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sioff-2021-12-31p1i1 sioff-2021-12-31p1i0
SIEM
Offshore
 
Inc. Annual Report 2021
0
 
Annual Report 2021
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
SIEM
Offshore
 
Inc. Annual Report 2021
Highlights 2021
2
Key Figures
3
Vessels in the fleet
5
Local presence in key markets
7
This is Siem Offshore Inc.
9
Board of Directors’ Report
11
Corporate Governance
17
Income Statements
21
Statements of Financial Position – Assets
22
Statements of Financial Position – Equity and Liabilities
23
Statements of Changes in Equity
24
Statements of Cash Flows
26
Notes to the Accounts
27
Environmental, Social and Governance (ESG) Report 2021
93
Auditor’s Report
97
Responsibility Statement
103
Board of Directors
104
Financial Calendar
105
 
 
 
 
 
 
Highligts 2021
SIEM
Offshore
 
Inc. Annual Report 2021
2
Revenue USD 1,000
254,493
Operating margin USD 1,000
100,585
Employees
1,021
Vessels in operation per 31.12.2021
28
Highlights for the First Quarter
●
“Siem Stingray” awarded a 6-month firm contract with
options for GE Renewables.
 
●
Bondholders’ meetings in SIOFF01 and SIOFF02 approved
the restructuring plan.
●
“Siem Barracuda” awarded a 100-day contract with options
for an offshore wind project in the Far East.
●
Signed term Sheet with all the European Lenders approving
the restructuring plan.
●
“Siem Spearfish” awarded a 2-month firm contract with
options for West Africa.
 
●
Sale and delivery of the Platform Supply Vessel “Siem
Hanne”.
Highlights for the Second Quarter
●
“Siem Spearfish” awarded a 110-day firm contract with
options for an offshore project in GoM.
 
●
“Siem Dorado” awarded a 40-day firm contract with options
for DNC Diving in the North Sea.
●
“Siem Dorado” awarded a 55-day firm contract with options
for work in Guyana.
●
Agreed a 3-month firm contract for “Siem Pearl” for PSE
Kinsale Energy Ltd.
 
●
Sold and delivered the 2 AHTS-vessels “Siem Diamond” and
”Siem Garnet” to an independent third party, for trading
outside the offshore shipping industry. Proceeds were used
to repay debt.
 
●
An Extraordinary General Meeting of Siem Offshore Inc. was
held on 29 April 2021 to consider a proposal to increase the
Company’s authorized share capital and to approve a 100:1
reversed split of its shares. All proposed resolutions were
unanimously approved.
●
The four-year financial restructuring plan of the Company
was successfully completed and implemented on 26 May
2021, significantly strengthening the Company’s balance
sheet as financial debt was reduced by USD269 million.
Highlights for the Third Quarter
●
The AHTS “Siem Topaz” was awarded a 6-month extension,
securing utilization for the vessel until February 2022.
●
The Company was awarded a 300-day firm contract for one
of its OSCVs for wind farm installations, commencing
operations in Q4 2021.
 
●
“Siem Symphony”, a dual fuel PSV has been upgraded with a
hybrid battery package, in line with the Company’s strategic
focus to proactively reduce its environmental impact.
 
Highlights for the Fourth Quarter
●
An Extraordinary General Meeting of Shareholders was held
29 October 2021 electing two new Directors to the Board.
●
The client for “Siem Stingray” exercised its option for the
vessel securing utilization until Q4 2022. In addition, the
Company received extension for “Siem Spearfish”, securing
utilization well into the first quarter of 2022.
●
Awarded an up to 210-day firm contract plus options for
“Siem Dorado”, commencing first quarter of 2022.
 
●
Entered into a 5-month contract plus options for “Siem
Barracuda”, in continuation to the vessel’s current contract in
the same region.
●
Entered into a 6-month contract plus options for “Siem
Opal”, commencing March-April 2022.
●
Entered into long-term contracts for “Siem Pilot” and “Siem
Thiima”, commencing Q1 2022.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Key figures
3
SIEM
Offshore
 
Inc. Annual Report 2021
(Amounts in USD 1,000)
CONSOLIDATED
INCOME STATEMENTS
Ref
2021
2020
Operating revenue
254,493
244,843
Operating expenses
-153,909
-162,584
Operating margin
(1)
100,585
82,259
Operating margin, %
(2)
40%
34%
Depreciation and amortization
-63,539
-74,944
Impairment of vessels
-
-276,857
Gain/(loss) on sale of assets
997
655
Gain/(loss) on currency derivative contracts
204
-1,970
Operating profit
(3)
38,247
-270,856
Net financial items
63,623
-77,787
Result from associated companies
42
844
Profit /(loss) before taxes
101,912
-347,799
Tax benefit/(expense)
1,000
-2,673
Net profit/(loss)
102,912
-350,472
Attributable to non-controlling interest
-4,947
-51,607
Net profit/(loss) attributable to shareholders
107,858
-298,866
STATEMENTS OF FINANCIAL POSITION
31 Dec 2021
31 Dec 2020
Non-current assets
926,037
1,030,207
Current assets
147,460
155,621
Total assets
1,073,497
1,185,828
Shareholders' equity
340,836
57,152
Non-current liabilities
627,570
857,412
Current liabilities
105,630
315,994
Total equity and liabilities
1,073,497
1,185,828
Definitions
(1) Operating Margin is the net of Operating revenue and operating expenses. For 2021 operating revenues
 
USD254,493 less
operating expenses at USD153,909 equals operating margin at USD100,585. The Company considers the operating
 
margin to be a
key number when analyzing the fleets operating performance and the margin that can be allocated to the finance
 
of capital
expenditures, debt-service and other cash disbursements.
 
(2) Operating Margin, %. The relative operating margin is calculated to be the percentage of operating
 
margin to operating
revenue. For 2021 the operating margin at USD100,585 equals 40% of the operating revenue at USD254,493. The
 
Company
considers the operating margin, % to be important when analyzing the vessels' relative performance.
(3) The Operating Profit is the profit before financial items and tax. The operating profit for 2021
 
is calculated by adding operating
revenues at USD254,493, less operating expenses at USD153,909, less depreciation and amortization at
 
USD63,539, add gain on
sale of assets at USD997, add gain on currency derivatives at USD204, which equal operating profit at USD
 
38,247,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
4
STATEMENTS OF CASH FLOWS
2021
2020
Net cash flow from operations
82,099
39,704
Net change in cash
-3,472
70
KEY FIGURES
2021
2020
Weighted average no. of outstanding shares (1,000)
147,050
9,347
Weighted average no. of diluted outstanding shares (1,000)
147,050
9,347
Earnings per share (USD)
0.73
-31.97
Diluted earnings per share (USD)
0.73
-31.97
Share price per year end (USD)
0.39
8.38
Share price per year end (NOK)
3.40
71.50
Note: Weighted average number of shares for 2020 and share price for 2020 have been adjusted for the 100:1 reverse
 
split that was
done in 2021 in order to present comparable figures.
31/12/2021
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I
 
I
 
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I
 
I I
 
I
 
28 TOTAL
31/12/2020
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I
 
I
 
31 TOTAL
31/12/2019
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I
 
I
 
I
 
I I
 
I
 
35 TOTAL
 
31/12/2018
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
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I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
40 TOTAL
31/12/2017
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
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I
 
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I
 
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I
 
I
 
I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
43 TOTAL
31/12/2016
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
46 TOTAL
31/12/2015
I
 
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I
 
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I
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
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I I
 
I
 
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I
 
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I
 
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I
 
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I I
 
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I
 
I I
 
I
 
51 TOTAL
31/12/2014
I
 
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I
 
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I I
 
I
 
I
 
I I
 
I
 
I
 
I I
 
I
 
I
 
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I
 
I
 
I I
 
I
 
I
 
I I
 
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I
 
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I
 
I
 
I I
 
I
 
I
 
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I
 
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I
 
I I
 
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I
 
I
 
55 TOTAL
31/12/2013
I
 
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55 TOTAL
31/12/2012
I
 
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I
 
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I
 
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I
 
47 TOTAL
31/12/2021
I
 
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I
 
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I
 
I
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I
 
I
 
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I
 
I
 
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I
 
28 TOTAL
31/12/2020
I
 
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31 TOTAL
31/12/2019
I
 
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I
 
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35 TOTAL
 
31/12/2018
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40 TOTAL
31/12/2017
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I
 
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I
 
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I
 
43 TOTAL
31/12/2016
I
 
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I
 
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I
 
I
 
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I
 
I
 
I
I
 
I
 
I
 
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I
 
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I
 
I
 
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I
 
I
 
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I
 
I
 
I I
 
46 TOTAL
31/12/2015
I
 
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I
 
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I
 
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I
 
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I
 
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I
 
I
 
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I
 
I
 
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I
 
51 TOTAL
31/12/2014
I
 
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I
 
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I
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I
 
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I
 
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I
 
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I
 
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I
 
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I
 
I
 
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I
 
I
 
I I
 
I
 
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I
 
I
 
55 TOTAL
31/12/2013
I
 
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I
 
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I
 
I
 
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I
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I
 
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I
 
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I
 
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I
 
I
 
55 TOTAL
31/12/2012
I
 
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I
 
I
 
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I
 
I
 
I I
 
I
 
I
 
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I
 
I
 
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47 TOTAL
Vessels
 
Newbuildings
 
Vessels in operation
Ownership
 
0-79%
 
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sioff-2021-12-31p6i7 sioff-2021-12-31p6i3 sioff-2021-12-31p6i0 sioff-2021-12-31p6i11 sioff-2021-12-31p6i10 sioff-2021-12-31p6i8 sioff-2021-12-31p6i4 sioff-2021-12-31p6i1 sioff-2021-12-31p6i12 sioff-2021-12-31p6i9 sioff-2021-12-31p6i6 sioff-2021-12-31p6i5 sioff-2021-12-31p6i2
Vessels in the fleet
5
SIEM
Offshore
 
Inc. Annual Report 2021
Platform Supply Vessels (PSV)
Siem Pride
Siem Symphony
Siem Atlas
Siem Giant
Built
 
2015
2014
2013
2014
Design |
VS 4411 DF
VS 4411 DF
STX PSV 4700
STX PSV 4700
Dp Class
 
2
2
2
2
LOA
 
89.20 m
89.20 m
 
87.90 m
87.90 m
Breadth
 
19.00 m
19.00 m
19.00 m
19.00 m
Draught
 
7.40 m
7.40 m
 
6.60m
6.60 m
Dwt
 
5,500 t
5,500 t
 
4700 T
4,700 T
Accommodation
 
28
25
34
34
Cargo Deck Area
 
980 m2
980 m2
1000 m2
 
usable
1000 m2
 
usable
Ownership
100%
100%
 
100%
100%
Anchor Handling Tug Supply Vessels (AHTS)
 
 
 
Siem Amethyst
Siem Opal
Siem Emerald
Siem Sapphire
Siem Aquamarine
Built
 
2011
2011
2009
2010
2010
Design
 
VS 491 CD
VS 491 CD
VS 491 CD
VS 491 CD
VS 491 CD
Dp Class
 
2
2
2
2
2
LOA
 
91.00 m
91.00 m
91.00 m
91.00 m
91.00 m
Breadth
 
22.00 m
22.00 m
22.00 m
22.00 m
22.00 m
Draught
 
7.95 m
7.95 m
7.95 m
7.95 m
7.95 m
Dwt
 
3800 T
3800 T
3800 T
3800 T
3800 T
Accommodation
 
60
60
60
60
60
Cargo Deck Area
 
800 m2
800 m2
800 m
2
800 m2
800 m2
BHP
 
28000
28000
28000
28000
28000
Bollard Pull
297 Te
297 Te
281 Te
301 Te
284 Te
Ownership
78,16%
78,16%
78,16%
78,16%
78,16%
Offshore Subsea Construction Vessel (OSCV) & Multipurpose
 
field & ROV Support Vessel (MRSV)
Siem Dorado
Siem Barracuda
Siem Spearfish
Siem Stingray
Built
 
2009
2013
2014
2014
Design
 
MT 6017 MK II
STX OSCV 11L
STX OSCV 03
STX OSCV 03
Dp Class
 
2
2
2
2
LOA
 
93.60 m
120.80 m
120.80 m
120.80 m
Breadth
 
19.70 m
22.00 m
23.00 m
23.00 m
Draught
 
6.30 m
6.60 m
6.60 m
6.60 m
Dwt
 
4.500 t
5.000 t
5.000 t
5.000 t
Accommodation
 
68
110
110
110
Cargo Deck Area
 
1046 m2
1300 m2
1,300 m2
1,300 m2
Crane
100 t Offshore/Subsea crane
250 t Offshore/Subsea crane
1 X 250 t AHC, 3,000 m
1 X 250 t AHC, 3,000 m
ROV Moonpool
-
7.2 X 7.2
 
7.2 X 7.2 m
7.2 X 7.2 m
Ownership
100%
100%
100%
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sioff-2021-12-31p7i8 sioff-2021-12-31p7i6 sioff-2021-12-31p7i4 sioff-2021-12-31p7i2 sioff-2021-12-31p7i0 sioff-2021-12-31p7i9 sioff-2021-12-31p7i7 sioff-2021-12-31p7i5 sioff-2021-12-31p7i3 sioff-2021-12-31p7i1 sioff-2021-12-31p7i10
SIEM
Offshore
 
Inc. Annual Report 2021
6
Siem Pilot
Siem Thiima
Built
 
2010
2016
Design
VS 485
VS 4411 DF
Dp Class
2
2
LOA
88.3 m
89.2 m
Breadth
20.00 m
19.00 m
Draught
7.19 m
7.40 m
Dwt
5000 T
5500 T
Accommodation
64
25
Cargo Deck Area
927 m
2
usable
980 m
2
Ownership
100%
100%
Siem Topaz
Siem Ruby
Siem Pearl
Built
 
2010
2010
2009
Design
 
VS 491 CD
VS 490 CD
VS 491 CD
Dp Class
 
2
2
2
LOA
 
91.00 m
91.00 m
91.00 m
Breadth
 
22.00 m
22.00 m
22.00 m
Draught
 
7.95 m
7.95 m
7.95 m
Dwt
 
3800 T
3800 T
3800 T
Accommodation
 
60
60
60
Cargo Deck Area
 
800 m
2
800 m
2
800 m
2
BHP
28000
28000
28000
Bollard Pull
306 Te
306 Te
285 Te
Ownership
78,16%
78,16%
78,16%
Other
Well Intervention Vessels (WIV)
Brazil – Fleet of 5 vessels
Avalon Sea - Canada
Siem Helix 1
Siem Helix 2
Type
OSRV/FCS/FSV
AHTS
Built
2016
2016
Ownership
100%
100%
Design
Salt 307 WIV
Salt 307 WIV
Dp Class
3
3
LOA
158.65 m
157.60 m
Breadth
31.00 m
31.00 m
Draught
8.50 m
8.50 m
Dwt
12500 t
12500 t
Joides Resolution
Big Orange XVIII
Accommodation
150
150
Type
Scientific Core Drilling Vessel (SCDV)
Well Stimulation Vessel (WSV)
BHP
36000
35000
Ownership
100%
41.3%
Ownership
100%
100%
sioff-2021-12-31p8i0
Local presence in key markets
7
SIEM
Offshore
 
Inc. Annual Report 2021
Geographical
footprint
Siem Offshore offices
●
Kristiansand (Norway)
●
Rio de Janeiro, Macaé, Aracaju (Brazil)
●
Houston (USA)
●
Perth (Australia)
●
St. John´s, Halifax (Canada)
●
Accra (Ghana)
sioff-2021-12-31p8i0
SIEM
Offshore
 
Inc. Annual Report 2021
8
Total employees
1,021
Vessels in operations
28
PSVs:
6
WIVs:
2
AHTs:
8
OSCVs:
4
CANADIAN FLEET:
1
Other:
7
sioff-2021-12-31p10i0
 
9
SIEM
Offshore
 
Inc. Annual Report 2021
Siem
 
Offshore
 
Inc.
 
at
 
a
 
glance
Siem Offshore owns and
operates one of the
world’s most modern
fleets of offshore support
vessels, equipped to meet
demands from clients and
the harshest
environments.
Siem Offshore had 28 vessels in operation at year-end 2021. By
end March 2022, the total fleet comprised of 28 vessels,
including, among others the following owned vessels, six Platform
Supply Vessels (PSVs), four Offshore Subsea Construction
Vessels (OSCVs), eight Anchor Handling, Tug and Supply vessels
(AHTS), two Well-Intervention Vessels (WIVs), five smaller
Brazilian flagged vessels, one scientific core drilling vessel and
one Canadian flagged vessel (an AHTS vessels). The fleet
provides a broad spectrum of services offered by a highly
experienced and competent crew with a strong focus on Health,
Safety, Environment and Quality within offshore oil and gas and
within the offshore renewable sector.
The Company’s vision is to become the leading provider and
the most attractive employer offering marine services to the
offshore energy service industry. The Company shall deliver
quality and reliable contracted services in a timely manner by
executing cost-efficient solutions developed in active
collaboration and cooperation with our customers.
Siem Offshore commenced operations with effect from 1 July
2005.
 
The Company is registered in the Cayman Islands and is
listed on the Oslo Stock Exchange (OSE Symbol: SIOFF). The
Company’s headquarter is located in Kristiansand, Norway and
additional subsidiary offices are located in Brazil, Canada,
Cayman Islands, Australia, USA and Ghana. The Company is tax
resident in Norway.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
10
254493
244843
292530
307736
306000
469000
411000
491000
363000
368000
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Amounts in USD 1,000
Revenue
100585
82259
109744
115056
125175
128295
118548
194125
122663
110348
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Amounts in USD 1,000
Operating Margin
1021
1042
1102
1335
1182
1058
949
1073
1110
1078
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Employees
Our Values
We continuously work to make the values a
part of the daily life of the Company, in
particular in training of leaders throughout the
organization. The values are established to
support our present and future business.
Caring
We encourage team spirit and knowledge
sharing. We strive to perform our daily work
correctly, safely and without causing damage
to people, environment and equipment.
Competitive
We behave in a pro-active manner and we are
innovative in our way of thinking. Continuous
improvement is our key to success.
Committed
We are driven by integrity. We step up and
take charge to fulfil given promises.
 
 
 
 
11
SIEM
Offshore
 
Inc. Annual Report 2021
Board of Directors' Report
The Board of Directors of Siem Offshore Inc. (the “Board”)
 
presents its report
for the fiscal year ended 31 December 2021, together with
 
the audited
consolidated financial statements for the Company and
 
the Parent Company.
The financial statements and related notes were authorized
 
for issue by the
Board on 21 April 2022 and will be presented to the shareholders
 
for approval
at the Annual General Meeting to be held on Friday 20 May 2022.
THE COMPANY
All references to “Siem Offshore” and the “Company” shall
mean Siem Offshore Inc. and its subsidiaries and associates
unless the context indicates otherwise. All references to
“Parent” shall mean Siem Offshore Inc. as the Parent Company
only.
Siem Offshore is registered in the Cayman Islands and is
listed on the Oslo Stock Exchange (OSE Symbol: SIOFF). The
Company’s headquarters is located in Kristiansand, Norway
and subsidiary offices are located in Brazil, Australia, Canada,
Cayman Islands, United States and. The Company is tax
domiciled in Norway.
The Company’s primary activity is the ownership and
operation of offshore support vessels (“OSVs”) for the offshore
energy service industry and the offshore renewables market.
 
The Company operated a fleet of 28 vessels at year-end,
including partly-owned vessels and 4 vessels in lay-up. During
2021, the total fleet of OSVs conducted operations in the North
Sea, Brazil, Australia, Canada, the Arctic Ocean, Northern
Pacific Ocean, Southeast Asia and West Africa.
FINANCIAL RESULTS, POSITION AND RISKS
IFRS
 
The financial statements for the Company and the Parent are
prepared in accordance with the International Financial Re-
porting Standards (“IFRS”) as adopted by the European Union.
Going-Concern
 
The financial statements have been prepared under the
assumption that the Company and the Parent are going-
concerns. The Company’s financial position, financing
arrangements and forecasted cashflows are supporting a
going concern status. Following the financial restructuring in
Q2 2021, the Company has substantially improved its equity,
cash position and forecasted cash flows. No debt will mature
before the end of 2024, except for debt that will be subject to
cash sweep if applicable. The volatile market conditions and
impact of the COVID-19 pandemic on vessel operations and
the world economy continue to have a negative influence on
the Company’s earnings and cash flows.
The Market
The OSV market is now in its 8th year of depressed
conditions. The Company expects the market to remain
volatile going forward.
 
The increase in offshore activities and
demand for offshore vessels that we have seen lately is
positive and gives hope that the market will recover faster than
earlier expected. Still, there are too many offshore vessels
available worldwide which may have an adverse effect on the
potential for uplifts in charter rates and vessel utilization.
No impairments were identified in fiscal year 2021. The
financial restructuring was implemented in Q2 2021 for a
period until 31 December 2024. The restructuring has
strengthened the Company’s financial position as liabilities to
banks and bondholders were reduced by USD269 million with
lower mandatory repayments going forward. See note 20 for
further details related to the financial items.
Total Equity (inclusive of Non-controlling interests) is
USD340 million at 31 December 2021.
 
The long-term fundamentals and outlook for the OSV
market are gradually improving on the back of increasing oil
SIEM
Offshore
 
Inc. Annual Report 2021
12
prices and energy demand. New drilling campaigns and
offshore projects, within offshore oil and gas and within
offshore renewables segments, are being sanctioned,
 
which
over time will create incremental demand for OSV’s.
 
The
immediate effects for our fleet are however limited to those of
our vessels that are idle or which come off charter in Q1 and
Q2.
 
For 2022, several projects have been approved and more
are under consideration. Specifically, we see increased
activity in Brazil, West Africa and the North Sea. Although we
are still positive that our young and advanced fleet will be in
demand for many years to come, our focus is on securing
commitment through to the end of the winter season and
beyond. Although the winter season is always demanding, we
believe activity going forward has improved compared to
previous years and increased activity in all segments is
expected. Although the vessel supply-demand balance is
slowly shifting, the market still suffers from oversupply. The
Company is well-positioned to compete with its peers based
on its modern fleet, quality backlog, strong operating record,
positive reputation, and its proven ability to provide
employment on a global scale within the fossil and renewable
energy markets.
The Company is exposed to credit risk due to the
financial strength of some counterparties and the difficulties
generally that the Company is facing in its markets. The world
supply and demand of oil and its market price is uncertain.
Energy prices have a direct impact on the offshore activities
which the Company serves. The recent increase in energy
prices, with oil now trading in the range between USD100 and
USD120 per barrel, is likely to lead to higher activity in the
offshore energy industry.
The COVID-19 pandemic and fluctuations in the oil
price have resulted in volatility in currency exchange rates.
The USD has strengthened against other currencies. The BRL
currency has depreciated substantially. As part of the financial
restructuring the Company has cancelled all currency and
interest rate hedging agreements with its lenders. Thus, the
Company will be exposed to changes in currency rates and
interest rates on its loans going forward.
Income Statement
In 2021, the Company recorded operating revenue of
USD254.5 million and a net profit attributable to shareholders
of USD107.9 million, or USD0.73 per share, compared to
operating revenue of USD244.8 million and a net loss
attributable to shareholders of USD298.9 million, or USD-31.97
per share, in 2020. The increase was primarily due to a more
positive outlook in the markets following a steady increase in
oil price, and improving estimates for worldwide demand for
oil and energy. The offshore renewable energy industry
launched new projects which generated vessel employment.
The supply – demand balance for offshore vessels improved.
The Company’s operating margin for 2021 was USD100.6
million compared to USD82.3 million in 2020. Net operating
margin as a percentage of operating revenue was 40% in 2021
compared to 34% in 2020. The increase was due to improved
vessel utilization and charter rates, and with operating
expenses being fairly stable, the operating margin improved.
The Company’s operating profit (loss) for 2021 was USD
38.2 million compared to USD -270.9 million in 2020 and
includes depreciation and amortization of USD 63.5 million
(2020: USD 74.9million). During 2021, the Company
conducted periodic reviews of vessel valuations, however
concluded not to recognize any impairments. In 2020
impairments of USD 276.9 million were recognized on certain
vessels. Net currency exchange gain (losses) of USD 0.2
million (2020: USD -2.0) was recorded on forward currency
contracts, all of which was realized. In 2020: USD12 million
was unrealized. The net gain (loss) on sale of assets was USD
1.0 million (2020: USD 0.7 million).
The Company’s net financial items were USD 63.6 million
(2020: USD -77.8 million) and included net financial expenses
of USD -28.6 million (2020: USD -55.5 million) and a
revaluation gain/(loss) of non-USD currency items of USD -4.5
million (2020: USD -29.4 million) mainly due to weaker NOK
and BRL compared to USD during the period. Non-USD
currency items are held to match short- and long-term
liabilities, including off-balance sheet liabilities, in a similar
currency. The Company’s debt was restructured 26 May 2021
at a total of USD 269 million. Of the total debt of USD 269
million, USD 177.4 million (representing 65.962%) was
reclassified into the Company’s equity accounts, and USD 91.6
million was
 
recognized as financial income.
The Parent Company is primarily a holding company
owning shares in subsidiaries.
 
The Board proposes that the Parent’s net profit of USD28.4
million for 2021 be allocated to retained earnings and that no
dividend shall be paid for 2021.
Financial Position and Cash Flows
Total equity for the Company was USD340 million at year-end
2021 (2020: USD12 million), and the book equity ratio was 32%
(2020: 1%). Shareholders’ equity was USD341 million (2020:
USD57 million), equivalent to USD1.43 per share (2020:
USD6.11 per share,
 
adjusted for a 100:1 reverse split made
effective in May 2021).
 
The Company recorded USD28 million as gross capital
expenditures in fixed assets during 2021, related to project-
specific investments in vessels and capitalized dry-dockings
and periodic maintenance.
The net interest-bearing debt at year-end was USD532
million (2020: USD928 million). The Company deferred interest
and guarantee-fee payments of USD17 million that, during the
year, were added to the principal loan balance of secured and
unsecured credit facilities related to Payment-in-kind (PIK)
 
Board of Directors’ Report
13
SIEM
Offshore
 
Inc. Annual Report 2021
agreements (2020: USD19 million). The minority interest in the
AHTS fleet increased its subordinated shareholder’s loan by
USD2.3 million (2020: USD3.6 million), inclusive of accrued
interest. The weighted average cost of debt for the Company
was approximately 3.3% p.a. at year-end (2020: 3.4% p.a.).
Following the financial restructuring all of the Company’s debt
related financial derivatives (currency hedging programs,
interest rate swaps and cross currency swaps) were settled
and terminated.
Cash flows
The cash position at year-end was USD 91.8 million (2020:
USD 103.2 million).
 
The Company paid debt instalments of the equivalent of
USD124 million in 2021 (2020: USD21 million). Debt instalments
included repayments related to sale of vessels at USD 49
million and repayments from cash sweeps at USD 29 million.
Following the refinancing in Q2 2021, fixed repayments of debt
have been reduced substantially and cash sweep mechanisms
are in place that will balance repayments of debt to the
Company’s cash position. The Company will be less exposed
if cash flows are negatively impacted from a volatile market. If
the Company’s cash flows are exceeding agreed values,
related to cash position and related measures, excess
installments will become payable following a set of agreed
cash sweep mechanisms.
The Company’s cash-flows are primarily denominated in
USD, NOK, EUR, BRL, GBP, CAD and AUD. During 2021, the
USD strengthened by 3.4% to the NOK, strengthened by 6.7%
to the BRL, strengthened by 6.0% to the AUD, strengthened by
1.3% to the GBP and strengthened by 7.7% to EUR. The
average recorded exchange rates were NOK/USD 0.11628,
EUR/USD 1.18506, BRL/USD 0.18549, GBP/USD 1.37549,
AUD/USD 0.75014 and CAD 0.79698 (2020: NOK/USD
0.10672, EUR/USD 1.14518, BRL/USD 0.19420 GBP/USD
1.36491 and AUD/USD 0.69192).
Financial Risks
Interest risk
The Company is exposed to changes in interest rates, as
approximately 61% of the interest-bearing debt is based on
floating interest rates and primarily denominated in USD and
NOK. The average 3-month USD LIBOR was 0.16% p.a. during
2021 (2020:0.65% p.a.) and the average 3-month NIBOR was
0.47% p.a. during 2021 (2020: 0.7%
 
p.a.). The Company held
no interest rate swap agreements, nor any cross-currency
interest rate swaps at year-end.
Currency risk
The Company is exposed to currency risk as revenue and
costs are denominated in various currencies. The Company
settled and terminated all forward exchange contracts in 2021.
Inflation Risk
The Company is exposed to inflation risk as inflation rates are
expected to increase. The revenues may not be inflated at
levels that could compensate for inflated operating cost. In
addition to general inflation-rates, the operating expenses
related to spare parts, service-personnel and logistics within
the shipping industry are further exposed to inflation.
 
Liquidity risk
The Company is financed by a combination of debt and equity.
If the Company fails to repay or refinance its credit facilities,
additional equity financing may be required. There can be no
assurance that the Company will be able to repay its debts or
extend the debt repayment schedule through re-financing of
credit facilities. There is no assurance that the Company will
not experience cash flow shortfalls exceeding the Company’s
available funding sources or to remain in compliance with
minimum cash requirements or other covenants. Please see
more information regarding this in the Going Concern
paragraph above. Further, there is no assurance that the
Company will be able to raise new equity or arrange new
credit facilities on favorable terms and in amounts necessary
to conduct its ongoing and future operations should this be
required.
 
Climate risk
The Company is exposed to both transition risk and physical
risks associated with climate change. The Company has a
structured approach to monitoring the development of the
offshore oil and gas market and opportunities created by the
transition to offshore renewable energy. The Company’s
strategy is based on market scenario analysis and positioning
of the Company for the energy transition by establishing new
segments to explore business opportunities within offshore
renewable energy.
 
The physical risks associated with climate
change may directly affect our offshore operations through
increased occurrence of extreme weather conditions.
Available days for offshore operations could be limited as
clients could shorten their weather windows. The Company
mitigates this risk through good crew training and awareness
programs, good vessel maintenance programs and close
cooperation with its clients.
 
War risk
The war in Ukraine could impact the market balance of
offshore support vessels in the Company’s key areas of
operation. There is associated risk of price escalations to
vessel spare parts, logistics and other services. The Company
observes indications of shortages of experienced crew and
escalation of crew costs. Sanctions that have been imposed
on nations and organizations could affect the Company’s
 
SIEM
Offshore
 
Inc. Annual Report 2021
14
competition directly and indirectly, and its ability to receive
and send payments for its services.
 
OPERATIONS
Fleet, Performance and Employment
The fleet in operation at end of year 2021 totaled 28 vessels,
including partly owned vessels and 4 vessels in lay-up. The
Company performed ship-management services for 3 vessels
owned by related parties.
 
The Company had six PSVs in operation at end of the year
(2020: seven). The PSV fleet earned operating revenues of
USD39.9 million and had 88% utilization (2020: USD 37.3
million and 94%). The operating margin before administrative
expenses was USD 14.8 million (2020: USD 13.8million) and the
operating margin as a percentage of revenue was 37% (2020:
37%).
 
The Company had four OSCVs and two WIVs in operation
at end of the year (2020: six in total).The OSCV and WIV fleet
earned operating revenues of USD 111.7million and had 88%
utilization (2020: USD 105.4million and 89%). The operating
margin before administrative expenses was USD 64.4 million
(2020: USD 64.5 million) and the operating margin as a
percentage of revenue was 58% (2020: 61%).
 
The Company had eight AHTS vessels in operation at end
of the year, following sale of two AHTS vessels in June 2021
 
(2020: ten). The AHTS fleet earned operating revenues of USD
43.1 million and had 78% utilization excluding vessels in lay-up
(2020: USD 37.2million and 67% utilization). The operating
margin before administrative expenses was USD 3.8 million
(2020: USD (5.9) million) and the operating margin as a
percentage of revenue was 9% (2020: -16%).
 
Secunda Holdings Limited (“Secunda”) is a wholly owned
subsidiary that owns and operates a one offshore support
vessel (2020: one owned vessel and one bare boated vessel).
Secunda is a leader in offshore support services for platform
supply, anchor-handling, rescue standby and towage in its
primary area of operation, offshore Eastern Canada. The
Canadian fleet earned operating revenues of USD 12.7million
and had 100% utilization (2020: USD 17.7 million and 90%). The
operating margin before administrative expenses was USD 9.1
million (2020: USD 8.6 million) and the operating margin as a
percentage of revenue was 72% (2020: 49%).
 
Siem Offshore do Brasil S.A. is the Company’s wholly
owned Brazilian subsidiary that owns and operates a fleet of
five OSVs in Brazil (2020: five). This fleet earned operating
revenues of USD 15.7million and had 98% utilization (2020:
USD 15.6million and 81%). The operating margin before
administrative expenses was USD 8.9 million (2020: USD 7.7
million) and the operating margin as a percentage of revenue
was 57% (2020: 49%).
 
The Scientific Core-Drilling includes the drillship “JOIDES
Resolution” which is on a firm charter for ocean seabed core
sample drilling. The charterer is an international research
program and expeditions are world-wide. The “JOIDES
Resolution” recorded operating revenues of USD 30.0 million
(2020: USD 28.6 million) with an operating margin before
administrative expenses of USD 16.4 million (2020: USD 13.6
million) and the operating margin as a percentage of revenue
was 55% (2020: 49%).
 
The total firm contract backlog for all OSV vessels at 31
December 2021 was USD298 million (2020: USD483 million),
including the drillship “JOIDES Resolution” and the 41%-
ownership in the well-stimulation vessel “Big Orange XVIII”.
The total vessel contract backlog is allocated with USD161
million in 2022, USD96 million 2023 and USD41 million in 2024
and onwards. The contract backlog, as a % of the annual fleet
capacity, is 39% for 2022, 19% for 2023 and 7% for 2024
(2020: 46% for 2021, 50% for 2021, 27% for 2022 and 18% for
2023).
HSEQ
Health, Safety, Environment & Quality - Committed to safe,
ethical, and sustainable operations
The Company’s continuous focus on safe operations,
cooperation and environmental initiatives is resulting in safety
and environmental improvements.
 
The Company reached a one-year period without
any Lost Time Injuries, which is a major achievement. The Total
Recordable Incidents Frequency has reached an all-time low,
which reflects hard work and dedication across the fleet and a
keen focus on safe operations.
 
The Company is interacting closely with several
clients in Safety Campaigns and environmental cooperation
globally on a continuous basis.
Clients are very satisfied with our operational and
safety performance, which reflects professional crew and a
well-developed safety culture throughout the Company
Environment
In 2021, protection of the environment has been a high priority
area. The environmental strategy outlines the company’s
internal goals for emission intensity reductions, waste handling
and energy loss. We have determined plans for specific
research and development targets to further develop emission
reduction technologies.
 
Siem Offshore Environmental Policy confirms the
Board of Directors and management’s commitment to
minimize the Company’s impact on the environment, in
relation to biodiversity, resource usage, water and waste
management.
 
At the senior management level, there is a
constant and shared responsibility to ensure that all staff are
familiar with this policy and that there are systems and
procedures in place to integrate environmental considerations
in our decision-making and operations.
 
 
 
 
Board of Directors’ Report
15
SIEM
Offshore
 
Inc. Annual Report 2021
Ethics, Compliance and Integrity
Siem Offshore is committed to carrying out its business in an
ethical manner and in strict compliance with applicable laws
wherever it operates. This continued to be a focus area in
2021, where we have further earned trust of our clients,
business partners, suppliers and other stakeholders by acting
consistently and reliably in accordance with these principles.
 
Management is accountable for compliance, which is
the responsibility of everyone who works for the Company.
One of the key roles of our compliance and ethics function is
to ensure Management understands, accepts and fulfils its
accountability.
SHAREHOLDERS AND CORPORATE
GOVERNANCE
Shareholder Information
The Company’s authorized share capital is USD300,000,000
divided into 300,000,000 ordinary shares of a nominal value of
USD1.00 each. The issued share capital on 21 April 2022,
based on the 238,852,052 Company shares issued and
outstanding, is USD 238,852,052. The Company’s shares are
listed on the Oslo Stock Exchange with the ticker symbol
SIOFF. The Company’s largest shareholder is Siem
Sustainable Energy S.a r.l., whose ultimate owner is Siem
Industries S.A., with a 33.6% interest at 21 April 2022. In May
2021, a reverse split 100:1 was made effective. Comparable
figures involving number of shares have been recalculated
reflecting the merger. During 2021, the closing share price
reached a high of NOK 74.0, a low of NOK 2.49 and closed at
NOK 3.4 at year-end.
Corporate Governance
The Company has implemented guidelines for good corporate
governance based on the recommendations and guidelines
given by the Oslo Stock Exchange. The purpose of these
guidelines is to clarify roles of the Shareholders, the General
Meeting, the Board of Directors and the day-to-day
Management beyond what follows from the legislation. A
detailed summary of our corporate governance principles is
included in a separate section of the Annual Report.
Directors and Officers Liability Insurance
Directors and Officers Liability Insurance (DOLI) is for the fiscal
year 2021 placed with Zurich Insurance Plc, Norway Branch.
The DOLI insurance provides financial protection for the
directors and officers of the Company in the event that they
are being sued in conjunction with the performance of their
duties as they relate to the Company. The insurance coverage
includes the directors’ and officers’ personal legal liabilities,
including defence - and legal cost. The cover also includes
employees in managerial positions.
 
THE WORKING ENVIRONMENT AND THE
EMPLOYEES
The Company provides a workplace with equal opportunities
for all employees. We treat current and prospective
employees fairly in relation to salaries, promotions, and
recruitment. The Company offers its employees a sound
working environment, giving opportunities for professional
development equally and free of any discrimination to all
employees.
 
The sick leave rate for onshore and offshore
employees was 0.9% and 1.8% respectively on a global basis.
 
The knowledge of the crew is vital for safe and
secure operations of any vessel. Such knowledge includes
good seamanship and understanding of the demanding
assignments to be executed.
OUTLOOK
While the oversupply of OSV vessels continues to have effects
on charter rates for the Company’s fleet, the Board sees an
encouraging increase in demand for its services. Our fleet
operates in markets that require the most technically
advanced and well-equipped vessels. Certain vessel
categories such as the IMR, OCSV, WIV and PSV are likely to
enjoy better rates in the near to medium term, while both
overcapacity and demand fundamentals for the AHTS fleet is
likely to remain challenging.
 
 
For the AHTS fleet, longer term contracts in the
North Sea are generally not available. Seasonal (summer)
campaigns, and selective tender contracts in Brazil, West
Africa and Australia are exceptions, but does still not provide
the required volume of demand that can provide satisfactory
economics. In addition, many contracts include liabilities, such
as early termination clauses, skewed payment terms, and
unacceptable and uninsurable risk to owners. In desperation,
owners tend to accept clients’ terms to avoid lay-up.
 
The Offshore Wind market is promising and we
expect increased interest for specialized built Offshore
Services Vessels (OSV) and Offshore Subsea Construction
Vessels (OSCV) to service both construction and maintenance
of offshore wind farms.
 
We expect the offshore wind market to
grow globally, which will have a positive effect on the demand
for the entire OSCV fleet.
 
Our “best in class” operating efficiency and our
deliberate efforts to reduce green house emissions by
 
SIEM
Offshore
 
Inc. Annual Report 2021
16
investing in fuel efficiency technology and battery packages
to several of our vessels, meets our clients demand, and
positions us as a preferred service provider going forward.
 
 
Further, we strongly believe that consolidation
should continue to be a required objective for the stakeholders
in our industry. As we move forward, the oil and gas industry
will be met with demands to reduce emission of green house
gases from its clients. In order to serve the interest of all
stakeholders, our ambition shall be to lead the consolidation
effort as well as the shift into new technology.
The Board believes that the Company is well-
positioned to compete with its peers based on its modern fleet,
quality backlog, strong operating record, positive reputation,
and its proven ability to provide employment on a global scale.
Following the implementation of the proposed reorganization
plan and re-domiciliation, the Company has a sustainable
financial position that sheets further growth and development.
21 April 2022
Kristian Siem
 
Chairman
(Sign.)
Barry W. Ridings
Director
(Sign.)
 
Alexander Monnas
 
Director
(Sign.)
Kenneth Ross
 
Director
(Sign.)
 
Peter Ditlef Knudsen
Director
(Sign.)
Bernt Omdal
Chief Executive Officer
(Sign.)
 
 
 
 
 
17
SIEM
Offshore
 
Inc. Annual Report 2021
Corporate Governance
The principles for corporate governance
adopted by the Company are based on the
“Norwegian Recommendation for
Corporate Governance” issued on the 14
October 2021.
Statement
of Policy on
Corporate
Governance
As a company incorporated in the Cayman Islands, Siem
Offshore Inc. is an exempted company duly incorporated
under the laws of the Cayman Islands and subject to Cayman
Islands’ laws and regulations with respect to corporate
governance. Cayman Islands corporate law is to a great extent
based on English Law. In addition, due to the Company’s
listing on the Oslo Stock Exchange, certain aspects of
Norwegian Securities Law apply to the Company and there is
a requirement to adhere to the Norwegian Code of Practice for
Corporate Governance. The Norwegian Code of Practice for
Corporate Governance is publicly available at www.nues.no in
both Norwegian and English languages. Due to new provisions
implemented in the Norwegian Accounting Act, compliance
with the regulations for Corporate Governance reporting is
now a legal requirement provided that it does not conflict with
the Cayman Islands laws and regulations. The Company
endeavours to maintain high standards of corporate
governance and is committed to ensuring that all shareholders
of the Company are treated equally and the same information
is communicated to all shareholders at the same time.
Corporate Governance is subject to annual assessment
and review by the Board of Directors.
 
The Board of Directors has reviewed this statement. It is
the opinion of the Board of Directors that the Company
complies with the Norwegian Code of Practice for Corporate
Governance.
 
This statement is structured in accordance with The
Norwegian Code of Practice for Corporate Governance.
 
Business
Cayman Islands laws and regulation do not require the objects
clause of the Companies Memorandum and Articles of
Association to be clearly defined. The Company has, however,
adopted clear objectives and strategies for its business.
 
Siem Offshore aims to grow the company within offshore
support vessels, both organically and through combination
with other operators, in order to achieve economies of scale
and a stronger presence in the market.
 
Siem Offshore aims to become a preferred supplier
of marine services to the offshore energy industry and in the
offshore renewable energy sector, based on quality and
reliability, and to provide cost-efficient solutions to its
customers by understanding their operations and by applying
technology and experience.
The Company builds its business around a motivated
and skilled workforce with the appropriate technical solutions.
This creates sustainable value for all shareholders.
Reference is made to the Board of Directors report
for detailed information.
Equity and Dividends
 
The priorities for the use of Company funds are determined by
the Board of Directors and with recommendations from the
Management, considering existing conditions. At present,
priorities for the use of funds in order of importance are vessels
operations and maintenance, repayment of debt, investment
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
18
opportunities in the business and the return of capital to the
shareholders in form of share buy-back or dividends.
The Board’s mandate to increase the Company’s
share capital is limited only to the extent of the authorized
share capital of the Company with certain pre-emption rights
for shareholders and in accordance with the Company’s
Memorandum and Articles of Association which comply with
Cayman Islands Law.
 
Under the Articles of Association, the Board can
issue new shares, convertible bonds or warrants at any time
within the limits of the authorized capital without the consent
of the General Meeting, but with pre-emption rights for
shareholders. A General Meeting has further authorized the
Board to issue new shares without pre-emption rights to all
shareholders up to a limit of 50% of Siem Offshore’ shares at
the time the authorization was given. The authority gives the
Board flexibility to finance investments, acquisitions and other
business combinations on short notice through the issue of
shares or certain other equity instruments in the Company.
Furthermore, the Board considers the granting of a new
standing authority at the time of holding an Annual General
Meeting rather than convening an Extraordinary General
Meeting at some future time to be in the best interests of the
Company, as this will result in cost savings and more effective
time management for both the Company’s senior management
and its Shareholders.
At the Annual General Meeting held on 29 April 2021
it was resolved to increase the authorised share capital of the
Company from USD15,000,000 divided into 1,500,000,000
Common Shares of par value USD0.01 each to
USD300,000,000 divided into 30,000,000,000 Common
Shares of par value USD0.01 each, by the creation of an
additional 28,500,000,000 Common Shares of par value
USD0.01 each which shall rank pari passu in all respect with
the existing Common Shares.
On 31 May 2021 a reverse split 100:1 was
implemented. The Company’s authorized capital following the
reverse split, is USD300,000,000 divided on 300,000,000
shares, each with a nominal value of USD 1.00. The Company
has issued 238,852,052 shares. There are 61,147,948
authorized, but unissued shares that can be issued by the
Board.
Equal Treatment of Shareholders, Freely Tradable
Shares and Transactions with Related Parties
The Company is committed to ensuring that all shareholders of
the Company are treated equally and all the issued shares in
Siem Offshore, at nominal value USD1.00 each, are freely
tradable and carry equal rights with no restrictions on voting.
Siem Sustainable Energy S.a r.l, which owns 33.6%
of the Company, is represented by its ultimate owner Siem
Industries S.A by its Chairman Kristian Siem on the Board of
Directors. The Company pays an annual fee to Siem Industries
S.A. as compensation for directorships, provision of an office
and presence in the Cayman Islands and other services. The
fee is adopted by the Annual General Meeting based on a
recommendation from the independent Board Members.
Related party transactions are disclosed in the notes to the
accounts.
Freely Negotiable Shares
All of the shares in the Company carry equal rights and are
freely negotiable. The shares are traded according to normal
market practice and no special limitations on transactions
have been laid down in the Articles of Association.
General Meetings
The Annual General Meeting of the Company will be held at
the registered office of Siem Offshore AS on 20 May 2022, at
01:00PM Norway local time and Shareholders can be
represented by proxy. Notices of general meetings and
related documents are made available to shareholders at the
latest 17 days prior to meeting date. Notice of attendance by
proxy is to be provided to the offices of Siem Offshore AS at
Nodeviga 14, P.O. Box 425, Kristiansand 4664, Norway, email:
info@siemoffshore.com, not less than 24 hours prior to the
stated time of the Annual General Meeting. Shareholders are
given the opportunity to vote on the election of board
members.
Nomination Committee
The appointment of a nomination committee is not a
requirement under Cayman Islands Law. However, the Board
did in 2021 appoint a Nomination Committee, represented by
three Board members.
Board of Directors; Composition and
Independence
In the nominations to the Board of Directors, the Board
consults with the Company’s major shareholders and ensures
 
 
 
 
19
SIEM
Offshore
 
Inc. Annual Report 2021
that the Board is constituted by Directors with the necessary
expertise and capacity. There is no requirement under
Cayman Islands Law for the Company to establish a corporate
assembly.
Each Board member is elected for a term of two
years or such shorter term as shall be specified in the ordinary
resolution pursuant to which the Director shall be appointed.
Representatives of the Executive Management are not
members of the Company’s Board of Directors.
The Board of Directors as a group has extensive
experience in areas which are important to Siem Offshore,
including offshore services, international shipping, ship
broking, finance and corporate governance and restructuring.
Work of the Board of Directors
The Board monitors the performance of management
through regular meetings and reporting. The Company has a
Compensation Committee, a Nomination Committee and an
Audit Committee.
The Compensation Committee consists of three Directors.
The mandate of the committee is to review and approve the
compensation of the CEO and any bonuses to all executive
personnel. Reference is also made to Note 18 to the Accounts,
Remuneration of the Executive Management.
 
The Nomination Committee consists of three Directors.
The Nomination Committee shall actively be seeking and
evaluating individuals qualified to become Directors of the
Company and nominate candidates to the Board of Directors.
The Audit Committee consists of two Directors. The
composition of the committee meets the requirements of the
Norwegian Code of Practice for Corporate Governance as
regards independence. The committee’s mandate can be
summarized as follows:
 
●
Ascertain that the internal and external accounting reporting
process are organized appropriately and carried out
efficiently, and are of high professional quality.
●
Monitor and assess the quality of the statutory audit of the
Company’s financial statements.
●
Ensure the independence of the external auditor, including
any additional services provided by the external auditor.
Risk Management and Internal Control
Internal control
A prerequisite for the Company’s system of decentralized
responsibility is that the activities in every part of the Company
meet general financial and non-financial requirements and are
carried out in accordance with the Company’s common norms
and values. The executive management of each subsidiary is
responsible for risk management and internal control in the
subsidiary with a view to ensuring 1) optimizing of business
opportunities, 2) targeted, safe, high-quality and cost-
effective operations, 3) reliable financial reporting, 4)
compliance with current legislation and regulations and 5)
operations in accordance with the Company’s governing
documents, including ethical, environmental and social
responsibility standards. The Company’s risk management
system is fundamental to the achievement of these goals.
Financial reporting process
The Company prepares and presents its financial statements
in accordance with current IAS/IFRS rules. Financial
information from subsidiaries is received each month in a
reporting package in standard format accommodated
necessary information for preparing the consolidated financial
statement for the Company. The reporting from the
subsidiaries is extended at the year-end reporting process to
meet various requirements for supplementary information.
There are established routines to check the financial data in
the received reporting packages to ensure the best quality for
the consolidated figures for the Company.
Training and further development of accounting
experience within the Company is provided locally by
participating on various external courses on a regular basis.
Remuneration of the Board of Directors
The remuneration of the Board members reflect their
experience and responsibilities, and is adopted by the Annual
General Meeting based on the recommendation from the
Board. The Board members do not have share options or
profit-based remuneration.
The responsibility statement of the Board of Directors
in this report and the notes to the accounts include information
about the remuneration of the Board of Directors.
Remuneration of the Executive Management
 
The Company has a Compensation Committee, which reviews
and approves the compensation of the CEO and the bonuses
to all executive personnel. The Articles of Association of the
Company permit the Board to approve the granting of share
options to employees. A long-term share option program for
eight key employees of the Company was introduced in Q1
2013. An additional share option program was implemented in
Q2 2014 for ten key employees of the Company. The
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
20
remuneration of the CEO and the share option scheme are
disclosed in the notes to the accounts.
 
The board of director’s statement on the
remuneration of executive personnel is presented as a
separate appendix to the agenda for the General Meeting. The
remuneration statement clearly states which aspects of the
guidelines are advisory and which, if any, are binding. The
General Meeting will vote separately on each of these aspects
of the guidelines.
Information and Communications
The Company has a policy of treating all its shareholders and
other market participants equally, and communicates relevant
and objective information on significant developments which
impact the Company in a timely manner.
 
The Company also seeks to ensure that its
accounting and financial reporting are to the standards of our
investors, and the Company presents its financial statements
in accordance with the International Financial Reporting
Standards (IFRS). The Audit Committee of the Board of
Directors monitors the Company’s reporting on behalf of the
Board.
 
Notices to the Oslo Stock Exchange and placements
of notices and other information, including quarterly and
annual reports, can be found on the Company’s website
(www.siemoffshore.com). The financial calendar for 2022 is
presented on the Company’s website under “Investors”.
Take-overs
 
The shares in the Company are freely tradable and the Articles
of Association of the Company does not hold specific defence
mechanisms against take-over situations. In a take-over
situation, the Board of Directors will comply with relevant
legislation.
Auditor
The Auditor of the Company is elected at the Annual General
Meeting, which also approves its remuneration. Details of the
Company’s remuneration of the external auditor are given in
the notes to the accounts.
 
The Auditor reports to the Audit Committee twice a
year at a minimum, but more often if necessary. During the
second half of the year, the external auditor presents to the
Audit Committee his assessment of risks, internal controls, risk
areas and improvement potential in control systems and his
audit plan for the following year. The second report to the
Audit Committee is the presentation of the Year-End Audit.
The external auditor presents a summary of the audit process,
including comments on audited internal control procedures
and key issues in the financial reporting.
 
The Audit Committee also receives an annual
independence reporting from the external auditor, confirming
the external auditor’s independence with respect to the
Company, within the meaning of the Norwegian Act on
Auditing and Auditors. The confirmation also includes services
delivered to the Company other than mandatory audit.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income statement
 
 
21
SIEM
Offshore
 
Inc. Annual Report 2021
PARENT COMPANY
CONSOLIDATED
2021
2020
(Amounts in USD 1,000)
Note
2021
2020
1,299
1,336
Operating revenue
2,3,4,14
254,493
244,843
-5,271
-3,114
Operating expenses
2,8,14,17,18,19
-153,909
-162,584
-3,972
-1,778
Operating margin
4
100,585
82,259
-
-
Depreciation and amortization
4,5
-63,539
-74,944
-
-
Impairment of vessels
3,4,5
-
-276,857
-
-
Gain/(loss) on sales of assets
23
997
655
-
14
Gain/(loss) on currency derivative contracts
26
204
-1,970
-3,973
-1,764
Operating profit
38,247
-270,856
Financial income and expenses
109,396
17,050
Financial income
20
96,727
7,161
-74,880
-301,267
Financial expenses
20
-28,573
-55,514
-862
-3,739
Net currency gain/(loss)
20
-4,531
-29,434
33,654
-287,956
Net financial items
63,623
-77,787
-
-
Result from associated companies
7
42
844
29,682
-289,720
Profit/(loss) before taxes
101,912
-347,799
-1,308
-693
Tax benefit/(expense)
11
1,000
-2,673
28,374
-290,413
Net profit/(loss)
102,912
-350,472
-
-
Attributable to non-controlling interest
6
-4,947
-51,607
28,374
-290,413
Attributable to shareholders of the Company
107,858
-298,866
Weighted average number of outstanding shares (1,000) *
21
147,050
9,347
Weighted average number of shares diluted (1,000) *
21
147,050
9,347
Statement of comprehensive income
2021
2020
(Amounts in USD 1,000)
2021
2020
28,374
-290,413
Net profit/(loss)
102,912
-350,472
Other Comprehensive income
Items that will not be reclassified to profit or loss
-
-
Pension remeasurement gain (loss)
-203
-721
Items that may be subsequently reclassified to profit or loss
-
-
Cash flow hedges
-2,217
-12,589
-
-
Currency translation differences
825
15,837
28,374
-290,413
Total comprehensive income for the year
101,317
-347,946
-
-
Attributable to non controlling-interest
-4,947
-51,606
28,374
-290,413
Attributable to shareholders of the Company
106,263
-296,341
* Weighted average number of shares for 2020 have been adjusted for the 100:1 reverse split in order to present
 
comparable
figures.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Financial Position
—Assets
SIEM
Offshore
 
Inc. Annual Report 2021
22
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
Note
12/31/2021
12/31/2020
Non-Current assets
766
-
Deferred tax asset
11
8,945
7,526
-
-
Vessels and equipment
4,5
844,652
936,990
-
-
Capitalized project costs
4,5
2,433
3,098
224,117
130,177
Investment in subsidiaries
6
-
-
-
-
Investment in associated companies
7
2,495
2,522
-
-
CIRR Loan deposit
12,27
36,763
45,946
3
59
Long-term receivables
9,14,27
30,749
34,125
224,885
130,236
Total non-current assets
926,037
1,030,207
Current assets
-
-
Trade receivable
2,27
34,097
29,843
1,014
2,454
Other short-term receivable
9,14,27
17,001
17,869
-
-
Inventories
28
4,524
4,684
33,362
51,777
Cash
2,10,27
91,839
103,225
34,376
54,231
Total current assets
147,460
155,621
259,262
184,467
Total assets
1,073,497
1,185,828
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Financial Position
—Equity and Liabilities
23
SIEM
Offshore
 
Inc. Annual Report 2021
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
Note
12/31/2021
12/31/2020
Equity
821,727
644,306
Paid-in capital
821,727
644,306
-22,302
-22,302
Other reserves
-30,725
-29,332
-542,164
-570,537
Retained earnings
-450,166
-557,822
257,261
51,467
Shareholders' equity
24
340,836
57,152
-
-
Non-controlling interest
-538
-44,730
257,261
51,467
Total equity
340,298
12,423
Liabilities
Non-current liabilities
-
86,425
Borrowings
2,12,14,27
576,596
791,897
-
-
CIRR Loan
12,27
36,763
45,946
-
621
Tax liabilities
11
421
1,255
-
-
Pension liabilities
8
1,014
1,100
-
1,833
Derivative financial instruments
2,15,27
-
1,833
-
-
Other non-current liabilities
19
12,776
15,381
-
88,878
Total non-current liabilities
627,570
857,412
Current liabilities
36
147
Accounts payable
2,27
13,542
13,654
-
43,664
Borrowings
2,12,14,27
47,650
238,890
-
-
Derivative financial instruments
2,15,26,27
-
18,829
-
-
Taxes payable
11
971
964
-
-
Other current provision
13
16,696
15,317
1,965
311
Other current liabilities
13,14,19,27
26,770
28,340
2,001
44,122
Total current liabilities
105,630
315,994
2,001
133,001
Total liabilities
733,200
1,173,405
259,262
184,467
Total equity and liabilities
1,073,497
1,185,828
606,880
815,504
Guarantees
16
686
686
21 April 2022
Kristian Siem
 
Chairman
(Sign.)
Barry W. Ridings
Director
(Sign.)
 
Alexander Monnas
 
Director
(Sign.)
Kenneth Ross
 
Director
(Sign.)
 
Peter Ditlef Knudsen
Director
(Sign.)
Bernt Omdal
Chief Executive Officer
(Sign.)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of changes in equity
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
24
CONSOLIDATED
(Amounts in USD 1,000)
Total no.
 
of shares
Share
 
capital
Share
premium
reserves
Other
reserves
Retained
earnings
Share-
holders'
equity
Non-
controlling
interest
Total
equity
Equity as of 31 December 2019
934,738,777
9,347
634,959
-32,580
-258,234
353,493
6,877
360,370
Net profit/(loss)
-
-
-
-
-298,866
-298,866
-51,607
-350,472
Cash flow hedge
-
-
-
-12,589
-
-12,589
-
-12,589
Currency translation differences
-
-
-
15,837
-
15,837
-
15,837
Pension remeasurement
-
-
-
-
-721
-721
-
-721
Equity as of 31 December 2020
934,738,777
9,347
634,959
-29,332
-557,821
57,152
-44,730
12,423
Net profit/(loss)
-
-
-
-
107,858
107,858
-4,947
102,912
Cash flow hedge
-
-
-
-2,217
-
-2,217
-
-2,217
Currency translation differences
-
-
-
825
-
825
-
825
Pension remeasurement
-
-
-
-
-203
-203
-
-203
Share issues in partially owned
subsidiaries
-
-
-
-
-
-
49,138
49,138
Shares issues in Siem Offshore
Inc
22,950,466,494
229,505
-52,084
-
-
177,421
-
177,421
Correction number of shares
following reversed split
-23,646,353,219
-
-
-
-
-
-
-
Equity as of 31 December 2021
238,852,052
238,852
582,875
-30,725
-450,166
340,836
-538
340,298
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of changes in equity
 
 
25
SIEM
Offshore
 
Inc. Annual Report 2021
PARENT COMPANY
(Amounts in USD 1,000)
Total no.
 
of shares
Share
 
capital
Share
premium
reserves
Other
reserves
Retained
earnings
Shareholders'
equity
Equity as of 31 December 2019
934,738,777
9,347
634,959
-22,302
-280,663
341,342
Other items
-
-
-
-
538
538
Net profit/(loss)
-
-
-
-
-290,413
-290,413
Equity as of 31 December 2020
934,738,777
9,347
634,959
-22,302
-570,538
51,467
Net profit/(loss)
-
-
-
-
28,374
28,374
Shares issues in Siem Offshore Inc
22,950,466,494
229,505
-52,084
-
-
177,421
Correction number of shares
following reversed split
-
23,646,353,219
-
-
-
-
-
Equity as of 31 December 2021
238,852,052
238,852
582,875
-22,302
-542,164
257,261
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of cash flows
 
SIEM
Offshore
 
Inc. Annual Report 2021
26
PARENT COMPANY
CONSOLIDATED
2021
2020
(Amounts in USD 1,000)
Note
2021
2020
CASH FLOW FROM OPERATIONS
28,374
-290,413
Net profit/(loss)
102,912
-350,472
2,408
5,956
Interest expenses
24,187
49,862
-1,997
-2,192
Interest income
-3,240
-3,855
-3,647
-5,393
Intercompany interest income
-
-
1,308
684
Tax expense
11
-1,000
2,673
-12,198
-
Result from associated companies
7
-42
-844
-
-
Gain/(loss) on sale of assets
22,23
-997
-655
-91,553
-
Debt forgiveness from restructuring
20
-91,553
-
-
-
Depreciation and amortization
5
63,539
74,944
-
-
Impairment of vessels
5
-
276,857
70,910
294,664
Impairment of shares in subsidiaries
20
-
-
-
-
Effect of unreal. gain on currency exchange forward
contracts
26
-3,578
-12,039
880
-4,062
Changes in short-term receivables and payables
9,174
1,806
-
-871
Other changes
2,493
11,317
-5,516
-1,626
Cash flow from operations
101,895
49,593
-433
-2,602
Interest paid
-23,342
-13,429
1,685
2,192
Interest received
3,183
4,073
-16
 
-
 
Taxes paid/(received)
363
-532
-4,280
-2,036
Net cash flow from operations
82,099
39,704
CASH FLOW FROM INVESTMENT ACTIVITIES
-
-
Investment in fixed assets
4,5
-27,736
-25,207
-
-
Proceeds from sale of fixed assets
22,23
52,463
838
-8,190
-8,657
Loan to subsidiaries
-
-
-
-
Change in other non-current receivables
4,202
5,778
-8,190
-8,657
Net cash flow from investment activities
 
28,929
-18,591
CASH FLOW FROM FINANCING ACTIVITIES
-
-
Proceeds from non-controlling interests in consolidated
subsidiary
10,000
2,184
-
-
Repayment of lease liability
19
-1,927
-2,112
-
-1,529
Effect from restatement of bonds to convertible bonds
-
-1,529
-
-
Changes in other non-current liabilities
1,697
1,066
-6,216
-
Repayment of long-term borrowing
12
-124,270
-20,652
-6,216
-1,529
Net cash flow from financing activites
-114,500
-21,043
-18,686
-12,222
Net change in cash
-3,472
70
51,777
60,430
Cash at bank as of 1 January
103,225
74,451
271
3,569
Effect of currency exchange rate differences
-7,914
28,704
33,362
51,777
Cash at bank as of 31 December
91,839
103,225
 
 
 
 
 
Notes to the accounts
27
SIEM
Offshore
 
Inc. Annual Report 2021
Note 1
Accounting Principles
1.1 General
Siem Offshore owns and operates a fleet of offshore support
vessels, including Platform Supply Vessels, Offshore Subsea
Construction Vessels, Anchor Handling Tug Supply Vessels
and Well-Intervention Vessels. Siem Offshore Inc.
commenced operations 1 July 2005 and is an exempted
company under the laws of the Cayman Islands and is listed on
the Oslo Stock Exchange. The Company’s headquarter is
located in Kristiansand, Norway and the Company is tax
domiciled in Norway. All references to “Siem Offshore Inc.”,
“Consolidated” and “Company” shall mean Siem Offshore Inc.
and its subsidiaries and associates unless the context
indicates otherwise. All references to “Parent” or “Parent
Company” shall mean Siem Offshore Inc. as a parent company
only.
The principal accounting policies applied in preparation of
these consolidated and parent company financial statements
are set out below. These policies have been consistently
applied for all the years presented, unless otherwise stated.
 
The financial statements were authorized by the Board of
Directors on 21 April 2022.
1.2 Basis of preparation
The consolidated and parent company financial statements
are prepared in accordance with International Financial
Reporting Standards (IFRS) as endorsed by the European
Union. The financial statements also include any additional
applicable disclosures as required by Norwegian law and Oslo
Stock Exchange regulations. The financial statements have
been prepared under the historical cost convention, as
modified by specific financial assets and financial liabilities
(including derivative instruments) measured at fair value and
assets held for sale measured at fair value less costs to sell.
The financial statements have been prepared under the
assumption of going concern.
 
All amounts are in USD thousands, unless otherwise stated.
Management is required to make estimates and
assumptions that affect the reported amounts of assets and
liabilities. In addition, the preparation of financial statements in
conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise
its judgment in the process of applying the Company’s
accounting policies. The areas involving a higher degree of
judgment or complexity or areas where assumptions and
estimates are significant to the consolidated financial
statements are disclosed in note 3 Critical Accounting
Estimates and Judgments.
(a) New and
amended
 
standards that have been adopted
 
The Company has applied the following standards and
amendments for the first time for their annual reporting period
commencing 1 January 2021:
•
Amendments to IFRS 7, IFRS 9 and IAS 39 Interest
Rate Benchmark Reform
•
Amendments to IAS 1 and IAS 8 Definition of Material
•
Revised Conceptual Framework for Financial
Reporting
●
Amendment to IFRS 16 Covid-19 Related Rent
Concessions
(b) New standards and interpretations not yet adopted
 
Certain new accounting standards and interpretations have
been published that are not mandatory for 31 December 2021
reporting periods and have not been early adopted by the
Company. These standards are not expected to have a
material impact on the entity in the current reporting period.
•
Amendment to IAS 1: Classification of Liabilities as
Current or Non-current
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
28
•
Onerous Contracts – Costs of Fulfilling a Contract –
Amendments to IAS 37
•
 
IFRS 9 Financial Instruments – Fees in the “10 per
cent” test for derecognition of financial liabilities
1.3 Consolidation
(a) Subsidiaries
Subsidiaries are entities over which the Parent has control. The
Parent controls an entity when the Parent is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power
over the entity. Subsidiaries are fully consolidated from the
date on which control is transferred to the Company. They are
deconsolidated from the date that control ceases.
Intercompany transactions, balances, and unrealized gains
on transactions between companies are eliminated.
Unrealized losses are also eliminated. When necessary,
amounts reported by subsidiaries have been adjusted to
ensure consistency with the policies adopted by the
Company.
 
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated income
statements, statement of financial position and statement of
changes in equity respectively.
(b) Business combinations
The Company applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets
transferred and the liabilities assumed to the former owners of
the acquirer and the equity interests issued by the Company.
The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration
arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date.
The Company recognizes any non-controlling interest in the
acquired entity on an acquisition-by-acquisition basis, either
at fair value or at the non-controlling interest’s proportionate
share of the recognized amounts of acquired entity’s
identifiable net as-sets. Acquisition-related costs are
expensed as incurred. If the business combination is achieved
in stages, fair value of the acquirer’s previously held equity
interest in the acquired entity is re-measured to fair value at
the acquisition date through profit or loss. Any contingent
consideration to be transferred by the Company is recognized
at fair value at the acquisition date. Subsequent changes to the
fair value of the contingent consideration of an asset or liability
are recognized in profit or loss. Contingent consideration that
is classified as equity is not re-measured and its subsequent
settlement is accounted for within equity.
(c) Associated companies
Associates are entities over which the Company has
significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity
method of accounting and are initially recognized at cost. The
Company’s investment in associates includes goodwill
identified on acquisition. The share of profit or loss recorded in
the consolidated financial statements is based on the after-tax
earnings of the associate.
The Company’s share of post-acquisition profit or loss is
recognized in the income statement, and its share of post-
acquisition movements in other comprehensive income is
recognized in other comprehensive income with a
corresponding adjustment to the carrying amount of the
investment. When the Company’s share of losses in an
associate equals or exceeds its interest in the associate,
including any other unsecured receivables, the Company
does not recognize further losses unless it has incurred legal
or constructive obligations or made payments on behalf of the
associate.
Unrealized gains on transactions between the Company
and its associates are eliminated to the extent of the
Company’s interest in the associates. Unrealized losses are
eliminated un-less the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure
consistency with the policies adopted by the Company.
1.4 Classification of items in the financial
statements
Assets designated for long-term ownership or use and
receivables due later than one year after drawdown are
classified as non-current assets. Other assets are classified as
current assets. Liabilities due later than one year after the end
of the reporting period are classified as non-current liabilities.
Other liabilities are classified as current liabilities. All derivative
financial instruments are classified as current assets or current
liabilities.
1.5 Segment reporting
Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is
responsible for allocating resources and assessing
performance of the operating segments, has been identified as
 
 
 
Notes to the accounts
29
SIEM
Offshore
 
Inc. Annual Report 2021
the executive management team consisting of the CEO, CFO
and COO.
1.6 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the
Company’s entities are measured using the currency of the
primary economic environment in which the entity operates
(the “functional currency”). The consolidated financial
statements are presented in USD, which is the Company’s
presentation currency.
 
(b) Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the
translation at year- end exchange rates of monetary assets
and liabilities denominated in foreign currencies are
recognized in the income statement line item Net currency
gain/loss.
(c) Subsidiary companies
The results and financial position of all the subsidiaries of the
Company (none of which have the currency of a
hyperinflationary economy) that have a functional currency
 
different from the presentation currency are translated into the
presentation currency as follows:
 
(i) assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that
statement of financial position;
(ii) income and expenses for each income statement are
translated at average exchange rates (unless this average is
not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income
and expenses are translated at the dates of the transactions);
and
(iii) all resulting exchange differences are recognized in other
comprehensive income.
 
As part of the consolidation process, exchange differences
arising from the translation of the net investment in foreign
operations is recognized directly in Other Comprehensive
Income (OCI). When a foreign operation is sold, exchange
differences previously recognized in OCI are reclassified to
profit or loss and included in the gain or loss on sale.
 
Goodwill and fair value adjustments arising on the
acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the closing rate.
Exchange differences arising are recognized in OCI.
1.7 Non-current tangible assets and maintenance
costs
Land and Buildings and Vessels are stated at their historical
cost less accumulated depreciation and net of any impairment
losses. All non-current tangible assets (excluding Land and
Vessels under construction) are depreciated on a straightline
basis over the estimated remaining useful economic life of the
asset. The vessel residual value is the estimated future sales
price for steel less the estimated costs associated with
scrapping a vessel. The residual value and expected useful life
for all non-current tangible assets is reviewed annually and,
where they differ significantly from previous estimates, the
rate of depreciation charges is changed accordingly. The
vessels presently owned by the Company have an estimated
economic life of 30 years. Some components of the vessels
have a shorter economic life than 30 years. Such components
are depreciated over their individual useful lives. Each part of a
vessel that is significant to the total cost of the vessel is
separately identified and depreciated over that component’s
useful life. Components with similar useful lives are included in
one component. The Company has identified nine significant
components relating to its different types of vessels. See note
5 for additional information.
In accordance with IAS 16 and the cost model, drydocking
costs is a separate component of the vessel’s cost at purchase
with a different pattern of benefits and are therefore initially
recognized as a separate depreciable asset. Subsequently,
the cost of major renovations and periodic maintenance costs
are capitalized as a dry-docking asset and depreciated over
the useful life of the parts replaced. The useful life of the dry-
docking costs will be the period until the next docking,
normally five years. Day- to-day maintenance costs are
immediately expensed during the reporting period in which
they are incurred.
 
Capitalized project cost - Certain vessel contracts require
an investment prior to commencing the contract to fulfil
requirements set by the charterer. These investments are
capitalized and amortized over the term of the specific charter
contract.
Gains and losses on the sale of assets and disposals are
determined by comparing the sales or disposal proceeds with
the net carrying amount and are included in operating profit.
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
30
1.8 Newbuild contracts and borrowing costs
Instalments on newbuild contracts are classified as non-
current tangible assets. Direct costs related to the on-site
supervision and other pre-delivery construction costs are
capitalized per vessel.
General and specific borrowing costs directly related to
the acquisition, construction or production of qualifying
vessels are added to the cost of those vessels, until such time
as the vessels are substantially ready for their intended use or
sale. All other borrowing costs are recognized in the profit or
loss in the period in which they are incurred.
 
1.9 Impairment of non-financial assets
Intangible assets that have an indefinite useful life or intangible
assets not ready to use are not subject to amortization and are
tested annually for impairment.
 
Assets that are subject to amortization are reviewed for
impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An
impairment loss is recognized for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. The recoverable amount is
established individually for all assets. In assessing value in use,
the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market
assessments of the time and the risk specific to the asset that
is considered impaired.
The relevant exchange rates vs. USD are:
Average 2021
31.12.2021
Average 2020
31.12.2020
NOK (Norwegian kroner)
0.1163
0.1134
0.1067
0.1172
EUR (Euros)
1.1851
1.1326
1.1452
1.2271
GBP (Pound Sterling)
1.3755
1.3479
1.2921
1.3649
BRL (Brazilian Reals)
0.1855
0.1792
0.1942
0.1924
Prior impairments of non-financial assets (other than
goodwill) are reviewed for possible reversal at each reporting
date. A previously recognized impairment loss is reversed if
there has been a change in the estimates used to determine
the recoverable amount. Reversal of a previously recognized
impairment is limited to an amount that would make the
carrying value of the asset equal to what it would have been
had the initial impairment charge not occurred.
 
1.10 Intangible assets
Intangible assets that are acquired separately are measured
on initial recognition at cost. The cost of intangible assets
acquired in a business combination is recognized at fair value
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortization and any accumulated impairment losses.
Internally-generated intangible assets, excluding capitalized
development costs, are not capitalized and expenditure is
charged against profits in the year in which the expenditure is
incurred. The useful lives of intangible assets are assessed to
be either finite or indefinite. Intangible assets with finite lives
are amortized over the useful economic life and assessed for
impairment whenever there is an indication that the intangible
asset may be impaired. The amortization period and the
amortization method are reviewed annually. Changes in the
expected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset is accounted
for by changing the amortization period or method, as
appropriate, and treated as a change in accounting estimate.
The amortization expense on intangible assets with finite lives
is recognized in the income statement in the expense category
consistent with the function of the intangible asset.
 
Intangible assets with indefinite useful lives are tested for
impairment annually either individually or at the cash-
generating unit level. Such intangibles are not amortized. The
useful life of an intangible asset with an indefinite life is
 
 
sioff-2021-12-31p32i0
 
 
 
 
Notes to the accounts
31
SIEM
Offshore
 
Inc. Annual Report 2021
reviewed annually to determine whether the indefinite life
assessment continues to be supportable. If not, the change in
the useful life assessment from indefinite to finite is made on a
prospective basis.
 
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree and the
acquisition- date fair value of any previous equity interest in
the acquiree over the fair value of the identifiable net assets
acquired. If the total of consideration transferred, non-
controlling interest recognized and previously held interest
measured at fair value is less than the fair value of the net
assets of the subsidiary acquired, in the case of a bargain
purchase, the difference is recognized directly in the income
statement. For the purpose of impairment testing, goodwill
acquired in a business combination is allocated to each of the
CGUs, or groups of CGUs, that is expected to benefit from the
synergies of the combination. Each unit or group of units to
which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the operating
segment level.
 
Goodwill impairment reviews are undertaken annually or
more frequently if events or changes in circumstances indicate
a potential impairment. The carrying value of goodwill is
compared to the recoverable amount, which is the higher of
value in use and the fair value less costs to sell. Any
impairment is recognized immediately as an expense and is
not subsequently reversed. Trademarks and licenses –
Separately
 
acquired trademarks and licenses are shown at cost.
Trademarks and licenses acquired in a business combination
are recognized at fair value at the acquisition date. Trademarks
and licenses have a finite useful life and are measured at cost
less accumulated amortization. Amortization is calculated
using the straight-line method to allocate the cost of
trademarks and licenses over their estimated useful lives of
three to seven years. Research and development - Research
and Development (R&D) relates to the development of a
production method for drilling process; this R&D is part of the
Other Segment.
 
1.11 Financial assets
1.11.1 Classification
The Company classifies its financial assets in the following two
categories: Financial assets at fair value through profit or loss
and Financial assets at amortized cost. The classification
depends on the purpose for which the financial assets were
acquired. Management determines the classification of its
financial assets at initial recognition and re-evaluates this
designation at every reporting date.
 
(a) Financial assets at fair value through profit or loss Assets at
fair value through profit or loss are derivative contracts and
contingent consideration. Derivatives in this category are
classified as current assets.
Picture by Andreas
Bjarkholm Vollen
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
32
(b) Financial assets at amortized cost
A financial asset is classified as at amortized cost if it is held
within a business model whose objective is to collect the
contractual cash flows and the contractual terms give rise to
cash flows that are solely payment of principal and interest.
These assets were classified as loans and receivables under
IAS 39. They are included in current assets, except for assets
with maturities greater than 12 months after the reporting date.
These are classified as non-current financial assets. The
Company’s financial assets at amortized cost include
accounts receivable, current and non-current loans to
management, related parties and other, and the CIRR loan
deposit.
 
1.11.2 Recognition and measurement
Regular purchases and sales of financial assets are recognized
on the trade-date – the date on which the Company commits
to purchase or sell the asset. Investments are initially
recognized at fair value plus transaction costs for all financial
assets not carried at fair value through profit or loss. Financial
assets carried at fair value through profit or loss are initially
recognized at fair value, and transaction costs are expensed in
the income statement. Financial assets are derecognized
when the rights to receive cash flows from the investments
have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership.
Loans and receivables are subsequently carried at amortized
cost using the effective interest method.
 
Gains or losses arising from changes in the fair value of the
‘financial assets at fair value through profit or loss’ category
are presented in the income statement within Operating profit
as gain/(loss) on currency derivative contracts if the gain or
loss is arising from currency contracts entered into in order to
hedge primarily operating expenses in foreign currencies.
Other gains or losses arising from changes in the fair value of
the ‘financial assets at fair value through profit and loss’
category are presented within Net financial items. See for note
20 for additional information.
 
1.12 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount
reported in the balance sheet when there is a legally
enforceable right to offset the recognized amounts and there
is an intention to settle on a net basis or realize the asset and
settle the liability simultaneously. The legally enforceable right
must not be contingent on future events and must be
enforceable in the normal course of business and in the event
of default, insolvency or bankruptcy of the company or the
counterparty. The Company has evaluated all of their
derivative contract positions and does not currently have the
right to offset the contracts, and therefore reports all derivative
positions at gross amounts.
1.13 Inventories
Lubricating oil and bunkers inventories are valued at the lower
of cost and net realizable value. Cost is determined using the
weighted average cost method. Bunkers and lubricating oil
inventories are an integral part of the vessel, and not sold
separately. Net realizable value is measured based on the
assumed use of the inventory.
1.14 Cash and cash equivalents
In the statement of cash flows, cash and cash equivalents
includes cash in hand and bank deposits.
1.15 Accounts receivable
 
Accounts receivable are recognized initially at fair value and
subsequently measured at amortized cost, less provision for
impairment. The interest factor for accounts receivable is
considered to be insignificant and therefore not included in
the measurement of amortized cost. In the case of an
objective evidence of impairment, the difference between
reported value and the present value of the
 
The Company applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance for accounts receivable. Lifetime
expected loss is based on Management’s experience of
historical loss levels and taking into account current and
forward-looking information on macroeconomic factors as
well as objective indicators that individual receivables may be
impaired. Such objective indicators include significant
financial problems facing the customer, bankruptcy
proceedings or the customer undergoing financial
restructuring, postponement and non-payment.
expected net future cash flows is reported as a loss.
 
1.16 Share capital
 
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
When any Company entity purchases its own shares, the
 
 
 
 
Notes to the accounts
33
SIEM
Offshore
 
Inc. Annual Report 2021
consideration paid, including any directly attributable
incremental costs (net of income taxes), is deducted as
appropriate from share capital and share premium reserve and
the shares are cancelled.
1.17 Borrowings
Borrowings are recognized initially at fair value, net of
transaction costs incurred and are subsequently stated at
amortized cost. Any difference between the proceeds (net of
transaction costs) and the redemption value is recognized in
the income statement over the period of the borrowings using
the effective interest method.
 
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a
financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non-
cash assets transferred or liabilities assumed, is recognized in
profit or loss as Financial income.
 
Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
 
1.18 Commercial Interest Reference Rate (CIRR)
loan
The Company has obtained two Commercial Interest
Reference Rate (CIRR) loans from the Norwegian Export
Credit Agency. The duration of the loans is 12 years and the
cash proceeds from the loans have been deposited in a fixed
interest deposit account with a Norwegian bank at the same
interest rate as the loans (being off-market). The agreed
periods of the deposits are identical with the periods of the
loans. The loan and the deposit are presented gross as there
are different counterparties.
1.19 Taxation
 
The tax expense for the period comprises current and
deferred tax. Tax is recognized in the income statement,
except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the
tax is also recognized in other comprehensive income or
directly in equity, respectively.
 
Tax expense/benefit includes current taxes and the
change in deferred taxes.
 
For companies under the Norwegian tax regime, the Com-
pany applies a tax rate of 22%. The tax expense consists of
taxes payable and changes in deferred tax assets/liabilities.
 
Deferred income tax is recognized on temporary
differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements.
 
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the
related deferred income tax asset is realized or the deferred
income tax liability is settled.
Deferred income tax assets are recognized only to the ex-
tent that it is probable that future taxable profit will be available
against which the temporary differences can be utilized.
Deferred income tax liabilities are provided on taxable
temporary differences arising from investments in subsidiaries
and associates, except for deferred income tax liability where
the timing of the reversal of the temporary difference is
controlled by the Company and it is probable that the
temporary difference will not reverse in the foreseeable future.
Generally the Company is unable to control the reversal of the
temporary difference for associates.
 
Deferred income tax assets are recognized on deductible
temporary differences arising from investments in subsidiaries
and associates only to the extent that it is probable the
temporary difference will reverse in the future and there is
sufficient taxable profit available against which the temporary
difference can be utilized.
 
Deferred income tax assets and liabilities are offset when
there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income
taxes assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or
different taxable entities where there is an intention to settle
the balances on a net basis.
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
34
1.20 Pension costs and obligations
The Company has a defined benefit plan for employees in
Norway. The pension scheme is financed through
contributions to insurance companies or pension funds. A
defined benefit plan defines the amount of pension benefit that
an employee will receive on retirement, usually dependent on
one or more factors such as age, years of service and
compensation.
 
The liability recognized in the statement of financial posi-
tion relating to defined benefit plans is the present value of the
defined benefit obligation at the end of the reporting period
less the fair value of the pension fund assets. The defined
benefit obligation is calculated annually by an independent
actuary on the basis of a linear model. The present value of the
defined benefit obligation is determined by discounting the
estimated future cash outflows based on the interest rate for
covered bonds. Since Covered bonds are not issued for terms
exceeding 10 years, a supplement to this bond rate is
calculated by means of estimation techniques to establish a
discount rate that is approximately the same as the term of the
pension obligation.
Past service costs are recognized immediately in income.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are
charged or credited to equity in other comprehensive income
in the period in which they arise.
For defined contribution plans, the group pays contributions to
publicly or privately administered pension insurance plans on
a mandatory, contractual or voluntary basis. The group has no
further payment obligations once the contributions have been
paid. The contributions are recognized as employee benefit
expense when they are due. Prepaid contributions are
recognized as an asset to the extent that a cash refund or a
reduction in the future payments is available. Interest
expenses are presented in the income statement under
operating expenses.
1.21 Derivatives and hedging activities
The Company enters into derivative instruments for economic
hedging purposes and not as speculative investments.
Derivative instruments are primarily foreign currency contracts
and interest rate swaps, to hedge foreign currency exposures,
for example related to operating expenses and vessel
purchase commitments, and interest rate exposures primarily
related to long-term borrowings. Where derivatives do not
meet hedge accounting criteria, they are accounted for at fair
value through profit or loss.
For cash flow hedges that qualify for hedge accounting,
the effective portion of changes in the fair value of the hedging
instrument that is designated and qualifies as a cash flow
hedge is recognized in equity. These are cash flow hedges
relating to highly probable forecast transactions. The effective
portion of changes in the fair value of the hedging instrument is
recognized in Other Comprehensive Income. Amounts
accumulated in equity are reclassified in the period when the
hedged item affects profit or loss. When the forecast
transaction is no longer expected to occur, the cumulative
gain or loss and deferred costs of hedging that were reported
in equity are immediately reclassified to profit or loss.
 
Derivatives are presented as current assets or liabilities to
the extent they are expected to be settled within 12 months
after the end of the reporting period.
 
Derivatives are initially recognized at fair value on the date
a derivative contract is entered into and are subsequently
remeasured at their fair value.
1.22 Revenue recognition
The Company’s activity is to employ different types of offshore
support vessels, including PSVs, OSCVs, AHTS vessels, WIVs,
OSRVs, standby- and crew-vessels and one scientific core-
drilling vessel. In addition, the Company holds interest in one
limited liability partnership with ownership in one well-
stimulation vessel. Revenue comprises the fair value of the
consideration received or receivable for the sale of goods and
services in the ordinary course of the Company’s activities.
Revenue is shown net of value-added tax, withholding tax,
returns, rebates and discounts and after elimination of sales
within the Company. Revenue is recognized as follows:
 
Charter rate contracts
Time charter contracts contain a lease element and a perfor-
mance obligation for the provision of time charter services.
The lease of the vessel, representing the use of the vessel
without any associated performance obligations or warranties,
is accounted for in accordance with the provisions of IFRS 16
Leases. Typically, lease revenues are recognized on a straight
line basis over the lease term. Revenues for time charter
services are recognized over time as the service is rendered in
accordance with IFRS 15.
 
Certain contracts include mobilization fees payable at the
start of the contract. Mobilization fees are recognized on a
straight line basis over the lease term. Expenses that the
mobilization fee is meant to cover, is recognized as an asset
and expensed over the lease term.
 
 
 
 
 
 
 
Notes to the accounts
35
SIEM
Offshore
 
Inc. Annual Report 2021
Interest income
Interest income is recognized using the effective interest
method. When a receivable is impaired, the Company reduces
the carrying amount to its recoverable amount, which is
determined as the estimated future cash flow discounted at
original effective interest rate of the instrument and continues
unwinding the discount as interest income. Interest income on
impaired loans and receivables is recognized using the original
effective interest rate.
Dividend income
Dividend income is recognized when the right to receive
payment is established.
 
Rendering of services
Service revenue is generally recognized when a signed con-
tract or other persuasive evidence of an arrangement exists,
the service has been provided, the fee is fixed or determinable
and collection of resulting receivables is reasonably assured.
1.23 Accounts payable
Accounts payables are obligations to pay for goods or
services that have been acquired in the ordinary course of
business from suppliers. Accounts payable are classified as
current liabilities if payment is due within one year or less (or in
the normal operating cycle of the business if longer). If not,
they are presented as non-current liabilities. Accounts
payable are recognized initially at fair value and subsequently
measured at amortized cost using the effective interest
method.
 
1.24 Earnings per share
Earnings per share is calculated by dividing the net profit/ loss
for shareholders of the Company by the weighted aver-
age number of outstanding shares over the reporting period.
Diluted earnings per share include the effect of the assumed
conversion of potentially dilutive instruments such as
employee stock options and a convertible bond loan. The
impact of share equivalents is computed using the treasury
stock method for stock options.
1.25 Statement of Cash Flows
The Statements of cash flows are prepared in accordance with
the indirect method.
 
1.26 Related party transactions
All transactions, agreements and business activities with
related parties are determined on an arm’s length basis in a
manner similar to transactions with third parties.
 
1.27 Government grants
Grants related to net wages arrangement in Norway are
recognized as a reduction of wage cost.
 
1.28 Leases
The Company leases various office premises, office machines
and communication satellite equipment. Rental contracts are
typically made for fixed periods of 1 to 6 years but may have
extension options. Lease terms are negotiated on an individual
basis and contain a wide range of different terms and
conditions.
 
Leases are recognized as a right-of-use asset and a
corresponding liability at the date at which the leased asset is
available for use by the group. Each lease payment is
allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset
is depreciated over the shorter of the asset’s useful life and the
lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially meas-
ured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
●
fixed payments (including in-substance fixed payments),
less any lease incentives receivable
●
variable lease payment that are based on an index or a rate
as at the commencement date
●
amounts expected to be payable by the lessee under
residual value guarantees
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
36
Lease payments to be made under reasonably certain
extension options are also included in the measurement of the
liability. The lease payments are discounted using the interest
rate implicit in the lease, if that rate can be determined, or the
group’s incremental borrowing rate.
 
Right-of-use assets are measured at cost comprising the
following:
 
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement
date less any lease incentives received
• any initial direct costs, and
• restoration costs.
 
Payments associated with short-term leases (less than 12
months) and leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Low-value
assets comprise IT-equipment and small items of office
furniture. The Company does not have lease agreements with
variable lease payments of any significance.
Extension and termination options are included in some of
the property leases across the Company. The majority of
extension and termination options held are exercisable only by
the group and not by the respective lessor. In determining the
lease term, management considers all facts and
circumstances that create an economic incentive to exercise
an extension option, or not exercise a termination option.
Extension options (or periods after termination options) are
only included in the lease term if the lease is reasonably
certain to be extended (or not terminated).
1.29 Share-based payments
The Company has a share-based compensation plan in place
for executive management. The plan is equity-settled, under
which the entity receives services from three top management
employees as consideration for equity instruments (share-
options) of the Company. The fair value of the employee
services received in exchange for the grant of the options is
recognized as an Operating Expense. For additional
information see note 29 Share-based payments. The total
amount to be expensed is determined by reference to the fair
value of the options granted at grant date, as determined using
a Black-Scholes model. Exercise price is the stock price at
date of the grant. The total expense is recognized over the
vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. The only
condition for vesting is employment with the Company;
options vest over a five-year period after grant date. At the
end of each reporting period, the Company revises its
estimates of the number of options that are expected to vest
based on the non-market vesting conditions. It recognizes the
impact of the revision to original estimates, if any, in the
income statement, with a corresponding adjustment to equity.
Each option gives the holder the right, but not the obligation, to
acquire one share at the exercise price on the terms and
subject to the conditions set out in the Stock Option Plan.
 
When the options are exercised, the Parent issues new
shares or re-issues treasury shares. The proceeds received
net of any directly attributable transaction costs are credited
to share capital (nominal value) and share premium.
 
The grant by the Company of options over its equity
instruments to the employees of subsidiary undertakings in the
Company is treated as a capital contribution. The fair value of
employee services received, measured by reference to the
grant date fair value, is recognized over the vesting period as
an increase to investment in subsidiary undertakings, with a
corresponding credit to equity in the parent entity accounts.
 
The social security contributions payable in connection
with the grant of the share options is considered an integral
part of the grant itself, and the charge will be treated as a
cash-settled transaction.
1.30 Other claims and obligations
Provisions for legal claims, service warranties and make-good
obligations are recognized when the Company has a present
legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation and the amount can be reliably estimated.
Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognized even if the likelihood of an outflow with respect to
any one item included in the same class of obligations may be
small. Provisions are measured at the present value of
management’s best estimate of the expenditure required to
settle the present obligation at the end of the reporting period.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
37
SIEM
Offshore
 
Inc. Annual Report 2021
 
Note 2
Financial Risk Management
2.1 Financial risk factors
The Company is exposed to a variety of financial risks through
its ordinary operations and debt financing. Such risks include
foreign exchange risk, interest rate risk, credit risk and liquidity
risk. To manage these risks, management reviews and
assesses its primary financial and market risks. Once risks are
identified, appropriate action is taken to mitigate the identified
risk. The Company’s risk management is exercised in line with
guidelines approved by the Board.
 
2.2 Foreign exchange risks
USD is the reporting currency for the Company. Functional
currency for the Parent is USD, and for the vessel-operating
subsidiaries USD, NOK, BRL, AUD and CAD are the functional
currencies. Remaining subsidiaries use NOK or EUR as
functional currency. The Company operates internationally
and is exposed to foreign exchange risks arising from various
currency exposures primary with respect to NOK, GBP, EUR,
BRL, CAD and AUD. Foreign exchange risks can be divided
into transaction risk from paying and receiving foreign
currency and translation risk due to recognizing assets and
liabilities in USD. The Company had in 2021 mainly USD, NOK,
EUR, GBP, BRL, CAD and AUD revenues and expenses,
compared to mainly USD, NOK, EUR, GBP, BRL, CAD and AUD
during 2020.
The Company is exposed to foreign exchange risk of its
subsidiaries, including the development of the Brazilian Real.
The following sensitivity table demonstrates the impact on
the Company’s profit and equity before tax from potential
changes to the exchange rates, all other variables held
constant.
CONSOLIDATED
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
91,839
3,531
3,531
-3,531
-3,531
Accounts receivable
34,097
1,406
1,406
-1,406
-1,406
Impact on finacial assets before tax
4,937
4,937
-4,937
-4,937
Financial liabilities
Accounts payable
13,542
-689
-689
689
689
Borrowings
624,246
-5,700
-5,700
5,700
5,700
Impact on financial liabilities before tax
-6,389
-6,389
6,389
6,389
Income statement
Operating revenue
254,493
12,645
12,645
-12,645
-12,645
Operating expenses
153,909
-8,763
-8,763
8,763
8,763
Impact on operating result before tax
3,882
3,882
-3,882
-3,882
Total increase/decrease before tax
2,431
2,431
-2,431
-2,431
Allocation per currency
NOK
-3,705
-3,705
3,705
3,705
EUR
-275
-275
275
275
GBP
804
804
-804
-804
BRL
2,145
2,145
-2,145
-2,145
CAD
193
193
-193
-193
AUD
3,270
3,270
-3,270
-3,270
Total increase/decrease before tax
2,431
2,431
-2,431
-2,431
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2021
38
Financial assets in 2020 include derivatives related to hedging of foreign exchange risks. The derivatives in
 
the sensitivity table
include path-dependent options in which the value of the derivatives is influenced when the underlying reaches
 
or fluctuates
within, below or above specific barrier levels. The change in value of the 2020 derivatives impacted the profit
 
of the Company.
 
CONSOLIDATED
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2020
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
103,225
3,374
3,374
-3,374
-3,374
Accounts receivable
29,843
1,686
1,686
-1,686
-1,686
Impact on finacial assets before tax
5,060
5,060
-5,060
-5,060
Financial liabilities
Accounts payable
13,654
-953
-953
953
953
Derivatives
20,662
3,466
3,466
-3,466
-3,466
Borrowings
1,030,787
-32,654
-32,654
32,654
32,654
Impact on financial liabilities before tax
-30,141
-30,141
30,141
30,141
Income statement
Operating revenue
244,843
14,020
14,020
-14,020
-14,020
Operating expenses
162,584
-10,753
-10,753
10,753
10,753
Impact on operating result before tax
3,267
3,267
-3,267
-3,267
Total increase/decrease before tax
-21,814
-21,814
21,814
21,814
Allocation per currency
NOK
-17,102
-17,102
17,102
17,102
EUR
484
484
-484
-484
GBP
2,402
2,402
-2,402
-2,402
BRL
414
414
-414
-414
CAD
1,116
1,116
-1,116
-1,116
AUD
-9,129
-9,129
9,129
9,129
Total increase/decrease before tax
-21,814
-21,814
21,814
21,814
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
39
SIEM
Offshore
 
Inc. Annual Report 2021
PARENT COMPANY
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
33,362
-1,297
-1,297
1,297
1,297
Impact on finacial assets before tax
-1,297
-1,297
1,297
1,297
Financial liabilities
Accounts payable
36
-4
-4
4
4
Impact on financial liabilities before tax
-4
-4
4
4
Income statement
Operating revenue
1,299
-
-
-
-
Operating expenses
-5,271
-574
-574
574
574
Impact on operating result before tax
-574
-574
574
574
Total increase/decrease before tax
-1,875
-1,875
1,875
1,875
Allocation per currency
NOK
-1,874
-1,874
1,874
1,874
EUR
-2
-2
2
2
Total increase/decrease before tax
-1,875
-1,875
1,875
1,875
PARENT COMPANY
Foreign exchange risk rate 10%
(Amounts in USD 1,000)
+10% movements
-10% movements
31 December 2020
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalent
51,777
-129
-129
129
129
Impact on finacial assets before tax
-129
-129
129
129
Financial liabilities
Accounts payable
147
-5
-5
5
5
Derivatives
1,833
-183
-183
183
183
Borrowings
130,089
-13,481
-13,481
13,481
13,481
Impact on financial liabilities before tax
-13,669
-13,669
13,669
13,669
Income statement
Operating revenue
1,336
-
-
-
-
Operating expenses
-3,114
-269
-269
269
269
Impact on operating result before tax
-269
-269
269
269
Total increase/decrease before tax
-14,067
-14,067
14,067
14,067
Allocation per currency
NOK
-14,059
-14,059
14,059
14,059
EUR
-9
-9
9
9
GBP
1
1
-1
-1
Total increase/decrease before tax
-14,067
-14,067
14,067
14,067
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2021
40
2.3 Credit risks
Concentration risks
The Company's credit risk is primarily attributable to its
trade and other short-term receivables and asset derivative
positions. The derivative counterparties, related to 2020 only,
are major established financial institutions, and the
counterparty risk for the asset derivative positions was
regarded as limited.
 
The exposure to credit risk for trade and other short-term
receivables is measured on an ongoing basis and credit
evaluations are performed for customers identified to be risky.
 
The Company’s debtors are mainly major oil companies and
offshore service companies, which are considered to be
creditworthy third parties. Historically, the loss percentage has
been low but due to the market development caused by the
low oil price, the counterparty risk has increased significantly
during the year. Ongoing provisions are made and, on 31
December 2021, the provision for certain accounts
receivables which may not be paid in full was USD 4.2 million
for the Company (2020: USD 5.9 million and nil for the Parent
(2020: nil).
 
 
The table below presents the concentration risk for 2021
and 2020:
 
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
USD
% of total
USD
% of total
Receivables on 31 December 2021
1 to 5 largest
-
-
28,023
73%
6 to 10 largest
-
-
3,919
10%
Others
-
-
6,305
16%
Provision for bad debt
-
-4,151
Total accounts receivable
-
-
34,097
100%
(Amounts in USD 1,000)
Receivables on 31 December 2020
1 to 5 largest
-
-
18,869
53%
6 to 10 largest
-
-
5,570
16%
Others
-
-
11,285
32%
Provision for bad debt
-
-
-5,881
-
Total accounts receivable
-
-
29,843
100%
Changes in the provision for bad debt can be summarized as follow:
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
2021
2020
Provision bad debt
Opening balance January 1
-
-
5,881
1,825
Reversal provision previous year
-
-
-1,735
-
Provision current year
-
-
6
4,095
Currency translation differences
-
-
-1
-40
Closing balance 31 December
-
-
4,151
5,881
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
41
SIEM
Offshore
 
Inc. Annual Report 2021
Trade and receivables
The table below presents an aging analysis of the outstanding receivables at year-end 2021 and 2020. Overdue receivables
 
are
monitored continually by Management. The Management considers the net outstanding amounts to be recoverable.
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
USD
% of total
USD
% of total
Aging on 31 December 2021
Not due
-
-
26,862
79%
Due up to 1 month
-
-
1,526
4%
Due 1-4 months
-
-
1,128
3%
Due more than 4 months
-
-
4,582
13%
Total accounts receivable
-
-
34,097
100%
(Amounts in USD 1,000)
Aging on 31 December 2020
Not due
-
-
25,255
85%
Due up to 1 month
-
-
2,597
9%
Due 1-4 months
-
-
818
3%
Due more than 4 months
-
-
1,173
4%
Total accounts receivable
-
-
29,843
100%
The carrying amounts of the Company’s and Parent’s accounts receivable are denominated in the following
 
currencies:
PARENT COMPANY
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
2021
2020
Currency
USD
-
-
20,033
12,982
NOK
-
-
2,926
2,774
EUR
-
-
2,289
5,328
GBP
-
-
748
1,256
CAD
-
-
3,045
1,888
AUD
-
-
3,812
2,707
BRL
-
-
1,245
2,908
Total accounts receivable
-
-
34,097
29,843
The maximum exposure to credit risk at the reporting date is the carrying value of each class of accounts receivable
 
mentioned
above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2021
42
2.4 Cash flow, interest risk and fair value
The Company is financed by debt and equity. If the
Company fails to repay or refinance its loan facilities,
additional equity financing may be required. There can be no
assurance that the Company will be able to repay its debts or
extend re-payment schedules through re-financing of its loan
agreements or avoid net cash flow shortfalls exceeding the
Company’s available funding sources or comply with minimum
cash requirements. Further, there can be no assurance that the
Company will be able to raise new equity, or arrange new
borrowing facilities, on favourable terms and at amounts
necessary to conduct its ongoing and future operations,
should this be required.
 
In the event of insolvency, liquidation or similar event
relating to a subsidiary of the Company, all creditors of such
subsidiary would be entitled to payment in full out of the assets
of such subsidiary before the Company, as a shareholder,
would be entitled to any payments. Defaults by, or the
insolvency of, a subsidiary of the Company could result in the
obligation of the Company to make payments under parent
company guarantees issued in favour of such subsidiary.
The Company is moreover exposed to changes in interest
rates, which may affect the Company’s financial results.
 
These risks are mainly related to the Company’s long term
borrowings with floating interest rates.
 
Further details of the Company’s borrowings are set out in
Note 12.
 
The Company has no significant interest-bearing assets
other than cash and cash-equivalents and therefore the
Company’s income and operating cash flows are substantially
independent of changes in market interest rates. Cash and
cash-equivalents are invested for short maturity periods,
generally from one day to three months, which mitigates some
of the potential interest rate risk.
 
Following the restructuring the Company and the Parent
Company is exposed to currency and interest risk. The
Company holds fixed interest for 39% of its interest bearing
debt.
The following sensitivity tables demonstrate the impact on
the Company’s profit before tax and equity from a potential
shift in interest rates, all other variables held constant.
 
CONSOLIDATED
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
91,839
-918
-918
918
918
Impact on financial assets before tax
-918
-918
918
918
Financial liabilities
Borrowings fixed rate
244,383
-
-
-
-
Borrowings floating rate
 
385,390
3,854
3,854
-3,854
-3,854
Impact on financial liabilities before tax
3,854
3,854
-3,854
-3,854
Total increase/decrease before tax
2,936
2,936
-2,936
-2,936
CONSOLIDATED
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2020
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
103,225
-1,032
-1,032
1,032
1,032
Impact on financial assets before tax
-1,032
-1,032
1,032
1,032
Financial liabilities
Borrowings fixed rate
559,511
-
-
-
-
Borrowings floating rate
 
471,276
4,713
4,713
-4,713
-4,713
Impact on financial liabilities before tax
4,713
4,713
-4,713
-4,713
Total increase/decrease before tax
3,681
3,681
-3,681
-3,681
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
43
SIEM
Offshore
 
Inc. Annual Report 2021
Above movements for 2020 also include the effect of interest rate swaps entered into in order to
 
hedge the floating interest risk.
Mark-to market effects in relation to the interest rate swaps impacts the profit and loss following
 
a change of +/- 1% in the interest
rate. For more details, see Note 12.
PARENT COMPANY
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2021
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
33,362
-334
-334
334
334
Impact on financial assets before tax
-334
-334
334
334
Financial liabilities
Borrowings
-
-
-
-
-
Impact on financial liabilities before tax
-
-
-
-
Total increase/decrease before tax
-334
-334
334
334
PARENT COMPANY
Interest rate risk (IR)
(Amounts in USD 1,000)
-1% movements
+1% movements
31 December 2020
Carrying amount
Profit/(loss)
Equity
Profit/(loss)
Equity
Financial assets
Cash and cash equivalents
51,777
-518
-518
518
518
Impact on financial assets before tax
-518
-518
518
518
Financial liabilities
Borrowings
43,664
437
437
-437
-437
Impact on financial liabilities before tax
437
437
-437
-437
Total increase/decrease before tax
-81
-81
81
81
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2021
44
The Company’s financial assets are classified into the
categories: assets at fair value through the profit and loss,
loans and receivables, and available for sale. Financial
liabilities are classified as liabilities at fair value through the
profit and loss, and other financial liabilities. For further
information about comparison by category, see Note 27.
The value of forward exchange contracts, valid for 2020
only, was set by comparing forward exchange rate and the
rate on the reporting date. The Company's following financial
instruments are not evaluated at fair value: accounts
receivable, cash and cash equivalents, other short-term
receivables, accounts payable and long-term liabilities with
floating interest.
Because of the short term to maturity, the value of cash and
cash equivalents entered into the Statements of Financial
Position is almost the same as the fair value of these.
Accordingly, the values of accounts receivables and accounts
payables are almost the same as their fair values since they are
entered on “normal” conditions.
 
The fair value of the Company’s non-current liabilities
subjected to fixed interest rates is calculated by comparing
the Company’s terms and market terms for liabilities with the
same terms to maturity and credit risk.
 
The following tables display the book value and the fair
value of financial assets and obligations.
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Financial assets
Book value
Fair value
Book value
Fair value
CIRR loan deposit
36,763
37,762
45,946
52,667
Long-term receivables
30,749
30,749
34,125
34,125
Accounts receivable
34,097
34,097
29,843
29,843
Other short-term receivables
17,001
17,001
17,869
17,869
Cash and cash equivalents
91,839
91,839
103,225
103,225
Total
 
210,449
211,448
231,007
237,728
Financial liabilities
Borrowings
624,246
626,752
1,030,787
1,047,076
CIRR loan
36,763
37,762
45,946
52,667
Other non-current liabilities
12,776
12,776
15,381
15,381
Accounts payable
13,542
13,542
13,654
13,654
Derivative financial instruments
-
-
20,662
20,662
Other current liabilities
26,770
26,770
43,657
43,657
Total
 
714,098
717,603
1,170,086
1,193,096
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Financial assets
Book value
Fair value
Book value
Fair value
Long-term loan
3
3
59
59
Other short-term receivables
1,014
1,014
2,454
2,454
Cash and cash equivalents
33,362
33,362
51,777
51,777
Total
 
34,379
34,379
54,290
54,290
Financial liabilities
Borrowings
-
-
130,089
130,089
Derivative financial instruments
-
-
1,833
1,833
Accounts payable
36
36
147
147
Other current liabilities
1,965
1,965
311
311
Total
 
2,001
2,001
132,380
132,380
2.5 Liquidity risk
The Company monitors its cash flow from operations closely
and optimizes the working capital level of the individual
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
45
SIEM
Offshore
 
Inc. Annual Report 2021
companies and the Company as a whole. The Company funds
are used for investment opportunities in the business,
scheduled repayments and repayments of debt and to general
working capital purposes.
 
The Company seeks to fix the majority of its fleet on long-
term contracts. Vessels not fixed on long-term contracts are
typically exposed to the volatility in the short- to medium term-
market.
The Company will from time to time require additional
capital to take advantage of business opportunities.
Historically the Company has managed to obtain necessary
financing in a timely manner at acceptable terms when
needed.
 
The Company's secured debt was restructured in
2021, with amended repayment terms and cash sweep
mechanisms. See note 20 for further details.
 
The tables below summarize the maturity profile of the
Company’s financial liabilities including interest. Siem
Offshore has agreed restructured terms with the equitized
lenders. The restructured terms shall remain in force till 31
December 2024, corresponding to extended maturity of the
restructured facilities. Financial covenants include minimum
available cash at USD 25 million and a minimum book equity
ratio of Siem Offshore at 10%. Other terms relate to vessel
buy-out options, no-dividend clause, restrictions on
investments in assets, restrictions to acquisitions of shares and
business undertakings, negative pledge, restrictions to selling
or otherwise disposal of assets, no equitization of the Brazilian
facilities, financial indebtedness, change of control clause,
PIK-interest arrangements and three cash sweep mechanisms;
one facility cash sweep, one SAP (Siem ATHS Pool AS) cash
sweep and one company cash sweep.
CONSOLIDATED
(Amounts in USD 1,000)
Less than 3
months
3 to 12
months
1 to 2
years
2 to 5
years
Thereafter
Total
31 December 2021
Interest-bearing loans and borrowings
5,639
42,151
310,950
209,642
125,639
694,022
Trade and other payables
14,513
-
-
-
-
14,513
Total
20,152
42,151
310,950
209,642
125,639
708,535
31 December 2020
Interest-bearing loans and borrowings
-
238,890
306,219
295,268
190,411
1,030,787
Trade and other payables
14,618
-
-
-
-
14,618
Total
14,618
238,890
306,219
295,268
190,411
1,045,405
PARENT COMPANY
(Amounts in USD 1,000)
Less than 3
months
3 to 12
months
1 to 2
years
2 to 5
years
Thereafter
Total
31 December 2021
Interest-bearing loans and borrowings
-
-
-
-
-
-
Trade and other payables
36
1,965
-
-
-
2,001
Total
36
1,965
-
-
-
2,001
31 December 2020
Interest-bearing loans and borrowings
-
43,664
86,425
-
-
130,089
Trade and other payables
147
-
-
-
-
147
Total
147
43,664
86,425
-
-
130,236
2.6 Capital management
 
The Company seeks to obtain long-term financing supported
by long-term contracts, in order to reduce the frequency and
risk associated with the refinancing of loans. Long-term
charter parties at acceptable charter rates will also enable the
Company to apply for a higher degree of debt-financing and
at favorable terms. The Company seeks for debt financing
exceeding 70%. See note 20 for comments related to
restrictions agreed under the current financing.
The volatile oil price and the excess capacity of offshore
service vessels have increased the competition amongst
owners which further put pressure on fixture rates. As a
consequence owners have placed vessels into lay-up. End of
year the Company had four vessels in lay-up.
 
 
 
 
 
Financial Risk Management Note 2
 
SIEM
Offshore
 
Inc. Annual Report 2021
46
Note 3
Critical Accounting Estimates and Judgements
IFRS requires management to make estimates and judgments
that affect the reported amounts of assets and liabilities, as
well as revenues and expenses in the financial statements. The
final reported outcomes may deviate from the original
estimates.
 
Certain amounts included in, or that have an effect on, the
accounts and the associated notes require estimation, which
in turn entails that the Company must make assessments
related to values and circumstances that are not known at the
point in time when the accounts are being prepared.
 
A significant accounting estimate is an estimate that is
important to provide a complete picture of the Company’s
financial position, which at the same time is the result of dif-
ficult, subjective and complex assessments performed by the
management. Such estimates are often uncertain by nature.
Management evaluates such estimates continuously
based on historical data and experience, consultation with
external experts, trend analysis and other factors that are
relevant for the individual estimate, including expectations of
future events that are believed to be reasonable under the
circumstances.
 
Estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of as-
sets and liabilities within the next financial year, as well as
judgments made by management, in the process of applying
the Company’s accounting policies, that have the most
significant effect on the amounts recognized in the financial
statements, are discussed below.
Going Concern
On the reporting date, the Company has assessed the ability
to continue as a going concern. These financial statements
have been prepared under the assumptions of going concern.
 
Vessel
Impairment of vessels
On the reporting date, the Company has assessed whether
there are any indicators of impairment related to its vessels.
Impairment indicators include some vessels still being in lay-
up, volatile charter rates and utilization, and that the quoted
market value of the Company is below book value of equity. If
such indicators exist and the book value exceeds the
recoverable amount, the fixed asset’s residual value is the
higher of net selling price and value in use. As the approach to
net selling price normally obtained valuations from
independent shipbrokers. Brokers’ estimates assume the
vessels are without charter contracts, immediately available
for sale in the market and that a willing seller and a willing
buyer exist. The value in use is calculated by discounting
future cash flows to present value at the balance sheet date.
In the value in use calculation, the first five years are
based on the Company’s market view. A terminal value is
calculated by assuming that the applicable market view for the
fifth year applies to the remaining years of the vessel’s lifetime.
The market for offshore service vessels is expected
to remain volatile for several years, despite some
improvements have been observed. For vessels fixed on firm
contracts with a duration in the period from 2022 through
2027, the assumption is that the firm contract remains
unchanged during the remaining contract period, and that the
rate levels will remain low, but will increase gradually towards
2027. Options for extended charter periods are not
considered in the value-in-use calculations. However, if
charter hire rates for optional periods is expected to be lower
than market rates for the applicable period, this is considered
in the value-in-use calculation.
In order to assess impairment, estimates and
assumptions regarding expected cash flows are made which
require considerable judgement. These assumptions are
among other based upon existing contracts, commercial
management judgment about future charter revenue rates,
historical performance, discount rates, financial forecasts and
industry trends and conditions. The key assumptions used to
determine the recoverable amount, including a sensitivity
analysis, are disclosed and further explained in Note 5.
 
 
Notes to the accounts
47
SIEM
Offshore
 
Inc. Annual Report 2021
Note 4
Segment Reporting
The Company identifies its reportable segments and disclose
segment information under IFRS8 Operating Segments which
requires Siem Offshore Inc to identify its segments according
to the organization and reporting structure used by
management. Operating Segments are components of a
business that are evaluated regularly by the chief operating
decision maker for the purpose of assessing performance and
allocating resources.
 
The Company’s chief operating decision maker is the
management board, comprised of the CEO, CFO, CCO and
COO. Generally, financial information is required to be
disclosed on the same basis that is used by the chief operating
decision maker. The Company’s operating segments
represent separately managed business areas with unique
products serving different markets. The reportable segments
are PSV, OSCV and WIV, AHTS Vessels, Canadian fleet,
Scientific Core-Drilling and Brazilian Fleet.
 
The PSV segment includes six Platform Supply Vessels.
The OSCV and WIV segment includes four Offshore Subsea
Construction Vessels and two Well Intervention Vessels. The
ATHS segment includes eight Anchor Handling and Tug
Supply Vessels per year-end 2021 as two vessels were sold in
June 2021. The Canadian fleet Segment at year-end 2021 and
2020 consists of one offshore support vessel operating
offshore Canada, as two vessels were sold in the beginning of
2020 and one vessel was sold in December 2020. The
Segment of Brazilian Fleet consists of two Oilspill Recovery
Vessels and three smaller fast supply vessels and crew
vessels. In addition, the Company holds ownership at 41% of
one vessel that is reflected under the line "Result from
associated companies", and hence not included below.
Scientific Core-Drilling is comprised of the activity of one
scientific drillship which performs core-drilling.
 
Siem Offshore Inc uses two measures of segment results,
Operating Revenue and Operating Margin.
Intersegment sales and transfers reflect arm’s length
prices as if sold or transferred to third parties at the time of
inception of the internal contract, which may cover several
years. Transfers of business or fixed assets within or between
the segments are reported without recognizing gains or
losses. Results of activities not considered part of Siem
Offshore Inc.’s main operations as well as unallocated
revenues, expenses, liabilities and assets are reported
together with Other under the caption “Other and
eliminations”.
 
The following tables include information about the
Company’s operating segments.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment reporting
Note 4
SIEM
Offshore
 
Inc. Annual Report 2021
48
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Operating revenue by segments
PSV
39,869
37,267
OSCV and WIV
111,718
105,367
AHTS Vessels
43,067
37,243
Brazilian Fleet
15,698
15,613
Canadian fleet
12,670
17,659
Scientific Core-Drilling
29,984
28,570
Other/Intercompany elimination
1,489
3,125
Total operating revenue
254,493
244,843
Operating margin by segments
PSV
14,812
13,763
OSCV and WIV
64,387
64,502
AHTS Vessels
3,780
-5,879
Brazilian Fleet
8,922
7,694
Canadian fleet
9,140
8,647
Scientific Core-Drilling
16,445
13,635
Other/Intercompany elimination
2,892
-503
Adminstrative expenses
-19,793
-19,600
Total operating margin from segments
100,585
82,259
Depreciation and amortization by segments
PSV
9,755
10,056
OSCV and WIV
26,042
27,021
AHTS Vessels
15,554
25,892
Brazilian Fleet
3,334
3,258
Canadian fleet
2,244
2,504
Scientific Core-Drilling
4,417
3,879
Other/Intercompany elimination
2,193
2,334
Total depreciation by segments
63,539
74,944
Vessel impairment by segments
PSV
-
25,963
OSCV and WIV
-
44,636
AHTS Vessels
-
187,074
Canadian fleet
-
19,184
Total vessel impairment by segments
-
276,857
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
49
SIEM
Offshore
 
Inc. Annual Report 2021
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Capital expenditures by business area for tangible assets
PSV
7,199
4,134
OSCV and WIV
13,261
1,093
AHTS Vessels
5,739
15,776
Brazilian Fleet
1,369
907
Canadian fleet
168
373
Scientific Core-Drilling
-
2,866
Other/Intercompany elimination
-
59
Total capital expenditures
27,736
25,207
Book value by business area for tangible assets, including vessel held for sale
PSV
131,873
142,584
OSCV and WIV
478,884
491,397
AHTS Vessels
179,146
237,502
Brazilian Fleet
8,549
11,684
Canadian fleet
37,489
39,668
Scientific Core-Drilling
7,806
12,222
Other/Intercompany elimination
3,340
5,031
Total book value
847,085
940,088
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
50
Note 5
Vessels, Equipment and Capitalized Project Cost
Tangible assets
CONSOLIDATED
(Amounts in USD 1,000)
Land and
buildings
Vessels and
equipment
Drydocking
Capitalised
project cost
Purchase cost on 1 January 2020
4,038
2,320,309
53,553
11,346
Capital expenditure
 
-
11,949
13,259
-
Movement between groups
 
-
-
304
-
The year's disposal at cost
-271
-17,937
-26,023
-
Effect of exchange rate differences
-265
-30,335
-597
84
Purchase cost on 31 December 2020
3,501
2,283,986
40,496
11,431
Accumulated depreciation on 1 January 2020
-933
-694,294
-34,857
-7,653
Accumulated impairment on 1 January 2020
-
-359,370
-
-
Movement between groups
 
-
-186
-117
-
The year's depreciation
-822
-66,431
-7,094
-597
Impairment of vessel
-
-276,857
-
-
The year's disposal of accumulated depreciation
43
9,623
26,023
-
The year's disposal of accumulated impairment
-
8,242
-
-
Effect of exchange rate differences
60
5,829
149
-82
Accumulated depreciation on 31 December 2020
-1,652
-1,373,446
-15,895
-8,332
Net book value on 31 December 2020
1,849
910,540
24,601
3,098
Purchase cost on 1 January 2021
3,501
2,283,986
40,496
11,431
Capital expenditure
-
19,100
8,636
-
Additions related to IFRS 16
139
-
-
-
The year's disposal at cost
-65
-165,435
-4,515
-2,827
Effect of exchange rate differences
-69
-9,942
-359
-92
Purchase cost on 31 December 2021
3,506
2,127,709
44,258
8,512
Accumulated depreciation on 1 January 2021
-1,652
-743,946
-15,895
-8,332
Accumulated impairment on 1 January 2021
-
-629,500
-
-
The year's depreciation
-639
-54,884
-7,375
-640
The year's disposal of accumulated depreciation
-
37,639
1,972
2,827
The year's disposal of accumulated impairment
-
79,274
-
-
Effect of exchange rate differences
35
3,918
232
67
Accumulated depreciation on 31 December 2021
-2,257
-1,307,499
-21,065
-6,079
Net book value on 31 December 2021
1,249
820,211
23,193
2,433
The balance of capitalized project costs relates to specific contracts.
 
 
 
 
 
 
 
Notes to the accounts
51
SIEM
Offshore
 
Inc. Annual Report 2021
The costs are amortized over the term of the specific charter contracts.
 
The vessels are divided into the following components and economical lives:
Component
Percentage of total
Economic life
Hull
27%
30 years
Cargo equipment
17%
30 years
Marine equipment
10%
15 years
Crew equipment
9%
15 years
Engine
18%
30 years
Engine system
6%
30 years
Combined sewerage system
 
13%
30 years
Docking
 
and class renewals
5 years
Equipment
3 years
Impairment vessels
The Book value of tangible and intangible assets with finite
lives is tested for impairment whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. If such indicators exist and the book value
exceeds the recoverable amount, the fixed asset’s residual
value is the higher of net selling price and value in use. As the
approach to net selling price normally obtained valuations
from independent shipbrokers. Brokers’ estimates assume the
vessels are without charter contracts, immediately available
for sale in the market and that a willing seller and a willing
buyer exist. The value in use is calculated by discounting
future cash flows to present value at the balance sheet date.
Due to reduced liquidity in the market for vessels, there is an
increased uncertainty about the estimated ship values in
today’s market. Per 31 December 2021 calculation of value in
use is used in the impairment testing for all vessels. In addition
to value in use calculations, management has obtained
brokers’ estimates for all the group’s vessels from two
independent and reputable shipbrokers per 31 December
2021. The obtained broker estimates were primarily used to
compare and test the reasonableness of management’s value
in use calculations.
As of 31 December 2021 impairment indicators were
identified. Impairment indicators include some vessels still
being in lay-up, volatile charter rates and utilization, and that
the quoted market value of the Company is below book value
of equity. Based on such indicators, impairment tests were
performed for all OSV vessels. No impairment charges were
recognized, and no impairment was recorded in 2021 (2020:
USD 276.9 million related to 19 vessels). The market outlook
has slightly improved, and if this trend continues it could
trigger reversal of impairment in the future.
The book value of the vessels does not reflect possible
impairment charges if a sale of assets is forced in today’s
market.
Value-in-use (VIU)
VIU is based on the present value of discounted cash flows for
each separate Cash Generating Unit (CGU). Remaining firm
charter hire periods are considered. The first five years are
based on the Company’s market view. A terminal value is
calculated by assuming that the applicable market view for the
fifth year applies to the remaining years of the vessel’s lifetime.
Three scenarios have been considered, and a weighted
average of the scenarios has been calculated.
 
Discount rate
The discount rate used in the value-in-use calculation is a
weighted average cost of capital (WACC) after tax ranging
from 7.43%-9.24%
 
(2020: 8.39%-10.75%).
Operating expenses
Operational expenses that are directly attributable to the CGU
are based on budget and forecasts with an annual escalation
as applicable. Dry-docking cost related to class renewals and
periodic maintenance costs are included at estimated cost.
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
52
Fair value less cost of disposal
FVLCOD (level 3) is the amount that would be obtained from a
sale of the asset in a regular market, less cost of sales, based
on the average of third-party valuation reports from two
independent ship brokers. The Company understands that
shipbrokers apply newbuilding price parity as basis for their
appraisals. Newbuilding prices have been adjusted for
building supervision costs and other additional costs, which
results in an estimated delivered cost of a newbuilding with
prompt delivery adjusted for age of each vessel.
Climate risk
Management has considered the potential impacts of climate
risk and whether this will have an adverse impact on the future
use of the Company’s vessels. The Company operates within
the offshore oil and gas sector and the offshore renewable
sector. It’s expected that demand for the Group’s services
could increase due to climate related opportunities.
Management does not consider there is a significant risk that
the Company’s vessels will become obsolete due to climate
considerations as they form a key part in the transition to the
provision of sustainable energy.
Sensitivities
The VIU calculation is mainly affected by changes in the
WACC and freight rate assumptions. The WACC used for
vessels financed in USD was 7.43% (2020: 8.39%) and for the
vessels financed in NOK the WACC was 7.82% (2020: 8.77 %).
The WACC used for vessels financed in USD in Brazil was
9.24% (2020: 10.75%).
 
A reduction of freight rate assumption of USD 1,000 per
day for each vessel would reduce the value of the fleet by
approximately USD 73 million. An increase in freight rate
assumption of USD 1,000 per day would increase the value of
the fleet by approximately USD 73 million.
 
An increase in WACC of 0.5% would reduce the total value
of the fleet by approximately USD 35 million. A decrease in
WACC of 0.5% would increase the total value of the fleet by
approximately USD 35 million.
 
sioff-2021-12-31p54i0
Notes to the accounts
53
SIEM
Offshore
 
Inc. Annual Report 2021
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
54
Note 6
Investment in Subsidiaries
Company
Registered office
Ownership and
voting share
Revenue
Net profit
 
(Amounts in USD 1,000)
Siem Offshore AS
Kristiansand, Norway
100%
12,313
2,163
Siem Offshore Invest AS
Kristiansand, Norway
100%
1,872
1,033
Siem Offshore Rederi AS
Kristiansand, Norway
100%
121,488
20,955
Siem Offshore do Brasil SA
Rio de Janeiro, Brazil
100%
25,277
-3,867
Siem AHTS Pool AS
Kristiansand, Norway
78%
13,557
-26,304
DSND Subsea Ltd
London, England
100%
-
-
Siem Offshore Management (US) Inc.
Texas, USA
100%
172
436
Siem Offshore US Holding AS
Kristiansand, Norway
100%
-
-10
ODL AS
Kristiansand, Norway
100%
29,997
10,018
Total value recorded in the statement of financial position of the Parent Company
The above companies are owned by the Parent. In addition, the subsidiaries own the following companies:
Company
Registered office
Share and voting rights
Consub Delaware LLC
Delaware, USA
100%
Aracaju Serviços Auxiliares Ltda
Rio de Janeiro, Brazil
100%
Siem Offshore Crewing AS
Kristiansand, Norway
100%
Siem Pilot DA
Kristiansand, Norway
100%
Siem Offshore Maritime Personnel AS
Kristiansand, Norway
100%
Overseas Drilling Ltd
Groningen, The Netherlands
100%
Siem Offshore Canada Inc
Halifax, Canada
100%
Siem Offshore Australia Pty Ltd
Perth, Australia
100%
Siem Real Estate GmbH
Leer, Germany
100%
Siem Offshore LLC
Delaware, USA
100%
Secunda Holdings SLH
Halifax, Canada
100%
Siem AHTS Pool Australia PTY LTD
Perth, Australia
100%
Siem Offshore Crewing Australia PTY Ltd
Perth, Australia
100%
Siem Offshore Servicos Maritimos Ltda
Rio de Janeiro, Brazil
100%
Siem Offshore Servicos Maritimos Ltda was incorporated in 2021.
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
55
SIEM
Offshore
 
Inc. Annual Report 2021
Share capital
Book equity
Cost price
Book value
 
Minority share
of net
profit/(loss)
Minority share of
net equity
Impairments
made in 2021
35
9,796
16,194
11,494
-
-
-
898
149,422
98,369
98,369
-
-
-20,000
6,175
107,101
378,457
107,064
-
-
-22,831
83,838
-68,214
135,978
-
-
-
-
163
-4,175
451,728
-
-4,947
-538
175,902
-
-203
18,352
-
-
-
-
1
921
1
1
-
-
-
5
170
961
187
-
-
-
4
14,335
7,002
7,002
-
-
-
209,155
1,107,043
224,117
-4,947
-538
133,072
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
56
Note 7
Investment in Associated Companies
Figures for associated companies included in the consolidated accounts based on the equity method of accounting.
31 December 2021
CONSOLIDATED
COMPANY NAME
PR Tracer
Offshore ANS
KS Big
 
Orange XVIII
Total
(Amounts in USD 1,000)
Income Statement
Operating revenues
5,211
424
5,635
Operating expenses
-5,523
-23
-5,546
Operating profit
-312
401
89
Net financial items
11
2
13
Net profit
-301
403
102
Result from associated companies
-124
166
42
Statement of financial position
Current assets
75
-
75
Cash
4,050
1,272
5,322
Total assets
4,125
1,272
5,396
Equity
4,022
1,255
5,277
Current liabilities
103
16
119
Total equity and liabilities
4,125
1,272
5,396
Siem Offshore's share of booked equity
1,662
519
2,181
Added/reduced in the period
Adjustments IFRS and fair value in excess of
book value for vessel and goodwill as of 31
December
-
314
314
Book value as of 31 December
1,662
833
2,495
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
57
SIEM
Offshore
 
Inc. Annual Report 2021
31 December 2021
CONSOLIDATED
COMPANY NAME
KS Big
Orange XVIII
KS Big Orange
XVIII
Total
(Amounts in USD 1,000)
Specification of changes net book value in Siem Offshore's accounts
Net book value as of 1 January
1,830
692
2,522
This year's share of net profit/(loss)
-124
166
42
This year's share of other comprehensive income
-
-
-
Adjustments consolidated accounts
-
-
-
Effect of exchange rate differences
-52
-17
-69
Net book value as of 31 December
1,654
841
2,495
Of which:
Amortisation of fair value in excess of book value
for vessels and goodwil
-
-
-
Effect of exchange rate differences
-
-24
-24
 
Fair value in excess of book value for vessels
and goodwill as of 31 December 2021
-
314
314
COMPANY NAME
Registered office
Consolidation
Owner
interest
Voting
 
rights
Paid in
capital
Issues, not
paid in capital
PR Tracer Offshore ANS
Kristiansand, Norway
Equity accounting
41.33%
41.33%
1,633
-
KS Big Orange XVIII
Kristiansand, Norway
Equity accounting
41.33%
41.33%
8
5
Total
1,640
5
Siem Offshore Ghana Ltd remained dormant in 2021 and has been excluded from the table. Assets and liabilities are considered
immaterial to the Company's consolidated accounts.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
58
31 December 2020
CONSOLIDATED
COMPANY NAME
PR Tracer
Offshore ANS
KS Big
Orange XVIII
Siem Offshore
Ghana Ltd
Total
(Amounts in USD 1,000)
Income Statement
Operating revenue
5,821
391
-
6,211
Operating expenses
-4,105
-19
-23
-4,147
Depreciation and Amortisation
-
-
-1
-1
Operating profit
1,716
372
-24
2,063
Net financial items
-28
2
-
-26
Net profit
1,688
374
-24
2,038
Result from associated companies
698
155
-12
840
Statement of financial position
Non-current assets
-
-
3
3
Current assets
927
-
10
937
Cash
3,584
909
1
4,493
Total assets
4,511
909
13
5,432
Equity
4,427
892
-146
5,172
Current liabilities
84
17
159
260
Total equity and liabilities
4,511
909
13
5,432
Siem Offshore's share of booked equity
1,830
368
-72
2,127
Added/reduced in the period
Adjustments IFRS and fair value in excess of
book value for vessel and goodwill as of 31
December
-
324
72
396
Net book value in Siem Offshore as of 31 December
1,830
692
-
2,522
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
59
SIEM
Offshore
 
Inc. Annual Report 2021
31 December 2020
CONSOLIDATED
COMPANY NAME
PR Tracer
Offshore ANS
KS Big
Orange XVIII
Siem Offshore
Ghana Ltd
Total
(Amounts in USD 1,000)
Specification of changes net book value in Siem Offshore's accounts
Net book value as of 1 January
1,033
193
-
1,226
This year's share of net profit/(loss)
698
155
-12
840
This year's share of other comprehensive
income
-
-
-
-
Effect of exchange rate differences
99
11
-
109
Net book value as of 31 December
1,830
692
-
2,522
Of which:
Amortisation of fair value in excess of book value
for vessels and goodwil
-
-
-
-
Effect of exchange rate differences
-
-5
-
-5
 
Fair value in excess of book value for vessels
and goodwill as of 31 December 2021
-
325
-
325
COMPANY NAME
Registered office
Consolidation
Owner
interest
Voting
rights
Paid in
capital
Issues, not
paid in capital
PR Tracer Offshore ANS
Kristiansand, Norway
Equity accounting
41.33%
41.33%
1,633
-
KS Big Orange XVIII
Kristiansand, Norway
Equity accounting
41.33%
41.33%
8
5
Siem Offshore Ghana Ltd
Accra, Ghana
Equity accounting
49.00%
49.00%
200
-
Total
1,840
5
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
60
Note 8
Pension Costs and Obligations
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Pension cost recognized in the income statement
Present value of current years benefit earned
1,236
1,144
Interest expense
140
138
Expected return on plan assets
-115
-130
Administration cost
17
-
Social contribution
151
38
Pension scheeme defined contribution
 
-
1,821
Impact of curtailment/settlement
 
-209
-882
Net periodic pension cost (see Note 18)
1,221
2,128
The development in the defined benefit obligation
At 1 January
8,231
6,536
Present value of current years benefit earned
1,236
1,144
Interest expense
140
138
Payroll tax of employer contribution, assets
-188
-155
Benefits paid
-37
-37
Remeasurements loss/(gain)
-736
373
Exchange differences
-281
232
At 31 December
8,364
8,231
The development in the fair value of plan assets
At 1 January
7,130
6,059
Expected return on plan assets
115
130
Employer's contribution
1,523
1,258
Payroll tax of employer contribution, assets
-188
-155
Benefits paid
-37
-37
Remeasurements loss/(gain)
-946
-328
Exchange differences
-246
202
At 31 December
7,350
7,130
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
61
SIEM
Offshore
 
Inc. Annual Report 2021
Pension liability
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Present value of funded obligations
8,364
8,231
Fair value of plan assets
-7,350
-7,130
Present value of funded obligations
1,014
1,101
Present value of unfunded obligations
-
-1
Liability in the statement of financial position
1,014
1,100
Financial assumptions
Discount rate
1.90%
1.70%
Expected return on funds
1.90%
1.70%
Expected wage adjustment
2.75%
2.25%
Adjustment of the basic National Insurance amount
2.50%
2.00%
Expected pension increase
- %
- %
Number of employees in defined benefit scheme
57
58
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
62
Note 9
Receivables
 
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Long-term receivables
-
-
Deposit related to legal dispute in Brazil
 
2,857
-
-
-
Receivable related to sale of Siem Marlin
16,378
21,356
-
-
Prepaid guarantee commission (1)
11,357
11,881
3
59
Other long-term receivables
158
888
3
59
Total long-term receivables
30,749
34,125
12/31/2021
12/31/2020
Other short-term receivables
12/31/2021
12/31/2020
-
14
Prepaid expenses
6,149
5,817
-
-
Unbilled revenue
6,049
5,597
-
-
Outstanding insurance claims (2)
1,106
2,310
-
-
Prepaid income taxes and other taxes
1,052
1,328
-
-
VAT
 
-177
44
1,014
2,440
Intercompany receivables
-
-
-
-
Other short-term receivables
2,822
2,772
1,014
2,454
Total other short-term receivables
17,001
17,869
(1) Prepaid guarantee commission relates to Siem Helix vessels facilities.
(2) Outstanding insurance claims refer to vessel breakdown expenses qualifying for insurance reclaim.
The amount is net of own deductibles.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
63
SIEM
Offshore
 
Inc. Annual Report 2021
Note 10
Restricted Cash
 
USD 12.0 million of the Company's cash balance at year-end were restricted funds of which USD 1.2 million was for
 
tax
withholdings and USD 10.8 million represented deposits for bank guarantees and secured loans.
Note 11
Taxes
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Temporary differences
Deferred tax
Time frame
Participation in limited liability companies
Long
-1,868
-2,522
Operating assets
Long
-5,555
-5,607
Pension funds/obligations
Long
-1,064
-1,100
Other short-term differences
-8,487
-9,229
Tax loss carried forward
-32,172
-24,544
Basis for deferred tax (tax asset)
-40,659
-33,773
Deferred tax (tax asset) Norway
-8,945
-6,726
Deferred tax (tax asset) Holland
-
-800
Deferred tax (tax asset)
-8,945
-7,526
Deferred tax (asset) recognized in statement of financial
position as of 31 December
-8,945
-7,526
Deferred tax asset in Norway includes USD 766 in the Parent.
Deferred tax assets are recognized as non-current assets as it is probable through prospective earnings that it
 
can be utilized.
 
The Company is subject to taxes in several jurisdictions, where significant judgment is required in calculating the tax provision
 
for
the Company. There are several transactions for which the ultimate tax cost is uncertain and for which the Company
 
makes
provisions based on an assessment of internal estimates, tax treaties and tax regulations in countries of
 
operation and
appropriate external advice. Where the final tax outcome of these matters is different from the amounts that were
 
initially
recorded, such difference will impact the tax charge in the period in which the outcome is determined.
 
The Company seeks to optimize its tax structure to minimize withholding taxes when operating
 
vessels abroad, avoiding double
taxation, and minimizing corporate tax paid by making optimal use of the shipping taxation rules
 
that apply. It is, however, a
challenging task to optimize taxation, and there is always a risk that the Company may end up paying more taxes
 
than the
theoretical minimum, which may in turn affect the financial results negatively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
64
Total tax liabilities
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Long-term tax liabilities falling due after 1 year
421
1,255
Payable taxes falling due within 1 year
971
964
Tax liabilities
1,391
2,220
Tax expense
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Taxes payable
1,069
89
Change in deferred tax asset /liability
-2,069
2,584
Total
-1,000
2,673
There is no tax amount related to the items under Other Comprehensive Income.
PARENT COMPANY
Tax expense
2021
2020
Change in deferred tax asset/liabilities
1,292
684
Taxes payable
16
8
Total
1,308
693
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
65
SIEM
Offshore
 
Inc. Annual Report 2021
Note 12
Borrowings
Carrying amount - excluding CIRR
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Secured
Current
Non-current
Total
Current
Non-current
 
Total
Fixed rates bank loans
18,989
225,393
244,383
107,051
365,782
472,834
Floating rates bank Loans
29,767
353,318
383,085
89,250
304,958
394,208
Total secured borrowings
48,756
578,711
627,467
196,301
670,741
867,042
Unsecured
Non-current
Total
Current
Non-current
 
Fixed rate notes / Bonds
-
-
-
-
86,425
86,425
Floating rate notes / Bonds
-
-
-
43,664
-
43,664
Loans from related parties (1)
-
2,305
2,305
-
38,533
38,533
Total unsecured borrowings
-
2,305
2,305
43,664
124,958
168,622
Total borrowings
48,756
581,017
629,772
239,965
795,699
1,035,664
Fees and expenses
-1,106
-4,420
-5,526
-1,075
-3,802
-4,877
Total borrowings incl. fees
47,650
576,596
624,246
238,890
791,897
1,030,787
Fair value - excluding CIRR
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Secured
Current
Non-current
Total
Current
Non-current
 
Total
Fixed rates bank loans
18,989
227,899
246,888
107,051
382,072
489,123
Floating rates bank Loans
29,767
353,318
383,085
89,250
304,958
394,208
Total secured borrowings
48,756
581,217
629,973
196,301
687,030
883,331
Unsecured
Current
Non-current
Total
Current
Non-current
 
Total
Fixed rate notes / Bonds
-
-
-
-
86,425
86,425
Floating rate notes / Bonds
-
-
-
43,664
-
43,664
Loans from related parties (1)
-
2,305
2,305
-
38,533
38,533
Total unsecured borrowings
-
2,305
2,305
43,664
124,958
168,622
Total borrowings
48,756
583,522
632,278
239,965
811,988
1,051,953
Fees and expenses
-1,106
-4,420
-5,526
-1,075
-3,802
-4,877
Total
 
47,650
579,102
626,752
238,890
808,186
1,047,076
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
66
Carrying amount - excluding CIRR
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Unsecured
Current
Non-current
Total
Current
Non-current
 
Total
Fixed rate notes / Bonds
-
-
-
-
86,425
86,425
Floating rate notes / Bonds
-
-
-
43,664
-
43,664
Total unsecured borrowings
-
-
-
43,664
86,425
130,089
Total borrowings
-
-
-
43,664
86,425
130,089
Fees and expenses
-
-
-
-
-
-
Total borrowings incl. Fees
-
-
-
43,664
86,425
130,089
Fair value - excluding CIRR
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Unsecured
Current
Non-current
Total
Current
Non-current
 
Total
Fixed rate notes / Bonds
-
-
-
-
86,425
86,425
Floating rate notes / Bonds
-
-
-
43,664
-
43,664
Total unsecured borrowings
-
-
-
43,664
86,425
130,089
Total borrowings
-
-
-
43,664
86,425
130,089
Fees and expenses
-
-
-
-
-
-
Total
-
-
-
43,664
86,425
130,089
Siem Offshore has agreed restructured terms with the equitized lenders. The restructured terms shall remain in
 
force till 31
December 2024, corresponding to extended maturity of the restructured facilities. Financial covenants include minimum
available cash at USD 25 million and a minimum book equity ratio of Siem Offshore at 10%. Other terms relate to vessel buy-out
options, no-dividend clause, restrictions on investments in assets, restrictions to acquisitions of shares and business
undertakings, negative pledge, restrictions to selling or otherwise disposal of assets, no equitization of the
 
Brazilian facilities,
financial indebtedness, change of control clause, Payment in kind ("PIK") -interest arrangements and three cash sweep
mechanisms; one facility cash sweep, one SAP (Siem ATHS Pool AS) cash sweep and one company cash sweep.
 
PIK supports
the Company's cash flow as due interest is added to the principal loan.
The Company has a portfolio of bank loans secured with mortgage in vessels. The creditors and guarantors are in general
 
first-
class commercial banks and state-owned financial institutions with ratings on or above BBB- and AAA.
As of year-end, the Company had restructured the unsecured bonds, partly by a debt conversion and partly by
 
cash repayment.
(1) At year-end 2021 the Company held a secured revolving credit facility with Siem Industries S.A. at USD10 million. The
 
credit
will be reduced by USD 2 million annually and will expire on 31.12.2026. The credit facility remained undrawn
 
at year-end 2021.
 
The non-controlling interest in Siem AHTS Pool AS has paid-in a subordinated shareholder's loan at USD2.3 million. Interests
 
are
accrued on a quarterly basis and added to the principal debt. Installments and interests will become payable
 
from 2025
contingent upon approval from mortgage debt lenders.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
67
SIEM
Offshore
 
Inc. Annual Report 2021
Instalments falling due over the next 5 years - excluding CIRR
CONSOLIDATED
(Amounts in USD 1,000)
Mortgage debt
Other interest
bearing debt
Total
2022
48,756
-
48,756
2023
30,133
-
30,133
2024
293,062
-
293,062
2025
40,253
231
40,483
2026
57,143
231
57,373
Thereafter
158,120
1,844
159,964
Total
627,467
2,305
629,772
Instalments falling due over the next 5 years - excluding CIRR
PARENT COMPANY
(Amounts in USD 1,000)
Mortgage debt
Other interest
bearing debt
Total
2022
-
-
-
2023
-
-
-
2024
-
-
-
2025
-
-
-
2026
-
-
-
Thereafter
-
-
-
Total
-
-
-
Following the financial restructuring, fixed instalments of secured debt were significantly reduced. Prior to the restructuring,
 
fixed
installments were USD 71 million in 2023 and were USD 63 million in 2024. In addition to fixed installments, contingent
 
instalments
from cash sweep mechanisms apply. There are fixed instalments for certain facilities, mainly related to the Siem
 
Helix 1 and 2 and
the Siem Symphony facilities.
The book value of mortgaged assets consists of non-current tangible assets and a portion of the accounts
 
receivables that
amounts to USD 873 million at year end.
 
The Company and the Parent Company are in compliance with their financial covenants on 31 December 2021.
 
PARENT COMPANY
CIRR arrangements
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
12/31/2021
12/31/2020
-
-
Total CIRR deposit
36,763
45,946
-
-
CIRR loan drawn
36,763
45,946
-
-
Net Commitment
-
-
Prior to ordering vessels from Norwegian yards, the Company applied for fixed 12-year interest rate options related to
 
the long-
term financing of such vessels.
 
The Company was granted such options for each of the relevant vessel by the Norwegian Export
Credit Agency. Long-term loans drawn from the Norwegian Export Credit Agency are placed as corresponding
 
deposits in the
Bank as financial security for the loans drawn. In relation to sale of a vessel in 2015, which had a
 
fixed 12-year USD interest rate
associated with its mortgage debt financing, the receipt from the sale equivalent to the amount and remaining term of the
outstanding long-term loan from the Norwegian Export Credit Agency was placed on deposits in the Bank
 
as financial security for
the drawn loan at the date when the sale was concluded.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
68
Net debt
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Cash and cash equivalents
91,839
103,225
Borrowings, repayable within one year
-47,650
-238,890
Borrowings, repayable after one year
-576,596
-791,897
Net debt
-532,408
-927,562
Cash and cash equivalents
91,839
103,225
Gross debt - fixed interest rates
-244,383
-559,511
Gross debt - floating interest rates
-385,390
-471,276
Net debt
-537,934
-927,562
Net debt
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Cash and cash equivalents
33,362
51,777
Borrowings, repayable within one year
-
-43,664
Borrowings, repayable after one year
-
-86,425
Net debt
33,362
-78,311
Cash and cash equivalents
33,362
51,777
Gross debt - fixed interest rates
-
-43,664
Gross debt - floating interest rates
-
-86,425
Net debt
33,362
-78,311
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
69
SIEM
Offshore
 
Inc. Annual Report 2021
Borrowings
CONSOLIDATED
(Amounts in USD 1,000)
Borrowings as at 1 January 2020
1,012,966
Lease liability 1 January 2020
7,004
Lease payments
-2,112
Repayment of borrowings
-20,652
Drawn amount PIK interest and fees
19,158
New loans related parties
2,184
Accrued interest
1,454
Accrued interest related parties
9,463
Foreign exchange adjustments
5,649
Other
761
Borrowings and lease liability at 31 December 2020
1,035,875
Lease payments
-1,565
Repayment of borrowings
-124,270
Drawn amount PIK interest and fees
17,085
Converted into equity
-278,906
New loans related parties
2,305
Related party converted into equity
-39,036
Accrued interest
-11,775
Foreign exchange adjustments
34,699
Other
-1,117
Borrowings and lease liability at 31 December 2021
633,295
Borrowings and lease liability
CONSOLIDATED
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Borrowings repayable within one year
48,756
238,890
Borrowings repayable after one year
581,017
791,897
Lease liability repayable within one year
1,969
1,978
Lease liability repayable after one year
1,554
3,110
Total
633,295
1,035,875
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
70
Borrowings
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
Borrowings as at 1 January 2020
122,224
Cash flows
3,891
Foreign exchange adjustments
3,974
Borrowings at 31 December 2020
130,089
Net change in cash during the period
Cash flows
-6,216
Accrued interest
 
3,120
Revaluation derivative
-312
Converted to equity
-155,081
Foreign exchange adjustments
28,401
Borrowings at 31 December 2021
-
Borrowings
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Borrowings repayable within one year
-
43,664
Borrowings repayable after one year
-
86,425
Total
-
130,089
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
71
SIEM
Offshore
 
Inc. Annual Report 2021
Note 13
Other Current Liabilities and Other Current Provision
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
12/31/2021
12/31/2020
-
-
Social security tax, etc.
2,374
2,749
-
-
Unearned income
3,581
3,394
-
-
Other accrued cost, mainly regarding operating
expenses vessels
13,575
13,493
-
-
Current lease liability
1,969
1,978
1,172
-
Intercompany liabilities
-
-
793
311
Accrued salaries, holiday pay, payroll tax and other
5,272
6,726
1,965
311
Total other current liabilities
26,770
28,340
Other accrued cost includes accrued commission and accruals for purchase orders.
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
12/31/2021
12/31/2020
-
-
Accrual for possible legal claims in Brazil
16,696
15,317
-
-
Total other current provision
16,696
15,317
An accrual at USD 17 million has been recorded for possible legal claims related to charter contracts and labour
 
cases in Brazil.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
72
Note 14
Related Party Transactions
The Company’s largest shareholder Siem Sustainable Energy S.à r.l., with a holding of 34 %, and its
 
parent company, Siem
Industries S.A., are defined as related parties. The Company is charged by Siem Industries S.A. for
 
an annual fee of USD 250 K for
2021 (2020: USD 250 K). The fee is the remuneration for the services provided by the Chairman of the Board
 
and cost related to
office and administration in the Cayman Islands.
Details related to transactions, loans and remuneration to the Executive Management and the Board of
 
Directors are set out in
Note 18. The Chairman Kristian Siem is also the Chairman of Siem Industries SA. Director Barry Ridings
 
is also a Director of Siem
Industries SA. Director Kenneth Ross is employed by a subsidiary of Siem Industries SA. For the Parent, all subsidiaries
 
listed in
Note 6 are also defined as related parties.
 
For other related parties, the following transactions were carried out:
Sale of services
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Service to entity where director has ownership
26,738
16,626
Total
26,738
16,626
The service is provided to companies in which the Chairman has an interest. Kristian Siem is the Chairman of
 
and controls Siem
Industries S.A. Siem Industries holds an interest in Subsea 7 and Seaway7. Siem Offshore Rederi AS, 100% owned
 
by the
Company, Siem Offshore LLC, 100% owned
 
by the Company and Siem AHTS Pool AS, 78% owned by the Company,
 
have
chartered vessels to Subsea 7 and Seaway 7 companies during 2021 and 2020.
 
The amounts for 2021 and 2020 also include management services and crew service to subsidiaries of Siem Europe S.à r.l. and
 
to
Subsea 7 and Seaway 7 companies.
Purchase of service
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Service from entity where director has ownership
602
1,398
Total
602
1,398
Services purchased from related parties for 2021 were mainly cost for corporate management services
 
and Board fees. Service
from entity where director has ownership consist of Board fees from Siem Industries S.A., management fees from
 
Siem Capital UK
Ltd and Siem Kapital AS, all three 100% owned
 
by Siem Europe S.à r.l. For 2020 the cost also related to service from the yard
Flensburger Schiffbau GmbH
 
and bare boat expenses charged from Siem Oil Service Invest Norway AS (20% owned by a
subsidiary of Siem Industries S.A.)
These transactions were at arm’s length.
Balance sheet items following purchase and sale of service
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Accounts receivable
5,466
598
Accounts payable
537
822
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
73
SIEM
Offshore
 
Inc. Annual Report 2021
Current loan to related parties
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
At January 1
-
710
Instalments
-
-710
Interest expenses
-
2
Interest paid
-
-2
At December 31
-
-
Day OCV Pte Ltd, 100% owned by Siem Europe S.a r.l.
 
was provided with a loan of USD 4.1 million in 2018. The loan was partly
repaid in 2019 and was fully repaid in 2020. The loan was at market terms of interest.
Non-current liability to related parties
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
At January 1
38,533
34,895
Drawings
2,288
2,184
Converted to shares
-39,036
-
Interest expenses
521
1,454
At December 31
2,305
38,533
Non-current liability
The Company holds a long-term credit facility in Siem AHTS Pool AS who has drawn a shareholder's loan from
 
its 22%
shareholder Singa Star PTE LTD. Interest charged has been added to the principal loan. Per agreement, no instalments
 
or interest
payments will fall due till 2025. The loan is unsecured and subordinated to bank debt. The liability is
 
at markets term of interest.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
74
Sale of service
PARENT COMPANY
(Amounts in USD 1,000)
2021
2020
Service to subsidiaries
1,299
1,336
Total
1,299
1,336
Purchase of service
PARENT COMPANY
(Amounts in USD 1,000)
2021
2020
Service from subsidiaries
4,482
2,528
Service from associates
250
250
Total
4,732
2,778
Sales to subsidiaries and associates consists of guarantee commissions to Siem Offshore Rederi AS and Secunda Holdings
Canada LP.
Service purchased from subsidiaries consists of administrative and corporate services provided by Siem Offshore
 
AS. Service
purchased from associates consists of payment for annual fee for remuneration for the services of
 
the Chairman of the Board and
cost related to office and administration in the Cayman Islands.
All terms used for above transactions are at arm’s length.
Year-end balance sheet items arising from sales and purchases
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Receivables from related parties
Subsidiaries
1,014
2,440
Total
1,014
2,440
Payables to related parties
Subsidiaries
1,172
-
Associates
-
311
Total
1,172
311
Non-current loan to subsidiaries
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
At 1 January
-
124,758
Drawings
109,834
8,657
Converted to shares
-175,902
-
Interest charged
3,614
5,351
Provision for bad debt
62,423
-138,795
Exchange rate variations
32
29
At 31 December
-
-
The long-term loan to subsidiaries on 31 December 2021, is with Siem Offshore do Brasil SA and Siem AHTS Pool
 
AS. Provision for
100% of outstanding amount for the long-term loan to Siem Offshore do Brasil SA (USD 24,233) and to Siem
 
AHTS Pool AS (USD
75,412) has been made and is reflected above. In relation with conversion of shares in Siem AHTS Pool AS made in May
 
2021, the
provided amounts was reversed (USD 138,319 )and at year-end 2021, a new provision was made.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
75
SIEM
Offshore
 
Inc. Annual Report 2021
All loans are at market terms of interest.
Current loan to related parties
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
At January 1
-
710
Instalments
-
-710
Interest charged
-
2
Interest received
-
-2
At December 31
-
-
Day OCV Pte Ltd, 100% owned by Siem Europe S.a r.l., was provided with a loan of USD 4.1 million in 2018.
 
The loan was partly repaid in 2019 and was fully repaid in 2020. The loan was at market terms of interest.
Non-current liability to related parties
PARENT COMPANY
(Amounts in USD 1,000)
12/31/2021
12/31/2020
At January 1
417
-
Interest charged
50
417
At December 31
467
417
The revolving credit facility provided by Siem Industries S.A. was fully repaid in 2019. The credit facility had a limit of USD 12
million and was terminated in April 2021. A new credit facility of USD 12 million was signed in April
 
2021. The new facility will be
reduced by USD 2 million at the last business date of each year commencing 31 December 2021. As such,
 
the facility is USD 10
million at year-end 2021 and is undrawn. The liability above reflects the accrued cost under the previous facility.
The credit facility is at market terms of interest.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
76
Note 15
Derivative Financial Instruments
Assets (Liabilities)
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
Assets
Liabilities
-
-
-
1,833
Derivatives related to the Convertible Bond
-
-
-
1,833
-
-
-
-
Cross currency swaps
-
-
-
18,829
-
-
-
1,833
Total derivative financial instruments
-
-
-
20,662
Derivatives related to the Senior Unsecured Convertible Bond, interest and cross currency
 
swaps
The Company and the Parent Company completed a financial restructuring in Q2 2021. As part
 
of the agreement with the lending
banks and convertible bond holders all of the Company's and Parent's derivatives related to the
 
convertible bond, the forward
currency contracts, interest rate swaps and cross currency swaps were settled and terminated.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
77
SIEM
Offshore
 
Inc. Annual Report 2021
Note 16
Guarantees
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
12/31/2021
12/31/2020
-
-
Guarantees related to tax-disputes, Brazil
686
686
606,880
815,504
Guarantees for debt in subsidiaries
-
-
606,880
815,504
Total gurantees
686
686
Guarantees related to disputes and ongoing tax-cases have been raised per request from Brazilian tax-authorities.
Note 17
Operating Expenses
PARENT COMPANY
CONSOLIDATED
2021
2020
(Amounts in USD 1,000)
2021
2020
-
-
Vessel crew expenses
90,992
90,923
-
-
Other vessel operating expenses
43,123
52,061
5,271
3,114
General and administration
19,793
19,600
5,271
3,114
Total operating expenses
153,909
162,584
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
78
Note 18
Salaries and Wages, Number of Employees
Personnel expenses (1)
 
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Salaries and wages
74,980
77,983
Government grants - net wages arrangement in Norway
-4,756
-4,012
Payroll tax
7,372
6,217
Pension costs, see Note 8
1,221
2,128
Other benefit
6,570
6,242
Total personnel expenses
85,386
88,558
(1) Personnel expenses include vessel crew expenses and part of general and administrative expenses, see
 
Note 17.
 
Government grants is a special Norwegian seamen payroll and tax refund scheme given to Norwegian shipping
 
companies.
 
The average number of employees in the Company was 1,032 for 2021 (2020: 1,072), including onshore and offshore
 
employees.
There are no employees in the Parent.
Payroll registered to the executive management:
(Amounts in USD 1,000)
2021
2020
Salary and other short term compensation
1,864
1,583
Total
1,864
1,583
Employees included in the above payroll in 2021 were six (2020: five).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
79
SIEM
Offshore
 
Inc. Annual Report 2021
Corporate management salaries and other benefits
(Amounts in USD 1,000)
2021
Salary paid
Pension premium
Other benefits
Share options held
CEO Bernt Omdal
371
49
2
24,000
CFO Dagfinn B. Lie
237
41
2
-
CFO Vidar Jerstad
221
32
2
-
COO Tore Lillestø
253
37
2
-
CHRO Tore B. Johannessen
287
32
1
-
CCO Andreas Hageli
 
259
31
2
-
Total
1,629
222
13
24,000
With effect from 1 August 2021, Vidar Jerstad replaced Dagfinn B. Lie as CFO.
Members of corporate management hold nil shares in the Company (2020: 100, adjusted for the 100:1 reverse split).
(Amounts in USD 1,000)
2020
Salary paid
Pension premium
Other benefits
Share options held
CEO Bernt Omdal
383
32
2
24,000
CFO Dagfinn B. Lie
283
26
2
24,000
COO Tore Lillestø
252
24
2
-
CHRO Tore B. Johannessen
258
33
3
24,000
CCO Andreas Hageli
 
256
26
2
-
Total
1,432
140
12
72,000
The Board of Directors of Siem Offshore Inc. has authorized the award of two programs of Share Options
 
to key employees of the
Company. Options outstanding for 2020 have been adjusted for the 100:1 reverse split in order to present comparable figures.
The total cost for the two programs is zero for 2021 and 2020.
 
See Note 29 for more information.
Remuneration to the Board of Directors
The Remuneration paid to the Board of Directors in 2021 was USD 387K (2020: USD 262K). The Chairman is
 
compensated by an
annual fee at USD 250K to Siem Industries S.A. The fee includes the remuneration for the services
 
of the Chairman and other cost
related to office and administration in Cayman Islands. Each of the other Directors are paid USD40K annually, or pro
 
rata in
relation to service part of the year.
Extraordinary bonus to Directors:
The Board proposes to the AGM to be held on 20 May 2022 that an extraordinary bonus remuneration to be paid
 
to the Directors
who served as Directors through the period of financial restructuring. Three of the Directors, for
 
several years, took exceptional
risk, exposure and working efforts, leading up to the successful restructuring of the Company in
 
May 2021. The extraordinary
remuneration proposal will be at a total cost of USD 102.5K.
Auditor's remuneration
PARENT COMPANY
CONSOLIDATED
2021
2020
(Amounts in USD 1,000)
2021
2020
111
29
Audit Fee
423
221
9
22
Audit Fee, Other
38
58
-
11
Tax and legal assistance
17
32
-
-
Other consultants, fees
45
35
120
61
Total auditor's remuneration
523
345
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
80
Note 19
Leases
Siem Offshore has entered into various operating leases for office premises, office machines and communication
 
satellite
equipment for the vessels. The lease period for the lease agreements varies and most of the leases contain an option
 
for
extension. The interest rates in the calculation of net present values are in the range of 3%-13% depending on the base
 
currency,
the nature of the lease and the length of the leasing agreement.
 
Low value leases and leases with maturity of up to one year from inception are considered insignificant to the financial
statements.
There are no leases for the Parent Company.
Consolidated Statements of Financial Position:
(Amounts in USD 1,000)
CONSOLIDATED
Right of use assets at 01.01.2021
4,771
Additions in 2021
139
Disposal in 2021
-65
The year's depreciation
-1,619
Effect of exchange rate differences
-35
Right of use assets at 31.12.2021
3,192
The balance sheet includes the following amounts relating to leases:
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Right of use assets*
Land and buildings
1,238
1,841
Vessels and equipment
1,954
2,930
Total Right of use assets
3,192
4,771
*included in the line item "Vessels and equipment" in the balance sheet.
(Amounts in USD 1,000)
CONSOLIDATED
Lease liability at 01.01.2021
5,088
Additions in 2021
139
Disposal in 2021
-65
Lease payments
-1,927
Interest cost
326
Effect of exchange rate differences
-43
Lease liability at 31.12.2021
3,518
(Amounts in USD 1,000)
12/31/2021
12/31/2020
Lease liabilities**
Current
1,968
1,978
Non-Current
1,551
3,110
Total Lease liabilities
3,518
5,088
 
Notes to the accounts
81
SIEM
Offshore
 
Inc. Annual Report 2021
**included in the line item "other liabilities" in the balance sheet.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
82
Operating Leases as Lessor of vessels:
The total contract backlog as per 31 December 2021 amounts at USD298 million (2020: USD483 million). The amount
 
for 2021
relates to in total 22 Time Charter contracts and 1 Bare Boat Contract. The contract backlog includes firm
 
contracts only, any
optional periods have been excluded. For the Time Charter contracts, the service element related
 
to operations of the vessels
(crewing, maintenance etc.) is also included in the amounts presented below.
There is no Contract Backlog for the Parent Company.
The contract backlog relates to fiscal years and per vessel segments:
12/31/2021
CONSOLIDATED
(Amounts in USD 1,000)
2022
2023
2024 onwards
Total
Vessel Segment
Platform Supply Vessels
14
7
14
35
Offshore Subsea Construction Vessels and WIV
91
51
4
146
Anchor Handling Tug Supply Vessels
5
-
-
5
Brazilian Fleet
14
7
2
23
Canadian Fleet
 
5
-
-
5
Scientific Core-Drilling Vessel
32
30
22
84
Total
161
95
42
298
12/31/2020
CONSOLIDATED
(Amounts in USD 1,000)
2021
2022
2023 onwards
Total
Vessel Segment
Platform Supply Vessels
41
15
22
78
Offshore Subsea Construction Vessels and WIV
77
77
60
214
Anchor Handling Tug Supply Vessels
27
2
-
29
Brazilian Fleet
15
15
9
39
Canadian Fleet
 
11
4
-
15
Scientific Core-Drilling Vessel
31
28
49
108
Total
202
141
140
483
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
83
SIEM
Offshore
 
Inc. Annual Report 2021
Note 20
Financial Items
PARENT COMPANY
CONSOLIDATED
2021
2020
(Amounts in USD 1,000)
2021
2020
Financial income
5,332
7,585
Interest income
 
3,240
3,855
91,553
-
Restructuring effects 1)
91,553
-
-
-
Dividend
 
1,546
-
12,511
9,465
Other financial income
388
3,306
109,396
17,050
Total financial income
96,727
7,161
Financial expenses
-2,408
-5,956
Interest expenses
-24,187
-50,297
-70,910
-294,664
Impairment of shares and receivables from subsidiaries
-
-
-1,562
-647
Other financial expenses
-4,386
-5,218
-74,880
-301,267
Total financial expenses
-28,573
-55,514
Other financial items
-862
-3,739
Net currency gain/(loss)
-4,531
-29,434
-862
-3,739
Total currency gain/(loss)
-4,531
-29,434
33,654
-287,956
Net Financial Items
63,623
-77,787
1) Gain related to debt converted to equity represents the difference between book value of loans
 
and obligations at 26 May 2021
that were converted to equity, and the fair value of shares issued used to settle these liabilities.
The weighted average cost of debt for the Company was approximately 3.3% (2020: 3.4%) at 31 December, including
 
the effect
of any fixed interest rate swap agreements.
Derecognition of financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged
 
or cancelled or expired. The
Company also derecognizes a financial liability when its terms are modified, and the cash flows
 
of the modified liability are
substantially different in which case a new financial liability based on the modified terms is recognized at fair value. The
 
difference
between the carrying amount of a financial liability (or part of a financial liability) extinguished or
 
transferred to another party and
the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit
 
or loss.
Restructured debt terms
The Company’s debt was restructured 26 May 2021, replacing a financial debt standstill agreement of April 2020.
 
Financial debt,
including bond loans, borrowings and financial derivatives at a total of USD 269 million was converted into 22,950,466,494
 
New
Shares at a conversion rate of NOK 0.10 per share. Following the debt-to-equity conversion the New Shares represented
 
around
96% of the Company’s shares.
 
In order to calculate the restructuring gain, the fair value of the shares issued had to be estimated. As a consequence
 
of
anomalies in the market price of the shares leading up to the conversion, the Company concluded to adopt the Oslo Stock
Exchange weighted average rate on 27 May 2021, being the first day of trading following the share
 
issue, as the basis for a fair
value estimate. The average weighted price was NOK 0.065962 per share, compared to the conversion
 
rate of NOK 0.10,
representing 65.962%. Of the total debt of USD 269 million, USD 177.4 million (representing 65.962%) was reclassified into the
Company’s equity accounts, and USD 91.6 million was recognized as financial income.
 
SIEM
Offshore
 
Inc. Annual Report 2021
84
Consideration was made whether the amended terms of the continuing loan facilities, were materially changed and that, in
 
fact,
these for accounting purposes were deemed to have been fully repaid and replaced by new loans.
 
The Company concluded that
the effects on the NPV of the loans following the new terms were less than 10%, due to no change
 
in interest or margins. The
Company will continue to account for these using the original effective interest rate.
 
The Company has agreed restructured terms with the equitized lenders. The restructured terms shall remain in
 
force till 31
December 2024, corresponding to extended maturity of the restructured facilities. Financial covenants include minimum
available cash at USD 25 million and a minimum Book Equity Ratio of the Company at 10%. Other
 
terms relate to vessel buy-out
options, no-dividend clause, restrictions on investments in assets, restrictions to acquisitions of shares and business
undertakings, negative pledge, restrictions to selling or otherwise disposal of assets, no equitization of
 
the Brazilian facilities,
financial indebtedness, change of control clause, PIK-interest arrangements and three Cash Sweep Mechanisms.
 
One Facility
Cash Sweep, one SAP (Siem ATHS Pool AS) Cash Sweep and one Company Cash Sweep.
 
In the Facility Cash Sweep, each of the Facilities Agreements (other than the SAP Facilities Agreements) were
 
amended to
include a cash sweep mechanism where 100 % of the excess cash in respect of the vessel(s) financed by the
 
relevant Facilities
Agreement shall be applied towards payments under the relevant facilities. In the SAP Cash Sweep
 
Cash each of the SAP
Facilities Agreements were amended to include a cash sweep mechanism, where 100 % of the aggregate excess
 
cash in respect
of all the SAP vessels shall be applied towards payments under the relevant SAP facilities. In the Company
 
Cash Sweep, each of
the Facilities were amended to include a cash sweep mechanism where 100 % of the Company excess cash shall be
 
distributed
towards payments of standstill deferred amounts, thereafter on a pro rata basis between the relevant Facilities
 
Agreements.
There are mandatory prepayment clauses related to sale or loss of vessels. The Cash Sweeps shall not take the Company’s
 
cash
position below USD 60 million (compensated for budgeted vessel operational cost). The cash sweep
 
mechanism applies bi-
annually. Upon the first cash sweep in Q3 2021, the Company paid USD 29 million to the lenders
 
as settlement related to deferred
interest and principal installments.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
85
SIEM
Offshore
 
Inc. Annual Report 2021
Note 21
Earnings/(loss) per Share
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Weighted average number of shares outstanding (1,000)
147,050
9,347
Weighted average number of shares diluted (1,000)
147,050
9,347
Result attributable to shareholders
107,858
-298,866
Earnings/(loss) per share attributable to equity shareholders
0.73
-31.97
Earnings/(loss) per share diluted attributable to equity shareholders
0.73
-31.97
Note: Weighted average number of shares for 2020 has been adjusted for the 100:1 reverse split in order to present
 
comparable
figures.
Note 22
Assets Held for Sale
CONSOLIDATED
(Amounts in USD 1,000)
2021
2020
Net book value per 1 January
-
715
The year's disposal at cost
-
-715
Net book value per 31 December
-
-
2021
No assets held for sale per 31.12.2021.
2020
“Burin Sea” and “Trinity Sea”, two of the Canadian vessels were sold in December 2019, with delivery
 
in 2020, and the disposal is
the capitalized sales cost for these two vessels.
 
 
 
 
 
 
 
 
 
 
 
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
86
Note 23
Other Gain/(Loss) on Sale of Assets
PARENT COMPANY
CONSOLIDATED
2021
2020
(Amounts in USD 1,000)
2021
2020
-
-
Gain/(loss) on sale of assets, net
997
655
-
-
Total
997
655
2021
The net gain for the Company on sale of assets of USD 0.997 million is from the sale of the AHTS
 
vessels "Siem Diamond " and
"Siem Garnet", and from the sale of the PSV "Siem Hanne".
2020
The net gain for the Company on sale of assets of USD 0.655 million is from the sale of the Canadian vessels
 
“Trinity Sea”, “Burin
Sea” and “Venture Sea”, and from the sale of two A-frames.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
87
SIEM
Offshore
 
Inc. Annual Report 2021
Note 24
Listing of the 20 Largest Shareholders
as of 31 December 2021
Shareholder
Number of shares
Owner interest
Siem Sustainable Energy S.à r.l.
80,260,604
33.60%
Støperigata Holding AS
77,743,160
32.55%
BNP Paribas Securities Services
13,776,384
5.77%
Citibank Europe PLC
10,892,058
4.56%
Caceis Bank
7,223,101
3.02%
MP Pensjon PK
6,178,623
2.59%
Banque Pictet & Cie SA
2,249,390
0.94%
Euroclear Bank S.A./N.V.
2,227,912
0.93%
Verdipapirfondet SR-Bank Kreditt
2,165,862
0.91%
Steinar Grønland
2,097,130
0.88%
Nordnet Livsforsikring AS
1,377,821
0.58%
Siem Foundation
1,065,475
0.45%
Stratos Investments LTD.
981,658
0.41%
Ace Crown International Limited
955,654
0.40%
Einar Kristian Tveitå
891,326
0.37%
Dag Kristian Vollstad
886,200
0.37%
State Street Bank and Trust Comp
795,764
0.33%
Tejø Invest AS
742,000
0.31%
Drøbak Invest AS
714,664
0.30%
Thorbjørn Hasselgård
612,833
0.26%
Total 20 largest shareholders
213,837,619
89.53%
Other shareholders
25,014,433
10.47%
Total number of outstanding shares
238,852,052
100.00%
Siem Sustainable Energy S.à r.l. is the main shareholder of Siem Offshore Inc and is controlled by Mr Kristian Siem,
 
who is the
Chairman of the Company and is also the Chairman of Siem Industries S.A., the ultimate parent company of
 
Siem Sustainable
Energy S.à r.l.
 
 
 
 
 
 
 
 
 
 
 
 
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Inc. Annual Report 2021
88
Note 25
Subsequent Events
February 2022:
•
Awarded a 6-month extension for the Canadian vessel
“Avalon Sea”, securing continued operations well into Q4
2022.
 
March 2022:
 
•
Announced a plan for a re-domiciliation of the company
whereby a new Norwegian holding company will be
established for the SIOFF group.
•
Awarded a 3-year agreement plus options for the Well
Intervention Vessels “Siem Helix 1” and a 5-year
agreement plus options for “Siem Helix 2”, securing
continued operations well into Q1 2025 and into Q1 2027
respectively.
 
•
Siem Offshore do Brasil has been notified of the final
unfavorable decision of a Brazilian court in a lawsuit filed
against Petrobras. The case is related to late delivery of
the vessel Siem Maragogi from yard back in 2015. A late
delivery penalty charge was imposed by Petrobras on
Siem Offshore do Brasil. The penalty charge has been
accrued for in previous years’ accounts and will not have
any impact on the Profit and Loss account for 2022. The
unfavorable decision of the court will have a negative
cash effect equivalent to USD 4.8 million
.
•
Awarded a contract for the OSCV “Siem Spearfish”,
securing continued utilization well into the second quarter
of 2022.
•
Awarded a contract for the AHTS “Siem Sapphire” for
contract in Taiwan, securing firm utilization well into the
third quarter of 2022, plus options.
•
The war in Ukraine have so far not had any material effect
on the operations of the Company.
 
The Company
observes indications of shortages of experienced crew
and escalation of crew costs due to shortages of
Ukrainian and Russian crew. Drilling campaigns in Russia
will probably go ahead without European tonnage thus
more vessel availability during the summer season.
Note 26
Gain/(Loss) on Currency Derivative Contracts
PARENT COMPANY
CONSOLIDATED
2021
2020
(Amounts in USD 1,000)
2021
2020
-
-
Unrealized gain/(loss)
-
12,039
-
14
Realized gain/(loss)
204
-14,009
-
14
Total
204
-1,970
Further details related to the currency derivative contracts are set out in Note 15.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
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Inc. Annual Report 2021
Note 27
Financial Instruments by Category
Below is a comparison by category for carrying amounts and fair values of all of the Company’s financial instruments.
31 Dec 2021
(Amounts in USD 1,000)
Financial assets at
 
amortized cost
Total
Assets as per statement of financial position
Accounts receivable
34,097
34,097
Other short term receivables
3,751
3,751
CIRR Loan deposits
36,763
36,763
Long term receivables
19,393
19,393
Cash and cash equivalents
91,839
91,839
Total
185,842
185,842
Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
USD 24.6 million. Also see Note 9.
31 Dec 2021
CONSOLIDATED
(Amounts in USD 1,000)
Other financial
liabilities
Total
Liabilities as per statement of financial position
Accounts payable
13,542
13,542
Borrowings
624,246
624,246
CIRR Loans
36,763
36,763
Other non-current liabilities
 
12,776
12,776
Other current liabilities
26,770
26,770
Other current provision
16,696
16,696
Adjustments for liabilities that do not qualify as a financial instrument (1)
-12,719
-12,719
Total
718,075
718,075
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded
 
liabilities
amount to USD 12,719 consisting of USD 421 in Tax liability, USD 1,014 in Pension Liability, USD 2,374 in Social
 
Security Payable,
USD 971 in Tax payable, USD 3,581 in Unearned Income and USD 4,360 in Accrued Interest.
 
See Note 13 for information about
Social Security Payable and Unearned Income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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31 Dec 2020
CONSOLIDATED
(Amounts in USD 1,000)
Financial assets
 
at amortized cost
Total
Assets as per statement of financial position
Accounts receivable
29,843
29,843
Other short term receivables
5,127
5,127
CIRR Loan deposits
45,946
45,946
Long term receivables
22,244
22,244
Cash and cash equivalents
103,225
103,225
Total
206,384
206,384
Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
USD 24,575, see Note 9.
31 Dec 2020
CONSOLIDATED
(Amounts in USD 1,000)
Liabilities at fair value
through the profit or loss
Other financial
liabilities
Total
Liabilities as per statement of financial position
Accounts payable
-
13,654
13,654
Borrowings
-
1,030,787
1,030,787
CIRR Loans
-
45,946
45,946
Other non-current liabilities
 
-
15,381
15,381
Other current provision
-
15,317
15,317
Other current liabilities
-
28,340
28,340
Adjustments for liabilities that do not qualify as a financial instrument (1)
-
-25,597
-25,597
Derivative financial instruments
20,662
-
20,662
Total
20,662
1,123,827
1,144,489
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded
 
liabilities
amount to USD 25,597 consisting of USD 965 in Taxes Payable, USD 1,100 in Pension Liability, USD 2,749 in Social
 
Security
Payable, USD 1,255 in Tax Liability, USD 3,394 in Unearned Income and USD 16,134 in Accrued Interest. See
 
Note 13 for
information about Social Security Payable and Unearned Income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes to the accounts
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31 Dec 2021
PARENT COMPANY
(Amounts in USD 1,000)
Financial assets
at amortized cost
Total
Assets as per statement of financial position
Trade and other instruments (1)
3
3
Cash and cash equivalents
33,362
33,362
Total
33,365
33,365
(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
USD zero. See Note 9.
31 Dec 2021
PARENT COMPANY
(Amounts in USD 1,000)
Other financial
liabilities
Total
Liabilities as per statement of financial position
Accounts payable
36
36
Adjustments for liabilities that do not qualify as a financial instrument (1)
-727
-727
Other current liabilities
1,965
1,965
Total
1,274
1,274
(1) Non-financial liabilities do not qualify as a financial instrument and are not included in above amount. Excluded
 
liabilities
amount to USD 727 consisting of USD466 in Accrued Interest and USD260 in provision.
31 Dec 2020
PARENT COMPANY
(Amounts in USD 1,000)
Financial assets
at amortized cost
Total
Assets as per statement of financial position
Trade and other instruments (1)
1,613
1,613
Cash and cash equivalents
51,777
51,777
Total
53,390
53,390
(1) Prepayments do not qualify as a financial instrument and are not included in above amount. Excluded prepayments
 
amount to
14. See Note 9.
31 Dec 2020
PARENT COMPANY
(Amounts in USD 1,000)
Liabilities at fair value
through the profit or loss
Other financial
liabilities
Total
Liabilities as per statement of financial position
Borrowings falling due after 1 year
-
86,425
86,425
Borrowings falling due within 12 months
-
43,664
43,664
Accounts payable
-
147
147
Derivatives
1,833
-
1,833
Other current liabilities
-
311
311
Total
1,833
130,547
132,380
 
 
 
 
 
 
 
 
 
 
 
 
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Offshore
 
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92
Note 28
Inventories
PARENT COMPANY
CONSOLIDATED
12/31/2021
12/31/2020
(Amounts in USD 1,000)
12/31/2021
12/31/2020
-
-
Fuel
2,041
1,854
-
-
Spareparts
2,483
2,830
-
-
Total inventories
4,524
4,684
 
Note 29
Share-based Payments
The Company has entered into two Share option agreements with selected key employees, at 13 January
 
2013 and 2 April 2014.
 
The exercise period shall in no event be later than the date falling 10 years after the award dates.
 
In 2020 and 2021, no cost was recognized under Retained earnings related to value of employee services, as
 
the vesting period
for these option programs ended in 2018 and 2019. In 2021 a reversal of employers contribution expenses
 
of USD 22k was
recognized in the income statement for share options granted to certain employees.
 
No options have been exercised since the start of the Option Agreement. The Company has no legal or
 
constructive obligation to
repurchase or settle the options in cash.
 
Since the share option programs were awarded, seven members of the option programs have left the Company.
 
As per 31
December 2021, 24,000 share options are outstanding at an average exercise price of NOK 855.
 
Options outstanding and
exercise price have been adjusted for the 100:1 reverse split in order to present comparable figures.
 
 
 
 
 
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Inc. Annual Report 2021
Environmental, Social and Governance (ESG)
Introduction
Siem Offshore’s vision is “To be the leading provider and the
most attractive employer within our business”.
To live up to our vision, we constantly strive to fulfil our
stakeholders’ expectations through actively promoting a
safety conscious working environment amongst our
employees. We shall care about our environmental footprint,
being committed to seeking solutions for how we can
contribute to its reduction. Lastly, we shall support personal
development regardless of gender and background. These
principles are at the core of our daily operations. Throughout
this report, we present the most important environmental,
social and governance performance parameters relevant for
our stakeholders.
The complete ESG report is available on
www.siemoffshore.com
Siem Offshore has worked actively with ESG initiatives for
several years. To better cooperate and coordinate the work
throughout the whole organization, an ESG Group was
established in October 2021. The Group consists of our
Finance Director, HR Director, Operations Manager, Business
Development Manager and HSEQ & Compliance Advisor. In
addition, in order to strengthen the team’s focus and priority, a
dedicated ESG Director is part of the organization from 1
March 2022. An important part of the group’s work is to raise
the awareness regarding sustainability to further promote this
matter throughout our daily operations.
Our Corporate Code of Business Conduct “The Siem
Way” was updated in 2021. It gives guidance on how to
behave when conducting our daily business activities related
to human rights, whistleblowing, fair and equal treatment,
conflict of interest, anti-bribery, anti-corruption, antitrust and
competition, trade restrictions, export controls, boycott
regulations and insider trading.
ENVIRONMENTAL
Emissions and Energy Reduction
Through our Health, Safety, Environment & Quality Policy, we
confirm that we strive to minimize the impact of our operations
to the environment and strive for zero spills. We report our
emissions to IMO DCS and are in compliance with MARPOL
Annex VI, reg. 14 and IMO Global Sulphur Cap 2020 by using
low Sulphur marine gas oil only.
In 2021 Siem Offshore set the following long-term
environmental goals:
•
 
To cut our greenhouse gas emissions by 50 percent
per unit by 2030 compared to 2008
•
 
Only order vessels with zero emission technology
from 2030
•
 
Climate neutral fleet from 2050
The company keep searching for solutions to reduce our
greenhouse gas emissions and carbon footprint. We need a
combination of solutions to reach our goals, and presently we
do not have the all the answers. Through internal KPIs,
Improvement plans and Ship Energy Efficiency plans, we
constantly monitor and find areas for improvement. We
actively search for ways to optimize the energy efficiency and
reduce our carbon footprint.
Shore power in port
Presently seven vessels have shore power system installed.
The initiative leads to zero greenhouse gas emissions/local
particle emissions. In addition, noise is considerably reduced
for the benefit of crew and the local community.
Hybrid battery power system
In July 2021, as the first vessel in our fleet, the PSV “Siem
Symphony” had hybrid battery power system installed. More
vessels will follow in 2022.
Regular hull cleaning
We will conduct regular vessel hull inspections and
subsequent cleaning if deemed necessary. An efficient tool to
control the biofouling risk and to optimize our vessels’ fuel
performance. This is another step in the right direction towards
 
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Inc. Annual Report 2021
94
reducing our environmental footprint. Intervals will be defined
in the vessel’s maintenance programs.
Use biogas (LBG) on PSV LNG
We have done the first tests of climate neutral bio-gas as fuel
on “Siem Symphony”, with excellent results. In cooperation a
client, preparations have been done for the use of LBG on
”Siem Pride”.
Yearly fuel oil (FO) campaign
Through our monitoring system we run yearly fuel oil
campaigns.
 
Reduced emissions are positive both for the
environment and our clients, and it seems to strengthen the
team spirit on board. This year’s campaign took place 1 June –
15 July, with the positive results.
Biodiversity and Marine Pollution
 
With vessels operating world-wide, biofouling management is
important.
 
We comply with the IMO International Convention
for the Control and Management of Ship’s Ballast Water and
Sediments, and all our vessels are equipped with an
International Ballast Water Management Certificate. We
conduct regular hull inspections on board our vessels and
perform hull cleaning when necessary. By having regularly
inspections and monitoring, we control the biofouling risk and
can optimize our fuel performance, which benefit both our
clients and the environment.
Ship recycling
When vessels are recycled, we ensure to comply with all
regulations in the Hong Kong International Convention, the
Basel Convention, EU Ship Recycling Regulations and EU
Waste Shipment Regulations.
The inventory of hazardous materials on Siem
Offshore’s fleet are compiled and maintained by support from
external partners. This assists Siem Offshore to show
continuous improvement for a long-term sustainability
regarding health, safety, and environmental objectives
throughout the value chain and life cycle of vessel.
No vessels were recycled in 2021. Two were
recycled in 2020.
Waste generated across the fleet
The company has worked actively to reduce the amount of
waste on board the vessels. Several initiatives have been
implemented. Our suppliers are also encouraged to seek
environmentally friendly solutions. Waste handling is strictly
regulated on board and handled according to MARPOL
regulations. We register high attention among crew members
and that the subject is often discussed on the vessels’ safety
meetings.
SOCIAL
Accidents, Safety and Labour Rights
Through our “Health, Safety, Environment and Quality Policy”
and “Personnel and Crew Management Policy”, we clearly
state our commitment to provide a safe workplace for all
employees. Health and safety for our employees are the top
priorities.
Safety work is a continuous job and affect all
employees, both on- and offshore. As described in our HSEQ
policy: “Everyone has the obligation to stop or delay activities
that may place him/her or others at risk of being injured, or
which could lead to harm to the environment or damage to the
equipment.”
Through regular safety meetings on board, all
employees play an active and important role to create a safe
working-place. Lessons learned circulars, sharing of
experience and safety campaigns are important tools in the
safety work and are distributed regularly throughout the fleet.
We have procedures in place for management of contractors
and prequalification of yards, to ensure that health and safety
issues are in compliance with our standard for employees
outside our organization.
To have well qualified and competent employees are
important factors to maintain a high standard and safe
operations on- and offshore. All vessels have their specific
training matrices to ensure that all requirements (regulatory,
client requested and internal) are met. A training matrix is also
developed for onshore personnel, and the company
emphasize personal development and encourage employees
to strengthen their competence. Furthermore, the
management team started a one-year leader development
program in 2021. The goal is to strengthen the management
team and develop their leadership abilities to the benefit of the
company and the employees.
We ensure that all our seafarers have good working
conditions according to international regulations, conventions
and industry standards. The various regulations cover
conditions of employment, medical care, social security
protection as well as standards for accommodation,
recreational facilities, food and catering on board. All vessels
operating in international waters comply with the Maritime
Labour Convention (MLC).
Some of our seafarers are directly employed. In
addition, the company cooperates with several crewing
agencies, which allow us to have competent personnel on all
our vessels worldwide. This includes local content, where
required. To ensure good quality and proper conditions for the
seafarers, all crewing agencies we cooperate with are certified
in accordance with the Maritime Labour Convention.
Evaluations and follow-up meetings with the crewing agencies
 
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are conducted regularly to keep a continuous focus and
maintain a good cooperation. As part of the company’s
external audit program, the crewing agencies are also audited
on a regularly basis.
Siem Offshore supports freedom of association and
the right of collective bargaining. Some of our regions have
regular meetings, where representatives from the various
trade unions and representatives from the management team
attend. Main topics are safety issues and a general brief from
the various departments and unions. The climate between the
unions and the company has always been fruitful and is based
on mutual respect.
In terms of security, Siem Offshore has a stand-alone
security policy, stating the commitment to provide a secure
working environment for all personnel.
 
The company is
organized and certified in accordance with the International
Ship and Port Facility Security Code (ISPS). All our ships are
issued with flag state approved security plans. When transiting
conditional- and high-risk areas, the vessels are prepared and
hardened in accordance with ‘Best Management Practice 5’
(BMP5) and ‘Best Management Practice West Africa’ (BMP
WA), in addition to measures recommended by insurance
companies and other stakeholders. Security measures related
to crew travels are laid down in the ‘Travel Journey
Management Plan’. All measures are based on up-to-date
information and assessments from reliable sources.
The covid-19 pandemic is still affecting the
company, and most of all, our seafarers. During 2021, the
company’s covid-19 task force continued their regular
meetings. The Covid Management Plan, first published 19
March 2020, is updated regularly, as new aspects are
discovered and dealt with. The attention is still high, to mitigate
the risk for our seafarers and maintain business operations.
Due to the pandemic, the planned Officer
Conference was cancelled in 2021. We hope to be able to
arrange the conference in 2022, as it is an important arena to
strengthen the cooperation between sea and shore. One of
the planned topics for next conference is mental health. Due to
the pandemic, the last two years have been challenging for our
personnel, and we need to pay attention to the longer-term
effects of this.
In line with our “Personnel and Crew Management
Policy” we continue our effort to give young people an
opportunity and recruit young seafarers to our fleet. Young
apprentices serve their sea time on board (mainly two years),
in order to receive their Certificate of Proficiency. Since 2010,
the company has given 79 young people a possibility to stay
on board as apprentices. In 2021, 9 apprentices served their
sea time on board our vessels.
Diversity
Gender equality is a focus area for the company. In 2021 we
completed a mapping of our employees, based on gender,
age, part time employment, salary and defined levels, both on-
and offshore. The data will be valuable input in the process to
define a strategy for gender equality and set short- and long-
term goals for work related to this.
GOVERNANCE
Business Ethics and ESG Governance
It is the policy of Siem Offshore to maintain the highest level of
ethical standard in the way we conduct our business. We fully
support the UN Global Compact Guiding Principles related to
human rights, labour, environment and anti-corruption. The
company has taken several actions to work towards a
transparent, ethical and corruption free business.
Our Corporate Code of Business Conduct “The Siem
Way” was updated in 2021. It gives guidance on how to
behave when conducting our daily business activities related
to human rights, whistleblowing, fair and equal treatment,
conflict of interest, anti-bribery, anti-corruption, antitrust and
competition, trade restrictions, export controls, boycott
regulations and insider trading.
Introduction to the Code of Business Conduct and
other relevant polices is part of the corporate Introduction
Program for new employees and is also applicable to partners
and suppliers. “The Siem Way” is available on our website:
www.siemoffshore.com
To highlight the importance of the subjects, Siem
Offshore has stand-alone policies related to HSEQ, security,
information & communication technology, anti-bribery,
modern anti-slavery, anti-money laundering, conflicts of
interest, competition compliance, dealing and sanctions.
A separate whistleblowing policy is in place, which aim is to
provide an internal mechanism for reporting, investigating and
remedying any wrongdoing in Siem Offshore. In 2021, 0
reports were received.
Several procedures ensure that our suppliers and
major contractors fulfil our requirements described in our
Code of Business Conduct. To strengthen our supply chain
management, the company entered into an agreement with
the procurement organization Incentra in 2021. Incentra is
owned by Norwegian shipowners and ship managers. The
goal is to establish and manage long term framework
agreements with quality suppliers. Incentra performs
prequalification and audits of all suppliers, to secure that the
quality standards are met.
The company keeps high attention towards third
parties. To ensure that our business partners meet all our
expectations and operate within the law, a dedicated
compliance advisor conduct risk based due diligence before
new contracts are agreed. The online system Dun & Bradstreet
is used to access information about a company’s credit risk, as
 
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96
well as the corporate hierarchy. Refinitiv World Check One is
used for due diligence in order to screen counterparts
regarding sanctions and other penalties.
Siem Offshore has a zero tolerance for bribery and
corruption. To maintain a continuous focus, yearly mandatory
anti-bribery training is implemented for all seafarers. All
onshore staff complete mandatory bribery prevention and
economic sanctions courses yearly.
 
Cyber security is without doubt an area which needs
high attention. In 2021, a Cyber Security Plan was established
and awareness training for on- and offshore shore staff was
rolled out. During the year we have had several cyber-attack
attempts, but through good routines, plans and procedures,
we have managed to stop them all. Through “Lesson Learned”
circulars, the organization are made aware of the challenges
and given tools to mitigate the risk for future attempts.
OUTLOOK
Most importantly, we will continue to maintain and promote
our strong safety culture, as the safety of our personnel is of
utmost importance.
In 2022 we will install hybrid battery power packages
on the platform supply vessels ”Siem Pride”, ”Siem Thiima”
and on our offshore construction vessel ”Siem Stingray”.
Further, we will consider to install same on the platform supply
vessel ”Siem Giant”.
We will continue to evaluate future alternative energy sources
for our vessels, such as hydrogen-based fuels, and the
applicability of the various alternatives from technical and
environmental perspectives.
Through digitalized solutions, we will continue to
improve vessel monitoring and environmental performance,
allowing for increased efficiency and reduced emissions.
We will continue to conduct annual anti-bribery
training for all seafarers and shore personnel, to keep the focus
and awareness on alert. In addition, we will arrange a tailor-
made online training for all employees, sea and shore, on our
updated Code of Business Conduct, “The Siem Way”.
We are committed to support diversity and gender
equality in line with our principles.
In 2022 the ESG work will mature, and a long-term
strategy will be defined. Siem Offshore will maintain its focus
on continuous development.
 
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Responsibility Statement
We confirm, to the best of our knowledge that the financial
statements for the period 1 January to 31 December 2021 have
been prepared in accordance with current applicable
accounting standards, and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
entity and the group taken as a whole. We also confirm that the
Board of Directors’ Report includes a true and fair review of the
development and performance of the business and the
position of the entity and the group, together with a
description of the principal risks and uncertainties facing the
entity and the group.
21 April 2022
Kristian Siem
 
Chairman
(Sign.)
Barry W. Ridings
Director
(Sign.)
 
Alexander Monnas
 
Director
(Sign.)
Kenneth Ross
 
Director
(Sign.)
 
Peter Ditlef Knudsen
Director
(Sign.)
Bernt Omdal
Chief Executive Officer
(Sign.)
 
 
 
 
 
 
 
 
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B
oard of Directors
The Company has a Board of five Directors. Members of the
Company’s management are not members of the Board,
 
but the
Company’s management does attend Board meetings.
Kristian Siem (born 1949), Chairman
 
Mr. Siem brings an extensive knowledge of the offshore oil and
gas service industry worldwide from previous senior executive
and non-executive roles combined with long-standing
experience as chairman of public companies listed in the USA,
UK and Norway. Mr. Siem is the founder of the Siem Industries
Group and has been Director and Chairman of Siem Industries
since 1982. He is also Chairman of Subsea 7 S.A. Mr. Siem has
held positions at Kvaerner ASA as CEO and director,
Transocean Inc. as Chairman and director and Norwegian
Cruise Line as Chairman. He holds a degree in Business
Economics. Mr. Siem is a Norwegian citizen.
Barry W. Ridings (born 1953), Board Member
Mr. Ridings is a Senior Advisor at Lazard Frères & Co. LLC.
Previously, he was Vice Chairman of US Investment Banking
and Co-Head of its Restructuring advisory practice. He is also
a Board Member of Siem Industries S.A., iStar Financial (a US
based REIT) and Republic Airlines (a region airline and code
share partner of United, American and Delta). He was formerly
a member of the Board of Directors of the American Stock
Exchange and a member of the NASDAQ Listing and Hearing
Review Council. Mr. Ridings has a M.B.A. in Finance from
Cornell University and a B.A. in Religion from Colgate
University. Mr. Ridings is a US citizen.
Alexander Monnas (born 1951), Board Member
Mr. Monnas is a non-executive advisor to Daiwa Capital
Markets Europe Ltd. Mr. Monnas is also an advisor on
investment and financial matters in Geneva, and on the board
of a private trust company. Mr. Monnas has spent over 40
years in the commercial and investment banking industries,
specializing in financial markets. He was CEO of Daiwa
Securities’ European operations from 1994 to 2001, and was a
board member of Veripos Inc. from 2012 to 2014. He has a
degree in Chemistry. Mr. Monnas is a British citizen.
Kenneth Ross (born 1968), Board Member
Mr. Ross is the COO and Head of shipping in the Siem Group,
holding the overall responsibility for ship owning and
operational activity including commercial, technical and crew
management, and development of solar renewables
investmentsship. He is the CEO of Siem Shipowning Inc and
Siem Car Carriers AS. Mr. Ross is the Chairman of BSR Group
Holdings and of Seven Yield Pte Ltd. He has a BA from
Strathclyde Business School, Glasgow. Mr. Ross
 
has been a
Director since 29 October 2021. Mr. Ross is a UK citizen.
 
Peter Ditlef Knudsen (born 1957), Board Member
Mr. Knudsen is founding partner and CEO of NorthCape AS
(2012). Mr. Knudsen previously worked as CEO of Oslo listed
Camillo Eitzen & Co. ASA, prior to this, he was employed by
Nordea Bank (Shipping Offshore and Oil Services) for 15 years,
and his last position was as General Manager, Nordea
Singapore Branch. Mr. Knudsen is presently a Board member
of Oslo listed Paretobank ASA, American Shipping Co. ASA
and deputy Chairman of AS Uglands Rederi. Until 2016 Mr.
Knudsen was also the Chairman of OSV owner Rem Offshore
ASA. He holds an MBA from Arizona State University.
Mr. Knudsen has been a Director since 29 October 2021.
 
Mr. Knudsen is a Norwegian citizen.
 
 
 
 
 
 
105
SIEM
Offshore
 
Inc. Annual Report 2021
Financial Calendar 2022
Siem Offshore Inc. will release financial figures on the following dates in 2022:
Q1 2022
Tuesday 31 May
Q2 2022
Thursday 25 August
Q3 2022
Friday 28 October
The Annual General Meeting of the Company will be held on Friday 20 May 2022.
 
 
SIEM
Offshore
 
Inc. Annual Report 2021
106
Alternative Performance Measurement (APM) and other
definitions
The Company has identified APMs that are consistently
applied for the reporting periods. The APMs are
supplementary to the Financial Statements that are disclosed
in compliance with IFRS. The APMs are disclosed to give a
broader understanding of the operations and associated risk
of the Company.
Operating margin
- Operating margin is the net of operating
revenue and operating expenses. For 2021 operating
revenues USD254,493 less operating expenses at
USD153,909 equals operating margin at USD100,585. The
Company considers the operating margin to be a key number
when analyzing the fleets operating performance and the
margin that can be applied to the finance of capital
expenditures, debt service and other cash disbursements.
 
Operating margin percentage
 
– Operating Margin, % is the
nominal operating margin calculated as a percentage of
operating revenue. For 2021 the operating margin at
USD100,585 equals 40% of the operating revenue at
USD254,493. The operating margin percentage is used to
compare, period by period, the development in relative margin
from operations. The operating margin, % is also used for
comparing segments’ relative performance.
OTHER DEFINTIONS:
Contract backlog
 
- the total, nominal value of future revenues
from firm contracts, excluding optional periods. The contract
backlog is categorized per year, and reflects coming years’
operating revenues that are considered firm following
contracts agreed with clients.
Utilization
 
– vessels’ effective time on hire relative to total time
available in the reporting period, excluding vessels in lay-up.
The relative utilization is reflecting the time that a vessel or the
fleet has been on hire with clients. Zero utilization is reported
when a vessel is off-hire caused by technical issues or when
idle, awaiting employment.
Capital expenditure
– gross capital expenditure related to
tangible assets at acquisitions, upgrades, class renewals (Dry-
docking) and major periodic maintenance.
Earnings per share
- Result attributable to the shareholders
divided by weighted average number of shares.
Comprehensive income per share
- Comprehensive income
for the period for the Group divided by weighted average
number of shares at the end of the reporting period.
Interest-bearing debt
- Current and long-term interest-
bearing debt.
Net interest-bearing debt
- Interest-bearing debt less cash
and cash equivalents.
 
 
sioff-2021-12-31p108i1 sioff-2021-12-31p108i0
107
SIEM
Offshore
 
Inc. Annual Report 2021
Siem Offshore Inc
c/o Siem Offshore AS
Nodeviga 14
4610 Kristiansand
Norway
 
POSTAL ADDRESS
P.O. Box 425
N-4664 Kristiansand S, Norway
TELEPHONE
+47 38 60 04 00
E-MAIL
info@siemoffshore.com
 
www.siemoffshore.com
@siemoffshore
Mandatory ESEF concepts:
Name of reporting entity:
Siem Offshore Inc.
Domicile of entity:
Cayman Islands
Legal form of entity:
Inc.
Country of incorporation:
Cayman Islands
Address of entity's registered office:
P.O. Box 425, N-4664 Kristiansand S, Norway
Principal place of business:
Norway
Description of nature of entity's operations and principal activities:
Siem Offshore Inc is an industrial investment company within
the marine sector of the oil service business.
Name of parent entity:
Siem Offshore Inc.
Name of ultimate parent of group:
Siem Offshore Inc.