Solstad Offshore ASA — M&A Activity 2017

Mar 24, 2017

FUSJONSPLAN

for fusjon mellom

DEEP SEA SUPPLY PLC

(som overdragende selskap)

og

SOLSHIP SUB AS

(som overtakende selskap)

Denne fusjonsplan ("Fusjonsplanen") gjelder grenseoverskridende fusjon som i det følgende er omtalt som "DESSC Fusjon 1". Fusjonsplanen er inngått 24.mars2017 av styrene i:

• (1) DEEP SEA SUPPLY PLC, selskap med begrenset ansvar registrert under kypriotisk lov med forretningsadresse i John Kennedy, lris House, Floor 7, F\at7408,3106 Limassol, Kypros, registreringsnummer 186838 i Registrar of Companies, Kypros ("DESSC"), som det overdragende selskap i DESSC Fusjon l, and
• (21 SOLSHIP SUB AS, et selskap med begrenset ansvar registrert under norsk lov med forretningsadresse i Nesavegen 39, 4280 Skudeneshavn, Karmøy kommune, Norge, organisasjonsnummer 918 665 900 i Foretaksregisteret, Norge ("Solship Sub"), som det overtakende selskap i DESSC Fusjon I,

heretter individuelt omtalt som en "Part" og i fellesskap som "Partene".

MERGER PLAN (draft terms of merger)

for the merger between

DEEP SEA SUPPLY PLC

(as the transferring company)

and

SOLSHIP SUB AS (as the surviving company)

This merger plan/draft terms of merger (the "Merger plan") applies to the cross-border merger that in the following is referred to as "DESSC Merger 1". The Merger Plan is entered into on 24 March 2017 by the boards of directors of:

• (1) DEEP SEA SUPPLY PLG, a public limited company registered under the laws of Cyprus with registered address in John Kennedy, lris House, Floor 7, Flat 7408, 3106 Limassol, Cyprus, business registration number 186838 in the Registrar of Companies, Cyprus ('DESSC'), as the transferring company in the DESSC Merger l, and
• (21 SOLSHIP SUB AS, a private limited company registered under the laws of Norway with registered address in Nesavegen 39, 4280 Skudeneshavn, Karmøy municipality, Nonruay, business registration number 918 665 900 in the Register of Business Enterprises, Nonrvay ("Solship Sub"), as the surviving company in the DESSC Merger l,

hereinafter individually referred to as a "Party'' and jointly referred to as the "Parties".

1 KORT OM FUSJONEN OG BEGRUNNELSEN FOR DEN

1.1 Bakgrunn

DESSC eier og drifter en flåte bestående av 37 skip som yter tjenester innen ulike deler av offshorevirksomheten. Flåten er fordelt mellom 25 plattformsupply-skip ( PSV) og I 2 ankerhåndteringsskip (AHTS). DESSC er notert på Oslo Børs under ticker "DESSC'. DESSC-konsernet har i dag færre enn 500 ansatte på sjø og land. I tillegg har DESSC gjennom sitt 50 % eide datterselskap DESS Aquaculture Shipping AS bestilt 2brønnbàter og 1 slaktebåt som skal benyttes in nen fiskeoppdrettsnæringen. DESS Aquaculture Shipping AS eies 50/50 av DESSC og Marine Harvest ASA.

Solship Sub er et nystiftet heleiet datterselskap av Solship lnvest 3 AS ("Solship lnvest 3"), som igjen er et nystiftet heleiet datterselskap av Solstad Offshore ASA ('SOFF"). SOFF opererer innenfor samme virksomhetsområde som DESSC, og eier og drifter 26 CSV-er (inkl 1 Denick Lay Barge (DLB)), 16 AHTS-er og 19 PSV-er. SOFF er notert på Oslo Børs under ticker "SOFF". SOFF-konsernet har i dag ca. 1500 sysselsatte på sjø og land.

I de siste to årene har markedet for offshoreserviceskip svekket seg vesentlig som følge av fallet i oljeprisen. Forventningene til aktivitetsnivået i næringen i de kommende år er preget av stor usikkerhet. Spesielt er lete- og utbyggingsaktiviteten i olje- og gassektoren vesentlig redusert. Særlig markedet for PSV-er og AHTS-er preges av overkapasitet. Partenes virksomhet er sterkt påvirket av det svekkede markedet og den markedsusikkerheten som råder.

SOFF gjennomførte i 2016 en større kapitalutvidelse (aksjekapital og konvertibelt lån) og en omfattende refinansiering som har bidratt til at selskapet har fått

BACKGROUND AND RATIONALE FOR THE MERGER

1.1 Background

DESSC owns and operates a fleet of 37 vessels providing services in various parts of the offshore industry. The fleet consists of 25 platform supply vessels (PSV) and 12 anchor handling tug supply vessels (AHTS). DESSC is listed on Oslo Stock Exchange under the ticker "DESSC". The DESSC group currently has less than 500 employees both offshore and onshore. ln addition, DESSC has through its 50% owned subsidiary DESS Aquacuture Shipping AS ordered two fish carries and one harvest vessel to be used within the fish farming industry. DESS Aquaculture Shipping AS is owned 50/50 by DESSC and Marine Harvest ASA.

Solship Sub is a recently incorporated wholly owned subsidiary of Solship lnvest 3 AS ("Solship Invest 3"), which again is a recently incorporated wholly owned subsidiary of Solstad Offshore ASA ('SOFF"). SOFF operates in the same business area as DESSC and owns and operates 26 CSVs (incl. 1 Derrick Lay Barge (DLB)), 16 AHTSs and 19 PSVs. SOFF is listed on Oslo Stock Exchange under the ticker "SOFF". The SOFF group currently has approx. 1,500 employees both offshore and onshore.

During the last two years, the conditions in the market for offshore service vessels have deteriorated due to the fallin oil prices. The expectations of the levelof activity in the industry in the near future are characterised by great uncertainty. The exploration and developing activity in the oil and gas industry specifically has been significantly reduced. ln particular, the market for PSVs and AHTSs has experienced a surplus in capacity. The Parties' operations have been severely affected by the downturn and uncertainty in the market.

ln 2016, SOFF carried out a large capital increase (share capital and convertible loans) as well as an extensive refinancing that has strengthened the

styrket sin balanse og likviditet. I etterkant av denne refinansieringen gjennomførte SOFF en fusjon med Rem Offshore ASA. Gjennom en såkalt trekantfusjon ble Rem Offshore ASA innfusjonert i SOFF sitt heleide datterselskap Solship lnvest 1 AS og aksjeeierne i Rem Offshore ASA mottok vederlagsaksjer i SOFF. I forbindelse med gjennomføringen av fusjonen ble det også opprettet en egen aksjeklasse i SOFF, B-aksjer, med begrenset stemmereft. B-aksjene ble notert på Oslo Børs i desember 2016.

DESSC gjennomførte i september 2016 enkelte endringer i sine låneavtaler, herunder endringer i finansielle covenants og nedbetalingsplan. Disse endringene er p.t. gyldige frem til 31. mars 2018. DESSC arbeider imidlertid med refinansiering av de fleste av sine låneavtaler som blant annet innebærer utsatt forfallstid og reduksjon i nedbetalingsplaner.

Farstad Shipping ASA ("FAR"), Aker Capital AS ("Aker"), Hemen Holding Limited ("Hemen"), FARs største långivere ("Långiverne"), en vesentlig del av FARs obligasjonseiere ("Obligasjonse¡erne"), samt F-Shiplease AS, signerte den 5. februar 2017 en omfattende og fullt ut finansiert restruktureringsavtale ("Restruktureringsavtalen") av FAR og flere av dets datterselskaper ("FAR Restruktureringen"). FAR Restruktureringen ble gjennomført den 9. mars 2017. Aker, Hemen, Långiverne og Obligasjonseieme, samt SOFF lnvest AS, lvan ll AS (i fellesskap "Solstad Familien"), Tyrholm & Farstad AS, Tyrholm & Farstad lnvest AS, Sverre A. Farstad og Jan H. Farstad (i fellesskap "Farstad Familien"), avtalte også å arbeide for en fusjon mellom SOFF, FAR og DESSC efter gjennomføringen av FAR Restruktureringen ("Sammenslåingen").

Styrene ¡ SOFF, FAR og DESSC er av den oppfatning at det er nødvendig å gjennomføre en konsolidering i bransjen. I etterkant av inngåelsen av Restruktureringsavtalen har sÇrene i de nevnte selskaper derfor diskutert mulighetene for en fusjon

company's balance sheet and liquidity. Following this refinancing, SOFF carried out a merger with Rem Offshore ASA. Through what is known as a triangular merger, Rem Offshore ASA was merged into SOFF's wholly owned subsidiary Solship lnvest 1 AS and the shareholders of Rem Offshore ASA received consideration shares in SOFF. ln connection with the completion of the merger, class B shares with limited voting rights were established in SOFF. The class B shares were listed on Oslo Stock Exchange in December 2016.

During September2016, DESSC made some alterations to its loan agreements, including financial covenants and downpayment schedules. These alterations are at present valid through 31 March 2018. However, DESSC is working on refinancing most of its loan agreements, which, among other things, involves an extension of maturity dates and reduced amortisation.

On 5 February 2017, Farstad Shipping ASA (.FAR"), Aker Capital AS ("Aker"), Hemen Holding Limited ("Hemen"), FAR's biggest lenders (the "Lenders"), a material part of FAR's bondholders (the "Bondholders"), as well as F-Shiplease AS, signed an extensive and fully financed restructuring agreement (the "Restructuring Agreement") for FAR and several of its subsidiary companies (the "FAR Restructuring"). The FAR Restructuring was completed on 9 March 2017. Aker, Hemen, the Lenders and the Bondholders as well as SOFF lnvest AS and lvan ll AS (jointly refened to as the "Solstad Family'') and Tyrholm & Farstad AS, Tyrholm & Farstad lnvest AS, Sverre A. Farstad and Jan H Farstad (jointly referred to as the "Farstad Family") also agreed to work to achieve a merger between SOFF, FAR and DESSC after the completion of the FAR Restructuring (the "Combination").

The boards of directors of SOFF, FAR and DESSC are of the opinion that a consolidation of the industry is required. After entering into the Restructuring Agreement, the boards of directors of the abovementioned companies have discussed the possibilities

mellom de tre selskapene og kommet til at en slik fusjon vil være fordelaktig for alle selskapene.

Gjennom Sammenslåingen vil man etablere et verdensledende OSV selskap, med en samlet flåte på 154 skip. Det fusjonerte konsernet vil operere en flåte bestående av 33 CSV, 66 PSV og 55 AHTS skip.

Formelt sett vil Sammenslåingen skje gjennom tre ulike fusjoner som er innbyrdes avhengig av hverandre:

• En grenseoverskridende (europeisk) fusjon mellom DESSC og Solship Sub, et heleiet datterselskap av Solship lnvest 3 ("DESSC Fusjon l"),
• 1. En umiddelbart etterfølgende trekantfusjon mellom Solship Sub og Solship lnvest 3 (et heleiet datterselskap av SOFF) med oppgjør i aksjer i SOFF ('DESSG Fusjon ll') (DESSC Fusjon I og DESSC Fusjon ll er til sammen benevnt "Deep Sea Supply Fusjonen"), og
• 1. En fusjon mellom FAR og Solship lnvest 2 AS med oppgjør i aksjer i SOFF ("Farstad Fusjonen").

Deep Sea Supply Fusjonen er regulert gjennom denne Fusjonsplanen og en egen fusjonsplan for DESSC Fusjon ll mellom Solship Sub, Solship lnvest 3 og SOFF, mens Farstad Fusjonen reguleres i en egen fusjonsplan mellom de involverte selskapene i Farstad Fusjonen. De ovennevnte fusjonene vil være gjensidig avhengig av hverandre slik at DESSC Fusjon I og DESSC Fusjon ll kun gjennomføres dersom Farstad Fusjonen gjennomføres parallelt.

Partene mener at Sammenslåingen vil bidra til positiv industriell løsning som vil være en styrke i forhold til om selskapene hver for seg skulle klare seg gjennom den svake perioden man nå opplever innen markedet for offshoreservice-skip. Det sammenslåtte konsernet vil fremstå som en betydelig sterkere enhet og være i en

of a merger of the three companies and have concluded that such a merger will be advantageous for all the companies.

The Combination will result in the establishment of a world-leading OSV company, with a fleet of a total of 154 vessels. The merged group will operate a fleet consisting of 33 CSV, 66 PSV and 55 AHTS vessels.

Formally, the Combination will be completed through three separate mergers that are mutually dependent on each other:

• 1. A cross-border (European) merger between DESSC and Solship Sub, a wholly owned subsidiary of Solship lnvest 3 ('DESSC Merger ¡"),
• 2 An immediately subsequent triangular merger of Solship Sub and Solship lnvest 3 (a wholly owned subsidiary of SOFF) with settlement in shares in SOFF ("DESSC Merger ll")(DESSC Merger I and DESSC Merger ll are jointly referred to as the "Deep Sea Supply Merger"), and
• 1. A merger of FAR and Solship lnvest 2 AS with settlement in SOFF shares (the "Farstad Merger").

The Deep Sea Supply Merger is governed by this Merger Plan and a separate merger plan for the DESSC Merger ll between Solship Sub, Solship lnvest 3 and SOFF, while the Farstad Merger is governed by a separate merger plan between the companies involved in the Farstad Merger. The above-mentioned mergers will be mutually dependent on each other, so that the DESSC Merger I and the DESSC Merger ll may only be carried out if the Farstad Merger is carried out in parallel.

The Parties are of the opinion that the Combination will contribute to a positive industrial solution, which will constitute a strength for the companies through the weak period for the offshore service vessel industry. The merged group will be a significantly stronger unit and will thus be well positioned to take advantage of

god posisjon til å kunne utnytte den fremtidige oppgangen i markedet som partene har tro på at vil komme. Sammenslåingen anses å være en god løsning for å sikre så vel kreditorer som aksjeeiernes verdier.

Styrene i DESSC og Solship Sub har på denne bakgrunn i fellesskap utarbeidet denne Fusjonsplanen for DESSC Fusjon l.

DESSC garanterer overfor Solship Sub at DESSC på tidspunktet for inngåelse av denne Fusjonsplanen har oppñ7lt sin informasjonsplikt til markedet etter gjeldende lover og regler, herunder Oslo Børs løpende forpliktelser, og at det med eventuelt unntak av upublisert finansiell informasjon som SOFF og FAR har fått innsyn i, ikke foreligger innsideinformasjon i DESSC på tidspunktet for inngåelse av denne Fusjonsplanen.

1.2 Nærmere om DESSC Fusjon I

Ved DESSC Fusjon I overføres DESSCS eiendeler, rettigheter og forpliktelser som helhet til Solship Sub. Aksjeeierne mottar som fusjonsvederlag 1 aksje i Solship Sub for hver aksje de eier i DESSC. Aksjene som utstedes vil ha fulle aksjonænettigheter, herunder stemmerett, rett til utbytte og andre rettigheter som kan utledes av aksjene. I forkant av DESSC Fusjon I legges det opp til at det gjennomføres en nedsettelse av aksjekapitalen i Solship Sub fra NOK 30 000 med NOK 30 000 t¡l NOK 0 ved tilbakebetaling til aksjeeier i Solship Sub, jf. aksjeloven S 12-1 (1) nr. 2. Kapitalnedseftelsen vil være betinget av beslutning og gjennomføring av DESSC Fusjon l.

Bytteforholdet i DESSC Fusjon I er fastsatt basert på at Solship Sub iforkant av DESSC Fusjon I vil være et tomt selskap som følge av kapitalnedsettelsen som gjennomføres umiddelbart forut for DESSC Fusjon l. Basert på virkelige verdier av DESSC og Solship Sub vil bytteforholdet derfor være 1 Solship Sub-aksje pr DESSC-aksje (bytteforhold 111). Av denne grunn vil

the market recovery that the parties believe will come. The Combination is considered to be a good solution in order to secure values for the creditors as well as the shareholders.

The boards of directors of DESSC and Solship Sub have on this basis jointly prepared this Merger Plan for the DESSC Merger L

DESSC guarantees to Solship Sub that DESSC, at the time of entering into this Merger Plan, has fulfilled its information obligation to the market pursuant to applicable laws and regulations, including the continued obligations of Oslo Stock Exchange, and that, with the exception of any unpublished financial information disclosed to SOFF and FAR (if relevant), there is no inside information in DESSC at the time of entering into this Merger Plan.

1.2 Further details about the DESSC Merger I

Through the DESSC Merger l, allthe assets, rights and obligations of DESSC will be transferred in whole to Solship Sub. As consideration for the merger, the shareholders will receive 1 share in Solship Sub for every share they hold in DESSC. The shares to be issued will carry full shareholder rights, including voting rights, right to dividend and other rights linked to the shares. Prior to the DESSC Merger l, a reduction of the share capital of Solship Sub from NOK 30,000 by NOK 30,000 to NOK 0 will be completed by repayment to the shareholder of Solship Sub, cf. Section 12-1 (1) no 2 of the Norwegian Private Limited Liability Companies Act (the "LLCA'). The capital reduction will be conditional on the resolution and completion of the DESSC Merger l.

The exchange ratio for the DESSC Merger I is based on the fact that Solship Sub, prior to the DESSC Merger l, will be a shell company due to the capital reduction completed immediately prior to the DESSC Merger l. Based on the actual value of DESSC and Solship Sub, the exchange ratio will therefore be 1 Solship Sub share per DESSC share (exchange ratio

man ved bytteforholdet i DESSC Fusjon ll (se nedenfor) kunne ta utgangspunkt i kurs per aksje i DESSC selv om disse aksjene ved DESSC Fusjon I vil ombyttes med aksjer i Solship Sub. Verdsettelsen av DESSC' eiendeler og forpliktelser er basert på historisk aksjekurs (børsverdi) sett sammen med behovet for DESSC til å reforhandle lånebetingelsene med bankene og å blitilført ny egenkapital samt forhandlinger mellom partene som deltar i Sammenslåingen.

1.3 Nærmere om DESSG Fusjon ll

Ved DESSC Fusjon ll overføres Solship Subs eiendeler, rettigheter og forpliktelser som helhet til Solship lnvest 3. Aksjeeieme i Solship Sub mottar som fusjonsvederlag 0,1052631 aksjer i SOFF for hver aksje de eier i Solship Sub. Vederlagsaksjene i SOFF vil skaffes til veie gjennom en kapitalforhøyelse i SOFF Kapitalforhøyelsen i SOFF gjennomføres ved at Solship lnvest 3 som kompensasjon for vederlagsaksjene utsteder en fordring direkte til SOFF samtidig som gjennomføringen av DESSC Fusjon ll registreres, jf. allmennaksjeloven $ 13-2 (2) annen setning. Pålydende på fusjonsfordri ngen vi I ti lsvare verd ien av fusjonsvederlaget.

For aksjeeieme i Solship Sub (som er tidligere aksjeeiere i DESSC) innebærer DESSC Fusjon ll at de får oppgjør i en aksje notert på Oslo Børs. Bytteforholdet mellom selskapene er basert på virkelige verdier og er avtalt til en kurs per aksje i SOFF på NOK 12,50 og en kurs per aksje i Solship Sub på NOK 1,31 57 8947 368421 (1,31 57 8947 368421 :12,50), dvs. at bytteforholdet skal være 0,1052631 SOFF-aksje pr Solship Sub-aksje. I forbindelse med DESSC Fusjon ll vil det i tillegg tíl utstedelse av til sammen 30 666 339 vederlagsaksjer i SOFF til aksjonærene i Solship Sub bli gjennomført en rettet emisjon i SOFF mot Hemen stor NOK 200 millioner ("Hemen Emisjonen") med en tegningskurs på NOK 12,50 per SOFF aksje. Dette er

1:1). For this reason, the exchange ratio for the DESSC Merger ll (cf. below) can be based on the price of each share in DESSC even though these shares will be exchanged for shares in Solship Sub in connection with the DESSC Merger l. The valuation of DESSC's assets and obligations is based on the historical share price (shareholder value) in combination with DESSC's need to renegotiate the loan terms with the banks and the need for issuing new equity as well as negotiations between the parties that participate in the Combination.

1.3 Further details about the DESSC Merger ll

Through the DESSC Merger ll, allthe assets, rights and obligations of Solship Sub will be transferred in whole to Solship lnvest 3. As consideration for the merger, the shareholders of Solship Sub will receive 0.1052631 shares in SOFF for every share they hold in Solship Sub. These consideration shares will be made available through a share issue in SOFF. To compensate for the issue of these shares, Solship lnvest 3 will issue a receivable directly to SOFF at the time of registration of the completion of the DESSC Merger ll, cf. the Nonregian Public Limited Liability Companies Act (the "PLLCA") Section 13-2 (2) second sentence. The nominal value of the receivable under the merger will correspond to the value of the merger consideration.

For the shareholders of Solship Sub (who before were shareholders of DESSC), the DESSC Merger ll will entail that the shareholders receive settlement in a share listed on Oslo Stock Exchange. The exchange ratio between the companies is based on actual values and is agreed at a price per share in SOFF of NOK 12.50 and a price per share in Solship Sub of NOK 1.31 57 8947368421 (1 .31 578947368421 :12.50), i.e. the exchange ratio is 0.1052631 SOFF shares per Solship Sub share. ln connection with the DESSC Merger ll and the issuing of a total of 30,666,339 consideration shares in SOFF to the shareholders of Solship Sub, a NOK 200 milion private placement of new shares in SOFF will be issued to Hemen (the

en emisjon som skulle vært gjennomført i DESSC som en del av restruktureringen av DESSC i forkant av Sammenslåingen. Av praktiske grunner vil imidlertid denne bli gjennomført direkte i SOFF i forbindelse med gjennomføringen av Deep Sea Supply Fusjonen. Provenyet som SOFF mottar i forbindelse med denne emisjonen vil i sin helhet bli benyttet til å styrke egenkapitalen i Solship lnvest 3 som fusjoneres med Solship Sub i DESSC Fusjon ll etter at Solship Sub har fusjonert med DESSC i DESSC Fusjon l. Det vil ikke bli gjennomført noen reparasjonsemisjon i SOFF ¡ etterkant av Hemen Emisjonen.

Bytteforholdet i DESSC Fusjon ll er fastsatt basert på forhandlinger mellom uavhengige parter. Ved fastsettelsen av kurs per aksje i SOFF er det tatt utgangspunkt i den tegningskurs som ble benyttet i forbindelse med kapitalutvidelsen iSOFF i2016, NOK 12,50 per aksje. Den samme kursen ble benyttet for vederlagsaksjene som ble utstedt i SOFF i forbindelse med fusjonen mellom Rem Offshore ASA og datterselskap av SOFF, gjennomført i desember 2016 og andre relaterte emisjoner på samme tidspunkt. Videre vil denne kursen bli benyttet når Aker i forbindelse med Sammenslåingen gjør opp sitt konvertible lån stort NOK 250 mill i SOFF gjennom konvertering eller utøvelse av tilhørende frittstående tegningsretter. Hemen Emisjonen iSOFF vilogså bli gjennomført på samme tegningskurs.

Ved fastseftelsen av kurs per aksje i Solship Sub har man tatt utgangspunkt i verdiene og dermed kursen på DESSC i forkant av DESSC Fusjon l. For DESSC har man ved fastsettelse av verdien i forkant av DESSC Fusjon I lagt til grunn en kurs på NOK

1,31578947368421 per aksje basert på avtale mellom partene som medvirker til Deep Sea Supply Fusjonen og Farstad Fusjonen, slik at det reelle bytteforholdet i Deep Sea Supply Fusjonen er

1,31 57 89 47 368421 :1 2,50, jf . ovenfo r. Ku rsen e r fremforhandlet av uavhengige parter, og er av den grunn et uttrykk for aksjenes markedsverdi. Styret i

"Hemen Share lssue"), with a subscription price of NOK 12.50 per SOFF share. This share issue should have been carried out in DESSC as part of the restructuring of DESSC prior to the Combination. For practical purposes, the issue will be made directly in SOFF in connection with completion of the Deep Sea Supply Merger. The proceeds that SOFF will receive from this share issue will in their entirety be used to strengthen the equity of Solship lnvest 3, which will be merged with Solship Sub in the DESSC Merger ll after Solship Sub has been merged with DESSC in the DESSC Merger l. No repair issue in SOFF will be carried out following the Hemen Share lssue.

The exchange ratio for the DESSC Merger ll is based on negotiations between independent parties. ln the determination of the price per share in SOFF, the parties have based the calculations on the NOK 12.50/share subscription price that was used in connection with the capital increase in SOFF in 2016. The same price was used for the consideration shares issued in SOFF in connection with the merger between Rem Offshore ASA and a subsidiary of SOFF, which was completed in December 2016, as well as other related share issues in SOFF carried out at the same time. This subscription price will also be used when Aker, in connection with the Combination, redeems its convertible loan of NOK 250 million to SOFF by conversion or the exercise of related independent subscription rights (Norwegian: Frittstående tegningsretter). The Hemen Share lssue in SOFF will also be carried with the same subscription price.

ln the determination of the price per share in Solship Sub, the parties have based the calculations on the values and thereby the share price of DESSC prior to the DESSC Merger l. For DESSC, the determination of the value prior to the DESSC Merger I has been based on a subscription price of NOK 1.31578947368421 per share, based on an agreement between the parties contributing to the Deep Sea Supply Merger and the Farstad Merger, so that the actual exchange ratio in the Deep Sea Supply Merger is

1.31578947368421:12.50, cf. above. The price has been negotiated by independent parties and is

SOFF har innhentet en uttalelse om bytteforholdet fra Arctic Securities. Styret i DESSC har innhentet en tilsvarende uttalelse fra Swedbank. Begge uttalelsene bekrefter at bytteforholdet er rimelig og saklig begrunnet.

Som nevnt ovenfor ble det i forbindelse med fusjonen mellom Rem Offshore ASA og datterselskap av SOFF etablert en ny aksjeklasse (B-aksjer) i SOFF med begrenset stemmerett. B-aksjene vil bli awiklet i forbindelse med gjennomføringen av Deep Sea Supply Fusjonen og Farstad Fusjonen ved at hver B-aksje vil bli byttet i én ordinær SOFF aksje, slik at SOFF etter Sammenslåingen kun vil ha én aksjeklasse. Alle aksjer i SOFF vil dermed fra gjennomføringstidspunktet for Sammenslåingen ha like rettigheter og herunder lik stemmerett. Aksjene som utstedes til tidligere aksjeeiere i DESSC som et resultat av Deep Sea Supply Fusjonen vil ha like rettigheter som øvrige aksjer i SOFF. Aksjene vilvære notert på Oslo Børs.

1.4 Nærmere om Farstad Fusjonen

Farstad Fusjonen er det avtalt et bytteforhold på 0,35:12,50 slik at hver aksje i FAR vil gi rett til 0,028 aksjer i SOFF. I forbindelse med Farstad Fusjonen vil det til sammen bli utstedt 136179 139 nye aksjer i SOFF til aksjonærene i FAR. Det er redegjort nærmere for Farstad Fusjonen og dette bytteforholdet i separat fusjonsplan for Farstad Fusjonen.

2. GJENNOMFøRING AV FUSJONEN

2.1 Skatte- og regnskapsrettsl i g gjennomføring

DESSC Fusjon I vil bli gjennomført med skattemessig kontinuitet (både på selskapsnivå og aksjeeiernivå) etter reglene i skatteloven kapitel 11, jf. S 11-11 (grenseoverskridende fusjoner) og i samsvar

therefore considered the market value of the shares. The Board of Directors of SOFF has obtained a statement on the exchange ratio from Arctic Securities AS. The Board of Directors of DESSC has obtained a corresponding statement from Swedbank. Both the statements confirm that the exchange ratio is fair and reasonably justified.

As mentioned above, a new class of shares in SOFF with limited voting rights was established in connection with the merger between Rem Offshore ASA and a subsidiary of SOFF (class B shares). The class B shares will be dissolved on completion of the Deep Sea Supply Merger and the Farstad Merger by way of every class B share being exchanged for one ordinary SOFF share, so that SOFF will only have one class of shares afterthe completion of the Combination. Consequently, all the shares in SOFF will carry equal rights and equal voting rights from the time of completion of the Combination. The SOFF shares issued to former DESSC shareholders as a result of the Deep Sea Supply Merger will have the same rights as the other shares in SOFF, including the right to vote. The shares will be listed on Oslo Stock Exchange.

1.4 Further details about the Farstad Merger

As regards the Farstad Merger, an exchange ratio of 0.35:12.50 has been agreed, so that each share in FAR will entitle the holder to 0.028 shares in SOFF. ln connection with the Farstad Merger, a total of 136,179,139 SOFF shares will be issued to the Farstad shareholders. The Farstad Merger and the related exchange ratio are described in more detail in the separate merger plan for the Farstad Merger.

2. IMPLEMENTATION OF THE MERGER

2.1 lmplementation of the merger for tax and accounting purposes

The DESSC Merger I will be carried out with what is known as tax continuity (on both company and shareholder level) in accordance with the provisions of Chapter 1 1 cf. Section 11-1 1 (cross-border mergers) of allmennaksjeloven kapittel 13, jf. S 13-25 flg. (grenseoverskridende fusjoner) og tilsvarende regler på Kypros. Dette medfører at DESSC Fusjon I vil bli gjennomført som en skattefri fusjon.

Skatteposisjoner knyttet til eiendeler, rettigheter og forpliktelser som overføres fra DESSC som ledd i DESSC Fusjon I og som befinner seg innen for norsk beskatningsområde forut for DESSC Fusjon I vil bli videreført uendret i henhold til skatteloven kapittel 11, jf. S 11-11. Dette innebærer at skatteposisjoner knyttet til eiendeler, rettigheter og forpliktelser innenfor norsk beskatningsområde forut for DESSC Fusjon I som overføres fra DESSC til Solship Sub vil bli videreført uendret ved gjennomføring av nevnte fusjon i henhold til punkt 2.3 nedenfor. Videre vil skatteposisjoner for aksjer i DESSC for norske aksjonærer i DESSC videreføres til aksjene som utstedes i Solship Sub som fusjonsvederlag. Endelig erfusjonen skattefri i henhold til kypriotisk rett (Cyprus lncome Tax Law section 30(aXi).

DESSC Fusjon I gjennomføres regnskapsmessig med virkning fra det tidspunkt fusjonen er registrert gjennomført i Foretaksregisteret. Alle transaksjoner, kostnader og inntekter knyttet til eiendelene, rettighetene og forpliktelsene som overføres i kraft av DESSC Fusjon l, skal fra dette tidspunkt henregnes til Solship Sub. DESSC Fusjon I gjennomføres som regnskapsmessig transaksjon. Følgelig er overførte eiendeler, rettigheter og forpliktelser oppført i åpningsbalansen til virkelig verdi i samsvar med oppkjøpsmetoden.

Ärsregnskapet for 2015 med balanse pr. 31 .12.15 som sist godkjente årsregnskap danner grunnlaget for fastsettelsen av vilkårene for DESSC Fusjon l.

lnntil den selskapsrettslige ikraftredelse av DESSC Untilthe DESSC Merger I takes effect under

the Norwegian Taxation Act (the "Tax Act") and in accordance with Chapter 13 cf. Section 13-25ff. (cross-border mergers) of the PLLCA and corresponding Cypriot rules. This means that the DESSC Merger I will be carried out as a tax-neutral merger.

Tax positions related to assets, rights and obligations transferred from DESSC as part of the DESSC Merger I and that are subject to Nonvegian taxation prior to the DESSC Merger l, will be transferred unchanged in accordance with Chapter 1 1 cf. Section 1 1-1 1 of the Tax Act. This means that tax positions related to assets, rights and obligations that are subject to Nonregian taxation prior to the DESSC Merger I will be transferred unchanged from DESSC to Solship Sub on the implementation of said merger pursuant to clause 2.3 below. Furthermore, tax positions related to shares in DESSC for Norwegian shareholders in DESSC will be carried over to the shares issued in Solship Sub as merger consideration. Finally, the DESSC Merger I falls within section 30(a)(i) of the Cyprus lncome Tax Law and will thus not have any tax implications in Cyprus.

For accounting purposes, the DESSC Merger I shall be deemed to have been implemented as of the date when the merger is registered as completed in the Norwegian Register of Business Enterprises. All transactions, costs and revenues related to the assets, rights and obligations that are transferred under the DESSC Merger I shallfrom this date be assigned to Solship Sub. The DESSC Merger I is for accounting purposes carried out as a transaction. Thus the transferred assets, rights and obligations are recorded in the opening balance at fair value in accordance with the acquisition method (Norwegian: "Oppkjøpsmetoden").

The 2015 financial statements as of 31 December 2015, as the latest approved financial statements, form the basis for the stipulation of the terms of the DESSC Merger l.

Fusjon I (jf. punkt 2.3 nedenfor) skal det føres separate regnskaper for DESSC og Solship Sub.

2.2 Selskapsrettslig gjen nomføri n g. Fusjonsinnskudd og fusjonsvederlag

DESSC Fusjon lgjennomføres som grenseoverskridende fusjon i henhold til reglene i allmennaksjeloven $ 13-25 tilS 13-36, jf. aksjeloven $ 13-25, og de kypriotiske reglene for grenseoverskridende fusjon inntatt i Cyprus Companies Law, Cap 113 ("Companies Law") section 201 (l-X). DESSC Fusjon I utgjør en fusjon i henhold til bokstav (a) i fusjonsdefinisjonen inntatt i Companies Law section 201(l).

Ved DESSC Fusjon I's ikraftredelse overføres DESSCS eiendeler, rettigheter og forpliktelser i sin helhet til Solship Sub. Samtidig oppløses DESSC.

Umiddelbart forut for DESSC Fusjon I gjennomføres en kapitalnedsettelse i Solship Sub med NOK 30 000 fra NOK 30 000 til NOK 0 ved tilbakebetaling til eneaksjonær i Solship Sub, jf. aksjeloven $ 12-1 (1) nr. 2.

Parallelt med DESSC Fusjon I og kapitalnedseftelsen gjennomføres DESSC Fusjon ll hvilket innebærer at Solship Sub's eiendeler, rettigheter og forpliktelser overføres til Solship lnvest 3. Samtidig oppløses Solship Sub. DESSC Fusjon ll er regulert gjennom separat fusjonsplan underlagt norsk rett. Gjennomføring av DESSC Fusjon I er betinget av at vilkårene for gjennomføring av DESSC Fusjon ll er oppfolt slik at denne kan gjennomføres umiddelbart etter gjennomføringen av DESSC Fusjon l.

Nonvegian company law, cf. clause 2.3 below, separate accounts shall be prepared for DESSC and Solship Sub.

2.2 lmplementation of the merger under company law. Merger contribution and merger consideration

The DESSC Merger I will be carried out as a crossborder merger in accordance with Section 13-25 to Section 1 3-36 of the PLLCA, cf. Section 13-25 of the PLLCA, as well as the rules regarding cross-border mergers incorporated in Cyprus Companies Law, Cap 113 ("Companies Law") section 201 (l-X). The DESSC Merger I constitutes a merger pursuant to letter (a) of the definition of mergers in the Companies Law section 201 (l).

Upon the implementation of the DESSC Merger I pursuant to clause 2.3 below, the assets, rights and obligations of DESSC will be transferred in whole to Solship Sub. At the same time, DESSC will be dissolved.

lmmediately prior to the DESSC Merger l, a reduction of the share capital in Solship Sub by NOK 30,000 from NOK 30,000 to NOK 0 will be carried out by repayment to the sole shareholder of Solship Sub, cf. Section 12-1 (1) no 2 of the LLCA.

ln parallel with the DESSC Merger I and the share capital reduction, the DESSC Merger ll will be completed. This means that the assets, rights and obligations of Solship Sub are transfered to Solship lnvest 3. At the same time, Solship Sub will be dissolved. The DESSC Merger ll is governed by a separate merger plan subject to Nonruegian law. Completion of the DESSC Merger I is contingent on the conditions for completion of the DESSC Merger ll being met, so that the DESSC Merger ll may be completed immediately after the completion of the DESSC Merger l.

Utkast til åpningsbalanse for Solship Sub, som er The draft opening balance sheet for Solship Sub,

inntatt i Vedleqq 1.1 til Fusjonsplanen, viser selskapets eiendeler og gjeld som om DESSC Fusjon I var gjennomført på balansedagen, og gir en nærmere beskrivelse av eiendeler og gjeld som overføres ved DESSC Fusjon l. lfølge åpningsbalansen har Solship Sub en regnskapsmessig egenkapital på NOK 383 329 239, hvorav aksjekapitalen utgjør NOK 291 330 222 og NOK 91 999 017 utgjør annen egenkapital. En bekreftelse fra revisor om at balansen er gjort opp i samsvar med gjeldende regnskapsregler er inntatt i Vedleqq 1.2, som sammen med Vedleqq 1.1 er å anse som en del av Fusjonsplanen.

Aksjeeierne i DESSC mottar som fusjonsvederlag I aksje i Solship Sub for hver aksje de eier i DESSC. Vederlagsaksjene vil skaffes til veie gjennom en kapitalforhøyelse i Solship Sub ved at det det utstedes tilsammen 291 330 222nye ordinære aksjer. Vederlagsaksjene i Solship Sub vil ha fulle aksjonærrettigheter, herunder stemmerett, rett til utbytte og andre rettigheter som kan utledes av aksjene.

Byfteforholdet er nærmere redegjort for under punkt 1.2 i denne Fusjonsplanen.

Fusjonsplanen innebærer således at aksjonærene i DESSC, etter gjennomføring av DESSC Fusjon ll, vil blí aksjonærer i SOFF.

2.3 Gjennomføringogvirkningstidspunkt

Hver av DESSC og Solship Sub skal snarest mulig etter inngåelse av Fusjonsplanen innkalle til generalforsamling som skal avholdes i de respektive selskaper for godkjenning av Fusjonsplanen. For Solship Sub skal dette også innebære behandling av kapitalnedsettelse umiddelbart forut for DESSC Fusjon I samt kapitalforhøyelse for utstedelse av vederlagsaksjer til aksjeeierne i DESSC ved gjennomføring av DESSC Fusjon l.

included in Apoendix 1.1 to the Merger Plan, sets out the company's assets and obligations as if the DESSC Merger I was completed on the balance sheet date, and gives a more detailed description of the assets and obligations that are transferred in connection with the DESSC Merger l. According to the opening balance sheet, Solship Sub has a book value of NOK 383,329,239 of which the share capitalis NOK 291,330,222 and the other reserves are NOK 91,999,017. A declaration from the auditor confirming that the balance sheet is prepared in accordance with applicable accounting regulations is included in Appendix 1 .2. which together with Apoendix 1.1 is to be considered part of the Merger Plan.

The shareholders of DESSC will receive I share in Solship Sub for each share they hold in DESSC as merger consideration. The consideration shares will be issued by a share capital increase in Solship Sub through the issuing of a total of 291,330,222 new ordinary shares. The consideration shares in Solship Sub will carry full shareholder rights, including voting rights, right to dividend and other rights derived from the shares.

The exchange ratio is presented in more detail in clause 1 .2 of this Merger Plan.

The Merger Plan thus entails that the shareholders of DESSC, after the completion of the DESSC Merger ll, will become shareholders of SOFF.

2.3 Gompletion and Effective date

DESSC and Solship Sub shall both, as soon as possible after the entering into of the Merger Plan, call for general meetings to be held in their respective companies for the purpose of approving the Merger Plan. For Solship Sub, this shall also involve the approval of the capital reduction immediately priorto the DESSC Merger I as wellas of the share capital increase with respect to the issue of consideration shares to the shareholders of DESSC on completion of the DESSC Merger l.

Senest en måned før generalforsamling i Solship Sub No later than one month before the general meeting of

skal behandle Fusjonsplanen skal (i) aksjeeierne i Solship Sub underrettes om Fusjonsplanen og øvrige saksdokumenter i henhold til allmennaksjeloven $ 13- 25 (2) nr. 5, jf. S 1 3-12 og (ii) Fusjonsplanen kunngjøres gjennom Brønnøysundregistrenes elektroniske kunngjøringspublikasjon i henhold til allmennaksjeloven $ 13-29, tf . S I 3-13.

Senest en måned før generalforsamling i DESSC skal behandle Fusjonsplanen, skal aksjeeierne i DESSC underrettes om Fusjonsplanen og øvrige saksdokumenter ved gjennom publisering av disse på selskapets hjemmeside. Dokumentene skal forbli tilgjengelig på hjemmesiden iminimum en måned efter generalforsamlingen. Videre skal Fusjonsplanen og øvrige saksdokumenter registreres hos Registrar of Companies på Kypros forut for generalforsamlingen.

DESSC og Solship Sub skal snarest mulig etter inngåelse av Fusjonsplanen utarbeide hver sin rapport om fusjonen til henholdsvis DESSC og Solship Sub's aksjonærer. Rapporten skal redegjøre for og underbygge de rettslige og økonomiske aspektene ved fusjonen og beskrive fusjonens føþer lor selskapenes aksjonærer, kreditorer og ansatte. Rapporten skal gjøres tilgjengelig for aksjonærene i Solship Sub og DESSC senest en måned før generalforsamling i selskapene, jf. ovenfor.

Styrene i DESSC og Solship Sub har i fellesskap engasjert FGH Revisjon AS som har utarbeidet en sakkyndig redegjørelse for Fusjonsplanen datert 24. mars i samsvar med allmennaksjeloven $ 13-28, jf. S 13-10 (1) til (3), jf. S 10-2 (3) os $ 2-6 (1) os (2) os section 2O1O(2) i Companies Law. Redegjørelsen skal gjøres tilgjengelig for aksjonærene i DESSC og Solship Sub senest en måned før generalforsamling i de respektive selskap.

Solship Sub is to consider the Merger Plan, fi) the shareholders of Solship Sub shall be notified of the Merger Plan and other documents related thereto, in accordance with Section 13-25 (2) no 5, cf. Section 13-12 of the PLLCA, and (jj) the Merger Plan shall be announced in the electronic publication system of the Nonaregian Register of Business Enterprises in accordance with Section 13-29, cf. Section 1 3-13 of the PLLCA.

The shareholders of DESSC shall be informed of the Merger Plan and related documents published on the company's website no later than one month prior to the general meeting of DESSC, which will vote on the approval of the Merger Plan. The documents shall remain accessible on the website for no less than one month after the general meeting. Furthermore, the Merger Plan and related documents shall be registered with the Registrar of Companies on Cyprus prior to the general meeting.

As soon as possible after the entering into of the Merger Plan, DESSC and Solship Sub shall each prepare a report on the merger to DESSC's and Solship Sub's shareholders. The report must state and substantiate the legal and financial aspects of the merger and describe the consequences of the merger for the companies' shareholders, creditors and employees. The report must be made available to the shareholders of Solship Sub and DESSC no later than one month prior to the general meeting of the companies, cf. above.

The boards of directors of DESSC and Solship Sub have jointly hired FGH Revisjon AS, which has prepared an expert statement regarding the Merger Plan dated 24 March in accordance with Section 13-28 cf. Section 13-1 0 (1 ) to (3), cf. Section 10-2 (3) and Section 2-6 (1) and (2) of the PLLCA and Section 2010(2) of the Companies Law. The statement shall be made available to the shareholders of DESSC and Solship Sub no later than one month prior to the general meetings of the companies.

Selskapenes generalforsamling skal behandle The general meetings of the companies involved in the

Fusjonsplanen på samme dag. Generalforsamlingene er planlagt avholdt omkring 25. april2017.

Partene skal umiddelbart etter at Fusjonsplanen er godkjent av generalforsamlingene i DESSC og Solship Sub (i) melde godkjennelsen av Fusjonsplanen til Foretaksregisteret og (ii) begjære utstedelse av en kypriotisk fusjonsattest (pre-merger certificate) fra District Court of Limassol som bekrefter at alle forberedende handlinger og formaliteter for gjennomføring av fusjonen har funnet sted. Domstolen på Kypros vil utstede fusjonsattesten så snart retten finner det bevist at prosedyren som anvist i section 201(L) til 201(P) i Companies Law ertilfredsstilt.

For norske selskapsrettslige formål vil det løpe en kreditorfrist på 6 uker fra og med registrering av melding om fusjonsbeslutningene i Brøn nøysundregistrenes elektroniske kun ngjøringspublikasjon, jf. allmennaksjeloven S 1 3-25, jf. S 13-15. Etter utløpet av kreditorperioden på 6 uker, jf. allmennaksjeloven S 13-31, og forutsatt at (i) forholdet til eventuelle kreditorer som har reist innsigelse mot DESSC Fusjon I er avklart, (ii) alle betingelser for DESSC Fusjon I, jf. punkt 2.4 nedenfor, er oppfilt eller frafalt, (iii) det er utstedt fusjonsattest fra Foretaksregisteret i henhold til allmennaksjeloven $ 13- 31 (f ) og (iv) det er utstedt fusjonsattest fra District Court of Limassol på Kypros i henhold til allmennaksjeloven $ 13-32 (1) nr. 1 og section 2011 til 201P i Companies Law, skal Solship Sub gi melding til Foretaksregisteret i hen hold til al lmennaksjeloven $ 1 3- 17 om at DESSC Fusjon I skaltre i kraft.

DESSC skal søke å innhente skriftlige forhåndssamtykker til fusjonen fra sine finansielle kreditorer, og vedlegge disse i begjæringen til District Court i Limassol.

merger shall consider the Merger Plan on the same date. The general meetings are scheduled to be held on or around 25 April2017.

The Parties shall, immediately after the approval of the Merger Plan by the general meetings of DESSC and Solship Sub, (i)file the approval of the Merger Plan with the Nonaregian Register of Business Enterprises and (ii) apply for a pre-merger certificate in Cyprus from the District Court of Limassol confirming that all preparatory actions and formalities required to complete the DESSC Merger I have been made. The court in Cyprus will issue the pre-merger certificate when the court finds that the procedures referred to in section 201(L) to 201(P) of the Companies Law have been complied with.

For Nonruegian company law purposes, a creditor notice period of 6 weeks will commence on the date that notification of the merger resolutions is registered in the electronic publication system if the Norwegian Register of Business Enterprises, cf. Section 13-25, cf . 13-15 of the PLLCA. After expiry of the creditor notice period of 6 weeks, cf. Section 13-31 of the PLLCA, and provided that O any creditor objections against the DESSC Merger I have been clarified and resolved, fi) all conditions for the DESSC Merger l, cf. clause 2.4 below, are fulfilled or waived, (iii) a merger certificate has been issued by the Norwegian Register of Business Enterprises in accordance with Section 13-31 (1) of the PLLCA and (iv) a pre-merger certificate has been issued by the District Court of Limassol in Cyprus in accordance with Section 13-32 (1 ) no 1 of the PLLCA and sections 201 L to 201P of the Companies Law, Solship Sub shall notiñ7 the Nonregian Register of Business Enterprises that the DESSC Merger shall take effect in accordance with Section 13-17 of the PLLCA.

DESSC shall, to the best of its ability, obtain prior written approvals of the merger from its financial creditors and include these in the application to the District Court of Limassol.

Fra og med det tidspunkt fusjonen er registrert For accounting purposes, the transactions in DESSC

gjennomført i Foretaksregisteretanses transaksjoner i DESSC regnskapsmessig foretatt for regningen til Solship Sub, jf. allmennaksjeloven $ 13-26 (2) nr.6.

Selskapsrettslig trer DESSC Fusjon I i kraft på det tidspunkt fusjonen er registrert gjennomført i Foretaksregisteret ("Virkn in gstidspu n ktet"), jf. allmennaksjeloven $ 13-33, jf. S 13-17. På Virkningstidspunktet er:

• (a) DESSC oppløst,
• (b) DESSCs eiendeler, rettigheter og forpliktelser overført til Solship Sub,
• (c) Aksjene i DESSC byttet om med ordinære aksjer i Solship Sub som beskrevet under punkt 2.2 ovenfor,
• (d) Vedtektene i Solship Sub er endret i overensstemmelse med forslaget i Fusjonsplanen, og
• (e) Andre virkninger som fastsatt i allmennaksjeloven, lovgivningen for øvrig samt Fusjonsplanen inntruffet.

Etter Virkningstidspunktet skal Foretaksregisteret uten opphold underrette Registrar of Companies and Official Receiver på Kypros om at DESSC Fusjon I har trådt i kraft slik at DESSC formelt kan oppløses og slettes fra Cyprus Companies Register i henhold til Companies Law.

2.4 Betingelser for gjennomføring av Fusjonen

Gjennomføring av DESSC Fusjon I er betinget av at:

are regarded as implemented at the expense of Solship Sub as from the date when the merger is registered as completed in the Norwegian Register of Business Enterprises, cf. Section 13-26 (2) no 6 of the PLLCA.

The merger is deemed to take effect under Nonaregian company law at the time when the merger is registered as completed in the Norwegian Register of Business Enterprises (the "Effective Date"), cf. Section 13-33, cf. Section 13-1 7 of the PLLCA. On the Effective Date:

• (a) DESSC is dissolved,
• (b) The assets, rights and obligations of DESSC are transferred to Solship Sub,
• (c) The shares of DESSC are exchanged for ordinary shares in Solship Sub as described under clause 2.2 above,
• (d) The Articles of Association of Solship Sub are amended in accordance with the proposal in the Merger Plan, and
• (e) Other effects as set out in the PLLCA, other relevant legislation and the Merger Plan have taken place.

After the Effective Date, the Nonruegian Register of Business Enterprises shall without delays notiff the Registrar of Companies and Official Receiver in Cyprus that the DESSC Merger I has taken effect, so that DESSC can formally be dissolved and deleted from the Cyprus Companies Register in accordance with the Companies Law.

2.4 Conditions for completion of the Merger

The completion of the DESSC Merger lis subjectto the following conditions:

• (a) Fusjonsplanen blir godkjent i DESSCS generalforsamling.

• (b) Revidert årsregnskap for 2016 blir godkjent i DESSCS generalforsamling.

• (c) Fusjonsplanen blir godkjent i Solship Subs generalforsamling.

• (d) Alle nødvendige samtykker til overføring av vesentlige eiendeler, rettigheter og forpliktelser fra DESSCs avtaleparter er mottatt, og/eller alle rettigheter til oppsigelse eller endring av avtaler er frafalt eller ubenyttet ved utløpet av relevante frister. Dette gjelder likevel ikke dersom det verken samlet eller hver for seg vil være av vesentlig negativ betydning for selskapene i SOFFkonsernet etter Deep Sea Supply Fusjonens gjennomføring dersom de eventuelt manglende samtykker ikke skulle bli gitt eller de eventuelle rettigheter til oppsigelse eller endring av avtaler skulle bli utøvet.

• (e) B-aksjene i SOFF awikles i forbindelse med Sammenslåingen ved at hver B-aksje er byttet i en ordinær SOFF aksje, slik at SOFF etter Sammenslåingen kun har en aksjeklasse.

• (f) Alle nødvendige samtykker fra hver av DESSCS og SOFFs bankforbindelser under den enkeltes bankfinansiering er mottatt slik at SOFFs og DESSCs finansiering kan videreføres etter Virkningstidspunktet.

• (g) Det er gjennomført en harmonisering av SOFF (utenom Solship lnvest I AS/Rem) og DESSC sine lånebetingelser med de nye lånebetingelsene til FAR i det alt vesentlige på de vilkår som er beskrevet i Side Letter Agreement til Restruktureri ngsavtalen.

• (h) Aker parallelt med Deep Sea Supply Fusjonen enten konverterer sitt eksisterende obligasjonslån stort NOK 250 millioner i SOFF til aksjer i SOFF til

• (a) The Merger Plan is approved by the general meeting of DESSC.

• (b) The audited annual accounts îor 2016 are approved by the general meeting of DESSC.

• (c) The Merger Plan is approved by the general meeting of Solship Sub.

• (d) All required consents to the transfer of material assets, rights and obligations from the contracting parties of DESSC are received, and/or all rights to termination of or amendments to contracts are waived or not exercised by the expiry of the relevant deadlines. However, this does not apply if neither collectively nor lndividually, any such missing consent or exercise of rights of termination or amendment after the completion of the Deep Sea Supply Merger will have any significant negative effect for the companies of the SOFF Group.

• (e) The 'class B' share class in SOFF is dissolved by way of every class B share being exchanged for 1 ordinary SOFF share, so that SOFF only has one class of shares after the Combination.

• (Ð All required consents from each of DESSC's and SOFF's lenders under their bank financings are received, so that SOFF's and DESSC's financing can continue after the Effective Date.

• (g) A harmonisation of SOFF's (excluding Solship lnvest 1 AS/Rem) and DESSC's loan terms with the new loan terms of FAR have been completed in all material respects on the terms described in the Side Letter Agreement to the Restructuring Agreement.

• (h) Aker, in parallel with the Deep Sea Supply Merger, either converts its existing convertible loan of NOK 250,000,000 in SOFF to shares in

tegningskurs NOK 12,50 per aksje eller utøver tilhørende frittstående tegningsretter slik at retten til konvertering bortfaller.

• (i) Vilkårene for gjennomføring av DESSC Fusjon ll og Farstad Fusjonen er oppñ7lt slik at disse kan gjennomføres umiddelbart etter gjennomføringen av DESSC Fusjon l.
• (j) Hemen Emisjonen gjennomføres parallelt med gjennomføringen av Deep Sea Supply Fusjonen og Farstad Fusjonen.
• (k) Alle nødvendige tillatelser og myndighetsgodkjennelser foreligger uten vilkår eller på vilkår som Solship Sub finner tilfredsstillende. Solship Sub forplikter seg til å akseptere slike eventuelle endelige vilkår som måtte pålegges SOFF konsemet etter at adm inistrative ankemu ligheter er benyttet, forutsatt at disse med rimelighet ikke vil anses å påvirke SOFF konsemet på en vesentlig negativ måte. Solship Sub er imidlertid ikke forpliktet til å akseptere vilkår som ikke godkjennes av SOFF konsernets vesentlige långivere på en slik måte at de ikke vil akseptere at finansieringen videreføres etter at Sammenslåingen er gjennomført.
• (l) lngen innsigelser mot DESSC Fusjon I eller DESSC ll Fusjonen er fremkommet fra noen kreditorer eller andre tredjeparter som kan innebære vesentlige hindringer mot gjennomføringen av DESSC Fusjon I eller DESSC Fusjon ll og som ikke senere er skriftlig frafalt.
• (m) For Solship Subs vedkommende: DESSC eller dets aksjeeiere skal ikke ha gjort seg skyldig i vesentlig brudd på Fusjonsplanen.

SOFF at a subscription price of NOK 12.50 per share or exercises related independent subscription rights (Norwegian: Frittstående tegningsretter), in which case the conversion right willlapse.

• (i) The conditions for completion of the DESSC Merger ll and the Farstad Merger have been met, so that these may be implemented immediately after completion of the DESSC Merger l.
• (j) The Hemen Share lssue is completed in parallel with the completion of the Deep Sea Supply Merger and the Farstad Merger.
• (k) All required permissions and approvals from the authorities have been obtained without conditions or on conditions that Solship Sub finds satisfactory. Solship Sub undertakes to accept such conditions pertaining to the enlarged SOFF group that are ultimately, after the exhaustion of any right to an administrative appeal, imposed by the relevant governmental body in order to permit completion of the Combination to be effected on conditions that cannot reasonably be expected to have a materially adverse effect on the enlarged SOFF group. However, Solship Sub has no obligation to accept any such conditions in respect of which the senior lenders do not give such consents that permit the financing to continue after the Combination.
• (l) No objections against the DESSC Merger I or the DESSC Merger ll have been received from any of the creditors or other third parties that can cause material obstacles to the completion of the DESSC Merger I orthe DESSC Merger lland that have not later been waived in writing.
• (m) As concerns Solship Sub: DESSC or its shareholders shall not have committed any material breach of the Merger Plan.
• (n) For DESSCS vedkommende: Solship Sub eller (n) As concerns DESSC: Solship Sub or its

dets aksjeeier skal ikke ha gjort seg skyldig i vesentlig brudd på Fusjonsplanen.

• (o) Gjennomføring ikke blir hindret av lov, eller pålegg eller forføyning med hjemmel i lov.
• (p) Norsk selskapsrettslig gjennomføring av DESSC Fusjon I finner sted senest 31. desember 2017.

2.5 Vilkår for å utøve rettigheter som aksjeeier

Aksjeeierne i DESSC vil få fulle aksjeeierrettigheter som eier av ordinære aksjer i Solship Sub fra tidspunktet DESSC Fusjon I er registrert gjennomført i Foretaksregisteret, jf. punkt 2.3. Nevnte aksjeeiere skal i utgangspunktet innføres i aksjeeierboken i Solship Sub snarest mulig etter at DESSC Fusjon I har trådt i kraft, jf. allmennaksjeloven $ 13-33, jf. $ 13-17, men siden DESSC Fusjon I vil gjennomføres parallelt med DESSC Fusjon llvilaksjeeieme i DESSC som mottakere av vederlagsaksjer i SOFF ¡ forbindelse med DESSC Fusjon ll bli innført som aksjeeier i aksjeeierregisteret til SOFF snarest mulig etter at DESSC Fusjon I og DESSC Fusjon ll har trådt i kraft, jf allmennaksjeloven $ 13-17, og få fulle aksjeeierrettigheter som eíer av ordinære aksjer i SOFF fra tidspunktet DESSC Fusjon log DESSC Fusjon ll er registret gjennomført i Foretaksregisteret, jf. punkt 2.3 og separat fusjonsplan for DESSC Fusjon ll. For å være berettiget til å motta vederlagsaksjer må aksjeeieren være aksjeeier i DESSC på samme tidspunkt.

2.6 Fremgangsmåte for utøvelse av rettigheter som tilkommer kreditorer og mi nd retal lsaksjeeie re

I henhold til allmennaksjeloven S 13-29 (3) skal det ved DESSC Fusjon I angis opplysninger om fremgangsmåte for utøvelse av rettigheter som

shareholder shall not have committed any material breach of the Merger Plan.

• (o) The completion is not impeded by law, or an order or injunction pursuant to law.
• (p) The completion of the DESSC Merger I under Norwegian company law takes place no later than 31 December2017.

2.5 Gonditions for the exercise of rights as a shareholder

The shareholders of DESSC will obtain full shareholders rights as owners of ordinary shares in Solship Sub from the time the DESSC Merger I is registered in the Nonregian Register of Business Enterprises, cf. clause 2.3 of this Merger Plan. Said shareholders shall as a main rule be recorded in the register of shareholders in Solship Sub as soon as possible after the implementation of the DESSC Merger I, cf. Section 13-33 of the PLLCA, cf. Section 13-17, but since the DESSC Merger I will be implemented in parallel with the DESSC Merger ll, the shareholders of DESSC, as recipients of the consideration shares in SOFF in connection with the DESSC Merger ll, will be recorded as shareholders in the shareholder register of SOFF as soon as possible after the implementation of the DESSC Merger I and the DESSC Merger ll, cf. Section 13-17 of the PLLCA, and obtain full shareholders rights as owners of ordinary shares in SOFF from the time the DESSC Merger I and the DESSC Merger ll are registered in the Nonivegian Register of Business Enterprises, cf. clause 2.3 and the separate merger plan for the DESSC Merger ll. ln order to be entitled to receive consideration shares, the shareholder must be a shareholder of DESSC at the same time.

2.6 Procedure for the exercise of creditors' rights and minority shareholders' rights

Pursuant to Section 13-29 (3) of the PLLCA, it is mandatory with respect to the DESSC Merger I to provide information about the procedure regarding the ti lkommer kreditorer og mindretallsaksjeeiere ved nevnte fusjon.

Dette er ikke relevant for Solship Sub da det i Solship Sub kun er én aksjeeier forut for gjennomføring av DESSC Fusjon L Uansett, vil ikke mindretallseiere i norske selskaper ha spesielle rettigheter ved fusjon, og det foreligger derfor ingen relevante opplysninger å gi. For norske selskaper, herunder Solship Sub, fremgår kreditorenes rettigheter av allmennaksjeloven S I 3-15 og $ 13-1 6, jf. S 1 3-25 om 6 ukers kreditorfrist forut for gjennomføring av fusjon.

For DESSC gjelder følgende regler i henhold til kypriotisk rett:

Rettigheter som tilkommer DESSC's kreditorer

Kreditorene har rett til å bli informert om vilkårene for fusjonen gjennom publisering av fusjonsplanen og relatert informasjon på selskapets websider minst en måned forut for generalforsamlingens behandling av fusjonen. Kypriotisk rett krever også at visse detaljer om fusjonen offentliggjøres gjennom Official Gazette of the Republic of Cyprus.

Kreditorene har dessuten rett til å delta i rettsmøtet ved District Court of Limassol når søknaden om utstedelse av fusjonsattest til DESSC skal behandles, og kan protestere mot gjennomføring av fusjonen dersom de er uenige i generalforsamlingens beslutning.

Rettigheter som tilkommer DESSC's m i n d retal I s a ksj ee i e re

Mindretallsaksjeeierne har rett til å bli informert om vilkårene for fusjonen gjennom (a) innsyn i fusjonsplanen, styrets rapport om fusjonen og rapporten fra den uavhengige sakkyndige, (b) publisering av fusjonsplanen og relatert informasjon på exercise of creditors' and minority shareholders' applicable rights in connection with the abovementioned merger.

This provision is not relevant for Solship Sub, as there is only one shareholder in Solship Sub prior to the completion of the DESSC Merger l. However, the minority shareholders of a Nonruegian company will not carry any special rights in connection with a merger, and there is therefore no relevant information to provide. For Nonvegian companies, including Solship Sub, the creditors' rights are further described in Section 13-15 and Section 13-16 of the PLLCA, cf. Section 13-25 regarding the six-week creditor notice period prior to the implementation of a merger.

Pursuant to Cypriot law, the following rules apply to DESSC:

Rþfrfs due fo DESSC's credÍors

The creditors have the right to be informed of the terms for the merger by publication of the Merger Plan and related information on the company's website no less than one month prior to the resolution of the merger by the general meeting. lt is also required under Cypriot law to make certain details of the merger public in the Official Gazette of the Republic of Cyprus.

The creditors also have the right to attend the court hearing at the District Court of Limassol when the application for the issuing of a pre-merger certificate to DESSC is considered and may object to the completion of the merger if they disagree with the general meeting's resolution.

Rr'ghfs due fo DESSC's minority shareholders

The minority shareholders have the right to be informed of the terms of the merger by (a) access to the Merger Plan, the Board of Director's report on the merger and the statement from the independent expert, (b) the publication of the Merger Plan and

selskapets websider minst en måned forut for generalforsamlingens behandling av fusjonen, og (c) offentliggjøring av visse detaljer om fusjonen gjennom Official Gazette of the Republic of Cyprus.

Mindretallsaksjeeierne har dessuten rett til å delta i rettsmøtet ved District Court of Limassol når søknaden om utstedelse av fusjonsattest til DESSC skal behandles, og kan protestere mot gjennomføring av fusjonen dersom de er uenige igeneralforsamlingens beslutning.

3 SELSKAPSRETTSLIGE BESLUTNINGER

3.r DESSC

Det foreslås at generalforsamlingen i DESSC treffer følgende beslutning:

Fusjonsplanen datert 24. mars 2017 mellom Deep Sea Supply Plc og So/sfrþ Sub AS godkjennes.

Sfyrefs rapporl datert 24. mars 2017 vedrørende fusjonen godkjennes.

Redegjørelsen fra FGH Revisjon AS datert 24. mars 2017 vedrørende fusjonen godkjennes.

Oppløsning av DESSC som følge av fusjonen godkjennes.

3.2 Solship Sub

Det foreslås at generalforsamlingen i Solship Sub treffer følgende beslutning :

Aksjekapitalen seffes ned med NOK 30 000 fra NOK 30 000 til 0 ved innløsning av samtlige av aksjene i se/skapef. Angivelsen av aksjekapitalen og antall aksjer ivedtektenes $ 4 endres tilsvarende.

related information on the company's website no less than one month prior to the resolution of the merger by the general meeting and (c) publication of certain details regarding the merger in the Official Gazette of the Republic of Cypus.

The minority shareholders also have the right to attend the court hearing at the District Court of Limassol when the application for the issuing of a pre-merger certificate to DESSC is considered and may object to the completion of the merger if they disagree with the general meeting's resolution.

3. RESOLUTIONS

3.1 DESSC

It is proposed that the general meeting of DESSC pass the following resolution :

The Merger Plan dated 24 March 2017 between Deep Sea Supply Plc and So/sfrþ Sub AS rs approved.

The Board of Director's report dated 24 March 2017 regarding the merger is approved.

The statement from FGH Revisjon AS dated 24 March 2017 regarding the merger is approved.

Dissolution of DESSC as a conseguence of the merger is approved.

3.2 Solship Sub

It is proposed that the general meeting of Solship Sub pass the following resolution:

The share capital is reduced by NOK 30,000 from NOK 30,000 to 0 by redemption of all the shares in the company. The stipulation of the share capital and the number of shares in Article 4 of the Articles of Association is amended accordingly.

• 2 Nedseffe/sesb e I ø pet ti lba kebefales f/ se/skapefs ekslsferende aksjeeier, So/shþ /nvesf 3 AS.
• 3 Bekreftelse pà at det er dekning for gjenværende aksjekapital og bundet egenkapitalfor øvrig i forbindelse med kapitalned settingen følger som vedlegg til generalforsamlingens beslutning om kapitalnedsettelse.
• 4 Be s I ut n i ng / gje n n omf ø ri ng av ka p ita I n ed seffelse er betinget av samtidig beslutning / gjennomføring av DESSC Fusjon l.

il

Fusjonsplanen datert 24. mars 2017 mellom Deep Sea Supply Plc og Solship Sub AS godkjennes.

lil

• I Aksjekapitalen forhøyes med NOK 291 330 222 fra NOK 0 til NOK 291 330 222, ved ufsfede/se av 291 330 222 nye aksjer, hver pàlydende NOK L Se/skapefs vedtekter $ 4 endres tilsvarende.
• 2 Det skal betales NOK 1,31578947368421 per aksje, tilsammen NOK 383 329 239.
• 3 De nye aksjene kan tegnes av aksjeeierne i Deep Sea Supply Plc som fusjonsvederlag i henhold til slik fordeling som fusjonsplanen fasfseffer mot at Deep Sea Supply PIc overdrar tilSo/shþ Sub AS de eiendeler, reftigheter og forpliktelser som F u sjo n s p I a n e n forut s ette r.

Aksjeeiernes fortrinnsrett etter allmennaksjeloven S 10-4 første ledd til å tegne de nye aksjene fravikes følgelig, jf. lovens S f0-5.

Aksjeinnskuddet skal tegnes med reft til â gjøre opp med innskudd i annet enn penger. Som 4

• 2 The amount of the reduction shall be repaid to the existing shareholder of the company, Solship /nvesf 3 AS.
• 3 Confirmation of coverage for remaining share capital and other undistributable equity following the share capital reducfion rs sef out in an appendix to the general meeting's resolution on the share capital reduction.
• 4 The resolution on and completion of the share capital reduction is conditional on a simultaneous resolution on and completion of fhe DESSC Merger l.

II

The Merger Plan dated 24 March 2017 between Deep Sea Supply Plc and So/sfilp Sub AS is approved.

ilt

• The share capital is increased by NOK 291,330,222 from NOK 0 to NOK 291,330,222, by the issuing of 291,330,222 new shares, each with a nominalvalue of NOK 1. Article 4 of the Company's Articles of Association is amended accordingly. 1
• 2 NOK 1.31578947368421 shall be paid per share, in total NOK 383,329,239.
• 3 The new shares may be issued to the shareholders of Deep Sea Supply Plc as merger consideration according to the distribution described in the Merger Plan, in exchange for the transfer of Deep Sea Supply P/c's assefg rlglrfs and obligations in whole fo So/ship Sub AS rn accordance with the Merger Plan.

Consequently, the shareholders' preferential rights to subscribe for the new shares pursuant to Secfion 10-4 of the PLLCA are set aside, cf. the PLLCA Section 10-5.

The share capital contribution shall be subscribed with a right to settlement by a contribution in kind. 4

aksjeinnskudd benyttes tingsinnskudd i form av samtlige eiendeler, rettigheter og forpliktelser i Deep Sea Supply Plc som beskrevet i Fu sjonsplanen. Restbel øpet utover økni ngen av aksjekapital tilføres annen egenkapital med NOK 91 999 017.

• 5 De nye aksjene anses fegnef av aksjeeierne i Deep Sea Supply PIc da Fusjonsplanen ble godkjent av generalforsamlingen i Deep Sea Supply Plc.
• Aksjeinnskuddef anses innbetalt når DESSC Fusjon I registreres gjennomført i Foretaksregisteret. 6
• De nye aksjene likestilles med Se/skapefs allerede utstedte aksjer og gir rett til utbytte fra og med registrering av gjennomføringen av DESSC Fusjon I i Foretaksregisteret. 7
• Det er anslått at det vil påløpe ca. NOK 2 000 000 i utgifter i forbi ndelse med kapitalforhøyelsen, hovedsakelig iforbindelse med juridisk b¡stand og kostnader til tilretteleggere, inkludert kostnader knyttet til utarbeidelse av sakkyndig redegjørelser forDESSC Fusjon L Kostnadene dekkes av Se/skapef. I

tv

• Se/skapef skal i forbi nde I se med gjennomføri ng av DESSC Fusjon I utstede 10 000 000 frittstäende tegningsrefter efter aksjeloven $ 11- 12. 1
• Tegningsrettene reguleres av særskilt avtale inngàtt 21. juli 2016 mellom Deep Sea Supply PIc og Sagale Beteiligungsverwaltungs GmbH 2

A// assefg rights and obligation of Deep Sea Supply Plc will serve as share capital contribution in the form of a contribution in kind as descrlbed in the Merger PIan. The remaining amount exceeding the share capital increase will be added to the other reserves, in total NOK 91,999,017.

• 5 The new shares sha// be considered to have been subscribed for by the shareholders of Deep Sea Supply Plc at the time of approval of the Merger Plan by the general meeting of Deep Sea Supply Plc.
• The share capital contribution shall be considered to have been paid when the DESSC Merger I is registered as implemented in the Nonarcgian Register of Busrness Enterprises. 6
• The new shares sha// be ranked equal with the existing shares and carry dividend rights from the date on which the capital increase ls reglsfered rn the Norwegian Register of Eusiness Enterprise ( F oret a k sre g i ste ret). 7
• Cosfs relafed to the capital increase are estimated to amount to approximately NOK 2,000,000, and mainly constitute cosfs ln connection with legal assrsfance and cosfs to managers, including costs related to the preparation of expert sfafemenfs for fhe DESSC Merger l. Ihe cosfs shall be covered by the Company. I

tv

• 1 ln connection with the completion of ffie DESSC Merger l, the Company shall issue 10,000,000 independent subscription rights (Norwegian: Frittstàende tegningsretter) in accordance with Section 11-12 of the LLCA.
• The subscription rights are governed by a separate agreement entered into on 21 July 2016 between Deep Sea Supply Plc and Sagale 2

22t30

("Rettighetshaver") om ufsfede/se av 10 000 000 frittstående tegningsretter i Deep Sea Supply PIc ("Warrants Avtalen"). Tegningsrettene skal konverteres til 10 000 000 tegningsretter i Se/skapef ved gjennomføring av DESSC Fusjon I ("Tegningsrette ne") og skal deretter konverteres til 1 052 631 tegningsrefter i So/sfad Offshore ASA ved gjennomføring av DESSC Fusjon ll. Warrants Avtalen skal derfor videreføres mellom Se/skapef og Rettighetshaver og deretter mellom Reftighetshaver og So/sfad Offshore ASA, dog slik at antall tegningsretter og tegningskursen ved ufsfede/se av tegningsretter i Solstad Offshore ASA blir justert for bytteforholdef I DESSC Fusjon Il, dvs. at det utstedes 1 052 631 tegningsretter i So/sfad Offshore AS og af tegningsrettene i So/sfad Offshore ASA ska/ kunne konverteres til aksjer i So/sfad Offshore ASA til kurs NOK 11,78 per aksje. Ufsfede/se av Tegningsrettene forutsetter at Rettighetshaver i henhold til vilkârene iWarrants Avtalen ikke krever Tegningsrettene innløst i Deep Sea Supply Plc til markedsverdi.

• 3 Tegningsrettene kan tegnes av Rettighetshaver.
• Aksjeeiernes fortrinnsrett etter aksjeloven $ 11-13 første ledd fravikes, jf. aksjeloven S f 0-5. 4
• 5 Det skal ikke ytes vederlag for Tegningsrettene.
• Tegni ngsrettene anses tegnet av Rettighetshaver da Fusjonsplanen ble godkjent av generalforsamlingen iDeep Sea Supply PIc. 6

Beteiligungsverwaltungs GmbH (the "Holde/') regarding fhe rssue of 10,000,000 independent subscription rights in Deep Sea Supply PIc (the "Warrants Agreement"). The subscription rights shall be converted into 10,000,000 subscription rights in the Company on completion of the DESSC Merger I (the "Subscription Rights") and shall then be converted into 1,052,631 subscription rights in So/sfad Offshore ASA on completion of fäe DESSC Merger ll. Thus, the Warrants Agreement shall continue to apply between the Company and the Holder and then continue between the Holder and So/sfad Offshore ASA. Notwithstanding the continuing of the Warants Agreement, the number of subscription rights and the subscription price shall be adjusted in accordance with the exchange ratio in ffie DESSC Merger ll, meaning that 1,052,631 subscription rights (Norwegian: frittstående tegningsretter) shall be lssued in So/sfad Offshore ASA and that the subscription rights may be converted into shares ln So/sfad Offshore ASA af a price of NOK 11 .78 per share. The issuing of Subscription Rights is contingent on the Holder not demanding to convert the Subscription Rights in Deep Sea Supply Plc at market value in accordance with the terms of the Warrants Agreement.

• 3 The Subscription Rights may be subscribed for by the Holder.

• 4 The preferential right of the existing shareholders pursuant to Section 11-13 of the LLCA to subscriöe for the Subscripfion Rigfrfs ls sef aside, cf. Secflon 10-5 of the LLCA.

• 5 No payment shall be made upon the issuing of the Subscription Rights.

• 6 The Subscription Rights are deemed to have been subscribed for by the Holder when the Merger Plan was approved by the general meeting of Deep Sea Supply Plc.

• 7 Hver av Tegningsrettene gir rett til å tegne én ny aksje iSe/skapef.

• 8 Vederlag for de nye aksjene som ufsfedes i henhold til Tegningsrettene skal være NOK 1,24 per aksje. Utøvelse av samtlige av Tegningsrettene vil maksimalt innebære en kapitalforhøyelse pà NOK 10 000 000. Fristen for ä kreve utstedt aksjer er den dag som faller 3 àr etter 21. juli 2016, dvs. 21. juli 2019, hvoretter Teg n i ng s rette n e bortf a I I e r ute n ko m p e nsas"¡bn f/ Rettighetshaver. Tegningsrettene kan utøves pä ethvert tidspunkt i nevnte periode.

• Dersom aksjekapitalen forhøyes eller red useres (herunder ved fusjon og fisjon) skal tegningskursen justeres, eller Rettighetshaver kompenseres pâ annen måte som fremgàr av Warrants Avtalen. Det samme skal gjelde ved kapitalnedseffelsq aks,¡bspleis og aksjesplitt, utbetaling av utbytte, afsfede/se av tegningsretter eller konvertible lân med fortrinnsrett for aksjeeierne, eller andre disposisjoner som pàvirker Se/skapefs aksjer, aksjekapital eller egenkapital pà en negativ màte for Reftighetshaver. Ovenstàende gjelder ikke de planlagte ege n ka pitaltransaksjoner s om følger av Sammenslåingen, dvs. Deep Sea Supply Fusjonen og Farstad Fusjonen. I

• 10 De nye aksjene som ska/ ufsfedes ved bruk av Te g n i n g s rette ne s kal I i ke st i I I es med Se/skapefs allerede utstedte aksjer og gi rett til utbytte fra og med registrering av kapitalforhøyelsen i Foretaksregisteret.

• 11 Øvrige vilkàr fremgår av Warrants Avtalen, og Tegningsrettene skal utøves pà de betingelser som følger av Warrants Avtalen.

• 7 Each Subscription Right shall confer the right to subscribe for one new share in the Company.

• I The consideration for the new sharesissued pursuant to the Subscription Rights shall be NOK 1.24 per share. The exercise of all of the Subscription Rights will result in an increase of the share capital by maximum NOK 10,000,000. The deadline for exercising the Subscription Rlghfs is the date falling 3 years after 21 July 2016, meaning 21 July 2019, after which the Subscription Rights will lapse without compensation to the Holder. The Subscription Rlghfs may be exercised at any time during the above-mentioned period.

• lf the share capital is increased or reduced (also by a merger or demerger), the subscription price shall be adjusted accordingly, or the Holder shall be compensated by other means as set out in the Warrants Agreement. Ihrs a/so applies in the event of a share consolidation or share split, dividend payments, the rssurng of subscription rights or convertible loans with preferential rights for the shareholders, or other resolutions that affect the Company's shares, share capital or equity with a negative effect for the Holder. The above does not apply to planned equity transactions that follow from the Combination, meaning the Deep Sea Supply Merger and the Farstad Merger. I

• 10 The new shares lssued by exercise of the Subscription Rights shall be ranked equally with the existing sf,ares in the Company and carry dividend rights from the date on which the capital increase is registered in the Norwegian Register of Eusiness Enterprise (Foretaksregisteret).

• 11 Terms and conditions are otherwise set out in the Warrants Agreement, and exercise of the Subscription Rights shall be made on the terms sef ouf in the Warrants Agreement.

• 12 Gjennomføring av utstedelse av Tegningsrefter etter denne sak pà dagsorden, herunder tegning

• av Tegningsrettene, er betinget av at DESSC Fusjon / og DESSC Fusjon ll gjennomføres som planlagt.

4. SÆRLIGE RETTIGHETER

lngen aksjeeiere har særlige rettigheter ¡ DESSC. DESSC har utstedt 10.000.000 frittstående tegningsretter (warrants) i henhold til avtale daterl21. juli 2016 ("Warrants Avtalen"). Tegningsreftene gir rett til å tegne et tilsvarende antall aksjer i DESSC for NOK 1,24 per aksje og kan utøves når som helst innen tre år fra utstedelsen. Med mindre tegningsrettene innløses til markedsverdi i henhold til Wanants Avtalen forut for gjennomføring av DESSC Fusjon l, skal disse tegningsrettene i samsvar med Warrants Avtalen konverteres til tegningsretter i Solship Sub, og demest konverteres til tegningsretter i SOFF i forbindelse med DESSC Fusjon ll. Antall tegningsretter og tegningskursen skal i den forbindelse justeres for bytteforholdet mellom DESSC og SOFF, men ellers videreføres i uendret form.

Utover tegningsrettene (warrants) beskrevet over har ikke DESCC utstedt noen tegningsretter som nevnt i allmennaksjeloven $ 11-1, S 11-10 eller S 11-12, jf. allmennaksjeloven $ 13-26 (2) nr. L

Det vil ikke tilfalle medlemmer av kontroll- eller tilsynsorganer, styret eller daglig leder i DESSC eller Solship Sub noen særlige rettigheter eller fordeler ved DESSC Fusjon l, jf. jf. allmennaksjeloven S 13-26 (2) nr. 8. Uavhengige sakkyndige vil motta honorarfor utarbeidelse av sakkyndig redegjørelse(r). Utover dette vil det ikke tilfelle uavhengige sakkyndige noen særlige rett ellerfordel ved DESSC Fusjon l.

12 Completion of the issue of Subscription Rights under this item on the agenda, including the subscription for Subscription Rþhfs, /s conditionalon fhe DESSC Merger I and the DESSC Merger ll being carried out as planned

4. SPECIAL RIGHTS

There are no shareholders in DESSC who have special rights. DESSC has issued 10,000,000 independent subscription rights (warrants) in accordance with the agreement dated 21 July 2016 (the "Warrants Agreement"). The warrants give the holder the right to subscribe for a conesponding number of shares in DESSC at NOK 1.24 per share and may be exercised at any time within three years of the issue date. Unless exercised at market value in accordance with the Warrants Agreement prior to completion of the DESSC Merger l, the warrants will, in accordance with the Warrants Agreement, be converted into wanants in Solship Sub, and then be converted into wanants in SOFF in connection with the DESSC Merger ll immediately thereafter. The number of warrants and the subscription price shall be adjusted in accordance with the exchange ratio between DESSC and SOFF, but othen¡vise remain unaltered.

Other than the warrants described above, DESSC has not issued any subscription rights as mentioned in Section 11-1 , 11-1 0 or 1 1-12 of the PLLCA, cf. Section 13-26 (2) no 8.

No special rights or benefits will accrue to supervisory or regulatory bodies, the board of directors or the general manager of DESSC or Solship Sub in connection with the DESSC Merger l, cf. Section 13- 26(2) no I of the PLLCA. lndependent experts will receive remuneration for the preparation of expert statement(s). Apart from this, no special rights or benefits will accrue to independent experts in connection with the DESSC Merger l.

5. nAoIcnETSBEGRENSNINGER. UTDELINGSFORBUD

lngen av Partene - eller selskapene som inngår i deres konsern - skal fra inngåelsen av Fusjonsplanen opptre i strid med bestemmelsene i Fusjonsplanen.

En Part skal ikke uten de øvrige Parters forutgående samtykke beslutte eller foreta vesentlige investeringer, salg av virksomhet eller forandringer i sin virksomhet eller kapitalstruktur, eller andre disposisjoner som er av vesentlig betydning for Sammenslåingen eller som faller utenfor rammen av ordinær drift. Disse begrensningene gjelder ikke handlinger som er forutsatt i Fusjonsplanen, eller som er nødvendige for å gjennomføre DESSC Fusjon l.

Fra signering av Fusjonsplanen og frem til DESSC Fusjon I's Virkningstidspunkt har verken DESSC eller Solship Sub rett til å foreta utdeling av utbytte eller andre utdelinger på aksjene uten samtykke fra samtlige aksjeeiere i disse selskapene.

6. FORVALTNING AV EIENDELER MV. FREM TIL VIRKNINGSTIDSPUNKTET

DESSC sine eiendeler skal forvaltes og holdes adskilt fra Solship Sub sine eiendeler inntil Virkningstidspunktet.

7 OMKOSTNINGER

Dersom DESSC Fusjon I ikke gjennomføres skal hver av Partene fullt ut dekke egne kostnader.

8. RAPPORT OM FUSJONEN OG REDEGJøRELSE FOR FUSJONSPLANEN

8.1 Rapport om DESSC Fusjon I

Styrene i DESSC og Solship Sub har utarbeidet hver sin rapport om DESSC Fusjon I og hva den vil bety for

5. RESTRICTION ON THE RIGHT OF DISPOSAL. PROHIBITON ON DISTRIBUTION OF DIVIDEND

Neither of the Parties - or the companies in the Parties' groups - shall, from the entering into of the Merger Plan, act in breach of the provisions of the Merger Plan.

A Party shall not, without prior approval from the other Parties, resolve or make any material investment, sale of activity or change to its business or capital structure, or other disposals of material importance to the Combination or that fall outside the scope of ordinary business conduct. These limitations do not apply to any of the actions provided for by the Merger Plan or that are deemed necessary in order to complete the DESSC Merger L

From the signing of the Merger Plan and until the Effective Date of the DESSC Merger, I neither DESSC nor Solship Sub shall have the right to distribute dividend or make other distributions of the shares without the prior consent of all shareholders of these companies.

6. MANAGEMENT OF ASSETS UNTIL THE EFFECTIVE DATE

The assets of DESSC shall be managed and kept separate from the assets of Solship Sub until the Effective Date.

7 GOSTS

lf the DESSC Merger I is not completed, each of the Parties shall cover their own costs in full.

8. REPORT ON THE MERGER AND STATEMENT ON THE MERGER PLAN

8.1 Report on the DESSC Merger I

The boards of directors of DESSC and Solship Sub have each prepared a report on the DESSC Merger I hvert av selskapene i samsvar med allmennaksjeloven Sf 3-27, jf. S 13-9 og section 201 N i Companies Law.

8.2 Sakkyndig redegjørelse for Fusjonsplanen Styrene i DESSC og Solship Sub har i fellesskap engasjert FGH Revisjon AS som har utarbeidet en sakkyndig redegjørelse for Fusjonsplanen datert 24. mars2017 i samsvar med allmennaksjeloven S 13-28, jf. S 13-10 (1) til (3), jf. S 10-2 (3) os S 2-6 (1) og (2), os section 201(O) i Companies Law.

9. REGNSKAPOGVEDTEKTER

Arsregnskap og årsberetning med revisjonsberetning for DESSC de siste 3 regnskapsår samt halvårsrapport etter verdipapirhandelloven $ 5-6 er inntatt i Vedleqq 2.1. Gjeldende vedtekter for DESSC er inntatt i Yedleqq2.2.

Solship Sub ble stiftet 21. februar 2017 , og har således ikke utarbeidet årsregnskap eller årsberetning. Gjeldende vedtekter for Solship Sub er inntatt i Vedleqq 1.3, mens vedtekter for Solship Sub etter DESSC Fusjon I er inntatt i Vedleqq 1.4.

IO. FORHOLDET TIL DE ANSATTE

10.1 DESSC

Partene har vurdert section 201W i Companies Law vedrørende ansattes rettigheter i en grensekryssende fusjon. Som et utgangspunkt vil ansattes rettigheter i forbindelse med fusjonen reguleres av norsk rett, siden overtakende selskap er norsk.

Siden DESSC ikke har noen ansatte vil ikke forholdet til Because DESSC does not have any employees, the

and on its implications for each of the companies in accordance with Section 13-27 of the PLLCA, cf. Section 13-9, and section 201N of the Companies Law.

8.2 Expert statement on the Merger Plan The boards of directors of DESSC and Solship Sub have jointly hired FGH Revisjon AS, which has prepared an expert statement on the Merger Plan dated 24 March 2017 in accordance with Section 13- 28 of the PLLCA, cf. Section 13-1 0 (1 ) to (3), cf. Section 10-2 (3) and Section 2-6 (1) and (2), and Section 201(O) of the Companies Law.

9. ANNUAL ACGOUNTS AND ARTICLES OF ASSOCTATTON

Annual accounts and the board of directors' report, including the auditor's report for DESSC for the past three financial years as well as the half-year report in accordance with the Securities Trading Act Section 5- 6, are enclosed hereto as Appendix 2.1. The current Articles of Association for DESSC are enclosed hereto as Appendix 2.2.

Solship Sub was formed on 21 February 20'17, and has therefore not prepared any annual accounts or annual reports. The current Articles of Association for Solship Sub are enclosed hereto as Aooendix 1.3. while the Articles of Association for Solship Sub after the DESSC Merger I are enclosed hereto as Appendix 1.4.

IO. IMPLICATIONS FOR THE EMPLOYEES

10.1 DESSC

The Parties have considered section 201W of the Companies Law regarding employee rights in connection with a cross-border merger. ln principle, the rights of the employees in connection with the merger will be governed by Norwegian law, because the surviving company is Nonruegian.

de ansatte være av betydning i henhold til norsk rett.

10.2 Solship Sub

Solship Sub har ingen ansatte.

11. ENDRINGER

Styrene i DESSC og Solship Sub gis fullmakt til i fellesskap à $øre mindre endringer i Fusjonsplanen uten at disse må legges frem for generalforsamlingen.

12. OFFENTLIGGJøRING OG KONFIDENSIALITET

lnngåelsen av Fusjonsplanen skal offentliggjøres gjennom utsendelse av felles pressemelding på slikt tidspunkt som avtales nærmere mellom Partene.

All informasjon som er og vil bli tilegnet fra en annen Part i anledning Deep Sea Supply Fusjonen, og som ikke er allment kjent, skal behandles konfidensielt og ikke benyttes til andre formål enn i forbindelse med sammenslåingen. Dette gjelder likevel ikke dersom plikt til å gi slik informasjon følger av lov eller forskrift. I slike tilfeller må den som er pålagt å gi informasjon, (så vidt mulig) konsultere den annen Part før informasjonen gis.

13. LOWALG OG JURISDIKSJON

Denne Fusjonsplanen skal være underlagt norsk reft. Enhver tvist vedrørende Fusjonsplanen som ikke avklares i minnelighet skal løses ved de ordinære domstoler med Oslo som vemeting.

matter of employee rights is of no significance in relation to Nonruegian law.

10.2 Solship Sub

Solship Sub does not have any employees.

1'1. AMENDMENTS

The boards of directors of DESSC and Solship Sub are authorised to jointly make minor changes to the Merger Plan without presenting such changes to the general meeting.

12. DISCLOSUREANDCONF¡DENTIALITY

The entering into of the Merger Plan shall be disclosed by publishing joint press release at a time to be agreed between the Parties.

All information that is and will be received from any other Party in relation to the Deep Sea Supply Merger, and that is not publicly available, shall be treated as confidential and shall not be used for other purposed than in connection with the Combination. However, this shall not apply to the extent that the duty to provide such information follows from law or regulations. ln such cases, the Party that is ordered to provide information must (as far as possible) consult the other Party before the information is given.

13. APPLICABLELAWANDJURISDICTION

This Merger Plan shall be governed by and construed in accordance with Norwegian law. Any disputes arising from or in connection with the Merger Plan that are not settled amicably shall be finally settled by the ordinary Norwegian courts with Oslo as the legal venue.

VEDLEGG TIL FUSJONSPLANEN

• SOLSHIP SUB SOM OVERTAKENDE SELSKAP
• 1.1 Utkast til åpningsbalanse for Solship Sub
• 1.2 Bekrefrelse fra revisor om at åpningsbalansen forSolship Sub er satt opp i samsvar med regnskapslovens bestemmelser
• 1.3 Gjeldende vedtekter for Solship Sub
• 1.4 Vedtekter for Solship Sub etter DESSC Fusjon I

2. OESSCSOMOVERDRAGENDESELSKAP

• 2.1 Arsregnskap og årsberetning med revisjonsberetning for siste 3 regnskapsår, samt halvårsrapport for 20 1 6
• 2.2 Gjeldende vedtekterfor DESSC

APPENDICES ÌO THE MERGER PLAN

• 1. SOLSHIP SUB AS THE SURVIVING COMPANY
• 1.1 Draft opening balance sheet for Solship Sub
• 1.2 Declaration from the auditor confirming that the opening balance sheet for Solship Sub has been prepared in accordance with the provisions of the Accounting Act
• 'l .3 Cunent Articles of Association for Solship Sub
• 1.4 Articles of Association for Solship Sub after the DESSC Merger I

2. DESSC AS THE TRANSFERRING COMPANY

• 2.1 Annual account and directors' report, including the auditor's report for the past three financial years and the half-yearly report for 2016
• 2.2 Cunent Articles of Association for DESSC

ISTGNATURSTDER FøLGERI / ISTGNATURE PAGE TO FOLLOWI

For styret i Solship Sub AS / For the board of directors of Solship Sub AS

$\ell$

Lars Peder Solstad styrets leder / Chairman of the Board

$t$ $5\nu$ tu Th É.

Sven Stakkestad Styremediem / Board member

29/30

For styret i Deep Sea Supply PLC / For the board of directors of Deep Sea Supply PLC

F Neofytos Neofytou Styremedlem/Board member

Iht. fullmakt fra styret/As per authorisation from the Board of Directors

Solship Sub AS

utkast lll åpa¡ngsbalenre yed fusjon (tâll iNOK 1 000)

BALANSË PR.	28.02.2017
EIENDELER
ANLEGGSMIÐLER
Finans¡elle ãnleggsm¡dlêr
lnvestering i dâtters€lskap	937.647
lnvestering I felleskontrollert v¡rksomhet	17
Sum flnansielle anleggsmidler	937.664
Sum anleggsmidler	937.664
OMLøPSMIDLER
Fordringer
Fordringer på konsomselskaper	60
Andre kortsiktige fordringer	89
Sum tordringer	149
Bankinnskudd, kontenter og lignende
Bank¡nnskudd	224
Sum omløpsñldle¡	t73
SUM EIENDELER	938.037
BALANSE PR.	28.02.2017
EGENKAPITAL OG GJELD
EGENKAPITAL
lnnskutt ôgenkepital
Aksjekapita¡	291.330
Sum innBkutt egonkapital	29'1.330
Opptjent egonkapltal
Annen egenkapital	91.999
Sr¡m opptjent egenkapital	9'1.999
Sum egenkapita¡	383.329
GJELO
LANGSIKTIG GJELD
Annen langsiklig gj6ld	527.085
Sum annen langsiktlg gjeld	527.085
Sum langsiktlg gjeld	527.085
KORTSIKTIC GJELD
Annen korts¡ktig gJeld	27.623
Sum kortsikt¡g gJeld	27.623
SUM EGEI¡KAPITÀL OG GJELD	938.037

Skudeneshavn, 24. mars 2017

hÞ.f#-{ -{,*åtÅ¿rú(

Lars Pedor Solstad Styr€ts leder

S\¡sn Stakkestad goard mâmber

Note

Utkast til ápningsbâlanse reprêsenterer fusjonrn metlom Solship Sub AS 09 Dæp Sea Supply pLC. Deep Sea Supply PLC er overd¡agende selskap i fusjonen og Solsf¡ip Sub AS sr overtâgende selskap, Regnskapsmess¡g er tusjonen behandlet i samsvar med oppkjøpsmetod€n.

Utkast lil åpningsbalans€ er utârbeidet i samsvar med God Regnskapssk¡kk i Nofge_ Utkast til å'póingsbalanso er urev¡dert.

Solship Sub AS Draft opening balance merger (figures in NOK 1.000)

BALANCE PER	28.02.2017
ASSETS
FIXED ASSETS
Financial fixed assets
Investment in subsidiaries	937.647
Investment in Joint ventures	17
Total financial fixed assets	937.664
Total fixed assets	937.664
CURRENT ASSETS
Receivables
Group receivables	60
Other current receivables	89
Total receivables	149
Bank deposits and cash equivalents
Bank deposits	224
Total current assets	373
TOTAL ASSETS	938.037
BALANCE PER	28.02.2017
EQUITY AND LIABILITIES
EQUITY
Paid in equity
Share capital	291.330
Total paid in equity	291.330
Earned equity
Other equity	91.999
Total earned equity	91.999
Total equity	383.329
LIABILITIES
LONG TERM LIABILITIES
Other long term debt
Other long term debt	527.085
Total long term debt	527.085
Total long term liabilities	527.085
CURRENT LIABILITIES
Other current liabilities	27.623
Total current liabilities	27.623
TOTAL EQUITY AND LIABILITIES	938.037

Skudeneshavn, March 24, 2017

Lars Peder Solstad Chairman

Sve Steblet Sven Stakkestad

Board member

Note

Draft opening balance represent the merger between Solship Sub AS and Deep Sea Supply PLC. Deep Sea Supply PLC is aquired company in the merger and Solship Sub AS is aquiring company. For accounting purposes, the merger is accounted for in accordance with the acquisition method.

Draft opening balance is prepared in accordance with Generally Accepted Accounting Principles in Norway. Draft opening balance is unaudited,

Frnst & Youno AS

Drorrning EufÊmias llate tì, NO-0191 Oslo Cslo Atriunr. P.O.Box 2tl. NO-0051 Oslo

Foriìtaksrcgistoret. NO $7fi 3B$ 387 N,{VA 'ltt. +47 24 Cì0 24 00 I ax. rr,7 24 Û0 24 t1 www.ey.no Medlenrnler av [Jen norske revisorforening

Til generalforsaml¡ngen i Solship Sub AS

Uttalelse om utkast til åpningsbalanse ved fusjon

Vi har kontrollert utkast til åpningsbalanse pr. 28. februar 2A17 avlagt av styret 24. mars 2017 tor Solship Sub AS som viser en egenkapital på TNOK 383 329. Utkastet til åpningsbalanse er sammenstilt, kun for illustrasjonsformå|, basert på grunnlaget som er beskrevet i note for å gi informasjon om Solship Sub ASs balanse med tillegg av de eiendelene selskapet skal overta i forbindelse med fusjonen. lnformasjonen er sammenst¡lt for å illustrere hvordan balansen ville fremstått dersom fusjonen var gjennomført.pà den angitte balansedagen,

Sfyrefs ansvar for utkast til äpningsbalansen

Styret er ansvarlig for utkastet til åpningsbalanse

Reylsors oppgaver og plikter

Vår oppgave er å uttale oss om utkastet til åpningsbalanse på grunnlag av vårt kontrollarbeid. Det er ikke vår oppgave å utføre revisjon av den informasjonen som ligger til grunn for utkastet til åpningsbalanse. Den finansielle informasjonen som er benyüet ved sammenstillingen av åpningsbalansen, er urevidert slik det er beskrevet i note. Vi påtar oss ikke noe ansvar for flnansiell informasjon vi ikke har revidert.

Vi har utført vår kontroll og avgir vår uttalelse i samsvar med standard for attestasjonsoppdrag SA 3802-1 "Revisors uttalelser og redegjørelser etter aksjelovgivningen". Standarden krever at vi planlegger og utfører kontroller for å oppnå betryggende sikkerhet for at informasjonen i utkastet til åpningsbalanse er tilbørlig sammenstilt basert på det angitte grunnlaget, og at utkastet til åpningsbalanse er klassifisert og presentert i samsvar med regnskapslovens regler og de beskrevne prinsippene. Vi har kontrollert sammenstillingen av, og vurdert innholdet i, klassifiseringen av postene og presentasjonen av utkastet til åpningsbalanse.

Etter vår oppfatning er ¡nnhentet bevis tilstrekkelig og hensiktsmessig som grunnlag for vår konklusjon

Konklusjon

Etter vår mening er utkastet til åpningsbalanse tilbørlig sammenstilt basert på det angitte grunnlaget beskrevet i note og klassifisering og presentasjon er etter vår mening i samsvar med regnskapslovens bestemmelser og prinsippene beskrevet i note.

Oslo, 24. mars 2A17 Fnrusr & You¡¡e AS

ffiie.ã

Asbjørn Rødal statsautorisert revisor

Statsautoriserte revisorer Ernst & Young AS

Dronning Eufemias gate 6, NO-0191 Oslo Oslo Atrium, P.O.Box 20, NO-0051 Oslo

Foretaksregisteret: NO 976 389 387 MVA TIf $+47.24.00.24.00$ Fax: +47 24 00 24 01 www.ev.no Medlemmer av Den norske revisorforening

To the General Meeting of Solship Sub AS

Statement on the drafted opening balance sheet at a merger

We have reviewed the draft opening balance sheet as at 28 February 2017 approved by the Board of Directors 24 March 2017 for Solship Sub AS showing an equity of NOK 383 329 thousand. The draft opening balance sheet has been compiled, only for illustration purposes, on the basis described in note to give information about Solship Sub AS's balance sheet with the addition of the assets to be taken over by the company in connection with the merger. The information has been compiled to illustrate how the balance sheet would have looked in the event that the merger had been carried out at the stated balance sheet date.

The Board of Directors' responsibility

The board is responsible for the draft opening balance.

Auditor's responsibility

Our responsibility is to make a statement on the draft opening balance sheet based on our review. It is not our responsibility to perform an audit of the information constituting the basis for the draft opening balance. The financial information applied at the compilation of the draft opening balance sheet is unaudited as described in note. We assume no responsibility for financial information that we have not audited.

We conducted our review and issue our statement in accordance with the Norwegian standard SA 3802-1 "The auditor's statements and reports pursuant to Norwegian company legislation". The standard requires that we plan and perform our review to obtain reasonable assurance for whether the information in the draft opening balance sheet is classified and presented in accordance with the requirements of the Accounting Act and the described principles. We have reviewed the compilation of, and assessed the information in, the classification of the items and the presentation of the draft opening balance.

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

Opinion

ln our opinion, the draft opening balance sheet has been appropriately compiled in accordance with the basis described in note, and the classification and presentat¡on is in accordance with the requirements of the Nonruegian Accounting Act and the principles described in note.

Oslo, 24 March 2017 ERnsr & Your.¡c AS

Asbjørn Rødal(sign) State Authorized Public Accountant (Norway)

This is a translation of the original official Nonrvegian document and is provided for information purposes only.

VEDTEKTER FOR SOLSHIP SUB AS

(Org.nr 918 665 900)

(vedtatt 21. februar 2017)

§ 1 Firma

Selskapets firmanavn er Solship Sub AS.

§ 2 Forretningskommune

Selskapet skal ha sitt forretningskontor i Karmøy kommune.

§ 3 Selskapets virksomhet

Selskapets virksomhet skal være å drive rederivirksomhet og alt som står i forbindelse med dette, herunder å eie aksjer og andeler i selskaper som driver tilsvarende eller beslektet virksomhet.

§ 4 Aksjekapital og aksjer

Selskapets aksjekapital er NOK 30 000 fordelt på NOK 30 000 aksjer hver pålydende NOK 1.

§ 5 Styre og signatur

Selskapets styre skal bestå av inntil fire medlemmer.

Selskapets firma tegnes av hvert av styrets medlemmer alene.

§ 6 Ordinær generalforsamling

På den ordinære generalforsamling skal følgende saker behandles og avgjøres:

• 1 Godkjennelse av årsregnskapet og årsberetningen, herunder utdeling av utbytte;
• 2 Valg av styremedlemmer og revisor (derom disse er på valg);
• 3 Andre saker som etter loven eller vedtektene hører under generalforsamlingen.

ARTICLES OF ASSOCIATION FOR SOLSHIP SUB AS

(Org.no 918 665 900)

(as per 21 February 2017)

§ 1 Company name

The Company's business name is Solship Sub AS.

§ 2 Municipality

The Company shall have its business offices in the municipality of Karmøy.

§ 3 The Company of the business

The business of the Company shall be to perform shipping activities and all other activities related thereto, including owning shares in companies engaging in the same or related activities.

§ 4 Share capital and shares

The share capital of the Company is NOK 30,000 divided into 30,000 shares each with a face value of NOK 1.

§ 5 Board and signatory powers

The board of the Company shall consist of up to four (4) board members.

The signatory powers are held by each board member separately.

§ 6 Ordinary general meeting

The annual general meeting shall address and decide:

• 1 Approval of the annual accounts and the board's statement, including distribution of dividends;
• 1. Election of board members and auditor (if these are to be elected);
• 1. Any other business which by law or the Articles of Association is required to be dealt with by the general meeting.

§ 7 Innkalling til generalforsamling

Når dokumenter som gjelder saker som skal behandles på generalforsamlingen, er gjort tilgjengelige for aksjeeierne på selskapets internettsider, gjelder ikke aksjelovens krav om at dokumentene skal sendes til aksjeeierne. Dette gjelder også dokumenter som etter lov skal inntas i eller vedlegges innkallingen til generalforsamlingen.

§ 7 Summons to general meeting

When documents regarding matters which are to be dealt with at the general meeting have been made available on the internet site of the company, the requirements in the Norwegian Private Limited Liability Companies Act which state that these documents shall be sent to the shareholders, shall not apply. This exemption is also applicable with regards to documents which according to statutory law shall be included in or attached to the notice of the general meeting.

VEDTEKTER FOR SOLSHIP SUB AS

(Org.nr 918 665 900)

(vedtatt [25. april] 2017)

§ 1 Firma

Selskapets firmanavn er Solship Sub AS.

§ 2 Forretningskommune

Selskapet skal ha sitt forretningskontor i Karmøy kommune.

§ 3 Selskapets virksomhet

Selskapets virksomhet skal være å drive rederivirksomhet og alt som står i forbindelse med dette, herunder å eie aksjer og andeler i selskaper som driver tilsvarende eller beslektet virksomhet.

§ 4 Aksjekapital og aksjer

Selskapets aksjekapital er NOK 291 330 222 fordelt på NOK 291 330 222 aksjer hver pålydende NOK 1.

§ 5 Styre og signatur

Selskapets styre skal bestå av inntil fire medlemmer.

Selskapets firma tegnes av hvert av styrets medlemmer alene.

§ 6 Ordinær generalforsamling

På den ordinære generalforsamling skal følgende saker behandles og avgjøres:

• 1 Godkjennelse av årsregnskapet og årsberetningen, herunder utdeling av utbytte;
• 2 Valg av styremedlemmer og revisor (derom disse er på valg);
• 3 Andre saker som etter loven eller vedtektene hører under generalforsamlingen.

ARTICLES OF ASSOCIATION FOR SOLSHIP SUB AS

(Org.no 918 665 900)

(as per [25 April] 2017)

§ 1 Company name

The Company's business name is Solship Sub AS.

§ 2 Municipality

The Company shall have its business offices in the municipality of Karmøy.

§ 3 The Company of the business

The business of the Company shall be to perform shipping activities and all other activities related thereto, including owning shares in companies engaging in the same or related activities.

§ 4 Share capital and shares

The share capital of the Company is NOK 291,330,222 divided into 291,330,222 shares each with a face value of NOK 1.

§ 5 Board and signatory powers

The board of the Company shall consist of up to four (4) board members.

The signatory powers are held by each board member separately.

§ 6 Ordinary general meeting

The annual general meeting shall address and decide:

• 1 Approval of the annual accounts and the board's statement, including distribution of dividends;
• 1. Election of board members and auditor (if these are to be elected);
• 1. Any other business which by law or the Articles of Association is required to be dealt with by the general meeting.

§ 7 Innkalling til generalforsamling

Når dokumenter som gjelder saker som skal behandles på generalforsamlingen, er gjort tilgjengelige for aksjeeierne på selskapets internettsider, gjelder ikke aksjelovens krav om at dokumentene skal sendes til aksjeeierne. Dette gjelder også dokumenter som etter lov skal inntas i eller vedlegges innkallingen til generalforsamlingen.

§ 7 Summons to general meeting

When documents regarding matters which are to be dealt with at the general meeting have been made available on the internet site of the company, the requirements in the Norwegian Private Limited Liability Companies Act which state that these documents shall be sent to the shareholders, shall not apply. This exemption is also applicable with regards to documents which according to statutory law shall be included in or attached to the notice of the general meeting.

DEEP SEA SUPPLY PLC Annual report 2013

Content

• 4 Deep Sea Supply at a glance
• Fleet list $6\phantom{a}$
• Board of directors 8
• 10 Report from the board
• 15 Consolidated Financial Statements
• 15 Consolidated income statement
• 15 Consolidated statement of comprehensive income
• 16 Consolidated balance sheet
• 18 Statement of changes in equity
• 19 Consolidated statement of cash flows
• 21 Notes to the consolidated financial statements
• 64 Auditor's report
• 66 The largest shareholders
• 68 Corporate governance
• 73 Parent Company Financial Statements

Deep Sea Supply at a glance

Deep Sea Supply PIc

I" DESSC" or the Company) is an offshore supply company listed on Oslo Stock Exchange. The company is incorporated in Cyprus.

Strategy

The Company's vision is to become a leading global offshore supply vessel company. The Company will primarily seek to obtain and maintain a chartering profile with emphasis on the long term contract markets for its fleet of AHTS (Anchor Handling Tug and SupplyVessels) and PSVs )Platform Supply Vessels). The Company's primary aims are to meet the demand from the markets that require modern and advanced offshore vessels.

The Company is focusing on acknowledged Safety Standards within the Offshore Marine Industry worldwide. The top management is dedicated to supervise that all personnel are well acquainted with HSEO standards and procedures, and all efforts will be made to ensure that each individual has the preferred attitude and behaviour with respect to safety matters and is carrying out the operations in accordance with best practices.

The Company has during the last couple of years focused on taking delivery of newbuildings, exploring new markets and developing in-house technical management organisations in Singapore, Brazil and Norway. All vessels are today under in-house technical management.

DESSC will actively consider investments in the perspective of providing attractive financial returns to its shareholders. The Company will actively consider possibilities to participate in industry consolidation, mergers and acquisitions, entering into joint ventures and will position itself to be part of such consolidation.

In line with this strategy the Company in May 2013 announced the sale of 50% of its Brazilian business (15 vessels and the Management company) to BTG Pactual ("DESS BTG") As part of the transaction DESS BTG acquired 6 newbuild PSV, with delivery 2013 and 2014.

The Company intends to use the capital market when doing investments, and does not intend to hold significant liquid reserves for investments. Retained earnings will, to the extent permitted under operational constraints, financial covenants and with due regard to appropriate working capita) requirements, be paid out as dividends.

Vessel operation

The Company had per 31 December 2013 a fleet consisting of 27 vessesl of which 15 AHTS and 12 PSVs. 9 AHTS and 9 PSVs is owned 50% by DESSC through DESS

BTG while one of the AHTS is owned through the participation in a Joint Venture in Malaysia.

At year-end the vessels operated in South America, Asia, Europe and Africa.

In 2013,3 newbuilding PSV were delivered frem Sinopacific shipyard to DESS BTG.

By year-end 2013 DESS BTG has 3 vessels under construction with expected delivery in 1 H 2014.

Please find a full presentation of the Company's fleet of vessels and newbuilding program on the next pages.

Management and employees

The Company employs and maintains a small, focused and qualified management within the following core activities;

• Chartering of the vessels
• •Technical and crew management of the vessels
• Business development
• Investor relations / finance / accounting

The Company is incorporated in Limassol, Cyprus. The Company has management companies in Cyprus, Singapore, Brazil and Norway. As of year-end the staff is 72 persons, which is an increase of 17 frem last year.

Deep Sea Supply Management (Cyprus) Ltd.

The Company was established in 2007 and focuses primarily on financial reporting, cash management, control functions and insurance claims handling. The Company has 3 employees and is headed by Mr. ConstantinosTzagotzides,

Deep Sea Supply Navegacao Maritima Ltda, Rio de Janeiro, Brazil

The company was established in 2009 after DESSC contracted a large PSV from STX Offshore Brazil S**.**A. The Company has 31 employees and is a fully operational shipping company in Brazil including chartering and technical and crew management. The General Manager is Mr. Dante Carvalho.

Deep Sea Supply Management (Singapore) Ltd.

The Company was established in 2010, in continuation of a representative off ice which has been in Singapore since 2006, and has 26 employees. The Company is a fully operational shipping company including chartering, technical and crew management. The General Manager is Mr. Joey Daigle.

Deep Sea Supply Management AS

The Company was established in 2006 and has 12 employees involved in Chartering, Business Development, Finance, Accounting andTechnical. The CEO is Mr. Finn Amund Norbye.

The Management team of the Company is as foliows:

Finn Amund Norbye, CEO - Chief Executive Officer: Finn Amund Norbye has a long and international career within shipping and finance. Mr Norbye held the position as CFO in Deep Sea Supply for 4 years before taking the position as CEO in 2010. From 2001-2006 he was CFO of Bergshav Management AS and from 1999-2001 he was Director and Head of Fortis Bank's Shipping Divisjon in Rotterdam. Prior to that, he worked 12 years with Christiania Bank's Shipping department in Singapore, London and Oslo. Mr. Norbye holds a Masters degree (Siviløkonom) from Norwegian School of Economics and Business Administration (NHH) and Stockholm School of Economics.

Anders Hall Jomaas, CFO - Chief Financial Off icer:

Anders Hall Jomaas holds a MsC within Industrial Economics and Technology Management from Norwegian University of Science and Technology (NTNU). He joined Deep Sea Supply in 2007 and held the position of Finance Manager for 3 years before taking the position as CFO in 2010. Prior to joining Deep Sea Supply, he worked within project management consulting and finance management for 5 years.

ConstantinosTzagotzides - Accounting Director

ConstantinosTzagotzides holds a BsC in Applied Accounting and is a Fellow of the Association of Chartered Certified Accountants. Re has 10 years of experience in accounting related positions. He has worked as Chief Accountant in Deep Sea Supply since 2007 Previously, he was employed as a chief accountant in A.P Moller Maersk, Cyprus and has furthermore worked as an auditor.

Olaf J. Hafredal, COO - Marketing Director:

Olaf J. Hafredal has an extensive and varied experience from the offshore supply industry and has been Marketing Director with Deep Sea Supply since 2005. From 1971 to 1990, he worked as shipbroker with Johan G. Olsen Shipbrokers AS. In 1990 he ioined Viking Supply Ships AS as Chartering Manager. When Viking Supply Ships sold its supply fleet to Sævik Supply ASA at the end of 1996, he followed the fleet and worked as Chartering Manager for Sævik Supply until the same fleet was sold on toTrico Supply ASA. Mr. Hafredal was then appointed Deputy Managing Director and Head of Chartering forTrico Supply, a position he held until 2004. Before joining Deep Sea Supply Plc, Mr. Hafredal worked as Chartering Manager for Havila Shipping AS.

Jon Are Gummedal,Technical Director:

Jon Are Gummedal started his carrier working as alechnical Superintendent from 2003. In 2008 he took the position as thelechnical Director in one of the largest Ship Management Companies in Norway managing 86 owned vessels. He joined Deep Sea Supply in 2014.

Kjetil LØseth, HSEQ Director:

Kjetil Løseth holds a Candidatus Scientiarum degree within natural science from the Norwegian University of Science andTechnology (NTNU). He has several years of experience from the offshore oil and gas and drilling industry (Archer, Seadrill and North Atlantic Drilling). Mr Løseth joined Deep Sea Supply in 2013.

Joey Daigle - General Manager, Singapore

Joey Daigle has a long and extensive experience in the offshore oil & gas industry. From 1982 to 1997, he worked onboard offshore supply and anchor-handling vessels as Captain. From 1998 to 2007, he worked on DP-3 drill ships, semi-submersibles, dive support and ROV vessels as a Deck Officer/DP Operator/Master and Offshore Installation Manager. Before joining DESS in July 2010, Mr. Daigle worked as Operations Manager for Eastern Marines Services Limited at which time he established and opened the office in Singapore in 2007

Dante Carvalho - General Manager, Brazil

Dante Carvalho holds Naval Architect/Marine Engineer degree from Federal University of Rio de Janeiro (UFRJ) in 1987 and Offshore Structures Post Graduated in 1989. Mr. Carvalho has a long and extensive experience from the Petroleum industry and the Shipping business. From 1989 to 2001 he worked as Port State, Flag State Surveyor and Auditor of ships and platforms in the Brazilian Maritime Authority. In 2002 he joined a position of Exploration and Production Operational Safety Coordinator in the Brazilian Petroleum Agency (ANP), working there until 2005. Dante worked as HSEO Coordinator in EN) Oil do Brasil from 2006 to 2007 and as Commercial Manager in Astromaritima Navegaçäo S.A. from 2007 to 2010. He is the General Manager of Deep Sea Supply Brazil since April 2010.

Fleet list as per April 2014 - Deep Sea Supply PLC

Existing Vessels	Design	Yard	Year Built	BHP/DWT
AHTS
Sea Lynx	KMAR 404	Kværner Leirvik, Norway	1999	15000 BHP
Sea Bear	KMAR 404	Kværner Kleven, Norway	1999	15000 BHP
Sea Ocelot	Khiam Chuan	Jaya Shipbuilding, Singapore	2007	10880 BHP
Sea Eagle 1	Khiam Chuan	Jaya Shipbuilding, Singapore	2009	12000 BHP
Sea Weasel	Seatech P 729	ABG Shipyard Ltd, India	2009	6500 BHP
Sea Badger	Seatech P729	ABG Shipyard Ltd, India	2011	6800 BHP
Psv
Sea Witch	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Angler	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 D\A/T
Sea Trout	VS 470 MKII	Karmsund M.S, Norway	2008	3300 DWT
Sea Falcon	PX105	Sinopacific Shipyard, China	2013	4543 DWT
Sea Flyer	PX105	Sinopacific Shipyard, China	2013	4600 DWT
Sea Tante lus	STX 05L	Cochin Shipyard Ltd, India	2013	4031 DWT
Sea Titus	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT
Sea Tortuga	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT

Fleet list as per April 2014 - Deep Sea Supply BTG

Existing Vessels	Design	Yard	Year Built	BHP/DWT
AHTS
Ses Tiger	KMAR 404	Kværner Kleven, Norway	1998	15000 BHP
Ses Leopard	KMAR 404	Kværner Kleven, Norway	1998	15000 BHP
Ses Panther	KMAR 404	Kværner Leirvik, Norway	1999	15000 BHP
Ses Cheetah	Khism Chuan	Jaya Shipbuilding, Singapore	2007	15000 BHP
Ses Jaguar	Khiam Chuan	Jaya Shipbuilding, Singapore	2007	15000 BHP
Ses Fox	Sestech P729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Jackal	Seatech P 729	ABG Shipyard Ltd, India	2011	6800 BHP
Ses Vixen	Sestech P 729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Stoat	Sestech P 729	ABG Shipyard Ltd, India	2011	6800 BHP
psv
Sea Halibut	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DWT
Sea Pike	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DWT
Ses Bass	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Poliock	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Turbot	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Ses Brasil	STX 09	STX Promar, Brazil	2012	4700 DWT
Ses Forth	PX105	Sinopacific Shipyard, China	2013	4600 DWT
Sea Frost	PX105	Sinopscific Shipyard, China	2013	4600 DWT
Sea Spark	PX105	Sinopscific Shipyard, China	2013	4600 DWT
Ses Spear	PX105	Sinopacific Shipyard, China	2014	4600 DWT
Sea Spider	PX105	Sinopscific Shipyard, China	2014	4600 DWT
Ses Springer	PX105	Sinopacific Shipyard, China	2014	4600 DWT

Board of directors

Frixos Savvides Bonn 1951 Director since 2007

Other board assignments: Trust International lnsurance Co. (Cyprus) Ltd (chairman) Trust Re Insurance - Bahrain Lanitis Holdings Ltd Advent E.0 Holdings Ltd Global Ship Lease

Education: Fellow of the Institute of Chartered

Accountants in England and Wales.

Shares in Deep Sea Supply Plc per 31.12.2013: 30000

Hans PetterAas Bonn 1946

Director since 2013

Other board assignments: Ship Finance International Ltd Golar LNG Ltd Golar LNG Partners Ltd Knightsbridge Tankers Ltd KNOT Partners Ltd Solvang ASA and several privately held companies

Education:

Norwegian School of Economics and Business Administration, Bergen

Shares in Deep Sea Supply per 31.12.2013: None

Kathrine Fredriksen Bom 1983

Director since 2009

Other board assignments: Golar LNG Ltd. Seadrill IndependentTankers Corporation Ltd.

Education:

Wang Handelsgymnas Oslo European Business School London 2002-2005

Shares in Deep Ses Supply Ptc per 31.12.2013: None

Harald Thorstein

Bonn 1979 Chairman since 2013 Member of the board of directors since 2013

Other board assignments:

Aktiv Kapital ASA (Chairman) Ship Finance International Limited Northern Offshore Limited Seadrill Partners

Education:

Master of Science degree within Industrial Economics andlechnology Management from the Norwegian University oflechnology and Science

Shares in Deep Sea Supply per 31.12.2013: None

Report from the board - the financial year 2013

Deep Sea Supply P!c

("Deep Sea Supply' "DESSC" or the "Company" on a consolidated basis) achieved operating revenues of USD 59.1 mill, gross profit of USD 18.6 mill and operating profit of USD 11.3 mill. Following profit from discontinued operations of USD 93.0 mill, the net result after tax was USD 100.2 mill or USD 0.79 per share. The book equity as per 31 December 2013 was USD 2572 mill.

The consolidated financial statements of the Company as presented in the 2013 Annual Report have been prepared in compliance with IFRS as adopted by the ELI and the requirements of the Cyprus Companies Law, Cap. 113. The financial results from the 50% owned Brazilian business is included in "Share of profit of investments accounted for using the equity method."

The Board measures the financial performance of Deep Sea Supply by financial statements as presented in note 5 to the Annual Report, in which 50% of the financial figures from the Brazilian business is incorporated line by line using the proportionate method.

Company background

Deep Sea Supply is a Cyprus based offshore supply company with a modem fleet of anchor handling tug and supply vessels ("AHTS") and platform supply vessels ("PSVs") operating worldwide. The Company became operational in July 2005 through the acquisition of 6 large AHTS vessels, and as per 31 December 2013 the company operated 30 vessels with an average age of 5.5 year. Of the 30 vessels, 15 are AHTS vessels and 15 are PSVs.

The parent company is domiciled in Limassol, Cyprus, and the Company has offices in Cyprus, Norway, Singapore and Brazil. The total number of on-shore employees at year-end was 72 and the number of seafarers was approximately 600

Deep Sea Supply is listed on Oslo Stock Exchange with the ticker code "DESSC'

Strategy

The Company's vision is to become one of the leading offshore supply vessel companies on a global basis. The Company is a fully integrated shipowning company and focus on the following main activities;

• Chartering of the vessels
• Technical and crew management of the vessels
• Business development
• Investor relations and finance

The chartering and marketing activities of the Company are performed from offices in Singapore, Brazil and Norway. The

Company seeks to obtain long term charter contracts for the vessels.

The Company aims at maintaining an open and transparent information strategy.

Sale of 50% of Brazilian business and purchase of 6 vessels

On 31 st of May 2013 the Company concluded the sale of 50% of its Brazilian business consisting of 15 vessels and the Brazilian management company and purchased 6 vessels under construction together with its new Brazilian partner BTG Pactual ("BTG"). By establishing this new company ("DESS BTG") and buying 6 new PSVs, DESS BTG owns a fleet of 21 vessels.

The sale to BTG resulted in a book gain of MUSD 82.4 net of transaction costs. The Company paid MUSD 50.1 as its 50% share of 6 newbuilding vessels. These vessels are large PSVs of PX 105 design built at Sinopacific Shipyard in China. As per 31 December 2013, 3 out of 6 vessels were delivered from the shipyard. The remaining 3 vessels are expected to be delivered during the first 4 months of 2014.

Fleet

In 2013, the three PSVs "Sea Forth "Sea Frost" and "Sea Spark" were delivered from Sinopacific Shipyard, China to DESS BTG

Deep Sea Supply operates a fleet of 30 vessels including the three PSVs "Sea Falcon' "Sea Flyer" and "Sealantalus" owned by PSV Holding Inc, a company affiliated with the Company's main shareholder, Hemen Holding Ltd.

The total fleet of 30 vessels operates worldwide, and by end of 2013 the vessels operated in the following geographical areas;

North Sea:	6 vessels
Asia:	6 vessels
South America:	15 vessels
West Africa:	3 vessels

Of the 30 vessels, 24 vessels had Cyprus flag, 1 Brazilian flag, 1 Panama flag, 2 Malaysian flag and 2 vessels had Norwegian flag.

Deep Sea Supply's maintenance philosophy is to do proactive maintenance to ensure that the vessels can operate safely and are in good technical condition at all times. At the same time the Company focuses on good cost control. During the last years, a fuel efficiency program aiming at reducing the vessels' fuel consumption has been initiated.

Geographic markets

In 2013, the Company will continue its current focus on South America, Asia and North Sea, and work in order to increase its presence in Africa.

The 2013 financial statements and certain main risk factors

The consolidated financial statements of the Company have been prepared in accordance with, and comply with, IFRS. The financial statements presented in note 5 incorporates 50% of the financial figures from the Brazilian business line by line using the proportionate method, and this is how the Board measures the financial performance of the Company.

Going concern

The financial accounts are prepared on a going concern basis

Revenue and profit

The Company recorded freight revenues of USD 59.1 mill and vessels' operating expenses of USD 23.3 mill. Operating lease for the vessels on bareboat contracts were USD 4.5 mill. Othor operating expenses (mainly general and administrative expenses for the offices in Cyprus, Singapore, 8razil and Norway) were USD 7.7 mill.

The Company's revenues in 2013 were in USD, BRL and GBR and the operating expenses were mainly in USD, BRL, SGD and NOK.

Normal depreciation of the vessels was USD 12.8 mill. The vessels' book values are depreciated to zero when the vessels are 30 years old.TheVessels' intermediate and full surveys are balanced and depreciated until the time of the next intermediate or special survey Iapproximately every 2.5 years for the intermediate and 5 years for the speciall.

The Company's operating profit in 2013 was USD 11.3 mill

Other gains of USD 1.1 mill mainly includes the deferred gain amortized in the period of USD 1.0 mill. Such deferred gain is related to the gain on sale of vessels to Ship Finance International in 2007 and 2008 where the gain on sale is recorded as revenue over a period of 12 years.

Financial expenses were USD 8.8 mill and net currency items were positive USD 2.6 mill.

Total taxes for the Group in 2013 were USD 0.4 mill

The profit for the year from continuing operations was USD 7.2 mill.

The profit for the year from discontinued operations was USD 93.0 mill. This includes the sales gain of USD 82.4 mill on the sale of 50% of the Brazilian business and the profit of USD 10.6 mill from the operations of the Brazilian business in the period from 01 January to 31 May 2013.

Following this, the Company's total profit for the year was USD 100.2 mill.

Dividend policy

The Company intends to actively use the capital market when doing investments, and does not intend to hold significant liquid reserves for investments. Retained earnings will, to the extent permitted under operational constraints, financial covenants, committed capital expenditures and with due regard to appropriate working capital requirements, be distributed to shareholders as dividend.

In 2013 there were no dividends distributed to the shareholders.

Balance sheet

Total assets as per 31.12.2013 were USD 436.7 mill consisting mainly of the book value of vessels. The three vessels chartered in on bareboat contracts are ciassified as operating leases and are not included in the balance sheet of the Company.

Bank deposits at year-end were USD 31.7 mill.

Book value of vessels and newbuildings - impairments The vessels were tested for impairment and none were found impaired.

Trade and other receivables

Total receivables from customers were USD 22.3 mill.

Financing - Bank facilities

In November 2011, the Company refinanced its senior loan facility with a syndicate consisting of leading international shipping banks. The loan has a repayment profile of 18 years for the new vessels, 14/15 years for the 2007/2008-built vessels and 7 years for the 1998/1999-built vessels. The senior loan facility is secured with a 1 st priority mortgage in the financed vessels.This facility originally included 15 vessels, of which 9were sold to DESS BTG in 2013. These 9 vessels were carved out from the existing 15 vessel facility to a new USD 128 mill facility, keeping both profile and remaining term from existing facility. As per year-end 2013, USD 91.6 mill was outstanding under the original facility, now including only 6 vessels, and USD 118.5 mill was outstanding under the USD 128 mill facility.

In addition, the Company also has a separate loan agreement secured with lst priority mortgage in the vessel "Sea Eagle 1 '.'This loan was drawn in February 2010 and by the end of 2013 USD 14.2 mill was outstanding. The loan has a 12 years repayment profile and a 5 year term maturing in February 2015.

In September 2012, a loan was drawn for the financing of the vessel "Ses Brasil'The loan has a 18 years repayment profile from May 2014 and fixed interest rate for the 18 years. By the end of 2013 USD 61.2 mill was outstanding under this loan agreement.

DESS BTG has secured a USD 164 mill facility with a syndicate consisting of leading international shipping banks for the financing of the 6 vessels delivered or to be delivered from Sinopacific Shipyard. As per 31 December 2013, Ioans related to 3 of 6 vessels were drawn and total outstanding loan was USD 83.4 mill, The loan has a 15 year repayment profile and a 5 year term.

Capital expenditure

DESS BTG has 3 vessels under newbuildings under construction, with remaining capital expenditure of in total USD 81 mill. For the same 3 vessels, DESS BTG can draw in total USD 81 mill under the USD 164 mill loan facility.

Equity

Shareholders' equity at the start of 2013 was USD 1570 mill. At the end of 2013 the Company's equity was USD 2572 mill. The increase of USD 100.2 mill in equity is mainly caused by the year's total comprehensive income of USD 100.3 mill.

Shareholders

Hemen Holding Limited is the Company's largest shareholder and holds 35,1% of the Company's shares.

Liquidity

Total current assets at year end were USD 89.6 mill and short term liabilities (including short term portion of long term debt) was USD 29.5 mill.

Cash and cash flow

Cash flow from operations was USD 31.8 mill for the year ended December 2013.

Sale of vessels to contributed with USD 132.1 mill, while USD 90.1 mill was spent on acquisition of 50% of 6 vessels to DESS BTG, initial funding of working capital for DESS BTG and special surveys and upgradings for the existing fleet. In addition, the Company has given a loan of USD 15 mill to DESS BTG.

Net repayment of borrowings in the twelve months period was USD 50.4 mill and interest paid was USD 171 mill.

Cash and cash equivalents were USD 31.7 mill end of 2013 compared to USD 40.4 mill end of 2012. Netinterest bearing debt was USD 86.4 mill, down from USD 468.6 mill end of 2012.

Principal risks and uncertainties

The principal risks and uncertainties faced by the Group are disclosed in Notes 3, 4 and 28 of the financial statements.

Health, safety and environment

By year end 2013, the Company's on-shore staff increased to 72 employees worl&wide. The working environment is considered good and all employees are encouraged to participate in the development of his/her position and in the development of the Company.

45 of the 72 employees are male and 27 female. The Company treats men and women equal in the recruitment processes.

Emphasis is made on professionalism and adherence to national and international laws and regulations by the suppliers delivering services to the Company. Efforts and initiatives to reduced accidents and pollution to the environment are compulsory.

The Company's vessels are engaged in sea transportation and hence at risk related to pollution of the environment.The fleet is modern with an average age of 5.5 years, and all the vessels are in compliance with requirements issued by regulatory bodies and the risk of pollution is hence viewed as limited.

The Company's shore based activities are considered environmental friendly and normal for this type (off ice) activity.

Changes in the Board of Directors in 2013

In May 2013 Mr. Fredrik Halvorsen resigned from the Board of Directors and the position of Chairman of the Board, and Mr. Harald Thorstein was elected member and Chairman of the Board of Directors for a period of 2 years. Mr. Hans Retter Aas was elected and Mr. Fr(xos Savvides was reelected as members of the Board of Directors, both for a period of 2 years. Ms. Kathrine Fredriksen was elected Alternate Director for a period of 2 years.

There were no changes to the responsibilities of the Board of Directors in 2013. Remuneration to the Board is described in Note 24 of the consolidated financial statements.

Future outlook

The Company's high contract coverage provides good earnings visibility during 2014. The Company expects revenues to increase in 102014 compared to 402013 due to improved technical and commercial utilization and positive contribution from newbuilds delivered in 402013 and 102014.

Worldwide utilization ratios and charter rates are showing positive signs. On the other hand, the order book for offshore supply vessels still remains high. Tendering activity for (ong term charters of PSVs is high, especially for operations in North Sea and Africa. The North Sea spot market remains volatile, however we expect the market to tighten as more rigs are entering the market and vessels are expected to leave for seasonal campaigns. Tendering activity for international vessels in Brazil remains 10w.

The Company's Board of Directors is evaluating strategic alternatives.These alternatives include the potential acquisition of up to 10 PSVs from PSV Holding. A conclusion is expected during 20 2014,

Corporate Governance

The Company's principles for Corporate Governance are shown below in the Annual Report.

Events after the balance sheet date

In January 2014, DESS BTG took delivery of the vessels 'Sea Spear" and "Sea Spider' and in April DESS BTG took delivery of the 6th and last vessel "Sea Springer from Sinopacific Shipyard, China.

In February 2014, "Sealitus" and "SeaTortuga' both vessels of STX 05CD design, were delivered from Cochin Shipyard, India. These vessels are owned by PSV Holding and operated by Deep Sea Supply.

Changes from preliminary accounts presented on 26 February 2014

There were no material changes from preliminary accounts presented on 26 February 2014.

Independent Auditors

The Independent Auditors, PricewaterhouseCoopers Limited, have expressed their willingness to continue in office. A resolution giving authority to the Board of Directors to f ix their remuneration will be proposed at the Annual General Meeting

Responsibility statement

In accordance with Article 9, sections (3) (c) and (7) of theTransparency Hequirements (Securities forTrading on Regulated Market) Law of 2007 ("Law"), we the members of the Board of Directors and other responsible persons for the financial statements of Deep Sea Supply Plc for the year ended 31 December 2013 confirm that to the best of our knowledge:

A)The annual consolidated financial statements that are presented on pages 15 to 61:

• (i) were prepared in accordance with the International Financial Reporting Standard as adopted by the European Union, and in accordance with the provisions of Article 9, section (4) of the Law, and
• (ii) give a true and fair view of the assets and liabilities, the financial position and the profit or losses of Deep Sea Supply Plc and the businesses that are included in the consolidated accounts as a total, and

B)The Directors' Report gives a fair review of the developments and the performance of the business as well as the financial position of Deep Sea Supply Plc and the businesses that are included in the consolidated accounts as a total, together with a description of the principal tasks and uncertainties that they are facing.

Limassol, 09 April 2014 The Board of Deep Sea Supply Pic

Kathrine Fredriksen	Hans Petter Aas
Finn Amund NorbyeChief Executive Officer	Anders Hall JomaasChief Financial Officer

Consolidated income statement

All amounts in USD 1000

	Note	2013	2012 Restated
Sales - freight revenue		59 089	42 552
Operating expenses vessels	20	(23 255)	(18 696)
Operating )eases	24	(4475)	0
Depreciation related to vessels	6	(12 781)	(12 140)
Gross Prof it		18578	11716
Other depreciation	6	(143)	(179)
Other income		589	0
Administrative expenses		(7 735)	(8 359)
Operating profit		11 289	3 178
Finance income		769	349
Other )losses(/gains - net	17	1 052	1 326
Currency gains / )losses)		2 570	713
Finance costs		(8842)	(9271)
Total other items		(4451)	(6883)
Share of profit of investments accounted for using the equity metbod	31	724	391
(Loss)/Profit before income tax		7 562	(3 314)
Income tax expenses	15	(379)	(908)
(Loss)/Profit for the year from continulng operations		7 183	(4222)
Discontinued operations
Profit for the year from discontinued operations	30	92 996	(201)
Profit for the year		100 179	(4423)
Profit Attributa ble to:
-Equity holders of the company		100 179	(4423)
-Non controlling interest		0	0
		100 179	(4 423)
Earnings per share for profit attributable to the equity holders of the company, expressed in USD per share
		USD per share	USD per share
-Basic	21	0,79	(0,03)
-Diluted	21	0,78	(0,03)

Consolidated statement of comprehensive income

	2013	2012
(Loss)/Profit for the year	100 179	(4222)
Adjustment for pension plan	217	0
Cash flow hedges	(56)	(1 435)
Total comprehensive (loss)/income for the year	100340	(5657)
Attributable to:
-Equity holders of the company	100340	(5657)
-Non-controlling interest	0	0
	100340	(5657)

Consolidated balance sheet

All amounts in USD 1000

		Year Ended 31 December
	Note	2013	2012
ASSETS
Non-Current Assets
Propertyplant and equipment
Vessels	6	162820	426751
Vessels under finance lease contracts	6	35648	212 225
Equipment and vehicie	6	257	822
Total property, plant and equipnient		198 726	639 798
Other lang term receivables		0	687
Deferred inconne tax		32	605
lnvestments accounted for using the equity method	31	113 814	1194
CIRR Deposit	14	27 070	35558
Loans to related parties	24	7 448	0
Total non-current assets		347 090	677 843
Current assets
CIRR Deposit short term portion	14	5215	5215
Inventories	10	1 372	2679
Trade receivables	9	22 323	30010
Other short term receivables	25	13 989	9 541
Loans to related parties	24	15 000	0
Cash and cash equivalents	11	31 693	40423
Total current assets		89 592	87 867
Total assets		436 681	765 710
EQUITY
Capital and reserves attributable to equity holders of the company
Share capital	12	2 544	2 544
Share premium		6878	6 878
Other paid in capital		1 807	1 934
Retained earnings and currency translation reserves		245 991	145 653

Total equity 257 220 157 007

			Year Ended 31 December
	Note	2013	2012
LIABILITIES
Non-current liabilities
Bank borrowings	14	90 790	278 426
Finance lease labiIity	14	25423	163 487
CIRR Loan	14	27070	35509
Borrowings from related parties	14	0	25 000
Deferred gain on sale and finance leaseback	29	4 910	25 984
Deferred gain on 0188 Loan		916	1173
Other long term liabilities		0	361
Pensjon scheme	7	20	195
Financial dorivatives	8	786	1 435
Total non current liabilities		149 915	531 569
Current liabilities
Trade and other payables	13	5554	23667
Current income tax liabilities		0	1 266
Bank borrowings	14	10805	26447
Finance lease liability	14	6 114	15655
CIRR Loan	14	5215	5215
Deferred gain on sale and finance leaseback	29	982	4488
Deferred gain on CIRR Loan		170	170
Financial derivatives	8	706	225
Total current liabilities		29 545	77 134
Total liabilities		179 460	608 703
Total equity and liabilities		436 681	765 710

Statement of changes in equity

All amounts in USD 1,000

	ShareCapital	Reorgani-reserves	Sharesation premium paid-in-reserves	Otherequity	Othercomprehensivereserve	income Retainedearnings	Currencytranslationdifferences	Total
Balance at 1 January 2012	2540	(123386)	130028	2023	0	158630		(7120) 162714
Comprehensive income
Profit for the year						(4 423)		(4 423)
Other comprehensive income for the year					(1 435)			(1 435)
Total comprehsive income	0	0	0	0	(1 435)	(4423)	0	(5 858)
Transaction with owners
Valuation of share option scheme				(89)				(89)
lssue of capital - exercise of share options	4		236					240
Total transactions with owners	4	0	236	(89)	0	0	0	151
Balance at 31 December 2012	2544	(123386)	130264	1934	(1435)	154206		(7 120) 157007
Balance at 1 January 2013	2544	(123386)	130264	1934	(1435)	154206		(7120) 157007
Comprehensive income
Profit for the year						100 179		100 179
Other comprehensive income for the year					161			161
Total comprehsive income	0	0	0	0	161	100179		0 100340
Transaction with owners
Valuation of share option scheme				(127)				(127)
Transfer currency tranlation to retained earnings						(7 120)	7 120	0
Total transactions with owners	0	0	0	(127)	0	(7 120)	7 120	(127)

2 544 (123 386) 130 264 i 807 (1 274) 247 265 (0) 257 220 Balance at 31 December 2013

Consolidated statement of cash fiows

All amounts in USD 1,000

			Year ended 31 December
	Note	2013	2012
Cash fiows from operating activities
Cash generated from operations	22	31 772	47 985
Net cash generated from operating activities		31 772	47985
Cash flow from investing activities
Acquisitions of vessels, constructions contracts and other PRE	6	(16 016)	(92 186)
Contributions to business combinations - newbuild program		(50 100)	0
Contributions to business combinations - equity in joint ventura		(24 000)	0
Borrowings to related parties		(15 000)	0
Disposals of vessels, construction contracts and other PPE		132 142	0
Net Cash (used n)/froin investing activities		27 026	(92 186)
Cash fiows from financng activities
Proceeds from borrowings		10 000	105 349
Repayments of borrowings		(60 399)	(40 270)
Interest paid		(17 130)	(20 774)
Net cash from/(used in) financing activities		(67 529)	44 305
Total changes in !iquidity in the year		(8731)	104
Cash and cash equivalents at beginning of year		40423	40318
Cash and cash equivalents at end of the year	11	31 693	40423

Notes to the consolidated finacial statements

1. General Information

Deep Sea Supply PLC's (the Company) and its subsidiaries, hereinafter collectively ("the Group"), principal activities are to engage and invest, directly or indirectly, by itseif or through subsidiaries or part-owned companies, partnerships or other forms of entities, in the international offshore supply vessel business.

The Company was incorporated as a public limited liability company on 7 November 2006 and is domiciled in Cyprus in accordance with the provisions of the Cyprus Companies Law, Cap. 113. Its registered office is at John Kennedy, Iris House, 7th F)oor, Limassol, Cyprus.

The Company has its primary and only listing on the Oslo Stock Exchange and trades under symbol DESSC. These consolidated financial statements have been approved for issue by the Board of Directors on 09 April 2014.

2. Summary of significant accounting policies_________

2.1 Statement of compliance and basis of preparation

These consolidated financial statements have been prepared in accordance with, and comply with, International Financial Reporting Standards as adopted by the EU and the requirements of the Cyprus Companies Law, Cap. 113.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities, inc)uding derivative instruments at fair value through profit or loss. A summary of the principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process 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 disc)osed in Note 4.

Basis of preparation

As of the date of the authorisation of the financial statements, all International Financial Reporting Standards issued by the International Accounting Standards Board lIASB) that are effective as of 1 January 2013 have been adopted by the EU through the endorsement procedure established by the European Commission, with the exception of certain provisions of lAS 39 "Financial Instruments: Recognition and Measurement" relating to portfolio hedge accounting.

Adoption of new and revised IFRSs

New and amended standards adopted by the Group During the current year the Group adopted all the new and revised IFRS as adopted by the EU that are relevant to its operations and are effective for accounting periods beginning on 1 January 2013. This adoption did not have a material effect on the accounting policies of the Company with the exception of the foliowing:

Amendment to lAS 1, 'Financial statement presentation' regarding other comprehensive income. The main change resulting from these amendments is a requirement for entities to group items presented in 'other comprehensive income' (OCI) on the basis of whether they are potentially reciassifiable to profit or loss subsequently (reclassification adjustments).

lAS 19, 'Employee benefits' was revised in June 2011.The changes on the group's accounting policies has been as follows: to immediately recognise all past service costs: and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset).

lFRS 13, 'Fair value measurement', aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across lFRSs.The requirements, which are largely aligned between IFRSS and US GAAP do not extend the use of fair value accounting but provide guidance on how it

should be applied where its use is already required or permitted by other standards within lFRSs or US GAAR

There are no other IFFISs or IFRIC interpretations that are endorsed by the EU and have been adopted by the Group that are expected to have a material impact.

The Group has also decided to early adopt the foliowing amendment as of 1 January 2013:

• Amendments to lAS 36 - Recoverable amount disclosures for non-financial assets (issued on 29 May 2013 and effective for annual periods beginning 1 January 2014; EU effective date for 1 January 2014). The amendments remove the requirement to disclose the recoverable amount when a CGU contains goodwill or indefinite lived intangible assets but there has been no impairment.

New standards and interpretations not yet adopted by the Group

At the date of approval of these financial statements a number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on these consolidated financial statements, except the following set out below:

(a) Adopted by the European Union

tAS 27 (revised 2011), Separate financial statements' (effective for annual periods beginning on or after 1 January 2013; EU effective date for i January 2014). lAS 27 was changed and its objective is now to prescribe the accounting and disciosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. The guidance on control and consolidated financial statements was replaced by IFRS 10, Consolidated Financial Statements.

lAS 28 )revised 2011), 'Associates and joint ventures' )effective for annual periods beginning on or after i January 2013; EU effective date for i January 2014). AS 28 (revised 2011) includes the requirements for joint ventures, as wel) as associates, to be equity accounted fotowing the issue of IFRS 11, IFRS 10, "consolidated financial statements" )effective for annual periods beginning on or after i January 2014) was issued in May 2011 and provides additional guidance to assist in the determination of control where this is difficult to assess. lFRS 10 builds on existing principles by identifying the concept of control as the determining factor in whether an entity shall be included within the consolidated financial statements of the parent company.

IFRS 10, "Consolidated Financial Statements" (effective for annual periods beginning on or efter 1 January 2013; EU effective date for i January 2014), replaces all of the guidance on control and consolidation in lAS 27 "Consolidated and separate financial statements" and SIC-12 "Consolidation - special purpose entities '.'IFRS 10 changes the definition of control se that the same criteria are applied to all entities to determine control. This definition is supported by extensive application guidance. IFRS il. 'Joint Arrangements' (effective for annua) periods

beginning on or after 1 January 2013; EU effective date for 1 January 2014). A joint venture gives the Group rights to the net assets or prof it of the joint arrangement. A joint operation gives the Group direct rights to the assets and obligations for the liabilities of the joint arrangement. lnvestments that meet the definition of a joint operation will be accounted for by recognizing assets, liabilities, revenues and expenses according to the entity's shares in the assets, liabilities, revenues and expenses of the joint operation as determined and specified in the contractual arrangement. For investments that meet the new definition of a joint venture proportionate consolidation will no longer be applicable. Under IFRS li joint ventures will be accounted for using the equity method of accounting. IFRS 12, 'Disclosures of interests in other entities' (effective for annual periods beginning on or after 1 January 2013; EU effective date for 1 January 2014). IFRS 12 includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The Group yet to assess the full impact of IFRS 12. Amendments to lAS 39 - Novation of Derivatives and Continuation of Hedge Accounting )issued on 27 June 2013 and effective for annual periods beginning 1 January 2014; EU effective date for 1 January 2014). The amendments will allow hedge accounting to continue in a situation where a derivative, which has been designated as a hedging instrument, is novated (i.e parties have agreed to replace their original counterparty with a new one( to effect clearing with a central counterparty as a result of laws or regulation, if specific conditions are met.

Off setting Financial Assets and Financial Liabilities - Amendments to lAS 32 (issued in December 2011 and effective for annual periods beginning on or after i January 2014; EU effective date for 1 January 2014). The amendment added application guidance to [AS 32 to address inconsistencies identified in applying some of the offsetting criteria. This includes clarifying the meaning of 'currently has a legally enforceable right of set-off and that some gross settlement systems may be considered equivalent to net settlement. Transition Guidance Amendments to IFRS 10, IFRS il and IFRS 12 (issued on 28 June 2012 and effective for annual periods beginning i January 2013; EU effective date for i January 2014). The amendments clarify the transition guidance in IFRS 10 Consolidated Financial Statements. Entities adopting IFRS 10 should assess control at the first day of the annual period in which IFRS 10 is adopted, and if the consolidation conclusion under IFRS io differs from lAS 27 and SIC 12, the immediately preceding comparative period (that is, year 2012 for a calendar year-end entity that adopts IFRS 10 in 2013) is restated, un)ess impracticable. The amendments also provide additional transition relief in IFRS 10, IFRS li, Joint Arrangements, and IFRS 12, Disclosure of lnterests in Other Entities, by limiting the requirement to provide adjusted comparative information only for the immediately preceding comparative period. Further, the amendments will remove the requirement to present comparative information for disclosures related to unconsolidated structured entities for periods before

IFRS 12 is first applied.

Amendments to IFRS 10, IFRS 12 and lAS 27 - Investment entities (issued on 31 October 2012 and effective for annual periods beginning 1 January 2014; EU effective date for 1 January 2014). The amendment introduced a definition of an investment entity as an entity that (i) obtains funds from investors for the purpose of providing them with investment management services, (ii) commits to its investors that its business purpose is to invest funds solely for capital appreciation or investment income and (iii) measures and evaluates its investments on a fair value basis. An investment entity will be required to account for its subsidiaries at fair value through profit or loss, and to consolidate only those subsidiaries that provide services that are related to the entity's investment activities. IFRS 12 was amended to introduce new disclosures, including any significant judgments made in determining whether an entity is an investment entity and information about financial or other support to an unconsolidated subsidiary, whether intended or already provided to the subsidiary.

(b) Not adopted by the European Union

• IFRIC 21 Levies (issued on 20 May 2013 and effective for annual periods beginning on 1 January 2014). The interpretation ciarifies the accounting for an obligation to pay a levy that is not income tax. The obligating event that gives rise to a liability is the event identified by the legislation that triggers the obligation to pay the levy. The fact that an entity is economically compelled to continue operating in a future period, or prepares its financial statements under the going concern assumption, does not create an obligation. The same recognition principles apply in interim and annual financial statements. The application of the interpretation to liabilities arising from emissions trading schemes is optional. - IFRS 9, Financial Instruments: Ciassification and Measure-

• ment'. Key features of the standard issued in November 2009 and amended in October 2010, December 2011 and November 2013 are:

  • Financial assets are required to be ciassified into two measurement categories: those to be measured subsequently at fair value, and those to be measured subsequently at amortized cost. The decision is to be made at initial recognition. The ciassification depends on the entity's business mode) for managing its financial instruments and the contractual cash flow characteristics of the instrument.
  • An instrument is subsequently measured at amortized cost only if it is a debt instrument and both (i) the oblective of the entity's business model is to hold the asset to collect the contractual cash fiows, and (ii) the asset's contractual cash fiows represent payments of principal and interest only (that is, it has only "basic loan features"l. All other debt instruments are to be measured at fair value through profit or loss.

• All equity instruments are to be measured subsequently at fair value. Equity instruments that are held for trading will be measured at fair value through profit or loss. For all other equity investments, an irrevocable election can be made at initial recognition, to recognize unrealized and realized fair value gains and losses through other comprehensive income rather than profit or loss. There is to be no recycling of fair value gains and losses to profit or loss. This election may be made on an instrument-by-instrument basis. Dividends are to be presented in profit or loss, as long as they represent a return on investment.

• Most of the requirements in lAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The key change is that an entity will be required to present the effects of changes in own credit risk of financial liabilities designated at fair value through profit or loss in other comprehensive income.

• Hedge accounting requirements were amended to align accounting more closely with risk management. The standard provides entities with an accounting policy choice between applying the hedge accounting requirements of IFRS 9 and continuing to apply lAS 39 to all hedges because the standard currently does not address accounting for macro hedging. The amendments made to IFRS 9 in November 2013 removed its mandatory effective date, thus making application of the standard voluntary. The Group does not intend to adopt the existing version of IFRS 9 until this is enclosed by the European Union. The Group has not yet assessed the impact of the adoption of IFRS9 in its financial statements.

-Annual lmprovements to lFRSs 2013 (issued in December 2013 and effective for annual periods beginning on or after 1 July 20141 the improvements consist of changes to four standards. The basis for conclusions on IFRS 1 is amended to clarify that, where a new version of a standard is not yet mandatory but is available for early adoption; a first-time adopter can use either the old or the new version, provided the same standard is applied in all periods presented. IFRS 3 was amended to clarify that it does not apply to the accounting for the formation of any joint arrangement under IFRS 11. The amendment also ciarifies that the scope exemption only applies in the financial statements of the joint arrangement itself. The amendment of IFRS 13 ciarifies that the portfolio exception in IFRS 13, which allows an entity to measure the fair value of a group of financial assets and financial liabilities on a net basis, applies to all contracts lincluding contracts to buy or seIl non-financial itemsl that are within the scope of lAS 39 or IFRS 9. ]AS 40 was amended to clarify that lAS 40 and IFRS 3 are not mutually exclusive. The guidance in lAS 40 assists preparers to distinguish between investment property and owner-occupied property. Preparers also need to refer to the guidance in IFRS 3 to determine whether the acquisition of an investment property is a business combination, -Annual lmprovements to lFRSs 2012 (issued in December 2013 and effective for annual periods beginning on or after 1 July 2014, unless otherwise stated belowl.The improvements consist of changes to seven standards. IFRS 2 was

amended to clarify the definition of a vesting condition' and to define separately 'performance condition' and service condition'; The amendment is effective for share-based payment transactions for which the grant date is on or after 1 July 2014. IFRS 3 was amended to clarify that (1) an obligation to pay contingent consideration which meets the dofinition at a financia) instrument is ciassified as a financial liability or as equity, on the basis of the definitions in lAS 32, and (2) all non-equity cantingont cansideration, both finoncial and non-financial, is measured at fair value at each reporting date, with changes in fair value recognized in prof it and (oss. Amendments to IFRS 3 are effective for business combinations where the acquisition date is on or after 1 July 2014. IFRS 8 was amended to require (1) disclasure of the judgments made by management in aggregating operating segments, including a description of the segments which have been aggregated and the economic indicators which have been assessed in determining that

the aggregated segments share similar ecanomic characteristics, and (2) a reconciliation at segment assets to the

entity's assets when segment assets are reparted.The basis far conclusions on IFRS 13 was amended ta clarify that deletian at certain paragraphs in lAS 39 upon publishing at IFRS 13 was not made with an intention ta remove the ability ta measure shart-term receivables and payables at invaice amaunt where the impact at discaunting is immaterial. lAS 16 and lAS 38 were amended ta clarify how the gross carrying amaunt and the accumulated depreciation are treated where an entity uses the reva)uatian model. lAS 24 was amended ta include, as a related party, an entity that provides key management persannel services ta the reparting entity ar to the parent of the reparting entity (the management entity'), and ta require ta disclose the amounts charged ta the reparting entity by the management entity for services provided.

The Baard of Directors assesses the impact at new standards and interpretatians at the paint when these are endarsed by the European Union. As a result the impact at the abave new standards and interpretatians that have not been endarsed by the European Union has not been assessed,

2.2 Consolidation

(a) Subsidiaries

Subsidiaries are those companies and other entities in which the Group, directly or indirectly, has an interest of more than one half of the voting rights or otherwise has power to govenn the financial and operating policies so as to obtain economic benefits. The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group (acquisition date) and are de-consolidated from the date that control ceases. The Company was established for the purpose of acquiring all shares of Deep Sea Supply ASA.

The consolidated financial statements are issued under the name of the legal parent, the "Company" and are a continuation of the financial statements of the legal subsidiary (Deep Sea Supply ASA). As a result:

• -The assets and liabilities of the legal subsidiary are recognized and measured at their pre-combination carrying amounts;
• -The retained earnings and other equity balances are the retained earnings and other equity balances of the legal subsidiary immediately before the reorganisation;
• -The amount of issued equity instruments is that of the Company; and
• Comparative information presented in the first year of consolidation is that of the legal subsidiary.

All intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

(b) Associates

Associates are all entities over which the group has sgnificant 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. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The group's share of post-acquisition profit or loss is recognised in profit or loss, and its share of post acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the group's share of losses in an associate equals or exceeds its interest

in the associate, including any other unsecured receivables, the group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The group determines at each reporting date whether there is any ob)ective evidence that the investment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of an associate' in profit or loss.

Profits and losses resulting from upstream and downstream transactions between the group and its associate are recognised in the group's financial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless 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 group.

(c) Joint ventures

The group's interests in jointly controlled entities are accounted for using the equity method of accounting (see policy on investments in associates). The group recognizes the portion of gains or losses on the sale of business by the group to the joint venture that is attributable to the other venturers. The group continues to treat the investment in the joint venture based on the value of the assets/ liabilities carrying amount prior to the establishment of the joint venture for equity accounting purposes.

Unrealized gains on transactions between the group and its joint ventures are eliminated to the extent of the group's interest in the joint ventures. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

2.3 Discontinued operations

An operation that has been disposed of (by a particular reporting date) or classified as heid for sale at that point may be classified as discontinued even if the entity continues to operate in the same business segment, but withdraws from a geographical area. If a disposal group meets the discontinued operation criteria, the cashflows and results of the disposal group are presented as discontinued operations. Discontinued operations are presented in a separate part of the statement of comprehensive income. The figure presented is for the entire period and not the result since the operation was discontinued. The amount to be disclosed is the entire post-tax result for the period plus any gain or loss on remeasurement/ disposal gain of assets or disposal groups. Hence, in the statement of comprehensive income each line item from revenue down to post-tax profit excludes discontinued operations. Discontinued operations held for sale are measured in the same way as other disposal groups, that is, at the lower of carrying amount and fair value less costs to seil.

2.4 Underlying concepts

The financial statements are prepared on the going concern basis using accrual accounting.

Assets and liabilities and income and expenses are not offset unless specifically permitted by an accounting standard. Financial assets and financial liabilities are offset and the net amount reported only when a legally enforceable right to set off exists and the intention is either to settle on a net basis or to realize the asset and settle the liability simultaneously. Changes in accounting policies are accounted for in accordance with the transitional provisions in the IFRS standards. If no such guidance is given, they are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively.

2.5 Recognition of assets

Assets are only recognized if they meet the definition of an asset, it is probable that future economic benefits associated with the asset will flow to the group and the cost or fair value can be measured reliably.

2.6 Ciassification of assets

Assets intended for long-term ownership or use, are ciassified as non-current. Other assets are classified as current. Receivables due to be repaid within one year are classified as current assets.

2.7 Use of estimates

The key sources of estimation of uncertainty at the balance sheet date, that have a significant risk for causing a material ad-Ïustment to the carrying amounts of assets and liabilities within the next financial year are discussed below under section 4.

2.8 Commercial Interest Reference Rate (CIRR) loan

The Group has applied for two Commercial Interest Reference Rate (CIRR) loans from the Norwegian Export Credit Agency in 2008. The duration of the loans may vary (DESSC 12 years) and the cash proceeds from the loans have been deposited in fixed deposit account with a Norwegian bank at a higher interest rate than that of the loans. The agreed period of the deposits is identical with the one of the loans. The loans and the interest thereof will be repaid from that account. At initial recognition the difference between the

amounts received and fair value of the loan has been recognised as deferred gain and is amortised over the period of the life of the asset.

2.9 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

The components of the Group that management uses to make decisions about operating matters are the geographical region and the type of the vessel.

The Group is organized into main geographic regions; North Sea, Mediterranean, Africa, Australia/Far East and North & South America. The geographical segments are based on the location of the vessels.

The types of vessels are AHTS and PSVs.

Depreciation is allocated between the different segments based on number of days the vessels have been operated within the different segments.

2.10 Foreign currencytranstation

(a) Functional and presentation currency

Deep Sea Supply PIc, located in Cyprus, became the parent company of the Group with effect from 28 December 2006. Items included in the financial statements of each of the Group'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 Group's functional and presentation currency. All Group entities have the USD as their functional currency.

All amounts in these financial statements are in USD 1,000 unless otherwise stated.

(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 profit or loss.

2.11 Non-current assets and maintenance costs

Property, plant and equipment are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include expenditures that are directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis, taking residual values into consideration, and adjusted for impairment charges, if any. The carrying value of the fixed assets on the balance sheet

represents the cost less accumulated depreciation and any impairment charges.

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Day-to-day maintenance costs are charged to the profit or loss during the financial period in which they are incurred. The cost of major renovations and periodic maintenance of vessels are capitalized and depreciated over the useful lifetime of the parts replaced. The useful lifetime of regular vessels docking expenses will normally be the period until next docking which if it is an intermediate survey is after 30 months and if it is a special survey is after 60 months. When ships are acquired, a proportion of the acquisition cost is capitalized as periodic maintenance.

Depreciation on vessels and other assets (equipment) is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

-Vessels	30 years
-Vehicles	5 years
- Dry docking costs
• Intermediate survey	2.5 years
• Special survey	5 years
- Software licenses	3 years
- Furniture, fittings and equipment	3 years

The assets' residual values and useful lifetime assumptions of fixed-assets are reviewed at each balance sheet date, and where they differ significantly fram previous estimates, depreciation charges are changed accordingly. Gains and losses on dispasals are determined by comparing the disposal proceeds with the carrying amount and are included in operating profit. For vessels under finance sale and leaseback disposals the deferred gain is recognized fully inta the profit and loss upan disposal.

2.12 Non-current assets (ar disposal graups) held for sale

Non-current assets (ar disposal graups) are ciassified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable,They are stated at the lower of carrying amount and fair value less costs to seil.

payments for vessels under construction in accordance with non-financial assets are impaired at least an a quarterly

the terms of the vessel-cantracts. The total acquisition cost includes the sum at installments payable plus direct costs incurred during the construction periad.

Prepayments are carried at cost less provision for impairment. A prepayment is ciassified as non-current when the goads ar services relating ta the prepayment are expected ta be abtained after ane year, ar when the prepayment relates ta an asset which will itselt be ciassified as non-current upan initial recagnitian. Prepayments ta acquire assets are transferred ta the carrying amount at the asset once the Group has obtained control of the asset and it is prabable that future economic benefits associated with the asset will flow ta the Group. Other prepayments are written off to profit ar loss when the gaads ar services relating ta the prepayments are received. If there is an indication that the assets, gaads ar services relating ta a prepayment will not be received, the carrying value of the prepayment is written down accardingly and a correspanding impairment loss is recognised in profit ar loss.

2.14 Lease agreements

The determination at whether an arrangement is, ar contains a lease, is based on the substance of the arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right ta use the asset. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are ciassified as aperating leases. Payments made under operating leases (net of any incentives received fram the lessor) are charged ta the profit ar loss an a straight-line basis over the period of the lease. In cases where the Group is the lessor in an operating lease, initial direct costs are added to the carrying amount at the leased asset and recognized as an expense over the lease term on the same basis as the lease incame. Financial leases, which transfer ta the Group substantially all

the riaks and benefits incidental to ownership of the leased item, are capitalized at the inception at the lease at fair value at the leased asset ar, it lower, at the present value of the minimum lease payments. Lease payments are apportianed between the finance charges and reduction of the lease liability sa as ta achieve a constant rate of interest an the remaining balance of the liability. Finance charges are charged directly ta financial expenses.

Capitalized leased assets are depreciated over the shorter at the estimated useful life at the asset and the lease term, if there is na reasonable certainty that the Group will obtain ownership by the end at the lease term.

In a sale and finance leaseback transaction any excess of sales proceeds over the carrying amount is deferred and recognized in the profit ar loss over the lease term.

2.13 Newbuild cantracts 2.15 Impairment of non-financial assets

Instailments on new vessel contracts are presented as pre- The Group determines whether there are indicatians that

basis. The carrying value of vesseis are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable .The asset's cash generating ability either through use or sale is reviewed and compared to the asset's carrying value in the balance sheet. If the carrying value is higher, the difference must be written off as an impairment loss. Fair value reduced by estimated sales costs is the amount achievable on an arm's length sale to an independent third party. The recoverable amount is the higher of value in use and fair value less costs to seil and is established individually for all cash generating units. 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 at the time and the risk specific to the asset that is considered impairod. For vessels that are held under a sale and finance leaseback arrangement that have a related carrying amount of a deferred gain as explained in 2.13 above, upon impairment the Group recognizes the impairment first within the unamortized part of the deferred gain for the same asset that is presented as a liability and any excess is charged to the profit or loss. A previousiy recognized impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Reversal of previausly recognized impairment is limited to the amount the carrying value of the asset wouid have been, had the initial impairment charge not taken piace.

2.16 Financial assets

The Group ciassifies its financial assets in the follawing categories: at fair value through profit or loss, Ioans and receivables, and avaiiable for sale. The ciassification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognitian.

(a) Financial assets at fair value through profit or loss This category has twa sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is ciassified in this category if acquirod principally for the purpose of seiling in the short term or if sa designated by management, and they meet certain criteria (lAS 39.9).Derivatives are also categorizod as held for trading unless they are designated as hedges. Assets in this category are ciassified as current assets if they are either hold for trading or are expected to be settled within 12 months of the balance sheet date.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are inciuded in current assets, except for maturitios greater than 12 months atter the balance sheet date. These are classified as non-current assets. Loans and receivables are ciassified as 'trade and other receivables' and 'cash and cash equivalents' in the balance sheet.

(c) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not ciassified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the balance sheet date.

Regular way purchases and sales of financial assets are recognized on the trade-date, the date on which the Group commits to purchase or seil the asset. Investments are initially recognized at fair value plus transactian costs for all financial assets not carried at fair value through profit ar ass. Financial assets carried at fair value through profit or loss, are initially recognized at fair value, and transaction costs are expensed in the profit ar loss. Financial assets are derecognized when the rights to receive cash flows fram the investmonts have expired ar have been transferred and the Group has transferred substantially all risks and rewards of awnership. Available-for-sale financial assets and financial assets at fair value through profit ar loss are subsequently carried at fair value. Loans and receivables are carried at amortisod cost using the effectivo interest method. Gains ar losses arising fram changos in the fair value of the "financial assets at fair value through profit ar ass" category are presented in the profit ar loss within other (lasses)/gains - not, in the poriad in which they anse. Dividend incame fram financial assets at fair value through profit ar loss is recognized in the profit ar loss as part of other incamo when the Graup's right ta receive payment is establishod.

The Company assesses at each balance sheet dato whether there is abjective evidence that a financial asset ar a graup of financial assets is impaired.

2.17 Derivative financial instruments and hedging activities

Dorivatives are initially recognized at fair value on the dato a derivative cantract is ontered inta and are subsequently remoasured at thoir fair value. The method of recagnising the rosulting gain ar loss deponds an whethor the derivativo is designated as a hedging instrument, and if sa, the nature at the item boing hedged. The Group dosignates cortain donivativos as either: (1) hedges of the fair value of recognized assets ar liabilities ar a firm commitment (fair value hedge); (2) hedges of a particu)ar risk associated with a recognized asset ar liability ar a highly probable forocast transactian )cash flaw hodge); ar (3) hedges of a net investment in a fareign aporatian (not investment hodge).

The graup documonts at the inceptian of the transactian the rolatianship between hedging instruments and hodgod items, as well as its risk management ob(octives and strategy far undortaking variaus hedging transactians. The graup alsa dacumonts its assossmont, bath at hedgo incoptian and an an ongaing basis, of whethor the derivativos that are

used in hedging transactions are highly effective in offsetting changes in fair values ar cash fiows of hedged items. The fair values of various derivative instruments used for hedging purposes are disclosed in note 8. Movements on the hedging reserve in other comprehensive income are shown in Statement of Changes of Equity. The full fair value of a hedging derivative is ciassified as a non-current asset ar liability when the remaining hedged item is more than 12 months, and as a current asset ar liability when the remaining maturity at the hedged item is less than 12 months.

Cash flow hedge

The effective portion at changes in the fair value at derivatives that are designated and quality as cash flow hedges is recognised in ather comprehensive income. The gain ar loss relating to the ineffective portion is recognised immediately in the profit or loss within finance income ar finance costs respectively.

When a hedging instrument expires ar is sold, ar when a hedge no longer meets the criteria for hedge accounting, any cumulative gain ar lass existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the profit ar loss. When a forecast transaction is na langer expected to occur, the cumulative gain ar loss that was reported in equity is immediately transterred ta the profit or (oss within finance income ar finance cost.

When the Graup provides guarantees ta parties autside the Graup for any losses sutfered in derivatives due to breach at contract, a provision is made for the fair value of the derivative when the loss becomes prabable.

2.18 Inventories

Bunkers inventories are valued at the lower at historical cost and net realisable value applying the FIFO (first-in, firstout) principle.

Lubail inventories are valued using the weighted average valuatian methad.

2.19 Trade receivables

Trade receivables are recognized initially at fair value and subsequent(y measured at amortised cost using the effective interest method, less provisian for impairment. A provisian for impairment at trade receivables is established when there is objective evidence that the graup will not be able to collect all amounts due according to the original terms at the receivables. Signiticant tinancial difticulties at the debtor, probability that the debtor will enter bankruptcy ar financial reorganisation, and default ar delinquency in payments (more than 120 days overdue) are considered indicators that the trade receivable is impaired. The amaunt at the pravision is the difference between the assets carrying amaunt and the present value at estimated tuture cash tiows, discounted at the original effective interest rate. The

carrying amaunt of the asset is reduced through the use at an allowance accaunt.

2.20 Cash and cash equivalents

Cash and cash equivalents, includes cash in hand and deposits held at call with banks.

2.21 Restricted cash

Restricted cash deposits comprise at tunds held in separate Graup bank accaunts, which will be used to settle accrued taxation liabitties related to employe&s tax deduction. Restricted cash are excluded fram cash and cash equivalents in the statement of cash flows.

2.22 Share capital

Ordinary shares are c(assitied as equity. Costs directly attributable to the issue at new shares ar options are shown in equity as a deduction, net at tax, fram the proceeds.

Share premium is the difference between the fair value at the consideration receivable for the issue at shares and the nominal value at the shares. Share premium account can only be resorted ta for limited purposes, which do not inciude the distribution at dividends, and is otherwise subïect to the provisions at the Cyprus Companies Law on reduction at share capital.

2.23 Borrowings

Borrowings are recognized initially at fair value, net at transaction costs incurred. Borrowings are

subsequently stated at amortised cost; any difference between the proceeds (net at transaction costs) and the redemption amount is recognized in the profit ar loss over the period at the borrowings using the effective interest metbod.

Borrowings are ciassitied as current liabilities unless the Graup has an unconditional right to deter settlement at the liability tar at least 12 months atter the balance sheet date. General and specitic borrowing costs directly attributable to the acquisition, construction ar production at qualitying assets, which are assets that necessarily take a substantial period at time to get ready for their intended use ar sale, are added to the cost at those assets, until such time as the assets are substantial(y ready for their intended use ar sale. Investment income earned on the temporary investment at specitic borrowings pending their expenditure on qualitying assets is deducted fram the borrowing costs eligible for capitalisation.

All ather borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.24 Trade payables

Trade payables are recognized initiaty at fair value and subsequently measured at amortized cost using the effective interest method.

2.25 Taxation

Tax expense/income includes current taxes and the change in deferred taxes.

Parts of the Groups activities within the Norwegian subsidiaries are structured within the regulations for the Norwegian lonnagelax System for shipping companies.

The Group has estimated a tax rate of 0% for the Companies sublect to the regulations of the shipping company regime. For all companies under this regime, the Group has estimated 0% deferred tax on temporary differences when entering the regime. For companies not included in the regime, and for taxable financial revenues in companies under the regime, the Group applies a tax rate of 28% for Norwegian companies and 10% for Cyprus companies.Tax expense/income includes current taxes and the change in deferred taxes.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it anses from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither the accounting nor taxable profit or loss. Deferred income tax is determined using tax rates land laws) that have been enacted or substantially 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 to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and its probable that the temporary difference will not reverse in the foreseeable future.

2.26 Profit-sharing and bonus plans

The Group recognizes a liability and an expense within wages and salaries, for bonuses and profit-sharing to certain employees, based on a formula that takes into consideration the performance of peer group companies. The Group recognizes a liability where contractual obligations exist or where there is a past practice that has created a constructive obligation.

2.27 Share based payments

Employees of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments such as options to buy shares of the Company.

The cost of equity-settled transactions is measured by reference to the fair value at the date on which the award is granted. The fair value is determined using appropriate valuation models.

The cost of equity settled transactions is recognised as an expense, together with a corresponding increase in reserves within equity, over the vesting period which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period the entity revises the estimates of the number of options that are expected to vest based on the non-market conditions, It recognises the impact of the revisjon to original estimates, jf any, in the income statement, with a corresponding adjustment to equity.

Where the terms of the share option scheme is modified to be settled in cash rather than in equity instruments, the entity measures the liability initially using the modification date fair value of the equity-settled award, based on the elapsed portion of the vesting period. This amount is then recognized as a credit to liability and a debit to equity. Until the liability is settled it is re-measured at each reporting date with changes in fair value recognized in profit and loss.

2.28 Pensjon costs and obligation

A defined contribution plan is a pensjon plan under which the group pays fixed contributions into a separate entity. The group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pensjon plan that is not a defined contribution plan.

Typically defined benefit plans define an 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 recognised in the balance sheet in respect of defined benefit pensjon plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the

currency in which the benefits will be pald, and that have terms to maturity approximating to the terms of the related pensjon obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used.

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 anse.

Fast-service costs are recognised immediately in income

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 recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

2.29 Provisions

Provisions represent liabilities of uncertain timing or amount. Provisions are recognized when the group has a present legal or constructive obligation, as a result of past event, for which it is probable that an outfiow of economic benefits will be required to settie the obligation, and a reliable estimate can be made for the amount of the obligation.

Provisions are measured at the present value of the expenditures expected to be required to settie the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

2.30 Revenue recognition

The group's activity is chartering out different kind of Anchor Handlingjug SuppIyvessels (AHTS's)and Platform Supply Vessels (PSV's).

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Groups activities. Revenue is shown net of valueadded tax, withholding tax, returns, rebates and discounts and atter eliminated sales within the Group. Revenue is recognized as foliows:

Charter rate contracts

Charter contracts are ciassified as operating leases under lAS 17 Revenue derived from charter contracts is recognized in the period over the lease term on a straight line basis. Related services are recognized as revenue in accordance with the services being rendered.

Vessels without signed contract in place at discharge have

no revenue before a new contract is signed. Charter related expenses incurred for vessels in the idle time are expensed. Revenues from time charters and bareboat charters accounted for as operating leases are recognized over the rental periods of such charters, as service is performed on a straight line basis.

Interest income

Interest income is recognized on a time-proportion basis using the effective interest method. When a receivabie is impaired, the Group reduces the carrying amount to its recoverabie amount, being the estimated future cash flow discounted at original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognized using the original effective interest rate.

Dividend income

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

2.31 Dividend distribution

Dividend distribution to the Company's sharehoiders is recognized as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders until payment is made.

2.32 Earnings per share

Earnings per share are calculated by dividing the flat profit/ oss for the Company by the average weighted number of outstanding shares over the period in question. Diluted earnings per share inciude the effect of the assumed conversion of potentially dilutive instruments such as stock options.

2.33 Statement of cash flow

The statement of cash flow is presented in accordance with the indirect method.

2.34 Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year The 2012 resuits have been restated to clearly present the result from continued and discontinued operations (as per note 30.2)

3. Financial risk management

3.1 Financial risk factors

The Group's normal business activities expose it to a variety of financial risks. Financial market risk is the possibility that f)uctuations in currency exchange rates, interest rates and freight rates in particular will affect the value of the Group's assets, liabilities or future cash flow. The Group has formulated a finance strategy where certain basic targets and policies are made for value adjusted equity (note 3.2), required Iiquidity, exchange rates, interest rates, funds management etc. To reduce and manage these risks, management daily reviews and assesses its primary financial and market risks. Once risks are identified, appropriate action is taken to mitigate the specific risk. Financial derivatives are used for hedging purposes in order to mitigate financial risks and only well understood conventional derivatives are used. Financial derivatives are entered into with our main banks which are highly rated financial institutions. The Group use derivatives in order to manage risks associated with interest rate and currency.

Foreign exchange risk:

The Company's functional currency is USD.The Group operates internationa)ly and is exposed to foreign exchange risks arising from various currency exposures primarily with respect to Euro ([UR), UK Pounds (GBP), Brazi)ian Rea)s )BRL), Singapore dollar )SGD) and Norwegian kroner (NOK). Foreign exchange risks anse from future commercial transactions and recognized assets and (iabilities.The Group had in 2013 and 2012 mainly USD, EUR, GBBRL and NOK revenues and mainly USD, BRL, SGD and NOK expenses. lmbalances between revenues and costs are often managed using forward currency contracts. Ide tab)e below shows the impact on profit before tax as a consequence of an increaseldecrease in the various exchange rates;

NOK	Increase	Effect USD '000
2013	+1-10%	+1-1,421
2012	+/-10%	+1-1,379
GBP	Increase	Effect USD '000
2013	+/-10%	+/-1,811
2012	+/-10%	+/-1,442
EUR	Increase	Effect USD '000
2013	+/-10%	+/- 229
2012	+/-10%	+1-56
BRL	Increase	Effect USD '000
2013	+/-10%	+/- 604
2012	+/-10%	+/-1,623
SGD	Increase	Effect USD '000
2013	+/-10%	+/- 448
2012	+/-10%	+/-434

Credit risk

Concentration risk

The Group trades only with recognized, creditworthy third parties. For banks and financial institutions, only credit worthy institutions are chosen. Receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debt is not significant. Below, we present a table showing the concentration risks for 2013 and 2012:

Receivables at 31.12.2013

Total	22324	100,0%
Others	0	0,0%
11 to 15 largest	124	0,6%
6 to 10 largest	2497	11,2%
1 to 5 largest	19702	88,3%
	USD '000	% of total

Receivables at 31.12.2012

	USD '000	% of total
1 to 5 largest	21 966	73,2%
6to10largest	6534	21,8%
11 to 15 largest	1 060	3,5%
Others	449	1,5%
Total-	30 010	100,0%

Cash flow and fair value interest rate risk

The Group's exposure to the risk of market interest rates are mainly related to the Group's long term debt ob)igations with foating interest rates. 8orrowings issued at variable rates expose the group to cash flow interest rate risk which is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose the group to fair value interest rate risk. Depending on the development of and on internal analyses of the interest rate market, the Group enters into various interest rate contracts to alter the ratio of fixed rate to floating rate debt and vice-versa.

As of 31 December 2013 and 2012, after taking into account the effect of the interest rate swaps, approximately 80% and 60% respectively of the interest bearing debt was fixed.

Interest rate risk table:

The foliowing table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, at the Group's proft betore tax.

Cash flow interest risk

	Increase/decrease in basis points	Effect on loss before tax (USD '000)
2013	+/-10
2012	+/-10	259

Liquidity risk

The Group monitors its risk to a shortage of tunds by ciosely monitoring the projected cash tlow from operations, financial expenses, its capital expenditure program related, in particular and to commitments (Note 6) under its newbuilding program. The Group maintains sufficient cash for its daily operations via short term cash deposits at banks.

The table below analysos the group's non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash tlows.The amounts disclosed in the table are the contractual undiscourited cash flows; (all numbers in USD 1,000).

	Lessthan	3t012	lto5	More than5 years	Total
At 31 December 2013	3 months	months	years
Interest bearing loans and borrowings	3453	10359	98921		112732
Finance lease liabilities	1299	3897	16417	14951	36564
Derivative financial instruments	36	108	1 919		2063
Trade and other payables	750	4804			6405
At 31 December 2012	5538	19167	117257	14951	156913
Interest bearing loans and borrowings	9 425	28 273	287 656	56 915	382 269
Finance lease liabilities	6707	20121	94423	112 645	233 896
Derivative financial instruments	106	244	2374		2 724
Trade and other payables	10927	12740			23 667
	27165	61378	384453	169 560	642 556

3.2 Capital risk management

The Group's objective is to actively pursue an optimal financing at its fleet at any time for the purposes ot providing good return to shareholders and benefits for other stakeholders, to aim at low cost of capital and at the same time secure the Group's ability to continue as a going concern.

The Group will actively use the capital markets when doing investments, and does not intend to hold signiticant liquid reserves for investments. The Group will aim at distributing retained earnings above a satistactory working capita) level as dividend. In the shipping and offshore industry, emphasis in made on Value Adjusted Risk Capita). A certain minimum Value Adjusted Risk Capital is otten used as one financial covenant by financial institutions.

The main source at financing of the Group is Senior Bank Loans fram international banks which are long term players in the shipping and offshore business segments. The Group believes in building and maintaining long term re)ationships with these financial institutions and has pursued this strategy since the Group was founded.

Bank loan financing has been combined with twa specially structured sale and leaseback transactions for (currently) 5 vessels owned by DESS BTG and 1 vessel owned by DESS P1-C. The sale and leaseback transactions are designed to withstand possible drops in the market by having fewer and leaner financial covenants compared to the senior bank loan facility.

The Groups Management considers the combination of senior bank Ioans and sale and the leaseback transaction as an effective and flexible way to finance the Companys fleet at an acceptable cost.

The Value Adjusted Risk Capital, for the group including 50% of DESS BTG, by year end 2013 and 2012 is presented in table below

	Year end 2013	Year end 2012
Total value adjusted assets ()	661	860
Total debt ()	351	536
Value Adjusted Risk Capital	310 or 47% of total value adjusted assets	324 or 38% of total value adjusted assets

() Market values obtained from two independent brokers on a charter-free basis including excess value of newbuilding contract (") Excluding deferred gain

3.3 Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been definod as foliows:

• Quoted prices (unadjusted) in active markets for identical asses or liabilities (Level 1).
• lnputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Leve] 2).
• Input for the asset or liability that are not based on observable market date (that is, unobservable inputs) (Level 3).

The following table presents the group '5 assets and liabilities that are measurest at fair value at 31 December 2013:

Liabilities	Levet 1	Levet 2	Levet 3	Total
Derivatives used for hedging		915		915
Derivatives		577		577
Total tiabilities	-	1 492	-	1492

The folloiwng table prosents the group 's assets and liabilities that are measurest at fair value at 31 Decembor 2012:

Liabilittes	Levet i	Level 2	Levet 3	Total
Derivatives used for hedging	-	1 660	-	1 660
Total liabilities	-	1660		1660

The financial derivatives are not traded in an active merket and are thus included in level 2. The derivatives are used for economic hedging purposes. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.These valuation techniques maximize the use of observable market data where is its available and rely as littie as possible on entity specific estimates. If all significant inputs required to fair value an instrument re observable, the instrument is included in Level 2.

4. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonabie under the circumstances.

4.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates wHl, by defini tion, seldom equal the related actual resuits. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Impairment of vessels

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual resuits could differ from such estimates. The Group performs an impairment test when there are indicators for impairment in accordance with the relevant accounting policy. The Group compares the carrying amount of the vessels with the recoverable amount, being the higher of the fair value less costs to seil and the value-in-use calculation. Management estimates the fair value less costs to seil by obtaining third party professional valuations for all vessels from two different valuers and calculating the average.

Year ended 31 December 2013

The balance sheet value of the Group's vessels and vessels owned 50% through investment in JV, new buiid contracts excluded, comprises approximateiy 69% of the total balance sheet of group and the balance sheet of investment in JV. In the current market for supply vessels, the recoverable amount of the Group's vessels at 31 December 2013 was higher than the balance sheet value for all vessels of the group. The recoverable amount for all vessels was based on their fair value less costs to seil except for two vessels owned by the Group and two vessels owned 50% through the investment in JV, for which the recoverable amount was based on value-in-use calculations. None of the vessels of the group was identified to be impaired.

A lO% change in the main assumptions used in the impairment test for the four vessels, whose recoverable amount was based on their value in use, would have no effect on the carrying amount of the vessels, profit for the year or deferred gain balance.

For the vessels for which the recoverable amount was based on fair value less costs to seil, a 15% decrease in the valuation of the brokers and assuming that the value-in-use of the vessels was not above fair value less costs to seil, would have decreased the carrying amount of the vessels by US$

4,910, deferred gain balance by US$ 7,429, profit for the year by US$ 13,740 and investment in JV by US$ 16,259. A 15% increase in the valuation of the brokers would have increased the carrying amount of the vessels by US$ 723, deferred gain by US$ 5,041 and Investment in JV by US$ 4,318.

Year ended 31 December 2012

The balance sheet value of the Group's vessels, comprised approximately 83 % of the total balance sheet. in the current market for supply vessels, the recoverable amount of the Group's vessels at 31 December 2012 was higher than the balance sheet value for all vessels of the group

The recoverable amount for all vessels was based on their fair value less costs to seil for all vessels. None of the vessels of the group was identified to be impaired.

A 15% decrease in the valuation of the brokers and assuming that the value-in-use of the vessels is not above fair value less costs to seil, wouid have decreased the carrying amount of the vessels by US$ 28,344, deferred gain by US$ 8,524 and profit for the year by US$ 19,819.

A 15% increase in the valuation of the brokers would have increased the carrying amount of the vessels and deferred gain by US$27233.

(b)Tax legislation

Tax legislation is subject to varying interpretations. Refer to Note 28.

(c) Insurance claim receivables

At balance sheet date, the Group has booked US$ 2.506 as amounts recoverable from insurance companies. The Ïoint venture has additional amount of US$7755 inciuded in the investments accounted for using the equity metbod. Such claims are filed foliowing insurance poiicies and fall in two categories: Loss of hire and Hull & Machinery.

Loss of hire pertains to claims made when a technical issue prevents the vessels' ability to be on hire.

Hull & Machinery pertains to reimbursement of actual expenses incurred to repair the problem.

There is an element of judgment when deciding which expenses can be claimed and whether it is virtually certain that the amounts will be recovered, but the Group foliows the pohcies and the advice of external consultants before submitting any claim,

4.2 Critical judgments in applying the group's accounting policies

(a) Classification of sale and leaseback transaction

The Group's management has recognized the sale and leaseback transaction for six of its vessels in 2007/2008 in accordance with lAS 17 "Leases" and SIC lnterpretation 27 "Evaluating the Substance ofTransactions Involving the Legal Form of a Lease' Management has considered that the provisions of SIC 27 are not applicable however the Group has substantial risks and rewards incidental to ownership and the exercise of the option to purchase the vessels is considered to be almost certain. Foliowing this analysis the Group's management has concluded that the leaseback is a finance lease since it considers that the Group retains substantially all the risks and rewards incidental to ownership since it is

reasonably certain that the Group will exercise the option to purchase the vessels.

As a result of the above the Group has derecognized the vessels and has recognized them back at their fair value which was higher than the carrying amount. The gain has been deferred and is being amortised to the profit or loss over the lease term which is considered to be 12 years (refer to the accounting policy on Lease agreements). fer to the accounting policy on Lease agreements).

5. Segment reporting

5.1 Income statement / balance sheet and cash flow

DEEP SEA SUPPLY PIc is a ship owner and operator of Anchor Handling Tug Supply vessels )AHTS) and Platform Supply Vessels (PSV). The Company has a worldwide operation, with particular focus on Brazil, North Sea, South Fast Asia and Africa. Since its foundation in 2004, Deep Sea has built a supply ship fleet with AHTSs and PSVs operating worldwide, with the aim of becoming one of the leading owners and operators of supply vessels on a global basis. As part of this strategy, the Company has sought to collaborations with foreign partners, which has resulted in an exclusive partnership agreement with two Malaysian partners in 2010 (associated entities); and the partnership with BTG Brasil (Ïoint venture). The DESS - BTG Ïoint venture was established with the primary purpose of owning and operating AHTSs and PSVs in the Brazilian territory and creating a solid position in the Brazilian offshore supply market. DESS has experience with AHTSs and PSVs worldwide and in Brazil. DESSs operations have traditionally been managed by the Board of Directors by reviewing information by area of operation; and by type of vessel )AHTS, PSV).

On 31 May 2013 DESS disposed 50% of its Brazilian operation (see note 30). A gain of US$82.356 was recognized on the sale. In the income statement the gain has been presented as discontinued operation; while for segment reporting the gain has been presented in gain on sale.

Management continues to review detailed information about its operations in Brazil as for all other Group operations and as such segment reporting is presented as follows:

-Without taking into consideration the impact of presentation for discontinued operations and therefore adding discontinued operations line by line, facilitating comparison with previous periods; however by taking into consideration the non depreciation of vessels since classified as held for sale for consistency to presentation in the primary statements.

• By removing the impact of equity accounting for the joint venture and by adding line by line the proportion of Deep Sea Supply participation )a)ike proportionate consolidation) in the JointVenture in the income statement; balance sheet; and cash fiows.

Consolidated income statement

All amounts in USO 1000

	YTD 2013	YTD 2012
Operating revenue	138866	124140
Vessel operating expenses	(65 603)	(66 345)
Other operating expenses	(12589)	(12356)
Other gains/(losses)	572	566
Gain on sale	85825	4492
EBITDA	147070	50498
Depreciation	(21 719)	(32 304)
EBIT	125351	18194
Financial income	527	351
Financial expenses	(23 847)	(23 802)
Net currency items	(1 749)	1 572
Change in value of financial derivatives	225	175
Net financial items	(24 844)	(21 704)
Pre-tax result	100 507	(3 509)
Taxes	(328)	(912)
Profit for the period/year	100179	(4423)

Consolidated statement of comprehensive income

	YTD 2013	YTD 2012
Profit for the period/year	100 179	(4 423)
Pensjon plan	217	0
Cash flow hedges	(56)	(1 435)
Total comprehensive income for the period/year	100 340	(5 858)

Consolidated balance sheet

All amounts in USD 1,000

	31.12.2013	31.12.2012
Non-current assets
Vessels cost	485 874	638 976
Construction contract	28 395	0
Equipment	734	822
Total property, plant and equipment	515 004	639 798
Deferred income tax	840	605
Other long term receivables	819	687
Investment in associates	1 245	1194
CIRR deposit	27 070	35 558
Total non-current assets	544 976	677 843
Current assets
Inventories	2 365	2 679
Loans to related parties	15 000	0
Other short term receivables	20364	9 541
ClRRdeposit	5215	5215
Freight income not received	26 542	30 010
Cash and cash equivalents	42 976	40423
Total current assets	112 462	87 867
Total assets	657 439	765 710
Liabilities
Borrowings	299 182	466 913
Loans from related parties	7 500	0
CIRRIoan	27070	35509
Deferred gain	14 114	27 157
Other long term payabtes	20	361
Einancial derivatives	1 492	1 630
Total long term liabilities	349 377	531 569
Borrowings	29 803	42 102
CIRRIoan	5215	5215
Trade and other payables	12 914	23667
Deferred gain	2 908	4 658
Tax payable	-0	1 266
Financial derivatives	0	225
Total short term liabilities	50 841	77 134
Total liabilities	400 218	608 703
Net assets	257220	157007
Shareholders equity
Share capital, share premium and treasury shares	11 228	11 356
Retained earnings and other reserves	245 991	145 653
Total shareholders equity	257 220	157 007

Consolidated statement of cash fiows

All amounts in USD 1,000

		Year ended
	Dec 13	Dec 12
Cash fiows from operating activities
Cash generated fram operations	39 874	47 985
Net cash generated from operations	39 874	47 985
Cash fiows from investing activities
Acquisitions and upgrades of property, plant and equipment	(69 550)	(92 186)
Disposals at praperty, plant and equipment	132 601	0
Acquisitions at construction constracts (equity contribution to JV)	(50 100)	0
Net cash generated from /(used in) investing activities	12 951	-92186
Cash fiows from financing activities
Interest paid	(24 314)	(20 774)
Proceods fram borrowings	51 700	105 349
Loans ta related parties	(7 500)	0
Repayments at barrawings	(70 157)	(40 270)
Net cash used in financing activities	(50 271)	44305
Total changes in Iiquidity in the period	2 554	104
Cash and cash equivalents at beginning of period	40423	40318
Cash and cash equivalents at end of period/year	42 977	40 422

5.2 Result per geographical area

Primary Segment - Area of Operations

The segment results tar the year ended 31 December 2013 is as failaws:

	North sea	Africa	Asia	SouthAmerica	Mediter-ranean	Unallocated	Total
Segment revenues	19266	16087	19809	82974	730	0	138866
Vessel operating expenses	(11 416)	(3 969)	(6 222)	(43 762)	(234)	0	(65 603)
Other gains	0	0	0	0	0	572	572
Gain an sale	0	0	0	0	0	85 825	85825
Other operating expenses	0	0	0	0	0	(12 372)	(12 372)
EBITDA per segment	7850	12117	13587	39212	496	74025	147 287
EBITDA margin per segment	41%	75%	69%	47%	68%		106%

The corresponding segment results for the year ended 31 December 2012 is as foliows:

	North sea	Africa	Asia	SouthAmerica	ranean	Mediter- Un-allocateditems	Total
Segment revenues	17694	13361	12692	79417	976	0	124140
Vessel operating expenses	(12 692)	(5333)	(4 925)	(42 845)	(550)	0	(66 345)
Other gains	0	0	0	0	0	566	566
Gain on sale	0	0	0	0	0	4492	4492
Other operating expenses	0	0	0	0	0	(12 356)	(12 356)
EBITDA per segment	5 002	8028	7 767	36 572	426	(7298)	50498
EBITDA margin per segment	28%	60%	61%	46%	44%		41%

Secondary Segment -Type ofVessel

The segment results for the year ended 31 December 2013 is as foliows:

	AHTS	PSV	Un-allocateditems	Total
Segment revenues	75555	63311	0	138866
Vessel operating expenses	(35 960)	(29 644)	0	(65 604)
Other gains	0	0	572	572
Gain on sale	0	0	85825	85825
Other operating expenses	0	0	(12372)	(12372)
EBITDA per segment	39595	33668	74025	147287
EBITDA margin per segment	52%	53%		106%

The corresponding segment results for the year ended 31 December 2012 is as foliows:

	AHTS	PSV	Un-allocateditems	Total
Segment revenues	69192	54948	0	124140
Vessel operating expenses	(38 158)	(28 188)	0	(66 345)
Other gains	0	0	566	566
Gain on sale	0	0	4491	4491
Other operating expenses	0	0	(12 356)	(12 356)
EBITDA per segment	31 034	26 761	(7 298)	50 498
EBITDA margin per segment	1 45%	49%		41%

6. Property Plant and equipment

		Finance lease	Vessels in	Vehicies &
	Vessels	vessels	progress	equipment	Total
Opening net book value as at 1 January 2012	340 178	214 756	17 659	644	573 237
Additions	26 901	5 302	47 850	426	80479
Vessels relocation cost capitalized	13048	5340	0	0	18388
Delivered new buildings	65 509	0	(65 509)	0	0
Depreciation and amortisation	(18 884)	(13 173)	0	(248)	(32 305)
Closing net book value as at 31 December 2012	426 751	212 225	0	822	639 797
At 31 December 2012
Cost or valuation	511 896	284 489	0	1 499	797 884
Accumulated depreciation	(85 145)	(72 265)	0	(676)	(158 086)
Closing net book amount	426750	212224	0	823	639797
Opening not book value as at i January 2013	426 750	212 224	0	823	639 797
Additions	5 598	3303	0	290	9 191
Vessels relocation cost capitalized	144	0	0	0	144
Disposals	(259 935)	(176 836)	0	(713)	(437 484)
Depreciation and amortisation	(9 737)	(3 043)	0	(143)	(12 923)
Ciosing net book value as at 31 December 2013	162 820	35648	0	257	198 725
At 31 December 2013
Cost or valuation	185931	47149	0	814	233894
Accumulated depreciation	(23 111)	(11 501)	0	(557)	(35 169)
Ciosing net book amount	162 820	35 648	0	257	198 725

Construction contracts )newbuildings) for investments in AHIS vessels and PSVs sto entered in the balance sheet as work in progress, as the installments are payable to the shipyards. Directly attributable costs, such as on-site supervision and other predolivery construction costs are also entered in the balance sheet as port ot the purchase costs.

During the year, the group hos not capitalized any borrowing costs (2012: US$324) as it had no qualifying assets. In 2012 borrowing costs were capitalized at the weighted average rate ot its general borrowings of 4.34%.

All vessels under category "Vessels" above are secured with a first priority mortgage. )Note 14).

7. Pensions

The amounts recognised in the balance sheet are determined as toliows:

2013	2012
1108	980
1128	1175
(20)	(195)

The movement in the defined benet it obligation over the year is as foltows:

	Present value of obligation	FairValue of plan assets	Total
At i January 2012	1 042	(768)	274
Current Service costs	350	0	350
Interest expenses/(lncome)	29	(23)	6
	379	(23)	356
Employer contribution
Employer benet its paid	0	(264)	(264)
Remeasurements loss (Gain)	(514)	(54)	(568)
Exchange difference	74	(67)	6
At 31 December 2012	980	(11 176)	(195)
January2013At	980	(1 176)	(196)
Current Service costs	234	0	234
Interest expenses/(lncome)	37	(34)	3
	271	(34)	237
Employer contribution	0	(380)	(380)
Employer benetits paid	0	0	0
Remeasurements loss (Gain)	(5)	215	210
Exchange difference	(137)	246	109
At 31 December 2013	1109	(1 128)	(20)

Ide plan is related to employees in Norway, and their are only active emploees in the plan

	2013	2012
Discount rate	4,0%	3,9%
Expected return on plan assets	4,0%	4,0%
Future salary increase	3,8%	3,5%
Future pension increases	0,6%	0,2%
Mortality table	K2013BE	K2005

Assumptions regarding future mortality are set based on actuarial advice in accorance with published statistics and experience. Changes in accounting policies

During the year the Group has implemented the amended standard lAS 19 Employee benetits from 1 January 2013.

The most signiticant change in the amended AS 19 is the removal at the corridor approach for actuarial gans and losses. Actuarial gains and losses are now recognised in the balance sheet immediately, with a charge ar credit to other comprehensive income )OCl) in the periods in which they occur. These are not reciassified in later periods to protit or loss. The group did not restate prior period tigures because the impact is immaterial.

8. Derivative financial instruments

		2013	2012
	Asset	Liability	Asset	Liability
Non-current portion
Interest rate swaps - cash flow hedge		577		1435
Forward Foreign exchange contracts-cash flow hedges		209
Current portion
Interest rate swaps				225
Forward Foreign exchange contracts-cash flow hedges		706
Total	0	1492	0	1660

Trading derivatives are ciassified as a current asset or liability. The full fair value of a hedging derivative is ciassitied as a noncurrent asset ar liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset ar liability, if the maturity at the hedged item is less than 12 months.

(a) Forward foreign exchange contracts

The national principal amounts at the autstanding forward foreign exchange contracts at 31 December 2013 were US$ 20,131 (2012:0)

The hedged highly probable forecast transactians denominated in foreign currency are expected to occur at variaus dates during the next 24 months. Gains and losses recagnized in the hedging reserve in equity on forward foreign exchange contracts as at 31 December 2013 are recagnized in the income statement in the period ar periods during which the hedged forecast transaction affects the income statement. This is generally within 24 months at the end at the reparting periad..

(b) Interest rate swaps

The nominal principal amounts of the autstanding interest rate swaps at 31 December 2013 were US$100.000 (2012: US$120.000).

At 31 December 2013, the fixed interest rate of interest rate swap used is 0,955% and the floating rate is 3-month LIBOR. Gains and losses are recognized in the hedging reserve in equity on interest rate swap cantract as at 31 December 2013 will be subsequently released to prafit ar loss within 'tinance cost' until the repayment of the bank borrowings (Nato 14). The full fair value at a hedging derivative is classified as a non-current asset ar liability it the remaining maturity ar the hedged item is more than 12 months and as a current asset ar liability, if the maturity at the hedged item is less than 12 months.

9.Trade and other receivables

	As at 31December 2013	As at 31 December 2012
Trade receivables	22 323	30 010
Less:Provision for impairment of receivables	0	0
Trade receivables -Net	22 323	30 010
Less nomcurrent portion	0	0
Current Portion	22 323	30010

Trade receivables that are less than four months due are not considered impaired. As of 31 December 2013, trade receivables of US$ 6.6 million (2012:1JS$ 14 million) were past due but not impaired.These relate to a number of independent customers for which there has been no case of default in 2013 or 2012. None of the receivables due for more than four months are considered impaired. The aging analysis of trade receivables is as foliows:

Aging	As at 31 December 2013	As at 31 December 2012
Up to one month	17 581	16 106
One to four months	3208	12 069
More than four months	1 534	1 836
Total	22 323	30 010

Currency	As at 31 December 2013	As at 31 December 2012
United State Dollars )USD)	15901	20958
Brazilian Real (BRU	2 402	6 664
Great British Pounds (GBR)	3 967	2 375
Euro (EUR)	0	14
Singaporian Dollars (SGD)	52	0
Norwegian Kroner (NOK)	i	0
Total	22323	30010

10. Inventories

	2013	2012
Bunkers	i 023	1 227
Lub oil	349	951
Spare parts and consumables	0	501
Total	1372	2 679

The cost of inventories recognised as expenses and included as income in vessels operating revenues, amounted to US$ 1**,**986 (2012: US$ 6,242)

11. Cash and cash equivalents

	2013	2012
Cash at bank and in hand	31 693	40423
Total bank deposits	31693	40423
Specification of restricted deposits
Bank deposits	IK11	124

The carrying amounts of cash approximate fair value. Currently, there is no undrawn credit facility for the Group. Restricted bank deposits are for employee tax withholdings. Cash and cash equivalents are denominated in the foliowing currencias:

Currency	As at 31 December 2013	As at 31 December 2012
United State Dollars (USD)	27 847	28770
Great British Pounds (GBP)	2 123	241
Euro (EUR)	482	2775
Norwegian Kroner (NOK)	1 203	446
Malaysian Ringgit (MYR)	37	0
Brazilian Real (BRU	0	8 191
	31693	40423

According to the loan agreement and corresponding covenants regulations, the Company has to maintain, at all times, a minimum cash amount which equals to the highest of: 5% of the total debt and US$ 20 million.

12 Share capitaI

	Number ofShares (thosands)	ShareCapital	Sharepremium	Other paid-in-equlty	Total
Opening balance as at 1 January 2012	126 997	2 540	6641	2 023	11 204
Valuation of share option scheme				(89)	(89)
lssua of shares - Exercise of share options	200	4	236		240
At 31 December 2012	127197	2544	6878	1934	11356
Opening balance as at 1 January 2013	127 197	2 544	6878	1934	11 356
Valuation of share option scheme				(127)	(127)
At31 December 2013	127197	2544	6878	1807	11229

The total authorised number of ordinary shares as per 31 December 2012 is 250,000,000 (2011: 250,000,000) shares with a par value at US$ 0.02 per share. The Company does not own any share of its own. All issued shares are fully paid.

The board at directors at the Company has approved a share optian scheme for directors and certain employees. The exercise price at the granted options is equal to the market price at the shares at date granted plus 10%.

Thase share options may be exercised with ane third atter ane, twa and three years, respectively and all share options must be exercised within 5 years. The strike price shall be reduced, on a USD tar USD basis, by the amaunt at all dividends declared by the Company in the period from the date at grant until the date the subsisting share options is exercised. Subsequent share options have been granted ta new employees based on the same principle.

Movements in the number at shares options and their related weighted average exercise prices are as follows:

		20122013
	Average exerciseprice Nok per share	Options(thousands)	Average exerciseprice Nok per share	Options(thousands)
At 1 January	8,83	1 058 333	8,83	1 820 109
Granted	0	0	0	0
Forfeited	12,27	159 3341	12,10	(133 333)
Exercised	6,99	(132 333)	6,99	1628 4441
Expired	0	0	0	0
At 31 December	9,72	866 667	9,52	1 058 333

The share options forteited pertained to employees that lett the Company during the year. Options exercised where partly settled in cash and partly by issuing shares. lncluded in the share options that expire in 2014, are 266,666 options granted ta the directors at the Company whose expiry was ariginally 2011 and have been extended to 2014.

Share options autstanding at the end at the year have the tailowing expiry date and exercise prices:

Expiry date (as per year ended 31 December 2013)

	Exercise price in NOK	2013
2014	6,99	266 666
2015	11,41	501 668
2016	9,72	98333
At 31 December		866 667

Expiry date (as per year ended 31 December 2012)

	Exercise price in NOK	2012
2013	6,99	398 998
2014	0	0
2015	11,49	561 002
2016	9,72	98333
At 31 December		1 058 333

The value at the aptian is estimated by Hull & White's inn

plementation (2002) tar emplayee stock options at the binomial troe model tar the pricing at early exercise equity options.

Change of control

The share options tar the board and the share options and certain other benefits for the employees will come into effect in the event at change at control at the Company.

13.Trade and other payables

	2013	2012
Trade payables	914	14517
Social Security and other taxes	126	2 137
Accruedexpensos	4514	7013
Total	5 554	23 667

Fair value of trade and other payables equal their carrying amounts.

Trade and other payables are denominated in the foliowing currencies:

Currency	2013	2012
United State Dollars (USD)	3 838	8 021
Great British Pounds (GBR)	86	640
Singapore dollar (SGD)	234	658
Euro (EUR)	1325	0
Malyasian Ringgit (MYR)	71	0
Brazilian Real (BRU	0	14349
	5554	23667

14. Borrowings

Group	2013	2012
Non-current
Bank borrowings	90 790	278 426
Finance lease liabilities	25423	163 487
CIRR loan	27 069	35 509
Borrowings from related parties	0	25 000
	143282	502422
Current
Bank borrowings	10 804	26447
Finance lease liabilities	6 114	15655
ClRRloan	5215	5215
	22133	47317
Total Borrowings	165,415	549,739

ma~ DEEP SEA SUPPLY

The carrying amounts of the groups borrowings are denominated in the t000wing currencies:

	2013	2012
US Dollars	133 162	509 015
Norwegian Kroner	32 253	40 724
	165415	549739

The fair value ot both current and non-current borrowings are not materially different fram their carrying amaunt.

(a) Bank borrowings

Bank borrowings comprise at loans secured with a first priority mortgage in the financed vessels at USD 528,000 (2012: 201609) and mature in 2016.

(b) Finance lease liabilities

The finance lease liabilities were entered into at end of 2007 and beginning of 2008.

Iha maturity is 12 years with several purchase options.

Finance lease labilities - minimum lease payments:

2013	2012
5 196	26 828
16417	94423
14951	112645
36 564	233 896
(5 028)	(54 782)
31 536	179 114

The present value of finance lease liabilities is as foliows:

	2013	2012
No later that 1 year	3 730	15418
Later than i year and no later than 5 years	13 059	60 103
Later than 5 years	14747	103593
	31 535	179 113

c) CIRR Loan

During the year ended 31 December 2008 the Graup has applied far twa Commercial Interest Reference Rate (CIRR) loan fram the Norwegian Export Credit Agency. The amaunt at the loans was NOK 132 mill (US$ 19 mill) and NOK 216 mill (US$31 mill). The duration at the loans is 12 years and the cash proceeds from the loans have been deposited in a fixed deposit account with a Norwegian bank at a higher interest rate than the ane at the loans. The agreed period at the depasits is identical with the ane at the loans. The loans and the interest thereat will be repaid fram that accaunt and the difference has been recognised as detorred gain and will be amortised over the period of the lite at the asset.The loan is denominated in NOK and subject to currency fluctuatians against the USD.

d} Borrowings from related parties

During the year ended 31 December 2013 the graup abtained another US$10000 fram the company cantrolled by a party with significant intluence and repaid the total balance at US$35,000.The company has paid interest at US$1 202 (2012: US$ 352) during 2013 with respect ta this loan. Cammitment tess at US$23 have been paid in 2013 (2012: US$308 cammitment fees at US$ 308).

Deep Sea Supply PIc Annual report 2013

15. Income tax expense

	2013	2012 Restated
Current tax	(379)	(908)

16. Provisions for other liabilites and charges

Bonus agreement

AD employees of Deep Sea Supply Management AS and Deep Sea Supply Management (Cyprus) Ltd. have performance bonus agreements with the Group based on comparison with peer group companies. The bonus is calculated annually with a maximum payment equal to 50% of the annual salary for the CEO and 25% of the salary for other employees.

The weighted average fair value of the bonus payment granted during the period determined using the multi dimensional Geometrical Brownian Motion Monte Carlo valuation model was USS 121 [NOK 7411 equivalent to 22% bonus payment. The sgnificant inputs into the model were average volatility of the peer group of 27%, no dividend yield and an expected correlation matrix for the peer group between -044 and 1.00. The volatility of the peer group is measured at the standard deviation of continuously compounded share returns based on statistical analyses of daily share prices over the last two years.

	Bonus provision
At 1 January 2013	157
Charged/)Credited) to the income statement	0
Paid during the year	(157)
Provision made during the year	121
At 31 December 2013	121

The whole amount is considered current.

17. Other (Iosses)/gains - net

	2013	2012 Restated
Change in value of financials derivatives	0	175
Deferred gain amortized in the period	982	981
Other gains	70	170
Total	1052	1326

18. Employee benefit expenses

	2013	2012 Restated
	5205	4 636
Wages and salariesSocial security costs	835	904
Pensjon costs - defined benefit plans (Note 7)	237	356
Other benefits	149	127
Total	6426	6 023
Number of employees as per year-end	41	31

(This does not include 31 employees in the 50% owned DESS BTG).

The above excludes crew short employee benefit expenses wh)ch are included in operating expenses vessels (Note 20). Share options exercised and forfeited by directors and employees resulted in a reversal of expenses by US$ 128 (2012: US$ 88).

19. Expenses by nature

	2013	2012 Restated
Depreciation, amortisation and impairment cherges )Note 6)	12 923	12 320
Operating expenses vessels )Note 20)	23 255	18 696
Payroll expenses administrative employees (Note 18)	6426	6102
Other administration costs	1 092	2205
Total	43 696	39 323

20. Operating expenses vessels

	2013	2012 Restated
Crew expenses	16218	12774
nsurance	1 576	1 281
Repairs and maintenance	1 927	231
Administration expenses	251	358
Provisions, stores, lubrication oil, administration of operations and miscel(aneous	3 283	4 052
Total	23255	18696

21. Earnings per share

Basic

Basic earnings per share are calculated by dividing the prof it attributable to equity holders of the Company by the weighted average number ot ardinary shares in issue during the year. Total number at outstanding shares as per year-end 2013 was 127,197,194 (2012:127,197200).

Basic

	2013	2012
Profit attributable to equity holders of the company	100 179	(4 423)
Weighted average number at ardinary shares (thousands)	127 197	127 147
Basic earnings per share (USD per share)	0,788	(0,035)

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number at ardinary shares autstanding ta assume canversian at all dilutive potential ardinary shares. The Company's anly categary at dilutive patential ta ardinary shares is the share aptians. Share aptians have been granted ta Board at Directars and management, and per year-end 2013 there were tatally 866,667 share aptians autstanding. The share aptians are included in the diluted number at shares depending an whether ar nat they were in the maney per year-end 2013.

Diluted

	2013	2012
Profit attributable to equity holders of the company	100 179	(4 423)
Weighted average number at ardinary shares diluted )thausands)	127 905	127 873
Diluted earnings per share (USD per share)	0,783	(0,035)

22. Cash generated from operations

	2013	2012
Profit betore tax	100 558	(3 511)
Adjustments far:
-Depreciatian (note 6)	12 923	32304
-Share of profit fram associates I JVs	(724)	(391)
-Lassl)gain( tram sale at assets (note 17)	0	0
-Amartizatian at deferred gain (note 17)	(2 005)	(4492)
-Financecasts - net	16856	21879
-Effect fram tinancial derivatives (flate 17)	0	(175)
-Gain an dispasal (note 30)	(82 356)	0
-Exchange )gains)/lasses	(1 809)	(558)
Changes in working capita[
)excluding the effects at acquisitian and exchange differences an cansalidatian)
-Inventaries	2 589	2 383
-Trade and ather receivables	(8 470)	(3 608)
-Trade and ather payables	(5 790)	4 154
Cash generated fram operations	31 772	47 985

m IF

23. Credit quality of financial assets

As at 31 December 2013

Credit rating
Al	22 531
A2	4 121
Aal	41
Aa3	4 872
Caa 1	128
	31 693

As at 31 December 2012

Credit rating	Amount
Al	26 233
A2	3 563
A3	6
Aol	28
Aa3	2 280
Baa2	8189
Caa i	123
	40 423

Ratings shown above were issued by the credit agency of Moody's os at 31/12/2013

24. Related party transactions

Key management compensation

Key management for 2013 and 2012 includes the Chief Executive Officer ICEOl, the Chief Financial Officer (CFO), the Chief Operating Officer )COO), thelechnical director and the Accounting director of the company and the board of directors.

The total compensation to the key management of the Group amounted to US$ 1,922 as of 31 December 2013. The corresponding amount as of 31 December 2012 was US$ 2,026.

The key management hos no other form of compensation, except salary, share options scheme mentioned in note 12 and the bonus agreement mentioned in nota 16.There are no loans to the employees of the Group as par 31 December 2013 and per 31 December 2012.

Remuneration to the board

Suggested remuneration to the Board in 2014 is US$ 180 (NOK 1.1 million), whareof US$57 (NOK 0.35 million) is suggested to the chairman. In 2012 payment to the board was US$ 154 (NOK 0.85 million), whereof US$64 (NOK 0.35 million) was payment to the Chairman.

Other services rendered

The Group rents offices from a company controlled by a party with a significant influence over the Company. The amount pald in 2013 was US$ 35 (2012: US$ 35).

The Group received consultancy services from a company controlled by a major shareholder in 2013 that amounted to US$ 50 (2012: US$ 50). The group bare boated vessels from a company controlled by a party with a significant influence for a fee of US$4.475.

The group paid US$3.000 on behalf of a company controlled by a party with significant influence with regards to commission for the sale of vessels that were owned by this company as part of the JV transaction (Note 31). This amount was still receivable by the year and. The group had a receivable from a company controlled by a major shareholder by the end of 2013 that amounted to US$329.

Transactions with DESS BTG companies.

The group has performed the following transactions during 2013 with companies the belong to the DESS BTG group (Note 32):

Vessels management

The group has entered into agreement with the JV Group where by it provides management services for the vessels of this group. The total amount for the period ended 31 December 2013 was US$276.

Administrative income

The Group has entered into an agreement with DESS for the provision at various services such as:

Hnancial and accounting services /Vessels technical related services / Business development/ Handling at insurance related matters /Administrative services

The fee payable for the services for the period ended 31 December 2013 was USD 1,467 and is included in Administrative expenses in the income statement .The amaunt was calculated by adding a markup element of 5.25% to the expected costs at the Group for providing those services.

Chartering out vessel

During the year the Group has leased a vessel to the DESS BTG far a fee at US$2.645

Balances with DESS BTG

The total year end balance with JV companies excluding loans was a receivable at US$58.

Loans from related parties
	2013	2012
Loans fram campanies controlled by by a party with signiticant influence:
At 1 January	25 000	-
Loans advanced during the year	10 000	25 000
Loans repaid during the year	(35 000)	-
Interest charged	1 202	352
Interest paid	(1 202)	(352)
Commitement tees charged	23	308
Commitement tees paid	(23)	(308)
At 31 December	-	25 000

Loans to related parties

	2013	2012
Loans to campanies in JV
At 1 January	-	-
Loans on establishment at JV	7 345	-
Loans advanced during the year	43 200	-
Loan repayments received	(28 200)	-
Interest Charged	302	-
Interest received	(199)	-
At 31 December	22 448	-

25. Other short term receivables

	2013	2012
Prepaid vessel insurances	1100	2311
Claims from insurance companies	2506	2500
VAT receivables	272	165
Prepaid borrowing costs	3381	0
Reserved deposits	1782	0
Receivable fram related party (Note 24)	3000	0
Other	1948	4565
	13989	9541

Reserved depasits pertain ta money held in banks as guarantees in relation to charter hire cantracts the Group has entered into.

26. Auditors remuneration

Remuneration to the statutory auditors in the financial statement for 2013 equals US$ 55.1 (2012: US$ 100.1) for audit services, US 18.5 (2012: US$ 176) for other assurance services and US$ nu (2012: US$ 10.3) for non-assurance services

27. Financial instruments by category

Setting out below is a comparison by category for carrying amounts and fair values of all of the group's financial instruments that are carried in the financial statements.

Group	Loans andReceivables	Assets at fair valuethrough profit and loss	Derivatives usedfor hedging	Avallablefor sale	Total
31 December 2013
Assets as per balance sheet
Trade and other receivables	54 007				54 007
CIRR Deposits	32 285				32 285
Cash and cash equivalents	31 693				31 693
Total	117985				117985

	Liabilities at fair valuethrough the profit and loss	Derivatives usedfor hedging	Other financialliabilities	Total
Liabilities as per balance sheet
Borrowings			133 132	133 132
CIRR Loans			32 285	32 285
Derivative financial instruments	-	1 492		1 492
Trade and other payables			5 554	5 554
Total		1492	170971	172463

Deep Sea Supply PIc Annual report 2013

Group	Loans andReceivables	Assets at fair valuethrough profit and loss	Derivatives usedfor hedging	Avallablefor sale	Total
31 December 2012
Assets as per balance sheet
Trade and otber receivables	40 238				40 238
CIRR Deposits	40 773				40 773
Cash end cash equivalents	40 423				40 423
Total	121 434	-	-	-	121 434

	Liabilities at fair value Derivatives usedthrough the profit andloss	for hedging	Other financialliabilities	Total
Liabilities as per balance sheet
Borrowings			509015	509015
CIRR Loans			40 724	40 724
Derivotive financial instruments	225	1 435		1 660
Trade and other payables			24 028	24 028
Total	225	1 435	573 767	575 427

28. Contingencies and commitments

Tax legislation

The Company is subject to taxes in several jurisdictions, where significant judgement is required in calculating the tax provision for the Company. There are many transactions for which the ultimate tax determination is uncertain and for which the Group makes provisions based on an essessment of internal estimates, tax treaties and tax regulations in the different countries where the Group is operating, 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.

Operating leased commitments - Group as lessor

The future minimum lease payments receivable under non-cancellable operating leases are as foliows: (in thousands of US dollars)

	2013
No later than i year	53 468
Later than 1 year and no later than 5 years	49 705
Later than 5 years	0
	103 173

29. Deferred gain on financed leasedvessels

	2013	2012
Opening balance at beginning of the year	30472	34 967
Released on disposal to JV (Note 30)	(11 067)	0
Booked against investment in JV (Note 31b)	(11 067)
Amortised during the year	(2 446)	(4495)
Ciosing baLance at the year end	5 892	304-12
	2013	2012
Non current	4 910	25 984

30. Discontinued operations

30.1 Disposal of 50% of Brazilian business

On 31 st May 20131he Company and BIG Pactual Oil & Gås Participaçöes S.A. ("BIG Pactual") entered into a joint venture )the Joint Ventura') for the ownership and operation of Platform Supply Vessels ("PSVs") and Anchor Handling Tug and SupplyVessels ("AHTS") in Brazil. The Company sold 50% of its Brazilian business and purchased together with its new Brazilian partner BTG Pactual 6 newbuliding contracts.

The Group sold 50% ownership interest in each of its Brazilian subsidiaries Deep Sea Supply Navegaçäo Maritima Ltda. (" Deep Sea Navegaçâo") and Deep Sea Supply Serviços Maritimos Ltda ("Deep Sea Serviços")

The Group also sold 9 AHIS and 5 PSVs together with their borrowings to Deep Sea Supply BIG B.V. group, which is owned jointly 50/50 by DESSC and BIG Pactual (Note 6).

30. 2 Analysis of profit for the year from discontinued operations

	Period 1jan 2013 to 31 May 2013	2012
Sales freight revenue	45 337	81 588
Operating expenses vessels	)25 066)	(47 649)
Depreciation related to vessels	0	(19 917)
Gross Profit	20271	14022
Other depreciation	0	(68)
Administrative expenses	)2 277)	(3 997)
Other )losses)/gains - net	i 463	3 516
Gain on disposal to JV	82 356	0
Operating profit	101 813	13 473
Finance income	0	861
Finance costs	(8783)	(14 531)
Finance costs - net	(8783)	(13 670)
(Loss)/Profit before tncome tax	93 030	(197)
lncome tax expenses	(34)	(4)
(Loss)/Profit for the year from discontinued opearations	92 996	(201)

The total consideration net of borrowings for the JV transaction was US$125,101.The total gain on sale was as foliows:

Gain on disposal to JV
Gain on disposal of business	71 289
Gain on release of deferred gain on Sale and Leasback vessels (Note 29)	11 067
Total	82356

The gain on disposal of the vessels was recognized 50% while the remaining 50% was recorded against the investment in JV (Note 29) Deferred gain on sale was recognized on a 50% while the remaining 50% is booked against investment in JV in balance sheet and is amortized over the remaining lite of the finance and leaseback transaction (Note 31).

303 Cash fiows from discontinued operations

	2013	2012
Operating cash fiows	17 994	31 995
Investing cash fiows	(10 131)	(81 956)
Financing cash flows	(15 238)	45 757
Total cash fiows	(7 375)	(4 204)

30.4AnaIysis of assets and liabilities of disposed subsidiaries

	2013
Current Assets
Cash and Cash Equivalents	459
Trade & Otber receivables	11 526
Inventory	90
Non CurrentAssets
Property plant and equipment	82 560
Deferred tax asset	1 613
Current Liabilities
Trade and other payables	(30 163)
Non current liabilities
Borrowings	(63 157)
Deferred tax liabilities
Net assets on disposal	2 928

31. Investments accounted for using the equity method

The amounts recognised in the balance sheet are as follows:

	2013	2012
Associates	1245	1194
Joint ventu res	112569	-
At 31 December	113 814	1194

The amounts recognised in the income statement are as follows:

	2013	2012
Associates	51	391
Joint ventu res	673
At 31 December	124	391

31a. Investment in Associates

	2013	2012
At 1 January	1194	594
Additions	0	209
Share of profit	51	391
At 31 December	1245	1194

The group's share of the results of its associste, and its aggregated assets and habitties are as follows:

Name	Country of Incorporation	Assets	Liabilities	Revenues		Prof it % Interest held
31 December 2013
-Sea Weasel Ltd	Malaysia	3944	2791	538	213	24
31 December 2012
-Sea Weasel Ltd	Malaysia	4 236	3 069	898	391	24

31b. Investment in JointVenture

	2013	2012
At 1 January	0	0
Additions on Establishment at JV (Note A)	122 963	0
Deferred gain on finsnce leased vessels (Note 29)	(11 067)	0
Deferred gain amortized in period	i 023	0
Share at profit	(350)	0
At 31 December	112 569	0

Note A: Additions on Establishment of JV

The additions on Establishment at JV on 31.05.2013 is comprised at the foliowing amounts

50% at Net assots at DESS Navegacaa & DESS Servicas 31.05.2013	1 463
Cantributian to JV	198 513
50% of Profit on disposal of vessels	(88 080)
50% at Deferred gain on sale and leaseback vessels disposed	il 067

Total 122963

Nature of investment in joint venture:
----------------------------------------	--

Name	Country of Incorporation		% Held Measurmenet method
31 December 2013
-Deep Ses Supply Navegaçäo Mar(tima Ltda	Brazil	50	Equity
-Deep Ses Supply Serviças Maritimos Ltda	Brazi(	50	Equity
-Deep Sea Supply BTG B.V.	Netberlands	50	Equity

ma~ DEEP SEA SUPPLY

Summarised Balance sheet	2013
Assets and liabilities of jointly controlled entities
Current Assets	22 567
Cash and Cash Equivalents	21 480
Trade & Other receivables	1 986
InventoryTotal Current assets	46 013
Non CurrentAssets
Property plant and equipment	632 558
Deferred tax asset	1 615
Other long term receivables	1 637
Total non current assets	635 810
Current Liabilities
Borrowings	25 770
Trade and other payables	14 909
Total current liabilities	40 679
Non current liabilities	395 834
Borrowings	395 834
Total non current liabilities
Not Assets	245 226
50% of net assets	122 613
Deferred gain on finance leased vessels not amortized	(10 044)
Total amount	112 569

Summarized statement of comprehensive income	2013
Sales - freight revenue	68 878
Operating expenses vessels	(34 840)
Depreciation reated to vessels	(17 525)
Gross Profit	16513
Other depreciation	(67)
Administrative expenses	(5 153)
Other (Iosses(/gains - not	0
Operating profit	11 293
Finance income	2 522
Finance costs	(14 685)
Finance costs - net	(12 163)
(Loss)/Profit before income tax	(870)
Income tax expenses	171
(Loss)/Profit for the year from continuing operations	(699)
50 % of(Loss)/Profit	(350)
Deferred gain amortized in period	1 023
Amount recognized as per note 31	674

60

Reconciliation of summarized financial information

Reconciliation of the summarised financial information presented to the carrying amount of its interest in the joint venture:

Summarized financial information	2013
Opening net assets 1 January	-
Not assets on 31.05.2013	245 925
Profit/Loss for the year	(699)
Ciosing net assets	245 226
Interest in joint venture@50%	122 613
Deferred gain (note 30)	(11 067)
Deferred gain amortized	1 023
Carrying value	112 569

The Company has guaranteed towards DESS BTG, the fulfilment of the obligations of PSV Holding under the newbuild purchase agreements. In the event PSV Holding is not able to deliver the vessels in accordance with its commitments under the newbuilds purchase agreements, there is a risk thatlhe Company will be responsible as guarantor towards DESS BTG. On the date of sign off of the financial statements, PSV Holdings has fulfilled its obligations under the newbuild purchase agreements and delivered all the newbuilds to the joint ventura group.

The Company has issued a parent company guarantee for the obligations of Deep Sea Supply Navegacao Maritima Ltda under the BNDES Pacility Agreement for the financing of Sea Brasil. As part of the BTG Pactual Group, BTG Brasil cannot issue guarantees pursuant to internal restrictions, and is therefore not able to assume 50% of the guarantee obligations in connection with the establishment of the Joint Venture.

BTG Brasil has instead issued a counter indemnity in favour of The Company, whereby BTG Brasil indemnifiesThe Company for any claims exceading 50% of the total liability under the guarantee given under the BNDES Facility. The Company will still be the initial guarantor under the guarantee granted in favour of BNDES, and in the event BTG Brasil is not able to fulfil its obligations under the counter indemnity guarantee, The Company will be responsible for the full guarantee amount if BNDES calls upon the guarantee, which may materially impact the financial condition of the Deep Sea Group. The obligations of BTG Brasil under the counter indemnity agreement will be secured by way of a share pledge by BTG Austria over the shares in DESS BTG. The Group is not expecting any financial impact from any of these guarantees.

32. Events after the balance sheet date

In February 2014, "Sealitus" and "SeaTortuga both vessels of STX OSCD design, were delivered frem Cochin Shipyard, lndia.These vessels are owned by PSV Holding and operated by Deep Sea Supply.

Independent auditor's report To the Members of Deep Sea Supply P1c

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Deep Sea Supply Ple (the «Company") aud its subsidiaries (together with the Company, the "Group"), which comprise the consolidated balance sheet as at 31 December 2013, and the consolidated statements ofincome, comprehensive income, changes in equity and cash fiows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Board ofDirectors' responsibility for the consolidatedfinancial statements

The Board of Directors is responsible for the preparation of consolidated financial statements that give a true aud fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors deterniines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

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

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

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

PricewaterhouseCoopers Ltd, City House, 6 Karaiskakis Street, CY-3032 Limassol, Cyprus P0 Box 53034, CY-3300 Limassol, Cyprus T. +35725-555 000, F:+357 -25555001, www.pwc.com/cy

FrioewaterhouseCoopers Ltd isa meniher ibm 01 PticowatemauseCoopers Tntefnattanel Ltd, e~ member ibm of ~h isa separate legal enitty. Ptcewatarhousstoopars Ltd isa private company registered in Cyprus (Reg. trio. 143594). A list of the fompany'sdirectore iriduding for Indivlduals (be presertt name and surnasie, as well sa any prevlous nemsy and to legal entitea Uro colporate name, is Irept by (ha Secretaly at the company at ta rogisterad Ofte at 3 Thmjstocles Oerv]s Street, 1088 bleasla and appeara arr Uro company's web alle. Ofttcaa in Nicosta, Limasaol, Lemaca end Pepbos.

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2013, aud of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union aud the requirements of the Cyprus Companies Law, Cap. 113.

Report on other legal requirements

Pursuant to the requirements of the Auditors and Statutory Audits of Annual aud Consolidated Accounts Law of 2609 and 2013, we report the following:

• We have obtained all the information and explanations we considered necessary for the purposes of our audit.
• In our opinion, proper books of account have been kept by the Company, so far as appears frorn our examination of these books.
• The consolidated financial statements are in agreement with the books of account.
• In our opinion and to the best of our information and according to the explanations given to Us, the consolidated financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required.
• In our opinion, the information given in the report of the Board of DirectoÉs is consistent with the consolidated financial statements.

Pursuant to the requirements of the Direetive DI190-2007-04 of the Cyprus Securities aud Exchange Commission, we report that a corporate governance statement has been made for the information relating to paragraphs (a), (b), (c), (f) and (g) of articie 5 of the said Directive, and it forms a special part of the Report of the Board of Directors.

Other matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Seetion 34 of the Auditors aud Statutory Audits of Annual and Consolidated Accounts Law of 2009 and 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

Tasos Nolas Certified Public Accountant and Registered Auditor for and on behalf of

PricewaterbouseCoopers Limited Certified Public Accountants and Registered Auditors

Limassol, 9April 2014

Shareholders registered in VPS

The largest shareho/ders as per 31 December 2013 registered in VPS

	Citizen	No. of shares:	%
HEMEN HOLDING LIMITED	CYP	44 583 853	35,05%
SKAGEN KON-TIKI	NOR	12 229 431	9,61%
DNB NOR MARKETS	NOR	4 182 870	3,29%
JP MORGAN CLEARING CORP	USA	3457 170	2,72%
MORGAN STANLEY & Co	USA	3 361 348	2,64%
HOLBERG NORGE	NOR	2446414	1,92%
JP MORGAN CHASE BANK	NOR	2 120 052	1,67%
FIRST GENERATOR	NOR	2020396	1,59%
JP MORGAN CHASE BANK	GBR	1 858 353	1,46%
UTHALDEN 415	NOR	1 575 000	1,24%
VERDIPAPIRFONDET DNB	NOR	1 560 000	1,23%
NORDEA BANK SVERIGE	SWE	i 527 969	1,20%
CENTRA INVESTAS	NOR	1 421 643	1,12%
UBS AG	GBR	1 343 697	1,06%
PACTUMAS	NOR	1325000	1,04%
TOLUMA NORDEN AS	NOR	1 200 000	0,94%
SOLSTEN INVESTMENT FUND	IRL	1 062 072	0,83%
DELPHI NORGE	GBR	800 000	0,63%
VPF NORDEA SMB	NOR	684 615	0,54%
MP PENSJON PK	NOR	658 800	0,52%

Total 20 largest shareholders: 89 418 683 70,30%

Total other shareholders 37 778 511 2970%

Total number of shares 127 197 194 100,00%

Shareholders registered in VPS

The largest shareholders as per 09 April 2014 registered in VPS

	Citizen	Nr,, of shares:
HEMEN HOLDING LIMITED	CYP	44 583853	35,05%
SKAGEN KON-TIKI	NOR	12 229 431	9,61%
DNB NOR MARKETS	NOR	4345788	3,42%
HOLBERG NORGE	NOR	2515000	1,98%
JR MORGAN CHASE BANK	SWE	2320052	1,82%
FIRST GENERATOR	NOR	2159137	1,70%
MORGAN STANLEY & CO	USA	2044937	1,61%
JR MORGAN CHASE BANK	GBR	1 830295	1,44%
VERDIPAPIRFONDET DNB	NOR	1 670 000	1,31%
UTHALDEN A/S	NOR	1 575 000	1,24%
UBS AG	GBR	1496627	1,18%
NORDEA BANK SVERIGE	SWE	i 495404	1,18%
CENTRA INVESTAS	NOR	1 421 643	1,12%
SOLSTEN INVESTMENT FUND	IRL	1342512	1,06%
PACTUM AS	NOR	1 325000	1,04%
JR MORGAN CLEARING CORP	USA	1 232 621	0,97%
TOLUMA NORDEN AS	NOR	1 200 000	0,94%
DELPHI NORGE	NOR	800 000	0,63%
VPF NORDEA SMB	NOR	716615	0,56%
SKANDINAVISKA ENSKIL	SWE	700 874	0,55%
Total 20 largest shareholders:		87 006 789	68,40%
Total other shareholders:		40 190 405	31,60%

Total number of shares: 127 197 194 100,00%

Corporate governance

Deep Sea Supply PIc

("DESSC or the Company' on a consolidated basis) principles for Corporate Governance are based on the "Norwegian Code of Practice for Corporate Governance" issued on 23 October 2012. Listed companies are expected to practice Corporate Governance that regulates the division of roles between Shareholders, the Board of Directors and the Executive Management more comprehensively than is required by the IegisIation.The code of practice intends to strengthen the confidence in listed companies providing the highest possible va)ue creation benefiting shareholders, employees and others. As long as DESSC is a Cyprus registered company, "Norwegian Code of Practice for Corporate Governance" can only be adopted as long as the recommendation is in accordance with Cyprus Companies Law, Cap 113. The Board of the Company is not aware of any differences between the content of the "Norwegian Code of Practice for Corporate Governance" and Cyprus Companies Act.

DESSC's management has presented "The Norwegian Code of practice for Corporate Governance" for the Board.

The foliowing elements underpin the Company's Corporate Governance Policy:

• DESSC will maintain an open and re)iable communication with the public about its business activities and conditions related to corporate governance.
• DESSC's Board will be autonomous and independent of the Company's Management.
• DESSC will attach importance to avoid conflicts of interest between the owners, the Board and the Management.
• DESSC will have a clear division of responsibilities between the Board and the Management.
• All shareholders will be treated equally.

The Company has established its own corporate Code of Ethics. Complianco with and follow up of the Code of Ethics have been discussed and presented thoroughly inhouse. For more detailed information about the Company's Code of Ethics, please see our corporate website at www. deepseasupply. no.

Company Background

Deep Sea Supply Plc was established on 7 November 2006 for the purpose of acquiring all shares of Deep Sea Supply ASA fo))owing an initiative by the Board of Deep Sea Supply ASA to change the domicile of the ultimate parent company to Cyprus.

Business

The Company's business objective is defined in Section 3 of the Memorandum of Association, and includes, inter alia, the foliowing;

"To engage and invest, directly or indirectly by itself or through subsidiaries or part-owned companies, partnerships or other forms of entities, in the international offshore anchor handling and supply vessel business, and to do all such acts and things as are relatad thereto, including without limitation the acquisition, construction, leasing, chartering, operation and manning of such vessels and everything incidental thereto."

The Company's primary aims are to meet the demand from markets that require modem and advanced supply vessels.

DESSC seeks investments in the perspective of providing attractive financial returns to its shareholders. The Company will actively consider possibilities to participate in industry consolidation, mergers and acquisitions, and will position itseif to be part of such consolidation.

Equity and dividend

Equity

The Company's book equity as per 31 December 2013 was USD 2572 mill The Board considers this to be an acceptable level. The Board evaluates continuously the Company's equity in light of the overall goals, strategy, risk profile and market.

Dividend policy

The Company will actively usa the capital market when doing investments, and does not intend to hold significant Iiquid reserves for investments. Retained earnings will, to the extent permitted under operational constraints, financial covenants, committed capital expenditures and with due regard to appropriate working capital requirements be paid out as dividends.

The General Meetings stipulate the annual dividend, based on the Board's recommendation. Distributions to shareholders for 2013 have been evaluated quarterly.

For 2013, no dividend distributions were made.

Purchase of treasury shares

The Board has been granted an authorization to acquire treasury shares, including acquisition of security rights. Authorization to acquire treasury shares is based on the assumption that acquisitions will be conducted at normal market conditions. DESSC did not own any own shares in 2013.

Major Shareholders

The major shareholder of the Company is Hemen Holding Limited with an ownership of 35.1%

Equal treatment of shareholders and transactions between related parties

Ciass of shares

All shares in DESSC are equal. The Articies of Association place no restrictions on voting rights or rights of receiving dividends.

Trading in treasury shares

The Board's authorization to acquire treasury shares is based on the assumption that acquisitions will be conducted at normal market conditions.

Transactions between related parties:

Related parties are considered to be the Board members (incIuding associated companies) and the Management (including associated companies).

Hemen Holding Limited I Metrogas Holdings Inc.

In connection with the Company's change of domicile from Norway to Cyprus, Metrogas Holdings Inc issued in January 2007 a short term loan facility to DESSC which amounted to USD 25,6 mill. The purpose of the loan was to make relevant deposit for the purpose of conducting the mandatory bid for all of the shares in Deep Sea Supply P1-C. Metrogas Holdings Inc is a sister company of Hemen Holding Ltd, the largest shareholder of DESSC. The loan agreement is entered into on an arms-Iength-basis. The loan was fully repaid in mid March 2007 In 2008, DESSC borrowed USD 12 mill. from Metrogas Holdings Inc and repaid the loan in full prior to year-end 2008. In 2010, DESSC borrowed USD 10 mill. from Metrogas Holdings Inc.The loan was fully repaid in 2011. In 2012, DESSC borrowed USD 25 mill. from Metrogas Holdings Inc. In 2013, DESSC borrowed USD 10 mill. from the same company. The total loan, of USD 35 mill., was fully repaid in 2013.

Freely negotiable

The shares are freely negotiable.

General meetings

By virtue of the Annual General Meeting (AGM), the shareholders are guaranteed participation in the Company's supreme governing body. Shareholders representing at least 10 per cent of the shares can call for an extraordinary general meeting. The AGM shall be held at the place of establishment of the Company (Cyprus).

Convening letter

The notifications to the AGM are distributed to all shareholders minimum 21 days in advance. It is considered important that the documents contain all relevant documentation so that the shareholders can take a position on all tems up for discussion.The Finance Calendar is published on the Company's web page and distributed via Oslo Stock Exchange,

Participation

It is possible to register for the AGM by ordinary mail, telefax or e-mail. The Board will attend the AGM. As a minimum, the management is represented by the CEO and the CFO.

Agenda and execution

The agenda is set by the Board, and the main tems are specified in the Company's Articles of Association. The Chairman of the Board will chair the AGM.

Nomination and Audit Committees

In accordance with the Articles of Association, the Company shall have a nomination committee consisting of the Chairman of the Board and two members elected by the AGM. In connection with the election of Directors and election of the members to the Nomination Committee, the Nomination Committee shall in connection with the summons for the General Meeting provide its recommendations for candidates. The nomination committee shall also propose the remuneration to the Board members.

The Board has established an Audit Committee who had five meetings in 2013. The meetings were held with together with the Management and the Company's Auditors.

Board of Directors

Composition and independence

The DESSC Board consists of three board members and one alternate director.

Election of the Board of Directors

The Board members are elected by the AGM based on a recommendation prepared and presented by the Nomination Committee. The recommendation is distributed to the shareholders along with the convening letter to the AGM. Decisions on the composition of the Board require a simple majority. Directors are elected for two-year terms and can be re-elected.

Composition of the Board

Emphasis is made on selecting board members with relevant competence. According to the Articles of Association, the Board shall have from three to seven board members. The Company's CEO is not member of the Board.

The Board's autonomy

The Board considers itself autonomous and independent of

the Company's executive management and main shareholders. Emphasis is made that there should exist no conflicts between the Board, the Management and the Company's shareholders. The corporate Code of Ethics discusses this topic under the heading "Conflict of interest'

Director's ownership of shares

By year-end 2013, the majority of the members of the Board either owned shares in the Company or represented significant shareholders. Reference is furthermore made to the separate presontation of the Board Members in the Annua] Report.

Board work

Board responsibilities

The Board bears the ultimate responsibility for running the Company and supervising routine management and business activities. The Board primarily looks after the interests of all the shareholders, but is also responsiblo for the Company's other stakeholdors.

The Board has made an annual plan for the board meetings. The Board's main tasks are developing and determining the Company's strategy, performing the required control functions and advice the executive management. The Board is responsible for employing the Company's CEO and to draw up his/her job description. The Board members receives a fixed compensation and has a total of 266,666 stock options. DESSC's Board of Directors consists of 1 Cyprus', 2 UK and 1 Norwegian resident.

Remuneration to leading employees

The remuneration for the CEO is decided by the Board. Bach year, the Board undertakes a thorough review of salary and other remuneration to the CEO. An incentive scheme for the management is established. Bonus schome is linked to the development of the stock price of the Company based on comparison with peer company companies. The terms are described in the notes of the annuel financial statements.

Remuneration to the members of the Board

The AGM stipulates the Board's remuneration each year. The suggested remuneration to the Board in 2013 breaks down as follows: NOK 350,000 for the Chairman and NOK 200,000 for each Director.

No Director is engaged in any pald consultancy work or other assignments for the Company.

Change of control

The share options for the board and certain other benet its for the management will come into effect at a change of control in the Company (in excess of 30%(.

Information and communication

The Company considers an open and frequent communication as important to its shareholders and other related parties. The Company's Financial Calendar is pubhshed on the Company's website and communicated via Oslo Stock Exchange. Monthly information about vessel revenues, medium and long term charters, delivery of vessels etc is provided via Oslo Stock Exchange. The Company's web-site contains financial and other information relevant for its shareholders and related parties.

Open presentations are made to present the quarterly financial statements. Present at these presentations are the CEO and the CFO,The financial information is simultaneously made availab(e on the Company's web-site.

It is considered essential to keep owners and investors informed about the Company's progress and financial status. Emphasis is made on presenting the same information to the entire equity market at the same time.

Internal control environment and audit committee

The Company has established the necessary set of processes and systems to ensure proper internal controls. An audit committee, established in 2009, holds oversight of all financial reporting and disclosure. The audit committee meets with the management and the auditors prior to publishing quarter and annua[ results to the stock exchange.

Take-over regulation

There are no defense mechanisms against take-over bids in the Company's Article of Associations, and the Company has not implemented other measures to limit the opportunity to acquiro shares in the Company.

The EU Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on take-over bids is implemented in Norway through the SecuritiesTrading Act of 29 June 2007 no. 79 (the "Norwegian SecuritiesTrading Act"( and in Cyprus through Cypriot Law 41(1(/2007 on Takeover Bids. A brief summary of the take-over rules applicable to the Company is included below.

Any person, entity or group acting in concert that acquires 30% or more of the voting rights of the Company is required to make an unconditional general offer for the purchase of the remaining shares in the Company. The offer is subject to approval by Oslo Stock Exchange, in its capacity as competent take-over authority of Norway. The offer price per share must be at least as high as the highest price paid or agreed by the offeror in the six-month period prior to the date the 30% threshold was reached, however equal to the market price if the market price was higher at that time. In the event

Deep Sea Supply Plc Annual report 2013

that the acquirer thereafter, but prior to the expiration of the acceptance period acquires, or agrees to acquire, additional shares at a higher price, the acquirer is obliged to restate its offer at that higher price. A mandatory offer must be in cash or contain a cash alternative at least equivalent to any other consideration offered. Payment of the offer price must be guaranteed by a bank.

Certain provisions regarding mandatory offers will also apply with respect to so called voluntary offers (le. offers that will trigger the mandatory offer obligation should the offer be accepted by the eligible shareholders.)

Auditor

The Company emphasizes a frequent and open dialogue between the Company and its auditor. The Companys auditor participates in the board meetings where the annual financial statements are discussed. At such meetings, the

auditor is briefing the Board on the annual accounts and any other issues of particular concern to the auditor. At least once a year the auditor presents to the Board a written report of the Companys accounting policies, risk areas and internal control routines.

The auditor submits the main features of the plan for the audit of the Company to the Board annually. The auditor annually presents for the Board a written confirmation that the auditor continues to satisfy the requirements for independence.

At least one meeting a year will be held between the auditor and the Board without the presence of the CEO or other executive managers.

The Companys auditor is PWC. There has been no change in audit firm after the Company was established.

Report from the board of directors

The Board of Directors presents its report together with the audited financial statements of Deep Sea Supply PIc ("the Company") for the year ended 31 December 2013.

Principle activities

Deep Ses Supply PLC's ("the Company") principal activity is the holding of investments.

Principle risks and uncertainties

As the Company's main income is dividend received from its subsidiaries and jointly controlled entities the Company is exposed to the performance of those entities. The Company's subsidiaries and jointly controlled entities operate in the international offshore supply vessel business and hence exposed to charter rate risk.

Results, review of developments, position and performance of the Company's business

The main income for the period was dividend received from the subsidiaries of the Company USD 141.0 million (2012: USD 8 million).

As a result of a dividend of USD li million, the net assets of one of the subsidiaries reduced USD 8.7 million below the investment cost, hence an impairment was recogniaed. The Company disposed 50% of its shares in Deep Sea Supply Servicos Maritimos Ltda, which was part of a bigger transaction, where 50% all assets and companies and companies operating in Brazil were sold to BTG Pactual Oil & Gås Participagöes S**.**A. )"BTG Pactual").The gain on disposal of 50% of the above mentioned company was USD 0.3 million. In January 2013, DESS announced the sale of 50% of its 15 vessels operating in Brazil. The deal was concluded end of May 2013. As a result the Company now has investments at cost of USD 191.3 million.

The Company's net result for the year is set out at page 74.

Dividends

Dividend policy and distributions made in 2013 The Company intends to actively use the capital market when doing investments, and does not intend to hold liquid reserves for significant investments. Retained earnings will, to the extent permitted under operational constraints, financial covenants and with due regard to appropriate working capital requirements, to be distributed to shareholders as dividend. There were no dividends distributions made in 2013.

Board of directors

The members of the Board of Directors at 31 December 2013 and at the date of this report are shown on page 8.

Events after the balance sheet date

No material events after the balance sheet date.

Auditors

The Independent Auditors, PricewaterhouseCoopers Limited, have expressed their willingness to continue in off ice. A resolution giving authority to the Board of Directors to fix their remuneration will be proposed at the Annual General Meeting.

Responsibility statement

In accordance with Article 9, sections 131(c) and (7) of the Transparency Requirements (Securities forlrading on Regulated Market) Law of 2007 1" Law"l, we the members of the Board of Directors and the other responsible persons for the financial statements of the Company for the year ended 31 December 2013 we confirm that, to the best of our knowledge:

al The annual financial statements that are presented on pages 74 to 92:

• i. were prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, and in accordance with the provisions of Article 9, section (4) of the Law, and
• U. give a true and fair view of the assets and liabilities, the financial position and the profit or losses of the Company, and

bi the director's report gives a fair view of the developments and performance of the business as well as the financial position of the Company, together with a description of the principal risks and uncertainties that they are facing.

Limassol, 09 April 2014 The Board of Deep Ses Supply Plc

Frixos Savvides	Kathrine Fredriksen	Hans Petter Aas
Harald Thorstein	Finn Amund Norbye	Anders Hall Jomaas
Chairman	Chief Executive Officer	Chief Financial Officer

Income statement Deep Sea Supply PIc (parent company)

All amounts in USD 1,000

	Note	2013	2012
Dividend income	13	141 000	8 000
lmpairment of investment in subsidiary	13	(8 713)	0
Administrative expenses	12	(1 178)	(1 629)
Operating profit		131 109	6 371
Financial income		273	2
Currency tems		510	(207)
Change in flnancial derivativs value		859	0
Financial expenses		(5 480)	(6 509)
Finance and currency items		(3 839)	(6 714)
(Loss)/Proflt from disposal of subsidiary		280	0
(Loss(/Profit before income tax		127 550	(343)
lncome tax	15	(0)	0
(Loss)/Profit for the year		127 550	(343)

Statement of comprehensive income

(Loss)/Profit for the year		127 550	(343)
Cash flow hedges		0	(1 435)
Total comprehensive income for the year		127 550	(1 778)
Earnings per share for profit attributable to the equity holders of the Company, expressed in USD per share
		USD per share	USD per share
-Basic	16	1,003	(0,003)
-Diluted	16	0,997	(0,003)
Attributable to;
-Equity holders of the company		127 550	(1 778)
-Minority interest		0	0
		127 550	(1 778)

Balance sheet Deep Sea Supply PIc (parent company)

Al/arnounts in USD 1000

	Note	31 December 2013	31 December 2012
ASSETS
Non-Current Assets
nvestments in subsidiaries	4	416230	397506
lnvestments in jolnt ventures at cost	11	191 319	0
Total non current assets		607 548	397 506
Current assets
Other short term receivables		3252	1173
Cash and cash equivalents	5	349	8100
Total current assets		3601	9273
Total assets		611 149	406 779
EQUITY
Capital and reserves attributable to equity holders of the company
Share Capital	6	2544	2544
Share premium		130264	130264
Other paid in capital		1880	2007
Other reserves		(0)	(1 435)
Retained earnings		215432	88741
Total equity		350 119	222 121
LIABILITIES
Non-current liabilities
Borrowings	7	51 678	165616
Financial derivatives	9	0	1435
Total non current borroiings		51 678	167 051
Current Liabilities
Amounts due to related partiet	13	204684	5995
Borrowings	7	4552	10568
Other short term payables	10	116	1 044
Total current liabilities		209352	17607
Total liabilities		261 030	184 658
Total equity and liabilities		611 149	406 779

Cash flow statement - Deep Sea Supply PIc (parent company)

All arnounts in USD 1,000

	Year ended 31 December	Year ended 31 December
Note	2013	2012
Cash fiows from operating activities
Profit before income tax	127550	(343)
Amortizatlon ot borrowlng costs	681	681
Currency galns/)Iosses)	0	208
Changes in working capital
Trade and other receivables	(2079)	(1 173)
Share based payments	(127)	0
Trade and other payables	(928)	3 409
Dividend income received	(141 000)	(8 000)
impa)rment in i vesments in subsidiaries	8713	0
Gain on disposal of subsidiary	(280)	0
Interest expense	4799	5033
Cash generated from operations	12 6721	(184)
Cash flow from investing activities
Acquisitions at shares in whally owned subsidiaries	(28 200)	(21 000)
Proceeds from disposals at subsidiary to JV	664
Contributions in jaintly controfed companies	(750)	0
Dividends received	11000	0
Net Cash used in investing activities	(17 286)	(21 000)
Cash fiows from tinancing activities
Proceeds from barrawings	10000	43376
Proceeds fram subsidiary companies	49 565
Repayments at barrawings and barraw)ng casts	(42 560)	(10 650)
Interest paid	(4799)	(5018)
Net cash from financing activities	122061	27708
Total changes in liquidity in the year	(7752)	6524
Cash and cash equivalents at beginning of year	8100	1577
5Cash and cash equivalents at end of the year	349	8100

Non-transactions

The Company has obtained 50% holding in Deep Sea Supply BTG Holding By. following the dispasal at vessels fram its subsidiary companies, and therefore has tinanced US$190 mill at its investment in the joint venture through a liability towards its subsidiaries. In addition cofected dividends receivable amaunting ta US$130 mil) fram these subsidiaries have not been received in cash but have been recognised as a reduction at the liability towards Os subsidiaries.

Finaty the Company has transferred ta the jaint venture as part at the jaint venture agreement US$88 mill of bank barrawings; and na cash outflow has been incurred in relation to this transaction.

Statement of changes in equity -

Deep Sea Supply PIc (parent company) All amounts In USD 1**,** OOO

	Note	ShareCapital	Sharepremiumreserves	Otherpald-in-equity	Cash flowhedge reserve	Retainedearnings	Total
Balance at i January 2012		2 540	130 028	2023	0	89084	223 676
Loss for the year					(1 435)	(343)	(343)
Other comprehensive income for the year							(1435)
Va(ue ot share option scheme	6			(16)			(16)
Exercise of share options	6	4	236				240
Balance at 31 December 2012		2544	130 264	2007	(1 435)	88741	222 121
Balance at i January 2013		2 544	130 264	2007	(1 435)	88 741	222 121
Cash f)ow hedge- transfer to lncome Statement					1 435	(859)	576
Profit for the year						127 550	127 550
Va)ue of share option scheme	6			(127)			(127)
Balance at 31 December 2013		2 544	130 264	1880	0	215 432	350 120

1. General information

Deep Sea Supply RLC's )"the Company") principal activities are to engage and invest, directly or indirectly, by itsolf or through subsidiaries or part-owned companies, partnerships or other forms of entities, in the international offshore supply vessel business. The Company was incorporated as a public limited liability company on 7 November 2006 and is domiciled in Cyprus in accordance with the provisions of the Companies Law, Cap, 113. Its registered office is at John Kennedy, Iris House, 7th Floor, Limassol, Cyprus, The Company has ds primary and only listing on the Oslo Stock Exchange. These financial statements have been approved for issue by the Board of Directors on 9th of April

1. The Company has also prepared consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU for the Company and its subsidiaries (the "Group").The consolidated financial statements can be obtained from the Company's registered office.

Users of these parent's separate financial statements should read them together with the Company's consolidated financial statements as at and for the year ended 31 December 2013 in order to obtain a proper understanding of the financi al position, the financial performance and the cash fiows of the Company and the Group.

2. Accounting principles

2.1 Statement of compliance and basis of p re pa ratio fl

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), and the requirements of the Cyprus Companies Law, Cap. 113 As of the data of the authorisation of the financial statements, all International Financial Reporting Standards issued by the International Accounting Standards Board IIASBI that are effective as of 1 January 2013 have been adopted by the EU through the endorsement procedure established by the European Commission, with the exception of certain provisions of lAS 39 "Financial Instruments: Recognition and Measurement" relating to portfolio hedge accounting.

The preparation of financi al statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process applying the Company's accounting policies. There are no areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements.

The financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and liabilities, including derivative financial instruments at fair value through profit or loss. Adoption of new and revised lFRSs.The adoption of new and revised lFRSs at 1 January 2013 did not have any material impact on the Company's separate financial statements.

2.2 Underlying concepts

The financial statements are prepared on the going concern basis using accrual accounting. Assets and liabilities and income and expenses are not offset unless specifically permitted by an accounting standard. Financial assets and financial liabilities are offset and the net amount reported only when a legally enforceable right to set off exists and the intention is either to settle on a net basis or to realize the asset and settle the liability simultaneously. Changes in accounting policies are accounted for in accordance with the transitional provisions in the IFRS standards. If no such guidance is given, they are applied retrospectiveiy, unless it is impracticable to do so, in which case they are applied prospectively.

2.3 Investments in subsidiary undertakings

Subsidiaries are those entities in which the Company has an interest of more than ene half of the voting rights or otherwise has power to govern the financial and operating policies. Investments in subsidiary undertakings are stated at cost and provision is only made where, in the opinion of the Directors, there is impairment in their value.

2.4 Investments in JointVentures

The investment in joint venture has been initially recognized at the fair value of two entities (out of the three that are subject to the joint venture agreement): the third one is held by a subsidiary of the Company. Investments in joint ventures

are stated at cost and provision is only made where, in the opinion of the Directors, there is impairment in their value.

2.5 Revenue recognition

Dividend income

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

Interest income

I nterest income is recognized on a time-proportion basis using the effective interest method. When a receivable is impaired, the Company reduces the carrying amount to its recoverable amount, being the estmated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognized using the original effective interest rate.

2.6 Recognition of assets and liabilities

Assets are only recognized if they meet the definition of an asset, it is probable that future economic benefits associated with the asset will flow to the Company and the cost or fair value can be measured reliably.

2.7 Valuation and ciassification of assets and liabilities

Assets intended for long-term ownership or use are classified as non-current. 0ther assets are ciassified as current. Receivables due to be repaid within one year are ciassified as current assets.

Non-current assets are stated at historic cost price, but written down to recoverable amount when the fall in value is considered to be permanent. Such write-downs are reversed when the reason for the write-down no longer applies.

2.8 Foreign exchange translation

Foreign currency translation

(i) Functional and presentation currency Items included in the Company's financial statements are measured using the currency of the primary economic environment in which the entity operates l'the functional currency"). The financial statements are presented in United States dollars 1US$), which is the Company's functional and presentation currency. All amounts in these financial statements are in US$1 000 unless otherwise stated.

(ii)Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevalling 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.

2.9 Financial assets

The Company ciassifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale.The ciassification 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

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is ciassified in this category if acquired principally for the purpose of selling in the short term or if 50 designated by management, and they meet certain criteria (lAS 39.9),Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are ciassified as current assets if they are either held for trading or are expected to be realized within 12 months of the balance sheet date.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are ciassified as trade and other receivables' and cash and cash equivalents' in the balance sheet.

(c) Available-for-sale financial assets

Available-for-sale financial assets are non-derivat)ves that are either designated in this category or not ciassified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the balance sheet date.

Regular way purchases and sales of financial assets are recognized on the trade-date, the date on which the Company commits to purchase or sel) the asset. lnvestments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or (oss. Financial assets carried at fair value through profit or (oss, 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 awnership. Available-for-sale financial assets and financial assets at fair value through profit ar loss are subsequently carried at fair value. Loans and receivables are carried at amartized cost using the effective interest method. Gains ar losses arising fram changes in the fair value at the "financial assets at fair value thraugh profit ar ass' categary are presented in the income statement within other (losses)/ gains - net, in the period in which they anse. Dividend incame fram financial assets at fair value thraugh profit ar lass is recognized in the incame statement as part of other income when the Campany's right ta receive payment is established.

The Company assesses at each balance sheet date whether there is abjective evidence that a financial asset ar a group of financial assets is impaired.

2.10 Derivative financial instruments

Derivatives are initially recognized at fair value an the date a derivative cantract is entered inta and are subsequently remeasured at their fair value. The method of recognizing the resulting gain ar loss depends on whether the derivative is designated as a hedging instrument, and it sa, the nature at the item being hedged. The Company designates certain derivatives as either: (1) hedges at the fair value of recognized assets ar liabilities ar a firm cammitment (fair value hedge); (2) hedges of a particular risk associated with a recognized asset or liability ar a highly prabable forecast transaction (cash tlaw hedge); ar (3) hedges at a net investment in a toreign aperation (net investment hedge).

The Company documents at the inceptian at the tnansacdon the relatianship between hedging instruments and hedged items, as well as its risk management abjectives and strategy for undertaking various hedging transactians. The Company also documents its assessment, both at hedge inceptian and on an angoing basis, at whether the derivatives that are used in hedging transactians are highly effective in offsetting changes in fair values ar cash flaws at hedged items.

Ide fair values at variaus derivative instruments used tar hedging purposes are disclosed in note 9. Movements an the hedging reserve in other comprehensive incame are shown in Statement at Changes of Equity. The full fair value of a hedging derivative is ciassified as a non-current asset ar liability when the remaining hedged item is more than 12 manths, and as a current asset ar liability when the nemaining maturity at the hedged item is less than 12 manths.

Cash flow hedge

The effective portion at changes in the fair value at derivatives that are designated and quality as cash tlaw hedges Is recognised in other comprehensive incame. The gain ar loss nelating ta the ineffective portion is recognised immediately in the incame statement within finance incame ar finance

casts respectively.

When a hedging instrument expires ar is sold, ar when a hedge na longer meets the criteria tar hedge accaunting, any cumulative gain ar loss existing in equity at that time remains in equity and is recognised when the torecast transaction is ultimately recognised in the income statement. When a tarecast transactian is na langer expected ta accur, the cumulative gain ar loss that was reported in equity is immediately transferred ta the incame statement within finance incame ar finance cost.

When the Company pravides guarantees ta parties autside the Graup for any losses suffered in derivatives due ta breach at cantnact, a pravision is made tar the fair value of the derivative when the ioss becomes prabable.

2.11Cash and cash equivalents

Cash and cash equivalents, includes cash in hand and deposits held at call with banks.

2.12 Share capital

Ordinany shares are ciassitied as equity.

Casts directly attributable ta the issue at new shares ar aptians ane shown in equity as a deductian, net at tax, fram the praceeds.

Share premium is the difference between the fair value at the consideratian receivable tar the issue at shares and the nominal value at the shares. Share premium account can anly be resarted ta for limited purpases, which da not include the distributian at dividends, and is atherwise subject ta the pravisians at the Cypnus Campanies Law on reduction at share capital.

2.13 Borrowings

Barrawings ane recognized initially at fair value, net at transactian casts incunred. Bornawings ane subsequentiy stated at amartized cost; any difterence between the praceeds (net at transactian casts) and the redemptian amaunt is recognized in the incame statement over the peniad of the borrawings using the effective interest method. Barnawings ane classitied as cunnent liabilities unless the Company has an unconditianal right ta deter settlement at the liability tar at least 12 manths aften the balance sheet date. General and specitic barrawing casts directly attributable ta the acquisitian, canstructian ar pnaductian at qualitying assets, which ane assets that necessarily take a substantial peniad at time ta get ready tar their intended use ar sale, ane added ta the cost at thase assets, until such time as the assets ane substantially ready tar their intended use ar sale. Investment incame eanned on the temponany investment at specitic bonnowings pending their expenditure an qualitying assets is deducted fram the barrawing casts eligible tar capitalisatian. All other bonnowing costs ane recognised in prof it ar lass in the peniad in which they are incunned.

2.14Trade payables

Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

2.1 5Taxation

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 directly in equity. In this cases, the tax is also recognized in equity. The current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it anses from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects either accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially 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 extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

2.16 Provisions

Provisions represent liabilities of uncertain timing or amount. Provisions are recognized when the Company has a present legal or constructive obligation, as a result of past event, for which it is probable that an outflow at economic benefits will be required to settie the obligation, and a reliable estimate can be made for the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settie the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage at time is recognized as interest expense.

2.17 Dividend income

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

2.17 Dividend distribution

Dividend distribution to the Company's shareholders is recognized as a liability in the Company's financial statements in the period in which the dividends are approved by the Company's shareholders until payment is made.

2.18 Earnings per share

Earnings per share are calculated by dividing the net profit/ 1055 for the Company by the average weighted number of outstanding shares over the period in question. Diluted earnings per share include the effect of the assumed conversion of potentially dilutive instruments such as stock options.

2.19 Statement of cash flow

The statement of cash flow is presented in accordance with the indirect method.

2.20 Share based payments

Employees of the subsidiaries of the company receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments such as options to buy shares of the Company. The cost of equity-settled transactions is measured by reference to the fair value at the date on which the award is granted. The fair value is determined using appropriate valuation models. The cost of equity settled transactions is recognised as an expense, together with a corresponding increase in reserves within equity, over the vesting period which is the period over which all at the specified vesting conditions are to be satisfied. At the end at each reporting period the entity revises the estimates of the number of options that are expected to vest based on the non-market conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. Where the terms of the share option scheme is modified ta be settled in cash rather than in equity instruments, the entity measures the liability initially using the modification date fair value of the equity-settled award, based on the elapsed portion of the vesting period. This amount is then recognized as a credit to liability and a debit to equity. Until the liability is settled it is re-measured at each reporting date with changes in fair value recognized in profit and loss.

2.20 Comparatives

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.

9

3. Financial risk management

The Company's normal business exposes it to various financial risks

Currency rate risk

On risk is the foreign exchange risk. The Company is exposed to that risk mainly due to the amounts due to and fram related parties. The main currencies that the company is exposed ta are Norwegian Kroner (NOK) and Euro (EUR). A variation at +/- 10% in the rate at exchange at USD/NOK would affoct the Company by USD 45 in 2013 (2012: USD 154). A variatian at +1- 10% in the rate at exchange at USD/EUR wauld affect the Company by USD 8 in 2012 (2012: USD 7).

Interest rate risk

The Company is exposed to interest rate risk due ta barrawings and cash at banks. The risk due ta cash held at banks is immaterial as the Company does not intend to hold material liquid reserves in fixed deposits. The risk due to interest rate fluctuations is USD 55 jf )nterest rates f)uctuate by +1- 10 basis points (2012: USD 76)

Liquiditv rate-risk.

The Company mon)tors its risk to a shortage of funds by closely monitoring the projected cash tlow fram operations, financial expenses and investment expenditure. The Company maintains sufficient cash for its daily operations via shart term cash deposits at banks. The table below analyses the company's non-derivative financial liabilities and net-settied derivative financial liabilities into relevant maturity grauping based on the remaining periad at the ba(ance sheet date ta the contractual maturity data. Derivative financial liabilities are included in the analysis jf their contractual maturit)es are essential for an understanding at the timing at the cash flows

	Less than3months	3t012months	i to 5 years	More than5 years	Total
At 31 December 2013
Interest bearing loans and borrowings	1 536	4607	56 189	0	62332
Derivative financial instruments	36	108	1 919	0	2063
Trade and ather payables	29	87	0	0	116
	1 601	4802	58 108	0	64 511
At 31 December 2012
Interest bearing loans and barrawings	4024	12 070	180 618	0	196 712
Derivative financial instruments	32	97	2 374	0	2 503
Trade and ather payables	1 044	5 995	0	0	7 039
	5100	18162	182992	0	206254

3.2 Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as foliows:

• Quoted prices (unadjusted) in active markets for identicai asses or liabilities (Leve) 1).
• lnputs other than quoted prices included within level i that are observable for the asset or hability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
• Input for the asset or )iability that are not based on observab)e merket date (that is, unobservable Inputs) (Level 3).

The amounts disc/osed in the table are the contractua/ undiscounted cash fiows; (all numbers are in USD 1,000)

The foliowing table presents the Company's liabilities that are measured at fair value at

31 December 2013
Labilities	Level i	Level 2	Level 3	Total
Derivatives used for hedging	0	576	0	576
	o	576	0	576
31 December 2012
Labilities	Level 1	Level 2	Level 3	Total
Derivatives used for hedging	0	i 435	0	i 435
	o	1435	0	1435

4. Investments in subsidiaries

	2013	2012
Cyprus based companies
DESS Cyprus Ltd	147827	147827
DESS PSV Ltd	144916	144916
DESS Finance Ltd	28201	0
Deep Sea Supply Management (Cyprus) Ltd	15	15
DESS Sea Eagle Ltd	1	1
DESS Invest Ltd	4001	4001
DESS PSV II Ltd	1	1
Norwegian based companies
Deep Sea Supply Management AS	89610	98323
Brazil based companies
Deep Sea Supply Servicos Maritimos Ltda	0	765
Singapore based companies
Deep Sea Supply Managemet Singapore Pte Ltd	i 656	1 656
Total	416230	397506

Cyprus based companies

During the year, the wholly owned subsidiary DESS Finance Ltd was created. The share capital was subscnbed for fully by the Company in cash.

IM Norwegian based companies

r The company recognized an Impairment in the subsidiary of USD 8,713. Such an impairment was a result of a reduction in the net assets of the subsidiary following a dividend payment to the Company of USD 11,000.

Brazil based companies

The company has disposed 50% of the share capital of Deep Sea Supply Servicos Maritimos Ltda during 2013 and this company is now a jointly controlled entity.

Singapore based companies

There were no movements in the Singapore based companies' investments

5. Cash and cash equivalents -

	2013	2012
Cash at bank and in hand	349	8 100
Total bank deposits	349	8 100

Currency	2013	2012
United State Dollars (USD)	316	8 056
Euro (EUR)	15	31
Norwegian Kroner (NOK)	16	4
Great British Pound (GBP)	i	10
Total	349	8 100

6. Share Capital

	Number ofShares(thousands)	ShareCapital	Sharepremium	Other paid-in-equity	Total
Opening balance as at i January 2012	126 997	2 540	130 028	2023	134 591
Valuation of share option scheme				(16)	(16)
Issue at shares - Exercise at share options	200	4	236		240
At 31 December 2012	127 197	2 544	130 264	2007	134 815
Opening balance as at 1 January 2013	127 197	2 544	130 264	2007	134 815
Valuation at share option scheme				(127)	(127)
At 31 December 2013	127 197	2 544	130 264	i 880	134 688

The total authorized number at ordinary shares as per December 2013 is 250,000000 2012: 250,000,000) shares with a par vslue of USD 0.02 per share. All issued shares are tully paid.

The board of directors at the Company has appraved a share option scheme for directars and certain emplayees. The exercise price at the granted options is equal ta the merket price at the shares at date granted plus 10%.

Ihese share options may be exercised with ane third efter ane, twa and three years, respectively and all share options must be exercised within 5 years. The strike price shall be reduced, on a USD far USD basis, by the amaunt of all dividends declared by the Company in the periad fram the data at grant until the date the subsisting share options is exercised. Subsequent share options have been granted ta new emplayees based on the same principle.

Movements in the number at shares options and their related weighted average exercise prices are as faliows:

	2013	2012
	Average exercise priceNok per share	Options(thousands)	Average exercise priceNok per share	Options(thousands)
At i January	8,83	i 058 333	8,83	1 820 109
Granted	0	0	0	0
Farfeited	12,27	(59 334)	12,10	(133333)
Exercised	6,99	(132 333)	6,99	1628 4441
Expired	0	0	0	0
At 31 December	9,72	866 667	9,52	i 058 333

ma~ DEEP SEA SUPPLY PLC

The share options forfeited pertained to employees that lett the Company during the year. Options exercised where partly settied in cash and partly by issuing shares.

IncIuded in the share options that expire in 2014, are 266,666 options granted to the directors of the Company whose expiry was originally 2011 and have been extended to 2014.

Share options outstanding at the end of the year have the foliowing expiry date and exercise prices:

Expiry date tas per year ended 31 December 2013)

	Exercise price in NOK	2013
2014	6,99	266666
2015	11,41	501 668
2016	9,72	98333
At 31 December		866 667

Expiry date tas per year ended 31 December 2012)

	Exercise price in NOK	2012
2013	6,99	398 998
2014	0	0
2015	11,49	561 002
2016	8,49	98333
At 31 December		1 058 333

The value of the option is estimated by Hull & White's implementation (2002) for employee stock options of the binomial tree model for the pricing of early exercise equity options.

Change of control

The share options for the board and the share options and certsin other benefits for the employees will come into effect in the event of change of control of the Company.

7. Borrowings

	As at 31 December 2013	As at 31 December 2012
Non-current
Bank borrowings	51678	140616
Borrowings from related parties (Note 13)	0	25 000
Total Non-current borrowings	51 678	165 616
Current
Bank borrowings	4 552	10 568
Total Current borrowings	4552	10 568
Total Borrowings	56 230	176 184

Deep Sea Supply Plc Annual report 2013

56230 165616

The outstanding loen of the Company's borrowings are denomnated in the foliowing currencies

		As at 31 December 2012
Borrowings	56 230	176 184
USD	56 230	176 184
The maturity of non-current borrowings is as follows		As at 31 December 2012
Borrowings
Between 1 and 2 years	4552	21136
Between 2 and 5 years	51 678	144480
Over 5 years	0	0

Bank borrowings compnise of loans secured with a first priority mortgage in the financed vossels of USD 390,000 (2012: 390,000).

8. Credit quality at financial assets

For the year ended 31 December 2013:

Credit Rating	Amount
Al	329
A2	20
	349

For the year ended 31 December 2012:

Credit Rating	Amount
Al	8078
A2	22
Total	8 100

9. Financial instruments by category

Company	Loans andReceivables	Assets at fairvalue throughprofit and loss	Derivatives	Availablefor sale	Total
31 December 2013
Assets as per balance sheet
Trade and other receivables	3 252				3 252
Cash and cash equivalents	349				349
Total	3601	-	-	-	3 601

	Liabiliities at fairvalue through theprofit and loss	Derivatives	Otherfinancialliabilities	Total
Liabilities as per balance sheet
Borrowings			56 230	56 230
Derivative financial instruments		577	-	577
Trade and other payables			204 800	204 800
Total	--	-	261 030	261 607

Company	Loans andReceivables	Assets at fairvalue throughprofit and loss	Derivatives	Availablefor sale	Total
31 December 2012
Assets as per balance sheet
Trade and other receivables	1173				1173
Cash and cash equivalents	8 100				8 100
Total	9 273			-	9273

	Liabiliities at fairvalue through theprofit and loss	Derivatives usedfor hedging11.	Otherfinancialliabilities	Total
Liabilities as per balance sheet
Borrowings			176184	176184
Dorivative financial instruments		1 435	-	1435
Trade and other payables			7039	7039
Total	-	1435	183223	184658

10. Other short term payables

	2013	2012
Trade payables	116	1 044
Total	116	1 044

Trade and other payables are denominated in the toliowing currencies:

Currency	2013	2012
United State Dollars (USD)	60	1 003
Great British poung (GBR)	9	8
Norwegian Kroner (NOK)	48	33
Total	116	1 044

11. Investment in JointVentures

On 31 st May 2013 The Company and BIG Pactual Oil & Gås RarticipaçOes SA. ("BTG Pactual "( entered inte a loint venture (the 'Joint Ventura') for the ownership and operation at Plattorm Supp(yVesse(s ("PSVs"( and Anchor Handling Tug and Supply Vessels ("AHIS") in Brazil. The Company sold 50% at its Brazilian business and purchased together with its new Brazilian partner 810 Pactual 6 newbuilding cantracts. The sale of the Brazilian business was done via:

• Sale of vessels that be(onged to tuty owned subsidiaries at the Company

• Sale at 50% at shares in Deep Sea Supply Navegacao Maritime Ltda, a company previous(y tul(y owned by a subsidiary at the Company. This company owns and operates the vesse( Sea Brasil.

• Sale of 50% at shares in Deep Sea Supply Servicos Maritimos Ltda, a previaus(y fu)(y owned subsidiary at the Company.

The Company has investments in the Jaint Ventura are

Deep Sea Supply BTG BV
Initial share capita( at Dutch entity	24
Acquisition at vessels previously owned by Deep Sea	124 062
Acquisition of newbui(d contracts	50 100
Equity contributian tar working capital	16 000
	190 186
Deep Sea Supply Servicos Ltda
Initial capita(	765
Dispasa) at 50%	-383
New equity contributed after disposal	750
	1133
Total	191 319

12. Administrative expenses

	2013	2012
Auditfees	16	9
Consultancyfees	149	151
Management fees fram subsidiaries	862	i 163
Other administratian expenses	151	306
	1178	1629

13. Related party transactions

Remuneration to the board

Suggested remuneratian ta the Baard in 2014 is US$ 180 (NOK 1.1 million), whereaf US$ 57 (NOK 0.35 million) is suggested ta the chairman. In 2012 payment ta the baard was US$ 154 (NOK 0.85 million), whereaf US$64 (NOK 0.35 million) was payment ta the Chairman.

Amounts due to related parties

	2013	2012
DESS Cyprus Ltd	115 194	1 964
Deep Ses Supply Management AS	0	3 098
DESS PSVLtd	86211	179
DESS Ses Eagle Ltd	429	526
DESS Finance Ltd	2001	0
Deep Ses Supply Singapore EIE Ltd	12	0
Deep Sea Supply Labuan Ltd	836	0
DESS Invest Ltd	0	228
Total	204 684	5 995

The balances with DESS Cyprus Ltd and DESS PSV Ltd represent amaunts due faflawing the sale of vessels. The amaunt was settied fram the buyer tawards Deep Ses Supply PLC and the Company naw awes the maney ta its subsidianes. The intentian is ta reduce the share premium of these campanies and settie the balance via a dividend deciaratian.

The balance with the ather campanies are payable an demand and are flat secured.

The balance with DESS Finance Ltd carries interest and such interest is calcu)ated an LIBOR + 2%. The balance was created tawards year end and interest charged was USD 5. (2012: USD 68).

Amounts due from related parties

At 31 December 2013, a company awned by DESS BTG (JV) awed the Company USD 1119. The amaunt pertains ta expenses prepaid by the Company an behalf at DESS BIG and is cansidered current.

Deep Sea Supply Plc Annual report 2013

Dividend received from subsidiaries

	2013	2012
DESS Cyprus Ltd	30 000	0
Deep Sea Supply Management AS	11 000	0
DESS PSV Ltd	100 000	8000
	141 000	8000

Impairment of investment

Foliowing the payment of dividend, the net assets of Deep Sea Supply Management AS have reduced below the investment in the balance sheet at the Company, and as a result an impairment had to be recognized at USD 8713.

Management fees

For 2013, the Company recognized management fees charged fram subsidiaries that amounted to USD 862 (2012: 1163)

Loan from related party

During the year, the company obtained an unsecured loan from a company controlled be a party with significant influence, ot USD 10 million. The opening balance for this loan in 2013 was USD 25 million. The tull USD 35 million was repaid during the year and the balance at year end was zero.

The company has paid interest of USD 1,202 (2012: 352) and commitment fees at USD 23 (2012: 308) related to the above.

14. Contingencies

Tax legislation

The Company is subject to taxes in several jurisdictions, where significant judgement is requ)red in calculating the tax provislon for the Company, There are many transactions far which the ultimate tax determination is uncertaln and for which the Group makes provisions based an an assessment at internal estimates, tax treaties and tax regulatians in the different cauntries where the Graup is operating, and apprapriate external advice. Where the final tax outcome of these matters is different fram the amounts that were initially recorded, such difference will impact the tax charge in the period in which the autcome is determined.

15. Income tax expenses

Na tax expences during 2013 and 2012.

16. Earnings per share

Basic

v-

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. Total number of outstanding shares as per year-end 2013 was 127,197194 (2012:127197200).

	2013	2012
Profit attributable to equity holders of the company	127 550	(343)
Weighted average number of ordinary shares (thousands)	127 197	127 147
Basic earnings per share (USD per share)	1 , 003	(00031

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company's only category of dilutive potential to ordinary shares is the share options. Share options have been granted to Board of Directors and management, and per year-end 2013 there were totally 866,667 share options outstanding. The share options are included in the diluted number of shares depending on whether or not they were in the money per year-end 2013.

	2013	2012
Profit attributable to equity holders of the company	127 550	(343)
Weighted average number of ordinary shares (thousands)	127 905	127 873
Diluted earnings per share (USD per share)	0,997	0,003(

17. Auditors remuneration

Remuneration to the statutory auditors in the financia( statement for 2013 equals US$55(2012: US$ 100.1) for audit services, US$ 18.5 (2012: US$ 17.6) for other assurance services and US$ nu (2012: US$ 10.3) for non-assurance services.

18. Events after the balance sheet

No matterial events atter the balance sheet date

Independent auditor's report To the Members of Deep Sea Supply P1c

Report on the financial statements

We have audited the accompanying financial statements ofparent company Deep Sea Supply Plc (the "Company"), which comprise the balance sheet as at 31 December 2013, aud the statements ofincome, comprehensive income, changes in equity and cash fiows for the year then ended, aud a summary of significant accounting policies and other explanatoiy information.

Board ofDirectors' responsibility for thefinancial statements

The Board of Directors is responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union aud the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibillty

our responsibifity is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Audliting. Tbose Standards require that we comply with ethieal requirements and plan aud perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts aud diselosures in the financial statements. The procedures seleeted depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In maldng those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements that give a true aud fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used aud the reasonableness of accounting estbnates made by the Board of Directors, as well as evaluating the overalt presentation of the financial statements.

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

PricewaterhouseCoopers Ltd, City House, 6Karaiskakis Street, CY-3032 Limassol, Cl ,prus P0 Bor 53034, CY-3300 Limassol, Cyprus T. +35725-555000, F:+357 -25555001, www.pwc.com/Cij

pncriwatefflouaeCoopeç$ Ltd Is imemberltrm at Pilcewaterhousecoopera International Ltd eaatt member lirm otwtitch ta e separete legat eritity. pdcewaterhouaeCoopera Ltd isa private ccmparry regfstered fri (yprua (Reg. No. 143594). A list 01 the company's dlrectOra IfldUatrr9 for indMdvals the prosent name and surrwee, aowett sa miy prevtous names end for legal entlttwe the cmperate name, is koptby the Secrelary of the company st 1115reptatored 055. at 3 Tberrfotolna Dorvis strøet1068 Nicosle and appnars on the company's web ett.. Oftoes In Nicosla, Umsasol, Lamaca end PaphO

Opinion

In our opinion, the financial statements give a true aud fair view of the financial position of parent company Deep Sea Supply Plc as at 31 December 2013, aud of its financial performance and its ~h fiows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union aud the requirements of the Cyprus Companies Law, Cap. i.

Report on other legal requirements

Pursuant to the requirements of the Auditors and StatutoiyAudits ofAnnual aud Consolidated Accounts Law of 2009 and 2013, wc report the foilowing:

• We have obtained all the information and explanations we considered necessary for the purposes of our audit.
• In our opinion, proper boo1s of aceount have been kept by the Company, so far as appears from our exaniination of these books.
• The Company's financial statements are in agreement with the boolcs of account.
• In our opinion aud to the best of our information and according to the explanations given to us, the financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required.
• In our opinion, the information given in the report of the Board of Directors is consistent with the financial statements.

Other matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Seetion 34 of the Auditors aud StatutoryAudits of Annual and Consolldated Accounts Law of 2009 aud for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose ar to any other person to wbose knowledge this report may come to.

We have reported separately on the consolidated financial statements of the Company aud its subsidiaries for the year ended 31 December 2013.

4t4

Tasos Nolas ertifiecl Public Accountant aud Registered Auditor for and on behalf of

PricewaterhouseCoopers Limited Certified Public Accountants aud Registered Auditors

Liinassol, 9 April 2014

COMPANY ADDRESSES

Cyprus

Deep Ses Supply PIc John Kennedy Ave,, Iris House, 7th Floor, ORice no.740B Limassol 3100 Cyprus

Deep Sea Supply Management (Cyprus) Ltd PO.Box 53340

CY-3302 Limassol Cyprus

Norway

Deep Ses Supply Management AS Storgaten 4 N-4876 Grimstad Norway

Singapore

Deep Ses Supply Management (Singapore) Pte. Ltd, 10 Hoe Chiang Rd #19-03/04/05 Keppel Tower Singapore 089315

flrazil

Deep Ses Supply Servicos Maritimos LTDA Avenida Repub)ica do Chile 230, 22o andar, 20031-170 Centro, Rio de Janeiro RJ Brazi)

Content

• 4 Report from the board
• 8 Fleet list
• 10 Board of directors
• 11 Offices and management team
• 13 Consolidated financial statements
• 13 Consolidated income statement
• 13 Consolidated statement of comprehensive income
• 12 Consolidated balance sheet
• 16 Statement of changes in equity
• 17 Consolidated statement of cash flows
• 19 Notes to the consolidated financial statements
• 64 Auditor's report on the consolidated financial statements
• 66 The largest shareholders
• 68 Corporate governance
• 74 Financial statements of parent company
• 78 Notes to parent company financial statements
• 94 Auditor's Report on the parent company financial statements

Report from the board – the financial year 2014

Deep Sea Supply Plc ("Deep Sea Supply", "DESSC" or the "Company" on a consolidated basis) in 2014 achieved operating revenues of USD 88.1 mill. gross profit of USD 19.7 mill and operating profit of USD 9.2 mill. Following total finance costs, currency losses, finance income and other gains of in total USD 13.1 mill and share of profit from investments accounted for using the equity method of USD 3.2 mill, the net result after tax was a loss of USD 0.9 mill or a negative USD 0.005 per share. The book equity as per 31 December 2014 was USD 443.1 mill.

The consolidated financial statements of the Company as presented in the 2014 Annual Report have been prepared in compliance with IFRS as adopted by the EU and the requirements of the Cyprus Companies Law, Cap. 113. The financial results from the 50% owned Brazilian business is included in "Share of profit of investments accounted for using the equity method."

The Board measures the financial performance of Deep Sea Supply as presented in note 5 to the financial statements, in which 50% of the financial figures from the Brazilian Joint Venture business are incorporated line by line using the proportionate consolidation method.

COMPANY BACKGROUND

Deep Sea Supply is a Cyprus based offshore supply company with a modern fleet of anchor handling tug and supply vessels ("AHTS") and platform supply vessels ("PSVs") operating worldwide. The Company became operational in July 2005 through the acquisition of 6 large AHTS vessels, and as per 31 December 2014 the Company operated 40 vessels with an average age of 5.1 vears. Of the 40 vessels, 15 are AHTS vessels and 25 are PSVs.

The parent company is domiciled in Limassol, Cyprus, and the Company has offices in Cyprus, Norway, Singapore and Brazil. The total number of onshore employees at year-end was 82 (including all onshore employees in the Brazilian joint venture) and the number of seafarers was approximately 700.

Deep Sea Supply is listed on Oslo Stock Exchange with the ticker code "DESSC"

STRATEGY

The Company's vision is to become one of the leading offshore supply vessel companies on a global basis. The Company is a fully integrated shipowning company and focus on the following main activities:

. Chartering of the vessels

. Technical and crew management of the vessels · Business development

· Investor relations and finance

The chartering and marketing activities of the Company are performed from offices in Singapore. Brazil and Norway.

The Company seeks to obtain long term charter contracts for the vessels

The Company aims at maintaining an open and transparent information strategy.

ACQUISITION OF 10 VESSELS AND USD 200 MILL PRIVATE PLACEMENT

On 2 June 2014, the Company announced the acquisition of 10 newbuild PSVs from PSV Holding Inc. a company affiliated with Hemen Holding. The 10 yessels have been delivered from yard during the period from February 2013 to October 2014. The total price paid for the 10 vessels including remaining CAPEX at the time of acquisition was USD 366 mill. On 2 June 2014, Deep Sea Supply also raised USD 200 mill through a Private Placement to partly finance the acquisition of the vessels. Bank financing for all 10 vessels have been secured, and as per 31 December 2014 the Company has drawn loans and registered mortgages on all vessels.

FLEET

The Company took delivery of in total 10 PSVs in 2014.

The following 3 vessels of STX 05L design were delivered from Cochin Shipyard, India: "Sea Titus", "Sea Tortuga" and "Sea Triumnh"

The following 7 yessels of PX 105 design were delivered from Sinopacific Shipyard, China: "Sea Spear", "Sea Spider" and "Sea Springer", "Sea Supra", "Sea Surfer", "Sea Swan" and "Sea Swift",

The total fleet of 40 vessels operates worldwide, and by end of 2014 the vessels operated in the following geographical areas;

North Sea:	6 vessels
Asia and Australia:	11 yessels
South America:	15 vessels
Mediterranean and Black Sea:	4 vessels
West Africa:	4 vessels

Of the 40 vessels, 31 vessels had Cyprus flag, 1 Brazilian flag, 1 Panama flag, 3 Marshall Islands flag, 3 Malaysian flag and 1 vessel had Norwegian flag.

Deep Sea Supply's maintenance philosophy is to do proactive maintenance to ensure that the vessels can operate safely and are in good technical condition at all times. At the same time the Company focuses on good cost control. During the last years, a fuel efficiency program aiming at reducing the vessels' fuel consumption has been initiated.

GEOGRAPHIC MARKETS

in 2015, the Company will continue its current focus on South America, Asia/Australia and North Sea, and work in order to increase its presence in Africa.

THE 2014 FINANCIAL STATEMENTS AND CERTAIN MAIN PISK FACTORS

The consolidated financial statements of the Company have been prepared in accordance with, and comply with, IFRS as adopted by the EU. The financial information presented in note 5 "Segment Reporting" incorporates 50% of the financial figures from the Brazilian Joint Venture business line by line using the proportionate consolidation method, and this is how the Board measures the financial performance of the Company

Going concern

The financial statements are prepared on a going concern basis.

Revenue and profit

The Company recorded freight revenues of USD 88.1 mill and vessels' operating expenses of USD 34.9 mill. Operating lease for the vessels on bareboat contracts were USD 5.6 mill. Other operating expenses (mainly general and administrative expenses for the offices in Cvorus. Singapore and Norway) were USD 11.0 mill.

The Company's revenues in 2014 were in USD, BRL, EURO and GBP and the operating expenses were mainly in USD, BRL. SGD and NOK

Normal depreciation of the vessels was USD 18.8 mill. The vessels' book values are depreciated to zero when the vessels are 30 years old. The Vessels' intermediate and full surveys are balanced and depreciated until the time of the next intermediate or special survey (approximately every 2.5 years for the intermediate and 5 years for the special).

Impairments

The Company has recognized total impairments on its vessels of USD 13.9 mill, of which USD 9.0 mill has been recognized in the income statement and USD 4.9 mill has been recognised against the deferred gain on financed leased vessels in the balance sheet (Note 29).

The Company's operating profit in 2014 was USD 9.2 mill.

Financial expenses were USD 9.7 mill and net currency items were negative USD 4.9 mill.

Total taxes for the Group in 2014 were USD 0.2 mill.

The loss for the year from continuing operations was USD 0.9 mill.

Receivable adjustments

In relation to vessels operating under long term contracts in Brazil, certain invoiced amounts have been disputed between the Company and the client. The disputes consist of a certain number of relatively smaller amounts that have gradually over the duration of the long term contracts built up to a total amount of USD 2.5 mill. The Company will continue to argue that these amounts should be paid by the client, but has decided to make a provision of the full amount of USD 2.4 mill against these receivables.

Investment in Associate - Sea Weasel Ltd

In 2011 the Company sold the 6,800 BHP AHTS vessel "Sea Weasel" to the company Sea Weasel Ltd, a partnership between a local Malaysian ship owner and operator, a Malaysian stateowned investment fund and DESS. DESS sold the vessel with a profit, and also kept approx, 25% of the shares in Sea Weasel Ltd. DESS' partners have not been able to support the vessel's operating expenses and liabilities. To protect the Company's exposure as ship managers of the vessel. DESS has out forward a claim leading to the arrest of the vessel in Singapore. Based on this, the Company has decided to write off the total exposure to Sea Weasel Ltd of USD 1.6 mill (USD 1.3 mill impairment of investment and USD 0.3 mill provision against outstanding receivable balance).

In total, the one-off items related to impairments, receivable adjustments and the Sea Weasel Ltd investment had a negative effect of USD 13.0 mill, which is reflected in the income statement and has turned a profit for 2014 into a loss of 0.9 mill.

Dividend policy

The acquisition of 10 new vessels with attractive break even rates is expected to improve the company's ability to pay competitive dividends over time. The Board of Directors in August 2014 therefore decided to re-introduce dividend payments for the Company and started this by distributing USD 0.02 per share both in August 2014 and November 2014.

The Company has a strong balance sheet and a comfortable cash position, but due to the recent drop in oil price and the uncertain market outlook in the oil service and offshore supply market, the Board of Directors in February 2015 decided to be cautious and not to distribute any dividend to shareholders in relation to 40.2014

Balance sheet

Total assets as per 31.12.2014 were USD 799.6 mill consisting mainly of the book value of vessels and the investment in the 50% owned Brazilian business.

Cash and cash equivalents at year-end were USD 47.3 mill.

Book value of vessels and newbuildings - impairments The vessels were tested for impairment and total impairments of USD 13.9 mill have been recognized.

Trade and other receivables Total receivables from customers were USD 21.7 mill.

Financing - Bank facilities

In November 2011, the Company refinanced its senior loan facility with a syndicate consisting of leading international shipping banks. The loan has a repayment profile of 18 years for the new vessels, 14/15 years for the 2007/2008-built vessels and 7 years for the 1998/1999-built vessels. The senior loan facility is secured with a 1st priority mortgage in the financed vessels. This facility originally included 15 vessels, of which 9 were sold to DESS BTG in 2013. These 9 vessels were carved out from the existing 15 vesset facility to a new facility, keeping both profile and remnining term fram exisling facility. As per year-end 2014, USD 82.5 mdtwno outstanding under the original facility, new including only 6 vessels.

In addilion, the Company alsa han a separate loan egreement secured with lot prionty mertgage in the vesset Sea Eagle V. Thin enn was drawr, in February 2010 and by the end of 2014 USD 12.5 mill was outstarrding. The tonn hos a 12 years repayment profile. In February 2015, the maturity hos been extended to November 2016.

In June 2014 the Company secured Inne fncilities for all 10 new vessels acquired. For the 4 vessels of STX 05L design delivered fram Cochin shipyard, n USD 72 mitt lose agreementwith 29 year repayment profile and a 5 year form was agreed. An per 31 December 2014, loano related 10 att 4 vessels were drawe and total oulntaodieg loan was USD 71.1 mill

For 2 vessels of PX 105 design delivered fram Sinopacific ohipyard, a USD 44.5 mill tonn agreement with 29.5 year repayment profile and a 5 year term was agreed. As per 31 December 2014, loano related to both vessels mere drawe ned total oulstanding loan was USD 43.8 mill.

For 4 vessels at PX 105 design delivered fram Sinopacific shipyard, a USD 92 mill loan agreement with 20.5 year repayment profile and a Spent term wan agreed. An per 31 December 2014, leans related to both vessels mere drawn ned total eulntanding loan was USD 90.1 mill.

Caoital eaoenditare

An per 31 December 2014 the Company had ro vessels ender canstruction and na capitat eependiture cammitmentS.

EQuity

Sharehnlders' eqaity at the start of 2014 men USD 257.2 mill. At the ned ni 2014 the Company's eqaity man USD 443.1 mitt. The increased equity is mainly caused by the USD 200 mill private placement in June 2014.

Shareholders

Hemen Holding Limited in the Company's largent shareholder and holde 35.1% of the Company's ehares.

Lieidiw

Total carreet a000ln at year end mere USD 114.7 mill and shert term liabitities (including shart term partian of lang term debl) was USD 36.9 mill.

Cash and cash 110w

Cash 110w bom operalionn was USD 47.2 mill for the year ended December 2014. Acquisilioe et vessels and newbailding centractn mere USD 376.1 mill, flnanced by way of USD 201.2 proceedn frem borrowiogs and increased ehare capilel et USD 196.6 mill (net of trannaelien conls).

Repayment el bnrrew,ngn in the lwelve meethe penied man USD 17.1 mill and ielerenl paid men USD 6.4 mill.

The Company paid USD 10.5 mill in dividende and has given a loan of USD 20 mill to DESS BTG. Cash and cash equinalents were USD 47.3 mill end of 2014 campared to USD 31.7 mill ord of 2013. Not interent bearing debt was USD 239.2 mill, up from USD 86.4 mill ned 012013, maiely due to the increased fleet.

Principal risks and uncertainties

The priecipel rinkn ord eecertainties faced by the Graup ere disclened in Notes 3,4 and 2801 the linaecial statemenls.

Health, safety and environment

By year ned 2014, the Company's on-show stoff increased to 82 employeen world-wide (irrclading all oenhore employnes in Brazif). The merking environment is connidered good and all employees are encoureged ta parlicipate in the development of his/her pasilian ord in the development of the Company.

53 out 01 the 92 emptoyeen are male ned 29 female. The Company lreatn men nord ~men equal in the recrailment procesnes. Emphasis is mede on pralessionalism and adhnrence to national ned international laws and regulalions by the supptiern delinering services la the Company. Efforts and ieitiatives ta reduced ancideets ard pollution ta the environment are compulnory.

The Company's vessels are engaged in sea lransportation and hence at nok related le pollalien el the environment. The fleet is modem with an average age 015.1 years, ned all the vessels are in complinece with requiremeels issued by regulalony bodies ned the risk of pellution in heece viemed an limited.

The Company's share based activities are considered enviranmental fniendly and normal for this type (eflice) aeliaity.

Changes in the Board at Directors in 2014

There rom se changes in the Board el Direclors in 2014 an all members at the board mere nlected ler a 2 year period in May 2013. There mere ne changes le the responsibilitins of the Board et Directorn is 2014. Remuneralinn le the Board is desoribed in Note 24 of the ceneelidated 9nancia1 slatemeots.

Future outlook

Frem November 2014 we have noen a dramalic decline in oil price, with Brent geing frem 81 USD to 50 USD. The oil cernpanies have 0 nlroeg fecus en cost cutting ned ane significaelly redecing their E&P spending. This dewnturn is negatively affecling the global offshore supply market. We currently eaperinncn reduced activity and downward pressare on mIne for lang term centracis. At the same lime mo nec Iew aclieily ned fierce cempelitiae in the various spat markets.

The Company's centract backlog 01 USD 220 mill an el I January 2015 providen good eamiegs vinibilily for 2015. The centract noverage for 2016 is however tower, so DESS' mein challeege will be to secarn increased cenlract coverage also for 2016 ned eewards. The Board of Directnrs believes the curreel weakeess in the markel will result in a beeer supply-demand bslance in the Ineg ran. Wilh a modem fleet ned healihy balnnce sheet DESS shoald be in a good posilien le eunlain the curment down turn and lake advantage if the merket recovers.

Corporate Govemnance

The Company's prieciples for Carporate Governance are reparted in a separate sectian at theArnual Report.

Contracts entered into atter the balnnce sheet dato

The PSVs "Sea Terlugu" and "Sen Tniumph" have been nwarded brg term coelracts for operalines in Australian ~ters. The ned charlerer mill be an international oil major company, and both barebeat coetracts uro for 18 wenlhs lirm plus 18 moelho optian. Commeecement of the bareboat charlers men late March 2015.

The PSV "Sen Brasil" han bonn awarded a 1 year fm plun 1 year opliuns contracl with Petrobras for operaliens in Brazil. bepecled commeecement is endel May 2015.

The vesnel "Sen Frost" was nwnrded a barebnal coelract for 120 days ples 3 030 days opli005 for opernliees in Australine meters. The ned charberer mill be an international major subsen contractor and commencnmenl man mid February 2015.

The Company han agreed on a caetraci extensioe for the AHTS "Snu Tiger". The entension intet I year tinn plun 6030 days option penod and started in direcl conlinuation with the current time charter contract which espimed end February 2015.

The vessel "Sen Bear" han been awnrded a coetract for 120 days trw plan 60 daily oplions ter opemalionn in Mediterranean waters, Cnrnmencemenl man early April 2015.

Deep Sea Supply has received lermination rutine of the time charter contracl for "Ses Fnlcon" ler eperalinre in North Sne. The termination man effective as of ned March.

Events atter the balanne sheet date

There mere ne material evente aller the bnlance sheet dele, which haven bearing on the understanding of the fieancial ntalnmenls.

Changes fram preliminary aocounts presented on 25 February 2015

The 9nancin1 slalemeets cenlain the folloveng changes compared to the preliminnry accoontn presented on 25 February 2015:

Not profil presented: USD 2.029 mill. - Decrenne frem share et profit nI inveelmentn accounled for aning

the equify melhod (DESS BTG) of USD 2.437 mill. Thio per-Inined to a) addilionol impairmeel Ola veeset owned by DESS BTG by USD 1.823 mill ned b) De-recognitinn nldefee'ed iecame 100 of USD 0.614 mill. - lncmeene in nther nxpnn505 via a provision for virile off of receivablen st USD 0.459 mill. - Olher itnms in total el USD 0.029 mill.

These adjustmenls lolaled USD 2.925 mill ned the not profil of 2.020 mill han turned to a lass of USD 0.896 mill, In addition, USD 0.413 mill perteining ta remeasurement lass on delined beneflt pension plan hos bonn recegeiced directly in Other Camprehernive lecame.

Independent Auditors

The IndepeednelAuditoms, PricewoterhousnCoopnrs Limited, have expressed their willingeess In conlinue in effice. A renolution giving nathorily to the Board el Direclorn to fie their remuneralion mill be proposed et the Annuel General Meetirg.

Statement of the members of the Board ot Dimectoms and other responnible persons øl the Company for the financial statements

In accordaece with Arlicle 9, nectione (3) (c) ned (7) et the Treesperency Requiremerts (Securities far Trading on Regulated Morket) Law 012007 ("Lam"), mo the members st the Board st Direcbors ned elher mnspnesible persons for the finaecial slatemeets at Deep Sea Supply FIG, ord the businesses that ute included in the consolidated accaunts en e total. far the year ended 31 December 2014 confirm that, to the best el ear knowiedge:

A) The nenunt consolidaled linennint slntemesls that ere presented an pages 13 ta 60:

• (i) were prepared in accordnece with the International Financial Rnpomlieg Standard as adopled by the Europenn Union, ned in accordaece with the provisi005 el Arlicle 9, section (4) of the Lnw, ned
• (ti) give a true and fair view of the nssets ned liabilities, the fmeaecial posilion ned the profil er losses of Deep Sen Supply Fin, and the businesses that are included in the covsolidated acceunts en a total, and

1. The Directers' Report gives n leir reviem el thn devetepmeels ned the performance of the business an well an fine linaecint posihan at Deep Sea Supply Plc and the businessen that uro inctoded in the connelidated accounln noe total, tngetherwilh n dencnplion at the priecipal riske ord uvcertaieties that they uro fecing.

limassol, 141h April 2015 The Board 01 Deep Sea Supply PIc

Harald Thorstein Chairman/ Chief Executive Off icer

Frinos Savvides Kathrine Fredriksen

Hans Petter Aas

Anders Hall Jomann Chief Finarcint Dificer

Fleet list Deep Sea Supply PLC Fleet list DESS BTG

Existing Vessels	Design	Yard	Year Budt	BHP!DWT	Existing Vessels	Design	Yard	Year Built	BHPIDWT
AHTS					AHTS
Sea Lynx	KMAR-404	Kværner Leirvik, Norway	1999	15000 BHP	Sea Tiger	KMAR-404	Kværner Kleven, Norway	1998	15000 BHP
Sea Bear	KMAR-404	Kværner Kleven, Norway	1999	15000 BHP	Sea Leopard	KMAR-404	Kværner Kleven, Norway	1998	15000 BHP
Sea Ocelot	Khiarn Chuan	Jaya Shipbuilding, Singapore	2007	10880 BHP	Sea Panther	KMAR-404	Kværner Leirvik, Norway	1999	15000 BHP
Sea Eagle 1	Khiarn Chuan	Jaya Shipbuilding, Singapore	2009	12000 81W	Sea Cheetah	Khiam Chuan	Jaya Shipbuilding, Singapore	2007	15000 OHP
Sea Weasel	Seatech P-729	ABG Shipyard Ltd, India	2009	6500 BHP	Sea Jaguar	Khiarn Chuan	Jaya Shipbuilding, Singapore	2007	15000 BI-IP
Sea Badger	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP	Sea Foo	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
psv					Sea Jackal	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Angler	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DWT	Sea Vinen	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Vdtch	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT	Sea Stoat	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Trent	VS 470 MKIt	Karmsund M.S, Norway	2008	3300 DWT	PSV
Sea Falcon	PX 105	Sinopacific Shipyard, China	2013	4700 DWT	Sea Halibot	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DVrTt'
Sea Flyer	PX 105	Sinopacific Shipyard, China	2013	4700 DVuT	Sea Pike	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DWT
Sea Tantalus	STX 05L	Cochin Shipyard Ltd, India	2013	4000 DWT	Sea Bass	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Tituo	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT	Sea Poltock	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Tortuga	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT	Sea Turbot	UT 755 L	Cochin Shipyard Ltd, India	2006	3250 DWT
Sea Triurnph	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT	Sea Brasil	STX 09	STX Promar, Brazil	2012	4700 DWT
Sea Supra	PX 105	Sinopacific Shipyard, China	2014	4700 DWT	Sea Forth	PX105	Sinopacific Shipyard, China	2013	4700 DWT
Sea Surfer	PX 105	Sinopacitic Shipyard, China	2014	4700 DWT	Sea Frost	PX105	Sinopacific Shipyard, China	2013	4700 DWT
Sea Swan	PX 105	Sinopacific Shipyard, China	2014	4700 DWT	Snu Spark	PX105	Sinopacific Shipyard, China	2013	4700 DrATt'
Sea Swift	PX 105	Sinopacific Shipyard, China	2014	4700 DWT	Sea Spear	PX105	Sinopacific Shipyard, China	2014	4700 DWT

Sea Spider	PX105	Sinopacific Shipyard, China	2014	4700 DVIII'
Sea Springer	PXI05	Sinopacific Shipyard, China	2014	4700 DWT

Mernber of the board at directors sinne 2013 Other board assignments:

Frontline 2012 Ship Finance International Limited Northern Offshore Limited Snadrill Partners North Atlantic Drilling

Education: Master ofScience degree within Industnial Economics and Technology Management from the Norwegian University ot Technology and Science

Shares in Deep Sea Supply per 31.12.2014: None

Kathrine Fredriksen Bonn 1983 Director sinne 2009

Other board assignments: Seadnill Limited

Education: Wang Handelsgymnas Oslo European Business School London 2002-2005

Shares in Deep Sno Supply Plc per 31.12.2014: None

Hans Petter Aas Bom 1946 Director sinne 2013

Other boord assignments: Ship Finance International Ltd Knightsbnidge Tankers Ltd KNOT Partners Ltd Solvang ASA ond seneral privately held companies

Education: Norwegian School 06 Economics and Business Administration, Bergen

Shares in Deep Sea Supply per 31 .12.2014: None

Frixos Savvides Barn 1951 Director sinne 2007

Other board assignments: Trust International Insuranne Co.

(Cyprus) Ltd (chairman) Trust Re Insurance .- Bahrain Larritis Holdings Ltd Advent E.0 Holdings Ltd Global Ship Lease

Education: Fellow nfthe Institute otChartered Accountants in England and Wales.

Shares in Deep Sea Supply FIn per 31.12.2014:62000

Board of directors Offices and Management Team

The Company is incorporated in Limassol, Cyprus.Thn Company han management cnmpanies in Cyprus, Singapore, 6razi1 and Norway. As of year-end the on-shore stoff is 82 persons, which is an increase of 10 from last year.

Deep Sea Supply Management (Cyprus) Ltd.

The Company was established in 2007 and facoses primanily 5v financial reponting, cash management, control functinns and insurancn claims handling. The Company hos 4 employees and is headed by Mr. Cnnntantinos Tzagotzides.

Deep Sea Supply Navegacao Maritime Ltda, Rio de Janeiro, Brozil

The company was established in 2009 aften DESSC controcted o lange PSV from STX Offshore 6razil S.A. The Company han 34 employees ond isa fully openational shipping company in Brazil inctuding chartening and techninal and crew management. The General Manager is Mr. Dante Carvalho.

Deep Sea Supply Management (Singapore) Ltd.

The Company was established in 2010, in continoatinn et 0 representative oftice mhrich han been in Singapore since 2006, and hos 31 employees. The Company is v tolly operational shipping company including charlering, technical and crew management. The General Manager is Mr. Steven Yong.

Deep Sea Supply Management AS

The Company was established in 2006 and hus 13 employees involved in Chantening, Business Development, Finance, Accounting and Technical.

The Management team of the Company is as fottows:

Harald L. Thorstein - Interim Chief Executive Officer and Chairman at the Board:

Harald L. Thorstein hnlds a MnC within Industniol Economics and Technology Management fram Norwegian University at Science ond Technology (NTNU). He hav held the position an Chairman of the Board st Directors since May 2013 and has been interim CEO sinne December 2014. Mr. Thorstein is empinyed by Frontline Corporale Services Ltd.

Anders Hall Jomaas, CFO - Chief Financial Officer:

Anders Hall Jnmaas holds a MsC within Indastnial Economics and Technology Management from Norwegian University nI Science and Technology (NTNU). He joined Deep Sea Supply in 2007 and hetd the position at Finance Manager far 3 years befare taking the position an CFO in 2010. Prior to joining Deep Sea Supply, be worked wilbin project management consulting and finance management for years.

Constantinos Tzagotzides -Accounting Director

Canstantinas Tzagotzides halds 0 BsC in Apptied Accounting and is a Fellow at the Association at Chartered Certi6ed Accnuotants. He hos more than 10 years ot expenience in accaunting relaled pnsitians. Ho han worked an ChintAccnuntant in Deep Sen Supply sinne 2007. Prenisusty, be man employed as a chief accoontant in A.P. Molter Maersk, Cyprus and han furthermore worked an an auditor.

Tallak Strandenæs, Chartering and Marketing Director: Tallak Strandenæs joined Deep Sen Supply in April 2014, and prior to Ihat be marked an a shipbroker and partner in RS Platnu from 19941o2014. During the peniod from 2008 to 2011 Mr. Strandenæs worked far RS Platnu in Singapore.

Jon Are Gummedal, Technical Director:

Jan Ane Gummedal started his naneer wsrking nu a Technical Supenintendent fram 2003. In 2008 be took the position Os the Technical Director in ane 01 the lurgest Ship Management Companies in Norway managing 86 awned vessets. Mr. Gummedal joined Deep Sen Supply in January 2014.

Kjetil Løseth, HSEQ Director:

Kjetil Løneth hntds a Candidatus Scinntiuram degree wifhin natural science from the Norwegian University at Science and Technology (NTNU). He han ueveral years at nxpenence from the offshore oil and gav and drilling industry (Archer, Seadnill and North Atlantic Drilling). Mr. Løselh joined Deep Sen Suppty, in 2013.

Steven Yong - General Manager, Singapore

Steven Yong han bonn wsrking in the Offshore induntry far 35 years in vanious funntions innloding Technical, Procuremnnt, Crewing, FISE and Operationn. He man the pianeening Manager with GultMark'n Far East aperalians (Galt Marine FE Singapore) ond held the position at Operationn Manager for close to 20 Years. Sabnequently be isined Deep Sen Supply Singapore in 2010 an the Operations Manager and man prornoted ta General Manager in 2014.

Dante Carvatho -General Manager, Brazit

Dante Carvalho 80145 v Noval ArchitectlManine Engineer degree from Fedenat University st Rio de Janeiro (UFRJ) and Offshore Structareo Post Graduated. Fram 1989 to 2001 be marked an Sarveynn/Asditor in the Bnazitian Maritime Aulhonity. In 2002 be joined a position at E&P Safety Caardinalor in the 6razilian Petroleum Agency (ANP), marking there unlil 2005. Mr. Carvalho then marked as HSEQ Coardinatsr in ENI Brasil fram 2006 102007 and as Commercial Manager in Astromariti. mo NavegaçSo fram 2007 to 2010. 10 April 2010 Mr. Carsalho joined Deep Sea Supply Brazit an General Manager.

Consolidated income statement

All omouvtsi,, 000 1, 000
---------------------------	--	--

	Note	2014	2013
Salen - freight revenue		88 050	59 089
Operating expenses vessels	20	(34 535)	(23 255)
Operating leases	24	(5 576)	(4 475)
Depreciation and impeirment retated to vessels	6,29	(27 801)	(12 781)
Gross profit		19738	18578
Other depreciation	6	(144)	(143)
Other icome/expenses	32	637	2 056
Administrative expenses		(11 036)	(9202)
Operating profit		9195	11 289
Finance income		1176	769
Other (losses(Igains - vet	17	325	i 052
Currevcy (tosses)lgains on financing activities		(4 679)	2 570
Finance costs		(9701)	(0042)
Total other items		(13 079)	(4451)
Share of profil st investments accounted for using the equity methsd	31	3 149	724
(Loss)lProfit before income tax		(735)	7562
Ivcome fax expenses	15	(161)	(379)
(Loss)lPrutit for the yearfrom continoing operations		(896)	7183
Discontinued operations
PraM far the year from discontinued operations	30	-	92 996
(Loss)IProfit for the year		(896)	100 179
PraM attributable to:
-Equity holders st the Group		(096)	100 179
-Nov controlling interest		-	-
		(896)	100 179
Earnings/(Losses( per share for profit anributabte ta the equity holders et the Group, expressed in USD per share
		USD per share	USD per share
-Basic	21	(0,005)	0,700
-Diluted	21	(0,005)	0,783

Consolidated statement of comprehensive income

	2014	2013
(Loss)!Profit for the year	(896)	100 179
Other Comprehensive lncome:
Items that wilt not be subsequently reclassified to profit and loss
Adjustment for pensiee plan	(413)	217
Cash flaw hedges	i 249	(96)
Total comprehensive (loss)Iincome for the year	(60)	100 340
Attributabte to:
-Eqoity holders of the Group	(60)	100 340
-Non-controlling interest	-	-
	(60)	100 348

Changes to other comprehensive income are stated gross of 180

Consolidated balance sheet

All av,ouvts in USO 1**,**000

ASS ETS				EQUITY
Non-Current Assets
Property,plant and equipment
Vessels
Vessels under flnance lease cnntracts
Equiprnent and vehiotes
Total property, plast and equipment
Deferred income tas asset		-	32	LIABILITIES
tnsestmento accnunted ter using the equity melhod	31	115 718	113 814	Non-current liabilities
CIRR Depnsit
Loans to related parties
Total non-current assets
Current assets
CIRR Depnst nhort term portion
Financial derivatives
tnventorieS
Trade receivables	9	21 661	22323
Other shnrt term receivabtes	25	4965	13999	Current liabilities
Lnans to related parties
Cash and cash equivalents
Total current assets
Total assets

		Year Ended 31 December				Year Ended 31 December
Note	2014	2013		Note	142.9.	2013
			EQUITY
			Capital and reserves attribulable to equity holders 08 the company
			Share capitat	12	5 224	2 544
6	519 074	162 820	Share premium & Renrganisation reserve		200 796	6878
6	22 420	35 640	Other paid in capital		1 654	1 807
6	519	257	Retained earnings and other comprehensive income		235 474	245 991
	542 013	198726	Total equity		443148	257228
	-	32	LIABILITIES
31	115 718	113 814	Non-current liabilities
14	19487	27070	Bankbnrrowings	14	274803	90790
24	7678	7448	Finance lesse liability	14	23974	25423
	684896	341090	ClRRLnan	14	19487	27070
			Deferred gain on sale and flnance leaseback	29	-	4 910
			Deferred gain on CIRR Loan		690	916
14	3 176	5215	Pensior scheme	7	267	20
8	143	-	Financial derivatives	8	386	766
10	2322	1 372	Total non-current liabilities		319 607	149 915
9	21 661	22323
25	4965	13999	Current liabilities
24	35 192	15000	Trade and nther payables	13	11 664	5554
11	47289	31 693	Bank borrowings	14	18027	10805
	114 748	89592	Finance lease tiability	14	3832	6 114
	799644	436681	CIRRLnan	14	3176	5215
			Deferred gain an sale and finance leaseback	29	-	982
			Deferred gain on CIRR Lovs - current portion		170	170
			Financial derivatives	8	-	706
			Total current liabilities		36 889	29 545
			Total liabilities		356496	179 460
			Total equity and liabilities		799 644	436 681

All Amoots i,, USO 1,000 All amouolsio 1100 1.000

	Share	Reorgani-		Share Other	Othercomprehensive		Currencysation premium paid-in income Retained translationCapital reserves reserves equity reserve earnings differences	Total
Balanre at I January 2013		2 544 (123 386)				138 264 1934 (1 435) 154 206		(7120) 157 007
Comprehensive income
Prott for the year						100179		100179
Other comprehensive income for the year					161			161
Total comprehensive income	-	-	-	-		161 100 179		- 100 340
Transaclions with owners
Valuation of share oplion scherrie				(127)				(127)
Transfer currency tranlation to retained earnings						(7 120)	7 120	-
Total transactions with owners		-		- (127)		- (7120)	7120	(127)
Balance at 31 December 2013		2 544 (123 386)				130 264 1807 (1274) 247 264		- 251 220
Balance at 1 January 2014		2544 (123 386)				130 264 1 807 (1 274) 247 264		- 257 220
Comprehensive income
Loss for the year						(096)		(096)
Other compreherrsive income for the year					836			636
Total comprehsive income	-	-	-	-	836	(898)	-	(60)
Transactions with owners
Share capital increase (Note 12)	2880		193 919					196 598
Valuation st share optlon scheme				(153)				(153)
Dividends paid (Nyte 12)						(10 457)		(10 457)
Total transactions with owners	2680			193919 (153)		- (10457)		. 185989
Balance at 31 December 2014		5 224 (123 386)		324 183 1 654		(438) 235 912		- 443 149

Statement of changes in equity Consolidated statement of cash fiows

Note 22 Cash Ilows from operating activities Cash generafed fram operaficns Net cash generated from operating activities Cash flow from invesling activities Acquisitions of vessels, constructions contracts and olher PPE Contributions to business combinations - newbuitd program Contributisns to business cambinations - equity in )oint venture 8orrowings to related parties Disposats 01 vessets, construction contracts and other EPE Net Cash (used in)from investing activities Cash ttows from financing activities Proceeds fram borrowings Increase of share capitat Repaymeofs 01 borrowings Interest paid Dividends paid Net cash froml(used in) financing activities Total changes in liquidity in the year Cash and cash equinatenls at begierring of year Cash and cash equivalents at end of the year Year Ended 31 December 2014 2013 47179 31637 47179 31637 6 (376 143) (16 016) - (50 100) - (24 000) 24 (20 000) (15 000) - 132142 (396 143) 27026 201245 10000 12 196599 - (17 114) (60 399) (6420) (17 130) 12 (10457) - 363 853 (67 529) 14889 4866 31693 40423 11 46582 31557

Notes to the consolidated finacial statements

1. General Information

Deep Sea Supply PLC's )"the Company') and its subsidiaries, hereinafter collectively )"the Group"), principal activities are to engage and invevt, direclty or indirectly, by itseif ar through subsidiaries nr part-owned companies, partnerships or other forms Ol entities, in the international offshore supply vesvet business. The Company was incorporated av a public limited liability company on 7 November 2006 and is domiciled in Cyprus in

accordance with the provisions st the Cyprus Companies Law, Cap. 113. Os registered office is at John Kennedy, Iris House, 7th Ftoor, Limassot, Cyprus. The Company hos its primary ard only listing on the Oslo Stock Eochange and trades under symbol DESSC.

These consolidated tinaeciat statements have been approved for issue by the Board nI Oirectorv on 14 April 2015,

2. Summary of significant accounting policies

2,1 Statement of Compliance and basis of preparation

These consolidated 6nanciat statements have been prepared in accordance with, and conipty with, International Financiat Reporting Standards ('IFRS') av adopted by the European Union )'EU') and the requirements of the Cyprus Companies Law, Cup. 113,

The consolidated financiat statements have been prepared under the historical cost conveotion, av moditied by the renatuation of financiat asseta and liabitities, inctuding derivative instruments at fair vatve through protit nr loss. A surnmary of the principal accounling policies applied in the preparation at thene consolidated 6nanciat statements are vet not below. These policies have been consistently applied to all the years preaented, antess otherwive stated.

The preparation of frnanciat statements in contormity with IFRS reqoires the osv of certain critical accounling evtimalev. It olso reqaires management to exercise its judgment in the process applying the Group's accaunting policies. The areas innolving a higher degree of judgment ar cnmptexity, nr areas where avsumptinns and evtimatev are signiticant to the consolidated financiat statements are disctoved in Note 4.

Basis of preparation

An 01 the date at the authorivation nI the tlnanciat statements, att International Finaociat Reporting Standards issaed by the tnternatinnatAccouoting Standards Board (tAS6) that are ettective an at 1 January 2014 have been adopted by the EU through the endorsemenl procedure establivhed by the European Commivvion.

Adoption of new and revised lFRSs New and amended standards adopted by the Groap During the carrent year the Group adopted att the new and revised IFRS av adopted by the EU that are relevant lv its

operatinnv and are effective for accoonting periods beginning on 1 January 2014. The key standards adopted mere the foltowing:

IFRS 10, Cnnvotidated tivanciat statements'. IFRS 10 buitds on eoivting principlev by idenhfying the concept ot conlrol av the determining factor in whether an entity shoutd be inctuded within the consolidated tinanciat statements at the parent company. The standard providev additional guidaoce to avvist in the determinatinn at controt where thiv is ditt malt to avsevs.

IFRS 11, JointArrnngementv. IFRS 11 isa more reativtic reftection ot joint arrangements by tocusiog on the rights and obligations 01 the arrangement rather thor its legal form. There are two types st iniot arrangement jnint nperatinnv and jaint ventares. Jnint nperationv anse where ajoint operator hav rights to the ovvets and obligations relolirg to the arrangement and henne acconrtv for its interest in avsets, liabitities, revenue and enpessev. Jojat veetures anse where the jnint operator hos rights to the net asselv of the arrangement ord henne equity accountv for us interest. Propartionat cnnvotidation otjnint ventnrev is vn longer permitted.

IFRS 12, "Disctnsurev at tnterests in Other Entities. IFRS 12 appties to entities that have an interest in a vabsidiary, a jaint arrangement, an associate or an urconsolidated slructured entity. IFRS 12 vetv out the reqaired disctosures for entities repnrting under the mo new standards: IFRS 10, Convotidated financial statements, and IFRS 11, Joist arrangementv, and replaces the divclosure reqairements carrently tound in lAS 25, tnvevtmentv in associates. IFRS 12 requires entities to divctove information that hetpv tinanciat vtatement readerv to enatuole the oatare, risks and tinanciat ettects associated with the entity'a interests in subsidiariev, associates, inint arrangemento and unconvotidated structuwd entities. To mccl these objectiven, the new standard requirev divctnvurev in a number nI areas,

including significant judgments and assumptions made in determining whether an entity controls, jointly controls, or significant-Iv influences its interests in other entities, extended disclosures on share of non-controlling interests in group activities and cash flows, summarised financial information of subsidiaries with material non-controlling interests, and detailed disclosures of interests in unconsolidated structured entities.

This adoption did not have a material effect on the accounting policies of the Group.

New standards and interpretations not vet adopted by the Group At the date of annroyal of these financial statements a number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2014, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on these consolidated financial statements:

IFRS 9 "Financial Instruments: Classification and Measurement"* (issued in July 2014 and effective for annual periods beginning on or after 1 January 2018). Key features of the new standard are:

• a. Financial assets are required to be classified into three measurement categories: those to be measured subsequently at amortised cost, those to be measured subsequently at fair value through other comprehensive income (FVOCI) and those to be measured subsequently at fair value through profit or loss (FVPL).

• b. Classification for debt instruments is driven by the entity's husiness model for managing the financial assets and whether the contractual cash flows represent solely payments of principal and interest (SPPI). If a debt instrument is held to collect, it may be carried at amortised cost if it also meets the SPPI requirement. Debt instruments that meet the SPPI requirement that are held in a portfolio where an entity both holds to collect assets' cash flows and sells assets may be classified as FVOCI. Financial assets that do not contain cash flows that are SPPI must be measured at FVPL (for example, derivatives). Embedded derivatives are no longer separated from financial assets but will be included in assessing the SPPI condition.

• c. Investments in equity instruments are always measured at fair value. However, management can make an irrevocable election to present changes in fair value in other comprehensive income, provided the instrument is not held for trading. If the equity instrument is held for trading, changes in fair value are presented in profit or loss.

• d. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The key change is that an entity will be required to present the effects of changes in own credit risk of financial liabilities designated at fair value through profit or loss in other comprehensive income.

• e. IFRS 9 introduces a new model for the recognition of impairment losses - the expected credit losses (ECL) model There is a 'three stage' approach which is based on the change in credit quality of financial assets since initial recognition. In practice, the new rules mean that entities will have to record an immediate loss equal to the 12-month FCL on initial recognition of financial assets that are not credit impaired (or lifetime ECL for trade receivables). Where there has been a significant increase in credit risk, impairment is measured using lifetime ECL rather than 12-month ECL. The model includes operational simplifications for lease and trade receivables.

• f. Hedge accounting requirements were amended to align accounting more closely with risk management. The standard provides entities with an accounting policy choice between applying the hedge accounting requirements of IFRS 9 and continuing to apply IAS 39 to all hedges because the standard currently does not address accounting for macro hedging.

IFRIC 21 - Levies (issued on 20 May 2013 and effective for annual neriods beginning 17 June 2014). The interpretation clarifies the accounting for an obligation to pay a levy that is not income tax. The obligating event that gives rise to a liability is the event identified by the legislation that triggers the obligation to pay the levy. The fact that an entity is economically compelled to continue operating in a future period, or prepares its financial statements under the going concern assumption, does not create an obligation. The same recognition principles apply in interim and annual financial statements. The application of the interpretation to liabilities arising from emissions trading schemes is optional.

Defined Benefit Plans: Employee Contributions - Amendments to IAS 19 (issued in November 2013 and effective for annual periods beginning 1 July 2014) The amendment allows entities to recognise employee contributions as a reduction in the service cost in the period in which the related employee service is rendered, instead of attributing the contributions to the periods of service, if the amount of the employee contributions is independent of the number of years of service.

Annual Improvements to IFRSs 2012 (issued in December 2013 and effective for annual periods beginning on or after 1 July 2014, unless otherwise stated below)*. The improvements consist of changes to seven standards. IFRS 2 was amended to clarify the definition of a 'vesting condition' and to define separately 'performance condition' and 'service condition': The amendment is effective for share-based payment transactions for which the grant date is on or after 1 July 2014.IFRS 3 was amended to clarify that (1) an obligation to pay contingent consideration which meets the definition of a financial instrument is classified as a financial liability or as equity, on the basis of the definitions in IAS 32, and (2) all non-equity contingent consideration, both financial and non-financial, is measured at fair value at each reporting date, with changes in fair value recognised in profit and loss. Amendments to IFRS 3 are effective for business combinations where the acquisition date is on or after 1 July 2014. IFRS 8 was amended to require (1) disclosure of the judgements made by management in aggregating operating segments, including a description of the segments which have been aggregated and the economic indicators which

have been assessed in determining that the aggregated segments share similar economic characteristics, and (2) a reconciliation of segment assets to the entity's assets when segment assets are reported. The basis for conclusions on IFRS 13 was amended to clarify that deletion of certain paragraphs in IAS 39 upon publishing of IFRS 13 was not made with an intention to remove the ability to measure short-term receivables and payables at invoice amount where the impact of discounting is immaterial. IAS 16 and IAS 38 were amended to clarify how the gross carrying amount and the accumulated depreciation are treated where an entity uses the revaluation model. IAS 24 was amended to include, as a related party. an entity that provides key management personnel services to the reporting entity or to the parent of the reporting entity ('the management entity'), and to require to disclose the amounts charged to the reporting entity by the management entity for services provided. IFRS 15, Revenue from Contracts with Customers* (issued on 28 May 2014 and effective for the periods beginning on or after 1 January 2017). The new standard introduces the core principle that revenue must be recognized when the goods or services are transferred to the customer, at the transaction price. Any bundled goods or services that are distinct must be separately recognized, and any discounts or rebates on the contract price must generally be allocated to the separate elements. When the consideration varies for any reason, minimum amounts must be recognized if they are not at significant risk of reversal. Costs incurred to secure contracts with customers have to be capitalised and amortised over the period when the benefits of the contract are consumed.

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28" (issued on 11 September 2014 and effective for annual periods beginning on or after 1 January 2016). These amendments address an inconsistency between the requirements in IFRS 10 and those in IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business. A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are held by a subsidiary.

*denotes standards, interpretations and amendments which have not been endorsed by the European Union.

The Board of Directors assesses the impact of new standards and interpretations at the point when these are endorsed by the European Union. As a result the impact of the above new standards and interpretations that have not been endorsed by the European Union has not been assessed.

2.2 Consolidation

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group 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 group. They are deconsolidated from the date that control ceases. The Group 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 the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. 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 Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree' s identifiable net assets.

Acquisition-related costs are expensed as incurred The Company was established for the purpose of acquiring all shares of Deep Sea Supply ASA.

The consolidated financial statements are issued under the name of the legal parent, the "Company" and are a continuation of the financial statements of the legal subsidiary (Deep Sea Supply ASA). As a result:

• The assets and liabilities of the legal subsidiary are recognized and measured at their pre-combination carrying amounts; - The retained earnings and other equity balances are the retained earnings and other equity balances of the legal subsidiary immediately before the reorganisation:

• The amount of issued equity instruments is that of the Company: and

• Comparative information presented in the first year of consolidation is that of the legal subsidiary.

All intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated: unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

(b) Associates

Associates are all entities over which the Group 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. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group's share of post-acquisition profit or loss is recognised in profit or loss, and its share of post acquisition movements in other comprehensive income is recognised in other comprehen-

sive income with a corresponding adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate. including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of an associate' in profit or loss.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group's financial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless 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 Group.

(c) Joint arrangement

The Group applies IFRS 11 to all joint arrangements. Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.

Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the group's share of the post-acquisition profits or losses and movements in other comprehensive income. When the group's share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint ventures), the group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.

Unrealised gains on transactions between the group and its joint ventures are eliminated to the extent of the group's interest in the inint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the group.

2.3 Discontinued operations

An oneration that has been disposed of (by a particular reporting date) or classified as held for sale at that point mav be classified as discontinued even if the entity continues to operate in the same business segment, but withdraws from a geographical area. If a disposal group meets the discontinued operation criteria, the cashflows and results of the disposal group are presented as discontinued operations. Discontinued operations are presented in a separate part of the statement of comprehensive income. The figure presented is for the entire period and not the result since the operation was discontinued. The amount to be disclosed is the entire post-tax result for the period plus any gain or loss on remeasurement/ disposal gain of assets or disposal groups. Hence, in the statement of comprehensive income each line item from revenue down to post-tax profit excludes discontinued operations. Discontinued operations held for sale are measured in the same way as other disposal groups, that is, at the lower of carrying amount and fair value less costs to sell

2.4 Underlying concepts

The financial statements are prepared on the going concern basis using accrual accounting.

Assets and liabilities and income and expenses are not offset unless specifically permitted by an accounting standard.

Financial assets and financial liabilities are offset and the net amount reported only when a legally enforceable right to set off exists and the intention is either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Changes in accounting policies are accounted for in accordance with the transitional provisions in the IFRS standards. If no such guidance is given, they are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively

2.5 Recognition of assets

Assets are only recognized if they meet the definition of an asset, it is probable that future economic benefits associated with the asset will flow to the Group and the cost or fair value can be measured reliably.

2.6 Classification of assets

Assets intended for long-term ownership or use, are classified as non-current. Other assets are classified as current. Receivables due to be repaid within one year are classified as current assets.

2.7 Use of estimates

The key sources of estimation of uncertainty at the balance sheet date, that have a significant risk for causing a material adiustment to the carrying amounts of assets and liabilities within the next financial year are discussed below in Note 4.

2.8 Commercial Interest Reference Rate (CIRR) loan

The Group has applied for two Commercial Interest Reference Rate (CIRR) loans from the Norwegian Export Credit Agency in 2008. The duration of the loans may vary and the cash proceeds from the loans have been deposited in fixed deposit account with a Norwegian bank at a higher interest rate than that of the loans. The agreed period of the deposits is identical with the one of the loans. The loans and the interest thereof will be repaid from that account. At initial recognition the difference between the amounts received and fair value of the loan has been recognised as deferred gain and is amortised over the period of the life of the asset.

2.9 Seament reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The components of the Group that management uses to make decisions about operating matters are the geographical region and the type of the vessel. The Group is organized into main gengraphic regions: North Sea, Mediterranean, Africa, Australia/Far East and North & South America. The geographical segments are based on the location of the vessels. The types of vessels are AHTS and PSVs. Depreciation is allocated between the different segments based on number of days the vessels have been operated within the different segments.

2.10 Foreion currency translation

(a) Functional and presentation currency

Deep Sea Supply Plc, located in Cyprus, became the parent company of the Group with effect from 28 December 2006. Items included in the financial statements of each of the Group'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 Group's functional and presentation currency. All Group entities have the USD as their functional currency

All amounts in these financial statements are in USD 1,000 unless otherwise stated.

(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 profit or loss.

2.11 Non-current assets and maintenance costs

Property, plant and equipment are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include expenditures that are directly attributable to the acoulsition of the items. Depreciation is calculated on a straight-line basis, taking residual values into consideration, and adjusted for impairment charges, if any. The carrying value of the fixed assets on the balance sheet represents the cost less accumulated depreciation and any impairment charges.

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is orobable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred

Day-to-day maintenance costs are charged to the profit or loss during the financial period in which they are incurred. The cost of major renovations and periodic maintenance of vessels are capitalized and depreciated over the useful lifetime of the parts replaced. The useful lifetime of regular vessels docking expenses will normally be the period until next docking which if it is an intermediate survey is after 30 months and if it is a special survey is after 60 months. When ships are acquired, a proportion of the acquisition cost is capitalized as periodic maintenance

Depreciation on vessels and other assets (equipment) is calculated using the straight-line method to allocate their cost to their residual values over their estimated ricaful lives as follows:

- Vessels	30 years
- Vehicles	5 years
- Dry docking costs
· Intermediate survey	2.5 years
· Special survey	5 years
- Software licenses	3 years
- Furniture, fittings and equipment	3 years

The assets' residual values and useful lifetime assumptions of fixed-assets are reviewed at each balance sheet date, and where they differ significantly from previous estimates, depreciation charges are changed accordingly. Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in operating profit. For vessels under finance sale and leaseback disposals the deferred gain is recognized fully into the profit and loss upon disposal.

2.12 Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

_____

2.13 Newbuild contracts

lostaitments on new vessel cootracts are presented an prepayments tar vessels under construction in accnrdance with the terms of the vessel-contracts. The total acquinition cont includes the sum of installmentn payable plan direct contn incurred during the construction period.

Prepaymentn are carried at cost less provisjon for impairment. A prepayment is clasnified on non-current when the gosds nr services relating to the prepayment are expected to be obtained after sne year, nr when the prepayment retates to an annet which wilt itself be ciassified an non-current upon initial recsgnition. Prepayments to acquire assets are transferred to the carrying amount of the annet once the Group ras obtained control of the asset and it is probabte that future e5000mnic benefits associated wtth the annet wilt flow to the Group. Other prepayments are written off to profit ar loss when the goodo or sernices relating to the prepayments are receined. If there is an indication that the assets, gonds nr services relating to a prepayment will not be receined, the carrying satse of the prepayment is written down accordingly and a corresponding impairment tonn in recognised in profit or loss.

2.14 Lease agreements

The determination st whether an arrangement is, om contains lease, is buned on the subntance at the arrangement and requires an annensment of whether the tsttlltnrent of the arrangement is dependent on the ane sto specific annet or assets and the arrangement conveyn a right to use the annet. Leanes in which a significant parbon st the risks and rewards of swnemship are retained by the lessor are ctassified an operating leases. Payments made under operating leasen (net of any incentineu receined from the tessor) are charged to the profit er loss on a straight-line basis over the period of the lease. In cases wtiere the Group is the tessor in an operating lease, initial direct costn are added to the carrying amount of the leaned annet and recognized an an expense ener the teane term on the same basis an the lease income.

Financiat teases, which transfer ta the Group substantiatty att the riskn and benefitn incidentat to owoernhip st the teaned item, are sapitatized at the inception st the lease at fair value at the teased annet om, jf tower, at the present value at the minimum lease payments. Lease payments are apportioned between the ti000se charges and redustion et the lease tiobility so an to achiene a conntsnt rate of interest on the remaining balanse st the tiabitity. Finaoce charges are charged directty to financiat espenoen.

Capitaticed leased assets are depreciated over the ohorter st the estimated unetul lite of the annet and the lease term, ifthere lS Os reasonabte cemtainty that the Group wrtt sbtain owoernhip by the end ot the lease term.

In a nato and tinaoce teasebask trannaction any excens at salen prsceedn aner the carrying amount in deferred and recognized in the profit ar tonn over the lease term.

2.15 Impairment of non-financial assets

The Group determines whether there are indications that ennfinanciat assets are impaired at least on quarterty basis. The carrying value st nessets are reviewed for impairment when eventn nr changen in circumntancen indicate that the carrying value may not be recoveruble .The annet'n cash generating abitity either through ase er sats is reniewed and somnpared to the annet'n carrying value in the balance sheet. ltthe carrying value in higher, the differeece munt be written off an on impairment tonn. Fair value reduced by estimated salen csntn is the amount achievable on an arm'n length sale to an independent third party. The reconerable amount in the higher of value in ane and fair value less costn to seil and in entablinhed individually for all cash generating units. In annesning value in use, the estimated future cash fiows are dinnonnted to their present natos uning 0 pre-tas discount rate that retlects current market ansesnmentn at the time and the risk specific to the annet that is considemed impaired.

For nessetn that are hetd under a sale and finance teasebask arrangement that hane a related carrying amount of 0 deferred gain an enplained in 2.14 above, apon impairment the Group recsgnizeo the impairment first within the unomortized part at the deferred gain for the same annet that is prevented an a liability and any exsenn in charged to the profit or tonn. A prenisusty recognized impairment tonn is reverned jf there hos been a change in the entimaten used to determine the recoverabte amount. Reversal of previounty recognized impairment in limited to the amount the carrying value st the annet would have been, had the initial impairment charge not taken place.

2.16 Financial assets

The Group ctonsifies its finaociot assets in the fotlowing categoden: at fair value through profit or tonn, loans and receinablen, and avaitabte for sale. The ciansitication depends on the purpone for which the tinanciat assets ~re acquired. Management determines the clasnif'ication st itn financiat assets at initial recognition.

(a) Financtat assets at fair value through profit or loss Thin category han twa sub-cotegorien: tinanciat assets held tom trading, and those designated at fair satse through profit om tonn at inception. A financiat annet in ctassified in this category jf acquired prinsipally for the purpose ut seiling in the short term om If nu designated by management, and they meet certain criteria (lAS 39.9).Derivatineo are 0150 categorized an hetd for trading unless they are designated an hedges. Annets in this category are ctasoified an current assets jf they are either hetd for trading nr are espested to be nettled within 12 months of the balance sheet date.

(b) Loann and receieablen

Loano and receivabten are non-derivatine flnanciat assets with fined om determinable payments that are not qssted in an actine mamket. They are included in current assets, encept for maturities greater than 12 months atter the balanse sheet date. These are ctannified on non-current assets. Loans and receinabtes are ctanuified an 'trade and other receivabteu' and 'cash ond cash equivalentn' in the balance sheet.

(c) Avallable-for-sale financiat assets

Avaitabte-for-sale financiat assets are non-derivatives that are either designated in this category nr not stassified in any of the other cotegorien. They are included in non-current assets unless the investment muturen or management intends to dinpose st the investment wrthin 12 months st the balance sheet date.

Regutar way purchases and notes of fisanciat assets are recognized on the trade-date, the date on which the Group commits to purchase or seil the annet. lnventments are initially recognized at fair value ptas trannaetion contn for alt fisuociat assets not carried at fair value through profit or tonn. Finonciut assets carried ut fair value through proff ar tonn, are initiatly recognized at fair vatne, and trannustiso nonts are espevned is the profit or loss. Fieanciat assets are deresngnized when the rightn to receine cash fiows from the ionentmeots have expired ur have been tranoterred and the Group han trannferred substantiatly alt misko and rewardn st owsernhip. Anaitabte-forsafe financiat assets and flnaociat assets at fair same through profit nr tonn ore sobsequentty carried at fair value. Laons and receivoblen ame carried at amorlined cost uning the effectine interest method. Gsinn ur losses arising from changen in the fair value st the "frsonciat assets at fair value through profit ur loss" category are presented in the profit ur tonn within other (lonsen)Igoinn - net, in the period is which they arme. Dividend income from tinanciat assets at fair value through profit or tonn in recognized in the profit ar tonn an part of nther income when the Group'n right to receive paymenl is entablished.

The Company annennen at each balanse sheet dato whether there in objectine evidense that o tinanciat annet nr a group of finaocial assets in impaired.

2.17 Der)vat(ve financiat instruments and hedging activities

Derinotiven are initiatty recognized at fair value on the date a demivative contrasl in entemed into syd arv subsequently re-measumed at their fair value. The method of resugnining the renulting gain ur tonn depends on whether the demivatine in designated an a hedging instrument, and it so, the nature ot the item being hedged. The Group denignaten cemtain derivatives on either: (1) hedges et the fair value of recognized assets ar liabititien nr a firm sommitment (fair satse hedge); (2) hedges of • particnlar risk associated with o recognized annet or tiabitity or a highty probabte torecant tronsaction (cash flow hedge); nr (3) hedges ot 0 net investment in a foreign nperatiun (vet investment hedge(.

The Group documents at the inception at the trannastinn the relationnhip between hedging instruments and hedged itemn, on wett an itn risk management objeCtiven and strategy for undertaking varioun hedging transastions. The Group also documents ils assesnmenl, both at hedge inception and on an ongsing basis, of whether the derivatives that are used in hedging trannactions arv highly ettective in offsetting changes in fair valuen nr cash flown at hedged items.

The fair valuen at varioun derivutive instruments used for hedging purpones ame dinslosed in mote 8. Movements on the hedging reserve in other comprehesnive income are showo in Stalement ot Changen of Equity. The full fair value of a hedging derinative is ctannified an a non-current annet om tiabitity when the remaining hedged item in more than 12 months, and as a current anset or tiability when the remaining maturity st the hedged item in lens than 12 months.

Cash flow hedge

The effestive portion ut changen in the fair value ot derivatives that are designated and quatify an cash 80w hedges in recognised in other compmehennive incume. The gain om lønn relating to the ineffestmve portion is recogvined immediatety in the profit nr tonn within finance incame nr tinonse contn renpectinety. Wheo a hedging instrument expiren nr is sold, nr when u hedge no longer meets the critemis for hedge accounting, any cumulatinn gain om loss eninting in equity at that time remainn in equity ond in mecngnined when the forecost transastion is uttimately recognined in the profit om ens, When a forecast transactiufl is nu longer eupected to occur, the cumalative gain ar loss that wao reported in equity in immediotely tranoferred to the profit ur tonn within finance income ur finance cost.

2.18 )nventories

ation method.

Bunkers innentories are vatued at the tower of hiotsrical cost and not realisable value apptying the FtFO (first-is, first-out) principle. Lubult ianentonien are vatued uniog the weighted anerage valu-

2.19 Trade reCeivables

Trade reseivabtes are recognized initialty at fair value and subnequently measured at amurlined cont using the ettectmne interest method, less provisjon for impairment. A provisjon for impairment 01 trade receivabten is estabtished when there in objectine eaidence that the Group wilt not be able to csttect att amounts due according to the original terms ut the receivables. Sigsi8caet finansiat diffmnutties st the debtor, probabitity that the debtor witt enter bankruptcy or tinanciat reorgasioatisn, and default ur delinquency in payments (more than 120 days overdue) arv considemed indicatoms that the trade meceivable is impaired. The amount et the provisjon in the differeoce between the usset's carrying amount and the present value ut estimated future cash tlows, discosnted at the original effective interest rute. The carrying amount at the annet is meduced through the sne ut an attnwaece accnunt.

2.20 Cash and cash equivalents

Cash and cash equivalents, includes cash in hand and deposits held at call with banks.

2.21 Restricted cash

Restnicted cash depasits camprise at funds hold in separate Graup bank acenunls, which will be used to settle accrued taxation liabilitiea related to emplayee's tax dedoctian. Restricted cash are excluded from cash and cash equivalents in the statement et cash fiows.

2.22 Share capital

Ondinary shares ane classitied as equity.

Cnsts directly attnibutable to the issue st new shares er options are show in equity an a deductinn, not of tax, frem the prnceeds. Share premiurn is the difference between the talt value et the consideratian receivable for the issue of shares and the nomiflat value of the shares. Share premium accaunt can only be resorted to for limited purpeses, which de not include the distriballen of dividends, and in other-wse oubject to the provisions et the Cyprus Companies Law on reduction et share capital.

2.23 Borrowings

Borrowings are recognized initially at fair valne, not et tnansaction costs incurred. Borrowings are subsequently stated at amertised cost; any difference between the proceeds (not ot transactlun costs) and the redemplion amount is necognized in the prntit nr tonn over the pednd at the borrnwings using the effective interest melhod.

Borrowings are clansitled an current tiabilitien unlens the Greup hus an unconditional right to defer settlement at the liability for at least 12 months atter the balance sheet dato. General and specifis bnrrowlng costs directly attnibatable to the acquisition, canstractian ar pradoction of qualifying assets, which are assets that necessarily lake a substantiat peniod of time to get ready for their intended use ar sale, are added to the cost at those assets, until such time as the assets are substantially ready for their intended use ar sale. Investment iacame earned an the temparany investment at specific berrnwings pending their eupenditure on qnalirying assets is dedacled frem the bnrnnwing costs eligible for capitalisalion. All elher bonrewing costs ane recognised in profil nr loss in the pedod in which they ane incanred.

2.24 Trade payables

Trade payables ane recngnized initialty, at fair value and subseqaeelly meanared at amorlized nest using the effective interest methad.

2.25 Taxation

Taa eapease/incamn includes cunrent taaes and the change in detenred tases. Paris ni the Greap's activities wllhin the Norwegian nubsidianies

ane slruclared within the regulalionn for the Norwegian Toonage Taa System for shipping companies.

The Grnap han estimated a Inc tale of 0% for the Cnmpanies subjecl ta the negalations st the shipping company regime. For all companies enden this regime, the Gneap has eslimated 0% deferred lan an tempenary dittereeces when entening the regime. For companies not locluded in the regime, and for taxable frnancial revenaee in companies under the regime, the Greup applies a tax tale ut 28% ter Norwegian companies and 10% for Cyprus cempanies. Tax expense/incemo includes current taaes and the change in deterred taaes.

Deferred income lan is pravided in fall, using the liability methed, on temporary ditterences anising belween the tas bases ot assets and liabilitios and their carrying amoants la the cansalidated llnancial statemenls. However, the deterned incnme fax in nat accaunted for jf il anses fram initial nocagnitian at an asaet ar liability in a transuction athen than a business combination that at the time at the transaction atfects neither the accounting nor taxable prnf I ar loss. Deferred income 100 is determined using tax natos (and laws) that have been enacted nr nabstantially enacted by the balance sheet dato and are eapected to apply when the relaled defenred incnme tas asset is realized on the deferned incamo be liability is settled.

Deferred inceme Inc assets ane recngnized to the exlenl that it is probable that futare taxable profit will be available against which the lemperary diffenencen can be atilized.

Deferred lacame tax in pnovided an temparary diffonences anising en inveetmeele in nubnidiarles and ansnciales, encepl where the timing at the reversal at the temparany difference is contralled by the Greup and its probable that the lempnnary difference will not neverse in the foreseeable tatano.

2.26 Bonus plans

The Gmap recngnlzes a liability and an expense mitbin wages and salaries tar bonasen, based an a formula that takes inta cansideratian the performance at peer graap companies. The Graup recngeizee a liability where centraclnal ebligations exint en where thone in a past pructice that han cresled a constnJctivo obligatian.

2.27 Share based payments

Emplayeos at the Graup roceivo nomaneratian in the form at share-based payment transactinns, whereby empinyees render nenvicon as cansiderutian tar equity instruments such as aptions ta bay shares at the Company.

The cost at equity-settled transactions is measarod by reference le the fair value at the dato en which the awerd is granled. The

fair value is detenminod using appropriate valaatian models.

The cost at equity settled transactians is recognised ca an expense, legelher wlth a cernespending increase in resenves wilhin equity, over the nesting perind which is the penied ener which all 01 the apecitied vesting csndilioeu are In be satisfied. At the end at each noponting peniod the entity nevisos the ostimaten at the namber at aptions that ane eapoclnd to vest based an the non-manket conditions. Il recognises the impact at the revisjon to original ostimates, if any, in the income statement, with u cernenpeading adjuslment to equity.

Where the terms st the snare eptinn scheme is maditied to be nettled in cash rather than in equity instruments, the entity measures the liability initially using the mnditication date falt value et Ore equity-settled award, based en the elapsed portion et the nesting penind. This amount in Ihen necognized an a cnodit ta liability and a debit to equity. Until the liability in settled il is ne-measuned at each reperting date with ctranges in fair value recngoized in prefil and lena.

2.28 Pension costs and obligation

A definert centnibalien plan in a pensjon plan under which the Grenp pays ttxed contnibutiens inte a separate entity. The Gnaap hus na legal ar constractivo obligatlons to pay farthor centribulionn li the fund dees not hold nufficieel assets le pay all emplsyees the benetits rolating le employee service in the cnrrenl and prior perinds. A defined benefrt plan is a pensjon plan that is net a deflned conlnibalien plan.

Typically definert beeefit plans detine an amount ni pensjon beeefil that an employee mill receive sa retinement, usually dependent on ann ar mare factors such an age, years at service and campensatian.

The liability recognised in the balance sheet in nespect at detined benefrl pensjon plass is the present value et the de0ned benefil ebligalien at the end at the reperting peniod less the fair value et plan assets. The defrned benetrt ebligation is calculaled annualty by independent actuanies using the pnojecled seil cnedit methed. The prosent value ut the detined benefit ubligatian is detenmined by discounting the entimated fature cash suttlews using interest talen et high-qualily cerperate bonde that ane denominuted in the currency in which the benetits mill bo paid, and that have terms ta mutunity approaimaling la the terms of the nelated pensjon obligalion. In cosntnies where there is no doep murket in such bonds, the market rutes an government bonds uro used.

Actuaniat gsins and losses anising frem eepenience adjunlmenls and chunges in actuanial ansumptions ane chunged ar crodited ta equity in elhen comprehennise incnme in the periad in which they anse.

Rast-service costs ane recognised immediutely in incsme. Fer definert ceetribntinn plans, fire Gnoap pays cnntnibutioon ta pablicly ar pnivately administered pensjon innuranco plans on

mandatony, contractual ar voluntany basis. The Graup has no funthen paymonl obligatiaas onne the contnibatians have been paid. The contnibutions ane recognised as employee benetlt expense when they ane due. Prepald cuntnibutiuns ane recognised an an usset ta the extent that a cash rotund snu redaclion in the future payments is avallable.

2.29 Prov)sions

Provisjons nepnesenl liabilitios at uncertain timing on amount. Proninionn ane recsgnized when the Graup has a present legal nr cnnstnuctive obligalion, an a result ni past event, ter which il is probable that an natflew et ecunnmic benetils mill be nequired to settle the obligation, and a reliable estimate can be made tar the amount of the obligatian.

Provisiona ane measuned at the prosent value at the eopenditures expected ta be neqained ta settle the abligatian using a pre-tax rate that retlects cunrent manket assensments et the time value et mnney and the nok5 specific to the ebligatinn. The incnoano in the provisjon due to pansage at time is necognized an interest expense.

2.30 Revenue recognition

The Graup's uctivity in chartening out different typen at Anchar Handling Tug Supply veesels (AHTS's) and Plattorm Supply Vessels (PSVs(.

Revenue campnises the talt value at the considerution neceived ar receivable tar the sale at gaods and servicos in the ondinary caunse et the Greap's activities. Revenue is shuwo net et valueadded tas, withhnlding tax, nelures, rebates and discuunts and atter eliminaled sales mithin the Greup. Revenue in recngnized as tellaws:

Charter rate contracts

Charter centracts ane clansitied as operating leasen under lAS 17. Revenue dermed frem charter centracts in necognized in the poniod over the leuse term an a slnaight line basis. Related senvices ane recegnized an revenue in accerdance with the senvices being rendened.

Vessels withnut signed cenlract in place at dischange have ne revenue betere a new cnntnacl is nigned. Charter mlated eeponses incarned far vessels in the idle time uro eapensed. Revenues fram time charters and baneboat chanters accounted foran operating leases am recngoized over lIte motal peniods si such chartem, as service is penformed on u slraight line basis.

Interest income

lnlemst inceme is recegnized en a lime-prnpnrtion basis using the effective interest method. When a receivable is impuired, the Graup reduces the canrying amount to its recoverable amount, being the en-0mated tulure cash tlew discounted at original effective interest rute of the instrument, and centmnues anminding the discennt as interest inceme. InteresI inccme en impaimd leans is wcngnized using the original effective interest rute.

Dividend Income

ment is established.

2.31 Dividend distribution

Dividend distribution to the Company's shareholders is recognized as a liability in the Graup's financial statemeets in the period in which the dividends are approned by the Company's shareholders until payment is made.

2.32 Earnings per share

Eamings per share are catcatated by dividing the not profitltoss tur the Company by the average weighted number of outstanding shares over the period in question. Diluted earnings per share include the etfect ut the assumed conversion of potentially dilative instruments such as stock options.

2.33 Statement of cash flow

The statement ut cash flow is presented in accordance with the indireet method.

2.34 Insurance claims receivables

lnsurance claims receivables fall into twa categories, Loss ot Hire (LOH) and Hull and Machinety (H&M). Loss of hire perbaino to claims made when a technical innse prevents the vessels ability to go onhire. Hull and machinery pertains to reimbursemeet et actual cxpenses incurred to repair the problem. There is an element of judgmenl when deciding which eapenses can be claimed and whether it is virtually cerlain that the amounts witl be recovered

1. Financial risk management Dividend income is recognized when the right to receine paybul the Group fotlows the policieo and the advice ut enternal consultants before submitting any claim. Loss ot hire claims receivables are calculated and booked as number of days that the vessel is unable to go onhire times INn daily rale an per LOH insurance policy. Hull and machinery is booked as actual expenses incurred to repair the problem less insurance deductible amount as per H&M insurance policy.

2.35 Financial guarantees

Financial guarantees are contracbn that require the Company to make apecified paymento to reimburse the holder of the guarantee for a tonn il incurs because a specified debtor failo to make payment when due in accordance with the terms of debt instrument. Financial guarantees are initially recognized at fair value, which is normally evidenced by the amount nI taes received. This amount is amortised on a straight-line basis over the lite of the guarantee. At ISa end of each reporting period, the guarantees ore measured at the higher of (i) the remaining unamortised balance of I/ro amount at initial recognition and (ii) the best estimate of expenditure required to settle the obligation at the end of the reporting period.

2.36 Assets Acquisition

For acquiniticns not meeting the detinilion at business under IFRS 3 "Business Combinations, the Group recogni005 ISa individual identiliable assets and tiabilities acquired at their fair values on the data ot acqaisition. The cost ut the transaction is allocuted to the assets acquired and liabilities assamed based on their relative fair values at the dato nI purohane. Nu goodwill anses on the transaction,

3.1 Financial risk factors

The Groap's normal business activities eopose it to a var/ety of financial risks. Financial market risk is the possibility that fluctuations in currency exchange rates, interest rates and freight rates in particular sol affect the valae at the Grnup'n assets, liabitities ar future cash Ibm. The Group has formutated a finance slrategy where certain basis targets and polmcies are made far eatue adjusted eqoity (note 3.2), reqoired liqoidity, exchange rates, interest ruten, fonds management etc.

To reduce and manage Ihese tisks, management daily reviums and anseoses its primary financial and market risks. once risks ane identitied, appmpriate action is taken ta mitigate the specitic risk. Financial derivatiees are used for hedging parpnses in orden to mitigate financial riska and enly mcli undemtood conventional denivalives are used. Financial derinatives are entered into wlh eur main banks which are highty rated financial institutions. The Group sne derivatives in orden ta manage risks associated with interest rate and csrrerlcy.

Foreign exchange risk:

The Company's functional corrency is USD. The Group operates internationally and is espused to foreign exchange risks arising fram sarinus cunrency eopasurea primarily with respeet ta Euro (EUR), UK Poands (GEIP), grazilian Reals (SRI.), Singapore dollar (SGD) ned Norwegian kroner (NOK). Foreign exchange nok5 anse from tutune commercial transactiens and recognized assets and liabilit/es. The Group had in 2013 and 2012 mainly USD, EUR, GOP,BRLand NOK renenues and mainly USD, BRL, SGD and NOK eapenses. lmbalances between resenues and costo ane aften managed asing forward curreecy contracts. The table below shows the impact on profil: betore fax an a consequence et an increaseldecrease in the various exchange rates;

Foreign Exehange Risk

Effect USD '000	tncrease	NOK
+1- 1,027	*/-10%	2014
+1-1,421	+1-10%	2013
Effect USD '000	lncrease	GBP
*1-2,555	*/-10%	2014
+1- 1,811	*/-10%	2013
Effect USD '000	lncrease	EUR
*1-06	+1-10%	2014
+1- 229	+1-10%	2013
Effect USD '000	lncrease	BRL
+1-75	+1-10%	2014
+1- 604	+/-10%	2013
Effect USD '000	trrcrease	SGD
+1- 305	+/-10%	2014
+1- 448	./-10%	2013

Crectit risk Concentration risk

The Group trades ooty with recognized, creditwonitry third parties. Far banks and financial institatmons, onty credit worthy mnstitutions are chosen. Receivable balaeces are monitoned on an angniog basis with the result that the Groap's enpnaure to bad debt is not signiticaet. Betxw, we prosent a table show/og the concentration risks for 2014 and 2013

Receivables at 31.12.2014

	USD '000	% of total
i to largest	12071	55,7%
610 10 largest	4418	20,4%
11 ta 15 largest	2683	12,4%
Others	2400	11,5%
Total	21 661	100,0%

Receivables at 31.12.2013

Total	22324	100,0%
0/ham	-	-
lite 15 largest	124	0,6%
6 to 10 largest	2497	11,2%
1105 largest	19702	08,3%
	USD '000	% of total

Cash flow and fair oalue interest rate risk

The Group's eupusure to the risk of market interest ruten are mainly related ta the Gmup's long term debt obligatioes with tloating interest rates. Borrowings issued at variable rates eapose the Group to cash 0cm interest rate risk which is partially offset by cash hold at variable ralen. Borrnwings issued all/ned rates aupose the Group to fair value interest rute risk. Depanding on the development of and on mnternal anulyses of the interest rate manket, the Group enters into vanious interest rate coritracts to aller the ratio xl fraed rate to fixaling rate debt and nice-nersa. An 0131 Dacember 2014 and 2013, after taking into account the effectofthe interest rate swaps, approximately 30% and 00% nespectinely at the interest beaning debt was faed.

Interest rate risk table:

The fotluwing table demonstrates the sensitinity to a reasonably possible change in interest raten, with att athen variablen hold constant, at the Gnaap's prafit betore tax.

Cash 510winterestrate risk	lncreaseldecreasein basis p01015	Effect 00 1055before tas (USD '000)
2014	+/-10	245
2013	*/-10	234

29

Liquidity risk

The Group monitors its risk to a shortage of funds by closely monitoring the projected cash flow from operations, financial expenses, its capital expenditure program related, in particular and to commitments (Note 6) under its newbuilding program. The Group maintains sufficient cash for its daily operations via short term cash deposits at banks.

The table below analyses the Group's non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash flows. The amounts disclosed in the table are the contractual undiscounted cash flows; (all numbers in USD 1,000).

	Less than3 months	3 to 12months	1 to 5years	More than5 years	Total
At 31 December 2014
Interest bearing loans and borrowings	8792	14 608	226 387		249 787
Finance lease liabilities	1063	3 188	27 866	۰.	32 117
Derivative financial instruments	180	540	619		1 3 3 9
Trade and other payables	2921	8763			11 684
	12955	27 098	254 872		294 927
At 31 December 2013
Interest bearing loans and borrowings	3453	10 359	98 921		112 732
Finance lease liabilities	1 2 9 9	3897	16 417	14951	36 564
Derivative financial instruments	36	108	1919		2063
Trade and other payables	750	4804			5554
	5.538	19 167	117 257	14951	156913

3.2 Capital risk management

The Group's objective is to actively pursue an optimal financing of its fleet at any time for the purposes of providing good return to shareholders and benefits for other stakeholders, to aim at low cost of capital and at the same time secure the Group's ability to continue as a going concern.

The Group will actively use the capital markets when doing investments, and does not intend to hold significant liquid reserves for investments. The Group will aim at distributing retained earnings above a satisfactory working capital level as dividend. In the shipping and offshore industry, emphasis in made on Value Adjusted Risk Capital, A certain minimum Value Adjusted Risk Capital is often used as one financial covenant by financial institutions.

The main source of financing of the Group is Senior Bank Loans from international banks which are long term players in the shipping and offshore business segments. The Group believes in building and maintaining long term relationships with these financial institutions and has pursued this strategy since the Group was founded.

Bank loan financing has been combined with a specially structured sale and leaseback transaction for (currently) 1 vessel owned by the Group. The sale and leaseback transaction is designed to withstand possible drops in the market by having fewer and leaner financial covenants compared to the senior bank loan facility.

The Group's Management considers the combination of senior bank loans and sale and the leaseback transaction as an effective and flexible way to finance the Company's fleet at an acceptable cost.

The Value Adjusted Risk Capital, for the Group (including 50% of DESS BTG), by year end 2014 and 2013 is presented in table below

(all numbers are in USD million)

Value Adjusted Risk Capital	435 or 43% of total value adjusted assets	310 or 47% of total value adjusted assets
Total debt (**)		351
Total value adjusted assets (*)	1.012	661
	Year end 2014	Year end 2013

(*) Market values obtained from two independent brokers on a charter-free basis including excess value of newbuilding contract (**) Excluding deferred gain

During the year the Group has complied with all externally imposed capital requirements

3.3 Fair value estimation

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follower

. Quoted prices (unadjusted) in active markets for identical asses or liabilities (Level 1).

• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
• . Input for the asset or liability that are not based on observable market date (that is, unobservable inputs) (Level 3).

The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2014:

Assets	Level 1	Level 2	Level 3	Total
Derivatives		143		143
Total assets		143		143
Liabilities	Level 1	Level 2	Level 3	Total
Derivatives used for hedging		386		386
Total liabilities		386		386

The following table presents the Group's assets and liabilities that are measured at fair value at 31 December 2013:

Liabilities~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~	Level 1	Level 2	evel 3	Total
Derivatives used for hedging		915		915
Derivatives				577
Total liabilities		492		492

The financial derivatives are not traded in an active market and are thus included in level 2. The derivatives are used for economic hedoing purposes. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where is its available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument re observable, the instrument is included in Level 2.

Specific valuation techniques used to value financial instruments include:

• Quoted market prices or dealer quotes for similar instruments.
• Adiusted comparable price-to-book value multiples
• Other techniques, such as discounted cash flow analysis

4. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

4.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Impairment of vessels

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from such estimates.

The Group performs an impairment test when there are indicators for impairment in accordance with the relevant accounting policy. The Group compares the carrying amount of the vessels with the recoverable amount, being the higher of the fair value less costs to sell and the value-in-use calculation. Management estimates the fair value less costs to sell by obtaining third party professional valuations for all vessels from two different valuers and calculating the average.

Year ended 31 December 2014

The carrying value of the Group's vessels and vessels owned 50% through investment in Joint Venture, comprised approximately 79% of the total balance sheet of the Group and the balance sheet of investment in Joint Venture. In the current market for supply vessels the recoverable amount of the Group's vessels at 31 December 2014 was lower than balance sheet value for a number of vessels. An impairment charge of USD 13,903 (Note 6) arose for vessels of the Group and USD 3,647 for the Group's share on the vessels of the Joint Venture during the course of the year 2014 resulting in the carrying amount of the vessels being written down to its recoverable amounts and share of profit from Joint venture and investment in Joint Venture being reduced.

A 10% change in the, main assumptions used in the impairment testing vessels whose recoverable amount was based on their value in use would have the following additional effect on carrying amounts of vessels, investment in Joint Venture and profit for the year:

	Decrease onCarrving amountof Vessels	Decrease in Shareof profit from Jointventure/Investment inJoint venture	Decrease of profitfor the year
10% decrease in utilization (or daily income)	(5132)	(3622)	(8724)
10% increase in daily operating expenses	(3003)	(575)	(3.548)
10% increase in discount factor	(2107)	(425)	(2502)
10% decrease in revenue growth	(1246)	(407)	(1624)

For the vessels for which the recoverable amount was based on fair value less costs to sell, a 10% decrease in the valuation of the brokers and assuming that the value in use of the vessels was not above fair value less costs to sell, would have the following effect:

	Decrease onCarrying amountof Vessels	Decrease in Shareof profit from Jointventure/investment inJoint venture	Decrease of profitfor the year
10% decrease in brokers valuation	(14485)	(743)	(15228)

Year ended 31 December 2013

The balance carrying value of the Group's vessels and vessels owned 50% through investment in Joint Venture, new build contracts excluded, comprised approximately 69% of the total balance sheet of Group and the balance sheet of investment in Joint Venture. In the current market for supply vessels, the recoverable amount of the Group's vessels at 31 December 2013 was higher than the balance sheet value for all vessels of the group.

The recoverable amount for all vessels was based on their fair value less costs to sell except for two vessels owned by the Group and two vessels owned 50% through the investment in Joint Venture, for which the recoverable amount was based on value-in-use calculations. None of the vessels of the group was identified to be impaired.

A 10% change in the main assumptions used in the impairment test for the four vessels, whose recoverable amount was based on their value in use, would have no effect on the carrying amount of the vessels, profit for the year or deferred gain balance. For the vessels for which the recoverable amount was based on fair value less costs to sell, a 15% decrease in the valuation of the brokers and assuming that the value-in-use of the vessels was not above fair value less costs to sell, would have decreased the carrying amount of the vessels by USD 4,910, deferred gain balance by USD 7,429, profit for the year by USD 13,740 and investment in Joint Venture by USD 16,259.

(b) Tax legislation

Tax legislation is subject to varying interpretations. Refer to Note 29.

(c) Insurance claim receivables

At balance sheet date, the Group has booked USD 1.370 (2013; USD 2,506) as amounts recoverable from insurance companies. Such claims are filed following insurance policies and fall in two categories: Loss of hire and Hull & Machinery. Loss of hire pertains to claims made when a technical issue prevents the vessels' ability to be on hire.

Hull & Machinery pertains to reimbursement of actual expenses incurred to repair the problem.

There is an element of judgment when deciding which expenses can be claimed and whether it is virtually certain that the amounts will be recovered, but the Group follows the policies and the advice of external consultants before submitting any claim.

(d) Residual values and Useful economic life

The Group follows the quidance of IAS 16 on determining the useful economic life of its vessel. In making this judgment, the Group evaluates, among other factors, the period over which an asset is expected to be available for use by an entity, which is based on management's intentions and past experience with similar assets.

Furthermore management estimates the residual value of the vessels to be Nil as the selling price is estimated to equal the selling/dismantling costs of the vessel at the end of its useful economic life.

4.2 Critical judgments in applying the group's accounting policies

(a) Classification of sale and leaseback transaction

The Group's management has recognized the sale and leaseback transaction for six of its vessels in 2007/2008 in accordance with IAS 17 "Leases" and SIC Interpretation 27 "Evaluating the Substance of Transactions Involving the Legal Form of a Lease". Management has considered that the provisions of SIC 27 are not applicable however the Group has substantial risks and rewards incidental to ownership and the exercise of the option to purchase the vessels is considered to be almost certain. Following this analysis the Group's management has concluded that the leaseback is a finance lease since it considers that the Group retains substantially all the risks and rewards incidental to ownership since it is reasonably certain that the Group will exercise the option to purchase the vessels. As a result of the above the Group has derecognized the vessels and has recognized them back at their fair value which was higher than the carrying amount. The gain has been deferred and is being amortised to the profit or loss over the lease term which is considered to be 12 years (refer to the accounting policy on Lease agreements).

5. Segment reporting

5.1 Income statement / balance sheet and cash flow

DEEP SEA SUPPLY PIc is a ship owner and operator of Anchor Handling Tug Supply vessels (AHTS) and Platform Supply Vessels (PSV). The Company has a worldwide operation, with particular focus on Brazil, North Sea, South East Asia and Africa. Since its foundation in 2004. Deep Sea has built a supply ship fleet with AHTSs and PSVs operating worldwide, with the aim of becoming one of the leading owners and operators of supply vessels on a global basis. As part of this strategy, the Company has sought to collaborations with foreign partners, which has resulted in an exclusive partnership agreement with two Malaysian partners in 2010 (associated entities); and the partnership with BTG Brasil (joint venture). The DESS - BTG joint venture was established with the primary purpose of owning and operating AHTSs and PSVs in the Brazilian territory and creating a solid position in the Brazilian offshore supply market. DESS has experience with AHTSs and PSVs worldwide and in Brazil. DESS's operations have traditionally been managed by the Board of Directors by reviewing information by area of operation; and by type of vessel (AHTS, PSV).

On 31 May 2013 DESS disposed 50% of its Brazilian operation (see note 30). A gain of US$82.356 was recognized on the sale. In the income statement the gain has been presented as discontinued operation; while for segment reporting the gain has been presented in gain on sale

Management continues to review detailed information about its operations in Brazil as for all other Group operations and as such segment reporting is presented as follows:

• Without taking into consideration the impact of presentation for discontinued operations and therefore adding discontinued operations line by line, facilitating comparison with previous periods; however by taking into consideration the non depreciation of vessels since classified as held for sale for consistency to presentation in the primary statements.

• By removing the impact of equity accounting for the joint venture and by adding line by line the proportion of Deep Sea Supply participation (alike proportionate consolidation) in the Joint Venture in the income statement; balance sheet; and cash flows.

The chief decision maker of the Group is the board of directors

Consolidated income statement Consolidated balance sheet

(All an,oa,,ts ene in USD000) (All an,000ta ene in USD000)

	YTD 2014	YTD 2013
Operating revenue	163 167	138 866
Vesset operating expenses	(70 424)	(65 603)
Other operating expenses	(13 085)	(12 509)
Other gains/(losses)	1 307	572
Gain on sale	2 670	05 825
EBITDA	83715	147 070
Depreciation and impairment	(45 500)	(21 719)
EBIT	34135	125351
Financial income	662	527
Financial expenses	(25 744)	(23 647)
Net currency ilerns	(3 400)	(1 749)
Change in value of 6nancia1 derivatives	-	225
Net financial items	(28 482)	(24 844)
016cr Wnte affs	(4 830)	-
Pre.tax result	814	100 507
Taxes	(1 710)	(328)
Protit for the period!year	(896)	100 179

Consolidated statement of comprehensive income

(All ar0005ts enn in USD000)

	YTD 2014	YTD 2013
Profit for the periodlyear	(896)	100 179
Pensjon plan	(413)	217
Cash 8mw hedges	1 240	(56)
Total comprehensive income for the period/year	(60)	100 340

	31.12.2014	31.12.2013
Non-current assets
Vessels cost	880 270	485 874
Construction cOfltraCt	-	28 395
Equipment	1 032	734
Total property, plant and equipment	801 302	515 004
Deferred income tall	-	840
016cr lang term receinables	019	819
Investment in associates	-	1 245
CIRR deposit	15407	27070
Total non-current assets	901 600	544 976
Current assets
Inventories	3 173	2365
Loans to related parties	35384	15000
Other short term receivables	11 087	20364
CIRR deposit	3176	5215
Freight income not received	35 466	26 542
Cash and cash equivalenls	61 839	42976
Financial derinativeo	143	-
Total currerrt assets	150268	112462
Total assets	1 051 876	657 439
Liabitities
00nowings	495 977	299 162
Loans from related parties	-	7 500
CIRR loan	19407	27070
Deferred gain	7645	14 114
Other lang term payables	267	20
Financial derinatises	386	I 492
Total long term liabilities	523 762	349 377
8orrowings	43 367	29 803
Loans 1,0w related parties	17692	-
CIRR laan	3 176	5215
Trade and ather payables	19240	12914
Deferred gain	1 491	2908
Tax payable	-	(0)
Total short term liabilities	84966	50 841
Total liabilities	608 728	400 218
Net assets	443148	257220
Shareholders equity
Share napital, share prensiumn and treasury shares	207 673	11 228
Retained eamnings and other resemves	235 475	245 991
Total shareholders equity	443 148	257 220

Consolidated statement of cash flows

(All amounts are in USD'000)

	Year endedDec 14	Year endedDec 13
Cash flows from operating activities
Cash generated from operations	78 268	39 874
Net cash generated from operations	78 268	39 874
Cash flows from investing activities
Acquisitions and upgrades of property, plant and equipment	(8639)	(69 550)
Disposals of property, plant and equipment		132 601
Acquisitions of construction constracts (equity contribution to DESS BTG)		(50 100)
Acquisition of new vessels	(412150)
Net cash (used in)/generated from investing activities	(420 789)	12951
Cash flows from financing activities
Interest paid	(22106)	(24314)
Payment of dividents to shareholders	(10.457)
Proceeds from borrowings	241745	51700
Loans to related parties	(10000)	(7500)
Increase in share capital	196 599
Repayments of borrowings	(34397)	(70157)
Net cash generated from/(used in) used in financing activities	361 384	(50271)
Total changes in liquidity in the period	18863	2554
Cash and cash equivalents at beginning of period	42 977	40 423
Cash and cash equivalents at end of period/year	61840	42977

5.2 Result per geographical area

Primary Segment - Area of Operations

The segment results for the year ended 31 December 2014 is as follows:

	North sea	Africa	Asia	Australia	SouthAmerica	Mediter-ranean andBlack Sea	Un-allocated	Total
Segment revenues	40744	29 29 4	14 209	7830	61 665	9425	$\blacksquare$	163 167
Vessel operating expenses	(18 220)	(10 195)	(7528)	(691)	(30720)	(3070)		(70, 424)
Other gains							1 3 8 7	1 3 8 7
Gain on sale							2670	2670
Other operating expenses							(13, 498)	(13, 498)
EBITDA per segment	22 5 24	19 099	6 6 8 1	7 139	30945	6355	(9,441)	83 302
EBITDA margin per segment	55%	65%	47%	91%	50%	67%		51%

The corresponding segment results for the year ended 31 December 2013 is as follows:

	North sea	Africa	Asia	Australia	SouthAmerica	Mediter-ranean andBlack Sea	Un-allocated	Totai
Seament revenues	19 266	16087	19809	$\cdot$	82974	730	$\blacksquare$	138 866
Vessel operating expenses	(11416)	(3969)	(6222)		(43762)	(234)	۰	(65603)
Other gains			٠		-	۰	572	572
Gain on sale	۰			۰	٠		85825	85 825
Other operating expenses	۰	$\overline{\phantom{a}}$	-		۰		(12372)	(12372)
EBITDA per segment	7850	12 117	13587	۰	39 21 2	496	74 025	147 288
EBITDA margin per segment	41%	75%	69%	N/A	47%	68%		106%

Secondary Segment - Type of Vessel

The segment results for the year ended 31 December 2014 is as follows:

		Un-allocated
AHTS	PSV	items	Total
63 498	99 669	$\overline{\phantom{a}}$	163 167
(29.967)	(40457)	۰.	(70.424)
	-	1 3 8 7	1 3 8 7
$\overline{\phantom{a}}$		2670	2670
$\blacksquare$		(13, 498)	(13, 498)
33531	59 212	(9,441)	83 30 2
53%	59%	N/A	51%

The corresponding segment results for the year ended 31 December 2013 is as follows:

AHTS	PSV	items	Total
75 555	63311	$\blacksquare$	138 866
(35960)	(29644)	$\blacksquare$	(65604)
۰	-	572	572
۰		85825	85825
۰	۰	(12 372)	(12372)
39 595	33 668	74 025	147 287
52%	53%	N/A	106%
			Un-allocated

Segment revenue includes an amount of USD 21,164 which derived from a single external customer of the Group (USD 17,199) and the Joint Venture (USD3.966). Segment revenue also includes an amount of USD 46,152 which derived from a single external customer of the Joint Venture (reflected on a proportionate consolidation basis in the segment analysis). The amount of USD 21,164 is attributable per type of vessel to PSVs and per Geographical area to North Sea. The amount of USD 46,152 is attributable per type of vessel to AHTS (USD 27,776) and PSVs (USD 18,376) and per Geographical area to South America.

6. Property, Plant and Equipment

	Vessels*	Financeleasevessels*	Vessels inprogress	Vehicles &equipment	Total
Opening net book value as at 1 January 2013	426 750	212 224		823	639797
Additions	5598	3 3 0 3		290	9 1 9 1
Vessels relocation cost capitalized	144		$\bullet$	$\overline{\phantom{a}}$	144
Disposals	(259935)	(176 836)		(713)	(437, 484)
Depreciation and amortisation	(9 737)	(3043)		(143)	(12923)
Closing net book value as at 31 December 2013	162820	35 648		257	198 725
At 31 December 2013
Cost or valuation	185 931	47 149		814	233 894
Accumulated depreciation	(23 111)	(11.501)		(557)	(35 169)
Closing net book amount	162 820	35 648		257	198725
Opening net book value as at 1 January 2014	162820	35 648		257	198725
Acquisitions of vessels (Note 24)	214 622		44 131		258 753
Delivered new vessels	156 004		(44131)		111 873
Additions	3794	140		406	4 3 4 0
Vessels relocation cost capitalized	1 177	٠			1177
Vessel impairment (Note 4.1 (a))	(3 276)	(10627)			(13903)
Depreciation and amortisation	(16067)	(2741)		(144)	(18952)
Closing net book value as at 31 December 2014	519 073	22 420		519	542 013
At 31 December 2014
Cost or valuation	561 528	47 289		1 2 2 0	610 037
Accumulated depreciation	(39 178)	(14242)		(701)	(54121)
Accumulated impairment	(3 276)	(10627)			(13903)
Closing net book amount	519 074	22 4 20		519	542 013

*Vessels and finance lease vessels include drydock costs with a carrying value of USD 16,018 (2013: USD 7,303) as at 31 December 2014.

Construction contracts (newbuildings) for investments in AHTS vessels and PSV's are entered in the balance sheet as work in progress, as the installments are payable to the shipyards. Directly attributable costs, such as on-site supervision and other pre-delivery construction costs are also entered in the balance sheet as part of the purchase costs.

Vessel depreciation as per PPE note and as per income statement

Vessel depreciation as per PPE note	(18, 808)
Vesel impairment as per PPE note	(13903)
a shi ne ya katika MkoaTotal	(32711)
Vessel depreciation as per income statement	(18.808)
Vessel impairment as per income statement	(8993)
Vessel depreciation and impairment as per income statement	(27801)
Vessel impairment recognised against deferred gain balance (Note 29)	(4910)
Total	(32711)

All vessels under category "Vessels" above are secured with a first priority mortgage. (Note 14).

Impairment of vessels

The Group performs an impairment test when there are indicators for impairment in accordance with the relevant accounting policy. The Group compares the carrying amount of the vessels with the recoverable amount, being the higher of the fair value less costs to sell and the value-in-use calculation. Management estimates the fair value less costs to sell by obtaining third party professional valuations for all vessels from two different valuers and calculating the average.

The market values of the vessels were lower than value-in-use calculations due to the fact that the market values are affected by the current market conditions which are characterized by a low number of transactinos and distressed sales.

The recoverable amounts of the vessels has been determined based in value in use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management and past performance.

An impairment charge of USD 13,903 arose for vessels of the Group resulting in the carrying amount of the vessels being written down to their recoverable amounts.

The recoverable amounts of the impaired vessels are as follows:

Vessel Name	Recoverable amount
______________________________________Sea Bear	20 182
Sea Eagle	32 486
Sea Trout	21907

For each of the vessels with fair value less costs to sell lower than the book value, value in use calculations were performed. The key assumptions used in the value in use calculations are, utilization, daily income, daily operating expenses, growth/inflation rate and discount rate.

The assumptions for year end 31 December 2014 are as follows:

Utilization

For vessels on spot market, a utilization of 50% to 66% was used for the whole useful life of the vessel based on its past performance.

For vessels currently on contracts 97% utilization was used for the remaining period of the contract. From completion of the contract up to 2018 a utilization of 65% was assumed considering this period as gradual market recovery period, increasing to 75% for the remaining useful life reflecting the intention of management to keep the vessels on long term contracts.

Daily Income

The daily income of the vessels was based on past performance and financial budgets approved by management. It ranges from 19k USD for small AHTS (Anchor Handling Tug Supply vessels), 18k USD for PSVs (Platform Supply Vessels), 21k for large AHTS (Anchor Handling Tug Supply vessels)

The daily income is assumed to increase 2% annually based on current contracts terms, predictions for inflation and growth expectations.

Daily operating expenses

The daily expenses of the vessels were based on past performance and financial budgets approved by management. It is assumed nil for vessels on bareboat contracts (only for the duration of the contract). For the rest of the vessels it ranges from 6 USD to 9 USD. The daily operating expenses are assumed to increase 2% annually based on predictions for inflation.

Discount Rate

The discount rate used was 6.78% based on Weighted Average Cost of Capital (WACC) calculations

	2014	2013	Non-current portion
	1 456	1128	Current portion
Fair value at plan asnets

	Present value of obligation	Fair Value of plan assets	Total	asset or liability il the remaining maturity ut the hedged jernis more than 12 monthn and, as Current asset or liability, il the maturity
At .J;yv3	980	176
Current service costs	234	-	234	of the hedged item is less than 12 morrths.
Interest expenses/(Income)	37271	(34)(34)	3237	(a) Forward foreign exchange contra cIOThe national principat amountn st the nutstanding forward foreign exchange contracfn at 31 December 2014 were USD 6,525
Employer contribution	-	(380)	(300)	(2013:USD 20,131)
Employer benefits paid	-	-	-	iThe hedged highty probable forecast trannactlann denominated n foreign currency are expecled Is occur at varisun dalen during the sext 9
Remeasurements tonn (Gaun)	(5)	215	210	msnths. Gains and losses recognized i n the hedging reserve in equily on forward foreign exchange contractn an at 31 December 2014 are
Eachangedifference	(137)	246	109	resognized n the incame statement in the perind nr periodn during which the hedged forecast transaction affects the iscsrne staternent.i
At 31 December 2013	11 109	(1 129)	(20)	Thin is generally within 9 msnths at the end st the reporting perisd.
At I January 2014	1109	(1129)	(20)	(li) Interest rate swaps
Current service costs	264	-	264	The nominal pnncipat amauntn of the autnlanding interest rate swapn at 31 Desember 2014 were USD100.000 (2013: USD100.000).
Interest expevsesl)tncome)	47	(40)	6	At 31 December 2014, the fixed interest rate at interest rate nwap used is 0,955% and the ttoating rate in 3-manth LlBOR. Gains and
	311	(40)	270	anses are recagnized in the hedging reserve in equitnj on interest rate swap csntract as of 31 December 2014 witl be subnequenttyreteaned ta pratif ar tonn within 'tinance sant' untit the repaymest of the bank bsrrawingn (Note 14).
Employer contnibution	-	-	-
Emplayer benefits paid	-	(433)	(433)
Remeasurements tonn (Gain)	279	134	413
Exchangedifference	(24)	12	(36)
At 31 December 2014	1723	(1 456)	267

The plan is rejated ta emptayees in Norway, and there are anly active emptayeen in the plan.

The signi0cant actuarial assumptisnn mere an fettsws:

	2014	2013
Dincount rate	2,3%	4,0%
Eapected return an plan ansets	2,3%	4,0%
Future nalary increase	2,0%	3,8%
Future pension increanes	0,0%	0,6%
Mortality table	K2013BE	K201380

Ansompti005 regarding future mortatity are not based on actuarial advice in accordance with pubtinhed ntatintics and experience

7. Pensions 8. Derivative financial instruments -

					2014		2013
The amsuets recognined in the balance nheet are determined an foltows:				Annet	Liabitity	Annet	Liability
	2014	2013	Non-current portion
			Interest rate nwaps - cash tlow hedge		386		577
	1 723	iioa	Forward Fsreign exchange contracts-cash 90w hedgen				209
Present value of funded obligation	1 456	1128	Current portion
Fair value at plan asnetsAnnet t(Liability) in Sne balance sheet	(267)	20	Forward Foreign exchange contracts-cash tlow hedges	143			706
The movement in the defined benefit obligation over the year is as toltows:			Total	143	386	-	1492

Trading derivatives are ciassified as a current annet nr liability. The full fair value et a hedgisg derivative is ciassified an a non-current asset or liability il the remaining maturity ut the hedged jernis more than 12 monthn and, as Current asset or liability, il the maturity of the hedged item is less than 12 morrths.

(a) Forward foreign exchange contra cIO

(li) Interest rate swaps

9. Trade and other receivables 10. Inventories

	As at 31 December 2014	As at 31 December 2013
Trade receivables	22 120	22 3 23
Less:Provision for impairment of receivables	(459)	-
Trade receivables -Net	21 661	22 3 23

Trade receivables thut are less than four months due are not considered impaired. As of 31 December 2014 trude receivables of USD 4,8 million (2013:USD 4,7 million) were post due bul not impaired. These reiste ta a number of independent customers far which there hus been no case sI default in 2014 or 2013. None of the receivables due for more than four months are considered impaired with the eoception of disputed amounts and amounts specifically provided for (sne further below).

The aging analysis of trade receivables is as foliows:

Agirre	As at 31 December 2014	As at 31 December 2013
Uptoenemonih	16836	17581
One to four months	3 740	3208
More than four months	1 085	1 534
Total	21 661	22 323

The carrying ameunt et the Greup's trade receivables are denominaled in the foltowing currencies:

As at 31 December 2014	As at 31 December 2013
16350	15901
282	2 402
2231	3987
2 593	-
205	52
-
21 661	22 323

Moeements en the Group provision ler impairment et trade receivables are as foltows:

	2014	2013
At i January	-	-
Altowance for impairment et trade receivables	459	-
Total	459	-

During the year, the Group has written down an amount of USD2553 frem trade receivables and other shorl term receivables don to disputed amounts in additiens to the allewaoce et impairment et trade receivables, resulting to a total loss et receivables et USD3012 (Note 32).

The muoimom eoposure to credit nok at the bulunce sheet date is the carrying votue 01 euch ciuss ot receivubte mentioned above. The Company does not hold any collaterul as security.

	As at 31 December 2014	An at 31 December 2013		2014	2013
Trude receivables	22 120	22323	Bunkers	1 564	i 023
Less:Provision for impairment et receivables	(459)	-	Lub oil	710	349
Trade receivables -hint	21 661	22 323	Spare paris and consumables	48	-
			Total	2 322	I 372

The nest et bunkers rncognized as a reduction et veooeto operating revenues, ameunled to USD 3,362 (2013: USD 1,114). The nest et Luboil recognized as eopeooes and included in vessets' eperatieg expenses amounted to USD 554 (2013: 310).

11.Cash and cash equivalents-.
	2014	2013
Cash at bank and in Sand	47 289	31 693
Total	47289	31 693
Speci8cation 01 restrieted deposits
Bank deposits	708	135

The carrying amounts et cash appreximate fair eatue. Currently, there is en undra~ credil facility ter the Group. Reslncted bank deposits are for empleyee tas withholdings (USD 126) and pertormaece guarantens for chartered vessels that expire in 2015 (USD 582 (2013: USD 135)).

Cash and cash eqeivalents are deneminaled in the foltewing currnncies:

Currency	As at 31 tlonnmber 2814	As at 31 Desember 2013
United State Dollars (USD)	41141	27847
Great British Pounde (GBP)	2875	2 123
Norwegian Kroner (NOK)	2442	1 2113
Singsperean dollars (SGD)	369	-
Euro (EUR)	367	482
Malaysian Ringgit (MYR)	96	37
	47289	31 693

According to the loan agreement and corresponding covenunts regolotions, the Group hus to maintain, at oil times, a minimum cash ameunt which equale le the highest et: 5% et the total debl and USD 20 million.

12. Share capital

	Numberof Shares(thousands)	ShareCapital	Sharepremium	Otherpaid-in -equity	Total
Opening balance as at 1 January 2013	127 197	2544	6878	1934	11 356
Valuation of share option scheme				(127)	(127)
At 31 December 2013	127 197	2544	6878	1807	11 2 2 9
Opening balance as at 1 January 2014	127 197	2544	6878	1807	11 229
Increase of share capital	134 000	2680	193918		196 598
Valuation of share option scheme				(153)	(153)
At 31 December 2014	261 197	5 2 2 4	200 796	1654	207 674

The total authorised number of ordinary shares as per 31 December 2014 is 375,000,000 (2013: 250,000,000) shares with a par value of USD 0.02 per share. The Company does not own any share of its own. All issued shares are fully paid.

On 19 June 2014, the Group issued 134,000,000 ordinary shares of USD 0,02 at a price of USD1,47 each. The share premium arising from this issue was USD 196,980.

The transaction costs relating to the issue of shares amounted to USD 3,061 and were deducted from share premium account as permitted by the Cyprus Companies Law, Cap.113.

On 5 August 2014 the Board of Directors approved the distribution of dividends of USD 0.02 per share relating to Q2 results and on 11 November 2014 approved the distribution of a dividend of USD 0.02 relating to Q3 results. The total dividends paid to shareholders amounted to USD 10,457.

The Board of Directors of the Company has approved a share option scheme for directors and certain employees. The exercise orice of the granted options is equal to the market price of the shares at date granted plus 10%.

These share options may be exercised with one third after one, two and three years, respectively and all share options must be exercised within 5 years. The strike price shall be reduced, on a USD for USD basis, by the amount of all dividends declared by the Company in the period from the date of grant until the date the subsisting share options are exercised. Subsequent share options have been granted to new employees based on the same principle.

Movements in the number of shares options and their related weighted average exercise prices are as follows:

	2014		2013---------------------------------------
	Average exerciseprice Nok per share	Options	Average exerciseprice Nok per share	Options
At 1 January	9.52	866 667	8.83	1058333
Granted
Forfeited	11.21	(323 333)	12.27	(59334)
Exercised	÷		6,99	(13233)
Expired	6.99	(266666)
At 31 December	10.60	276 668	9.52	866 667

The share options exercised and forfeited pertained to employees that left the Company during the year.

Deep Sea Supply Plc Annual report 2014

Share options outstanding at the end of the year have the following expiry date and exercise prices:

Expiry date (as per year ended 31 December 2014)

	Exercise price in NOK	Shares
	______________________________________
2015	11.76	178 335
2016	8.49	98 333
At 31 December		276 668

Expiry date (as per year ended 31 December 2013)

	Exercise price in NOK.	Shares.
2014	6.99	266 666
2015	11.41	501 668
2016	9.72	98 333
At 31 December		866 667

The value of the option is estimated by Hull & White's implementation (2002) for employee stock options of the binomial tree model for the pricing of early exercise equity options.

Change of control

The share options for the board and the share options and certain other benefits for the employees will come into effect in the event of change of control of the Company.

13. Trade and other payables

	2014	2013,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
--------------------------------------Trade payables	6 3 0 3	914
Social Security and other taxes	214	126
Accrued expenses	5 1 6 7	4514
Total	11 684	5554

Fair value of trade and other payables equal their carrying amounts. Trade and other payables are denominated in the following currencies:

Currency	2014	2013
United State Dollars (USD)	8848	3838
Great British Pounds (GBP)	1 1 1 7	86
Singapore dollar (SGD)	586	234
Euro (EUR)	938	1325
Malaysian Ringgit (MYR)	91	71
Norwegian Kroner (NOK)	104

11 684

5 5 5 4

14. Borrowings

Group	2014	2013
Non-current
Bank berrowings	274 803	90790
Finance lease liabilities	23 974	20423
ClRRtoan	19487	27069
	318264	143282
Current
Bankborrowings	18027	10804
Finance lease liabilities	3 832	6 114
CIRR loan	3 176	5 215
	25035	22133
Total Borrowings	343 299	165 415

The carrying amnunts et the groups berrewings are denominated in the teliowing currencies:

	2014	2013
US Dollars	320636	133162
Norwegian Kroner	22 663	32 253
	343299	165415

The fair value at both current and non-current borrewings are not materially different frem their carrying ameunt Currently, Ihere is en undrawn credit tacilily for the Group.

(a) Bank borrowings

Bank borrewings comprise et teans secured with the folteasng:

1. First priority rnertgage in the 6nanced vessets

• 1. First priority assignment et insurances agreernents
• 1. First priority receivabte floating charges
• 1. First priority hedging assignment agreement 5. First priority share ptedge et share in Group companies

Bank berrowings rnature in 2016 and 2019, bear interest LtBOR-r2.25%, LIBORi2.5% and LtBOR*2.75%, and are repaid quarterty and semi-annuelly.

The weighted average etteetive interest rate et the Greup's bank borrewings is 2.66%

Lang term bank borrowings have the foliowing expiratian dates

Falling due between	2814	2013
1-2Years	89326	10805
2-5 Years	185 477	79905
,5Years	-	-
Total	274 803	90 790

(b) Finance lease liabilities

The 9nance lease liabilities were entered info at end et 2007 and beginning 002008. Tha maturity is 12 years with several purchase optiens.

Finance lease labilities - minimum lease payments:

	2014	2013
Not later than 1 year	4251	5196
Later than 1 year and not later than 5 years	27865	16417
Later than 5 years	-	14951
	32 116	36 564
Future finance charges et tinanne leases	(4311)	(5028)
Present value otfinaece lease liabilities	27005	31 536

The prosent value of linance lease liabilities is as foltows:

	2014	2013
Ne later thatl year	2916	3730
Later than 1 year and no later than 5 years	24 890	13 059
Later than 5 years	-	14747
	27 806	31 535

e) CIRR Deposit/Loan

During the year ended 31 December 2008 the Group hos applied for two Commerciat Interest Reference Rate (CIRR) toan from the Norwegian Export CredilAgency. The amount et the toaes man NOK 132 mitt (USD19 mill) and NOK 216 mill (USD31 mill). The daratien et the leans is 12 years and the cash preceeds frem the bane have byen deposited in a tixed deposit acceunl with a Norwegian bank al a higher interest rate than the ene et the bane. The agreed period of the deposits is identical with the ene et the leans. The leans and the interest Ihereef mill be repaid frem that acceunt and the ditterence hos been recognised as deferred gain and mill be arnortised over the period of the tife of the asset.

The loan is denominated in NOK and nubject to curreecy fluctualions against the USD.

15. Income tax expense

	2014	2013
Current tas	(161)	(379)

16. Provisions for other liabilities and charges

Bonus agreement

All emplovees of Deep Sea Supply Management AS and Deep Sea Supply Management (Cyprus) Ltd. have performance bonus agreements with the Group based on comparison with peer group companies.

The weighted average fair value of the bonus payment granted during the period determined using the multi-dimensional Geometrical Brownian Motion Monte Carlo valuation model was USD 162 INOK 1.2031 equivalent to 31% bonus payment. The significant inputs into the model were average volatility of the peer group of 33.5%, no dividend yield and an expected correlation matrix for the peer group between 0.88 and 1.00. The volatility of the peer group is measured at the standard deviation of continuously compounded share returns based on statistical analyses of daily share prices over the last two years.

	Bonus provision
At 1 January 2014,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	121
Charged/(Credited) to the income statement	(121)
Paid during the year
Provision made during the year	162
At 31 December 2014	162
At 1 January 2013	157
Charged/(Credited) to the income statement
Paid during the year	(157)
Provision made during the year	121
At 31 December 2013	121

The whole amount is considered current.

17. Other (losses)/gains - net

	2014	2013
Deferred gain amortized in the period	982	982
Other gains	607	70
Impairment of investment in associate (Note 31a)	(1264)
Total	325	1052

18. Employee benefit expenses

	2014	2013
Wages and salaries	6765	5 205
Social security costs	783	835
Pension costs -- defined benefit plans (Note 7)	270	237
Other benefits	258	149
Total	8076	6 4 2 0
Number of employees as per year-end	48	4.

The above excludes crew short employee benefit expenses which are included in operating expenses vessels (Note 20). Share options exercised and forfeited by directors and employees resulted in a reversal of expenses by USD 153 (2013: USD 128).

19. Expenses by nature

	2014	2013
Depreciation, amortisation and impairment charges (Note 6)	27945	12923
	34 935	23 255
Operating expenses vessels (Note 20)
Payroll expenses administrative employees (Note 18)	8 0 7 6	6426
Other administration costs	2960	1.092
Total	73916	43 696

20. Operating expenses vessels

	2014	2013
Crew expenses	23 267	16 218
Insurance	2832	1576
Repairs and maintenance	3065	1927
Administration expenses	407	251
Provisions, stores, lubrication oil, administration of operations and miscellaneous	5 3 6 4	3 2 8 3
Total	34 935	23 255

21. Earnings per share

Basic

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. Total number of outstanding shares as per year-end 2014 was 261,197,194 (2012:127,197,200).

	2014	2013--------------------------------------
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,Profit attributable to equity holders of the company	(896)	100 179
Weighted average number of ordinary shares (thousands)	198786	127 197
Basic earnings per share (USD per share)	(0.005)	0.788

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company's only category of dilutive potential to ordinary shares is the share options. Share options have been granted to Board of Directors and management, and per year-end 2014 there were totally 543,335 (2013: 866,667) share options outstanding. The share options are included in the diluted number of shares depending on whether or not they were in the money per year-end 2014.

	2014	2013
Profit attributable to equity holders of the company	(896)	100 179
Weighted average number of ordinary shares diluted
(thousands)	198 786	127 905
Diluted earnings per share (USD per share)	(0.005)	0.783

As at 31 December 2014, there was no dilutive effect of the share options as they were out of money

22. Cash generated from operations

	2014	2013
Profit before tax	(735)	100 558
Adjustments for:
-Depreciation (note 6)	27945	12923
-Share of profit from associates / JVs	(3149)	(724)
-Impairment of investment in associate	1 2 6 4
-Amortization of deferred gain (note 17)	(982)	(2 005)
-Finance costs - net	8525	16856
-Gain on disposal (note 30)		(82356)
-Exchange (gains)/losses	566	(1809)
-Remeasurement loss - Pension	(413)
Changes in working capital
(excluding the effects of acquisition and exchange
differences on consolidation)
-Inventories	(950)	2589
-Trade and other receivables	9686	(8, 470)
-Trade and other payables	6 1 3 0	(5790)
-Restricted Cash	(708)	$-135$
Cash generated from operations	47 179	31 637

23. Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.

Trade Receivables

Out of the USD 21,661, USD 17,872 is with existing customers for more than 6 months with no defaults in the past and USD 4,576 is with new customers.

Cash and cash equivalent

The ratings for the banks where the Group holds it cash at bank and short-term bank deposits are as follows:

As at 31 December 2014

Credit rating
A 1	31.29'
A2	3 4 3 0
Aa3	12.45'
Caa3	$2^{\circ}$
Unrated	96
10.00	47.289

As at 31 December 2013***************************************	______________________________________
Credit rating	Amount
A 1	22 531
A2	4 1 2 1
Aa1	41
Aa3	4872
Caa1	128
	31 693

Ratings shown above were issued by the credit agency of Moody's as at 31/12/2014 and 31/12/2013, respectively.

24. Related party transactions

Key management compensation

Key management for 2014 and 2013 includes the Chief Executive Officer (CEO), the Chief Financial officer (CFO), the Chartering and Marketing Director, the Technical director and the Accounting director of the Group and the board of directors.

The total compensation to the key management of the Group amounted to USD 2,028 as of 31 December 2014. The corresponding amount as of 31 December 2013 was USD 1.922. The key management has no other form of compensation, except salary, share options scheme mentioned in note 12 and the bonus agreement mentioned in note 16. There are no loans to the employees of the Group as per 31 December 2013 and per 31 December 2012.

Remuneration to the board

Remuneration to the Board in 2014 is USD 127 (NOK 0.95) million), whereof USD 47 (NOK 0.35 million) is suggested to the chairman. In 2013 payment to the board was USD 180 (NOK 1.1 million), whereof USD 57 (NOK 0.35 million) was payment to the Chairman.

Other transactions with related parties

The Group rents offices from a company controlled by a party exercising significant influence over the Group. The amount charged in 2014 was USD 40 (2013: USD 35). The Group received consultancy services from a company controlled by a party exercising significant influence over the Group in 2014 that amounted to USD 50 (2013: USD 50). The Group leased vessels on a bareboat basis from a company controlled by a party exercising significant influence over the Group for a fee of USD 5.576 (2013: USD 4,475)

In 2014, the Group paid USD 84 on behalf of a company controlled by a party exercising significant influence over the group with regards to yard expenses.

In 2013, the Group paid USD 3,000 on behalf of a company controlled by a party exercising significant influence over the Group with regards to commission for the sale of vessels that were owned by this company as part of the JV transaction (Note 30). No such amounts have been paid in 2014. The Group had a receivable from a company controlled by a major shareholder by the end of 2014 that amounted to USD 84 (2013: USD329).

Transactions with DESS BTG Companies

The Group has performed the following transactions during 2014 and 2013 with companies that belong to the DESS BTG Group (Note 32):

Vessels management

The Group has entered into agreement with the DESS BTG Group where by it provides management services for the vessels of the joint venture. The total amount for 2014 was USD 1,145 (2013: USD 589) (Note 32).

Administrative income

The Group has entered into an agreement with DESS BTG Group for the provision of various services such as: · Financial and accounting services / Vessels technical related services / Business development / Handling of insurance related matters / Administrative services The fee for the services for 2014 was USD 2.504 (2013: USD 1,467) and is included in other income (Note 32) in the income statement .The amount was calculated by adding a markup element of 5.25% to the expected costs of the Group for providing those services

Chartering out vessel

During year 2013 the Group has leased a vessel to the DESS BTG Group for a fee of USD 2.645. No such transaction has taken place in 2014.

Balances with JV Group

The total year end balance with JV companies excluding loans (see further below) was a payable of USD 30 (USD2013: Receivable of USD58).

Acquisition of 10 new vessels and newbuildings

In June 2014, the Company entered into a share purchase agreement with Greenwich Holdings Ltd. (company controled by party exercising significant influence over the Group). for the acquisition of 100% of the shares in PSV Holding Inc ("PSV Holding"), a non-resident domestic corporation formed under the laws of Liberia. The sole activity of PSV Holding consisted of holding vessels and newbuilding contracts for construction of PSVs. PSV Holding was the owner of six PSVs and furthermore a party to shipbuilding contracts for four PSVs under construction at the time of the transaction.

The total purchase consideration paid by the Company for the shares in PSV Holding was based on an Enterprise Value (equity plus net debt and remaining capital expenditure) of USD 366 million, including the capital expenditure commitments of approximately USD 107 million and net debt of USD 192 million. The acquisition of PSV Holdings is accounted for in the consolidated financial statements as an asset acquisition a purchase of the vessels and not as a business combination. The acquisition price of the vessels and vessels under construction at the dated of acquisition was recorded as USD 258,753. Subsequent to acquisition the Group paid an additional USD 107,247 upon the delivery of the four vessels under construction.

Loans from related parties

Loans from cornpanies controlted by a party with oignificant influence over the Group;
At 1 January	-	25000	Rernoneration to the otututory auditars in the financiat otatements for 2014 equats USD 109 (2013: USD 55) for audit services,
Loons odvanced during the year	-	10000	USD 33(2013: USD105) for other asnurance services and USD 13(2013: NIL) for non-0050rance servicen.
Loans repaid during the year	-	(35 000)
Interest charged	-	1 202
Interest poid	-	(1 202)
Connnhiternent fees charged	-	23
	-	(23)	27. Financial instruments by category
A631 December	-

The toan carried interest of 3 rnonths LtBOR plus 4.5% per annum. carried in the finunciat statements.

Loans to related parties

At 1 January	22440	-
Loans on establishment of Joint Venture	-	7 345
Loans odvanced during the year	20 000	43 200
Love repayments received	-	(28 200)
Interest Charged	977	302
Interest received	(555)	(199)
At 31 December	42870	22448

Loans to companies under DESS BTG are payabte in 2015 and 2016 and carry interent at 3% and 3 Months LtBOR*4.75%.

			Derivative tinaociat instruments			386
	2014	2013	Trude and other payables				ti 684
Prepaid vensel insurances	1 787	i 100	Total	-	-	386	394983
Ctairnn from insurance companies	i 370	2 506
VAT receivabten	167	272
Prepaid borrowing costs	-	3 381		Loans and	Assets at fair value Derivatives used		Available
Reserved deposits with maturity over 3 months	-	i 782	Group	Receivables	through profit and loss	for hedging	for safe
Other deposits with mutudty over 3 mooths	368	158	31 December 2013
Receivoble from related party (Nyte 24)	84	3 000	Assets an per bataoce sheet
Guarantee receivobteo	315	-	Trude and other receivabtes	54007
Net pay (Norway) recoverabte	199	282	CtRR Depasits	32285
Other	675	1 508	Cash and cash equivutents	31 693

Reserved deposits pertain to money Seid ir banks on guarantees in relotion to charter hire controcts the Group has entered into.

2014 2013 26. Aud itors remuneration

Setting out betow in a carnparioon by category for carrying arrnounts and fair values of att at the group's tinanciat instruments that are

2014	2013	Group	Loans andReceivabtes	Assets at fair value Derivatives usedthrough protit and tonn	for hedging	Availablefor safe	Total
		31 Deceurber 2014
		Assets an per bataoce sheet
		Trade and other receivabtes	67 709				67 709
		CIRR Deposits	22 663				22 683
		Derivative financiat instruments		143			143
		Cash and cash equivatents	47209				47280
		Total	137 661	143	-		137 664

					for hedging	Availablefor safe	Total
		Liabitities an per batance sheet
		8orrowingn				292 030	292 830
		Finance teane tiubdrties				27806	27006
		ClRRLoaris				22663	22863
		Derivative tinaociat instruments			386		386
							11 684
1 787							355369
i 370	2 506
167	272
-	3 381		Loans and			Available
	25 Other short term receivables2014	Loans to companies under DESS BTG are payabte in 2015 and 2016 and carry interent at 3% and 3 Months LtBOR*4.75%.2013i 100	Trude and other payablesTotal	-	through the profit aud loss-	Liabititien at fair value Derivatives used386Assets at fair value Derivatives used	ti 684394983

Reserved deposits with maturity over 3 months	-	i 782	Group	Receivables	through profit and loss	for hedging	for safe	Total
Other deposits with mutudty over 3 mooths	368	158	31 December 2013
Receivoble from related party (Nyte 24)	84	3 000	Assets an per bataoce sheet
Guarantee receivobteo	315	-	Trude and other receivabtes	54007				54007
Net pay (Norway) recoverabte	199	282	CtRR Depasits	32285				32285
Other	675	1 508	Cash and cash equivutents	31 693				31 693
	4960	13989	Total	117985	-	-	-	117985

	Liabilitien at fair value Derivatives usedthreugh lise profit and oss	for hedging	Availablefor sale	Total
Liabitities an per batance sheet
Borrowiogs			133 132	133 132
CtRRLoans			32285	32285
Derivative financiat instruments	-	I 492		1 492
Trude and other poyabteo			5 554	5 554
Total	--	1492	170971	172463

28. Contingencies & commitments

Tax legislation

The Company is subject to taxes in several jurisdictions, where significant judgement is required in calculating the tax provision for the Company. There are many transactions for which the ultimate tax determination is uncertain and for which the Group makes provisions based on an assessment of internal estimates, tax treaties and tax regulations in the different countries where the Group is operating, 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.

Operating leased commitments - Group as lessor

The future minimum lease payments receivable under non-cancellable operating leases (mainly port infrastructure) are as follows:

	2014	2013
--------------------------------------No later than 1 year	45799	53 468
Later than 1 year and no later than 5 years	51 560	49 705
Later than 5 years	$\overline{\phantom{a}}$	۰
	97359	103 173

29. Deferred gain on finance leased vessels

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2014	2N 19
Opening balance at beginning of the year	5892	30 472
Released on disposal to JV (Note 31)		(11067)
Booked against investment in JV		(11 067
Amortised during the year	(982)	(2446)
Impairment (See Note below)	(4910)
Closing balance at the year end		5892
	2014	2013
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,Non current		4910
Current		982
		5892

During 2014 finance lease vessel was impaired by USD 10,627 (Note 6). Out of this amount USD 4,910 was set off against deferred gain on sale and leaseback and the remaining amount USD 5,717 against profit and loss

30. Discontinued operations

30.1 Disposal of 50% of Brazilian business

On 31st May 2013 The Company and BTG Pactual Oil & Gás Participações S.A. ("BTG Pactual") entered into a joint venture (the "Joint Venture") for the ownership and operation of Platform Supply Vessels ("PSVs") and Anchor Handling Tug and Supply Vessels ("AHTS") in Brazil (see note 31). The Company sold 50% of its Brazilian business and purchased together with its new Brazilian partner BTG Pactual 6 newbuilding contracts.

The Group sold 50% ownership interest in each of its Brazilian subsidiaries Deep Sea Supply Navegação Marítima Ltda. ("Deep Sea Navegação") and Deep Sea Supply Serviços Marítimos Ltda ("Deep Sea Serviços") (Note 33).

The Group also sold 9 AHTS and 5 PSVs together with their borrowings to Deep Sea Supply BTG B.V. group, which is owned jointly 50/50 by DESSC and BTG Pactual (Note 6).

30.2 Analysis of profit for the year from discontinued operations

	2013
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,Sales - freight revenue	45 337
Operating expenses vessels	(25066)
Depreciation related to vessels
Gross Profit	20 271
Other depreciation
Administrative expenses	(2 277)
Other (losses)/gains - net	1463
Gain on disposal to JV	82 356
Operating profit	101813
Finance income
Finance costs	(8783)
Finance costs - net	(8783)
(Loss)/Profit before income tax	93 030
income tax expenses	(34)
(Loss)/Profit for the year from discontinued opearations	92996

The total consideration net of borrowings for the JV transaction was USD125.101. The total gain on sale was as follows:

Gain on disposal to JV
Gain on disposal of business	71 289
Gain on release of deferred gain on Sale and Leasback vessels (Note 30)	11 067
Total	82.356

82 356

The gain on disposal of the vessels was recognized 50% while the remaining 50% was recorded against the investment in JV (Note 32) Deferred gain on sale was recognized on a 50% while the remaining 50% is booked against investment in JV in balance sheet and is amortized over the remaining life of the finance and leaseback transaction (Note 31).

30.3 Cash flows from discontinued operations

	2013
Operating cash flows	17994
Investing cash flows	(10131)
Financing cash flows	(15238)
Total cash flows	(7375)

30.4 Analysis of assets and liabilities of disposed subsisiaries

Analysis of assets and liabilities of disposed subsidiaries

	2013
Current Assets
Cash and Cash Equivalents	459
Trade & Other receivables	11 526
Inventory	90
Non Current Assets
Property plant and equipment	82 560
Deferred tax asset	1613
Current Liabilities
Trade and other payables	(30163)
Non current liabilities
	(63 157)
Borrowings
Deferred tax liabilities
Net assets on disposal	2928

31. Investments accounted for using the equity method

The amounts recognised in the balance sheet are as follows:

	2014	2013
______________________________________Associates		1 2 4 5
Joint ventures	115 718	112 569
At 31 December	115718	113 814

The amounts recognised in the income statement are as follows:

	2014	2013
Associates	19	5.
Joint ventures	3 130	673
At 31 December	3 1 4 9	724

31a. Investment in Associates

	2014	2013
--------------------------------------At 1 January	1 2 4 5	194
Additions
Share of profit	19	51
Impairment (Note 17)	$-1264$	n
At 31 December	0	1 245

On 02 February 2015, DESS commenced proceedings in the High court of Singapore against Sea Weasel Ltd for unpaid management fees and disbursements. Vessel "Sea Weasel" owned by associate Sea Weasel Itd was arrested on the same day. The Group has recognized a 100% impairment on the investment in associate (Note 17) and has performed off 100% provision on the receivable from Sea Weasel Ltd amounting to USD 300 (Note 32). The reason for the 100% write off is that Sea Weasel Ltd has secured loans against the one vessel it owns, and the estimated sale price of this vessel is not expected to cover more than that secured loan.

The group's share of the results of its associate, and its aggregated assets and liabilities are as follows:

Name,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Country ofIncorporation	Assets	.iabilities	Revenues	Profit---------------------------------------	% Interestheld
31 December 2013
-Sea Weasel Ltd	Malaysia	3944	2791	538	213	24

Due to the legal proceedings of DESS against Sea Weasel Ltd, no financial information was made available for year end 31 December 2014.

31b. Investment in Joint Venture

On 31st May 2013 The Company and BTG Pactual Oil & Gás Participações S.A. ("BTG Pactual") entered into a joint venture (the "Joint Venture") for the ownership and operation of Platform Supply Vessels ("PSVs") and Anchor Handling Tug and Supply Vessels ("AHTS") in Brazil. The Company sold 50% of its Brazilian business and purchased together with its new Brazilian partner BTG Pactual 6 newbuilding contracts.

The Group sold 50% ownership interest in each of its Brazilian subsidiaries Deep Sea Supply Navegação Marítima Ltda.

("Deep Sea Navegação") and Deep Sea Supply Serviços Maritimos Ltda ("Deep Sea Serviços") (Note 33).

The Group also sold 9 AHTS and 5 PSVs together with their borrowings to Deep Sea Supply BTG B.V. group, which is owned jointly 50/50 by DESSC and BTG Pactual (Note 6).

	2014	2013
At 1 January	112 569
Additions on Establishment of JV (Note 1)		122 963
Deferred gain on finance leased vessels (Note 29)	-	(11067)
Deferred gain amortized in period	1906	1023
Share of profit excluding deferred gain	1 2 4 3	(350)
At 31 December	115718	112 569

Note1: Additions on Establishement of JV

The additions on Establishement of JV on 31.05.2013 is comprised of the following amounts

50% of Net assets of DESS Navegacao & DESS Servicos 31.05.2013	1463
Contribution to JV	198 513
50% of Profit on disposal of vessels	(88080)
50% of Deferred gain on sale and leaseback vessels disposed	11 067
Total	122963

Nature of investment in joint venture:

	Country of		Measurmenet
Name	Incorporation	%	method
31 December 2014
-Deep Sea Supply Navegação Marítima Ltda	Brazil	50	Equity
-Deep Sea Supply Servicos Marítimos Ltda	Brazil	50	Eauity
-Deep Sea Supply BTG B.V.	Netherlands	50	Equity

Nature of investment in joint venture:

	Country of		Measurmenet
Name	Incorporation	%	method
31 December 2013
-Deep Sea Supply Navegação Marítima Ltda	Brazil	50	Eauity
-Deep Sea Supply Servicos Marítimos Ltda	Brazil	50	Eauitv
-Deep Sea Supply BTG B.V.	Netherlands	50	Equity

Summarized financial information for joint ventures

Set out below are the combined summarized information for Deep Sea Supply Navegação Maritima Ltda, Deep Sea Supply Serviços Marítimos Ltda and Deep Sea Supply BTG B.V. group.

Summarised Balance sheet	2014	2013
Assets and liabilities of jointly controlled entities
Current Assets
Cash and Cash Equivalents	29 098	22 5 67
Trade & Other receivables	39 856	21460
Inventory	1703	1986
Total Current assets	70 657	46 013
Non Current Assets
Property plant and equipment	678 577	632 558
Deferred tax asset		1615
Other long term receivables	1637	1637
Total non current assets	680 214	635 810
Current Liabilities
Borrowings	41 034	25 770
Trade and other payables	15 397	14 993
Total current liabilities	56 431	40763
Non current liabilities
Borrowings	446 728	395 834
Total non-current liabilities	446 728	395 834
Net Assets	247 712	245 226
50% of net assets	123 856	122 613
Deferred gain on finance leased vessels not amortized	(8138)	(10044)
Total amount	115718	112569
Summarized statement of comprehensive income	2014	2013
Sales - freight revenue	150 233	68878
Operating expenses vessels	(71890)	(34840)
Depreciation and impairment related to vessels	(43127)	(17525)
Gross Profit	35 216	16513
Other depreciation	(146)	(67)
Administrative expenses	(9 107)	(5153)
Other expenses	(1123)
Other (losses)/gains - net	(18)	11 293
Operating profit	248222894	2522
Finance income
Finance costs	(22131)	(14685)
Finance costs - net	(19237)5585	(12163)(870)
(Loss)/Profit before income tax	(3.097)	171
Income tax expenses	2487	(699)
(Loss)/Profit for the year from continuing operations	1 243	(350)
50 % of(Loss)/Profit	1906	1023
Deferred gain amortized in periodAmount recognized as per note 31	3 149	674

Reconcdiation of summarized financial information

Recunciliation ot the summarised financial information presented to the carrying arnount st its intereul in the juint venture:

Summariced financial information	2014	2013
Opening net assets I January	245 226	-
Net assets on 3105.2013	-	245 925
ProfitiLoss for the year	2 486	(699)
Cioning not assets	247 712	245 226
Interest in (cml venture 50%	123 856	122 613
Deferred gain (note 30)	(10 044)	(11 067)
Deterred gain amnrlized	I 906	I 023
Carryingvalue	115710	112569

The Company han guaranteed towardn DESS BTG, the fulfilment of the obligationn st PSV Holding under the newt,uild purchase agreemenls. In the event PSV Holding is not able to deliver the vennets in accordance with us curnmitments under the newbuilds purchase agreemnnts, there is a risk that The Company will be responsible an guarantor towards DESS BTG. On the date ut sign off ot the financial statements, PSV Holdings hos tulfilled its obligatiuns under the newbuild purchase agreements and delivered all the newbuilds to the (sist venture group.

The Company hos issued o parent company guarantee for the obligations st Deep Sea Supply Navegacuo Moritimo Ltda under the ENDES Facility Agreement for the llnancing ut Sen Brasil. As part ut the BTG Pactual Group, BTG Brasil cannot issue guaranteen purnuant to internal restrictions, and in therefnre not able to ansume 50% ut the guarantee obligationn in conoectmon with the establishment st the Juint Venture.

BTG Brasil han inntead issued a couoter indemnity in tavnur of The Company, whereby BTG Brasil indemnifies The Company tur any claims enceeding 50% ut the total liability under the guarantee given under the BNDES Facility. The Company mill stilt be the initial guarantur under the guarantee granted in tansur ot BNDES, and in the enent BTG Brasil is not able to fultil its obligalions under the counter indemnity guarantee, The Company mill be responsible tur the tull guarantee am000t il BNDES calts upon the guarantee, which may materially impact the financial cundition st the Deep Sea Gmup. The obligatiuns ut BTG Brasil under the counter indemnity agreemenl will be necured by way ut a show pledge by BTG Austria over the shares in DESS BTG. The Group in not expecting any financial impacl from any st these guaranteen.

32. Other income/expenses-net

	2014	2013
Crew and technicat management tee )Note 24)	1145	589
Admin lncsme (Note 24)	2 504	I 467
Write ott/provision for impuirment ot receivables	(3012)
	637	2056

33. Events after the balance sheet date

There were nu material events atter the balaoce sheet dato, which have a bearing on the understanding st the financial statemeols

—&1 pwc pwc

Independent auditor's report To the Members of Deep Sea Supply P1c

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Deep Sea Supply Ple (the "Company") and its subsidiaries (together with the Company, the "Group"), which comprise the consolidated balance steet as at 31 December 2014, aud the consolidated statements of incame, comprehensive income, changes in equity and cash fiows for the year then ended, aud a summary of signilicant accounting policies and other explanatory information.

Boord ofDirectors' responsibility for the consolidatedfinancial statements

The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards at adopted by the European Union aud the requirements of the Cyprus Companies Law, Cap. 113, and for such intemal control as the Board of Directors determines is necessaryto enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's rasponsibility

Our responsibiity is to express an opinion on these consolidated financial statements based on our audit. We condueted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves perftrming procedures to obtain audit evideoce about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor'ajudgment, including the assessment of the rislts of material misstatement ofthe consolidated financial statements, whether due to fraud or error. In maldng those risk assessments, the auditor considers internal contsol relevant to the entity's preparation of consolidated financial statements that give a true aud fair view in order to design audit procedures that are appropriate in the circuinstanees, bot not for the purpose of expressing an opinion on the effectiveness ofthe entity's intemal controL An audit also includes evaluating the appropriateness of accounting policies used aud the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

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

PricewaterhouseCoopers Ltd, City House, 6Karaiskalds Street; CY-3032 Limassol, Cyprus P0 Box 53034, CY-3300 Limassol, Cyprus T: +35725-555000,10+357-25555001, www.pwc.rem/cy

prawate,l,s,nCteP6,s 11410 ame,t08flnn ofpri,6514e,hou,oC6,peislfliwmlonell14, 489, y,0rrberfifly 96919,153 ~»WIegalo,sty. Pteegste,1,oU84050pes Ltd I, p,ivffi tempny Æglsisred 9 C~ (Seg. fl,. 140094). A list 0154 bo,(SWlys dl,esloaindtdlng to, 64,446915 0,0 proust fl969 3n4 $4001,8, 80t 3S prebibus Sone, eng ter 099 eM9eo0repnIa ~, is kept by 150 leroetary 019,0 06n,po,y st 1% tegletared 08150 st3Tlro,9et0440 Dette 0,8.1, 1086 ttcbsa Ild zçpearo on tfl. conpsnysweb 9t4. Olicselnrllcogs, Umees6I, 1,00.69 31,4 popfles.

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2014, and of its financial performance aud its cash flows for the year then ended in accordance with International Finaneial Reporting Standards as adopted by the European Union aud the requirements ofthe Cyprus Compames Law, Cap, 113.

Report on other legal requirements

Pursuant to the requirements ofthe Auditors aud Statutory Audits of Annual aud Consolidated Accounts Laws of 2009 aud 2013, We report the following

• We have obtained all the information aud explanations we considered necessary for the purposea of our audit.
• In our opinion, proper boolos of account have been 1sept by the Company, so far as appears from our examination of these hooks.
• The consolidated financial statements are in agreement with the books of account.
• In our opinion and to the best of our information aud according to the explanations given to us, the consolidated financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner 50 required.
• In our opinion, the information given in the report ofthe Board of Directors is consistent with the consolidated financial statements.

Pursuant to the requirements of the Directive DI190-2007-04 of the Cyprus Securities aud Exchange Commission, we report that a corporate governauce statement lisa been made for the information relating to paragraphs (a), (b), (c), (I) aud (g) of article 5 ofthe said Directive, aud it forms aspecial part of the Report of lite Board of Directors.

Other matter

This report, including the opinion, has been prepared for aud only for the Company's members asabody in accordance with Section 34 of the Auditors aud StatutoryAndits of Annual aud Consolidated Accounts Laws of 2009 and 2013 aud for no other purpose. We do not, in giving this opinion, accept or assugne responsibility for auy other purpose or to auy other person to whose knowledge this report may come to.

Yiaugoa Kaponides

Certifled Public Accountaut aud RegisteredAuditor for aud onbehalf of

PricewaterhouseCoopers Linsited Certified Public Accountants aud RegisteredAuditors

Liniassol, 14 April 2015

Shareholders registered in VPS

The Largesf Shareholders As Per 31 Dec 2014 Pegislered In VPS

	Citizen	No. ofshares:
HEMEN HOLDING LIMITED	CYP	91 543 853	35,05%
DNB NOR MARKETS	NOR	32320 875	12,37%
SKAGEN KON-TIKI	NOR	17250 931	6,00%
VPF NORDEA NORGE	NOR	6009570	3,07%
MORGAN STANLEY & Co	GBR	7 115 573	2,72%
BANK OF NEW YORK	GBR	5 989 303	2,29%
EUROCLEAR BANK S.A.	BEL	5306780	2,03%
KLP ALFA GLOBAL ENERGI	NOR	4 400 000	1,68%
JP MORGAN CLEARING CORP.	USA	4 143 155	1,59%
CE NT RA IN V EST AS	NOE	3157853	1,21 %
SOLSTEN INVESTMENT FUND	IRL	3140870	1,20%
STATE STREET BANK	USA	2928921	1,12%
HOLBERG NORGE	NOR	2827128	1,08%
PACTUM AS	NOE	1 960 000	0,75%
VEEDIPAPIRFONDET DNB SMB	NOR	1 750 000	0,67%
KLP AKSJE NORGE	NOR	1 586 800	0,61 %
VPF NORDEA KAPITAL	NOE	I 577 143	0,60%
SKANDINAVISKA ENSKILDA BANKEN AB	SWE	1 357 827	0,52%
STATOIL PENSJON	NOR	i 213 306	0,46%
CITIBANK	USA	1 194 523	0.46 %
Total 20 largest shareholders:		198774322	76,10%
Total other shareholder5		82422872	23,90%
Total number of shares:		261197194	100,09%

DEEPSEASUPPLY Oeep Sen Supply PIc Annua] report 2014

Shareholders registered in VPS

The Largest Shareholders As Per 07 April 2015 Regisfered In VPS

	Citizen	No. 09 shares:
HEMEN HOLDING LIMITED	CYP	91 543 853	35,05%
DNB NOR MARKETS	NOR	39318428	15,05%
SKAGEN KON-TIKI	NOR	17250931	6,00%
VPF NORDEA NORGE	NOR	8509570	3,20%
BANK OF NEW YORK	GBR	5961 395	2,28%
MORGAN STANLEY & CO	GBR	5727056	2,19%
KLP ALFA GLOBAL ENERGI	NOE	4400000	1,68%
SOLSTEN INVESTMENT FUND	IRL	3844399	1,47%
EUROCLEAR BANK S.A.	BEL	3575906	1,37%
CENTRA INVEST AS	NOE	3157053	1,21%
STATE STREET BANK	USA	2840790	1,09%
HOLBERG NORGE	NOE	2727129	1,04%
PACTUM AS	NOE	1 560 000	0,75%
VPF NOEDEAAVKASTNING	NOR	1821584	0,70%
KLP AKSJE NORGE	NOE	1 586 800	0,61 %
VPF NORDEA KAPITAL	NOE	i 577 143	0,60%
UBSAG	GBR	1258186	0,48%
CITIBANK	USA	i 234 018	0,47%
STATOIL PENSJON	NOR	1 213 306	0,46%
JP MORGAN CHASE BANK	USA	i 090 247	0,42%
Total 20 largest shareholders:		200 598 594	76,80%
Total other shareholders;		60 598 600	23,20%
Total number of shares:		261 197 194	108,90%

Corporate governance

Deep Sea Supply PIc

("DESSC "or the Company' on a consolidated basis) principles for Corporate Governance are based on the"Norwegian Code of Practice for Corporate Governance" issued on 30 October 2014. Listed companies are eopected to practice Corporate Governance that regutates the divisinn of roles between Shareholders, the Board of Directors and the Executive Management more comprehensively than is required by the legislation. The onde et practice istends to strengthen the cnslidence in listed companies prooiding the highest possible valoe creatian benefiting shareholders, emptoyees and olhers. As DESSC is a Cyprus registered company,'Norwegian Code el Practice for Corporate Governance" can only be adopted as lang as the recommendatinn is in accnrdance with Cyprus Companies Law, Cap 113, The Board of the Company is not aware at any ditlerences between the contenl nI the "Norwegian Code of Practice for Corporate Governance" and Cyprus Companies Act.

DESSC'n management han presented The Norwegian Code et practice for Corporate Governance for the Board.

The followiog elements underpin the Company's Corpnrate Governance Policy:

• DESSC will mainlain an open and reliable communication with the public about its business activities and conditions related ta corporate governance.
• DESSC's Board will be aut000nnnus and independent of the Company's Management.
• DESSC will altach importance to avoid cosflicts of interest between the owners, the Board and the Management. • DESSC will have a olear divisinn of responsibilities between the Board and the Management. • All shareholders will be treated equalty.

The Company has established its nwn corporale Code of Ethics. Cnmpliance with and fnllnw up of the Code of Ethics havn been discussed and presented thnrnughly in-hause. For more detailed information abaot the Company's Code of Ethics, please sen var corpnrale websile ut mrdeepseasupply,vn.

Company Background

Deep Sen Supply Plc was eslablished on 7 November 2006 for the purpase at ocquiring all shares 01 Deep Sen Supply ASA fnllowing an initiativa by the Board el Deep Sen Supply ASA ta change the domicile of the ultimate parert company to Cyprus.

Business

The Company's business objectioe is defined in SeclioO 3 of the Memorandum et Association, and includes, inter alia, the follnming; "Ta ergage and invest, directly ar indirectly, by itselt ar lhroogh subsidianies nr parl-owned companies, partnerships nr olher forms at entities, in the international offshore anchar handling and supply vessel business, and ta do all such acts and things an are related Iherelo, including withnul limitation the acquisitian, constructian, leasing, chartering, operatian and manning of such vessels and eoerything incidental therelo.

The Company's primary aimo are to meet the demand fram morkets that require modem ord advanced supply vessels.

DESSC oeeks investments in the perspective of providing at-Iractive tfnancial refurns to its shareholders. The Company will actively considvr possibilities ta participate in industry consolidafinn, mergero and acquisitions, avd will positinn itsell to be part of such cansalidation.

Equ)ty and dividend

Equity

The Company's book equily as per 31 December 2014 was USD 443,1 mill The Board considers this to be an acceplable levd, The Board evatuales conlinuously the Company's equity in light 01 the overalt goals, strategy, risk protile ned markel.

Dividend policy

The Company mill actively noe the capitat markel when dning investmenls, and dans not intevd lv hold signillcant liquid reserves ler inveslmenfs, Retained earningn mill, ta the extenf permilted under operalinnal cunstraints, financial covenanls, cnmmitled capital eapevdilures and with due regard to appropriole working capita] requiremevts be paid out an dividends.

In 2014, a total 01USD 0.04 per share hos byen distributed as dividend. Sne Board at Directors report for details on the sovoiderabnns made mifh regards In dividend paymenfs in 2014.

Purohase 0! treasury shares

The Board has been granfed an aulhnrizalion In acquire Ireasury shares, includivg acquisilinn of secarity rights. Aulhnrization to acquire treusury shares is based an the assumptian that acquisitions mill be conducled at normal markel condilions. DESSC did not own any nwn shares in 2014,

Major Shareholders

The major ohureholder cl the Company is Hemen Holding Limiled with an nwnership of 35,1%

Equal Irealment at shareholders avd Iranoacti000 between related parties

Class of shares All shares in DESSC are eqoal. Thv Articles of Association plece 00 restrictians ar vating rights ar rights of receivirg dividvods.

Trading in treasury shares

The Board's aufhorization to acquire treusury shares is based on the assumption that acquisitions mill be conducted at normal market canditians.

Transactioes between related parties:

Relaled parlies are considered to be the Board members (including associated companies) and the Management )including associated companies).

Acquisitton at 10 vessels from PSV Holding Inc.

On June 2014 the Company announced the acquisition 0110 vessels and conslruclian centracls bom a company affdiated with Hemen Holding Ltd, the largest sharehotder nI DESSC. The total price paid for the 10 vessels, ircluding remaining CAPEX at the time of acquisihan, was USD 366 mill,

Freely negottable

The shares uro freely negatiable.

General meetings

By virtue at the Annual General Meeting )AGM), the shareholders arv guaraoteed participatiar in the Company's supreme gaverning body. Shurehatders representing at least 10 per cent ut the shares can call far an eotraordinary general meeting. The AGM shall be held at the ploce 01 establishment 00 the Company )Cyprus).

Convening letter

The notifications to the AGM are distributed ta att shareholders minimum 21 days in adoarce. It is cansidered important that the docomento cantain all relevant dacumentatiao so that 1kv shareholders can take a pasitian an all items up for discussian. The Finance Calendar is published on the Company's web page and distributed via Oslo Stock Eochange.

Participation

It is possible ta register far theAGM by ordinary mail, telefon nr e-mail. The Board mill attend the ADM. As a minimum, the management is represeoled by the CEO and the CFO.

Agenda ned exeCutioe

The agenda is set by the Board, and the rvuiv items are specified in the Cnmpavy'sArlicles of Association. The Chairman nI the Board mill ohair the ADM.

Nomination ned Audit Committens

In accordance with the Articles olAssocialinn, the Company shall have u nomination committev cansisting 01 the Chairman nI Ihe Board ond Iwo members elected by the ADM. In cnnnechan with the dccl inn 01 Directors and eleotinn st the members In the Namination Cammiltee, the Namination Cammittee shall in

connection with the summons for the General Meeting provide its recammendatiars for candidatvs. The namination committee shall also propose the remuneralian In the Board members,

The Board hus eslablished an Audil Commitlee who bad bar meetings in 2014. The meetings ~re held with togetherwilh the Management and the Company's Auditors.

Board of Directors

Composition and independencn

Av per April 2015 the DESSC Board censists of three bnamd members and ane ulternate director.

Eleotion at the Board Ol Directors

The Board members are nlected by the AGM based on a necommendatian prepared and presented by 1kv Namiration Cammittyv. The recommendation is distributed ta the shareholders alung with the cnnvenivg letter to the ADM, Decisionu on the campositrnn nI the Board require a simple mujodly. Directors arv eleclnd for two-year terms avd can be re-elecled.

Compnsitioe of the Board

Emphaois is made on setecting board members with relevant csmpelvnce. Accardivg la the Arlicles of Association, the Board shall have fram three to nov00 bourd members. The Company's CEO is not member at the Board. During the peried Som 5 December 2014 antil today's date the Chairman at the Board also holds the pasition at interim CEO.

The Board's autonomy

The Board considers itnetf autnnowous and independent 01 the Company's executive management and muin shareholders. Emphasin is made that Ihere should exint an centlicls between the Board, the Management and the Company's shareholders. The carporate Code 0! Ethics discusses Ihis tapic under 1kv heading Cenflicf et interesr.

Director's ownership of shares

By year-end 2014, the majority of the members nI the Board eilher owned shares in the Company nr repmnsnnled vigniticant shareholders. Reference is furthermare made ta the separate presenlaliov Ol the Board Membems in the Annual Report.

Board work

Board responsibilities

The Board bearo the altimute menpnnsibilily for running the Company ord supervising rautine management and business activities. The Board primarity loaks aller the intemeols stall the shareholders, but is also responsiblv far 1kv Company's olher stakehalders.

The Board han made an annual plan for the board meetings. The Board's main tasks are developing and determining the Company's strategy, performing the required control functions and odsice the executive management. The Board is responsible for employing the Company's CEO and to draw up his/her job desoriptiso. The Board members receives a fixed compensalion. DESSC's Board of Directors cansiols ut i Cyprus', 2 UK and i Norwegian resident

Remuneration to leading employees

The remuneration for the CEO is decided by the Board. Bach year, the Boord underlakes a thorough review at salary and other remuneration to the CEO. An incentive scheme for the management is eotablished. Bonus scheme is linked to the development st the stock price ut the Company based on compariann with peer company csmponies. The terms om described in the notes at the annual financial statements.

Remuneration to the members of the Board

The AGM appmves the Board's remuneration each year. The remuneration to the Board in 2014 breaks down an follows NOK 350,000 for the Chairman and NOK 200,000 for each Director.

Nu Oireclor is engaged in any paid consultancy mark on other assignments for the Company.

Change 01 control

The share nplions and cerlain 015cr benef to for the management will come into effect at a change at control in the Company (in excess 0130%).

Information and commonication

The Company considers an open and frequent communication as important to its shareholders and other related parties. The Company's Financial Catendar is pablished on the Company's websile and communicated via Oslo Stock Exchange. Monthty information about vessel revenues, medium and long term charters, delivery st vessels etc is provided via Oslo Stock Exchange. The Company's web-site contains financial and other information relevant for its shareholders and related parties.

Open presentatiens are made la present the quarlerly financial statements. Present at these presentations are the CEO and the CFO. The financial information is simultaneoanly made ovailable on the Company's ~b-sile.

Il is connidered essentiat to keep owners and investors informed abnut the Company's progreos ned financial status. Emphasis is made on presenting the same information to the entine equity manket at the same time,

Internal control environment and audit committee

The Company has established the necessary set of processes and systems to ensure proper internal controts. An audit commiltee, estabtished in 2009, hotds anersighl at all financial reporling and disclosare. The audit commiltee meets with the management and the auditors prior to publishing quarter and annual results to the stock exchange.

Take-over regulatiort

There are nu defenoe mechanisms against take-over bids in the Company's Articie of Associations, and the Company has not implemented other measures to limit the opportunity to acquire shares in the Company.

The EU Directive 2004/25/EC at the European Parliament and of the Council of 21 April 2004 on take-over bids is implemenled in Norway lhrough the Securilies Trading Act 0129 June 2007 no. 79 )the'Norwegian Securities Trading Act) and in Cyprus througtr Cypniet Law 41 (1)12007 on Takeover Bido, A brief summary at the take-over ruten applicable to the Company in inctuded below.

Any person, entity nr greup acting in concert that acquires 30% ur more of the voting rights ut the Company is required to make an unconditional general offer for the purchase ut the remaining shares in the Company. The offer is oubject to appruvat by Oslo Stock Exchange, in its capacity as competent take-over aulhorily at Norway. The offer price per share mast be at least as high as the highnst price paid or agreed by the offeror in the sin-montli period prior to the dale the 30% threshxld was reached, however equat to the manket price il the market price man higher at that time, In the event that the acquirer thereatter, bat prior to the eupiration of the acceptance period acquires, on agrees to acquire, additional shares at a higher price, the acquirer is obliged to restate its offer at that higher price. A mandatory offer must be in cash or contain 0 cash alternative at least equivalent to any other consideration offered. Payment ut the offer price must be guaranteed by a bank.

Cerlain provisions regarding mandatory offers will alsa apply wilh respect to ss catted vnluntary otters )i.e. uffern that will trigger the mandatory offer obligation shoald the offer be accepted by the eligible shareholders.)

Auditor

The Company emphasizes a frequent and open dialogue belween the Company and its auditor- The Company's auditor participales in the board meetings wtrere the annual financial statements are discussed. At such meetings, the auditor is

briefing the Board on the annual accnunts and any other issaes of particutar concern to the auditor. At least once a year the auditor presents tolke Board a wniBen report at the Company's accounting policies, risk areas and internal control routines.

The auditor submits the main featares of the plan for the audit of the Company to the Board annuatly. The auditor annaolly presents for the Board 0 wnitten contirmation that the auditor

continues to satisfy the requirements for independence.

At least sne meeting a year mdl be hold befween the auditor and the Bourd without the preseace of the CEO nr other executive managers.

The Company's auditor is PWC. There hus been no change in audit firm atter the Company was esiablished.

Report from the board of directors

The Board of Directors presents its report together with the audited parent company financiat statements of Deep Sea Supply PIc ('the Company) for the year ended 31 December 2014.

Principle activities

Deep Sea Supply PLC's ("the Company") prinsipal activity, which is unchonged from last year, is the holding of investments

Principal risks and uncertainties

As the Company's main income is dividend received from its subsidianies and jointly controlled entities the Company is enposed to the performance of those entities The Company's sobsidiaries and jointly controlled entities operate is the international offshore supply vessel business and hence evpooed to charter rote risk

Results, review at developments, position and performance 01 the Company's business

The main income for the peulod was dividend receined from the subsidianes ot the Company totaling USD 294.9 million (2013: MUSO 141,0 million). Ass resolt of dividends paid out, and reduced markel valuations st sessels owned by subsidianies, the recoverable amonnto ut certain subsidiaries havn been reduced by USD 290.2 million (2013: USD 8.7 million) and henne corresponding impairment was recognized in the income statement. More details are disctosed in Note 4 at the financial statements. The Company's vet resalt for the year is sel out at page 74

Dividends

Dividend policy and distnibutions made in 2014

for nignificant inveslments. Retained earnings mill, to the not ent pormi0ed under operationat constraints, finaocial cnvenanls and with don regard to apprnpriate workisg capita[ requirements, to be diotribated to shareholders an dividend. 0n5 August 2014 the Board st Directors approved the distnibotinn 01 dividends of USD 0.02 per share reloting to 02 resulln avd on 11 November 2014 deciared and paid a dividend of USD 0.02 relatiog to 03 renults The total dividends paid to ohureholdcr0 amountnd to USD 10.5 million (2013: nil(.

The Company intends to actively use the capitul market when doing investments, and does not intend to hold liqvid reserves

Future developments at (be Company

The Board of Directors does not nxpect any signifcant changes nr devnlopmeefs in the operations, financial position and performance of the Company in the fvreseeable fature.

Board ut directors

The members of the Board st Directors at 31 December 2014 and at the date ut Ihis report are show on page 10. Alt at them were membern st Ibm Board throughout the year 2014.

Share capita[

All changes in share capital csmposition including new shares issued during 2014 are disclosed in Note 6otthe tinaocial statements

Branches

The Company did not opnmste throagh any branches during the year

Events after (be balance sheet date No material events after the balance sheet date.

Auditors

The Independent Auditors, PricewaterhouseCoopers Limited, have expressed Iheir willingness to continue in otfice. A resolution giving authority to the Board st Directors ta fin their remuneroliun Mil be proposed at the Asnual General Meeting.

Responsibility statement

In accnrduncn withArlicle 9, sentions (3)(c( and (7) at the Tnannparency Requirements )Secorities tar Trading on Regulated Market) Law st 2007 ("Lam"), we the membern st the Boord st Directors and the other responsible persons for the tinancial statements at the Company for the year ended 31 December 2014 confirm that, to the best sI our knowledge:

a( The annual tinanciat statements that arm presented ss pages 74 to 92:

i. mere prepared in accsrdance with the International Financial Reporting Standards an adopted by the European Union, and in accordance with Ibm prnvisions otArticle 9, section (4) sI Ibm Law, and

ti. gine a Iran and fair view st the annet s and liabilities, the finannial posilion and the prntlt or losses st the Company, and

b) the directorn' report gives 0 fair vinw ot the devetopmentn and performance of the business as welt an the fisancial position of Ibm Company, together with a descriptisn st the pnincipal risks ond uncertointieo that il is facing

Lumassol. 14th April 2015 The Board of Dnnp Ses Supply Plc

Harald Thorstein Chairman/ Chief Executive Officer

Frinos Savvides

Kathrine Fredriksen Hans Petter Aas

Anders Hall Jomoas Chief Financial Off icer

-Diluted

Income statement Deep Sea Supply PLC (parent company)

$\frac{1}{2}$ amounts in thousands of United States Dollars)

	Note	2014	2013
Dividend income	13	294 955	141 000
Other income		443
Impairment of investment in subsidiaries	4	(290 233)	(8713)
Administrative expenses	12	(1230)	(1178)
Profit from disposal of subsidiaries			280
Change in financial derivatives value		(1114)	859
Operating profit		2822	132 248
Financial income		27	273
Currency items		872	510
Financial expenses		(2613)	(5480)
Finance and currency items		(1714)	(4698)
(Loss)/Profit before income tax		1 1 0 7	127 550
Income tax	15	(1)	(0)
(Loss)/Profit and other comprehensive income for the year		1 1 0 6	127 550
Attributable to:
-Equity holders of the company		1 106	127 550
-Minority interest
		1 106	127 550
Earnings per share for profit attributable to the equity holders of the Company, expressed in USD per share
		USD per share	USD per share
-Basic	16,00	0.01	1,00

16,00

$0.01$

1,00

Balance sheet Deep Sea Supply PLC (parent company)

(all amounts in thousands of United States Dollars)

	Note	31 December 2014	31 December 2013
ASSETS
Non-Current Assets
Investments in subsidiaries	4	395 847	416 230
Investments in joint ventures	11	191 319	191319
Total non current assets		587 166	607 548
Current assets
Other short term receivables		220	3 2 5 2
Total current assets		6870	3601
Total assets		594 036	611 149
EQUITY
Capital and reserves attributable to equity holders of the Company
Share Capital	6	5 2 2 4	2 5 4 4
Share premium		324 183	130 264
Other paid in capital		1727	1880
Retained earnings		206 079	215 432
Total equity		537 213	350 119
LIABILITIES
Non-current liabilities
Borrowings	7	48 122	51 678
Financial derivatives		386
Total non current borrowings		48 507	51 678
Current Liabilities
Amounts due to related parties	13	3543	204 684
Borrowings	$\overline{7}$	4552	4552
Other short term payables	10	220	116
Total current liabilities		8 3 1 6	209 352
Total liabilities		56 823	261 030
Total equity and liabilities		594 036	611 149

75

Cash flow statement Deep Sea Supply Plc (parent company)

(all amounts in thousands of United States Dollars)

		rear encec
	Note	31 December 2014	31 December 2013
Cash flows from operating activities
Profit before income tax		1 107	127 550
Amortization of borrowing costs		1 0 3 2	681
Changes in working capital
Trade and other receivables		3022	(2079)
Share based payments			(127)
Trade and other payables		104	(928)
Change in value of financial derivatives		386
Balances to related parties
Dividend income receivable		(294955)	(141000)
Impairment in invesments in subsidiaries		290 233	8713
Gain on disposal of subsidiary			(280)
Interest expense		1581	4799
Cash generated from operations		2510	(2671)
Cash flow from investing activities
Acquisitions of shares in wholly owned subsidiaries		(250949)	(28 200)
Proceeds from disposals of subsidiaries to JV			664.00
Contributions in jointly controlled companies			(750.00)
Dividends received			11 000
Net Cash used in investing activities		(250949)	(17286)
Cash flows from financing activities
Increase of share capital	6	196 599
Proceeds from borrowings			10 000
Financing from subsidiary companies		74910	49 5 64
Repayments of borrowings and borrowing costs		(4552)	(42560)
Interest paid		(1760)	(4799)
Payment of dividends	6	(10457)
Net cash from financing activities		254 740	12 205
Total changes in liquidity in the year		6301	(7752)
Cash and cash equivalents at beginning of year		348	8 1 0 0
Cash and cash equivalents at end of the year	5	6649	348

Non cash transactions of 2014

During the year, DESS Invest accepted a shareholders contribution of USD 18,903 as an advance payment in the future share capital increase to be performed by the subsidiary. The payable balance to DESS Invest was agreed to be set-off against a receivable balance from an indirect subsidiary.

Non-cash transaction of 2013

The Company has obtained 50% holding in Deep Sea Supply BTG Holding B.V. following the disposal of vessels from its subsidiary companies; and therefore has financed US$190 mill of its investment in the joint venture through a liability towards its subsidiaries. In addition collected dividends receivable amounting to US$130 mill from these subsidiaries have not been received in cash but have been recognised as a reduction of the liability towards its subsidiaries.

Finally the Company has transferred to the joint venture as part of the joint venture agreement US$88 mill of bank borrowings; and no cash outflow has been incurred in relation to this transaction.

Statement of changes in equity

Deep Sea Supply Plc (parent company)

(all amounts in thousands of United States Dollars)

	Note	ShareCapital	Sharepremiumreserves	paid in-equity	Cash flowhedge reserve	Retainedearnings	Total
Balance at 1 January 2013		2544	130 264	2007	(1435)	88 741	222 121
Comprehensive Income
Profit for the year						127 550	127 550
Other comprehensive income
Cash flow hedge - transfer to Income Statement					1435	(859)	576
Total Comprehensive income					1435	126 691	128 126
Transactions with owners
Value of share option scheme	6			(127)			(127)
Balance at 31 December 2013		2544	130 264	1880	٠	215 432	350 120
Balance at 1 January 2014		2544	130 264	1880		215 432	350 120
Comprehensive Income
Profit for the year						1682	1682
Other comprehensive income
Cash flow hedge- transfer to Income Statement						(576)	(576)
Value of share option scheme				(153)			(153)
Total Comprehensive Income						1 106	1 1 0 6
Transactions with owners
Value of share option scheme				(153)			(153)
Dividends paid						(10, 459)	(10459)
Share capital increase		2680	193 919				196 599
Balance at 31 December 2014		5 2 2 4	324 183	1727		206 079	537 213

Notes to the Parent Company Financial Statements

1. General information

Deep Sea Supply PLC's (the Company) principal activities are to engage and invest, directly ur jndirectly, by itselt or through subsjdiaries er part-awned cornpaniea, partnerships ar other forms nI entities. in the international offshore supply cessel business. The Company was incorporated av a public limited liability company on 7 November 2006 and is domiciled in Cyprun in accordance with the provisinns of the Companies Law, Cap. 113. Its registered offjce is at John Kennedy, Iris House, 7th Fleor, Limassot, Cyprus.

The Company han ito primary and only listing on the Oslo Stock Eechange. These parents separate financial statements have been appreved for issue by the Board el Directors on 14th ei April 2015.

2. Accounting principles

2.1 Statement of Compliance and basis of preparation

The financial statements et the Company havn been prepared in accordance with International Financial Reporting Standards (tFRS), av adopted by the Europeon Union (EU), and the requiremenls et the Cyprus Companies Law, Cap. 113 Av of the date et the aathonsation ni the financial statements, alt International Financial Reporting Standards issand by lIte Intemational Accoanting Standards Board (IASB) that are effnctive av ett January 2013 have been adopted by the EU through the endomemnnt procedore established by the European Commissjon, with the exception et certain pronisions ut tAS 39 Financial instruments: Recognition and Measurement" retating to portfolio hedge accounting

The preparatien ot financial statements in conforrnity with IFRS requires the ane ut certain critical accounting estimates It also requires management ta eoercioe its jadgment in lIte procenn applyivg the Company's accounting policies. There arv vn areas innelving a higher degree et jodgment nr compleoity, er areas where assumptions and enlimates are signiticant to the financial statements.

The financial statements havn heve prepared under the historicat Post convention an modified by lIte revatuation et financial assets and liabilities, inclading derivative financial instruments at fair value through prefit ar lovs.

Adoption of new and revised IFRSs

The adoptioe el new and revised lFRSs att January 2014 did not have ary material impact on the Company's separate financial statements.

2.2 Underlying conCepts

The financial statements are prepared en the geiog coecern basis using accroal accounting, Assets and liabilities and jncome and eopenses are not offset

The Company hav alsu prepared consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU for the Company and ito nubsjdiaries (the Greup). The ceeseljdated financial statements can be ebtained frem the Company's registered ot6ce.

Users et these parenrs separate financial statements should read them tegether with the Company's coesotidated financial statements an at and for the year ended 31 December 2014 in order to nbtain a proper undemtaeding at the financial peaition, the financial perferniance and the cash flows of the Company and the Greup.

unless speci6ca11y permitted by an accounting standard. Financial assets and financial liabilities are offset and the ed ameunt reperted only when a legatly enforceable right to sel off voists and the jntention is ejther to settle on v vet basis nr to realize lIte asset avd setlle lIte liabilily simultaneously. Changes in accounting policies arv accoonted for in accordance with the transitinnat previsions in the lFRS standards. Il nu sach guidavce is ginen, they are applied retrospectinely, avless il is impracticable to do sa, in which case they are applied prospectiuely,

2.3 Investments in subsidiary undertakings

Subnidiaries are Ihese entities in which the Company hav an interest ni more than one hall of the netivg righls er elherwise han power to govern lIte finavdal and operating policies.

lnvestmeots in subsidiary andertakings arv staled at cust and pmvision is onty made where, in the opinion 01 the Dimclars, lhere in impairmevt in their nabo.

2.4 tnvestments in Joint Ventures

The investment is jaiet venture has been initiativ recognized at the fair value el Iwe entities (naf el the three that are sabject to the jeiet venture agreement); the Ihird sne is held by a subsidiary et lIte Company. lnvestments in joint ventures are stated at cest and provisjon in only made where, in lIte opinion at lIte Directurs, there is impairment in value

2.5 Revenue recognition

Dividend income

Dividend incsme is recognized retten the right to receive payment is established.

Interest income

teterent income is recognized en a time-proportion basis using the ettectine interest method. When a receivable is impaired. the Company reduces the carrying amnunt to its reconerable amnunt, being the entimated lalare cash tbow dincounted at Cc original ettective interest rute et the instrument, and contieaes anwrnding the discount as interest ivcnme. Interest incume on impabred boans in recognized sving fIre original effective interest rate.

2.6 Recognition of assets and liabilities

Assets are only recognized il they mccl the detinition et an anvet, il is prebable that tuture ecenemic benetits associated with the asset will 10w to lIte Company and lIte cost er fair value can be measored reliably.

2.7 Valuation and ciassification of assets and liabilities

Assets intended ler lang-term ownernhrp er ane are ctassifred an nos-currevt. Olher assets are classitied as carrent. Receivables due le be repaid within nye year are classified an carrent assets. Non-carrent assets are slated at historic cest price, bul wriltee down to recoverable amoanl when the tatt in value is cnevidered to be permanent. Sach write-dewns are reaersed retten lIte reasen ler lIte write-do~ no lenger appties.

2.8 Foreign exchange translation

Foreign currency translation

(i) Functional and presentation currency Items inclucted in the Company's financial statements are measorvd using the currency ut the primary econnmic environment in which the entity operates ('the tanchonal currency'). The financial statements are presented in United States dollars (US$(, which is lIte Company's tanctionut and preseotution currency. All amoants in Ihese financial statements ute in US$1000 untess otherwise stated.

(ti) Transactiofls and balances

Foreign currency transactions are traestated info the tunctiunal currency using the noehange rates prenailing at the daten ni lIte trannaclions. Foreign evchuege gains and 1055ev resulting from the settlement ut such transactinnn

ord from the transbation at year end euchange rates ot monetary assets and liabilities denominated in fnreigv cur. revcies are recognized in the income statemeet.

2,9 Financial assets

The Company clasoifres its financial assets in the toltowing calegorien; at tatt value through prefit nr lovs, leans and receivables, and available for sale. The classitcatien depeeds on the parpoue for which lIte financial assets were acquired. Management determises the clansification et ils financial assets ar initial recugnition and re-vnaluates thin denignation at enery repurting date

(a) Financial assets at fair value through profit nr loss Thin category hav two sub-calegories; financial assets held ter trading, and thsse designated at fair value through pro6t er lovs at inceptinn. A financial asset in ctassified in this calngnry il apquired principally for the purpnse ut seiling in the short form nr it vn designated by management. syd they ment certain criterra (tAS 39.9).Derivatives are also categorized av held ter Irading unless they are designated an hedgen Assets in this categnry are classited an carrenl assets il they are either held for Irading nr are ecpecled to be realized wilhin 12 monthn el lIte balance sheet date

)b) Loans and receivables

Loans and receivables are non-derivative financial assets with tloed ar determinable payments that are not qaoted in an achve manket. They uro incbuded in current assets, encept tur maturilivs greater lIten 12 mnnths atter lIte babance sheet date These are classitieci av non-corrent assets. Loans and receivables are classified av 'trade and other receivables' and 'cash and cash eqainalents' in the balanse street.

(c) Avajlable-for-sale financial assets

Avarlable-for-sale financial assets are nen-derinatives that are eilher designated in this categery nr not clasniIted in any nt lIte other naleguries. They are included in non-corrent assets unless the investment matures nr management intends to dispuse ut the investmentwhlhin 12 monthn of the balanne sheet dato.

Regalar way parchases and salen ut financial aouels are recognized on lIte trade-date, the dale en which the Company commits to purchase nr seil the asset lnvestments arv initially recognized at fair value plan Irannactien cnsts for all financial assets vet carried at fair value through proff or lovs. Financial assets carried at fair value through profil er less, are inilially recognized at fair value, and transactmon cusls are espensed in the income slatement. Financial assets are derecognized when the rights to receive cash fbows fram the inveslments have eopired ur have been travsterred and the Company has trannferred sabstantially all risks and rewnrds of oweership. Anailabte-torsale financial assets and financial assets at fair value through protit nr less are subseqaenity carried at fair value. Loans and receivables are carried at amortizod post using lIte effeclive interest method Gains nr losses arising from chongen in the fair

value at the financiat assets at fair value through proff ar loss" categary are presented In the income statement within other (tosses)lgains - set, in the period in which they anse. Dividend insanie fram tinanciat assets at talt value through profut ar loss is recognized in the incorne statement as part et other incorne when the Company's right to receine payment is estabtished.

The Company assesses at each batance sheet date wtrether there is objective esidence that a tinanciat asset ar a graup at finaociat assets is impaired.

2.10 Derivative financial instruments

Denivatives are initialty recognized at fair value on the date a denivative contraci is entered into and are subsequently re-measured at their fair value. The method st recngnizing the resutting gain ar lass depends on whether the derivatmve is designated asa hedging instrument, and il so, the nature st the bern being hedged. The Company designates certain deriva. tives ca either: (1) hedges at the fair value st recognized assets ar tiabitities ar a firm cammitment (falt value hedge); (2) hedges ut a particufar nok associated with a recognized asset ar liability on a highty probabte torecast transactian (cash tlow hedge); ur (3) hedges ot a nat investment in a toreiga operation (flat investment hedge)

The Company documents at the inception st the transaction the retationship between hedging instruments and hedged items, as wett as its risk management objectiaes and strategy for undertaking various hedging transactions. The Company also documents its assessment, both at hedge inception aud on an ongoing basis, otwtrether the dermvatives that ane used in hedging transactions are highly effective in offsetting changes in fait vatues ar cash flonis of hedged iterns.

The fair values of vanious deriaative instruments used for hedging purpases are disctosed in flate 9. Monements an the hedging reserve in other comprehensive income ane shown in Statement of Changes st Equity, The full talt value of a hedging derinatine is ctassitied 80 8 non-current asset ar liability when the remaining hedged item is more than 12 months, and as a current asset ar liability when the remaining matanity at the hedged item is less than 12 months.

Cash 5mw hedge

The effective portion ot changes in the talt value om derivatmves that ane designatad and qaatify an saab 110w hedges is recognised in other comprehensive income The gain ur loss relating to the inesectine portion is recognised immediately in the incame statement within finaoce mncnme ar finaoce costs respectinely

When a hedging instrument expires on is sold, ar when a hedge tro longer meets the criter,a for hedge accounting, any cumulalive gain st loss existing in equity at that time remains in equity and is recognised when the tanecast tnansaction is uttimatety, recognised in the incorne statement. When a torecast transaction la nu longer expected to occur, the cumulatine gain st loss

that was reported in equity is immediatety transterred to the incame statement within financn income nr frnance cost. When the Company provides gauruntees to parties oatside the Gtoup for any losses suffered in derivutives due to breach of contnact, a provision is made for the fair value ot the derivative when the loss becames prsbabte.

2.11 Cash and Cash equivalents

Cash and cash eqsivalents, includns cash in hund and deposits held at calt wnth banks.

2.12 Share Capital

Ordinary shares are ciansified as equity. Costs dinnctty attributabte ta the issue at new shares om aptians ane show in equity as a deductian, net at tax, fram the proceeds. Share premiam is the diffemeace between the fair value of the considenation receivuble for the issse ot shares and the nominal value ut the shares. Share premium account can only be nesorted ta far limited purposes, which do not inctude the distribution at dividends, and is atherwise subject to the praaisions at the Cyptas Companies Law an reductioa ut share capitat.

2.13 Borrowings

Borrowings are recognized initiatty at fair value, net ut transaction costs mncumned. Borrowings are subsequentty stated at amantized cost; any diftenence between the proceeds (not at traasaction costs) and the redemptian amaunt is recognized in the incame statement aner the period at the barrawings using the effective interest method.

Bomnamings am ctassified as current tiabitities un(ess the Company hus an anconditionul right to defet settlement ofthe liability forut [east 12 months after the bulance sheet date.

General and specitic banrowing costs directty annibutabte to the acquisitian, canstruction ar pnaductian at qoatitying assets, which ute assets that necessarily take a substuntiul pedod of time to get ready for their intended ane or sule, ute udded to the cost of tbose assets, until such time us the assets ute substantially ready for their intanded ane st sum.

Investment incame earned an the temparary investment at specific bammwrngs pending their expenditure an quatityiag assets is deducted fram the bormoming costs etigibta far capitatisation. Att other bornowing costs ute recognised in pmftt ar (oss in the periad in which they ane incumred.

2.14 Trade payab(es

Trude payabbes ane recognized moitiatty at fair value and subsequentty measured at amontized cost using the effective interest method.

2.15 Taxation

The tas enpense fot the period comprmses current and deferred tas. Tas is recognized in the incnme statement, eocept to the eofnnt that il retates ta tems recognized directty in equity. to this cases, the fax is atsa recognized in equity.

The current income lan is calculuted on the basis st the tax taws enacted on substantmvety enacted at the bataoce sheet date in the country wbnne the Company aperates and generates tanuble mncome Management periodicully evaluates positions taken in tax returno with nespect ta situations mo which applicabte tas regutatian is subject to interpretation. ti estabtishes pnavisions wbene appnopmtate an the basis at amounts expected to be pald to the len uuthorities

Deterned incame is recognized, using the liability method, on temparary ditterences arising between the fax bases at assets and tiabitities and their canrying amsunts in the financiat statemeats. Huwever, the deterred incame tax is not accousted far if il anses from initial recsgnition ut an asset ur liability in u trunsactisn other than a business combination that at the time st the trunsaction atfects eithem accountisg not taxable protit or loss. Deterred income lan is detenmined using tax rates (and taws) that bane been enacted nr sabstartially enacted by the balance sheet date and ane expected ta appty when the retuted deterred incsme fax asset is rnalized ar the defenmed incame tan liability is sett ed. Defenred incame tua assets ane recognized only to the extent that il is prababte that futume taoabte profit mitt be aaaitabte against which the temparary differenceo can be utitized.

2.16 Provisions

Provisions represant liabilities of sncettuin timing or amoant Provisions ane recognized when the Company has a prosent legal or constructive obligation, as a result of pust event, for which it is prababte that an outftow at ecsnamic benefits mitt be requimed to settle the obligution, and u reliuble estirnute can be made for the umounr of the obligution

Provisions ute measured ut the present value ut the enpnnditures expected to be required to settle the sbligation using a pre-tax mate that reflects current manket assessments at the time satse at mnney and the risks opecific ta the obtigatios. The increase in the pronision due to pussuge ut time is recognized as interest enpense.

2.17 Dividend inCome

Dividend incame is recognized when the right ta receive payment is estublished.

2.18 Dividend distribution

Dividend distribution to the Company's shureholders is recugnized as a liability in the Company's finaeciat statemnats in the period in which the dmnidends ute appraaed by the Company's shuteholders until payment is made

2.19 Earnings per share

Eamings per share ane catcutated by dividing the net pnofltltsss far the Company by the aanrage wnighted numbnn at outstanding shares over the period in questinn Diluted earnings per share mnclude the nffect ut the ussumed conversion 01 potentially diluhne instruments such an stock options

2.20 Statement of cash flow

The statement at cash Bom is presented in accardance with the indirect method.

2.21 Share based payments

Emplsyees ut the aubsidiuries of the company rncemne remuneration in the form ut share-basnd payment transactions, wfrernby emptayees render snrnices 85 annsidemation for equity instruments such an optiunu to buy shares of the Company. The cost ut equity-settled transactions is measured by reference to the fair value at the date an which the awand is granted. The fair value is determined using upptoptiate nalualion models The cost st equity settied transactions is recognised as an expense, tagetber with a carrespanding increase in resennes within equity, 50cr the vesting period which is the periad aner which att of the specified nesting cnnditmans ane ta be satisfied. At the end ut each reporting period the natity revises the estimaten ut the number of options that ute expected to vest hased on the non-murket conditions It recognises the impact ut the revision to original entimates, if any, in the mncome statement, with a conrespaodiag adjustment to equity. Vdhere the tennis at the share aptian scheme is rnoditied ta be settted in cash mather than in equity instruments, the entity measures the liability mitiatty using the modification date fair value of the equity-sett(ed awand, baoed as the etapsed portion at the ensting period. Thio amaunt is then recognized as a cnedit ta liability and a debit ta equity. Until the liability is sattiad it is re-measured at each tepotting dele with changes in fair value recognized in pnatit and loss.

3. Financial risk management

The Company's normal business exposes il to varioun financial nok5.

Currency rate ri sk

On risk is the foreign eschange risk The Company is exposed to that risk mainly due to the amoants don to and from relatert parties. The main curreocies that lite company is exposed to ane Norwegian Kroner (NOK) and Euro (EUR). A variatiorr st .1- 10% in the rute 01 exchasge st USD/NOI< woold affecl the Company by USD45 in 2014 (2013: USD 154). A variatioe at +1- to% is the rate of esohange st USD/EUR would affect the Company by USD8 in 2014 (2013: USD 7).

Interest rate risk

The Company is exposed to ieteresl rate risk due to borrowings and cash at banks. The ri sk due to cash held at banks is immaterial an the Company does not intend to hold material liquid reserves in fined deposits. The risk due to isterest rate tluctuali050 is USD 55 it inlerent natos ftuctuate by +/-10 basis poiets (2013: USD 76)

Liquidity rute-nok.

The Company monitors ita risk In a shsrtage ot fonds by closely monitoring the projected cash flow from sperationo, financial espenses ned investment expenditune. The Company maintaiss safficieet cash ter its daily operatisns via short term cash deposils at banks. The lable below analyses the company's non-deneative financial liabilities and net-settled derivalive financial liabilities into relevant maturily grouping baoed se lite remaining period at the batasce sheet date to the contractual matarily dale. Denivative financial liabilities are incladed in the analysis if their contractual maturities ane essenlial for an understanding st the timing st the cash tows.

Liquidity risk

	Lena than 3 months 3 to 12 moelhs lto5 years More thae 5 years				Total
At 31 Desember 2014
Interest beaning loans and berromings	2 662	4 328	49 984	-	56 874
Derivalive financial instruments	180	540	615	-	1 339
Trade and athen payabtes	55	165		-	220
	2897	5033	50603	-	58533

	Less tina 3 moeths 3 to 12 months ItoS ynre's More tharr 5 years				Total
At 31 December 2013
Inlerest beaning loans and borrowisgs	1 536	4607	56 159	-	62332
Derivutive financial instruments,	36	100	1 919	-	2063
Trade and other payables	29	87	-	-	116
	1601	4802	50108	-	64511

3.2 Fair value estimation

The table below analyses financial instruments carnied at fair value, by valaation melhod. The different levelo have been defined an follows: • Qaoted prices (unadjanled( in active markets for ideelical anses nr liabilities (Leve] 1).

• leputn sliter than quoted pnces included within levet 1 that ane oboervable for the annet nr liabildy, either direstly (that is, an peces( or indirectly (that is, derived from pr/ses) (Levet 2)

• Input for the annet yr fability that are not based on observable mvrket date (that is, unobservable inpots) (Level 3)

The follswing tabte presentn the Company's liabilities that ane measared at fair value at

31 Desember 2014
------------------	--	--	--

Labilities	Levet I	Levet 2	Levet 3	Total
Denivatives used for hedging	-	386	-	386
	-	386	-	306

31 Decereber 2013
Labilitien	Levet i	Levd 2	Level 3	Total
Derivatises used for hedging	-	576	-	576
	-	576	-	576

3.3 Capita( risk management

The Company's ob)ectives wbes managing capital am to nafeguard the Company's abilily to continae an a going cancem in orden to provide relams for nhaneholdern and benefils for other ntakehstders ned to maintain an optimal capital struclsre to redace the csst st capital.

In order to mainlain on adjaot lite capital otrostane. the Company may adjast the amount st disideeds paid to nhanehnlders, neturs capital to nhareholders, isnue new shares or seIl ansetn to redoce debt.

Connistent with othern in lite indastry, lite Company monitorn capital on the bane st lite gearing ratio. This ratio in calcolated an net debt divided by total capital. Net debt is catculated as total bsrrowingn (incladiog 'carrent and non-csrreet bsrrowings' as show in the balanse sheet( less cash and cash equivaleetn. Total capital in catcalated an 'equity' as show in lite balanse sheet plan net debt.

The Gearing Ration at 31 Desember 2014 and 31 Desember 2013 were an follows

	2014	2013
Total Borrvwingn (Note 7)	52 674	56 230
Lena: Cash and bank balanses (Note 24)	(6 690)	(349)
NetDebt	46024	55881
Total Eqaily	537213	390 119
Total Capital as defined by management	583 237	406 000
	8%	14%

DEEP SEA SUPPLY PLC

4. Investments in subsidiaries

	Principal activity	2013	Additions	Impairment	2014
Cyprus based companies
DESS Cyprus Ltd	Shipowning	147827	٠	(130 103)	17724
DESS PSV Ltd	Shipowning	144 916	٠	(54905)	90 012
PSV Holding Inc*	Shipowning	٠	66 617	(66617)	٠
DESS Finance Ltd	Financing	28 201	5 000	۰	33 201
Deep Sea Supply Management (Cyprus) Ltd	Management	15			15
DESS Sea Eagle Ltd	Shipowning	۹
DESS Invest Ltd	Investment holding	4 001	18 903		22 904
DESS PSV II Ltd	Shipowning		67 341		67 341
DESS PSV III Ltd	Shipowning		36 990		36 990
DESS PSV IV Ltd	Shipowning	1	75 000		75 001
Norwegian based companies
Deep Sea Supply Management AS	Management	89 610	٠	(37085)	52 525
Singapore based companies
Deep Sea Supply Managemet Singapore Pte Ltd	Management	1656	٠	(1523)	133
Total		416 230	269 852	(290 233)	395 847

All subsidiaries are 100% owned.

* PSV Holdings Inc was acquired during the year from a related party as explained in Note 13. The impairment of this subsidiary represents dividends paid back to Deep Sea Supply Pic further to a restructuring of the assets of PSV Holdings Inc. after acquisition, Indications of impairment existed for the subsidiaries for which their net assets were lower than the carrying value recorded in the Company's financial statements. For the subsidiaries for which impairment indications were identified, then management estimated their recoverable amount.

All net assets with the exception of vessel costs were considered to be at fair value. The cost of vessels for the shipowning subsidiaries was replaced with the recoverable amount of the vessels and the revised net assets were then compared to the carrying value of the investment in subsidiaries. If the cost was higher than the revised fair value of subsidiaries impairment was recognized, being the difference between the cost of investment and the recoverable amount.

5. Cash and cash equivalents

	2014	2013A REAL AND A REPORT OF A REPORT OF A 200 A REPORT OF A 200 A REPORT OF A 200 A REPORT OF A 200 A REPORT OF A 200
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,Cash at bank and in hand	6650	349
Total bank deposits	6650	349

Cash and cash equivalents are denominated in the following currencies:

Currency1. 医血管切除术 医心包 医麦克尔氏试验检尿 医气体性 医眼镜 医血管切除术 医神经节 计数据文件 医神经性 医心包性 医心包性 医心包性 医阿尔特氏试验检尿道	2014	2013
United State Dollars (USD)	6578	316
Norwegian Kroner (NOK)	55	16
Great British Pound (GBP)	16
Euro (EUR)	٥	15
Total	6650	349

6. Share Capital

	Number ofShares(thousands)	ShareCapital	Sharepremium	Other paid-in-equity	Total
Opening balance as at 1 January 2013	127 197	2544	130 264	2007	134 815
Valuation of share option scheme				(127)	(127)
At 31 December 2013	127 197	2 5 4 4	130 264	1880	134 688
Opening balance as at 1 January 2014	127 197	2544	130 264	1880	134 688
Increase of share capital	134 000	2680	193 918		196 599
Valuation of share option scheme				(153)	(153)
At 31 December 2014	261 197	5 2 2 4	324 183	1 7 2 7	331 134

The total authorised number of ordinary shares as per 31 December 2014 is 375,000,000 (2013: 250,000,000) shares with a par value of USD 0.02 per share. The Company does not own any share of its own. All issued shares are fully paid.

On 19 June 2014, the Group issued 134,000,000 ordinary shares of USD 0.02 at a price of USD1.47 each. The share premium arising from this issue was USD 196,980.

The transaction costs relating to the issue of shares amounted to USD 3,061 and were deducted from share premium account as permitted by the Cyprus Companies Law, Cap.113.

On 5 August 2014 the Board of Directors approved the distribution of dividends of USD 0.02 per share relating to Q2 results and on 11 November 2014 declared and paid a dividend of USD 0.02 relating to Q3 results. The total dividends paid to shareholders amounted to USD 10,457.

The board of directors of the Company has approved a share option scheme for directors and certain employees. The exercise price of the granted options is equal to the market price of the shares at date granted plus 10%.

These share options may be exercised with one third after one, two and three years, respectively and all share options must be exercised within 5 years. The strike price shall be reduced, on a USD for USD basis, by the amount of all dividends declared by the Company in the period from the date of grant until the date the subsisting share options is exercised. Subsequent share options have been granted to new employees based on the same principle.

Movements in the number of shares options and their related weighted average exercise prices are as follows:

		2014	2013
A 2012 THE RESERVATION SERVER OF THE PERSON WAS CITED AND RELEASED.	Average exercise price		Average exercise price
	NOK per share	Ootions	NOK per share	Options
At 1 January	9.52	866 667	8.83	1 058 333
Granted
Forfeited	11.21	(32333)	12.27	(59334)
Exercised			6.99	(13233)
Expired	6.99	(266 666)
At 31 December	10.60	276 668	9.52	866 667

The share options exercised and forfeited pertained to employees that left the Company during the year.

DEEP SEA SUPPLY PLC

Share options outstanding at the end of the year have the following expiry date and exercise prices:

Expiry date (as per year ended 31 December 2014)

	Exercise price in NOK	Shares.
2015	11,76	178 335
2016	8.49	98 333
At 31 December		276 668
Expiry date (as per year ended 31 December 2013)
	Exercise price in NOK	Shares
2014	6.99	266 666
2015	11.41	501 668
2016	9.72	98 333

The value of the option is estimated by Hull & White's implementation (2002) for employee stock options of the binomial tree model for the pricing of early exercise equity options.

Change of control

At 31 December

The share options for the board and the share options and certain other benefits for the employees will come into effect in the event of change of control of the Company.

7. Borrowings

--------------------------------------	As at 31 December 2014	As at 31 December 2013_______________________________________
Non-current
Bank borrowings	48 122	51 678
Total Non-current borrowings	48 122	51 678
Current
Bank borrowings	4552	4552
Total Current borrowings	4552	4552
Total Borrowings	52 674	56 230

The outstanding loan of the Company's borrowings are denominated in the following currencies

	As at 31 December 2014	As at 31 December 2013
USD	52 674	56 230
	52 674	56 230
The maturity of non-current borrowings is as follows
	As at 31 December 2014	As at 31 December 2013
Borrowings
Between 1 and 2 years	4552	4552
Between 2 and 5 years	43 570	51 678
Over 5 years	٠
	48 122	56 230

Bank borrowings comprise of loans secured with the following:

• A first priority mortgage in the financed vessels of subsidiaries of USD 390,000 (2013: 390,000).

• Security agreements in relation to the vessels

• Receivables charges

866 667

• Hedging assignment agreement

• Intra-group receivables assignment agreement

• Share pledge agreements in relation to the shares of DESS Cyprus Ltd and DESS PSV Ltd

• Corporate guarantees by Deep Sea Supply PLC, Deep Sea Supply Management AS, DESS Cyprus Ltd and DESS PSV Ltd

The carrying value of borrowings approximate their fair value.

The effective interest rate of company's bank borrowings is 2.76%.

8. Credit quality of financial assets

For the year ended 31 December 2014:

Credit Rating	Amount
A 1	6650
Total	6650

For the year ended 31 December 2013:

.Credit Rating	Amount
A 1	329
A2	20
Total	349

Ratings shown above were issued by the credit agency of Moody's as at 31 December 2014.

9. Financial instruments by category

Company	Receivables	Assets atfair valueLoafls and through profitand 1055	Derivativesused forhedging	Availablefor sale	Total
31 December 2014
Assets an per balance sheet
Trade and other receivables	220	-	-	-	220
Cash and cash equivalents	6 650	-	-	-	6 650
Total	6870				6870

	Liabilities atfair valuethrough profitand toss	Derivativesused forhedging	Otherfinancialliobilities	Total
Liabilities as per balance sheet
8orrowings	-	-	52 674	52 674
Derivalive financial instruments	-	386	-	386
Trade and other payables	-	-	3 763	3 763
Total	-		56 438	56 824

3ompany	Receivables	Assets atfair valueLoans and through profitand oss	Derivativesused forhedging	Avallablefor safe	Total
31 December 2013
Assets an per balance sheet
Trade and other receivables	3 252	-	-	-	3 252
Cash and cash equivalents	349		-	-	349
Total	3601	-	-	-	3601

	fair valuethrough profitand loss	Liabilities atDerivativesused forhedging	Otherfinancialliabilities	Total
Liabilities an per balance sheet
Borrowings	-	-	56 230	56 230
Derivalive financial instruments	-	576	-	576
Trade and other payables			204 800	204 800
Total	-	-	261 030	261 606

10. Other short term payables

	2014	2013
Trade payables	220	116
Total	220	116

Trade and 016cr payables are denominaled in the following currencies:

Currency	2014	2013
United State Dollars )IJSD)	183	60
Norwegian Kroner (NOK)	50	48
Euro (EUR)	7	-
Great British poung )GBP)	-	9
Total	220	116

11. Investment in JointVentures

On 31st May 2013 The Company and OTG Pactual Oil & Gas Participaçôes S**.**A. (6TG Pactuar) entered into a joinl venture (the Joint Ventur&) for the ownership and operation of Plattorm Supply Vessels (PSVs) andAnchor Handling Tog and Supply Vesnels (AHTS) in Brazil. The Company sold 50% of ils Brazilian business and purchased together with its new 6razi11an partner BTG Pactual 6 newbuilding contracts. The sale nI the 8razilian business was done via:

• Sale of vessels Ihat belonged to fully owned subsidiaries st Inc Company

• Sale of 58% of shares in Deep Sea Supply Navegacan Marilima Ltda, a company previously fully owned by a subsidiary of the Company. This company owns and operates the vessel Sea Brasil.

• Sale 0150% st shares in Deep Sea Supply Servicos Maritimos Ltda, a previously fully owned subsidiary of the Company.

The Company's investmenls in the Jsint Venlure are:

	2013	2014
Deep Sea Supply STO SV
Opening 01/12/2013	190 186	-
Initial share capital of Dutch entity	-	24
Acquioilion st vessels previously owned by Deep Sea	-	124 062
Acquisilion st newbuild conlracts	-	50 100
Equity contribation for working capital	-	16 000
Balance31112	190186	190186
Deep Sea Supply Servicns Ltda
Openingol/12/2013	1 133	-
Initial capital	-	765
Dispooal 0850%	-	(383)
New equily contributed aller disposal	-	750
Balance 31112	1133	1133
Total	191 319	191 319

DEEP SEASUPPLY PLC

12. Administrative expenses

	2014	2013
Audit taes	32	16
Cnnsultancy fees	96	149
Management fees fram subsidiaries	789	862
Other admumotration expenses	311	151
	1230	1178

13. Related party transactions

Remuneration to the board

Remuneration to the Board in 2014 was US$ 180 (NOK 1.1 million), wherenf US$57 (NOK 0.35 million) In the chairman. In 2013 payment to the board was US$ 154 (NOK 0.85 million), whereof Us$64 (NOK 0.35 million) man paymenl to the Chairman.

Amounts due to retated parties

2014	2013
3000		Tax legislation
175	2001	iThe Company s subject to taxnn n several jansdictions, where significaot )udgement is required in calculating the tax prnnision fori
263		fire Company. There are many traonactions for which the altimale lan determinalinn is uncertain and for which the Group makes
47		pronisions based on an aunnnsment nI internat estimales, lan treatien and lan negulalions in the different cnunlries wirere the Group
46	429	is operating, and appropriate enternal advice. Wtrere the 1maI lan outcomo otthese matters is different from the amounts Ihat mere
5	-	initially recorded, such differeoce mill impacl the lan charge in the penmod in which the nulcnme is determined.
3	-
2	86211
2	-
	115 194
-	836	15. I ncome tax expenses
-	12
3 543	204 684
	I	---

The bnlnncns are pnyable on demand and are not secured.

Amounts due from related parlies

	2014	2013	2014	2013
DESS Cyprus Ltd	129 250	30000	(130 103)	-
DESS PSV Ltd	92975	100 000	(54 905)	-
PSV Holding Inc	67 846	-	(66 617)	-
DESS Snu Eagle Ltd	4 854	-	-	-
Deep Sea Supply Management AS	-	11 050	(37 005)	(0713)
Deep Sea Supply Management Singapore PTE Ltd	-	-	(1 523)	-
	294 955	141 000	(299 233)	(8713)

Management fees

For 2014, the Company rncngnized management fees charged fram subsidiaries that amounted to USD 789 (2013: 862)

Acquisition of 10 new vessels and newbuiidings

In June 2014, the Company entered intn a share purchase agreement with Greenwich Holdings Ltd. (company controled by party exercising significant inftuence ener the Group), for the acquisition at 100% 00 the shares in PSV Holding Inc ("PSV Hntding"(, non-resident domeslic corporation tormod under the laws nI Liberia. The sole activity et PSV Holding cnnsisled et holding vessels and newbuitding contracts for construction nI PSVs. PSV Holding was the owner nI sin PSVs and furthnrmnre a party to shipbuilding contracts for tour PSVs under construction at the time at the lransaction.

The total purchaoe consideralion paid by the Company for the strares in PSV Holding was based on an Enterprise Valae (equity plan net debt ond remaining copitol nxpenditure) ut USD 366 million, including the capita[ expenditure commitments ut approximntely USD 107 million and net debt nI USD 192 million.

The acquisilion ut PSV Holdings in accounted for in the connotidated financiat stalementn an a purchase 01 the vessels ned not an a business combination. The acqaisition price of the vessels and vessels under construction at the daled nI acquiSition was recorded an USD 258,753. Subseqaent to acqaisilion the Group paid an additinnal USD 107,247 upon the detivery at the four vessels under construction.

14. Contingencies

- Tax legislation

--

The lan on the Company's prolit before fax differs fram the Iheoretical amoant 1501 would arme unixg the applicable lan rate an tnllnws:

			2014	2013
Amounts due from related parliesAt 31 December 2014, a company owned by DESS BTG )JV) owed the Company USD 1,119. The amonnl pertains to expenses		(Laos) I Pmnlil befnre lan	i 106	127 550
prepaid by the Company on behalf of DESS BTG and is considered current.		Tan calcalaled at the applicable corporation lan male nI 12,5%	138	15944
		Tax effect nI expenses not deductible for tax purpnnes	36 051	1 383
Dividend received from subsidiaries and lmpairment of investment in subsidiaries		Tau elfect nI allnwaocen and income not nubjecl to tan	(36 978)	(17 660)
	lmpairment nI	Tau losses tom which no deferred tan asset was rncognined (b)	189	333
Divident received	investment in subsidiaries	Total	-

16. Earnings per share

Basic

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. Total number of outstanding shares as per year-end 2014 was 261,197,200 (2013:127.197.200).

	2014	2013
1999 1999 1999 1999 1999 1999 1999 19Profit attributable to equity holders of the company	1106	127 550
Weighted average number of ordinary shares (thousands)	198 786	127 197
Basic earnings per share (USD per share)	0.192	1003

As at 31 December 2014, there was no dilutive effect of the share options as they were out of money.

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company's only category of dilutive potential to ordinary shares is the share options. Share options have been granted to Board of Directors and management, and per year-end 2014 there were totally 543,333 share options outstanding. The share options are included in the diluted number of shares depending on whether or not they were in the money per year-end 2014

	2014	2013***********
Profit attributable to equity holders of the company	1 106	127 550
Weighted average number of ordinary shares (thousands)	198 786	127 905
Diluted earnings per share (USD per share)	0.192	0.997

As at 31 December 2014, there was no dilutive effect of the share options as they were out of money.

17. Auditors remuneration

Remuneration to the statutory auditors in the financial statement for 2014 equals USD 16 (2013: USD 55) for audit services, USD 33 (2013: USD 18.5) for other assurance services and US$ 1(2013: USD Nil) for non-assurance services.

18. Financial expenses

	2014	2013,,,,,,,,,,,,,
Interest to related parties (Note 13)		202
Interest on Bank Borrowings	1541	2764
Amortization of borrowing costs	1032	681
Other financial expenses	40	833
	2613	5480

18. Events after balance sheet

There were no material events after the balance sheet date, which have a bearing on the understanding of the financial statements.

pwc

Independent auditor's report To the Meinbers of Deep Sea Supply P1c

Report on the financial statements

We have audited the accompanying financial statements of parent company Deep Sea Supply PIc (titt "Company"), whieh comprise the balance sheet as at 31 Deceniber 2054, and the statements ofiocome, comprehensive income, ehanges in equity aud cash fiows for the year then ended, and a summary of significant accounting policies aud other explanatory inforination.

Board of Directors'responsibility for theflnancial statements

The Board of Direetors is responsible for the preparation of financial statements that give a true aud fair view in accordance with International Finaucial Reporting Standards as adopted by the European Union aud the requirements of the Cyprus Companies Law, Cap. 153, aud for sueh internal control as the Board of Directora determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

0cr responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in aceordauce with International Standards on Auditing. Those Standards require that wc comply with ethical requirements aud plan aud perform the audit to obtain reasonable assuranee about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtaio audit evidence about the amounts and disclosures in the financial statements. The procedurea seleeted depend on the auditor's judgment, including tite assessinent of the risks et material misstatement of tite financial statements, whether due to fraud er error. In making those risk assessments, the auditor considers internal control relevant to tite entity's preparation of financial statements that give a true and fair view in order to design audit procedores that art appropriate in tite cireumstanees, bot not for the purpose of expressing an opinion on the effeetiveness of the entity's internal control. An audit also ineludes evaluating the appropriateness of accounting policies used and the reasonableness et accounting estimstes made by the Board of Direetors, as well as evaluating the overall presentation of the financial statements.

We believe that tite audit evidence wc have obtained is sufficient aud appropriate to provide a basis for our audit opinion.

PricewaterhouseCoopers Ltd, City House, 6 Xaraiskakis Street, CY-3032 Lipnassol, Cyprus P0 Box 53034, CY-3300 Limassol, Cyprus To *357 25 555 000, F:+357- 25555001, WWW.pWe.COm/Ct,

Prloowat,tyo052100pel0 Ltd Is atltomb,n finn 01 Pd,ewataytoljte000pets etem000nt Ltd. 05001 memlo, enn 010.615,1,, ,opare,e lest 0,35. Pnicaaetod,oes0050pent Ltd isa pnya,s company ,esitla,nd I, Opnos (Ro. 140 143594) Sitt 01 yte ,ompano aireS,,, induding I,, 1101,0194, eie p,eaerc narra 5,0 sun,ano. at wdl eswry p,,seu, forlot 01,010, loyel enttes se cotpo,at, nam, i, Ropl by ISa Sontary et et. company titt legisteted 01166013 Ttn,,nlstodss 90155 Street 106614100520,10 appaa,s en Ine ren,peny's web Sto 011,00 in Ni0jS Ur,cosnd, Larn008 5,0 Papt,5

opinion

In our opinion, the financial statements give a true aud fair view of the financial position et parent company Ï.)eep Sea Supply Ple as at 31 December 2014, and of its financial performance and its cash fiows for the year then ended in accordance with International Finaocial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113.

Report on other legal requirements

Pursuant to the requirements of the Auditors aud StatutoryAudits of Annua] aud Consolidated Accouuts Laws of 2009 aud 2013, wc report the fobowing:

• We have obtained all the information and explauations we considered oecessary for the purposes et our audit.
• In our opinion, proper books of aecount have been kept by the Company, an far as appears from our examination of theae books,
• Tite Company's financial statements art in agreement with titt books ofaccount.
• In our opinion and to the best of our information and aecording to titt explanations given to Os, titt financial statements give titt information required by the Cyprus Colnpanies Law, Cap. 113, in the manner so required.
• In our opinion. vise information given in the report of the Board ot Direetors is consistent with titt financial statements.

~er anatter

This report, including titt opinion, hat been prepared for aud only for the Company's members as a body in accordance with Section 34 of the Auditors aud Statutoty Audits of Annual aud Consolidated Accounts Laws of 2009 and for no other purpose. We do not, in giving tIds opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

We have reported separately on the consolidated financial statements of titt Company aud its subsidiaries for the year ended 31 Deeember 2ou4.

9---A

Yiangos Kaponides Certified Public Accoimtaut and Registered Auditor for aud on behalf ot

pricewaterhouseCoopers Limited Certified Public Accountants aud Registered Auditors

Limassol, 14 April 2015

COMPANY ADDRESSES

Cyprus

Deep Sea Supply PIc John Kennedy Ave.. I ris House, 7th Floor. Office no.740B Limassol 3100 Cyprus

Deep Sea Supply Management (Cyprus) Ltd

P.O.Box 53340 CY-3302 Limassol Cyprus

Norway

Deep Sea Supply Management AS Storgaten 4 N-4876 Grimstad Norway

Singapore

Deep Sea Supply Management (Singapore) Pte.Ltd 10 Hoe Chiang Rd #19-03/04/05 Keppel Tower Singapore 089315

Brazil

Deep Sea Supply Servicos Maritimos LTDA Avenida Republica do Chile 230, 22o andar, 20031-170 Centro, Rio de Janeiro RJ Brazil

ANNUAL REPORT

Content

• 4 Report from the board
• 8 Fleet list
• 10 Board ofdirectors
• 11 Offices and management team
• 13 Consolidated financial statements
• 13 Consolidated incorne statement
• 13 Consolidated statemerit of comprehensive incorne
• 14 Consolidated balance sheet
• 16 Consolidated statement of changes in equity
• 17 Consolidated statement of cash fiows
• 19 Notes to the consolidated financial statements
• 66 Auditor's report on the consolidated financial statements
• 68 The targest shareholders
• 70 Corporate governance
• 76 Financial statements of parent company
• 80 Notes to parent company financial statements
• 98 Auditor's Report on the parent company financial statements

**m**a~

Report from the board - the financial year 2015

Deep Ses Supply P/c ("Deep Sea Supply", "DESSC" or the "Company") and its subsidiaries ('Group") on a consolidated basis in 2015 achieved operating revenues of USD 70.2 mill, vessel operating expenses of USD 27.4 mill and net other operating expenses of USD 6.5 mill. Share of profit from investments accounted for using the equity method was negative USD 60.9 mill due to the impairments of vessels of the joint venture in Brazil ("DESS BTG"). The EBITDA for 2015 was therefore negative USD 24.9 mill. Total depreciation and extraordinary impairment of vessels of the Group and of the investment DESS BTG was in total USD 114.0 mill. Foliowing net financial items of negative USD 12.4 mill, the net result after tax was a loss of USD 151.5 mill or a negative USD 0.58 per share. The book equity as per 31 December 2015 was USD 291.6 mill.

In 2015 the Group generated USD 42.1 mill from its operating activities, and increased the cash position with USD 27.5 mill from USD 46.6 mill oni January 2015 to USD 74.1 mill on 31 December 2015.

The consolidated financial statements of the Company as presented in the 2015 Annual Report have been prepared in compliance with lFRS as adopted by the EU and the requirements of the Cyprus Companies Law, Gap. 113. The financial results from the 50% owned DESS BTG is included in "Share of profit of investments accounted for using the equity method."

The Board measures the financial performance of Deep Sea Supply as presented in note 5 to the consolidated financial statements, in which 50% of the financial figures from DESS BTG are incorporated line by line using the proportionate consolidation method.

COMPANY BACKGROUND

Deep Ses Supply is a Cyprus based offshore supply company with a modem fleet of anchor handling tug and supply vessels ("AHTS") and platform supply vessels ("PSVs") operating worldwide. The Group became operational in July 2005 through the acquisition of 6 large AHTS vessels, and as per 31 December 2015 the Group operated 39 vessels with an average age of 6.1 years. Of the 39 vessels, 14 are AHTS vessels and 25 are PSVs.

The parent company is domiciled in Limassol, Cyprus, and the Group has offices in Cyprus, Norway, Singapore, Ukraine and Brazil. The total number of onshore employees at year-end was 59 (including all onshore employees in the Brazilian joint venture) and the number of seafarers was approximately 500. Deep Sea Supply is listed on Oslo Stock Exchange with the ticker code "DESSC".

STRATEGY

The Company's vision is to become one of the leading offshore supply vessel companies on a global basis. The Group is a fully integrated shipowning group and focus on the following main

activities;

• Chartering of the vessels
• Technical and crew management of the vessels
• Business development
• Investor relations and finance

The chartering and marketing activities of the Group are performed from offices in Singapore, Brazil and Norway. The Group seeks to obtain long term charter contracts for the vessels.

The Company aims at maintaining an open and transparent information strategy.

FLEET

The total fleet of 39 vessels operates worldwide, and in total 10 vessels were laid up as per end of 2015. The remaining 29 vessels operated in the foliowing geographical areas;

North Sea:	5 vessels
Asia and Australia:	8 vessels
South America:	13 vessels
Mediterranean and Black Ses:	1 vessels
West Africa:	2 vessels

Of the 39 vessels, 30 vessels had Cyprus flag, 1 Brazilian flag, I Panama flag, 4 Marshall Islands flag, 2 Malaysian flag and 1 vessel had Norwegian flag.

Deep Ses Supply's maintenance philosophy is to do proactive maintenance to ensure that the vessels can operate safely and are in good technical condition at all times. At the same time the Company focuses on good cost control. During the last years, a fuel efficiency program aiming at reducing the vessels' fuel consumption has been initiated.

THE 2015 FINANCIAL STATEMENTS AND CERTAIN MAlN RISK FACTORS

The consolidated financial statements of the Company have been prepared in accordance with, and comply with, IFRS as adopted by the EU. The financial information presented in note 5 "Segment Reporting" incorporates 50% of the financial figures from the Brazilian Joint Venture business line by line using the proportionate consolidation method, and this is how the Board measures the financial performance of the Company.

Going concern

The financial statements are prepared on a going concem basis.

Revenue and profit

The Company in 2015 achieved operating revenues of USD 70.2 mill, vessel operating expenses of USD 27.4 mill and net other operating expenses of USD 6.5 mill. Share of profit from investments accounted for using the equity method was negative USD

60.9 mill due to impairments of the book values of vessels. The EBITDA for 2015 was therefore negative USD 24.9 mill.

The Company's revenues in 2015 were in USD, BRL, EURO and GBP and the operating expenses were mainly in USD, BRL, SGD and NOK.

Total depreciation and extraordinary impairment of vessels and of the investment in DESS BTG was in total USD 114.0 mill. Following net financial items of negative USD 12.4 mill, the net result atter tax was a loss of USD 151.5 mill or a negative USD 0.58 per share. The book equity as per 31 December 2015 was USD 291.6 mill.

lmpairment of book values

When testing the book value of all assets for possible impairments, the Company has considered both market valuations received from independent ship brokers and an internal cash flow valuation on a per vessel basis. Such cash flow valuation reflects the current 10w contract coverage, significant number of vessels in lay-up and a difficult market outlook.

The result of these tests shows an impairment of book values of USD 56.9 mill for the total fleet of the Group on a consolidated basis. Following the impairment, book value of the fleet was USD 462.9 mill by the end of 2015 compared to USD 541.5 mill by the end of 2014.

Impairment of investment in Joint Venture (DESS BTG)

When assessing the recoverability of the investment, the Company took into account the going concern uncertainties surrounding DESS BTG. DESS BTG is in a challenging financial position, and the Company has assessed the recoverable amount of the investment in two possible outcomes; one with DESS BTG on a going concem basis and ono with DESS BTG on a not going concem basis. The management has allocated a weight to each scenario and the result was to write down the investment in DESS BTG to USD 31.637 mill (2014: USD 115.718 mill) as presented in the balance sheet and in the notes of the financial statements. The Company has allocated 50% to each scenario to reflect the current expectations, as allocating 100% to the going concern would not be allowed until the Company has a formal agreement with the lenders. The dialogue with the banks is positive and well progressed but no formal agreement has been reached yet. The effect of the not going concern scenario is an impairment as presented in the consolidated income statement of USD 30.894 mill (2014: USD 0).

Dividend policy

Due to the uncertain market outlook in the oil service and offshore supply market, the Board of Directors decided to be cautious and not to distribute any dividend to shareholders in relation to 2015.

Balance sheet

Total assets as per 31.12.2015 were USD 616.2 mill consisting mainly

of the book value of vessels and the investment in DESS BTG. Cash and cash equivalents at year-end were USD 74.2 mill.

Trade and other receivables

Total receivables from customers were USD 10.0 mill.

Financing - Bank facilities

In November 2011, the Company reflnanced its senior loan facility with a syndicate consisting of leading international shipping banks. The loan has a repayment profile of 18 years for the new vessels, 14/15 years for the 2007/2008-built vessels and 7 years for the 1998/1999-built vessels. The senior loan facility is secured with a 1 s priority mortgage in the flnanced vessels. This facility originally included 15 vessels, ofwhich 9 were sold to DESS BTG in 2013. These 9 vessels were carved out from the existing 15 vessel facility to a new facility, keeping both profile and remaining term from existing facility. As per year-end 2015, USD 73.3 mill was outstanding under the original facility, now including only 6 vessels

In addition, the Company also has a separate loan agreement secured with 1 s priority mortgage in the vessel 'Sea Eagle 1". This loan was drawn in February 2010 and by the end of 2015 USD 10.8 mill was outstanding. The loan has a 12 years repayment profile. In February 2015, the maturity has been extended to November 2016.

In June 2014 the Group secured loan facilities for all 10 new vessels acquired. For the 4 vessels of STX 05L design delivered from Cochiri shipyard, a USD 72 mill loan agreement with 29 year repayment profile and a 5 year term was agreed. As per 31 December 2015, total outstanding loan was USD 68.4 mill.

For 2 vessels of PX 105 design delivered from Sinopacific shipyard, a USD 44.5 mill loan agreement with 29.5 year repayment profile and a 5 year term was agreed. As per 31 December 2015, total outstanding loan was USD 42.3 mill.

For 4 vessels of PX 105 design delivered from Sinopaciflc shipyard, a USD 92 mill loan agreement with 28.5 year repayment profile and a 5 year term was agreed. As per 31 December 2015, total outstanding loan was USD 86.9 mill.

Caoital exenditure

As per 31 December 2015 the Group had no vessels under construction and no capital expenditure commitments.

Equity

Shareholders' equity at the start of 2015 was USD 443.1 mill. At the end of 2015 the Group's equity was USD 291.6 mill. The decreased equity is mainly caused by the impairment of book value of the vessels of the Group and of DESS BTG and of the investment in DESS BTG.

Shareholders

Hemen Holding Limited is the Company's largest shareholder and holds 35.1% of the Company's shares.

Lipuidity

Total current assets at year end were USD 108.0 mill and short term liabilities (including short term portion of long term debt) was USD 104.7 mill. Short term liabilities include a bank loan facility balloon payment of USD 66.5 mill due in October 2016, which is in the process of being refinanced.

Cash and cash flow

Cash flow from operations was USD 42.0 mill for the year ended 31 December 2015.

Capital expenditure related to scheduled special surveys and upgrading of vessels was USD 4.4 mill. In January 2015, the Group received repayment of borrowings of USD 20.0 mill, and during the year received interest payments of USD 1.2 mill.

In 2015, the Group has repaid USD 21.1 mill of borrowings and paid USD 10.2 mill of interest.

Cash and cash equivalents were USD 74.2 by the end of 2015, which is an increase at MUSD 26.9 fram end of 2014.

Principal risks and uncertainties

The principal risks and uncertainties faced by the Group are disclosed in Notes 3, 4 and 28 of the financial statements.

Health, safety and environment

By year end 2015, the Group's on-shore staff was to 77 employees woild-wide (induding all onshore employees in Brazil). The working environment is considered good and all employees are encouraged to participate in the development of his/her position and in the development of the Group.

Out of the 77 employees are 52 male and 25 female. The Group treats men and women equal in the recruitment processes.

Emphasis is made on professionalism and adherence to national and international laws and regulations by the suppliers delivering services to the Group. Efforts and initiatives to reduced accidents and pollution to the environment are compulsory.

The Group's vessels are engaged in sea transportation and hence at risk related to pollution of the environment. The fleet is modem with an average age of 6.1 years, and all the vessels are in compliance with requirements issued by regulatory bodies and the risk of pollution is hence viewed as limited.

The Group's shore based activities are considered environmental fnendly and normal for this type (office) activity.

Changes in the Board of Directors in 2015

All members of the Board of Directors had their term expiring in 2015, and Chairman Mr. Harald Thorstein and Mr. Hans Petter Ass were re-elected for a 2 year period. Ms. Kathrine Fre-

driksen was re-elected as Altemate Director for the same period. Mr. Neofytos Neofytou was elected as memberofthe Board of Directors for a period of 2 years from May 2015.

There were no changes to the responsibilities of the Board of Directors in 2015. Remuneration to the Board is described in Note 24 of the consolidated financial statements.

Future outlook

During 2015 the Group saw a continued weakening of the global OSV markets. In Brazil, the situation remains difficult with reduced activity and foreign flagged vessels being blocked by vessels with local flag. The North Sea spot market is challenging with unsustainable rate levels and 10w utilization. No improvement in the market situation for OSVs is expected in the short to medium term. Following the sale of two AHTS vessels, the Group has no vessels in the North Sea spot market. The contract coverage for 2016 for the Group is not satisfactory. DESSC is currently pursuing several term opportunities, however the cornpetition is fierce and rate levels are low.

As a consequence of the weak market, Deep Sea Supply will continue to lay up vessels that do not have any fixed activity the next months. In addition to laying up vessels to reduce cost, the management is working hard to further reduce operating expenses for the vessels in operation.

The 50% owned company DESS BTG, which own 21 vessels, is in a challenging financial position with a significantly reduced contract backlog following the expiry of many term charters without new contracts being entered into. The cash position was USD 25.7 mill end of 2015, and the DESS BTG companies are dependent on certain adjustments of their financial obligations going forward. Such discussions with the banks have been initiated and are progressing well. The financing of DESS BTG is non-recourse to Deep Sea Supply PIc except to a financial guarantee provided as disclosed in Nato 30 of the consolidated financial statements

The Board is pleased that the Company has been able to strengthen its balance sheet and build us cash position through 2015.

Corporate Governance

The Company's principles for Corporate Governance are reported in a separate section of the Annual Report.

Events after the balance sheet date

The Group sold the twa AHTS vessels "Sea Lynx" and "Sea Bear" and delivered to new Owners in February 2016. "Sea Lynx" was 100% owned by the Company, while "Sea Bear" was owned by Ship Finance International Ltd ("SF1") and leased to the Company under a 12 year sale and leaseback agreement entered into in 2008. Following the sale of "Sea Lynx" and the terrnination at the sale and leaseback agreement with SF1 for "Ses Bear", the Company's loans are reduced by USD 21.9 mill and the cash reduced by USD 6.6 mill. The sale and termination will give a book loss of USD 17.3 mill which will be included in the 1Q 2016 financials.

The PSV Sea Falcon" has been awarded a contract for 2 years firm plus 3 yearly options with Statoil (UK.) Ltd. for operations in the North Sea. Expected commencement is 40 2016.

The PSVs "Sea Frost" and "Sea Supra" have been awarded 60 days and 90 days firm contracts, respectively, plus 120 days options for an international oil company for operations in Asia The vessels commenced the charter contracts in April 2016.

The PSV 'Sea Titus" has been awarded 4 months flnn plus 2 months options for an international oil company for operations in South America. The vessel commenced the charter contract in April 2016.

Changes from preliminary accounts presented on 19 February 2016

The financial statements contain the foliowing changes compared to the preliminary accounts announced on 19 February 2016:

• Total comprehensive loss for the year presented on 19 February 2016: USD - 120.506 mill.
• lmpairment of investment in Joint Venture (DESS BTG) USD 30.894 mill. As explained earlier in this report, the Company has recognized an additional impairment in the investment in DESS BTG of USD 30.894 mill
• Revised comprehensive loss for the year as in Annual Report: USD -151.396 mill.

Independent Auditors

The Independent Auditors, PricewaterhouseCoopers Limited, have expressed their willingness to continue in office. A resolution giving authority to the Board of Directors to fix their remuneration will be proposed at the Annual General Meeting.

Statement of the members of the Board of Directors and other responsible persons of the Company for the financial statements In accordance with Article 9, sections (3) (c) and (7) of the Transparency Requirements (Securities for Trading on Regulated Market) Law of 2007 (Law"), we the members of the Board of Directors and other responsible persons for the financial statements of Deep Sea Supply Plc, and the businesses that are included in the consolidated accounts as a total, for the year ended 31 December 2015 confirm that, to the best of our knowledge:

A) The annual consolidated financial statements that are presented on pages 13 to 63:

• (i) were prepared in accordance with the International Financial Reporting Standard as adopted by the European Union, and in accordance with the provisions ofArticle 9, section (4) of the Law, and
• (il) give a true and fair view of the assets and liabilities, the financial position and the profit or losses of Deep Sea Supply Plc, and the businesses that are included in the consolidated accounts as a total, and

B) The Directors' Report gives a fair review of the developments and the performance of the business as well as the financial position of Deep Ses Supply Plc and the businesses that are included in the consolidated accounts as a total, together with a desoription of the principal risks and uncertainties that they are facing.

Limassol, 25th April 2016 The Board of Deep Sea Supply Plc

Harald Thorstein Chairman

Neofytos Neofytou Kathrine Fredriksen Hans Petter Aas

Jon Are Gummedal Anders Hall Jomaas

CEO CFO

Fleet list Deep Sea Supply PLC

Existing Vessels	Design	Yard	Year Built	BHP/DWT
AHTS
Sea Lynx	KMAR-404	Kværner Leirvik, Norway	1999	15000 BHP
Sea Bear	KMAR-404	Kværner Kleven, Norway	1999	15000 BHP
Sea Ocelot	Khiam Chuan	Jaya Shipbuilding, Singapore	2007	10880 BHP
Sea Eagle 1	Khiam Chuan	Jaya Shipbuilding, Singapore	2009	12000 BHP
Sea Badger	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
psv
Sea Angler	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DWT
Sea Witch	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Trout	VS 470 MKII	Karmsund M.S, Norway	2008	3300 DWT
Sea Falcon	PX 105	Sinopacific Shipyard, China	2013	4700 DWT
Sea Flyer	PX 105	Sinopacific Shipyard, China	2013	4700 DWT
Sea Tantalus	STX 05L	Cochin Shipyard Ltd, India	2013	4000 DWT
Sea Titus	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT
Sea Tortuga	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT
Sea Triumph	STX 05L	Cochin Shipyard Ltd, India	2014	4000 DWT
Sea Supra	PX 105	Sinopacific Shipyard, China	2014	4700 DWT
Sea Surfer	PX 105	Sinopacific Shipyard, China	2014	4700 DWT
Sea Swan	PX 105	Sinopacific Shipyard, China	2014	4700 DWT
Sea Swift	PX 105	Sinopacific Shipyard, China	2014	4700 DWT

Fleet list DESS BTG

Existing Vessels	Design	Yard	Year Built	BHP/DWT
AHTS
Sea Tiger	KMAR-404	Kværner Kleven, Norway	1998	15000 BHP
Sea Leopard	KMAR-404	Kværner Kleven, Norway	1998	15000 BHP
Sea Panther	KMAR-404	Kværner Leirvik, Norway	1999	15000 BHP
Sea Cheetah	Khiam Chuan	Jaya Shipbuilding, Singapore	2007	15000 BHP
Sea Jaguar	Khiam Chuan	Jaya Shipbuilding, Singapore	2007	15000 BHP
Sea Fox	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Jackal	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Vixen	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
Sea Stoat	Seatech P-729	ABG Shipyard Ltd, India	2011	6800 BHP
Psv
Sea Halibut	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DWT
Sea Pike	UT 755 L	Cochin Shipyard Ltd, India	2007	3250 DWT
Sea Bass	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Poliock	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Turbot	UT 755 L	Cochin Shipyard Ltd, India	2008	3250 DWT
Sea Brasil	STX 09	STX Promar, Brazil	2012	4700 DWT
Sea Forth	PX105	Sinopacific Shipyard, China	2013	4700 DWT
Sea Frost	PX105	Sinopaciflc Shipyard, China	2013	4700 DWT
Sea Spark	PX1OS	Sinopacific Shipyard, China	2013	4700 DWT
Sea Spear	PX105	Sinopacific Shipyard, China	2014	4700 DWT
Sea Spider	PX1O5	Sinopacific Shipyard, China	2014	4700 DWT
Sea Springer	PXI05	Sinopacific Shipyard, China	2014	4700 DWT

I

Board of directors

Harald Thorstein Bonn 1979 Chairman since 2013 Memberofthe board of directors since 2013

Other board assignments: Ship Finance International Limited Seadrill Partners Archer Limited

Education:

Master of Science degree within Industrial Economics and Technology Management from the Norwegian University of Technology and Science

Shares in Deep Sea Supply per 31.12.2015: None

Hans Petter Aas Bonn 1946 Director since 2013

Other board assignments:

Ship Finance International Ltd Golden Ocean Group Limited Seadrill Limited KNOT Partners Ltd Solvang ASA and several privately held companies

Education: Norwegian School of Economics and Business Administration, Bergen

Shares in Deep Sea Supply per 31.12.2015: None

Kathrine Fredriksen Bonn 1983

Alternate Director for Mr. Harald Thorstein since 2009

Other board assignments: Seadrill Limited Norwegian Property ASA

Education:

Wang Handelsgymnas Oslo European Business School London 2002-2005

Shares in Deep Sea Supply Plc per 31.12.2015: None

Neofytos Neofytou Bonn 1951 Director since 2015

Other board assignments: Seatankers Management Co. Ltd Redimus Services Ltd Synot International Ltd

Education: Fellow Chartered Accountant

Shares in Deep Sea Supply per 31.12.2015: None

Offices and Management Team

The Company is incorporated in Limassol, Cyprus. The Company has management companies in Cyprus, Singapore, Brazil and Norway. As of year-end the on-shore staff is 77 persons, which is a decrease of 5 from last year.

Deep Sea Supply Management (Cyprus) Ltd.

The Company was established in 2007 and focuses primarily on financial reporting, cash management, control functions and insurance claims handling. The Company has 4 employees and is headed by Mr. Constantinos Tzagotzides.

Deep Sea SUPPIY Navegacao Maritima Ltda, Rio de Janeiro, Brazil

The company was established in 2009 atter DESSC contracted a large PSV from STX Offshore Brazil S.A. The Company has 34 employees and is a fully operational shipping company in Brazil including chartering and technical and crew management. The General Manager is Mr. Abilio Mello.

Deep Sea Supply Management (Singapore) Ltd.

The Company was established in 2010, in continuation of a representative office which has been in Singapore since 2006, and has 24 employees. The Company is a fully operational shipping company including chartering, technical and crew management. The General Manager is Mr. Steven Yong.

Deep Sea Supply Management AS

The Company was established in 2006 and has 14 employees involved in Chartering, Business Development, Finance, Accounting and Technical.

Deep Sea Supply Crew (Ukraine) Ltd

The company was established in 2015 and employs 1 person. The company's activities are crew management for the fleet of DESSC.

The Management team of the Company is as foliows:

Jon Are Gummedal, CEO Chief Executive Officeri Technical Director:

Jon Are Gummedal has worked with Deep Sea Supply since January 2014, first as Technical Director with the responsibility of the technical management and crewing of the fleet operating worldwide. He took the position as CEO in Deep Sea Supply in April 2015. Prior to joining DESS, he held the position asTechnical Director in one of the largest ship management companies in Norway, managing a fleet of 86 vessels. Mr. Gummedal has more than 14 years of experience in the shipping industry, last 8 years in senior management positions.

Anders Hall Jomaas, CFO - Chief Financial Officer: Anders Hall Jomaas holds a MsC within lndustrial Economics and Technology Management from Norwegian University of

Science and Technology (NTNU). He joined Deep Sea Supply in 2007 and held the position of Finance Manager for 3 years before taking the position as CFO in 2010. Prior to joining Deep Sea Supply, he worked within project management consulting and finance management for 5 years.

Constantinos Tzagotzides - Accounting Director

Constantinos Tzagotzides holds a BsC in Applied Accounting and is a Fellow of the Association of Chartered Certified Accountants (FCCA). He has more than 10 years of experience in accounting related positions. He has worked as Chief Accountant in Deep Sea Supply since 2007. Previously, he was employed as a chief accountant in A.P. Moller Maersk, Cyprus and has furthermore worked as an auditor.

Tallak Strandenæs, Chartering and Marketing Director:

Tallak Strandenæs joined Deep Sea Supply in April 2014, and prior to that he worked as a shipbroker and partner in RS Platou from 1994 to 2014. During the period from 2008 to 2011 Mr. Strandenæs worked for RS Platou in Singapore.

Kjetil Løseth, HSEQ Director:

Kjetil Løseth holds a Candidatus Scientiarum degree within natural science from the Norwegian University of Science and Technology (NTNU). He has several years of experience from the offshore oil and gas and drilling industry (Archer, Seadrill and North Atlantic Drilling). Mr. Løseth joined Deep Sea Supply in 2013.

Steven Yong - General Manager, Singapore

Steven Yong has been working in the Offshore industry for 35 years in various functions including Technical, Procurement, Crewing, HSE and Operations. He was the pioneering Manager with GulfTvlark's Far East operations (Gulf Marine FE Singapore) and held the position of Operations Manager for close to 20 Years. Subsequently he joined Deep Sea Supply Singapore in 2010 as the Operations Manager and was promoted to General Manager in 2014.

Abilio Mello - General Manager, Brazil

Mr. Abilio Mello is a former Navy Officer with more than 30 years' experience working in the Brazilian Navy. . Atter his retirement in 2009 he joined the Offshore Market working as Operations Manager atAstromaritima. In January 2011 he started working in Deep Sea Supply as Fleet Superintendent, where he received the technical I operational management of the first vessels under DESS Brazil Management in 2011 & 2012. In 2012 Abilio was promoted to Technical Manager where he was in charge of the technical management team.

Mr. Mello has graduated from the Naval Academy in 1987, Naval Architect and postgraduate course in Machinery. Holds a MSc in Naval Sciences - Naval War College and has an MBA in Business Management from COPPEAD Institute / Federal University

Consolidated income statement

All amounts in USD 1,000

	Note	2015	2014
Sales - freight revenue		70155	88050
Management fee income from related parties	24	3038	3650
Operating expenses vessels	19	(27 354)	(34 935)
Other operating expenses	20	(9519)	(11 036)
Operating leases	24	-	(5 576)
Share of (loss)/proflt of investments accounted for using the equity method	30	(60 924)	3 149
Other gainsl(Iosses) - net	17	401	325
Other write offs	9	(659)	(3 013)
operati ng profit before deprecat o' and impairments (EBITDA)		(24862)	40614
Depreciation and impairment related to vessels	6	(82 949)	(27 801)
Other depreciation	6	(225)	(144)
Impairment of investment in Joint Venture	30	(30 894)	-
Operating profit (EBIT)		(138 930)	12 669
Finance income		1124	1176
Finance costs		(12 246)	(9701)
Currency (losses)/gains		(1 295)	(4 879)
Not Financial items		(12417)	(13404)
Loss before income tax		(151 347)	(735)
Income tax expenses	15	(175)	(161)
Loss for the year		(151 522)	(896)
Loss attributable to:
-Equity holders of the Group		(151 522)	(896)
-Non controlling interest		-	-
		(151 522)	(896)

In 2015 the Group has changed the presentation of the consolidated income statement. The comparative column has been adjusted accordingly ( Note 31)

Earningsl(Losses) per share for profit attributable to the equity holders of the Group, expressed In USD per share

		USD per share	USD per share
-Basic	21	(0,580)	(0,005)
-Diluted	21	(0,580)	(0,005)

Consolidated statement of comprehensive income

All amounts in USD 1,000

	2015	2014
Loss for the year	(151 522)	(896)
Other Comprehensive Income:
Items that will not be subsequently reciassified to profit and loss
Adjustment for pensjon plan (Note 7)	105	(413)
Cash flow hedges	21	1 249
Total comprehensive loss for the year	(151 396)	(60)
Attributable to:
-Equity holders of the Group	(151 396)	(60)
-Non-controlling interest	-(151 396)	-(60)

Changes to other comprehensive income are stated gross of tax. The notes in pages 19 to 63 f0m7 an integral part of these tinanciai statementa

Consolidated balance sheet

All amounts in USD 1,000

			As at 31 December
	Note	2015	2014
ASSETS
Non-Current Assets
Property, plant and equipment
Vessels	6	446516	519074
Vessels under finance lease contracts	6	16335	22420
Equipment and vehicles	6	393	519
Total property, plant and equipment		463244	542013
lnvestments accountod for using the equity method	30	31 637	115 718
ClRRDeposit	14	13258	19487
Loans to related parties	24	-	7 678
Pensions	7	45	-
Total non current assets		508 184	684 896
Current assets
CIRR Deposit short term portion	14	2684	3176
Financial derivatives	8	-	143
Inventories	10	2 108	2 322
Trade receivables	9	10012	21661
Other short term receivables	25	3 979	4 965
Loans to related parties	24	15 000	35 192
Cash and cash equivalents	11	74 186	47289
Total current assets		107 969	114 748
Total assets		616 153	799 644

			As at 31 December
	Note	2015	2014
EQUITY
Capital and reserves
Share capita[	12	5224	5224
Share premium & Reorganisation reserve	12	200796	200796
Other paid in capital	12	1486	1654
Retained earnings and other comprehensive income		84078	235474
Total equity		291 584	443 148
LIABILITIES
Non-current liabilities
Bank borrowings	14	185415	274803
Finance lease liability	14	20825	23974
CIRR Loan	14	13258	19487
Deferred gain on CIRR Loan		401	690
Pensions	7	-	267
Financial derivatives	8	-	386
Total non current liabilities		219899	319608
Current liabilities
Trade and other payables	13	6200	11684
Bank borrowings	14	91378	18027
Finance lease liability	14	4065	3832
CIRR Loan	14	2684	3176
Deferred gain on CIRR Loan		122	170
Financial derivatives	8	221	-
Total current liabilities		104 670	36889
Total liabilities		324 569	356 496
Total equity and tiabilities		616153	799644

The notes in pages 19 to 63 form an integral part of these financial statements

Consolidated statement of changes in equity

All amounts in USD 1,000

	Capita]	Share Reorganisationreserve	Sharepremiumreserve	Otherpaid-in-capita[	Othercomprehensiveincome reserve	Retainedeamings	Total
Balance at I January 2014	2 544	(123 386)	130 264	1807	(1 274)	247 264	257 220
Comprehensive income
Loss for the year						(896)	(896)
Other comprehensive income for the year					836		836
Total comprehslve income/(loss)		-	-	-	836	(896)	(60)
Transaction with owners
Share capital increase (Note 12)	2680		193 918				196 598
Valuation of share option scheme				(153)			(153)
Dividends paid (Note 12)						(10456)	(10456)
Total transactions with owners	2680	-	193 918	(153)	-	(10 456)	185 988
Balance at 31 December 2014	5224	(123 386)	324 182	1 654	(438)	235 912	443 148
Balance at I January 2015	5224	(123 386)	324 182	I 654	(438)	235 912	443148
Comprehensive income
Loss for the year							(151 522) (151 522)
Other comprehensive income for the year					126		126
Total comprehsive income/(loss)	-	-	-	-	126		(151 522) (151 396)
Transaction with owners
Share capita] increase (Note 12)							-
Valuation of share option scheme				(168)			(168)
Total transactions with owners	-	-	-	(168)	-	-	(168)

Balance at 31 December 2015 5 224 (123 386) 324 182 1486 (312) 84390 291 584

The notes in pages 19 to 63 form an integral part of these financial statements.

Consolidated statement of cash fiows

All amounts fri USD 1000

			Year Ended 31 December
	Note	2015	2014
Cash fiows from operating activities
Cash generated from operations	22	42078	47 179
Income tax paid		(56)	-
Net cash generated from operating activities		42 022	47 179
Cash flow from investing activities
Acquisitions ofvessels, constructions contracts and other PPE	6	(4405)	(376 143)
Loans to related parties		-	(20 000)
Repayment of loans from related parties	24	20 000	-
Interest received		1 213	-
Not Cash generated from/(used in) Investing activities		16 808	(396 143)
Cash fiows from financing activities
Proceeds from borrowings		-	201 245
Increase of share capital	12	-	196 599
Repayments ofborrowings		(21 113)	(17 114)
Interest paid		(10 223)	(6420)
Dividends paid	12	-	(10 457)
Net cash generated from!(used in) financing activities		(31 336)	363 853
Total changes in liquidity in the year		27494	14 889
Cash and cash equivalents at beginning of year		46 581	31 692
Cash and cash equivalents at end of the year	11	74 075	46 581
Pleclged bank accounts	11	110	708
Cash at bank as per batance sheet		74 165	47 289

For the non-cash transactions please refer to Note 11, The notes in pages 19 to 63 form an integral part of these financial statements.

Notes to the consolidated finacial statements

1. General Information

Deep Sea Supply PLC's ("the Company") and its subsidiaries, hereinafter collectively ("the Group"), principal activities are to engage and invest, directly or indirectly, by itseif or through subsidiaries or part-owned companies, partnerships or other forms of entities, in the international offshore supply vessel business. The Company was incorporated as a public limited liability company on 7 November 2006 and is domiciled in Cyprus in accordance

with the provisions of the Cyprus Companies Law, Cap. 113. Its registered office is at John Kennedy, Iris House, 7th Floor, Limassol, Cyprus. The Company has its primary and only listing on the Oslo Stock Exchange and trades under symbol DESSC.

The Group's principal subsidiaries at 31 December 2015 are set out below:

Name of Entity	Country ofincorporation		Ownership heldby the Group	Principalactivities
Ownership throuh direct interest		2015	2014
Deep Sea Supply Management (Cyprus) Ltd	Cyprus	100%	100%	Management
Deep Sea Supply Management AS	Norway	100%	100%	Management
DESS Invest Ltd	Cyprus	100%	100%	Investment holding
Deep Sea Supply Management (Singapore) PTE Ltd	Singapore	100%	100%	Management
Deep Sea Supply Shipowning AS	Norway	100%	100%	Shipowning
DESS Cyprus Ltd	Cyprus	100%	100%	Shipowning
DESS PSV Ltd	Cyprus	100%	100%	Shipowning
DESS Sea Eagle Ltd	Cyprus	100%	100%	Shipowning
DESS Finance Ltd	Cyprus	100%	100%	Financing
DESS PSV Il Ltd	Cyprus	100%	100%	Shipowning
DESS PSV Ill Ltd	Cyprus	100%	100%	Shipowning
DESS PSV IV Ltd	Cyprus	100%	100%	Shipowning
DESS Labuan Ltd	Malaysia	100%	100%	Shipowning
DESS Labuan II Ltd	Malaysia	100%	100%	Shipowning
DESS Sea Supply Management (Malaysia) SDN. BI-11).	Malaysia	100%	100%	Management
Deep Sea Supply Serviços Maritimos Ltda	Brazil	50%	50%	Management
Deep Sea Supply Navegaçåo Maritima Ltda.	Brazil	50%	50%	Shipowning
Deep Sea Supply BTG AS	Norway	50%	-	Investment holding
Deep Sea Supply BTG B.V.	The Netherlands	-	50%	Investment holding

Ownershin throuah indirect interest from direct interest in Deep Sea Supply BTG AS
Deep Sea Supply Shipowning I AS	Norway	50%	-	Shipowning
Deep Sea Supply Shipowning Il AS	Norway	50%	-	Shipowning
Deep Sea Supply Shipowning Ill AS	Norway	50%	-	Shipowning
Deep Sea Supply Shipowning I B.V	The Netherlands	-	50%	Shipowning
Deep Sea Supply Shipowning Il B.V.	The Netherlands	-	50%	Shipowning
Deep Sea Supply Shipowning Ill B.V.	The Netherlands	-	50%	Shipowning

On 23rd September 2015 the Dutch companies of the Joint Venture Group, Deep Sea Supply BTG B.V., Deep Sea Supply Shipowning I B.V., Deep Sea Supply Shipowning Il B.V., Deep Sea Supply Shipowning Ill B.V. merged with corresponding Norwegian companies Deep Sea Supply BTG AS, Deep Sea Supply Shipowning I AS, Deep Sea Supply Shipowning II AS, Deep Sea Supply Shipowning Ill AS with the Norwegian companies being the surviving entities.

These consolidated financial statements have been approved for issue by the Board of Directors on 25 April 2016.

2. Summary of significant accounting policies

As of the date of the authorisation of the financial statements, all International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) that are effective as of 1 January 2015 have been adopted by the EU through the endorsement procedure established by the European Commission.

2.1 Statement of compliance and basis of preparation

These consolidated financial statements have been prepared in accordance with, and comply with, International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU') and the requirements of the Cyprus Companies Law, Gap. 113.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities, including derivative instruments at fair value through profit or loss. A summary of the principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Refer to Note 31 for disclosures in relation to the change of accounting policy to consolidated income statement.

The preparation of financial statements in conforniitywith IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process applying the Group's accounting policies. The areas involving a higher degree ofjudgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

Adoption of new and revised IFRSs

New and amended standards adopted by the Group During the current year the Group adopted all the new and revised IFRS as adopted by the EU that are relevant to its operations and are effective for accounting periods beginning on 1 January 2015.

The new standards did not have a significant effect on the Group's financial statements.

New standards and interpretations not yet adopted by the Group At the date of approval of these financial statements a number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2015, and have not been applied in prepanng these financial statements.

IFRS 9 'Financial Instruments: Classification and Measurement" *(issued in July 2014 and effective for annual periods beginning on or after 1 January 2018). Key features of the new standard are:

i. Financial assets are required to be classified into three moasurement categories: those to be measured subsequently at amortised cost, those to be measured subsequently at

fair value through other comprehensive income (FVOCI) and those to be measured subsequently at fair value through profit or loss (FVPL).

• Classiflcation for debt instruments is driven by the entity's business model for managing the financial assets and whether the contractual cash fiows represent solely payments of principal and interest (SPPI). If a debt instrument is held to collect, it may be carried at amortised cost If it also meets the SPPI requirement. Debt instruments that meet the SPPI requirement that are held in a portfolio where an entity both holds to collect assets' cash fiows and sells assets may be classified as FVOCI. Financial assets that do not contain cash fiows that are SPPI must be measured at FVPL (for example, derivatives). Embedded derivatives are no longer separated from financial assets but will be included in assessing the SPPI condition.
• Investments in equity instruments are always measured at fair value. However, management can make an irrevocable election to present changes in fair value in other comprehensive income, provided the instrument is not hold for trading. If the equity instrument is held for trading, changes in fair value are presented in profit or loss.
• iv. Most of the requirements in lAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The key change is that an entity will be required to present the effects of changes in own credit risk of financial liabilities designated at fair value through profit or loss in other comprehensive income.
• IFRS 9 introduces a new model for the recognition of impairment losses - the expected credit losses (ECL) model. There is a 'three stage' approach which is based on the change in credit quality of financial assets since initial recognition. In practice, the new rules mean that entities will have to record an immediate loss equal to the 12-month ECL on initial recognition of financial assets that are not credit impaired (or lifetime ECL for trade receivables). Where there has been a significant increase in credit risk, impairment is measured using lifetime ECL rather than 12-month ECL. The model indudes operational simplifications for lease and trade receivables.
• vi. Hedge accounting requirements were amended to align accounting more dosely with risk management. The standard provides entities with an accounting policy choice between applying the hedge accounting requirements of IFRS 9 and continuing to apply lAS 39 to all hedges because the standard currently does not address accounting for macro hedging.

The Group is currently assessing the impact of the amendments on its financial statements.

Defined Benefit Plans: Employee Contributions - Amendments to lAS 19 (issued in November 2013 and effective for annual periods beginning I February 2015). * The amendment allows entities to recognise employee contributions as a reduction in the service cost in the penod in which the related employee service is rendered, instead of attributing the contributions to the periods of service, if the amount of the employee contributions is independent of the number of years of service. The Group is currently assessing the impact of the amendments on its financial statements.

Annual lmprovementsto IFRSs 2012 (issued in December 2013 and effective from the commencement dato of its first financial year starting on or after I February 2015). The improvemonts consist of changes to seven standards. IFRS 2 was amended to darify the definition of a vesting condition' and to define separately 'performance condition' and service condition'; The amendment is effective for share-based payment transactions for which the grant date is on or after 1 July 2014.IFRS 3 was amended to clarify that (1) an obligation to pay contingent consideration which meets the definition of a financial instrument is ciassified as a financial tiability or as equity, on the basis of the definitions in lAS 32, and (2) all non-equity contingent consideration, both financial and non-financial, is measured at fair value at each reporting date, with changes in fair value recognised in profit and loss. Amendments to IFRS 3 are effective for business combinations where the acquisition date is on or after i July 2014. IFRS 8 was amended to require (1) disclosure of the judgements made by management in aggregating operating segments, including a description of the segments which have been aggregated and the economic indicators which have been assessed in determining that the aggregated segments share similar economic characteristics, and (2) a reconciliation of segment assets to the entity's assets when segment assets are reported. The basis for conclusions on IFRS 13 was amended to clarify that deletion of certain paragraphs in lAS 39 upon publishing of IFRS 13 was not made with an intention to remove the ability to measure short-term receivables and payables at invoice amount where the impact of discounting is immaterial. lAS 16 and lAS 38 were amended to clarify how the gross carrying amount and the accumulated deprociation are treated where an entity uses the revaluation model. lAS 24 was amended to include, as a related party, an entity that provides key management personnel services to the reporting entity or to the parent of the reporting entity (the management entity'), and to require to disclose the amounts charged to the reporting entity by the management entity for services provided. The Group is currently assessing the impact of the amendments on its financial statements.

Accounting for Acquisitions of lnterests in Joint Operations - Amendments to IFRS 11 (issued on 6 May 2014 and effective for the periods beginning on or after 1 January 2016*). This amendment adds new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The Group is currently assessing the impact of the amendments on

its financial statements.

Clarification ofAcceptable Methods of Depreciation and Amortisation - Amendmentsto lAS 16 and lAS 38 (issued on 12 May 2014 and effective for the periods beginning on or after 1 January 2016*). In this amendment, the IASB has clarified that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The Group is currently assessing the impact of the amendments on its financial statements.

IFRS 15, Revenue from Contracts with Customers (issued on 28 May 2014 and effective for the periods beginning on or after 1 January 2018)*. The new standard introducos the coro principle that revenue must be recognised when the goods or services are transferred to the customer, at the transaction price. Any bundled goods or services that are distinct must be separately recognised, and any discounts or rebates on the contract price must generally be allocated to the separate elements. When the consideration varies for any reason, minimum amounts must be recognised if they are not at significant risk of reversal. Costs incurred to secure contracts with customers have to be capitalised and amortised over the period when the benefits of the contract are consumed. The Group is currently assessing the impact of the amendments on its financial statements.

Sale or Contribution ofAssets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and lAS 28 (issued on 11 September 2014 and effective for annual periods beginning on or after 1 January 2016. EU endorsement has been postponed; awaiting IASB developments)*. These amendments address an inconsistency between the requirements in IFRS 10 and those in lAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognised when a transaction involves a business. A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are held by a subsidiary. The Group is currently assessing the impact of the amendments on its financial statements.

Annual lmprovements to lFRSs 2014 (issued on 25 September 2014 and effective for annual periods beginning on or after i January 2016*). The amendments impact 4 standards. IFRS 5 was amended to clarify that change in the manner of disposal (reciassification from "hold for sale" to "hold for distribution" or vice versa) does not constitute a change to a plan of sale ore distribution, and does not have to be accounted for as such. The amendment to IFRS 7 adds guidance to help management determine whether the terms of an arrangement to service a financial asset which has been transferred constitute continuing involvement, for the purposes of disclosures required by IFRS 7. The amendment also clarifies that the offsetting disclosures of IFRS 7 are not specifically required for all interim periods, unless required by lAS 34.The amendment to lAS 19 clarifies that for post-employment benefit obligations, the decisions regarding

discount rate, existence of deep market in high-quality corporate bonds, ar which government bonds to use as a basis, should be based on the currency that the liabilities are denominated in, and not the country where they anse. lAS 34 will require a cross reference fram the interim financial statements to the location of inforniation disclosed elsewhere in the interim financial report". The Group is currently assessing the impact of the amendments on its financial statements.

Disclosure Initiative Amendments to lAS I (issued in December 2014 and effective for annual periods on or after 1 January 2016)*. The Standard was amended to clarify the concept of materiality and explain that an entity need not provide a specific disclosure required by an IFRS if the information resulting from that disclosure is not material, even if the IFRS contains a list of specific requirements or describes them as minimum requirements. The Standard also provides new guidance on subtotals in financial statements, in particular, such subtotals (a) should be comprised of line items made up of amounts recognised and measured in accordance with IFRS; (b) be presented and labelled in a manner that makes the line items that constitute the subtotal clear and understandable; (c) be consistent from period to period; and (d) not be displayed with more prominence than the subtotals and totals required by IFRS. The Group is currently assessing the impact of the amendments on its financial statements.

IFRS 16 'Leases" (issued in January 2016 and effective for annual periods beginning on or after i January 2019)*. The new standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. All leases result in the lessee obtaining the right to use an asset at the start of the lease and, if lease payments are made over time, also obtaining financing. Accordingly, IFRS 16 eliminates the classification of leases as either operating leases ar finance leases as is required by lAS 17 and, instead, introduces a single lessee accounting model. Lessees will be required to recognise: (a) assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value; and (b) depreciation of lease assets separately from interest on lease liabilities in the income statement. IFRS 16 substantially carries forward the lessor accounting requirements in lAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those Mo types of leases differently. The Group is currently assessing the impact of the amendments on its financial statements.

Recognition of Deferred TaxAssets for Unrealised Losses - Amendments to lAS 12 (issued in January 2016 and effective for annual periods beginning on ar after i January 2017). The amendment has clanfied the requirements on recognition of deferred tax assets for unrealised losses on debt instruments. The entity will have to recognise deferred tax asset for unrealised losses that anse as a result of discounting cash fiows of debt instruments at market interest rates, even if it expects to hold the instrument to maturity and no tax will be payable upon collecting the principal amount. The economic benefit embodied in the deferred tax asset anses from the ability of the holder of the debt instrument to achieve future gains (unwinding of the effects of discounting) without paying taxes on those gains. The Group is currently assessing the impact of the amendments on its financial statements.

Disclosure Initiative - Amendments to lAS 7 (issued on 29 January 2016 and effective for annual periods beginning on or after i January 2017) The amended lAS 7 will require disclosure of reconciliation of movements in liabilities arising fram financing activities. The Group is currently assessing the impact of the amendments on its financial statements.

*denotes standards, interpretations and amendments which have not been endorsed by the European Union.

The Board of Directors assesses the impact of new standards and interpretations at the point when these are endorsed by the European Union. As a result the impact of the new standards and interpretations that have not been endorsed by the European Union has not yet been assessed.

2.2 Consolidation

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group 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 fram the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. The Group 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, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. 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 Group recognises any non-controlling interest in the acquiree on an acquisitionby-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree' s identifiable net assets.

Acquisition-related costs are expensed as incurred. All intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

(b) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. lnvestments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased ar decreased to

recognise the investors share of the profit or loss of the investee after the date of acquisition. Dividends received or receivable from associates are recognized as a reduction in the carrying amount of the investment. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is redassified to profit or loss where appropnate.

The Group's share of post-acquisition profit or loss is recognised in profit or loss, and its share of post acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment, When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise furiher losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount separately to 'share of profit/(Ioss) of an associate' in profit or loss.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group's flnancial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless 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 Group.

(c) Joint arrangement

Investments in joint arrangements are classified as eitherjoint operations or joint ventures depending on the contractual rights and obligations each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.

Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the group's share of the post-acquisition profits or losses and movements in other comprehensive income. Dividends received or receivable from joint venture are recognized as a reduction in the carrying amount of the investment. When the group's share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint ventures), the group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.

Unrealised gains on transactions between the group and its joint ventures are eliminated to the extent of the group's interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the

asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the group.

The Group determines at each reporting date whether there is any objective evidence that the investment in the JV is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the JV and its carrying value and recognises the amount separately in the consolidated income statement.

2.3 Discontinued operations

An operation that has been disposed of (by a particular reporting date) or ciassified as held for sale at that point may be classifiod as discontinued even if the entity continues to operate in the same business segment, but withdraws from a geographical area. If a disposal group meets the discontinued operation criteria, the cashflows and results of the disposal group are presented as discontinued operations. Discontinued operations are presented in a separate part of the statement of comprehensive income. The figure presented is for the entire period and not the result sinco the operation was discontinued. The amount to bo disclosed is the entire post-tax result for the period plus any gain or loss on remeasurement/ disposal gain of assets or disposal groups. Hence, in the statement of comprehensive income each line item from revenue down to post-tax profit excludes discontinued operations. Discontinued operations held for sale are measured in the same way as other disposal groups, that is, at the lower of carrying amount and fair value less costs to seil.

2.4 Underlying concepts

The flnancial statements are prepared on the going concern basis using accrual accounting.

Assets and liabilities and income and expenses are not offset unless spocifically permitted by an accounting standard.

Financial assets and financial IiabiIities are offset and the net amount reported only when a IegaIIy enforceable right to set off exists and the intention is either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Changes in accounting policies are accounted for in accordance with the transitional provisions in the IFRS standards. If no such guidance is given, they are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively.

2.5 Recognition of assets

Assets are only recognized if they moet the dofinition of an asset, it is probable that future economic beriefits associated with the asset will flow to the Group and the cost or fair value can be measured reliably.

2.6 Ciassification of assets

Assets intended for long-term ownership or use, are ciassified as non-current. Other assets are ciassified as current. Receivables due to be repaid within one year are classifled as current assets.

2.7 Use of estimates

The key sources of estimation of uncertainty at the balance sheet date, that have a significant risk for causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below in Note 4.

2.8 Commercial Interest Reference Rate (CIRR) toan

The Group has applied for Mo Commercial Interest Reference Rate (CIRR) loans from the Norwegian Export Credit Agency in 2008. The duration of the loans may vary and the cash proceeds from the loans have been deposited in flxed deposit account with a Norwegian bank at a higher interest rate than that of the loans. The agreed period of the deposits is identical with the one of the loans. The loans and the interost thereof will be repaid from that account. At initial recognition the difference between the amounts received and fair value of the loan has been recognised as deferred gain and is amortised over the period of the life of the asset.

2.9 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker. The chief operating decision-maker of the Group is its Board of Directors.

The components of the Group that management uses to make decisions about operating matters are the geographical region and the type of the vessel.

The Group is organized into main geographic regions; North Sea, Mediterranean, Africa, Australia/Far East and North & South America. The geographical segments are based on the location of the vessels.

The types of vessels are AHTS and PSVs.

Depreciation is allocated between the different segments based on number of days the vessels have been operated within the different segments.

2.10 Foreign currency translation

(a) Functional and presentatlon currency

Items induded in the financial statements of each of the Group'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 Group's functional and presentation currency. All Group entities have the USD as their functional currency.

All amounts in these financial statements are in USD 1,000 unless otherwise stated.

(b) Transactions and baances

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 profit ar loss.

2.11 Non-current assets and maintenance costs

Property, plant and equipment are stated at historical cost, less subsequent depreciation and impairment. For vessels purchased, these costs include expenditures that are directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis, taking residual values into consideration, and adjusted for impairment charges, if any. The carrying value of the fixed assets on the balance sheet represents the cost less accumulated depreciation and any impairment charges.

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as apprapriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit or loss during the financial period in which they are incurred.

Day-to-day maintenance costs are charged to the profit or loss during the financial period in which they are incurred. The cost of major renovations and periodic maintenance of vessels are capitalized and depreciated over the useful lifetime of the parts replaced. The useful lifetime of regular vessels docking expenses will normally be the period until next docking which if it is an intermediate survey is after 30 months and if it is a special survey is after 60 months. When ships are acquired, a proportion of the acquisition cost is separated to periodic maintenance.

Depreciation on vessels and other assets (equipment) is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

- Vessels	30 years
- Vehicles	5 years
- Dry docking costs
• Intermediate survey	2.5 years
• Special survey	5 years
- Software licensos	3 years
- Furniture, fittings and equipment	3 years

The assets' residual values and useful lifetime assumptions of fixedassets are reviewed at each balance sheet date, and where they differ significantly from previous estimates, depreciation charges are changed accordingly.

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are i ncluded in operating profit. For vessels under flnance sale and leaseback disposals the deferred gain is recognized fully into the profit and loss upon disposal.

2.12 Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) are ciassified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to seil.

2.13 Newbuild contracts

InstalIments on new vessel contracts are presented as prepayments for vessels under construction in accordance with the terms of the vessel-contracts. The total acquisition cost includes the sum of installments payable plus direct costs incurred during the construction period.

Prepayments are carried at cost less provision for impairment. A prepayment is classified as non-current when the goods or services relating to the prepayment are expected to be obtained after one year, or when the prepayment relates to an asset which will itseif be ciassified as non-current upon initial recognition. Prepayments to acquire assets are transferred to the carrying amount of the asset once the Group has obtained control of the asset and it is probable that future economic benefits associated with the asset will flow to the Group. Other prepayments are written off to profit or loss when the goods or services relating to the prepayments are received. If there is an indication that the assets, goods or services relating to a prepayment will not be received, the carrying value of the prepayment is written down accordingly and a corresponding impairment loss is recognised in profit or loss.

2.14 Lease agreements

The determination of whether an arrangement is, or contains a lease, is based on the substance of the arrangement and requires an assessment of whether the fulfihlment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are ciassified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit or loss on a straight-line basis over the period of the lease.

In cases where the Group is the lessor in an operating lease, initial direct costs are added to the carrying amount of the leased asset and recognized as an expense over the lease term on the same basis as the lease income. Financial leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apporboned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. The corresponding rental obligations, net of finance charges, are included in borrowings. Finance charges are charged directly to financial expenses.

Capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

In a sale and finance leaseback transaction any excess of sales proceeds over the carrying amount is deferred and recognized in the profit or loss over the lease term.

2.15 Impairment of non-financial assets

The Group determines whether there are indications that nonfinancial assets are impaired at each balance sheet date or more frequently if events or changes in circumstances indicate that might be impaired.. The carrying value of vessels are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable,The asset's cash generating ability either through use or sale is reviewed and compared to the asset's carrying value in the balance sheet. If the carrying value is higher, the difference must be written off as an impairment loss. Fair value reduced by estimated sales costs is the amount achievable on an arm's length sale to an independent third party. The recoverable amount is the higher of value in use and fair value less costs to seil and is established individually for all cash generating units. In assessing value in use, the estimated future cash fiows are discounted to their present value using a pre-tax discount rate that reflects current market assessments at the time and the risk specific to the asset that is considered impaired.

For vessels that are held under a sale and finance leaseback arrangement that have a related carrying amount of a deferred gain as explained in 2.14 above, upon impairment the Group recognizes the impairment first within the unamortized part of the deferred gain for the same asset that is presented as a liability and any excess is charged to the profit or loss.

A previously recognized impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Reversal of previously recognized impairment is limited

to the amount the carrying value of the asset would have been, had the initial impairment charge not token plaGe.

2.16 Financial assets

The Group ciassifies its financial assets in the foliowing categories: at fair value through profit or loss, loans and receivables, and available for sale. The dassification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(a) Hnancial assets at fair value through profit or loss

This category has two sub-categories: financial assets held for trad ing, and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principaily for the purpose of seiling in the short term or if so designated by management, and they meet cortain criteria (lAS 39.9).Derivatives are also categonized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be settied within 12 months of the balance sheet date.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and for which there is no intention of trading the receivable. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are classified as trade and other receivables', Ioans to related parties' and cash and cash equivalents' in the balance sheet.

(c) Available-for-sale financial assets

Availabie-for-sale financial assets are non-derivatives that are either designated in this category if they do not have fixed maturities and fixed or determinable payments and management intends to hold thom for the medium or long term or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the balance sheet dato.

Regular way purchases and sales of financial assets are recognized on the trade-date, the date on which the Group commits to purchase or seil the asset. lnvestments 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 profit or loss. Financial assets are derecognized when the rights to receive cash fiows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-forsale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amontised 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 profit or loss within other (losses)/gains - net, in the period in which they anse. Dividend income from financial assets at fair value through profit or loss is recognized in the profit or loss as part of other income when the Group's right to receive payment is established.

(d) Held to maturity financial assets

Held to maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Group's management has the positive intention and abihty to hold to maturity that do not meet the definition of loans and receivables. During the year, the Group did not hold any investments in this category.

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired.

2.17 Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the dato a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of the fair value of recognized assets or habihties or a firm commitment (fair value hedge); (2) hedges of a particulan risk associated with a recognized asset on liability or a highly probable forecast transaction (cash flow hedge); or (3) hedges of a not investment in a foreign operation (not investment hedge).

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that ane used in hedging transactions are highly effective in offsetting changes in fair values on cash fiows of hedged items.

The fair values of various derivative instruments used for hedging purposes are disclosed in note 8. Movements on the hedging reserve in other comprehensive income are shown in Statement of Changes of Equity. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that ane designated and qualify as cash flow hedges is necognised in other comprehensive income. The gain or loss relating to the ineffective portion is necognised immediately in the profit on loss

within finance income ar finance costs respectively. When a hedging instrument expires ar is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the profit or loss. When a forecast transaction is no langer expected ta occur, the cumulative gain or lass that was reported in equity is immediately transferred to the profit ar loss within finance incame or finance cost.

2.18 Inventories

Bunkers inventories are valued at the lower of histarical cost and net realisable value applying the FIFO (first-in, first-out) principle. Luboil inventories are valued using the weighted average valuation method.

2.19 Trade receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able ta callect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 120 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash fiows, discounted at the original effective interest rate. The carrying amount of the asset is reduced thraugh the use of an allowance account.

2.20 Cash and cash equivalents

Cash and cash equivalents, includes cash in hand and deposits held at call with banks.

2.21 Restricted cash

Restricted cash deposits comprise of funds held in separate Group bank accounts, which will be used to settie accrued taxation liabilities related to employee's tax deduction. Restricted cash are excluded from cash and cash equivalents in the statement of cash fiows.

2.22 Share capita

Ordinary shares are classified as equity.

Costs directly attributable to the issue of new shares ar options are shown in equity as a deduction, net of tax, fram the proceeds.

Share premium is the difference between the fair value of the consideration receivable for the issue of shares and the nominal value of the shares. Share premium account can only be resorted to far limited purposes, which do not include the distilbution of dividends, and is otherwise subject to the provisions of the Cyprus Companies Law on reductian of share capital.

2.23 Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amartised cost; any difference between the proceeds (net of transaction costs) and the redemptian amount is recognized in the profit ar loss over the period of the borrawings using the effective interest method. Borrowings are dassified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet dato.

General and specific borrowing costs directly attributable to the acquisitian, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income eamed an the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted fram the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit ar 1055 in the period in which they are incurred.

2.24 Trade payables

Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.

2.25 Taxation

Tax expense/income includes current taxes and the change in deferred taxes. Parts of the Group's activities within the Norwegian and the Cyprus subsidiaries are structured within the regulations for the Norwegian and the Cyprus Tannage Tax System for shipping companies, respectively.

The Group has estimated a tax rate of 0% for the Companies subject to the regulations of the shipping company regime. For all companies under this regime, the Group has estimated 0% deferred tax on temporary differences when entering the regime. For companies not included in the regime, and for taxable financial revenues in companies under the regime, the Group applies a tax rate of 27% for Norwegian companies and 12,5% for Cyprus companies. Tax expense/income includes current taxes and the change in deferred taxes.

Deferred incorne tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it anses from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither the accounting nor taxable profit or loss. Deferred income tax is determined Using tax rates (and laws) that have been enacted or substantially 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 to the extent that it is probable that future taxable profit will be avallable against which the temporary differences can be utilized. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and its probable that the temporary difference will not reverse in the foreseeable future.

2.26 Bonus plans

The Group recognizes a liability and an expense within wages and salaries for bonuses, based on a formula that takes into consideration the performance of peer group companies. The Group recognizes a liability where contractual obligations exist or where there is a past practice that has created a constructive obligation.

2.27 Share based payments

Employees of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments such as options to buy shares of the Company.

The cost of equity-settled transactions is measured by reference to the fair value at the date on which the award is granted. The fair value is determined using appropriate valuation models.

The cost of equity settled transactions is recognised as an expense, together with a corresponding increase in reserves within equity, over the vesting period which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period the entity revises the estimates of the number of options that are expectod to vest based on the non-market conditions. It recognises the impact of the revision to original estimates, if any, in the ineome statement, with a corresponding adjustment to equity.

Where the terms of the share option scheme is modified to be settled in cash rather than in equity instruments, the entity measures the liability initially using the modification date fair value of the equity-settled award, based on the elapsed portion of the vesting period. This amount is then recognized as a credit to liability and a debit to equity. Until the liability is settled it is re-measured at each reporting date with changes in fair value recognized in profit and loss.

2.28 Pensjon costs and obligation

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan.

Typically defined benefit plans define an 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 recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. In countries where there is no deep market in such bonds, the rnarket rates on government bonds are used.

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 anse.

Past-service costs are recognised immediately in income.

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 recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

2.29 Provisions

Provisions represent liabilities of uncertain timing or amount.

Provisions are recognized when the Group has a present legal or constructive obligation, as a result of past event, for which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made for the amount of the obligation.

Provisions are measured at the present value of the expenditures expected to be required to settie the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the nsks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

2.30 Revenue recognition

The Group's activity is chartering out different types of Anchor Handling Tug Supply vessels (AHTS's) and Platform Supply Vessels (PSV's).

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is shown net of value-added tax, withholding tax, retums, rebates and discounts and after eliminated sales within the Group. Revenue is recognized as foliows:

Charter rate contracts

Charter contracts are ciassified as operating leases under lAS 17. Revenue derived from charter contracts is recognized in the period over the lease term on a straight line basis. Related services are recognized as revenue in accordance with the services being rendered.

Vessels without signed contract in place at discharge have no revenue before a new contract is signed. Charter related expenses incurred for vessels in the idle time are expensed. Revenues from time charters and bareboat charters accounted for as operating leases are recognized over the rental periods of such charters, as service is performed on a straight line basis.

Interest income

Interest income is recognized on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognized using the original effective interest rate.

Dividend income

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

2.31 Dividend distribution

Dividend distribution to the Company's shareholders is recognized as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders until payment is made.

2.32 Earnings per share

Earnings per share are calculated by dividing the net profitlloss for the Company by the average weighted number of outstanding shares over the period in question. Diluted earnings per share

include the effect of the assumed conversion of potentially dilutive instruments such as stock options.

2.33 Statement of cash flow

The statement of cash flow is presented in accordance with the indirect method.

2.34 Insurance claims receivables

lnsurance claims receivables fall into two categories, Loss of Hire (LOH) and Hull and Machinery (H&M).

Loss of hire pertains to claims made when a technical issue prevents the vessels ability to go onhire.

Hull and machinery pertains to reimbursement of actual expenses incurred to repair the problem. There is an element ofjudgment when deciding which expenses can be claimed and whether it is virtually certain that the amounts will be recovered but the Group follows the policies and the advice of external consultants before submitting any claim.

Loss of hire claims receivables are calculated and booked as number of days that the vessel is unable to go onhire times the daily rate as per LOH insurance policy.

Hull and machinery is booked as actual expenses incurred to repair the problem less insurance deductible amount as per H&M insurance policy.

2.35 Financial guarantees

Financial guarantees are contracts that require the Company to make specified payments to reimburse the holder of the guarantee for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantees are initially recognized at fair value, which is normally evidenced by the amount of fees received. This amount is amortised on a straight-line basis over the life of the guarantee. At the end of each reporting period, the guarantees are measured at the higher of (i) the remaining unamortised balance of the amount at initial recognition and (ii) the best estimate of expenditure required to settle the obligation at the end of the reporting period.

2.36 Assets Acquisition

For acquisitions not meeting the definition of a business under IFRS 3 'Business Combinations", the Group recognises the individual identifiable assets and liabilities acquired at their fair values on the date of acquisition. The cost of the transaction is allocated to the assets acquired and liabilities assumed based on their relative fair values at the date of purchase. No goodwill anses on the transaction.

3. Financial risk management

3.1 Financial risk factors

The Group's normal business activities expose it to a variety of financial nsks. Financial market risk is the possibility that fluctuations in currency exchange rates, interest rates and freight rates in particular will affect the value of the Group's assets, liabilities or future cash flow. The Group has formulated a finance strategy where certain basic targets and policies are made for value adjusted equity (note 3.2), required Iiquidity, exchange rates, interest rates, funds management etc.

To reduce and manage these risks, management daily reviews and assesses its primary financial and market risks. Once risks are identified, appropriate action is taken to mitigate the specific risk. Financial derivatives are used for hedging purposes in order to mitigate financial risks and only well understood conventional derivatives are used. Financial derivatives are entered into with our main banks which are highly rated financial institutions. The Group use derivatives in order to manage risks associated with interest rate and currency.

Foreign exchange risk:

The Group's functional currency is USD. The Group operates internationally and is exposed to foreign exchange risks arising from various currency exposures primarily with respect to Euro (EUR), UK Pounds (GBP), Brazilian Reals (BRL), Singapore dollar (SGD) and Norwegian kroner (NOK). Foreign exchange risks anse from future commercial transactions and recognized assets and liabilities. The Group had in 2015 and 2014 mainly USD, EUR, GBP,BRL and NOK revenues and mainly USD, BRL, SGD and NOK expenses. lmbalances between revenues and costs are often managed using forward currency contracts. The table below shows the impact on profit before tax as a consequence of an increaseldecrease in the various exchange rates;

Foreign Exchango Risk

NOK	Increase	Effect USD '000
2015	+/-10%	+1-649
2014	+/-10%	+1- 1,027
GBP	Increase	Effect USD '000
2015	+1-10%	+1- 931
2014	+1-10%	+/-2,555
EUR	Increase	Effect USD '000
2015	+1-10%	+1- 355
2014	+/-10%	+1-96
BRL	Increase	Effect USD '000
2015	+1-10%	+1-5
2014	+1-10%	+1-78
SGD	Increase	Effect USD '000
2015	+1-10%	+/-619
2014	+1-10%	+1- 305

Credit risk

The Group trades only with recognized, creditworthy third parties. For banks and financial institutions, only credit worthy institutions are chosen. Receivablo balances are monitored on an ongoing basis with the result that the Group's exposure to bad debt is not significant. Below, we present a table showing the concentration risks for 2015 and 2014:

Receivables at 31 .12.2015

	USD '000	% of total
5 largest	6 604	66,0%
6tololargest	2217	22,1%
lltolslargest	910	9,1%
Others	281	2,8%
Total	10012	100,0%

Receivables at 31 .12.2014

	USD '000	% of total
5 largest	12071	55,7%
6 to 10 largest	4418	20,4%
11 to 15 largest	2683	12,4%
Others	2489	11,5%
Total	21 661	100,0%

Other information on the credit quality of the financial assets is presented in Note 23.

Cash flow and fair value interest rate risk

The Group's exposure to the risk of market interest rates are mainly related to the Group's long term debt obligations and loans receivables with floating interest rates. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash held at variable rates. Bonowings issued at fixed rates expose the Group to fair value interest rate risk. Depending on the development of and on internal analyses of the interest rate market, the Group enters into various interest rate contracts to alter the ratio of fixed rate to floating rate debt and vice-versa

As of 31 December 2015 and 2014, after taking into account the effect of the interest rate swaps, approximately 28% and 30% respectively of the interest bearing debt was fixed through interest rate SWAP agreements.

Interest rate risk table:

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the Group's profit before tax..

Cash flowinterestrate risk	Increase/decreasein basis points	Effect on lossbefore tax (USD '000)
2015	+1-25	546
2014	+/-10	210

Liquidity risk

The Group monitors its risk to a shortage offunds by ciosely monitoring the projected cash flow from operations, financial expenses, its capital expenditure program related. The Group maintains sufficient cash for its daily operations via short term cash deposits at banks. The table below analyses the Group's non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis iftheir contractual matunties are essential for an understanding of the timing of the cash fiows. The amounts disclosed in the table are the contractual undiscounted cash fiows; (all numbers in USD 1,000).

At 31 December 2015	Less than3 months	3 to 12months	I to 2years	2 to 3years	3 to 4years	4 to 5years	Total
Interest bearing loans and borrowings	6 587	92 533	12 696	12 489	178 732	-	303 037
Finance lease liabilities	1101	3303	4 390	4390	15240	-	28424
Derivative financial instruments	138	322	-	-	-	-	460
Trade and other payables	i 550	4 650	-	-	-	-	6200
	9376	100808	17086	16879	193972		338121
At 31 December 2014
Interest bearing loans and borrowings	8792	14608	94 113	7847	7228	178 604	311 192
Finance lease liabilities	I 063	3 188	4264	4251	4251	15 100	32 117
Derivative financial instruments	180	540	619	-	-	-	1 339
Trade and other payables	2 921	8 763	-	-	-	-	11 684
	12955	27098	98996	12098	11479	193704	356331

The liquidity effects of the CIRR loan are excluded from the above table as the cash outflows from the maturity of the loans are matched with the cash inflows from the maturity of the CIRR deposit account, and thus the Group is not exposed to liquidity risk in this respect.

The Group has issued guarantees in relation to a bank loan drawn by a joint venture entity (Note 30(b)). The Group's commitments are disclosed in Note 28.

3.2 Capital risk management

The Group's objective is to actively pursue an optimal financing of its feet at any time for the purposes of providing good return to shareholders and benefits for other stakeholders, to aim at 10w cost of capital and at the same time secure the Group's ability to continue as a going concern. In the shipping and offshore industry, emphasis in made on Value Adjusted Risk Capital. A certain minimum Value Adjusted Risk Capital is often used as one financial covenant by financial institutions. The main source of financing of the Group is Senior Bank Loans from international banks which are long term players in the shipping and offshore business segments. The Group believes in building and maintaining long term relationships with these financial institutions and has pursued this strategy since the Group was founded. Bank loan financing has been combined with a specially structured sale and leaseback transaction for (currently) I vessel owned by the Group. The sale and leaseback transaction is designed to withstand possible drops in the market by having fewer and leaner financial covenants compared to the senior bank loan facility. The Group's Management considers the combination of senior bank loans and sale and the leaseback transaction as an effective and flexible way to finance the Group's feet at an acceptable cost. The Value Adjusted Risk Capital, for the Group (including 50% of DESS BTG), by year end 2015 and 2014 is presented in table below

(all numbers are in LJSD million)	Year end 2015	Year end 2014
Total value adjusted assets (*)	833	1,012
Total debt (**)	523	577
Value Adjusted Risk Capital	310 or 37% of totalvalue adjusted assets	435 or 43% of totalvalue adjusted assets

(*) Adjustment of total assets relates to the replacement of book values of the vessels with the market values and replacement of the cost of Investment in Joint Venture with the market values of the vessels of the Joint Venture group. The market values obtained from two independent brokers on a charter-free basis.

(**) Excluding deferred gain

During the year the Group has complied with all externally imposed capital requirements.

3.3 Fair value estimation

The table below analyses financial instruments camed at fair value, by valuation method. The different levels have been defined as follows:

• Quoted prices (unadjusted) in active markets for identical asses or liabilities (Level 1).
• lnputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
• Input for the asset or hability that are not based on observable market date (that is, unobservable inputs) (Level 3),

The foliowing table presents the group 's assets and liabilities that are measurest at fair value at 31 December 2015:

Liabilities	Level I	Level 2	Level 3	Total
Derivatives used for hedging		221		221
Total liabilities		221		221

The foliowing table presents the group 's assets and liabilities that are measurest at fair value at 31 December 2014

Assets	Level I	Level 2	Level 3	Total
Derivatives		143		143
Total assets		143		143
Liabilities	Level I	Level 2	Level 3	Total
Derivatives used for hedging		386		386
Total liabilities		386		386

The financial derivatives are not traded in an active market and are thus included in level 2. The derivatives are used for economic hedging purposes. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where is its available and rely as littie as possible on entity speciflc estimates. If all significant inputs required to fair value an instrument re observable, the instrument is included in Level 2.

Specific valuation techniques used to value financial instruments include:

• Quoted market prices or dealer quotes for similar instruments.

• Adjusted comparable price-to-book value multiples

• 0ther techniques, such as discounted cash flow analysis.

4. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

4.1 Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) lmpairment of Group's vessels

The Group performs an impairment test of its vessels when there are indicators for impairment in accordance with the relevant accounting policy. The Group compares the carrying amount of the vessels with their recoverable amount, being the higher of their fair value less costs to seil and their value-in-use. Management estimatos the fair value less costs to seil by obtaining third party professional valuations for

all vessels from Mo different independent valuers, by calculating the average and by adjusting to incorporate specific characteristics that market participants consider when pricing the asset, which include, but is not limited to, charter commitments and costs relating to reusing laid-up vessels.

In the current market for supply vessels the recoverable amount of the Group's vessels at 31 December 2015 and 31 December 2014 was lower than balance sheet value for a number of vessels. An impairment charge of USD 56,897 (2014: USD 13,903) (Note 6) arose for vessels of the Group which was recognized in the consolidated income statement.

For the main assumptions used for the impairment testing of the vessels, please refer to Note 6.

A 10% change in the main assumptions used in the impairment testing of the vessels whose recoverable amount was based on their value in use would have the following effect on carrying amounts of vessels and profit for the year:

	Decrease onof Vessels	Carrying amount Decrease of profitfor the year
Year Ended 31 December 2015
10% decrease in utilization (or daily income)	(7 047)	(7 047)
10% increase in daily operating expenses	(6931)	(6931)
10% increase in discount factor	(6 664)	(6 664)
10% decrease in revenue growth	(2 152)	(2 152)
Year Ended 31 December 2014
10% decrease in utilization (or daily income)	(5 132)	(5 132)
10% increase in daily operating expenses	(3003)	(3003)
10% increase in discount factor	(2 107)	(2 107)
10% decrease in revenue growth	(1 246)	(1 246)

For the vessels for which the recoverable amount was based on fair value less costs to seil, a 10% decrease in the valuation of the brokers would have the following effect

	Decrease onCarrying amountof Vessels	Decrease of profitfor the year
Year Ended 31 December 201510% decrease in brokers valuation	(11 065)	(11 065)
Year Ended 31 December 201410% decrease in brokers valuation	(14 485)	(14 485)

(b) Tax legislation

Tax legislation is subject to varying interpretations. Refer to Note 28.

(c) lnsurance claim receivables

At balance sheet date, the Group has booked USD 812 (2014: USD 1,370) as amounts recoverable from insurance companles. Such claims are filed following insurance policies and fall in two categories: Loss of hire and Hull & Machinery. Loss of hire pertains to claims made when a technical issue prevents the vessels' ability to be on hire. Hull & Machinery pertains to reimbursement of actual expenses incurred to repair the problem. There is an element of judgment when deciding which expenses can be claimed and whether it is virtually certain that the amounts will be recovered, but the Group follows the policies and the advice of external consultants before submitting any claim.

(d) Residual values and Useful economic Ilfe

The Group follows the guidance of lAS 16 on determining the useful economic life of its vessel. In making this judgment, the Group evaluates, among other factors, the period over which an asset is oxpected to be available for use by an entity, which is based on management's intentions and past experience with similar assets. Furthermore management estimates the residual value of the vessels to be Nil as the seiling pnce is estimated to equal the selling/dismantling costs of the vessel at the end of its useful economic life.

ma~ DEEP SEA SUPPLY

(e) lmpairment of investment in Joint Ventures, impairment of loan receivable and financial guarantees

As at 31 December 2015, the Group has tested for impairment its net investment in its joint ventures ("JVs"), the loans receivable from the JVs and has assessed the fair value of the flnancial guarantees provided in relation to a bank loan of one of the JVs. As part of the application of the equity method of accounting the Group has recognised the share of its loss for the year from the JVs,

excluding deferred gain amortised, of USD69200 (2014:proflt USD1 ,243). The share of loss for the year from the JVs indude an amount of USD67316 (2014: USD1823) which relates to the Group's 50% share of the vessel impairment losses recognised in the JVs.This impairment testing of the vessels of the JVs was done in accordance with the Group's accounting policies on impairment and on the assumption that the JVs will continue to operate as a going concem.

After the application of the equity method of accounting the Group has also carried-out additional impairment testing on the not investment in the JVs in order to determine whether it is necessary to recognise any additional impairment loss at the investment level. This additional impairment testing was considered necessary due to the market conditions referred to in Note 28 (c) which particularly affected vessels operating in Brazil and the financiai performance of the JVs as well as due to the maturity of certain bank loans of the JVs during 2016 which have not yet been refinanced. The bank loans of the JVs which mature in 2016 and have not yet been refinanced as at the date of this report amount to USD93124.

The Management of the Group considers that uniess some actions are taken such as agreement with the banks for delay of loan instalments for an agreed period and/or flnancial support to the JVs by their shareholders, the JVs will not be able to meet their obligations towards the banks in the next 12 months and it is uncertain if the JVs will be able to continue their operations on a going concem basis.

The recoverable amount of the investment in the JVs was estimated as the higher of the foliowing:

• The fair value less costs to seil of the investment was estimated using market multiples of listed companies and then applied a discount to reflect that the JVs are private entities and subject toadditional country-related risks.
• The value in use was estimated using the weighted average of two scenarios on the expected cashflows from the JVs which were based on the Management's assessment on the probability of whether the JVs will be able to continue operating on a going concern basis or not. Currently negotiations are in progress between the management of the Group, the banks and the management of the JV partner to resolve the matter. The management of the Group has assessed that the probability of reaching a conclusion and the JVs will be able to continue as a going concern is 50% while the remaining 50% probability was assessed that the negotiations could fait and thus the JVs would not be able to continue as going concern.

The recoverable amount of the investment was calculated using the value in use estimates. The value in use estimates were estimated as foliows:

• in the event where the negotiations are successful and the JVs wouid be able to continue on a going concern basis, the recoverable amount of the Group's investment in the JVs is estimated at USD62530 (50% probability). The expected cash-flows under this possibility were estimated using the same cash-flows used by the JVs to assess the impairment of their vessels.
• in the event where the negotiations are unsuccessfui and the JVs would not be able to continue on a going concern basis, the recoverable amount of the Group's investment in the JVs is estimated at USD743 (50% probability). The expected cash-flows under this possibility were estimated using brokers valuations as at 31/03/2016 less a discount based on the age of the vessels in order to reflect the circumstances of a potential break-up sale. The Management has estimated the discount over the brokers vaiues depending on the age of the vessels as foliows:

Age of vessels (Years)

From	To	Discount
0	3	10%
3	7	10%
7	10	20%
10	15	25%
15	20	25%
20	30	50%

Further to the above, the weighted average recoverable amount of the investment in the JVs was estimated at USD31 ,637 and an impairment loss of USD30894 has been recognised in the consolidated income statement. No further impairment is estimated to be required in respect of the loans receivable from the JVs, amounting to USD 15,000 as at 31 December 2015, as the loans receivable have priority over the equity investment.

In addition, as disclosed in Note 30(b), the Group has provided a financial guarantee for the bank borrowings of Deep Sea Supply Navegaço Maritime Ltda, one of the JVs. The maximum exposure under this guarantee is the outstanding amount of the loan at year end amounting to USD 53,913. The bank borrowings are also secured by a first-priority mortgage over a vessel owned by this JV company. In addition BTG Pactual Group issued a counter indemnity in favor of the Company, whereby BTG Pactual Group indemnifies the Company for any claims exceeding 50% of the total liability under the guarantee given under the BNDES Facility. Taking into account the probability assessment above and the estimated value of the other securities over this bank loan, the Management does not expect a liability to anse to the Group in relation to this financial guarantee and estimates its fair value as insignificant.

Sensitivity analysis:

By applying different probabilities between the going concern and non-going concern status of the JVs, the impairment charge would be as foliows:

Going concern	Not going concern	Impairment
60%	40%	24715
70%	30%	18536
80%	20%	12357
40%	60%	37072
30%	70%	43251
20%	80%	49430

By applying a 50% increase on the discount based on the age of the vessels, the impairment charge of investment in JVs would amount to USD 31265. By applying a 50% decreaso on the discount based on the age of the vessels, the impairment charge of investment in JVs would amount to USD 23.297.

Under the above sensitivity analysis no further impairment would be recognised on the loan receivable from the JVs and the fair value estimate of the financial guarantee would be irisignificant.

4.2 CritiCaI judgments in applying the group's aCcounting poliCies

(a) Ciassification of sale and leaseback transaction

The Group's management has recognized the sale and leaseback transaction for six of its vessels in 2007/2008 in accordance with lAS 17 Leases" and SIC lnterpretation 27 "Evaluating the Substance ofTransactions Involving the Legal Form of Lease". Management has considered that the provisions of SIC 27 are not applicable however the Group has substantial risks and rewards incidental to ownership and the exercise of the option to purchase the vessels is considered to be almost certain. Foliowing this analysis the Group's management has concluded that the leaseback is a finance lease since it considers that the Group retains substantially all the risks and rewards incidental to ownership since it is reasonably certain that the Group will exercise the option to purchase the vessels. As a result of the above the Group has derecognized the vessels and has recognized them back at their fair value which was higher than the carrying amount. The gain has been deferred and is being amortised to the profit or loss over the lease term which is considered to bo 12 years (refer to the accounting policy on Lease agreements).

(b) Sale of Sea Bear and Sea Lynx

In February 2016, the vessel Sea Lynx and the flnance lease vessel Sea Bear were sold to a third party for a seiling price significantly lower than the fair value of these vessels, recognizing a loss in 2016 of USO 10,196 and USD 6,400 respectively. On the basis of management's judgement, this seiling price is not considered to be the fair value of the vessels as at 31 December 2015 as defined by IFRS 13, as the sale is assessed as a distressed sale since management agreed to seil these vessels at a significantly lower price than their brokers valuations in order to preserve the liquidity position of the Group. In this respect, the Management considers this transaction as non-orderly and the transaction price as outlier and hence the seiling price was not taken into account in the fair value considerations when estimating the recoverable amount of these and other vessels during their impairment assessment as at 31 December 2015.

(c) Going Concern basis

These consolidated financial statements were prepared in accordance with IFRS, as adopted by ELI, on a going concern basis, which assumes the realisation of assets and discharge of liabilities in the normal course of business within the foreseeable future. The Board of Directors is confident that the Group will continue as a going concern and in making this judgment the Board considered the Group's financial position, current intentions, profitability of operations and access to financial resources, as weli as its analysis of the impact of

-'7

the ongoing conditions and uncertainties in the markets which the Group operates.

The Group incurred a nei loss of USD151 ,522. during the year ended 31 December 2015 and, as of that date, the Group's current liabilities totaled USD104.670 while its current assets totaled USD107969. When examining the Group's ability to continue as a going concern, the Board of Directors has considered the foliowing factors:

• The Group's cash flow forecasts and projections which are used for managing Iiquidity indicate that the Group would be able to meet its short term obligations and contractual commitments in the foreseeable future.
• The current liabilities include a payment related to the maturity of one of the bank borrowings in October 2016. The amount of those is USD 65,456. The Company is in progressed discussions with the banks on extending the maturities of these Ioans (beyond the end of 2016, thus making them long term). The maturing loan agreement was entered into in October 2011, and the October 2016 maturity foliows from the original 5 year term of the agreement. The Management is confident that with us historic successful track record in obtaining new flnance and reflnancing flnancial liabilities for the Group, the debt reflnancing process will be completed before October 2016.
• The Group's management considers a variety of other factors and maintains fiexibility to take other steps to improve liquidity if needed, including control over discretionary spending, disposing of assets and monitoring of the economic conditions in the markets where the Group operates.

Taking into account the above, the Board of Directors has assessed that the going concern basis in preparing the consolidated financial statements is appropriate and that there is no material uncertainty over the basis of preparation in this respect.

5. Segment reporting

5.1 Income statement I balance sheet and cash flow

The Company presents the effect of the investment in joint venture (DESS BTG) using the equity method as this is what is allowed by IFRS. The presentation of lncome Statement, Balance Sheet and Cash Flow statement below are presented atter foliowing these principles:

• Equity accounting method is removed.
• Tile proportion of DESS participation (50%) has been added line by line (alike proportionate consolidation).

These principles are applied when the board (Chief operating decision maker) of the Company reviews the results on a periodic basis. In addition the board reviews the results based on the geographic area where the vessels are located and per type of vessel (as shown in 5.2).

Consolidated income statement

(All amounts are in USD000)
	YTD2OI5	YTD2OI4
Sales - freight revenue	132 425	163 167
Operating expenses vessels	(55 009)	(70 424)
Other operating expenses	(11 117)	(13 085)
Other gains/(losses)	2 785	4 057
Other write-offs	(873)	(4 839)
Operating profit before deprecuatuon and impairments (EBITDA)	68 211	78 876
Depreciation and impairment	(164 603)	(49 580)
lmpairment of investment in Joint Venture (Note 4.1(e))	(30 894)	-
Operating profit (EBIT)	(127 486)	29 296
Financial income	653	662
Financial expenses	(20 969)	(25 744)
Currency (losses)/gains	(2 988)	(3 400)
Net financial items	(23 304)	(28 482)
Loss before income tax	(150 790)	814
lncome fax expenses	(732)	(1 710)
Loss for the year	(161 522)	(896)

Consolidated statement of comprehensive income

(All amounts are in USD000)

	YTD 2015	YTD 2014
Loss for the year	(151 522)	(896)
Pension plan	105	(413)
Cash flow hedges	21	1 249
Total comprehensive uncome for the year	(151 396)	(60)

Consolidated balance sheet

(All amounts are in USD000)

	31.12.2015	31.12.2014
Non-current assets
Vessels cost*	683 606	880 270
Equipment	745	i 032
Total property, plant and equipment	684 351	881 302
Other long term receivables	-	819
ClRRdeposit	13258	19487
Total non current assets	697 609	901 608
Current assets
Inventories	3374	3 173
Loans to related parties	15000	35384
Other short term receivables	9 780	li 087
ClRRdeposit	2684	3176
Freight income not received	15 286	35 466
Cash and cash equivalents	87 079	61 839
Financial derivatives	-	143
Total current assets	133 203	150 268
Total assets	830 812	I 051 876
Long term liabilities
Borrowings	345 678	495 977
Loans from related parties	7 500	-
ClRRloan	13258	19487
Doferred gain	401	7 645
Other long term payables	-	267
Financial derivatives	-	386
Total long term liabilities	366 837	523 762
Short term liabilities
Borrowings	156 146	43367
Loans from related parties	-	17692
ClRRloan	2684	3176
Trade and other payables	13218	19240
Deferred gain	122	i 491
Financial derivatives	221	-
Total short term liabilities	172 391	84966
Total liabilities	539 228	608 728
Net assets	291 584	443 148
Shareholders oquity
Share capital, share premium and treasury shares	207 507	207 673
Retained oarnings and other reserves	84 077	235 475
Total shareholders equity	291 584	443 148

The above consolidated income statemont and balance sheet assume a going concern status of the JVs as included in the management reports. As explained in note 4.1(e) an additional impairment of investment in the JVs of the amount USD 30 894 was reported at year end considering a 50% probability for the JV to continue on a going concern and 50% probability for the JV to be on a not going concern.

* The amount of USD 30,894, being impairment ot investment in Jointventure as per note 4.1(e) has been deducted from the book value of the vessels.

Consolidated statement of cash fiows

(All amounts are in USD000)
	Year ended Dec 15	Year ended Dec 14
Cash fiows from operating activities
Cash generated from operations	77 543	78 268
Net cash generated from operations	77 543	78 268
Cash fiows from investing activities
Acquisitions and upgrades of property, plant and equipment	(5 553)	(8 639)
Acquisition of new vessels	-	(412 150)
Net cash generated used in investing activities	(5 553)	(420 789)
Cash fiows from flnancing activities
Interest paid	(17 861)	(22 106)
Psyment of dividents to shareholders	-	(10 457)
Interest received	777	-
Proceeds from borrowings	-	241 745
Loans to related parties	10000	(10 000)
lncrease in share capital	-	196 599
Repayments of borrowings	(39 666)	(34 398)
Net cash generated from/(used in) financtng activities	(46 750)	361 383
Total changes in liquidity in the year	25 240	18 862
Cash and cash equivalents at beginning of year	61 839	42977
Cash and cash equtvalents at end of year	87 079	61 839

5.2 Result per geographical area and type of vessel

The segment results for the year ended 31 December 2015 is as foliows:

	North sea	Africa				MediterSouth ranean andAsia Australia America Black Sea allocated	Un	Total
AHTS
Operating revenues	2814	(43)	11 007	-	31 734	4 040	-	49552
Vessel operating expenses	(3714)	(313)	(5 369)	-	(13 694)	(825)	-	(23 915)
GROSS OPERATING PROFIT AHTS	(900)	(356)	8638		18040	3215		25637
MARGIN AHTS	N/A	N/A	51%	N/A	57%	80%	N/A	52%
PSVs
Operating revenues	22503	7 033	(151)	29474	12960	11 054	-	82873
Vessel operating expenses	(9 677)	(5 454)	(1 642)	(703)	(9 526)	(4 092)	-	(31 094)
GROSS OPERATING PROFIT PSVs	12 826	I 579	(1 793)	28771	3434	6 962		51 779
MARGIN PSVS	57%	22%	N/A	98%	26%	63%	N/A	62%
AHTS& PSVS
Operating revenues	25317	6990	10856	29474	44694	15094	-	132425
Vessel operating expenses	(13 391)	(5767)	(7011)	(703)	(23 220)	(4917)	-	(55 009)
GROSS OPERATING PROFITAHTS&PSVs	11 926	I 223	3845	28771	21 474	10177		77416
MARGIN AHTS&PSVs	47%	17%	36%	98%	48%	67%	N/A	68%
Other gains	-	-	-	-	-	-	2 785	2 785
Other operating expenses	-	-	-	-	-	-	(11 117)	(11 117)
Other wnte-offs							(659)	(659)
EBITDA	11 926	1223	3845	28771	21 474	10 177	(8 991)	68428
								52%

The corresponding segment results for the year ended 31 December 2014 is as foliows

	North sea	Africa	Asia	Australia	America	MediterSouth ranean andBlack Sea	Unallocated	Total
AHTS
Operating revenues	6619	3634	12755	-	37 940	2550	-	63498
Vessel operating expenses	(3648)	(2440)	(5462)	-	(17317)	(1 100)	-	(29967)
GROSS OPERATING PROFIT AHTS	2 971	1194	7 293		20 623	I 450		33531
MARGIN AHTS	45%	33%	67%	N/A	54%	67%	N/A	53%
PSVs
Operating revenues	34 125	25660	1 454	7 830	23725	6 875	-	99669
Vessel operating expenses	(14 572)	(7755)	(2066)	(692)	(13 403)	(1 969)	-	(40 457)
GROSS OPERATING PROFIT PSVs	19 553	17905	(812)	7 138	10322	4906		59212
MARGIN PSVS	57%	70%	N/A	91%	44%	71%	N/A	59%
AHTS& PSVS
Operating revenues	40744	29294	14209	7830	61665	9425	-	163167
Vessel operating expenses		(18 220) (10 195)	(7528)	(692)	(30 720)	(3069)	-	(70 424)
GROSS OPERATING PROFIT AHTS&PSVs	22 524	19 099	6681	7 138	30945	6 356		92743
MARGIN AHTS&PSVs	55%	65%	47%	91%	50%	67%	N/A	57%
Other gains	-	-	-	-	-	-	4057	4 057
Other operating expenses		-	-	-	-	-	(13 085)	(13 085)
Other wnte-offs							(3 013)	(3 013)
EBITDA	22524	19099	6681	7138	30945	6356	(12041)	80702
								49%

Segment revenue indudes the foliowing concentrations from single customers from which revenue is in excess of 10% of revenue of the Group plus 50% of revenue of the Joint Venture (on a proportionate consolidation basis):

Deep Sea Supply PicAnnual report 2015

						Tyne of vessol		Area of ooerations
	Year	Group	Joint Venture	Total	AHTS	PSVs	North Sea	South Amenca	Australia
Customer 1	2015	10095	4230	14325	-	14325	14325	-	-
	2014	17199		3966 21165	-	21165	21165	-	-
Customer2	2015	-		36915 36915	24107	12808		36915	-
	2014	-	46152	46152	27776	18376	-	46152	-
Customer 3	2015	17 988		4 788 22 776	-	22776	-	-	22776
	2014	-	-	-

6. Property, Plant and Equipment

	Vessels*	Financelease	Vessels in	Vehicies &
		vessels*	progress	equipment	Total
Opening net book value as at I January 2014	162 820	35 648	-	257	198 725
Acquisitions of vessels (Note 24)	214 622	-	44 131	-	258 753
Delivered new vessels	156 004	-	(44 131)	-	111 873
Additions	3 794	140	-	406	4 340
Vessels relocation cost capitalized	1177	-	-	-	1177
Vessel impairment (Note 4.1 (a))	(3 276)	(10 627)	-	-	(13 903)
Depreciation and amortisation	(16 067)	(2741)	-	(144)	(18 952)
Ciosing net book value as at 31 December 2014	519 074	22 420		519	542 013
At 31 December 2014
Cost	561 528	47289	-	1220	610037
Accumulated depreciation	(39 178)	(14 242)	-	(701)	(54 121)
Accumulated impairment	(3276)	(10 627)	-	-	(13 903)
Closing net book amount	519 074	22 420		519	542 013
Opening not book value as at I January 2015	519 074	22420	-	519	542 013
Additions	3 103	27	-	99	3 229
Vessels relocation cost capitalized	1176	-	-	-	1176
Vessel impairment (Note 4.1 (a))	(52 802)	(4 095)	-	-	(56 897)
Depreciation and amortisation	(24 035)	(2017)	-	(225)	(26 277)
Ciosing net book value as at 31 December 2015	446 516	16335	-	393	463 244
At 31 December 2015
Cost	565807	47316	-	1319	614442
Accumulated depreciation	(63 213)	(16 259)	-	(926)	(80 398)
Accumulated impairment	(56 078)	(14 722)	-	-	(70 800)
Ciosing net book amount	446 516	16 335	-	393	463 244

*vessels and finance lease vessels indude drydock costs with a carrying value of USD 12,726 (2014: USD16018) as at 31 December 2015.

Vessel depreciation as per Property, Plant and Equipment (PPE) note and as per income statement

	2015	2014
Vessel depreciation as per PPE note	(26052)	(18808)
Vesel impairment as per PPE note	(56897)	(13903)
Total	(82 949)	(32 711)
Vessel depreciation as per income statement	(26 052)	(18 808)
Vessel impairment as per income statement	(56 897)	(8 993)
Vessel depreciation and impairment as per income statement	(82 949)	(27 801)
Vessel impairment recognised against deferred gain balance (Note 29)	-	(4910)
Total	(82 949)	(32 711)

All vessels under category "Vessels" above are secured with a first priority mortgage for the Group's borrowings. (Note 14).

lmpairnient of vessels

The Group performs an impairment test when there are indicators for impairment in accordance with the relevant accounting policy. The Group compares the carrying amount of the vessels with the recoverable amount, being the higher of the fair value less costs to seil and the value-in-use calculation. Management estimates the fair value less costs to seil by obtaining third party professional valuations for all vessels from two different valuers and caiculating the average. and adjusting to incorporate specific characteristics that market participants consider when pricing the asset, which include, but are not limited to, charter commitments and costs reiating to lay-up vessels.

31 December 2015

The recoverable amounts of the vessels have been determined based on fair value less costs to seil for some vessels and value in use caicuiations for other vessels. The value in use caiculations use pre-tax cash flow projections based on financial budgets approved by management and past performance. An impairment charge of USD 56,897 arose for 12 vessels of the Group resulting in the carrying amount of the vessels being written down to their recoverable amounts.

The impairment and recoverable amounts of the impaired vessels are as foliows:

Vessel name	lmpairment	Recoverable amount	Determined based on	Type of vessel
Sea Lynx	(2 391)	15 964	Fair value less costs to seil	AHTS
Sea Bear	(4 096)	16 335	Fair value less costs to seil	AHTS
Sea Ocelot	(6 820)	19 800	Fair value less costs to seil	AHTS
Sea Eagle	(7 614)	23 713	Value in use	AHTS
Sea Badger	(1 591)	11 261	Fair value less costs to sel	AHTS
Sea Witch	(572)	16 765	Value in use	PSV
Ses Trout	(4571)	16559	Value in use	PSV
Sea Faicon	(4 129)	33 012	Value in use	PSV
Sea Supra	(5 774)	32 542	Value in use	PSV
Sea Surfer	(6 240)	31 999	Fair value less costs to sel	PSV
Sea Swan	(5 582)	33 094	Value in use	PSV
Sea Swift	(7518)	31 999	Fair value less costs to seil	PSV
	(56 897)

For the vessels whose recoverable amounts were determined based on fair values less costs to seil, inputs from independent valuers were used (Note 3.3: Levei 2). The valuers determine the fair value based on the evaluation of comparable transactions; through an analysis of recent arm's length transactions of similar vessels (like dead weight, age, shipyards, ciass and other specifications) in the market. If there are no relevant transactions with comparable assets, such transactions wili normally be given significant weight in the valuation. Special circumstances relating to the transaction (forced sale etc.) may also be factors that are included in the assessment of the comparability of the transaction. Valuers have access to the bid I ask prices for each type of ship, the purchase - and sales mandates for individual ship-owners. Range of buy and seil mandates for each type of ship gives an indication ofwhat a price between a willing buyer and a wiliing seiler would be if the transaction is completed. For the vessels on iayup, on determining the fair value less costs to seil, estimated lay-up costs were deducted. For all vessels, a 1% cost to seil was also deducted. For the vessels whose recoverable

amounts were determined based on the Value in use calculations, the management of the Group has assumed a weak market for 2016-2018 and normalization of results from 2019 onwards. For vessels on layup the costs to bring back the vessel to operations was taken into account for the value in use calculations. The following key assumptions were used in the calculations:

Utilization

For vessels currently on layup, 0% utilization was assumed for years 2016 and 2017 increasing to 50%-75% from 2017 to 2018 depending on expectations of management on prospective jobs. For vessels currently in contracts 97%-100% utilization was assumed for the remaining period of the contract. From completion of the contract up to 2018 a utilization of 50%-73% was assumed. For vessels on spot market a 60% utilization was assumed for years 2016 to 2018. From 2019 and onwards a 75% utilization was assumed for all vessels.

Daily Income

The daily income of the vessels is based on current market conditions, expectations from management and financiai budgets approved by management. The average daily income for years 2016 to 2018 was USD 14 for time chartered AHTS, USD 11 for bareboated PSVs and USD 14 for time chartered PSVs. The average daily income for year 2019 is assumed to increase to USD 16 for time chartered AHTS and USD 19 for time chartered PSVs. The daily income is assumed to increase by 1% annually from 2020 onwards based on long-term growth expectations from management.

Daily oerating exoenses

The daily operating expenses of the vessels were based on past performance and financial budgets approved by management. It is assumed nil during bareboat contracts, and USD6-7 for vessels on layup. For the rest of the vessels it ranges from USD4 to USD 6. The daily operating expenses are assumed to increase 1% annually based on expectations of management.

Discount Rate

The discount rate used was 7.98% based on Weighted Average Cost of Capital (WACC) calculations.

31 December 2014

The recoverable amounts of the vessels has been determined based in value in use calculations. These calculations use pre-tax cash flow projections based on flnancial budgets approved by management and past performance. An impairment charge of USD 13,903 arose for 3 vessels of the Group resulting in the carrying amount of the vessels being written down to their recoverable amounts.The impairment and recoverable amounts of the impaired vessels are as follows:

		Recoverable	Determined
Vessel Name	Impairment	amount	based on	ofvessel
Sea Bear	(10 627)	20 182	Value in use	AHTS
Sea Eagle	(1 877)	32 486	Value in use	AHTS
Sea Trout	(1 399)	21 907	Value in use	PSV
	(13 903)

For each of the vessels with fair value less costs to seil lower than the book value, value in use calculations were performed. The key assumptions used in the value in use calculations are, utilization, daily income, daily operating expenses, growth/inflation rate and discount rate.

The assumptions for year end 31 December 2014 are as follows:

Utilization

For vessels on spot market, a utilization of 50% to 66% was used for the whole useful life of the vessel based on its past performance. For vessels currently on contracts 97% utilization was used for the remaining period of the contract. From completion of the contract up to 2018 a utilization of 65% was assumed considering this period as gradual market recovery period, increasing to 75% for the remaining useful life reflecting the intention of management to keep the vessels on long term contracts.

Daily lncome

The daily income of the vessels was based on past performance and flnancial budgets approved by management. It ranges from USD 19 for small AHTS (Anchor Handling Tug Supply vessels), USD 18 for PSVs (Platform Supply Vessels), USD 21 for large AHTS (Anchor Handling Tug Supply vessels)

The daily income is assumed to increase 2% annually based on current contracts terms, predictions for infiation and growth expectations.

Daily operating expenses

The daily expenses of the vessels were based on past performance and flnancial budgets approved by management. It is assumed

nil for vessels on bareboat contracts (only for the duration of the contract). For the rest of the vessels it ranges from 6 USD to 9 USD. The daily operating expenses are assumed to increase 2% annually based on predictions for infiation.

Discount Rate

The discount rate used was 6.78% based on Weighted Average Cost of Capital (WACC) calculations.

7. Pensions

The amounts recognised in the balance sheet are determined as foliows:

	2015	2014
Present value of funded obuigation	(1 107)	(1 723)
Fair value of plan assets	1152	I 456
Asset /(Liability) in the balance sheet	45	(267)

The movement in the defined benefit obligation over the year is as follows:

	Present value of obligation	Fair Value of plan assets	Total
At I January 2014	1109	(11 129)	(20)
Current service costs	264	-	264
Interest expenses/(Income)	47	(40)	6
	311	(40)	270
Employer contribution	-	-	-
Employer benefits paid	-	(433)	(433)
Remeasurements loss/(Gain)	279	134	413
Exchange difference	(24)	(13)	(37)
At 31 December 2014	1675	(1 481)	193
At I January 2015	I 675	(1 481)	193
Current service costs	362	-	362
Interest expenses/(Income)	30	(21)	9
	392	(21)	371
Employer contribution	(57)	(407)	(464)
Employer benefits pald	-	-	-
Remeasurements loss/(Gain)	(385)	280	(105)
Exchange difference	(302)	188	(114)
At 31 December 2015	I 323	(1 441)	(119)

The plan is related to employees in Norway, and there are only active employees in the plan.

The signiticant actuarial assumptions were as foliows:

	2015	2014
Discount rate	2,3%	2,7%
Expected return on plan assets	2,3%	2,7%
Future salary increase	2,8%	2,5%
Future pension increases	0,0%	0,0%
Mortalitytable	K2013BE	K2013BE

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience.

8. Derivative financial instruments

		2015		2014
	Asset	Liability	Asset	Liability
Non-current portion
Interest rate swaps - cash flow hedge				386
Current portion
Interest rate swaps - cash flow hedge		221	143
Forward Foreign exchange contracts - cash
Flow hedges
Total	-	221	143	386

Trading derivatives are classified as a current asset or liability. The full fair value of a hedging derivative is ciassified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, If the maturity of the hedged item is less than 12 months.

(a) Forward foreign exchange contracts

During the year ended 31 December 2015, the forward foreign exchange contracts have expired. The notional principal amounts of the outstanding forward foreign exchange contracts at 31 December 2014 were USD 6,525.

(b) Interest rate swaps

The nominal principal amounts of the outstanding interest rate swaps at 31 December 2015 were USD100.000 (2014: USD100.000).

At 31 December 2015, the fixed interest rate of interest rate swap used is 0,955% and the floating rate is 3-month LIBOR. Gains and losses are recognized in the hedging reserve in equity on interest rate swap contract as of 31 December 2015 will be subsequently released to profil: or loss within 'flnance cost' until the repayment of the bank borrowings (Note 14).

9. Trade receivables

	As at 31 December 2015	As at 31 December 2014
Trade receivables	10 328	22 120
Less:Provision for impairment of receivables	(316)	(459)
Trade receivables Net	10 012	21 661

Trade receivables that are less than four months due are not considered impaired. As of 31 December 2015 trade receivables of USD 2,5 million (2014:USD 1,1 million) were past due but not impaired. These relate to a number of independent customers for which there has been no case of default in 2015 or 2014. None of the receivables due for more than four months are considered impaired with the exception of disputed amounts and amounts specifically provided for (see further below). The aging analysis of trade receivables is as follows:

Aging	As at 31 December 2015	As at 31 December 2014
Uptoonemonth	6409	16836
One to four months	I 022	3 740
More than four months	2 581	1 085
Total	10 012	21 661

The carrying amourit of the Group's trade receivables are denominated in the following currencies:

Currency	As at 31 December 2015	As at 31 December 2014
United State Dollars (USD)	7 806	16 350
Great British Pounds (GBP)	1 304	2 231
Euro (EUR)	506	2 593
Brazilian Real (BRL)	193	282
Singaporian Dollars (SGD)	191	205
Norwegian Kroner (NOK)	12	-
Total	10012	21661

Movements on the Group provision for impairment of trade receivables are as follows:

	2015	2014
At 1 January	459	-
Allowance for impairment of trade receivables	(143)	459
Total	316	459

During the year, the Group has written down an amount of USD 240 (2014: USD 2,553) from trade receivables and other short term receivables due to disputed amounts in additions to the allowance of impairment of trade receivables, resulting to a total loss from impairment of receivables of USD 659(2014: USD 3,013). These are ciassified as "otherwrite-offs" in the consolidated income statement. The maximum exposure to credit risk at the balance sheot dato is the carrying value of each Glass of receivable mentioned above. The Group does not hold any collateral as security.

10. Inventories

	2015	2014
Bunkers	i 432	i 564
Lub oil	646	710
Spare parts and consumables	30	48
Total	2108	2322

The cost of bunkers recognized as a reduction of vessels operating revenues, amounted to USD 3**,**075 (2014: USD 3,362). The cost of luboil consumed is recognized as expenses and included in vessels' operating expenses amounted to USD 484 (2014: 554).

11.Cash and cash equivalents

	2015	2014
Cash at bank and in hand	74 186	47289
Total	74186	47289

Specification of restricted deposits

Bank deposits 110 708

The carrying amounts of cash approximate fair value. Currently, there is no undrawn credit facility for the Group. Restricted bank deposits are for employee taxwithholdings USD 110 (2014: USD 126). In 2014, restricted bank deposits included USD 582 performance guarantees for chartered vessels that expired in 2015.

Cash and cash equivalents are denominated in the foliowing currencies:

Currency	As at 31 December 2015	As at 31 December 2014
United State Dollars (USD)	67 779	41141
Great British Pounds (GBP)	3 170	2 875
Norwegian Kroner (NOK)	715	2 442
Singaporean dollars (SGD)	98	369
Euro (EUR)	2 391	367
Malaysian Ringgit (MYR)	33	96
	74 186	47 289

According to the loan agreement and corresponding covenants regulations, the Group has to maintain, at all times, a minimum cash amount which equals to the highest of: 5% of the total debt and USD 20 million.

Principal non-cash transaction

The principal non-cash transaction during 2015 was the settlement of the loan receivable from Deep Sea Supply Navegaçâo Maritima Ltda amounting to USD7.087 via the subscription of the additional 55 681 522 shares (Note 24).

12. Share capital

	Numberof Shares(thousands)	ShareCapital	Reorganizationreserve	Sharepremiumreserve	Otherpaid-incapital	Total
Opening balance as at I January 2014	127 197	2 544	(123 386)	130 264	I 807	11 229
lncrease of share capital	134 000	2680		193 918		196 598
Valuation of share option scheme					(153)	(153)
At 31 December 2014	261 197	5 224	(123 386)	324 182	1654	207 674
Opening balance as at I January 2015	261 197	5224	(123 386)	324 182	1664	207 674
lncrease of share capital						-
Valuation of share option scheme					(168)	(168)
At 31 December 2015	261 197	5224	(123386)	324182	1486	207506

The total authorised number of ordinary shares as per 31 December 2015 is 375,000,000 (2014: 375,000,000) shares with a par value of USD 0.02 per share. The Company does not own any share of its own. All issued shares are fully pald.

On 19 June 2014, the Group issued 134.000.000 ordinary shares of USD 002 at a price of USD1,47 each. The share premium arising from this issue was USD 196,980. The transaction costs relating to the issue of shares amounted to USD 3,061 and were deducted from share premium account as permitted by the Cyprus Companies Law, Cap.113.

On 5 August 2014 the Board of Directors approved the distribution of dividends of USD 0.02 per share relating to Q2 results and on 11 November 2014 approved the distribution of a dividend of USD 0.02 relating to 03 results. The total dividends paid to shareholders amounted to USD 10,457.

Share option scheme

The Board of Directors of the Company has approved a share option scheme for directors and certain employees. The exercise price of the granted options is equal to the market price of the shares at date granted plus 10%.

These share options may be exercised with one third after one, two and three years, respectively and all share options must be exercised within 5 years. The strike price shall be reduced, on a USD for USD basis, by the amount of all dividends declared by the Company in the period from the date of grant until the date the subsisting share options are exercised. Subsequent share options have been granted to new employees based on the same principle.

Movements in the number of shares options and their related weighted average exercise prices are as follows:

		2015		2014
	Average exerciseprice Nok per share	Options	Average exerciseprice Nok per share	Options
AtlJanuary	10,60	276668	9,52	866667
Granted	-	-	-	-
Forfeited	-	-	11,21	(323 333)
Exercised	-	-	-	-
Expired	11,76	(178 335)	6,99	(266 666)
At 31 December	849	98333	106	276668

The share options exercised and forfeited pertained to employees that left the Company during the year.

Share options outstanding at the end of the year have the foliowing expiry date and exercise prices

Expiry date (as per year ended 31 December 2015)

	Exercise price in NOK	Shares
2016	8,49	98333
At 31 December		98 333

Expiry date (as per year ended 31 December 2014)

	Exercise price in NOK	Shares
2015	11,76	178335
2016	8,49	98333
At 31 December		276 668

The value of the option is estimated by Hull & White's implementation (2002) for employee stock options of the binomial tree model for the pricing of early exercise equity options.

Change of control

The share options for the board and the share options and certain other benefits for the employees will come into effect in the event of change of control of the Company.

13. Trade and other payables

	2015	2014
Trade payables	2713	6303
Social Security and other taxes	281	214
Accrued expenses	2618	5 167
Payables to related parties (Note 24)	588	-
Total	6200	11684

Fair value of trade and other payables equal their carrying amounts. Trade and other payables are denominated in the foliowing currencies:

Currency	2015	2014
United State Dollars (USD)	3 433	8 848
Great British Pounds (GBP)	250	1117
Singapore dollar (SGD)	203	586
Euro (EUR)	588	938
Malyasian Ringgit (MYR)	-	91
Norwegian Kroner (NOK)	1 648	104
Danish Kroner (DKK)	78	-
	6 200	11 684

14. Borrowings

Group	2015	2014
Non-current
Bank borrowings	185415	274803
Finance lease liabilities	20 825	23 974
CIRR loan	13258	19487
	219498	318264
Current
Bank borrowings	91378	18027
Finance lease liabilities	4065	3832
CIRR loan	2684	3176
	98127	25035
Total Borrowings	.511 OQ	040 000

The carrying amounts of the Group's borrowings are denominated in the foliowing currencies:

	2015	2014
US Dollars	301 683	320 636
Norwegian Kroner	15 942	22 663
	317 625	343 299

The fair value of both current and non-current borrowings is not materially different from their carrying amount. Currently, there is no undrawn credit facility for the Group.

a) Bank borrowings

Bank borrowings comprise of Ioans secured with the foliowing:

• 1. First priority mortgage in the financed vessels
• 1. First priority assignment of insurances agreements
• 1. First priority receivable floating charges
• 1. First priority hedging assignment agreement
• 1. First priority share pledge of share in Group companies

Bank borrowings mature in 2016 and 2019, bearinterestLlBOR+2.25%, LIBOR+2.5% and LIBOR+2.75%, and are repaid quarterly and semi-annually.

The weighted average effective interest rate of the Group's bank borrowings is 2.72%.

Long term bank borrowings have the foliowing expiration dates:

Falling due between	0.2.51.	2014
1-2Years	7223	89326
2-5Years	178192	185477
>5Years	-	-
Total	185415	274803

In February 2016, vessel Sea Lynx was sold to a third party and the associate bank loan was fully repaid (Note 32).

b) Finance lease liabilities

The flnance lease liabilities were entered into at end of 2007 and beginning of 2008.

The maturity was 12 years with several purchase options. In February 2016, flnance leased vessel Sea Bear was sold to a third party and the associated flnance lease liability was restructured (Note 32).

24 890 27 805

Finance lease labilities - minimum lease payments:

	2015	2014
Not later than 1 year	4264	4251
Later than 1 year and not later than 5 years	23 602	27 865
Later than 5 years
	27866	32116
Future finance charges of finance leases	(2976)	(4311)
Present value of finance lease liabilities	24 890	27 805
The present vallue of finance lease liabilitles is as follows:
	2015	2014
No later that 1 year	3148	2916
Later than i year and no later than 5 years	21 742	24 890
Later than 5 years	-	-

c) CIRR DepositiLoan

During the year ended 31 December 2008 the Group has applied for two Commercial Interest Reference Rate (CIRR) loan from the Norwegian Export Credit Agency. The amount of the loans was NOK 132 mill (USD 19 mill) and NOK 216 mill (USD31 mill). The duration of the loans is 12 years and the cash proceeds from the loans have been deposited in a flxed deposit account with a Norwegian bank at a higher interest rate than the one of the loans. The agreed period of the deposits is identical with the one of the loans. The loans and the interest thereof will be repaid from that account and the difference has been recognised as deferred gain and is amortised over the period of the life of the deposit.

The loan is denominated in NOK and subject to currency fluctuations against the USD.

15. Income tax expense

	2015	2014
Currenttax	(175)	(161)

16. Provisions for other liabilities and charges

Bonus agreement

All employees of Deep Sea Supply Management AS and Deep Sea Supply Management (Cyprus) Ltd. have performance bonus agreements with the Group based on comparison with peer group companies. No bonus was granted during the period as the relevant criteria were not mot. For 2014 the weighted average fair value of the bonus payment granted during the period determined using the multi-dimensional Geometrical Brownian Motion Monte Carlo valuation model was USD 162 [NOK 1,2031 equivalentto 31% bonus payment. The significant inputs into the model were average volatility of the peer group of 33.5%, no dividend yield and an expected correlation matrix for the peer group between 0.88 and 1.00. The volatility of the peer group is measured at the standard deviation of continuously compounded share returns based on statistical analyses of daily share prices over the last two years.

	Bonus provision
At I January 2015	162
Charged/(Credited) to the income statement
Paid during the year	(162)
Provision made during the yearAt 31 December 2015
At I January 2014	121
Charged/(Credited) to the income statement	(121)
Paid during the year
Provision made during the yearAt 31 December 2014	162162

The whole amount is considered current.

17. Other (Iosses)/gains - net

	2015	2014
Deferred gain amortized in the period	-	982
lmpairment of investment in associate (Note 30a)	-	(1 264)
Other gains	401	607
Total	401	325

Deferred gain is amortized over 12 years which is the period of the finance lease liability. In 2014, the deferred gain resulting from the sale and finance lease back arrangement was fully written-off due to the impairment charge on the finance lease vessel in 2014.

18. Employee benefit expenses

	2015	2014
Wages and salaries	5 077	6 765
Social security costs	816	783
-defined benefit plans (Note 7)Pension costs	371	270
Other benefits	144	258
Total	6408	8 076
Number of employees as per year-end (Excluding DESS BTG)	43	48

The above excludes crew short employee benefit expenses which are included in operating expenses vessels (Note 20). Share options exercised and forfeited by directors and employees resulted in a reversal of expenses by USD 138 (2014: USD 153).

19. Operating expenses vessels

	2015	2014
Crew expenses	17086	23267
lnsurance	2116	2832
Repairs and maintenance	3099	3065
Administration expenses	54	407
Provisions, stores, lubrication oil, administration of operations and miscellaneous	4999	5364
Total	27354	34935

20. Other operating expenses

	2015	2014
Payroll expenses of administrative employees	6032	7300
Consultancy fees	1221	1109
Office related expenses	794	770
IT and communication	625	778
Travel Expenses	369	533
Sundry	478	546
Total	9 519	11 036

21. Earnings per share

Basic

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. Total number of outstanding shares as per year-end 2015, was 261,197,194 (2014: 198,786,235).

	2015	2014
Profit attributable to equity holders of the company	(151 522)	(896)
Weighted average number of ordinary shares (thousands)	261 197	198 786
Basic earnings per share (USD per share)	(0,580)	(0,005)

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company's only category of dilutive potential to ordinary shares is the share options. Share options have been granted to Board of Directors and management, and per year-end 2015 there were totally 98,333 (2014: 276,668) share options outstanding. The share options are included in the diluted number of shares depending on whetheror not they were in the money per year-end 2015 and 2014.

	2015	2014
Loss attributable to equity holders of the company	(151 522)	(896)
'Weighted average number of ordinary shares diluted
(thousands)'	261 197	198786
Diluted earnings per share (USD per share)	(0,580)	(0,005)

As at 31 December 2014 and 2015, there was no dilutive effect of the share options as they were out of money.

22. Cash generated from operations

	2015	2014
Loss before tax	(151 347)	(735)
Adjustments for:
-Depreciation and impairment (note 6)	83 174	27 945
-Share of profit from associates I JVs, net of deferred gain	60 924	(3 149)
-Impairment of investment in associate	-	I 264
-Impeirment of investment in JV (Note 4.1(e))	30894
-Amortization of deferred gain (note 17)	(337)	(982)
-Finance costs - net	11122	8 525
-Effect from financial derivatives	(22)
-Exchange (gains)/Iosses	(20)	566
-Remeasurement loss - Pension	(105)	(413)
-Valuation of Share option scheme	(168)
- Changes in working capital
"(excluding the effects of acquisition and exchange
differences on consolidation)"
-Inventories	214	(950)
-Trade and other receivables	12635	9 686
-Trade and other payables	(5 484)	6130
-Restrieted Cash (Note 11)	598	(708)
Cash generated from operations	42 078	47 179

23. Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.

Trade Receivables

Out of the USD 7,431 (2014 :USD 20,576), which were neither past due nor impaired USD 5,851 (2014 :USD 15,999) is with existing customers for more than 6 months with no defaults in the past and USD 1,579 (USD 4,576) is with new customers.

Cash and cash equivalent

The ratings for the banks where the Group holds it cash at bank and short-term bank deposits are as foliows:

As at 31 December 2015

Credit rating	Amount
Aa1	51
A2	1688
Aa2	42 736
A3	33
Aa3	29 628
Caa3	45
Unrated	4
	74 186

Deep Sea Supply PicAnnual report 2015

As at 31 December 2014
Credit rating	Amount
Al	31 291
A2	3 430
Aa3	12451
Caa3	21
Unrated	96
	47 289

Ratings shown above were issued by the credit agency of Moody's as at 31/12/2015 and 31/12/2014, respectively. The rest of the balance sheet item 'cash and cash equivalent' is cash in hand,

24. Related party transactions

Key management compensation

Key management for 2015 and 2014 includes the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), the Chartering and Marketing Director, the Technical director and the Accounting director of the Group and the Board of Directors.

The total compensation to the key management of the Group amounted to USD 1,098 as of 31 December 2015. The corresponding amount as of 31 December 2014 was USD 2,028.

The key management has no other form of compensation, except salary, share options schemo mentioned in note 12 and the bonus agreement mentioned in note 16. There are no loans to the employees of the Group as per 31 December 2015 and per 31 December 2014.

Remuneration to the board

The remuneration to the Board in 2015 is USD 95 (NOK 0.75 million), whereof USD 44 (NOK 0.35 million) is payment to the chairman. In 2014 payment to the board was USD 127 (NOK 0.95 million), whereof USD 47 (NOK 0.35 million) was payment to the Chairman.

Other transactions with related parties

The Group rents offices from a company controlled by a party exercising significant influence over the Group. The amount charged in 2015 was USD 36 (2014: USD 40). The Group rents part of its offices to a company controlled by a party exercising significant influence over the Group. The amount charged in 2015 was USD2 (2014: NILL).

The Group received consultancy services from a company controlled by a party exercising significant influence over the Group in 2015 that amounted to USD 50 (2014: USD 50).

In 2014, the Group leased vessels on a bareboat basis from a company controlled by a party exercising significant influence over the Group for a fee of USD 5,576. No such expenses existed in 2015.

In 2014, the Group paid USD 84 on behalf of a company controlled by a party exercising significant influence over the group with regards to yard expensos. No such amounts have been paid in 2015. In 2014, the Group had a receivable from a company controlled bys major shareholder by the end of 2014 that amounted to USD 84. No such amounts existed in 2015.

Transactions with DESS BTG Companies

The Group has performed the following transactions during 2015 and 2014 with companies that belong to the DESS BTG Group:

Vessels manaoement

The Group has entered into agreement with the DESS BTG Group where by it provides management services for the vessels of the joint venture. The total amount for 2015 was USD 1,025 (2014: USD 1,145) and is included in Management fee lncome from related parties".

Administrative income

The Group has entered into an agreement with DESS BTG Group for the provision ofvarious services such as:

Financial and accounting services / Vessels technical related services / Business development / Handling of insurance related matters / Administrative services

DEEP SEA SUPPLY

The fee for the services for 2015 was USD 2,013 (2014: USD 2,505) and is included in "Management fee lncome from related parties". in the income statement. The amount was calculated by adding a markup element of 5.25% to the expected costs of the Group for providing those services.

Balances with JV Group

The total year end balance with JV companies excluding loans (see further below) was a payable of USD 588 (USD2014: Payable of USD30). This relates to an amount received by the Group on behalf of JV Group ciose to year and was fully repaid atter year end.

Acquisition of 10 new vessels and newbuildings

In June 2014, the Group entered into a share purchase agreement with Greenwich Holdings Ltd. (company controlled by party exercising significant influence over the Group), for the acquisition of 100% of the shares in PSV Holding Inc (PSV Holding"), a non-resident domestic corporation formed under the laws of Liberia. The sole activity of PSV Holding consisted of holding vessels and newbuilding contracts for construction of PSVs. PSV Holding was the owner of six PSVs and furthormore a party to shipbuilding contracts for four PSVs under construction at the time of the transaction.

The total purchase consideration paid by the Group for the shares in PSV Holding was based on an Enterprise Value (equity plus net debt and remaining capital expenditure) of USD 366 million, including the capital expenditure commitments of approximately USD 107 million and net debt of USD 192 million.

The acquisition of PSV Holdings is accounted for in the consolidated flnancial statements as an asset acquisition a purchase of the vessels and not as a business combination. The acquisition price of the vessels and vessels under construction at the dated of acquisition was recorded as USD 258,753. Subsequent to acquisition the Group paid an additional USD 107,247 upon the delivery of the four vessels under construction. No such transactions existed in 2015.

Loans to related parties

	2015	2014
Loans to companies under Joint Venture
At i January	42 870	22 448
Loans advanced during the year	-	20 000
Loan repayments received	(20 000)	-
Loan and interest converted into equity	(7 737)	-
Interest Charged	990	977
Interest received	(1 123)	(555)
At 31 Decomber	15000	42870

Loans to companies under DESS BTG are payable in 2016 and carry interest 3 Months Libor + 4.75%.

Financial guarantees to related parties

The Group acts as a guarantor in relation to bank borrowings of Deep Sea Supply Navegaço Maritima Ltda for the bank borrowings of a company in the Joint Venture (Note 30b).

25. Other short term receivables

	2015	2014
Prepaid vessel insurances	1184	1 787
Claims from insurance companies	812	i 370
VAT receivables	145	167
Other deposits with maturity over 3 months	370	368
Receivable from related party (Note 24)	-	84
Guarantee receivables	491	315
Net pay (Norway) recoverable	319	199
Other	658	675
	3979	4965

26. Aud itors remuneration

Remuneration to the statutory auditors in the financial statements for 2015 equals USD 94(2014: USD 109) for audit services, USD Nu (2014: USD33) for other assurance services and USD 43 (2014: 13) for non-assurance services.

27. Financial instruments by category

Setting out below is a comparison by category for carrying amounts and fair values of all of the group's financial instruments that are carried in the financial statements.

	Loans andReceivables	Total
31 December 2015
Assets as per balance sheet
Trade and other receivables	13991	13 991
Loans to related parties	15000	15000
ClRRDeposits	15942	15942
Cash and cash equivalents	74 186	74 186
Total	119 119	119 119

	Derivatives used	Other financial
	for hedging	liabilities	Total
Liabilities as per balance sheet
Borrowings		276 793	276 793
Finance lease liabilities		24 890	24 890
ClRRLoans		15942	15942
Derivative financial instruments	221		221
Trade and other payables		6201	6201
Total	221	323 826	324 047

Group	Loans andReceivables	Assets at fairvalue throughprofit and loss	Total
31 December 2014
Assets as per balance sheet
Trade and other receivables	26 626		26 626
Loans to related parties	42 870		42 870
CIRR Deposits	22 663		22 663
Derivative financial instruments		143	143
Cash and cash equivalents	47 289		47 289
Total	139448	143	139591

	Derivatives used	Other
	for hedging	financial liabilities	Total
Liabilities as per balance sheet
Borrowings		292 830	292 830
Finance lease liabilities		27 806	27 806
ClRRLoans		22663	22663
Derivative financial instruments	386		386
Trade and other payables		11 684	11 684
Total	386	354 983	355 369

28. Contingencies & commitments

(a) Tax legislation

The Group is subject to taxes in several jurisdictions, where significant judgement is required in calculating the tax provision for the Group. There are many transactions for which the ultimate tax determination is uncertain and for which the Group makes provisions based on an assessment of internal estimates, tax treaties and tax regulations in the different countries where the Group is operating, 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 management estimates that no material liability will anse from uncertain tax positions.

(b) Operating leased commitments - Group as lessor

The future minimum lease payments receivable under non-cancellable operating leases (mainly port infrastructure) are as follows:

	2015	2014
No later than 1 year	23 108	45 799
Later than I year and no later than 5 years	16 005	51 560
Later than 5 years
	39113	97359

(c) Operating Environment of the Group

The demand for offshore supply vessels depends on the level of activity in the offshore oil industry, which is significantly affected by, among other things, volatile oil prices and may be materially and adversely affected by the current significant decline in prices. Declines in oil prices for an extended period of time could continue to negatively affect the Group's business; reduced demand for vessels which could result in vessels being idle for long periods of time and put in Iay-up.

Management believes that the market for OSV will become highly competitive in the short to medium term due to these events. Management estimates that the vessels put in lay will remain in this state until 2019 when the market is expected to recover.

The operating vessels are being marketed and the Group is actively participating in various tenders in order to secure employment of its vessels.

The Group's management has assessed:

(1) Whether recognition of impairment provisions are deemed necessary for the Group's vessels as explained in detail in Note 6; and (2) The ability of the Group and the Joint Venture of the Group to continue as a going concern as explained further in Note 4.

The Group's management is unable to accurately predict the future developments in the industry, and consequently, what effect, if any, they could have on the future financial performance, cash fiows and financial position of the Group.

The Group's management believes that it is taking all the necessary measures to maintain the viability of the Group and the development of its business in the current challenging business and economic environment.

(d) Financial guarantees

The Group has issed guarantees as described in Note 30(b).

29. Deferred gain on finance leased vessels

	2015	2014
Opening balance at beginning of the year	-	5 892
Amortised during the year	-	(982)
Impairment (See Note below)	-	(4 910)
Closing balance at the year end

During 2014 out of the amount of USD 10,627 (Note 6), an amount of USD 4,910 was set off against deferred gain on sale and leaseback and the remaining amount USD 5,717 against profit and loss.This impairment charged reduced the deferred gain to USD Nil as at 31 December 2014.

30. Investments accounted for using the equity method

The amounts recognised in the balance sheet are as foliows:
	2015	2014
Joint ventures	62531	115 718
At 31 December	62531	115718
The amounts recognised in the income statement are as foliows:
	2015	2014
Share of profitl(Ioss):
Associates	-	19
Joint ventures	(60 924)	3 130
tmpairment
Associates	-	(1 264)
Joint ventures	(30 894)	-
Total	(91 818)	1 885
30a. Investment in Associates
	2015	2014
At I January	-	I 245
Additions	-	-
Share of profit	-	19
lmpairment (Note 17)	-	(1 264)
At 31 December	-	-

31 December 2014

On 02 February 2015, DESS commenced proceedings in the High court of Singapore against Sea Weasel Ltd for unpaid management fees and disbursements. Vessel Sea Weasel" owned by associate Sea Weasel ltd was arrested on the same day. The Group has recognized a 100% impairment on the investment in associate (Note 17) and has performed 100% provision on the receivable from Sea Weasel Ltd amounting to USD 300. The reason for the 100% write off is that Sea Weasel Ltd has secured loans against the one vessel it owns, and the estimated sale price of this vessel is not expected to cover more than that secured loan.

Due to the legal proceedings of DESS against Sea Weasel Ltd, no flnancial information was made available for year 31 December 2014.

31 December 2015

On 30 September 2015 the court ordered that the Vessel Sea weasel be sold to a third party and on 9 October 2015 the proceeds of the sale of the Vessel was paid into court. The Group has obtained a final judgement in the High court of the republic of Singapore for the sum of USD 121 for unpaid management fees and disbursements, and USD 103 for unpaid crew wages. The Group has written off all amounts that are considered non recoverable at an amount of USD 82.

30b. Investment in Joint Venture

On 31st May 2013 The Group and DSB Serviços de Ôleo e Gås II S**.**A. (previously named BTG Pactual Oil & Gås Participaçöes SA). (BTG Pactual") entered into a joint venture agreement for the ownership and operation of Platform Supply Vessels (PSVs") and Anchor Handling Tug and Supply Vessels ('AHTS") in Brazil. The Group sold 50% of its Brazilian business and purchased together with its new Brazilian partner BTG Pactual 6 newbuilding contracts.

The Group sold 50% ownership interest in each of its Brazilian subsidiaries Deep Sea Supply Navegaçåo Maritima Ltda. (Deep Sea Navegaçäo") and Deep Sea Supply Serviços Maritimos Ltda (Deep Sea Serviços"). All the joint venture entities are collectively referred to as "DESS BTG or "JVs".

The Group also sold 9 AHTS and 5 PSVs togelher with their borrowings to Deep Sea Supply BTG B.V. group, which is owned jointly 50/50 by DESSC and BTG Pactual (Note 5).

	2015	2014
At 1 January	115718	112569
lncrease in share capital of JV companies	7737	-
Deferred gain amortized in year	1756	1906
Deferred gain released in year	6520	-
Share of (loss)/proflt excluding deferred gain	(69 200)	1 243
lmpairment of investment in JV (Note 4.1 (e)	(30 894)	-
At 31 December	31637	115718

On 30 March 2015, the Brazilian entities of the Joint Venture issued additional share capital. Deep Sea Navegaço issued shares for a total consideration of USD 7,084 per venture which was used to repay the loan provided to the company (Note 24) and Deep Sea Serviços issued shares for a consideration of USD 650 which was fully repaid.

Nature of investment in joint venture:

	Country of		Measurmenet
Name	lncorporation	% Held	method
31 December 2015
-Deep Sea Supply Navegaçäo Maritima Ltda	Brazil	50	Equity
-Deep Sea Supply Serviços Maritimos Ltda	Brazil	50	Equity
-Deep Sea Supply BTG AS	Norway	50	Equity
	Country oflncorporation	% Held	Measurmenetmethod
Name
31 December 2014
-Deep Sea Supply Navegaçäo Maritima Ltda	Brazil	50	Equity
-Deep Sea Supply Serviços Maritimos Ltda	Brazil	50	Equity
-Deep Sea Supply BTG B.V.	Netherlands	50	Equity

Summarized financial information for joint ventures

Set out below are the combined summarized information for Deep Sea Supply Navegaçâo Maritima Ltda, Deep Sea Supply Serviços Maritimos Ltda and Deep Sea Supply BTG B.V. group.

Deep Sea Supply PlcAnrival report 2015

Summarised Balance sheet
	2015	2014
Assets and liabilities ofjointly controlled entities
Current Assets
Cash and Cash Equivalents	25 787	29 098
Trade & Other receivables	21 960	39 856
Inventory	2630	I 703
Total Current assets	50 377	70 657
Non CurrentAssets
Property plant and equipment	504 003	678 577
Other long term receivables	-	i 637
Total non current assets	504 003	680 214
Current Liabilities
Borrowings	121 406	41 034
Borrowings from related parties	15 000	35 000
Trade and otherpayables	14039	15397
Total current liabilities	150 445	91 431
Non current liabilities
Borrowings	278 874	411 728
Total non current liabilities	278 874	411 728
Net Assets	125061	247712
50% of net assets	62531	123856
Deferred gain on flnance leased vessels not amortized	-	(8 138)
lmpairment of investment in JV (Note 4.1 (e) )	(30 894)	-
Total amount	31 637	115 718

Summarized statement of comprehensive income

	2015	2014
Operating revenue	124 540	150 233
Operating expenses vessels	(55 309)	(71 890)
Other operating expenses	(7 220)	(9 107)
Other (losses)/gains - net	(794)	(18)
EBITDA	61 217	69 218
Depreciation and irnpairment related to vessels	(176 080)	(43 127)
Other deprecia0on	(218)	(146)
EBIT	(115081)	25945
Finance income	(944)	2 894
Finance costs	(20 831)	(22 131)
Net financial items	(21 775)	(19 237)
Other write offs	(430)	(1123)
(Loss)/Profit before income tax	(137 286)	5 585
lncome tax expenses	(1 114)	(3 097)
(Loss)/Profit for the year from continuing operations	(138 400)	2 487
50 % of(Loss)/Profit	(69 200)	I 243
Deferred gain amortized in period	I 756	I 906
Deferred gain releases during period	6 520	-
Amount recognizod as per note 30	(60 924)	3 149

Reconciliation of summarized financial information

Reconciliation of the summarised financial information presented to the carrying amount of its interest in the joint venture:

Summarized financial information	2015	2014
Opening net assets 01 January	247 712	245 226
lncrease in Share capital	15749	-
Profit/(Loss) for the year	(138 400)	2 486
Ciosing net assets	125 061	247 712
Interest in joint venture@50%	62531	123 856
Deferred gain 01 January	(8 276)	(10 044)
Deferred gain amortized	1 756	1 906
Deferred gain releasod	6 520	-
lmpairment of investment in JV (Note 4.1 (e))	(30 894)
Carrylng value	31 637	115 718

The Company has issued a parent company guarantee for the obligations of Deep Sea Supply Navegacao Maritima Ltda under the BNDES Facility Agreement for the financing of Sea Brasil for a maximum amount of USD53,91 3 being the year end outstanding amount of the BNDES loan. The bank borrowings are also secured by a first-prioiity mortgage over a vessel owned by Deep Sea Supply Navegacao Maritima Ltda. BTG Pactual Group could not issue guarantees pursuant to internal restrictions, and was therefore not able to assume 50% of the guarantee obligations in connection with the establishment of the Joint Venture.

BTG Pactual Group has instead issued a counter indemnity in favour of the Company, whereby BTG Pactual Group indemnifies the Company for any claims exceeding 50% of the total liability under the guarantee given under the BNDES Facility. The Company still is the initial guarantor under the guarantee granted in favour of BNDES, and in the event BTG Pactual Group is not able to fulfil its obligations under the counter indemnity guarantee, the Company will be responsible for the full guarantee amount If BNDES calls upon the guarantee, which may materially impact the financial condition of the Group. The obligations of BTG Pactual Group under the counter indemnity agreement are secured by way of a share pledge over shares in companies which are controlled by BTG Pactual Group. The Group is not expecting any financial impact from any of these guarantees (Note 4.1(e)).

Refer to Note 4.1(e) for impairment of investment in JV.

31. Change of presentation of consolidated income Statement

Management of the Group has decided to change the presentation of the Consolidated Income Statement using the nature of expenses method as compared to the function of expense method which was previously used. Management considers that presenting consolidated income statement by nature provides more reliable and relevant information to users about the Group's performance in current market conditions. The reason for the change of the presentation is that performance of the companies in the offshore supply sector is often evaluated by analysts and other interested parties through analysis of the financial figures arising from the nature of operations, such as for example EBITDA results. Because of this quarterly and other reporting to the market has always been based on presenting the consolidated income statement by nature. This change will achieve better consistency and comparability.

As a result of this change in the presentation of the Consolidated lncome statement the subtotals of the consolidated income statement 'Gross Profit' and 'Operating Profit' have been removed. The new sub-totals include 'Operating profil: before depreciation and Impairments (EBITDA)' ('EBITDA') and 'Operating Profit (EBIT)' ('EBIT'). EBITDA is defined as the earnings generated by the Group before the effect of financial income and expense, tax, depreciation and impairment and currency gains/losses. EBlT is defined as earnings generated by the Group before the effect of financial income and expense, currency gains/Iosses and tax.

The impact of the changes in the comparative information presented is as follows:

Presentation as per 2014
Consolidated Financial Statements	USD' 000	Changes made to the presentation
Sales freight revenue	88 050	No change
Operating expenses vessels	(34 935)	No change
Operating leases	(5 576)	No change
Depreciation and impairment related to vessels	(27 801)	This amount has been reclassified below EBITDA sub-total
Gross Profit	19738	This sub-total has been removed
Other depreciation	(144)	This amount has been reclassified below EBITDA sub-total
	637	"Financial Statement Line Item split as follows:
		1. Management fee income amounting to USD3650 and was
		redassified above the EBITDA sub-total
		2.0therwrite-offs amouning to USD3013 and were
Other income/expenses		reclassified above the EBITDA sub-total"
Administrative expenses	(11 036)	Note 20
Operating profit	9 195	This sub-total has been removed
Finance income	1176	No change
Other (losses)/gains - net	325	This amount has been reclassified above EBITDA sub-total
Currency (losses)Igains	(4 879)	No change
Finance costs	(9 701)	No change
Total other items	(13 079)	This sub-total has been removed
Share of profil: of investments accounted
for using the equity method	3 149	This amount has been reclassified above EBITDA sub-total
(Loss)/Profit before income tax	(735)	No change

32. Events after the balance sheet date

The Group has sold the two AHTS vessels Sea Lynx and Sea Bear. The vessels were delivered to new owners within February 2016. Sea Lynx was 100% owned by the Group, while Sea Bear was owned by Ship Finance International Ltd (SF1") and leased to the Company under a 12 year sale and leaseback agreement entered into in 2008. Following the sale of Sea Lynx and the termination of the sale and leaseback agreement with SF1 for Sea Bear, the Group's loans are reduced by USD 21.9 mill and the cash reduced by USD 6.6 mill. The sale and termination will give a book loss of USD 17.3 mill which will be included in the 10 2016 flnancials.

Before sale of Sea Lynx an instalment of 11.632 USD was pald against the bank loan facility linked to this vessel. Upon disposal of finance leased vessel Sea Bear, the finance, lease was terminated and the finance lease liability amounting to 24.512 USD at date of sale was replaced by a promissory note amounting to USD 14.589 bearing interest at 7.25% per annum. Payments of interest and installments for this promissory note are on a monthly basis and is fully repayable by 7 January 2022. Gain on sale on replacement of the financial lease liability with the promissory note will be reported in 01 financials as part of loss of disposal of vessel.

The PSV Sea Falcon has been awarded a contract for 2 years firm plus 3 yearly options with Statoil (UK.) Ltd. for operations in the North Sea. Expected commencement is 40 2016.

The PSVs Sea Frost and Sea Supra have been awarded 60 days and 90 days firm contracts, respectively, plus 120 days options for an international oil company for operations in Asia. The vessels commenced the charter contracts in April 2016.

The PSV Sea Titus has been awarded 4 months firm plus 2 months options for an international oil company for operations in South America. The vessel commenced the charter contract in April 2016.

Independent auditor's report To the Members of Deep Sea Supply P1c

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Deep Sea Supply Plc (the "Company") and its subsidiaries (together with the Company, the "Group"), which comprise the consolidated balance sheet as at 31 December 2015, and the consolidated statements of income, comprehensive income, changes in equity and cash fiows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Board of Direetors' responsibility for the consolidatedfinctncial statements

The Board of Directors is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

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

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

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

PricewaterhouseCoopers Ltd, Ltd, City House, 6 Karaiskakis Street, CY-3032 Lirnassol, Cyprus P 0 Box 53034, CY-3300 Limassol, Cyprus

T: +357 -25 555 000, F: +357 -25 555 001, www.pwc.comlcy

PricewaterhouseCoapers Ltd is a member tirm at PricewaterhauseCaapers International Ltd, each member 6,-m at which isa separate legal entity. Pricewatert,ouseCoapers Ltd is a private company registered in Cyprus (Reg. Na. 143594). A list st the company's directors includirig for individuals the present same and sumams, as well as any prmesus names and far legal entities fire corparate name, is kept by the Secretary of the company at Ila registered office at 3 Themistoclea Dervis Street, 1066 Nicosla and appeara an fire company's web site. Offices in Nicosla, Limassol, Larnaca and Paphos.

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2015, and of its financial performance and its cash fiows for the year ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap.113.

Report on other legal requirements

Pursuant to the additional requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013, we report the foliowing:

• We have obtained all the information and explanations we considered necessary for the purposes of our audit.
• In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of these books.
• The consolidated financial statements are in agreernent with the books of account.
• In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required.
• In our opinion, the information given in the report of the Board of Directors is consistent with the consolidated financial statements.

Pursuant to the requirements of the Directive DI19o-2007-04 of the Cyprus Securities and Exchange Commission, we report that a corporate governance statement has been made for the information relating to paragraphs (a), (b), (c), (f) and (g) of articie 5 the said Directive, and it forms a special part of the Report of the Board ofDirectors.

Other matter

This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 34 of the Auditors and StatutoryAudits of Annual and Consolidated Accounts Laws of 2009 and 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

Ylangos Kaponides Certified Public Accountant and Registered Auditor for and on behalf of

PricewaterhouseCoopers Limited Certified Public Accountants and Registered Auditors

Limassol, 25 April 2016

Shareholders registered in VPS

The Largest Shareho!ders As Per 31 Dec 2015 Registered In VPS

	Citizen	Mo of shares:	%
HEMEN HOLDING LIMITED	CYP	91 543 853	35,05%
DNB NOR MARKETS	NOR	41114000	15,74%
SKAGEN KON-TIKI	NOR	17250931	6,60%
VPF NORDEA NORGE	NOR	8 509 570	3,26%
UBS SWITZERLAND AG	CHE	8 037 430	3,08%
BANK OF NEW YORK	BEL	6 163 032	2,36%
KLP ALFA GLOBAL ENERGI	NOR	4 400 000	1,68%
SKANDINAVISKA ENSKILDA BANKEN AB	SWE	4046713	1,55%
SOLSTEN INVESTMENT FUND	DEU	3 850 881	1,47%
MORGAN STANLEY & CO	GBR	3193600	1,22%
CENTRA INVESTAS	NOR	3157853	1,21 %
PACTUM AS	NOR	1 960 000	0,75%
STATE STREET BANK	USA	1 840 397	0,70%
VPF NORDEAAVKASTNING	NOR	1821584	0,70%
KLP AKSJENORGE	NOR	1 586 800	0,61 %
VPF NORDEA KAPITAL	NOR	I 577 129	0,60%
CIPI LAMP UCITS SWEDBANK SMB	GBR	1 400 000	0,54%
STATOIL PENSJON	NOR	1 213 306	0,46%
NORDEA BANK SVERIGE AB	SWE	1110208	0,43%
CITIBANK	USA	1 083 506	0,41 %
Total 20 largest shareholders:		204 860 793	78,43%
Total other sharoholders:		56 336 401	21,57%
Total number at shares:		261 197 194	100,00%

Shareholders registered in VPS

The Largest Shareholders As Per 25 April 2016 Registered In VPS

	Citizen	No. of shares;	%
HEMEN HOLDING LIMITED	CYP	91 543 853	35,05%
DNB NOR MARKETS	NOR	41 026 807	15,71 %
SKAGEN KON-TIKI	NOR	17 250 931	6,60%
UBS SWITZERLAND AG	CHE	7 985 450	3,06%
BANK OF NEW YORK	BEL	6110655	2,34%
SKANDINAVISKA ENSKILDA BANKEN AB	SWE	5500000	2,11%
VPF NORDEA NORGE	NOR	5471 085	2,09%
KLP ALFA GLOBAL ENERGI	NOR	4400 000	1,68%
CENTRA INVEST AS	NOR	3157853	1,21%
SOLSTEN INVESTMENT FUNDS PLC	DEU	2935604	1,12%
PACTUM AS	NOR	1 960 000	0,75%
VERDIPAPIRFONDET KLP AKSJENORGE	NOR	I 586 800	0,61 %
JR MORGAN BANK LUXEMBOURG SA	GBR	1 494 200	0,57%
dPI LAMP UCITS SWEDBANK SMB	GBR	I 400 000	0,54%
VPF NORDEAAVKASTNING	NOR	i 240 582	0,47%
NORDEA BANK SVERIGE AB	SWE	1 221 403	0,47%
STATOIL PENSJON	NOR	1 213 306	0,46%
VPF NORDEA KAPITAL	NOR	1 014 557	0,39%
KOMMUNAL LANDSPENSJONSKASSE	NOR	1 008 200	0,39%
PER HAGA	GBR	1 000 000	0,38%
Total 20 largest shareholders:		198 521 286	76,00%
Total other shareholders:		62 675 908	24,00%
Total number of shares:		261 197 194	100,00%

Corporate governance

Deep Sea Supply PIc ("DESSC" or the Company on a consolidated basis) principles for Corporate Governance are based on the 'Norwegian Code of Practice for Corporate Governance" issued on 30 october 2014. Listed companies are expected to practice Corporate Governance that regulates the divisjon of roles between Shareholders, the Board of Directors and the Executive Management more comprehensively than is required by the legislation.

The code of practice intends to strengthen the confidence in listed companies providing the highest possible value creation benefiting shareholders, employees and others. As DESSC is a Cyprus registered company, "Norwegian Code of Practice for Corporate Governance" can only be adopted as long as the recommendation is in accordance with Cyprus Companies Law, Cap 113. The Board of the Company is not aware of any differences between the content of the "Norwegian Code of Practice for Corporate Governance" and Cyprus Companios Act. DESSC's management has presented "The Norwegian Code of practice for Corporate Governance" for the Board.

The foliowing elements underpin the Company's Corporate Governance Policy:

• DESSC will maintain an open and reliable communication with the public about its business activities and conditions related to corporate governance.
• DESSC's Board will be autonomous and independent of the Company's Management.
• DESSC will attach importance to avojd conflicts of interest between the owners, the Board and the Management.
• DESSC will have a clear divisjon of responsibilities between the Board and the Management.
• All shareholders will be treated equally.

The Company has established its own corporate Code of Ethics. Compliance with and follow up of the Code of Ethics have been discussed and presented thoroughly in-house. For more detailed information about the Company's Code of Ethics, please see our corporate website at www.deepseasupply.no.

Company Background

Deep Sea Supply Plc was established on 7 November 2006 for the purpose of acquiring all shares of Deep Sea Supply ASA foliowing an initiative by the Board of Deep Sea Supply ASA to change the domicile of the ultimate parent company to Cyprus.

Business

The Company's business objective is defined in Section 3 of the Memorandum of Association, and includes, inter alla, the following; "To engage and invest, directly or indirectly, by itself or through subsidianes or part-owned companies, partnerships or other forms

of entities, in the international offshore anchor handling and supply vessel business, and to do all such acts and things as are related thereto, including without limitation the acquisition, construction, leasing, chartering, operation and manning of such vessels and everything incidental thereto."

The Company's primary aims are to meet the demand from markets that require modem and advanced supply vessels. DESSC seeks investments in the perspective of providing attractive financial returns to its shareholders. The Company will actively consider possibilities to participate in industry consolidation, mergers and acquisitions, and will position itself to be part of such consolidation.

Equity and dividend

Equity

The Company's book equity as per 31 December 2015 was USD 291.6 mill The Board considers this to be an acceptable level. The Board evaluates continuously the Company's equity in light of the overall goals, strategy, risk profile and market.

Dividend policy

The Company will actively use the capital market when doing investments, and does not intend to hold significant liquid reserves for investments. Retained earnings will, to the extent permitted under operational constraints, financial covenants, committed capital expenditures and with due regard to appropriate working capital requirements be paid out as dividends. In 2015, no dividend has been distributed. See Board of Directors report for details on the considerations made with regards to dividend payments in 2015.

Purchase of treasury shares

The Board has been granted an authorization to acquire treasury shares, including acquisition of security rights. Authorization to acquire treasury shares is based on the assumption that acquisitions will be conducted at normal market conditions. DESSC did not own any own shares in 2015.

Major Shareholders

The major shareholder of the Company is Hemen Holding Limited with an ownership of 35.1%. Equal treatment of shareholders and transactions between related parties

Class of shares

All shares in DESSC are equal. TheArticles of Association place no restrictions on voting rights or rights of receiving dividends.

Trading in treasury shares

The Board's authorization to acquire treasury shares is based on the assumption that acquisitions will be conducted at normal market conditions.

Transactions between related parties:

Related parties are considered to be the Board members (including associated companies) and the Management (including associated companies).

Freely negotiable

The shares are froely negotiable.

General meetings

By virtue of the Annual General Meeting (AGM), the shareholders are guaranteed participation in the Company's supreme governing body. Shareholders representing at least 10 per cent of the shares can call for an extraordinary general meeting. The AGM shall be held at the place of establishment of the Company (Cyprus).

Convening letter

The notifications to the AGM are distributed to all shareholders minimum 21 days in advance. It is considered important that the documents contain all relevant documentation se that the shareholders can take a position on all items up for discussion. The Finance Calendar is published on the Company's web page and distributed via Oslo Stock Exchange.

Participation

It is possible to register for the AGM by ordinary mali, telefax or e-mail. The Board will attend the AGM. As a minimum, the management is represented by the CEO and the CFO.

Agenda and execution

The agenda is set by the Board, and the main items are specified in the Company's Articies of Association. The Chairman of the Board will chair the AGM.

Nomination and Audit Committees

In accordance with the Articles of Association, the Company shall have a nomination committee consisting of the Chairman of the Board and two members elected by the AGM. In connection with the election of Directors and election of the members to the Nomination Committee, the Nomination Committee shall in connection with the summons for the General Meeting provide its recommendations for candidates. The nomination committee shall also propose the remuneration to the Board members. The Board has established an Audit Committee who had four meetings in 2015. The meetings were held with together with the Management and the Company's Auditors.

Board of Directors

Composition and independence

As per April 2016 the DESSC Board consists of three board members and one alternate director.

Election of the Board of Directors

The Board members are elected by the AGM based on a recommendation prepared and presented by the Nomination Committee. The recommendation is distributed to the shareholders along with the convening letter to the AGM. Decisions on the composition of the Board require a simple majority. Directors are elected for two-year terms and can be re-elected.

Composition of the Board

Emphasis is made on selecting board members with relevant competence. According to theArticles of Association, the Board shall have from three to seven board members. The Company's CEO is not member of the Board.

The Board's autonomy

The Board considers itself autonomous and independent of the Company's executive management and main shareholders. Emphasis is made that there should exist no conflicts between the Board, the Management and the Company's shareholders. The corporate Code of Ethics discusses this topic under the heading 'Conflict of interest".

Director's ownership of shares

By year-end 2015, the majority of the members of the Board either owned shares in the Company or represented significant shareholders. Reference is furthermore made to the separate presentation of the Board Members in the Annual Report.

Board work

Board responsibilities

The Board bears the ultimate responsibility for running the Company and supervising routine management and business activities. The Board primarily looks after the interests of all the shareholders, but is also responsible for the Company's other stakeholders.

The Board has made an annual plan for the board meetings. The Board's main tasks are developing and determining the Company's strategy, performing the required control functions and advice the executive management. The Board is responsible for employing the Company's CEO and to draw up his/herjob description. The Board members receives a fixed compensation. DESSC's Board of Directors consists of 1 Cyprus, 2 UK and 1 Norwegian resident.

Remuneration to leading employees

The remuneration for the CEO is decided by the Board. Each year, the Board undertakes a thorough review of salary and other remuneration to the CEO. An incentive scheme for the management is established. Bonus scheme is linked to the development of the stock price of the Company based on comparison with peer company companies. The terms are described in the notes of the annual financial statements.

Remuneration to the members of the Board

The AGM approves the Board's remuneration each year. The remuneration to the Board in 2015 breaks down as foliows: NOK 350,000 for the Chairman and NOK 200,000 for each Director. No Director is engaged in any paid consultancy work or other assignments for the Company.

Change of control

Certain benefits for the management will come into effect at a change of control in the Company (in excess of 30%).

Information and communication

The Company considers an open and frequent communication as important to its shareholders and other related parties. The Company's Financial Calendar is published on the Company's website and communicated via Oslo Stock Exchange.

The Company's web-site contains financial and other information relevant for its shareholders and related parties.

Open presentations are made to present the quarterly financial statements. Present at these presentations are the CEO and the CFO. The financial information is simultaneously made available on the Company's web-site.

It is considered essential to keep owners and investors informed about the Company's progress and financial status.

Emphasis is made on presenting the same information to the entire equity market at the same time.

Internal control environment and audit committee

The Company has established the necessary set of processes and systems to ensure proper internal controls. An audit committee, established in 2009, holds oversight of all financial reporting and disclosure. The audit committee meets with the management and the auditors prior to publishing quarter and annual results to the stock exchange.

Take-over regulation

There are no defense mechanisms against take-over bids in the Company's Article of Associations, and the Company has not implemented other measures to limit the opportunity to acquire shares in the Company.

The EU Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on take-over bids is implemented in Norway through the Securities Trading Act of 29 June 2007 no. 79 (the "Norwegian Securities Trading Act") and in Cyprus through Cypriot Law 41 (1)12007 on Takeover Bids. A brief summary of the take-over rules applicable to the Company is included below.

Any person, entity or group acting in concert that acquires 30% or more of the voting rights of the Company is required to make an unconditional general offer for the purchase of the remaining shares in the Company, The offer is subject to approval by Oslo Stock Exchange, in its capacity as competent take-over authority of Norway. The offer price per share must be at least as high as the highest price paid or agreed by the offeror in the six-month period prior to the date the 30% threshold was reached, however equal to the market price if the market price was higher at that time. In the event that the acquirer thereafter, but prior to the expiration of the acceptance period acquires, or agrees to acquire, additional shares at a higher price, the acquirer is obliged to restate its offer at that higher price. A mandatory offer must be in cash or contain a cash alternative at least equivalent to any other consideration offered. Payment of the offer price must be guaranteed by a bank. Certain provisions regarding mandatory offers will also apply with respect to so called voluntary offers (i.e. offers that will trigger the mandatory offer obligation should the offer be accepted by the eligible shareholders.)

The Company emphasizes a frequent and open dialogue between the Company and its auditor. The Company's auditor participates in the board meetings where the annual financial statements are discussed. At such meetings, the auditor is briefing the Board on the annual accounts and any other issues of particular concern to the auditor. At least once a year the auditor presents to the Board a written report of the Company's accounting policies, risk areas and internal control routines.

The auditor submits the main features of the plan for the audit of the Company to the Board annually. The auditor annually presents for the Board a written confirmation that the auditor continues to satisfy the requirements for independence. At least one meeting a year will be held between the auditor and the Board without the presence of the CEO or other executive managers. The Company's auditor is Pricewaterhousecoopers Limited. There has been no change in audit firm after the Company was established.

Report from the board of directors

The Board of Directors presents its report together with the audited parent company financial statements of Deep Sea Supply PIc ("the Company") for the year ended 31 December 2015.

Principal activities

Deep Sea Supply PLC's ('the Company") principal activity, which is unchanged from last year, is the holding of investments.

Principal risks and uncertainties

As the Company's main income is dividend received from its subsidiaries and jointly controlled entities the Company is exposed to the performance of those entities. The Company's subsidiaries and jointly controlled entities operate in the international offshore supply vessel business and hence exposed to charter rate risk.

Going concern

The financial statements are prepared on a going concern basis. More details are disclosed in Note 4 of the parent company financial statements.

Results, review of developments, position and performance of the Company's business

lncome statement

The main income for the period was dividend received from the subsidiaries of the Company totaling USD 41.0 million (2014: MUSD 294.5 million).

As a result of dividends paid out, and reduced market valuations of vessels owned by subsidiaries, the recoverable amounts of certain subsidiaries have been reduced by USD 114.2 million (2014: USD 290.2 million) and of jointly controlled entities by USD 162.9 million (2014: USD -) and hence corresponding impairment was recognized in the income statement. More details are disclosed in Note 4 and 5 of the parent company financial statements. The Company's net result for the year is set out at page 76.

Balance Sheet

Investment in subsidiaries and joint ventures was USD 350.6 million (2014: USD 587.2). The movements are explained in Note 5 and 12 of the financial statements. Current assets were USD 0.5 million (2014: USD 6.9 million). Net assets for the Company at year end were USD 297.3 million (2014: USD 537.2).

Future developments of the Company

The Board of Directors does not expect any significant changes or developments in the operations, financial position and performance of the Company in the foreseeable future.

Board of directors

All members of the Board of Directors had their term expiring in 2015, and Chairman Mr. Harald Thorstein and Mr. Hans Petter Aas were re-elected for a 2 year period. Ms. Kathrine Fredriksen was re-elected as Alternate Director for the same period. Mr.

Neofytos Neofytou was elected as member of the Board of Directors for a period of 2 years from May 2015.

There were no changes to the responsibilities of the Board of Directors in 2015.

Remuneration to the Board is described in Note 14 of the parent company financial statements.

Share capital

All changes in share capital composition including new shares issued during 2014 are disclosed in Note 7 of the parent company financial statements. There were no changes in share capital during 2015.

Branches

The Company did not operate through any branches during the year.

Events after the balance sheet date

No material events occurred after the balance sheet date.

Auditors

The Independent Auditors, PricewaterhouseCoopers Limited, have expressed their willingness to continue in office. A resolution giving authonty to the Board of Directors to fix their remuneration will be proposed at the Annual General Meeting.

Responsibility statement

In accordance with Article 9, sections (3)(c) and (7) of the Transparency Requirements (Securities for Trading on Regulated Market) Law of 2007 ('Law"), we the members of the Board of Directors and the other responsible persons for the financial statements of the Company for the year ended 31 December 2015 confirm that, to the best of our knowledge:

• a) The annual financial statements that are presented on pages 76 to 97:
  • i. were prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, and in accordance with the provisions ofArticle 9, section (4) of the Law, and

li. give a true and fair view of the assets and IiabiIities, the financial position and the profit or losses of the Company, and

b) the directors' report gives a fair view of the developments and performance of the business as well as the financial position of the Company, together with a description of the principal risks and uncertainties that it is facing.

LmassoI, 25th April 2016 The Board of Deep Sea Supply PIc

Harald Thorstein Chairman

Neofytos Neofytou Kathrine Fredriksen Hans Petter Aas

Jon Are Gummedal Chief Executive Officer

Anders Hall Jomaas Chief Financial Officer

Statement of Comprehensive lncome

Deep Sea Supply PLC (parent company)

(all amounts in thousands of United States Dollars)

	Note	2015	2014
Dividend income	14	41 000	294 955
Other income		249	443
mpairment of investment in subsidiarios	5	(114 232)	(290 233)
Impairment of investment in joint ventures	12	(162 967)	-
Administrative expenses	13	(1 158)	(1 230)
Change in financial derivatives value		(527)	(1 114)
Operating profit		(237 636)	2 822
Financial ineome		-	27
Currency items		26	872
Financial expenses		(2 087)	(2 613)
Finance and currency items		(2 061)	(1 714)
(Loss)IProflt betore tncome tax		(239 697)	I 107
ncome tax	15	-	(1)
(Loss)!Proflt and other comprehensive (Ioss)lrncome for the year		(239 697)	I 106

Earnings/(losses) per share for profit attributable to the equity holders of the Company, expressed in USD per share

-Basic	16	(0,918)	0,006
-Diluted	16	(0,918)	0,006

The notes in pages 80 to 97 form an integral part ofthese financial statements.

Balance sheet Deep Sea Supply PLC (parent company)

(all amounts in thousands of United States Dollars)

	Note	31 December 2015	31 December 2014
ASSETS
Non-Current Assets
lnvestments in subsidiaries	5	321 616	395 847
lnvestments in joint ventures	12	29003	191 319
Total non current assets		350 619	587 166
Current assets
Other short term receivables		430	220
Cash and cash equivalonts	6	27	6650
Total current assets		457	6 870
Total assets		351 076	594 036
EQ(JITY
Capital and reserves attributable to equity holders of the company
Share Capital	7	5224	5224
Share premium		324183	324183
Other paid in capital		1559	1727
Retained earnings		(33619)	206079
Total equity		297 347	537 213
LIABILITIES
Non-current liabilities
Borrowings	8	-	48122
Financial derivatives		221	386
Total non current liabilities		221	48 507
Current Liabilities
Amounts due to related parties	14	4749	3543
Borrowings	8	48 630	4 552
Other short term payables	11	130	220
Total current liabilities		53509	8316
Total liabilities		53 730	56 823
Total equity and liabilities		351 076	594 036

The notes in pagos 80 to 97 form an integral pati ofthese financial statements.

Statement of Cash Fiows

Deep Sea Supply PIc (parent company)

(all amounts in thousands of United States Dollars)

			Year ended
	Note	31 December 2015	31 December 2014
Cash fiows from operating activities
(Loss) I Profit before income tax		(239 697)	1107
Impairrnent of investments in subsidiaries		114 232	290 233
lmpairment of investments in joint ventures		162 967	-
Dividend income receivable		(41 000)	(294 955)
Interest expense		2 255	1 581
Amortization of borrowing costs		508	I 032
Change in value of financial derivatives		(165)	386
Changes in working capital
Amounts due to related parties		1 206	-
Trade and other payables		(90)	104
Trade and other receivables		(210)	3022
Cash generated operations		7	2 510
Cash flow from Investing activities
Acquisitions of shares in wholly owned subsidiaries		(40 000)	(250 949)
Contributions in jointly controlled companies		(651)	-
Dividends received		41 000	-
Net cash froml(used in)investing activities		349	(250 949)
Cash flows from financing activities
Increase of share capital	7	-	196 599
Financing from subsidiary companies		-	74 910
Repayments of borrowings and borrowing costs		(4 552)	(4 552)
Interest paid		(2 425)	(1 760)
Payment ofdividends	7	-	(10 457)
Net cash (used in)/from financing activities		(6 977)	254 740
Total changes in liquidity in the year		(6 622)	6 301
Cash and cash equivalents at beginning of year		6 649	348
Cash and cash equivalents at end of the year	6	27	6 649

Non cash transactions of 2014

During 2014, DESS Invest accepted a sharoholders contribution of USD 18,903 as an advance payment in the future share capital increase to be performed by the subsidiary. The payable balance to DESS Invest was agreed to be set-off against a receivable balance from an indirect subsidiary. No such transactions existed in 2015.

The notes in pages 80 to 97 form an integral part ofthese financial statements

Statement of changes in equity

Deep Sea Supply PIc (parent company)

(all amounts in thousands of United States Dollars)

		Share	Sharepremium	Otherpald-in	Retained
	Note	Capita[	reserves	capita]	eamings	Total
Balance at I Januarv 2014		2 544	130 264	I 880	215432	350120
Comprehensive lncome
Profit for the year					1106	1106
Total Comprehensive Income					1106	1106
Transactions with owners
Value of share option scheme				(153)		(153)
Dividends paid	7				(10459)	(10459)
Share capital increase	7	2680	193 919			196 599
Balance at 31 December 2014		5224	324183	1727	206079	537213
Balance at 1 January 2015		5224	324 183	1727	206 079	537 213
Comprehensive lncome
Loss for the year					(239 697)	(239 697)
Total Comprehensive Loss		-	-	-	(239 697)	(239 697)
Transactions with owners
Value of share option scheme				(168)		(168)
Balance at 31 December 2015		5224	324 183	I 559	(33 619)	297 347

The notes in pages 80 to 97 form an integral part ofthese financia! statements

Notes to the Parent Company Financial Statements

1. General information

Deep Sea Supply PLC's (the Company') principal activities are to engage and invest, directly or indirectly, by itseif or through subsidiaries or part-owned companies, partnerships or other forms of entities, in the international offshore supply vessel business.

The Company was incorporated as a public limited liability company on 7 November 2006 and is domiciled in Cyprus in accordance with the provisions of the Companies Law, Cap. 113. Its registered office is at John Kennedy, Iris House, 7th Ftoor, Limassol, Cyprus.

The Company has its primary and only listing on the Oslo Stock Exchange and trades under the symbol DESSC.

These parent's separate financial statements have been approved for issue by the Board of Directors on 25th of April 2016. These financial statements are prepared for the year ending 31 December 2015 as separate financial statements.

The Company has prepared these separate financial statements to comply with the Cyprus Transparency Requirements (securities for Trading on Regulated Markets) of 2007 as amended (the "Law") and the Cyprus lncome Tax Laws and Regulations.

The Company has also prepared consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the EU for the Company and its subsidiaries (the "Group"). The consolidated financial statements can be obtained from the Company's registered office.

Users of these parent's separate financial statements should read them together with the Company's consolidated financial statements as at and for the year ended 31 December 2015 in order to obtain a proper understanding of the financial position, the financial performance and the cash fiows of the Company and the Group.

2. Accounting principles

2.1 Statement of complianCe and basis of preparation

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union (ELI), and the requirements of the Cyprus Companies Law, Cap. 113

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 applying the Company's accounting policies. The areas involving a higher degree ofjudgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

The financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and liabilities, including derivative financial instruments at fair value through profit or loss.

Adoption of new and reviseci lFRSs

The adoption of new and revised IFRSs at i January 2015 did not have any material impact on the Company's separate financial statements.

At the date of approval of these financial statements a number of new standards and amendments to standards and interpretations are effective for annual periods beginning after i January 2015, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the company, except the following set out below:

Equity Method in Separate Financial Statements - Amendments to lAS 27 (issued on 12 August 2014 and effective for annual periods beginning i January 2016*). The amendments will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements.

* Denotes standards, interpretations and amendments which have not yet been endorsed by the European Union.

The Company is assessing the impact of the amendment on its financial statements after its endorsement by the European Union.

2.2 Underlying ConCepts

The financial statements are prepared on the going concern

basis using accrual accounting. Assets and liabilities and income and expenses are not offset unless specifically permitted by an accounting standard.

Financial assets and financial liabilities are offset and the net amount reported only when a legally enforceable right to set off exists and the intention is either to settie on a net basis or to realize the asset and settie the liability simultaneously.

Changes in accounting policies are accounted for in accordance with the transitional provisions in the IFRS standards. If no such guidance is given, they are applied retrospectively, unless it is impracticable to do so, in which case they are applied prospectively.

2.3 Investments in subsidiary undertakings

Subsidiaries are those entities in which the Company has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies.

Investments in subsidiary undertakings are stated at cost and provision is only made where, in the opinion of the Directors, there is impairment in their value.

2.4 Investments in Joint Ventures

The investment in joint venture has been initially recognized at the fair value of two entities (out of the threo that are subject to the joint venture agreement); the third one is held by a subsidiary of the Company. Investments in joint ventures are stated at cost and provision is only made where, in the opinion of the Directors, there is impairment in value.

2.5 Revenue reCognition

Dividend income

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

Interest income

Interest income is recognized on a time-proportion basis using the effective interest method. When a receivable is impaired, the Company reduces the carrying amount to its recoverable amount, being the ostimated fliture cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired !oans is recognized using the original effective interest rate.

2.6 ReCognition of assets and liabilities

Assets are only recognized if they meet the definition of an asset, it is probable that future economic benefits associated with the asset will flow to the Company and the cost or fair value can be measured reliably.

2.7 Foreign exchange translation

(i) Functional and presentation currency

ltems included in the Company's financial statements are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The financial statements are presented in United States dollars (US$), which is the Company's functional and presentation currency. All amounts in these financial statements are in US$1 000 unless otherwise stated.

(il) 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.

2.8 Financial assets

The Company ciassifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for safe. The classification depends on the purpose for which the financial assets were acquired. Management determines the dassification 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

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of seiling in the short term or if so designated by management, and they meet certain eriteria (lAS 39.9). Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realized within 12 months of the balance sheet date. The company did not hold any investments in this category.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are classified as 'trade and other receivables' and 'cash and cash equivalents' in the balance sheet.

(c) Available-for-sale financial assets

Avallable-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of the investment within 12 months of the balance sheet date. The company did not hold any investments in this category.

Regular way purchases and sales of financial assets are recognized on the trade-date, the date on which the Company commits to purchase or seil 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 nights to receive cash fiows from the investments have expired or have been transferred and the Company has transferred substantiaily all nisks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequentiy carried at fair value. Loans and receivabies are carried at amortized cost using the effective interest method. Gains or losses arising from changes in the fair value of the 'flnancial assets at fair value through profit or loss" category are presented in the income statement within other (losses)/gains - net, in the period in which they anse. Dividend income from financial assets at fair value through profit or loss is recognized in the income statement as part of other income when the Company's right to receive payment is established.

The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired.

2.9 Derivative financial instruments

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequentiy remeasured at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Company designates certain derivatives as either: (1) hedges of the fair value of recognized assets or liabilitios or a firm commitment (fair value hedge); (2) hedges of a particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge); or (3) hedges of a net investment in a foreign operation (net investment hedge).

The Company documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash fiows of hedged items.

The fair values of various derivative instruments used for hedging purposes are disclosed in note 10. Movements on the hedging reserve in other comprehensive income are shown in Statement of Changes of Equity. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within finance income or finance costs respectively.

When a hedging instrument expires on is sold, or when a hedge no longer moets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occun, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within finance income or finance cost.

When the Company provides guarantees to parties outside the Group for any losses suffered in derivatives due to breach of contract, a provision is made for the fair value of the derivative when the loss becomes probable.

2.10 Cash and Cash equivalents

Cash and cash equivaients, inciudes cash in hand and deposits held at call with banks.

2.11 Share Capital

Ordinary shares are classified as equity.

Costs directly attnibutable to the issue of new shares on options are shown in equity as a deduction, net of tax, from the proceeds.

Share pnemium is the difference between the fair value of the consideration receivabie for the issue of shares and the nominal value of the shares. Share premium account can only be resorted to for limited purposes, which do not include the distribution of dividends, and is otherwise sub]ect to the provisions of the Cyprus Companies Law on reduction of share capital.

2.12 Borrowings

Borrowings ane recognized initially at fair value, net of transaction costs incurned. Borrowings ane subsequently stated at amontized cost; any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the income statement over the peniod of the bonnowings using the effective interest method.

Borrowings are classified as current liabilities unless the Company has an unconditionai right to defer settlement of the liability for at least 12 months atter the baiance sheet date.

General and specific borrowing costs dinectly attnibutable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale,

Investment income eamed on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profil: or loss in the period in which they are incurred.

2.13 Trade payables

Trade payables are recognized initially at fair value and subsequenhly measured at amortized cost using the effective interest method.

2.14 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 directly in equity. In this cases, the tax is also recognized in equity.

The current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to intorpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it anses from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects either accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially 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 extent that it is probable that future taxable profil: will be available against which the temporary differences can be utilized.

2.15 Provisions

Provisions represent liabilities of uncertain timing or amount.

Provisions are recognized when the Company has a present legal or constructive obligation, as a result of past event, for

which it is probable that an outflow of economic benefits will be required to settie the obligation, and a reliable estimate can be made for the amount of the obligation.

Provisions are measured at the present value of the expenditures expected to be required to settie the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks speciflc to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

2.16 Dividend income

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

2.17 Dividend distribution

Dividend distribution to the Company's shareholders is recognized as a liability in the Company's flnancial statements in the period in which the dividends are approved by the Company's shareholders until payment is made.

2.18 Earnings per share

Earnings per share are calculated by dividing the net profitlloss for the Company by the average weighted number of outstanding shares over the period in question. Diluted earnings per share include the effect of the assumed conversion of potentially dilutive instruments such as stock options.

2.19 Statement of cash fiows

The statement of cash fiows is presented in accordance with the indirect method.

2.20 Share based payments

Employees of the subsidiaries of the Company receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments such as options to buy shares of the Company. The cost of equity-settled transactions is measured by reference to the fair value at the date on which the award is granted. The fair value is determined using appropriate valuation models.

The cost of equity settied transactions is recognised as an expense, together with a corresponding increase in reserves within equity, over the vesting period which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period the entity revises the estimates of the number of options that are expected to vest based on the non-market conditions. It recognises the impact of the revision to original estimates, If any, in the income statement, with a corresponding adjustment to equity. Whero the terms of the share

option scheme is modified to be settled in cash rather than in recognized as a credit to liability and a debit to equity. Until the equity instruments, the entity measures the liability initially using liability is settled it is re-measured at each reporting date with the modification date fair value of the equity-settled award, based changes in fair value recognized in profit and loss. on the elapsed portion of the vesting period. This amount isthen

3. Financial risk management

The Company's normal business exposes it to various financial risks.

3.1 Market risk

Currency rate risk

Ono risk is the foreign exchange risk. The Company is exposed to that risk mainly due to the amounts due to and from related parties. The main currencies that the Company is exposed to are Norwegian Kroner (NOK) and Euro (EUR). A variation of +1- 10% in the rate of exchange of USDINOK would affect the Company by USD 21 in 2015 (2014: USD 45). A variation of +1- 10% in the rate of exchange of USDIEUR would affect the Company by USD 22 in 2015 (2014: USD 8).

Interest rate risk

The Company is exposed to interest rate risk due to borrowings and cash at banks. The risk due to cash held at banks is immaterial as the Company does not intend to hold material liquid reserves in fixed deposits. The impact of interest rate fluctuations is USD 49 ifinterest rates fluctuate by +1-10 basis points (2014: USD 55)

Liquidity risk

The Company monitors its risk to a shortage offunds by closely monitoring the projected cash flow from operations, financial expenses and investment expenditure. The Company maintains sufficient cash for its daily operations via short term cash deposits at banks. The table below analyses the company's non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity grouping based on the remaining period at the balance sheet date to the contractual maturity date. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash fiows

	Less than3 months	3 to 12months	I to 5years	More than5 years	Total
At 31 December 2015
Interest bearing loans and borrowings	1 495	48 748	-	-	50 243
Derivative financial instruments	138	322	-	-	460
Trade and other payables	32	98	-	-	131
	I 665	49168	-	-	50833
	Less than3 months	3 to 12months	1 to 5years	More than5 years	Total
At 31 December 2014
Interest bearing loans and borrowings	2 662	4 328	49 984	-	56 974
Derivative financial instruments	180	540	619	-	i 339
Trade and other payables	55	165	-	-	220
	2 897	5 033	50 603	-	58 533

The company also has financial guarantees with related party as disclosed in Note 14.

3.2 Fair value estimation

The table below analyses financial instruments carned at fair value, by valuation method. The different levels have been defined as foltows:

• •Quoted prices (unadjusted) in active markets for identical asses or liabilities (Levet 1).
• Inputs other than quoted prices included within level i that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Levet 2).
• Input for the asset or liability that are not based on observable market date (that is, unobservable inputs) (Levet 3).

The following table presents the Company's liabilities that are measured at fair value at

31 December 2015
Labilities	Level I	Level 2	Level 3	Total
Derivatives used for hedging		221	-	221
	-	221	-	221

31 December 2014
Labilities	Level I	Level 2	Level 3	Total
Derivatives used for hedging	-	386	-	386
	-	386	-	386

3.3 Capital risk management

The Company's objectives when managing capital are to safeguard the Company's abitity to continue as a going concem in order to provide retums for shareholders and benefits for other stakeholders and to maintain an optimal capital stnicture to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or seIl assets to reduce debt.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divtded by total capital. Net debt is calculated as total borrowings (induding 'cunent and non-current borrowings' as shown in the balance sheet) less cash and cash equivalents. Total capital is calculated as equity' as shown in the balance sheet plus net debt.

The Gearing Ratios at 31 December 2015 and 31 December 2014 were as follows

	2015	2014
Total Borrowings (Note 8)	48 630	52 674
Less: Cash and bank batances (Note 6)	(27)	(6 650)
Not Debt	48 602	46 024
Total Equ!ty	297 347	537 213
Total Capital as defined by management	345 949	583 237
	14%	8%

4. Critical Accounting estimates and judgements

Estimates and judgments are continuatty evatuated and are based on historicat experience and other factors, i ciuding expectations of future events that are betieved to be reasonabte under the circumstances.

4.1 CritiCal accounting estimates and assumptions

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets arid liabilities within the next flnancial year are discussed below.

a) lmpairment of subsidiaries

The Company performs an impairment test of its subsidiaries when there are indicators for impairment in accordance with the relevant accounting policy. Whon estimating the recoverable amounts of the subsidiaries the Management has considered the recoverable amounts of the underlying vessels owned by the subsidiaries.

For subsidiaries where the recoverable amount was estimated using value in use, the value in use of the investment was estimated based on the Company's share of the present value of the subsidiary's estimated cash fiows less the fair value of the outstanding debt. The key assumptions used for the value in use estimates was the utilisation rate, daily income, daily operating expenses and the discount rate.

For subsdiaries where the recoverable amount was estimated using fair value less costs to seil, the fair value was estimated based on the fair value of the underlying vessels less the fair value of the outstanding debil. The fair value of the underlying vessels was estimated by obtaining third party professional valuations from two different independent valuers, by calculating the average and by adjusting to incorporate speciflc characteristics that market participants consider when pricing the asset, which include, but is not limited to, capital commitments and costs relating to reusing laid-up vessels.

Based on the above, the recoverable amount of the Company's subsidiaries at 31 December 2015 and 31 December 2014 was iower than balance sheet value and an impairment charge of USD 114,232 (2014: USD 290,233)was recognised in the statement of comprehensive incomo as disclosed in Note 5.

A 10% change in the main assumptions used in the impairment testing of the subsidiaries whose recoverable amount was based on the value in use of the underlying vessels would have the foliowing effect on carrying amounts of subsidiaries and profit for the year:

Year Ended 31 December 2015	Decrease on Carrying amount of subsidiaries	Decrease of profit for the year
10% decrease in utilization (or daily income)	(7047)	(7047)
10% increase in daily operating expenses	(6931)	(6931)
10% increase in discount factor	(6 664)	(6 664)
10% decrease in revenue growth	(2 152)	(2 152)
Year Ended 31 December 2014
10% decrease in utilization (or daily income)	(5 132)	(5 132)
10% increase in daily operating expenses	(3 003)	(3 003)
10% increase in discount factor	(2 107)	(2 107)
10% decrease in revenue growth	(1 246)	(1 246)

For the vessels for which the recoverable amount was based on fair value less costs to seil, a 10% decrease in the valuation of the brokers would have the foliowing effect:

Year Ended 31 December 2015	Decrease on Carrying amount of subsidiaries	Decrease of profit for the year
10% decrease in brokers valuation	(11 065)	(11 065)
Year Ended 31 December 2014
10% decrease in brokers valuation	(14 485)	(14 485)

(b) lmpairment of investment in Joint Ventures and financial guarantees

As at 31 December 2015, the Company has tested for impairment its investment in its joint ventures ('JVs') and has assessed the fair value of the financiai guarantees provided in relation to a bank loan of one of the JVs.

As at the balance sheet date, an impairment testing was considered necessary due to the market conditions referred to in Note 19(a) which particularly affected vessels operating in Brazil and the flnancial performance of the JVs as well as due to the maturity of certain bank loans of the JVs during 2016 which have not yet been reflnanced. The bank ioans of the JVs which mature in 2016 and have not yet been refinanced as at the date ofthis report amount to USD 93,124.The Management of the Company considers that unless some actions are taken such as agreement with the banks for delay of loan instalments for an agreed period and/or financiai support to the JVs by their sharehoiders, the JVs will not be able to meet their obligations towards the banks in the next 12 months

and it is uncertain if the JVs will be able to continue their operations on a going concern basis. The matter is not concluded yet and its outcome is uncertain.

The recoverable amount of the investment in the JVs was estimated as the higher of the foliowing:

• The fair value less costs to seil of the investment was estimated using market multiples of listed companies and then applied a discount to reflect that the JVs are private entities and additional country-related risks.
• The value in use was estimated using the weighted average of two scenarios on the expected cashflows from the JVs which were based on the Management's assessment on the probability ofwhetherthe JVs will be able to continue operating on a going concern basis or not. Currently negotiations are in progress between the management of the Company, the banks and the management of the JV partner to resolve the matter. The management of the Company has assessed that the probability of reaching a conclusion and the JVs will be able to continue as a going concern is 50% while the remaining 50% probability was assessed that the negotiations couid fall and thus the JVs would not be able to continue as going concern.

The recoverable amount of the investment was calculated using the value in use estimates. The value in use estimates were estimated as follows:

• In the event where the negotiations are successful and the JVs would be able to continue on a going concern basis, the recoverable amount of the Company's investment in the JVs is estimated at USD56770 (50% probability). The expected cash-flows under this possibility were estimated using the same cash-flows used by the JVs to assess the impairment of their vessels.
• In the event where the negotiations are unsuccessful and the JVs would not be able to continue on a going concern basis, the recoverable amount of the Company's investment in the JVs is estimated at USD1 236 (50% probability). The expected cash-flows under this possibility were estimated using brokers valuations as at 31/03/2016 less a discount based on the age of the vessels in order to reflect the circumstances of a potential sale. The Management has estimated the discount over the brokers values depending on the age of the vessels as follows:

Age of vessels (Years)

From	To	Discount
0	3	10%
3	7	10%
7	10	20%
10	15	25%
15	20	25%
20	30	50%

Further to the above, the weighted average recoverable amount of the investment in the JVs was estimated at USD29003 and an i mpairment loss of USD162.967 has been recognised in the statement of comprehensive income.

In addition, as disclosed in Note 14, the Company has provided a financial guarantee for the bank borrowings of Deep Sea Supply Navegaçåo Maritima Ltda, the JV company owned by one of the Company's subsidiaries. The maximum exposure under this guarantee is the outstanding amount of the loan at year end amounting to USD 53,913. The bank borrowings are also secured by a first-priority mortgage over a vessel owned by this JV company. In addition BTG Pactual Group issued a counter indemnity in favour of the Company, whereby BTG Pactual Group indemnifies the Company for any claims exceeding 50% of the total liability under the guarantee given under the BNDES Facility. Taking into account the probability assessment above and the estimated value of the other secunties over this bank loan, the Management does not expect a liability to anse to the Company in relation to this financial guarantee and estimates its fair value as insignificant.

Sensitivity analysis:

By applying different probabilities between the going concern and non-going concern status of the JVs, the impairment charge would be as follows:

	Going concern Not going concern Impairment
60%	40%	157414
70%	30%	151861
80%	20%	146308
40%	60%	168521
30%	70%	174074
20%	80%	179627

1

By applying a 50% increase on the discount based on the age of the vessels, the impairment charge of investment in JVs would amountto USD 163,224. By applying a 50% decrease on the discount based on the age of the vessels, the impairment charge of investment in JVs would amountto USD 156161.

4.2 Critical judgments in applying the Company's accounting policies

(a) Going concern basis

The financial statements were prepared in accordance with IFRS, as adopted by EU, on a going concern basis, which assumes the realisation of assets and discharge of liabilities in the normal course of business within the foreseeable future. The Board of Directors is confident (hat the Company will continue as a going concern and in making this judgment the Board considered the Company's financial position, current intentions, profitability of operations and access to financial resources, as well as its analysis of the impact of the ongoing conditions and uncertainties in the markets which the Company operates.

The Company incurred a net loss of USD239697 during the year ended 31 December 2015 and, as of (hat date, the Company's current liabilities totaled USD53509 while its current assets totaled USD457.

\Nhen examining the Company's ability to continue as a going concern, the Board of Directors has considered the following factors:

• The Company's cash flow forecasts and projections which are used for managing liquidity indicate (hat the Company would be able to meet its short term obligations and contractual commitments in the foreseeable future.
• The current liabilities include a payment related to the maturity of one of the bank borrowings in October 2016. The amount of those is USD 48,630. The Company is in progressed diseussions with the banks on extending the maturities of these loans (beyond the end of 2016, thus making them long term). The maturing loan agreement was entered into in October 2011, and the October 2016 maturity follows from the original 5 year term of the agreement. The Management is confident that with its historic successful track record in obtaining new finance and refinancing financial liabilities for the Company, the debt reflnancing process will be completed before Octobor 2016.
• -The Company's management considers a variety of other factors and maintains fiexibility to take other steps to improvo liquidity if needed, including control over discretionary spending, disposing of assets and monitoring of (ha economic conditions in the markets where the Company operates.

Taking into account the above, the Board of Directors has assessed that the going concern basis in preparing the financial statements is appropriate and that there is no material uncertainty over the basis of preparation in this respect.

	Principalactivity	01 January		2014 Addit!onsImpairment	31 December		2014 Mditions !mp.airment .	31 December2015
Cyprus based companies
DESS Cyprus Ltd	Shipowning	147 827	-	(130 103)	17724	-	(17 724)	-
DESS PSV Ltd	Shipowning	144 916	-	(54 905)	90011	-	(40 056)	49955
PSV Holding lnc*	Shipowning	-	66617	(66 617)	-	-	-	-
DESS Finance Ltd	Financing	28 201	5 000	-	33201	40 000	-	73 201
Deep Sea Supply
Management(Cyprus)Ltd	Management	15		-	15		(15)	-
DESS Sea Eagle Ltd	Shipowning	i	-	-	i			i
DESS Invest Ltd	Investment holding	4001	18 903		22904	-	(10 170)	12734
DESS PSV II Ltd	Shipowning	-	67 341	-	67 341			67 341
DESS PSV Ill Ltd	Shipowning	-	36 990	-	36 990		i(1 931)	35 060
DESS PSV IV Ltd	Shipowning	i	75 000	-	75 001		i(26 907)	48 095
Norwegian based companies
Deep Sea Supply
ManagementAS	Management	89610	-	(37085)	52525	-	(17429)	35096
Singapore based companies
Deep Sea Supply Managemet
Singapore Pte Ltd	Management	1656	-	(1 523)	133	-	-	133
Total		416 228	269 862	(290 233)	395 847	40002	(114 232)	321 616

5. Investment in subsidiaries

All subsidiaries are 100% owned.

* In 2014, PSV Holdings Inc was acquired from a related party as explained in Note 14. The impairment of this subsidiary represents dividends paid back to Deep Sea Supply Plc further to a restructuring of the assets of PSV Holdings Inc. after acquisition. Indications of impairment existed for the subsidiaries for which their net assets were lower than the carrying value recorded in the Company's financial statements. For the subsidiaries for which impairment indications were identified, management estimated their recoverable amount. All net assets with the exception of vessel costs were considered to be at fair value. The cost of vessels for the shipowning subsidiaries was replaced with the recoverable amount of the vessels and the revised net assets were then compared to the carrying value of the investment in subsidiaries. If the cost was higher than the estimated recoverable amount of subsidiaries then impairment was recognized, being the difference between the cost of investment and the recoverable amount.

6. Cash and cash equivalents

	2015	2014
Cash at bank	27	6 650
Total bank deposits	27	6 650

Cash and cash equivalents are denominated in the following currencies:

Currency	2015	2014
United State Dollars (USD)		6 578
Norwegian Kroner (NOK)	i	55
Great British Pound (GBP)	15	16
Euro (EUR)	11	0
Total	27	6 650

7. Share Capital

	Number ofShares(thousands)	ShareCapital	Sharepremium	Other pald-in-capita]	Total
Opening balance as at I January 2014	127 197	2 544	130 264	1880	134 688
lncrease of share capital	134 000	2680	193 918		196 598
Valuation of share option scheme				(153)	(153)
At 31 December 2014	261 197	5224	324182	1727	331133
Opening balance as at I January 2015	261 197	5 224	324 182	1727	331 133
Valuation of share option scheme				(168)	(168)
At 31 December 2015	261197	5224	324183	1559	330965

The total authorised number of ordinary shares as per 31 December 2015 is 375,000,000 (2014: 375,000,000) shares with a par value of USD 0.02 per share. The Company does not own any share of its own. All issued shares are fully paid.

On 19 June 2014, the Group issued 134,000,000 ordinary shares of USD 0.02 at price of USD147 each. The share premium arising from this issue was USD 196,980. The transaction costs relating to the issue of shares amounted to USD 3,062 and were deducted from share premium account as permitted by the Cyprus Companies Law, Cap.113.

Dividends

On 5 August 2014 the Board of Directors approved the distribution of dividends of USD 0.02 per share relating to 2014 results and on 11 November 2014 deciared and paid a dividend of USD 0.02 per share relating to 2014 results. The total dividends paid to shareholders in 2014 amounted to USD 10,457.

Share option scheme

The board of directors of the Company has approved a share option scheme for directors and certain employees. The exercise price of the granted options is equal to the market price of the shares at date granted plus 10%.

These share options may be exercised with one third after one, Mo and three years, respectively and all share options must be exercised within 5 years. The strike price shall be reduced, on a USD for USD basis, by the amount of all dividends declared by the Company in the period from the date of grant until the date the subsisting share options is exercised. Subsequent share options have been granted to new employees based on the same principle.

Movements in the number of shares options and their related weighted average exercise prices are as follows:

		2015		2014
	Average exercise price		Average exercise price
	NOK per share	Options	NOK per share	Options
At I January	10,60	276 668	9,52	866 667
Granted	-	-
Forfeited	-	-	11,21	(323 333)
Exercised	-	-
Expired	11,76	(178 335)	6,99	(266 666)
At 31 December	10,60	98 333	10.60	276 668

The share options exercised and forfeited pertained to employees that left the Company during the year. Share options outstanding at the end of the year have the following expiry date and exercise prices:

Deep Sea Supply Plc Annual report 2015

Expiry date (as per year ended 31 December 2015)

	Exercise price in NOK	Shares
2016	8,49	98 333
At 31 December		98 333

Expiry date (as per year ended 31 December 2014)

	Exercise price in NOK	Shares
2015	11,76	178335
2016	8,49	98333
At 31 December		276 668

The value of the option is estimated by Hull & White's implementation (2002) for employee stock options of the binomiat tree model for the pricing of early exercise equity options.

Change of control

The share options for the board and the share options and certain other benefits for the employees will come into effect in the event of change of control of the Company.

8. Borrowings

	As at 31 December 2015	As at 31 December 2014
Non-current
Bank borrowings	-	48 122
Total Non-current borrowings	-	48 122
Current
Bank borrowings	48 630	4 552
Total Current borrowings	48 630	4 552
Total Borrowings	48 630	52 674

The outstanding loan of the Company's borrowings are denominated in the foliowing currencies:

	As at 31 December 2015	As at 31 December 2014
Borrowings
USD	48 630	52 674
	48 630	52 674
The maturity of non-current borrowings is as follows:
	As at 31 December 2015	As at 31 December 2014
Borrowings
Between 1 and 2 years		48 122
		48 122

Bank borrowings comprise of loans secured with the following:

• -A first prionty mortgage in the financed vessels of subsidiaries of USD 390,000 (2014: 390,000).

• Security agreements in relation to the vessels of subsidiaries

• Roceivables charges

• Hedging assignment agreement

• lntra-group receivables assignment agreement

• Share pledge agreements in relation to the shares of DESS Cyprus Ltd and DESS PSV Ltd

• Corporate guarantees by Deep Sea Supply PLC, Deep Sea Supply Management AS, DESS Cyprus Ltd and DESS PSV Ltd

The carrying value of borrowings approximate their fair value. The effective interest rate of company's bank borrowings is 2.86%.

9 Credit qualityoffinancial assets

Other receivables

Balance of USD 430 is with existing customers for more than 6 months with no defaults in the past.

Cash at bank

The ratings for the banks where the Company holds its cash at bank and short term deposits are as follows:

				For the year ended 31 December 2015:
--	--	--	--	--------------------------------------	--

Credit Rating	Amount
Aa2	27
Total	27
For the year ended 31 December 2014:
Credit Rating	Amount
Al	6 650
Total	6 650

Ratings shown above were issued by the credit agency of Moody's as at 31 December 2015.

10. Financial instruments by category

Company		Loans and Receivables	Total
31 December 2015
Assets as per balance sheet
Trade and other receivables		430	430
Cash and cash equivalents		27	27
Total		457	457
	Derivatives used for hedging	Other financial liabilities	Total
Liabilities as per balance sheet
Borrowings	-	48 630	48 630
Derivative financial instruments	221	-	221
Trade and other payables	-	4 879	4 879
Total	221	53 509	53 730
Company		Loans and Receivables	Total
31 December 2014
Assets as per balance sheet
Trade and other receivables		220	220
Cash and cash equivalents		6 650	6 650
Total		6 870	6 870

Deep Sea Supply Plc Annual report 2015

	Derivatives used for hedging	Other financial liabilities	Total
Liabilities as per balance sheet
Borrowings	-	52 674	52 674
Derivative flnancial instruments	386	-	386
Trade and other payables	-	3 763	3 763
Total	386	56 437	56 824

11. Other short termpayables

	2015	2014
Trade payables	130	220
Total	130	220

Trade and other payables are denominated in the following currencies:

Currency	2015	2014
United State Dollars (USD)	123	163
Norwegian Kroner (NOK)		50
Euro (EUR)	6	7
Great British pound (GBP)
Total	130	220

12 Investment in Joint Ventures

The Company's investments in the Joint Venture are:
	2015	2014
Deep Sea Supply BTG AS
Opening 01 January	190 186	190 186
lmpairment	(161 907)
Additions	2
Balance 31 December	28 281	190 186
Deep Sea Supply Servicos Ltda
Opening 01 January	1133	I 133
lmpairment	(1 060)
Additions	650
Balance 31 December	723	1133
Total	29 003	191 319

On 30 March 2015, the Company contributed to the increase in the share capital of Deep Sea Supply Servicos Ltda. The Company subscribed for 7,875,765 ordinary shares at a total cash consideration of USD 650. On 23 September 2015, Deep Sea Supply BTG BV merged with the Norwegian company Deep Sea Supply BTG AS. The Company has contributed USD 2 as increase in equity of Deep Sea Supply BTG AS,

13. Administrative expenses

	2015	2014
Audit fees	18	32
Consultancy fees	257	98
Management fees from subsidiaries	678	789
Otber administration expenses	205	311
	1158	1230

14. Related party transactions

Remuneration to the board

The remuneration to the Board in 2015 is US$ 95 (NOK 0.75 million), whereof US$44 (NOK 0.35 million) is payment to the chairman. In 2014 payment to the board was US$127 (NOK 0.95 million), whereof US$ 47 (NOK 0.35 million) was payment to the Chairman.

Amounts due to related parties

	2015	2014
Deep Sea Supply Labuan Il Ltd	3 000	3 000
Deep Sea Supply Management AS	788	-
Deep Sea Supply Shipowning AS	691	263
DESS Finance Ltd	85	175
DESS PSV Ill Ltd	48	47
DESS Sea Eagle Ltd	46	46
Deep Sea Supply Management (Cyprus) Ltd	32	2
Deep Sea Supply Navegasao Maritima Ltda	24	i-
DESS Cyprus Ltd	14
DESS Invest Ltd	9	3
DESS PSV IILtd	5	5
DESS PSV Ltd	3	2
Deep Sea Supply BTG AS	3	-
DESS PSV IV Ltd	i	-
Total	4 749	3 543

The balances are payable on demand and are not secured.

Amounts due from related parties

At 31 December 2014, a company owned by DESS BTG (JV) owed the Company USD 1,119. The amount pertains to expenses prepaid by the Company on behalf of DESS BTG and is considered current. No such balances exist as 31 December 2015.

			lmpairment of investment
		Dividend received		in subsidiaries
	2015	2014	2015	2014
DESS Cyprus Ltd	-	129250	(17724)	(130103)
DESS PSV Ltd	31 000	92 975	(40 056)	(54 905)
PSV Holding Inc	-	67846	-	(66617)
DESS Sea Eagle Ltd	-	4884
Deep Sea Supply Management AS			(17429)	(37085)
Deep Sea Supply Management Singapore PTE Ltd			-	(1 523)
DESS PSV Il Ltd	6000	-
DESS PSV III Ltd			(1 931)	-
DESS PSV IV Ltd	4000	-	(26 907)	-
DESS Invest Ltd			(10 170)	-
Deep Sea Supply Management (Cyprus) Ltd			(15)	-
	41 000	294 955	(114 232)	(290 233)

Dividend received from subsidiaries and lmpairment of investment in subsidiaries

Management fees

For 2015, the Company recognized management fees charged from subsidiaries that amounted to USD 878 (2014: USD 789)

Acquisition of 10 new vessels and newbuildings

In June 2014, the Company entered into a share purchase agreement with Greenwich Holdings Ltd. (company controled by party exercising significant influence over the Group), for the acquisition of 100% of the shares in PSV Holding Inc ("PSV Holding"), a non-resident domestic corporation formed under the laws of Liberia. The sole activity of PSV Holding consisted of holding vessels and newbuilding contracts for construction of PSVs. PSV Holding was the owner of six PSVs and furthermore a party to shipbuilding contracts for four PSVs under construction at the time of the transaction.

The total purchase consideration paid by the Company for the shares in PSV Holding was based on an Enterprise Value (equity plus net debt and remaining capital expenditure) of USD 366 million, including the capital expenditure commitments of approximately USD 107 million and net debt of USD 192 million.

The acquisition of PSV Holdings is accounted for in the consolidated financial statements as a purchase of the vessels and not as a business combination. The acquisition price of the vessels and vessels under construction at the dated of acquisition was recorded as USD 258,753. Subsequentto acquisition the Group paid an additional USD 107,247 upon the delivery of the four vessels under construction. No such transactions existed in 2015.

Financlal guarantees to related parties

The Company acts as a guarantor in relation to bank borrowings of Deep Sea Supply Navegaçflo Maritima Ltda for the bank borrowings of a company in the Joint Venture (Note 19b).

15 Income tax expenses

The tax on the Company's profit before tax differs from the theoretical amount that would anse using the applicable tax rate as follows:

	2015	2014
(Loss) / Profit before tax	(76 731)	1106
Tax calculated at the applicable corporation tax rate of 12,5%	(9 591)	138
Tax effect of expenses not deductible for tax purposes	18 650	36651
Tax effect of allowances and income not subject to tax	(9 132)	(36 978)
Tax losses for which no deferred tax asset was recognised	73	189
Total		-

16. Earnings per share

Basic

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. Total number of outstanding shares as per year-end 2015 was 261 197194 (2014: 198,786,235).

	2015	2014
Profit attributable to equity holders of the company	(239 697)	1106
Weighted average number of ordinary shares (thousands)	261 197	198 786
Basic earnings per share (USD per share)	(0,918)	0,006

As at 31 December 2015, there was no dilutive effect of the share options as they were out of money.

Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of at dilutive potential ordinary shares. The Company's only category of dilutive potential to ordinary shares is the share options. Share options have been granted to Board of Directors and management, and per year-end 2015 there were totally 98,333 (2014: 543,333) share options outstanding. The share options are included in the diluted number of shares depending on whether or not they were in the money per year-end 2015.

	2015	2014
Profit attributable to equity holders of the company	(239697)	1106
Weighted average number of ordinary shares (thousands)	261 197	198786
Diluted earnings per share (USD per share)	(0,918)	0,006

As at 31 December 2015, there was no dilutive effect of the share options as they were out of money.

17. Auditors remuneration

Remuneration to the statutory auditors in the financial statement for 2015 equals USD 16(2014: USD 16) for audit services, USD 30 (2014: USD 33) for other assurance services and Nill (2014: USD 1) for non-assurance services.

18. Financial expenses

	2015	2014
Interest on Bank Borrowings	1468	1541
Amortization of borrowing costs	508	1 032
Other financial expenses	111	40
	2087	2613

19. Contigencies & commitments

(a) Operating environment of the Company

The Company's subsidaries and joint ventures are operating offshore supply vesselsThe demand for offshore supply vessels depends on the level of activity in the offshore oil industry, which is significantly affected by, among other things, volatile oil prices and may be materially and adversely affected by the current significant decline in prices. Declines in oil prices for an extended period of time could continue to riegatively affect the Company's business; reduced demand for vessels which could result in vessels being idle for long periods of time and put in Isy-up.

Management believes that the market for OSV will become highly competitive in the short to medium term due to these events. Management estimates that the vessels put in lay-up will remain in this state until 2019 when the market is expected to recover. The operating vessels are being marketed and the Company is actively participating in various tenders in order to secure employment of its vessels.

The Company's management has assessed:

• (1) Whether recognition of impairment provisions are deemed necessary for the Company's shipwoning subsidiaries; and
• (2) The ability of the Company and the Joint Venture of the Company to continue as a going concern as explained further in Note 4. The Company's management is unable to accurately prediet the future developments in the industry, and consequently, what effect, if any, they could have on the future financial performance, cash fiows and financial position of the Company. The Company's management believes that it is taking all the necessary measures to maintain the viability of the Company and the development of its business in the current challenging business and economic environment.

(b) Financial guarantees

The Company has issued a parent company guarantee for the obligations of Deep Sea Supply Navogacao Maritima Ltda under the BNDES Facility Agreement for the flnancing of Sea Brasil for a maximum amount of USD53,91 3 being the year end outstanding amount of the BNDES loan. The bank borrowings are also secured by a first-priority mortgage over a vessel owned by Deep Sea Supply Navegacao Maritime Ltda. BTG Pactual Group could not issue guarantees pursuant to internal restrictions, and was therefore not able to assume 50% of the guarantee obligations in connection with the establishment of the Joint Venture.

BTG Pactual Group has instead issued a counter indemnity in favour of the Company, whereby BTG Pactual Group indemnifies the Company for any claims exceeding 50% of the total liability under the guarantee given under the BNDES Facility. The Company still is the initial guarantor under the guarantee granted in favour of BNDES, and in the event BTG Pactual Group is not able to fulfil its obligations under the counter indemnity guarantee, the Company will be responsible for the full guarantee amount if BNDES calls upon the guarantee, which may materially impact the financial condition of the Company. The obligations of BTG Pactual Group under the counter indemnity agreement is secured by way of a share pledge over shares in companies which are controlled by BTG. The Company is not expecting any financial impact from any of these guarantees (Note 4.1(b)).

20. Events after the balance sheet

There were no material events after the balance sheet date, which have a bearing on the understanding of the financial statements.

Independent auditor's report To the Members of Deep Sea Supply P1c

Report on the financial statements

We have audited the accompanying financial statements of parent company Deep Sea Supply Plc (the "Company"), which cornprise the balance sheet as at 31 December 2015, and the statements of comprehensive income, changes in equity and cash fiows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Board ofDirectors' responsibility for thefinancial statements

The Board of Directors is responsible for the preparation of financial statements that give a true aud fair view in accordance with International Financial Reporting Standards as adopted by the European Union aud the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

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

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

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

P,'icewaterhouseCoopers Ltd, Ltd, City House, 6 Karaiskakis Street, CY-3032 Limassol, Cyprus P 0 Box 53034, CY-3300 Li,nassol, Cyprus

T: +357 -25 555 000, F: +357 -25 555 001, www.pwc.cornicy

PricewaterhouseCoopers Ltd isa menrber firm at PricewaterhouseCoapers International Ltd, each member fom of which is a separate legat enlity. rrrcewaterhnuseCaopers Ltd is a private company registered in Cyprus (Reg. No. 143594). A lint at the company's directors including for iadividvats the present name and surnam e, av well av any prevlaus names and for legal enlities the corporate name, Is kepi by the Secrelary at the company at its registered of0ce at 3 Themistocles Demnms Street, 1066 Nmcosia and appears on the company's web site. Offlces in Nicooia, Ltmassot, Lamnaca and Paphos.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of parent company Deep Sea Supply P1c as at 31 December 2015, and of its financial performance and its cash fiows for the year ended in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap.113.

Report on other legal requirements

Pursuant to the additional requirements of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 and 2013, we report the foliowing:

• We have obtained all the information and explanations we considered necessary for the purposes of our audit.
• In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of these books.
• The Company's financial statements are in agreement with the books of account.
• In our opinion and to the best of our information aud according to the explanations given to us, the financial statements give the information required by the Cyprus Companies Law, Cap. 113, in ille manner so required.
• In our opinion, the information given in the report of the Board of Directors is consistent with the financial statements.

Other matter

This report, including the opinion, has been prepared for aud only for the Company's members as a body in accordance with Section 34 of the Auditors and Statutory Audits of Annual and Consolidated Accounts Laws of 2009 aud 2013 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.

We have reported separately on the consolidated financial statements of the Company and its subsidiaries for the year ended 31 December 2015.

£Kapollides Certified Public Accouritant and Registered Auditor for and on behalf of

PricewaterhouseCoopers Limited Certified Public Accountants and Registered Auditors

Limassol, 25 April 2016

COMPANY ADORESSES

Cyprus Deep Sea Supply Plc John Kennedy Ave., Iris House, 7th Floor, Office no.740B Limassol 3100 Cyprus

Deep Sea Supply Management (Cyprus) Ltd

P.O.Box 53340 CY-3302 Limassol Cyprus

Norway

Deep Sea Supply Management AS Storgaten 4 N-4876 Grimstad Norway

Singapore

Deep Sea Supply Management (Singapore) Pte.Ltd. 1 Maritime Square #11-03 HarbourFront Centre, S099253 Singapore

8raziI

Deep Sea Supply Servicos Maritimos LTDA Avenida Republica do Chile 230, 22o andar, 20031-170 Centro, Rio de Janeiro RJ Brazil

7 2J

Deep Sea Supply PLC

Quarter 2 2016

Financial Report

Deep Sea Supply P1c 2Q2016 Financial Report

BOARD OF DIRECTORS' REPORT

Deep Sea Supply ('DESS" or "Company") reports unaudited results for 2Q 2016.

2Q Highlights

• Consolidated revenues of MUSD 11.6 and EBITDA of MUSD 1.3
• Exc!uding non-recurring items, pre-tax profit was negative MUSD 13.2
• Reported pre-tax loss of MUSD 30.8 includes extraordinary impairments ofbook va!ue of vessels of MUSD 17.6
• Established a 50/50 owned aquaculture shipping joint venture with Marine Harvest
• Secured new contracts for seven PSVs for a total firm period of 2,460 days combined

Subsequent events

• Announced major amendments to financing terms and roll-up of the DESS BTG JV
• DESS and Marine Harvest's joint venture entered into shipbui!ding contracts for two vessels firm with options for four more vessels
• Secured new contracts for 1 AHTS and 2 PSVs

Comparing 2Q 2016 financial figures with 1Q 2016, revenues decreased by MUSD 4.9. The main reason for this was lower utilization due to vessels coming off long term charters not being replaced by new contracts and lower rates. The vessels' operating expenses decreased with MUSD 0.7 from 1Q 2016 to 2Q 2016, due to vessels being lald up, sale of two vessels in 102016 and also underlying cost reductions.

Reporting principles

The sale of 50% of DESS' Brazilian business took place in May 2013, when DESS established the company "DESS BTG", 50% owned by DESS and 50% owned by the Brazilian investment bank BTG Pactual. DESS BTG acquired 15 vessels operating in Brazil and 6 newbuilding PSVs from PSV Holding Inc.

For the vessels owned by DESS BTG, 50% of total figures are incorporated "line by line" in the statement of comprehensive income and balance sheet in the presentation of 202016 and this report from Board of Directors.

Balance sheet and impairment of book values

Vessel values received from shipbrokers as per 30 June 2016 have reduced further from end of 2015, and the corresponding result of the impairment testing according to IFRS, shows an extraordinary impairment of book values of MUSD 17.6 for the total fleet on a consolidated basis in 202016.

Following the impairment, book va lue of the fleet was MUSD 617.5 by the end of 202016 compared to MUSD 683.6 end of 40 2015. Total shareholder's book equity is MUSD 235.3 or 31.8%. Total number of outstanding shares in the Company was 261,197,194 at the end of the quarter.

Cash flow

Cash flow from operations was MUSD 9.5 for the six months period ended 30 June 2016. Capital expenditure related to scheduled special surveys and upgrading was limited to MUSD 1.1. In the six month period, the Company has repaid borrowings of MUSD 12.4 and paid net interest expenses of MUSD 7.6. In addition to this, the sale of two vessels in February 2016 and the prepayment of borrowings relating to this sale, gave a net negative cash flow of MUSD 6.4.

The Company has given a loan to DESS BTG, under which USD 15.0 mill was drawn by end of 202016. In the balance sheet this loan is shown as Ioans to related parties.

Cash and cash equivalents were MUSD 69.1 by the end of 202016, which isa decrease of MUSD 18.0 compared to MUSD 87.1 by the end of 402015.

Net interest bearing debt was MUSD 392.8 by the end of 202016, which is a decrease of MUSD 14.5 from end of 40 2015 due to ordinary repayment of borrowings and prepayment of borrowings related to sale of vessels.

OPERATIONS

Fleet

As per end of 202016, Deep Sea Supply had 12 AHTS vessels and 25 PSVs in the fleet, in total 37 vessels. Ofthese vessels, 16 are owned 100% by the Company and 21 vessels are owned 50% through a Joint Venture with BTG.

The Company's organizations in Singapore, Brazil and Norway perform the chartering activities and the technical management of DESS' fleet.

Newbuilding program

The Company has no offshore supply vessels under construction.

Lay-up of vessels

Deep Sea Supply has per August 2016 laid up in total 17 vessels, of which 12 are PSVs and 5 AHTS.

EVENTS AFTER END OF 2Q 2016

Contracts

The AHTS Sea Tiger has been awarded a 120 days firm plus 4 x 60 days options for operations for OGPar in Brazil. The vessel commenced the charter contract on 5 August 2016.

The PSV Sea Titus has been extended until 18 December 2016. The vessel has been working for an international oil company for operations in South America since 6 April 2016.

The PSV Sea Forth has been awarded a 3 month extension from December 2017 until March 2018 of its existing term contract with Apache North Sea Limited. The charter started in February 2014.

The PSV Sea Swift has commenced a 2 years firm plus 1 year option contract, and the PSVs Sea Spear and Sea Spark have commenced 1 year firm plus 1 year option contracts with BP Egypt for operation in Egypt.

Amendments to financing terms and agreement with DPC for a roll-up of the DESS BTG iv On 22 July 2016, the Company reached an agreement with DPC Serviços de Ôleo e Gås ('DPC") where 50% of the DESS BTG iv was acquired by the Company in exchange for 30,133,022 new common shares in the Company, 10,000,000 warrants and a cash payment of MUSD 2.0. The warrants will be exercisable into common shares in the Company at any time during a period of 36 months at an exercise price of NOK 1.24 per share.

The Company believes the acquisition represents an attractive growth opportunity as the vessels are acquired at historical trough valuations. lnclusion of the vessels will strengthen the operational platform and better position the Company in today's challenging market. Limited cash proceeds are paid as consideration, preserving the Iiquidityofthe Company while also simplifying the corporate structure of the combined company.

As part of the roll-up, the Company reached an agreement with its senior lenders, securing extensive amendments to substantially all of the Company's debt facilities;

• Commencing May 31, 2016 the Company will not pay scheduled amortizations under substantially all of its bank facilities until March 31, 2018, including bank debt in DESS BTG, deferring a total amount of up to MUSD 68
• Minimum value adjusted equity ratio and value adjusted equity covenant will be waived, minimum consolidated free cash will be reduced to USD 20 million and the minimum value covenant will be reduced to 100% until March 31, 2018
• The loan facilities maturing in October 2016 will be extended until October 2018, and as such, the Company will not have any material debt maturities over the next two years
• The margin on the Company's debt facilities will remain unchanged, however with a slightly increased margin of 4.25% for the deferred amount under the loan facilities
• Ship Finance agreed to reduce the bareboat hire from and including iune 2016 through May 2018 with approximately USD 17 million in aggregate against an extension of the bareboat period with 3 years in addition to a 50/50 profit-split.

Foliowing the refinancing, the Company will be a guarantor for all of its outstanding debt, including Ship Finance.

The Company believes the roll-up combined with the refinancing better positions the Company to participate in consolidation of the OSV industry, should attractive opportunities anse.

The refinancing of the debt facilities and the roll-up of the joint venture are both subject to standard ciosing conditions, including anti-trust approval. All closing conditions are expected to be fulfihled during 30 2016. An information memorandum with further details on the transaction will be prepared and published in accordance with the Norwegian Securities Trading Act and the Oslo Stock Exchanges Continuing Obligations.

DESS Aquaculture Shipping AS

On 2 June 2016, Deep Sea Supply and Marine Harvest ASA (Marine Harvest) announced that they have established a 50/50 owned aquaculture shipping joint venture (the "iv') that is to build, own and operate aquaculture vessels. The iv represents a unique opportunity for Deep Sea Supply to capitalize on the Company's experience from the OSV sector to enter into a new and attractive market together with an industry leading partner. Subsequent to the establishment, the joint venture has entered into contracts for one 3,000 m3 well boat and one harvest vessel.

The wellboat is expected to have a delivery cost of MNOK 225, and represents substantial savings compared to contracting similar vessels from other aquaculture vessel providers. 100% of the expected delivery cost is payable on delivery, preserving DESS' liquidity. Upon delivery, the vessel will enter into a five year charter contract with Marine Harvest at terms reflecting a payback period of less than 7 years. The vessel will be managed by DESS and employed in Canada to support Marine Harvest's farming operations.

The harvest vessel is expected to have a delivery cost of MNOK 179 (net after receiving a MNOK 20 grant from lnnovation Norway) and will have an annual capacity to slaughter and transport approximately 40 000 GWT. With 10/10/80 payments terms, limited liquidity is needed prior to delivery. The harvest vessel will be managed by DESS and be chartered by Marine Harvest under a five year contract for Marine Harvest's farming operations in Region South in Norway. The contract terms are expected to be similar to the wellboat contract.

DESS Aquaculture Shipping has further options for three similar wellboats and one similar harvest vessel.

The Board is pleased to see that Marine Harvest and Deep Sea Supply have established an aquaculture shipping joint venture. The announced contracts of one wellboat and one harvest vessel represents the start of an important new venture for DESS. The long term strategy is to bulld the iV into an industry leading aquaculture company that will generate substantial cash flows to DESS.

OUTLOOK

During the second quarter of 2016 the oil price has remained low, and there are no signs of improvement of the fundamentals of the global OSV markets. The Company expects no improvement of the difficult market situation for OSvs in the short to medium term. In Brazil, the situation remains challenging, and the Company now has only 4 vessels left operating in Brazil. The North Sea spot market is challenging with unsustainable rate levels and low utilization for PSVs. Following the sale of two AHTS vessels in February 2016, the Company only has one vessel (PSV) in the North Sea spot market. The contract coverage for 2016 for the Company is not satisfactory. DESS is currently in advanced contract

negotiations for some term opportunities, however the competition is fierce and rate levels are low.

As a consequence of the weak market, Deep Sea Supply will continue to lay up vessels that do not have any fixed activity the next months. In addition to Iaying up vessels to reduce cost, the Company is working hard to further reduce operating expenses for the vessels in o pe ratio n.

The board is actively considering alternative use of the fleet, this includes use of vessels for aquaculture shipping as well for other sectors.

Limassol, 18 August 2016 Deep Sea Supply Plc

Quarter 2 2016 Financial Report

Deep Sea Supply PLC Group (DESS PLC) owns 50% of Deep Sea Supply BTG Group (DESS BTG) foliowing the establishment of the Joint venture on 315t May 2013.

Pages 7-10: Financial results as viewed by management

The financial statements of DESS PLC are presented in the following way, as Management believes they give a clearer view to the reader:

• Consolidated lncome Statement, Balance Sheet and Statement of Cash fiows: The results (50%) of DESS BTG are added line by line to those of DESS PLC

The presentation is the same as Note 5 of the Annual Report 2015.

Pages 11-16: Financial results as per lAS 34

As per IFRS the proportionate method of presentation of the financial statements is not allowed therefore they are presented in pages 6-10 as foliows:

• Consolidated lncome Statement: The result of DESS BTG is apportioned to DESS PLC (50%) and is shown under line "Share of Profit/Loss from iv"
• Consolidated Balance Sheet: Share (50%) of Net Assets/liabilities of DESS BTG are shown as one line called Investment in Joint Venture"
• Consolidated Statement of Cash Fiows: This includes only Cash flows of DESS PLC

FINANCIAL RESULTS

Income Statement, Balance Sheet and Statement of cash fiows of DESS BTG (50%) added on a line by line basis

CONSOLIDATED INCOME STATEMENT
(Unauditedfigures in USD 1,000)	YTD 2016	YTD 2015	2Q 2016	2Q 2015	1Q 2016
Sales - freight revenue	28,112	75,944	11,618	35,629	16,494
Operating expenses vessels	-16,314	-31,649	-7,799	-15,575	-8,515
Other operating expenses	-4,599	-5,652	-2,350	-2,672	-2,249
Othergains/(Iosses)	-162	251	-194	-47	31
Profit/(Ioss) from sale ofvessels	-17,337	8781	0	439	-17,337
Operating profit before dep'n (EBITDA)	-10,300	39,7741	1,274	17,775	-11,576
Depreciation and amortization	-18,842	-22,828	-9,358	-11,446	-9,485
Impairment effect	-17,588	0	-17,588	0	0
Operating profit (EBIT)	-46,731	16,946	-25,672	6,328	-21,060
Financial income	353	340	175	206	178
Financial expenses	-10,189	-10,272	-5,124	-4,998	-5,065
Currency (Iosses)/gains	368	-1,458	-159	-302	526
Net financial items	-9,468	-11,391	-5,107	-5,094	-4,361
Profit/(Loss) before income tax	-56,199	5,556	-30,779	1,234	-25,421
lncome tax expenses	-173	-439	-123	-6	-50
Profit/(Loss) for the period	-56,372	5,116	-30,902	1,229	-25,470
Ave rage number of shares					261,197,194 261,197,194 261,197,194 261,197,194 261,197,194
Earnings per share	-0.22	0.02	-0.12	0.00	-0.10
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	YTD 2016	YTD 2015	2Q 2016	2Q 2015	1Q 2016
Profit/(Loss) for the period	-56,372	5,116	-30,902	1,229	-25,470
Other comprehensive income	82	-254	61	-206	21
Total comprehensive income for the period	-56,290	4,862	-30,841	1,023	-25,449

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET
(Unauditedfigures in USD 1,000)		30.06.2016 31.12.2015
Non-current assets
Vesselscost	617,492	683,606
Equipment	659	745
Total property, plant and equipment	618,151	684,351
CIRR deposit	11,544	13,258
Total non-current assets	629,694	697,609
Current assets
Inventories	3,079	3,374
Loans to related parties	15,000	15,000
Other short term receivables	6,872	9,780
ClRRdeposit	3,438	2,684
Trade receivables	13,662	15,286
Cash and cash equivalents	69,062	87,079
Total current assets	111,113	133,203
Total assets	740,807	830,813
Longterm liabilities
Borrowings	332,346	345,678
CIRR loan	11,361	13,258
Deferred gain	371	401
Financial derivatives	139	221
Total longterm liabilities	344,216	359,557
Short term liabilities
Borrowings	136,993	156,146
Loansfrom related parties	7,500	7,500
CIRRloan	3,438	2,684
Trade and other payables	13,251	13,219
Deferredgain	114	122
Total short term liabilities	161,296	179,672
Total liabilities	505,512	539,229
Net assets	235,295	291,583
Shareholders equity
Share capital, share premium and treasury shares	207,507	207,507
Retained earnings and other reserves	27,788	84,075
Total shareholders equity	235,295	291,583

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited figures in USD 1,000)	Period ended
	June 16	June 15
Cash flows from operating activities
Cash generated from operations	9,446	45,143
Net cash generated from operations	9,446	45,143
Cash flows from investing activitiesAcquisitions and upgrades of property, plant and equipment	$-1,055$	$-4,165$
Net cash (used in) investing activities	$-1,055$	$-4,165$
Cash flows from financing activities
Interest and finance expenses paid	$-7,995$	$-9,537$
Interest received	368	93
Loans to related parties	0	2,500
Repayments of borrowings	$-12,408$	$-20,581$
Net cash from sale of vessel and prepayment of borrowings	$-6,373$	0
Net cash (used in)/generated from financing activities	$-26,408$	$-27,525$
Total changes in liquidity in the period	$-18,017$	13,453
Cash and cash equivalents at beginning of period	87,079	61,839
Cash and cash equivalents at end of period/year	69,062	75,292

Segment reporting

Segments- Area of Operations & Type of Vessel

The segment results for the period ended 30 lune 2016 are as follows:

	North				South		Mediterranean
							sea Africa Asia Australia America Russia and Black Sea Caribbean Unallocated			Total
AHTS
Operating revenues	1,530		0 1,027	0	9,317	0	0	0		0 11,874
Vessel operating expenses	-622		0 -1,499	0	-5,027	0	0	0		0 -7,148
GROSSOPERATING PROFITAHTS	908		0 -472	0	4,290	0	0	0	0	4,726
MARGIN AHTS	59%	N/A	N/A	N/A	46%	N/A	N/A	N/A	N/A	40%
PSVs
Operating revenues	7,894		668 -294	3,571		1,386 2,174	-58	897		0 16,238
Vessel operating expenses		-3,433 -1,078 -1,271		-10		-1,535 -1,007	-210	-622		0 -9,166
GROSSOPERATING PROFITPSV5		4,461 -410 -1,565		3,561		-149 1,167	-268	275	0	7,072
MARGIN PSVS	57%	N/A	N/A	100%	N/A	54%	N/A	31%	N/A	44%
AHTS & PSVs
Operating revenues	9,424	668	733	3,571		10,703 2,174	-58	897		0 28,112
Vessel operating expenses		-4,055 -1,078 -2,770		-10		-6,562 -1,007	-210	-622		0 -16,314
GROSSOPERATING PROFIT AHTS & PSVs	5,369		-410 -2,037	3,561		4,141 1,167	-268	275		0 11,798
MARGIN AHTS& PSVs	57%	N/A	N/A	100%	39%	54%	N/A	31%	N/A	42%
Management fee income front related partiet	0	0	0	0	0	0	0	0	862	862
Otheroperating expenses	0	0	0	0	0	0	0	0		-5,101 -5,101
Othergains/(Iosses)	0	0	0	0	0	0	0	0	-522	-522
Profit/(Ioss) from tale of vessels	0	0		0	0	0	0	0		-17,337 -17,337
EBITDA	5,369		-410 -2,037	3,561		4,141 1,167	-268	275		-22,098 -10,300
										-37%

The corresponding segment results for the period ended 3øiune 2015 are as foliows:

	North				South		Mediterranean
		sea Africa		Asia Australia	America Russia		and Black Sea Caribbean Unallocated			Total
AHTS
Operating revenues	936		-43 6,020	0	17,611	0	821	0		0 25,345
Vessel operating expenses		-1,734 -313 -2,873		0	-7,825	0	-268	0		0 -13,013
GROSSOPERATING PROFITAHTS		-798 -356 3,147		0	9,786	0	553	0		0 12,332
MARGIN AHTS	N/A	N/A	52%	NILS	56%	N/A	67%	N/A	N/A	49%
PSVs
Operating revenues	12,425 6,653		-228	15,407	8,593	0	7,749	0		0 50,599
Vessel operatingexpenses		-5,676 -3,320 -335		-626	-5,697	0	-2,982	0		0 -18,636
GROSSOPERATING PROFITPSV5		6,749 3,333	-563	14,781	2,896	0	4,767	0		0 31,963
MARGIN PSVS	54%	50%	N/A	96%	34%	N/A	62%	N/A	N/A	63%
AHTS & PSVs
Operating revenues		13,361 6,610 5,792		15,407	26,204	0	8,570	0		0 75,944
Vessel operating expenses		-7,410 -3,633 -3,208		-626	-13,522	0	-3,250	0		0 -31,649
GROSSOPERATING PROFITAHTS& PSVs		5,951 2,977 2,584		14,781	12,682	0	5,320	0		0 44,295
MARGIN AHTS & PSVs	45%	45%	45%	961/.	48%	N/A	62%	N/A	N/A	58%
Management fee income from related parties	0	0	0	0	0	0	0	0	772	772
Otheroperatingexpenses	0	0	0	0	0	0	0	0		-6,174 -6,174
Othergains/(Iosses)	0	0	0	0	0	0	0	0	2	2
Profit/(Ioss) from sale ofvessels	0	0	0	0	0	0	0	0	878	878
EBITDA		5,951 2,977 2,584		14,781	12,682	0	5,320	0		-4,522 39,773
										52%

RESULTS AS PER IFRS

CONSOLIDATED INCOME STATEMENT
(Unauditedfigures in USO 1,000)Note	YTD 2016	YTD 2015	2Q 20161	2Q 2015	1Q 2016
Sales - freight revenue	15,986	37,935	6,933	17,506	9,052
Management fee income from related parties	1,689	1,534	843	762	846
Operating expenses vessels	-8,021	-15,705	-4,007	-7,604	-4,014
Other operating espenses	-4,149	-4,796	-2,130	-2,167	-2,018
Share of profit/(loss) from iv	-14,274	4,720	-10,206	2,068	-4,068
Othergains/(losses)	-466	-5	-374	-615	-92
Profit/(Ioss) fram sale of vessels	-17,337	878	0	878	-17,337
Operating profit before depreciation and impairments (EBITDA)	-26,572	24,561	-8,9411	10,827	-17,63
Depreciation and amortization4	-10,519	-13,037	-5,271	-6,573	-5,249
lmpairmenteffect	-13,468	0	-13,468	0	0
Operating profit (EBIT)	-50,560	11,52	-27,680	4,25	-22,879
tinancial income	572	568	288	297	284
Finandal espenses	-5,955	-5,938	-3,002	-2,851	-2,953
Currency (Iosses)/gains	-284	-913	-402	-371	119
Net financial items	-5,667	-6,283	-3,117	-2,924	-2,550
Profit/(Loss) before income tax	-56,227	5,241	-30,797	1,329	-25,428
Income tax expenses	-145	-122	-105	-100	-41
Profit/(Loss) for the period	-56,37311	5,118	-30,9021	1,228	-25,470
Average number of shares6			261,197,194 261,197,194 261,197,194 261,197,194 261,197,194
Earnings per share	-0.22	0.02	-0.12	0.00	-0.10
CONSOLIDATED STATfMENT OF COMPREHENSIVE INCOME
	YTD 2016	YTD 2015	2Q 2016	212 2015	1Q 2016
Profit/(Loss) for the period	-56,373	5,118	-30,902	1,228	-25,470
Other comprehensive income	82	-254	61	-206	21
Total comprehensive income for the period	-56,291	4,864	-30,841	1,022	-25,449

CONSOLIDATED BALANCE SHEET
(Unauditedfigures in USD 1,000)	Note		30.06.2016 31.12.2015
Non-current assets
Vesselscost	4	408,214	462,851
Equipment	4	345	393
Total property, plant and equipment		408,560	463,244
Investment in Joint Venture	7	17,364	31,637
ClRRdeposit		11,544	13,258
Total non-current assets		437,467	508,139
Current assets
Inventories		1,721	2,108
Othershort term receivables		3,624	4,024
Loans to related parties		15,000	15,000
CIRR deposit		3,438	2,684
Freight income not received		8,864	10,012
Cash and cash equivalents		62,009	74,186
Total current assets		94,655	108,015
Total assets		532,122	616,154
Liabi I ities
Borrowings	5	197,287	206,240
CIRRloan		11,361	13,258
Deferred gain		371	401
Financial derivatives		139	221
Total long term liabilities		209,158	220,120
Borrowings	5	78,648	95,443
CIRRloan		3,438	2,684
Trade and other payables		5,470	6,201
Deferredgain		114	122
Total short term liabilities		87,670	104,450
Total liabilities		296,828	324,570
Net assets		235,295	291,585
Shareholders equity
Share capital, share premium and treasury shares		207,506	207,506
Retai ned earnings and other reserves		27,788	84,079
Total shareholders equity		235,295	291,585

CONSOLIDATEDSTATEMENTOF CI-1ANGES IN EQUITY

	Capital	ReverseShare acquisitionreserves	Sharereserves	premium Other paid-in-equiy	Cash flowhedgereserve	Retainedearnings	Total
(Unaudited figures in USD 1,000)Balance atiJanuary 2015	5,224	-123,386	324,183	1,654	-438	235,912	443,149
Profit for the period/year						5,116	5,116
Othercomprehensive income					-254		-254
Balance at 30June 2015	5,224	-123,386	324,183	1,654	-692	241,028	448,010
Balance atlianuary 2016	5,224	-123,386	324,183	1,486	-312	84,390	291,583
Profit for the period/year						-56,373	-56,373
Valuation of share option scheme							0
Othercomprehensive income					82		82
Balance at 30June 2016	5,224	-123,386	324,183	1,486	-230	28,017	235,295

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unauditedfigures in USD 1,000)	Period ended
Note	June 16	June 15
Cash flows from operating activities
Cash generated from operations	3,875	24,754
Net cash generated from operations	3,875	24,754
Cash flows from investing activities
Acquisitions of vessels, contraction contracts and
	-534	-3,480
4otherPPE
Net cash (used in) investing activities	-534	-3,480
Cash flows from financing activities
Interest and finance expenses pald	-4,434	-4,841
Interest received	737	187
Loans to related parties	0	5,000
Repayments of borrowings	-5,447	-10,557
Net cash from sale of vessel and prepayment of borrowings	-6,373	0
Net cash (used in) financing activities	-15,517	-10,211
Total changes in Iiquidity in the period	-12,176	11,063
Cash and cash equivalents at beginning of period	74,186	47,289
Cash and cash equivalents at end of period/year	62,009	58,353

1. General information

Deep Sea Supply PLC ("the Company") and its subsidiaries', here after collectively ("the Group") principal activities are to engage and invest, directly or indirectly, by itseif or through subsidiaries or part-owned companies, partnerships or other forms of entities, in the international offshore supply vessel business.

The Company has its primary and only listing on the Oslo Stock Exchange.

These unaudited condensed consolidated financial statements have been approved for issue by the Board of Directors on 17 August 2016.

2. Basis of preparation

These condensed unaudited consolidated interim financial information for the period ended 30 June 2016 have been prepared in accordance with IFRS as adopted by the E.U. applicable to interim financial reporting, lAS 34 'Interim Financial Reporting' and the regulations of Oslo stock exchange. The interim financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2015, which have been prepared in accordance with IFRS as adopted by the European Union.

3. Summary of significant accounting policies

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2015, as described in those financial statements.

Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual earnings.

At the date of approval of these financial statements a number of accounting standards were issued by the International Accounting Standards Board but were not yet effective. The effect of those standards is not expected to be material for the Group.

There has been no further impact on the measurement of the Group's assets and liabilities

4. Property Plant and equipment

		Financelease	Vehicies &Vessels vessels equipment Total
Opening net book value as at i January 2015	519,074	22,420	519	542,013
Additions	3,031	51	66	3,142
Depreciation and amortization	-11,927	-1,009	-101	-13,037
Closing net book value as at 30June 2015	510,178	21,462	424	532,124
Opening net book value as at 1 January 2016	446,516	16,335	393	463,244
Additions	1,556	0	47	1,602
Disposals	-15,964	-16,335	0	-32,299
Depreciation and amortisation	-10,425	0	-94	-10,519
Impairment	-13,468	0	0	-13,468
Ciosing net book value as at 30June 2016	408,214	0	345	408,560

5. Borrowings and Ioans

	30June 2016	30June 2015
Borrowi ngs
Non-current	197,287	289,090
Current	78,648	21,979
	275,936	311,069

Movements in borrowings are analyzed as foliows:

Period ended:	30June 2016	30June 2015
Opening Balance as at lianuary	301,683	320,637
Replacement of Ioans (Sea Bear)	-9,923	0
Repayments of loans	-17,153	-10,557
Borrow ing costs	1,329	989
Ciosing amount end of period	275,936	311,069

The split of borrowings between Current/Non-current as per above note, was based on the borrowing terms before the agreement with the banks to defer installments between 31 May 2016 and 31 March 2018, as disclosed in Note 7. Based on the terms agreed with the banks, the current portion of borrowings as at 30 June 2016 was USD 4,528.

6. Earnings per share
		YTD 2016 YTD 2014	2Q 2016	2Q 2015	1Q 2016
Basic
Profit attributable to equity hol ders of the company	-56,373	5,118	-30,902	1,228	-25,470
Wei ghted average n u mbe r of ordi nary shares (thous	261,197	261,197	261,197	261,197	261,197
Basic earnings per share (USD per share)	-0.22	0.02	-0.12	0.00	-0.10
Dfluted
Profit attributable to equity holders of the company	-56,373	5,118	-30,902	1,228	-25,470
Weighted average number of ordinary shares (thous	261,197	261,197	261,197	261,197	261,197
Diluted earnings pershare (USD per share)	-0.22	0.02	-0.12	0.00	-0.10

7. Investment in Joint Venture ØV)

At 30June		17,364 136,451
Share of (Ioss)/profit from JV*	-14,274	4,720
Increase in share capital ofJV Companies	0	7,737
Ati Jan uary		31,637 123,993
	2016	2015

*Share of loss from iv for 2016, includes 50% of 8.239 USD being amount of impairment of the vessels of the ioint venture. Share of loss excluding the impairment effect is -10.153USD.

8. Events after the balance sheet date

Agreement on amendments to financing terms and agreement with DPC for a roll-up of the DESS BTG iv announced 22 July 2016 See Directors report for details.

Establishment of DESS Aquaculture Shipping, a 50/50 owned aquaculture shipping joint venture with Marine Harvest ASA on 2 June 2016. See Directors report for details.

New Contracts

The AHTS Sea Tiger has been awarded a 120 days firm plus 4 x 60 days options for operations for OGPar in Brazil. The vessel commenced the charter contract on 5 August 2016.

The PSV Sea Titus has been extended until 18 December 2016. The vessel has been working for an international oil company for operations in South America since 6 April 2016.

The PSV Sea Forth has been awarded a 3 month extension from December 2017 until March 2018 of its existing term contract with Apache North Sea Limited. The charter started in February 2014.

The PSV Sea Swift has commenced a 2 years firm plus 1 year option contract, and the PSVs Sea Spear and Sea Spark have commenced 1 year firm plus 1 year option contracts with BP Egypt for operation in Egypt.

THE COMPANIES LAW, CAP. 113 OF THE STATUTE LAWS OF THE REPUBLIC OF CYPRUS

PUBLIC COMPANY LIMITED BY SHARES

MEMORANDUM

AND

ARTICLES OF ASSOCIATION

$OF$

DEEP SEA SUPPLY PLC

MONTANIOS & MONTANIOS Advocates & Legal Consultants Diagoras House 16 P. Catelaris Street 1097 Nicosia - Cyprus

AVM/VK/5538

THE COMPANIES LAW, CAP. [113] OF THE STATUTE LAWS OF THE REPUBLIC OF CYPRUS

PUBLIC COMPANY LIMITED BY SHARES

MEMORANDUM OF ASSOCIATION OF DEEP SEA SUPPLY PLC

The name of the Company is: $\mathbf{1}$

DEEP SEA SUPPLY PLC

(hereinafter referred to as "the Company").

• The registered office of the Company will be situate in Cyprus. $2.$

• The objects for which the Company is established are: $\overline{3}$ .

  • To engage and invest, directly or indirectly, by itself or through $3.1$ subsidiaries or part-owned companies, partnerships or other forms of entities, in the international offshore anchor handling and supply vessel business, and to do all such acts and things as are related thereto, including without limitation the acquisition, construction, leasing, chartering, operation and manning of such vessels and everything incidental thereto.
  • To exercise and impose all the rights and powers deriving from $3.2$ or attached to the ownership of any shares, share capital, debentures or other titles or securities or emanating from agreements or guarantees or other security, including (without limitation to the generality of the foregoing) all the powers of veto, supervision or control, that may be provided by virtue of the possession by the Company of such number of shares or debentures or such special proportion of the issued capital of the company in which the Company is investing, and to provide directorship and other executive, supervisory and consultancy services to any company in which the Company has an interest and on such terms as shall be considered appropriate.

• $3.3$ To acquire the whole or any part of the shares, debentures, debenture or other stock or other securities of any company, authority or undertaking the acquisition of which could in the opinion of the Directors promote or be conducive to the objects or enhance the property or interests of the Company and to manage, deal with, replace, exchange or dispose of same.

• To apply for, take out, purchase or otherwise acquire. $3.4$ lease, exchange, register and use any patents, brevets d'invention, trade marks, copyrights, licences, business names, concessions, easements, rights or privileges and to sell, lease, assign or otherwise secure or grant licences or consents for the use thereof or any of them.

• To acquire by purchase, gift or exchange or otherwise, possess and $3.5$ register in the name of the Company, manage, exchange, assign, lease, sub-lease, develop, equip, charge, mortgage, sell or otherwise dispose of movable or immovable property of any nature including ships, vessels, lands, building sites, plots, buildings and any easements, privileges, shares, licences or other rights or interests in or over movable or immovable property.

• To hold, possess, use, construct, improve, convert, extend, equip, 3.6 furnish, administer, operate, manage immovable property, buildings, other installations, works, places or other structures and generally to develop, improve or manage property belonging to or in the possession, control or management of the Company.

• To finance, lend or advance credit or other financial assistance, or $3.7$ to provide assistance or services for the securing of finance, lending or credit or other assistance, excluding any kind of banking business, to persons associated or dealing with the Company or its subsidiaries or part-owned companies.

• To help, aid and assist in all and every possible way, whether $3.8$ commercially, financially or otherwise, any company belonging to the same group of companies as the Company, or being managed and controlled by the same person or persons, including (without limitation) the Company's holding, parent, affiliated, associated or subsidiary company or companies; to co-operate, mutually assist, collaborate and/or participate in a joint venture in all fields of business, commercial, property, and/or economic enterprises with any company or companies belonging to the same group as the Company, and/or controlled by the same person or persons for the purpose of growing, and/or expanding its overall or particular activities.

• To mortgage and/or charge the undertaking of the Company and all 3.9 or part of the movable or immovable property, present or future, and all or part of the uncalled capital of the Company.

• To guarantee the payment of any monies or the fulfilment or 3.10 performance of any obligation or contract of any government, administrative body, legal or natural person, company or firm; to give and accept counter-guarantees, cross-guarantees and to give guarantees and indemnities in general to any person or company and to secure such guarantees and indemnities by mortgaging or charging the assets of the Company.

• $3.11$ To mortgage and/or encumber the whole or part of its movable or immovable property by way of security and/or guarantee for a loan or any other facility, banking or otherwise, provided to the Company itself or to any member of the same group as the Company.

• To buy or otherwise acquire the whole or any part of the 3.12 undertaking, property, assets and liabilities of any company, firm, body or person whose objects coincide in whole or in part with the objects or activities of the Company or any of them and to carry on, continue or liquidate any such undertaking.

• To establish, acquire, manage, carry on, or assist or participate $3.13$ directly or indirectly in the establishment, acquisition, management or carrying on of any trade, work or business of any nature and to carry out any trade, work or business which may be profitably carried out by the Company in relation to, in conjunction with or as ancillary to, any other objects or activities or the general business of the Company.

• To establish, set up, enter into, administer, operate or manage $3.14$ representative offices. branches. agencies. subsidiaries. sponsorships, or other arrangements in any part of the world.

• To invest available monies of the Company in such investments as 3.15 the Directors shall decide and in particular for that purpose to acquire by purchase or in any other manner, maintain, exchange, deal with shares, stocks, debentures or other securities or other interests or rights or other movable or immovable property.

• To contract, obtain or grant loans, credits or other financial or credit 3.16 facilities with or without security in such way as the Company may consider fit and to mortgage, pledge or charge its undertakings or any part thereof, assets, movable and immovable property, present or future, wherever situate, including the uncalled capital of the Company or any part thereof, to secure any loan or loans, facilities or other obligations of the Company entities within the same group as the Company parties and to issue bonds, promissory notes, debentures, bills, securities, floating debentures or debentures payable at such time and manner as the Company may think proper.

• To accept mortgages, bonds, charges, debentures or other securities 3.17 and to assign, transfer, alter, substitute or release same.

• To sign, execute, endorse, transfer, negotiate and discount 3.18 promissory notes, bonds, bills, bills of lading and other negotiable or transferable documents, instruments or titles or other mercantile documents and do any other similar transactions excluding banking business.

• 3.19 To establish, promote or participate in the establishment of any company in any country of the world and to acquire by subscription, purchase or otherwise and to accept, take, hold, exchange, sell or otherwise dispose of shares, stocks, debentures or other securities or interests in any company, body or undertaking.

• To issue and allot fully or partly paid shares in the capital of the 3.20 Company for the payment of any shares or other securities in any other company or any movable or immovable property or any other rights or interests purchased or otherwise acquired by the Company or for any service rendered to the Company and to pay in any other way for any property or service thus acquired or rendered.

• 3.21 To enter into any agreement or contract or arrangement and do any act with any State, Governmental, Municipal or other authority, body or organ or with any person as in the circumstances may be considered necessary or conducive to the attainment of the objects of the Company.

• To amalgamate or enter into and carry into effect any contract or 3.22 arrangement for a joint venture, partnership, union of interests, participation in profits, or co-operation with any person, legal or natural, in Cyprus or abroad, carrying on or interested in carrying on any business, work or activity which the Company may carry on, or which may in the opinion of the Directors be carried on in conjunction with the business of the Company or in a way serving directly or indirectly the objects of the Company.

• To sell or otherwise alienate or dispose of, exchange, mortgage, 3.23 charge, assign, transfer the undertaking of the Company or any part thereof for such consideration and under such terms as the Company may consider fit and in particular, but without prejudice to the aforesaid generality, in consideration of shares, debentures or other securities of any other company.

• To distribute in specie among the members any assets of the 3.24 Company or the proceeds of sale or disposition thereof and in particular, but without prejudice to this generality, any shares, debentures or other securities of any other company owned or controlled by the Company or with which the Company may have entered into any contract or arrangement in relation to the take over of the assets or business of the Company, or which the Company may have power to dispose.

• 3.25 To purchase or otherwise acquire any shares in the Company's share capital.

• 3.26 To amalgamate, merge, reorganise, restructure, reconstruct the Company or its capital and to take, enter into and perform any act, contract, compromise, arrangement or procedure which may be considered beneficial, useful or necessary for the Company or any of its objects.

• To pay all costs, charges and expenses incurred or sustained in or 3.27 about the promotion, formation and establishment of the Company or which the Company shall consider to be in the nature of preliminary expenses, including study, consultancy, printing and similar expenses.

• To establish and maintain profit sharing schemes for any persons 3.28 who are in the employment of the Company or in the employment of any other company which belongs to the same group of companies as the Company or persons who are Directors or officers of the Company or of any other company which belongs to the same group of companies as the Company.

• To establish, participate, finance and maintain or contribute to the 3.29 establishment and maintenance of any pension, provident or other fund by contributions or otherwise for the welfare or assistance of any persons which are or at any time have been in the employment of the Company or of any other company which belongs to the same group of companies as the Company or any person or persons who are or at any time have been Directors or officers of the Company or of any other company which belongs to the same group of companies as the Company or the spouses, widows, families or the dependants of any such persons and to pay or otherwise contribute to the granting to such persons of donations, bonuses, grants, contributions or other assistance.

• 3.30 To procure the Company to be registered or recognised in any country and to comply with any terms and conditions enabling the Company to carry on business and to establish in any such country any offices, branches, agencies or sponsorships in order to achieve the objects of the Company.

• To pay subscriptions or contributions for charitable, benevolent or 3.31 other useful purposes of a public nature, the support of which may in the opinion of the Company contribute in the enhancement of the goodwill of the Company or its relations with its employees, customers or the public in general.

• To carry out any of the above objects, business, acts or works in any 3.32 country or place and either by the Company acting in its name and for its own account or as agent, broker, contractor, trustee or otherwise and either alone or in conjunction with others and either directly or through agents, contractors, subcontractors, nominees or otherwise.

• To adopt, acknowledge, ratify and perform any contract, act or 3.33 transaction entered into or made for account or on behalf of the Company before incorporation with or without modifications as the Directors may think fit.

• To undertake and carry out any other business, act or activity which 3.34 in the opinion of the Directors may be carried out usefully, incidentally or in parallel with any other object or business of the Company or which may enhance directly or indirectly the value. usefulness or productivity of any of the business, work, assets or rights of the Company.

• Generally to do all such other things as may appear to the Company 3.35 to be useful, incidental or conducive to the attainment, directly or indirectly, of the above objects or any of them.

It is hereby declared that in interpreting this clause the powers conferred on the Company by any paragraph hereof shall not be limited or restricted in any way by reference to any other paragraphs or the name of the Company and each paragraph shall be interpreted independently as if each one of them contained the main object of the Company.

And it is further declared that where in this clause the word "company" does not refer to this Company, it shall be deemed to include any company or body corporate with limited liability or not or other legal person whether the same has its place of business in Cyprus or abroad and whether the same has been incorporated under the Laws of the Republic of Cyprus or of any other State. And the word "person" (unless the context expressly otherwise requires) shall be deemed to include a legal person.

• $\overline{4}$ . The liability of the members is limited.
• The share capital of the Company is U.S.$4,000,000 United States Dollars Four 5. Million divided into 200,000,000 (Two hundred Million) shares of U.S.$0.02 (Two United States cents) each, with power of the Company to increase or reduce the same and with power to issue any of the shares in the capital, original or increased, with or subject to any preferential, special, restricted, defined or differed rights, privileges or terms as to dividend, repayment of capital, voting rights, surplus assets or otherwise, as well as with power to convent the currency of the share capital of the Company into any other currency within the framework of the reorganisation or restructuring in accordance with the Law.
• Authorised Share Capital increased to US$5.000.000 by an Ordinary Resolution dated Notes: $\overline{I}$ . 30/11/06.
  • Share Capital reduced to US$4,960,000.14 and then increased again to US$5,000,000 by $\overline{2}$ . Special Resolutions dated 07/05/08, a Court Order and a Certificate of the Registrar of Companies dated 22/7/2010.
  • Share Capital reduced to US$4.937.980 and then increased again to US$5.000.000 by 3. Special Resolutions dated 11/05/10, a Court Order and a Certificate of the Registrar of Companies dated 08/11/2010.
  • Authorised Capital increased to US$7.500.000 by an Ordinary Resolution dated 17/06/14. $\overline{4}$ .

We, the several persons whose names and addresses are subscribed, are desirous of being formed into a Company in pursuance of this Memorandum of Association and we respectively agree to take the number of shares in the capital of the Company set opposite to our respective names.

	NAMES, ADDRESSES AND DESCRIPTION OF	Number and class of shares
	SUBSCRIBERS	taken by each subscriber
1.	HEMEN HOLDING LIMITEDHolding CompanyMeliza Court, 4 th Floor,229 Arch. Makarios III Ave,3105 Limassol, CyprusC87804	1,999,994 ordinary shares
2.	STELIOS SAVVIDESAccountantMeliza Court, 4 th Floor229 Arch. Makarios III Ave,3105 Limassol, CyprusI.D. Nr. 362233	1 ordinary share
3.	EVA AGATHANGELOUPrivate EmployeeMeliza Court, 4 th Floor229 Arch. Makarios III Ave,3105 Limassol, CyprusI.D. Nr. 636341	1 ordinary share
4.	DIMITRIS HANNASCompany ManagerMeliza Court, 4 th Floor229 Arch. Makarios III Ave,3105 Limassol, CyprusI.D. Nr. 412888	1 ordinary share
5.	COSTAS PALLARISCompany ManagerMeliza Court, 4 th Floor229 Arch. Makarios III Ave,3105 Limassol, CyprusI.D. Nr. 490431	1 ordinary share

	NAMES, ADDRESSES AND DESCRIPTION OF	Number and class of shares
	SUBSCRIBERS	taken by each subscriber
6.	ELEFTHERIOS MONTANIOSAdvocateDiagoras House16 P. Catelaris Street1097 Nicosia, CyprusI.D. Nr. 341786	1 ordinary share
7.	ADAM MONTANIOSAdvocateDiagoras House16 P. Catelaris Street1097 Nicosia, CyprusI.D. Nr. 490148	1 ordinary share

Total number of shares taken:

2,000,000 ordinary shares

Dated this 27 day of October 2006

Witness to the above signatures:

HELEN GEORGIADES Legal Executive Diagoras House 16 P. Catelaris Street 1097 Nicosia, Cyprus

$\sim$

THE COMPANIES LAW, CAP. 113 OF THE STATUTE LAWS OF THE REPUBLIC OF CYPRUS

the contract of the contract of the contract of

PUBLIC COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION

OF

DEEP SEA SUPPLY PLC

$\sim$

INTERPRETATION

• The Company shall always apply the Law and any applicable Regulations that govern or 1. relate to public companies.
• $2.$ In these Articles:

"the Secretary"	means any person appointed to perform the duties of thesecretary of the Company.
"the Office"	means the Registered Office of the Company for the timebeing.
"the Republic"of Cyprus"	means the Republic of Cyprus.
"the Board orthe Directors"	means (in respect of either term) the Board of Directors of theCompany or the Directors present at a duly convened meetingof the Board at which a quorum is present.
"the Company"	means Deep Sea Supply Plc
"these Articles orthese Regulations"	means the Articles of Association herein set out or as mayfrom time to time be altered or amended by Special Resolutionof the Company.
"Member or Shareholder"	means member or shareholder of the Company.
"dividend"	means dividend or bonus.
"the Register"	means the Register of Members of the Company.

"the Law"	means the Companies Law, Chapter 113 of the Statute Laws
	of the Republic of Cyprus as amended to date or any law
	substituting the same, and includes any future amending law.

"the Seal" means the common seal of the Company.

Expressions referring to writing shall, unless the contrary intention appears, be construed as including references to printing, lithography, photography, and other modes of representing or reproducing words in a visible form.

Unless the context otherwise requires, words or expressions contained in these Articles shall bear the same meaning as in the Law or any statutory modification thereof in force at the date at which these Articles become binding on the Company.

TABLE A EXCLUDED

$\overline{3}$ . The Regulations contained in Table A of the First Schedule to the Law shall not apply except in so far as the same are repeated or contained in these Articles.

BUSINESS

The Board of Directors shall from time to time decide which particular business or other $\overline{4}$ . activities that shall be carried out, within its object clause, by the Company.

SHARE CAPITAL, ALTERATION OF CAPITAL AND VARIATION OF RIGHTS

• The Board of Directors may allot or otherwise dispose of the shares of the Company and grant 5. options or special purchase rights in relation thereto, to such persons at such times and generally on such terms and conditions as the Board thinks proper, and whether at their nominal value, or at a premium, only with the approval of two-thirds of the votes and share capital represented at the general meeting.

• The general meeting may grant the Board an authorization to issue shares and to determine 6. the terms and conditions of such issue. Such decision requires the approval of two-thirds of the votes and share capital represented at the general meeting. The designation shall only take place for a specific period of no more than two years and may not be extended by more than two years on each occasion.

• In the event of an issue of shares, Shareholders shall have a pre-emptive right in proportion to $7.$ the number of shares which they own, notwithstanding the provisions of the law. In respect of the issue of shares there shall be no pre-emptive right to shares issued to employees of the Company or of a group company. The Board may limit or debar the pre-emptive right accruing to Shareholders, if and in so far as the Board has been designated by the general meeting for this purpose as the authorized body for the period of such designation. The designation shall only take place for a specific period of no more than two years and may not be extended by more than two years on each occasion.

• If a designation as referred to in the aforesaid is not in force, the general meeting may, upon $\mathbf{8}$ . the proposal of the Board, limit or debar the pre-emptive right accruing to shareholders. A resolution of the general meeting to limit or exclude pre-emptive rights or to designate the Board as authorized to resolve upon limiting or excluding of pre-emptive rights requires twothirds of the votes and share capital represented at the general meeting.

• 1. There is only one class of shares in the company.

• The Company may only issue shares with preferred, deferred or other rights or such $10.$ restrictions, whether in regard to dividend, voting, return of capital if the general meeting approves such decision with the majority requirements laid down in this provision. A resolution which has the effect on issued shares that the Shareholders right to dividend or to the assets of the Company is reduced in any way requires the approval of nine tenths of the share capital represented at the general meeting as well as two thirds of the votes and share capital represented at the general meeting. A resolution which has the effect on issued shares that the Shareholders' obligations to the Company are to be increased, or that the shares may be subject for compulsory redemption, requires unanimity. If such a resolution only affects some of the Shareholders, the resolution shall require the endorsement of all affected Shareholders as well as two thirds of the votes and share capital represented at the general meeting.

The Company may by a resolution requiring two thirds of the votes and share capital 11. Regulation represented at the general meeting decide to reduce its share capital, any capital redemption amended by Special reserve fund or any share premium account in any manner and with, and subject to, any Resolutions incident authorised, and consent required, by law. dd 07/05/07

• $121$ The Company may by a resolution requiring two thirds of the votes and share capital represented at the general meeting decide to:

  • (a) consolidate and divide all of its share capital into shares or larger amount than its existing shares:
  • (b) subdivide its existing shares into shares of smaller amount that is fixed by the memorandum of association subject, nevertheless, to the provisions of section $60(1)(d)$ of the Law:

• Except as required by law, no person shall be recognised by the Company as holding any 13. shares upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or (except only as by these Articles or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

• Notwithstanding the foregoing but always subject to the provisions of section 112 of the Law, 14. the Company may, if it so wishes and if so notified in writing to that effect, recognise the existence of a trust in respect of any share even if it cannot enter the same in the Register of Members of the Company. Such recognition is notified by letter to the trustees and remains irrevocable for as long as the trust subsists, even if the trustees or some of them are replaced.

• Every person whose name is entered as a member in the Register of Members shall be entitled 15. without payment to receive within two months after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) one certificate for all his shares or several certificates each for one or more of his shares upon payment of such sum as the Directors shall from time to time determine for every certificate after the first. Every certificate shall be under the seal and shall specify the shares to which it relates and the amount paid up thereon.

• If a share certificate be defaced, lost or destroved, it may be renewed on payment of a fee (if $161$ any) as the Directors may prescribe and on such terms (if any) as to evidence and indemnity and the payment of out-of-pocket expenses of the Company of investigating evidence as the Directors think fit.

• The Company shall not give, whether directly or indirectly, and whether by means of a loan, 17. guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the Company or in its holding company nor shall the Company make a loan for any purpose whatsoever on the security of its shares or those of its holding company but nothing in this regulation shall prohibit transactions mentioned in the proviso to section $53(1)$ of the Law.

PURCHASE OF OWN SHARES

The Company may acquire, for valuable consideration, shares in its own share capital if and $18.$ in so far as the general meeting, by a resolution requiring two thirds of the votes and share Regulation amended by capital represented at the general meeting, has authorized the Board to acquire such shares. Special The authorization may be given for no more than eighteen months on each occasion, Resolutions dd 07/05/07 notwithstanding any other provisions.

• The company may, without being authorized thereto by the general meeting and 19. notwithstanding to what is provided in the previous article, acquire shares in its own share capital in order to transfer those shares to the employees of the company or a group company under a scheme applicable to such employees.
• In the general meeting no votes may be cast in respect of a share held by the company or a $20.$ subsidiary company; no votes may be cast in respect of a share the depositary receipt for which is held by the company or a subsidiary company. Shares in respect of which voting rights may not be exercised by law or by the articles of association shall not be taken into account, when determining to what extent the shareholders cast votes, to what extent they are present or represented or to what extent the share capital is provided or represented.
• Upon the proposal of the Board the general meeting may decide to cancel shares acquired by 21. the Company from its own share capital.

LIEN

• The Company shall have a first and paramount lien on every share for all moneys (whether $22$ presently payable or not) called or payable at a fixed time in respect of that share, and the Company shall also have a first and paramount lien on all shares standing registered in the name of a single person for all moneys presently payable by him or his estate to the Company: but the Directors may at any time declare any share to be wholly or in part exempt from the provisions of this regulation. The Company's lien, if any, on a share shall extend to all dividends payable thereon.
• The Company may sell, in such manner as the Directors think fit, any shares on which the 23. Company has a lien, but no sale shall be made unless a sum in respect of which the lien exists is presently payable, nor until the, expiration of fourteen days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share, or the person entitled thereto by reason of his death or bankruptcy.

$\overline{4}$

• To give effect to any such sale the Directors may authorise some person to transfer the shares $24$ sold to the purchaser thereof. The purchaser shall be registered as the holder of the shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.
• The proceeds of the sale shall be received by the Company and applied in payment of such 25. part of the amount in respect of which the lien exists as is presently payable, and the residue, if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares at the date of the sale.

CALLS ON SHARES

• The Directors may from time to time make calls upon the members in respect of any moneys 26. unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof made payable at fixed times, and each member shall (subject to receiving at least fourteen days' notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed as the Directors may determine.
• A call shall be deemed to have been made at the time when the resolution of the Directors 27. authorising the call was passed and may be required to be paid by instalments.
• The joint holders of a share shall be jointly and severally liable to pay all calls in respect 28. thereof.
• If a sum called in respect of a share is not paid before or on the day appointed for payment 29. thereof, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at such rate as the Directors may determine, but the Directors shall be at liberty to waive payment of such interest wholly or in part.
• Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed 30. date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these Regulations be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable and in case of non-payment all the relevant provisions of these Regulations as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.
• The Directors may not, on the issue of shares, differentiate between the holders as to the 31. amount of calls to be paid and the times of payment.
• The Directors may, if they think fit, receive from any member willing to advance the same, all 32. or any part of the moneys uncalled and unpaid upon any shares held by him and upon all or any of the moneys so advanced may (until the same would, but for such advance, become payable) pay interest at such rate not exceeding (unless the Company in General Meeting otherwise resolves) five per cent per annum, as may be agreed upon between the Directors and the member paying such sum in advance.

TRANSFER OF SHARES

• The Company's shares are freely transferable. 33.
• The instrument of transfer of any share shall be executed by or on behalf of the transferor and 34. transferee, and the transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the Register of Members in respect thereof.
• Subject to such of the restrictions of these Regulations as may be applicable, any member 35 may transfer all or any of his shares by instrument in writing in any usual or common form or any other form which the Directors may approve.
• Notwithstanding the provisions of these Regulations the Board of Directors may decline to 36. register any transfer of shares if this transfer refutes or infringes the preconditions which make this Company a "Public Company" for tax purposes or the preconditions necessary to provide the Company with tax exemptions and/or tax benefits applicable to companies by the tax laws of the Republic, as valid from time to time. The Board of Directors however may approve the registration of the transfer of a reduced number of shares transferred, if by the transfer of such reduced number of shares the refutation or infringement of such preconditions is avoided. In such case the transfer of the reduced number of shares approved as provided above shall be registered.

TRANSMISSION OF SHARES

• In case of the death of a member, the survivor or survivors where the deceased was a 37. joint holder, and the legal personal representative of the deceased where he was a sole holder, shall be the only persons recognised by the Company as having any title to his interest in the shares; but nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons.
• Any person becoming entitled to a share in consequence of the death or bankruptcy of a 38. member may, upon such evidence being produced as may from time to time properly be required by the Directors and subject as hereinafter provided, elect either to be registered himself as holder of the share or to have some person nominated by him registered as the transferee thereof.
• If the person so becoming entitled shall elect to be registered himself, he shall deliver or 39. send to the Company a notice in writing signed by him stating that he so elects. If he shall elect to have another person registered he shall testify his election by executing a transfer of the share to that person. All the limitations, restrictions and provisions of these Regulations relating to the right to transfer and the registration of transfers of shares notice or transfer as aforesaid as if the death or shall be applicable to any such bankruptcy of the member had not occurred and the notice or transfer were a transfer signed by that member.
• A person becoming entitled to a share by reason of the death or bankruptcy of the holder shall $40°$ be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company.

Provided always that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within ninety days the Directors may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.

$40A-40\Sigma T$

N.B. New Regulations added by Special Resolutions dated 30/11/06

FORFEITURE OF SHARES

• If a member fails to pay any call or instalment of a call on the day appointed for payment 41. thereof, the Directors may at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued.
• The notice shall name a further day (not earlier than the expiration of fourteen days from the 42. date of service of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed the shares in respect of which the call was made will be liable to be forfeited.
• If the requirements of any such notice as aforesaid are not complied with, any share in respect 43. of which the notice has been given may at any time thereafter before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect.
• A forfeited share may be sold or otherwise disposed of on such terms and in such manner as 44. the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit.
• A person whose shares have been forfeited shall cease to be a member in respect of the 45. forfeited shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which, at the date of forfeiture, were payable by him to the Company in respect of the shares, but his liability shall cease if and when the Company shall have received payment in full of all such moneys in respect of the shares.
• A statutory declaration in writing that the declarant is a director or the secretary of the 46 Company, and that a share in the Company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration, if any given for the share on any sale or disposition thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.
• The provisions of these Regulations as to forfeiture shall apply in the case of non-payment of 47. any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the shares or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

GENERAL MEETINGS

The Company shall in each year hold a general meeting as its annual general meeting in 48. addition to any other meetings in that year, and shall specify the meeting as such in the notices calling.

The annual general meeting shall deal with:

• (a) the consideration of the financial statements of the company,
• (b) the report of the Directors and the report of the Auditors of the company,
• (c) the election of Directors in the place of those retiring,
• (d) the appointment of and the fixing of the remuneration of the auditors, and
• (e) the declaration of any dividend,

Regulation amended by Special Resolutions dd 07/05/07

The Company must hold a general meeting within six months after the close of each financial 49. year provided that so long as the Company holds its first annual general meeting within eighteen months of its incorporation it need not hold one in the year of incorporation. The annual general meeting shall be held at the place of establishment of the Company, and the notice convening the meeting shall inform the Shareholders accordingly.

• All general meetings other than annual general meetings shall be called extraordinary general 50. meetings. All business shall be deemed special that is transacted at an extraordinary general meeting, and also all that is transacted at an annual general meeting, with the exception of the matters listed in Article 49.
• The Directors may, whenever they think fit, convene an extraordinary general meeting, and $51.$ extraordinary general meetings shall also be convened on such requisition, or, in default, may be convened by such requisitionists, as provided by section 126 of the Law.
• 1. Extraordinary general meetings shall be held as often as deemed necessary by the Board and shall be held if one or more Shareholders and other persons entitled to attend the meetings of shareholders jointly representing at least one-tenth of the issued share capital make a written request to that effect to the Board, specifying in detail the business to be dealt with.

NOTICE OF GENERAL MEETINGS

An annual general meeting and a meeting called for the passing of a special resolution shall be 53. called by twenty-one days' notice in writing at the least, and a meeting of the Company other than an annual general meeting or a meeting for the passing of a special resolution shall be called by fourteen days' notice in writing at the least. The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall specify the place, the day and the hour of meeting and, in case of special business, the general nature of that business and shall be given, in manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the Company in general meetings to such persons as are, under the regulations of the Company, entitled to receive such notices from the Company;

Provided that a meeting of the Company shall, notwithstanding that it is called by shorter notice than that specified in this regulation, be deemed to have been duly called if it is so agreed in the meeting called, by all the members entitled to attend and vote thereat.

The accidental omission to give notice of a meeting to, or the non-receipt of notice of a 54. meeting by, any person entitled to receive notice, shall not invalidate the proceedings at that meeting.

PROCEEDINGS AT GENERAL MEETINGS

• 1. No business shall be transacted at any general meeting unless a quorum of members is present at the time when the meeting proceeds to business; save as herein or in the Law otherwise provided, three members representing at least 10% of the issued share capital of the Company present in person or by proxy shall be a quorum.
• If within half an hour from the time appointed for the meeting a quorum is not present, the 56. meeting, if convened upon the requisition of members, shall be dissolved; in any other case it shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the members present shall be a quorum.
• The Chairman, if any, of the Board of Directors shall preside as chairman at every general 57. meeting of the Company, or if there is no such chairman, or if he shall not be present within fifteen minutes after the time appointed for the holding of the meeting or is unwilling to act the Directors present shall elect one of their number to be the chairman of the meeting If at any meeting no Director is willing to act as chairman or if no Director is present within fifteen minutes after the time appointed for holding the meeting, the members present shall elect one of their number to be chairman of the meeting.
• At any general meeting any resolution put to the vote of the meeting shall be decided by a 58. poll.
• In the case of an equality of votes on a poll, the chairman of the meeting shall not have a 59. second or casting vote.

VOTES OF MEMBERS

• Subject to any rights or restrictions for the time being attached to any class or classes of 60. shares, every member shall have one vote for each share of which he is the holder.

• Decisions of the general meeting require a simple majority of the votes unless otherwise is Regulation $61.$ amended by laid-down in these Articles. Any change of provisions of these Articles requires approval of Special Resolutions two-thirds of the votes and share capital represented at the general meeting. dd 07/05/07

  • No member shall be entitled to vote at any general meeting unless all calls or other sums 62. presently payable by him in respect of shares in the Company have been paid.
  • No objection shall be raised to the qualification of any voter except at the meeting or 63. adjourned meeting at which the vote objected to is given or tendered and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive.
  • In a general meeting a vote may be given either personally or by proxy (through a Proxy or a 64. Substitute Proxy as provided hereafter).

• The instrument appointing a Proxy shall be dated and in writing under the hand of the 65. appointer or of his attorney duly authorised in writing, or, if the appointer is a corporation, either under seal, or under the hand of an officer or attorney duly authorised. A Proxy need not be a member of the Company.

• The instrument appointing a Proxy and the power of attorney or other authority, if any, under 66. which it is signed or a notarially certified copy of that power or authority shall be deposited at the registered office of the Company or at such other place within Cyprus as is specified for that purpose in the notice convening the meeting, at any time before the time for holding the meeting or adjourned meeting, at which the person named in the instrument proposes to vote, or, in the case of a poll, at any time before the time appointed for the taking of the poll, and in default the instrument of proxy shall not be treated as valid.

• An instrument appointing a Proxy shall be in the following form or a form as near thereto as 67. circumstances admit:

		"DEEP SEA SUPPLY PLC
I/We		, of
		being a member/members of the above-named Company, hereby
appoint
		as my/our proxy to vote for me/us or my/our behalf at the (annual
		or extraordinary, as the case may be) general meeting of the Company,
to be held on the	day of	, and at any adjournment thereof.

This instrument also empowers my/our said proxy to appoint a substitute proxy to attend the said general meeting in his stead and vote on my behalf.

$\bar{\mathbf{H}}$

Where it is desired to afford members an opportunity of voting for or against a resolution the 68. instrument appointing a proxy shall be in the following form or a form as near thereto as circumstances admit:

		"DEEP SEA SUPPLY PLC
I/We		. of
		being a member/members of the above-named Company, hereby
appoint
		as my/our proxy to vote for me/us or my/our behalf at the (annual or extraordinary, as the case
		day ofmay be) general meeting of the Company, to be held on the
	, and at any adjournment thereof.
Signed this	day of	οf
	proxy will vote as he thinks fit.	This form is to be used in favour of/* against* the resolution. Unless otherwise instructed, the

This instrument also empowers my/our said proxy to appoint a substitute proxy to attend the said General meeting in his stead and vote on my behalf.

* Strike out whichever is not desired."

An appointed Proxy may in turn appoint a substitute to attend and vote in a general meeting of 69. the Company ("the Substitute Proxy").

• The instrument appointing a Substitute Proxy shall be dated and in writing under the hand of $701$ the Proxy, or, if the Proxy is a corporation, either under seal, or under the hand of an officer or attorney duly authorised. A Substitute Proxy need not be a member of the Company.
• The instrument appointing a Substitute Proxy, and the power of attorney or other authority, if $71.$ any, under which it is signed or a notarially certified copy of that power or authority, shall be deposited at the registered office of the Company or at such other place within Cyprus as is specified for that purpose in the notice convening the meeting, at any time before the time for holding the meeting or adjourned meeting, at which the person named in the instrument proposes to vote, or, in the case of a poll, at any time before the time appointed for the taking of the poll. In default the instrument appointing a Substitute Proxy shall not be treated as valid.
• An instrument appointing a Substitute Proxy shall be in the following form or a form as near 72. thereto as circumstances admit:

		I/We
		being appointed Proxy for
		member/members of the above-named Company, hereby appoint
	Substitute Proxy to vote for the said Member(s) at the (annual
	or extraordinary, as the case may be) general meeting of the Company,
to be held on the day of		, and at any adjournment thereof.

Where it is desired to afford members an opportunity of voting for or against a resolution the 73. instrument appointing a Substitute Proxy shall be in the following form or a form as near thereto as circumstances admit:

	"DEEP SEA SUPPLY PLC
I/We	, of
	being an appointed Proxy for
	a member/members of the above-named Company, hereby appointof
	the said member(s) at the (annual or extraordinary, as the case may be) general meeting of the
	Company, to be held on the day of
thereof.
Signed this day of	ΩŤ

This form is to be used in favour of/* against* the resolution. Unless otherwise instructed, the proxy will vote as he thinks fit.

Strike out whichever is not desired."

MANAGEMENT OF THE COMPANY - DIRECTORS

• The Board of Directors is responsible for the managing of the Company. 74.
• The Board shall elect a Chairman of the Board among its members. 75.

Special

Regulation amended by Special Resolutions dd 07/05/07

• The management of the Company is exercised by a Board of Directors of which the number of 76. members may range between three to seven. The Company may by a resolution requiring two third and the votes and share capital represented at the general meeting may decide to change the way in which the Company is managed and to increase or reduce the number of the members of the Board.
• The company shall have a nomination committee consisting of the Chairman of the Board of $777$ Directors and two members elected by the general meeting. The members elected by the Regulation general meeting shall be appointed for two years. The Chairman of the Board of Directors amended by shall act as the chairman of nomination committee. In connection with election of Directors Resolutions and members to the nomination committee, the nomination committee shall in connection dd 08/05/09 with the notice for the general meeting provide proposal for candidates for directorship for the general meeting. The nomination committee shall also present proposal for the remuneration to the Board of Directors.
  • The names of the first members of the Board shall be determined in writing by the subscribers 78. to the Memorandum of Association.
  • The remuneration of the Directors shall from time to time be determined by the Company in 79. general meeting. Such remuneration shall be deemed to accrue from day to day. The Directors may also be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Directors or any committee of the Directors or general meetings of the Company or in connection with the business of the Company.
  • The shareholding qualification for Directors may be fixed by the Company in general 80. meeting, and unless and until so fixed no qualification shall be required.
  • A director of the Company may be or become a director or other officer of, or otherwise 81. interested in, any Company promoted by the Company or in which the Company may be interested as a shareholder or otherwise, and no such director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other Company unless the Company otherwise directs.

BORROWING POWERS

The Directors may exercise all the powers of the Company to borrow money, to provide 82. guarantees and to charge or mortgage its undertaking, property and uncalled capital, or any part thereof, and to issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party or independently of such security.

POWERS AND DUTIES OF DIRECTORS

The business of the Company shall be managed by the Directors who may exercise all such 83. powers of the Company as are not, by the Law or by these Regulations, required to be exercised by the Company in general meeting, subject, nevertheless to these Regulations, to

12

the provisions of the Law and to such regulations, being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in general meeting but no regulation made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made.

• The Directors may from time to time and at any time by power of attorney appoint any 84. Company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney of attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Regulations) and for such period and subject to such conditions as they may think fit, and any such powers of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit and may also authorise any such attorney to delegate all or any of the powers, authorities and discretions vested in him.
• The Company may exercise the powers conferred upon the Company by section 36 of the Law 85 with regard to having an official seal for use abroad and such powers shall be vested in the Directors.
• A Director who is in any way, whether directly or indirectly, interested in a contract or 86. $(a)$ proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors in accordance with section 191 of the Law.
  • (b) A Director shall not vote in respect of any contract or proposed contract or arrangement in which he is interested and if he shall do so his vote shall not be counted nor shall he be counted in the quorum at any meeting of the Directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration, but none of these prohibitions shall apply to:
    • any arrangement for giving any Director any security or indemnity in respect of $(i)$ money lent by him to or obligations undertaken by him for the benefit of the Company: or
    • to any arrangement for the giving by the Company of any security to a third party $(ii)$ in respect of a debt or obligation of the Company for which the Director himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the deposit of a security; or
    • (iii) any contract by a Director to subscribe for or underwrite shares or debentures of the Company; or
    • (iv) any contract or arrangement with any other company in which he is interested only as an officer of the company or as holder of shares or other securities,

and these prohibitions may at any time be suspended or relaxed to any extent, and either generally or in respect of any particular contract, arrangement or transaction, by the Company in general meeting.

A Director may hold any other office or place of profit under the Company (other than $(c)$ the office of auditor) in conjunction with his office of director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no director or intending director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise; nor shall any such contract, or any contract or arrangement entered into by or on behalf of the Company in which any director is in any way interested, be liable to be avoided, nor shall any director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such director holding that office or of the fiduciary relation thereby established.

• (d) A Director, notwithstanding his interest, may be counted in the quorum present at any meeting whereat he or any other Director is appointed to hold any such office or place of profit under the Company or whereat the terms of any such appointment are arranged, and he may vote on any such appointment or arrangement other than his own appointment or the arrangement of the terms thereof.
• All cheques, promissory notes, drafts, bills of exchange, and other negotiable instruments and 87. all receipts for moneys paid to the Company, shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such manner as the Directors shall from time to time by resolution determine.
• The Directors shall cause minutes to be made in books provided for this purpose: 88.
  • (a) of all appointments of officers made by the Directors;
  • (b) of the names of the Directors present at each meeting of the Directors and of any committee of the Directors;
  • (c) of all resolutions and proceedings at all meetings of the Company, and of the Directors, and of committees of Directors.

DISQUALIFICATION OF DIRECTORS

• The office of director shall be vacated if a Director-89
  • ceases to be a Director by virtue of section 176 of the Law; or $(a)$
  • becomes bankrupt or makes any arrangement or composition with his creditors $(b)$ generally; or
  • becomes prohibited from being a Director by reason of any order made under section $(c)$ 180 of the Law; or
  • becomes of unsound mind; or $(d)$
  • resigns his office by notice in writing to the Company; or $(f)$
  • shall for more than six months have been absent without permission of the directors $(g)$ from meetings of the Board of Directors held during that period; or
  • comes to the end of his term of office. $(h)$
• A Director shall serve for a term of two years. The period of office is calculated from the $90.$ election unless otherwise provided for. It shall expire at the conclusion of the ordinary general

meeting in the year which the period of office expires. If a Director terminates the directorship before the end of the period of office and there is no alternate member, the Board must arrange for the election of a new Director for the remainder of the period of office. In connection with a supplementary election, a shorter period of office may be set.

• A Director is eligible for re-election after the two-year period of office as director of the 91. Company.
• The Company may by ordinary resolution of the general meeting, of which special notice has 92. been given in accordance with section 136 of the Law, remove any Director before the expiration of his period of office notwithstanding anything in these Regulations or in any agreement between the Company and such Director. Such removal shall be without prejudice to any claim such Director may have for damages for breach of any contract of service between him and the Company.
• The Company may by ordinary resolution of the general meeting appoint another person in 93 place of a Director removed from office under the immediately preceding regulation, and without prejudice to the powers of the Directors under Regulation 102 the Company in general meeting may appoint any person to be a Director either to fill a casual vacancy or as an additional Director.

PROCEEDINGS OF DIRECTORS

• The Directors may meet together for the despatch of business, adjourn, and otherwise regulate 94. their meetings, as they think fit.
• Questions arising at any meeting shall be determined by a majority of votes of the Directors 95. present provided a quorum is present. In case of equality of votes, the Chairman shall have a second or casting vote.
• The Chairman of the Board shall ensure that relevant matters which fall under the Board are 96. dealt with. A Director may at any time demand that a meeting of the Directors is summoned.
• The quorum necessary for the transaction of the business of the Directors may be fixed by the 97. Directors and unless so fixed shall be two.
• The Chairman of the Board is the chairman of the meeting. If at any meeting the Chairman is 98. not present within fifteen minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting.
• The Directors may delegate any of their powers to a committee or committees consisting of 99. such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors, as to its powers, constitution, proceedings, quorum or otherwise.
• 1. A committee may elect a chairman of its meetings; if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairman of the meeting.
• 1. Subject to any regulations imposed on it by the Directors, a committee may meet and adjourn as it thinks proper and questions arising at any meeting shall be determined by a majority of

votes of the members present and in the case of equality of votes, the chairman shall have a second or casting vote.

• 1. All acts done by any meeting of the Directors or of a committee of Directors or by any person acting as a director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director.
• A resolution in writing signed or approved by letter, facsimile or electronic mail by 103. (a) each Director or his alternate shall be as valid and effectual as if it had been passed at a meeting of the Directors duly convened and held and when signed may consist of several documents each signed by one or more of the persons aforesaid, provided that the Chairman of the Board finds that the matter can be adequately handled by such procedure
  • For the purpose of these Regulations the contemporaneous linking together by $(b)$ telephone or other means of communications of a number of the Directors not less than a quorum, whether or not any one or more of the Directors is out of Cyprus, shall be deemed to constitute a meeting of the Directors and all the provisions in these Regulations as to meetings of the Directors shall apply to such meetings so long as to the following conditions are met:
    • the Chairman of the Board finds that the matter may be adequately handled $(i)$ without a physical meeting
    • all the Directors for the time being entitled to receive notice of a meeting of $(ii)$ theDirectors shall be entitled to notice of a meeting by telephone or other means of communication and to be linked by telephone or such other means for the purposes of such meeting. Notice of any such meeting may be given by telephone or other means of communication;
    • each of the Directors taking part in the meeting must be able to hear each of the $(iii)$ other Directors taking part at the commencement of the meeting;

and minutes of the proceedings at any such meeting shall subsequently be circulated among the participating Directors for signing, and be sufficient evidence of such proceedings and of the observance of all necessary formalities.

ALTERNATE DIRECTORS

• 1. The general meeting may elect one or several alternate director.
• 1. An alternate director shall be subject in all respects to the terms and conditions existing with reference to the other Directors, and shall be entitled to receive notices of all meetings of the Directors and to attend, speak and vote at any such meeting at which the Director the alternate director is replacing is not present.
• 1. A Director shall not be liable for the acts and defaults of any alternate director.
• 1. An alternate director shall not be taken into account in reckoning the minimum or maximum number of Directors allowed for the time being but he shall be counted for the purpose of

reckoning whether a quorum is present at any meeting of the Directors attended by him at which he is entitled to vote.

MANAGING DIRECTOR

• 1. The Directors may from time to time appoint to the office of managing director for such period and on such terms as they think fit, and, subject to the terms of any agreement entered into in any particular case, may revoke such appointment.
• 1. A managing director shall receive such remuneration (whether by way of salary, commission or participation in profits, or partly in one way and partly in another) as the Directors may determine.
• 1. The Directors may entrust to and confer upon a managing director any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit, and either collaterally with or to the exclusion of their own powers and may from time to time revoke, withdraw, alter or vary all or any of such powers.

SECRETARY

• 1. The Secretary shall be appointed by the Directors for such term, at such remuneration and upon such conditions as they may think fit; and any secretary so appointed may be removed by them.
• 1. A provision of the Law or these Regulations requiring or authorising a thing to be done by or to a director and the secretary shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, the secretary or assistant secretary.

PUBLIC OFFERS ON SHARES

1. This article shall lapse when regulation concerning mandatory offer on shares which is applicable to the Company has entered into force.

Regulation deleted by Special Resolutions dd 11/05/10

• 113.1 A person that directly or indirectly acquires shares which implies that the percentage of the capital interest or voting rights held by such person exceeds a threshold of fourty percent, such person (the "Offeror"), is required to make an unconditional public offer (the "Offer") at a fair price for the purpose of acquiring all issued and outstanding shares in the share capital of the Company, as well as all issued and outstanding instruments giving rights to shares in the share capital of the Company or voting rights.
  • 113.2 The Offer shall insure the equality of treatment of holders of shares and of holders of instruments giving right to shares in the share capital of the Company or voting rights.
  • 113.3 The Offer price shall be at least as high as the highest price paid by the Offeror for shares in the Company in the period 6 months prior to the date which the Offeror passed the fourty percent threshold. If it is clear that the fair price when the Offer obligation was activated is higher than the price referred to above, the Offer price shall be at least as high as the fair price.
  • 113.4 Offers for the purchase of the remaining shares in the Company shall be made without undue delay from the date of the acquisition of the shares which took the Offer's

ownership position above the fourty percent level and no later than 4 weeks after the date thereof.

• 113.5 If the Offeror, after the Offer obligation has arisen and before expiry of the period of the Offer, has paid or agreed to pay a higher price than the price reflected in the Offer, a new Offer shall be deemed to have been made with an Offer price equivalent to the higher price.

• 113.6 Settlement under the terms of the Offer shall be made in eash. An Offer may nonetheless give the Shareholders the right to accept any other form of settlement. The Offeror's settlement obligation shall be guaranteed by a bank or insurance institution which has been authorised to conduct business in Norway in accordance with the terms established by the Oslo Stock Exchange.

• 113.7 The Offeror may not, in making the Offer, differentiate the Offer between groups of or individual Shareholders.

• 113.8 The Offer shall include a time limit for the Shareholders to accept the Offer. The time limit shall not be shorter than 4 weeks and not longer than 6 weeks. Settlement shall take place as soon as possible and no later than 14 days after the expiry of the Offer period. The Offeror may make a new Offer prior to the expiry of the original Offer period. The Shareholders are, in such event, entitled to choose between the two Offers so made. If a new Offer is made, the period of acceptance of such Offer-shall be extended so that at least two weeks remain until its expiry when made.

• 113.9 The Offeror shall issue an Offer document which shall document the main terms of the Offer and provide correct and complete information about matters of importance in evaluating such Offer. The following information shall be specifically included in the Offer document:

  • The Offeror's name and address, type of organisation and organisation number if the Offeror is a legal entity other than individual person.
  • Information about parties with whom the Offeror is acting in concert including the $b$ basis for the consolidation thereof and any shareholder agreements relevant thereto.
  • The number of shares in the Company which, at the time the Offer is made, are $e$ owned by the Offeror or any person or entity acting in concert with the Offeror.
  • The Offer price, the time limit for settlement, the form of settlement and security $d$ provided for the Offeror's settlement obligations.
  • e The principles applying to the valuation of any asset Offered in settlement for the shares purchased under the Offer other than cash.
  • The time limit for accepting the Offer and how acceptance notice should be made. $\uparrow$
  • Information as to how the Offeror's purchase of the shares is to be financed. $\mathbf{F}$
  • Any special advantages or rights which are accorded by agreements with members of $h$ the management and governing bodies of the Company by the Offeror.
  • The content of any contact the Offeror has had with the management or governing $\frac{1}{4}$ bodies of the Company prior to the date the Offer was made.
  • The Offeror's purpose of taking over control of the Company and any plans for $\ddot{\dagger}$ further operation or reorganisation of the Company.
  • k The significance the implementation of the Offer will have in relation to the Company's employees, including legal, financial and work related effects; and
  • Legal and tax consequences of the Offer. $\perp$

• 113.10 The Offer document shall be signed by the Offeror.

• 113.11 When an Offer is made in accordance with the above, the Board shall issue a statement on the Offer which shall include information on the employee's views and other factors of significance for assessing whether the Offer should be accepted by the Shareholders or not. Information shall also be given about the views, if any, of the Board in their capacity as Shareholders.

THE SEAL

1. The Directors shall provide for the safe custody of the seal, which shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors in that behalf, and every instrument to which the seal shall be affixed shall be signed by a Director and shall be countersigned by the Secretary or by a second Director or by some other person appointed by the Directors for the purpose. In the case that the Company has one Sole Director every instrument to which the seal shall be affixed shall be signed by the Sole Director or the Secretary of the Company.

DIVIDENDS AND RESERVE

• 1. The Company may in general meeting by a simple majority vote declare dividends, but no dividend shall exceed the amount recommended by the Directors.
• 1. The Directors may from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company.
• 1. No dividend shall be paid otherwise than out of profits.
• 1. The Directors may, before recommending any dividend, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company be properly applied, and pending such application may, at the like discretion, either be employed in the business of the Company or be invested in such investments as the Directors may from time to time think fit. The Directors may also without placing the same to the reserve carry forward any profits which they may think prudent not to divide.
• 1. The Directors may deduct from any dividend payable to any member all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in relation to the shares of the Company.
• 1. Any general meeting declaring a dividend or bonus may direct payment of such dividend or bonus wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures or debenture stock of any other Company or in anyone or more of such ways, and the Directors shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient, and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to the Directors.
• 1. No dividend shall bear interest against the Company.

19

Regulation amended by Special Resolutions dd 07/05/07

FINANCIAL STATEMENTS

• 1. The Directors shall ensure that proper books of account are kept by the Company which are necessary for the preparation of financial statements in accordance with the provisions of the Law and which give a true and fair view of the state of the Company's affairs and explain its transactions.
• 1. The books of account shall be kept at the registered office of the Company, or, subject to section 141(3) of the Law, at such other place or places as the Directors think fit and shall always be open to the inspection of the Directors.
• 1. The Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of members not being Directors and no member (not being a director) shall have any right of inspecting any account or book or document of the Company except as conferred by statute or authorised by the Directors or by the Company in general meeting.
• 1. The Directors shall cause to be prepared and to be laid before the Company in general meeting within the time limits prescribed by the Law such documents as are referred to in section 152 $(1)$ of the Law.
• 1. Copies of the documents referred to in section 152 (1) of the Law shall, not less than twenty-Regulation one days before the date of the general meeting be sent to every member of and every holder amended by Special of debentures of the Company. Resolutions dd 10/05/11

CAPITALISATION OF PROFITS

1. The Company in general meeting may upon the recommendation of the Directors resolve that it is desirable to capitalize any part of the amount for the time being standing to the credit of any of the Company's reserve accounts or to the credit of the profit and loss account or otherwise available for distribution, and accordingly that such sum be set free for distribution, amongst the members who would have been entitled thereto if distributed by way of dividend and in the same proportions on condition that the same be not paid in cash but be applied either in or towards paying up any amounts for the time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures if the Company to be allotted, distributed and credited as fully paid up to and amongst such members in the proportion aforesaid, or partly in the one way and partly in the other, and the Directors shall give effect to such resolution.

Provided that a share premium account and a capital redemption reserve fund may, for the purposes of this regulation, only be applied in the paying up of unissued shares to be issued to members of the Company as fully paid bonus shares.

1. Whenever such a resolution as aforesaid shall have been passed the Directors shall make all appropriations and applications of the undivided profits resolved to be capitalized thereby, and all allotments and issues of fully paid shares or debentures, if any, and generally shall do all acts and things required to give effect thereto, with full power to the Directors to make such provisions by the issue of fractional certificates or by payment in cash or otherwise as they think fit for the case of shares or debentures becoming distributable in fractions and also to authorise any person to enter on behalf of all the members entitled thereto into an agreement with the Company providing for the allotment to them respectively, credited as fully paid up, of any further shares or debentures to which they may be entitled upon such capitalisation, or (as the case may require) for the payment up by the Company on their behalf, by the application thereto of their respective proportions of the profits resolved to be capitalised, of the amounts or any part of the amounts remaining unpaid on their existing shares, and any agreement made under such authority shall be effective and binding on all such members.

AUDIT

1. The auditors shall be appointed by the general meeting and their duties regulated in accordance with sections 153 to 156 (both inclusive) of the Law.

NOTICES

• 1. A notice may be given by the Company to any member either personally or by sending it by post or by facsimile to him or to his registered address, or (if he has no address in Cyprus) to the address, if any, supplied by him to the Company for the giving of notice to him. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the notice, at the expiration of 24 hours after the letter containing the same is posted, and in case of notice by facsimile or electronic mail, service shall be deemed to be effected at the time of dispatch subject to there being a transmission confirmation.
• 1. Notice of every general meeting shall be given in any manner herein before authorised to:
  • $(a)$ every member of the Company
  • every person upon whom the ownership of a share devolves by reason of his being a $(b)$ legal personal representative or a trustee in bankruptcy of a member where the member but for his death or bankruptcy would be entitled to receive notice of the meeting; and
  • the auditor for the time being of the Company. $(c)$

No other person shall be entitled to receive notices of general meetings.

WINDING UP

1. If the Company shall be wound up the liquidator may, with the sanction aresolution approved by two-thirds of the votes and share capital represented at the general meeting, divide amongst the members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no member shall be compelled to accept any shares or other securities whereon there is any liability.

INDEMNITY

1. Every Director, the auditor, Secretary, or other officer for the time being of the Company shall be indemnified out of the assets of the Company against any losses or liabilities which he may sustain or incur in or about the execution of his duties including liability incurred by him in

defending any proceedings whether civil or criminal in which judgment is given in his favour or in which he is acquitted or in connection with any application under section 383 of the Law in which relief is granted to him by the Court and no Director or other such officer of the Company shall be liable for any loss, damage or misfortune which may happen to or be incurred by the Company in the execution of the duties of his office or in relation thereto. But this clause shall only have effect in so far as its provisions are not avoided by section 197 of the Law.

NAMES, ADDRESSES AND DESCRIPTION OF SUBSCRIBERS

HEMEN HOLDING LIMITED $\overline{1}$ . Holding Company Meliza Court, 4th Floor, 229 Arch. Makarios III Ave. 3105 Limassol, Cyprus

C87804

$\overline{2}$ . STELIOS SAVVIDES Accountant Meliza Court, 4th Floor, 229 Arch. Makarios III Ave, 3105 Limassol, Cyprus

C87804

EVA AGATHANGELOU $\overline{3}$ . Private Employee Meliza Court, 4th Floor 229 Arch. Makarios III Ave, 3105 Limassol, Cyprus

I.D. Nr. 636341

$\overline{4}$ . DIMITRIS HANNAS General Manager Meliza Court, 4th Floor 229 Arch. Makarios III Ave, 3105 Limassol, Cyprus

I.D. Nr. 412888

COSTAS PALLARIS 5. General Manager Meliza Court, 4th Floor 229 Arch. Makarios III Ave, 3105 Limassol, Cyprus

I.D. Nr. 490431

NAMES, ADDRESSES AND DESCRIPTION OF SUBSCRIBERS ELEFTHERIOS MONTANIOS 6. Advocate Diagoras House 16 P. Catelaris Street 1097 Nicosia, Cyprus I.D. Nr. 341786 $7.$ ADAM MONTANIOS Advocate Diagoras House 16 P. Catelaris Street 1097 Nicosia, Cyprus I.D. Nr. 490148

Dated this 27 day of October 2006

Witness to the above signatures:

HELEN GEORGIADES Legal Executive Diagoras House 16 P. Catelaris Street 1097 Nicosia, Cyprus

CERTIFICATE pursuant to section 11 (5) (a) of the Advocates Law

I certify that I am registered in the Roll of Practising Advocates and that the above Memorandum and Articles of Association were drawn up by me.

ADAM MONTANIOS Diagoras House 16 P. Catelaris Street 1097 Nicosia – Cyprus

Company No. 186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

ORDINARY RESOLUTION APPROVED BY ALL THE MEMBERS OF THE COMPANY

All the Members of the above Company entitled to receive notice of and to attend and vote at its General Meetings have been present, personally or through a proxy, to the Extraordinary General Meeting of the Company that was held on 30 November 2006 at 18.00 hrs and unanimously approved the following Ordinary Resolution:

"ORDINARY RESOLUTION

THAT the authorised share capital of the Company be increased from US$4.000.000 divided into 200.000.000 ordinary shares of US$0,02 cents each to US$5.000.000 divided into 250.000.000 ordinary shares of US$0,02 cents each, by the creation of 50.000.000 additional ordinary shares of US$0,02 cents each, such new shares to rank pari passu in all respects with the existing shares in the capital of the Company."

DATED this 1st day of December 2006.

AM MONTANIOS Company Secretary

COARTALT.4TR 2

Company No. 186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

SPECIAL RESOLUTION APPROVED BY ALL THE MEMBERS OF THE COMPANY

All the Members of the above Company entitled to receive notice of and to attend and vote at its General Meetings have been present, personally or through a proxy, to the Extraordinary General Meeting of the Company that was held on 30 November 2006 at 18.00 hrs and unanimously approved the following Special Resolution:

SPECIAL RESOLUTION

"THAT the Articles of Association of the Company be and is hereby amended by the addition of the following new Regulations after the existing Regulation 40:

"COMPULSORY TRANSFER OF SHARES

• If a shareholder, directly or via a subsidiary or subsidiaries, acquires shares in the Company with $40A$ the result that its holding in the Company will represent more than 90 per cent of the total number of issued shares in the Company as well as more than 90 per cent of the total voting rights attached to such Company shares ("the Special Majority Shareholder"), then such Special Majority Shareholder would have the right to effect a compulsory acquisition for cash of any Company shares not already owned by such Special Majority Shareholder ("the Remaining Shares").
• If the Special Majority Shareholder does not exercise the right mentioned in Regulation 40A $40B$ above, anyone of the holders of the Remaining Shares shall be entitled to demand from the Special Majority Shareholders to effect such a compulsory acquisition of the Remaining Shares.
• The Special Majority Shareholder must offer the holders of the Remaining Shares a specific price $40C$ per share for the purchase of each Remaining Share equivalent to a fair price. The offer must be made in writing to all holders of a Remaining Share with a known address and a deadline must be fixed within which such individual shareholder may make objections to or reject the offer.
• If no such objection is received by the Company before the expiry of the deadline, the minority $40D$ shareholder shall be regarded as having accepted the offer. The deadline cannot be fixed for a period of less than two months from the notice. In the written communication and in the notices, the shareholders must be informed of the deadline and of the consequences of any failure to meet it.

COARTALT.4TR 1

• Should any holder of Remaining Shares not accept the offered price, such minority shareholder 40E may, within a specified deadline not to be of less than two months' duration, request that the price for such sale be set by arbitration. The Special Majority Shareholder and the collective of shareholders which are parties to the arbitration shall each appoint one arbitrator and these two arbitrators shall appoint the third arbitrator who shall be the chairman of the arbitration tribunal. The appointed arbitrators of the parties shall possess experience from valuation of shipping companies. The chairman shall be a Cypriot professional that possesses satisfactory knowledge and experience concerning valuations. The valuation of the arbitration tribunal is final.
• The cost of such price determination by arbitration would, as a general rule, be for the account of $40F$ the Special Majority Shareholder. The arbitration tribunal may decide that the costs shall be bore in full or part by the minority shareholders that have requested for arbitration if the tribunal finds that the offer reflected a fair price and thus should have been accepted."

DATED this 1st day of December 2006.

AM MONTANIOS Company Secretary

COARTALT.4TR 1

Company No.: C186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

SPECIAL RESOLUTION APPROVED BY THE MEMBERS OF THE COMPANY

The following Special Resolution was passed at the Extraordinary General Meeting of the Company that was duly held in Limassol, Cyprus on 7 May 2007 at 17.30 hrs:

SPECIAL RESOLUTION

"THAT the Articles of Association of the Company be and hereby altered, pursuant to the provisions of Section 12 of the Companies Law, Cap. 113, as follows:

Article 11 to be amended from: $(a)$

"The Company may by a resolution requiring two thirds of the votes and share capital represented at the general meeting decide to reduce its share capital, any capital redemption reserve fund or any share premium account in any manner and with, and subject to, any incident authorised, and consent required, by law."

to the following wording

"The Company may by a special resolution requiring three fourths of the votes and share capital represented at the general meeting decide to reduce its share capital, any capital redemption reserve fund or any share premium account in any manner and with, and subject to, any incident authorised, and consent required, by law."

$(b)$ Article 18 to be amended from:

"The Company may acquire, for valuable consideration, shares in its own share capital if and in so far as the general meeting, by a resolution requiring two thirds of the votes and share capital represented at the general meeting, has authorized the Board to acquire such shares. The authorization may be given for no more than eighteen months on each occasion, notwithstanding the further statutory provisions.'

to the following wording

"The Company may acquire, for valuable consideration, shares in its own share capital if and in so far as the general meeting, by a special resolution requiring three fourths of the votes and share capital represented at the general meeting, has authorized the Board to acquire such shares. The authorization may be given for no more than eighteen months on each occasion, notwithstanding the further statutory provisions."

$\dots/2$

Article 61 to be amended from $(c)$

"Decisions of the general meeting require a simple majority of the votes unless otherwise is laid down in these Articles. Any change of provisions of these Articles requires approval of two-thirds of the votes and share capital represented at the general meeting"

to the following wording

"Decisions of the general meeting require a simple majority of three-fourths of the votes unless otherwise is laid down in these Articles. Any change of provisions of these Articles requires a special resolution and approval of three fourths of the votes and share capital represented at the general meeting"

Article 75 to be amended from $(d)$

"The Board shall elect a Chairman of the Board among its members"

to the following wording

"The Chairman of the Board of Directors shall be elected by the General Meeting".

Article 49 to be amended from $(e)$

"The Company must hold a general meeting within six months after the close of each financial year provided that so long as the Company holds its first annual general meeting within eighteen months of its incorporation it need not hold one in the year of incorporation. The annual general meeting shall be held at the place of establishment of the Company, and the notice convening the meeting shall inform the Shareholders accordingly"

to the following wording

"The Company must hold a general meeting within six months after the close of each financial year provided that so long as the Company holds its first annual general meeting within eighteen months of its incorporation it need not hold one in the year of incorporation. All general meetings shall be conducted in the English language. The time and place of any general meeting shall be within the EU/EEA as decided by the Board and notified to the Shareholders"

$(f)$ Article 114 to be amended from

"The Directors shall provide for the safe custody of the seal, which shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors in that behalf, and every instrument to which the seal shall be affixed shall be signed by a Director and shall be countersigned by the Secretary or by a second Director or by some other person appointed by the Directors for the purpose. In the case that the Company has one Sole Director every instrument to which the seal shall be affixed shall be signed by the Sole Director or the Secretary of the Company."

to the following wording

$.../3$

$-2-$

"The Directors shall provide for the safe custody of the seal, which shall only he used by the authority of the Directors or of a committee of the Directors authorised by the Directors in that behalf, and every instrument to which the seal shall be affixed shall be signed by a Director or the Secretary or Assistant Secretary of the Company."

$-3-$

DATED this 8th day of May 2007.

ADAM MONTANIOS Company Secretary V

AVM/VK/DESS/Special Resolutions May 2007

Company No.: C186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

SPECIAL RESOLUTION DATED 7 MAY 2008

The Members of the above Company who attended the Extraordinary General Meeting of the Company that was held in Limassol, Cyprus on 7 May 2008 approved the following Special Resolution pursuant to the Articles of Association of the Company and pursuant to the provisions of Section 64 of the Companies Laws Cap. 113:-

"SPECIAL RESOLUTION

IT IS HEREBY RESOLVED

• THAT the Company's share capital be and is hereby reduced from an authorised capital of $\mathbf{1}$ . U.S.$5.000.000 divided into 250.000.000 ordinary shares of U.S.$0,02 each to U.S.$4.960.000,14 divided into 248.000.007 shares of U.S.$0,02 each by the cancellation of 1.999.993 ordinary issued shares of U.S.$0,02 each which are currently held by the Company itself.
• THAT forthwith upon the abovementioned reduction taking effect the authorised capital of the $2.$ Company be increased to the formal capital of U.S.$5,000.000 divided into 250,000.000 shares of U.S.$0,02 each."

DATED the 7 May 2008.

DAM MONTANIOS Secretary of Deep Sea Supply Plc

Company No.: 186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

SPECIAL RESOLUTION APPROVED BY THE MEMBERS OF THE COMPANY

The following Special Resolution was passed at the Extraordinary General Meeting of the Company that was duly held in Limassol, Cyprus on 8 May 2009 at 10.00 hrs:

SPECIAL RESOLUTION

"THAT Regulation 77 of the Articles of Association of the Company be altered, pursuant to the provisions of Section 12 of the Companies Law, Cap.113, by the deletion of the phrase:

"The Chairman of the Board of Directors shall act as the chairman of the nomination committee"

and its replacement with the phrase:

"The Chairman of the Nomination Committee shall be elected by the three members of the Nomination Committee and shall not be the Chairman of the Board of Directors".

DATED this 9th day of May 2009.

ÁDAM MONTANIOS Company Secretary

AVM/VK/DccpSca-Sp.Rcs.(amcndment of Arts.08.05.2009).cngl

Company No.: HE186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

SPECIAL RESOLUTION DATED 11 MAY 2010

The Members of the above Company who attended the Extraordinary General Meeting of the Company that was held in Limassol, Cyprus on 11 May 2010 approved the following Special Resolution pursuant to the Articles of Association of the Company and pursuant to the provisions of Section 64 of the Companies Law, Cap. 113:-

"SPECIAL RESOLUTION

IT IS HEREBY RESOLVED

• THAT the Company's share capital be and is hereby reduced from an authorised capital of 1. US$5,000,000 divided into 250,000.000 ordinary shares of US$0,02 each to US$4.937.980 divided into 246.899.000 shares of US$0,02 each by the cancellation of 3.101.000 ordinary issued shares of US$0,02 each which are currently held by Nordea Bank Norder ASA.
• THAT forthwith upon the abovementioned reduction taking effect the authorised capital of $2.$ the Company be increased to the formal capital of US$5.000.000 divided into 250.000.000 shares of US$0,02 each."

DATED the 11 May 2010.

DAM MONTANIOS Secretary of DEEP SEA SUPPLY PLC

ES/SY/Corporate Dept/5538/Special Res. (en)

Company No. C186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

SPECIAL RESOLUTION APPROVED BY THE MEMBERS OF THE COMPANY

The following Special Resolution was passed at the Extraordinary General Meeting of the Company that was duly held in Limassol, Cyprus on 11 May 2010 at 10.00 hrs:

SPECIAL RESOLUTION

"THAT the Articles of Association of the Company be altered, pursuant to the provisions of Section 12 of the Companies Law, Cap.113, as amended, by the deletion of the Regulation 113 of the Articles.

THAT the remaining Regulations of the Articles of Association be renumbered accordingly."

DATED this 12th day of May 2010

ADAM MONTANIOS Combany Secretary

Company No.: C186838

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

SPECIAL RESOLUTION APPROVED BY THE MEMBERS OF THE COMPANY

The following Special Resolution was passed at the Extraordinary General Meeting of the Company that was duly held in Limassol, Cyprus on 10 May 2011 at 13.00 hrs:

SPECIAL RESOLUTION

"THAT the Articles of Association of the Company be and are hereby altered (pursuant to the provisions of Section 12 of the Companies Law, Cap. 113, as amended) by the insertion of the sentence "or be placed in the Company's website" at the end of Regulation 126 so that the Regulation would read as follows:

"126. Copies of the documents referred to in section 152 (1) of the Law shall, not less than twenty-one days before the date of the general meeting be sent to every member of and every holder of debentures of the Company or be placed in the Company's website".

DATED this 11th day of May 2011.

DAM MONTANIOS ompany Secretary

AVM/VK/DeepSea-Sp,Res,(amendment of Arts, 10.05.2011).engl

THE COMPANIES LAW, CAP. 113

DEEP SEA SUPPLY PLC

ORDINARY RESOLUTION APPROVED BY THE GENERAL MEETING OF THE COMPANY

The Members of the above Company who attended the Extraordinary General Meeting of the Company which was held in Nicosia, Cyprus on 17 June 2014 at 11.00 a.m. approved the following resolution as an Ordinary Resolution pursuant to the Articles of Association of the Company:

ORDINARY RESOLUTION

"RESOLVED THAT the authorised share capital of the Company be increased from USD5.000.000 divided into 250.000.000 ordinary shares of USD0,02 each to USD7.500.000 divided into 375.000.000 ordinary shares of USD0,02 each by the creation of 125.000.000 additional shares of USD0,02 each, such new shares to rank pari passu in all respects with the existing shares in the capital of the Company."

DATED the 17th day of June 2014

ADAM MONTANIOS

Company Secretary

BOARD OF DIRECTORS' REPORT TO THE SHARE,HOLDERS OF DEEP SEA SUPPLY PLC

REGARDING

MERGER BETWEEN DEEP SEA SUPPLY PLC (AS TRANSFERRING ENTITÐ AND SOLSHIP SUB AS (AS SURVIVING ENTITÐ

1 INTRODUCTION

The board of directors (the "Board") of Deep Sea Supply Plc, a public limited company registered under the laws of Cyprus ("DESSC") has, together with the board of directors of Solship Sub AS, a private limited company registered under the laws of Norway ("Solship Sub"), prepared a joint merger plan dated 24March20l7 (the "Merger Plan") with a proposal for a merger (the "Merger") between DESSC (as the transferring entity) and Solship Sub (as the surviving entity).

The Merger entails that all assets, rights and liabilities of DESSC will be transferred to Solship Sub in exchange for the issue of shares in Solship Sub to DESSC's shareholders. Simultaneously with the Merger, the surviving entity Solship Sub will be merged with Solship Invest 3 AS, a wholly owned subsidiary of Solstad Offshore ASA ("SOFF'), in exchange for the issue of shares in SOFF to Solship Sub's shareholders (i.e. the former DESSC shareholders) (the "Second Merger"). Accordingly, the end result of the Merger and the Second Merger is that the shareholders of DESSC will become shareholders in SOFF. After completion of the Merger and the Second Merger, DESSC will be delisted and dissolved, whereas SOFF will continue its current listing on the Oslo Stock Exchange,

Pursuant to section 201(N) of the Cyprus Companies Law, Cap 113 (the'oCompanies Law"), the Board has prepared this report to the shareholders of DESSC, explaining and justifying the legal and economic aspects of the Merger and explaining the implications of the Merger for DESSC's shareholders, creditors and employees. The report will be made available to the shareholders and the employees not less than one month before the date of the general meeting where shareholders are invited to vote on the proposed Merger.

The Board believes that the Merger will be beneficial to DESSC's shareholders, and thus recornmends that the shareholders approve the Merger.

2 BACKGROUND AI\D RATIONALE FOR THE MERGER

DESSC owns and operates a fleet of 37 vessels providing services in various parts of the offshore industry. The fleet consists of 25 platform supply vessels (PSV) and 12 anchor handling tug supply vessels (AHTS). DESSC is listed on Oslo Stock Exchange under the ticker'DESSC'. The DESSC group currently has less than 500 employees both offshore and onshore.

Solship Sub is a recently incorporated wholly owned subsidiary of Solship Invest 3 AS ("Solship Invest 3"), which again is a recently incorporated wholly owned subsidiary of Solstad Ofßhore ASA ("SOFF"). SOFF operates within the same business area as DESSC

and owns and operates 26 CSVs (incl. 1 Derrick Lay Barge (DLB)), 16 AHTSs and 19 PSVs SOFF is listed on Oslo Stock Exchange under the ticker 'SOFF'. The SOFF goup currently has approx. 1500 employees both offshore and onshore.

During the last two years, the conditions in the market for offshore service vessels have deteriorated due to the fall in oil prices. The expectations of the level of activity in the industry for the near future are characteized by great uncertainty. The exploration and developing activity in the oil and gas industry specifically has been significantly reduced. In particular, the market for PSVs and AHTSs has experienced a surplus in capacity. DESSC's operations have been severely affected by the downturn and uncertainty in the market.

In September 2016, DESSC completed an amendment to its loan agreements, including amendments to its financial covenants and down payment schedules. Such amendments are currently valid until 3l March 2018. However, DESSC is currently working on refinancing most of its loan agreements which, among other things, involves an extension of maturity dates and reduced amortisation.

On 5 February 2017, Farstad Shipping ASA ('FAR"), Aker Capital AS ("Aker"), Hemen Holding Limited ("Hemen"), FAR's largest lenders (the "Lenders"), a major part of FAR's bondholders (the "Bondholders"), as well as F-Shiplease AS signed an extensive and fully financed restructuring agreement (the "Restructuring Agreement") for FAR and several of its subsidiary companies (the "FAR Restructuring"). The FAR Restructuring was completed 9 March 2017.In connection with the FAR Restructuring, Aker, Hemon, the Lenders and the Bondholders as well as the main shareholders of SOFF and FAR also agreed to work for a merger between SOFF, FAR and DESSC after the completion of FAR Restructuring (the "Combination").

The boards of directors of DESSC, SOFF and FAR are of the opinion that a consolidation in the industry is required. After concluding the Restructuring Agreement, the boards of directors of the mentioned companies have discussed the possibilities for a merger of the operations of the three companies and have concluded that such merger will be advantageous for all companies. The Combination will result in the establishment of a world leading OSV company, with a fleet of totally 154 vessels. The merged group will operate a fleet consisting of 33 CSV, 66 PSV and 55 AHTS vessels.

Formally, the Combination will be completed by three separate mergers that are mutually dependent upon one another:

• 1. The Merger between DESSC and Solship Sub,
• 1. the Second Merger of Solship Sub and Solship Invest 3 with settlement in shares in SOFF (together with the Merger, the "Deep Sea Supply Merger"), and
• 1. a merger of FAR and Solship lnvest 2 AS with settlement in SOFF shares (the "Farstad Merger").

The Deep Sea Supply Merger is governed by the Merger Plan and a separate merger plan dated 24March20l7 for the Second Merger, while the Farstad Merger is governed by a separate merger plan dated 24March2017 between the companies involved in the Farstad Merger. The above mentioned mergers will be mutually dependent upon each other, so that the Deep Sea Supply Merger may only be completed if the Farstad Merger is completed in parallel.

This report is issued in relation to the Merger (item 1 above).

3 LEGAL ASPECTS OF THE MERGER

3.1 Company law

The Merger will be carried out as a cross-border merger in accordance with the cross-border merger rules set out in section 201 (I-X) of the Companies Law and corresponding legislation under Norwegian law. The Merger constitutes a'merger' pursuant to letter (a) of the definition of merger in the Companies Law section 201 (f.

Following execution of the Merger Plan, DESSC and Solship Sub shall as soon as possible call for general meetings to be held in their respective companies in order to approve the Merger. The general meetings of DESSC and Solship Sub are scheduled to be held on or about 25 April 2017.

No later than one month before DESSC's general meeting, the shareholders of DESSC shall be informed about the Merger by publication of the Merger Plan and related documentation (including this report) on the company's web page. The documents shall remain accessible on the web page for no less than one month after the general meeting has been held. Further, the Merger Plan and related documents shall be registered at the Cyprus Registrar of Companies prior to the general meeting.

The affirmative vote of at least 75Vo of the shares and votes represented in DESSC's general meeting is required to approve the Merger from DESSC's side. The corresponding requirement at Solship Sub's general meeting is 2/3 majority.

As soon as possible after the approval of the Merger by the general meetings of DESSC and Solship Sub, DESSC will apply for a pre-merger certificate to be issued by the District Court of Limassol confirming that all preparatory actions and formalities required to complete the Merger have been made. The Limassol Court will issue the pre-merger certificate once the Court finds that the procedures referred to in section 201(L) to 201(P) of the Companies Law have been complied with.

For Norwegian company law purposes, a creditor notice period of 6 weeks will commence at the date of the registration of the Merger in the Norwegian Register of Business Enterprises. After the expiry of the creditor notice period, and provided that (i) any creditor objections have been clarified and resolved, (iÐ all conditions precedent for the Merger are either fulfilled or waived, (iii) a merger certificate has been issued by the Norwegian Register of Business Enterprises and (iv) the above-mentioned pre-merger certificate has been issued by the District Court of Limassol, Solship Sub will notifu the Norwegian Register of Business Enterprises that the Merger shall be implemented. From a company law perspective, the Merger becomes effective when it is implemented by the Norwegian Register of Business Enterprises. It is currently anticipated that this will occur within June2017. The Norwegian Register of Business Enterprises shall inform the relevant Cypriot authorities about the implementation of the Merger once it has been registered in Norway.

DESSC has issued 10,000,000 independent subscription rights (warrants) in accordance with an agreement dated 2l July 2016. The warrants give its holder the right to subscribe for a corresponding number of shares in DESSC at NOK 1.24 per share and may be exercised at any time within three years of the issuance date. Unless exercised prior to completion of the Merger, the warrants will in accordance with the warrant agreement be converted into warrants in Solship Sub upon completion of the Merger, and immediately thereafter be converted into warrants in SOFF upon completion of the Second Merger. The number of warrants and the subscription price shall be adjusted in accordance with the agreed exchange ratio between DESSC and SOFF, but otherwise remain unaltered.

Other than the warrants described above, there are no outstanding warrants, subscription right shares or convertible shares outstanding in DESSC, and no shareholders of DESSC enjoy any special rights. Further, no special rights or benefits will accrue to supervisory or regulatory bodies, the board of directors or the general manager of DESSC or the board of directors of Solship Sub in connection with the Merger. Independent experts will receive remuneration for the preparation of expert statement(s), but will not enjoy any special rights or benefits as a result of the Merger.

3.2 Tax and accounting law

The Merger will be carried out as a tax-neutral merger. Tax positions related to assets, rights and obligations of DESSC located within Norwegian tax jurisdiction prior to the Merger will be continued following implementation of the Merger. Further, tax positions related to shares in DESSC will for Norwegian shareholders will be divided on the shares issued in Solship Sub as consideration in the Merger. Finally, the Merger falls within section 30 (a)(i) of the Cyprus Income Tax Law and will thus not have any tax implications in Cyprus.

For accounting purposes, the Merger shall be deemed to have been implemented as of the date when the Merger is registered as completed in the Norwegian Register of Business Enterprises. All transactions, costs and revenue related to the assets, rights and obligations which are transferred under the Merger, shall from this time be assigned to Solship Sub. The Merger is for accounting purposes completed as a transaction. Thus the transferred assets, rights and obligations are recorded in the opening balance of Solship Sub at its actual (true) value in accordance with the acquisition method.

3 ECONOMIC ASPECTS OF THE MERGER

In the Merger, all the assets, rights and obligations of DESSC will be transferred in whole to Solship Sub. As consideration for the Merger the shareholders of DESSC will receive I share in Solship Sub for every share they hold in DESSC. The 1:1 exchange ratio in the Merger is based on the fact that Solship Sub prior to Merger will be an empty company without any assets or capital (due to the above-mentioned reduction in capital completed immediately prior to the Merger), meaning that the implied value of Solship Sub immediately following implementation of the Merger is identical to the implied value of DESSC prior to the Merger.

In the Second Merger, all the assets, rights and obligations of Solship Sub will be transferred in whole to Solship Invest 3. As consideration for the Second Merger, the shareholders of Solship Sub (who are former DESSC shareholders) will receive 0J052631 shares in SOFF

for every share they hold in Solship Sub. These consideration shares will be made available through a share issue in SOFF, and Solship Invest 3 will issue a receivable directly to SOFF to compensate for the issue of these shares at the time of registration of the completion of the Second Merger. The nominal amount of the receivable issued by Solship lnvest 3 to SOFF will correspond to the aggregate nominal amount of the merger consideration shares issued by SOFF.

The consideration shares issued in the Merger and the Second Merger is based on an agreed pre-merger share value NOK 131578947368421 per DESSC share and NOK 12.50 per SOFF share, so that the actual exchange ratio in the Deep Sea Supply Merger is 1.31578947368421:12.50. The share values and exchange ratio has been negotiated by independent parties and is therefore considered to represent fair market value for the respective shares. The Board has obtained a statement from Swedbank confirming that the exchange ratio is fair and reasonably justified.

Reference is made to the joint expert statement dated 24March20l7 by FGH Revisjon AS for further details.

4 IMPLICATIONS FOR EMPLOYEES

DESSC has no employees.

5 IMPLICATIONS FOR CREDITORS

As aresult of the Merger, the creditors of DESSC will become creditors of Solship Sub. Immediately thereafter, as a result of the Second Merger, the same creditors will become creditors of Solship Invest 3. Neither Solship Sub nor Solship Invest 3 will have any existing financial creditors prior to completion of the Merger and the Second Merger.

6 IMPLICATIONS FOR SHAREHOLDERS

At the implementation of the Merger, the assets, rights and obligations of DESSC will be transferred in whole to Solship Sub, following which DESSC will be dissolved. As settlement for the Merger, the shareholders of DESSC will receive 1 share in Solship Sub for every share they hold in DESSC. Immediately prior the Merger, a reduction of the share capital in Solship Sub from NOK 30,000 to NOK 0 will be carried out in order to ensure that only former shareholders of DESSC will be shareholders of Solship Sub as a result of the Merger. However, as noted above, the Second Merger between Solship Sub, Solship lnvest 3 and SOFF will be completed in parallel with the Merger, and implies that the assets, rights and obligations of Solship Sub will be transferred to Solship Invest 3 in exchange for the issue of shares in SOFF to Solship Sub's shareholders (i.e. the former DESSC shareholders), while Solship Sub will be dissolved. Accordingly, the end result of the Merger and the Second Merger is that the shareholders of DESSC will become shareholders in SOFF, receiving 0.1052631 shares in SOFF for every share they held in DESSC before the Merger. SOFF is a public limited company incorporated in Norway and listed on the Oslo Stock Exchange.

For the board of directors of Deep Sea Supply PLC

ਨਿਲ Neofylos Neofytou Board member As per authorisation from the Board of Directors

$6/6$

RAPPORT TIL GENERALFORSAMLINGEN I SOLSHIP SUB AS

UTARBEIDET AV STYRET I SOLSHIP SUB AS

OM FUSJON MELLOM DEEP SEA SUPPLY PLC (SOM OVERDRAGENDE SELSKAP) OG SOLSHIP SUB AS (SOM OVERTAGENDE SELSKAP)

$\mathbf{1}$ INNLEDNING

Styrene i Deep Sea Supply Plc, organisasjonsnummer 186838 ("Deep Sea Supply") og Solship Sub AS, organisasjonsnummer 918 665 900 ("Selskapet" eller "Solship Sub") foreslår ved fusjonsplan datert 24. mars 2017 ("Fusjonsplanen") at Deep Sea Supply og Selskapet fusjoneres, med Selskapet som det overtagende selskap og Deep Sea Supply som det overdragende selskap, slik at Deep Sea Supply overdrar sine eiendeler, rettigheter og forpliktelser som helhet til Selskapet. Deep Sea Supply oppløses ved fusjonen og Deep Sea Supplys aksjeeiere mottar fusjonsvederlag i form av aksjer i Selskapet, på det tidspunktet fusjonen selskapsrettslig trer i kraft.

Etter allmennaksjeloven §§ 13-25, jf. 13-9 og 13-27 skal styrene i det overdragende og overtakende selskap utarbeide hver sin rapport vedrørende fusjonen. Styrets rapport skal gjøres tilgjengelig for aksjeeierne i de respektive selskapene og skal sammen med Fusjonsplanen med vedlegg og den sakkyndiges redegjørelse for fusjonen gi aksjeeierne i Selskapet et tilstrekkelig grunnlag for å vurdere fusjonen.

Styret anbefaler fusjonen overfor Selskapets aksjeeiere. Fusjonen vil etter styrets oppfatning totalt sett være fordelaktig for Selskapet og Selskapets aksjeeier.

$\overline{2}$ BAKGRUNN OG BEGRUNNELSE FOR FUSJONEN

Deep Sea Supply eier og drifter en flåte bestående av 37 skip som yter tjenester innen ulike deler av offshorevirksomheten. Flåten er fordelt mellom 25 plattformsupply-skip (PSV) og 12 ankerhåndteringsskip (AHTS). DESSC er notert på Oslo Børs under ticker "DESSC". DESSC-konsernet har i dag færre enn 500 ansatte på sjø og land. I tillegg har DESSC gjennom sitt 50 % eide datterselskap DESS Aquaculture Shipping AS bestilt 2 brønnbåter og 1 slaktebåt som skal benyttes innen fiskeoppdrettsnæringen. DESS Aquaculture Shipping AS eies 50/50 av DESSC og Marine Harvest AS.

SOFF opererer innenfor samme virksomhetsområde som DESSC, og eier og drifter 26 CSVer (inkl 1 Derrick Lay Barge (DLB)), 16 AHTS-er og 19 PSV-er. SOFF er notert på Oslo Børs under ticker "SOFF". SOFF-konsernet har i dag ca. 1500 sysselsatte på sjø og land. Solship Sub er et nystiftet heleiet datterselskap av Solship Invest 3 AS ("Solship Invest 3"), som igjen er et nystiftet heleiet datterselskap av Solstad Offshore ASA ("SOFF").

I de siste to årene har markedet for offshoreservice-skip svekket seg vesentlig som følge av fallet i oljeprisen. Forventningene til aktivitetsnivået i næringen i de kommende år er preget av stor usikkerhet. Spesielt er lete- og utbyggingsaktiviteten i olje- og gassektoren vesentlig redusert. Særlig markedet for PSV-er og AHTS-er preges av overkapasitet. SOFF og DESSCs virksomhet er sterkt påvirket av det svekkede markedet og den markedsusikkerheten som råder.

SOFF gjennomførte i 2016 en større kapitalutvidelse (aksjekapital og konvertibelt lån) og en omfattende refinansiering som har bidratt til at selskapet har fått styrket sin balanse og likviditet. I etterkant av denne refinansieringen gjennomførte SOFF en fusjon med Rem Offshore ASA. Gjennom en såkalt trekantfusjon ble Rem Offshore ASA innfusjonert i SOFF sitt heleide datterselskap Solship Invest 1 AS og aksjeeierne i Rem Offshore ASA mottok vederlagsaksier i SOFF. I forbindelse med gjennomføringen av fusjonen ble det også opprettet en egen aksieklasse i SOFF, B-aksier, med begrenset stemmerett. B-aksiene ble notert på Oslo Børs i desember 2016.

Farstad Shipping ASA ("FAR"), Aker Capital AS ("Aker"), Hemen Holding Limited ("Hemen") i tillegg til FAR's største långivere ("Långiverne"), en vesentlig del av FARs obligasjonseiere ("Obligasjonseierne"), samt F-Shiplease AS, signerte den 5. februar 2017 en omfattende og fullt ut finansiert restruktureringsavtale ("Restruktureringsavtalen") av FAR og flere av dets datterselskaper ("FAR Restruktureringen"). FAR Restruktureringen ble gjennomført 9. mars 2017. Aker, Hemen, Långiverne og Obligasjonseierne, samt SOFF Invest AS, Ivan II AS (i fellesskap "Solstad Familien"), Tyrholm & Farstad AS, Tyrholm & Farstad Invest AS, Sverre A. Farstad og Jan H. Farstad (i fellesskap "Farstad Familien"), avtalte også å arbeide for en fusjon mellom SOFF, FAR og Deep Sea Supply etter gjennomføringen av FAR Restruktureringen ("Sammenslåingen").

Styrene i SOFF, FAR og Deep Sea Supply er av den oppfatning at det er nødvendig å gjennomføre en konsolidering i bransjen. I etterkant av inngåelsen av Restruktureringsavtalen har styrene i de nevnte selskaper derfor diskutert mulighetene for en fusjon mellom de tre selskapene og kommet til at en slik fusjon vil være fordelaktig for alle selskapene. Gjennom Sammenslåingen vil man etablere et verdensledende OSV-selskap, med en samlet flåte på 154 skip. Det fusjonerte konsernet vil operere en flåte bestående av 33 CSV, 66 PSV og 55 AHTS skip.

Formelt sett vil Sammenslåingen skje gjennom tre ulike fusjoner som er innbyrdes avhengig av hverandre:

• 1. En grenseoverskridende (europeisk) fusjon mellom Deep Sea Supply og Solship Sub, et heleiet datterselskap av Solship Invest 3 ("DESSC Fusjon I"),
• 1. En umiddelbart etterfølgende trekantfusjon mellom Solship Sub og Solship Invest 3 (heleiet datterselskap av SOFF) med oppgjør i aksjer i SOFF ("DESSC Fusjon II") (DESSC Fusion I og DESSC Fusion II er til sammen benevnt "Deep Sea Supply Fusjonen"), og
• 1. En fusjon mellom FAR og Solship Invest 2 AS med oppgjør i aksjer i SOFF ("Farstad Fusjonen").

Det er DESSC Fusjon I (heretter benevnt "Fusjonen") som er gjenstand for behandling i denne rapporten.

$\overline{3}$ FUSJONENS RETTSLIGE OG ØKONOMISKE KONSEKVENSER

$3.1$ Selskapsrettslige virkninger

Fusjonsplanen skal meldes til Foretaksregisteret umiddelbart etter at Fusjonsplanen er godkjent av styrene i Selskapet og Deep Sea Supply og senest én måned før generalforsamlingen skal behandle Fusjonsplanen, jf. allmennaksjeloven 13-25 jf. § 13-13 og § 13-29. Foretaksregisteret skal kunngjøre at Foretaksregisteret har mottatt planen, hvilke selskaper som deltar i fusjonen, og at planen er tilgjengelig hos Foretaksregisteret.

Fusionsplanen og de øvrige saksdokumentene skal gjøres tilgjengelig for aksjeeierne på selskapenes forretningskontor eller på selskapenes internettsider, if. allmennaksjeloven § 13-25 if. § 13-12 (1). Deep Sea Supply og Selskapet skal avholde ekstraordinær generalforsamling for behandling av Fusjonsplanen. Generalforsamlingene er planlagt avholdt 25. april 2017.

Beslutningen om Fusjon treffes i det overtagende og overdragende selskap ved at generalforsamlingen i de respektive selskap vedtar Fusjonsplanen med minst totrediedels flertall så vel av de avgitte stemmer som den aksjekapital som er representert på generalforsamlingene, jf. allmennaksjeloven § 13-25 jf. § 13-3 (2). Begge selskapene skal senest en måned etter avholdt generalforsamling melde beslutningene om Fusion til Foretaksregisteret, jf. allmennaksjeloven § 13-25 jf. § 13-14. Umiddelbart forut for DESSC Fusion I gjennomføres en kapitalnedsettelse i Selskapet med NOK 30 000 fra NOK 30 000 til NOK 0 ved tilbakebetaling til eneaksjonær i Selskapet, jf. aksjeloven § 12-1 (1) nr. 2. Umiddelbart etter Fusjonen gjennomføres DESSC Fusjon II, hvilket innebærer at Selskapets eiendeler, rettigheter og forpliktelser overføres til Solship Invest 3. Samtidig oppløses Selskapet. DESSC Fusjon II er regulert gjennom separat fusjonsplan og redegjort for i separat rapport. Gjennomføring av Fusjonen er betinget av at vilkårene for gjennomføring av DESSC Fusjon II er oppfylt, slik at denne kan gjennomføres umiddelbart etter gjennomføringen av Fusjonen.

Foretaksregisteret skal kunngjøre beslutningene om Fusjon og varsle selskapets kreditorer om at innsigelse mot Fusjonen må meldes til selskapet innen seks uker fra kunngjøringen, jf. allmennaksjeloven § 13-25 jf. § 13-15.

Når fristen for kreditorene til å fremme innsigelse er utløpt etter allmennaksjeloven § 13-25 jf. § 13-15 for selskapene som deltar i Fusjonen og forholdet til de kreditorer som i tilfelle har fremsatt innsigelse etter allmennaksjeloven § 13-16 er avklart, og alle betingelsene for gjennomføring av Fusjonen, jf. punkt 2.4 i Fusjonsplanen er tilstede, skal Selskapet gi melding til Foretaksregisteret for både Deep Sea Supply og Selskapet om at Fusjonen skal tre i kraft. Fusjonen trer selskapsrettslig i kraft ved registrering av denne meldingen. Det antas at selskapsrettslig ikrafttredelse vil finne sted innen utløpet av juni 2017. Foretaksregisteret skal underrette registreringsmyndigheten der DESSC er registret om at Fusjonen har trådt i kraft

Ved selskapsrettslig ikrafttredelse av Fusjonen inntrer blant annet følgende virkninger:

• 1. Deep Sea Supply er oppløst.

• Eiendeler, rettigheter og forpliktelser i Deep Sea Supply som helhet er overført 2. til Selskapet.

• 1. Aksjene i Deep Sea Supply er byttet om med aksjer i Selskapet.

• Vedtektene i Solship Sub er endret i overensstemmelse med forslaget i $4.$ Fusionsplanen.

• Andre virkninger som er fastsatt i allmennaksjeloven, lovgivningen for øvrig 5. samt Fusjonsplanen.

Aksieeierne i Deep Sea Supply vil få fulle aksieeierrettigheter som eier av ordinære aksier i Solship Sub fra tidspunktet Fusjonen er registret gjennomført i Foretaksregisteret. Nevnte aksieeiere skal i utgangspunktet innføres i aksjeeierboken i Selskapet snarest mulig etter at Fusjonen har trådt i kraft, jf. allmennaksjeloven § 13-33, jf. § 13-17, men siden Fusjonen vil gjennomføres parallelt med DESSC Fusion II vil aksjeeierne i Deep Sea Supply som mottakere av vederlagsaksjer i SOFF bli innført som aksjeeier i aksjeeierregisteret til SOFF snarest mulig etter at Fusjonen og DESSC Fusjon II har trådt i kraft, jf. allmennaksjeloven § 13-17, og få fulle aksjeeierrettigheter som eier av ordinære aksjer i SOFF fra tidspunktet Fusjonen og DESSC Fusjon II er registret gjennomført i Foretaksregisteret. For å være berettiget til å motta vederlagsaksjer må aksjeeieren være aksjeeier i Deep Sea Supply på samme tidspunkt.

Ingen aksjeciere har særlige rettigheter i Deep Sea Supply. Deep Sea Supply har utstedt 10.000.000 frittstående tegningsretter (warrants) i henhold til avtale datert 21. juli 2016. Tegningsrettene gir rett til å tegne et tilsvarende antall aksjer i DESSC for NOK 1,24 per aksie og kan utøves når som helst innen tre år fra utstedelsen. Disse tegningsrettene skal konverteres til tegningsretter i Solship Sub, og dernest konverteres til tegningsretter i SOFF i forbindelse med DESSC Fusion II. Antall tegningsretter og tegningskursen for tegningsrettene skal i den forbindelse justeres for bytteforholdet mellom Deep Sea Supply og SOFF, men ellers videreføres i uendret form. For øvrig har ikke DESCC utstedt noen tegningsretter som nevnt i allmennaksjeloven § 11-1, § 11-10 eller § 11-12, jf. allmennaksjeloven § 13-26 (2) nr. 8.

Det eksisterer ikke og vil ikke tilfalle særlige fordeler i forbindelse med Fusjonen til medlemmer av selskapenes styrer, de daglige ledere eller uavhengige sakkyndige. Uavhengige sakkyndige vil motta honorarer for utarbeidelse av sakkyndige redegjørelser. Utover dette vil det ikke tilfelle uavhengige sakkyndige noen særlige rett eller fordel ved Fusjonen. Det gjelder ingen særskilte vilkår for utøvelse av rettigheter som aksjeeier i SOFF eller for registrering i aksjeeierregisteret.

$3.2$ Regnskapsmessige virkninger

Fusjonen gjennomføres med regnskapsmessig virkning fra det tidspunkt Fusjonen er registrert gjennomført i Foretaksregisteret. Alle transaksjoner, kostnader og inntekter knyttet til eiendelene, rettighetene og forpliktelsene som overføres i kraft av Fusjonen, skal fra dette tidspunkt henregnes til Selskapet. DESSC Fusjon I gjennomføres som regnskapsmessig transaksjon til virkelig verdi i samsvar med oppkjøpsmetoden.

Årsregnskapet for 2015 med balanse pr. 31.12.15 som sist godkjente årsregnskap danner grunnlaget for fastsettelsen av vilkårene for DESSC Fusjon I.

Inntil den selskapsrettslige ikrafttredelse av DESSC Fusjon I skal det føres separate regnskaper for Deep Sea Supply og Selskapet.

$3.3$ Skattemessige virkninger

Fusjonen vil bli gjennomført med skattemessig kontinuitet (både på selskapsnivå og aksjeeiernivå) etter reglene i skatteloven kapittel 11, jf. § 11-11 (grenseoverskridende fusjoner) og i samsvar med allmennaksjeloven kapittel 13, jf. § 13-25 flg. (grenseoverskridende fusjoner). Dette medfører at Fusjonen vil bli gjennomført som en skattefri fusjon.

Skatteposisjoner knyttet til eiendeler, rettigheter og forpliktelser som overføres fra Deep Sea Supply som ledd i Fusjonen og som befinner seg innen for norsk beskatningsområde forut for Fusjonen vil bli videreført uendret i henhold til skatteloven kapittel 11, jf. § 11-11. Dette innebærer at skatteposisjoner knyttet til eiendeler, rettigheter og forpliktelser innenfor norsk beskatningsområde forut for Fusjonen som overføres fra Deep Sea Supply til Selskapet vil bli videreført uendret ved selskapsrettslig ikrafttredelse av nevnte Fusjon. Videre vil skatteposisjoner for aksjer i Deep Sea Supply for norske aksjonærer i Deep Sea Supply videreføres til aksjene som utstedes i Selskapet som fusjonsvederlag. Endelig er Fusjonen skattefri i henhold til kypriotisk rett (Cyprus Income Tax Law Section 30 (a)(i)).

$\overline{\mathbf{4}}$ FASTSETTELSEN AV VEDERLAGET OG BEGRUNNELSEN FOR BYTTEFORHOLDET

Fusjonsvederlaget til aksjeeierne i Deep Sea Supply skal bestå av aksjer i Selskapet, utstedt gjennom en kapitalforhøyelse i Selskapet. Ved Fusjonen overføres DESSCs eiendeler, rettigheter og forpliktelser som helhet til Selskapet.

Som fusjonsvederlag vil aksjeeierne i DESSC per gjennomføringstidspunkt motta 1 aksjer i Solship Sub for hver aksje de eier i DESSC.

Basert på ovennevnte tall, gjennomføres Fusjonen basert på virkelige verdier med et bytteforhold mellom DESSC og Solship Sub på 1:1=1 dvs. at bytteforholdet skal være 1 Solship Sub- aksjer per aksje i DESSC.

Bytteforholdet i Fusjonen er fastsatt basert på at Selskapet i forkant av Fusjonen vil være et tomt selskap som følge av kapitalnedsettelsen som gjennomføres umiddelbart forut for Fusjonen. Basert på virkelige verdier av Deep Sea Supply og Selskapet vil bytteforholdet derfor være 1 Solship Sub-aksje per Deep Sea Supply-aksje (bytteforhold 1/1). Av denne grunn vil man ved bytteforholdet i DESSC Fusjon II kunne ta utgangspunkt i kurs per aksje i Deep Sea Supply selv om disse aksjene ved Fusjonen vil ombyttes med aksjer i Selskapet.

Ved fastsettelsen av kurs per aksje i Solship Sub ved DESSC Fusjon II har man tatt utgangspunkt i verdiene og dermed kursen på Deep Sea Supply i forkant av Fusjonen, hvilket er satt til NOK 1,31578947368421. For Deep Sea Supply har man ved fastsettelse av verdien i forkant av DESSC Fusjon I lagt til grunn en kurs på NOK 1,31578947368421 per aksje basert på avtale mellom partene som medvirker til Deep Sea Supply Fusjonen og Farstad Fusjonen, slik at det reelle bytteforholdet i Deep Sea Supply Fusjonen er 1,31578947368421:12,50, jf. ovenfor. Kursen er fremforhandlet av uavhengige parter, og er av den grunn et uttrykk for aksjenes markedsverdi.

Særlige vanskeligheter ved fastsettelsen av bytteforholdet har vært:

Umiddelbart etter gjennomføring av DESSC Fusjon I og samtidig med at DESSC $\bullet$ Fusjon II gjennomføres, gjennomføres som nevnt ovenfor en fusjon mellom FAR og Solship Invest 2 AS med utstedelse av vederlagsaksjer i SOFF (Farstad Fusjonen). Farstad Fusionen omhandles ikke av denne rapporten. Imidlertid er gjennomføringen av Farstad Fusjonen og Deep Sea Fusjonen, herunder DESSC Fusjon I og DESSC Fusion II, betinget av hverandre.

Styret i SOFF har innhentet en uttalelse fra Arctic Securities AS. Styret i DESSC har innhentet en tilsvarende uttalelse fra Swedbank. Begge uttalelsene bekrefter at bytteforholdet er rimelig og saklig begrunnet.

Det vises for øvrig til uavhengig sakkyndig redegjørelse for Fusjonsplanen utarbeidet av FGH Revisjon AS den 24. mars 2017, som konkluderte med at vederlaget til aksjeeierne er rimelig og saklig begrunnet.

5 BETYDNING FOR DE ANSATTE

Selskapet har ingen ansatte.

6 BETYDNING FOR KREDITORENE OG AKSJEEIERNE I SELSKAPET

Forut for gjennomføring av Fusjonen vil det ikke være kreditorer i Selskapet. Kreditorene i Deep Sea Supply vil på tidspunktet for gjennomføringen av Fusjonen bli Selskapets kreditorer.

Det vil heller ikke være aksjeeiere i Selskapet forut for gjennomføring av Fusjonen. Aksjekapitalen nedskrives til NOK 0 ved tilbakebetaling av selskapets aksjekapital umiddelbart før gjennomføringen, og da slik at nye aksjer alene utstedes som vederlagsaksjer forholdsmessig til aksjonærene i Deep Sea Supply.

$* * *$

$6/7$

Signaturside følger

Skudeneshavn, 24. mars 2017

STYRET I SOLSHIP SUB AS

and. L

Lars Peder Solstad, styrets leder

rin c

Sven Stakkestad, styremedlem

Til generalforsamlingen i Deep Sea Supply Plc og Solship Sub AS

Uavhengig sakkyndig redegjørelse for fusjonsplanen ved grenseoverskridende fusjon

Vi er statsautoriserte revisorer godkjent av Finanstilsynet, som er kompetent myndighet i Norge for slike formål. Vårt firma har vært virksomt i 27 år, og vi blir jevnlig engasjert for å avgi sakkyndige redegjørelser om verdsettelse av selskaper som deltar i fusjoner. Vi er uavhengig av hver av partene i nærværende transaksjon.

På felles anmodning fra styrene i Deep Sea Supply Plc og Solship Sub AS avgir vi som uavhengig sakkyndig, i samsvar med allmennaksjeloven § 13-28, jf. § 13-10 og section 201O(2) i Cyprus Companies Law, en redegjørelse om fusjonsplanen datert 24. mars 2017 for grenseoverskridende fusjon mellom Deep Sea Supply Plc som overdragende selskap og Solship Sub AS som overtakende selskap ("DESSC Fusjon I"). Ved DESSC Fusjon I overtar Solship Sub AS samtlige eiendeler, rettigheter og forpliktelser i Deep Sea Supply Plc mot at det utstedes vederlag i form av ordinære aksjer i Solship Sub AS. Umiddelbart forut for selskapsrettslig ikrafttredelse av DESSC Fusjon I vil det gjennomføres en kapitalnedsettelse i Solship Sub AS med NOK 30 000 fra NOK 30 000 til NOK 0 med tilbakebetaling til eneaksjonær i Solship Sub AS, jf. aksjeloven § 12-1 første ledd nr. 2. Aksjeeierne i Deep Sea Supply Plc mottar derfor som fusjonsvederlag 1 aksje i Solship Sub AS for hver aksje i Deep Sea Supply Plc.

DESSC Fusjon I er en del av en sammenslåing av Solstad Offshore ASA ("SOFF"), Farstad shipping ASA ("FAR") og Deep Sea Supply Plc ("Sammenslåingen"). Formelt sett vil Sammenslåingen skje gjennom tre ulike fusjoner som er innbyrdes avhengig av hverandre:

• 1. En grenseoverskridende (Europeisk) fusjon mellom Deep Sea Supply Plc og Solship Sub AS, et heleiet datterselskap av Solship Invest 3 AS (DESSC Fusjon I).
• 1. En umiddelbart etterfølgende trekantfusjon mellom Solship Sub AS og Solship Invest 3 AS (et heleiet datterselskap av SOFF) med oppgjør i aksjer i SOFF ("DESSC Fusjon II") (DESSC Fusjon I og DESSC Fusjon II er til sammen benevnt "Deep Sea Supply Fusjonen").
• 1. En fusjon mellom FAR og Solship Invest 2 AS med oppgjør i aksjer i SOFF ("Farstad Fusjonen").

Det er DESSC Fusjon I som er gjenstand for denne uavhengige sakkyndige redegjørelsen.

Styrets ansvar for redegjørelsen

Styrene i hvert selskap er ansvarlige for informasjonen redegjørelsen bygger på og de verdsettelser som ligger til grunn for vederlaget.

Uavhengig sakkyndiges oppgaver og plikter

Vår oppgave er å utarbeide en uavhengige sakkyndig redegjørelse om fusjonsplanen og å uttale oss om vederlaget.

Den videre redegjørelsen består av tre deler. Den første delen er en presentasjon av opplysninger i overensstemmelse med de krav som stilles i allmennaksjeloven § 13-10 annet ledd og § 2-6 første ledd nr. 1 til 4. Den andre delen angir hvilke fremgangsmåter som er brukt ved fastsettelsen av det foreslåtte bytteforholdet og resulterende vederlag til aksjeeierne i Deep Sea Supply Plc, herunder særlige vanskeligheter ved fastsettelse av bytteforholdet. Den tredje delen er vår uttalelse om fusjonsvederlaget.

Del 1: Opplysninger om innskuddet

Solship Sub AS overtar samtlige eiendeler, rettigheter og forpliktelser i Deep Sea Supply Plc. De eiendeler, rettigheter og forpliktelser som overtas, fremkommer av utkast til åpningsbalanse for Solship Sub AS med balansedag 28.02.2017, som er vedlagt fusjonsplanen.

Som fusjonsvederlag mottar aksjeeierne i Deep Sea Supply Plc aksjer i Solship Sub AS, ved at det gjennomføres en kapitalforhøyelse i Solship Sub AS hvor det utstedes 291 330 222 nye ordinære aksjer.

Del 2: Fremgangsmåter ved fastsettelse av vederlaget

Bytteforholdet i DESSC Fusjon I på 1 aksje i Solship Sub AS for hver aksje eiet i Deep Sea Supply Plc (bytteforhold 1:1), fremkommer med basis i at Solship Sub AS i forkant av selskapsrettslig gjennomføring av DESSC Fusjon I vil være et tomt selskap som følge av kapitalnedsettelsen som gjennomføres forut for DESSC Fusjon I. Av denne grunn vil man ved bytteforholdet i DESSC Fusjon II kunne ta utgangspunkt i kurs per aksje i Deep Sea Supply Plc selv om disse aksjene vil ombyttes med aksjer i Solship Sub AS ved selskapsrettslig ikrafttredelse av DESSC Fusjon I.

Ved fastsettelsen av kurs per aksje i Solship Sub AS ved DESSC Fusjon II har man derfor tatt utgangspunkt i verdien av Deep Sea Supply Plc i forkant av DESSC Fusjon I. For Deep Sea Supply Plc har man ved fastsettelsen av verdien og dermed kursen per aksje i forkant av DESSC Fusjon I lagt til grunn kurs på NOK 1,31578947368421 per aksje basert på avtale mellom partene som medvirker til Sammenslåingen. Dette innebærer at det reelle bytteforholdet i Deep Sea Supply Fusjonen (som omfatter både DESSC Fusjon I og DESSC Fusjon II) er 1,31578947368421:12,50. Bytteforholdet er fremforhandlet av uavhengige parter med utgangspunkt i historiske børskurser i Deep Sea Supply Plc og SOFF. De fremforhandlede verdier og det resulterende bytteforholdet er av den grunn et uttrykk for aksjenes markedsverdi. Styret i SOFF har innhentet en uttalelse om bytteforholdet fra Arctic Securities AS. Styret i Deep Sea Supply Plc har innhentet en tilsvarende uttalelse fra Swedbank. Begge uttalelsene bekrefter at bytteforholdet i Deep Sea Supply Fusjonen er rimelig og saklig begrunnet.

Særlige vanskeligheter ved fastsettelse av bytteforholdet:

1. Umiddelbart etter DESSC Fusjon I og samtidig med at DESSC Fusjon II gjennomføres, skjer det som nevnt innledningsvis i denne redegjørelsen en fusjon mellom Farstad Shipping ASA og Solship Invest 2 AS med utstedelse av vederlagsaksjer i SOFF (Farstad Fusjonen). Farstad Fusjonen omhandles ikke av denne redegjørelsen. Imidlertid er gjennomføringen av Farstad Fusjonen og Deep Sea Supply Fusjonen, herunder DESSC Fusjon I og DESSC Fusjon II, betinget av hverandre.

Punktet ovenfor sannsynliggjør etter vår oppfatning ikke et annet verdiutgangspunkt enn det som er presentert i fusjonsplanen for DESSC Fusjon I, og som ligger til grunn for vederlaget til aksjeeierne i Deep Sea Supply Plc.

Verdivurderingene og bytteforholdet er primært basert på observerte markedskurser og forhandlinger mellom eksterne parter. Hver av SOFF og Deep Sea Supply Plc har innhentet en uttalelse fra hvert sitt uavhengige meglerhus som konkluderer med at prisen og bytteforholdet er rimelig og saklig begrunnet. Vi anser at disse uttalelsene, de gjennomførte vurderingene og de forutgående forhandlinger og transaksjoner samlet gir uttrykk for den mest korrekte verdsettelsen av verdiene i Deep Sea Supply Plc og Solship Sub AS.

Det foreligger ikke andre forhold som er av betydning for å bedømme fusjonsvederlaget og bytteforholdet.

Del 3: Den uavhengig sakkyndiges uttalelse

Vi har utført vår kontroll og avgir vår uttalelse i samsvar med standard for attestasjonsoppdrag SA 3802" Revisors uttalelser og redegjørelser etter selskapslovgivningen". Standarden krever at vi planlegger og utfører kontroller for å oppnå betryggende sikkerhet for at vederlaget til aksjeeierne i Deep Sea Supply Plc er rimelig og saklig begrunnet, og at de eiendeler og forpliktelser Solship Sub AS skal overta, har en verdi som minst svarer til det avtalte vederlaget. Arbeidet omfatter kontroll av verdsettelsen av innskuddet og vederlaget, herunder vurderingsprinsippene og eksistens og tilhørighet. Videre har vi vurdert de verdsettelsesmetoder som er benyttet, og de forutsetninger som ligger til grunn for verdsettelsen**.**

Etter vår oppfatning er det innhentet bevis tilstrekkelig og hensiktsmessig som grunnlag for vår konklusjon.

Konklusjon

Etter vår mening har de eiendeler Solship Sub AS skal overta ved DESSC Fusjon I, en verdi som minst svarer til det avtalte vederlaget på 291 330 222 ordinære aksjer i Solship Sub AS med samlet pålydende NOK 291 330 222 samt annen egenkapital NOK 91 999 017, og etter vår mening er begrunnelsen for vederlaget til aksjeeierne i Deep Sea Supply Plc på 1 aksje i Solship Sub AS for hver aksje i Deep Sea Supply Plc rimelig og saklig basert på verdsettelsen av selskapene som beskrevet ovenfor.

Presisering

Dersom denne redegjørelsen blir oversatt til andre språk og det blir tolkningsspørsmål vedrørende oversettelsen, skal den norske versjonen gå foran.

Oslo, 24. mars 2017 FGH Revisjon AS

Ståle Raastad Hansen Statsautorisert revisor

i

ANSVARLIGE REVISORER:

lilT\TSAUI O!ìlSEFl REVISìOÍì FllODt- G I-IANSEN {Rrvrsg+r¡r:irirL'rìrn¡i 0r{Ír6il STATSAUI()FìISFRT fIEVISOH KAY VIDAFì TI-I(JMASSËN,H¡.!r¡,onnrrìrs¡rrrfrr ,r)r;?rrl SìTAfSAtJl OtìlSFRI REV¡SOR Sl-Al,F BAASI^D HANSE¡J (Hr vJri)Í{rrr;r:,'r.nùiiÌ

FGH FEVISJON AS. GODKJENT REVISJONSSELSKAP. REVI$ORBEGISTERNR, 959 152 446 . FORFÍAKSNR, NO 95S 152 446 MVA FLOBSGT. 2a, 3211 SANDEFJORD . TELEFON: 33 42 64 20 . TELEFAX: 33 42 64 29 o E-MAIL: post@fghrevisjön.no HJ EMMÊSIDE: www.fghrevisjon.no

To the general meeting of Deep Sea Supply Plc and Solship Sub AS

lndependent expert report on the merger plan for a cross-border merger

We are a firm of state authorised public accountants, duly approved as such by the Norwegian Financial Supervisory Authority (Finanstilsynet), which is the competent authority in Norway for such purposes. Our firm has been in business for 27 years and we are regularly appointed to give reports on valuations of companies in connection with merger transactions. We are independent of each of the parties to the transaction in question.

At the joint request of the boards of directors of Deep Sea Supply Plc and Solship Sub AS, we hereby submit, as an independent expert, in accordance with the Public Limited Liability Companies Act Section t3-28, cf. Section l-3-10, and section 2OLO(2) of the Cyprus Companies Law, a report on the merger plan dated 24 March 2OI7 for a cross-border merger of Deep Sea Supply Plc as the i transferring company and Solship Sub AS as the surviving company ('DESSC Merger l'). Through the DESSC Merger l, Solship Sub AS acquires all assets, rights and obligations of Deep Sea Supply Plc in exchange for consideration in the form of ordinary shares in Solship Sub AS. lmmediately prior to the DESSC Merger I taking effect pursuant to applicable company law, a capital reduction will be carried out in Solshíp Sub AS in the amount of NOK 30,000, from NOK 30,000 to NOK 0, with repayment to the sole shareholder of Solship Sub AS, cf. the Limited Liability Companies Act Section t2-L {Ll no 2. The shareholders of Deep Sea Supply Plc will therefore receive as merger consideration L share in Solship Sub AS for every share they hold in Deep Sea Supply Plc.

The DESSC Merger I is part of a combination of Solstad Offshore ASA, Farstad Shipping ASA ('FAR') and Deep Sea Supply Plc ('the Combination'). Formally, the Combination willtake place through three different but interdependent mergers:

• 1. A cross-border (European) merger between Deep Sea Supply Plc and Solship Sub AS, a wholly owned subsidiary of Solship lnvest 3 AS (DESSC Merger l).
• 1. An immediately subsequent triangular merger between Solship Sub AS and Solship lnvest 3 AS (a wholly owned subsidiary of SOFF) with settlement in shares in SOFF ('DESSC Merger ll') (DESSC Merger I and DESSC Merger ll are jointly referred to as the 'Deep Sea Supply Merger').
• 1. A merger between FAR and Solship lnvest 2 AS with settlement in shares in SOFF ('the Farstad Merger').

It is the DESSC Merger I that is the subject of this independent expert report

True tra nslation certifie d, 24 March 2OI7 fl+^V4'u fcrrr-'<--.. Govern ment Authorised Tra nslator

Allegro språktjenester AS

L-87 2745 6-V 7 22.0 3. L7 50 33s2'OO9

ANSVARLIGE REVISORER: STATSAUTORISERT REVISOR FRODE G. HANSEN (REVISORREGISTERIOR: 100006.) STATSAUTORISERT REVISOR KAY VIDAR THOMASSEN INFORMATION TO LODGE STATSAUTORISERT REVISOR STALE RAASTAD HANSEN (REVISORIEGISTERING 10th)

FGH REVISJON AS . GODKJENT REVISJONSSELSKAP . REVISORREGISTERNR, 959 152 446 . FORETAKSNR, NO 959 152 446 MVA . FLORSGT. 2a, 3211 SANDEFJORD . TELEFON: 33 42 64 20 . TELEFAX: 33 42 64 29 . E-MAIL: post@fghrevisjon.no HJEMMESIDE: www.fghrevisjon.no

The board's responsibility for the report

Each company's board is responsible for the information on which the report is based and the valuations that form the basis for the consideration.

The tasks and obligations of independent experts

Our task is to prepare an independent expert report on the merger plan and to give an opinion on the consideration.

The report consists of the three parts below. The first part is a presentation of certain information in accordance with the requirements set out in the Public Limited Liability Companies Act Section 13-10 (2) and Section 2-6 (1) no 1 to 4. The second part describes the methods used to arrive at the proposed share exchange ratio and resulting consideration to the shareholders of Deep Sea Supply Plc, including any special difficulties relating to the stipulation of the exchange ratio. The third part is our opinion on the merger consideration.

Part 1: Information about the contribution

Solship Sub AS acquires all assets, rights and obligations in Deep Sea Supply Plc. Such acquired assets, rights and obligations are stipulated in the draft opening balance for Solship Sub AS with balance sheet date 28 February 2017, which is enclosed with the merger plan.

As consideration for the merger, the shareholders of Deep Sea Supply Plc will receive shares in Solship Sub AS by way of a capital increase in Solship Sub AS in which 291,330,222 new ordinary shares are issued.

Part 2: Procedure for stipulation of consideration

The exchange ratio in the DESSC Merger I, being 1 share in Solship Sub AS for every share owned in Deep Sea Supply Plc (exchange ratio 1:1), is based on the fact that Solship Sub AS, prior to the DESSC Merger I taking effect, will be an empty shell company as a result of the capital reduction carried out prior to the completion of the DESSC Merger I. For this reason, the exchange ratio in the DESSC Merger II can be based on the price per share in Deep Sea Supply Plc even though these shares will be exchanged for shares in Solship Sub AS when the DESSC Merger I takes effect.

When stipulating the price per share in Solship Sub AS in connection with the DESSC Merger II, the point of departure has therefore been the value of Deep Sea Supply Plc prior to the DESSC Merger I. For Deep Sea Supply Plc, the stipulation of the value and thereby the price per share prior to the DESSC Merger I has been based on a price of NOK 1.31578947368421 per share, which is based on an agreement between the parties participating in the Combination. This means that the actual exchange ratio in the Deep Sea Supply Merger (which includes both the DESSC Merger I and the DESSC Merger II) is 1.31578947368421:12.50. The exchange ratio has been negotiated by independent parties based on historic share prices for Deep Sea Supply Plc and SOFF. The negotiated values and resulting exchange ratio are therefore an expression of the market value of the shares. The board of SOFF has obtained a statement on the exchange ratio from Arctic Securities AS. The board of Deep Sea Supply Plc has obtained a corresponding statement from Swedbank. Both

True translation certified, 24 March 2017 track of Ferman ╲

Government Authorised Translator Allegro språktjenester AS

L_8721456_V1_22.03.17_503352-009

ANSVARLIGE REVISORER: STATSAUTORISERT REVISOR FRODE G. HANSEN PERVISORREGISTERREL (00506 STATSAUTORISERT REVISOR KAY VIDAR THOMASSEN REVISORREGISTERIUR. 1017 STATSAUTORISERT REVISOR STALE RAASTAD HANSEN (REVISORIEGISTERNA 1014)

FGH REVISJON AS . GODKJENT REVISJONSSELSKAP . REVISORREGISTERNR. 959 152 446 . FORETAKSNR. NO 959 152 446 MVA . FLORSGT. 2a, 3211 SANDEFJORD . TELEFON: 33 42 64 20 . TELEFAX: 33 42 64 29 . E-MAIL: post@fghrevisjon.no HJEMMESIDE: www.fghrevlsjon.no

statements confirm that the exchange ratio in the Deep Sea Supply Merger is fair and reasonably justified.

Special difficulties relating to the stipulation of the exchange ratio:

1. Immediately after the DESSC Merger I and at the same time as the DESSC Merger II is carried out, a merger will, as mentioned in the introduction, take place between Farstad Shipping ASA and Solship Invest 2 AS with the issue of a consideration in shares in SOFF (the Farstad Merger). The Farstad Merger is not discussed in this independent expert report. However, the completion of the Farstad Merger and the Deep Sea Supply Merger, which includes the DESSC Merger I and the DESSC Merger II, are contingent on each other.

In our opinion, the point above does not substantiate a different value basis than the one presented in the merger plan for the DESSC Merger I, and which forms the basis for the consideration to the shareholders of Deep Sea Supply Plc.

The valuations and the exchange ratio are primarily based on observed market prices and negotiations between external parties. SOFF and Deep Sea Supply Plc have each obtained a statement from an independent broker, which concludes that the price and the exchange ratio are fair and reasonably justified. In our assessment, these statements, the valuations that have been carried out and the prior negotiations and transactions in aggregate provide the most correct valuation of the assets in Deep Sea Supply Plc and Solship Sub AS.

No other factors exist that have a bearing on the assessment of the merger consideration and the exchange ratio.

Part 3: Opinion of the independent expert

We have carried out our review and express our opinion in accordance with the standard for attestation assignments SA 3802 Revisors uttalelser og redegjørelser etter selskapslovgivningen ('Auditor's opinions and statements pursuant to company legislation' - in Norwegian only). The standard requires us to plan and carry out certain investigations in order to achieve adequate assurance that the consideration to the shareholders of Deep Sea Supply Plc is fair and reasonably justified and that the value of the assets and obligations to be acquired by Solship Sub AS is at least equal to the agreed consideration. Our work includes a review of the valuation of the contribution and the consideration, including the valuation principles and existence and affiliation. We have also considered the valuation methods used, and the assumptions on which the valuation is based.

In our opinion, the evidence obtained forms an adequate and appropriate basis for our conclusion.

Conclusion

In our opinion, the value of the assets that Solship Sub AS shall acquire in connection with the DESSC Merger I is at least equal to the agreed consideration of 291,330,222 ordinary shares in Solship Sub AS with a nominal value of NOK 291,330,222 and other equity of NOK 91,999,017, and, in our

True translation certified, 24 March 2017 timobil Fere

Government Authorised Translator Allegro språktjenester AS

L_8721456_V1 22.03.17 503352-009

Translation from Norwegian

ANSVARLIGE REVISORER:

STATSAUTORISERT REVISOR FRODE G. HANSEN (REVISORREGISTERNR COGO STATSAUTORISERT REVISOR KAY VIDAR THOMASSEN INFVISORREGISTERMR STATSAUTORISERT REVISOR STALE RAASTAD HANSEN (HEVISORIECUSTERINE)

FGH REVISJON AS . GODKJENT REVISJONSSELSKAP . REVISORREGISTERNR. 959 152 446 . FORETAKSNR, NO 959 152 446 MVA. FLORSGT. 2a, 3211 SANDEFJORD . TELEFON: 33 42 64 20 . TELEFAX: 33 42 64 29 . E-MAIL: post@fghrevisjon.no HJEMMESIDE: www.fghrevisjon.no

opinion, the justification for the consideration to the shareholders of Deep Sea Supply Plc of 1 share in Solship Sub AS for every share they hold in Deep Sea Supply Plc is fair and reasonable based on the valuation of the companies, as described above.

Specification

If this report is translated into other languages and questions arise concerning the interpretation of the translation, the Norwegian version shall take precedence.

Oslo, 24 March 2017 FGH Revisjon AS

Ståle Raastad Hansen State Authorised Public Accountant

The English version of the report is for translation purposes only, and is not to be signed.

True translation certified, 24 March 2017 Frach Form

Government Authorised Translator Allegro språktjenester AS

L_8721456_V1 22.03.17 503352-009

The undersigned Notary Public hereby certifies that Elisabeth Fossum, government authorized translator, signed this document.

The signature is certified on the basis of the signature deposited in our register of signatories. Bergen tingrett, 23 March 2017

Notary Public Hanne M. Brandt Olsen

APOSTILLE (Convention de La Haye du 5 octobre 1961) Country: Norway T) This public document 2 has been signed by Houw $\mathbf{S}$ acting in the capacity of notal bears the seal/stamp of dis A. $\infty$ Notarius Publicus in Bergen Certified 6. the 23.03.2017 6. al Bergen Evide Governor of the County of HordalandNO LOTR QUIT Ÿ. 8 10. Signature Gunhildtane Gunhild Faugstad NEW

ANSVARLIGE REVISORER STATSAUTORISERT REVISOR FRODE G. HANSEN INFVISORREGISTER STATSAUTORISERT REVISOR KAY VIDAR THOMASSEN mevisorined STATSAUTORISERT REVISOR STÄLE RAASTAD HANSEN (REVISORREC)

FGH REVISJON AS . GODKJENT REVISJONSSELSKAP . REVISORREGISTERNR, 959 152 446 . FORETAKSNR, NO 959 152 446 MVA . FLORSGT. 2a, 3211 SANDEFJORD . TELEFON: 33 42 64 20 . TELEFAX: 33 42 64 29 . E-MAIL: post@fghrevlsjon.no HJEMMESIDE: www.fghrevisjon.no

Til generalforsamlingen i Deep Sea Supply Plc og Solship Sub AS

Uavhengig sakkyndig redegjørelse for fusjonsplanen ved grenseoverskridende fusjon

Vi er statsautoriserte revisorer godkjent av Finanstilsynet, som er kompetent myndighet i Norge for slike formål. Vårt firma har vært virksomt i 27 år, og vi blir jevnlig engasjert for å avgi sakkyndige redegjørelser om verdsettelse av selskaper som deltar i fusjoner. Vi er uavhengig av hver av partene i nærværende transaksjon.

På felles anmodning fra styrene i Deep Sea Supply Plc og Solship Sub AS avgir vi som uavhengig sakkyndig, i samsvar med allmennaksjeloven § 13-28, jf. § 13-10 og section 2010(2) i Cyprus Companies Law, en redegjørelse om fusjonsplanen datert 24. mars 2017 for grenseoverskridende fusjon mellom Deep Sea Supply Plc som overdragende selskap og Solship Sub AS som overtakende selskap ("DESSC Fusjon I"). Ved DESSC Fusjon I overtar Solship Sub AS samtlige eiendeler, rettigheter og forpliktelser i Deep Sea Supply Plc mot at det utstedes vederlag i form av ordinære aksjer i Solship Sub AS. Umiddelbart forut for selskapsrettslig ikrafttredelse av DESSC Fusion I vil det gjennomføres en kapitalnedsettelse i Solship Sub AS med NOK 30 000 fra NOK 30 000 til NOK 0 med tilbakebetaling til eneaksjonær i Solship Sub AS, jf. aksjeloven § 12-1 første ledd nr. 2. Aksjeeierne i Deep Sea Supply Plc mottar derfor som fusjonsvederlag 1 aksje i Solship Sub AS for hver aksje i Deep Sea Supply Plc.

DESSC Fusjon I er en del av en sammenslåing av Solstad Offshore ASA ("SOFF"), Farstad shipping ASA ("FAR") og Deep Sea Supply Plc ("Sammenslåingen"). Formelt sett vil Sammenslåingen skje gjennom tre ulike fusjoner som er innbyrdes avhengig av hverandre:

• 1. En grenseoverskridende (Europeisk) fusjon mellom Deep Sea Supply Plc og Solship Sub AS, et heleiet datterselskap av Solship Invest 3 AS (DESSC Fusjon I).
• 1. En umiddelbart etterfølgende trekantfusjon mellom Solship Sub AS og Solship Invest 3 AS (et heleiet datterselskap av SOFF) med oppgjør i aksjer i SOFF ("DESSC Fusjon II") (DESSC Fusjon I og DESSC Fusjon II er til sammen benevnt "Deep Sea Supply Fusjonen").
• 1. En fusjon mellom FAR og Solship Invest 2 AS med oppgjør i aksjer i SOFF ("Farstad" Fusjonen").

Det er DESSC Fusjon I som er gjenstand for denne uavhengige sakkyndige redegjørelsen.

Styrets ansvar for redegjørelsen

Styrene i hvert selskap er ansvarlige for informasjonen redegjørelsen bygger på og de verdsettelser som ligger til grunn for vederlaget.

Uavhengig sakkyndiges oppgaver og plikter

Vår oppgave er å utarbeide en uavhengige sakkyndig redegjørelse om fusjonsplanen og å uttale oss om vederlaget.

ANSVARI.IGE REVISOREB: STAI SAt_ll OR|SERÌ Hr:VlSoFì Í:RODL Lì l-lANtS¡:hl STAI.SAI ]T OIìISF:RT REVISoR STALE rìAASlAI) HANSFI\j 1I jI vJl]i]I*ìI STATSAUI ORISEFìl REVTSOR Kl\y VTDAR Tt]OM,ASSËht r,li ,ist)pi

r

Ê

ü

FGH REVISJON AS . GODKJENT RËVISJONSSELSKAP . BEVISoRRËGISTERNR. 95s 1 FLORSGT. 2a, 3211 SANDEFJORD ¡ TELEFON: gZ 42 64 20. TELEFAX: 93 42 HJEMMESIDE: www.f ghrev¡sion.no 52 446. FOFEIAKSNR. NO 9S9 1SZ 446 N/ÎVA. 64 29 ¡ E-MAIL: posi@fghrovision.no

Den videre redegjørelsen består av tre deler. Den første delen er en presentasjon av opplysninger i overensstemmelse med de krav som stilles i allmennaksjeloven S 13_10 annet ledd og S 2_6 første ledd nr' ttil 4. Den andre delen angir hvilke fremgangsmåter som er brukt ved fastsettelsen av det foreslåtte bytteforholdet og resulterende vederlag til aksjeeierne i Deep Sea Supply plc, herunder særlige vanskeligheter ved fastsettelse av bytteforholdet. Den tredje delen er vår uttalelse om fusjonsvederlaget.

Del 1: Opplysninger om innskuddet

rcll nillflolf

Solship Sub AS overtar samtlige eiendeler, rettigheter og forpliktelser i Deep Sea Supply plc. De eiendeler, rett¡gheter og forpliktelser som overtas, fremkommer av utkast til åpningsbalanse for solship sub AS med balansedag 2g.02.2017, som er vedlagt fusjonsplanen.

Som fusjonsvederlag mottar aksjeeierne i Deep Sea Supply plc aksjer i Solship Sub AS, ved at det gjennomføres en kapitalforhØyelse i Solship Sub AS hvor det utstedes 2gL 330 222 nye ordinære a ksje r.

Del 2: Fremgangsmåter ved fastsettelse av vederlaget

Bytteforholdet i DESSC Fusjon I på laksje isolship sub AS for hver aksje eiet i Deep Sea supply plc (bytteforhold 1:1), fremkommer med basis i at Solship Sub AS i forkant av selskapsrettslig gjennomføring av DEssc Fusjon I vil være et tomt selskap som følge av kapitalnedsettelsen som gjennomf6res forut for DESSC Fusjon L Av denne grunn vil man ved bytteforholdet i DESSC Fusjon ll kunne ta utgangspunkt i kurs per aksje i Deep Sea supply Plc selv om disse aksjene vil ombyttes med aksjer i solship sub AS ved selskapsrettslig ikrafttredelse av DESSC Fusjon L

Ved fastsettelsen av kurs per aksje i Solship Sub AS ved DESSC Fusjon il har man derfor tatt utgangspunkt i verdien av Deep Sea Supply Plc i forkant av DESSC Fusjon L For Deep sea supply plc har man ved fastsettelsen av ve.rdien og dermed kursen per aksje i forkant av DESSC Fusjon I lagt til grunn kurs på NoK 1,31578947368421' per aksje basert på avtale mellom partene sorn medvirker til Sammenslåingen' Dette innebærer at det reelle bytteforholdet i Deep Sea Supply Fusjonen (som omfatter både DESSC Fusjon I og DESSC Fusjon ll) er 3,,31578g4736842L:!2,50. Bytteforholdet er fremforhandlet av uavhengige parter med utgangspunkt i historiske børskurser i Deep sea supply plc og SoFF. De fremforhandlede verdier og det resulterende bytteforholdet er av den giunn et uttrykk for aksjenes markedsverdi. Styret i SOFF har innhentet en uttalelse om bytteforhold-et fra Arctic securities AS. styret i Deep sea supply Plc har innhentet en tilsvarende uttalelse fra swedbank. Begge uttalelsene bekrefter at bytteforholdet i Deep Sea Supply Fusjonen er rimelig og saklig begrunnet.

Særl ige va nske I ighete r ved fastsettelse av bytteforholdet:

t. Umiddelbart etter DESsc Fusjon log samtidig med at DESSC Fusjon llgjennomfØres, skjer det som nevnt innledníngsvis i denne redegjørelsen en fusjon mellom Farstad Shipping ASA og Solship lnvest 2 AS med utstedelse av vederlagsaksjer i SoFF (Farstad Fusjonen). Farstad Fusjonen omhandles ikke av denne redegjørelsen. rmidlertid er gjennomføringen av Farstad Fusjonen og Deep Sea Supply Fusjonen, herunder DESSC Fusjon log DESSC fui;on ll, betinget av hverandre.

Punktet ovenfor sannsynliggjør etter vår oppfatning ikke et annet verdiutgangspunkt enn det som er presentert i fusjonsplanen for DEsSc Fusjon l, og som ligger til grunn for vederlaget til aksjeeierne i Deep Sea Supply Plc.

ANSVARLIGE REVISORER: STATSAUTORISERT REVISOR FRODE G. HANSEN IREVISORREGISTERN STATSAUTORISERT REVISOR KAY VIDAR THOMASSEN REVISORREGIS STATSAUTORISERT REVISOR STALE RAASTAD HANSEN (REVISORIEGE

FGH REVISJON AS . GODKJENT REVISJONSSELSKAP . REVISORREGISTERNR, 959 152 446 . FORETAKSNR, NO 959 152 446 MVA -FLORSGT. 2a, 3211 SANDEFJORD . TELEFON: 33 42 64 20 . TELEFAX: 33 42 64 29 . E-MAIL: post@fghrevisjon.no HJEMMESIDE: www.fghrevisjon.no

Verdivurderingene og bytteforholdet er primært basert på observerte markedskurser og forhandlinger mellom eksterne parter. Hver av SOFF og Deep Sea Supply Plc har innhentet en uttalelse fra hvert sitt uavhengige meglerhus som konkluderer med at prisen og bytteforholdet er rimelig og saklig begrunnet. Vi anser at disse uttalelsene, de gjennomførte vurderingene og de forutgående forhandlinger og transaksjoner samlet gir uttrykk for den mest korrekte verdsettelsen av verdiene i Deep Sea Supply Plc og Solship Sub AS.

Det foreligger ikke andre forhold som er av betydning for å bedømme fusjonsvederlaget og bytteforholdet.

Del 3: Den uavhengig sakkyndiges uttalelse

FGH REVISJON

Vi har utført vår kontroll og avgir vår uttalelse i samsvar med standard for attestasjonsoppdrag SA 3802" Revisors uttalelser og redegjørelser etter selskapslovgivningen". Standarden krever at vi planlegger og utfører kontroller for å oppnå betryggende sikkerhet for at vederlaget til aksjeeierne i Deep Sea Supply Plc er rimelig og saklig begrunnet, og at de eiendeler og forpliktelser Solship Sub AS skal overta, har en verdi som minst svarer til det avtalte vederlaget. Arbeidet omfatter kontroll av verdsettelsen av innskuddet og vederlaget, herunder vurderingsprinsippene og eksistens og tilhørighet. Videre har vi vurdert de verdsettelsesmetoder som er benyttet, og de forutsetninger som ligger til grunn for verdsettelsen.

Etter vår oppfatning er det innhentet bevis tilstrekkelig og hensiktsmessig som grunnlag for vår konklusjon.

Konklusjon

Etter vår mening har de eiendeler Solship Sub AS skal overta ved DESSC Fusjon I, en verdi som minst svarer til det avtalte vederlaget på 291 330 222 ordinære aksjer i Solship Sub AS med samlet pålydende NOK 291 330 222 samt annen egenkapital NOK 91 999 017, og etter vår mening er begrunnelsen for vederlaget til aksjeeierne i Deep Sea Supply Plc på 1 aksje i Solship Sub AS for hver aksje i Deep Sea Supply Plc rimelig og saklig basert på verdsettelsen av selskapene som beskrevet ovenfor.

Presisering

Dersom denne redegjørelsen blir oversatt til andre språk og det blir tolkningsspørsmål vedrørende oversettelsen, skal den norske versjonen gå foran.

Oslo, 24. mars 2017 FGH Revisjon AS

Ståle Raastad Hansen Statsautorisert revisor