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A n n u A l r e p o r t 2 0 1 0

STX OSV >> Annual report 2010

03 About StX oSV

14 Chairman’s Statement

16 Ceo letter

18 Board of Directors

20 executive Management

22 Shareholding and Group Structure

24 Core products and Services

32 Vessels Delivered in 2010

34 Significant events

36 Awards

38 Financial Highlights

42 Business Strategy

44 operational review

47 Health, Safety and environment (HSe)

49 Corporate Social responsibility (CSr)

50 outlook

52 Investor relations

54 Corporate Information

56 Corporate Governance report

65 Statutory Financial reports

128 Appendix - Ipt Mandate

142 Statistics of Shareholdings

144 notice of Annual General Meeting

148 notice of Book Closure

c O n T e n T S

STX OSV >> Annual report 2010 3

The rough and challenging waters off the west coast of Norway

have taught us respect for the seas.

Our maritime heritage forms

the basis of our culture and our company.

STX OSV Holdings Limited, together with its subsidiaries, is one of the major global designers and builders of offshore and

specialized vessels used in the offshore oil and gas exploration and production and oil services industries.

The Group is headquartered in Norway, and operates nine strategically located shipbuilding facilities, including five in

Norway, two in Romania, one in Brazil and one in Vietnam.


Our shipbuilding competence has been

built over generations. Almost 9,000 highly skilled and motivated

employees work hard to carry on these

traditions into the future.

>>

Our Company’s long shipbuilding traditions date back almost a century. Our employees with their diverse backgrounds, knowledge and experience form our most valuable asset. Maintaining a staff of committed professionals through continuous training and development is therefore a top priority for us, as is the constant search for new talent. We put people at the center of all our efforts, and aim to uphold the highest standards in our work with respect to health, safety and the environment.


We believe that teamwork unites

individual strengths to create value.

New solutions are best developed in a

partnership approach with our clients.

>>

Close cooperation with ship owners and end users is a key factor in the process of designing and building offshore and specialized vessels. Through collaboration between our designers and engineers, the staff at our yards, ship owners and operators, equipment suppliers, and other players in the oil and gas and maritime industries, we can incorporate their combined experience and know-how into our designs and products.


Innovation is key to our success.

We strive for technological excellence by

challenging established paradigms and

continually pushing the boundaries of what is possible.

Our expertise and track record in designing and constructing complex and highly customized offshore and specialized vessels have earned us recognition from key industry players. Our research and development efforts are aimed at adding value for our customers by enhancing vessel performance, in relation to the work assignments to be performed in the offshore industry, in terms of cost effectiveness, safety, and environmental considerations.

>>


STX OSV is a global integrated company, operating shipyard facilities on three continents strategically located to ensure access to the fastest growing oil and gas exploration and production areas. Vessels built by STX OSV sail on every ocean. In-house design capabilities and development of electrical engineering, power and automation solutions complement our service offering.

Through its main shareholder STX Europe, STX OSV is part of the international STX Group, which aims to be a global top player in its core areas; shipping and trade, shipbuilding and machineries, plant and construction, and energy.

Our global presence enables us

to serve our clients close to where they operate.

Our integrated group of companies enables

us to understand and serve their needs

from design to delivery.

>>

STX OSV >> Annual report 2010 13STX OSV >> Annual report 2010 13

We always look for new horizons.

STX OSV Holdings Limited was listed on the Main Board of the Singapore Exchange on 12 November 2010. The listing opens a new chapter in the history of the Company. It gives the Group a broader base and an even more international profile, and enables us to capture new opportunities for future growth.

Dear valued shareholders,


C h a I r m a n ’ S S T a T e m e n T

On behalf of the Board of Directors, I would like to express my gratitude for your support for and belief in STX OSV

Holdings Limited. The year 2010 has been a significant and exciting year of growth for STX OSV, which culminated in

the successful listing of the Company on the Singapore Exchange in November 2010. Since then, the Company has

received a lot of exposure as it was introduced to the vast investor community in Asia as well as globally.

STX OSV is recognized as a major global designer and builder of offshore support vessels used in the offshore oil and

gas exploration and production and oil services industries. We operate nine strategically located shipbuilding facilities

worldwide, which are able to provide the optimal balance of capabilities, capacity, cost efficiency and market proximity

to meet the needs of diverse, sophisticated industry-leading customers.

We are constantly striving to maintain our leading position as one of the major shipbuilders of advanced offshore

support vessels, and take advantage of attractive growth opportunities. As part of our growth strategy, we plan to

strengthen the integration of our shipyards worldwide and to invest in a new yard in Brazil. We expect to break ground

Jong Chul LeeChairman of the Board


for the new yard in mid-2011 and to start vessel construction in 2012. The decision to invest in the new yard in Brazil

marks a significant milestone in the Company’s history, as it will expand our global capacity by approximately 25% and

reinforce our leading market position in one of the most attractive growth markets in our industry.

We also plan to further focus on design, R&D and technology to enhance our vessels with cutting-edge innovation. Our

growth strategy also means that we will continue to develop the strong relationships we enjoy with our key customers,

and build equally strong relationships with new clients around the globe.

Once again, I would like to express my sincere appreciation to our shareholders and customers for the confidence

and support given to us; and to our management and staff members for their commitment and contribution to the

Company. STX OSV remains confident of delivering on the Company’s growth initiatives to create greater value.

We look forward to your continued support in the years ahead.


It is my pleasure to present to you our inaugural annual report and to bring you through the key highlights of an eventful 2010.

We have had a good year, both in terms of financial and non-financial indicators. Our strong set of results for the year in review tells a story of improved operational performance across all yards and subsidiaries, as well as a strong increase in new order intake. We are pleased to have these full-year results mark the start of our life as a listed entity, following the successful initial public offering and subsequent listing on the Main Board of the Singapore Exchange.

Our listing on 12 November 2010 marks a new phase in the development of the Company, and gives rise to new opportunities. It gives the Company a broader base, a more international profile, and enables future growth. We are encouraged by the overwhelming response from retail and institutional investors, which is a strong endorsement of our value proposition and growth story.

Improved bottom line, strong operational performanceWhile our revenues remained stable during 2010 compared to the previous year, EBITDA more thandoubled in the same period, leading to a healthy margin increase. This good showing came on the back

of significant investment in facilities and equipment made during the year, which led to much improved operational stability throughout the business. We achieved a high rate of on-time deliveries, and several vessels were delivered before the contractually agreed delivery date.

Our investments put us in good stead to withstand volatile macroeconomic conditions during the year. With the offshore service market still difficult, ship owners have generally been hesitant to place vessel orders. Despite the uncertainties, we saw order intake for the year almost triple compared to the previous year. As of 31 December 2010, we had 49 vessels in the order book, 37 of which are of our design.

Creating a knowledge-driven cultureWe believe that our success is driven by the true creators of our vessels – our employees – and their willingness to use their skills creatively and responsibly. As such, we invest beyond the “hardware” of our equipment and facilities, and prioritize investment in human resources to reflect our knowledge-driven organizational culture. The payoff is seen in the progress that all our yards have experienced this year: Our newest yard in Vietnam has phased in to full operations. In Brazil, our staff have mastered a new level of technological complexity. OurRomanian yards made efficiency gains, and successfully

C e O L e T T e r

Dear shareholders,


delivered two fully outfitted highly specialized vessels. In Norway, we moved steps ahead in R&D and engineering, and broke through with innovations such as a new hull shape for our in-house designed vessels.

We have a strong focus on Health, Safety and Environment (HSE) and continually aim to improve on all three aspects throughout STX OSV. These values are important for us as a company, and by focusing on them ourselves, we believe customers also see us as a credible partner in developing solutions with high HSE focus for them.

This partnership with our clients continuously pushes us to meet new challenges in design and engineering solutions. As a result, the skills and competencies of our employees are constantly being developed, enabling us to innovate and stay ahead.

Positive outlookWe are optimistic about our prospects in 2011, given the wider industry trends that drive demand for new vessels. Firstly, with oil being found in increasingly challenging terrains, the exploration and production industry will push for deeper water exploration and engage in operations in harsh environments. Secondly, with environmental concerns becoming a major topic of

discussion in the industry, we expect customers to ask for increasingly environmental-friendly vessels that are efficient on fuel, have lower emission levels and higher safety standards.

Given these factors, we believe that we are fundamentally well-positioned to seize opportunities when the market picks up. In line with industry expectations for rates to pick up in 2012, we expect new order momentum to accelerate towards the second half of 2011.

acknowledgementsFinally, I would like to thank our partners, business associates, professional service providers and shareholders for their resounding support during our listing. I would also like to extend my gratitude to all our employees for their outstanding dedication to their craft and their invaluable contribution to the Company.

Thank you.

roy reiteChief Executive Officer and Executive Director

mr. Jong Chul Lee is the vice chairman and chief executive officer of STX Corporation and the vice chairman and chief executive officer of STX Pan Ocean Co. Ltd. Mr. Lee has extensive experience in the shipbuilding industry, having held various positions within the STX Group since 1979. He served as a manager in the business department and subsequently in the London office of STX Pan Ocean from 1979 to 1995. Thereafter, he was managing director of its tramper division and planning division. Mr. Lee was the president and chief executive officer of STX Pan Ocean from 2004 to 2008, before joining STX Corporation in 2008.

Mr. Lee also serves as vice chairman of the Korea Shipowners’ Association and director of the Korean Register of Shipping. In 2008, Mr. Lee was awarded the Silver Tower Order of Industrial

Service Merit from the Government of the Republic of Korea as recognition for his contributions to the Korean industry.

Mr. Lee holds a Bachelor of Law degree from Korea University.

mr. Byung ryoon Woo is the chief financial officer of STX Europe AS. Mr. Woo has held various positions within the STX Group, serving as chief financial officer in STX Pan Ocean Co. Ltd. from 2004 to 2009, and chief financial officer in STX Energy Co. Ltd. from 2002 to 2004. Prior to joining the STX Group, he worked as general manager of Ssangyong Corporation. He currently serves on the board of STX OSV AS as non-executive director.

Mr. Woo holds a Bachelor of Administration from Korea National Open University and a Master of

International Finance from Hankuk University of Foreign Studies.

mr. Sung hyon Sok is the chief executive officer of SummerStone LSL Pte. Ltd., and executive director of AON 21 Singapore Pte. Ltd. and has more than 20 years’ experience in brokering and corporate finance. Mr. Sok started his career in Goodmorning Shinhan Securities Co. Ltd. (formerly known as Ssangyong Securities Co., Ltd.), where he served in Seoul, Hong Kong and Singapore between 1987 and 1998. Thereafter, he served as vice president of ICAP (Singapore) Pte. Ltd. from 1998 before joining REFCO (Singapore) Pte. Ltd. in 2005 as vice president. Prior to joining SummerStone LSL Pte. Ltd. in 2009, Mr. Sok was the president of World Hawk Eyes Advisor Pte. Ltd. from 2005 to 2007 and senior vice president of AM Fraser Securities Pte. Ltd. from 2007 to 2009.

18

B O a r d O f d I r e C T O r S

mr. Jong Chul LeeNon-Executive Director and Chairman of the Board

mr. Byung ryoon WooNon-Executive Director

mr. Sung hyon SokIndependent Director


Mr. Sok holds a Master of Science in Finance degree from the University of Lancaster, United Kingdom, and a Master of Business Administration degree awarded by the University of Hull, United Kingdom

mr. Keen Whye Lee is the managing director of Strategic Alliance Capital Pte. Ltd., a venture capital and investment management advisory company. Prior to joining Strategic Alliance Capital Pte. Ltd. in 1997, Mr. Lee was the managing director of Rothschild Venture Asia Pte. Ltd. from 1990 to 1997, associate director of Kay Hian James Capel Pte. Ltd. from 1987 to 1990, a freelance investment consultant from 1985 to 1987, an investmentmanager of Government of <Singapore Investment Corporation Private Limited from 1981 to 1985, a general manager of United Engineers Group from 1980 to 1981,

and a general manager of Hewlett Packard Singapore Pte. Ltd. from 1978 to 1979.

Mr. Lee is a director of various companies, including public companies listed on the SGX-ST such as AFOR Limited, Oniontech Limited and Santak Holdings Limited.

Mr. Lee holds a Master in Business Administration degree from the Harvard Graduate School of Business Administration.

mr. ho nam Yi is a managing director of STX Corporation. Prior to joining STX Shipbuilding Co. Ltd. in 2009 as a managing director and STX Corporation in 2010, Mr. Yi was with GS Global Corporation (formerly known as Ssangyong Corporation) from 1988 to 2009. Mr. Yi holds a Bachelor of Arts degree from Seoul National University.

mr. roy reite is the chief executive officer of STX OSV and has served as the president of the Company since 2001. Prior to that, he served as yard director at STX OSV Søviknes, from 1999 to 2001, and in various positions as project manager, production manager and technical manager from 1990 to 1995. Mr. Reite has also served as a business consultant at Intentia International AS from 1995 to 1999. He is presently a non-executive director of Sparebanken Møre, a Norway-based regional bank.

Mr. Reite holds a Master of Science degree from the Norwegian University of Science and Technology.


mr. Keen Whye LeeIndependent Director

mr. ho nam YiNon-Executive Director

mr. roy reite Chief Executive Officer and Executive Director

mr. roy reite is the chief executive officer of STX OSV and has served as the president of the Company since 2001. Prior to that, he served as yard director at STX OSV Søviknes from 1999 to 2001, and in various positions as project manager, production manager and technical manager from 1990 to 1995. Mr. Reite has also served as a business consultant at Intentia International AS from 1995 to 1999. He is presently a non-executive director of Sparebanken Møre, a Norway-based regional bank.

Mr. Reite holds a Master of Science degree from the Norwegian University of Science and Technology.

mr. Jan Ivar nielsen is the chief financial officer, serving as the head of the finance department at STX OSV. Mr. Nielsen joined the Company in 2007 as vice president of finance for the Group’s operations in Brazil.

Previously, Mr. Nielsen was head of investor relations for Aker AmericanShipping ASA from 2005 to 2007. He served as chief financial officer ofKværner Philadelphia Shipyard Inc. from 2002 to 2005, and had earlier beenbased in London as chief financial officer for Kværner Shipbuilding PLC. He also spent one and a half years in Finland for STX Finland. Mr. Nielsen was chief financial officer of Kværner Mandal AS from 1997 to 1998 and held various finance positions in the process industry from 1990 to 1997.

Mr. Nielsen holds a Master of Science in Business degree from Bodø Graduate School of Business and an Executive MBA degree from Temple University in the United States.

mr. magne håberg is the head of marketing and sales in STX OSV. Mr. Håberg joined STX OSV as a project manager at STX OSV Langsten in 2001, and became senior vice president with responsibility for sales and market in STX OSV in 2004. Between 1995 and 2001, Mr Håberg held several positions as senior project engineer at Aker Maritime, where he was responsible for different projects within the offshore oil and gas industry. Prior to that, Mr. Håberg served in various engineering roles in the offshore oil and gas business in Smedvik Drilling AS from 1990 to 1994, and with Wilh. Wilhelmsen from 1982 to 1989.

Mr. Håberg holds a diploma in Engineering from the Ålesund Maritime College.


e X e C u T I V e m a n a g e m e n T

mr. roy reite Chief Executive Officer and Executive Director

mr. Jan Ivar nielsenExecutive Vice President and Chief Financial Officer

mr. magne håbergExecutive Vice President Sales and Marketing


mr. Stig Bjørkedal is the head of the business development and strategy department at STX OSV, having joined the Company in 2006. Prior to that, he was the vice president of deck machinery at Rolls Royce Marine AS in Brattvaag, Norway, from 2001 to 2006. Mr. Bjørkedal has extensive projectmanagement experience, having served in this position in various shippingcompanies from 1993 to 2000, including at STX OSV Piping, Skipsteknisk AS and Ulstein Brattvaag AS.

Mr. Bjørkedal holds a Bachelor’s degree in Naval Architecture from University of Møre og Romsdal in Ålesund, Norway, and a Master of Management degree from BI Executive School in Oslo, Norway.

mr. Knut Ola Tverdal is the head of the strategy implementation department at STX OSV. Mr. Tverdal is also the yard director at the STX OSV Aukra yard in Norway and oversees operations in the Vung Tau yard in Vietnam as well as the yard in Niterói, Brazil. He joined STX OSV in 2000 and has extensive experience in the shipbuilding industry, having served as the vice president of production at Kværner Philadelphia Shipyard from 2003 to 2005, as well as a project manager from 2002 to 2003 and production manager from 2000 to 2002 at STX OSV.

Mr. Tverdal holds a Master of Science degree from the Norwegian Universityof Science and Technology in Trondheim.

mr. magne O. Bakke is head of the shipyard operations at STX OSV, overseeing the Norway and Romania operations. Previously, he was the director at the STX OSV Søviknes yard from 2005 to 2009. Between 2001 and 2005, Mr. Bakke served as vice president of business management at Aker Kværner Engineering & Technology AS, and as contracts manager of Aker Energy AS. From 1996 to 2001, Mr. Bakke held different managerial positions overseeing finance, projects and procurement at Maritime Hydraulics AS and Advanced Production System DA. Prior to that, Mr. Bakke worked as a contract engineer in Aker Verdal AS from 1984 before taking on various positions in procurement and purchasing at Aker Engineering AS.

Mr. Bakke holds a Bachelor of Science in Civil Engineering degree from Møre og Romsdal State College of Engineering in Ålesund, Norway, and a Bachelor of Science in Marine Technology degree from the Aust-Agder State College of Engineering in Norway.

mr. Stig BjørkedalExecutive Vice PresidentBusiness Development and Strategy

mr. Knut Ola TverdalExecutive Vice PresidentStrategy Implementation

mr. magne O. BakkeExecutive Vice President and Chief Operating Officer


S h a r e h O L d I n g a n d g r O u P S T r u C T u r e

STX Europe Holding AS

STX Europe AS

STX Norway AS

STX Corporation Co., Ltd.

STX Engine Co., Ltd.STX Offshore & Shipbuilding Co., Ltd.

Free float

33.6%33.7%

66.7% 33.3%

69.02% 30.98%

STX OSV Holdings Limited (Singapore)

100%

STX OSV Brevik Holding AS (Norway)

STX OSV Niterói SA

(Brazil)

Estaleiro Promar SA

(Brazil)

STX OSV Design AS (Norway)

STX OSV Electro AS (Norway)

STX OSV Piping AS (Norway)

STX OSV Accommodation

AS (Norway)

STX OSV Braila SA (Romania)

STX OSV Tulcea SA (Romania)

STX OSV Vung Tau Ltd.

(Vietnam)

100%100%100%100%100%100%50.5%51%1)100%5.88%

94.12% 95.43% 100%

STX OSV Singapore Pte Ltd.

(Singapore)

STX OSV RO Holding SRL (Romania)

1) 100% of voting rights.

Shareholding structure as of 15 March 2011.

STX OSV AS (Norway)

100%

100%

1,557employees

4,923 employees

1,479 employees

1 employee

664 employees

6 employees


IndiaWe have established an electrical installation and engineering subsidiary in Cochin, to support our clients in India as well as other Asian customers.

The company provides an important foothold for STX OSV in the region, providing supervision and services related to electrical engineering, installation, power and automation.

Additional operations: STX OSV Electrical

Installation & Engineering

SingaporeOur Singapore companies include the group holding company, listed on the Singapore Exchange, as well as a sales office to support the Asian market.

Registered office: STX OSV Holdings

Sales office: STX OSV Singapore

romaniaOur Romanian yards specialize in hull manufacturing, but also selectively deliver fully outfitted vessels.

The split of activities between the yards in Romania and Norway is made primarily to realize the full benefit of cost efficiency for man-hour intensive activities in Romania.

Shipyards: STX OSV Tulcea STX OSV Braila

Additional operations: STX OSV Electro Tulcea STX OSV Electro Braila STX OSV Piping

BrazilSTX OSV has operated in Brazil since 2001, and was one of the first OSV builders to enter the market. Our consistent track record has allowed us to capture a strong market share in Brazil.

We have decided to invest in the developement of a second shipyard in Brazil to capture opportunities from the strong demand for locally-built vessels.

Shipyard: STX OSV Niterói

Additional operations: STX OSV Electro Niterói

norwayOur operational headquarters, design center and our five Norwegian outfitting yards are located in Norway.

The western coast of Norway is the base of several world-class companies in the offshore marine design, equipment manufacturing, shipbuilding and oil services industries.

Head office: STX OSV

Shipyards: STX OSV Aukra STX OSV Brattvaag STX OSV Brevik STX OSV Langsten STX OSV Søviknes

Additional operations: STX OSV Electro STX OSV Design STX OSV Accommodation STX OSV Piping STX OSV Trading STX OSV Brevik Holding

VietnamThe Vietnam yard, located in Vung Tau, launched manufacturing operations in 2008. In 2010 the yard officially opened and delivered its first two vessels.

Through our yard in Vietnam we have a competitivepresence in the regional market while benefiting from a favour-able manufacturing cost level.

Shipyard: STX OSV Vung Tau

100%

We design and build technologically advanced Anchor Handling Tug Supply (AHTS) vessels that are capable of operations in the harshest environments. AHTS vessels mainly perform anchor handling duties and towage of offshore drilling units and floating production units. As AHTS vessels generally have free deck area, and some of them have tanks under deck, they can also supply cargo and bulk. Due to their large and heavy duty deck area, the AHTS vessels can be used to transport large chains, anchors and other equipment. Some AHTS vessels are equipped with additional equipment such launch- and recovery systems for Remote Operated Vehicles (ROV), and cranes for light construction work. Additionally, if equipped for, AHTS vessels can also do firefighting, rescue operations and oil recovery.


C O r e P r O d u C T S a n d S e r V I C e S

Improved stability Normand Prosper, delivered in

2010, was the first AHTS vessel with a 24-meter-wide extreme beam, providing significantly improved stability in anchor handling operations in harsh seawater conditions.

World records In 2010 we delivered some of the

most powerful AHTS vessels in the world measured by bollard pull – the pulling force of the vessel; Normand Prosper, Skandi Vega, Skandi Skolten, Skandi Herkules and Rem Gambler ranged from 330 to 360 metric tons of bollard pull.

number one market share We have the number one market

share for new build orders of AHTS vessels greater than 20,000 BHP with a 36.4% share of the world wide order book as of 31.12.2010 (Source: RS Platou).

Anchor Handling Tug Supply vessels (AHTS)


We design and build a complete range of Platform Supply Vessels (PSV). PSVs are commonly referred to as the trucks of the sea, as they are designed to transport cargo to and from offshore oil rigs and platforms. PSVs are generally able to perform a variety of tasks to support offshore operations; our PSVs are designed with focus on cargo-carrying capacity and excellent maneuvering capabilities combined with low fuel consumption. The design allows for flexible configuration with respect to liquid and bulk cargo. Equally important to loading capacity and maneuverability is crew comfort, low noise levels and enhanced safety. Our designers have optimized the PSV Clean Design-hulls to a maximum cargo capacity/deadweight ratio.

Platform Supply Vessels (PSV)

green vessels In 2010 we introduced a new

generation of LNG-powered PSVs with

improved environmental performance.

The LNG-powered PSVs have enhanced

hull design for better fuel efficiency

and the cargo/deadweight ratio was

optimized by locating the LNG-tank

outside the cargo area.

number one market share We have the number one

marketshare for both newbuild orders

and design of PSVs above 4,500 DWT

with a 24.7% share of orders and

a 31.8% design market share as of

31.12.2010 (Source: RS Platou).


We design and build highly advanced Offshore Subsea Construction Vessels (OSCV) for the oil and gas industry. These highly complex vessels perform subsea operations and maintenance work, and include pipelaying vessels, subsea construction vessels, saturation diving support vessels, ROV support vessels, well intervention vessels, as well as ice-classed offshore vessels designed to operate in arctic areas.


Ship of the Year Skandi Aker, a deepwater

well intervention vessel designed for operations previously performed by offshore drilling units, was awarded “Ship of the Year 2010” by Skipsrevyen shipping magazine. The vessel can perform riser-based well interventions at subsea wells in water depths up to 3000 meters.

high-tech from Brazil In August, Skandi Vitória became

the first vessel of its kind and complexity to be delivered from a yard in Brazil. With the STX OSV design OSCV 06, Skandi Vitória is equipped for pipe-laying, subsea construction, installation and maintenance work. The vessel is well equipped with a vertical and horizontal pipelay system, a carousel for 2,000 tons of product, a second carousel for 750 tons of product, two work class ROVs, and a 250 tons active heave-compensated crane.


Offshore Subsea Construction Vessels (OSCV)


We also design and build naval and coast guard vessels, seismic vessels, fishing vessels like sterntrawlers and longliners, icebreakers, as well as conventional and LNG-powered car and passenger ferries.

Seismic research vessels We have extensive experience and

an established track record of building

eight of the most advanced high capacity

seismic research vessels ever built, as

well as conversion of vessels for seismic

operations. In 2010, we developed and

launched our own designs for this type

of vessels, and our range of designs

are capable of multi-streamer towing

as well as ocean bottom seismic and

source operations.

Powerful icebreaking tugs In 2010 we delivered two, in a

series of five, icebreaking tugs for

operations in the Caspian Sea.

The vessels were wholly built and

delivered from our yard in Braila,

Romania. With bollard pull exceeding

50 tons, these ships are amongst the

most powerful tugs for operations in

the Caspian Sea.

Oil recovery step change We launched and applied for

patent on a new design for a Large

Extent Oil Recovery (LEOR) vessel

in 2010. Based on our experience

from several vessels delivered with

Oil Recovery Operation (ORO)

classification and on board processing,

we have developed the LEOR vessel for

worldwide operations in harsh weather

conditions. The vessel has an extreme

capacity compared to existing oil

recovery systems, and is also

designed for stand-by-, towing- and

rescue operations.

Other specialized vessels

Our in-house design company, STX OSV Design, develops designs for both standardized and highly advanced vessels with significant customer-specified adaptations.

Close cooperation with ship owners is a key factor in the process of designing specialized vessels. Experience and know-how are transferred and incorporated into the designs in close cooperation with the yards, ship owners, operators, and equipment suppliers.

STX OSV Design creates vessels with a great variety of purposes. Our designers optimize the vessel’s characteristics for the work assignments to be performed in the offshore industry, in relation to sea conditions, and as a workplace and residence. The designs are developed with high focus on safety, cost optimization, fuel economy and environmental considerations.

STX OSV Design focuses on innovation as a dynamic process, and is constantly in search for new and improved solutions. Developing state-of-the-art designs, which provide ever higher performance and more value for our customers, is always our main priority. STX OSV Design offers innovative solutions for the offshore industry, creating business opportunities for our customers.



Ship design

STX OSV Electro is a fully integrated part of STX OSV and a world-class supplier of complete electrical systems for ships, including diesel-electric propulsion, switchboards, automation systems, and electrical installation. The company offers its customers a complete electrical systems package – from engineering through installation, integration, testing, commissioning and field services.

We combine innovative concepts and cutting-edge technologies in our designs, and we install performance-enhancing, environmentally responsible and cost-effective solutions. For example, we have developed our own Integrated Automation System (IAS) and Power Management System (PMS). The IAS allows real-time central monitoring and analysis of all of the essential functions of the vessel, and is also accessible remotely via satellite at the fleet management headquarters. The PMS, which may be integrated into the IAS or offered on a stand-alone basis, allows central control of the ship’s generators, main switchboard, and propulsion and other major electric power-consuming equipment. Both systems contribute to more efficient use of power on board the vessel, thereby improving its environmental performance.

We also manufacture and supply electric frequency-driven winches and winch control systems. Service personnel are available around the clock, worldwide, for assignments at shipyards and on board vessels en route.


Electrical engineering, power and automation


STX OSV Trading was established in 2007 to offer STX OSV vessel designs to third-party shipyards. In order to uphold the high standard of STX OSV designed vessels, designs are only being offered as a trading package including basic design, as well as major equipment like main engines, switchboards, propulsion systems, deck machinery and other key components. Third-party yards are carefully selected to ensure high quality implementation of our designs.

Trading packages are an assembled product consisting of different components and services. These components and services are purchased from external and internal suppliers, and are key elements for the construction of offshore and specialized vessels, including design, electro, piping, and management services. STX OSV Trading is the commercial contact point towards the customer, and coordinates all activities and deliveries from sub-suppliers and STX OSV business units.

Additionally, STX OSV Trading provides full equipment packages for our yards in Brazil and Vietnam. By building on our experience from our own yards, we have demonstrated ability to provide these services to other shipyards.


Trading – design and equipment packages

Rudders

Bridge consoles

Mooring equipment

Deck/provision cranes

Main switchboards

Side thrusters

Engine control room consoles

Power generation

Propulsion lines

Anchor handling winches

Rope reels

Tugger winches

Cargorail cranes

Towing pins and shark jaws

Stern roller

Bulk handling systemsPropeller nozzles

Yard No. 713 far ShOgun Farstad Shipping UT 731 STX OSV Langsten

Yard No. 714 far SaraCen Farstad Shipping UT 731 STX OSV Langsten


Yard No. 724 nOrmand PrOSPer Solstad Offshore AH 12 STX OSV Brattvaag

Yard No. 706 SKandI Vega DOF AH 04 STX OSV Aukra

Yard No. 1 SKandI emeraLd Aker DOF Deepwater AH 08 STX OSV Vung Tau

Yard No. 725 rem gamBLer Rem Offshore AH 12 STX OSV Brattvaag

Yard No. 707 SKandI SKOLTen DOF AH 04 STX OSV Aukra

Yard No. 2 SKandI PeregrInO Aker DOF Deepwater AH 08 STX OSV Vung Tau

Yard No. 25 SKandI IPanema DOF AH 05 STX OSV Niterói

V e S S e L S d e L I V e r e d I n 2 0 1 0

ah

TS

Yard No. 722 SKandI herCuLeS DOF AH 04 STX OSV Aukra

Yard No. 705 SKandI aKer DOF OSCV 06 L STX OSV Søviknes

Yard No. 67 TIdeWaTer enaBLer Tidewater PSV/ROV 06 STX OSV Brevik

Yard No. 68 e.r. geOrgIna Nordcapital UT 776 STX OSV Brevik

Yard No. 727 nOrTh PurPOSe Gulf Offshore PSV 09 STX OSV Søviknes

Yard No. 69 nOrmand BaLTIC Solstad Offshore PSV/ROV 06 STX OSV Brevik

Yard No. 718 aKer WaYfarer Aker Oilfield Services OSCV 06 STX OSV Søviknes

Yard No. 741 mangYSTau-2 JSC Circle Marine Invest Aker ARC 104 STX OSV Braila

Yard No. 23 SKandI VITOrIa DOF OSCV 06 STX OSV Niterói

Yard No. 740 mangYSTau-1 JSC Circle Marine Invest Aker ARC 104 STX OSV Braila

Yard No. 733 KL BreVIKfJOrd K Line Offshore PSV 06 STX OSV Brevik

Yard No. 728 enea Portosalvo PSV 09 STX OSV Søviknes

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VO

SC

VO

The

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SP

eCI

aLI

zed

Ve

SS

eLS


Commercial breakthrough of our own new hull designIn 2010, we contracted 18 vessels of our own design with the new innovative hull shape, optimized bow for all weather conditions, including large and small waves as well as calm water. While most new orders were of our well-known PSV 09 and PSV 06 designs, we also contracted orders for three state-of-the-art AHTS vessels with our new AH 11 design to be built in Brazil, and one OSCV to be built in Norway.

decision to invest in the construction of a second shipyard in BrazilReflecting the bullish market outlook for the E&P and oil services sectors in Brazil, we decided to invest in the development of a new yard in Brazil. A Letter of Intent was signed with our partners in Brazil on 1 March 2010, giving STX OSV majority control of the project. Upon finalization of planning and permitting work, ground-breaking for the new yard is expected to commence in mid 2011, and construction start of the first vessels is expected in 2012. The new yard will be located in the Suape Industrial area in the state of Pernambuco, and will triple STX OSV’s total delivery capacity in Brazil.


S I g n I f I C a n T e V e n T S

J A N U A R Y F E B R U A R Y M A R C H A P R I L M A Y J U N E

Official opening of our shipyard in Vung Tau, VietnamIn April 2010, our new shipyard in Vung Tau, Vietnam, was formally opened. Research for establishment in Asia was completed at the end of 2005, shareholders’ agreement with partners, licenses and internal approvals in 2006, and yard construction started in 2007. The yard delivered its first vessel in May and the second in November 2010. The yard had 664 employees at year end, and an order book consisting of six vessels.

developed the Large extent Oil recovery (LeOr) vesselBased on our experience from several vessels delivered with Oil Recovery Operation (ORO)classification and on board processing, we developed a Large Extent Oil Recovery vessel for worldwide operations in harsh weather conditions. The vessel has extreme capacity compared to existing oil recovery systems, and is also designed for standby-, towing- and rescue operations.

all-time best hSe figures STX OSV has had a strong focus on Health, Safety and Environment (HSE) for several years and seen a continuous improvement on key HSE performance indicators. For 2010 we reached our all-time best results of 3.2 for the Lost Time Injury (LTI) frequency and 3.1% sick leave, an improvement from 3.9 and 3.8% respectively in 2009.

Listing on main Board of Singapore exchangeOn 12 November 2010, we success-fully concluded our initial public offering with the listing on the Main Board of the Singapore Exchange. STX OSV Holdings is the first Norwegian-headquartered company with a primary listing on the SGX Main Board, and the IPO was the largest foreign IPO in Singapore in 2010. The listing marks a new phase in the development of the Company, giving it a broader base and an even more international profile, enabling future growth.

“Ship of the Year” awardDuring the last 10 years our yards have received six “Ship of the Year” awards. However, one of the most gratifying to date was the 2010 award, the first awarded to a ship designed by STX OSV Design. The ship is known as Skandi Aker and was delivered as an advanced deepwater well intervention vessel to DOF. The vessel is operated by Aker Solutions.

Skandi Vitória – most advanced OSCV delivered in BrazilIn August, Skandi Vitória became the first vessel of its kind and complexity to be delivered from a yard in Brazil. With the STX OSV design OSCV 06, Skandi Vitória is equipped for pipe-laying, subsea construction, installation and maintenance work. The vessel is well equipped with a vertical and horizontal pipelay system, a carousel for 2,000 tons of product, a second carousel for 750 tons of product, two work class ROVs, and a 250-ton active heave compensated crane.


A U G U S T S E P T E M B E R O C T O B E R N O V E M B E R D E C E M B E RJ U LY

Bollard pull world record for anchor handling Tug Supply vesselsIn 2010 we delivered several record- breaking AHTS vessels. Our vessels set new standards both with respect to vessel width and stability, and also bollard pull (vessel strength). The maximum recorded pull was 391 tons on the last AH 12 completed in 2010, and we understand this was at the time the most powerful AHTS vessel ever built.

Strong full-year resultsWhile our revenues of approx. NOK 12 billion remained stable in FY2010 compared to the previous year, EBITDA more than doubled in the same period, from NOK 648 million to NOK 1,330 million, and a high rate of on-time deliveries, EBITDA margin increased to a healthy 11.2% in FY2010, reflecting stable operations.

300

600

900

1,200

1,500

0

-300

2%

4%

6%

8%

10%

0%

-2%

12%1,800

2007

1.3%121

2008

-1.8%-201

2009

5.4%648

2010

11.2%1,330

EBITDA (NOK million) EBITDA margin (%)

4

6

8

10

2

2007 2008 2009 2010

Lost Time Injury (LTI) frequency

0


a W a r d S


The new deepwater well intervention vessel, Skandi Aker, delivered from STX OSV Søviknes in January 2010, was recognized with the coveted international “Ship of the Year 2010” award.

“In its decision, the jury emphasizes the vessel’s ability to combine qualities which partly substitute ordinary oil rigs as well as its ability to perform well intervention on depths which so far have been inaccessible. This makes the vessel unique. The arguments summed up in the designation “Subsea Service Vessel” is fully approved by the jury. The vessel represents a quantum leap within its niche, and is a worthy winner of the Ship of the Year 2010 award.”

Excerpt from the justification given by the Skipsrevyen jury.


f I n a n C I a L h I g h L I g h T S

STX OSV reported operating revenues of NOK 11,881 million for the 2010 fiscal year, in line with 2009.

Our 2010 operating profit for the year was NOK 1,206 million, an increase of 130% from NOK 525 million in 2009. Our operating margin, representing operating profit to total operating revenues, increased to 10.2% from 4.4% in 2009.

Due to revaluation of derivatives, financial income increased in 2010 compared to 2009. This is mainly due to a reversal of the loss taken in 2009 related to the embedded derivatives and hedges revaluation.

Profit before tax increased from NOK 160 million in 2009 to NOK 1,534 million in 2010, reflecting a profit before tax margin of 12.9%.

With an effective tax rate of 30.5% in 2010, STX OSV achieved a net profit margin (after tax) of 9.0% in 2010, up from 0.8% for the 2009 financial year.

Our EBITDA margin for the full year 2010 was 11.2%, up from 5.4% in 2009. This was due to good project execution in general, as well as released risk contingencies to profit for vessels delivered or near completion.

The positive margin development can be attributed to strong operational performance, resulting from stronger integration and good collaboration between design, engineering and construction in the Romania-Norway value chain. Training programs have contributed to the further development of the organization in Vietnam, while the Brazil yard has successfully completed several of its technologically most complex projects to date. Reflecting solid project execution, the Group enjoyed a high rate of on-time deliveries and was able to deliver several projects ahead of contractual delivery date. The Group also benefited from a positive trend in key Health, Safety, and Environment (HSE) indicators, reflecting decreasing levels of injuries and sick-leave absence.

Statement of income

2007

9,431

2008

11,370

2009

11,895

2010

11,881

2,000

4,000

6,000

8,000

10,000

12,000

14,000

0

revenue (nOK million)

300

600

900

1,200

1,500

0

-300

2%

4%

6%

8%

10%

0%

-2%

12%1,800

2007

1.3%121

2008

-1.8%-201

2009

5.4%648

2010

11.2%1,330

EBITDA (NOK million) EBITDA margin (%)

eBITda and eBITda margin


Total assets were reduced by 15.4% from NOK 14.5 billion per year end 2009 to NOK 12.3 billion per year end 2010. This was primarily due to delivery of several high value projects and is reflected in a reduction of NOK 3.2 billion in projects under construction and a corresponding reduction of NOK 1.8 billion in construction loans and NOK 1.6 billion reductions in construction work in progress. The remaining impact is primarily due to the offset of all intercompany balances, receivables and debts.

Total interest-bearing liabilities, excluding construction loans, amounted to NOK 310 million (of which current portion equals NOK 44 million) as at the 31 December 2010, down from NOK 406 million at the end of 2009.

Cash and cash equivalents increased from NOK 1,393 million as of 31 December 2009 to NOK 2,851 million as of 31 December 2010. As per 31 December 2010, the cash balance included approximately NOK 700 million in advance payment of loans in Brazil and approximately NOK 600 million in public offering proceeds. Of the total cash and bank deposits as of 31 December 2010, NOK 300 million is fully restricted escrow accounts, used as security for customer advance payment guarantees and restricted bank account for employees’ tax deduction.

Cash flows from operating activities were at a healthy NOK 968 million for the full year 2010. Cash and cash equivalents increased more than twofold to NOK 2,851 million for 2010.

Cash flows used in investing activities were at NOK -148 million, mainly due to purchase of assets, acquisition of non-controlling interest in Singapore and equity participation in certain projects.

Cash flows from financing activities amounted to NOK 474 million for the full year 2010. This is mainly attributable to proceeds from issuance of new shares during the initial public offering.

Balance sheet Cash flows

500

1,000

1,500

2,000

2,500

3,000

02007 2008 2009 2010

Restricted cash Non-restricted cash

1,259

809

1,393

2,851

Cash and cash equivalents (nOK million)

500

1,000

1,500

2,000

2,500

3,000

02010200920082007

2,541

987

74

603

net cash1) (nOK million)

1) Cash and cash equivalents less sum of short-term and long-term interest bearing liabilities, excluding construction financing.


amounts in nOK million 2010 2009 20081) 20071)

revenue 11,881 11,895 11,370 9,431

Materials, subcontract costs and others (8,318) (9,116) (9,562) (7,408)

Salaries and related costs (1,722) (1,723) (1,600) (1,445)

Other operating expenses (511) (407) (409) (457)

eBITda 1,330 648 (201) 121

Depreciation, impairment and amortization (124) (123) (122) (106)

Operating profit 1,206 525 (323) 15

Financial income 393 100 363 168

Financial costs (73) (472) (177) (179)

Share of results of associates 8 7 - -

Profit before tax 1,534 160 (137) 4

Income tax expense (468) (66) (20) 22

Profit for the year 1,066 94 (157) 26

f I n a n C I a L h I g h L I g h T S

Summary statement of income


Cash flows from operating activites 968 272 485 115

Cash flows used in investing activities (148) (199) (161) (199)

Cash flows from financing activities 474 538 (408) (225)

net change in cash and cash equivalents 1,294 611 (84) (309)

Cash and cash equivalents at the beginning

of financial year 1,267 751 746 1,061

Effects of currency translation differences (10) (95) 89 (6)

Cash and cash equivalents excluding restricted cash

at the end of financial year 2,551 1,267 751 746

Restricted cash at the end of financial year 300 126 58 513

Cash and cash equivalents at the end of

financial year 2,851 1,393 809 1,259

Summary statement of cash flows

Year ended 31 December 2010

Year ended 31 December 2010



assets

Property, plant and equipment 1,012 1,065 1,122 954

Intangible assets 348 350 354 347

Interest-bearing receivables 1 136 35 368

Other non-current assets 307 219 131 87

Total non-current assets 1,668 1,770 1,642 1,756

Inventories 310 333 547 411

Construction work in progress 5,608 8,779 7,430 3,424

Trade and other receivables 1,816 1,999 3,352 1,671

Interest-bearing receivables - 211 851 169

Cash and cash equivalents 2,851 1,393 809 1,260

Total current assets 10,585 12,715 12,989 6,934

Total assets 12,253 14,485 14,631 8,690

equity and liabilities

Total equity 2,418 1,034 832 749

Loans and borrowings 4,442 6,173 6,026 3,345

Trade and other payables and

construction work in progress 4,324 6,013 6,443 3,319

Other current liabilities 471 227 239 189

Total current liabilities 9,237 12,413 12,708 6,853

Interest-bearing long-term liabilities 266 335 493 549

Other non-current liabilities 332 703 598 539

Total non-current liabilities 598 1,038 1,091 1,088

Total liabilities 9,835 13,451 13,799 7,941

Total equity and liabilities 12,253 14,485 14,631 8,690

Summary balance sheet

As at 31 December 2010

1) Comparable figures for the financial years ended 2007 and 2008 are presented according to IFRS as reported in the prospectus dated 4 November 2010. Financial figures for 2009 and 2010 are presented according to SFRS. Minor reclassifications have been made to ensure proper comparison.


STX OSV’s strategic objective is to be the global leader in the design and construction of advanced offshore and specialized vessels for the oil and gas exploration and production and oil service industries. We plan to achieve our objective by pursuing the following strategies:

Pursuing research and development excellence To stay at the forefront of the industry, we will continue to invest in research and development to create new designs and technologies, and build more efficient and environmentally-friendly vessels. We are constantly developing and introducing vessels equipped with cutting-edge innovation and technology, greater capacity, stability and new functions. We also regularly monitor and assess key drivers in the market that demand new technological solutions, with a focus on improving fuel efficiency and reducing energy consumption.

Expanding yard facilities and capacities To meet the market demand for larger multi-functional vessels, we plan to expand our facilities to increase capacity and accommodate larger construction projects. As a measure to increase our overall OSV construction capacity, we have plans to gradually develop our Romanian shipbuilding facilities into shipyards capable of completing a larger portion of the entire vessel construction, rather than being limited to hull production. To leverage on our early-mover advantage in the Brazilian market and the local regulations that impose certain local content requirements in the oil and gas sector, we intend to increase our capacity through the construction of a new shipyard. Furthermore, we also plan to consider strategic acquisitions and partnerships to expand our production capacity and design and engineering capabilities.

Building and maintaining strong customer relationsWe will keep our relations with our key customers a top priority, focusing on joint development of new projects and innovations that will meet their specific demands and requirements, with dedicated attention from the most senior management level to all members of our sales team. We will seek constant feedback from existing and potential customers on the current market trends, potential opportunities and possible production of vessels and prototypes.

Enhancing global capabilities and integrationTo further strengthen the development of our global management capabilities, we will reinforce integration of our nine shipbuilding facilities worldwide to maintain build quality and improve overall productivity and efficiency.

Augmenting product and service offeringsWe will also seek to diversify our revenue source by offering a variety of products produced in our value chain that will extend our global footprint and penetrate markets where the majority of vessels are locally built. We will also look into expanding our customer base by offering and actively marketing products to third-party shipyards.

B u S I n e S S S T r a T e g Y


Reflecting the bullish market outlook for the E&P and oil services sectors in Brazil, STX OSV decided to invest in the development of a second shipyard in Brazil. Upon finalization of planning and permitting work, ground-breaking for the new yard is expected to commence in mid-2011, and construction start of the first vessels is expected in 2012. The new yard will be located in the Suape Industrial area in the state of Pernambuco, and will triple STX OSV’s total delivery capacity in Brazil.

(Illustration of preliminary layout of the new shipyard)


We currently operate nine shipbuilding facilities worldwide: five in Norway, two in Romania, one in Brazil and one in Vietnam. Our global delivery capacity is approximately 23 to 25 vessels per year, based on the mix of vessel types and sizes in the current order book.

In March 2010, we decided to invest in the construction of a new shipyard in Brazil, which upon completion is expected to increase global capacity by 6-7 vessels annually, or approximately 25%. Following finalization of planning and permitting work, we expect to break ground for the new yard in mid-2011, with vessel construction scheduled to start in 2012.

In December 2010, we acquired full control of the Vietnam yard from our previous joint venture partners.

In the construction of our vessels, we follow one of two different value chains: we either produce vessel hulls in Romania and have the finished hulls towed to Norway for final outfitting, or we produce complete vessels in one location as we do in Brazil and Vietnam. Certain vessel types can also be fully outfitted in Romania.

Our subsidiaries such as STX OSV Design, STX OSV Electro, STX OSV Piping and STX OSV Accommodation play a key role as internal suppliers in our overall value chain, reflecting our position as a vertically integrated group of companies. In addition to producing complete vessels, we develop electrical solutions for ships, such as automation and power management systems, and we sell our designs to, and assemble equipment packages for, selected third-party shipyards.

At the end of 2010, our order book comprised 49 vessels for delivery between 1 January 2011 and 31 December 2013, 37 of which were designed by STX OSV Design. The order book amounted to NOK 17,031 million, compared with NOK 16,411 million at the end of 2009. The order intake for the year was for 27 vessels and a total of NOK 12,555 million, significantly higher than the 8 vessels and NOK 4,458 million order intake in 2009. Order book and order intake values include the contract value of variation orders received, and the sale of design and equipment packages to third parties.

In addition, we signed contracts for eight LPG carriers, with an aggregate contract value in excess of NOK 3 billion. These vessels will be built at the new shipyard in Brazil, with expected delivery between 2013 and 2015. The contracts will be included in the order book upon becoming effective following delivery of certain contractual documents.

During 2010, we delivered 21 vessels globally. While the geographical split in the order book between Norway/Romania, Brazil, and Vietnam has remained fairly constant, the mix in terms of vessel types has changed during the course of the year. We delivered 10 AHTS vessels and 6 PSVs, but took in new orders for 3 AHTS vessels and 17 PSVs, reflecting the strong demand for PSVs during the year in review.

The Group’s yard in Brazil enjoys the strongest order book, with 9 vessels utilizing the yard’s capacity until end of 2013, while certain other yards still can accommodate new orders for delivery from 2012 onwards.

O P e r a T I O n a L r e V I e W

44

STX OSV international value chains

OutfittingFabricationDetailedEngineering

BasicDesign

Concept Development & Sales

ContractClass Approval

Procurement Commissioning

Delivery

Design Hull production Outfitting

Hull production and outfittingDesign

Production capacity Order book development

OutfittingFabricationDetailedEngineering

BasicDesign

Concept Development & Sales

ContractClass Approval

Procurement Commissioning

Delivery

Design Hull production Outfitting

Hull production and outfittingDesign


Order intake (nOK million)

2007

15,46128 vessels

2008

5,6924 vessels

2009

4,4588 vessels

2010

12,55527 vessels

5,000

10,000

15,000

20,000

25,000

0

Order book (nOK million)

5,000

10,000

15,000

20,000

25,000

30,000

35,000

02007

27,363

2008

22,389

2009

16,411

2010

17,031

Order book delivery schedules as of 31 december 2010 (number of vessels)

0 10 20

2014-16

2013

2012

2011

2010

30

8 orders for LPG carriers to be constructed at new yard in Brazil – not yet effective

8

6

18

25

21 Delivered

Order book development

Order book deliveries Order intake Order book

By region 31 dec. 2009 2010 2010 31 dec. 2010

Norway/Romania 29 17 22 34

Brazil 8 2 3 9

Vietnam 6 2 2 6

Total 43 21 27 49

Order book deliveries Order intake Order book

By vessel type 31 dec. 2009 2010 2010 31 dec. 2010

AHTS 19 10 3 12

PSV 15 6 17 26

OSCV 6 3 1 4

Other 3 2 6 7

Total 43 21 27 49

O P e r a T I O n a L r e V I e W

During 2010, STX OSV enjoyed very stable operations. This was mainly a result of stronger integration and good collaboration between design, engineering and construction in the Romania-Norway value chain. Initiatives to realize synergies by harmonizing work processes and tools for planning and design have borne fruit. Lean planning processes were introduced, and the follow-up throughout the complete value chain from engineering, procurement, fabrication, to outfitting and completion was strengthened. We are seeing the effect of efficiency improvements, measured in terms of key performance indicators, cost, and lead time reductions. We also benefited from good quality and timely deliveries from our key suppliers.

The use of dedicated companies for electrical and piping work in Romania was increased. Labour intensive activities previously done at our yards in Norway were transferred to our yards in Romania. More equipment, cables and piping are being installed in the hulls during the hull fabrication phase in Romania (prior to towing the hulls to Norway). The work force for interior outfitting of vessels in Norway was reorganized, and the specialized company STX OSV Accommodation was established to bundle these resources.

Training programs have contributed to the further development of the organization in Vietnam, which has been phased into full operations with the delivery of the first two vessels from this new yard. In Brazil, the yard has successfully completed several of its technologically most complex projects to date.

Reflecting solid project execution, we enjoyed a high rate of on-time deliveries. More than 95% of vessels delivered did not incur delay penalties, and several vessel projects were completed ahead of contractual delivery date.

Our shipbuilding projects are generally carried out on a fixed price per contract basis and according to a pre-determined timetable, pursuant to the terms of a delivery contract, except for a small number of contracts with price adjustment provisions in case of steel price increases. The pricing of fixed price contracts is crucial to our profitability, as is our ability to quantify risks and to provide for contingencies in the contract accordingly. For example, if additional expenses, other than those specifically requested and agreed to by the customer, arise, such expenses are usually borne by us.

In order to mitigate the risk of cost overruns, we typically negotiate the costs of major equipment and supplies at the time that the shipbuilding order is placed and reflect all related costs in the vessel contract price. Steel accounts for a relatively small portion of our purchases compared to commercial shipbuilders, due to the focus of our business on advanced vessels with high-end equipment and systems. With respect to labor cost, which is a major cost component that is subject to the risk of cost overruns and is not hedged, we use our best estimates of inflation and expected cost increases to determine the vessel contract price.

We have also implemented a tender review process to ensure quality control of third party design specifications and calculations, as well as integration between the yards by conducting joint evaluation of suppliers on a regular basis, improving communication through frequent meetings and deploying experienced senior project managers to oversee the process across different yards.


Operational performance Risk management

STX OSV maintains a zero-tolerance policy towards lapses in the Company’s HSE efforts. All accidents can and must be avoided, whether personal injury, damage to property, or harm to the environment. We continuously work to improve performance in HSE-related matters. Specific focus areas for 2010 included focus on risk behaviour, focus on sick-leave and injuries, and waste handling. We have implemented a Behaviour-Based Safety program (BBS) which will raise awareness about risk factors and safe behaviour among the workforce.

Health and safety

By reporting and handling safety observations at an early stage, STX OSV is able to be proactive regarding HSE. Tracking and management of safety-related data in our HSE systems have significantly improved in recent years. Getting safety observations reported, and executing immediate preventive actions, are some of our important tools to eliminate risks and prevent accidents. As the number of safety observations handled has increased, the number of accidents and injuries has dropped.

The number of safety observations reported and handled in 2009 was 4,270, and for 2010 it was 6,344. Simultaneously, the number of accidents1) has dropped from 572 in 2009 to 505 in 2010. The same trend applies for the number of Lost Time Injuries (LTI)2), from 93 LTIs in 2009 giving the LTI frequency3) of 3.9, down to 65 LTIs in 2010, resulting in an LTI frequency of 3.2.

The sick-leave statistics have improved as well, from an average sick leave in 2009 of 3.8% down to 3.1% in 2010. Continuous focus on handling sick-leave individually at an early stage benefits each employee as well as the Company as a whole. Such efforts will continue in 2011.

Despite the overall positive trend, one fatal accident occurred at our shipyards in 2010. The accident happened at the Tulcea yard during subcontracted maintenance of the assembly/cutting hall outside ordinary working hours. A worker employed with the subcontractor company fell from a high level. The accident has been thoroughly investigated, both internally and by the Romanian authorities, and measures have been taken to improve enforcement of safety procedures when hiring maintenance contractors, to prevent similar tragic events from happening in the future.


4

5

3

2007 2008 2009 2010

1

2

0

Sick-leave (%)

h e a L T h , S a f e T Y a n d e n V I r O n m e n T ( h S e )

4

6

8

10

2

2007 2008 2009 2010

Lost Time Injury (LTI) frequency

0

LTI frequency (number of Lost Time Injuries per million hours work)

1) Total recordable injuries plus environmental impacts plus start of fires2) Injuries resulting in absence from work beyond the day of the accident3) Number of lost time injuries per million worked hours


Environment

We take our environmental responsibilities seriously, and it is our policy that environmental considerations should be an integral part of our day-to-day activities. Waste management, noise abatement, minimal emissions, and the construction of environmentally-friendly vessels are among the areas we focus on. We promote an open dialogue on environmental issues with employees, public authorities, the local communities where we operate, and other interested parties. Our operations aim to inflict a minimal amount of stress on the environment.

Our shipyards collect and sort their waste to ensure that it is handled, disposed of, and, where possible, recycled in an environmentally appropriate way. Hazardous waste and other sorted waste, is collected by approved waste management companies. We keep track of environmental performance by means of an Environmental Performance System (EPS), in which the shipyards record their consumption of chemicals, disposal of waste, and other metrics. Various types of metal, including steel and aluminum, account for the bulk of the waste that is sent for recycling. Other recycled waste fractions include electro waste, wood, paint residues, oil-based waste, plastic, paper and cardboard. Our objective is to send as much sorted waste as possible for recycling, in order to minimize the amount of unsorted waste delivered to landfills and incineration plants.

STX OSV is in close dialogue with public authorities on issues concerning the environment. As part of a nation-wide governmental initiative to map pollution at Norwegian industrial sites and in coastal waters, in 2008 and 2009 we concluded extensive environmental surveys at our Norwegian yards. We have recently received notifications from the local environmental authorities that orders may be issued in 2011 requesting the Company to propose action plans for clean-up measures for historical contaminations on land. Similar orders may be issued at a later stage in relation to pollution on the sea-bed. The Company has been advised that such orders do not imply that we have violated Norwegian environmental laws as the contamination in question was lawful at the time of emission. There are currently no proceedings alleging non-compliance pending or, to our knowledge, threatened against us or any of our Directors, officers or employees in relation to such environmental laws or regulations.

h e a L T h , S a f e T Y a n d e n V I r O n m e n T ( h S e )

C O r P O r a T e S O C I a L r e S P O n S I B I L I T Y ( C S r )

Global objectives

STX OSV’s central CSR objective is to provide our products and services in a socially, environmentally, and ethical responsible way.

We provide important employment opportunities and economic stability for many citizens. With almost 9,000 employees globally, representing many nationalities, cultures and backgrounds, our focus is to help each individual employee realize their potential and safeguard their health and safety. Our efforts are guided by a commitment to protecting the human rights of our employees and other stakeholders.

Besides the immediate focus on our employees and on HSE issues, we believe in playing our part in the communities we operate in. Our efforts to translate corporate social responsibility objectives into practical actions mainly focus on training and cooperation with educational institutions, but also include contributions to emergency relief, sponsorship of cultural events, and other local initiatives.

Local initiatives

In Norway, we cooperate with local schools, and have, together with local educational institutions, developed courses within international business and technical subjects. At university level, we have developed a graduate program in cooperation with a college in Ålesund, where STX OSV maintains its operational headquarters. In September 2010, we announced that we will co-sponsor a professorship focusing on environmentally responsible business practices and technologies.

In Romania, we maintain an annual sponsorship with a high school in Braila, providing scholarships for students from disadvantaged backgrounds. Another program provides scholarships for students of the Shipbuilding University in Galatz. In 2010, we also sponsored a local emergency hospital in Tulcea, and cultural events including theater performances in Braila.

In Brazil, we are sponsoring a school in Niterói, where our yard is located, and we take part in a program to sponsor students with education tailor-made for future work in the shipyard, or in one of the other companies in the region that participates in the program.

In Vietnam, we participate in activities in support of the elderly in need, and for a children’s orphanage. In response to the devastating floods that ravaged the country in the fall of 2010, we donated funds that would normally have been spent on the delivery ceremony for the second vessel from the new yard, for the relief mission to central Vietnam.


O u T L O O K

The offshore shipbuilding industry has experienced rapid expansion over the last decade, with new orders peaking in 2006 and 2007. In the wake of the global financial crisis and the collapse of oil prices the following year, new order activity stalled as markets struggled to absorb many deliveries from the order boom of the pre-crisis years. During 2010, fleet growth flattened, and rising oil prices have contributed to revived order activity especially in the second half of the year.

While shipyards in Asia have steadily increased their market shares for many types of vessels, shipbuilders in Norway have continued to lead the way in OSV design and innovation, driven by a deep understanding of demanding customers’ requirements, technological advances, a challenging operational environment, and an ever-tightening regulatory framework.

The industry’s increasing focus on environmental performance, such as fuel efficiency and lower emissions, as well as increased safety standards and new rules and regulations, help drive demand for sophisticated innovative designs that are STX OSV’s area of expertise. We have introduced to the market LNG-powered PSVs with enhanced hull design for optimal fuel efficiency and improved cargo-to-dead-

weight ratio. All our new ship designs are environmentally-friendly with a low resistance hull shape, designed for high speed and low fuel consumption.

The shift towards deeper water exploration and operations in harsh environments will continue to drive order momentum for advanced vessels. According to RS Platou, larger modern OSVs are increasingly in demand as distances from shore to deepwater fields in Brazil are often quite far and the installations and offshore rigs to be serviced are often larger than in shallow water

(Source: “The Platou Report 2011”). In 2010, we delivered Skandi Skolten, which at the time of delivery was said to be the world’s most powerful AHTS vessel, ideally suited to conduct deepwater construction operations.

Our strong presence in Brazil, fostered by our early entry into the local OSV market in 2001 and backed by our track record of technological expertise, offers exciting growth prospects for us. With Brazil currently being one of the most attractive growth markets in the global E&P and oil services industries, and strong demand for locally-built vessels in that market, STX OSV decided in 2010 to invest in the construction of a second shipyard in Brazil. Following finalization of planning and permitting work, we expect to break ground for the new


yard in mid-2011, with vessel construction scheduled to start in 2012. The new yard will enable the Company to grow its global delivery capacity by approximately 25% within three years.

In 2010, we successfully delivered the first two anchor handlers from our newest shipbuilding facility in Vietnam, and in December, we acquired full control of the yard from our previous joint-venture partners. The new yard does not only benefit us in terms of lower manufacturing cost, but also provides us with a footprint in the Asia Pacific region upon which we can further develop potential customers in the region and globally.

The pick-up in oil and gas activity following the downturn in 2009 provided the backdrop for STX OSV recording a significant increase in new orders in 2010. The improvement in order intake for the last half of 2010 should not yet be seen as a sign of a healthier market in general, as the current market situation is still considered difficult within the OSV segment. Although demand rose substantially, the market had to absorb many new deliveries, resulting in low utilization and depressed day rates, and generally slow pick-up in new vessel orders from ship owners. In addition, the short-to medium-term outlook is still characterized by economic instability and uncertainty.

The slow-down in fleet growth however, combined with a brighter outlook for demand as oil prices once again have passed 100 USD per barrel, is raising expectations for utilization and day rates for PSVs and AHTS vessels through 2011 and moving into 2012. Global E&P spending is expected to increase more than 10% year-on-year by many estimates, and may reach new record levels in 2011. Deepwater spending is projected to increase even more markedly, and according to RS Platou, the order intake of subsea companies has already improved significantly during the latter part of 2010, indicating that demand for OSCVs is also likely to improve through 2011 and accelerate in 2012-13.

Fundamentally, we believe that STX OSV is well positioned to reinforce our market position by capturing opportunities from the key industry trends detailed above, and from our investments in new yard capacity. STX OSV is recognized in the market as an innovative, competent and reliable partner, and we are optimistic that the Company will be able to benefit from this market position to obtain new orders.


STX OSV recognizes that precise, timely and open communication goes a long way in building various stakeholders’ trust in our Company, and we have structured our investor relations program based on that principle.

We have a dedicated investor relations function in Norway, where we are headquartered, supported by a team of investor relations advisors in Singapore, where we are listed on the Main Board of the Singapore Exchange. Above and beyond fulfilling the minimum requirements of disclosure, we aim to explain our business and results as articulately as possible through the channels detailed below, as long as it does not compromise our competitiveness in the field.

Announcement of financial results

We publish timely announcements of our quarterly financial results on SGX-ST’s online portal (SGXNET), and distribute all related documents to the media and investment community. In addition, all information disseminated is mirrored on our corporate website (www.stxosv.com) in an easily downloadable format.

Where feasible, our management strives to organize physical briefing meetings in Singapore when our quarterly and full-year results are announced. Being in Singapore allows us to meet with analysts, fund managers, equity sales representatives, shareholders and others who are interested in obtaining a first-hand update of our business. We organize group or one-on-one meetings and conference calls with interested parties following our results announcements.

Corporate information

Our annual report, which is distributed in April, aims to comprehensively present stakeholders with updates on our business performance, as well as corporate developments in the past financial year.

News releases and announcements of significant events and developments, including all new vessel contracts, are posted on SGXNET, as well as distributed to the investment community and media via email. Such announcements are also immediately uploaded onto our corporate website for easy access by both shareholders and the general public. Interested parties can sign up for automatic email alerts of new announcements through the website.

Our corporate website features comprehensive information on our products and services, yard facilities, and many other aspects of our business, including an up-to-date list of vessels recently delivered from our yards. It also includes an “Investor Centre” section (www.stxosv.com/investor) which contains real-time stock information and fundamentals, financial results and presentations, and investor relations contact details.

Conferences, briefings and road shows

STX OSV regularly engages local and international institutional investors, analysts and the media through face-to-face meetings, conference calls, results briefings and the Annual General Meeting. Senior management is particularly involved in interacting with existing and potential investors and research analysts via direct meetings at road shows and conferences. While investor relations activities have focused on Singapore and other Asian markets immediately following the listing, road shows have been conducted, or are being prepared for, in Europe and the US as well. Video conferences and teleconferences are frequently used in order to update existing and potential investors globally on key developments, or to address any questions.

I n V e S T O r r e L a T I O n S


C O r P O r a T e I n f O r m a T I O n

Board of directorsJong Chul Lee, Chairman and Non-Executive DirectorRoy Reite, Executive Director & Chief Executive OfficerSung Hyon Sok, Independent DirectorKeen Whye Lee, Independent DirectorHo Nam Yi, Non-Executive DirectorByung Ryoon Woo, Non-Executive Director (Appointed on 21 December 2010)

audit CommitteeKeen Whye Lee, ChairmanSung Hyon SokByung Ryoon Woo (Appointed on 21 December 2010)

nominating CommitteeSung Hyon Sok, ChairmanKeen Whye Lee Jong Chul Lee

remuneration CommitteeSung Hyon Sok, ChairmanKeen Whye LeeHo Nam Yi (Appointed on 21 December 2010)

SecretaryElizabeth Krishnan

registered office50 Raffles Place #32-01 Singapore Land TowerSingapore 048623Telephone: +65 6536 5355Fax: +65 6536 1360

head officeP.O. Box 76, NO-6001 Ålesund, NorwayTelephone: + 47 70 21 06 00Fax: +47 23 50 23 [email protected]

Visiting address:Molovegen 6, NO-6004 Ålesund, Norway

Share registrar/Share Transfer agentBoardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land TowerSingapore 048623Telephone: +65 6536 5355Fax: +65 6536 1360

auditorsKPMG LLP16 Raffles Quay #22-00Hong Leong BuildingSingapore 048581

audit Partner-in-Charge Jeremy Hoon (Appointed in 2010)

Investor relations advisorsKreab Gavin Anderson 24 Raffles Place#21-05 Clifford CentreSingapore 048621Telephone: +65 6339 9110Fax: +65 6339 9578

Sponsors Goldman Sachs (Singapore) Pte. (“Goldman Sachs”) was the sole global coordinator, bookrunner and issue manager for the initial public offering. Goldman Sachs and Nordea Bank Finland Plc, Singapore Branch, were the joint lead managers and underwriters. The Royal Bank of Scotland N.V., Singapore Branch, was the co-lead manager and underwriter and DBS Bank Ltd. was the Singapore public offer coordinator and subunderwriter.

The initial public offering of the Company was sponsored by Goldman Sachs, who assumes no responsibility for the contents of this Annual Report.


The directors and management of STX OSV Holdings Limited (the “Company”) are committed to high standards of corporate governance and have adopted the principles set out in the Code of Corporate Governance (the “Code”) which forms part of the Continuing Obligations of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Where there are deviations from the Code, appropriate explanations are provided.

The Board’s conduct of affairsPrinciple 1 The principal functions of the Board are:1) providing entrepreneurial leadership and approving board policies, corporate strategies, key operational initiatives, financial objectives of the Group and monitoring the performance of management;2) overseeing the processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance;3) ensuring the Group’s compliance with laws, regulations, policies, directives, guidelines and internal code of conduct;4) approving the nomination of directors and appointment of key personnel;5) approving annual budgets, major funding, investments, divestment proposals and monitoring operations; 6) approving the remuneration packages for the Board and key executives;7) ensuring accurate, adequate and timely reporting to, and communication with shareholders; and8) assuming the role for the satisfactory fulfilment of social responsibilities of the Group.

The Board has adopted a charter setting out rules and procedures for its self-governance. Certain functions have been delegated by the Board to three main sub-committees (Audit, Nominating and Remuneration Committees), which operate under clearly defined terms of reference. The Chairman of the respective committees reports the outcome of committee meetings to the Board. The background of each director is set out on pages 18 to 19.

Matters that are specifically reserved for the full Board to decide are those involving a conflict of interest for a substantial shareholder or a director, material acquisitions and disposal of assets, corporate or financial restructuring and share issuances, dividends and other returns to shareholders and matters that require Board approval.

The Board conducts scheduled meetings on a quarterly basis. Ad-hoc meetings are held where necessary, to address significant issues. Where expedient, board meetings are held by way of teleconference, which is permitted by the Articles of Association of the Company. The attendance of the directors at meetings of the Board and Board Committees for FY2010 (up to 31 December 2010) is as follows:

C O r P O r a T e g O V e r n a n C e r e P O r T


audit remuneration nominating Committee (“aC”) Committee (“rC”) Committee (“nC”) no. of atten- no. of atten- no. of atten- no. of atten- meetings dance meetings dance meetings dance meetings dance

Jong Chul Lee 2 2 N/A N/A N/A N/A 1 1

Roy Reite 2 2 N/A N/A N/A N/A N/A N/A

Ho Nam Yi 2 2 1 1 N/A N/A N/A N/A

Woung Hyung Rhee1) 2 1 N/A N/A 1 1 N/A N/A

Sung Hyon Sok 2 2 1 1 1 1 1 1

Keen Whye Lee 2 2 1 1 1 1 1 1

Byung Ryoon Woo2) N/A N/A N/A N/A N/A N/A N/A N/A

N/A: Not Applicable1) Woung Hyung Rhee ceased as director on 21 December 2010.2) Byung Ryoon Woo was appointed to the Board on 21 December 2010.

name of directors Board


Upon joining the Board, all directors are provided with an orientation to familiarize them with the Group’s business, operations and the relevant regulations and governance requirements.

The Company adopts a policy whereby directors are encouraged to request further explanation, briefings or informal discussion on any aspect of the Group’s operations or business issues from management. The directors are also briefed on new updates in the requirements of the SGX-ST, Companies Act or other regulations/statutory requirements from time to time. The directors have open invitations to visit and have visited some of the Group’s operating facilities to enable them to obtain a better perspective of the business and to enhance their understanding of the Group’s operations.

Board composition and guidancePrinciple 2The current Board comprises six directors, five of whom are non-executive directors. In compliance with the requirements of the Code, two of the six directors are independent. Mr. Roy Reite, the Chief Executive Officer, is the only executive director. The Board comprises directors with a broad range of commercial experience including expertise in shipbuilding industry. Together, they bring a wide range of expertise, technical skills and relevant experience to the Group. There is sufficient independent element on the Board. This is to ensure that there is effective representation for shareholders and issues of strategy, performance and resources are fully discussed and examined to take into account long-term interest of shareholders, employees, customers, suppliers and the industry in which the Group conducts its business.

Chairman and Chief executive OfficerPrinciple 3 The roles of the Chairman and Chief Executive Officer (“CEO”) are separate, and the positions are held by separate persons who are not related. There is a division of responsibility between the Chairman and the CEO. The Chairman leads the Board and bears responsibility for the workings of the Board of directors, the governance process of the Board of directors, scheduling Board meetings and setting the Board meeting agenda in consultation with the CEO. The Chairman reviews most board papers before they are presented to the Board of directors and ensures that Board members are provided with adequate and timely information.

The CEO is the most senior executive in the Group and is responsible for strategic goals and day-to-day management of the Group.

Board membershipPrinciple 4 The Nominating Committee (“NC”) comprises three directors, namely, Mr. Jong Chul Lee, Mr. Sung Hyon Sok and Mr. Keen Whye Lee. Mr. Sung Hyon Sok (Chairman of the NC) and Mr. Keen Whye Lee are independent directors.

The scope and responsibilities of the NC include:1) identifying, reviewing and recommending candidates for nomination for appointment and reappointment of Directors, senior executive staff and the members of the various committees;2) reviewing the Board structure, size and composition and making recommendations to the Board with regard to any adjustments that are deemed necessary;3) reviewing the strength and assessing the effectiveness of the Board as a whole;4) determining on an annual basis the independent status of directors;5) making recommendations to the Board for the continuation (or otherwise) in services of any director who has reached the age of seventy;


6) deciding whether or not a director is able to and has been adequately carrying out his duties as a director of the Company, particularly when he has multiple Board representations; and7) overseeing the management, development and succession planning of the Group.

The NC considered and recommended the appointment of Mr. Byung Ryoon Woo to the Board as a non-independent and non-executive director. The Board accepted the NC’s recommendation.

The NC assessed and recommended to the Board, the directors to be re-elected pursuant to Article 100 of the Company’s Articles of Association at the Annual General Meeting.

The NC determines the independence of directors annually in accordance with the guidelines set out in the Code and is of the opinion that the Board is able to exercise objective judgment on corporate affairs independently and that the Board’s decision-making process is not dominated by any individual or small group of individuals. The NC considers that the multiple Board representations held presently by the directors do not impede their performance in carrying out their duties to the Company.

Board performancePrinciple 5 Performance evaluation of the Board is aimed at giving directors an opportunity to gauge their effectiveness individually and collectively. It also helps to ensure continual improvement in the Board’s decision-making process as it provides a benchmark by which future performance can be measured. As the Board has only been constituted recently, the first evaluation will be conducted for the financial year 2011.

access to informationPrinciple 6Management will provide all directors with Board/Board committee reports prior to the respective meetings. As a general rule, papers on specific subjects are sent to the Board in advance and are issued, where possible, in a timely manner to enable the directors to obtain further explanations where necessary so that they are adequately informed prior to the meetings. Amongst others, the report provides information on the Company’s performance, financial position and prospects.

The Company Secretary attends all Board and Board committee meetings. The Company Secretary is responsible for ensuring that procedures are followed and that the Company has complied with the requirements of the Companies Act and all other rules and regulations that are applicable to the Company. Directors have independent access to the Company Secretary at all times.

Procedures for developing remuneration policies Level and mix of remunerationPrinciple 7 and 8The Remuneration Committee (“RC”) comprises three members, namely Mr. Sung Hyon Sok, Mr. Keen Whye Lee and Mr. Ho Nam Yi. Mr. Sung Hyon Sok (Chairman of the RC) and Mr. Keen Whye Lee are independent directors.

The RC’s responsibilities include:1) recommending a framework of executive remuneration for the Board and key executives; and2) reviewing and recommending to the Board the remuneration packages and terms of employment of the CEO and senior executives of the Group.

C O r P O r a T e g O V e r n a n C e r e P O r T


Fees* Salary Bonus Other Pension TotalRemuneration band & name of directors* (%) (%) (%) Benefits (%) Benefits (%) (%) S$750,000 to S$1,000,000 Roy Reite 66% 27% 4% 3% 100%

S$500,000 to S$749,999 NIL

S$250,000 to S$499,999 NIL Below S$250,000 Keen Whye Lee 100% 100%Sung Hyon Sok 100% 100%

*These fees are subject to approval by shareholders as a lump sum at the AGM.

The RC ensures that the remuneration package of employees related to executive directors and controlling shareholders of the Group are in line with the Group’s staff remuneration guidelines and commensurate with their respective job scope and level of responsibilities. The aim of the RC is to motivate and retain such executives and ensure that the Group is able to attract the best talent in the market in order to maximize shareholders’ value.

There is a formal and transparent procedure for fixing the remuneration packages of individual directors. No director is involved in deciding his own remuneration. In addition to the RC’s responsibilities as stated above, the RC is also responsible for reviewing and recommending to the Board, the remuneration packages for all directors, taking into account the current market circumstances and the need to attract directors of experience and good standing.

As part of its review, the RC will cover all aspects of remuneration including but not limited to directors’ fees, salaries, allowances, bonuses, shares and benefits-in-kind.

The RC and the Board are of the view that the remuneration of the directors is adequate but not excessive in order to attract, retain and motivate them to run the Company successfully.

Non-executive directors including the Chairman have no service contracts. The CEO’s contract, which commenced on 1 October 2010, has no fixed term. His service contract contains non-competition and non-solicitation clauses, which are binding on him for a period of 6 months and 12 months respectively after the cessation of his employment with the Company.

The CEO’s remuneration package includes pension contributions. It also includes a discretionary bonus to be determined by the RC and recommended to the Board.

Disclosure of remuneration paid to directors and key executivesPrinciple 9A breakdown showing the level and mix of each individual director’s remuneration payable for FY2010 is as follows:


The Group has one employee whose remuneration exceeded S$150,000 during the financial year ended 31 December 2010 and who is an immediate family member of Mr. Roy Reite, Director and Chief Executive Officer of the Company.

AccountabilityPrinciple 10The results and other relevant information on the Company, are disseminated via SGXNET and are also available on the Company’s website at www.stxosv.com

In presenting the periodic announcement of the results, the Board aims to provide shareholders with a balanced and comprehensible assessment of the Group’s performance, financial positions and prospects on a quarterly basis.

To enable the Board to fulfill its responsibilities, management reports are made available regularly to all the directors that include updates on the performance of the Company and all its subsidiaries. The management is accountable to the Board and the Board is accountable to shareholders.

Audit committeePrinciple 11The Audit Committee (“AC”) comprises three members, namely Mr. Keen Whye Lee, Mr. Sung Hyon Sok and Mr. Byung Ryoon Woo (appointed on 21 December 2010). Mr. Keen Whye Lee (Chairman of the AC) and Mr. Sung Hyon Sok are independent directors.

The principal responsibilities of the AC include:1) recommending to the Board of Directors the external auditors to be nominated, and approving the compensation of the external auditors. It also reviews the scope and results of the audit, its cost-effectiveness, and the

independence and objectivity of the external auditors;2) reviewing with management, the significant risks or exposures that exist and the steps management have taken to

manage such risks to the Company, and with the external auditors the audit plan and areas of audit focus;

C O R P O R A T e G O V e R n A n C e R e P O R T

The table below shows the range of gross remuneration of the top five executives (executives who are not directors):

Salary Bonus Other Pension TotalRemuneration band & name of executives (%) (%) Benefits (%) Benefits (%) (%) S$750,000 to S$1,000,000 NIL S$500,000 to S$749,999 NIL S$250,000 to S$499,999 Jan Ivar Nielsen 79% 19% 0% 2% 100%Magne Bakke 78% 19% 1% 2% 100%Magne Håberg 76% 22% 0% 2% 100%Stig Bjørkedal 77% 20% 1% 2% 100%Knut Ola Tverdal 77% 20% 1% 2% 100% Below S$250,000 NIL


3) reviewing with the Chief Financial Officer and external auditors at the completion of the full year financial results of the Group: a) any significant findings and recommendations of the external auditors together with management’s

responses thereto; b) the external auditors’ evaluation of the system of internal controls; c) the external auditors’ reports; d) the assistance given by management and the staff of the Company to the external auditors, including any concerns encountered during the course of audit; e) interested person transactions (“IPTs”) falling within the scope of Chapter 9 of the Listing Manual;4) reviewing quarterly and full year financial statements for submission to the Board for its approval; 5) considering legal and regulatory matters that may have a material impact on the financial statements, related exchange compliance policies and reports received from regulators.

Minutes of the AC meetings are submitted to the Board for its information and review. To create an environment for open discussion on audit matters, the AC meets with the external auditors, without the presence of management, at least once a year.

The AC had reviewed all non-audit services provided by KPMG LLP and is of the view that fees for non-audit services provided are immaterial and would not affect the independence of the external auditors.

Internal controls and internal audit Principle 12 and Principle 13 The Board believes in the importance of maintaining a sound system of internal controls to safeguard the interests of shareholders and the Company’s assets. The Board has approved a set of internal controls that set out approval limits for expenditure and transactions to be incurred in the ordinary course of business including hedge transactions.

In performing its functions, the AC:a) had full access to and assistance of the management and the discretion to invite any director and executive officer to attend its meetings;b) had been given reasonable resources to enable it to discharge its functions properly; andc) had the express powers to conduct or authorize investigation into any matters within its terms of reference.

Based on the management controls in place, the AC believes that there are adequate internal controls in the Company.

Whistle-blowing policyManagement has put in place a whistle-blowing policy, whereby employees may, in confidence, raise concerns about possible improprieties on matters of financial reporting or other matters. The objective for such arrangement is to ensure independent investigation of such matters and for appropriate follow-up action.

Communication with shareholders Greater shareholder participationPrinciple 14 and 15Major developments on the Company and its business operations are communicated to shareholders via SGXNET and are also available on the Company’s website at www.stxosv.com. The Company does not practise selective disclosure. Price-sensitive information is first publicly released before the Company meets with any group of investors or analysts.

Quarterly and annual results are released on SGXNET within the mandatory period.


All shareholders of the Company will receive the Annual Report of the Company and notice of AGM within the mandatory period. The notice of AGM is also advertised in a prominent newspaper. The Articles of the Company permit a shareholder to appoint one or two proxies to attend and vote in his stead. The Company has not amended its Articles to provide for absentee voting methods, which call for elaborate and costly implementation of a foolproof system, the need for which does not arise presently.

Each item of special business included in the notice of the general meetings is accompanied, where appropriate, by an explanation for the proposed resolution. Separate resolutions are proposed for each separate issue at the meeting.

The Chairmen of the Board committees are present and available to address questions relating to the work of their respective board committees at general meetings. Shareholders are given the opportunity to air their views and ask directors, management and external auditors questions regarding the Company.

Dealings in securitiesThe Company has adopted an internal Code of Best Practices on Securities Transactions (“Code”) to provide guidance to its officers with regard to dealings in the securities of the Company in compliance with principles of Rule 1207 (18) of the Listing Manual of the SGX-ST.

In general, officers are encouraged to hold shares in the Company but are prohibited from dealing in shares:

• intheperiodcommencingtwoweeksbeforetheannouncementofthequarterlyfinancialresultsoronemonth before the announcement of the financial statements of the financial year, as the case may be, and ending on the dates of the announcement of the relevant results.

• atanytimewhileinpossessionofprice-sensitiveinformation.

Directors and employees are expected not to deal in the Company’s securities on short-term considerations and to observe insider trading laws at all times. All senior managers of the Company are required to notify their dealings in STX shares within two market days of transaction.

Interested Person Transactions (“IPTs”)The Company has adopted an internal policy in respect of any transaction with interested person and has set out the procedures for review and approval of the Company’s IPTs.

The aggregate value of the transactions conducted during the financial year are as follows:



Aggregate value of all interested person transactions during the Aggregate value of all financial year under review interested person (excluding transactions transactions conducted less than S$100,000 and under shareholders’ transactions conducted mandate pursuant under shareholders’ to Rule 920 (excluding mandate pursuant to transactions less than Rule 920) S$100,000) nOK nOK

STX Corporation Group

Purchase of raw materials, shipbuilding parts and

ancillary equipment from STX Corporation Group

- Steel 16,731,817

- Generator sets 300,393,159

Purchase of ship design services from STX Canada Marine

and provision of manpower support by STX Canada Marine 420,559

Sale of vessels to STX Pan Ocean 1,029,000,000

Sub-total - 1,346,545,535

STX europe Group

Amounts outstanding under guarantees by STX Europe Group 5,386,451,211

Commission fees paid to STX Europe Group 27,862,681

Aggregate value of hedges guaranteed by STX Europe 618,000,000

Management fees for corporate services by STX Europe 33,367,000

Licensing of software licenses to STX Europe Group 3,405,150

Provision of switchboard services to STX Europe Group 100,000

Joint sourcing office in Shanghai 1,207,500

Management service agreement with STX Norway Florø AS 423,845

Sub-total 621,505,150 5,449,312,237

Total 621,505,150 6,795,857,772


Material contractsThere were no material contracts involving the interests of any director or controlling shareholder of the Company, not being contracts entered into in the ordinary course of business, entered into by the Company during the period under review, except as disclosed in the audited accounts.

Use of proceedsFrom the IPO on 4 November 2010, the Company raised total net proceeds of NOK 605 million from the issuance of 180,000,000 new ordinary shares of S$0.79 each. As of 31.12.2010, the total net proceeds of NOK 605 million (after deducting the offering expenses payable by us in relation to the offering) were utilized as follows:

Amount allocated Amount utilized BalanceUse of IPO Proceeds (nOK million) (nOK million) (nOK million)

Construction of a second shipyard in Brazil 84 84

Expansion of yard capabilities in Norway 19 19

Improvement of manufacturing capacity and equipment

at the Vung Tau (Vietnam) and Tulcea (Romania) yards 227 227

Expansion of power and automation capabilities at

STX OSV Electro AS, including potential acquisitions 65 65

Investment in emerging markets, including potential acquisitions 65 30 35

R&D, including potential acquisitions of design/

engineering companies 61 61

General corporate purposes and working capital 85 85

Total net proceeds 606 30 576



The Directors present this report to the members of the Company together with the audited financial statements for the financial year ended 31 December 2010. The consolidated financial statements have been presented on the basis described in note 1 to the audited financial statements.

The Company (Registration No. 201012504K) was incorporated on 11 June 2010 as STX OSV Holding Private Limited. On 24 June 2010, it changed its name to STX OSV Holdings Pte. Ltd. On 29 October 2010, the Company was converted into a public limited company and changed its name to STX OSV Holdings Limited. The Company was admitted to the official list of the Singapore Exchange Securities Trading Limited on 12 November 2010.

1. DirectorsThe directors in office at the date of this report are as follows: Mr. Jong Chul Lee, Chairman Appointed on 21 September 2010 Mr. Roy Reite, Chief Executive Officer and Executive Director Appointed on 4 August 2010 Mr. Ho Nam Yi, Non-Executive Director Appointed on 21 September 2010 Mr. Byung Ryoon Woo, Non-Executive Director Appointed on 21 December 2010 Mr. Keen Whye Lee, Independent Director Appointed on 13 October 2010 Mr. Sung Hyon Sok, Independent Director Appointed on 13 October 2010

2. Directors’ interests in shares and debenturesAccording to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the “Act”), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants and share options in the Company and in related corporations (other than wholly-owned subsidiaries) are as follows:

name of Directors and corporation Holdings at beginning of the Holdings atin which interests are held year / date of appointment end of the yearMr. Jong Chul Lee STX OSV Holdings Ltd– ordinary shares nil nil– interests held nil nil– deemed interests nil nilSTX Corporation Co., Ltd, Ultimate Holding Company– ordinary shares of KRW 2,500 each 2,166 2,166 STX Pan Ocean Co., Ltd, Related Corporation– ordinary shares of KRW 1,000 each 36,777 36,777

Mr. Byung Ryoon WooSTX OSV Holdings Ltd– ordinary shares nil nil– interests held nil nil– deemed interests nil nilSTX Pan Ocean Co., Ltd, Related Corporation– ordinary shares of KRW 1,000 each 11,302 11,302

S T A T U T O R y F I n A n C I A L R e P O R T SD I R e C T O R S ’ R e P O R T


S T A T U T O R y F I n A n C I A L R e P O R T SD I R e C T O R S ’ R e P O R T

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year.

There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 January 2011.

3. Arrangement to enable directors to acquire shares and debenturesNeither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

4. Directors’ contractual benefitsSince the date of incorporation of the Company, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in the accompanying financial statements or in this report.

5. Share optionsThere were no options granted during the financial year to subscribe for unissued shares of the Company or its subsidiaries. No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company or its subsidiaries. There were no unissued shares of the Company or its subsidiaries under options granted by the Company or its subsidiaries as at the end of the financial year.

6. Audit CommitteeThe members of the Audit Committee at the date of this report are:• Mr.KeenWhyeLee(Chairman),IndependentDirector• Mr.ByungRyoonWoo,Non-ExecutiveDirector*• Mr.SungHyonSok,IndependentDirector

*Mr.ByungRyoonWoowasappointedasamemberoftheAuditCommitteeinplaceofMr.HoNamYiwitheffectfrom21 December 2010.

The Audit Committee performs the functions specified in Section 201B of the Act, the SGX Listing Manual and the Code of Corporate Governance.

In performing its functions, the Audit Committee met with the Company’s auditors to discuss the scope of their work, the results of their examination and evaluation of the Company’s internal accounting control system.

The Audit Committee also reviewed the following:• assistanceprovidedbytheCompany’sofficerstotheexternalauditors;• quarterlyfinancialinformationandannualfinancialstatementsoftheGroupandtheCompanypriortotheir

submission to the directors of the Company for adoption; and• interestedpersontransactions(asdefinedinChapter9oftheSGXListingManual).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.


The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated as auditors at the forthcoming Annual General Meeting of the Company.

7. Independent AuditorsThe auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

____________________Mr. Jong Chul LeeChairman of the Board

____________________Mr. Roy ReiteChief Executive Officer and Executive Director

25 March 2011


S T A T U T O R y F I n A n C I A L R e P O R T SS T A T e M e n T B y D I R e C T O R S

In our opinion:

a) the financial statements set out on pages 70 to 127 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the results, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and

b) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has, on the date of this statement, authorized these financial statements for issue.

On behalf of the Board of Directors

____________________Mr. Jong Chul LeeChairman of the Board

____________________Mr. Roy ReiteChief Executive Officer and Executive Director 25 March 2011


S T A T U T O R y F I n A n C I A L R e P O R T SI n D e P e n D e n T A U D I T O R ’ S R e P O R T

To the Members of STX OSV Holdings Limited

Report on the financial statementsWe have audited the accompanying financial statements of STX OSV Holdings Limited (the Company) and its subsidiaries (the Group), which comprise the statement of financial position of the Group and the Company as at 31 December 2010, and the statements of comprehensive income, changes in equity and cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 70 to 127.

Management’s responsibility for the financial statementsManagement is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition; and transactions are properly authorized and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the results, changes in equity and cash flows of the Group for the year ended on that date.

Report on other legal and regulatory requirementsIn our opinion, the accounting and other records required by the Act to be kept by the Company and by the subsidiary incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

KPMG LLPPublic Accountants and Certified Public Accountants

Singapore, 25 March 2011


(All amounts in nOK millions unless otherwise stated)

S T A T U T O R y F I n A n C I A L R e P O R T SS T A T e M e n T O F F I n A n C I A L P O S I T I O n

Group Company note 2010 2009 2010Assetsnon-current assetsProperty, plant and equipment 4 1,012 1,065 - Intangible assets 5 348 350 - Investment in subsidiary 6 - - 2,123 Investment in associates 7 169 81 - Other investments 8 8 9 - Interest-bearing receivables 9 1 136 - Other receivables 10 27 25 - Deferred tax assets 11 100 96 - Employee benefits 12 3 8 - Total non-current assets 1,668 1,770 2,123 Current assetsInventories 13 310 333 - Construction work in progress 14 5,608 8,779 - Trade and other receivables 15 1,816 1,999 - Interest-bearing receivables 9 - 211 - Cash and cash equivalents 16 2,851 1,393 623 Total current assets 10,585 12,715 623 Total assets 12,253 14,485 2,746

equity and liabilitiesPaid up capital 17 4,138 343 4,138 Restructuring reserve 18 (3,190) - (1,411)Other reserves 18 (81) (56) - Retained earnings 18 1,511 728 1 Total equity attributable to equity holders of the Company 2,378 1,015 2,728 Non-controlling interest 18 40 19 - Total equity 2,418 1,034 2,728

non-current liabilitiesLoans and borrowings 19 266 335 - Deferred tax liabilities 11 230 119 - Employee benefits 12 28 34 - Other payables 20 - 547 - Provisions 21 74 3 - Total non-current liabilities 598 1,038 - Current liabilitiesLoans and borrowings 19 4,442 6,173 - Construction work in progress 14 1,115 2,870 - Trade and other payables 22 3,209 3,143 18 Income tax payable 357 50 - Provisions 21 93 29 - Other current liabilities 23 21 148 - Total current liabilities 9,237 12,413 18 Total liabilities 9,835 13,451 18 Total equity and liabilities 12,253 14,485 2,746

The accompanying notes form an integral part of these financial statements.



S T A T U T O R y F I n A n C I A L R e P O R T SS T A T e M e n T O F C O M P R e H e n S I V e I n C O M e

Group note 2010 2009 Revenue 24 11,881 11,895

Materials, subcontract costs and others (8,318) (9,116)Salaries and related costs 25 (1,722) (1,723)Depreciation, impairment and amortization 4,5 (124) (123)Other operating expenses 26 (511) (407)Operating profit 1,206 525

Financial income 27 393 100 Financial costs 27 (73) (472)net 320 (372)

Share of results of associates 7 8 7 Profit before tax 1,534 160

Income tax expense 28 (468) (66)Profit for the year 1,066 94

Other comprehensive income Exchange differences on translation of foreign operations (23) (61)Net fair value changes of available-for-sale financial assets (1) (1)Income tax on other comprehensive income 1 4 Share of other comprehensive income of associates - - Other comprehensive income/(expense) for the year, net of income tax (23) (58)Total comprehensive income/(expense) for the year 1,043 36

Profit/(loss) for the year attributable to:Equity holders of the Company 1,031 95 Non-controlling interest 35 (1)Profit for the year 1,066 94

Total comprehensive income/(expense) attributable to:Equity holders of the Company 1,006 41 Non-controlling interest 37 (6)Total comprehensive income/(expense) for the year 1,043 36

earnings per share (expressed in nOK) Attributable to Equity holders of the Company Basic 29 1.01 0.10Diluted 29 1.01 0.10




S T A T U T O R y F I n A n C I A L R e P O R T SS T A T e M e n T O F C H A n G e S I n e Q U I T y

Total equity attributable Restructu- to equity non- Paid up ring Translation Fair value Retained holders of controlling TotalGroup capital reserve reserve reserve earnings company Interest equity

At 1 January 2010 343 - (55) (1) 728 1,015 19 1,034

Comprehensive income

Profit for the year - - - - 1,031 1,031 35 1,066

Other comprehensive income:

Exchange differences on translation of foreign operations - - (25) - - (25) 2 (23)

Net fair value changes of available-for-sale financial assets - - - (1) - (1) - (1)

Income tax on other comprehensive income - - 1 - - 1 - 1

Total other comprehensive income - - (24) (1) - (25) 2 (23)

Total comprehensive income for the year - - (24) (1) 1,031 1,006 37 1,043

Transactions with owners

Reversal of group contribution from earlier years - - - - (240) (240) - (240)

Reclassification related to restructuring (343) 343 - - - - - -

Issue of shares for restructuring purposes 3,533 (3,533) - - - - - -

Issue of new shares during public offering 636 - - - - 636 - 636

Share issue expenses (31) - - - - (31) - (31)

Changes in non-controlling interest - - - - (8) (8) (16) (24)

Total transactions with owners 3,795 (3,190) - - (248) 357 (16) 341

At 31 December 2010 4,138 (3,190) (79) (2) 1,511 2,378 40 2,418




Total equity attributable Restructu- to equity non- Paid up ring Translation Fair value Retained holders of controlling TotalGroup capital reserve reserve reserve earnings company Interest equity

At 1 January 2009 153 - (2) - 652 803 29 832

Comprehensive income

Profit for the year - - - - 95 95 (1) 94

Other comprehensive income:

Exchange differences on translation of foreign operations - - (57) - - (57) (4) (61)

Net fair value changes of available-for-sale financial assets - - - (1) - (1) - (1)

Income tax on other comprehensive income - - 4 - - 4 - 4

Total other comprehensive income - - (53) (1) - (54) (4) (58)

Total comprehensive income for the year - - (53) (1) 95 41 (5) 36

Transactions with owners

Adjustment for employee defined benefit plans - - - - 2 2 - 2

Received group contribution - - - - 31 31 - 31

Given group contribution - - - - (22) (22) - (22)

Conversion of convertible debt 190 - - - - 190 (12) 178

Change in non-controlling interest - - - - (30) (30) 7 (22)

Total transactions with owners 190 - - - (19) 171 (5) 166

At 31 December 2009 343 - (55) (1) 728 1,015 19 1,034




S T A T U T O R y F I n A n C I A L R e P O R T SS T A T e M e n T O F C A S H F L O W S

Group note 2010 2009Operating activities

Profit before tax 1,534 160 Adjustments for:Net interest (11) 49 (Gain)/loss on disposal of property, plant and equipment, net - 121 Unrealized foreign exchange gain 25 217 Depreciation, impairment and amortization 124 123 Provisions 135 11 Share of results of associates (8) (7)Operating cash flows before movements in working capital 1,799 674 Inventories 22 205 Construction work in progress (288) 1,818 Trade and other receivables 220 (1,962)Trade and other payables 246 (445)Cash generated from operations 1,999 (290)Interest received 11 10 Interest paid (13) (25)Income tax paid (79) (3)Non-cash items related to restructuring of the Group prior to listing (950) - Cash flows from operating activities 968 272

Investing activitiesProceeds from disposal of property, plant and equipment 1 2 Proceeds from disposal of investments 9 6 Purchase of property, plant and equipment (81) (176)Purchase of intangible assets (2) (3)Issuance of new non-current interest bearing receivables - (31)Proceeds from repayment of non-current interest bearing receivables 7 1 Acquisition of shares in associates (83) - Changes in other investments 1 2 Cash flows used in investing activities (148) (199)

Financing activitiesProceeds from loans and borrowings 17 51 Repayment of loans and borrowings (113) (238)Proceeds from issue of shares 605 - Proceeds from repayment of short-term interest-bearing receivables - 640 Proceeds from group contribution (net) - 100 Purchase of non-controlling interest in subsidiary (30) (22)Change in other financial liabilities (5) 6 Cash flows from financing activities 474 538

Net increase/(decrease) in cash and cash equivalents 1,294 611 Effects of currency translation difference on cash and cash equivalents (10) (95)Cash and cash equivalents at beginning of financial year 1,267 751 Cash and cash equivalents excluding restricted cash at end of financial year 2,551 1,267 Restricted cash at end of financial year 300 126 Cash and cash equivalents at end of financial year 16 2,851 1,393



S T A T U T O R y F I n A n C I A L R e P O R T Sn O T e S

These notes form an integral part of and should be read in conjunction with the accompanying consolidated financial statements. All amounts in these notes are in NOK millions unless otherwise stated.

1. Corporate information

(a) General informationThe Company (Registration No. 201012504K) was incorporated on 11 June 2010 as STX OSV Holding Private Limited. On 24 June 2010, it changed its name to STX OSV Holdings Pte. Ltd. On 29 October 2010, the Company was converted into a public limited company and changed its name to STX OSV Holdings Limited. The Company was admitted to the official list of the Singapore Exchange Securities Trading Limited on 12 November 2010.

The Company is domiciled in the Republic of Singapore and the address of its registered office is at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623.

The principal activities of the Company during the financial period are mainly that of an investment holding company. The Company also provides support services to its subsidiaries, including the provision of performance and repayment guarantees on the construction contracts. The Company became the immediate holding company of STX OSV AS (formerly known as STX Norway Offshore AS) and its subsidiaries following the restructuring exercise described below. The principal activities of its subsidiaries are described in Note 35 to the financial statements.

These are the first financial statements prepared by the Company for presentation to its shareholders.

(b) Restructuring exerciseThe Group is one of the major global manufacturers of offshore support vessels used in the offshore oil and gas exploration and production and oil services industries. The Group’s core business is design and construction of complex and highly customized offshore support vessels, including Platform Supply Vessels (PSV), Anchor Handling Tug Supply (AHTS) vessels and advanced Offshore Subsea Construction Vessels (OSCV). The business comprises nine yards in four countries: Aukra, Brattvaag, Søviknes, Langsten and Brevik in Norway, Niterói in Brazil, Tulcea and Braila in Romania and Vung Tau in Vietnam. A new yard in Suape in Brazil is under construction.

STX OSV AS and its subsidiaries were previously wholly owned by STX Europe Holding AS, and as part of the restructuring exercise undertaken to form the Group, the ownership was transferred to STX OSV Holdings Limited on 25 October 2010.

Pursuant to the restructuring exercise to form the Group (Note 6(a)), the consolidated financial statements of the Group for the financial year ended 31 December 2009 and 2010 were prepared using the “pooling-of-interest” method. The historical combined financial statements of STX OSV AS group acquired by the Company pursuant to the restructuring exercise on 25 October 2010 are presented as the Group’s consolidated financial statements for 2009 and are included for the current period from 1 January 2010 to 25 October 2010. Such manner of presentation reflects the economic substance of the combining entities as a single economic enterprise, although the legal parent-subsidiary relationship was not established until 25 October 2010. Accordingly, the Group’s consolidated financial statements for the financial years ended 31 December 2009 and 2010 have accounted for the business combination as if the acquisition of the combined group by the Company had occurred prior to 1 January 2009.



2. Basis of preparation

(a) Statement of complianceThe financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS).

(b) Basis of measurementThe financial statements have been prepared on the historical cost basis except as disclosed in the notes to these financial statements.

(c) Functional and presentation currencyThe Company’s functional currency is the Norwegian Kroner (NOK). The financial statements of the Group and the statement of financial position of the Company are presented in Norwegian Kroner (NOK) and all amounts have been rounded to the nearest million, unless otherwise stated.

(d) Use of estimates and judgementsThe preparation of financial statements in conformity with FRSs requires the management to make estimates, judgements and assumptions that affect the application of the accounting policies and reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Estimates are based on management’s best knowledge of current events and actions, experiences and other factors that are reasonable under the circumstances. Actual results may ultimately differ from these estimates.

Estimates and underlying assumptions are evaluated on an ongoing basis. Revision to accounting estimates are accounted for in the period in which the estimates are revised and any future periods affected.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

Revenue recognitionThe Group uses the percentage-of-completion (POC) method to account for construction work in progress. The use of this method requires the Group to estimate the stage of completion of contract activity and also estimate the outcome of a contract at each reporting date. Revenue recognition depends on variables such as development in steel prices, cost of other factor inputs, extent of calculated contingencies, developments in projects and shipyard capacity.

The scope of variation orders and acceptance of claims by customers may affect revenue estimates. Uncertainties about revenue estimates will also be affected by the Group’s previous experience from similar construction projects. Generally, there are greater uncertainties related to revenue estimates of new constructions, new designs and new yards. Events, changes in assumptions and management’s judgement will affect recognition of revenue in the current period.

Estimated impairment of goodwillIn accordance with FRS, goodwill is tested annually for impairment or more frequently when there is an indication of a possible impairment. The recoverable amount of a cash generating unit is estimated each year at the same time. The recoverable amount of a cash generating unit is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows of the cash generating unit are discounted to their present value. The calculations require the use of estimates and assumptions relating to cash flows and discount rates.

Generally there will be uncertainties related to cash flow estimates. The degree of uncertainty will depend on certainty of the order backlog and market development, uncertainties in prices related to different factor inputs and to what extent the prices are hedged. Events, changes in assumptions and the management’s judgement will affect the


evaluation of impairment. The carrying amount of goodwill is disclosed in Note 5 to the financial statements. An impairment test has been performed on the goodwill as of 31 December 2009 and 2010 and there is no indication of impairment.

Income taxesThe Group is subject to income tax in several jurisdictions. Considerable judgements are required when determining the global allocation of income taxes. The Group has many transactions and calculations where the final outcome may be uncertain. The Group accounts for its expected tax liabilities based on estimates. When final outcomes differ from the original estimations, the deviations in the estimations will affect the tax expense and provision in the period in which the re-estimation is made.

Deferred tax assets relating to loss carried forwards are recognized when it is probable that the loss carried forwards may be utilized. The evaluation of probability is based on historical earnings, expected future margins and the size of order backlog for the relevant entity. Any deviations in the probability evaluation will affect the deferred tax asset amount.

Post-employment benefitsThe present value of defined benefit pension plans depends on several factors which include actuarial and financial assumptions. Any changes in assumptions affects calculations of the present value of the obligations and future pension costs.

The Group estimates the discount rate at the end of each year. The rate is used to discount future cash flows related to future defined benefit obligations. The discount rate is determined by reference to government bonds or market yields on high quality corporate bonds at the reporting date. The currency and term of the bonds shall be consistent with the currency and estimated term of the post-employment benefit obligations. Other assumptions by management used in the calculation of the present value of defined benefit plans are based on market values and best estimates. Assumptions related to turnover and salary increase reflect the management’s historical experience with operations.

ProvisionsThe provision for warranties is based on estimates from known and expected warranty work and contractual obligations for further work to be performed after completion. The warranty expense incurred could be higher or lower than the provision made. The carrying amount and movements in provision for warranties are detailed in Note 21.

Property, plant and equipmentThe Group reviews the residual values and useful lives of property, plant and equipment at each reporting date in accordance with the accounting policy in Note 3(e). The estimation of the residual amount and useful lives involves significant judgment.

(e) Changes in accounting policiesAccounting for business combinationsFrom 1 January 2010, the Group has applied FRS 103 Business Combinations (2009) in accounting for business combinations. Business combinations are now accounted for using the acquisition method as at the acquisition date (see Note 3(a) for the new accounting policy).

Previously, business combinations were accounted for under the purchase method. The cost of an acquisition was measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill represents the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiary and is assessed for impairment annually. The excess of the Group’s interest in the net fair value of



the identifiable assets, liabilities and contingent liabilities over the cost of acquisition was credited to profit or loss in the period of the acquisition. For business acquisitions that were achieved in stages, any existing equity interests in the acquiree were not re-measured to their fair value. Contingent consideration was recognized as an adjustment to the cost of acquisition only when it was probable and can be measured reliably.

The change in accounting policy has been applied prospectively to new business combinations occurring on or after 1 January 2010 and has no material impact on earnings per share.

Accounting for acquisitions of non-controlling interestsFrom 1 January 2010, the Group has applied FRS 27 Consolidated and Separate Financial Statements (2009) in accounting for acquisitions of non-controlling interests. See Note 3(a) for the new accounting policy.

Previously, goodwill was recognized on the acquisition of non-controlling interests in a subsidiary, which represented the excess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired at the date of the transaction.

The change in accounting policy has been applied prospectively and has no impact on earnings per share.

(f) Accounting policies for new transactions and eventsDistributions of non-cash assets to owners of the Company From 1 January 2010, the Group has applied INT FRS 117 Distributions of Non-cash Assets to Owners in accounting for distributions of non-cash assets to owners of the Company. The new accounting policy (see Note 3(d)) has been applied prospectively.

3. Significant accounting policies

The accounting policies described below are applied consistently for all periods presented in the financial statements, and have been applied consistently by Group entities, except as explained in Note 2(e), which addresses changes in accounting policies.

(a) Accounting for business combinations At Group levelThe acquisition of STX OSV AS and its subsidiaries (STX OSV AS combined group) as described in Note 6(a) has been accounted for as an acquisition from entities under common control, using the “pooling-of-interest” method in the consolidated financial statements of the Group. Under the pooling-of-interest method, the consolidated financial statements of the Group have been prepared as if the Group had been in existence prior to 1 January 2009.

• TheassetsandliabilitiesofSTXOSVAScombinedgrouparerecognizedintheGroup’sconsolidatedstatementoffinancial position at the carrying amounts recognized previously in STX OSV AS combined group’s controlling shareholder’s consolidated financial statements;

• Nogoodwill,eitherpositiveornegative,istoberecorded;• ThecomponentsofequityoftheacquiredentitiesareaddedtothesamecomponentswithintheGroupequity;and• ThedifferencebetweenthecostoftheacquisitionfortherestructuringandtheamountofsharecapitalofSTXOSV

AS has been reclassified to a restructuring reserve within equity.


(b) Basis of consolidationBusiness combinationsBusiness combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognized in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognized at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not re-measured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognized in profit or loss.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.

SubsidiariesSubsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non- controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Acquisition from entities under common controlBusiness combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative year presented or, if later, at the date that common control was established; for this purpose comparatives are restated. The assets and liabilities acquired are recognized at the carrying amounts recognized in the previous Group’s controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are added to the same components within Group equity. Any difference between cash paid for the acquisition and net assets acquired is recognized directly in equity.

Loss of controlUpon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non- controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

Investments in associates (equity-accounted investees)Associates are those entities in which the Group has significant influence, but not control, over the financial and



operating policies of these entities. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Investments in associates are accounted for using the equity method (equity-accounted investees) and are recognized initially at cost. The cost of the investments includes transaction costs.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted investees with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Acquisition of non-controlling interestAcquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognized as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary.

Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries and associatesInvestments in subsidiaries and associates are carried in the Company’s statement of financial position at cost less accumulated impairment losses. On disposal of investments in subsidiaries and associates, the difference between disposal proceeds and the carrying amounts of the investments are recognized in profit or loss.

(c) Foreign currency translation and transactionsForeign currency transactionsTransactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign operation that is effective, or qualifying cash flow hedges, which are recognized in other comprehensive income.


Foreign currency differences arising in respect of operating business items are included in operating profit in the appropriate income or expense account, and those arising in respect of financial assets and liabilities are recorded net as a financial item.

Foreign operationsThe assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to NOK at exchange rates at the end of the reporting period. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to NOK at the weighted average exchange rate for the period. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Foreign currency translation differences are recognized in other comprehensive income, and presented in the translation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognized in other comprehensive income, and are presented in the translation reserve in equity.

(d) Financial instrumentsNon-derivative financial assetsThe Group initially recognizes loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognized initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets.

Financial assets at fair value through profit or lossA financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented risk management or investment strategy. Attributable transaction costs are recognized in profit or loss as



incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss. Financial assets designated at fair value through profit or loss comprise equity securities that otherwise would have been classified as available for sale.

There are no financial assets at fair value through profit or loss at the reporting date.

Held-to-maturity financial assetsIf the Group has the positive intent and ability to hold debt securities to maturity, then such financial assets are classified as held-to-maturity. Held-to-maturity financial assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized cost using the effective interest method, less any impairment losses. Any sale or reclassification of a more than insignificant amount of held-to-maturity investments not close to their maturity would result in the reclassification of all held-to-maturity investments as available for sale. It would also prevent the Group from classifying investment securities as held-to-maturity for the current and the following two financial years.There are no held-to-maturity financial assets at the reporting date.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Loans and receivables comprise cash and cash equivalents and trade and other receivables.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.

Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of the above categories of financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (see Note 3(j)) and foreign currency differences on available-for-sale debt instruments (see Note 3(c)), are recognized in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognized, the gain or loss accumulated in equity is reclassified to profit or loss.

Available-for-sale financial assets comprise other investments (see Note 8).

Non-derivatives liabilitiesThe Group initially recognizes debt securities issued on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognized initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

Financial assets and liabilities are offset and the net amount presented on the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.


Financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

Financial liabilities comprise loans and borrowings, trade and other payables, and other financial liabilities.

Bank overdrafts, if any, that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Share capitalOrdinary sharesOrdinary shares are classified as paid-up capital in equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects. The ordinary shares issued by the Company have no par value and carry equal rights to voting, distributions of profits and dividends and to the residual assets of the Company in liquidation.

The share capital of STX OSV AS as of 31 December 2009 has been reclassified to restructuring reserve to conform with the Group’s current year’s presentation of the business combination as described in Notes 1(b) and 3(a).

Derivative financial instruments, including hedge accountingA derivative financial instrument is initially recognized at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged. The Group designates each hedge as either fair value hedge or cash flow hedge.

Fair value changes of derivatives that are not designated, or do not qualify for the hedge accounting, are recognized in profit or loss when the changes arise.The Group documents at the inception of the transaction the relationship between the hedging instruments and hedged items, as well as the risk management objective and strategies for undertaking various hedge transactions. The Group also documents the assessment, both at hedge inception and on an ongoing basis, of whether the derivatives designated as hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items attributable to the hedged risk, and whether the actual results of each hedge are within a range of 80% to 125%. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flow that could ultimately affect reported profit or loss.

The carrying amount of a derivative designated as a hedge is presented as a non-current asset or liability if the remaining expected life of the hedged item is more than 12 months and as a current asset or liability if the remaining expected life of the hedged item is less than 12 months. The fair value of a trading derivative is presented as a current asset or liability.

Fair value hedges The Group has entered into currency forwards that are fair value hedges for currency risk arising from contractual commitments (firm commitments) with respect to values of construction contracts or costs related to contracts in foreign currencies (hedged item). The fair value changes on the hedged item resulting from currency risk are recognized in profit or loss. The fair value changes on the effective portion of currency forwards designated as fair value hedges are recognized in profit or loss within the same line item as the fair value changes from the hedged item. The fair value changes on the ineffective portion of currency forwards are recognized separately in profit or loss.

Currency risk arising from construction contracts is evaluated for each contract. The hedge is accounted for under the concept of a firm commitment. This implies that a percentage-of-completion contract is a firm commitment until the asset under construction is completed and transferred to the customer.



Cash flow hedgesInterest rate swapThe Group can enter into interest swaps that are cash flow hedges for the Group’s exposure to interest rate risk on its borrowings. These contracts entitle the Group to receive interest at floating rates on notional principal amounts and oblige the Group to pay interest at fixed rates on the same notional principal amounts, thus allowing the Group to raise borrowings at floating rates and swap them into fixed rates.

Currency forwardsThe Group can enter into currency forwards that qualify as cash flow hedges against probable forecasted transactions in foreign currencies. The fair changes on the effective portion of the currency forwards designated as cash flow hedges are recognized in the hedging reserve and transferred to either the cost of a hedged non-monetary asset upon acquisition or profit or loss when the hedged forecast transactions are recognized.

The fair value changes on the ineffective portion are recognized immediately in profit or loss. When a forecasted transaction is no longer expected to occur, the gains and losses that were previously recognized in the hedging reserve are reclassified to profit or loss immediately.

(e) Property, plant and equipmentRecognition and measurementItems of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and capitalized borrowing costs. Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognized net in profit or loss. When revalued assets are sold, any related amount included in the revaluation reserve is transferred to retained earnings.

Subsequent costsThe cost of replacing a component of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

DepreciationDepreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

Depreciation is recognized in profit or loss on a straight line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated.


The residual values, estimated useful lives and depreciation methods of property, plant and equipment are reviewed, and adjusted as appropriate, at each reporting date. The effects of any revision are recognized in profit or loss when changes arise.

The estimated useful lives for the current and comparative years are as follows:

• Machineryandvehicles 3-20years• Buildings 20-50years• Leaseholdland Leaseperiod• Otherassets 33-50years

(f) Intangible assetsGoodwill Goodwill represents the excess of the fair value of the consideration transferred; plus the recognized amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree, over the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss.

Subsequent measurementGoodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity- accounted investee.

Research and development costsExpenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalized includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalized borrowing costs. Other development expenditure is recognized in profit or loss as incurred.

Capitalized development expenditure is measured at cost less accumulated amortization and impairment losses.

Other intangible assetsOther intangible assets (patents, trademarks and licenses) acquired are recognized at cost less accumulated amortization and impairment losses.

Subsequent expenditureSubsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.



AmortizationAmortization is calculated based on the cost of the asset, less its residual value.

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative period is 3 to 5 years.

Amortization methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.

(g) Leased assetsLeases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and are not recognized in the Group’s statement of financial position.

(h) InventoriesInventories are recognized at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.

(i) Construction contractsA construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and functions or their ultimate purpose or use.

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognized as revenue and expenses, respectively, by reference to the stage of completion of the contract activity at the reporting date (percentage-of-completion method). When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred that are likely to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract as well as variation orders and claims that can be measured reliably. A variation order or a claim is only included in contract revenue when it is probable that the customer will approve the variation order or negotiations have reached an advanced stage such that it is probable that the customer will accept the claim.

The stage of completion is measured generally by reference to the ratio of contract costs incurred to date to the estimated total costs for the contract. Costs incurred during the financial year in connection with future activity on a contract are excluded from the costs incurred to date when determining the stage of completion of a contract. Such costs are shown as construction contract work-in-progress on the statement of financial position unless it is not probable that such contract costs are recoverable from the customers, in which case, such costs are recognized as an expense immediately.


At the reporting date, the aggregated costs incurred plus recognized profit (less recognized losses) on each contract is compared against the progress billings. Where the cumulative costs incurred plus the recognized profits (less recognized losses) exceed progress billings, the balance is presented as due from customers on construction contracts. Where progress billings exceed the cumulative costs incurred plus recognized profits (less recognized losses), the balance is presented as due to customers on construction contracts.

Progress billings not yet paid by customers are included within “trade receivables.” Advances received are included within “advances received on construction contracts.”

(j) ImpairmentNon-derivative financial assetsA financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers in the Group. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against loans and receivables or securities. Interest on the impaired asset continues to be recognized. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Loans and receivablesThe Group considers evidence of impairment for loans and receivables on a specific asset level. All individually significant loans and receivables are assessed for specific impairment.

Available-for-sale financial assetsImpairment losses on available-for-sale financial assets are recognized by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortization, and the current fair value, less any impairment loss recognized previously in profit or loss. Changes in impairment provisions attributable to application of the effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized in profit or loss, then the impairment loss is reversed. The amount of the reversal is recognized in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in fair value reserve as other comprehensive income.

Non-financial assetsThe carrying amounts of the Group’s non-financial assets, investment property, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.



The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

The Group’s corporate assets do not generate separate cash inflows and are utilized by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated.

Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Goodwill that forms part of the carrying amount of an investment in an associate is not recognized separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired.

(k) employee benefitsThe Group has both defined contribution and benefit plans.

Defined contribution plans For defined contribution plans, contributions are paid to an outside entity in accordance with local law and regulations. Once the contributions have been paid, there are no further payment obligations. Contributions to defined contribution plans are charged to profit or loss in the period to which the contributions relate.

Defined benefit plansThe cost of providing benefits under defined benefit plans, is determined separately for each plan using the projected unit credit actuarial valuation method. Actuarial gains and losses are caused by deviations between estimated and actual events, changes in actuarial and financial assumptions and changes in plans. Actuarial gains and losses are recognized in profit or loss when the cumulative unrecognized actuarial gains and losses for each individual plan at the end of the previous reporting year exceeded 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains are recognized over the expected remaining working lives of the employees participating in the plans.

The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and losses not recognized reduced by the fair value of plan assets out of which the obligations are to be settled directly.


The benefit obligation is calculated by independent actuaries and measures the net present value of estimated future cash flows. The pension cost is recognized in the profit or loss over the remaining working lives of the employees.

Termination benefitsTermination benefits are recognized as an expense when the Group is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.

Short-term employee benefitsShort-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(l) ProvisionsA provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

WarrantiesA provision for warranties is recognized for completed contracts based on historical data (Note 21(b)).

(m) RevenueRevenue comprises the fair value of the consideration received or receivable for the rendering of services and the sale of goods in the ordinary course of the Group’s activities. Revenue is presented, net of value-added tax, rebates and discounts, and after eliminating transactions within the Group. Revenue is recognized as follows:

Revenue from construction contractsContract revenue is recognized by reference to the stage of completion of the contract activity at the reporting date. The stage of completion is measured generally by reference to the contract costs incurred to date, as compared to the estimated total costs for the contract.

Please refer to Note 3(i) “Construction Contracts” for the elaboration of accounting policy for revenue from construction contracts

Interest incomeInterest income arising from financial instruments is recognized on a time-proportion basis using the effective interest method.

Revenue from sales of goods and servicesSale of goods primarily relates to the sale of automated systems by a subsidiary group.

Upon the sale of design and equipment packages, an assessment is made of the accrued value creation and the remaining work. If a significant proportion of the value creation has already taken place, income is recognized immediately, and the rest of the income is recognized over the period of the project’s completion.



(n) Government grantsGovernment grants are recognized initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant. These grants are then recognized in profit or loss on a systematic basis over the useful life of the asset for grants related to assets. Grants that compensate the Group for expenses incurred are recognized in profit or loss in the same periods in which the expenses are recognized.

(o) LeasesLease payments Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

Determining whether an arrangement contains a leaseAt inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset.

At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognized at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance charge on the liability is recognized using the Group’s incremental borrowing rate.

(p) Finance income and finance costsFinance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through profit or loss, gains on the re-measurement to fair value of any pre-existing interest in an acquiree and gains on hedging instruments that are recognized in profit or loss. Interest income is recognized as it accrues in profit or loss, using the effective interest method. Dividend income is recognized in profit or loss on the date that the Group’s right to receive payment is established.

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, losses on disposal of available-for-sale financial assets, dividends on preference shares classified as liabilities, fair value losses on financial assets at fair value through profit or loss, impairment losses recognized on financial assets (other than trade receivables), and losses on hedging instruments that are recognized in profit or loss.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss using the effective interest method.


Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

(q) Income taxesIncome tax expense comprises current and deferred tax. Current tax and deferred tax is recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:

• temporarydifferencesontheinitialrecognitionofassetsorliabilitiesinatransactionthatisnotabusinesscombination and that affects neither accounting nor taxable profit or loss;

• temporarydifferencesrelatedtoinvestmentsinsubsidiariesandjointlycontrolledentitiestotheextentthatitisprobable that they will not reverse in the foreseeable future; and

• taxabletemporarydifferencesarisingontheinitialrecognitionofgoodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(r) Segment reportingAn operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill.



(s) new accounting standards and interpretations Certain new standards, amendments to standards and interpretations to existing standards have been issued as at the end of the reporting period and are mandatory for the Group’s accounting periods beginning on or after 1 January 2011 or later periods. The Group has not adopted these standards, amendments or interpretations in preparing these financial statements and none of these are expected to have a significant effect on the financial statements of the Group.

(t) Comparative figuresCertain comparative figures have been reclassified to conform with the current year’s presentation.


Under Machinery Other con-Group and vehicles Buildings Land assets struction Total

Cost

At 1 January 2009 791 851 65 183 69 1,959

Additions 63 13 - 12 89 177

Disposals (11) (1) - - - (12)

Reclassifications 21 18 6 - (45) -

Currency translation differences (63) (92) (11) (20) (15) (201)

At 31 December 2009 801 789 60 175 98 1,923

At 1 January 2010 801 789 60 175 98 1,923

Additions 60 16 - 1 4 81

Disposals (22) (3) - - - (25)

Reclassifications (1) 101 - - (100) -

Currency translation differences (4) (26) (3) (6) 4 (35)

At 31 December 2010 834 877 57 170 6 1,944

Accumulated depreciation and impairment losses

At 1 January 2009 421 381 1 33 - 836

Depreciation charge for the year 75 39 - 6 - 120

Disposals (9) (1) - - - (10)

Currency translation differences (23) (53) - (12) - (88)

At 31 December 2009 464 366 1 27 - 858

At 1 January 2010 464 366 1 27 - 858

Depreciation charge for the year 81 34 - 6 - 121

Disposals (21) (3) - - - (24)

Currency translation differences (7) (13) - (3) - (23)

At 31 December 2010 517 384 1 30 - 932

Carrying amounts

At 31 December 2009 337 423 59 148 98 1,065

At 31 December 2010 317 493 56 140 6 1,012

STX OSV Holdings Limited did not have any PPE at the reporting date.

4. Property, plant and equipment (PPE)



(a) Other assetsOther assets comprise quays/docks of the Norwegian yards.

(b) Property, plant and equipment under construction - Group Investments were made at the facilities at many of the Group’s yards, but mainly Romania and Brazil in 2010 (mainly STX Vietnam and STX Brazil in 2009). The investments are made to increase yard capacity, to enable the yards to deliver larger–sized vessels in the segment for offshore vessels, and to increase yard productivity.

At 31 December 2010, PPE of the Group with the carrying amount of NOK 409 million (2009: NOK 557 million) are pledged as security to secure the Group’s borrowings (see Note 19).

OtherGroup Goodwill intangibles Total

Cost

At 1 January 2009 373 42 415

Additions acquired separately - 1 1

Additions – internally developed - 2 2

Currency translation differences - (11) (11)

At 31 December 2009 373 34 407

At 1 January 2010 373 34 407

Additions acquired separately - 1 1

Additions - internally developed - 1 1


At 31 December 2010 373 33 406

Accumulated amortization and impairment losses

At 1 January 2009 35 26 61

Amortization for the year - 3 3


At 31 December 2009 35 22 57

At 1 January 2010 35 22 57

Amortization for the year - 3 3


At 31 December 2010 35 23 58

Carrying amounts

At 31 December 2009 338 12 350

At 31 December 2010 338 10 348

5. Intangible assets


Impairment tests for goodwillThe Group has defined one cash generating unit (CGU) with goodwill which is its shipyards in Norway and Romania, and its goodwill relates mainly to this CGU. All of these shipyards have the same management, who is central in the allocation of contracts. As shipyards in Romania are mainly hull producers, there is a high degree of dependence between these shipyards and the outfitting shipyards in Norway. Accordingly, shipyards at different locations are not defined as separate CGUs.

An impairment test has been performed for the CGU at 31 December 2010 and 31 December 2009 to assess whether impairment existed. Based on the calculations performed, there is no impairment in value of goodwill.

The recoverable amount of the entities within the CGU has been determined based on a value in use calculation. Value in use is calculated based on cash flow projections based on financial budgets, business plans and strategical figures approved by senior management covering the period of 2011 to 2015. Determining budget and strategical figures is based on long term construction contracts and their margins and expectations of new contracts. This is reflected in the budget and business plan figures.

The discount rate, which is based on the Group’s weighted average cost of capital (WACC), applied to cash flows for the impairment test at 31 December 2010 is 10.5 percent after tax and terminal value is based on long term strategical figures, however adjusted for cyclical fluctuations, and using a growth rate of 2.5 percent in the terminal year. The assumptions related to the impairment test at 31 December 2009 are 9.3 percent discount rate before tax and 2.5 percent growth rate in the terminal year.

Unless a long lasting situation will occur with low capacity utilization or significantly lower margins than what has been assumed for the period after 2011, realistic sensitivity calculations will not indicate any impairment in value of goodwill.

6. Investments in subsidiary

Company 2010Unquoted shares, at cost At date of incorporation - Acquisition during the financial year 2,123 At end of financial year 2,123

(a) Acquisition of subsidiary from entities under common control On 25 October 2010, the Company acquired STX OSV AS and its subsidiaries (STX OSV AS combined group) by issuing 999,999,999 ordinary shares with paid up capital of NOK 3,533,354,000 (equivalent to SGD 789,999,999) as consideration for the acquisition to STX Europe Holding AS. STX OSV AS was previously wholly owned by STX Europe Holding AS and the acquisition was conducted on an arm’s length basis at deemed fair value. The cost of acquisition of the unquoted shares has been recorded at NOK 2,123 million, in accordance with FRS 27.38B, and the difference of NOK 1,411 million between the paid up capital of NOK 3,533 million (equivalent to SGD 790 million) and the cost of acquisition has been recorded as a restructuring reserve in shareholders’ equity.

(b) Acquisition of non-controlling interest On 22 December 2010, the Group, through STX OSV AS, announced to have entered into an agreement to acquire the remaining 30% equity interest in STX OSV Singapore Pte Ltd (STX Singapore) from its non-controlling interest for a cash consideration of USD 5 million equivalent to approximately NOK 30 million. The purchase consideration was fully funded



by the net proceeds raised from the initial public offering. Following this acquisition, STX Singapore became a wholly-owned subsidiary of the Company. The difference between the consideration and carrying amount of the additional interest acquired has been recognized as a transaction with owners within equity.

(c) Details of the Group’s significant subsidiaries are set out in note 35

7. Investments in associates

Group 2010 2009Unquoted shares at cost 161 74 Share of post acquisition reserves 8 7 Total 169 81

2010 Balance as Acquisitions Share/ loss Fair value Balance as ofMovements of investments in associates of 1 January and disposals of profit adjustment 31 December

Møkster Supply AS - 5 - - 5 Møkster Supply KS - 11 - - 11 Island Offshore LNG AS - 1 - - 1 Island Offshore LNG KS - 6 - - 6 Rem Supply AS - 51 - - 51 Olympic Green Energy KS - 9 - - 9 Olympic Subsea KS 76 - 8 - 84 Vest Industriselskap AS 3 (3) - - - Bridge Eiendom AS 1 - - - 1 Other 1 - - - 1 Total 81 80 8 - 169

2009 Balance as Acquisitions Share/ loss Fair value Balance as ofMovements of investments in associates of 1 January and disposals of profit adjustment 31 December

Olympic Subsea KS 69 - 7 - 76 Vest Industriselskap AS 3 - - - 3 Bridge Eiendom AS 1 - - - 1 Other 1 - - - 1 Total 74 - 7 - 81


2010 % Profit/ Associates and Reporting name of Principal interest Total Total (loss) forcountry of incorporation date* auditor activity held assets liabilities Revenue the year

Møkster Supply AS Ernst &(Norway) 31.12.2010 Young AS Shipping 40% 13 - - - Møkster Supply KS Ernst &(Norway) 31.12.2010 Young AS Shipping 36% 38 7 - - Island Offshore LNG AS(Norway) 31.12.2010 PwC AS Shipping 30% 2 - - - Island Offshore LNG KS(Norway) 31.12.2010 PwC AS Shipping 27% 22 - - - Rem Supply AS(Norway) 31.12.2010 PwC AS Shipping 49% 104 - - - Olympic Green Energy KS(Norway) 31.12.2010 BDO AS Shipping 30% 29 - - - Olympic Subsea KS (Norway) 31.12.2010 BDO AS Shipping 35% 543 365 98 20 Bridge Eiendom AS Real(Norway) 31.12.2010 KPMG AS estate 50% 75 75 5 (1)Total 826 447 103 19

*Thefinancialinformationprovidedinthetableaboveisunauditedandareestimatesprovidedbymanagementofeach entity.

2009 % Profit/ Associates and Reporting name of Principal interest Total Total (loss) forcountry of incorporation date* auditor activity held assets liabilities Revenue the year

Olympic Subsea KS (Norway) 31.12.2009 BDO AS Shipping 35% 547 407 101 24 Bridge Eiendom AS Real(Norway) 31.12.2009 KPMG AS estate 50% 77 76 5 (1)Total 624 483 106 23

STX OSV will from time to time participate with minority stakes in various of its own shipbuilding projects. This will typically be in selected projects where STX OSV normally has an exit or intention to exit from within two years from the time of delivery.



8. Other investments

Groupnon-current investments 2010 2009Available-for-sale financial assets- Equity securities 8 9 Total 8 9

Unquoted equity securities/ debt securities which have no market prices and whose fair value cannot be reliably measured using valuation techniques are carried at cost less impairment loss. As of the reporting date, these are summarized as follows:

Share % 2010 Share % 2009Ullern Utvikling AS 18% 1 18% 1 Moldekraft AS 8% 5 8% 5 Shares in other companies 2 3 Total 8 9

9. Interest-bearing receivables

2010 2009 Interest Interest Group Rate Amounts Rate Amountsnon-currentInterest–bearing receivables due from:– Related parties - - 4.0% 131 – Third parties 2.4% 1 0.7% 5 Total 1 136

CurrentInterest–bearing receivablesdue from related parties - - 2.5% 211 Total - 211

This is not applicable for the Company.

These interest-bearing receivables are non-trade in nature, unsecured and bear interest at an average 2.4% (2009: 0.7%-4.0%) per annum. The non-current receivables are repayable within two years and the current receivables are repayable on demand.


10. Other receivables

Included in non-current other receivables is an amount of NOK 13 million (2009: NOK 15 million) which relates to a refund claim of US tax. The amount is unsecured, interest free and expected to be recovered by 2012.

11. Deferred tax assets and liabilities

(a) Recognized deferred tax assets and deferred tax liabilitiesDeferred tax assets and deferred tax liabilities are related to the following items:

Assets LiabilitiesGroup 2010 2009 2010 2009Property, plant and equipment (2) (2) (1) (1)Employee benefits 2 4 4 3 Projects under construction (5) (3) (178) (231)Tax losses - 1 - 126 Others 105 96 (55) (16)Total 100 96 (230) (119)

(b) Movement in temporary differences during the year

Property, Construction plant and employee work in Group equipment benefits progress Tax losses Others TotalAt 1 January 2010 (3) 7 (234) 127 80 (23)(Charged)/credited to profit or loss - (1) 51 (116) 39 (27)(Charged)/credited to the equity - - - (11) - (11)Other - - - - (69) (69)At 31 December 2010 (3) 6 (183) - 50 (130)

At 1 January 2009 (10) 8 (71) 80 (14) (7)(Charged)/credited to profit or loss 7 (2) (160) 45 98 (12)(Charged)/credited to the equity - 1 (3) 2 (4) (4)At 31 December 2009 (3) 7 (234) 127 80 (23)



(c) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items: Group 2010 2009Tax losses 212 326 Deductible temporary differences 35 54 Total 247 380

The unrecognized tax losses carried forward expire in the following years: Group 2010 2009After 1 year - - After 2 years 2 1 After 3 years 110 94 After 4 years 6 64 After 5 years - 41 After 6 years 87 - After 7 years - 93 No expiry date 7 33 Total 212 326

The deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profits will be available against which the Group can utilize the benefit therefrom. The tax losses are subject to agreement by the tax authorities and compliance with the tax regulations in the respective countries in which the entities of the Group operate.

12. Employee benefits

STX OSV Holdings Limited has no employees, and hence no pension arrangements.

The Group’s Norwegian companies mainly cover their pensions through group pension plans in life insurance companies. The pension plans are either defined benefit plans or group contribution plans. The defined benefit plans are accounted for according to FRS 19 Employee Benefits.

The Group’s companies outside Norway have pension plans based on local practice and regulations.

The Group also has uninsured pension liabilities for which provisions have been made.

Actuarial calculations have been made to determine pension liabilities and pension expenses in connection with the Group’s defined benefit plans.


The following assumptions have been used in the calculations:

Group CompanyAssumptions: 2010 2009 2010Expected return 4.60% 5.60% n/aDiscount rate 3.20% 4.40% n/aWage growth 4.00% 4.25% n/aSocial security base adjustment 3.75% 4.00% n/aPension adjustment 0.50% 1.30% n/a

expected remaining lifetime: Age Men Women 20 61 64 40 41 45 60 22 26 80 8 10

Group expenses recognized in profit or loss: 2010 2009Current service cost 12 6 Interest cost 3 2 Expect return on pension funds (1) (1)Amortization of actuarial gains and losses 1 2 Curtailment / Settlement (4) (4)Amortization of past service cost - - net pension expenses 11 5 Contribution plans (employer’s contribution) 10 3 Total net pension expenses 21 8

Actual return on plan assets in 2010 was positive with NOK 1 million (2009: positive of NOK 1 million).

Groupnet pension funds and liabilities: 2010 2009Defined benefit obligation funded plans 37 36 Defined benefit obligation unfunded plans 9 13 Fair value of plan assets (22) (21)Present value of net obligations 24 28 Unrecognized actuarial gains and losses (2) (4)Social security tax 3 2 net liability recognized on statement of financial position 25 26

Represented by employee benefits:Non-current asset 3 8 Non-current liability (28) (34)



GroupMovements in the fair value of plan assets: 2010 2009Fair value of plan assets as of 1 January 21 14 Expected return 1 1 Paid in premium 3 7 Actuarial gain and losses - - Acquisitions and disposals - - Effect of settlement - - Benefit paid (3) (1)Currency translation differences - - Fair value of plan assets as of 31 December 22 21

Changes in net liability recognized in the Groupstatement of financial position are as follows: 2010 2009Net liability as of 1 January 26 29 Net expense recognized 11 5 Pension contribution (12) (7)Acquisitions and disposals - - Currency translation differences - (1)net liability as of 31 December 25 26

The major categories of plan assets as a percentage of total plan assets are as follows: Group 2010 2009Bonds 49% 55%Money market 19% 11%Equity instruments and shares 12% 13%Property 19% 19%Others 1% 2%Total 100% 100%

13. Inventories

Inventories comprise the following items: Group 2010 2009Raw materials 250 255 Work in progress 42 57 Finished goods 18 21 Total 310 333 The carrying amount of inventories pledged as security for borrowings (Note 19) 2 13

Raw materials comprise mainly steel plates and steel profiles, pipes and pipe fittings, tools and consumables which are used in the Group’s construction projects.


14. Construction work in progress

Group 2010 2009Aggregate costs incurred and attributable profits recognized (less losses recognized) to-date 9,613 11,578 Progress billings (5,120) (5,669)Total 4,493 5,909 Presented asCurrent asset 5,608 8,779 Current liability (1,115) (2,870)Total 4,493 5,909

Advances received on construction contracts 2,664 4,398

Provisions for loss contracts (Note 21(a)) (11) (6)

No retention sums are included in progress billings.

15. Trade and other receivables

Trade and other receivables consist of the following items: Group 2010 2009Trade receivables (a) 153 211 Allowance for impairment of trade receivables (25) (23)Total 128 188

Advances to suppliers 919 723 Short-term investments - 81 VAT and tax receivables 3 1 Receivables from related parties (b) 2 696 Other financial assets 398 59 Derivative financial instruments 366 251 Total 1,816 1,999


(a) At 31 December 2010, trade receivables for the Group did not include any retention sums relating to construction work in progress or completed contracts.

(b) The amounts due from related parties are interest-free, unsecured and repayable on demand. (Note 34). Except from a group contribution of NOK 240 million in 2009, these receivables consisted of intercompany receivables which were settled in 2010 prior to listing of the Company.



16. Cash and cash equivalents Group Company 2010 2009 2010Short-term investments with terms less than three months 822 878 - Cash and bank deposits 2,029 515 623 Cash and cash equivalents 2,851 1,393 623

Of the total cash and bank balances as of 31 December 2010 an amount of NOK 300 million (2009: NOK 126 million) is in fully restricted escrow accounts, which is mainly security for guarantees made to customers on prepaid instalments and restricted bank accounts for employees’ tax deductions.

17. Paid up capital

number of Share capitalGroup and Company shares issued SGD nOKIssue of shares on date of incorporation 1 1 4.47 Shares issued pursuant to the Restructuring Exercise (Note 6(a)) 999,999,999 789,999,999 3,533,354,000 Issue of shares pursuant to the Initial Public Offering Exercise 180,000,000 142,200,000 635,993,197 Share issue expenses (30,868,202)At 31 December 2010 1,180,000,000 4,138,478,999

(a) The ordinary shares issued by the Company have no par value and carry equal rights to voting, distribution of profits and dividends and to the residual assets of the Company in liquidation.

(b) The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.

(c) Issue of ordinary sharesThe Company was incorporated on 11 June 2010 with a paid up capital of SGD 1 consisting of one ordinary share of no par value held by STX Europe Holding AS.

On 25 October 2010, the Company acquired STX OSV AS and its subsidiaries (STX OSV AS combined group) by issuing 999,999,999 ordinary shares with paid up capital of NOK 3,533,354,000 (equivalent to SGD 789,999,999) as consideration of the acquisition to STX Europe Holding AS.

On 12 November 2010, the Company offered 180,000,000 new ordinary shares in the Initial Public Offering at an Offering price of SGD 0.79 per share.

(d) Paid up capital for 2009 - GroupAs described in Notes 1(b) and 3(a), the consolidated financial statements of the Group for the financial years ended 31 December 2009 and 2010 were prepared using the pooling-of-interest method. The share capital for 2009 represents the paid-in capital of STX OSV AS.


18. Other reserves and retained earnings/ Non-controlling interests

GroupTranslation reserveThe translation reserve comprises foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of monetary items that form part of the Group’s net investment in a foreign operation.

Fair value reserveThe fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognized or impaired.

Restructuring reserveThe restructuring reserve as presented in the Group’s consolidated financial statements for 2010 represents the difference between the cost of the acquisition for the restructuring as described in Notes 1(b) and 6(a), and the amount of share capital of STX OSV AS at the date of acquisition.

Reserves for financial year ended 31 December 2009 - GroupThe reserves and retained earnings in the consolidated financial statements of the Group for 2009 represent the historical aggregate reserves of the entities in the STX OSV AS combined group as if the restructuring as described in Notes 1(b) and 6(a) has occurred prior to 1 January 2009.

CompanyRestructuring reserveThe restructuring reserve presented in the Company’s statement of financial position at 31 December 2010 comprises the difference between the cost of acquisition of the STX OSV AS combined group as described in Notes 1(b) and 6(a) recorded in accordance with FRS 27.38B, and the paid up capital of the Company issued for the acquisition.

DividendsNo dividends have been paid by the Company since the date of incorporation. The Directors have recommended the payment of a dividend of Singapore 3 cents per ordinary share to shareholders, based on the Group profits made between 25 October 2010 (restructuring date) and 31 December 2010. This is subject to the approval of shareholders at the First Annual General Meeting of the Company to be held on 27 April 2011.

Group Non-controlling interestsThis relates to the non-controlling interests in those subsidiaries (refer Note 35) where the Group owns less than 100% of the equity shares.



19. Loans and borrowings This note provides information about the contractual terms of the Group’s interest–bearing loans and borrowings. For more information about the Group’s exposure to interest rate and foreign currency risk, see Note 31.

GroupCurrent 2010 2009Overdraft - - Revolving credit facilities - - Construction loans facilities 4,398 6,102 Term loan facilities 44 71 Total 4,442 6,173

Groupnon current 2010 2009Revolving credit facilities - - Construction loans facilities - - Term loan facilities 266 249 Loans from related companies - 86 Total 266 335 This is not applicable for the Company.

(a) Revolving credit facilities and term loans:Innovation norwaySTX OSV AS has seven secured loans with Innovation Norway as of 31.12.10. The three most material loans are NOK 47 million, NOK 46 million and NOK 30 million and mature respectively in 2024, 2025 and 2020. The interest rates are fixed at 4.3%, 4.6% and 4.5% respectively. All Innovation Norway loans are considered low risk secured loans. The loans are secured by investments, fixed assets such as property and plant as well as the dock at the Langsten yard. Most Innovation Norway loans have fixed interest rates while some are floating, currently at 4.40%. All Innovation Norway loans have covenants requiring working capital to be greater than NOK 600 million, equity greater than NOK 1,300 million and book equity greater than 2/3.

nordeaThe long term Nordea credit facility agreement is a USD 15 million investment facility to STX OSV Singapore Pte. Ltd. The loan is used towards financing of investments with purpose of building the Vietnam shipyard. The loan is secured by pledge of shares, the charge and the guarantees, and matures in 2015 and interest rate is libor + 1.125% p.a. Romania loansDuring the first half of 2010, there were changes related to the loans in Romania. A credit facility with Raiffeisen Bank and a loan with Romanian Commercial Bank were both repaid. In addition the investment loan with Erste Bank was refinanced and replaced by a new loan with Banca Transilvania. The EUR 2.9 million loan applies to STX OSV Tulcea, with a floating interest rate of EURIBOR (6 months) + 4.5% margin and scheduled maturity of mid 2013.

Brazil loansWith the purpose of modernization of the shipyard in Niterói, the Brazilian entity has a USD 5.5 million long term loan from BNDES. A USD 1.3 million loan from Finame is used for equipment investment. The loans mature in 2016 and 2014, respectively. The entity also has an import finance facility agreement with Itau Bank of USD 1.9 million maturing in 2014.


(b) Loans from related companiesThis consists of several loans from other group companies, mainly the holding companies STX Europe AS and STX Europe Holding AS. The STX Europe loans have been repaid during 2010 prior to listing the Company.

(c) Construction loan facilitiesConstruction loan facilities are project specific and these borrowings are secured by the vessels under construction. The facilities are drawn down as the construction of the projects progresses. The loans will be fully repaid from the proceeds received from the client upon the delivery of the completed vessels. More specifically, the Group’s construction loan facilities consist of the following (by entity):

STX OSV ASSTX OSV Holdings Ltd. Group’s Norwegian shipyards have established framework agreements with a Norwegian bank stipulating loan terms, conditions, and structures. Construction financing for projects is established on a project-by-project basis within the agreed-upon frameworks. The Romanian yards are largely financed via the Group’s Norwegian yards in the form of partial payments on hull building contracts. Nordea Bank Norge ASA was per year end 2010 the provider of construction financing to the Norwegian shipyards. As of 31.12.2010 the Nordea facility consisted of a construction facility, a guarantee facility and another special purpose facility of NOK 4,392, NOK 500 and NOK 150 million, respectively. In addition to the maximum drawdown within the NOK 5,042 million frame, restrictions to minimum working capital of NOK 700 million and minimum equity of NOK 1,100 million apply per 31.12.2010. Each construction loan is due at delivery of the vessel.

STX OSV niterói SASTX OSV Niterói SA has construction financing with BNDES, on a project-by-project basis. STX Europe AS provides guarantees related to this agreement. As of 31.12.2010, the BNDES construction financing applies to the shipbuilding projects 24, 26 and 27 in addition to shipyard modernization. Also and correspondingly, another facility regarding shipbuilding project number 28, in addition to shipyard investment, is entered into with Banco do Brasil and Banco Itau. The construction loans are due at delivery of the vessel. As of 31.12.2010, the BNDES and Banco do Brasil project financing facilities were limited to USD 388.5 million and USD 54.7 million respectively.

STX OSV Vung Tau LtdSTX OSV Vung Tau Ltd. has construction financing agreement with Nordea Bank in Singapore established by the holding company STX OSV Singapore Pte. Ltd. STX Europe AS and STX OSV AS provides guarantees related to this agreement. This construction facility works more like a working capital facility and for specific projects being the shipbuilding projects in STX OSV Vung Tau Ltd. This is a revolving multi-currency facility subject to approval by Nordea and limited to USD 90 million as of 31.12.2010.

The fair values of the loans and borrowings are disclosed in Note 31. The carrying amounts of current borrowings, and non-current borrowings which are at variable market rates, approximate their fair values.



20. Other payables (non-current)

GroupDue to: 2010 2009Related parties - 547 Third parties - - Total - 547


These are STX Europe loans which have been repaid during 2010 prior to listing the Company.

21. Provisions

Loss on contracts WarrantiesGroup (note a) (note b) Others TotalAt 1 January 2010 2 27 3 32 Provisions made during the year 6 141 1 148 Provisions utilized during the year (1) (9) - (10)Provisions reversed during the year - (3) - (3)Currency translation differences - - - - At 31 December 2010 7 156 4 167 RepresentingNon–current - 72 2 74 Current 7 84 2 93 Total 7 156 4 167

Loss on contracts Warranties Group (note a) (note b) Others TotalAt 1 January 2009 1 18 - 19 Provisions made during the year 1 31 3 35 Provisions utilized during the year - (16) - (16)Provisions reversed during the year - (6) - (6)Currency translation differences - - - - At 31 December 2009 2 28 3 32 RepresentingNon–current - - 3 3 Current 2 27 - 29 Total 2 27 3 32


(a) Provisions for loss on contracts Group 2010 2009At 1 January 6 460 Additional provisions 6 1 Amounts used (1) (455)Unused amounts reversed during the period - - At 31 December 11 6 RepresentingAmount recorded as reduction of construction in progress 4 4 Amount recorded as current provision 7 2 Total 11 6


(b) WarrantiesProvisions for warranties relate to completed contracts and possible guarantee work after vessel delivery. The warranty period is normally one to two years, but some of the provisions may relate to a longer period.

Provisions for warranties are made based on historical data for corresponding projects and experience analysis.

22. Trade and other payables Group Company 2010 2009 2010Trade payables 1,775 2,391 - Accrued expenses 835 357 - Other financial liabilities 529 358 18 Derivative financial instruments 70 37 -Total 3,209 3,143 18

23. Other current liabilities

Other current liabilities comprise mainly liabilities of the Group together with STX Europe AS and STX Europe Holding AS (2009). Following the settlement of intercompany balances, the NOK 21 million 2010 balance represents approximately NOK 13 million liability to STX Corporation and NOK 8 million to STX Europe AS and STX Europe Holding AS.

24. Revenue Group 2010 2009Construction contract revenue 11,417 11,349 Sales of goods 414 338 Revenue from services 50 208 Total 11,881 11,895



25. Salaries and related costs Group 2010 2009Salaries and wages 1,331 1,328 Social security contributions 282 284 Pension costs (Note 12) 21 8 Other expenses 88 103 Total 1,722 1,723

No directors fees are included in salaries and related costs to directors of the Company during the financial year (2009: NOK 0.2 million to STX OSV AS). Remuneration to key management personnel are disclosed in Note 34.

During the financial year, the Group received grants from public employment service in Norway (NAV) for support of training costs. These grants totalling zero (2009: NOK 1 million recognized in profit or loss as a reduction of salaries and related costs).

26. Other operating expenses

Other operating expenses include: Group 2010 2009Non-audit fees paid to auditors of the Company - - Rent and leasing expenses (Note 33) 38 19

Other operating expenses not specified above are mainly related to STX OSV AS (2010: 80%). The expenses relate to general administrative expenses such as various office costs, electricity, repair and maintenance not capitalized, travel expenses, legal expenses and other consultancy costs etc. No specific item exceeds 10% of total other operating expenses (NOK 511 million) for 2010.

27. Financial income and financial expenses Group 2010 2009Financial income Interest income on loan and receivables, including bank deposits 36 45 Dividend income - 1 Net change in fair value of unqualified hedge instruments and embedded derivatives 198 44 Other financial income 159 9 Total financial income 393 100 Financial costsInterest expense on loans and borrowings (25) (40)Net foreign exchange loss (25) (197)Net change in fair value of unqualified hedge instruments and embedded derivatives - (118)Other financial expenses (23) (117)Total financial costs (73) (472)net financial items 320 (372)


28. Income tax expenses

The Group is subject to income tax on an entity basis on profit arising or derived from the tax jurisdiction in which the Group is domiciled and operates.

(a) Income tax recognized in profit or loss Group 2010 2009Current tax expense:Current year (359) (59)Adjustments for prior years - 7 Total current tax expense (359) (52)

Deferred tax expense:Originating and reversal of temporary differences 34 (59)(Over)/under provision in respect of prior years (27) - Recognition of previously unrecognized tax losses - - Changes in tax rates - - Changes in recognized tax losses (116) 45 Total deferred tax expense (109) (14)Total income tax expense (468) (66)

(b) Income tax recognized in other comprehensive income

2010 2009 Tax Tax Before (expense)/ net Before (expense)/ netGroup tax benefit of tax tax benefit of taxOther comprehensive income

Exchange differences on translation of foreign operations (1) - (1) 4 - 4

Income tax on translation exchange difference on monetary items considered as part of the Group’s net investment in foreign subsidiary (22) 1 (21) (65) 4 (61)

Net fair value changes of available-for-sale financial assets (1) - (1) (1) - (1)

Total (24) 1 (23) (62) 4 (58)



(c) Reconciliation of effective tax rate

2010 2009 % Amount % AmountProfit before tax 1,534 160 Tax at the domestic rates applicable to profits in the countries where the Group operates 29.9% 459 30.6% 49 Income not subject to tax -0.9% (13) -9.1% (15)Not deductible expenses 3.3% 49 16.6% 27 Utilization of previously unrecognized tax assets -1.8% (27) -17.2% (28)Tax losses for which no deferred income tax asset was recognized 0.0% - 20.5% 33 Total income tax expense in profit or loss 30.5% 468 41.4% 66

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.

29. Earnings per share

The Group’s basic earnings per share are calculated as follows: Group 2010 2009Net profit attributable ordinary shareholders of the Company 1,031 95 Weighted average number of ordinary shares in issue during the year for basic earnings per share (million) 1,025 1,000 Basic earnings per share (nOK per share) 1.01 0.10

The aggregate of the weighted average number of shares of the Company outstanding after the restructuring exercise of 1,000,000,000 ordinary shares are included in the calculation of the weighted average number of shares for 2010 and 2009 because the consolidated financial statements of the Group are prepared as if the Group had existed since 1 January 2009 (see Notes 1(b) and 6(a)).

The weighted average number of ordinary shares outstanding at 31 December 2010 is after including the effect of the shares issued by the Company pursuant to the Initial Public Offering on 12 November 2010 (Note 17).

Diluted earnings per share is equal to basic earnings per shares for the years ended 31 December 2010 and 2009 as the Company has no potential dilutive ordinary shares.


30. Operating segments

(a) Reportable segmentsThe application of FRS 108 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker, which for the Group is the CEO, to make decisions about resource allocation and performance assessment.

The main business activity and core business of the Group is design and construction of offshore and specialized vessels. This segment comprises all vessels that traditionally have been built within the Group. This is the core business of the Group and the Group is neither actively pursuing nor engaging in other areas of business. Therefore, management is of the view that the Group has only one single reportable segment.

(b) Geographical informationThe Group has activity in six (2009: five) countries and principally in Norway. In presenting geographical information, segmental revenue is based on the geographical location of companies. Segmental assets are based on the geographical location of the assets and the expenditure incurred.

Revenue non-current assets 2010 2009 2010 2009Norway 8,780 9,594 690 1,148 EU* 564 63 665 332Asia 803 393 181 180 South America 1,734 1,845 132 110 Total 11,881 11,895 1,668 1,770

*RelatedonlytovesselscompletedanddeliveredfromRomania.

(c) Major customersThe Group has a few single customers which have revenue amounted to 10% or more of the Group’s revenue:

% 2010 % 2009Customer 1 32% 3,774 38% 4,500 Customer 2 16% 1,889 5% 574 Customer 3 1% 126 12% 1,473 Total 5,789 6,547

31. Financial risk management objectives and policies

OverviewThe main risks arising from the Group’s financial instruments are credit risk, market risk (mainly interest rate risk and foreign currency risk) and liquidity risk. The Group enters into derivative transactions, primarily forward foreign currency contracts, to manage the Group’s exposure risks arising from its operations and sources of finance. It is the Group´s policy that no trading of derivatives shall be undertaken.

The Board of Directors reviews and agrees policies for managing each of these risks.



Credit riskCredit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s loans and receivables.

The Group has an established process to evaluate the creditworthiness of its prospective customers. An internal credit review and rating is carried out on the prospective customers prior to contract signing. The Group requires customers to have the necessary funding in place at signing of the shipbuilding contract. In instances where the customer’s funding is not in place, the Group would, where appropriate, obtain collaterals, including bank guarantees and letters of credit, from customers.

There is no significant concentration of credit risk on outstanding financial instruments as at the reporting date.

The Group´s maximum exposure to credit risk is represented by the carrying values of each financial asset, including derivative financial instruments with positive fair values as follows: Group Company 2010 2009 2010Interest bearing receivables (Note 9) 1 347 - Other receivables 27 25 - Trade and other receivables less derivative financial instruments (Note 15) 1,450 1,748 - Derivative financial instruments (Note 15) 366 251 -Cash and cash equivalents (Note 16) 2,851 1,393 623 Total 4,695 3,764 623

Cash and cash equivalents are placed in banks and financial institutions which are regulated. Trade and other receivables that are not past due are with counterparties with good collection track record and credit rating with the Group.

The age analysis of trade receivables that are not impaired is as follows: Group 2010 2009Not due 87 93 0-30 days 32 29 31-120 days 9 47 121-365 days - 15 More than 365 days - 4 Total 128 188


Allowance for impairment losses for trade receivables: Group 2010 2009Gross amount 153 211 Less: Allowance for impairment losses (25) (23)Total 128 188

At 1 January 23 27 Currency translation difference - - Allowance made/(utilized) 2 (4)At 31 December 25 23



Trade receivables that are individually determined to be impaired at the reporting date relate to non-shipbuilding receivables.

Based on historic defaults rates, the Group believes that, apart from the above, no impairment allowance is necessary in respect of trade receivables not past due.

Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group´s exposure to fluctuations in interest rate relates primarily to construction loan facilities. Interest rate risk is managed on an on-going basis with the primary objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates.

The Group used a combination of fixed and floating interest rates to manage the exposure to changes in the variability of interest rate fluctuations of its loans and borrowings. Floating interest rate loans are typically used for the loans with the shortest maturity whereas the fixed rate loans are used for the construction loans with the longest maturity.

At the reporting date, the interest rate profile of the Group’s interest bearing financial instruments was:

Group Company 2010 2009 2010Fixed rate instrumentsFinancial assets (cash and cash equivalents) 765 43 623 Financial liabilities (loans and borrowings) 1,882 1,410 -

Variable rate instrumentsFinancial assets (cash and cash equivalents) 2,086 1,350 - Financial liabilities (loans and borrowings) 2,826 5,098 -

Sensitivity analysis A change of 50 basis points (“bp”) in interest rates at reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

Profit and loss equity 50bp 50bp 50bp 50bpGroup increase decrease increase decrease31 December 2010Variable rate instruments (3) 3 3 (3)Interest rate swap - - - - Cash flow sensitivity (net) (3) 3 3 (3)

31 December 2009Variable rate instruments (13) 13 13 (13)Interest rate swap - - - - Cash flow sensitivity (net) (13) 13 13 (13)



Foreign currency riskAs a significant part of the operations take place in countries other than Norway (such as Romania, Singapore, Vietnam and Brazil), the Group’s financial performance can be affected, especially by movements in the EURNOK and USDNOK currency rates as well as local (functional) currency versus foreign currencies. Where contract prices and costs are in the same foreign currency, there is an economic hedge and the currency exposure of such contracts is relatively small.

The Group utilizes forward foreign currency contracts to hedge its currency risk for contracts in foreign currencies where exposure is significant. The Group uses forward contracts purely as a hedging tool and does not use forward foreign currency contracts for trading purposes.

The Group’s and Company’s exposure to foreign currency risk, in millions of foreign currency units, when compared to functional currencies, are as follows: 31 December 2010 31 December 2009 Group eUR USD SGD eUR USD SGDFinancial assetsOther investments - - - - - - Trade and other receivables 110 37 - 91 6 - Cash and cash equivalents 80 109 4 14 19 - Total 190 146 4 105 25 -

Financial liabilitiesLoans and borrowings (8) (309) - - (209) - Trade and other payables (27) (93) - (45) (116) - Total (35) (401) - (45) (326) - net financial assets / (liabilities) 155 (255) 4 59 (301) -

Net USD liability is offset by USD reveivables not yet included in statement of financial position. USD receivables primarily relate to delivery instalment received at delivery, and hence not included above.

31 December 2010Company eUR USD SGDFinancial assetsOther investments - - - Trade and other receivables - - - Cash and cash equivalents - - 4 Total - - 4

Financial liabilitiesLoans and borrowings - - - Trade and other payables - - - Total - - - net financial assets /(liabilities) - - 4

The assessment of the foreign currency exposure is based on the Group’s and Company’s monetary items. The construction work in progress (asset/liability), since it is a non monetary item, is not dealt with above. This is managed as part of each construction contract.


Sensitivity analysisA strengthening of the following foreign currencies as indicated below against the functional currencies of the Company and its subsidiaries at the reporting date for the Group’s and Company’s monetary items, including forward foreign currency contracts, would have increased/(decreased) equity and profit and loss by the amounts shown below. This analysis is based on foreign exchange rate variances that the Group considered to be reasonably possible at the end of reporting period. This analysis also assumes that all other variables remain constant.

Group 2010 2009USD (5% strengthening) (152) (64)EUR (5% strengthening) 104 81 SGD (5% strengthening) - -


A weakening of the above foreign currencies against the functional currencies of the Company and its subsidiaries at the reporting date would have equal but opposite effects on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Liquidity riskLiquidity risk is the risk that the Group will encounter in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group monitors its net operating cash flows based on individual construction contracts. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of available credit facilities and construction financing.

The table below analyses the maturity profile of the Group’s and Company’s financial liabilities (including derivative financial instruments) based on the gross contractual undiscounted cash flows:

Total Carrying contractual Within WithinGroup amount cash flow 1 year 1-5 years >5 yearsAt 31 December 2010non–derivative financial liabilitiesTrade and other payables (Note 22) (3,139) (3,139) (3,139) - - Construction Loans (Note 19) (4,398) (4,398) (4,398) - - Loans and borrowings (Note 19) (310) (328) (49) (188) (91)Other current liabilities (Note 23) (21) (21) (21)

Derivative financial liabilities Forward exchange contracts used for hedging: - Outflow (Note 22) (70) (2,406) (2,228) (178) - - Inflow - 2,336 2,161 175 - Interest rate swaps used for hedging:- Assets - - - - - - Liabilities - - - - -

Derivative financial assetsForward exchange contracts used for hedging:- Outflow - (4,761) (4,036) (725) - - Inflow (Note 15) 366 5,127 4,344 783 - Total (7,572) (7,590) (7,366) (133) (91)



Total Carrying contractual Within WithinGroup amount cash flow 1 year 1-5 years >5 yearsAt 31 December 2009non–derivative financial liabilitiesTrade and other payables (Note 22) (3,106) (3,106) (3,106) - - Construction Loans (Note 19) (6,102) (6,102) (6,102) - - Loans and borrowings (Note 19) (406) (484) (138) (185) (161)Other current liabilities (Note 23) (148) (148) (148) - -

Derivative financial liabilitiesForward exchange contracts used for hedging:- Outflow (Note 22) (37) (852) (824) (28) - - Inflow - 815 789 26 - Interest rate swaps used for hedging:- Assets - - - - - - Liabilities - - - - -

Derivative financial assetsForward exchange contracts used for hedging:- Outflow - (4,870) (4,096) (774) - - Inflow (Note 15) 251 5,121 4,315 806 - Total (9,548) (9,626) (9,310) (155) (161)

Total Carrying contractual Within WithinCompany amount cash flow 1 year 1-5 years >5 yearsAt 31 December 2010non–derivative financial liabilitiesTrade and other payables (Note 22) (18) (18) (18) - -Construction Loans (Note 19) - - - - -Loans and borrowings (Note 19) - - - - -Other current liabilities (Note 23) - - - - -

Derivative financial liabilitiesForward exchange contracts used for hedging:- Outflow (Note 22) - - - - -- Inflow - - - - -Interest rate swaps used for hedging:- Assets - - - - -- Liabilities - - - - -

Derivative financial assetsForward exchange contracts used for hedging:- Outflow - - - - -- Inflow (Note 15) - - - - -Total (18) (18) (18) - -

The Company has issued financial guarantees amounting to NOK 139 million to the Group’s customers. This amount is not included in the above table.


Fair Fair Amortized Amortized value – value – cost – cost – Total Hedging Available- Loans and Financial carrying FairGroup note instruments for-sale receivables liabilities amount value

31 December 2010

Financial assets

Other investments 8 - 8 - - 8 8

Non-current interest-bearing receivables 9 - - 1 - 1 1

Other non-current receivables 10 - - 27 - 27 26

Trade and other receivables 15 366 - 1,450 - 1,816 1,816

Interest-bearing receivables 9 - - - - - -

Cash and cash equivalents 16 - - 2,851 - 2,851 2,851

Total 366 8 4,329 - 4,703 4,702

Financial liabilities

Non-current loans and borrowings 19 - - (266) - (266) (224)

Other non-current payables 20 - - - - - -

Trade and other payables 22 (70) - - (3,139) (3,209) (3,209)

Current loans and borrowings 19 - - (4,442) - (4,442) (4,442)

Other current liabilities 23 - - - (21) (21) (21)

Total (70) - (4,708) (3,160) (7,938) (7,896)

Accounting classification and fair valuesFair value disclosuresThe fair values of financial assets and financial liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:



Fair Fair Amortized Amortized value – value – cost – cost – Total Hedging Available- Loans and Financial carrying FairGroup note instruments for-sale receivables liabilities amount value

31 December 2009

Financial assets

Other investments 8 - 9 - - 9 9

Non-current interest-bearing receivables 9 - - 136 - 136 126

Other non-current receivables 10 - - 25 - 25 24

Trade and other receivables 15 251 - 1,748 - 1,999 1,999

Interest-bearing receivables 9 - - 211 - 211 211

Cash and cash equivalents 16 - - 1,393 - 1,393 1,393

Total 251 9 3,513 - 3,773 3,762

Financial liabilities

Non-current loans and borrowings 19 - - (335) - (335) (299)

Other non-current payables 20 - - - (547) (547) (547)

Trade and other payables 22 (37) - - (3,106) (3,143) (3,143)

Current loans and borrowings 19 - - (6,173) - (6,173) (6,173)

Other current liabilities 23 - - - (148) (148) (148)

Total (37) - (6,508) (3,801) (10,346) (10,310)

Interest rates used for determining fair value The interest rates used to discount estimated cash flows, when applicable, are based on management’s best estimates and the discount rates are the market interest rate for a similar instrument at the reporting date. The fair value of other non-current payables 2009 were interest-free while non-current loans and borrowings for both years were valued at the rate of 2-6%.


Fair value by hierarchyThe table below analyses financial instruments carried out at fair value, by valuation methods as at 31 December 2010 and 2009.

Group Level 1 Level 2 Level 3 TotalAt 31 December 2010AssetsAvailable-for-sale financial assets - 8 - 8 Interest rate swaps - - - - Forward contracts used for hedging - 366 - 366 Total - 374 - 374 LiabilitiesForward contracts used for hedging - (70) - (70)Total - (70) - (70)net - 304 - 304

At 31 December 2009AssetsAvailable-for-sale financial assets - 9 - 9 Interest rate swaps - - - - Forward contracts used for hedging - 251 - 251 Total - 260 - 260 LiabilitiesForward contracts used for hedging - (37) - (37)Total - (37) - (37)net - 223 - 223

The Company has no financial assets or liabilities carried at fair value at 31 December 2010.

The different levels of the fair value hierarchy are as follows:

• Level1–Fairvaluesaremeasuredbasedonquotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities.

• Level2–FairvaluesaremeasuredusinginputsotherthanquotedpricesincludedwithinLevel1thatare observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level3–Fairvaluesaremeasuredusinginputsfortheassetorliabilitythatarenotbasedonobservablemarketdata (unobservable inputs).

Determination of fair valuesSecuritiesThe fair value of available-for-sale assets-equity securities is determined using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value the security are observable, the instrument is included in level 2.

DerivativesFair value of forward foreign currency contracts is determined using the forward exchange rates at the reporting date.

Fair value of interest rate swaps, if any, is determined based on the present value of the estimated future cash flows based on observable yield curves.



32. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios so as to maintain investors’, creditors’ and market confidence and to support and sustain future development of the business. The Group seeks to maintain a healthy balance between higher returns that might be possible with higher levels of borrowings, and the advantages and security afforded by a sound capital position.

All companies in the Group shall have net working capital that is sufficient to finance construction projects during a normal to high level activity period. Financing of major investments and acquisitions shall as far as possible be done by long term debt, with a maturity profile that corresponds to the useful life of the investment.

Capital consists of paid up capital, other reserves, retained earnings and non-controlling interests of the Group. The Board of Directors monitors the return of capital as well as the level of dividends to the shareholders. There were no changes in the Group’s approach to capital management during the year.

Except from covenant requirements as described in Note 19, neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

33. Operational lease commitments

Non-cancellable operating lease rentals are payable as follows:

Group 2010 2009Within one year 38 18 Between one and five years 121 68 More than five years 61 39 Total 220 125

STX OSV Holdings Limited did not have any lease commitments as of 31.12.2010.

The Group’s non-cancellable operating lease relate primarily to yard lease which has a remaining lease period of four years. The Company leases office premises under operating leases and the lease has a non-cancellable remaining period of eight years. The leases have options for renewal.

During the financial year, an amount of NOK 38 million was recognized as an expense in profit or loss in respect of operating leases (2009: NOK 19 million).


34. Related parties

(a) Parent and ultimate holding companyDuring the year, pursuant to the restructuring exercise as mentioned in Note 1(b), shares of the Company were issued to STX Europe Holding AS. At the reporting date, STX Europe Holding AS is the immediate holding of the Company. STX Europe Holding AS is wholly owned by STX Europe AS. The ultimate holding company is STX Corporation Co., Ltd, incorporated in South Korea.

(b) Transactions with key management personnel Key management personnel compensationThe Group’s principles relating to remuneration to the Group’s key management personnel are to cultivate a performance-based corporate culture based on the Group’s values, and to motivate contribution to good financial performance and greater value creation for the shareholders of the Group. The Group’s key management personnel participate in the Group’s collective pension plan, under which all employees are entitled to a pension contribution amounting to 2.5% of salary up to 12 times the social security base amount. In addition, the Group’s Executive management team and other senior managers have an additional 2.5% salary pension contribution.

Remuneration to key management personnel of the Group during the year are as follow:

Groupnumbers in nOK thousand 2010 2009Base salary 10,923 7,517 Variable pay 3,325 1,932 Other benefits 221 57 Pension benefit 362 272 Total 14,831 9,778

(c) Other related party transactionsThe following transactions took place between the Group and related parties, who are not members of the Group, during the financial year on terms agreed between the parties concerned:



Transactions and agreements with related parties

Sales of goods and services 2010 2009Sales of construction contracts and engineering services to other related parties 2 2 Other - - Total sales of goods and services 2 2

Purchases of goods and services 2010 2009Cost of goods other related parties (317) (662)Other operating expenses parent company (4) (6)Other operating expenses other related parties (24) (51)Total purchases of goods and services (345) (719)

The purchases defined as other operating expenses from parent company and other related parties are related to administration services.

Financial items 2010 2009Interest income parent company 1 - Interest income other related parties 18 30 Interest expense parent company (8) (7)Interest expense other related parties (1) - net financial items 10 23

Other related parties refer to companies which are owned by STX Europe AS but are not part of the Group, and entities which are controlled or significantly influenced by the Group’s key management personnel and their close family members.

Outstanding balances receivable from/ payable to related parties are disclosed in Notes 9, 15, 19 and 20 accordingly.

The holding companies, STX Europe AS and STX Europe Holding AS, have guaranteed various corporate loans, construction loans, advance payment bonds and suppliers on behalf of the Group. These guarantees amounted to NOK 5,386 million at the reporting date (2009: NOK 5,516 million).

A portion of the Group’s forward foreign currency contracts are entered into by the holding company, STX Europe AS on behalf of subsidiaries within the Group. A corresponding back–to–back agreement is made between STX Europe AS and the respective subsidiaries. Where hedge instruments are entered into by the Group, the contractual obligations are guaranteed by STX Europe AS.


35. Group of companies

The subsidiaries included in the STX OSV Holdings Limited Group were as follows.

effective equity held by the Group Place of incorporation 2010 2009name of the company and business Principal activities % %STX OSV AS Norway Shipbuilding 100 100Subsidiaries of STX OSV ASSTX OSV Electro AS Norway Electrical / automation installation 100 100STX OSV RO Holding SRL Romania Holding company 100 100STX OSV Niterói SA Brazil Shipbuilding 100 100Estaleiro Promar SA Brazil Shipbuilding 51 -STX OSV Singapore Pte. Ltd Singapore Sales, trading and engineering 100 70STX OSV Design AS Norway Project development and ship design 100 100STX OSV Accommodation AS Norway Accommodation installation 100 -STX OSV Piping AS Norway Pipe installation 100 100STX OSV Brevik Holding AS Norway Holding and parent company 100 100Subsidiaries of STX OSV electro ASSTX OSV Electro Tulcea SRL Romania Electrical installation 100 100STX OSV Electro Niterói Ltda Brazil Electrical installation 100 100STX OSV Electro Braila SRL Romania Electrical installation 100 100STX Electrical Installation and Engineering (India) Private Limited India Electrical installation 99 -STX Brevik Philadelphia USA Dormant 100 100Subsidiaries of STX OSV RO Holding SRLSTX OSV Tulcea SA Romania Shipbuilding 95 95STX OSV Scanyard SRL Romania Shipbuilding 100 100STX OSV Braila SA1) Romania Shipbuilding 100 99 - Braila Ship Repair SA2) Romania Ship repair and maintenance 100 99 - AJA Ship Design SA Romania Ship engineering 60 60Subsidiaries of STX OSV Singapore Pte. LtdSTX OSV Vung Tau Ltd Vietnam Shipbuilding 100 70Subsidiaries of STX OSV Piping ASSTX OSV Piping SRL Romania Pipe installation 100 100Johansen Maritime AS Norway Dormant 100 -Subsidiaries of STX OSV Brevik Holding ASSTX Grenland Industri AS Norway Onshore industrial services and install. 100 100- Hjallum AS Norway Pipe installation 100 100STX Brevik Support AS Norway Ship services 100 50- STX Shipyard Support AS Norway Dormant 100 100Ronor AS Norway Dormant 100 100- Noryards AS Norway Dormant 100 100- Scanrom SRL Romania Dormant 100 100- Norfarm SRL Romania Dormant 100 100

1) STX OSV RO Holding SRL 94.12%, STX OSV AS 5.88% 2) STX OSV Braila SA 68.58%, STX OSV Brevik Holding AS 31.42%



KPMG LLP is the auditor of the Singapore-incorporated subsidiary. Other member firms of KPMG International are auditors of all significant foreign-incorporated subsidiaries except where auditors need not be appointed.

36. Post balance sheet events

Court ruling in arbitration case with nordcapital groupAfter 31 December 2010, awards were handed down in arbitrations under four shipbuilding contracts between subsidiaries in the Nordcapital group and the Company. The Company has revised its accruals in relation to the claims put forward based on the awards. The adjustment of the accruals provided a gain of NOK 20 million, which is incorporated in the accounts as of reporting date. Some additional adjustments may occur in later reports.

Aquisition of a subsidiaryOn 28 February 2011, the Group decided to acquire Emil Langva AS, a company incorporated in Norway. The new subsidiary is based in Ålesund, has 17 employees and provides high tech electronic solutions, in particular within navigation and communication systems. Their competence and projects fit well with activities and strategies in STX OSV Electro AS. The Group acquires 100 percent of the equity interest for a cash consideration of NOK 5 million. The transaction became effective 3 March 2011.

37. Contingencies and capital commitments

Guarantee obligationsAs part of its ordinary operations, completion guarantees and guarantees for advance payments from customers (refundment guarantees) are issued. Such guarantees typically involve a financial institution that writes the guarantee vis-à-vis the customer.

Project risks and uncertaintiesThe Group operations are subject to long term contracts, many of which are fixed-price, turnkey contracts that are awarded on a competitive bidding basis. Failure to meet schedule or performance guarantees or increases in contract costs can result in non-recoverable costs, which could exceed revenues realized from the applicable project. Where a project is identified as loss making, forward loss provisions are made. The accounting treatment is based on experience, events and management’s best judgment. Inevitably, such circumstances and information may be subject to change in subsequent periods and thus the eventual outcome may be better or worse than the assessments made in drawing up periodical financial reports.

Legal proceedingsWith its extensive worldwide operations, companies included in the Group are in the course of its activities involved in numerous legal disputes. Provisions have been made to cover the expected outcome of the disputes to the extent that negative outcomes are likely and reliable estimates can be made. However, the final outcome of these cases will always be subject to uncertainties and resulting liabilities may exceed booked provisions. As of reporting date, the Group is not part in any major ongoing legal dispute, which could have a material impact on the financial statements, and not already provided for (refer Note 36).

Clean-up costsThe Group’s operations are subject to numerous national and supra-national environmental regulations, including removal and cleanup of environmental contamination. Although there have to date been no indications that the Group have failed to comply with applicable environmental rules, regulations or permits, current concentration limits for hazardous material will apply to historical contamination, and any further studies or changes in concentration limits


may result in further clean-up operations or protective measures being imposed in the future. The costs related to such clean-up or protective measures may be significant and could have a material adverse effect on our business, financial condition and results of operations. Although the cost related to this can be material, the company expects that the potential cost related to this can be covered within normal operations without any material negative impact.


Appendix in relation to the proposed renewal of the IPT Mandate

STX OSV Holdings Limited

(Incorporated in the Republic of Singapore)(Company Registration No. 201012504K)

Directors:Jong Chul Lee (Non-Executive Chairman)Roy Reite (Chief Executive Officer and Executive Director)Ho Nam Yi (Non-Executive Director)Byung Ryoon Woo (Non-Executive Director)Keen Whye Lee (Independent Director)Sung Hyon Sok (Independent Director)

Registered Office:50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

12 April 2011

To the Shareholders of STX OSV Holdings Limited

1. IntroductionThe Company has issued the Notice of AGM dated 12 April 2011 in relation to the first AGM of the Company to be held on 27 April 2011, which is set out on page 144 to 148 of the 2010 Annual Report. The Ordinary Resolution 13 under the heading “Special Business” as set out in the Notice of AGM is an Ordinary Resolution relating to the renewal of the IPT Mandate.

The purpose of this Appendix is to provide Shareholders with information relating to the proposed renewal of the IPT Mandate pursuant to Chapter 9 of the Listing Manual for the purpose of seeking their approval thereto at the 2011 AGM. All defined terms in this Appendix have their meanings as acribed in the Definitions section on pages 132 and 133, unless otherwise stated.

Further details of the IPT Mandate are set out in the Annex to this Appendix.

A P P e n D I X – I P T M A n D A T e


2. The proposed renewal of the IPT Mandate2.1 The Existing IPT Mandate The IPT Mandate was first adopted by the Shareholders to allow the Company, its subsidiaries and associated companies (the “Group”) which are considered to be entities at risk within the meaning of Rule 904(2) of the Listing Manual to enter into certain Mandated Transactions with the Mandated Interested Persons as set out in the IPT Mandate.

The IPT Mandate is effective until the earlier of (i) the Company’s first AGM following its Listing; or (ii) the first anniversary of the date of the Listing.

2.2 Duration of the Renewed IPT MandateThe rationale for and benefits of the IPT Mandate, its scope, the classes of Mandated Interested Persons, the categories of Mandated Transactions and the Review Procedures in respect of which the IPT Mandate is sought to be renewed, remain unchanged and are as set out in the Annex to this Appendix.

The Directors propose that the IPT Mandate be renewed at the Company’s 2011 AGM on the terms of Ordinary Resolution 13 to be proposed at the 2011 AGM and (unless revoked or varied by the Company in general meeting) to continue in force until the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is earlier. Approval from Shareholders will be sought for the renewal of the IPT Mandate at the next and each subsequent AGM of the Company, subject to satisfactory review by the Audit Committee of its continued application to the Mandated Transactions.

2.3 Audit Committee’s Statements

The Audit Committee, comprising Mr. Keen Whye Lee, Mr. Byung Ryoon Woo and Mr. Sung Hyon Sok as at the date of this Appendix, confirms that:

(a) the Review Procedures have not changed since the IPT Mandate was adopted pursuant to Rule 920 (2) of the Listing Manual; and

(b) the Review Procedures are sufficient to ensure that the Mandated Transactions will be carried out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders.

If, during the periodic reviews by the Audit Committee, the Audit Committee is of the view that the Review Procedures are inadequate or inappropriate to ensure that the Mandated Transactions will be carried out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders, or in the event of any amendment to Chapter 9 of the Listing Manual, it will in consultation with the Board of Directors take such action as it deems proper in respect of such procedures and/or modify or implement such procedures as may be necessary and direct the Company to revert to Shareholders for a fresh mandate based on new guidelines and procedures for transactions with the Mandated Interested Persons.



3. Directors’ and substantial shareholders’ interests

As at the Latest Practicable Date, the interests of the Company’s Substantial Shareholders and Directors are as follows: Direct Interest Deemed Interest Total no. of no. of no. of Shares (%)(1) Shares (%)(1) Shares (%)(1)

DirectorsJong Chul Lee - - - - - -Roy Reite - - - - - -Ho Nam Yi - - - - - -Byung Ryoon Woo - - - - - -Keen Whye Lee - - - - - -Sung Hyon Sok - - - - - -Substantial Shareholders STX Europe Holding AS 814,441,000 69.02 - - 814,441,000 69.02STX Europe AS(2) - - 814,441,000 69.02 814,441,000 69.02STX Norway AS(2) - - 814,441,000 69.02 814,441,000 69.02STX Engine Co., Ltd.(2) - - 814,441,000 69.02 814,441,000 69.02STX Offshore & Shipbuilding Co., Ltd.(2) - - 814,441,000 69.02 814,441,000 69.02STX Corporation Co., Ltd.(2) - - 814,441,000 69.02 814,441,000 69.02Morgan Stanley Entities(3) - - 64,000,000 5.42 64,000,000 5.42Morgan Stanley; Morgan Stanley International Holdings Inc.(4) - - 68,646,000 5.82 68,646,000 5.82

notes:(1) As a percentage of the issued share capital of the Company, comprising 1,180,000,000 Shares.

(2) By virtue of Section 7 of the Companies Act, these entities are deemed to be interested in the shares held by STX Europe Holding AS in the Company. The relationship of the said entities is as follows: (i) STX Europe AS holds 100% of the share capital of STX Europe Holding AS. (ii) 100% of the shares of STX Europe AS are held by STX Norway AS. (iii) STX Offshore & Shipbuilding Co., Ltd. holds 66.7% of the share capital of STX Norway AS and STX Engine Co.,

Ltd. holds the remaining 33.3%. (iv) STX Corporation Co., Ltd. holds 33.7% of the share capital of STX Offshore & Shipbuilding Co., Ltd. and 33.6%

of the share capital of STX Engine Co., Ltd.

(3) (i) Morgan Stanley; (ii) Morgan Stanley International Holdings Inc.; (iii) Morgan Stanley Asia Pacific (Holdings) Limited; (iv) Morgan Stanley Asia Regional (Holdings) III LLC; (v) Morgan Stanley (Singapore) Holdings Pte. Ltd.;

and (vi) Morgan Stanley Investment Management Company (together, the “Morgan Stanley Entities”).

(4) Shares held or in respect of which Morgan Stanley and Co. International Plc may exercise right to rehypothecate or dispose of.


4. Directors’ recommendationsThe Directors who are considered independent for the purposes of the IPT Mandate are Mr. Roy Reite, Mr. Keen Whye Lee and Mr. Sung Hyon Sok (the “Independent Directors”).

The Independent Directors, having considered the terms, rationale for and benefits of the IPT Mandate and taken into account the Audit Committee’s statements in paragraph 2.3 above, are of the opinion that the proposed renewal of the IPT Mandate is in the best interests of the Company and accordingly recommend that Shareholders vote in favour of the Ordinary Resolution 13 relating to the renewal of the IPT Mandate at the 2011 AGM.

Mr. Jong Chul Lee and Mr. Ho Nam Yi are nominees of STX Corporation Co., Ltd. and Mr. Byung Ryoon Woo is a nominee of STX Europe AS. Accordingly, they are not considered independent for the purposes of the IPT Mandate.

5. Abstention from votingIn accordance with the requirements of Chapter 9 of the Listing Manual, STX Europe Holding AS, being a Substantial Shareholder, is regarded as an Interested Person in relation to the IPT Mandate and will abstain from voting and has undertaken to ensure that its respective associates will abstain from voting on the Ordinary Resolution 13 in relation to the renewal of the IPT Mandate at the 2011 AGM. Such persons will also decline to accept nominations to act as proxy to vote and attend at the 2011 AGM in respect of the said Ordinary Resolution unless the Shareholders appointing them have given specific instructions as to the manner in which their votes are to be cast in respect of the said resolution.

6. Inspection of documentsThe following documents are available for inspection at the registered office of the Company during normal business hours on any weekday (public holidays excluded) from the date of this Appendix up to and including the date of the 2011 AGM:

(a) the 2010 Annual Report; and

(b) the Memorandum and Articles of Association of the Company.

7. Directors’ responsibility statementThis Appendix has been approved by all the Directors who collectively and individually accept responsibility for the accuracy of the information given in this Appendix and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the opinions expressed in this Appendix are fair and accurate in all material respects as at the Latest Practicable Date and that there are no material facts the omission of which would make any statement in this Appendix misleading.

Where information has been extracted from published or otherwise publicly available sources, the sole responsibility of the Directors has been to ensure that such information has been accurately extracted from such sources or, as the case may be, reflected or reproduced in this Appendix.

For and on behalf of the Board of Directors

Mr. Roy ReiteChief Executive Officer and Executive Director



Definitions

In this Appendix, the following definitions apply throughout unless otherwise stated:

“2010 Annual Report” The annual report of the Company for the financial year ended 31 December 2010

“2011 AGM” The first AGM of the Company to be held on 27 April 2011

“AGM” Annual general meeting of the Company

“associate” Has the meaning ascribed to it in the Listing Manual or as set out in paragraph 1.2 of the Annex to this Appendix

“associated company” Has the meaning ascribed to it in the Listing Manual or as set out in paragraph 1.2 of the Annex to this Appendix

“Audit Committee” The audit committee of the Company, comprising Mr. Keen Whye Lee, Mr. Byung Ryoon Woo and Mr. Sung Hyon Sok, as at the date of this Appendix

“Board” or “Directors” The Board of Directors of the Company

“CDP” The Central Depository (Pte) Limited

“Chief Financial Officer” The chief financial officer of the Company

“Companies Act” The Companies Act, Chapter 50 of Singapore, as amended or modified from time to time

“Company” STX OSV Holdings Limited

“Compliance Committee” The compliance committee of the Company in relation to the IPT Mandate, comprising three senior management executives who do not have any interest, whether direct or indirect, in the Mandated Transactions and who are familiar with the operations of the Group.

“Group” The Company, its subsidiaries and associated companies

“Independent Directors” The Directors who are deemed independent for the purposes of the IPT Mandate, being Mr. Roy Reite, Mr. Keen Whye Lee and Mr. Sung Hyun Sok

“Interested Persons” Has the meaning ascribed to it in the Listing Manual or as set out in paragraph 1.2 of the Annex to this Appendix

“IPT Mandate” The general mandate approved by Shareholders pursuant to Chapter 9 of the Listing Manual for the Group to enter into the Mandated Transactions

“Latest Practicable Date” 15 March 2011, being the latest practicable date prior to the printing of this Appendix

“Listing” The admission of the Company to the Official List of the SGX-ST on 12 November 2010


“Listing Manual” The listing manual of the SGX-ST

“Mandated Interested Persons” Has the meaning ascribed to it in paragraph 2 of the Annex to this Appendix

“Mandated Transactions” Has the meaning ascribed to it in paragraph 3 of the Annex to this Appendix

“Market Day” A day on which the SGX-ST is open for trading of securities

“notice of AGM” The Notice of AGM dated 12 April 2011 in relation to the 2011 AGM

“nTA” Net tangible assets

“Ordinary Resolution” A resolution proposed and passed as such by a majority consisting more than 50% of the total number of votes cast for and against such resolution at a meeting of Shareholders

“Review Procedures” The methods or procedures for determining the transaction prices for Mandated Transactions as set out in the IPT Mandate

“SGX-ST” Singapore Exchange Securities Trading Limited

“Shareholders” Persons (other than CDP) who are for the time being registered as holders of Shares in the Register of Members maintained by the Company and Depositors who have Shares entered against their names in the Depository Register

“Shares” Ordinary shares in the capital of the Company

“Substantial Shareholder” A Shareholder who has in interest in five per cent. or more of the voting Shares of the Company

“S$” and “cents” Singapore dollars and cents, respectively

“%” or “per cent” Per centum or percentage

The terms “Depositor” and “Depository Register” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act.

The term “subsidiary” shall have the meaning ascribed to it by Section 5 of the Companies Act.

Words importing the singular shall, where applicable, include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations.

Any reference in this Appendix to any enactment is a reference to that enactment for the time being amended or re-enacted. Any word defined under the Companies Act or any statutory modification thereof and used in this Appendix shall have the same meaning assigned to it under the Companies Act or any statutory modification thereof, as the case may be.

Any reference to a time of day in this Appendix shall be a reference to Singapore time unless otherwise stated.



Annex – IPT Mandate

1. Introduction1.1 Chapter 9 of the Listing ManualChapter 9 of the Listing Manual applies to transactions which a listed company or any of its subsidiaries or associated companies, which is considered to be an “entity at risk” within the meaning of Rule 904(2) of the Listing Manual, proposes to enter into with a counter-party who is an interested person of the listed company.

1.2 Definitions of main terms used in Chapter 9 of the Listing ManualAn “entity at risk” means:

(a) the listed company;

(b) a subsidiary of the listed company that is not listed on the SGX-ST or an approved exchange; or

(c) an associated company of the listed company that is not listed on the SGX-ST or an approved exchange, provided that the listed company and/or its subsidiaries (the “listed group”), or the listed group and its interested person(s), has or have control over the associated company.

An “interested person” means a director, chief executive officer or controlling shareholder of the listed company or an associate of such director, chief executive officer or controlling shareholder. An “interested person transaction” means a transaction between an entity at risk and an interested person.

An “approved exchange” means a stock exchange that has rules which safeguard the interests of shareholders against interested person transactions according to similar principles to Chapter 9 of the Listing Manual.

An “associate” in relation to any director, chief executive officer or controlling shareholder which is an individual means (i) his immediate family (that is, the spouse, child, adopted child, step-child, sibling or parent), (ii) the trustees of any trust of which he or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object, and (iii) any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more, and, in relation to a controlling shareholder which is a company, its subsidiary or holding company or a subsidiary of such holding company or a company in which it and/or they have (directly or indirectly) an interest of 30% or more. An “associated company” means a company in which at least 20% but not more than 50% of its shares are held by the listed company or the listed group.

A “subsidiary” bears the meaning set out in the Companies Act.

A “controlling shareholder” means a person who holds (directly or indirectly) 15% or more of the total number of issued shares excluding treasury shares in the company (provided that the SGX-ST may determine that such a person is not a controlling shareholder) or one who in fact exercises control over the company.

“control” means the capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of a company.


1.3 Materiality thresholds, disclosure requirements and shareholders’ approvalUnder Chapter 9 of the Listing Manual, except for certain transactions which, by reason of the nature of such transactions, are not considered to put the listed company at risk to its interested persons and are hence excluded from the ambit of Chapter 9, immediate announcement, or, immediate announcement and shareholders’ approval would be required in respect of transactions with interested persons if certain materiality thresholds (which are based on the value of the transaction as compared with the listed company’s latest audited consolidated NTA), are reached or exceeded.

The materiality thresholds are:

Threshold 1: 3% of the latest audited consolidated NTA of the listed company and its subsidiaries.Threshold 2: 5% of the latest audited consolidated NTA of the listed company and its subsidiaries.

In particular, an immediate announcement is required where:

(a) the transaction is of a value equal to, or more than, 3% of the latest audited consolidated NTA of the listed company and its subsidiaries; or

(b) the aggregate value of all transactions entered into with the same interested person (as defined in Rule 908 of the Listing Manual) during the same financial year amounts to 3% or more of the latest audited consolidated NTA of the listed company and its subsidiaries; in such a case, an immediate announcement is also required of all future transactions entered into with that same interested person during that financial year; and

shareholders’ approval (in addition to an immediate announcement) is required where:

(a) the transaction is of a value equal to, or more than 5% of the latest audited consolidated NTA of the listed company and its subsidiaries; or

(b) the transaction, when aggregated with other transactions entered into with the same interested person during the same financial year, is of a value equal to, or more than, 5% of the latest audited consolidated NTA of the listed company and its subsidiaries. The aggregation will exclude any transaction that has been approved by shareholders previously, or is the subject of aggregation with another transaction that has been approved by shareholders.

For the purposes of aggregation, any interested person transaction which is below S$100,000 in value is to be excluded.

1.4 Shareholders’ general mandateRule 920(1) of the Listing Manual allows a listed company to seek a general mandate from its shareholders for recurrent transactions of a revenue or trading nature or those necessary for its day-to-day operations such as the purchase and sale of supplies and materials but not in respect of the purchase or sale of assets, undertakings or businesses, which may be carried out with the listed company’s interested persons.

2. Classes of mandated interested personsThe IPT Mandate will apply to the Group’s interested person transactions with STX Corporation Co., Ltd. and its associates (including STX Engine Co., Ltd and excluding the Group) (the “Mandated Interested Persons”).



3. Mandated transactionsThe categories of ongoing transactions with Mandated Interested Persons which will be covered by the IPT Mandate (the “Mandated Transactions”) are:

(a) sale of goods to the Group including: (i) raw materials such as steel, piping and electrical cables; and (ii) equipment such as engines, generator sets, winch and propulsion systems, electrical and automation

systems and software systems, which are required for the construction of vessels;(b) provision of services to the Group which are: (i) corporate services such as communications and public relations and provision of office space; (ii) ship design and consultancy services; (iii) procurement services for equipment and raw materials; and (iv) docking services;

(c) sale of goods including vessels and ship design and equipment packages by the Group;

(d) provision of services such as legal and advisory services provided to STX Europe AS by certain of the Company’s senior management who have previously held positions in STX Europe AS during the transitional period after the Listing, and ancillary technical services and technology for the installation of design and equipment packages by the Group; and

(e) provision of corporate guarantees and other credit support for the benefit of the Group.

4. Rationale for and benefits of the IPT MandateThe Mandated Transactions are entered into or to be entered into by the Group in its ordinary course of business. They are recurring transactions which are likely to occur with some degree of frequency and arise at any time and from time to time.

The IPT Mandate and the renewal of the IPT Mandate on an annual basis will eliminate the need to convene separate general meetings from time to time to seek Shareholders’ approval as and when potential interested person transactions with the Mandated Interested Persons arise, thereby reducing substantially, the administrative time and expenses in convening such meetings, without compromising the corporate objectives and adversely affecting the business opportunities available to us.

The IPT Mandate is intended to facilitate these transactions, provided that they are carried out on normal commercial terms and are not prejudicial to us and the Company’s minority shareholders. The Directors are of the view that the Group will be able to benefit from such transactions with Mandated Interested Persons.

In addition to obtaining quotes from, or transacting with, non-Mandated Interested Persons, the Group will benefit from having access to competitive quotes from, or transacting with, the Mandated Interested Persons as this will enable the Group to obtain more competitive pricing for services and goods procured. The IPT Mandate will also allow the Group to enjoy economies of scale in the procurement of services and goods. Further, it will facilitate a more lean and efficient administrative set-up as the Group will be able to utilize the personnel of the Mandated Interested Persons for certain corporate services.


5. DisclosureDisclosure will be made in the Company’s annual report of the aggregate value of transactions conducted pursuant to the IPT Mandate and otherwise during the financial year under review, and in the annual reports for the subsequent financial years during which the IPT Mandate is renewed and remains in force.

6. Scope and validity period of IPT MandateThe IPT Mandate will not cover any interested person transaction that is below S$100,000 in value, as the threshold and aggregation requirements of Chapter 9 of the Listing Manual do not apply to such transactions.

Transactions with interested persons which do not fall within the ambit of the proposed IPT Mandate, will be subject to the relevant provisions of Chapter 9 of the Listing Manual.

If approved by the Shareholders at the 2011 AGM, the IPT Mandate will take effect from 2011 AGM and will, unless revoked or varied by the Company in a general meeting, continue in force until the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is earlier. Approval from Shareholders will be sought for the renewal of the IPT Mandate on the date of the next AGM and each subsequent AGM of the Company, subject to satisfactory review by the Audit Committee of its continued application to the Mandated Transactions.

7. Review procedures for interested person transactionsTo ensure that the Mandated Transactions are undertaken at arm’s length and on normal commercial terms consistent with the Group’s usual business practices and policies, and will not be prejudicial to the interests of the Company and its minority Shareholders, the following review procedures under the IPT Mandate (the “Review Procedures”) will apply:

7.1 Provision of services and sale of goods to the Group by Mandated Interested PersonsIn relation to any transaction proposed to be carried out with the Mandated Interested Persons for:

(a) the provision of services to the Group which are: (i) corporate services such as communications and public relations and provision of office space; (ii) ship design and consultancy services; (iii) procurement services for equipment and raw materials; and (iv) docking services,

(b) the sale of goods to the Group including: (i) raw materials such as steel, piping and electrical cables; and (ii) equipment such as engines, generator sets, winch and propulsion systems, electrical and automation

systems and software systems, which are required for the construction of vessels,

the Group will satisfy itself that the actual fees paid or payable for the services provided or goods sold are fair and reasonable.

For services provided and goods supplied to the Group in relation to shipbuilding, such as ship design services, docking services and the sale of raw materials and shipbuilding parts, the project team in charge of that particular shipbuilding project will obtain quotations from the Mandated Interested Person and at least two unrelated third party service providers or suppliers.



For other services, such as corporate services and goods, the Chief Financial Officer or a senior management executive from the relevant department will obtain quotations from the Mandated Interested Person and at least two unrelated third party service providers or suppliers. Such third party service providers or suppliers will include those which have provided or supplied similar services or goods to us previously, or any service provider or supplier which is able to provide or supply similar services or goods.

Quotations from these third party service providers and suppliers are obtained in order to provide a basis of comparison to ensure that the price and terms offered by the Mandated Interested Person are comparable to those offered by unrelated parties for the same or substantially similar type of services or goods, and the price and terms offered by unrelated parties are not more favourable than the price and terms offered by the Mandated Interested Person.

The project team, Chief Financial Officer or senior management executive will select the quotation received from the Mandated Interested Person if the terms (including price) of such quotation are not less favourable than those offered by unrelated third party service providers or suppliers. The transaction will then be subject to the approval of the relevant authority based on the quantum of the transaction. Please refer to “Threshold Limits” in paragraph 7.4 below for further details.

As certain of the shipbuilding-related services and goods are of a specialized nature, and have to comply with specific technical requirements and standards, there may be few unrelated third party service providers or suppliers of such services or goods.

For certain corporate services, it may be impracticable to obtain third party quotations as the Mandated Interested Persons are staffed by employees with the relevant experience and expertise for the provision of these services and the intention of the Company is not to outsource such services and for such services to be provided by personnel within the Group subsequent to the Listing, if such services are not provided by the Mandated Interested Persons.

Where it is impracticable to obtain such third party quotations, or where such third party quotations are not available, or where it is not practicable or appropriate in the circumstances to make reference to prevailing market rates or prices, the Group may enter into transactions for the provision of services or sale of goods by Mandated Interested Persons provided that the terms (including price) received from the Mandated Interested Person have been reviewed and approved by the Compliance Committee.

The Compliance Committee will evaluate and weigh the commercial benefits of, and rationale for, transacting with the Mandated Interested Person before proceeding with the transactions.

In reviewing the terms of the transaction, the Compliance Committee will evaluate such terms in accordance with prevailing industry norms (including the reasonableness of the terms), and will take into account the Group’s usual business practices and pricing policies and all relevant factors including the circumstances relating to the need to obtain such services or goods.

The Compliance Committee may at its discretion defer the approval of the transactions to the Audit Committee where such transactions fall within paragraph (c) of the threshold limits set out in paragraph 7.4 or where any of the members of the Compliance Committee (i) are Interested Persons in respect of those Mandated Transactions, (ii) have an interest, whether direct or indirect, in relation to those Mandated Transactions, and/ or (iii) are not considered independent in relation to those Mandated Transactions.


The factors which (i) the project team, Chief Financial Officer or senior management executive from the relevant department will take into account when considering quotations from the Mandated Interested Person and unrelated third parties or (ii) the Compliance Committee will take into account when reviewing the terms received from the Mandated Interested Person when third party quotes are not available, include, but are not limited to, the following: price, delivery and payment criteria, accessibility of the service providers or suppliers, past performance of service providers or suppliers, quality of the services or goods and compliance of the services or goods with industry standards.

7.2 Provision of services and sale of goods by the Group to Mandated Interested PersonsIn relation to any transaction proposed to be carried out with Mandated Interested Persons for:

(a) the provision of services such as legal and advisory services provided to STX Europe AS by certain of the Company’s senior management who have previously held positions in STX Europe AS during the transitional period after the Listing, and ancillary technical services and technology for the installation of design and equipment packages by the Group; and

(b) the sale of goods including vessels and ship design and equipment packages by the Group,

such transactions shall where possible, be made at the Company’s prevailing rates or prices and carried out on normal commercial terms that are not less competitive than those extended by unrelated third persons or otherwise in accordance with industry norms.

Where prevailing market rates or prices are not available, whether due to the nature of the services or goods to be provided, or the unavailability or impracticability of obtaining comparable third party quotes or otherwise, or it is not practicable or appropriate in the circumstances to make reference to prevailing market rates or prices, the Group’s pricing for such services or goods will be determined by the Compliance Committee in accordance with the Group’s usual business practices and pricing policies and taking into account all relevant factors including the circumstances relating to the need to provide such services or goods and any other direct or incidental benefit or detriment to the Group in providing such services or goods to the Mandated Interested Persons.

The Compliance Committee may at its discretion defer the approval of the transactions to the Audit Committee where such transactions fall within paragraph (c) of the threshold limits set out in paragraph 7.4 or where any of the members of the Compliance Committee (i) are Interested Persons in respect of those Mandated Transactions, (ii) have an interest, whether direct or indirect, in relation to those Mandated Transactions, and/ or (iii) are otherwise not considered independent in relation to those Mandated Transactions.

7.3 Provision of corporate guarantees and other credit support for the benefit of the Group by Mandated Interested PersonsIn relation to the provision of corporate guarantees or other credit support (such as securities, indemnities or letters of comfort) by the Mandated Interested Persons, such transactions shall only be entered into if the Directors (other than those who are not independent of the relevant Mandated Interested Persons) are of the view that it is in the interests of the Group to do so.

In particular, the fee charged by the Mandated Interested Persons for the provision of corporate guarantees or other credit support shall not be more than the lowest of the rates quoted by the Group’s principal bankers for guarantees or credit support of an equivalent amount and tenure. The Company shall also take into consideration other factors, including but not limited to the terms of the relevant corporate guarantees or credit support, processing requirements, operation requirements and risks and other pertinent factors.



7.4 Threshold LimitsIn addition to the review procedures listed above, the Mandated Transactions will be reviewed and approved in accordance with the following thresholds:

(a) transactions amounting from S$100,000 to 1.5% of the latest audited consolidated NTA of the Group will be reviewed and approved by a Director, Chief Financial Officer or an executive officer of the Group (who has relevant experience and authority);

(b) transactions amounting from 1.5% to 3.0% of the latest audited consolidated NTA of the Group will be reviewed and approved by the Board of Directors;

(c) transactions exceeding 3.0% of the latest audited consolidated NTA of the Group will be reviewed and approved by the Audit Committee.

Any of the persons referred to in paragraphs (a), (b) and (c) above may, as he deems fit, request for additional information pertaining to the transaction from independent sources or advisors, including the obtaining of valuations from professional valuers. If any of the persons referred to in paragraphs (a), (b) and (c) above (a) is an Interested Person in respect of that particular Mandated Transaction to be reviewed, (b) has an interest, whether direct or indirect, in relation to that particular Mandated Transaction, and/or (c) is otherwise not considered independent in relation to that particular Mandated Transaction, he will abstain from any decision-making in respect of that particular Mandated Transaction.

The threshold limits stated in paragraphs (a), (b) and (c) above apply to Mandated Transactions only. Non-mandated interested person transactions will be subject to the review procedures stated in paragraph 7.5 below and Rules 905 and 906 of the Listing Manual.

7.5 Other Review ProceduresThe Audit Committee will also review all interested person transactions including the Mandated Transactions to ensure that the prevailing rules and regulations of the SGX-ST (in particular, Chapter 9 of the Listing Manual) are complied with. Interested person transactions which are not within the ambit of the IPT Mandate will be subject to Rules 905 and 906 of the Listing Manual.

The Group has also implemented the following procedures for the identification of interested person transactions (including Mandated Transactions) and interested persons (including Mandated Interested Persons) and the recording of all the interested person transactions:

(a) the Compliance Committee will maintain two registers of all transactions carried out with interested persons including Mandated Interested Persons (recording the basis and the quotations, if any, obtained to support such basis on which these transactions are entered into, whether mandated or non-mandated). One register is maintained to record Mandated Transactions and the other register is maintained to record interested person transactions which are not classified as Mandated Transactions. The registers shall be submitted to the Audit Committee for review on a quarterly basis;

(b) by the end of each month, each member of the Group will submit details of all interested person transactions entered into or existing interested person transactions that are renewed or revised during that month to the Compliance Committee. The Compliance Committee will reconcile the registers of interested person transactions based on the submissions by the various members of the Group. On a quarterly basis, the Compliance Committee will submit a report to the Audit Committee of all recorded interested person transactions, and the basis of such


transactions, entered into by the Group. The Audit Committee shall review such interested person transactions at its quarterly meetings subject to the requirement under the review procedures for any such interested person transactions to be approved by the Audit Committee prior to the entry thereof. The outcome of such review shall be documented and filed in the registers of interested person transactions; and

(c) the Company’s annual internal audit plan shall incorporate a review of all interested person transactions, including the established review procedures for the monitoring of all such transactions including transactions with Mandated Interested Persons, whether they are new interested person transactions or existing interested person transactions that have been renewed or revised during the relevant financial year pursuant to the IPT Mandate.

In addition, the Audit Committee shall also review from time to time such internal controls and review procedures for interested person transactions to determine if they are adequate and/or commercially practicable in ensuring that the transactions between the Group and interested persons are conducted on normal commercial terms and not prejudicial to the interests of the Company and the Company’s minority Shareholders.

In conjunction with such review, the Audit Committee will also ascertain whether the established review procedures have been complied with.

The Company’s Board of Directors and the Audit Committee will have overall responsibility for determining the review procedures with the authority to delegate to individuals or committees within the Group as they deem appropriate.

Class of equity securities number of equity securities Voting rightsOrdinary shares 1,180,000,000 One vote for each share

Distribution of shareholdings

Size of shareholdings number of shareholders % number of shares %

1-999 0 0.00 0 0.00

1,000-10,000 3,330 71.43 20,506,000 1.74

10,001-1,000,000 1,315 28.21 54,861,000 4.65

1,000,001 and above 17 0.36 1,104,633,000 93.61

Total 4,662 100.00 1,180,000,000 100.00

Substantial shareholders(As recorded in the Register of Substantial Shareholders)

Direct interest % Deemed interest %

STX Europe Holding AS 814,441,000 69.02 - -

STX Europe AS(1) - - 814,441,000 69.02

STX Norway AS(1) - - 814,441,000 69.02

STX Engine Co., Ltd.(1) - - 814,441,000 69.02

STX Offshore & Shipbuilding Co., Ltd.(1) - - 814,441,000 69.02

STX Corporation Co., Ltd. (1) - - 814,441,000 69.02

Morgan Stanley Entities(2) - - 64,000,000 5.42

Morgan Stanley; Morgan Stanley International Holdings Inc.(3) - - 68,646,000 5.82

Notes:(1) By virtue of Section 7 of the Companies Act, Cap 50, these entities are deemed to be interested in the shares held

by STX Europe Holding AS in the Company. The relationship of the said entities is as follows: (i) STX Europe AS holds 100% of the share capital of STX Europe Holding AS. (ii) 100% of the shares of STX Europe AS are held by STX Norway AS. (iii) STX Offshore & Shipbuilding Co., Ltd. holds 66.7% of the share capital of STX Norway AS and STX Engine Co., Ltd. holds the remaining 33.3%. (iv) STX Corporation Co., Ltd. holds 33.7% of the share capital of STX Offshore & Shipbuilding Co., Ltd. and 33.6% of the share capital of STX Engine Co., Ltd. (2) (i) Morgan Stanley (ii) Morgan Stanley International Holdings Inc.; (iii) Morgan Stanley Asia Pacific (Holdings) Limited; (iv) Morgan Stanley Asia Regional (Holdings) III LLC; (v) Morgan Stanley (Singapore) Holdings Pte. Ltd.; and (vi) Morgan Stanley Investment Management Company (together, the “Morgan Stanley Entities”). (3) Shares held or in respect of which Morgan Stanley and Co. International Plc may exercise right to rehypothecate or dispose of.

S T A T I S T I C S O F S H A R e H O L D I n G S

As at 15 March 2011



Twenty largest shareholders

no. name of shareholders number of shares %

1. STX Europe Holding AS 805,508,000 68.26

2. Citibank Nominees Singapore Pte Ltd. 60,760,500 5.15

3. DBS Nominees Pte Ltd 58,134,900 4.93

4. Raffles Nominees (Pte) Ltd 50,786,000 4.30

5. HSBC (Singapore) Nominees Pte Ltd 42,113,000 3.57

6. United Overseas Bank Nominees Pte Ltd 28,107,000 2.38

7. DBSN Services Pte Ltd 25,557,600 2.17

8. DB Nominees (S) Pte Ltd 9,705,000 0.82

9. Morgan Stanley Asia (Singapore) Securities Pte Ltd 6,536,000 0.55

10. UOB Kay Hian Pte Ltd 3,187,000 0.27

11. Kim Eng Securities Pte. Ltd. 2,782,000 0.24

12. Royal Bank of Canada (Asia) Ltd 2,598,000 0.22

13. OCBC Securities Private Ltd 2,574,000 0.22

14. CIMB Securities (Singapore) Pte Ltd 2,077,000 0.18

15. Phillip Securities Pte Ltd 1,792,000 0.15

16. Eric Yong Han Keong 1,270,000 0.11

17. Lim & Tan Securities Pte Ltd 1,145,000 0.10

18. Lim Song Teng 913,000 0.08

19. BNP Paribas Securities Services Singapore 759,000 0.06

20. DBS Vickers Securities (S) Pte Ltd 759,000 0.06

Total 1,107,064,000 93.82

Percentage of shareholding in Public’s hands

Approximately 25.15% of the Company’s shares are held in the hands of the Public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of the SGX-ST.

NOTICE IS HEREBY GIVEN that the Annual General Meeting of STX OSV Holdings Limited (“the Company”) will be held at Casuarina Suite B, Level 3, Raffles Hotel Singapore, 1 Beach Road, Singapore 189673 on Wednesday, 27 April 2011 at 10:00 a.m. for the following purposes:

As ordinary business

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the financial period ended 31 December 2010 together with the Auditors’ Report thereon. (Resolution 1) 2. To declare a dividend of 3.0 Singapore cents per ordinary share. (Resolution 2) 3. To re-elect the following Directors of the Company retiring pursuant to Article 100 of the Articles of Association of the Company: Mr. Jong Chul Lee (Resolution 3) Mr. Roy Reite (Resolution 4) Mr. Ho Nam Yi (Resolution 5) Mr. Byung Ryoon Woo (Resolution 6) Mr. Sung Hyon Sok (Resolution 7) Mr. Keen Whye Lee (Resolution 8)

Mr. Jong Chul Lee will, upon re-election as a Director of the Company, remain as the Chairman of the Board of Directors and a member of the Nominating Committee and will be considered non-independent.

Mr. Roy Reite will, upon re-election as a Director of the Company, remain as the Chief Executive Officer of the Company and will be considered non-independent.

Mr. Ho Nam Yi will, upon re-election as a Director of the Company, remain as a member of the Remuneration Committee, and will be considered non-independent.

Mr. Byung Ryoon Woo will, upon re-election as a Director of the Company, remain as a member of the Audit Committee, and will be considered non-independent.

Mr. Sung Hyon Sok will, upon re-election as a Director of the Company, remain as the Chairman of the Nominating Committee and the Remuneration Committee and a member of the Audit Committee, and will be considered independent.

Mr. Keen Whye Lee will, upon re-election as a Director of the Company, remain as the Chairman of the Audit Committee and a member of the Nominating Committee and the Remuneration Committee, and will be considered independent.

4. To approve the payment of Directors’ fees of S$33,000 for the financial period ended 31 December 2010. (Resolution 9)

5. To approve the payment of Directors’ fees of S$200,000 for the financial year ending 31 December 2011, to be paid quarterly in arrears. (Resolution 10)

n O T I C e O F A n n U A L G e n e R A L M e e T I n G



6. To re-appoint KPMG LLP as the Auditors of the Company and to authorize the Directors of the Company to fix their remuneration. (Resolution 11) 7. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

As special business

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 8. Authority to issue shares

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorized and empowered to:

(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instruments made or granted by the Directors of the Company while this Resolution was in force,

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the percentage of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this Resolution; and

(c) any subsequent bonus issue, consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (i)] (Resolution 12)

9. Renewal of Shareholders’ Mandate for Interested Person Transactions

That for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited:

(a) approval be and is hereby given for the Company, its subsidiaries and associated companies or any of them to enter into any of the transactions falling within the categories of Mandated Transactions (as defined in the Appendix to the Annual Report dated 12 April 2011 (the “Appendix”)) with any of the Mandated Interested Persons (as defined in the Appendix), provided that such transactions are carried out on normal commercial terms and in accordance with the review procedures of the Company for such Mandated Transactions as set out in the Appendix (the “Shareholders’ Mandate”);

(b) the Shareholders’ Mandate shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier; and

(c) the Directors of the Company and/or any of them be and are hereby authorized to complete and do all such acts and things (including executing all such documents as may be required) as they and/or he may consider necessary, desirable or expedient, incidental or in the interests of the Company to give effect to the Shareholders’ Mandate and/or this Resolution as they may deem fit.

[See Explanatory Note (ii)] (Resolution 13)

By Order of the BoardElizabeth KrishnanCompany SecretarySingapore, 12 April 2011


n O T I C e O F A n n U A L G e n e R A L M e e T I n G


explanatory notes:(i) The Ordinary Resolution 12 in item 8 above, if passed, will empower the Directors of the Company, effective until

the conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant Instruments convertible into shares and to issue shares pursuant to such Instruments, up to a number not exceeding, in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to shareholders.

For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.

(ii) The Ordinary Resolution 13 proposed in item 9 above, if passed, will renew the mandate authorizing the Company, its subsidiaries and associated companies, or any of them, for the purposes of Chapter 9 of the Listing Manual, to enter into certain interested person transactions as described in the Appendix to the Annual Report and will empower the Directors of the Company to do all acts necessary to give effect to the Shareholders’ Mandate. This authority will, unless previously revoked or varied by the Company in a general meeting, expire at the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. Please refer to the Appendix for further details.

notes:1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company. 2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

n O T I C e O F B O O K C L O S U R e

NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of STX OSV Holdings Limited (the “Company”) will be closed at 5.00 p.m. on 5 May 2011 for the purpose of determining shareholders’ entitlement to dividend.

Duly completed registrable transfers received by the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 5 May 2011 will be registered to determine shareholders’ entitlements to the said dividend. Members whose Securities Accounts with The Central Depository (Pte) Limited are credited with shares at 5.00 p.m. on 5 May 2011 will be entitled to the proposed dividend.

Payment of the dividend, if approved by the members at the Annual General Meeting to be held on 27 April 2011 will be made on 25 May 2011.



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Design: I&M Kommunikasjon AS Circulation: 6,000 Printed by: Equal Brand Design 3D: Fuglefjellet

Photo: STX OSV, Pravda, Redrum, Harald M. Valderhaug, Peder O. Dybvik, Jacky Ho, Johan Holmquist, Constantin Dina, Per Magne Gjerde, Gunder T. Sandersen, Seung-mo Hong, Caroline Sissener


Shipyards

STX OSV AukraNO-6480 Aukra, NorwayTel: + 47 70 21 06 [email protected]

STX OSV BrattvaagStrandgata 74NO-6270 Brattvåg, NorwayTel: + 47 70 21 06 [email protected]

STX OSV BrevikP.O. Box 15NO-3991 Brevik, NorwayTel: + 47 35 51 87 [email protected]

STX OSV LangstenNO-6393 Tomrefjord, NorwayTel: + 47 70 21 06 [email protected]

STX OSV SøviknesNO-6280 Søvik, NorwayTel: + 47 70 21 06 [email protected]

STX OSV Braila SACeluozei Street 1ARO-810282 Braila, RomaniaTel. + 40 [email protected]

STX OSV Tulcea SA22, Ing. Dumitru Ivanov Street820242 Tulcea, RomaniaTel: + 40 [email protected]

STX OSV Vung Tau Ltd.No. 6, Dong Xuyen Industrial Park, Rach DuaWard, Vung Tau, VietnamTel: + 84 064 3615 [email protected]

STX OSV Niterói SAPraça Alcides Pereira1 - Parte Ilha da Conceiçâo - Niterói - RJCEP: 24.050-350, BrazilTel: + 55 212 7189 [email protected]

electrical engineering,installation, power & automation

STX OSV Electro ASNO-6280 Søvik, NorwayTel: + 47 70 21 07 [email protected]

STX OSV Electro Niterói Ltda.Praça Alcides Pereira1 - Parte Ilha da Conceiçâo – Niterói - RJCEP: 24.050-350, BrazilTel: + 55 212 7292 [email protected]

STX OSV Electro Braila SRLCeluozei Street 1ARO-810282 Braila, RomaniaTel: + 40 [email protected]

STX OSV Electro Tulcea SRL22, Ing. Dumitru Ivanov StreetElectrical SectionRO-820242 Tulcea, RomaniaTel: + 40 [email protected]

STX OSV Electrical Installation & Engineering (India) Private Limited39/4609, 3rd Floor - 3BK.G. Oxford Business CentreSreekandath Road, RavipuramKOCHI - 682 016 [email protected]

Design

STX OSV Design ASP.O.Box 76, NO-6001 Ålesund, NorwayVisiting address:Brunholmgt. 1BNO-6004 Ålesund, NorwayTel: + 47 70 21 06 [email protected]

Trading – design and equipment packages

STX OSV TradingP.O.Box 76, NO-6001 Ålesund, NorwayVisiting address:Brunholmgt. 1BNO-6004 Ålesund, NorwayTel: + 47 70 21 06 [email protected]

Accommodation

STX OSV Accommodation ASTomrenbyggetNO-6393 Tomrefjord, NorwayTel: + 47 70 21 06 [email protected]

STX OSV Accommodation ASJohangarden NæringsparkNO-6264 Tennfjord, NorwayTel: +47 70 21 06 [email protected]

Piping systems and installation

STX OSV Piping ASSkjelt-Iver Bakken 1NO-6270 Brattvåg, NorwayTel: + 47 70 20 99 [email protected]

STX OSV Piping SRL22, ing. Dumitru Ivanov Street820242 Tulcea, RomaniaTel: + 40 [email protected]

Additional activities

STX OSV Singapore Pte Ltd.3 Temasek Avenue, #20-07 Centennial TowerSingapore 039190Tel: + 65 [email protected]

STX OSV AftermarketStrandgata 74NO-6270 Brattvåg, NorwayTel: +47 70 21 06 [email protected]

STX OSV Brevik Holding ASP.O. Box 15 NO-3991 Brevik, Norway Tel. +47 35 51 87 00 [email protected]

STX Grenland Industri ASHavneveien 31NO-3739 Skien, NorwayTel: + 47 35 56 93 [email protected]

c O n T A c T I n f O r m A T I O n

registered officeSTX OSV Holdings Limited50 Raffles Place#31-01 Singapore Land TowerSingapore 048623

Head office STX OSV ASP.O. Box 76, NO-6001 Ålesund, NorwayTel: + 47 70 21 06 [email protected]

Visiting addressMolovegen 6, NO-6004 Ålesund, Norway

www.stxosv.com

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