Oceanteam Annual Report 2021 1 OCEANTEAM ASA ANNUAL REPORT 2021
Oceanteam Annual Report 2021 2 CONTENT 1. KEY EVENTS AND FINANCIAL PERFORMANCE ................................................................................................... 3 2. MESSAGE FROM THE CEO ..................................................................................................................................... 3 3. CORPORATE IDENTITY, VISION AND MISSION .................................................................................................... 4 4. MARKET OUTLOOK ................................................................................................................................................. 4 5. BOARD OF DIRECTORS AND MANAGEMENT TEAM ........................................................................................... 5 6. REPORT OF THE BOARD OF DIRECTORS ............................................................................................................ 5 a. CORPORATE STRUCTURE............................................................................................................................. 5 b. BUSINESS ACTIVITY OCEANTEAM SOLUTIONS......................................................................................... 5 c. BACKLOG ......................................................................................................................................................... 6 d. COMMENTS RELATED TO THE FINANCIAL STATEMENTS ........................................................................ 6 e. GOING CONCERN ........................................................................................................................................... 7 f. RISKS .............................................................................................................................................................. 7 g. EVENTS AFTER THE BALANCE SHEET DATE ............................................................................................10 h. SHARE HOLDER INFORMATION .................................................................................................................10 7. CONFIRMATION FROM THE BOARD OF DIRECTORS AND CEO .....................................................................10 8. CORPORATE GOVERNANCE AND CSR ...............................................................................................................11 a. CORPORATE SOCIAL RESPONSIBILITY (CSR) ..........................................................................................11 b. CORPORATE GOVERNANCE POLICY .........................................................................................................12 c. CORPORATE GOVERNANCE DEVIATIONS ................................................................................................17 9. FINANCIAL STATEMENTS GROUP .......................................................................................................................18 10. FINANCIAL STATEMENTS PARENT ......................................................................................................................65 11. AUDITOR’S REPORT ..............................................................................................................................................84
Oceanteam Annual Report 2021 3 1. KEY EVENTS AND FINANCIAL PERFORMANCE In this report Oceanteam ASA is further referred to as “Oceanteam” or “Company”. Oceanteam Group consists of Oceanteam ASA and its subsidiaries. KEY EVENTS in 2021 Vessel activities: • CSV Southern Ocean was sold and delivered to the new owner on 27 April 2021. • In May 2021, an agreement was reached to sell CSV Bourbon Oceanteam 101 (CSV BO 101) following which the delivery to the new owner took place on 19 July 2021. • Proceeds from the sales were used to fully repay the loans from the banking consortium. Oceanteam Solutions activities: • In January 2021, Oceanteam extended a storage contract of 100+ kilometres subsea cable with one of Europe’s biggest cable manufacturers. • In May 2021, Oceanteam was awarded a contract for the provision of a cable transport spread for a project in the German Baltic area which commenced in May 2021 and was completed in September 2021. • In December 2021 the storage contract of 100+ kilometres subsea cable was extended by 2 years until December 2023. • In 2021, utilisation of the Oceanteam Solutions carousels and tensioners was 36% and 28% respectively. The carousels are much more valuable than the tensioners and earn significantly higher day rates. Corporate events: • Henk Hazenoot succeeded Henk van den IJssel as CEO on 1 August 2021. • Hans Reinigert succeeded Henk Hazenoot as CEO on 1 November 2021. KEY FINANCIAL FIGURES OF THE OCEANTEAM GROUP Amounts in US Dollar million From the income statement 2021 2020 Variance Operating income 5.8 5.9 (0.1) Operating expenses (3.3) (3.4) 0.1 Personnel costs (1.7) (1.3) (0.4) General & administration (0.8) (0.6) (0.2) Operating profit / (loss) (1.2) (0.4) (0.8) Net finance costs (0.3) (0.1) (0.2) Profit / (loss) from continuing operations (1.5) (0.5) (1.0) Tax income / (expense) (0.1) (0.8) 0.7 Profit / (loss) from discontinued operations (1.6) (71.9) 70.3 Profit / (loss) for the year (3.1) (73.2) 70.1 Amounts in US Dollar million From the finance position 2021 2020 Non-current assets 13.2 44.8 Current assets 5.4 8.0 Cash 2.8 3.2 Total assets 18.5 52.8 Interest bearing debt 3.0 25.2 Equity 13.1 16.3 Key Figures 2021 2020 EBITDA* 0.1 0.7 Current ratio* 2.2 0.2 Equity ratio* 71% 31% Capital Expenditures* (0.0) (0.1) Operating margin* 2% 12% *See note 27 – Alternative Performance Measures Number of outstanding shares on 31 December 2021/ 2020 34.338.833 34.338.833 2. MESSAGE FROM THE CEO Following the divestment of our shipping assets, the financials of 2020 have been reclassified for comparison reasons. Oceanteam ASA has been reclassified from the Shipping to the Solutions segment as our corporate costs are now in the interest of financing and supporting the Solutions activities. This reclassification has been applied retrospectively. On a standalone basis, revenue of the Solutions division has decreased slightly from USD 5.6 million in 2020 to USD 5.4 million in 2021, with a similar EBITDA of USD 1.7 million. Net income in 2021 was USD 0.4 million vs. USD 0.7 million in 2020 due to lower margins on projects. 2021 has been another global COVID vested year with multiple challenges for the energy supply, marine and offshore industry. Oceanteam has weathered this “storm of challenges” in the best possible way. The Shipping segment, with its substantial and pressing liabilities, has been divested cashflow positively and cost reductions have been executed simultaneously. This has resulted in a lean and, aside from the shareholder loans, debt free company. It also has set the foundation for a future beyond “the storm” whereby Oceanteam is committed to broaden its horizon and capitalize on opportunities the global energy transition is offering. Our first attempt to revitalize Oceanteam was the potential transaction with the Passer Group. The Passer transaction was considered an important first step towards a consolidation play in the offshore wind cable services segment, in which Oceanteam Solutions division is also active. The outcome of the prolonged due diligence process led Oceanteam to conclude that a merger/acquisition would not create the desired value for Oceanteam and its shareholders.
Oceanteam Annual Report 2021 4 Negotiations were discontinued in October 2021 and Board and management are firmly of the opinion this was the right decision to make. Despite the disappointing outcome of the Passer transaction, Oceanteam remains committed to finding an M&A opportunity that has the right value proposition. Criteria that play a role in the search for the right opportunity are predictability of cashflow at an acceptable level of market risk thereby giving return to both existing and potential new shareholders. This search has commenced end Q4 2021 and at the time of writing multiple targets are being evaluated with any material developments to be reported in due course. I would like to take this opportunity to thank all stakeholders and employees for their positive contributions in another challenging year for the company. At the same time, I very much look forward to re-energizing Oceanteam ASA and am positive that in 2022 we will succeed in following through on the new course for the company. Our team is more than ready for it! Hans Reinigert CEO of Oceanteam ASA 3. CORPORATE IDENTITY, VISION AND MISSION Oceanteam is a Norwegian listed subsea and offshore services company, with a head office in Bærum, Norway and a regional office in Velsen-Noord, the Netherlands. The Company will be comprised of only Oceanteam Solutions aſter the divestment of Oceanteam Shipping. Oceanteam Solutions has been active in the transportation, storage and handling of electric power cables for the offshore wind industry since 2007. Oceanteam Solutions has equipment and project experience to manage projects that involve operational complexity both in the mature North Sea market as well as in new emerging offshore wind markets in North America and in the Far East. The company currently owns 6 carousels and ancillary equipment and has its deep-water port and offshore base in Velsen-Noord, the Netherlands. The Solutions division is generally performing the following activities: cable storage at its offshore base in Velsen-Noord, the rental of carousels and other ancillary equipment, and the execution of large electric power cable transport and logistics projects, using Oceanteam’s own equipment and/or third-party owned equipment. At this stage of the energy transition, we believe we must further focus on the globally growing offshore wind industry which offers good opportunities for a cleaner future. For more information about the Company: www.oceanteam.no The Company ticker on the Oslo Stock Exchange is “OTS” (www.ose.no). 4. MARKET OUTLOOK OFFSHORE WIND The global wind electricity market is expected to grow from $90 billion in 2021 to $104 billion in 2022 (a growth percentage of 16%). The growth is mainly due to companies rearranging their operations and recovering from the impact of COVID-19, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $185 billion in 2026 which means a yearly growth of 15%. Partly due to the conflict in Ukraine and the enormously increased prices for oil and gas, investment in alternative energy will be increased to be less dependent on oil and gas. Europe Europe installed 17 Gigawatts of new wind capacity in 2021. This is not even half of what Europe should be building to be on track to deliver its 2030 Climate and Energy goals. 19% of the new wind installation in Europe last year was offshore wind (81% onshore). Sweden, Germany, and Turkey built the most onshore wind. The UK had the highest total new wind installations. Europe now has 236 Gigawatts of wind capacity. We expect Europe will have to build 116 Gigawatts of new wind farms over the period from 2022-2026. 25% of these new capacity additions will be offshore wind. We expect Europe to build on average 18 Gigawatts of new wind farms per year between 2022-26. They should build 32 Gigawatts a year in order to meet the various European governments’ targets. Germany will be Europe’s largest wind market thanks to the expected strong performance of its onshore market over the next five years and rising offshore installations, followed by the United Kingdom, France, Spain and Sweden. Asia China built more offshore wind capacity, in 2021 alone, than the rest of the world in the last 5 years put together. Taiwan is expected to become the second-largest offshore wind market in Asia aſter Mainland China in new installations in the period leading up to 2030. To reduce its independence from foreign energy sources, Taiwan is committed to having 20% of its power from renewables by 2025. China dominates the market for installation of wind farms in Asia. It is difficult for European companies to infiltrate this market, especially in recent years with all the COVID-19 restrictions.
Oceanteam Annual Report 2021 5 United States Petroleum and natural gas are expected to remain the most consumed sources of energy in the United States through to 2050, but renewable energy will grow more quickly than any other energy source. Despite having more onshore wind farms than any country bar China, the US has lagged in offshore wind farms with only 42 Megawatts. However, development opportunities are now blossoming, promising a new multi-billion-dollar, job-rich sector for the US’s green economy, one likely to eventually overtake in size even the most successful offshore wind sectors in Europe. US states on the East Coast have taken the lead in creating offshore wind opportunities. In 2019, their procurement goals were already 23,698 Megawatts by 2035, but by this year they had grown to 39,298 Megawatts by 2040. Overall, in 2022 the market will remain challenging, partly because the new installation areas have been allocated but construction has yet to start, but there will be great momentum in the years to come. Suppliers are expected to come up with total solutions, including equipment rental, handling, transportation, storage etc., so that the installer is unburdened. Oceanteam Solutions targets wind farm owners, contractors and suppliers in the offshore wind industry and develops and offers a range of services, starting from a simple rental of equipment to a complex tailored logistics service package including rental of equipment, cable transportation, cable storage and handling services with the aim to participate in the market growth and position itself as the preferred offshore wind subcontractor. 5. BOARD OF DIRECTORS AND MANAGEMENT TEAM Board of Directors Keesjan Cordia Chairman of the Board of Oceanteam ASA since April 2018 Year of birth: 1974, Dutch national Current positions: Director Invaco Management B.V. and Corinvest B.V., Board member / director Ship Finance International (NYSE), Board member / Director Northern Drilling (OSE), Board member Combifloat B.V., Board member Kerrco Petroleum Former positions: Owner/director of Sea Accommodation Resorts Limited (SeafoxGroup) B.V Education: Academic degree in Business Economics Karin Govaert Member of the Board of Oceanteam ASA since April 2018 Year of birth: 1968, Dutch national Current position: Founder and director of Rivermaas B.V. (Investments in Coastal Shipping) Former positions: Maritime Consultant, Investment Manager Rotterdam Port Fund Education: Academic degree in Economics at the Erasmus University in Rotterdam and a master’s in finance at the Tias Business School in Tilburg Jacob Johannes van Heijst Member of the Board of Oceanteam ASA since April 2022 Year of birth: 1968, Dutch national Current positions: Director of Stichting ValuePartners Family Office, Non-Executive Director of Arcona Property Fund NV Former positions: Derivatives trader in Amsterdam and New York, Head of Research at Optiver Education: PhD in Medical Physics Management Team: Hans Reinigert, CEO of Oceanteam ASA since November 2021 Ben de Jong, CFO of Oceanteam ASA since August 2021 6. REPORT OF THE BOARD OF DIRECTORS a. CORPORATE STRUCTURE Oceanteam ASA is the parent company of a group of companies (together the “Oceanteam Group”). Aſter the divestment of the Shipping segment, the remaining subsidiary companies will consist of those which are grouped under Oceanteam Solutions. Oceanteam plans to liquidate the two remaining companies falling within the shipping segment in 2022. Oceanteam Solutions comprises of Oceanteam companies active as a service provider to the renewables offshore wind energy business with the supply of rental equipment for the transportation, storage, and handling of subsea cables. The majority of the subsidiary companies are incorporated in Norway and in the Netherlands. b. BUSINESS ACTIVITY OCEANTEAM SOLUTIONS Oceanteam Solutions delivers high specification assets and unique services to the renewables offshore wind energy business and provides a complete set of high-quality rental equipment (demountable carousels, tensioners and other cable handling equipment) and tailored solutions for the transportation, storage and handling of subsea cables. Oceanteam Solutions has a long track record as a service provider to the renewables and oil and gas industries. It has a pool of experienced staff that, combined with Oceanteam’s owned equipment, has the ability to provide a complete range of Lloyd’s ISO certified solutions to its customers. Multiple cable storage projects, cable transportation and handling activities and rental of equipment were ongoing in 2021 and beyond.
Oceanteam Annual Report 2021 6 c. BACKLOG Oceanteam Solutions has one long term rental agreement for a carousel which ends mid-December 2023. The other long term rental agreement has been cancelled in January 2022 and all cancellation fees have been received. A cable transportation agreement is finalized and will start in February 2022. d. COMMENTS RELATED TO THE FINANCIAL STATEMENTS INCOME STATEMENT The financials have been adjusted for comparison reasons because of the divestment of the shipping segment. The continuing operations only represent the Solutions segment. Oceanteam ASA has been reclassified from the Shipping Segment to the Solutions segment as these corporate related costs are now in the interest of financing and growing the Solutions segment. This reclassification has been made retrospectively. The net result following the divestment from the shipping segment is presented as net result from discontinuing operations. On 31 December 2020, both vessels were impaired down to their expected selling prices, less costs to sell, therefore the sale of CSV Southern Ocean in 2021 had minimal impact on the 2021 result. The credit loss provision which Oceanteam Bourbon 4 AS has in respect of Oceanteam Bourbon 101 AS’s inability to settle its debts has been increased by USD 1.85 million in 2021. The expense has been classified under discontinued operations. See note 14 and 28 for further details. The total operating loss of the Oceanteam Group increased to USD 1.2 million in 2021 compared to USD 0.4 million in 2020. During 2021 the revenue consists of equipment rental, cable storage income, transport, handling services and management fee income. In 2021 Oceanteam successfully finalised a project for a client in Northern Europe, which commenced in May 2021. During 2021 Oceanteam’s Solutions business continued to service its existing long-term contracts. EBITDA from the Solutions segment has decreased by USD 0.6 million from USD 0.7 million in 2020 to USD 0.1 million in 2021. The total operational expenses of the Solutions division for the reporting period are USD 6.9 million compared to USD 6.4 million during the same period in 2020. This is primarily due to non-recurring personnel related costs. The fixed costs related to the overall equipment base remained unaltered. The Group made a net loss from continuing operations of USD 1.6 million in 2021 compared to a net loss of USD 1.3 million in 2020. In 2021 there was a loss from discontinued operations of USD 1.6 million whereas in 2020 there was a loss from discontinued operations of USD 71.9 million. The above factors resulted in a enormous decrease in the net loss for the period with a loss of USD 3.1 million in 2021 compared to a net loss of USD 73.2 million in 2020. BALANCE SHEET AND CAPITAL STRUCTURE Total assets at the end of the reporting period amounted to USD 18.5 million, compared to USD 52.8 million as of 31 December 2020. Equity as a percentage of total assets was 71 percent per 31 December 2021, compared to 31 percent per 31 December 2020. Oceanteam has diversified capital sources consisting of equity and shareholders’ loans. The equity (share capital of the Company) is divided into 34,338,833 shares with a nominal value of NOK 5.75 each. The loans from the consortium of banks was fully repaid during 2021 with the proceeds from the sale of the vessels. Before the sale of both vessels, the shipping division used to charter and manage two deep water construction support vessels, owned by two vessel owning companies, of which 50 percent of the shares are owned by Oceanteam. The shipping company, Oceanteam Bourbon 4 AS, which owned the CSV Southern Ocean, has been fully consolidated. The shipping company, Oceanteam Bourbon 101 AS, which owned the CSV BO 101, is accounted for according to the equity method. As at 31 December 2021, the carrying value of the equipment was 13.0 million. As at 31 December 2020, the carrying value of the equipment and CSV Southern Ocean was USD 44.1 million. As both the vessels have now been sold, Oceanteam is in the process of winding down both shipping companies. Interim distribution of remaining funds has taken place in the fourth quarter of 2021 through intercompany loans. Final distribution will take place when the entities are liquidated in 2022. VESSELS AND EQUIPMENT, INVESTMENT IN ASSOCIATES AND JOINT VENTURES The net book value of Solutions equipment was USD 13.0 million on 31 December 2021. The same line item of USD 44.1 million as at 31 December 2020 included both Solutions equipment and CSV Southern Ocean. The Investment in associates and joint ventures was nil on 31 December 2021 (31 December 2020: USD nil). This is primarily the investment in Oceanteam Bourbon 101 AS, the company being accounted for according to the equity method. The Total Non-current assets of USD 13.2 million represents 71 percent of the total assets (31 December 2020: 85 percent). For clarity, only the CSV Southern Ocean was accounted for as fixed asset on the statement of financial position as at 31 December 2020. CASH FLOW AND LIQUIDITY During 2021 the Group’s overall cash position decreased from USD 3.2 million to USD 2.8 million.
Oceanteam Annual Report 2021 7 Net cash flow from operating activities amounted to USD 2.6 million in 2021 compared to negative USD 1.4 million in 2020. The net decrease in cash from discontinued operations amounted to USD 2.9 million in 2021 compared to USD 0.2 million in 2020. Following the repayment of the loans from the banking consortium, cash within Oceanteam Bourbon 4 AS is no longer considered restricted. e. GOING CONCERN In accordance with the Accounting Act § 3-3a Oceanteam ASA confirms that the financial statements have been prepared under the assumption of going concern. This assumption is based on income forecasts for the years 2022 – 2023 and the Group’s long-term strategic forecasts. Aſter the divestment of the Shipping division the cash flow position has improved and has a positive impact on the performance and liquidity of the Group. Liquidity forecasts going forward are for modest but positive cash flows. The Directors have considered all available information about the future when concluding whether the Company is a going concern at the date, they approve the financial statements. The review covers a period of at least twelve months from the date of approval of the annual report. Detailed information on future cash flows for the 12 months (April 2022 until April 2023) with underlying key assumptions are available in the 2021 annual report within Financial Statement disclosure Note 3. There is inherent risk in cash flow estimates for the Company’s ability to secure new contracts within its business segment. However, the Company has plans to mitigate this constraint through various actions. Reference is made to the detailed disclosure information regarding various risks in the 2021 annual report and how the Company is mitigating these. The Solutions segment has a good forward contract position and can focus on utilisation. The spot offshore wind market offers opportunities where service and handling are more important than price. Within this segment the maritime asset rental business is doing better based upon an asset cost base which is written off. An uptick in interest/demand will improve cash yield of this service in the course of 2022 and 2023. f. RISKS Based on the Group’s activities and strategic objectives, the Company has identified the main risks associated with its activities and strategy. The Group is exposed to technical, economical, commercial, operational and political (TECOP) risks, including financial, liquidity, and health, safety and environmental risks. Those risk factors may positively or adversely affect Oceanteam in the future. Please note that the risks below are not the only risks that may affect Oceanteam’s business or the value of the shares. Additional risks not presently known to the Board of Directors or considered immaterial may also affect its business operations and projects. Development of the business and changes in market conditions can also lead to new risk areas that previously were not applicable. If any of the risks described below materialise, individually or together with other circumstances, they may have a material adverse effect on the Group’s business, financial condition, results of operations and cash flow and / or prospects. The order in which the risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance. The risks mentioned herein could materialise individually or cumulatively. The appetite for risks is extensively discussed and tested for every major individual event, such as entering into a contract, making an acquisition or divestment, deciding to make an (capex) investment, or hiring new management. All management in Oceanteam must identify and evaluate the risks to the achievement of any project and rental contract objectives, set boundaries for risk acceptance, and apply fit-for-purpose responses. Management must actively manage their project and rental contract risks and accurately inform decision authorities and Management of the Group. Risk management is primarily about adopting a structured way of working that ensures risks are identified, understood, agreed, communicated and acted upon in a timely and consistent manner. An unambiguous organizational framework is a pre-requisite. Risk management is an integrated part of and is actively used to support the decision-making process. The Company has two explicit “zero tolerance” criteria: 1) In relation to HSE: Oceanteam has zero tolerance for harm to people or for damage to the environment or to its assets in the execution of its activities. 2) In relation to Compliance: Oceanteam has zero tolerance for non- compliance with the Oceanteam’s Code of Ethics and any related applicable laws and regulations. In the Solutions segment, the Group is willing to consider risk to a certain extent as long as the amounts involved are acceptable and within limits of the Company’s financial position and capabilities. Oceanteam has limited appetite to engage with joint venture parties and vendors which rate unsatisfactorily on the Company’s set criteria. Risk breakdown structures are excellent tools for both risk identification as well as classifying, evaluating and managing risks to assist with managing sub sections of the risk register. Active risk management must help in achieving the Companies’ strategic goals and objectives. The most commonly used project risk breakdown structure in Oceanteam is TECOP. TECHNICAL RISKS The Company is active in the offshore wind business. The assets are employed worldwide, including in deep water and hostile environments. The assets suffer from wear and tear and require regular maintenance and planned and unplanned repair. Oceanteam enters into contracts with its
Oceanteam Annual Report 2021 8 customers where Oceanteam is accepting certain project execution risks in line with industry practice. Such construction risks are generally limited in nature and absorbed by the customer and or his end-client. Key subsections of Technical Risks are Health, Safety, Environmental and Security risks, Integrity risks (of equipment and systems), Availability risks, Operability risks, Technology risks, and Maintenance risks. Oceanteam only accepts industry standard and limited project-related risks where it believes it can manage and absorb such risk adequately or can transfer this risk to third parties. Oceanteam is committed to pioneering new technologies that improves the safety and the efficiency of the operations and has a risk appetite to explore with its customers on better ways to design and execute its subsea and solutions activities. Oceanteam sees advantages of utilising digital technologies and is supportive to make investments in such technologies in cooperation with its customers. The Group devotes considerable resources to ensure its assets are performing safely and to high quality standards. Oceanteam promotes adequate day rates to allow making such investments. Control and maintenance of all equipment are vital to daily activities on board and at the sites. Equipment performance is continuously measured. COMMERCIAL RISKS The Group is exposed to market fluctuations which may result in lower utilisation and reduced rental rates for future contracts (existing rental contracts are firm) and thus earnings for the Group’s equipment and services. Attempts are made to reduce this risk by entering into contracts that secure long-term rental contracts for the main portion of the carousels in the Oceanteam Solutions business. Oceanteam is currently active in one stream of business, the offshore wind business through its Solutions division. Oceanteam will contribute to the energy transition and offer its capabilities to make such a transition happen. Risks in this sub-category could be grouped along Market and competition, Contracting and procurement, Financing (Credit) and Liquidity, Business controls, Legal, Terms and conditions, and Liabilities and Compliance. In the Solutions segment Oceanteam enters into a variety of contract structures, from lump-sum fixed price contracts to rental contracts, cost- plus contracts and performance-driven type of contracts. Oceanteam is working under long-term contracts and short-term and spot market contracts. FINANCIAL RISKS The Company is exposed to financial risk in different areas. Financial risks include interest rate and currency fluctuations and investment, credit and liquidity risks in general. The Company has sales revenues and liabilities in foreign currencies and is exposed to currency risks: 11 percent of the revenue is in USD, 57 percent is in Euro and the remaining 32 percent in GBP. Since the functional currency is in USD the foreign exposure is for liabilities in the EUR and its fluctuations with USD. Some of the local costs for Oceanteam are in NOK. The overall strategy to reduce currency risk is largely based on natural hedging with incoming and outgoing cash flows been made in the same currency. Today’s Group’s customers are primarily large companies with high credit rating. Credit risk is the risk of financial loss to the Group if a customer or other counterpart to a financial instrument or invoice fails to meet its contractual obligations and such loss would arise principally from the Group’s trade receivables and its customers. At year-end, trade receivables from the Solutions segment represented 100 percent of the Group’s total trade receivables. These receivables were all related to rental contracts. The exposure to credit risk depends on the individual characteristics of each customer. Before projects are in tendering phase and awarded, the Group performs full credit assessments on its existing and future customers. CREDIT RISK The Group’s customers and partners are preferably and primarily large companies with high credit rating. Credit risk is the risk of financial loss to the Group if a customer or other counterpart to a financial instrument or invoice fails to meet its contractual obligations and such loss would arise principally from the Group’s trade receivables and its clients and customers. Solutions segment At year-end, trade receivables from the Solutions segment represented 100 percent of the Group’s total trade receivables. The exposure to credit risk depends on the individual characteristics of each customer. Before projects are in tendering phase and awarded, the Group performs full credit assessments on its existing and future clients. Geographically the credit risk for the Solutions segment can be divided into activities in European countries and with an approximate number of 15 clients. Clients within the Solutions segment are in the offshore wind industry. In the Solutions segment, almost all the outstanding trade receivables per year end have already been received in 2022. No allowance for expected credit losses is considered necessary. Oceanteam Group As at 31 December 2021, Oceanteam Bourbon 101 AS had negative equity of USD 7.9 million. Oceanteam Bourbon 4 AS has reflected this by increasing its provision for lifetime expected credit losses by USD 1.85 million from USD 6.15 million to USD 8 million.
Oceanteam Annual Report 2021 9 The need for bank guarantees, parent company guarantees, and pre- payments are considered on an individual basis project by project. LIQUIDITY RISK Liquidity risk relates to the ability to meet financial obligations as they fall due. Oceanteam has financial obligations due to both, major shareholders in respect of loans provided and to vendors. At the end of 2021, the balance of secured debt is USD 3 million. There is USD 0.5 million in trade payables and USD 2 million in other liabilities. The loans from the banking consortium to Oceanteam Bourbon 101 AS and Oceanteam Bourbon 4 AS were fully repaid during 2021. Obligations to vendors are mostly smaller in size and across a larger number of vendors. The liquidity risk can be divided into short-term, medium-term, and long- term risks. The short-term risks relate to certain specific small vendors requiring immediate payment compared to incoming cash flows. This risk is managed through the incoming cash flow which the Group has from the Solutions division. The medium-term risks relate to aggregation of smaller vendors. Due to increased solutions activity, cash flow fluctuation in medium term should remain covered by the cash flow from the performance of contracts in the Solutions segment. This medium-term risk is being managed by attempting to have contracts for a longer period in the Solutions division. Long term risks relate to the repayment of the shareholder loans which has been managed by requesting deferral of the repayment of instalments and through the divestment of the shipping segment. The operations of the Mexican office have been closed. Both the Tiburon II and Mantarraya II are laid up in Venezuela and subject to charges due to vendor claims. The development of the offshore wind industry is expected to strengthen the income of the Solutions division and the effect of cost reduction objectives for operational expenditures and corporate expenses will carry on in 2022. The results and cash flow of the Solutions division will be key to maintain a stable cash flow. Within Oceanteam Bourbon 4 AS, which is fully consolidated, as at 31 December 2021, there was cash of USD 0.3 million and no loan debt. At the balance sheet date, the Group had a cash position of USD 2.8 million. The 100% owned subsidiary, Oceanteam Shipping B.V, had an overdraſt facility of EUR 0.8 million which was not in use. MARKET RISK Market risk includes risk due to political, economic risk and other uncertainties, increased competition and risk of war, other armed conflicts and terrorist attacks. The deteriorated financial climate has an impact on projects in the renewable energy industries. Oceanteam expects the demand for Oceanteam Solutions’ services may be affected by economic climate and global supply chain trends. ORGANISATIONAL RISKS Key subsections of Organizational Risks are risks related to the Corporate structure, Resources, Competencies, Procedures, Project Controls, Knowledge management, Systems and IT, -Interfaces, Reporting, Partners and Governance. Oceanteam has gone through a major restructuring during the last three years. The Management and the Board of Directors have initiated a series of initiatives to improve the organization, including its procedures, systems, resources, controls and reporting. Improving the internal organisation is an on-going process. For 2022, further focus will be put on resources, competencies, and project and risk management controls. The Group is committed to continuously improve its organisational capabilities, processes and systems. The Group’s risk management and internal control are based on principles in the Norwegian Code of Practise for Corporate Governance. The Board of Directors’ view is that continuous improvement of the Group’s operations in a systemic manner is a necessity in order to manage risks and realise opportunities to ensure efficient and effective operations in line with stakeholders’ expectations. The Group has established routines for weekly, monthly and quarterly reporting regarding commercial, operations, liquidity, financing, investments, HSE, HR, and legal performance. As part of the monthly reporting, Management presents detailed budgets and forecast on a 12-month rolling-basis, and up to final maturity date of the outstanding loans. The Board of Directors considers the Group’s reporting procedures to be satisfactory and in compliance with the requirements on risk management and internal control. Liability insurance has been taken out for the Directors and Officers for their possible liability to the company and third parties. POLITICAL RISKS Key subsections of political risks are risks related to government, stakeholders, regulations, compliance, reputation, export controls, local requirements, community and license to operate.
Oceanteam Annual Report 2021 10 The Group has the ambition to be an incident free organisation, onshore and offshore. The Group strives to improve safety and environmental performance across all worksites, globally. Oceanteam’s activities are carried out in compliance with laws and regulations valid in the relevant territory, including international protocols and conventions, which apply to the specific segments of operation. Changes to such regulatory frameworks, if not properly identified and implemented, may expose the Company to fines, sanctions or penalties. Compliance is enforced across both segments within the Group. g. EVENTS AFTER THE BALANCE SHEET DATE In April 2022, Mr Jacob Johannes van Heijst was elected as a member of the board. h. SHAREHOLDER INFORMATION SHAREHOLDER INFORMATION Shares in Oceanteam ASA are publicly traded at the Oslo Stock Exchange. Per 31 December 2021 the Company had 34,338,833 shares traded under the ticker code ‘’OTS’’. All shares are given equal voting rights. Shares are identified by the name of its owner or its owner’s nominee account. As reflected in the Company’s Articles of Association there are no restrictions relating to voting or transfer of ownership of the shares, nor are there mechanisms aimed at preventing takeovers. There are no specific representations, individual or in total, for shares owned by the employees. MARKET VALUE OF THE SHARES The shares on the Oslo Børs Stock Exchange were traded around NOK 2,35 per year end 2021 which gives a market valuation of the Company of approximately NOK 80.7 million on 31 December 2021 (in USD approximately USD 9.2 million at the conversion rate of 8.82), taking into account the share volume of 34.338.833 shares of the Company. The Company holds 0.37 percent treasury shares (127,573 shares). There are no restrictions in the Company’s articles of association for trading the shares. PARENT COMPANY The parent company, Oceanteam ASA, showed a loss of USD 1.7 million standalone. The negative result was attributable to a lack of dividends from equity accounted investments and subsidiaries, with none being received in 2021, and to significant impairments recognised. The year-end impairment review of the company’s investment in Oceanteam Bourbon 4 AS resulted in a write-off of USD 0.84 million. The parent company’s share capital per year-end 2021 amounted to USD 25.4 million (2020: USD 25.4 million) with a total equity of USD 10.8 million (2020: USD 12.4 million). The equity changes in the parent company are explained in detail in note 11 of the parent company. Net change in cash amounted to positive USD 1.5 million. The parent company is reporting its financial statements in USD as this is its functional currency and is in line with the Group reports. RESULT AND EQUITY The consolidated accounts show a loss for the period of USD 3.1 million. The consolidated total equity is USD 13.1 million as of 31 December 2021. The equity ratio as a percentage of the total assets is 71 percent. ALLOCATION OF NET INCOME The Company’s financial statement has returned a loss of USD 1.7 million. The Board of Directors proposes to allocate this figure against uncovered losses. The Group’s consolidated financial statements have returned a loss of USD 3.1 million and no other comprehensive income. The Board of Directors proposes to allocate this figure against uncovered losses. 7. CONFIRMATION FROM THE BOARD OF DIRECTORS AND CEO We confirm to the best of our knowledge that the financial statements for the period 1 January to 31 December 2021 have been prepared in accordance with current applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and result for the period of the Company and the Group taken as a whole. We also confirm that the Board of Director’s Report includes a true and fair review of the development and performance of the business and the position of the entity and the Group, together with a description of the principal risks and uncertainties facing the Company and the Group. The Board recommends that Annual General Meeting of Shareholders adopts the Financial Statements for the year 2021. Baerum / Norway, 13 April 2022 The Board of Directors and CEO of Oceanteam ASA Keesjan Cordia Karin Govaert Jacob Johannes van Heijst Hans Reinigert Chairman Director Director CEO
Oceanteam Annual Report 2021 11 8. CORPORATE GOVERNANCE AND CSR a) CORPORATE SOCIAL RESPONSIBILITY (CSR) Corporate Responsibility (CR) at Oceanteam is a matter of making good and sustainable business decisions. The Company considers Corporate Responsibility a strategic benefit that adds value to the Company, its stakeholders and society. The goals of the Company regarding corporate responsibility are to increase the positive effects and reduce potential negative consequences of its operations. As part of its responsibilities towards internal and external stakeholders, the Company has a number of policies expressing its position on governance matters that include safety, environment, business ethics and integrity. The Board of Directors is ultimately responsible for CR and governance activities. Development and oversight of the Corporate Responsibility as well as performance and reporting is delegated to the Management. The Solutions business of Oceanteam holds Lloyds certificates for ISO 9001:2015, standards for quality, environmental and health and safety management. WORKING ENVIRONMENT At the end of 2021, the Company employed 7 people - contractors and marine crew not included - with various background and roots from all over the world, bringing together a broad mix of cultures. The people within Oceanteam are a crucial factor in the entire process of creating value for our customers. For the future Oceanteam intends applying a systematic approach to the performance and achievements of the employees. The aim is to encourage, acknowledge and continuously motivate employees. Uniform job profiles for the Group have been implemented throughout the Company, which helps ensure our workforce is performing at its best for Oceanteam and its customers. The percentage sick leave for 2021 was 18 percent. The Company has procedures in place to ensure employees have a good working environment. PROFESSIONAL STANDARD, BUSINESS ETHICS AND ANTI-CORRUPTION In December 2019 the Board of Directors of Oceanteam approved an updated code of ethics (“Code of Ethics”). All permanent employees and managers, contractors, suppliers, subcontractors, representatives and other contracting parties of Oceanteam are required to act in accordance with the principles set forth in the Code of Ethics and to confirm in writing adherence to Oceanteam’s ethical standards. EQUAL OPPORTUNITY Oceanteam is fully committed to meeting its obligation to provide equal employment opportunities to all employees and applicants without regard to race, colour, religion, gender, national origin/ancestry, citizenship, age, sexual orientation, disability or other protected status. Most of Oceanteam’s employees work in the Netherlands, however a number of the staff represents other nationalities, backgrounds and cultures than those of the Netherlands and Norway. The anti- discrimination laws’ objective is to promote gender equality, ensure equal opportunities and rights and to prevent discrimination due to ethnicity, national origin, descent, skin colour, language, religion and faith. Oceanteam is actively and systematically working to comply with the anti-discrimination laws and actively to avoid discrimination in the fields of recruiting, salary and working conditions, promotion, development, opportunities and protection against harassment. SAFETY At times the Company engages in work under challenging conditions, making it imperative to maintain the safety of employees and customers, subcontractors, consultants and other parties. The foundation for this continuous diligence is the Company’s QHSE management system and the Integrated Management System (IMS) as well as regular risk assessments. The Company’s QHSE policy is instrumental to the development of our employees to ensure that they are safe and comply with all relevant QHSE legislation. This is done through involvement in our introduction process and attendance at various mandatory training courses. Oceanteam requires all employees to adhere strictly to its policies and procedures. The Company rigorously enforces its obligation to ensure both the appropriate training and competences for the task in hand and the awareness of each employee of their rights and obligations in maintaining a healthy and safe workplace. In2021,nolarge-scaleaccidentsorincidentswererecordedintheOceanteam group. Nor were any personal injuries reported in any Oceanteam company in 2021. Any and all reported incidents and accidents are always followed up with an investigation that is recorded and filed. The cause and solution of the investigation are recorded in a database. NATURAL ENVIRONMENT The desire to minimise harm to the natural environment continues to be a prime objective. Oceanteam Solutions’ Lloyds certification for ISO 9001:2015 and the Integrated Management System ensure a systematic approach to environmental management and continuous improvement throughout the Group.
Oceanteam Annual Report 2021 12 The identified main aspects and potential negative impact from Oceanteam operations and locations are the use and transfer of oil, general waste production and pollution from waste oil and waste cooling fluids. Mitigating activities to reduce impacts and potential negative impacts include spill kits available on-site, work instructions for waste reduction and sorting and waste transfer notes kept on site. Oceanteam Solutions require smaller amounts of oil-use in their operations and use only biodegradable oil to ensure minimum environmental risk. The results of the environmental risk mitigation work in 2021 are deemed to be satisfactory, with zero reported leakage or spillage incidents. b) CORPORATE GOVERNANCE POLICY Adopted by the board of Directors on 3 April 2020 1 INTRODUCTION 1.1 Background Oceanteam ASA (“Oceanteam” or the “Company”) is a listed company, established and registered in Norway in accordance with Norwegian law. The Company and its subsidiaries (the “Group”) make every effort to comply with all applicable laws and regulations, as well as with the Norwegian Code of Practice for Corporate Governance (Nw: “Norsk anbefaling for eierstyring og selskapsledelse”) issued by the Norwegian Corporate Governance Board on 14 October 2021 (the “Code”) and published at www.nues.no. The Board of Directors (the “Board”) adopted this Corporate Governance Policy (the “Policy”) on 3 April 2020 to reflect and underline the Company’s commitment to good corporate governance and to reflect the amendments to the Code on 17 October 2018. The Policy is intended both as a guiding instrument for the Board and the executive management and as a device to maintain good relations and trust with the various stakeholders of the Company and Group. In further implementation of this goal, the Board has also adopted an Insider Trading Policy and a Code of Ethics, applicable throughout the whole Group. 1.2 Purpose This Policy includes measures implemented for the purpose of clarifying the division of roles between the shareholders, the Board and the executive management, consisting of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) more comprehensively and for ensuring an efficient management of and control over the Company’s operations. The main goal is to have systems for communication, monitoring, accountability and incentives that enhance and maximise the corporate profit, the long-term health and overall success of the business, and the shareholders’ return on their investment. The development of and improvements on the Company’s corporate governance is a continuous process, to which the Board and the executive management devote a strong focus. 1.3 Regulatory framework The Company is a Norwegian public limited liability company (ASA) listed on Oslo Børs (the Oslo Stock Exchange). The Company is subject to the corporate governance requirements set out in the Norwegian Public Limited Liability Companies Act 1997 (the “NCA”), the Norwegian Securities Trading Act of 2007 as amended in 2014 (the “STA”) and the Norwegian Stock Exchange Regulations (the “SER”). Any deviations from the guidelines provided in the Code will be explained in accordance with the “comply or explain” principle of the guidelines. The status of compliance in respect of each recommendation provided in the Code will also be set out in the Company’s annual report in accordance with the requirements of section 3-3b of the Norwegian Accounting Act. 1.4 Management and Control of the Company The management and control of the Company is shared between the shareholders, represented in the general meeting of shareholders of Oceanteam (the “General Meeting”), the Board and the CEO according to applicable company law. The Company has an external independent auditor elected by the General Meeting. 1.5 Corporate values and ethics The Company is an offshore services and shipping company. In addition to owning, chartering and managing deep-water offshore construction service vessels, the Company also offers rental of equipment and integrated cable transport- and handling solutions. The Board sets the core values and guides the affairs of the Group. This includes the Group’s commitment to achieving its health and safety vision and the Group’s adherence to the highest ethical standards in all of its operations. The Board integrates environmental improvement into its business plans and strategies, and seeks to embed sustainability into the Group’s business processes. The Board monitors the Group’s performance in these areas. The Company holds certificates to the ISO 9001 standards for quality, environmental and health & safety management. The Company further strives to maintain a high ethical standard. All employees are appropriately trained and confirm adherence with the Group ethical principles set forth in the Group Code of Ethics. 2 BUSINESS The operations of the Company shall be in compliance with the business objective set forth in its Articles of Association. The Company’s business purpose reads as follows: “The objective of the company is sale, purchase, contracting, acquiring, lease and operation of vessels and equipment with associated services directly through wholly or partly owned subsidiaries. The company may sell assets, including shares in subsidiaries, and invest and participate in other companies”.
Oceanteam Annual Report 2021 13 3 THE BOARD OF DIRECTORS 3.1 Role Oceanteam shall be directed by an efficient Board with collective responsibility for the success of the Company. The Board represents, and is accountable, to the shareholders of the Company. The Board shall define clear objectives, strategies and risk profiles for the Company’s business, such that the Company creates value for the shareholders. The Board has both managerial and supervisory duties and sets clear objectives and strategically guides the Company by effectively monitoring the executive and senior management, the financial situation of the Company and the Company’s accountability towards- and communication to its shareholders. The Board has overall responsibility for the operational and financial performance of the Group and will review this on a regular basis. The Board shall approve major capital projects and related capital expenditures, as well as significant investments and disposals, acquisitions, mergers and divestments. The board shall approve loans and other financing for the Group. The Board could take board positions in Joint ventures. The Board delegates to the executive management the implementation of the strategy and business plan. The Board ensures that the Company is efficiently organised and that its operations are carried out in accordance with all applicable laws and regulations, in accordance with the objectives of the Company and its purpose pursuant to its Articles of Association, and within the guidelines given by the shareholders through resolutions in General Meetings from time to time. In order to ensure efficient and thorough working procedures, the Board may appoint one or more working committees to prepare matters for final decision by the Board. The appointment, composition and mandate of such committees shall be made in due consideration of issues such as the nature of the envisaged project and the particular skills required and may include board members. The Board shall ensure that members of the Board and executive personnel make the Company aware of any material interests that they may have in matters to be considered by the Board. The Board shall initiate activities, processes and investigations as it deems necessary in order to carry out its responsibilities as may be required from time to time by one or more Board members, employees or relevant external parties. 3.2 Financial control, risk management and internal control 3.2.1 Supervision The Board shall at all times ensure that it has a clear view on the financial situation of the Company and has a duty to ensure that the Company’s operations, accounting and asset management are subject to satisfactory control. The members of the Board have full and free access to officers, employees and the books and records of the Company and specifically to the key executive functions stipulated under sections 4 and 5 hereof. The Board shall ensure that the CEO reports monthly to the Board on the Company´s activities, position and financial situation. 3.2.2 Adequate capitalisation The Board shall evaluate whether the Company’s capital and liquidity are adequate in relation to the risks and the scope of the Company’s operations at all times and whether it fulfils the minimum requirements established by law. The Board shall immediately take adequate measures should it be apparent at any time that the Company’s capital or liquidity is less than adequate. If the Board requests the General Meeting to grant authority to the Board to increase the share capital, the Board will ensure that the increase is designated for a specific purpose. If several purposes are of relevance, each purpose should be dealt with separately in the General Meeting. 3.2.3 Risk management and internal control The Board shall ensure that the company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the Company’s activities and shall be regularly briefed by the Chief Financial Officer (“CFO”) thereon. Internal control and the systems shall encompass the Company’s corporate values and guidelines for ethical and corporate social responsibility. The Board will carry out an annual review of the Company’s most important areas of exposure to risk and its internal control arrangements. In compliance with section 3-3b of the Norwegian Accounting Act, the Board will provide an account in the annual report of the main features of the Company’s internal control and risk management systems as they relate to the Company’s financial reporting. 3.3 Composition 3.3.1 Number of directors The Board shall be elected by the General Meeting. The Company currently has no employee representatives on its Board. 3.3.2 Independent directors The Company shall have a majority of directors that are independent from its executive management and main business partners, and no representatives of the executive management shall be a member of the Board. Further, the Board shall include at least two directors that are independent of the Company’s major shareholders, i.e. shareholders holding more than 10 % of the Company’s shares. Independence shall for these purposes mean that there are no circumstances or relationships that are likely to affect or could appear to affect the director’s independent judgement. The evaluation of whether a director is independent shall be based on the criteria set out in section 8 of the Code.
Oceanteam Annual Report 2021 14 The Company may be in need of in-depth support to the executive management for the day-to-day business of the Company by experienced senior professionals with profound knowledge of the Company. To the extent that the CEO considers that there is such need of expertise and one or more of the directors fulfil these criteria, the CEO shall indicate to the Board that it is deemed beneficial for the Company that a director provides the required support. Such support can be provided through specific project agreements. In order to ensure transparency about such project agreements, any agreements for additional services provided by directors shall be approved by the Board and submitted to the General Meeting for approval. The members of the Board are encouraged to hold shares in the Company. 3.4 Appointment and termination – Nomination and Remuneration Committee The Board or any shareholders may recommend candidates for the Board, whereas any recommendation shall be supported by justification including information on each candidate’s competence, capacity and independence with the aim to attract reputable and experienced professionals with relevant knowledge and skills for the Company. The members of the Board are appointed by the shareholders in a General Meeting for a period of two years. The Board elects the Chairman of the Board. The shareholders in a General Meeting can resolve to remove directors. The Company’s size entails that the Company views it as an unnecessary costly arrangement to have a separate Nomination and Remuneration Committee and has therefore chosen to deviate from section 7 of the Code. 3.5 Proceedings The Board shall adopt guidelines on the division of responsibilities between the executive management and the Board. The Board will hold board meetings as oſten as required, whereas such meetings may be conducted by a conference call. 3.6 Annual evaluation The Board will annually evaluate its performance in the previous year and the performance of the CEO. 4 THE EXECUTIVE MANAGEMENT 4.1 THE CEO 4.1.1 Appointment The Board appoints and removes the CEO. 4.1.2 The Tasks and Procedures applicable to the CEO The CEO is in charge of the day-to-day management of the Company’s business and shall comply with the guidelines and instructions issued by the Board and in accordance with applicable laws and regulations. 4.1.3 The CEO’s Duties to the Board of Directors The CEO shall at least each month at a meeting or in writing, provide the Board with information of the Company’s business, position and financial situation. The CEO shall ensure that the Board receives accurate, relevant and timely information that is sufficient to allow the Board to carry out its duties. 4.2 The CFO The Board appoints and removes the CFO. The CFO reports to the CEO. The CFO is authorised to participate in the meetings of the Board as required and shall have primary responsibility for managing the company’s finances, including treasury, financial planning, management of financial risks, record-keeping and financial reporting. 5 OTHER EXECUTIVE FUNCTIONS 5.1 The Corporate Counsel The Corporate Counsel shall give solicited and unsolicited advice on matters relating to governance, ethics, risk assessment, agreements and arrangements that bind the Company and any matters that have legal implications and is responsible to regularly report thereon to the CEO. The Board may invite the Corporate Counsel to participate in meetings of the Board and the Corporate Counsel may interact directly with the Board on any matters with corporate governance- and legal implication. 6 REMUNERATION OF DIRECTORS AND CEO 6.1 Remuneration of Directors The remuneration of the directors shall be determined by the shareholders in a General Meeting and be disclosed in the annual accounts of the Company. Additional remuneration may be granted to members of the Board who are appointed to board committees. Any remuneration in addition to normal director’s fee shall be approved as stated in section 3.3.2 hereof and shall be specifically identified in the annual report of the Company. The Company deems it beneficial that the directors have aligned interests with the Company’s shareholders and other stakeholders. Therefore, the Company may choose to remunerate Board members through performance-based remuneration schemes such as options. The Company has therefore chosen to deviate from section 11 of the Code. Directors shall be encouraged to invest part of their remuneration in shares in the Company at market price. 6.2 Remuneration of CEO The Board shall adopt a statement with guidelines in respect of the remuneration of the CEO that is to be considered by the General Meeting. The statement should be produced as a separate appendix to the notice for the annual General Meeting. The guidelines for remuneration of executive personnel should clearly state which aspects of the guidelines are advisory and which, if any, are binding 6 (equity-based remuneration). Based on this division, separate votes should be held on these aspects of the guidelines at the General Meeting.
Oceanteam Annual Report 2021 15 Remuneration including any performance related incentive to the CEO shall be determined by the Board in meeting. All elements of remuneration to the CEO, and the total remuneration for the CEO shall appear from the annual report. The Board may at its sole discretion, grant performance related incentive to employees. The incentive cannot exceed one year’s annual salary, unless the Board decides otherwise and substantiates such decision. The Board may develop incentive schemes for the Group in order to align the motivation goals of personnel with that of the Company and enhance the value creation capacity for the shareholders. 6.3 Severance payments No employees of the Group shall have employment contracts granting notice periods of more than 12 months. 7 DISCLOSURE AND TRANSPARENCY 7.1 General The Company shall at all times provide its shareholders, the stock market (Oslo Børs) and the financial markets generally (through Oslo Børs’ information system) with timely and accurate information. Such information will take the form of annual reports, semi-annual interim reports, press releases, stock exchange notifications and investor presentations, as applicable. The Company shall seek to clarify its long- term potential, including its strategy, value drivers and risk factors. The Company shall maintain an open and proactive investor relations policy, a best-practice website and may give presentations as the Board deems fit in connection with annual and interim results. The Company shall disclose insider information in accordance with prevailing applicable laws. The Company will disclose relevant events including, without limitation, board and shareholder resolutions regarding dividends, mergers/de-mergers or changes in share capital, issue of warrants, convertible loans and all agreements of material importance that are entered into between group companies or related parties. 7.2 Communication with Shareholders The Board shall make itself available for discussions with the major shareholders to develop a balanced understanding of the issues and concerns of such shareholders, subject always to the provisions of the NCA, the STA, the SER and the principle of fair treatment of shareholders stipulated under section 8 hereof. The Chairman shall ensure that the views of shareholders are communicated to the entire Board. Information given to the Company’s shareholders shall simultaneously be made available on the Company’s website. 8 FAIR TREATMENT OF SHAREHOLDERS 8.1 General The Board shall take into account the interest of all shareholders of the Company and treat all shareholders fairly. There is and will remain to be only one class of shares and all shares are and will remain freely transferrable. If and when applicable, the reason for any proposed deviation from the pre-emptive rights of shareholders to participate in new share capital increases will be explained and included in notifications to the market. 8.2 Approval of agreements with shareholders and other related parties All transactions that are not immaterial between the Company and a shareholder of the Company (or related parties thereto) will be subject to a valuation from an independent third party and shall be approved by the Board. If the consideration exceeds 5 % of the Company’s share capital such transactions shall be approved by the shareholders in a General Meeting, to the extent required by the NCA Section 3-8. The directors and the executive and senior management shall notify the Board if they have any material direct or indirect interest in any transaction entered into by the Group. 9 AUDIT Under Norwegian law, the Company’s auditor is elected by the shareholders in a General Meeting. The Board shall make recommendations to the General Meeting on the auditor’s appointment, removal and remuneration and shall also monitor the auditor’s independence, including the performance by the auditor of any non-audit work. The Board will inform the shareholders in the Annual General Meeting (the “AGM”) on the auditor’s fees specified on audit and non-audit work respectively. The Company shall have an audit committee (the “Audit Committee”) that consists of two or more Board members that have the required qualifications. The Audit committee may involve specialists and nominate advisors to support the work of the Audit Committee. The Audit Committee may request the CFO to directly provide to the Audit Committee information related to financial reporting, financial risks, internal controls over financial reporting and corresponding compliance aspects. The auditor shall annually present a plan for the auditing work to the Audit Committee or to the Board and have at least one annual meeting with the Audit Committee or the Board to go through the Company’s internal control systems and to identify possible weaknesses and potential areas of improvement.
Oceanteam Annual Report 2021 16 10 DIVIDEND POLICY The Company’s objective is to yield a competitive return on invested capital to the shareholders through a combination of distribution of dividends and increase in share value. In evaluating the amount of dividend, the Board of Directors shall place emphasis on certainty, foreseeability and stable development, the Company’s dividend capacity, the requirements for sound and optimal equity capital as well as for adequate financial resources to enable future growth and investments, and the ambition to minimise the cost of capital. The AGM can resolve to grant a mandate to the board of directors to approve the distribution of dividends on the basis of the approved annual accounts. Such a mandate should be based on the existing dividend policy. The explanation for the proposal to grant a mandate should state, inter alia, how the mandate reflects the Company’s dividend policy. 11 SHAREHOLDER MEETINGS The shareholders represent the ultimate decision-making body of Oceanteam through the General Meetings. The AGM of the Company will be held each year before the end of June. The AGM shall approve the annual accounts and report and the distribution of dividend, as well as make such resolutions as required under applicable laws and regulations. The Board may convene an extraordinary general meeting (“EGM”) whenever deemed appropriate or when such meetings are required by applicable laws or regulations. The Company’s auditor and any shareholder or group of shareholders representing more than 5 % of the current issued and outstanding share capital of the Company may require that the Board convene an EGM. The Board will make arrangements to ensure that as many shareholders as possible are enabled to exercise their shareholders’ rights by attending the General Meetings, and that the General Meetings become an active arena for meetings between the Board and the shareholders by inter alia: - Ensuring that at all times a member of the Board attends the General Meetings. - Posing the summons together with the agenda and all documents pertaining to each matter on the agenda on the Company’s website not later than 21 days prior to the date of the meeting (except when otherwise decided by the General Meeting, cf NCA section 5-11b) irrespective of whether the Company also resolves to summon the meeting by way of other forms of communication ref § 7 in the Company’s articles of association. - Posing in the same manner on the website information and any forms required to be used in order to vote by proxy or by letter, unless such forms have been submitted directly to each shareholder. - Ensuring that the shareholders are adequately informed about their right to vote by proxy and of the procedures to be observed in doing so. - Ensuring that the summons, the documents and any further supporting material are sufficiently detailed and comprehensive in order for the shareholders to understand and form an opinion on the matters at hand. - Ensuring that the summons specify that any shareholder wishing to attend the General Meeting must notify the Company within a certain time limit stated in the notice, which must not expire earlier than five days before the General Meeting, ref § 8 in the Company’s articles of association. Shareholders failing to notify the company within the specified time limit may be denied access to the General Meeting. The Company will publish the minutes from General Meetings as an Oslo Stock Exchange notice and on its website immediately or as soon as possible aſter the meeting and will also keep them available for inspection at the Company’s offices. The Board will not make contact with shareholders of the Company outside the General Meeting in a way that may unfairly discriminate between the shareholders or infringe on any applicable laws or regulations. 12 CHANGE OF CONTROL, TAKEOVERS 12.1 General The shares in Oceanteam are freely transferable, and the Company shall not establish any mechanisms that may hinder a takeover or deter takeover-bids, unless this has been resolved in a General Meeting by a two- third majority of votes cast and share capital represented. However, the Board may, in the case of a takeover-bid, take such actions that evidently are in the best interest of the shareholders, such as, inter alia, advising the shareholders in the assessment of the bid and, if appropriate, seeking to find a competing bidder (“white knight”), always provided that the Board should not hinder or obstruct any take-over bids for the Company’s activities or shares. In the event of a take-over bid for the Company’s activities or shares, the Board has a particular responsibility to ensure that shareholders are given sufficient information and time to form a view on the offer. The Company’s Board shall issue a statement including a recommendation as to whether shareholders should accept the offer. If the Board finds itself unable to give a recommendation to shareholders, it shall explain the background for not making such a recommendation. The Board’s statement on a bid shall make it clear whether the views expressed are unanimous, and if this is not the case it shall explain the basis on which specific members of the Board have excluded themselves from the Board’s statement. The Board shall arrange a valuation from an independent expert. The valuation shall be published and explained at the latest at the same time as the Board’s statement.
Oceanteam Annual Report 2021 17 12.2 Overview of Norwegian statutory provisions on takeovers 12.2.1 Voluntary offer An offer to acquire shares in Oceanteam which, if accepted, triggers an obligation to put forward a mandatory offer must be made in an offer document and according to the requirements for voluntary offers set forth in the STA. 12.2.2 Mandatory offer Subject to certain exceptions, a mandatory offer has to be made in the event an acquirer (together with any concert parties) acquires more than 33 %, 40% or 50% of the voting shares in the Company. The requirement to make a mandatory offer is triggered when a purchaser becomes the owner of such percentage of the shares. A mandatory offer must be made within four weeks aſter the threshold was passed. The only alternative to a mandatory offer at such stage is to sell a sufficient number of shares to fall below the relevant threshold. All shareholders must be treated equally and the price to be paid is the higher of (i) the highest price paid by the purchaser during the last six months, and (ii) the market price when the obligation to make the mandatory offer was triggered. The offer must be made in cash or contain a cash alternative at least equal in value to any non-cash offer. 12.2.3 Compulsory Acquisition (“Squeeze out”) Compulsory acquisition of the remaining shares may be initiated by a shareholder who holds more than 90 % of the shares and voting rights. The acquisition is initiated through a Board decision of the shareholder and payment of the price offered. Failing agreement between the parties, the price shall be determined through a valuation by the court, but the acquirer will obtain title to the shares immediately. C. CORPORATE GOVERNANCE DEVIATIONS Oceanteam ASA (“Oceanteam” or the “Company”) adopted an updated Corporate Governance Policy in 2020 (the “Policy”) which outlines the Company’s governing principles in accordance with applicable laws and regulations, as well as the Norwegian Code of Practice for Corporate Governance dated 17 October 2018 (the “Code”). The Company has assessed its Policy for compliance with the Code which resulted in the amended Policy adopted on 3 April 2020. Oceanteam’s board of directors actively adheres to good corporate governance standards and ensures at all times that the Company complies with the applicable corporate governance principles or explains possible deviations therefrom. In relation to the above, the Company’s corporate governance principles comply with the Code, with the following exceptions: • Nomination Committee (Section 7 of the Code and Section 3.4 of the Policy) The Company has not appointed a nomination committee, as in the Company’s opinion, it is a costly arrangement, considering the size of the Company, therefore the Company has chosen to deviate from the Code, acting in accordance with section 3.4 of the Policy. • Remuneration of Directors and Management (Section 11 of the Code and Section 4 of the Policy). The Policy contains deviating arrangement from Section 11 of the Code the Company may enter into an agreement with a member of the board which is subject to approval of the General Meeting. • Equal Treatment of Shareholders and transactions with close associates (Section 4 of the Code and Section 6.2 of the Policy) The Company has implemented appropriate measures to identify and record such transactions with related parties with the aim to ensure that all material related party transactions have been disclosed to all shareholders through shareholder meetings and in the annual accounts, and that all such transactions have been made at arm’s length. All employees are required to annually disclose their related parties. In addition, all employees and contractors are required to attend training and confirm their adherence with the Company’s Code of Ethics, which is also applicable for Company’s associates, contractors and agents. Remuneration of Directors The Company deems it beneficial that the directors have aligned interests with the Company’s shareholders and other stakeholders. Therefore, the Company may choose to remunerate Board members through performance-based remuneration schemes such as options. The Company has therefore chosen to deviate from section 11 of the Code as stipulated in Section 4.1 of the Policy, however, as per the date of this financial report no such schemes have been implemented. • Board of directors composition and independence (Section 8 of the code and 3.3.2 of the policy) As of April 2022, the company deviates from section 8 of the code and 3.3.2 of the policy as only one of the members of the board elected by shareholders is independent of the company’s major shareholders. The board of directors of the Company consider the direct involvement and alignment of major shareholders as crucial during the transitional phase the company is currently in.
Oceanteam Annual Report 2021 18 9. FINANCIAL STATEMENTS GROUP Consolidated statement of profit or loss and other comprehensive income GROUP USD ‘000 Notes 2021 2020 Revenue 5, 6 5.747 5.936 Net income from associates and joint ventures 5, 26 - - Total operating income 5.747 5.936 Operating costs 5 (3.249 ) (3.393 ) Personnel costs 5, 8 (1.652 ) (1.298 ) General & administration 5, 9 (748 ) (562 ) Depreciation and amortisation 5, 11, 12 (1.129 ) (1.100 ) Write off / Impairment 5, 12 (165 ) - Total operating expenses (6.943 ) (6.353 ) Operating profit profit / (loss) (1.196 ) (417 ) Financial income - 19 Financial expense 18 (231 ) (258 ) Provision for expected credit loss guarantee 14 - - Foreign exchange gain / (loss) (75 ) 148 Net finance (306 ) (91 ) Ordinary profit / (loss) before taxes (1.502 ) (508 ) Tax expense 5, 13 (50 ) (750 ) Profit / (loss) from continuing operations (1.552 ) (1.258 ) Profit / (loss) from discountinued operation 5, 28 (1.574 ) (71.930 ) Profit / (loss) for the period (3.126 ) (73.188 ) Other comprehensive income/cost - - Total comprehensive income for the period (3.126 ) (73.188 )
Oceanteam Annual Report 2021 19 Consolidated statement of profit or loss and other comprehensive income GROUP USD ‘000 2021 2020 Profit / (loss) attributable to: Owners of the company (2.326 ) (45.714 ) Non controlling interests (800 ) (27.473 ) Profit / (loss) (3.126 ) (73.188 ) Total comprehensive income attributable to: Owners of the company (2.326 ) (45.714 ) Non controlling interests (800 ) (27.473 ) Total comprehensive income / (loss) for the period (3.126 ) (73.188 ) Earnings per share (in USD) Basic earnings per share (in USD) (0,09 ) (2,14 ) Dilutive earning per share (in USD) (0,09 ) (2,14 ) Weighted average of shares during the period (‘000) 34.211 34.211
Oceanteam Annual Report 2021 20 Consolidated statement of financial position GROUP USD ‘000 Notes 31-12-2021 31-12-2020 Non-current Assets Investment in associates and joint ventures 26 - - Vessels and equipment 12 12.976 44.060 Deferred tax assets 13 200 250 Right of use assets 11 - 481 Total non-current assets 13.176 44.791 Current Assets Trade receivables 14 974 2.481 Other receivables 14 1.637 2.294 Total receivables 2.611 4.774 Cash and cash equivalents 15 2.751 3.191 Total current assets 5.362 7.965 Total assets 18.538 52.756
Oceanteam Annual Report 2021 21 Consolidated statement of financial position GROUP USD ‘000 Notes 31-12-2021 31-12-2020 Equity and liabilities Share capital 17 25.403 25.403 Treasury shares (128 ) (128 ) Share premium 1.304 1.304 Uncovered loss (14.671 ) (12.345 ) Equity attributable to owners of the Company 11.909 14.235 Non-controlling interests 16 1.219 2.019 Total non-controlling interests 1.219 2.019 Total equity 13.128 16.254 Loans and borrowings 18 3.000 3.000 Lease liabilities 11 - 405 Total non current liabilities 3.000 3.405 First year installments 18 - 22.164 Lease liabilities 11 - 107 Trade payables 19 452 1.674 Tax payable 13 - 2 Public charges 36 58 Provisions 19 543 543 Other current liabilities 19 1.380 8.549 Total current liabilities 2.410 33.097 Total liabilities 5.410 36.502 Total equity and liabilities 18.538 52.756 Baerum / Norway, 13 April 2022 The Board of Directors and CEO of Oceanteam ASA Keesjan Cordia Karin Govaert Jacob Johannes van Heijst Hans Reinigert Chairman Director Director CEO
Oceanteam Annual Report 2021 22 Consolidated statement of changes in equity GROUP USD ‘000 Share Treasury Share Uncovered Non Total equity capital shares premium loss controlling interests Equity at 1 January 2021 25.403 (128 ) 1.304 (12.344 ) 2.019 16.254 Profit / (loss) (2.326 ) (800 ) (3.126 ) Total comprehensive income - - - (2.326 ) (800 ) (3.126 ) Equity per 31 December 2021 25.403 (128 ) 1.304 (14.671 ) 1.219 13.128 Share Treasury Share Uncovered Non Total equity capital shares premium loss controlling interests Equity at 1 January 2020 25.403 (128 ) 1.304 33.371 29.492 89.442 Profit / (loss) (45.714 ) (27.473 ) (73.188 ) Total comprehensive income - - - (45.714 ) (27.473 ) (73.188 ) Equity per 31 December 2020 25.403 (128 ) 1.304 (12.344 ) 2.019 16.254
Oceanteam Annual Report 2021 23 Consolidated cash flow statement GROUP USD ‘000 Notes 2021 2020 Ordinary profit / (loss) before taxes (1.502 ) (508 ) Net finance costs 306 91 Interest received - 19 Interest paid (263 ) (225 ) Depreciation and amortisation 5, 11, 12 1.129 1.100 Provision for loan guarantee expense 14 - - Tax paid 13 - - Net income of associates 26 - - Write off assets 5 ,12 165 - Change in trade receivables 14 255 (728 ) Change in other receivables 14 1.939 (535 ) Change in trade payables 19 (877 ) 594 Change in other accruals 19 1.415 (1.170 ) Other changes 2 (26 ) Net cash flow from operating activities 2.568 (1.387 ) Cash out due to investments 12 (16 ) (132 ) Cash in due to disposals 2 - Net cash flow from investing activities (14 ) (132 ) Increase / (decrease) in overdraſt facility 18 (81 ) 82 Repayment of lease liability principle 11 (54 ) (50 ) Net cash flow from financing activities (135 ) 32 Cash flows from discontinued operations Net cash outflow from operating activities 28 (10.048 ) 3.008 Net cash outflow from financing activities 28 (22.298 ) (49 ) Net cash inflow from investing activities 28 29.488 (3.108 ) Net increase / (decrease) in cash from discontinued operations (2.858 ) (149 ) Net change in cash and equivalents (440 ) (1.636 ) Cash and equivalents at start of period 3.191 4.827 Cash and equivalents at end of period 2.751 3.191
Oceanteam Annual Report 2021 24 9. NOTES FINANCIAL STATEMENTS GROUP Note 1 -Corporate information Oceanteam is an investment platform for marine and offshore assets with particular focus on the energy transition. Oceanteam Solutions is an independent offshore cable-services provider. With an asset-base of carousels, loading towers, tensioners and other ancillary equipment as well as a large team of competent cable handling crew, Oceanteam Solutions supports the marine cable industry with a variety of services such as short- and long-haul cable transport, cable storage and handling on a global basis. Oceanteam Shipping consisted of its fleet of large and advanced offshore vessels. Oceanteam is Lloyd’s ISO certified. Oceanteam has an office in Velsen-Noord, the Netherlands. The corporate headquarters is in Baerum, Norway . The Company is a public limited company incorporated and domiciled in Norway. The address of its registered office is Strandveien 15, 1366 Lysaker, Baerum , Norway . The Company is listed on the Oslo Stock Exchange and is traded under the ticker code “OTS”. The consolidated financial statements were authorised for issue by the Board of Directors on 13 April 2022 and are based on the assumption of going concern. The Group annual accounts consist of the Parent company Oceanteam ASA with its subsidiaries, joint venture companies and associated companies. Note 2 - Summary of significant accounting policies 2.1 Basis of preparation The group accounts for Oceanteam ASA are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and the Norwegian Accounting Act § 3-9. The Group’s financial statements are based on the principle of historical cost of acquisitions, construction or production. The financial year follows the calendar year. The group was established on 5 October 2005. The preparation of the financial statements, which are in conformity with IFRS, require the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 4. IFRSs and IFRICs effective for annual periods beginning on 1 January 2021 Oceanteam ASA has not implemented any new standards with effect from 1 January 2021.
Oceanteam Annual Report 2021 25 IFRSs and IFRICs issued but not yet effective The following standards, interpretations and amendments were issued before the issuance of the company’s financial statements. • IFRS 16 amendments, regarding Covid-19-related rent concessions - Effective date 1 April 2021 • IFRS 3 amendments, updating reference to the Conceptual Framework - Effective date 1 January 2022 • IAS 37 amendments, regarding onerous contracts - Effective date 1 January 2022 • IAS 16 amendments, regarding proceeds before intended use - Effective date 1 January 2022 • IFRS 17 and IFRS 17 amendments, regarding Insurance contracts - Effective date 1 January 2023 • IAS 8 amendments, regarding accounting estimates - Effective date 1 January 2023 • IAS 12 amendments, regarding how companies account for deferred tax - Effective date 1 January 2023 • IAS 1 amendments, regarding classification of current and non-current liabilities and disclosure of accounting policies - Effective date 1 January 2023 These are not expected to have a significant impact on the Group’s consolidated financial statements. 2.2 Basis of consolidation A) Business combinations The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in the Consolidated statement of profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. Contingent consideration is measured at net present value and regulated quarterly using a discount rate similar to WACC. B) Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it 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. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. C) Non-controlling interests NCI and related goodwill is measured at their share of fair value. Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions. NCI Investments and related goodwill are assessed for impairments quarterly and tested for impairment annually. D) Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in the Consolidated statement of profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. E) Interests in equity-accounted investees The Group’s interests in equity-accounted investees comprise interests in associates and joint ventures. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Joint ventures are those arrangements in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Interests in associates and joint ventures are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity-accounted investees, until the date on which significant influence or joint control ceases.
Oceanteam Annual Report 2021 26 F) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 2.3 Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s Board of Directors to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. Segment results that are reported to the Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly group administrative expenses, head office expenses, and income tax assets and liabilities. The offshore shipping operations and solutions driven services, including equipment rental, are reported in two different segments. For more information, please refer to note 5. 2.4 Foreign currency translation (a) Functional and reporting currency 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 functional currency of the parent company. (b) Transactions and balances Transactions in foreign currencies are translated into the respective functional currencies of Group companies. Transactions are recognized at the transaction date exchange rate. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate on the reporting date. Foreign currency differences are generally recognised in profit or loss. Non-monetary items at historical cost are translated, but at the rate at the date of the transaction (they are not re-translated) (c) Group companies The results and financial position of all the Group entities (none of which has the currency of a hyper inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) Assets and liabilities are translated at the closing rate at the date of that statement of financial position. (b) Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions). (c) All resulting exchange differences are recognised as a separate component of other comprehensive income. Translation differences that are related to NCI are allocated to NCI. On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders equity. When a foreign operation is partially disposed of or sold,
Oceanteam Annual Report 2021 27 exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. These consolidated financial statements are presented in USD. All financial information presented in USD has been rounded to the nearest thousand. 2.5 Non-current assets – Property Plant and Equipment A) Recognition and Measurement Construction Support Vessels (CSVs) and Machinery – Principles applied The CSV’s and machinery are accounted for under the cost model. They are initially recognised at cost, including all costs necessary to bring the assets to their working condition for intended use. Under the cost model the assets are carried at cost less accumulated depreciation and impairment. On a recurring basis, the CSV’s and machinery are investigated for indications of impairment, and at a minimum every year an impairment test is performed, comparing the carrying amount with the recoverable amount (higher of fair value less costs of disposal and value in use). Other Tangible Fixed Assets – Principles applied All other tangible fixed assets are initially recognised at acquisition cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. Components of cost Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use. Purchased soſtware that is integral to the functionality of the related equipment is capitalised as part of that equipment. B) Subsequent Expenditure Subsequent costs are included in the asset’s carrying amount or recognised 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. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. C) Depreciation Depreciation is calculated using the straight line method to allocate their cost, less their residual values, over their estimated useful lives, as follows: • CSV vessels 25 years • CSV vessels dry dock additions 5 years • Fast Support Vessels 15 years • Machinery and equipment 10–15 years • Furniture, fittings and equipment 3–8 years The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. D) Disposal Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within
Oceanteam Annual Report 2021 28 other (losses)/gains – net, in the income statement. E) Component accounting When an item of vessel, plant and equipment comprises individual components for which different depreciation methods or rates are appropriate, each component is depreciated separately. A separate component may be either a physical component, or a non- physical component that represents a major inspection or overhaul. An item of vessel, plant and equipment will be separated into parts (“components”) when those parts are significant in relation on the total cost of the item. F) Impairment Non-financial assets that are subject to depreciation are tested for impairment according to IAS 36 whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value-in-use. The recoverable amount is determined for an individual asset if it generates cash inflows that are largely independent of those from other assets or group of assets. An impairment loss is recognized for the amount by which the assets or CGU’s carrying amount value (net book value) exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money, and risks specific to the asset. 2.6 Trade and other receivables Trade receivables are initially measured at their transaction price (as defined in IFRS 15). Other receivables are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, both trade receivables and other receivables are measured at amortized cost. IFRS 9 ‘Financial Instruments’ requires the use of an expected credit loss impairment model and requires the Group to record allowances for expected credit losses. For trade receivables (with no significant financing component) expected credit losses are measured at an amount equal to the lifetime expected credit losses. For lease receivables, in scope of IFRS 16, Oceanteam has chosen to measure expected credit losses equal to the lifetime expected credit losses. 2.7 Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less. Bank overdraſts are shown within borrowings in current liabilities in the statement of financial position. 2.8 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received (net of any directly attributable incremental transaction costs and the related income tax effects) is included in equity attributable to the Company’s equity holders.
Oceanteam Annual Report 2021 29 2.9 Trade payables Trade payables are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method. 2.10 Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months aſter the date of statement of financial position. Borrowing costs are capitalised to the extent that they are directly attributable to the purchase, construction or production of a non-current asset. Borrowing costs are capitalised when the interest costs are incurred during the noncurrent asset’s construction period. The borrowing costs are capitalised until the date when the non-current asset is ready for use. If the cost price exceeds the recoverable amount, an impairment loss is recognised. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 2.11 Tax (a) Taxes Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: • the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit • differences relating to investments in subsidiaries and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future. • taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognised to the extent that it is more likely than not that future taxable profit will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. When an entity has a history of recent losses, the entity recognises a deferred tax asset arising from unused tax losses or tax credits only to the extent that the entity has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised by the entity. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.
Oceanteam Annual Report 2021 30 (b) Shipping activities The shipping activities have operated in several countries and under different tax schemes, including the ordinary tax system in Norway and the Norwegian tonnage tax system. In addition, we operate under local tax systems in various countries. Our onshore activities are generally subject to the ordinary corporate tax rates within the country in which the activities are located. The variation in the tax systems and rates may cause tax costs to vary significantly depending on the country in which profits are accumulated and taxed. The Group’s taxes include taxes of Group companies based on taxable profit for the financial period, together with tax adjustments for previous periods and the change in deferred taxes. Tax credits arising from subsidiaries’ distribution of dividends are deducted from tax expenses. Companies taxed under special tax shipping tax systems will generally not be taxed on their net operating profit from the approved shipping activities. A portion of net financial income and other non-shipping activities are normally taxed at the ordinary applicable tax rate. Taxation under shipping tax regimes requires compliance to certain requirements, and breach of these requirements could lead to forced exit of the regime. A forced exit of the Norwegian shipping tax system can lead to accelerated tax payments. Tax payable and deferred taxes are recognised directly in equity to the extent that they relate to factors that are recognised directly in equity. 2.12 Employee benefits Pension obligations The Group has a defined contribution plan. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The obligations for contributions to defined contribution plans are expensed as the related service is provided. The defined contribution plan complies with the applicable requirements. 2.13 Provisions Provisions for environmental restoration, restructuring costs and legal claims are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle 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 recognised as interest expense. 2.14 Revenue recognition Oceanteam’s business is engineering services consisting of both engineering and design services and equipment rental to support our clients (Solutions Segment). Oceanteam owned, chartered and managed deep-water offshore construction support vessel (Shipping Segment) which has been discontinued. Project revenue is based on operations where Oceanteam utilises its vessels, equipment and personnel to perform services for our clients. Under IFRS 15 ‘Revenue from Contracts with Customers’ revenue is recognised when separate performance obligations are satisfied. When performance obligations are satisfied at a future point in time, costs incurred relating to the performance obligations are deferred and recognised as assets in the consolidated statement of financial position. The costs incurred are expensed in line with the satisfaction of the performance obligation. The Groups’ revenue streams have been categorised into the following types: Hire income, Crewing, Mobilisation fee income and Management fee income.
Oceanteam Annual Report 2021 31 a) Shipping revenues Time charter agreements are considered to contain both a service component and a lease component. The service component covering crew and operational costs. The lease component, being the hire of the vessel on a bareboat basis. The service component is within the scope of IFRS 15, while the bareboat component is within the scope of IFRS 16 ‘Leases’. The service components of the agreements are reviewed to identify the performance obligations within the contract. If there is more than one performance obligation, the contract price is disaggregated. Separate transaction prices determined and allocated to the separate performance obligations. Revenue is recognised when separate performance obligations are satisfied. The performance obligation of manning and operating the vessels on a continues basis leads to the satisfying of the performance obligation over time as the provision of the service by Oceanteam is received and consumed by the customer simultaneously. The service component is recognised as revenue on a straight-line basis. The performance obligation of mobilisation of vessels is recognised at a point in time. This performance obligation is considered satisfied when the vessel is delivered to the designated location and ready to begin operations. Bareboat charter agreements, which meet the definition of leases per IFRS 16, are considered to fall in their entirety under IFRS 16. (see note 2.16) b) Solutions revenues Oceanteam’s solutions contracts with customers consist of equipment lease contracts, service contracts and contracts which contain elements of both leasing arrangements and provision of services. Standalone service contracts and the component of contracts which relate to services are within the scope of IFRS 15. The service contracts and service component of contracts are reviewed to identify the performance obligations within the contract. If there is more than one performance obligation, the contract price is disaggregated. Separate transaction prices determined and allocated to the separate performance obligations. Revenue is recognised when separate performance obligations are satisfied. The performance obligation of manning and operating the equipment on a continues basis leads to the satisfying of the performance obligation over time as the provision of the service by Oceanteam is received and consumed by the customer simultaneously. The service component is recognised as revenue on a straight line basis. The performance obligation of mobilisation / demobilisation of equipment is recognised at a point in time. This performance obligation is considered satisfied when the equipment is delivered to the designated location and ready to begin operations. Standalone lease contracts and components of contracts which relate to leases, and meet the definition of leases per IFRS 16 are within the scope of IFRS 16. (see note 2.16) 2.15 Dividend distribution Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders. Financial covenants may restrict the possibility to distribute dividends. 2.16 Financial and operating leasing (i) The Group as a lessee All leases are recognised in the statement of financial position as a ‘right of use’ asset and a financial liability. There are exceptions to this recognition principle for leases where the underlying asset is of low value and for leases classified as short-term in nature (less than one year). For leases falling under these exemptions, lease payments are expensed on a straight- line basis.
Oceanteam Annual Report 2021 32 (ii) The Group as a lessor Lessors account for leases as either operating or finance leases depending on whether the lease transfers substantially all the risks and rewards incidental to ownership of the underlying asset. Finance leases Assets leased to others are presented as receivables equal to the net investment in the leases. The Group’s financial income is determined such that a constant rate of return is achieved on outstanding receivables during the contract period. Direct costs incurred in connection with establishing the lease are included in the receivable. Oceanteam is not the lessor to any finance leases. Operating leases Oceanteam presents assets it has leased to others as non-current assets in the statement of financial position. The rental income is recognised as revenue on a straight line basis over the term of the lease. Direct costs incurred in establishing the operating lease are included in the leased asset’s carrying amount and are expensed over the term of the lease on the same basis as the rental income. The hire of Oceanteam’s vessels on a bareboat basis and the hire of Oceanteam’s equipment are treated as operating leases. 2.17 Financial instruments Under IFRS 9 financial instruments are classified under one of three different measurement models. These being amortised cost, fair value through profit and loss and fair value through other comprehensive income. Classification and measurement of financial assets is determined based on both: • the entity’s business model for managing the financial assets • the contractual cash flow characteristics of the financial asset. Financial liabilities are classified and measured at fair value through profit and loss when they meet the definition of held for trading or when they are designated as such on initial recognition. Otherwise, financial liabilities are measured at amortised cost. All financial assets and liabilities are initially measured at fair value net of transaction costs, with the exception of those classified as fair value through profit or loss and trade receivables which are measured at their transaction price (as defined in IFRS 15). Oceanteam’s financial assets include cash, trade receivables and other receivables. Oceanteam’s financial liabilities include borrowings, trade payables and other current liabilities. These are all measured at amortised cost. 2.18 Discontinued Operations A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the statement of profit or loss and other comprehensive income.
Oceanteam Annual Report 2021 33 Note 3 - Financial risk management During 2021 the following key events affected the financial risk of Oceanteam: Oceanteam Bourbon 4 AS’s main asset, CSV Southern Ocean, was sold in April 2021. In May 2021, an agreement was reached to sell Oceanteam Bourbon 101 AS’s main asset, CSV Bourbon Oceanteam 101. The vessel was delivered to the new owner in July 2021. As at 31 December 2020, the carrying values of both vessels were impaired down to their fair value, less costs to sell, therefore the sales have had little impact on the result for 2021. The loans from the banking consortium were fully repaid shortly aſter the sale of the vessels. All corporate guarantees given to the banking consortium have been released. See notes 12 and 18 for further information. As Oceanteam Bourbon 101 AS was unable to settle its share of the loan from the banking consortium to Oceanteam Bourbon 101 AS and Oceanteam Bourbon 4 AS, In June 2021, Oceanteam Bourbon 4 AS provided a loan to Oceanteam Bourbon 101 AS for USD 11.7 million. Following partial repayments made and interest accrued, the balance of the loan as at 31 December 2021 is USD 9.2 million. The provision for expected credit losses in respect of this loan was increased by USD 1.85 million from USD 6.15 million as at 31 December 2020 to USD 8 million as at 31 December 2021. The credit loss expense is classified under discontinuing operations. The net amount receivable, as at 31 December 2021, stands at USD 1.2 million. As the vessel, CSV Bourbon Oceanteam 101, has been sold and the insurance claims settled, there is less uncertainty regarding the estimated provision for expected credit losses. See note 14 and note 28 for further information. During 2022 the following key events affected the financial risk of Oceanteam: There have not been any key events that affected the financial risk of Oceanteam in 2022. (A) CREDIT RISK Credit risk is the risk of financial loss to the Group if a customer or other counterpart to a financial instrument fails to meet its contractual obligations. Such loss would arise principally from the Group’s trade receivables with its clients and through financial guarantees provided. The Group’s customers are primarily large companies with high credit ratings. The Group has sales revenues and liabilities in foreign currencies and is exposed to currency risks. In 2021, from continuing operations, 11% of the revenue is in USD, 57% is in EUR and 32% is in GBP. Since the functional currency is in USD, the foreign currency exposure is for liabilities in EUR and its fluctuations with USD. Some of the local costs for Oceanteam ASA are in NOK. The overall strategy to reduce currency risk is largely based on natural hedging with incoming and outgoing cash flows being in the same currency. Shipping segment (Discontinued Operations) At the year-end, there were no trade receivables within the Shipping segment. The loan from Oceanteam Bourbon 4 AS to Oceanteam Bourbon 101 AS had a carrying value, aſter deducting the provision for expected credit losses, of USD 1.2 million. This amount will be repaid when the companies are liquidated which is expected to take place in the second half of 2022. As at 31 December 2021, Oceanteam Bourbon 101 AS has negative equity of USD 7.9 million. Oceanteam Bourbon 4 AS has reflected this by recognising the USD 8 million provision for expected credit losses. As at 31 December 2021, Oceanteam Bourbon 4 AS has positive equity of USD 2.5 million. The liquidation of the two companies is expected to result in a significant liquidation dividend.
Oceanteam Annual Report 2021 34 Oceanteam Mexico SA de CV still owns two Fast Support Vessels (FSVs), Tiburon II and Mantarraya II, which are on a long- term bareboat charter to a charterer however are laid up in Venezuela. In 2017 Oceanteam unsuccessfully attempted to regain possession of the vessels through legal proceedings. No attempts to regain the vessels has been initiated in 2021. Due to the uncertain political situation and the unreliability of the judicial process, the total value of the assets was written off in previous years. Oceanteam’s management is considering all options for recovery of the vessels. Solutions segment (Continuing Operations) At the year-end, trade receivables from the Solutions segment represented 100 percent of the Group’s total trade receivables. The exposure to credit risk depends on the individual characteristics of each customer. Before projects are in tendering phase and awarded, the Group performs full credit assessments on its existing and future customers. Geographically the credit risk for the Solutions segment can be divided into activities in European countries and with an approximate number of 15 customers. Customers within the Solutions segment are in the renewable offshore industry. For the Solutions segment, the vast majority of outstanding trade receivables per year end of USD 1 million have already been received in 2022. The need for bank guarantees, parent company guarantees, and pre-payments are considered on an individual basis project by project. As at 31 December 2021, no provisions for expected credit losses have been made. Oceanteam The Group’s allowance for expected credit losses is determined based on lifetime expected credit losses. (B) LIQUIDITY RISK Liquidity risk relates to the ability to meet financial obligations as they fall due. Oceanteam has financial obligations due to both, major shareholders in respect of loans provided and to vendors. At the end of 2021, the balance of secured debt is USD 3 million. There is USD 0.5 million in trade payables and USD 2 million in other liabilities. The loans from the banking consortium to Oceanteam Bourbon 101 AS and Oceanteam Bourbon 4 AS were fully repaid during 2021. Obligations to vendors are mostly smaller in size and across a larger number of vendors. The liquidity risk can be divided into short-term, medium-term, and long-term risks. The short-term risks relate to certain specific small vendors requiring immediate payment compared to incoming cash flows. This risk is managed through the incoming cash flow which the Group has from the Solutions division. The medium-term risks relate to aggregation of smaller vendors. Due to increased solutions activity, cash flow fluctuation in medium term should remain covered by the cash flow from the performance of contracts in the Solutions segment. This medium- term risk is being managed by attempting to have contracts for a longer period in the Solutions division. Long term risks relate to the repayment of the shareholder loans which has been managed by requesting deferral of the repayment of instalments and through the divestment of the shipping segment. The operations of the Mexican office have been closed. Both the Tiburon II and Mantarraya II are laid up in Venezuela and subject to charges due to vendor claims. The development of the offshore wind industry is expected to strengthen the income of the Solutions division and the effect of cost reduction objectives for operational expenditures and corporate expenses will carry on in 2022. The results and cash flow of the Solutions division will be key to maintain a stable cash flow. Within Oceanteam Bourbon 4 AS, which is fully consolidated, as at 31 December 2021, there was cash of USD 0.3 million and no loan debt.
Oceanteam Annual Report 2021 35 At the balance sheet date, the Group had a cash position of USD 2.8 million. The 100% owned subsidiary, Oceanteam Shipping B.V, had an overdraſt facility of EUR 0.8 million which was not in use. Future cash flows and going concern Oceanteam prepares and reviews detailed future cash flow forecasts for the group on a constant rolling basis. The 12-month forecast from April 2022 to April 2023 has been reviewed and the underlying key assumptions evaluated in determining that the group is a going concern. There is inherent risk in cash flow estimates depending on the Company’s ability to secure new contracts within its solutions segment. There are certain key assumptions which are pivotal to the going concern assertion during 2022 and 2023. The key events assumed in the cash flow forecast, of the Oceanteam fully controlled group, for the 12 months from April 2022 to April 2023, are summarised below. Cash inflows • The Solutions division of the business is expected to decrease its revenue volumes compared with 2021 levels. • Divestment of the shipping segment is expected to result in positive net proceeds Cash outflows • General and Administrative costs are expected to decrease further during 2022. Cost saving programs continue to be in place. • Operating expenditure within the Solutions division is expected to decrease in line with a decrease in revenue • Payment of the Stichting Value Partners Family Office loan interest and Corinvest B.V loan interest. It is assumed that the repayment date of the Stichting Value Partners Family Office and Corinvest B.V loans will be extended from 23 April 2023 until a later point in time. (C) MARKET RISK Market risk includes risk due to fluctuations in oil prices, energy prices, political, economic risk and other uncertainties, increased competition and risk of war, other armed conflicts, and terrorist attacks. The financial climate has an impact on projects in both the oil and gas and renewable energy industries. The demand for Oceanteam Solutions’ services may be affected by economic climate and global supply chain trends. Note 4 - Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience, market values and other factors, including expectations of future events and market developments that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. 4.1 Critical accounting estimates and assumptions (A) Impairment testing The value in use and fair value estimates of the Machinery may fluctuate due to changes in hire rates, OPEX, WACC (weighted average cost of capital), market conditions and operational risks of operating the machinery. Refer to note 12 for more information. (B) Going Concern Oceanteam prepares and reviews detailed future cash flow forecasts for the group on a constant rolling basis. The 12-month forecast from April 2022 to April 2023 has been reviewed and the underlying key assumptions evaluated in determining that the group is a going concern. There is inherent risk in cash flow estimates for the Company’s ability to secure new contracts. There are certain key assumptions which are pivotal to the going concern assertion during 2023. Refer to note 3 for more information.
Oceanteam Annual Report 2021 36 Note 5 - Operating segments The Group has two segments, Oceanteam Shipping and Oceanteam Solutions. Following the sale of both vessels and the liquidation of the three companies falling within the shipping segment, there will only be one segment, Oceanteam Solutions. The three companies falling within the shipping segment are classified under discontinued operations. See note 28 for further details. Oceanteam ASA has been reclassified from the shipping segment to the solutions segment as these corporate related costs are now in the interest of financing and growing the solutions segment. This reclassification has been applied retrospectively. Oceanteam Solutions consists of rental equipment and tailored solutions for installation, transportation, storage and handling of subsea cables. Administration expenses in Oceanteam Shipping BV are allocated to the Solutions segment. The Shipping segment consisted of two CSV vessels which were sold (CSV Southern Ocean in April 2021 and CSV BO 101 in July 2021). CSV BO 101 was accounted for according to equity method, while the other CSV vessel, CSV Southern Ocean, was fully consolidated prior to its sale. There is no difference between the accounting policies of the reportable segments or between the reporting segments and the group. The following summary describes the operations in each of the Group’s reportable segments: Oceanteam Shipping Oceanteam Solutions TOTAL USD ‘000 2021 2020 2021 2020 2021 2020 Revenue - - 5.747 5.936 5.747 5.936 Net income from associates/joint ventures - - - - - - Operating cost - - (3.249) (3.393) (3.249) (3.393) Personnel costs - - (1.652) (1.298) (1.652) (1.298) General & administration - - (748) (562) (748) (562) EBITDA - - 97 684 97 684 Depreciation and Amortisation - - (1.129) (1.100) (1.129) (1.100) Write off / Reversal of impairment - - (165) - (165) - Reportable segment operating profit / (loss) - - (1.196) (417) (1.196) (417) Financial income - (0) 19 (0) 19 Financial expense - - (231) (258) (231) (258) Provision for loan guarantee expense - - - - - - Foreign exchange effects - - (75) 148 (75) 148 Net finance - - (306) (91) (306) (91) Pre-tax profit / (loss) - - (1.502) (508) (1.502) (508) Tax expense - - (50) (750) (50) (750) Net result from continuing operations - - (1.552) (1.258) (1.552) (1.258) Net result from discontinuing operations (1.574) (71.930) - - (1.574) (71.930) Net result for the period (1.574) (71.930) (1.552) (1.258) (3.126) (73.188)
Oceanteam Annual Report 2021 37 Information on the reportable assets and liabilities is not reviewed by the Group’s CEO (the chief operating decision maker). On this basis and given this disclosure information is not considered material, this information has not been disclosed. Geographical segments USD ‘000 In presenting the following information, segment revenue has been based on the geographic location of customers. Revenue 2021 2020 Europe 5.747 5.936 Total 5.747 5.936 Refer to note 6 for a breakdown of segment revenues by the type of services provided. Major customers Percentage Percentage of Group’s of Group’s Segment Major Customer 2021 revenue 2020 revenue Solutions Customer 1 893 16% 3.405 57% Customer 2 1.700 30% 1.192 20% Customer 3 1.476 26% Customer 4 673 12% There were no other customers (more than 10 percent of Group revenue) as per definition of IFRS 8.34.
Oceanteam Annual Report 2021 38 Note 6 - Revenue US’000 Revenue comprises: 2021 2020 Change in % Solutions 5.747 5.936 -3% Total revenue 5.747 5.936 -3% Oceanteam derives its revenue from the transfer of goods and services over time and at a point in time from the following sources. Solutions revenue comprises: 2021 2020 Change in % Hire income 3.434 3.096 11% Crewing 1.381 2.039 -32% Mobilization / Demobilization fee income 606 451 34% Management fee income* 326 350 -7% Total revenue 5.747 5.936 -3% *The management fee income consists of fees Oceanteam ASA and Oceanteam Shipping B.V have charged the equity accounted associate, Oceanteam Bourbon 101 AS. Hire income is recognized on a straight line basis over the term of the leases. Crewing income is recognized as revenue over time on a straight line basis as provision of the services by Oceanteam is received and consumed by the customer simultaneously. The performance obligations are satisfied on a continues basis. Mobilization fee income is recognized at a point in time when the performance obligation is satisfied (the equipment is delivered to the designated location and ready to begin operations). There were no performance obligations that are unsatisfied (or partially unsatisfied) as at the end of the reporting period. Typically, invoices are sent immediately upon performance obligations being satisfied at a point in time. Performance obligations that are satisfied over time are normally invoiced on a monthly basis. Payment terms are generally 30-45 days. Oceanteam sometimes experiences delays in receiving payment from some clients which can lead to short-term fluctuations in trade receivables. Refer to note 14 for further information on contract receivables from contracts with customers and note 19 for further information on contract liabilities from contracts with customers. Solutions Contract Backlog The level of secured work is limited however tenders out are at a satisfactory level. Seasonal effects remain and projects tend to have durations of weeks and months instead of years. Activity in the Oil & Gas segment is low but is being compensated by the offshore renewable segment and other projects.
Oceanteam Annual Report 2021 39 Note 7 - Leasing Future contracted revenue from lease contracts The Solutions segment leases out its equipment pool on its own contracts. The future minimum lease payments under non- cancellable leases are as follows: USD ‘000 2021 2020 Less than one year: 879 1.209 Between one and five years: 356 - More than five years: - - Total 1.235 1.209 Future contracted expenses from lease contracts Future contracted expenses include office spaces, a work area and a barge rental agreement. These leases are short-term (operating) leases. These expenses are recognised under Operating costs. The cash outflows are approximately equivalent to the lease expenses. Lease expense recognised: USD ‘000 2021 2020 Oslo office 16 15 Velsen base 114 132 Velsen office 17 16 Barge for project 296 374 Amsterdam office* 64 - Total 507 537 The non-cancellable lease payments are as follows: USD ‘000 2021 2020 Less than one year: 139 156 Between one and five years: 15 4 More than five years: - - Total 154 160 *As at 31 December 2020, the Amsterdam office had been accounted for as a right of use asset. As at 31 December 2021, this is accounted for as an operating lease. Oceanteam vacated the Amsterdam office in Q1 2022.
Oceanteam Annual Report 2021 40 Note 8 - Personnel cost USD ‘000 Personnel cost 2021 2020 Salary 1.173 1.107 Pensions 101 114 Social security cost 110 83 Insurance 70 106 Directors fees 119 112 Contractors fees 388 239 Other costs 33 23 Total 1.992 1.784 Relating to: 2021 2020 Continuing operations 1.652 1.298 Discontinued Operations 341 486 Total 1.992 1.784 Number of man-years employed over the financial year 9 11 Contractor fees are related to external consultants and temporary employees supporting the Group’s operations. USD ‘000 Management remuneration Board Wages / Pension Other 2021 Position fees Fees premiums remuneration Total Henk van den IJssel CEO (until July 2021) 397 14 411 Kornelis Jan Willem Cordia Chairman 47 47 Karin Antoinette Yvonne Govaert Director 39 96 135 Hans Reinigert Director (until Nov 2021), CEO 33 126 159 Hendrik Hazenoot Interim CFO / CEO (Until Nov 2021) 144 144 Ben de Jong CFO (from Aug 2021) 190 31 220 Total 119 952 45 - 1.115 Management remuneration Board Wages / Pension Other 2020 Position fees Fees premiums remuneration Total Leidus Bosman CEO (until Feb 2020) 38 2 41 Henk van den IJssel CEO (from Feb 2020) 240 20 260 Kornelis Jan Willem Cordia Chairman 43 43 Karin Antoinette Yvonne Govaert Director 36 36 Hendrik Johannes Jesse Director (until Aug 2020) 22 7 30 Hans Reinigert Director (from Sept 2020) 10 10 Hendrik Hazenoot Interim CFO 135 135 Diederik Legger Advisor to the board 44 44 Hendrik ten Hoeve Interim CEO Solutions (until May 2020) 52 52 Total 112 518 22 - 652 Henk van den IJssel resigned as CEO effective 1 August 2021. He received an annual salary of EUR 198.000, which attracted a holiday allowance at 8%, and an annual travel allowance of EUR 16.140. During the period 1 January 2021 to 31 July 2021 he
Oceanteam Annual Report 2021 41 received EUR 115.500 (USD 138.666) in salary, EUR 198.000 (USD 235.442) in severance payment, EUR 9.240 (USD 11.549) in holiday allowance and EUR 9.415 (USD 11.303) as a travel allowance all which have been classified under wages/fees. For the year 2021, the agreed annual fee for the chairman of the board is NOK 400.000 and NOK 337.500 for the other members of the board (including NOK 37.500 for audit committee fees). Kornelis Jan Willem Cordia, chairman of the board, received board fees of NOK 400.000 (USD 46.506) in 2021. Director, Karin Antoinette Yvonne Govaert received board fees of NOK 337.500 (USD 39.240) and an additional fee for advisory services of NOK 765.000 (USD 87.142) which attracted non-deductible VAT of NOK 77.245 (USD 8.799). During the period from 1 January 2021 to 31 October 2021, former director, Hans Reinigert received board fees of NOK 281.250 (USD 32.942) and an additional fee for advisory services of NOK 765.000 (USD 87.128) which attracted non-deductible VAT of NOK 16.175 (USD 1.842). Hans Renigert resigned as director and was appointed as CEO effective 1 November 2021. For his CEO services he has a service agreement through Merlion Nederland B.V. The service fee is EUR 16.000 per month. In 2021, fees of EUR 32.000 (USD 36.303), which attracted non-deductible VAT of EUR 313 (USD 354), have been charged in respect of his CEO services. As at 31 December 2021, Oceanteam had no obligation to pay special compensation upon termination of, or change to, the CEO’s employment. As at 31 December 2021, Oceanteam had not recognized any liabilities in respect of severance pay or bonuses to the CEO. As at 31 December 2021, Oceanteam had no obligation to pay special compensation upon termination of, or change to, the chairman’s appointment. As at 31 December 2021, there were no agreements between Oceanteam and the chairman providing for bonuses, profit sharing, options or similar benefits. No expenses or liabilities have been recognized in 2021. Hendrik Hazenoot, Interim CFO until 2 August 2021 and Interim CEO from 2 August 2021 until 1 November 2021, had a service agreement through DTN Noordwijk B.V. which was cancelled effective January 2022 (three-month notice period). In 2021, fees of EUR 121.508 (USD 143.547), including non-deductible VAT of EUR 16.102 (USD 19.050), have been charged in respect of his services. Ben de Jong was appointed as CFO on 2 August 2021. He receives an annual salary of EUR 138.000, which attracts a holiday allowance at 8%. During the year he received EUR 138.000 (USD 163.055) in salary, EUR 11.040 (USD 13.065) in holiday allowance and an incentive of EUR 11.500 (USD 13.392). Refer to note 20 for the year-end balances of related parties. The incentive scheme throughout the group is given at the discretion of the board and CEO. The CEO makes a proposal to the board for different incentives for the employees of the company. There is no share incentive program. There have not been given any loans, advance payments and security by the Company or other companies in the group to the individual senior executives or the individual members of the board of directors, audit committee or other elected corporate bodies. Other than mentioned above, there has not been any remuneration, pension’s plans or other benefits to members of the audit committee or other elected corporate bodies. Liability insurance has been taken out for the Directors and Officers for their possible liability to the company and third parties. The main principles for the Company’s executive management salary policy is that executive management shall be offered terms that are competitive when salary, payment in kind, bonus, share options and pension scheme are considered as a whole. The Board may at its sole discretion, grant performance related incentive to employees. The incentive cannot exceed one year’s annual salary unless the Board decides otherwise and substantiates such decision. The Board may develop incentive schemes for the Group in order to align the motivation goals of personnel with that of the Company and enhance the value creation capacity for the shareholders by enhancing the Company’s ability to attract, retain and motivate employees who are expected to make important contributions to the Company. By providing such persons with performance-based incentives, the Company aligns the interests of such persons with those of the Company’s shareholders.
Oceanteam Annual Report 2021 42 Note 9 - Auditor’s fee Auditor’s fee consists of the following: USD ‘000 2021 2020 Statutory audit 181 174 Other assurance services 4 2 Tax advisory 2 18 Other - - Total 186 194 Relating to: 2021 2020 Continuing operations 163 179 Discontinued Operations 23 16 Total 186 194 Claimable VAT is not included in the auditor’s fee. Note 10 - Financial income and financial expenses USD ‘000 2021 2020 Bank Interest income (0) 19 Foreign exchange gain/loss (75) 148 Interest expense (229) (176) Other financial expense (3) (82) Net finance (306) (91) Note 11 - Right of use assets and lease liabilities USD ‘000 Right of use assets - 2021 Crane Amsterdam office Total Historical Cost 1 January 2021 532 153 686 Disposals (532) (153) (686) Historical Cost 31 December 2021 - - - Accumulated depreciation 1 January 2021 107 97 204 Depreciation 15 47 63 Disposals (123) (144) (267) Accumulated depreciation 31 December 2021 - - - Total carrying amount per 31 December 2021 - - -
Oceanteam Annual Report 2021 43 Right of use assets - 2020 Crane Amsterdam office Total Historical Cost 1 January 2020 532 153 686 Additions - - - Historical Cost 31 December 2020 532 153 686 Accumulated depreciation 1 January 2020 46 48 94 Depreciation 61 48 110 Accumulated depreciation 31 December 2020 107 97 204 Total carrying amount per 31 December 2020 425 56 481 Lease liabilities as at 31 December 2021 Crane Amsterdam office Total Non-current - - - Current - - - Total discounted lease liabilities - - - Effect of not discounting - - - Total undiscounted lease liabilities - - - Lease liabilities as at 31 December 2020 Crane Amsterdam office Total Non-current 395 9 405 Current 53 54 107 Total discounted lease liabilities 448 63 511 Effect of not discounting 133 5 138 Total undiscounted lease liabilities 581 68 649 Lease liabilities maturity analysis - contractual undiscounted cash flows 2021 2020 Less than one year: - 142 Between one and five years: - 346 More than five years: - 161 Total - 649 During Q1 2021, the ship crane mounted on the vessel CSV Southern Ocean was leased by the fully consolidated company, Oceanteam Bourbon 4 AS, from the associated company Oceanteam Bourbon Investments AS. At the end of Q1 2021, Oceanteam Bourbon 4 AS purchased the crane which it then sold along with CSV Southern Ocean. See note 7 for further details. The fully consolidated company, Oceanteam Shipping B.V, rented an office space from an entity external to Oceanteam Group. As at 31 December 2021, this is accounted for as an operating lease. Oceanteam vacated the Amsterdam office in Q1 2022. The total rental cost incurred in 2022 relating to the Amsterdam Office lease is USD 5.000. For the period 1 January - 31 December 2021 Crane Amsterdam office Total Lease liabilities interest expense 8 4 12 Cash outflow 21 58 79
Oceanteam Annual Report 2021 44 Note 12 - Tangible assets USD’000 Carrying values Fast Support Vessels Southern Ocean Equipment & other Total Carrying values per 1 January 2021 - 29.812 14.248 44.060 Additions - 233 16 249 Disposals historical cost - (174.474) (5) (174.479) Disposals depreciation - 32.079 3 32.082 Depreciation tangible asset - (324) (1.081) (1.405) Disposals accumulated Impairment - 112.674 (205) 112.469 Carrying values per 31 December 2021 - - 12.976 12.976 Vessel and Equipment Fast Support Vessels Southern Ocean Equipment & other Total Historical Cost 1 January 2021 8.725 174.241 41.784 224.751 Additions 233 16 249 Disposals (174.474) (5) (174.479) Historical Cost 31 December 2021 8.725 - 41.795 50.521 Accumulated depreciation 1 January 2021 (8.725) (31.755) (15.108) (55.590) Depreciation (324) (1.081) (1.405) Disposals depreciation 32.079 3 32.082 Accumulated depreciation 31 December 2021 (8.725) - (16.186) (24.913) Accumulated impairments 1 January 2021 - (112.674) (12.426) (125.101) Impairments/reversals (205) (205) Disposals 112.674 112.674 Accumulated impairments 31 December 2021 - - (12.631) (12.632) Total carrying amount per 31 December 2021 - - 12.976 12.976 Vessel and Equipment Fast Support Vessels Southern Ocean Equipment & other Total Historical Cost 1 January 2020 8.725 171.134 41.652 221.511 Additions 3.108 132 3.240 Disposals - Historical Cost 31 December 2020 8.725 174.241 41.784 224.751 Accumulated depreciation 1 January 2020 (8.725) (27.049) (14.057) (49.832) Depreciation (4.707) (1.052) (5.759) Disposals depreciation - Accumulated depreciation 31 December 2020 (8.725) (31.755) (15.108) (55.590) Accumulated impairments 1 January 2020 (66.576) (12.426) (79.002) Impairments/reversals (46.099) (46.099) Accumulated impairments 31 December 2020 - (112.674) (12.426) (125.101) Total carrying amount per 31 December 2020 - 29.812 14.248 44.060 Depreciation rates 5-10 years 5-25 years 3-25 years Depreciation method linear linear linear When internal resources are used to engineer and construct a fixed asset, the relevant costs are added to the historical cost. All construction financing costs are capitalized. There have not been costs related to own development and borrowing cost in 2021. Following the sale of Southern Ocean in April 2021 and BO 101 in July 2021, the loans related to these vessels were fully repaid. The Fast Support Vessels (FSV’s) are financed and held for security. In May 2020, Oceanteam agreed to non-possessory pledges being placed on 2 of the 6 carousels classified under ‘Machinery and other’. See note 18, loans and borrowings, for further information.
Oceanteam Annual Report 2021 45 Equipment Impairment Testing On a recurring basis, the main items of equipment are investigated for indications of impairment, and at a minimum, every year an impairment test is performed, comparing the carrying amounts with the recoverable amounts (higher of fair value less costs of disposal and value in use). Oceanteam has applied a WACC of 9.1 percent when testing the Equipment. The calculated WACC has the following assumptions: a) Risk free rate of -0.03% b) 78 / 22 ratio of equity /debt c) 1.19 Equity Beta d) Market risk premium 5% Assumptions made in determining the recoverable amount of Equipment: a) Equipment utilization between 30% and 70% determined on and asset by asset basis b) Increases in the hire rates of 2% year on year c) Increases to operating costs of 2% year on year d) Maintenance costs amounting to 4% of the machines’ historic costs to be incurred every other year e) Residual values of 10% of the equipment’s’ historic costs The impairment tests of the equipment resulted in an impairment of USD 0.2 million in 2021 relating to three of the six carousels. The two Fast Support Vessels, Mantarraya and Tiburon, were written down to nil in previous years and continue to have a carrying value of nil. It is highly doubtful that Oceanteam can recover the vessels from Venezuela.
Oceanteam Annual Report 2021 46 Note 13 - Income taxes The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Information for Oceanteam Bourbon 4 AS, classified under discontinued operations, is not included in this note. See note 28 for more information. USD’000 Tax income / (expense) comprises: 2021 2020 Tax charge on profit / loss for the year - - Withholding taxes - - Changes in deferred tax (50) (750) Other changes - - Deferred tax from equity transactions - - Total income tax expense (50) (750) Reconciliation of nominal and effective tax rate Ordinary profit / (loss) before income tax (1.502) (508) Weighted average income tax rate* 23% 22% Tax expected based on weighted average tax rate 344 114 Tax effect of: Expenses not deductible for tax purposes (29) (733) Changes in temporary differences 22 206 Translation differences (43) 20 Correction from previous periods - - Utilization of losses - - Losses generated and not utilized (344) (357) Income tax expense (50) (750) Effective tax rate in % -3,3% -147,7% Temporary differences: Fixed assets (1.038) (1.148) Profit and Loss account 38 49 Total temporary differences (1.000) (1.098) Losses carry forward (191.450) (208.964) Total temporary differences and losses carried forward (192.450) (210.063) Not Included in basis for tax calculation of deferred tax asset 190.650 209.063 Included in basis for tax calculation of deferred tax asset 800 1.000 Total temporary differences and losses carried forward 191.450 210.063 Deferred tax asset recognized (2021: 25%, 2020: 25%)** 200 250
Oceanteam Annual Report 2021 47 Tax losses and temporary differences for which no deferred tax asset was recognized expire as follows: USD’000 2021 Expiry date 2020 Expiry date Expire (the Netherlands) 10.556 2022-2027 23.622 2021 - 2026 Never expire (Norway) 180.094 n/a 185.441 n/a Total 190.650 209.063 *Domestic tax rates applicable to the Group vary from country to country. The weighted average income tax rate has been calculated by weighting the profit/(loss) before income tax made be each company in relation to the applicable domestic corporation tax rate. “**Oceanteam has recognized USD 0.2 million as a deferred tax asset relating to carry forward taxable losses for the operations in the Netherlands where the corporation tax rate is 25%. The deferred tax asset relates to the equipment business, and is based on latest forecast for this business segment. Plans indicate that there will be sufficient taxable profit to offset some of the tax loss carry forward during the period 2022-2024. Contracts and budgeted revenue with customers gives convincing evidence to support the conclusion that the deferred tax asset can be recognized in the accounts. Foreign deferred tax assets are only recorded in tax note if it is expected that they can be utilized within the statute of limitations in their local jurisdiction. Parent company Oceanteam ASA and other Norwegian entities in the group have suffered large tax losses. The basis for potential deferred tax loss is estimated to amount to NOK 1 579 million (USD 179 million) as at 31 December 2021 for the Norwegian entities. Confirmation from the tax authorities for a cumulative carry forward tax loss of NOK 1 572 million (USD 178 million) for the year 2020 was received in September 2021. The deferred tax losses are not recognized in the balance sheet as there is uncertainty to what extent the losses can be offset against future profits. Carry-forward taxable losses do not have a statute of limitation under current Norwegian tax regimes. Deferred income tax liabilities are offset when there is an enforceable right to offset deferred tax assets against deferred tax liabilities and when the deferred income tax relate to the same fiscal authority.
Oceanteam Annual Report 2021 48 Note 14 - Receivables USD ‘000 2021 2020 Trade receivables at nominal value 974 2.481 Less: allowance for expected credit losses - - Net trade receivables 974 2.481 Movements in the group allowance for expected credit losses of trade receivables are as follows: 2021 2020 At 1 January - - Allowance for expected credit losses movement - - At 31 December - - Trade receivables - Ageing Due 1-30 Due 31- 60 Due 61- 90 Due > 90 Total days days days days Shipping - - - - - Solutions 963 16 - (5) 974 Total trade receivables 963 16 - (5) 974 The trade receivables allowance for expected credit losses was assessed under the requirements of IFRS 9. Management concluded that no adjustment was required. Trade receivables as at 31 December 2021 does not include transactions with parties in respect of which there has historically been allowances for expected credit losses. Other receivables 2021 2020 Prepayments 45 53 Accrued Revenue - 907 Receivable from the sale of KCI the Engineers B.V - 149 Receivables from JV’s and associates - 128 Loan to Oceanteam Bourbon 101 AS* 1.237 - Other short term receivables 355 1.057 Other current receivables 1.637 2.294 *On 28 June 2021, the fully consolidated subsidiary, Oceanteam Bourbon 4 AS (lender) entered into a loan agreement with the equity accounted associate, Oceanteam Bourbon 101 AS (borrower). The loan amount was USD 11.7 million. The loan has an annual interest rate of 4%. The loan amount and interest must be repaid immediately upon the settlement of all other liabilities by Oceanteam Bourbon 101 AS. The loan agreement contains provisions whereby amounts may be waived but this is at the discretion of Oceanteam Bourbon 4 AS. Loan to Oceanteam Bourbon 101 AS 2021 2020 Loan amount provided 11.680 - Accrued interest 268 - Repayments made (2.711) - Closing loan balance 9.237 - Opening provision for expected credit losses** (6.150) - Movement in the period (1.850) - Closing provision for expected credit losses (8.000) - Net loan amount receivable 1.237 -
Oceanteam Annual Report 2021 49 **As at 31 December 2020, the fully consolidated subsidiary, Oceanteam Bourbon 4 AS, was jointly and severally liable for the loan from the banking consortium to Oceanteam Bourbon 101 AS and Oceanteam Bourbon 4 AS. Oceanteam Bourbon 4 AS was considered to have a financial guarantee contract in respect of this arrangement and therefore recognized a provision for lifetime expected credit losses. This provision has been reclassified in 2021 from other current liabilities to other receivables as the loan from the banking consortium was fully repaid in 2021. The expected credit loss is based on a forward looking probability weighted calculation that reflects the possibility of a loss occurring. This forward looking information includes assumptions and estimates regarding residual costs within the company and when it will be liquidated. The actual results may differ from the estimates made. Oceanteam Bourbon 4 AS’s result is presented within discontinued operations. See note 28 for more details. Contract Receivables The below tables includes assets relating to contracts with customers recognized under IFRS 15 ‘Revenue from Contracts with Customers’. Oceanteam ASA has been reclassified from the shipping segment to the solutions segment. This reclassification has been applied retrospectively resulting in the comparative figures being restated. Trade receivables Accrued Revenue Total USD ‘000 Segment 2021 2020 2021 2020 2021 2020 Mobilisation fees Shipping - 20 - - - 20 Crewing Shipping - 138 - - - 138 Management fees Shipping - - - - - Total shipping receivables - 158 - - - 158 Crewing Solutions - 263 - - - 263 Management fees Solutions 116 151 Total Solutions receivables 116 414 - - - 263 Total contract receivables 116 572 - - - 421 Lease receivables The below table includes assets relating to lease agreements recognised under IFRS 16 ‘Leases’. Trade receivables Accrued Revenue Total USD ‘000 Segment 2021 2020 2021 2020 2021 2020 Vessel hire Shipping - 1.075 - 907 - 1.982 Equipment hire Solutions 842 798 - - 842 798 Total lease receivables 842 1.873 - 907 842 2.780
Oceanteam Annual Report 2021 50 Note 15 - Cash and cash equivalents USD ‘000 2021 2020 Cash 2.751 3.191 Cash and cash equivalents 2.751 3.191 Of which is restricted deposits* - 3.139 * Restricted deposits 2021 2020 Amounts within Oceanteam Bourbon 4 AS** - 3.113 Tax deducted from employees, deposited in a separate bank account 16 26 amounts to NOK 142.790 (2020: NOK 208.276) Total 16 3.139 **Payment of dividends and other distributions that may be considered dividends from Oceanteam Bourbon 4 AS were subject to the prior approval of SpareBank 1 SMN in accordance with the loan agreement. The loan was fully repaid during 2021 therefore this restriction, as at 31 December 2021, no longer applies. The bank accounts within Oceanteam Bourbon 4 AS are jointly controlled by Oceanteam ASA and Bourbon Offshore Norway AS. Any payments have to be agreed upon by both JV partners. The cash within Oceanteam Bourbon 4 AS is not considered restricted.
Oceanteam Annual Report 2021 51 Note 16 – Investments in Subsidiaries and other consolidated entities USD ‘000 Profit / Equity / (Loss) (Negative Ownership Voting Head Office / Country of Overview subsidiaries: 2021 Equity) percentage share registration Subsidiary companies: Oceanteam II B.V. (62) 4.410 100% 100% Amsterdam, Netherlands RentOcean B.V (230) 2.400 100% 100% Amsterdam, Netherlands North Ocean 309 AS - (945) 100% 100% Baerum, Norway Oceanteam Bourbon 4 AS***** (1.601) 2.462 50% 60% Baerum, Norway 2nd level Subsidiaries Oceanteam Shipping B.V.* (471) 5.406 100% 100% Amsterdam, Netherlands Kingfisher Enterprise B.V (7) (85) 100% 100% Amsterdam, Netherlands Oceanteam Shipping GmbH* (0) 0 100% 100% Wilhelmshaven, Germany Oceanteam Mexico B.V.* - (1) 100% 100% Amsterdam, Netherlands 3rd level Subsidiaries Oceanteam Mexico S.A. de C.V.**** - (120) 90% 49% Cd, del Carmen, Mexico Oceanteam Solutions B.V.** (5) (4) 100% 100% Amsterdam, Netherlands Oceanteam GmbH** - - 100% 100% Wilhelmshaven, Germany 4th level Subsidiary Oceanteam Power & Umbilical GmbH*** - - 100% 100% Wilhelmshaven, Germany * The shares are directly owned by Oceanteam II B.V. a subsidiary of Oceanteam ASA ** The shares are directly owned by Oceanteam Shipping B.V. a subsidiary of Oceanteam II B.V. *** The shares are directly owned by Oceanteam GmbH, a subsidiary of Oceanteam Shipping B.V. **** Oceanteam Mexico B.V, a subsidiary of Oceanteam II B.V, holds 49% of the ordinary shares in Oceanteam Mexico S.A. de C.V. however, between its ordinary shares and class N shares it holds 90% of the equity in the company. The class N shares don’t give the same voting rights as ordinary shares but do give voting rights on matters including; amendments to the purpose of the company, dissolution of the company and mergers. Additionally, Oceanteam ASA provides the funding to this company and sets the policies and strategy. On this basis Oceanteam ASA is considered to have control of Oceanteam Mexico S.A. de C.V. ***** Oceanteam Bourbon 4 AS has a material non-controlling interest of 50% illustrated in table below. USD ‘000 Oceanteam Bourbon 4 AS Operating segment Shipping Principal place of business Baerum, Norway Ownership interest held by non-controlling interests 50% Voting rights held by non-controlling interests* 40% The following is summarised financial information for Oceanteam Bourbon 4 AS based on the company’s financial statements prepared according to Norwegian GAAP. The information is before intercompany eliminations with other companies in the Group.
Oceanteam Annual Report 2021 52 Oceanteam Bourbon 4 AS USD ‘000 2021 2020 Operating income 3.500 7.625 Operating expenses (3.240) (8.843) Net finance costs (211) (1.254) Tax on ordinary result 200 (2) Write off / Impairment (1.850) (36.454) Net profit / (loss) for the year (1.601) (38.928) Adjustments made at group level: - (16.019) Net profit / (loss) for the year (1.601) (54.946) Other comprehensive income - - Total comprehensive income (1.601) (54.946) Profit / (loss) attributable to non-controlling interests (800) (27.473) Current assets 2.805 5.632 Non-current assets - 29.812 Current liabilities (343) (31.381) Non-current liabilities - - Net assets 2.462 4.063 Adjustment made at group level: - - Net assets 2.462 4.063 Net assets attributable to non-controlling interests 1.231 2.031 *Oceanteam ASA controls the day to day operations of Oceanteam Bourbon 4 AS however any decisions including the transfer of assets, cash or declaration of dividends, has to be jointly decided upon by both JV partners, Oceanteam ASA and Bourbon Offshore Norway AS. Oceanteam Bourbon 4 AS has repaid the credit and guarantee facility in full. The consolidated group’s total cash consists of USD 2.75 million out of which USD 0.25 million belongs to Oceanteam Bourbon 4 AS. See notes 15 and 18 for further details. In December 2014 the shareholders’ agreements between Oceanteam ASA and Bourbon Offshore Norway AS regarding the companies Oceanteam Bourbon 4 AS and Oceanteam Bourbon 101 AS were amended. The result of the amendment was that Bourbon Offshore Norway AS acquired control over Oceanteam Bourbon 101 AS, and that Oceanteam ASA acquired control over Oceanteam Bourbon 4 AS. The change became effective from 1 January 2014. (agreements are dated 15 May 2014) Aſter the amendment equity interest still remained 50 percent, voting rights on shareholders level are equal, voting rights in the board are 2/5 Bourbon Offshore Norway AS and 3/5 Oceanteam ASA. The control is currently also affirmed by Oceanteam ASA being represented by three of a total of five directors on the company’s board. However the owner companies, Bourbon Offshore Norway AS and Oceanteam ASA have equal voting shares in general meetings. Oceanteam Bourbon 4 AS operated the vessel CSV Southern Ocean that was sold in April 2021.
Oceanteam Annual Report 2021 53 Note 17 - Share capital and shareholder information Share capital Per 31.12.2021 As per 31.12.2021, the share capital of the Company is NOK 197.448.290 (USD 25.403.333) divided into 34.338.833 shares with a nominal value of NOK 5,75 (USD 0,74). All shares have equal voting rights. Oceanteam owns a total of 127.573 own shares representing 0,4% of the shares in the Company. The calculations are made on the basis of 34.338.833 shares in the Company. Shareholders Notes Number of shares Percentage of total BNP Paribas Securities Services 12.459.966 36,3% UBS Switzerland AG 1 6.690.948 19,5% Euroclear Bank S.A./N.V. 3.798.796 11,1% State Street Bank and Trust Comp 1.826.012 5,3% SIX SIS AG 1.481.374 4,3% HESSEL HALBESMA DØDSBO 756.307 2,2% Banque Pictet & Cie SA 457.772 1,3% STEINAR GRØNLAND 285.000 0,8% Citibank Europe plc 281.063 0,8% CLEARSTREAM BANKING S.A. 276.883 0,8% STIG EEG AUNE 260.000 0,8% Geir Bjørndalen 197.824 0,6% Nordnet Bank AB 195.445 0,6% CACEIS Bank 181.713 0,5% FRANK ROBERT SUNDE 171.417 0,5% U-TURN VENTURES AS 162.707 0,5% OCEANTEAM ASA 127.573 0,4% VESLIK AS 110.000 0,3% MOMO INVEST AS 102.254 0,3% ERIK SMITH JAGLAND 100.000 0,3% Subtotal 20 largest 29.923.054 87,1 % Others 4.415.779 12,9% Total 34.338.833 100,0 % Shareholders Notes Number of shares Percentage of total Board: Kornelis Jan Willem Cordia (Chairman) 1 6.590.517 19,2 % Jacob Johannes van Heijst (Board member) 87.987 0,3 % Total 6.678.504 19,4 % 1. Through UBS Switzerland AG, Kornelis Jan Willem Cordia, Chairman of Oceanteam ASA, owns 6.590.517 shares. For more information, please refer to related party transactions in note 20.
Oceanteam Annual Report 2021 54 Note 18 - Loans and Borrowings The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual cash flows representing nominal value at payment date. There are no net-settled derivative financial liabilities. USD ´000 At 31 December 2021 0 to 1 years 1 to 2 years 2 to 5 years over 5 years Total Total outstanding on loans - 3.000 - - 3.000 Total outstanding on loans - 3.000 - - 3.000 At 31 December 2020 0 to 1 years 1 to 2 years 2 to 5 years over 5 years Total Total outstanding on loans 22.164 - 3.000 - 25.164 Total outstanding on loans 22.164 - 3.000 - 25.164 Loans/ Currency of loans True rate of interes Description 31-12-2021 31-12-2020 Oceanteam ASA (USD) Secured* Interest 7% Stichting Value Partners 1.500 1.500 Family Office Oceanteam ASA (USD) Secured* Interest 7% Corinvest B.V. 1.500 1.500 Total short-term debt 3.000 3.000 CSV Southern Ocean (USD) Secured** LIBOR + margin SpareBank 1 SMN - 22.275 Bank USD 81 million Oceanteam Shipping B.V (EUR) Secured*** EURIBOR + margin Overdraſt facility with - 82 Rabobank Borrowing costs - (193) Total short-term debt - 22.164 *On 25 May 2020, a non-possessory pledge on one carousel each was provided to Stichting Value Partners Family Office and Corinvest B.V. One of the carousels is owned by RentOcean B.V. The other is owned by Oceanteam Shipping B.V. The total carrying value of the two carousels, as at 31 December 2021, is USD 5.4 million. **The CSV Southern Ocean and various equipment was sold in April 2021. The majority of the proceeds from the sale were used to repay the SpareBank 1 SMN bank loan. ***The Oceanteam Shipping B.V overdraſt facility with Rabobank may be drawn at any time with the total facility available being EUR 0.8m. The facility may be terminated by Rabobank by providing 3 months notice with the amounts borrowed being repayable immediately aſter the notice period has expired. All of Oceanteam Shipping B.V’s and Oceanteam Solutions B.V’s equipment, cash and receivables, subject to the carousel pledged by Stichting Value Partners Family Office, are collateral. The carrying value of these assets per 31 December 2021 was USD 9.1m million. Stichting Value Partners Family Office - USD 1.500.000 - Oceanteam ASA Oceanteam ASA entered into a loan agreement on 23 April 2018 with Stichting Value Partners Family Office for the amount of USD 1.5 million. The loan attracts interest of 7% per annum. In May 2020, the repayment date was extended from April 2021 to April 2023. Refer to note 20 for further details. Corinvest B.V. - USD 1.500.000 - Oceanteam ASA Oceanteam ASA entered into a loan agreement on 21 December 2018 with Corinvest B.V. for the amount of USD 1.5 million. The loan attracts interest of 7% per annum. In May 2020, the repayment date was extended from April 2021 to April 2023. Refer to note 20 for further details.
Oceanteam Annual Report 2021 55 Financial costs 2021 2020 Shareholder loans 210 210 Lease liabilities interest expense 4 8 Other 16 40 Total interest costs 231 258 Total loan facilities As per 31 December 2021, the total interest bearing debt of the Group is USD 3 million. The Group had free cash of USD 2.8 million. The equity ratio was 70.8 percent per balance sheet date.
Oceanteam Annual Report 2021 56 Note 19 - Liabilities USD’000 Trade payables Current Due 30-60 day Due 61-90 days Due > 120 days Total Shipping 141 - - - 141 Solutions 114 50 60 87 311 Total trade payables 255 50 60 87 452 The aging analysis above provides information on the overdue status of invoices for the group companies. Provisions 2021 2020 Provisions 543 543 Total provisions 543 543 The provision relates to disputed brokers fees which are pledged by the Dutch tax authority. Other payables 2021 2020 Accrued interest costs 106 321 Holiday and wages due 40 62 Preinvoicing 361 212 JV Partner balance - 1.065 Provision for loan guarantee* - 6.150 Other short term debt 873 740 Total other current liabilities 1.380 8.549 The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term nature. *This provision has been reclassified in 2021 from other current liabilities to other receivables as the loan from the banking consortium was fully repaid in 2021. See note 14 for more information. Contract Liabilities The below tables includes liabilities relating to contracts with customers recognised under IFRS 15 ‘Revenue from Contracts with Customers’. Preinvoicing USD ‘000 Segment 2021 2020 Mobilisation fees Solutions - 53 Total contract liabilities - 53 Lease Liabilities The below tables includes liabilities relating to lease agreements recognised under IFRS 16 ‘Leases’. Preinvoicing USD ‘000 Segment 2021 2020 Equipment hire Solutions 361 159 Total lease liabilities 361 159
Oceanteam Annual Report 2021 57 Note 20 - Related party transactions DTN Noordwijk B.V. DTN Noordwijk B.V. is controlled by former Interim CEO / former interim CFO, Henrik Hazenoot. Transactions consist mostly of invoicing for monthly management and consultancy services. Travel costs have also been recharged through this company. Refer to note 8 for more details. Maas Technical Management B.V. Maas Technical Management B.V. is controlled by Hendrik ten Hoeve, former Managing Director of Oceanteam Solutions. Transactions include invoicing of management fees and recharges for travel expenses. Refer to note 8 for more details. Workships Contractors B.V Workships Contractors B.V. is 50% controlled by Kornelis Jan Willem Cordia, chairman of the board. Transactions consist of invoicing for docking budget control for both of the vessels and project management services. Oliley B.V. Oliley B.V. is controlled by Karin Antoinette Yvonne Govaert, director of Oceanteam ASA. Transactions consist mostly of advisory services. Travel costs have also been recharged through this company. Refer to note 8 for more details. Josco Strategisch Advies Josco Strategic Advies is controlled by Hendrik Johannes Jesse, former director of Oceanteam ASA. Transactions consist mainly of invoicing for strategic advisory services. Refer to note 8 for more details. J. Hofland B.V. Former interim CEO, Diederik Legger, provided advisory services to the board of directors of Oceanteam through J. Hofland B.V. Transactions include invoicing advisory fees. Refer to note 8 for more details. Corinvest B.V. Corinvest B.V. is controlled by Kornelis Jan Willem Cordia, chairman of the board. Transactions consist mainly of invoicing recharges for travel expenses. Merlion Nederland B.V. Merlion Nederland B.V. is controlled by Hans Reimer Reinigert, CEO of Oceanteam ASA. Transactions consists of invoicing for advisory services, CEO services and travel expenses. Refer to note 8 for more details. USD ‘000 Cost Vendor & accrued balance Company 2021 2020 2021 2020 Type of transaction DTN Noordwijk B.V. (144) (135) (11) (11) see above Maas Technical Management B.V. - (52) - - see above Workships Contractors B.V. (42) (57) - (12) see above Oliley B.V. (98) (1) - (1) see above Josco Strategisch Advies - (7) - - see above J. Hofland B.V - (44) - - see above Corinvest B.V. - (4) (4) (5) see above Merlion Nederland B.V. (137) - (20) - see above
Oceanteam Annual Report 2021 58 Transactions with Group companies USD ‘000 Crane Hire expense Interest Income Management fee income Company 2021 2020 2021 2020 2021 2020 Oceanteam Bourbon 101 AS* - - 268 - 326 350 Oceanteam Bourbon Investments AS** (19) (84) - - 15 30 Only transactions with non-consolidated companies are disclosed above. See note 16 in the parent financial statements for details of transactions between Oceanteam ASA and all group companies. *On 28 June 2021, the fully consolidated subsidiary, Oceanteam Bourbon 4 AS entered into a loan agreement with the equity accounted associate, Oceanteam Bourbon 101 AS (borrower). See note 14 for further details. **The equity accounted associate, Oceanteam Bourbon Investments AS, has charged the fully consolidated subsidiary, Oceanteam Bourbon 4 AS amounts in respect of crane hire. Oceanteam Bourbon 4 AS purchased the crane from Oceanteam Bourbon Investments AS in March 2021 for USD 212.000. Stichting Value Partners Family Office Stichting Value Partners Family Office is controlled by Mr Hendrik Marius van Heijst. During 2021, Mr Hendrik Marius van Heijst has held a shareholding in Oceanteam ASA of greater than 20% and is therefore considered to have significant influence. In April 2018 a loan was issued by Stichting Value Partners Family Office. See note 18 for further details. Corinvest B.V. Corinvest B.V. is controlled by Kornelis Jan Willem Cordia, chairman of the board. In December 2018 a loan for USD 1.5 million was issued by Corinvest B.V. See note 18 for further details. USD ‘000 Loans Accrued interest on loans Company 2021 2020 2021 2020 Stichting Value Partners Family Office 1.500 1.500 53 70 Corinvest B.V. 1.500 1.500 53 70 Total 3.000 3.000 106 140 Note 21 - Contingent liabilities There were no contingent liabilities as at 31 December 2021. Note 22 - Contingent assets There were no contingent assets as at 31 December 2021. Note 23 - Guarantees A parent company guarantee from Oceanteam ASA has been granted to the buyers of KCI the Engineers BV effective for a period of 60 months from January 2018 with a maximum liability of EUR 700.000. In March 2020, Oceanteam ASA provided a guarantee to a company renting a barge to Oceanteam Shipping B.V. The minimum commitment as at 31 December 2021 was USD 19.000.
Oceanteam Annual Report 2021 59 Note 24 - Events aſter the balance sheet date Election of Board Member In April 2022, Jacob Johannes van Heijst was elected as a board member of Oceanteam ASA. Note 25 - Earnings per share The calculation of basic earnings per share has been based on the following profit attributable to ordinary shareholders and weighted-average number of ordinary shares outstanding. Shares are stated in thousands. USD ‘000 2021 2020 Net Profit / (loss) (3.126) (73.188) Shares per 1 January 34.339 34.339 Holding of own shares 1 January (128) (128) Issued during the year - - Shares 31 December 34.339 34.339 Own shares 31 December (128) (128) Weighted average of shares during the year 34.211 34.211 Earnings / (loss) per share (USD) (0,09) (2,14) Earnings / (loss) per share (NOK) (0,79) (20,15) Earnings / (loss) per share (USD) Discontinued operations (0,05) (2,10) Continuing operations (0,05) (0,04) Total (0,09) (2,14) There is no difference between basic and diluted earnings per share. Note 26 - Investment in joint ventures and associates USD’000 Investments in joint ventures and associates Investment in Investment in Total Oceanteam Oceanteam Bourbon 101 AS Bourbon Investments AS Type of investment Associate Joint venture Carrying amount of investment per 31 December 2020 - - - Net result from investment in 2021 - 3 3 Dividends received during the year - (3) (3) Total carrying amounts 31 December 2021 - - - Oceanteam Bourbon Investments AS was liquidated in December 2021. See note 28 for more information. The table above summarizes the investments of the Group. The following sections in this note describe Oceanteam Bourbon 101 AS more thoroughly.
Oceanteam Annual Report 2021 60 Oceanteam Bourbon 101 AS is equity accounted for with nil value in the Oceanteam Group figures. CSV BO 101 (Oceanteam Bourbon 101 AS’s main asset) was idle from April 2020 until it was sold in July 2021. Due to the lack of revenue and the write down of the vessel value in 2020 to its sale price, less costs to sell, Oceanteam Bourbon 101 AS has negative equity of USD 8 million as at 31 December 2021. Oceanteam Group’s share of accumulated unrecognized losses as at 31 December 2021 stands at USD 4 million. The fully consolidated subsidiary, Oceanteam Bourbon 4 AS, was jointly and severally liable for the loan from the banking consortium to Oceanteam Bourbon 101 AS and Oceanteam Bourbon 4 AS. During the period from April to June 2021, Oceanteam Bourbon 4 AS lent Oceanteam Bourbon 101 AS USD 11.7 million which has been formalized in an intercompany loan agreement. Oceanteam Bourbon 4 AS’s share of the loan from the banking consortium was paid in April 2021 and Oceanteam Bourbon 101 AS’s share was paid in July 2021. As at 31 December 2020 it was known that Oceanteam Bourbon 101 AS would not be able to settle its part of the bank loan in full without financial support from Oceanteam Bourbon 4 AS. Oceanteam Bourbon 4 AS was considered to have a financial guarantee contract in respect of this arrangement and therefore recognized a lifetime expected credit loss of USD 6.15 million in 2020 (classified under other current liabilities). As at 31 December 2021, this credit loss is now in respect of the intercompany loan provided (classified under other receivables) and has been increased by USD 1.85 million to USD 8 million. The intercompany loan agreement contains a clause through which amounts that Oceanteam Bourbon 101 AS cannot afford to repay to Oceanteam Bourbon 4 AS can be waived. See note 14 for more information. Associates Oceanteam Bourbon 101 AS is an unlisted company in which the Group has a 50 percent ownership interest. This company was founded in June 2009 by Oceanteam ASA and Bourbon Offshore Norway AS. The Group has classified its interest in Oceanteam Bourbon 101 AS as an associate, which is equity accounted for. Oceanteam Bourbon 101 AS Nature of relationship with the Group Vessel CSV Bourbon Oceanteam 101 Principal place of business Baerum, Norway Ownership interest 50% Voting rights held in board of directors 40%* The following is summarized financial information for Oceanteam Bourbon 101 AS based on USD as the functional currency modified for any differences in the Group’s accounting policies. *In December 2014 the owning parties agreed to change the shareholders’ agreement for Oceanteam Bourbon 101 AS. Oceanteam ASA have two of a total of five directors on the board, which is the basis for calculation of voting rights given above. The owner companies, Bourbon Offshore Norway AS and Oceanteam ASA have equal voting shares in general meetings. The changes were implemented from 1 January 2014.
Oceanteam Annual Report 2021 61 In USD ‘000 Oceanteam Bourbon 101 AS 2021 2020 Revenue - 1.984 Profit / (loss) before tax (3.352) (39.212) Tax (2) (2) Net result (3.353) (39.214) Current assets 1.969 1.619 Non current assets - 15.498 Current liabilities (9.876) (22.389) Non-current liabilities - - Net assets (7.908) (5.272) In USD ‘000 Oceanteam Bourbon 101 AS 2021 2020 Group’s interest in net assets of investee at beginning of the period - 16.971 Total profit / loss attributable to the Group - (16.971) Total other comprehensive income attributable to the Group - - Dividends received during the year - - Carrying amount of interest in investee at the end of the period - -
Oceanteam Annual Report 2021 62 Note 27 - Alternative Performance Measures Oceanteam’s Group financial statements are prepared in accordance with international financial reporting standards (IFRS). Oceanteam discloses various alternative performance measures as a supplement to the financial statements. The alternative performance measures are used to provide additional insight into the operating performance, financing and prospects of the Group. Such measures are oſten used by various interested parties. Definitions of these measures are as follows: EBIT ‘Earnings before interest and tax’ is the same as ‘Operating profit / (loss)’ EBITDA ‘Earnings before interest, tax, depreciation and amortisation’ is ‘Operating profit / (loss)’ less ‘Depreciation and amortisation’ and ‘Write off / Impairment’ USD ‘000 2021 2020 Operating profit / (loss) (1.196) (417) Depreciation and amortisation 1.129 1.100 Write off / Impairment 165 - EBITDA 97 684 SG&A ‘Selling, general & administration’ is the sum of ‘Personnel costs’ and ‘General & administration’ USD ‘000 2021 2020 Personnel costs (1.652) (1.298) General & administration (748) (562) SG&A (2.400) (1.860) Equity ratio ‘Total equity’ divided by ‘Total assets’ USD ‘000 2021 USD ‘000 2020 Total equity 13.128 = 71% Total equity 16.254 = 31% Total assets 18.538 Total assets 52.756 Operating margin ‘EBITDA’ divided by ‘Total operating income’ USD ‘000 2021 USD ‘000 2020 EBITDA 97 = 2% EBITDA 684 = 12% Total operating income 5.747 Total operating income 5.936 Current ratio ‘Total current assets’ divided by ‘Total current liabilities’ USD ‘000 2021 USD ‘000 2020 Total current assets 5.362 = 2,22 Total current assets 7.965 = 0,24 Total current liabilities 2.410 Total current liabilities 33.097
Oceanteam Annual Report 2021 63 Utilisation (Equipment) ‘The average utilisation of Oceanteam Solutions’ equipment. For each item of equipment, this is calculated as proportionally the number of days in a calendar year in which the item of equipment is on contract with a customer and earning the operating day rate. Contracted The period for which a customer has committed to hire out one of Oceanteam’s assets. This does not include options which have not yet been exercised. Interest bearing debt Amounts shown under ‘First year instalments’ and ‘ Loans and borrowings’ all which attract interest. Capital Expenditures Purchased fixed assets. Note 28 - Discontinued operations Oceanteam Bourbon 4 AS’s main asset, CSV Southern Ocean, was sold in April 2021. Oceanteam Bourbon 4 AS purchased Oceanteam Bourbon Investments AS’s main asset, a crane, in March 2021 which it sold along with CSV Southern Ocean. In May 2021, an agreement was reached to sell Oceanteam Bourbon 101 AS’s main asset, CSV Bourbon Oceanteam 101 (CSV BO 101). The vessel was delivered to the new owner in July 2021. Oceanteam Bourbon Investments was liquidated in December 2021. Oceanteam and the co-owner, Bourbon Offshore Norway AS, intend on liquidating Oceanteam Bourbon 101 AS and Oceanteam Bourbon 4 AS in the second half of 2022. Oceanteam Bourbon 4 AS is a fully consolidated subsidiary whereas Oceanteam Bourbon 101 AS and Oceanteam Bourbon Investments AS are equity accounted for. All three companies have been classified as discontinuing operations. All three companies are within and represent Oceanteam’s shipping Segment. *CSV Southern Ocean was impaired down to its sale price, less costs to sell in 2020. The sale transaction in 2021 resulted in a USD 21.000 loss on disposal which is classified within operating costs. Oceanteam Bourbon 4 AS In USD ‘000 Financial performance of discontinued operation 2021 2020 Operating income 3.500 7.625 Operating costs* (2.900) (8.356) Personnel costs** (341) (486) Net finance costs (211) (1.254) Provision for expected credit losses expense (1.850) (6.150) Write off / Impairment* - (30.304) Write off / Impairment (Group level adjustment)* - (16.019) Loss before tax (1.801) (54.944) Tax on ordinary result 200 (2) Loss aſter tax (1.601) (54.946) IFRS 16 adjustment 23 (12) Net loss (1.578) (54.959)
Oceanteam Annual Report 2021 64 Oceanteam Bourbon 101 AS and Oceanteam Bourbon Investments AS In USD ‘000 Financial performance of discontinued operation 2021 2020 Oceanteam Bourbon 101 AS - (16.971) Oceanteam Bourbon Investments AS 3 - Income from associates and joint ventures 3 (16.971) Profit / (Loss) from discontinued operations (1.574) (71.930) Profit / (loss) attributable to: Owners of the company (786) (44.451) Non controlling interests (789) (27.479) Profit / (Loss) from discontinued operations (1.574) (71.930) **Oceanteam ASA and Oceanteam Shipping B.V charge management fees to all three of the companies classified under discontinuing operations. The management fees charged to Oceanteam Bourbon 4 AS, which is fully consolidated, are eliminated from the Group’s revenue and the Group’s costs. The underlying personnel costs within Oceanteam ASA and Oceanteam Shipping B.V which form the basis of the management fees charged to Oceanteam Bourbon 4 AS are shown in the above table under personnel costs. See note 8 for more information. The management fees charged to Oceanteam Bourbon 101 AS are presented within Revenue. See note 6 for more information.
Oceanteam Annual Report 2021 65 10. FINANCIAL STATEMENTS PARENT Income Statement 01.01 - 31.12 USD ‘000 Notes 2021 2020 Operating Income and expenses Management fee income 16 546 657 Personnel Costs 2, 12, 15 (1.160) (837) Depreciation (1) (1) Other operating expenses 2 (499) (196) Total operating income / (expense) (1.113) (376) Operating profit / (loss) (1.113) (376) Financial Income and expense Profit on investment in joint ventures, subsidiaries and associates 3 3 - Interest from group companies 3, 16 472 294 Foreign exchange result 3 (13) 68 Write-offs, reversal of write-offs and forgiven debt 3, 6, 7 (792) (5.832) Other financial expenses 3 (4) (22) Interest expense 3, 15 (216) (210) Net financial income / (cost) (550) (5.702) Profit / (loss) before income tax (1.663) (6.078) Tax on ordinary income 4 - - Net Profit / (loss) (1.663) (6.078) Attributable to: Uncovered loss 11 (1.663) (6.078) Total (1.663) (6.078)
Oceanteam Annual Report 2021 66 Statement of financial position 31 December 2021 Assets USD ‘000 Notes 2021 2020 Non-current assets Tangible assets Office equipment 4 5 Total tangible assets 4 5 Financial assets Investments in joint ventures and subsidiaries 6 6.196 7.031 Loans to group companies 7 7.068 8.280 Investments in associates 6 - - Total financial assets 13.264 15.311 Total non current assets 13.268 15.316 Current assets Receivables Other receivables 8 28 522 Accounts receivable 8 250 94 Total receivables 278 615 Cash and cash equivalents 9 1.601 65 Total current assets 1.879 680 Total assets 15.147 15.996
Oceanteam Annual Report 2021 67 Statement of financial position 31 December 2021 Equity and liabilities USD ‘000 Note 2021 2020 Equity Owners equity Share capital 10, 11 25.403 25.403 Holdings of own shares 10, 11 (128) (128) Share premium reserve 11 23.526 23.526 Total owners equity 48.801 48.801 Accumulated profits / (losses) Uncovered loss 11 (38.037) (36.373) Total accumulated profits / (losses) (38.037) (36.373) Total equity 10.765 12.428 Non-current liabilities Loans and borrowings 8, 15 4.100 3.000 Total non-current liabilities 4.100 3.000 Current liabilities Accounts payable 8 46 369 Public duties payable 8 20 20 Other current liabilities 8, 15 217 178 Total current liabilities 282 568 Total Liabilities 4.382 3.568 Total equity and liabilities 15.147 15.996 Baerum / Norway, 13 April 2022 The Board of Directors and CEO of Oceanteam ASA Keesjan Cordia Karin Govaert Jacob Johannes van Heijst Hans Reinigert Chairman Director Director CEO
Oceanteam Annual Report 2021 68 Cash flow statement 01.01 - 31.12 USD ‘000 2021 2020 Cash flow from operating activities Profit / (loss) before income taxes (1.663) (6.078) Depreciation 1 1 Write-offs, reversal of write-offs and forgiven debt 792 5.832 Change in other receivables 493 (515) Change in accounts receivable (156) (23) Change in accounts payable (283) 249 Change in other current liabilities 38 (1.177) Profit on sale of shares (3) - Net cash flow from operating activities (783) (1.711) Cash flow from investing activities Paid-out from purchase of fixed assets - - Proceeds from sales of shares 3 - Net cash flow from investing activities 3 - Cash flow from financing activities Changes in intragroup balances 1.216 1.389 Paid-in from new loans raised 1.100 - Net cash flow from financing activities 2.316 1.389 Net change in cash and cash equivalents 1.536 (322) Cash and cash equivalent at 01.01 65 387 Cash and cash equivalents at 31.12 1.601 65
Oceanteam Annual Report 2021 69 NOTES TO THE FINANCIAL STATEMENTS PARENT Note 1 - Primary accounting principles The financial statements, which have been presented in compliance with the Norwegian Public Liability Companies Act, the Norwegian Accounting Act and Norwegian generally accepted accounting principles in effect as of 31 December 2021, consist of the income statement, statement of financial position, cash flow statement and notes to the accounts. The financial statements have been prepared based on the fundamental principles governing historical cost accounting, comparability, continued operations, congruence and prudence. Transactions are recorded at their value at the time of the transaction. The different accounting principles are further commented on below. Assets / liabilities related to current business activities and items which fall due within one year are classified as current assets/ liabilities. Current assets / short-term debts are recorded at the lowest/ highest of acquisition cost and fair value. The definition of fair value is the estimated future sales price reduced by expected sales costs. Other assets are classified as fixed assets. Fixed assets are entered in the accounts at historical cost, with deductions for depreciation. In the event of a decline in value which is not temporary, the fixed asset will be subject to a write-down. The same principle applies to liabilities. According to generally accepted accounting standards there are some exceptions to the basic assessment and valuation principles. Comments on these exceptions can be found in the respective notes to the accounts. When applying the basic accounting principles and disclosure of transactions and other items, the “substance over form” rule is adopted. Contingent losses which are probable and quantifiable are charged to the profit and loss account. Accounting principles for material items Revenue recognition Revenue is normally recognized at the time of delivery of services. Oceanteam ASA issues management fees to companies in the same Group. Interest on intercompany receivables is charged based on an inter-group cash pooling agreement. Other operating expenses Other costs which are not related to day to day operations are classified as other operating expenses. Dividends Dividends, group contributions and other distributions are recognized in the same year as they are recognized in the subsidiary or joint venture financial statements. If dividends / group contribution exceed withheld profits aſter acquisition, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recorded value of the acquisition in the balance sheet of the parent company. Dividend from subsidiaries and Joint ventures will only be recognized per balance sheet date if it’s significantly more likely than not that the dividend will be approved in the relevant company. Use of estimates The management has used estimates and assumptions that have affected assets, liabilities, incomes, expenses and information on potential liabilities in accordance with generally accepted accounting principles in Norway.
Oceanteam Annual Report 2021 70 Pensions The Company has a pension scheme that is classified as a defined contribution plan. The defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Depreciation Based on the historical cost of the asset, straight line depreciation is applied over the useful economic life of the fixed assets. Depreciation is classified as an operating cost. Finance leases are depreciated over the term of the lease and the liability is reduced in line with the lease payments aſter deducting interest. Income tax The tax expense consists of the tax payable and changes to deferred tax. Deferred tax / tax assets are calculated on all differences between the book value and tax value of assets and liabilities. Deferred tax is calculated as 22 percent of temporary differences and the tax effect of tax losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be utilized. Foreign currency translation Functional and reporting currency Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Company’s functional and reporting currency are in USD. The USD against NOK exchange rate applied as at 31 December 2021 is 8.8191. The average exchange rate for the 2021 year applied was 8.6064. Foreign currency transactions are translated into the functional currency using the respective month end exchange rates. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at each month end using the month end exchange rates. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at month end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Foreign exchange gains and losses are presented in the income statement within ‘Foreign exchange result’. Balance sheet classification Current assets and short term liabilities consist of receivables and payables due within one year and cash and cash equivalents. Other balance sheet items are classified as fixed assets / long term liabilities. Current assets are valued at the lower of cost and fair value. Short term liabilities are recognized at nominal value. Fixed assets are valued at cost, less depreciation and impairment losses. Long term liabilities are recognized at nominal value.
Oceanteam Annual Report 2021 71 Tangible assets Tangible assets are entered in the accounts at historical cost, with deductions for accumulated depreciation and write-downs. If the fair value of a tangible asset is lower than book value, and the decline in value is not temporary, that tangible asset will be written down to fair value. Investment in Joint Ventures, Subsidiaries and Associates Subsidiaries and investments in joint ventures and associates are valued at cost in the company accounts. The investment is valued at the cost of the shares, less any impairment losses. An impairment loss is recognized if the impairment is not considered temporary, in accordance with generally accepted accounting principles. Impairment losses are reversed if the reason for the impairment loss disappears in a later period. Accounts receivable and other receivables Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables. For the remaining receivables, a general provision is estimated based on expected loss. Cash flow statement The cash flow statement is presented using the indirect method, whereby the profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. Cash and cash equivalents include cash, bank deposits and other short term, highly liquid investments with maturities of three months or less. Currency Cash, receivables and liabilities in a foreign currency are valued using the exchange rate at the year end. Events after the balance sheet date New information on the Company’s position at the balance sheet date is taken into account in the annual financial statements. Events aſter the balance sheet date that do not affect the Company’s position at the balance sheet date, but which will affect the Company’s position in the future, are stated if significant. Note 2 - Employees, Board and auditor USD ‘000 2021 2020 Personnel Costs Employee salaries 187 168 Social security 28 24 Pension costs 12 10 Other benefits 14 5 Board and audit committee fees 119 112 Recharged salary costs* 432 331 Contractor fees** 369 187 Total 1.160 837 Number of man-years employed in Oceanteam ASA over the financial year. 2 2
Oceanteam Annual Report 2021 72 *2021 recharged salary costs relate to amounts recharged from Oceanteam Shipping B.V in respect of Henk van den IJssel’s employment (former CEO). 2020 recharged salary costs relate to amounts recharged in respect of Leidus Bosman’s employment (former CEO) and Henk van den IJssel’s employment. **Contractor fees relate to CFO / CEO services provided by Hendrik Hazenoot (former interim CFO / interim CEO) and additional services provided by Hans Reinigert (former board member) and Karin Antoinette Yvonne Govaert (board member). Management remuneration USD ‘000 Board Wages / Pension Other 2021 Position fees Fees premiums remuneration Total Henk van den Ijssel CEO (Until July 2021) 397 14 411 Kornelis Jan Willem Cordia Chairman 47 47 Karin Antoinette Yvonne Govaert Director 39 96 135 Hans Reinigert Director (until Nov 2021), CEO 33 126 159 Hendrik Hazenoot Interim CFO / CEO (Until Nov 2021) 144 144 Ben de Jong CFO (from Aug 2021) 190 31 220 Total 119 952 45 - 1.115 Board Wages / Pension Other 2020 Position fees Fees premiums remuneration Total Leidus Bosman CEO (until Feb 2020) 38 2 41 Henk van den Ijssel CEO (from Feb 2020 240 20 260 Kornelis Jan Willem Cordia Chairman 43 43 Karin Antoinette Yvonne Govaert Director 36 36 Hendrik Johannes Jesse Director (until Aug 2020) 22 7 30 Hans Reinigert Director (from Sept 2020) 10 10 Hendrik Hazenoot Interim CFO 135 135 Diederik Legger Advisor to the board 44 44 Total 112 465 22 - 600 Henk van den IJssel resigned as CEO effective 1 August 2021. He received an annual salary of EUR 198.000, which attracted a holiday allowance at 8%, and an annual travel allowance of EUR 16.140. During the period 1 January 2021 to 31 July 2021 he received EUR 115.500 (USD 138.666) in salary, EUR 198.000 (USD 235.442) in severance payment, EUR 9.240 (USD 11.549) in holiday allowance and EUR 9.415 (USD 11.303) as a travel allowance all which have been classified under wages/fees For the year 2021, the agreed annual fee for the chairman of the board is NOK 400.000 and NOK 337.500 for the other members of the board (including NOK 37.500 for audit committee fees). Kornelis Jan Willem Cordia, chairman of the board, received board fees of NOK 400.000 (USD 46.506) in 2021. Director, Karin Antoinette Yvonne Govaert received board fees of NOK 337.500 (USD 39.240) and an additional fee for advisory services of NOK 765.000 (USD 87.142) which attracted non-deductible VAT of NOK 77.245 (USD 8.799). During the period from 1 January 2021 to 31 October 2021, former director, Hans Reinigert received board fees of NOK 281.250 (USD 32.942) and an additional fee for advisory services of NOK 765.000 (USD 87.128) which attracted non-deductible VAT of NOK 16.175 (USD 1.842). Hans Renigert resigned as director and was appointed as CEO effective 1 November 2021. For his CEO services he has a service agreement through Merlion Nederland B.V. The service fee is EUR 16.000 per month. In 2021, fees of EUR 32.000 (USD 36.303), which attracted non-deductible VAT of EUR 313 (USD 354), have been charged in respect of his CEO services.
Oceanteam Annual Report 2021 73 As at 31 December 2021, Oceanteam had no obligation to pay special compensation upon termination of, or change to, the CEO’s employment. As at 31 December 2021, Oceanteam had not recognized any liabilities in respect of severance pay or bonuses to the CEO. As at 31 December 2021, Oceanteam had no obligation to pay special compensation upon termination of, or change to, the chairman’s appointment. As at 31 December 2021, there were no agreements between Oceanteam and the chairman providing for bonuses, profit sharing, options or similar benefits. No expenses or liabilities have been recognized in 2021. Hendrik Hazenoot, Interim CFO until 2 August 2021 and Interim CEO from 2 August 2021 until 1 November 2021, had a service agreement through DTN Noordwijk B.V. which was cancelled effective January 2022 (three-month notice period). In 2021, fees of EUR 121.508 (USD 143.547), including non-deductible VAT of EUR 16.102 (USD 19.050), have been charged in respect of his services. Ben de Jong was appointed as CFO on 2 August 2021. He receives an annual salary of EUR 138.000, which attracts a holiday allowance at 8%. During the year he received EUR 138.000 (USD 163.055) in salary, EUR 11.040 (USD 13.065) in holiday allowance and an incentive of EUR 11.500 (USD 13.392). Refer to note 15 for the year-end balances of related parties. The incentive scheme throughout the group is given at the discretion of the board and CEO. The CEO makes a proposal to the board for different incentives for the employees of the company. There is no share incentive program. There have not been given any loans, advance payments and security by the Company or other companies in the group to the individual senior executives or the individual members of the board of directors, audit committee or other elected corporate bodies. Other than mentioned above, there has not been any remuneration, pension’s plans or other benefits to members of the audit committee or other elected corporate bodies. Liability insurance has been taken out for the Directors and Officers for their possible liability to the company and third parties. The main principles for the Company’s executive management salary policy is that executive management shall be offered terms that are competitive when salary, payment in kind, bonus, share options and pension scheme are considered as a whole. The Board may at its sole discretion, grant performance related incentive to employees. The incentive cannot exceed one year’s annual salary unless the Board decides otherwise and substantiates such decision. The Board may develop incentive schemes for the Group in order to align the motivation goals of personnel with that of the Company and enhance the value creation capacity for the shareholders by enhancing the Company’s ability to attract, retain and motivate employees who are expected to make important contributions to the Company. By providing such persons with performance-based incentives, the Company aligns the interests of such persons with those of the Company’s shareholders. Auditor Auditor’s fee consists of the following: USD ‘000 2021 2020 Statutory audit 123 129 Other assurance services 4 2 Tax advisory 2 18 Other - - Total 128 149 Claimable VAT is not included in the auditor’s fee.
Oceanteam Annual Report 2021 74 Note 3 - Financial income and financial expenses USD ‘000 2021 2020 Finance income Dividend income* 3 - Reversal of write-offs - - Interest income from group companies 472 294 Other financial income (foreign exchange gains) - 263 Total finance income 475 557 Finance costs Write-offs and forgiven debt (792) (5.832) Interest expenses (216) (210) Other financial expenses (4) (22) Other financial cost (foreign exchange losses) (13) (195) Total finance costs (1.026) (6.259) Result financial items (550) (5.702) *Oceanteam Bourbon Investments AS was liquidated in December 2021. The dividend received was a liquidation dividend. Note 4 - Income taxes USD ‘000 2021 2020 Income tax expense Tax payable - - Tax payable previous year - - Changes in deferred tax - - Total income tax expense - - Tax base calculation Profit/(loss) before income tax (1.663) (6.078) Permanent differences 792 5.832 Changes in temporary differences (98) (914) Corrections from previous periods - - Translation differences 190 (89) Tax base (779) (1.249) Temporary differences: Fixed assets (1.038) (1.148) Non-current receivables - - Non current assets - - Current assets - - Profit and Loss account 38 49 Tax-deductible part of write-down - - Taxable income from Subsidiaries - - Effect foreign exchange on long-term liabilities - - Other temporary differences - - Total temporary differences (1.000) (1.098)
Oceanteam Annual Report 2021 75 Loss carried forward (178.172) (183.368) Total temporary differences and loss carried forward (179.172) (184.467) Deferred tax liability / (asset) - (2021: 22%, 2020: 22%)* (39.418) (40.583) Reconciliation of nominal and effective tax rate 2021 2020 Profit/(loss) before income tax (1.663) (6.078) Expected income taxes 22% (2020: 22%) (366) (1.337) Permanent differences 174 1.283 Changes in temporary differences (22) (201) Translation differences 42 (20) Corrections from previous periods - - Losses generated and not utilized 171 275 Income tax expense - - Effective tax rate in % 0,0 % 0,0 % *Deferred tax assets are not recognized in the balance sheet as there is uncertainty regarding utilization in the foreseeable future. Note 5 - Deferred tax Confirmation from the tax authorities of a cumulative carry forward tax loss of NOK 1 565 million (USD 177 million) as at the 2020 year end was received on 23 September 2021. Cumulative carry forward tax loss at year-end 2021 is estimated to NOK 1 571 million (USD 178 million). The carryforward tax loss has no statute on limitation and can be utilized against company’s future losses.
Oceanteam Annual Report 2021 76 Note 6 - Investment in subsidiaries, joint ventures and associates Year aquired / Head Office/ Ownership Voting incorporated Country of share share registration Subsidiaries directly owned Oceanteam II B.V. 2007 Amsterdam, Netherlands 100% 100% RentOcean B.V. 2015 Amsterdam, Netherlands 100% 100% North Ocean 309 AS 2011 Bærum, Norway 100% 100% Oceanteam Bourbon 4 AS 2006 Bærum, Norway 50% 60% Associates directly owned Oceanteam Bourbon 101 AS 2006 Bærum, Norway 50% 40% Subsidiaries indirectly owned Oceanteam Mexico B.V. 2008 Amsterdam, Netherlands 100% 100% Oceanteam Shipping B.V. 2011 Amsterdam, Netherlands 100% 100% Oceanteam Solutions B.V. 2012 Amsterdam, Netherlands 100% 100% Kingfisher Enterprise B.V. 2008 Schiedam, Netherlands 100% 100% Oceanteam Shipping GmbH 2007 Wilhelmshaven, Germany 100% 100% Oceanteam GmbH 2007 Wilhelmshaven, Germany 100% 100% Oceanteam Power and Umbilical GmbH 2007 Wilhelmshaven, Germany 100% 100% Oceanteam Mexico S.A de C.V. 2008 Cd. del Carmen, Mexico 90% 49% Oceanteam Bourbon Investments AS was liquidated in December 2021. Investments valued at cost (company accounts) Subsidiaries and joint ventures USD ‘000 Company name Share Number of Write downs Net book value The company’s Net profit (loss) capital shares issued in 2021 of investment total equity 2021 Oceanteam II B.V. 22 18.000 - 5.000 4.878 (64) RentOcean B.V. 11 10.000 - - 2.400 (230) North Ocean 309 AS 17 100 - - (945) - Oceanteam Bourbon 4 AS* 4.215 100 835 1.196 2.462 (1.158) Sum 4.265 835 6.196 8.795 (1.452) Associates Company name Share Number of Write downs Net book value The company’s Net profit (loss) capital shares issued in 2021 of investment total equity 2021 Oceanteam Bourbon 101 AS* 556 2.610 - - (7.908) (3.353) Sum 556 - - (7.908) (3.353) The above investments are only those directly owned by Oceanteam ASA. The investments are valued at the lower of cost and net realizable value.
Oceanteam Annual Report 2021 77 *During December 2013 the shareholders’ agreements between Oceanteam ASA and Bourbon Offshore Norway AS regarding the companies Oceanteam Bourbon 4 AS and Oceanteam Bourbon 101 AS was amended. The result of the amendment was that Bourbon Offshore Norway AS acquired significant control over Oceanteam Bourbon 101 AS, and that Oceanteam ASA acquired significant control over Oceanteam Bourbon 4 AS. The change became effective from 1 January 2014. Aſter the amendment equity interest still remained 50 percent, but voting shares in Oceanteam Bourbon 4 AS became 60 percent and significant control of the company came in place. The control is currently also affirmed by Oceanteam ASA being represented by three of a total of five directors at the Company’s Board. But in general, the owner companies, Bourbon Offshore Norway AS and Oceanteam ASA have equal voting shares in general meetings.
Oceanteam Annual Report 2021 78 Note 7 - Intercompany balances with group companies and associates USD ‘000 Write downs / Write downs / (reversal of (reversal of write downs) write downs) Balance Balance Intercompany balances in 2021 in 2020 2021 2020 Oceanteam Bourbon 101 AS - - - 76 Oceanteam Bourbon 4 AS* - - - 1.066 Oceanteam Bourbon Investments AS - - - - Oceanteam Shipping GmbH - - 2 2 Oceanteam II B.V. - - 996 935 Oceanteam Mexico S.A de C.V. - - - - Oceanteam Mexico B.V. - - 1 1 Kingfisher Enterprise B.V. (5) - - 138 North Ocean 309 AS 1 - - 1 Oceanteam Solutions B.V. - - 8 9 RentOcean B.V. - - 1.252 1.404 Oceanteam Shipping B.V. - - 4.808 4.650 Sum (4) - 7.068 8.280 *See notes 8 and 15 for details of the loan agreement entered into between Oceanteam Bourbon 4 AS and Oceanteam ASA. Note 8 - Receivables and Liabilities USD ‘000 2021 2020 Receivables Prepayments 28 27 Accrued Income - 494 Accounts receivable* 250 94 Total receivables 278 615 Non-current liabilities Loans and borrowings (4.100) (3.000) Total non-current liabilities (4.100) (3.000) Current liabilities Accounts payable (46) (369) Public duties payable (20) (20) Other current liabilities (217) (178) Total current liabilities (282) (568) *Accounts receivable, per 31.12.2021, consists of management fees charged to Oceanteam Bourbon 4 AS of USD 134.375 and Oceanteam Bourbon 101 AS of USD 115.625 Oceanteam ASA entered into loan agreement on 23 April 2018 with Stichting Value Partners Family Office for the amount of USD 1.5 million. The loan has an interest rate of 7%. Oceanteam ASA entered into another loan agreement on 21 December 2018 with Corinvest B.V. for the amount of USD 1.5 million. The loan has an interest rate of 7% per annum.
Oceanteam Annual Report 2021 79 In May 2020, the repayment date for both the Stichting Value Partners Family Office loan and Corinvest B.V. loan was extended from April 2021 to April 2023. In May 2020, a non-possessory pledge on one carousel each was provided to Stichting Value Partners Family Office and Corinvest B.V. One of the carousels is owned by RentOcean B.V. The other is owned by Oceanteam Shipping B.V Oceanteam ASA entered into a loan agreement on 9 November 2021 with Oceanteam Bourbon 4 AS for the amount of USD 1.1 million. The loan has an interest rate of 4%. The loan has a repayment date of 9 November 2023. If Oceanteam ASA becomes insolvent or unable to pay its debts as they fall due, the loan amount becomes payable upon demand. Refer to note 15 for more details. Note 9 - Bank deposits As at 31 December 2021, tax deducted from employees, deposited in a separate bank account amounts to NOK 142.790 (USD 16.191). Note 10 - Share Capital and Shareholder Information Share capital Pr 31.12.2021 As per 31.12.2021, the share capital of the Company is NOK 197.448.290 (USD 25.403.333) divided into 34.338.833 shares with a nominal value of NOK 5,75 (USD 0,74). All shares have equal voting rights. Oceanteam owns a total of 127.573 own shares representing 0,4% of the shares in the Company. The calculations are made on the basis of 34.338.833 shares in the Company. Shareholders Notes Number of shares Percentage of total BNP Paribas Securities Services 12.459.966 36,3% UBS Switzerland AG 1 6.690.948 19,5% Euroclear Bank S.A./N.V. 3.798.796 11,1% State Street Bank and Trust Comp 1.826.012 5,3% SIX SIS AG 1.481.374 4,3% HESSEL HALBESMA DØDSBO 756.307 2,2% Banque Pictet & Cie SA 457.772 1,3% STEINAR GRØNLAND 285.000 0,8% Citibank Europe plc 281.063 0,8% CLEARSTREAM BANKING S.A. 276.883 0,8% STIG EEG AUNE 260.000 0,8% Geir Bjørndalen 197.824 0,6% Nordnet Bank AB 195.445 0,6% CACEIS Bank 181.713 0,5% FRANK ROBERT SUNDE 171.417 0,5% U-TURN VENTURES AS 162.707 0,5% OCEANTEAM ASA 127.573 0,4% VESLIK AS 110.000 0,3% MOMO INVEST AS 102.254 0,3% ERIK SMITH JAGLAND 100.000 0,3% Subtotal 20 largest 29.923.054 87,1 % Others 4.415.779 12,9% Total 34.338.833 100,0 %
Oceanteam Annual Report 2021 80 Shareholders Notes Number of shares Percentage of total Board: Kornelis Jan Willem Cordia (Chairman) 1 6.590.517 19,2 % Jacob Johannes van Heijst (Board member) 87.987 0,3 % Total 6.678.504 19,4 % 1. Through UBS Switzerland AG, Kornelis Jan Willem Cordia, Chairman of Oceanteam ASA, owns 6.590.517 shares. For more information, please refer to related party transactions in note 15. Note 11. Equity USD ‘000 Share capital Own shares Premium fund Uncovered loss Total Equity 01.01.21 25.403 (128) 23.526 (36.373) 12.428 Net profit / (loss) for the year (1.663) (1.663) Equity 31.12.21 25.403 (128) 23.526 (38.037) 10.765 Note 12 - Pensions The Company is required to have an occupational pension scheme in accordance with Norwegian law (“lov om obligatorisk tjenestepensjon”). The Company’s pension scheme meets the requirements of that law. The Company’s pension scheme is a defined contribution plan funded through an insurance company. All employees within Oceanteam ASA are included within the pension scheme. Refer to note 2 for the number of employees. Note 13 - Events after the balance sheet date Election of Board Member In April 2022, Jacob Johannes van Heijst was elected as a board member of Oceanteam ASA. Note 14 - Financial risk management GOING CONCERN In accordance with the Accounting Act § 4-5 the company confirms that the financial statements have been prepared under the assumption of going concern. This assumption is based on income forecasts for the years 2022 – 2023 and the Group’s long-term strategic forecasts. The Directors have considered all available information about the future when concluding whether the Company is a going concern at the date they approve the financial statements. The review covers a period of at least twelve months from the date of approval of annual financial statements. (A) CREDIT RISK The credit risk of receivables from group entities is dependent on the performance of the actual operations within the subsidiary, joint venture or associate.
Oceanteam Annual Report 2021 81 (B) LIQUIDITY RISK Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company’s reputation. The company is receiving their revenue and thus cash liquidity from their subsidiaries and associates, and is consequently dependent on the liquidity in these companies. (C) MARKET RISK The market risk with regard to currency risk is considered low as the functional and reporting currency are in USD. The company’s loans and the majority of the companies revenues, which are dividends, intercompany interest and management fees, are in USD. Other liabilities are mostly a mix of USD, EUR and NOK. Market risk is considered low. Note 15 - Transactions with related parties DTN Noordwijk B.V. DTN Noordwijk B.V. is controlled by former Interim CEO / former interim CFO, Hendrik Hazenoot. Transactions consist mostly of invoicing for monthly management and consultancy services. Travel costs have also been recharged through this company. Refer to note 2 for more details. Workships Contractors B.V Workships Contractors B.V. is 50% controlled by Kornelis Jan Willem Cordia, chairman of the board. Transactions consist of invoicing for docking budget control for both of the vessels and project management services. Oliley B.V. Oliley B.V. is controlled by Karin Antoinette Yvonne Govaert, director of Oceanteam ASA. Transactions consist mostly of advisory services. Travel costs have also been recharged through this company. Refer to note 2 for more details. Josco Strategisch Advies Josco Strategic Advies is controlled by Hendrik Johannes Jesse, former director of Oceanteam ASA. Transactions consist mainly of invoicing for strategic advisory services. Refer to note 2 for more details. J.Hofland B.V. Former interim CEO, Diederik Legger, provided advisory services to the board of directors of Oceanteam through J. Hofland B.V. Transactions include invoicing advisory fees. Refer to note 2 for more details. Corinvest B.V. Corinvest B.V. is controlled by Kornelis Jan Willem Cordia, chairman of the board. Transactions consist mainly of invoicing recharges for travel expenses. Merlion Nederland B.V. Merlion Nederland B.V. is controlled by Hans Reimer Reinigert, CEO of Oceanteam ASA. Transactions consists of invoicing for advisory services, CEO services and travel expenses. Refer to note 2 for more details.
Oceanteam Annual Report 2021 82 USD ‘000 Cost Vendor & accrued balance Company 2021 2020 2021 2020 Type of transaction DTN Noordwijk B.V. (144) (135) (11) (11) see above Workships Contractors B.V. (29) - - - see above Oliley B.V. (96) (1) - - see above Josco Strategisch Advies - (7) - - see above J. Hofland B.V - (44) - - see above Corinvest B.V. - (4) (4) (5) see above Merlion Nederland B.V. (137) - (20) - see above Stichting Value Partners Family Office Stichting Value Partners Family Office is controlled by Mr Hendrik Marius van Heijst. During 2021, Mr Hendrik Marius van Heijst has held a shareholding in Oceanteam ASA of greater than 20% and is therefore considered to have significant influence. In April 2018 a loan was issued by Stichting Value Partners Family Office. See note 8 for further details. Corinvest B.V. Corinvest B.V. is controlled by Kornelis Jan Willem Cordia, chairman of the board. In December 2018 a loan for USD 1.5m was issued by Corinvest B.V. See note 8 for further details. Oceanteam Bourbon 4 AS Oceanteam ASA entered into a loan agreement on 9 November 2021 with Oceanteam Bourbon 4 AS, a subsidiary of Oceanteam ASA, for the amount of USD 1.1 million. See note 8 for further details. USD ‘000 Accrued interest Loans payable on loans Interest expense Company 2021 2020 2021 2020 2021 2020 Stichting Value Partners Family Office 1.500 1.500 53 70 105 105 Corinvest B.V. 1.500 1.500 53 70 105 105 Oceanteam Bourbon 4 AS 1.100 - 6 - 6 - Total 4.100 3.000 112 140 216 210 Note 16 - Transactions with Group companies USD ‘000 Interest Income / (Expense) Management fee income 2021 2020 2021 2020 Kingfisher Enterprise B.V.* - - - - Oceanteam Shipping B.V. 310 201 7 60 Oceanteam II B.V. 62 34 - - Oceanteam Bourbon 101 AS - - 256 245 Oceanteam Bourbon 4 AS - - 268 319 North Ocean 309 AS* - - - 1 Oceanteam Bourbon Investments AS - - 15 30 RentOcean B.V. 101 59 - 2 Total 472 294 546 657 *Oceanteam ASA waived 2021 interest income due from Kingfisher Enterprise B.V of USD 9.527 and North Ocean 309 AS of USD 67.644.
Oceanteam Annual Report 2021 83 Internal interest is calculated on intercompany balances. An interest rate of 7% + Libor 3 months is applied to all the above company’s intercompany balances subject to Oceanteam Bourbon Investments AS on which the interest is 4% per annum. Please see note 7 for intercompany balances. Note 17 - Guarantees A parent company guarantee from Oceanteam ASA has been granted to the buyers of KCI the Engineers BV effective for a period of 60 months from January 2018 with a maximum liability of EUR 700.000. In March 2020, Oceanteam ASA provided a guarantee to a company renting a barge to Oceanteam Shipping B.V. The minimum commitment as at 31 December 2021 was USD 19.000.
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Norge AS is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Norge AS er medlem av/is a member of Den norske Revisorforening. RSM Norge AS Ruseløkkveien 30, 0251 Oslo Pb 1312 Vika, 0112 Oslo Org.nr: 982 316 588 MVA T +47 23 11 42 00 F +47 23 11 42 01 www.rsmnorge.no To the General Meeting of Oceanteam ASA Independent Auditor’s Report Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Oceanteam ASA, which comprise: • The financial statements of the parent company Oceanteam ASA (the Company), which comprise the balance sheet as at 31 December 2021, the income statement showing a loss of USD 1 663 000 and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and • The consolidated financial statements of Oceanteam ASA and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2021, the income statement showing a loss of USD 3 126 000, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion: • the financial statements comply with applicable statutory requirements, • the financial statements give a true and fair view of the financial position of the Company as at 31 December 2021, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and • the financial statements give a true and fair view of the financial position of the Group as at 31 December 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of the Company for 4 years from the election by the general meeting of the shareholders on 13.04.2018 for the accounting year 5.
Independent Auditor's Report 2021 for Oceanteam ASA Material Uncertainty Related to Going Concern We draw attention to note 3 in the financial statements and the Board of Director’s Report which indicates that the Group’s liquidity forecast is showing a constrained cash flow and that there is inherent risk in cash flow estimates depending on the Group’s ability to secure new contracts within its business segments. There are significant assumptions within the cash flow forecast which are both within and outside the control of the Group. The events and assumptions described in note 3 and in the Board of Directors’ report, even though the management has taken measures to mitigate risk of uncertainty, indicate that a material uncertainty still exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter described below to be the key audit matters to be communicated in our report. Carrying value of Equipment Equipment constitute a significant share of the total assets in the Group with a carrying amount of USD 12.9 million at 31 December 2021. Due to the continued difficult market conditions, management identified indications of impairment for the Group’s Equipment. Consequently, they have carried out an impairment assessment and estimated recoverable amount of the assets, which is the highest of fair value less costs of disposals and value in use. For the Equipment the impairment assessments resulted in an impairment charge of USD 0.2 million recognized in 2021 due to recoverable amount being lower than the carrying value. Our audit addressed the Key Audit Matter by procedures including, among others: • We obtained management’s impairment models and considered whether the models contained the elements and methodology IFRS require from such models. We found the model to be in accordance with our expectations. • We challenged management’s key assumptions such as the projected utilization, hire rates, operating costs and discount rates, and compared with historical performance and management’s internal forecasts. We also tested the mathematical accuracy of the valuation model and assessed the weighted average cost of capital by comparing input with external data such as risk free interest on government bonds, beta and market risk premium and assessed adjustments for company specific factors. • We lastly evaluated the adequacy of the related disclosures including those regarding the key assumptions and sensitivities. We refer to Notes 2 and 4 for the Group’s accounting policy for impairment of non-financial assets, and Note 12 where the Board of Directors explain the valuation process for the Group’s tangible assets. Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements.
Independent Auditor's Report 2021 for Oceanteam ASA In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the financial statements otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial statements. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report • is consistent with the financial statements and • contains the information required by applicable legal requirements. Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate Social Responsibility. Responsibilities of Management for the Financial Statements Management 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 EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit 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 Company's or the Group's internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • conclude on the appropriateness of management’s use of the going concern basis of accounting, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
Independent Auditor's Report 2021 for Oceanteam ASA inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. • obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Independent Auditor's Report 2021 for Oceanteam ASA Report on Other Legal and Regulatory Requirements Report on compliance with Regulation on European Single Electronic Format (ESEF) Opinion We have performed an assurance engagement to obtain reasonable assurance that the financial statements with file name 213800AVDTP5HXHL3548-2021-12-31-en have been prepared in accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the accompanying Regulation on European Single Electronic Format (ESEF). In our opinion, the financial statements have been prepared, in all material respects, in accordance with the requirements of ESEF. Management’s Responsibilities Management is responsible for preparing, tagging and publishing the financial statements in the single electronic reporting format required in ESEF. This responsibility comprises an adequate process and the internal control procedures which management determines is necessary for the preparation, tagging and publication of the financial statements. Auditor’s Responsibilities For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger Oslo, 13 April 2022 RSM Norge AS Lars Løyning State Authorised Public Accountant