement of financial position

Derivative financial instruments 1,041 1,041 - 1,041
Trade and other instruments (1) 33,146 - - 33,146
Cash and cash equivalents 117,623 - - 117,623
Total 151,810 1,041 - 151,810

(1) Prepayments do not qualify as a financial instrument and are not included in above amount.
Excluded prepayments amount to USD 32,905, see Note 9.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 89

 NOTES TO THE ACCOUNTS

CONSOLIDATED
(Amounts in USD 1,000) Liabilities at fair value Other financial
December 31, 2014 through the profit and loss liabilities Total

Liabilities as per statement of financial position

Bank debts, bonds, loans and other payables (1) - 172,662 172,662
Derivative financial instruments 16,732 - 16,732
Total 16,732 172,662 189,394

(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded liabilities amount to
USD 22.161 consisting of USD 10.438 in Taxes Payable, USD 2.778 in Pension Liability, USD 5.428 in Social Security Payable and USD 3.517
in Unearned Income. See Note 13 for information about Social Security Payable and Unearned Income.

PARENT COMPANY
(Amounts in USD 1,000) Loans and Assets at fair value through Available for
December 31, 2015 receivables the profit and loss sale Total

Assets as per statement of financial position

Trade and other instruments (1) 55,766 - - 55,766
Cash and cash equivalents 269,293 - - 269,293
Total 325,059 - - 325,059

(1) Prepayments do not qualify as a financial instrument and are not included in above amount.
Excluded prepayments amount to USD 0, see Note 9.

PARENT COMPANY
(Amounts in USD 1,000) Liabilities at fair value Other financial
December 31, 2015 through the profit and loss liabilities Total

Liabilities as per statement of financial position

Borrowings falling due after 1 year - 207,852 207,852
Accounts payable - 144 144
CIRR Loan - 19,208 19,208
Total - 227,203 227,203

PARENT COMPANY
(Amounts in USD 1,000) Loans and Assets at fair value through Available for
December 31, 2014 receivables the profit and loss sale Total

Assets as per statement of financial position

Trade and other receivables (1) 76,636 - - 76,636
Cash and cash equivalents 222,579 - - 222,579
Total 299,215 - - 299,215

(1) Prepayments do not qualify as a financial instrument and are not included in above amount.
Excluded prepayments amount to USD 3,480, see Note 9.

90 SIEM OFFSHORE INC., ANNUAL REPORT 2015

PARENT COMPANY
(Amounts in USD 1,000) Liabilities at fair value Other financial
December 31, 2014 through the profit and loss liabilities Total

Liabilities as per statement of financial position

Bank debts, bonds, loans and other payables - 203,387 203,387
Derivative financial instruments - - -
Total - 203,387 203,387

Note 30 Profit Before Taxes, Excluding Interests

Reconciliation of net profit for the fiscal year to profit/(loss) before taxes, excluding interest.

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) 2015 2014
-16,196 -64,448 Net profit/(loss) -196,416 70,710
12,210 11,801 Interest expenses 51,796 48,451
-568 -921 Intercompany interest - -
-2,923 -3,241 Interest income -4,223 -4,188
- - Tax expense 4,737 2,729
-7,477 -56,809 Profit before taxes, excluding interest -144,106 117,702

Siem Pride
Photographer: Henrik Engeb

SIEM OFFSHORE INC., ANNUAL REPORT 2015 91

 NOTES TO THE ACCOUNTS
Note 31 Share-based payments
The Company has entered into two
Share option agreeements with selected
employees:
On the 13 january 2013, the Company
entered into a Share option agreement as
follows:
January 18th 2017, less any options
The Board of Directors of Siem
Offshore Inc. has authorized the award
of 14.000.000 share options to eight key
employees of the Company. The exercise
price is NOK 8.45 per share.The exercise
price of the granted options is equal to the
market price of the shares on the date of
the grant.
group has no legal or constructive obliga-
2014:
20% of the total number beginning on
January 18th 2014
2015:
40% of the total number beginning on
January 18th 2015, less any options
previously issued.
On the 02 April 2014, the Company
entered into a Share option agreement
with selected employees.
The Board of Directors of Siem
Offshore Inc. has authorized the award
of 3,000,000 share options to ten key
employees of the Company.
The exercise price is NOK 9.07 per share.
The exercise price of the granted options
is equal to the market price of the shares
on the date of the grant.
The Options can be exercised as follows:
2017:
60% of the total number beginning on
April 2nd 2017, less any options previously
issued.
92 SIEM OFFSHORE INC., ANNUAL REPORT 2015
2016:
60% of the total number beginning on
January 18th 2016, less any options
previously issued.
2017:
80% of the total number beginning on
previously issued.
2018:
100% of the total number beginning on
January 18th 2018, less any options
previously issued. The exercise period
shall in no event be later than the date
falling 10 years after the award date. The
options granted to certain employees.
tion to repurchase or settle the options
in cash.No options were exercised during
2014 or 2015.
under Retained earnings at USD 3,125.
The weighted average fair value of
options granted during the period deter-
mined using the Black-Scholes valuation
model was NOK 3.72 per option.
2018:
80% of the total number beginning on
April 2nd 2018, less any options
previously issued.
2019:
100% of the total number beginning on
April 2nd 2019, less any options previ-
ously issued.
The exercise period shall in no event be
later than the date falling 10 years after
the award date.
The group has no legal or constructive
obligation to repurchase or settle the
options in cash. The weighted average fair
value of options granted during the period
determined using the Black-Scholes
valuation model was NOK 3.65 per option.
The significant inputs into the model were
weighted average share price of NOK 9,07
at the grant date, exercise price of NOK
The significant inputs into the model
were weighted average share price of
NOK 8.45 at the grant date, exercise
price of NOK 8.45, volatility of 23%,
dividend yield of 0%, an expected option
life of 10 years and an annual risk-free
interest rate of 2.32% (4.13%).
The volatility measured at the standard
deviation of continuously compounded
share returns is based on statistical
analysis of daily share prices over the
last three years.
See note 19 for the total expense recog-
nised in the income statement for share
Value of employee services as per
December 31, 2015 are recognized
9,07, volatility of 25,92%, dividend yield of
0%, an expected option life of 10 years and
an annual risk-free interest rate of 2,90%.
The volatility measured at the standard
deviation of continuously compounded
share returns is based on statistical
analysis of daily share prices over the last
five years.
During 2015 three members of the op-
tion program left the Company. They
have been taken out of the progam and
previously expensesd option costs are
reversed.
See note 19 for the total expense recog-
nised in the income statement for share
options granted to certain employees.
Value of employee services as per
December 31, 2015 are recognized under
Retained earnings at USD 0.391.
(Amounts in USD 1,000) Excercise price per share option, NOK Options outstanding
At 1 January 2014 8.45 14,000,000
Granted 9.07 3,000,000
Forfeited - -
Excersised - -
Expired - -
At 31 December 2014 8,56* 17,000,000
- -
At 1 January 2015 - 17,000,000
Granted - -
Forfeited - -7,200,000
Excersised - -
Expired - -
At 31 December 2015 8,56* 9,800,000

*weighted average

Note 32 Inventories

PARENT COMPANY CONSOLIDATED

2015 2014 (Amounts in USD 1,000) 2015 2014
- - Fuel 2,514 2,805
- - Spareparts 5,225 4,676
- - Total inventories 7,739 7,481

SIEM OFFSHORE INC., ANNUAL REPORT 2015 93

 CORPORATE SOCIAL RESPONSIBILITY
Statement on Social Responsibility
As a company incorporated in the Cay-
man Islands, Siem Offshore Inc. (The
Company) is an exempted company
duly incorporated under the laws of the
Cayman Islands and subject to Cayman
Island laws and regulations with respect
to corporate governance. Cayman Islands
corporate law is to a great extent based
on English Law. In addition, due to The
Company being a Norwegian Tax Resident,
the Norwegian Accounting law applies to
the Company.
According to the Norwegian Accounting
Act $3-3c The Company should provide
a statement on social responsibility. The
statement should include which actions
are taken by The Company to integrate
human rights, employees rights and so-
cial conditions, external environment and
the fight against corruption in its business
strategies, daily operations and in relation
to its interested parties.
The Board of Directors has reviewed this
statement. It is the opinion of the Board
of Directors that The Company com-
plies with regulations in the Norwegian
Accounting law with respect to Social
Responsibility reporting.
Code of Conduct
The Company has established a Code of
Conduct policy expressing its non-toler-
ance on corruption as well as dealing with
ethical principles of the Company. The
Company is fully committed to perform
its business with integrity and transpar-
ency throughout its global operations. As
stated in the Code of Conduct Policy it is
the policy of the Company to conduct its
business in accordance with all applicable
laws and regulations and in an ethically
responsible manner.
Protection of health, safety and the
prevention of pollution to the environment
are primary goals of The Company. All of
our employees and representatives must
conduct their duties and responsibilities in
compliance with The Companys policy on
Health, Safety and Environment, applica-
ble law and industry standards relating
94 SIEM OFFSHORE INC., ANNUAL REPORT 2015
to health and safety in the workplace and
prevention of pollution to the environment.
The Company has implemented policies
and control procedures to ensure that only
proper transactions are entered into by
The Company, that such transactions have
proper management approval, that such
transactions are properly accounted for in
the books and records of The Company,
and the reports and financial statements
of The Company are prepared in a timely
manner, understandable and fully, fairly
and accurately reflect such transactions.
The Company observes fair employment
practices in every aspect of its business.
The Company conducts its business with
honesty and integrity and competes fairly
and ethically within the framework of the
law. The Company has entered into agree-
ments with well-known subcontractors for
the delivery of technical management and
crew management services to some of the
Companys vessels.
The Company has also entered into
shipbuilding contracts with high standard
shipbuilding yards in Norway, Poland
and Germany. These subcontractors are
subject to review on an ongoing basis. The
Company expects that all of its business
partners have the same approach to busi-
ness dealing.
Improper payments
The Code of Conduct does also include
policies on improper payments. The Com-
pany does not tolerate any actions / pay-
ments which could be viewed as improper
payments.
No gift, hospitality or travel benefit may
be offered to or requested or accepted
from any third party if that benefit could
be seen to be disproportionately generous
or otherwise be seen as something which
may induce or make the recipient feel
obliged to reciprocate by way of improp-
erly performing his or her function.
The Company and its directors, officers
and employees will not accept any gift,
hospitality or travel benefit either directly
or indirectly from business partners,
against making commitment, recom-
mending or promoting a certain conduct
or position by The Company or otherwise
seek to gain personal benefit in relation to
The Companys business dealings.
Likewise, the Company does not itself
offer inducements to anyone associated
with business partners to promote a cer-
tain conduct or position by such business
partner.
The Company and any of its people shall
not pay money or provide gifts, entertain-
ment, hospitality or any other thing or ser-
vice of value to any Government Official.
This prohibition extends to payments to
consultants, agents or other intermediar-
ies when the payer knows or has reason to
believe that some part of the payment will
be used to bribe or otherwise influence a
public official. Political contributions are
not authorized.
Corporate Social Responsibility
The Company respects and promotes
harmonious working relationship with the
local communities where it operates, but
refrains from participating in local politics.
The Company seeks to foster a sustain-
able business for its many stakeholders.
The Company is fully committed to
comply with local laws and regulations
throughout its global operations.
The Company is committed to employ
local staff where applicable and possible
in all countries where it is operating and
conducting business. The Company is
committed to providing equal opportunity
and fair treatment to all individuals on
the basis of merit, without discrimination
on the grounds of race, colour, religion,
national origin, sex, pregnancy, age, dis-
ability, marital status or other characteris-
tics protected by applicable law.
The Company is dedicated in creating a
high-quality working environment under
which its people respect and trust each
other such that everyone acts in an
honest, friendly and proactive way with
a responsible attitude and high moral
standards. The Company prohibits bully- The Company has furthermore previously
ing and harassment in any form including donated funds to Pro Criana Cardaca
sexual, racial, ethnic, and other forms of in Rio de Janeiro, Brasil, a non-profit
harassment. organization helping children with heart
diseases. Pro Criana Cardaca is a
At Christmas 2012 The Company donated hospital founded in 1996 by Cardiologist
funds to Jaynii Streetwise in Ghana. No Doctor Celia Rose.
funds have been donated in 2015. Jaynii
Streetwise is a charity and non-govern- The mission of the organization is to
mental organization founded in Ghana by provide medical care to cardiac children
Jay Borquaye and Emmanuel (Nii) Quartey focusing in cardiac surgery and any other
in the deprived area of Jamestown (Ac- procedure that requires high technology
cra) with the aim of improving the lives of treatment to children. No funds have been
children and youth. Jaynii Streetwise was donated in 2014-2015.
born out of their Jaynii Cultural Troupe, a
traditional music and dance group which The Company has also in previous years
has performed at countless functions lo- made donations to the Norwegian Salva-
cally and internationally. tion Army, Redningsselskapet and the
street magazine Klar. No donations have
Over time, Jaynii has identified the need been made in 2015.
to support ongoing efforts by government
and civil society to keep children off the
streets and in school. As a poor, margin-
alized and deprived area, many children
are found walking on the beach and in the
streets during school hours. Most of these
children come from very deprived homes.
So far Jaynii has identified fifty children
aged between 4 to 16 years who have
been enrolled into the Streetwise Project,
based at Jaynii Beach, a small stretch of
beach just below the Jamestown light-
house which is now their centre.

These 24 girls and 26 boys, who were

spending their childhood walking aim-
lessly on the Jamestown Beach, are now
enrolled at schools in the communities-
Accra Sempe Primary School in Classes
1 to 6 and St. Thomas Day Care Centre.
Jaynii, without assistance from parents,
buys them school uniforms, shoes, bags
and exercise books and registers them in
school.

After school hours, the children go to

Jaynii Beach where they get fed as well
as get extra classes, homework help and
afternoon activities and entertainment.
During 2013 the Company has also
donated funds for the funeral and family
support of passed away gardener of the
Companys office in Ghana.

SIEM OFFSHORE INC., ANNUAL REPORT 2015 95

 NOTES TO THE ACCOUNTS

96 SIEM OFFSHORE INC., ANNUAL REPORT 2015

SIEM OFFSHORE INC., ANNUAL REPORT 2015 97
 RESPONSIBILITY STATEMENT

We confirm, to the best of our knowledge that the financial

statements for the period 1 January to 31 December 2015
have been prepared in accordance with current applicable ac-
counting standards, and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the entity and
the group taken as a whole. We also confirm that the Board of
Directors Report includes a true and fair review of the develop-
ment and performance of the business and the position of the
entity and the group, together with a description of the principal
risks and uncertainties facing the entity and the group.

11 April 2016

Eystein Eriksrud Kristian Siem John C. Wallace

Chairman Director Director
(Sign.) (Sign.) (Sign.)

Michael Delouche David Mullen Idar Hillersy

Director Director Chief Executive Officer
(Sign.) (Sign.) (Sign.)

98 SIEM OFFSHORE INC., ANNUAL REPORT 2015

BOARD OF DIRECTORS
The Company has a Board of five Directors. Members of the
Companys management are not members of the Board, but
the companys management does attend Board meetings.
Eystein Eriksrud, (born 1970)
Chairman
Mr Eriksrud joined the Board of Directors
of Siem Offshore in May 2010 and became
Chairman in May 2012. Mr Eriksrud is
the Deputy CEO of the Siem Industries
Group. Prior to joining Siem Industries in
October 2011, Mr Eriksrud was a partner
in the Norwegian law firm Wiersholm
Mellbye & Bech, from 2005, working as a
business lawyer, particularly in the ship-
ping, offshore and oil service sectors. Mr
Eriksrud was Group Company Secretary of
the Kvaerner Group from 20002002 and
served as Group General Counsel of the
Siem Industries Group from 20022005.
He is a candidate of jurisprudence from
the University of Oslo. Mr Eriksrud has
served on the boards of Privatbanken
ASA and Tinfos AS as well as a number
of other boards. He is the Chairman of
Flensburger Schiffbau-Gesellschaft mbH
& Co. KG and Electromagnetic Geoser-
vices ASA and a Director of Subsea 7 SA,
Siem Kapital AS, VSK Holdings Ltd, Venn
Partners LLP, Siem Car Carriers AS, Siem
Capital UK Ltd. and Siem Europe S. r.l.
Mr Eriksrud is a Norwegian citizen
Kristian Siem (born 1949),
Board member
Mr. Siem is the Chairman of Subsea 7 SA
and is a Director of Siem Offshore Inc.,
Siem Shipping Inc. (former Star Reefers
Inc.), Flensburger Schiffbau Gesellschaft
mbH, Norh Atlantic Smaller Companies
Investment Trust plc. and London and
Frupor S.A., Portugal.
Mr. Siem is a Norwegian citizen.
Michael Delouche (born 1957), In November 2004, he successfully com-
Board member pleted the International Uniform Certified
Mr. Delouche is the president and the Public Accountant Qualification Examina-
secretary of Siem Industries Inc. and is tion and has received a CPA Certificate
in charge of the Companys operations at from the State of Illinois. Mr. Wallace
the head office in George Town, Cayman also retired from the board of directors of
Islands. He is a director of Siem Shipping Ganger Rolf ASA and Bonheur ASA, Oslo,
Inc. Mr. Delouche received degrees in civil both publicly-traded shipping companies
engineering (structural) and business and with interests in offshore energy services
was previously an audit manager with and renewable energy. He is a Director of
KPMG Peat Marwick LLP. Mr. Delouche is Callon Petroleum Co , USA where he is
a US citizen. Chairman of the Audit Committee. He was
inducted as a 2011 Industry Pioneer by the
David Mullen (born 1958), Offshore Energy Centre in Houston. Mr.
Board member Wallace is a Canadian citizen.
Mr David Mullen, who has served as a
Director of the Company since 2008,
informed the Board that he will retire with
effect at the conclusion of the Annual
General Meeting. The Board expresses its
sincere appreciation to Mr Mullen for his
service and dedication to the Company as
a Director for many years.
John C. Wallace (born 1938),
Board member
John C. Wallace is a Chartered Account-
ant having qualified with Pricewaterhouse-
Coopers in Canada in 1963, after which he
joined Baring Brothers & Co., Limited in
London, England. Prior to his retirement
in 2010, he served for over twenty-five
years as Chairman of Fred. Olsen Ltd., a
London-based corporation that he joined
in 1968 and which specializes in the busi-
ness of shipping, renewable energy and
property development. He received his B.
Comm degree majoring in Accounting and
Economics from McGill University in 1959.
SIEM OFFSHORE INC., ANNUAL REPORT 2015 99
 FINANCIAL CALENDAR 2016

Siem Offshore Inc. will release financial figures on the following dates in 2016:

Q1 2016 Monday 9 May

Q2 2016 Thursday 25 August

Q3 2016 Thursday 27 October

The Annual General Meeting of the company will be held on Friday6 May 2016.

100 SIEM OFFSHORE INC., ANNUAL REPORT 2015

 INNOVENTI
Siem Offshore Inc

c/o Siem Offshore AS

Nodeviga 14
4610 Kristiansand
Norway

Postal address
P.O. Box 425
N-4664 Kristiansand S, Norway

Telephone
+47 38 60 04 00

Telefax
+47 37 40 62 86

E-mail
siemoffshore@siemoffshore.com

www.siemoffshore.com

SIEM OFFSHORE INC., ANNUAL REPORT 2015