dockwise annual report 2009 - bourse€¦ · dockwise ltd. • annual report 2009 3 message from...

Annual Report 2009

Dockwise Ltd.Bermuda incorporatedLage Mosten 214822 NJ Bredatel: +31 76 548 41 00www.dockwise.com

Dockw

ise Annual Report 2

009

360 9030

3Dockwise Ltd. • Annual Report 2009


Message from the Chairman 4

General Information

Company Profi le 6

Group History and Development 9

Key Figures 10

Board of Directors 14

Board of Directors: Profi les 15

Executive Management: Profi les 17

Report of the Executive Management

Message from the CEO 20

Business Overview and Strategy 21

Health, Safety, Environment and Security 25

Operational Review 29

Financial Review 35

Resources

Human Resources 44

Financial Resources 48

Fleet and other assets 52

Corporate Governance 60

Risks & Risk Management 72

Financial Statements 2009

Consolidated Income Statement for the Year ended 31 December 2009 79

Consolidated Statement of Comprehensive Income for the Year

ended 31 December 2009 80

Consolidated Balance Sheet as of 31 December 2009 81

Consolidated Statement of changes in Equity 82

Consolidated Statement of Cash Flows 84

Notes to the Consolidated Financial Statements 85

Company Balance Sheet as at 31 December 2009 134

Company Income Statement for the Year ended 31 December 2009 135

Notes to the Company Financial Statements 136

Other information 145

List of defi nitions and abbreviations 150

Contact Information 152

Table of Contents

Note: certain fi gures contained in this annual report have been subject to rounding adjustments. Accordingly, in certain instances

the sum of the numbers in a column or a row in tables contained in this annual report may not conform exactly to the total fi gure

given for that column or row.

Message from the Chairman4

Welcome to the 2009Dockwise Annual Report

The improvement of the solvency of Dockwise after the

reduction of the net debt position from more than one

billion USD at the end of 2008 to approximately

USD 641 million at the end of 2009 has strengthened

the position of Dockwise as a long term business

partner. In addition to operational achievements,

this will support the development of future revenues

in the larger project market segment.

Dockwise is now listed at the stock exchange in both

Norway and the Netherlands, increasing the universe of

potential investors and enhancing liquidity in the stock.

In October 2009 the private equity company 3i sold its

shares to HAL Investments, Project Holland Fonds, a

joint venture of Rabobank and Delta Lloyd, and Sankaty

Advisors, an affi liate of Bain Capital. This gave the

confi dence to the investment community to conclude a

directed placement of shares and a subsequent rights

offering of shares to existing shareholders. Dockwise is

grateful to 3i for the role they played since the buyout

of Dockwise from Heerema and for its support – with

additional capital – for the merger with Sealift in 2007.

This has greatly assisted the Company to become

market leader in the Heavy Marine Transport business.

With this change of ownership Menno Antal, a non-

executive member of the Board, resigned. The Board

wishes to express its gratitude to Menno Antal for his

valuable contributions and its confi dence in the future

cooperation with the new shareholders. Earlier in 2009

at the Annual General Meeting Bert Bekker resigned.

His experience as a former Chief Executive Offi cer of

Dockwise has been of great value to the Company.

The Board would like to express its gratitude for his

commitment in different positions over so many years.

André Goedée, Danny McNease and Rutger van Slobbe

were re-elected by the shareholders as Board Members.

Jaap van Wiechen of HAL investments was elected to

the Board at the special shareholders meeting of

4 November 2009. The Nomination Committee

has advised the Annual General Meeting on these

re-elections and on the election of Jaap van Wiechen.

The Board of Directors has three Committees:

an Audit Committee, a Remuneration Committee and

a Project Committee. The Audit Committee meets at

least four times per year, the Remuneration and Project

Committees at least twice per year.

After a promising start of the year 2009 with a record fi rst quarter, the

cyclicality of energy markets slowly emerged, affecting Dockwise

towards the end of the year. Although operations remained strong,

with some 85% utilization of the fl eet at the low point of the year,

prices gradually came under pressure. Dockwise fi nished the year

in line with market expectations. The successful completion of the

CPOC fl oat-over and the award to Dockwise of the Bongkot fl oat-

over were highlights that position the Company towards successful

execution of its strategy to become an offshore contractor of choice,

in addition to its Heavy Marine Transport services.


The Executive Management Team has been

strengthened by Peter Wit as Chief Financial Offi cer

(CFO). The Board is thankful to Claudia Mennen who

acted as the interim CFO from the end of 2008 until

September 2009.

The Company is determined to realize its potential

value. The steps taken in 2009 have helped to

transform Dockwise from a leveraged buy-out company

into a corporation ready for the next phase of its

development.

Adri Baan

Chairman of the Board of Directors

On June 30th 2009, Dockwise assisted the Canadian

Department of Foreign Affairs & International Trade and

the Russian Navy by managing the transport of two

“Viktor III – Class” nuclear powered attack submarines

(nr. 282 & nr.300) from their base in Kamchatka to the

shipyard in Bolshoy Kamen for dismantlement.

Both subs were fl oated onto the Dockwise owned,

Heavy Marine Transport vessel, Transshelf.

6

Dockwise Ltd. is the parent company of the Dockwise group of

companies, the world’s leading contractor for Heavy Marine Transport,

Transport & Installation and Logistical Management services.

Dockwise operates the world’s largest, semi-

submersible, Heavy Marine Transport fl eet, consisting

of 20 versatile vessels. The Company offers

consistent, high quality, reliable and safe execution of

innovative projects to customers who operate over a

broad range of industries including Oil & Gas, power,

desalination, mining, Port & Marine, the military and

the yachting industry. Key customers and end users

include major, national and independent oil companies,

drilling contractors and other well-known fi rms active in

offshore engineering and construction, in dredging and

in industrial production of platforms, cranes and the like.

Dockwise has grown its business substantially in

recent years, with revenue increasing from USD 136

million in 2003 to USD 478 million in 2009.

Dockwise originates from the 1993 merger between

Wijsmuller Heavy Transport and Dock Express Shipping,

both pioneers in the Heavy Marine Transport business.

The merger combined their interests to form the

world’s largest and most versatile seagoing heavy

transport company.

As the market leader, Dockwise has developed new

methods that have expanded its market, so that

customers now have the unique ability to transport

increasingly larger structures over longer distances.

In addition, Dockwise expanded the scope of its

services to include project management and logistical

services as a total transport management and marine

contracting company. Over the last three years, the

Company has grown signifi cantly and increased the size

of its fl eet, which has expanded the Company’s overall

scale and operating capabilities.

To maintain this world leader position in Heavy Marine

Transportation, Dockwise will continuously safeguard

that the mix of its fl eet is meeting client’s

developments and demands.

During the year under review, Dockwise’s head offi ce

was moved from Hamilton Bermuda to Breda,

the Netherlands. The legally registered seat remains

in Bermuda. The Dockwise group of companies has

operating offi ces in Breda (the Netherlands), Shenzhen

(China), Houston and Fort Lauderdale (USA).

General Information

Company Profi le

6


Sales offi ces are located in Houston and Fort

Lauderdale (USA), Shanghai (China), Busan (Korea),

Genoa (Italy), Perth (Australia), Lagos (Nigeria),

Rio de Janeiro (Brazil), Mexico City (Mexico),

Singapore (Singapore), Kuala Lumpur (Malaysia),

Moscow (Russia) and Breda (the Netherlands).

As the world’s demand for Oil & Gas stabilizes and

untapped sources of Oil & Gas available on land

decrease, Dockwise anticipates that the demand for its

expertise in the Transport and Installation of offshore

marine Oil & Gas rigs and production equipment will

continue to grow in the medium term after the current

decline. In addition, Dockwise expects that its

increasing experience and expertise in onshore

logistics, particularly when paired with its unique

expertise and abilities in Heavy Marine Transport,

will permit the Company to increase revenues in the

overall logistical and project management market.

Dockwise foresees an increased demand for its

services, especially as large construction projects are

built using modular techniques.

Vision

Dockwise’s vision is to become the contractor of choice

for the execution of exceptional ocean transport,

logistical management and installation projects.

Each project, each operation, each achievement is

unique and realizes something that is often perceived

as impossible to the outside world, including clients.

This is why the Company’s mission is: “Create superior

value by realizing the inconceivable.”

Core Values

Four simple values that apply to any professional

working in the Dockwise organization symbolize the

Company’s main cultural characteristics:

Reliable – Dockwise continuously strives to deliver

optimal, quality services. This means Dockwise takes

its commitments very seriously and aims to deliver

its services to the highest standards. Dockwise

ensures that its vessels are in good condition, able

to consistently satisfy the needs of its clients.

Innovative – As leaders in the markets in which

Dockwise operates, the Company aims to set the

standard. To that end, a focus on the latest state of

the art technology ensures that Dockwise remains in

the forefront of its industry.

Passionate – Highly motivated and passionate

employees are the key to Dockwise’s success.

Dockwise aims to attract and retain the most highly

skilled and motivated employees. To maximize their

commitments, the Company offers robust training

and development opportunities.

Respectful – Dockwise is committed to approaching

its customers, (sub)contractors, suppliers,

employees, shareholders and other business

partners with the greatest level of service and

respect. Dockwise respects the environment and is

committed to being a good corporate citizen in all

areas where the Company operates. Furthermore,

Dockwise respects the laws and regulations of all

countries where operations occur.

7

8 General Information

Simplifi ed group structure

Dockwise Ltd.

Bermuda

Offshore Kinematics Inc.

US

Ocean Dynamics LLC

US

Ocean Dynamics

China

Dockwise Yacht

Transport LLC

US

DYT Europe S.r.l.

Italy

Dockwise Yacht

Transport (France) Sarl

France

Dockwise USA LLC

US

Dockwise Shanghai

China (branch)

Dockwise Korea YH

Korea

Dockwise Shipping

Australia Pty-Ltd.

Australia

Dockwise Transport

Nigeria Ltd.

Nigeria

Dockwise Transport

Services Brasil Ltda

Brasil

Dockwise Shipping B.V.

(Singapore Branch)

Singapore

Dockwise Transport

Services S.A. de C.V. Mexico

Mexico

Dockwise LLC

Russia

Dockwise Malaysia Sdn Bhd

Malaysia

Offshore Kinematics

Holding Inc.

US

Dockwise

Shipping B.V.

Netherlands

DYT Netherlands B.V.

Netherlands


The main events in the history of the Company:

1993 The founding of Dockwise through a merger between Wijsmuller Heavy Transport

and Dock Express Shipping.

2001 Merger of Dockwise and Offshore Heavy Transport adding Black and Blue Marlin

to the fl eet.

2004 Shift in Dockwise’s strategy targeting complex projects involving Transport &

Installation of offshore structures and onshore modules.

12 January 2007 3i completes the buyout of Dockwise.

18 January 2007 Sealift Ltd. completes initial USD 180 million Private Placement on the Norwegian

OTC Market and issues 90 million shares.

30 January 2007 Sealift Ltd. agrees to acquire six Suez max tankers from Frontline Ltd. to be converted

into heavy-lift vessels.

21 March 2007 Completion of the acquisition by Sealift Ltd. of six single ship companies;

Sealift Ltd. begins operations and starts the conversion of the Suez max tankers

into heavy-lift vessels.

4 May 2007 Sealift Ltd. completes NOK 1.2 billion (USD 200 million) Private Placement on the

Norwegian OTC Market.

4 May 2007 Completion of merger between Sealift Ltd. and Dockwise, adding six T- class vessels

to the fl eet. From an accounting point of view, the merger constitutes a “reverse

acquisition” of Sealift by Dockwise. Sealift Ltd. was renamed Dockwise Ltd.

on 31 July 2007.

27 July 2007 Acquisition of OKI and ODL: two companies specializing in the design, engineering

and installation of offshore modules.

2 October 2007 Full listing on the Oslo Stock Exchange.

5 October 2007 Issuance of 18,392,300 new shares.

30 December 2008 Completion of the conversion of the six Suez max tankers into heavy-lift vessels.

19 October 2009 Three tier one investors take over the 26% 3i stake in Dockwise.

2 December 2009 Completion of issuance of 183,122,011 common shares in Private Placement

and Subsequent Offering.

2 December 2009 Capital reduction and reversed stock split 20:1.

3 December 2009 Secondary listing Dockwise on NYSE Euronext Amsterdam.

Group History and Development

Dockwise Ltd. • Annual Report 2009


Key Figures

(x USD 1,000)

2009 2008 2007 2006 2005

IncomeRevenues 478,041 456,583 290,139 252,099 208,356

Revenues adjusted * 490,706 495,429 329,985 252,099 208,356

Net Charter Income (NCI) ** 309,450 293,385 199,268 175,522 140,635

EBITDA 208,859 201,105 104,538 101,847 89,335

EBITDA adjusted *** 222,791 226,355 141,038 101,847 89,335

Depreciation and amortization 96,413 71,555 83,050 34,518 32,074

EBIT 112,446 129,550 21,488 67,329 57,261

Net fi nancing costs (74,388) (82,786) (96,396) (6,137) (6,447)

Earnings after tax 36,581 46,976 (75,773) 60,495 50,681

Earnings after tax adjusted **** 62,913 73,514 6,741 60,495 50,681

Balance sheet

Tangible assets 941,941 1,008,245 837,582 295,403 285,335

Intangible assets 598,288 613,529 614,753 539 652

Shareholders’ equity 858,262 576,210 553,950 209,835 188,637

Net debt 640,825 1,003,128 949,006 62,842 81,088

Cash fl ow

Operating 131,691 155,981 19,117 117,057 80,837

Investment (11,358) (209,417) (786,072) (44,473) (39,163)

Finance (89,847) 59,314 782,449 (74,717) (32,745)

Increase / (decrease) in cash and cash equivalents 30,486 5,878 15,494 (2,133) 8,929

EVANOPAT 151,007 164,890 106,738 73,674 57,462

WACC (for EVA purposes) 8.7% 9.2% 9.1% 10.4% 9.8%

EVA ***** (Economic Value Added) 11,790 25,560 (1,828) (1,768) –

20

05

20

06

20

07

20

08

20

09

0

100

200

300

400

500

(x m

ln U

SD

)

Fig: Revenues adjusted*

20

05

20

06

20

07

20

08

20

09

0

50

100

150

200

250

(x m

ln U

SD

)

Fig: EBITDA adjusted***

20

05

20

06

20

07

20

08

20

09

0

10

20

30

40

50

60

70

80

(x m

ln U

SD

)

Fig: Earnings after tax adjusted****


2009 2008 2007 2006 2005

Average number of shares outstanding x 1,000****** 13,194 12,321 9,360 n.a. n.a.

Per shareEarnings in USD 2.773 3.813 (8.095) n.a. n.a.

Earnings in NOK 17.461 21.530 (47.473) n.a. n.a.

Earnings in EURO 1.994 2.606 (5.916) n.a. n.a.

Equity 65.05 46.77 59.18 n.a. n.a.

Highest price (NOK) 197.00 446.00 506.00 n.a. n.a.

Lowest price (NOK) 79.00 74.00 402.00 n.a. n.a.

Highest price (EUR) 22.80 n.a. n.a. n.a. n.a.

Lowest price (EUR) 21.10 n.a. n.a. n.a. n.a.

Net debt / EBITDA 3.1 5.0 9.1 0.6 0.9

Interest cover (EBITDA / net fi nancing costs) 2.8 2.4 1.1 16.6 13.9

Average number of employees 315 289 213 186 –

Order book excl. DYT in USD million 324 388 233 – –

* Includes gross compensation for Mighty Servant 3 (MS3) 2009 USD 12.7 million (2008: USD 38.8 million).

** Net Charter Income includes revenue less contract related costs.

*** Includes net compensation for MS3 2009 USD 8.2 million (2008: USD 25.3 million) and excludes non recurring costs for the listing at the NYSE

Euronext Amsterdam and pre acquisition costs totalling USD 5.7 million for 2009 (2008: nil).

**** Earnings after tax adjusted: includes adjustments stated under *** and excludes an impairment and book losses totalling USD 9.0 million

(2008: nil), amortization backlog nil (2008: USD 1.3 million), non recurring fi nance income and costs relating to debt buy back and loan redemptions

USD 3.4 million (2008: nil).

***** The capital base of Dockwise drasticly changed with the issue of shares in 2009. On 2 December 2009 a reversed stock split occurred.

****** The average number of shares is calculated according to IAS 33 and restated for the years before 2009.

On 3 December 2009 Dockwise Ltd. listed at the NYSE Euronext Amsterdam.

Note: Dockwise Transport N.V. was the reporting entity for the Consolidated Financial Statements 2006 and 2005, which are available upon request

from Dockwise Transport N.V.’s registered offi ce at Breda, The Netherlands.

20

05

20

06

20

07

20

08

20

09

0

200

400

600

800

1000

(x m

ln U

SD

)

Fig: Shareholders equilty

20

05

20

06

20

07

20

08

20

09

0

200

400

600

800

1000

1200

(x m

ln U

SD

)

Fig: Net debt

20

05

20

06

20

07

20

08

20

09

0

50

100

150

200

(x m

ln U

SD

)

Fig: Operating Cash flow

11

Petroserv S/A contracted Dockwise to safely transport

the 36,000 tonne (39,683 s.ton)

SS Victoria, semi-submersible drilling platform from

Korea to Brasil onboard Dockwise’s fl agship, Blue

Marlin. This proved to be the safest, most expeditious

and reliable transatlantic solution.

Due to draft restrictions, the Victoria could not be

loaded with her eight thrusters in place.

This meant the thrusters had to be removed at the

load-port and later re-installed at the discharge port.

To achieve the greatest success, Dockwise combined its

engineering and project management expertise to offer

Petroserv a Turn-Key solution.

In cooperation with its subcontractor Wärtsilä, Dockwise

removed the eight, massive (each weighing 57 tonnes)

thrusters from the rig’s structure at the DSME yard in

Okpo, South Korea and then reinstalled them at the

discharge site in Angra dos Reis, Rio de Janeiro Brasil.

In line with the extended-scope, Dockwise arranged

24/7 dive support during the removal and

reinstallation, the crane barge, the wet-tow from DSME

to loading location in Busan, Tow Masters, tugs, pilots,

the fl oat-on and fl oat-off operations onto and from the

Blue Marlin, sea-fastenings and the dry-transport from

Korea to Brasil.


Thruster removal


Board of DirectorsIn accordance with article 23.4 of the Bye-laws,

Dockwise operates a Nomination Committee.

This committee was installed during the Annual General

Meeting on 30 July 2007. Members of the Nomination

Committee are Mr. Wim van Vonno (Chairman, due for

resignation in 2010) and Mr. Adri Baan (member).

The Board of Directors also operates an Audit

Committee consisting of Mr. Jaap van Wiechen

(Chairman), Mr. Adri Baan and Mr. Rutger van Slobbe as

well as a Remuneration Committee consisting of Mr.

Rutger van Slobbe (Chairman) and Mr. Adri Baan. Since

the end of 2008, the Board of Directors also operates

a Project Committee consisting of Mr. Tom Ehret

(Chairman) and Mr. Adri Baan.

The functions of these four committees are described in

the Corporate Governance section of this Annual Report.

Dockwise Ltd. is managed by a one-tier Board of

Directors. At the end of 2009 the Board consisted of

the following members:

Mr. Adri Baan (1942), Chairman

Mr. André Goedée (1951), CEO

Mr. Tom Ehret (1952)

Mr. Danny McNease (1951)

Mr. Rutger van Slobbe (1952)

Mr. Pietro Franco Tali (1949)

Mr. Jaap van Wiechen (1972)

During the year under review, both Mr. Bert Bekker (1939)

and Mr. Menno Antal (1975) resigned as members of

the board of directors. Mr. Jaap van Wiechen replaced

Mr. Menno Antal as per 1 December 2009.

Of this seven member Board of Directors, six members

are non-executive. The majority of the Board members

are independent of the Executive Management of the

Company, of main business associates and of the main

shareholders. The composition of the Board is in

accordance with applicable Corporate Governance

Codes. Members of the board of directors are

appointed for a period of two years. The schedule of

resignation is as follows:

Board member 2010 2011 2012 2013

Adri Baan * *

André Goedée * *

Tom Ehret * *

Danny McNease * *

Rutger van Slobbe * *

Pietro Franco Tali * *

Jaap van Wiechen * *

Fig: Schedule of resignation

February 17, 2009 – The Black Marlin delivered the

pipe-lay barge Nebula at Watson’s Bay, Sydney Harbor

for the Sydney Water Desalination Project.


Board of Directors: Profi les Adri Baan (born 1942), Chairman

Mr. Baan was first appointed on 30 July 2007. From

1981 he held a series of senior positions in Philips

Electronics N.V. and was a Member of the Executive

Board from 1998 until 2001. Furthermore, he has been

a non-executive Director of PSA Corporation Limited

(Port of Singapore Authority) and PSA Europe Limited,

a non-executive Director of International Power plc.,

a non-executive Director of ICI plc., a Member of the

Supervisory Board of Directors of ASM International

N.V. and a Director of NPM Capital. He is currently the

Chairman of the Supervisory Board of Directors of

Wolters Kluwer N.V. and Royal Volker Wessels Stevin

N.V., Member of the Supervisory Board of Directors of

OCE N.V. and Imtech N.V., Member of the Board of

Directors of the preference shares foundation ASML

N.V., Chairman of the Trust Office of KAS Bank N.V. and

Senior Advisor to Warburg Pincus, UK. He is also a

Member of the Supervisory Board of Directors of the

University of Amsterdam and the Amsterdam Medical

Center. Mr. Baan has a Master’s Degree in Physics

from the University of Amsterdam. He is a Dutch citizen

and resides in the Netherlands.

André Goedée (born 1951), Member and CEO

Mr. Goedée is Chief Executive Offi cer of Dockwise

(since 2003). He was first appointed to the Board of

Directors on 4 May 2007. Mr. Goedée has over forty

years of experience with the shipping, drilling and

Heavy Marine Transport industries. He spent eight

years with Nedlloyd Lines and twelve years with Neddrill

Drilling Contractors. He graduated from Rijnlands

Lyceum, Wassenaar and Merchant Marine College,

Scheveningen. He holds a degree as Master Mariner

and has served as the Executive Vice President of the

Heerema Group. Prior to being appointed CEO of the

Company in 2003, he served as Chief Executive Officer

of the European speciality staffing division of Vedior,

a global staffing organization. Mr. Goedée is a Dutch

citizen and resides in the Netherlands.

Tom Ehret (born 1952),

Member and Deputy Chairman

Mr. Ehret was first appointed on 15 October 2007.

He retired as Chief Executive Offi cer of Acergy SA

(formerly Stolt Offshore SA) in April 2008. Mr. Ehret

has been active in the offshore Oil & Gas business for

over thirty years, and has held a variety of positions,

both technical and commercial, working with Comex SA,

FMC Corporation, Coflexip Stena Offshore and Technip

S.A. He has managed companies for over twenty years.

Mr. Ehret has been trained as a Mechanical Engineer,

and started working as a Research and Development

Engineer before moving into Project Management.

In addition to Dockwise, Mr. Ehret currently holds the

following Directorships: Viking Moorings Ltd.

(Chairman), SBM Offshore N.V. (Supervisory Board),

Acergy SA (Deputy Chairman), Green Holdings

Corporation and Comex SA. He is also an operating

partner with Advent International Inc. Mr. Ehret is a

French citizen and resides in France.

Danny McNease (born 1951), Member

Mr. McNease was first appointed on 15 October 2007.

He retired at the end of 2008 from Rowan Companies

Inc., an international offshore and land drilling

contractor, after more than thirty years with the

company. Mr. McNease is a graduate of the University

of Southern Mississippi and the Columbia University

Executive Program. He has served in the Drilling

Division of Rowan Companies Inc. as a barge engineer,

driller, rig superintendent and manager both in the

United States and abroad before moving into executive

management positions. Mr. McNease is Chairman of

the Board of Axon Energy Products AS and Senior

Advisor to HitecVision AS. Mr. McNease is a United

States citizen and resides in the United States.


Jaap van Wiechen (born 1972), Member

Mr. van Wiechen was fi rst appointed on 1 December

2009. He has been active in the investment industry

since he joined HAL Investments B.V. in 1997.

Within HAL, Mr. van Wiechen is responsible for the

following HAL-investments where he also acts as a

Member of the Supervisory Boards and Audit

Committees: Mercurius Groep B.V., N.V. Nationale

Borgmaatschappij (Chairman of the Supervisory Board),

FD Mediagroep B.V. and InVesting B.V. in addition to

these board positions, Mr. van Wiechen is a Member of

the Board of the Stichting HAL Pensioenfonds.

Mr. van Wiechen is a Dutch citizen and resides in

the Netherlands.

Rutger van Slobbe (born 1952), Member

Mr. Van Slobbe was first appointed on 13 July 2007.

He has been active in the container transport business

since he joined Nedlloyd Lines in 1982. After serving

in various operational and executive positions,

Mr. Van Slobbe was appointed as Executive Director

of P&O Nedlloyd in 1997. He stepped down as Member

of the Executive Board of Directors after the acquisition

and delisting of P&O Nedlloyd by Maersk Sealand in

2005. Mr. Van Slobbe holds the following additional

positions: Member of the Supervisory Board of

Directors of the Port of Rotterdam N.V., Member of the

Supervisory Board of Directors of the Royal Netherlands

Sea Rescue Institution (KNRM), Chairman of Supervisory

Board of Directors of Cargonaut B.V., Member of the

Supervisory Board of Directors of Shipping and

Transport College (STC) Rotterdam and co-owner of

Oxalis Coöperatie U.A. Mr. Van Slobbe is a Dutch


Pietro Franco Tali (born 1949), Member

Mr. Tali was first appointed on 15 October 2007.

He joined Saipem S.p.A in 1993 and has been the

Deputy Chairman and Chief Executive Offi cer since

November 2000. From 1981 to 1993, Mr. Tali worked

for the textile machinery manufacturing company Savio,

reaching the position of Administration, Finance and

Control Manager. He then became a Manager of

Saipem S.p.A.’s administration, fi nance and control unit

and Managing Director and Chairman of some of the

Saipem group’s foreign companies. He became Saipem

S.p.A.’s Finance and Control Managing Director in 1996

and Managing Director for Commercial Activities of Agip

Petroli S.p.A in 1999. He holds degrees in Business

Economics and Political Science. Mr. Tali is an Italian

citizen and resides in Italy.


Executive Management: Profi les Martin Adler (born 1965),

Chief Commercial Offi cer (CCO)

Mr. Adler has served as Chief Commercial Offi cer for

Dockwise since May 2008 and is responsible for the

Company's global sales and marketing activities.

Mr. Adler also oversees the Company’s international

offi ces in Houston, Rio de Janeiro, Busan, Shanghai,

Singapore, Perth and Moscow. Prior to assuming his

current role, Mr. Adler held positions as Senior Vice

President for the Shaw Group (Stone & Webster) and

various senior management positions at Fluor.

Mr. Adler has gained extensive operational and project

management experience in both home offi ce engineering

and site construction across a variety of industries.

Mr. Adler holds a Master's Degree from Delft University

of Technology. He completed the International Master

of Business Administration program (MBA) at the

Erasmus University Rotterdam. Mr. Adler is a Dutch


Rob Strijland (born 1949),

Chief Operating Offi cer (COO)

Mr. Strijland was appointed as Chief Operational

Offi cer in March, 2008. Prior to this appointment,

he was employed by Royal Wagenborg Group where

he held the position of Director of Fleet Management.

Mr. Strijland’s previous experience includes Senior

Management positions with Allocean Maritime (UK),

Hanson Aggregates (UK), Amsterdam Schipdock and

ITC Towage & Salvage. Mr. Strijland studied Marine

Engineering and Naval Architecture. Mr. Strijland is a

Dutch citizen and resides in the Netherlands.

André Goedée (born 1951),

Chief Executive Offi cer (CEO)

Mr. Goedée has been Chief Executive Offi cer since

2003 and a Member of the Board of Directors since

2007. Mr. Goedée has over forty years of experience

in shipping, drilling and Heavy Marine Transport

management including eight years with Nedlloyd Lines

and twelve years with Nedrill Drilling Contractors.

He graduated from Rijnlands Lyceum, Wassenaar and

Merchant Marine College, Scheveningen. He holds a

degree as Master Mariner, served as Executive Vice

President of the Heerema Group and prior to being

appointed as CEO of Dockwise in 2003, he served as

CEO of the European division of Vedior, a global staffi ng

organization. Mr. Goedée is a Dutch citizen and resides

in the Netherlands.

Peter Wit (born 1967),

Chief Financial Offi cer (CFO)

Mr. Wit joined Dockwise as Chief Financial Offi cer in

2009. He has a Master's Degree in Business

Administration from Groningen University and a (post

doctorate) Degree in Controlling from VU Amsterdam.

Mr. Wit leads the Company's global Finance, Legal and

Information Technology Departments. Before joining

Dockwise, Mr. Wit was employed by Shell where he

served as Chief Operations Offi cer and Finance

Manager of Shell's Asset Management Company and

VP Finance for Shell's Solar business. He also worked

as the Head of Finance for Shell's Albanian oil

exploration venture. Mr. Wit is a Dutch citizen and

resides in the Netherlands.

Militar y Market

Dockwise Ltd. • Annual Report 2009 19

In the military market, new-build, testing and

decommissioning programs often require Heavy

Marine Transport services, such as the transport

of newly-built vessels from the fabrication yard to

the working area, or the transport of modules

between shipyards during new build projects or

the transport of completed hulls.

In addition, the transfer of used Navy vessels and

the transport of damaged submarines and other

Navy vessels as part of salvage operations, create

transport opportunities.

20

companies, we have adopted a robust Corporate

Governance Policy, Rules of Procedure for the Board of

Directors and Disclosure and Insider Trading Policies.

Based on the Company’s values and principles,

Dockwise is implementing a Code of Conduct

throughout its global organization.

Also during 2009 we achieved ISO 14001 (Environment)

and OHSAS 18001 (Safety) certifi cations, and realized

the full integration of Dockwise USA with Offshore

Kinematics Inc (OKI) and Ocean Dynamics, Inc (ODL) at

one location, which further synergizes our engineering

and project management capabilities. A similar

integration is also planned for our offi ces in China,

which eventually will be fully concentrated in Shanghai.

We also expanded our global offi ces to include

locations in Malaysia and in Singapore, and we are

currently establishing a corporate entity in Russia.

Also this year, we celebrated the return of the fully

restored Mighty Servant 3, actualizing a turning point

in reinstatement history.

These results prove that our strategy is steadily moving

forward. Dockwise believes 2010 will be a foundational

year for future growth. We have come a long way, and I

am greatful for the resilience and commitment the

Dockwise organization and its people have shown.

André Goedée

Chief Executive Offi cer

Another milestone was the balance sheet reinforcement

executed during the fourth quarter. This transformed

the Company and will assist Dockwise in realizing its

strategy to grow its total transport and marine

contracting services in Transport & Installation and

Logistical Management. Over time, this will result in a

better balance between revenues from the spot market

and projects with longer lead-times. The fact that

Dockwise was well received for a secondary listing

at the NYSE Euronext in Amsterdam is further

confi rmation that the market is starting to recognize

the sustainable performance that Dockwise is able

to provide.

As the world demand for energy increases, LNG

developments are expected to increase. Remote and

environmentally sensitive construction sites demand

modular solutions, which will create opportunities for

Dockwise’s Logistical Management onshore/offshore

services. Further investments in untapped offshore

resources will also yield an increase in production

platforms creating a need for Dockwise’s Transport &

Installation expertise. Combining the experience and

expertise in Heavy Marine Transport with the unique

knowledge in project management has equipped

Dockwise with the best instruments to support

upcoming, larger projects.

We are serious about our responsibility with regard to

Corporate Governance. To ensure effi cient management

and control over operations of the Dockwise group of

Message from the CEO


2009 was an important year for Dockwise. The Company

celebrated various milestones including the successful

fl oat-over Transport & Installation of the CPOC

platform for the national oil companies of Malaysia

and Thailand. Dockwise was the main contractor.

This achievement underscores the qualifi cation of

Dockwise as a service provider to oil companies with

long-term project commitments.


Business Overview and Strategy

Services

To achieve our vision, we deliver the following services

to our clients:

• Heavy Marine Transport

• Transport & Installation

• Logistical Management

• Engineering & Procurement Services

• Offshore Installation Equipment

• Yacht Transport

Heavy Marine Transport

Dockwise aims to maintain and secure its leadership

position in the Heavy Marine Transport (HMT) industry

by using the fl exibility and size of its HMT vessels to

improve the ability to respond to diverse opportunities

worldwide. Dockwise extends its HMT services to all of

its target markets including: offshore drilling rigs

(jack-ups and semi-submersibles), offshore production

structures (fi xed, fl oating and gravity based), onshore

industrial projects (LNG, refi neries and chemical

plants), other resource industries (mining, power and

desalination plants), military (vessels, new built

programs, salvage and special navy projects) and Port

& Marine Industry (cranes, dredging equipment, docks

and bridges, various barges, vessels and all other

various fl oating and non-fl oating equipment). For this

service, Dockwise uses its total fl eet of Type I to IV

vessels through optimized schedule management.

Dockwise maintained its market leadership position in

the jack-up and semi-submersible rig segments by

transporting 30 jack-up rigs and seven semi-

submersible rigs in 2009. Additionally, Dockwise

transported nuclear submarines, dredging equipment,

work and jack-up barges.

Strategy

Dockwise aims to consistently develop creative

solutions to serve its global customers and to maintain

effi cient, high quality and safe operations.

The Company’s overall strategy to grow involves:

• Strengthening its leading market position in Heavy

Marine Transport;

• Growing its total transport management and marine

contracting capacities for both offshore transport

installation and onshore industrial projects;

• Building on the engineering and project management

experience acquired as part of OKI and ODL;

• Offering customers complete turn-key logistical

solutions.

Dockwise implements its overall business strategy by:

• Delivering each customer contract in a way that is

safe, reliable and of high quality;

• Leveraging its market leading position in the Heavy

Marine Transport sector to obtain overall project

management contracts;

• Offering in-house engineering and project

management teams who interact directly with clients;

• Making opportunistic acquisitions of engineering and

project management service providers;

• De-leverage the balance sheet to increase the

Company’s fi nancial fl exibility;

• Permanently optimizing the fl eet to meet existing and

future client demands.

22 Report of the Executive Management

These projects are often located in remote areas where

multiple transports of numerous onshore modules can

be highly complex. The fl eet of Heavy Marine

Transportation vessels combined with partner vessels,

project management, procurement, land transport and

robust interface management enables Dockwise to

improve the total effi ciency of these complex projects

and reduce risks. This combined and cooperative

approach provides signifi cant schedule and overall

project savings for the client. For this service Dockwise

will use its Type I to IV vessels in collaboration with

vessels provided by third parties. Currently, Dockwise

holds two transports of several onshore modules for

the Koniambo Nickel Mining Project from Qingdoa

(China) to New Caledonia.

Engineering Services

Dockwise supports its clients from the pre-FEED phase

all the way through the complete project execution by

offering all crucial engineering disciplines. Around the

globe, Dockwise’s international offi ces cooperate to

provide the most dedicated and skilled engineering

teams able to advise customers during all phases of

the project starting with conceptual design to

assistance with the selection of various alternative

options. Furthermore, all transports executed by

Dockwise are supported with transport and outfi tting

plans. To deliver these services, Dockwise employs

over 80 skilled and highly experienced Transport

Engineers, Project Engineers, Marine Engineers,

Structural Engineers and a dedicated CAD department.

Transport & Installation

Dockwise offers a total marine scope for fl oat-over and

deck-mating operations, which is supported by its

in-house engineering, procurement and dedicated

project management capabilities. The marine scope

includes the load-out operation and transportation from

the construction site to the fi eld whereby offshore

installation is conducted by lowering a fully-integrated

topside construction onto a pre-installed jacket.

OKI is an innovative leader in the development and

supply of Leg Mating Units (LMUs) and Deck Support

Units (DSUs) for fl oat-over operations. Its thorough

quality control standards and fabrication procedures

have been developed over decades of experience.

Every component is manufactured to strict tolerances

and tested for quality. For the fl oat-over technique,

Dockwise uses Type I and II fl at deck and open stern

vessels and/or in combination with semi-submersible

barges.

In 2009, next to the competitors of the CPOC project

Dockwise secured the contract to perform the fl oat-over

of the Bongkot topside offshore Thailand. The topside

will be built in South Korea. This underwrites the

Company’s strong performance in the fl oat-over market.

Currently Dockwise holds four fl oat-overs in its backlog,

which are scheduled to occur in 2010 and 2011.

Logistical Management

Dockwise offers total transport management solutions

for all aspects of modular project transportation and

installation and interface management for onshore

industrial projects in the Oil & Gas processing

business and in other resource industries.

Strengths

• World’s largest and most versatile fl eet

• Loyal and diversifi ed customer base

• Global presence

• active in fundamentally active and growing markets

• Highest quality, safety and risk standards

(ISO 14001 and OHSAS 18001 certifi cations)

• Market leader in Heavy Marine Transport

• Know-how & experience in fl oat-over techniques

Weaknesses

• Largely depending on Oil & Gas activities

• Lack of knowledge of the industry with

fi nancial community

• Perception of Dockwise as traditional shipping

company with day rate pricing structure

Opportunities

• Increasing long term demand for energy

• Well positioned in expanding value added

installation and total logistical management services

• New oil fi elds in deeper water and harsh

environments

• Increase in development of remote locations

thanks to modular construction possibilities

Threats

• New or expanding competition

• clients in low point of cycle

(wet towing, own keel transport alternatives)

• Security issues at sea

• Prolonged global recession


carrier submerges and the yachts are fl oated-on and

fl oated-off of the carrier. The high-end luxury yachts

drive this market segment. Dockwise has also entered

the lift-on/lift-off segment as a complement for the

segment of smaller yachts. Compared with 2008,

DYT’s revenue decreased from USD 53 million to

USD 44 million due to the economic downturn in 2009.

Competitive strengths

The following key strengths characterize the position

of Dockwise:

• Market leader in Heavy Marine Transport

Dockwise holds a leading position in the Heavy

Marine Transport industry, based on the safety and

reliability of its operations and the size of its fl eet,

which guarantees Dockwise a certain amount of

fl exibility to deploy interchangeable vessels

throughout the world. Dockwise also operates the

Blue Marlin and the Mighty Servant 1, the largest,

semi-submersible heavy transport vessels in the

world, making it the only company in the world able

to transport certain structures and modules.

• Well positioned in expanding value added installation

and logistical management services

Dockwise completes complex transportation, logistical

management and installation projects by providing its

customers with the benefi ts of specialized in-house

engineering capabilities, proprietary software,

processes, project management and extensive

experience in all areas of Heavy Marine

Transportation & Installation services for offshore

structures and modules for onshore industrial

projects.

Offshore Installation Equipment

Dockwise delivers a variety of offshore installation

equipment. Dockwise subsidiary, Offshore Kinematics

Inc. (OKI) is recognized as the market leader in

fl oat-over hardware, engineering, design, analysis,

testing and supply of offshore installation equipment.

Examples of services delivered are:

• Float-over Hardware: Complete Engineering, Design,

Analysis, Testing & Supply.

• Engineering & Design: FEED to Completion including

Site and Offshore Services.

• Research & Development: Extensive Technical

Database and Testing Programs.

Yacht Transport

In addition to the Company’s large, semi-submersible

Heavy Marine Transportation vessels, Dockwise

operates three yacht carriers (three Type V vessels)

for the transportation of luxury yachts across different

regions of the world. Customers in this market

segment are yacht owners, yacht charter companies

and yacht builders. Owners may choose DYT’s yacht

service for voyages that are considered to be out of

cruising range, or to lower fuel related and other costs.

Yacht owners and yacht charter companies may also

seek DYT’s services to expand their cruising grounds to

benefi t from two seasons within one year.

For example, yachts are transported from the

Mediterranean to the Caribbean during fall and vice

versa during spring. Dockwise has historically operated

only in the fl oat-on/fl oat-off segment, by which the

September 14, 2009 Dockwise’s Mighty Servant 1

was safely escorted by EUNAVFOR warships while

transporting the Gjoa Hull from Korea to Norway

through the IRTC (Internationally Recommended

Transit Corridor) in the Gulf of Aden.


• Experienced management team with a strong

track record

Dockwise’s highly qualifi ed and experienced

management team boasts considerable expertise

in all areas of Heavy Marine Transport, Logistical

Management and Installation services. Dockwise has

developed an in-house sales organization with a

global footprint that allows it to emphasize a

presence in the various key national and regional

markets and to identify and pursue new business

opportunities.

• Highest quality, safety and risk management standards

Dockwise works to the highest quality, safety and risk

management standards with ISO 9001, OHSAS

18001 and ISO 14001 certifi cations. Furthermore,

Dockwise operates numerous internal quality, safety

and risk management procedures, including extensive

quantitative risk modeling for all major projects.

Recently, Dockwise was pre-qualifi ed by a premier Oil

& Gas major as a stand-alone fl oat-over contractor.

• Loyal and diversifi ed customer base

Dockwise has developed a brand name and good

reputation in the market through consistent,

high quality, reliable and safe execution of projects.

This record of strong performance is key to

Dockwise’s strong relationships and assurance of

repeat business. Key customers and end users

include major oil companies such as ExxonMobil,

Chevron, Carigali PTTEPI, Petronas and Shell, drilling

contractors such as Noble, Diamond Offshore and

Rowan and other well-known fi rms such as Technip,

Saipem, Boskalis, McDermott, Hyundai Heavy

Industries, Daewoo International, Mitsui, Prosafe and

Samsung Heavy Industries.

• Largest and most versatile fl eet

The diversity and size of Dockwise’s Heavy Marine

Transportation fl eet in comparison to its competitors

enables Dockwise to deploy vessels around the

world (in a manner that its competitors cannot

match), and to respond rapidly to customer needs.

Dockwise operates twenty (three yacht carriers

included) fl at-deck Heavy Marine Transportation

vessels, fi ve of which have an open stern, competing

with its largest competitors Ocean Heavy Transport,

Norway (four comparable tanker shaped vessels),

Fairstar, the Netherlands (two fl at-deck open stern

vessels), and Cosco, China (two smaller fl at deck,

open stern vessels). In addition, Cosco is building two

more larger fl at deck open stern vessels to be added

to the market in 2011. Potential competition could be

expected from vessels that are currently solely used

for internal transportation by industrial companies.


Health, Safety, Environment and Security

Top Management conveys the Dockwise policy and

shows leadership by giving presentations, participating

actively in meetings and visits to work sites.

In Anglo Eastern Ship Management, Dockwise has

found a reliable partner who shares the same vision

and manages the Dockwise vessels beyond compliance

with applicable international and national legislation

such as ISM, ISPS and other fl ag/class requirements.

In 2009 Dockwise and Anglo Eastern Ship Management

worked together to keep up the high standard and to

improve further. An example is the start of the

implementation of “STOP for Supervision” on board the

Dockwise vessels. The STOP program will take people

beyond safety rules compliance and will infl uence their

safety behavior in a positive way.

Security of the vessels in high risk areas is another

issue on which Dockwise and Anglo Eastern work

closely together. Measures resulting from the

assessments done by the Dockwise Security Council

are implemented by joint efforts and can go as far as

having a Navy vessel escorting Dockwise vessels

during the passage through a high risk areas.

Health and Safety

Performance with regards to Health and Safety is being

measured by the type and number of incident reports.

These reports can be related to vessels, projects and

offi ces. The safety statistics are updated on a monthly

basis and measured on a Year To Date and a 12 month

rolling average basis.

Highlights

• LTI frequency index with 0.56 below industry

benchmark of 0.72

• Decline in loss-time accidents

• Joined the European Foundation of Quality

Management (EFQM)

Targets:

• Zero security incidents

• Zero accidents

HSES Overview

Procedures and processes followed by the Dockwise

organization and employees have been proven to be

compliant with International Standards such as ISO

9001:2008, ISO 14001:2004 and OHSAS 18001:2007.

These Standards are related to Quality, Environment

and Health & Safety.

The scope for certifi cation encompasses the activities

executed by Dockwise: “Development, engineering,

execution and management of on- and offshore heavy

transportation- and installation services”.

In July 2009, Dockwise received the three certifi cates

following audits performed by Lloyd’s Register Quality

Assurance. The subsequent surveillance audit in

December 2009 was passed without obstacles.

Dockwise QHSE policy shows clear commitment from

Senior Management to achieve the “zero-accident”

objective. The Company knows the risks associated

with it’s operations, has measures in place to mitigate

these risks and ensures continuous improvement in

safety and environmental performance.


From the table above it can be seen that Dockwise LTIF

is lower than the benchmark (0.56 vs 0.72). However,

bearing the zero-accident policy in mind, there is no

reason to be satisfi ed with the status quo. It is

Dockwise's belief that all injuries can be prevented.

Even though the number of Lost Time Incidents has

decreased signifi cantly over the past three years, the

total number of injuries stays at the same level.

This has been recognized and Dockwise has initiated

an Increased Safety Awareness Program. This is an

initiative that affects all Dockwise employees and

vessels’s crew. This Program is based on three pillars:

Lead Safety, Sail Safety and Experience Safety.

The Safety audit system STOP by Dupont is part of

the program, together with other initiatives, such as

the introduction of formal Safety moments at offi cial

2009 2008 2007

Fatalities 0 0 0

Lost Time Injuries (LTI) 3 6 10

Medical Treatment / Restricted Work Case (MTC/RWC) 10 4 4

First Aid Case 4 9 13

Damage reports 36 38 36

Near Miss Reports 102 72 62

Environmental Incidents 3 1 6

Security Incidents 0 0 0

Lost Time Incident Frequency (1,000,000 working hours)*(LTIF) 0.56 1.56 3.2

Lost Time Incident Frequency Benchmark (IMCA overall) 0.72 0.74 1.25

Total Recordable Incident Rate (LTI+RWC+MTC per 1,000,000 working hours)* 2.43 2.60 4.27

* LTIF / TRIR is measured in accordance with IMCA guidelines as per 2009

Fig: Overview of the performance for 2009, including

statistics of sub-contractors on Dockwise projects

meetings. In 2010 this program will be further rolled

out. Detailed information on ISAP is provided through

the Dockwise internal web site.

Projects

In 2009 the QHSES department has contributed to

several successful projects, such as the CPOC fl oatover

project and the SS Victoria transport (including thruster

removal and re-installation). HSE engineers are actively

involved in the tendering process for projects and the

execution of the same.

The LTIF for the onshore / offshore projects managed

by Dockwise is nil. In 2009, Dockwise has successfully

passed client HSE audits by various major oil

companies.

Fleet

The Dockwise vessels are managed by it’s partner

Anglo Eastern Ship Management Offi ces in Glasgow


In addition to legislative compliance, Dockwise is

committed to improve environmental performance.

For this reason an environmental improvement plan has

been drafted in 2009, which lists improvement plans in

progress and other opportunities.

Fleet

It is obvious that from all activities by Dockwise, the

effl uents of the vessels have the highest impact on the

environment.

Another important aspect of the operations is the use

of ballast water by the vessels. This is essential for safe

operations. Future legislation will require ballast water

treatment before it is pumped over board. Dockwise is

looking for ways to reduce the amount of ballast water

needed to be transported around the globe, without

compromising safety. A program to measure the volume

of ballast water affected by vessel operations has been

started, enabling Dockwise to enhance it’s

environmental performance in that area.

It has been recognized that asbestos in parts such as

claddings, gaskets, etc. is an issue that has to be dealt

with pro-actively and in line with applicable legislation

and is acted upon appropriately. Other environmental

achievements for the fl eet in 2009 are the replacement

of chemicals on board by biodegradable grades and the

installation of incinerators.

Projects

All transports and installation activities are organized by

the Company through a project management structure.

In this project structure, environmental performance

plays an important role. This is refl ected in the

environmental aspects and impacts register,

listing all environmental infl uences due to operations

and the controls in place. This register is the basis

which enables Dockwise to work in environmentally

vulnerable areas.

and Hong Kong. Being active in the international trade,

the vessels are subject to internal and external

inspections and audits. Examples are Port State Control

Inspections and ISM/ISPS audits on behalf of the Flag

State. On board the fl eet procedures are being followed

which comply with voluntary safety and environmental

standards OHSAS 18001 and ISO 14001. Dockwise

and Anglo Eastern work closely together to monitor the

performance and to drive towards continuous

improvement. Installation of the Octopus motion

monitoring system has continued across the fl eet

in 2009. Currently 13 vessels have been equipped

with the Octopus system.

Offi ce Employees

Dockwise cares about the health and well-being of all

employees, including the offi ce based personnel.

The success of this is refl ected in the low sickness

absence rate of 2.56% for the Breda offi ce, which is an

improvement on the 2008 percentage. This rate is

signifi cantly lower than the industry overall average.

Pro-active initiatives have been taken to maintain the

high well-being standard in 2009 and further. Examples

are the company sponsored vaccination program and

online health coach. The latter is a Dockwise dedicated

web portal, provided by the health insurance partner

CZ. Through this portal Dockwise personnel have

access to health related information, online tests, tips

and coaching programs to stay fi t and healthy.

Environment

As with health and safety, Dockwise is fully aware of the

environmental risks associated with all the operations

executed by the Company. The basis for addressing all

identifi ed risks is in compliance with applicable rules

and regulations as laid down in international and local

legislation. The environmental statistics show that in

2009, three environmental incidents occurred. These

were related to small rapidly containable (hydraulic) oil

spills on deck of vessels.


Safety of the Dockwise personnel is of utmost

importance, both for vessels’s crews and the offi ce

based employees. Business trips to countries with

elevated security risk profi les will be assessed to decide

whether the trip is safe, or if other alternative

arrangements have to be made. For this purpose a travel

authorization form is in use to facilitate the process.

For the future it is anticipated that the security subject

will remain an important issue, which needs to be

addressed in the Dockwise business.

Business excellence

Quality, Health, Safety, Environment and Security are

key to Dockwise. The Company has recognized that

management of processes that enable these key topics

is very important. For that reason, Dockwise has signed

up as a member of EFQM (European Foundation of

Quality Management) in 2009. 2010 and the years

after will be the years to demonstrate excellence,

starting off with the “Commitment to Excellence” level.

In its drive towards improvement of environmental

performance, Dockwise has started a project to fi nd

alternative solutions for the use of cribbing wood

needed for the safe stowage of the cargo.

Offi ce Environment

Although the environmental impact of working in an

offi ce seems low compared to the execution of

projects, it will not be neglected by the Company.

At present, the focus is on the regular actions to

take, such as paper recycling and electrical power

consumption. Dockwise will further enhance it’s

performance in the offi ce environment.

Security

In 2009, Dockwise executed 29 transport and

installation projects in high risk area’s. None of the

projects experienced a security incident. Based on risk

assessments done by the Dockwise Security Council

and the Anglo Eastern Company Security Offi cer, security

measures were put in place to reduce the risk of piracy

and robbery. The Company will continue this routine and

look for further measures to increase the effectiveness

of the mitigating strategies.


Operational Review

Oil & Gas

Within each of the Oil & Gas industry’s market

segments, Dockwise’s clients require Heavy Marine

Transportation, installation and logistical management

services for different types of equipment and

structures. The Oil & Gas industry clients engage in the

following activities:

• Exploration: operating offshore jack-up and semi-

submersible drilling rigs that locate and develop new

Oil & Gas sources;

• Production: operating various types of offshore

production structures, which can be fi xed, fl oating or

gravity-based, that extract Oil & Gas; and

• Processing: operating various onshore and offshore

industrial projects using Oil & Gas feedstock, such

as LNG liquefaction plants and terminals, refi neries

and chemical plants.

Although the current economic downturn has resulted

in a decreased demand for oil, Dockwise believes the

long-term fundamentals for the Oil & Gas industry are

robust. This belief is consistent with, amongst others,

the expectations of the International Energy Agency,

which predicts that oil prices will rise above USD 100 a

barrel by 2015. This anticipated price increase is

based on projected changes in demand and supplies

of oil, with demand for crude oil expected to grow by an

annual average of approximately 1.5% until 2030.

Existing oil fi eld output is estimated to decrease at

approximately 6.7% per year.

According to a Douglas Westwood study of 2009, total

CAPEX was expected to decrease by approximately

3.5% in 2009. In 2010 the total CAPEX is expected to

stabilize at the current level after which it is expected

to grow approximately 9% annually.

Highlights 2009

• CPOC fl oat-over project completed

• Secured fl oat-over contract BONGKOT

• Transported 30 jack-up rigs and 7 Semi submersible

drilling units

Targets:

• 50% - 50% balance in projects & revenues

from transports

Industry Trends

Overview

Dockwise offers a range of marine transportation and

related services and is considered to be the global

leader in the Transport & Installation of extremely large

and heavy structures and equipment, primarily in the

Oil & Gas industry. The Oil & Gas industry has three

principal segments: exploration, production and

processing. Dockwise also provides marine

transportation and related services to other energy

& resource industries, including the military transport

sector, port & marine industries and yacht transport

areas.

Oil & Gas

Port & Marine

Yachts

Military

55%

28%

9%

8%

Fig: Revenues 2009


then jacked up on three or four hydraulic legs attached

to the platform. There were approximately 60 jack-up

drilling rigs under construction as of January 2010 with

scheduled delivery from 2010 to 2012, which will need

to be transported from the construction site to oil

fi elds. In addition, the percentage of existing jack-up

rigs projected to be moved inter-basin is expected to

remain fairly stable between 2010 and 2014 at 7.0%

or 7.5% with only a temporary decrease in 2010.

During the current recession, many of the global oil

companies have reduced or delayed their investment in

exploration of new oil fi elds. Consequently, there is less

movement of jack-up rigs for distances in excess of

1,000 nautical miles in certain geographical areas,

including China, the Middle East, India and the Persian

Gulf. In addition, the average time between customer

enquiry and contract award has been signifi cantly

reduced, with the contract award occurring only shortly

before the commencement of drilling operations.

As a result of this compression in the contracting

process, the time between the tender for a new

transport and the loading of the offshore drilling rig

has decreased signifi cantly, which has made it

increasingly important to have adequate available

shipping capacity and has also resulted in less

visibility for future contract awards.

In 2009 around 11% of the world’s jack-up rigs,

including newly built rigs were moved to another region.

This was approximately the same amount as in 2008.

The number of transports were supported by 24 newly

built jack-up rigs entering the market. In 2009 there

was a delay in the deliveries of newly built jack-up rigs,

increasing the amount of opportunities for the

transport of newly built jack-up rigs in 2010 and

onwards. In 2010 the fl eet is expected to grow with

the addition of 31 newly built jack-up rigs.

Exp

enditure

(U

SD

billions) 250

200

150

100

50

0

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

O&G: Processing & Refi ning

O&G: Offshore Production

O&G: Exploration & Development

Fig: CAPEX development

(Source: Douglas Westwood November-‘09)

Oil & Gas – Exploration and Development

Transport requirements for offshore drilling rigs consist

primarily of (i) delivery from the construction shipyard

to the initial exploration or production location (referred

to as ‘‘new builds’’), (ii) movements of existing offshore

drilling rigs between different exploration basins

(referred to as ‘‘inter-basin moves’’) and (iii), intra-basin

movements, which are generally carried out over short

distances. Historically, approximately 7.5% of the

offshore drilling rigs in any given basin will move over

1,000 nautical miles to a new location in any given

year. In general, these movements over 1,000 miles

represent a better target market for Dockwise’s Heavy

Marine Transport services than shorter movements of

less than 1,000 miles. There are two types of drilling

rigs in general use today: jack-up rigs and semi-

submersible rigs.

Jack-up rigs

Jack-up rigs are drilling platforms typically used in water

depths up to 500 feet which are carried out to sea and

Dockwise engineers monitor the Black Marlin’s position.


transported by the fastest transportation method

available. Furthermore, the percentage of existing

semi-submersible rigs projected to be moved inter-

basin is expected to be relatively stable between

2010 and 2014 at 25.0% with only a relatively

minor decrease in 2010 and 2011.

By the end of 2009 there were 180 semi-submersible

drilling rigs including 15 newly built deliveries.

In 2009 several deliveries of newly built semi-

submersible drilling rigs were delayed. Twenty newly

built semi-submersible rigs are expected to be added

to the market in 2010.

50

40

30

20

10

0

250

200

150

100

50

0

20

04

20

03

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Regional transports

New build semi rigs

Existing semi rigs

Transport

s

Rig

s

Fig: Semi-submersible Rig transports

(Source: ODS Petrodata)

In the Oil & Gas industry the CAPEX of the exploration

segment was affected the most by the economic

downturn of 2009. Shallow water activities were hit the

worst, but are expected to experience a slow recovery

60

50

40

30

20

10

0

550

500

450

400

350

300

250

20

04

20

03

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Regional transports

New build JU rigs

Existing JU rigs

Transport

s

Rig

s

Fig: Jack-up Rig transport

(Source: ODS Petrodata)

Semi-submersible rigs

Semi-submersible rigs are fl oating drilling rigs used in

water depths up to 10,000 feet. Six generations of

semi-submersible rigs have been developed by the

Oil & Gas industry to date, each with higher degrees

of sophistication and greater size than the previous

generation. All six generations remain in use. Most of

the recently built semi-submersible rigs are self-

propelled and can travel at a speed of six to eight

knots. However, this is still signifi cantly slower than a

dry-transport aboard Heavy Marine Transportation

vessels, with average speeds of approximately 10 to

12 knots. There are approximately 40 semi-

submersible drilling rigs under construction as of

January 2010 with scheduled delivery in 2010, 2011

and 2012. These offshore drilling rigs are primarily

constructed in Southeast Asia for operation in the deep

waters near Brazil.

Operators of these drilling rigs are typically paid based

on a daily rate. Due to the high drilling day rates paid in

these oil fi elds, Dockwise expects that many of these

offshore drilling rigs, when completed, will need to be

The semi-submersible drilling rig, Ocean Monarch,

was successfully discharged from the Blue Marlin in

January, 2009.


14,000 tonnes, which is the maximum weight cranes

can carry, combined with the high cost and time

required to construct a structure offshore, is driving the

market towards the use of the fl oat-over technique.

Float-over Installation (shown on the pictures below)

A fl oat-over is basically a two-in-one discharge-

installation operation. The large topside constructions,

which will remain above water once installed, are built

onshore, at a signifi cantly lower cost than construction

at the production site. They are then transported on

top of a Heavy Marine Transportation vessel. On

location, the construction is discharged from the vessel

and directly installed onto a jacket or fl oating hull

offshore during one single operation.

In order to accomplish this, the vessel maneuvers

between a pre-installed jacket or fl oating hull, so that

the top construction stabilizes precisely above the

stucture. The vessel then slowly lowers itself by

ballasting combined with a load transfer system until

the topside and jacket mate, resulting in the platform

‘‘resting’’ on the unit. Once the platform ‘‘rests’’ on the

unit, the construction is installed and the hook up and

commissioning continues.

In 2009 there were less Final Investment Decisions

(FIDs) which will affect the activities in the offshore

production segment for the coming years. Projects

already with a FID or under construction, faced delays

due to contract re-negotiations. Oil companies used the

economic downturn to put pressure on the EPIC

contractors to reduce costs. During the second half of

2010 the number of FIDs is expected to pick up again

driven by the robust long term fundamentals of the Oil

& Gas industry. The CAPEX outlook for the fi xed

platforms expects a decline in 2010 with a strong

recovery in 2011. The forecast for the fl oating

production structures shows a decrease in 2011 and

2012 but will recover by 2013.

returning to the 2008 level by 2012. The deep water

CAPEX was not affected much and is expected to

recover in 2010 with a steady growth afterwards.

100

80

60

40

20

0

20

04

Expe

nditu

re (

US

D b

illio

ns)

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Deep water

Shallow water

Fig: CAPEX development (CAPEX includes next to

drilling activities also engineering, geosciences and

support services)

(Source: Douglas Westwood November -‘09)

Oil & Gas – Production

Offshore production structures include fi xed platforms,

fl oating platforms and gravity based structures.

Examples of fl oating platforms are semi-submersible

production structures, stabilized spar buoy structures,

and tension-leg platforms (or “TLPs”). These structures

are mainly built in Asia and typically need to be moved

and installed over long distances. Most of these

structures, as whole or modularized units, are

transported from the fabrication yard to the installation

site on board of a Heavy Marine Transportation vessel

or towed via tug or tug and barge combination.

Platforms or ‘‘topsides’’ can be installed using several

types of heavy crane vessels or by using the ‘‘fl oat-

over’’ technique, illustrated below. The ongoing trend

towards the construction of larger offshore structures

with a weight greater than

Transport Approach Jacket Docking


Shorter transit times and operating effi ciencies arise

from the reduced need for on-site support equipment.

In this industry segment, LNG projects in Australia have

been less affected by the economic downturn and are

needed to help meet the demand for LNG supplies in

Asia and the Far East. It is expected that a number of

LNG projects will come on-line between 2013 and

2015 to help meet this demand. Because the bulk of

heavy transport services for an LNG project is executed

one to two years before the project comes on-line,

additional business opportunities for Dockwise exist

between 2011 and 2014. In contrast to LNG projects,

as a result of the recession, investments in refi neries

and petro-chemical plants have been delayed, as oil

companies seek to reduce costs by re-bidding and

postponing Final Investment Decisions with respect to

major projects.

100

80

60

40

20

0

20

04

Expe

nditu

re (

US

D b

illio

ns)

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

LNG Liquefaction and Regasifi cation Terminals

Petrochemicals

Refi ning and Gas Processing



35

30

25

20

15

10

5

0

20

04

Expe

nditu

re (

US

D b

illio

ns)

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

Fixed platforms



14

12

10

8

6

4

2

0

20

04

Expe

nditu

re (

US

D b

illio

ns)

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

TLPs

Spars

SEMIs

FPSOs

Oil & Gas – Processing

For the Oil & Gas processing market, marine transport

services are required for heavy onshore structures

such as modules for LNG plants, refi neries and

petro-chemical plants. Transporting large integrated

units provides customers with a number of benefi ts,

including the option to build and assemble large

projects or parts of projects in lower cost environments.

Installation Completion


construction equipment, bridge modules, dry docks and

container cranes. Although the P&M industry has been

adversely affected by the current recession, Dockwise

expects a slow pickup in activities when the recession

ends. Currently this market is driven by activities in

developing countries and major projects such as the

expansion project for the Panama Canal. The transport

of most of the above mentioned, as well as all other

fl oating and non-fl oating equipment such as power and

working barges, workboats, accommodation units, and

river vessels is characterized as a spot market.

Dockwise expects activity in this market segment to

pick up on a basis consistent with Gross Domestic

Product (‘‘GDP’’) growth.

Yacht Transport

Yacht owners may have their yachts transported when

they are out of cruising range, or due to lower fuel and

other related costs. Yacht owners and yacht charter

companies may also seek expansion of their cruising

grounds to benefi t from two seasons within one year.

For example, yachts are transported from the

Mediterranean to the Caribbean during the fall and vice

versa during the spring. In addition to yacht owners and

yacht charter companies, DYT transports yachts for

yacht builders. The market can be divided into the

fl oat-on/fl oat-off segment, by which the carrier

submerges and the yachts are fl oated on, and the

lift-on/lift-off segment, in which yachts are loaded and

unloaded using a crane. Dockwise is the only operator

in the fl oat-on/fl oat-off segment, a method that is

believed to be safer. Furthermore, yachts in excess of

120 feet or more can only be transported by means of

fl oat-on/fl oat-off transport. Although the current trading

conditions are negatively affected by the overall

economic developments, Dockwise expects longer-term

growth in the sector as a whole to increase, due

primarily to higher client awareness of the benefi ts of

yacht carrier services.

Other Energy & Resources

Large infrastructure projects such as desalination

plants, power plants and mining projects will require

Heavy Marine Transport services. These transport

services include heavy marine and onshore transport

services. In contrast to the Oil & Gas industry, this

market has been less affected by the economic

downturn and big power and drinking water projects

have continued. The mining industry has been more

affected by swings in commodity prices, particularly

during 2007 and 2008. However, these markets have

shown some signs of recovery in 2009, driven by

demand in developing countries and governmental

supported infrastructure projects and are expected to

develop along with the general global economic

development. It is expected that both the Heavy Marine

Transport and the offshore and onshore project markets

will grow from approximately USD 1.5 billion in 2010 to

approximately USD 2.3 billion in 2014 in aggregate.

Military

In the military market, new-build and decommissioning

programs often require Heavy Marine Transport services,

such as the transport of newly-built vessels from the

fabrication yard to the working area, or the transport of

modules between shipyards during new build projects or

the transport of completed hulls. In addition, the transfer

of used Navy vessels between developed and

developing countries and the transport of damaged

submarines and other Navy vessels as part of salvage

operations, create transport opportunities.

Port & Marine

The P&M market consists of various types of

equipment, such as dredging vessels, fl oating

Jack-up lift-boats provide various types of offshore

services, including the installation of wind farms.


Financial Review

to USD 373 million from USD 363 million in 2008,

mainly as a result of a very strong start of the year and

higher capacity. Activity, especially in rig transportation,

was very high at the beginning of 2009 when Dockwise

benefi ted from high capex spending by the Oil & Gas

industry in the preceeding years. Revenue from

offshore/onshore contracts increased by 50%,

to USD 61 million from USD 41 million in 2008.

The milestone fl oat-over project for Carigali PTTEPI

Operating Company ("CPOC") highly contributed to

this number.

Dockwise Yacht Transport (DYT)

Revenue from the yacht transport business decreased

by 17%, to USD 44 million from USD 53 million in

2008, as a result of general economic downturn.

The Mighty Servant 3 was out of service until August

2009. Dockwise was compensated by the former

owners of Dockwise (and hence the vessel) until

April 2009. In this respect an amount of almost

USD 8 million was received from escrow account

established by the former owners of Dockwise.

This amount was grossed up at historic average

margins, but a period of four months was without

revenues or compensation.

Reporting and functional currency

All amounts mentioned in the Financial Statements are

stated in thousands of United States Dollars (USD)

unless stated otherwise. Dockwise Ltd. reports in USD

in view of the concentration of operational revenues

and expenditures in this currency. Apart from using

natural hedges, Dockwise hedges its transactions

exposure versus the Euro in general one year in

advance using currency options and forward exchange

contracts.

Revenues

Dockwise is segmenting its heavy lift business in order

to better allocate between the long term offshore/

onshore transportation and installation contracts and

the more short term Heavy Marine Transport contracts.

The table below shows an overview of the revenue split

according to the current segmentation.

Revenue increased by 5% to USD 478 million from

USD 457 million in 2008. The increase in revenue was

due to higher revenue from both offshore/onshore

projects as well as from Heavy Marine Transport as a

result of the additional capacity added to the fl eet.

Dockwise Heavy Marine Transport

Revenue from Heavy Marine Transport increased by 3%,

In USD million 2009 2008 2007

Heavy Marine Transport 373 78% 363 79% 238 82%

Offshore/Onshore projects 61 13% 41 9% 11 4%

Yacht Transport 44 9% 53 12% 41 14%

Total revenues 478 100% 457 100% 290 100%

MS 3 compensation 13 39 40

Adjusted revenues 491 496 330

Revenue segmentation:


Depreciation and amortization

Depreciation and amortization increased by 35%,

to USD 96 million from USD 72 million in 2008 mainly

as a result of the expansion of the fl eet by four Type II

vessels. Of a non- recurring nature are the

derecognition of information systems with a book loss

of USD 2 million, an impairment loss of USD 4 million

on DYT clients and a derecognition of DYT equipment

with a book loss of USD 3 million.

Gross profi t

Gross profi t represents revenue less direct costs.

Gross profi t decreased by 7% to USD 163 million from

USD 175 million for 2008. Gross profi t margin on an

adjusted basis (MS3 compensation) for 2009 was 35%

compared to 40% in 2008. The decrease in gross profi t

was primarily a result of increase in contract-related

expenses and depreciation and amortization.

Administrative expenses

Administrative expenses include the personnel

expenses of management and offi ce staff and other

general expenses. Administrative expenses increased

by 7% to USD 54 million from USD 50 million for 2008.

The increase in administrative expenses was primarily

due to an increase in the fourth quarter where non

recurring costs of USD 6 million were booked related to

the listing at NYSE Euronext Amsterdam and pre-

acquisition costs. Adjusted for this, SG&A for 2009 are

largely in line with 2008 and show a slightly decreasing

Over the year revenues were spread as follows:

Direct costs

Direct costs are composed of contract-related

expenses, vessel operating expenses, depreciation and

amortization. Direct costs increased by USD 33 million

or 12%, to USD 315 million from USD 282 million

in 2008.

The increase in direct costs was primarily due to higher

depreciation and amortization charges of USD 25 million

or 35% following non- recurring items of USD 9 million

and the addition of vessels to the fl eet in 2008.

Contract-related expenses

The Company's contract-related expenses increased by

3%, to USD 169 million from USD 163 million in 2008.

As the year progressed Dockwise experienced increasing

diffi culties to pass on these contract related expenses

to the client. This decreased margins towards the end of

2009. At DYT problems with one of the thrusters of the

Yacht Express caused higher contract related expenses.

Vessel operating expenses

Vessel operating expenses increased by 7%, to

USD 50 million from USD 47 million in 2008, mainly as

a result of the increase of the total number of vessels.

These costs are relatively fi xed and consist of crewing

costs, insurance premiums and repair & maintenance

costs. On a per unit basis, vessel operating expenses

decreased in 2009. This was mainly caused by lower

crewing and maintenance costs.

In USD million Q1 2009 Q2 2009 Q3 2009 Q4 2009 Total 2009

Heavy Marine Transport 113 89 83 88 373

Offshore/Onshore projects 4 16 24 17 61

DYT 10 14 7 13 44

Total 127 119 114 118 478


Profi t/(loss) before income tax

Profi t before income tax is profi t from operations less

net fi nancing costs. Profi t before tax decreased to

USD 38 million from USD 47 million for 2008, because

of the items discussed above.

Income tax expense

Income tax expense increased to USD 1 million from nil

in 2008. Dockwise pays only minimal tax because

most of its income is subject to the Dutch tonnage tax

regime. This system assesses tax on a dead weight

tonnage capacity of the fl eet and not on income.

Disputed claim Mighty Servant 3

The Company has a claim of an amount of USD 44

million on the former shareholders of Dockwise

Transport N.V. related to the reinstatement of the Mighty

Servant 3 and is currently being disputed by the former

shareholders of Dockwise Transport N.V. The former

shareholders of Dockwise Transport N.V. are of the

opinion that the released escrow amounts are deemed

to be compensation for any liability to this claim.

In June 2009 the remaining escrow amount (USD 34

million) related to the reinstatement of the Mighty

Servant 3 was released to the Company and has been

accrued and presented as a deduction of MS3

receivables of the Company. The Company disputes the

view of the former shareholders of Dockwise Transport

N.V. that the released amount covers the reinstatement

of the Mighty Servant 3. The Company believes that its

legal position on this issue is correct and intends to

fully pursue its claim, but no assurances can be given

us to the outcome of this dispute.

trend. As a percentage of revenue, administrative

expenses after non- recurring represented 9.8% of

adjusted revenue for 2009 and 10.2% of adjusted

revenue for 2008.

Profi t/(loss) from operations

Profi t from operations decreased by 13%,

to USD 112 million from USD 130 million for 2008.

This was primarily due to non- recurring expenses

as recorded above and the margin pressure from

the second half towards the end of the year.

Financial income

Financial income comprises interest income from the

outstanding amount in the Mighty Servant 3 escrow

account and cash deposits. Financial income was fl at

year on year at USD 3 million. The positieve result in

2009 on the debt buy back transactions is accounted

for as fi nancial income and amounted to USD 2 million.

Interest from the escrow account was substantially

lower in 2009 compared to 2008.

Financial expenses

Financial expenses principally comprise interest

expenses and fi nancial charges on the indebtedness

incurred during the periods. Financial expenses

decreased to USD 77 million from USD 85 million in

2008 and includes in 2009 two non- recurring items

being the impairment of capitalized bank fees as a

result of debt reduction USD 4 million and a consent

fee of USD 1 million. Furthermore, lower outstanding

debt and lower LIBOR had a positive effect on fi nancial

expenses.

Net fi nancing costs

Net fi nancing costs represent the difference between

fi nancial income and fi nancial costs. Net fi nancing

costs decreased to USD 74 million from

USD 83 million in 2008.

Dockwise utilizes the expertise of

engineers, project managers,

operational managers, support product

experts, procurement, legal and HSES

to deliver the highest quality service.


Facilities bear interest at a rate of LIBOR plus a margin

of between 1.25% and 4.50% per annum depending on

the specifi c tranche of loans the facility is drawn under.

The margin payable for certain tranches of loans

decreases as the Company's leverage ratio (as

described below) decreases. Dockwise has currently

hedged LIBOR for 95%. The average margin on the

outstanding debt was some 2% bringing interest in

total from almost 7% at the end of 2008 to some 6%

at the end of 2009. The total amount outstanding

under the Senior Credit Facilities as of 31 December

2009 was USD 693 million.

Required repayments and prepayments.

One tranche of the Senior Credit Facilities (facility A)

requires repayment in semi-annual amounts which

started on 30 June 2009 with a remaining amount

being due 31 December 2012. The other tranches

mature in 2015 and 2016. The outstanding

amounts (excluding capitalized bank fees) under the

Senior Credit Facilities as of 31 December 2009

are as follows: facility A USD 66 million, facility B

USD 280 million, facility C USD 268 million and

facility D USD 79 million.

Liquidity and cash resources

Dockwise’s liquidity needs are principally related to

fi nancing its existing operations, survey and docking

and lifetime extension programs for its vessels.

Dockwise’s principal sources of funding have been

cash from operations and bank borrowings.

Senior Credit Facilities

On 4 May 2007, Dockwise group companies Delphi

Acquisition Holding I B.V., Dockwise Transport N.V. and

Dockwise Transport B.V., as borrowers, and certain

subsidiaries, as guarantors, entered into the Senior

Credit Facilities.

The Senior Credit Facilities are secured through the

vesting of security interests on the majority of

Dockwise’s material assets. The charged assets

include the vessels of the Company, bank accounts,

other fi xed assets, insurance policies, intercompany

receivables and shares in its consolidated companies.

The Senior Credit Facilities provide four term loan

facilities, referred to as facilities A, B, C and D

respectively. Borrowings under the Senior Credit

Mandatory Repayment Schedule

USD mlns. Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12 Q1 13 Q1 14 Q1 15 Q1 16 Q2 16

Facility A 66 5 5 5 7 7 37

Facility B 280 280

Facility C 268 268

Facility D 79 79

Total 693 5 5 5 7 7 37 – – 280 268 79

Outstanding 693 688 683 678 671 664 627 627 627 347 79 –

The Mighty Servant 1 next to the Erasmus

bridge in Rotterdam, the Netherlands


consolidated net debt service (each as defi ned in the

Senior Credit Facilities) equal to or greater than a

specifi ed level, as described below. This is referred to

as the "Cash fl ow cover ratio". Dockwise must also

maintain a ratio of consolidated normalized EBITDA to

consolidated net debt service (each as defi ned in the

Senior Credit Facilities) equal to or greater than a


as the "Interest coverage ratio". Finally, Dockwise must

maintain a ratio of consolidated net debt to

consolidated normalized EBITDA (each as defi ned in

the Senior Credit Facilities) equal to or less than a


as the "Leverage ratio". Set forth below is a summary

of these requirements.

As of 31 December 2009 Dockwise’s interest cover ratio

was 3.32 to 1; Dockwise’s cash fl ow cover ratio was

5.37 to 1; and Dockwise’s leverage ratio was 2.92 to 1.

In addition to this fi xed repayment schedule, Dockwise

is required to make annual prepayments based on its

excess cash fl ow (as defi ned under the Senior Credit

Facilities) for the prior year and its leverage ratio at that

time. The percentage of this annual prepayment is 75%

if the leverage ratio exceeds 4.25, 50% if the leverage

ratio exceeds 3.5 but is lower than or equals 4.25, 25%

if the leverage ratio exceeds 2.5 but is lower than or

equals 3.5 and 0% if the leverage ratio is lower than or

equals 2.5.

Covenants

Dockwise has undertaken to meet certain fi nancial

covenants set forth in the Senior Credit Facilities.

These fi nancial covenants relate to the total level of

leverage allowed, the level of interest covered and the

level of cash fl ows generated.

These fi nancial covenants are described in greater

detail below. If these fi nancial covenants are not met,

this would trigger an event of default, allowing the

lenders to take certain actions including demanding

early repayment of the amounts outstanding under

the facilities.

Dockwise must comply with three principal covenants

under the Senior Credit Facilities. Dockwise must

maintain a ratio of consolidated cash fl ow to

Q4 ‘09 Q2 '10 Q4 ‘10 Q2 '11 Q4 ‘11 Q2 '12 Q4 ‘12

Cash fl ow cover ≥ 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Interest rate cover ≥ 2.25 2.25 2.25 2.25 2.25 2.25 2.25

Leverage ratio ≥ 4.00 4.00 4.00 3.75 3.50 3.25 3.00

The Black Marlin in front of the Sydney

Opera House, February 2009.

Bank Covenants


Working capital

Net working capital (excluding cash and cash

equivalents and including current maturities of

interest bearing borrowings) decreased to negative

USD 68 million as of 31 December 2009 as compared

to a negative USD 78 million as of 31 December 2008.

Cash fl ows

The table below sets forth a summary of Dockwise’s

cash fl ows for the years 2009 and 2008.

Cash fl ows

(USD in millions) 2009 2008

Net cash generated from operating activities 132 156

Net cash used in investing activities (11) (209)

Net cash from/(used in) fi nancing activities (90) 59

Net increase/(decrease) in cash and cash equivalents 30 6

Capital expenditure

(USD in millions) 2009 2008

Lifetime extension program (1) 16

Investments in new vessels and conversion (2) 176

Survey and docking 17 20

Non-vessel related investments 14 11

Total 28 223

Capital expenditure

The table below sets forth the Company's capital

expenditures relating to property, plant and

equipment and intangible assets incurred during the

periods indicated.

Dockwise expects to make capital expenditures

(excluding intangibles) of USD 50 million (average) in

total per year, primarily related to survey and docking

of current vessels. Dockwise intends to fi nance this

capital expenditure primarily through the cash fl ow

generated from operations.

Gelukkig niet letterlijk, want onze vloot

bestaat uit 20 unieke half-afzinkbare

schepen die qua formaat het Damrak met

gemak overspannen. Maar vanaf donderdag

3 december zal het aandeel Dockwise een

notering op NYSE Euronext in Amsterdam

krijgen. Dockwise is een puur Nederlands

bedrijf en sinds 1993 gespecialiseerd in

uitzonderlijk oceaantransport, installatie en

management van complexe logistieke

projecten. Als u meer wilt weten over

Dockwise en onze schepen met de meest

uitzonderlijke ladingen, bezoek ons dan op

www.dockwise.com

Blue Marlin met de BP Thunderhorse bij benadering

op schaal afgebeeld in het centrum van Amsterdam.

Lading 60.000 ton

zet koers op Beursplein 5

BEURSPLEIN

KR

AS

NA

PO

LSK

Y

DE BIJENKORF

DAM

ROKIN

KALVERSTRAAT

DA

MR

AK

NIE

UW

EZI

JDS

VO

OR

BU

RG

WA

L

NIE

UW

EN

DIJ

K

M E


Balance sheet reinforcement

At the end of 2009, Dockwise completed a fi nancial

(balance sheet restructuring) transaction including:

• the replacement of the 3i stake of 26% with three

new tier one investors; HAL investments, Project

Holland Fonds and Sankaty Advisors.

• a USD 250 million capital raise through directed

placement and subsequent secondary offering of

shares with existing shareholders to reduce

outstanding long term debt through repayment and

buy- back

• a secondary listing at NYSE Euronext Amsterdam.

Advertisement used in the weeks preceding Dockwise’s listing on NYSE Euronext Amsterdam.


Dockwise frequently transports fl oating docks. To assist

the Australian Marine Complex (AMC), Dockwise

delivered the fl oating pontoon to the AMC Common User

Facility in Henderson, Western Australia.


Por t & Marine Infrastructure

The large MES container cranes were easily

loaded on board the Tern, a Swan-class vessel,

using the ‘roll on’ method, whereby a steel track

was placed onto the vessel, which was moored

alongside the quay. Upon arrival in Los Angeles,

the cranes had to be maneuvered beneath the

famous Vincent Thomas Bridge. To do this,

the boom of the crane had to be lowered so that

the vessel carrying the cranes could pass safely

underneath. Today these are the largest

container cranes in the Port of Los Angeles.


Resources

Works Council

In 2003 Dockwise established a Works Council for

the Dutch organization. The Works Council is a

representative body within the Company and is vested

with certain rights with respect to advice and

consultation in connection with decision-making in

the fi eld of fi nance, organization and social policy.

The Works Council became dormant in 2007,

but the council was revived in May 2009. There are

currently eight members on the council, elected by

the employees of the Company, which meet rwith

management on regular basis.

To the best of the Company's knowledge, none of

Dockwise’s employees belong to a union nor are

employed pursuant to any collective bargaining

agreement or any similar arrangement. Dockwise

believes its relationship with employees and the Works

Council is favorable.

Developing our people

In 2008, Dockwise implemented Leadership and Future

Leadership Development Programs to support its

commitment to develop the leadership capabilities

within the organization. Twenty-four Senior and Mid-

Level Managers were commenced into the LDP. By the

end of 2009, a total of sixteen employees participated

in the Future Leadership Development Program (FLDP),

which was designed to support staff members moving

into leadership positions for the fi rst time.

Furthermore, Dockwise provides on-the-job learning

complemented by formal training and development to

assist its staff in keeping their skills up to date and to

enhance their long-term career opportunities and

motivation.

Highlights

• Increased workforce by 9% to 315

• Reinforced balance sheet

• Increased analyst coverage

• Sale of Dock Express 10 and Dock Express 12

• Reinstatement of MS 3

Targets:

• Further debt reduction to net debt/EBITDA of 2.5

• Further increase sell side analyst coverage

Human resources

Staff

At the end of 2009, Dockwise’s workforce grew to 315,

representing a 9% increase compared to 289 in 2008.

The Company’s recruitment efforts throughout the year

resulted in 55 new hires with a 5% voluntary turnover

rate. Dockwise also contracted, at any given time,

through the Company’s crewing manager Anglo-Eastern,

approximately 900 offi cers and crew to operate its

vessels.

61%

14%

22%

3%

Fig: Employee division

Netherlands

China

USA

Rest of World


Dutch (and in some instances, international) market

and ensures that Dockwise:

• Provides competitive rewards that attract, retain and

motivate executives of the highest caliber;

• Sets demanding levels of performance that support

the Company's core values of Passion, Reliability,

Innovation and Respect;

• Structures remuneration at a level that refl ects the

executive’s duties and accountabilities and is

competitive within the Netherlands and, for certain

roles, internationally;

• Benchmarks remuneration against appropriate

comparison groups at the 50th percentile up to the

70th percentile in exceptional cases;

• Aligns executive incentive rewards with the creation

of value for shareholders;

• Complies with applicable legal requirements and

appropriate standards of governance.

Executive remuneration is reviewed annually with regard

to individual and business performance (compared

against agreed fi nancial and non-fi nancial performance

measures set at the start of the year), relevant

comparative information and expert advice from both

internal and independent external sources.

In 2009, Dockwise spent approximately USD 1 million

on training through a variety of structured learning

opportunities within all levels of the organization,

including business and technical skills development,

trainee programs and leadership and management

capability development and compliance training.

Dockwise does at this time not see any issues with

regards to its ability to attract and retain suitable

qualifi ed personnel or management in 2010 or beyond.

The company’s global presence assures a balanced

resource pool to successfully execute current and

future commitments to customers.

Remuneration committee

The Remuneration Committee assists the Board of

Directors by making recommendations on the

remuneration of the Executives of the Company and

establishes guidelines for the remuneration of the

other Senior Managers. None of the Remuneration

Committee members participate in any of the

Company’s employee compensation programs in order

to preserve their independence to make compensation

decisions.

Remuneration Policy

Dockwise’s Remuneration Policy aims to reward

executives fairly and responsibly in accordance with the

Works Council

The revived Dockwise Works Council has resumed its

duties in June 2009. The Works Council consists of

people from various departments of the Dutch

Dockwise entities.

Currently the Works Council consists of the following

7 people:

• Rob van Drimmelen – Chairman

• Marcel Uitdewillegen – Vice Chairman

• Anthony van Ginkel – Secretary

• Sander Gorissen

• Marcel Keus

• Arend van der Marel

• Patrick Vermazen

On behalf of management, Rob Strijland meets

with the Works Council on a monthly basis.

As of June 2009 the following topics were

addressed.

• The Works Council has been informed about

the capital raising, debt reduction and

Euronext listing project.

• The Works Council has given positive advice

on the intended acquisition of Yacht Path.

Eventually the acquisition did not take place.

• The Works Council has agreed with the

implementation of the new job evaluations.

•


The proposed LTIP foresees in

• A short term incentive (STI): an annual maximized

percentage of the annual salary paid in cash and

resulting from the EVA performance over the previous

book year. The pay-out levels will be in line with

market levels for peergroup companies and

maximized at a percentage of base salary.

• A long term incentive (LTI): an annual conditional

grant of shares rewarding performance over a period

of three years. Performance will be based on TSR

(total shareholder return compared to a defi ned peer

group) and EVA.

Pension scheme

Dockwise makes contributions to defi ned benefi t plans

that provide pension benefi ts to its employees upon

retirement. Dockwise’s pension obligations are insured.

For more information, see notes to the “Consolidated

Financial Statements of Dockwise for 2009”, page 91

of the annual accounts in this annual report.

Current Short Term Incentive Plan

The Company has an Economic Value Added (‘‘EVA’’)

plan for all of its employees, including Executives and

Senior Managers. The focus of the EVA plan is to direct

the performance of the participants and to promote

teamwork towards achieving the operational and

fi nancial objectives established in the Company’s

annual budget. Apart from the above mentioned

fi nancial criteria, the EVA plan also includes an

appraisal of the individual performance against

annually set individual targets. Similar incentive

percentages apply for similar job levels throughout the

Company and are expressed as a percentage of the

annual base salary. Target incentive percentages

increase with job ranking and the employee impacts on

the Company.

Proposed share based, long-term incentive plan for

Managers and key employees

In 2009, the board proposed a new performance

related, share based, long-term incentive plan for Chief

Offi cers and certain key employees (the ‘‘LTIP’’).

The conditions under which Shares are awarded to

Chief Offi cers and key employees under the LTIP will be

put forward for approval at the Annual General Meeting

of shareholders in 2010. The proposed scheme,

once approved, will replace the current 100% EVA cash

bonus system as of 1st January 2010, thus reducing

the short term part of the incentive. Under the LTIP

the Board of Directors has the discretionary power to

award conditional Shares with a vesting period of three

years, subject to continued employment and

performance conditions.

On July 12th the Transshelf arrived at the discharge

location where the ship began the submersion operation,

so that the subs could be easily fl oated-off.

The Transshelf is fully submerged at 22 meters.

After the submarines were discharged, the wooden

cribbing and sea-fastenings were removed at anchorage.


The 2010 peer group compares Dockwise and the following companies:

Name Currency

Market

Value (MM) Price

3 Month %

Change

1 Year %

Change

Forward

P/E 2009

Total

12-Month

Return

Dockwise NOK 2,407 180.00 26% 147% 5.6 147%

Acergy NOK 17,868 91.65 26% 135% 15.4 140%

Aker Solutions NOK 20,673 75.45 16% 68% 9.3 75%

Petrofac GBP 3,604 1043.00 6% 201% 17.9 206%

Saipem EUR 10,634 24.10 17% 104% 15.2 110%

SBM Offshore EUR 2,265 13.78 –5% 52% 14.2 56%

Technip EUR 5,400 49.40 13% 127% 12.8 134%

Tecnicas Reunidas EUR 2,243 40.13 7% 118% 15.4 128%

Wood Group GBP 1,637 308.80 2% 64% 12.5 67%

McDermott USD 5,526 24.01 –5% 143% 14.6 147%

Fluor USD 8,062 45.04 –11% 0% 11.8 2%

Foster Wheeler USD 3,740 29.44 –8% 26% 10.0 29%

Worley Parsons AUD 6,927 29.08 –2% 106% 17.1 111%

Helex USD 1,226 11.75 –22% 62% 21.0 63%

Situation per 31 december 2009

Source: Thomson Reuters


The Board of Directors may award, at its discretion,

the payment of future dividends on shares as stated

in the Bye-laws. This is subject to Bermuda law.

The amount of such dividends will be determined in

light of the Company’s earnings and cash fl ow,

capital requirements, fi nancial condition and prospects,

applicable contractual restrictions and other factors

the Board of Directors deems relevant.

Since its incorporation on 11 January 2007, Dockwise

has not declared a dividend or made a distribution.

Not before its target net debt/EBITDA ratio of 2.5 is

reached, Dockwise envisages payment of a dividend.

With the equity raise in the fourth quarter 2009 and

the subsequent balance sheet reinforcement, such a

ratio is now a realistic possibility in the short to

medium term. The introduction of dividend payments

has consequently become more viable. Dockwise will

therefore propose a dividend policy to shareholders in

2010. The choice in any year to propose a dividend in

cash and/or entirely or partly in shares is based on

Dockwise’s desired balance sheet structure and the

interests of shareholders.

Any dividends will be paid to shareholders through the

VPS, the Norwegian centralized securities custody and

administration system, or through Euroclear Nederland,

the Dutch centralized securities custody and

administration system. Dividends will be credited

automatically to the shareholder’s accounts without

the need for shareholders to present documentation

proving their ownership of the shares. Dividend and

distribution payments are subject to Dutch dividend

withholding tax at a rate of 15%.

Financial resources

Equity

Capital

After a capital reduction and reverse share split

(20:1) on 2 December 2009, the authorized share

capital of Dockwise is USD 125,000,000 divided into

25,000,000 common shares with par value USD 5.00

each. There of 20,643,780 common shares were

issued and are all listed:

• under the symbol DOCK on the Oslo Stock Exchange,

ISIN code BMG2786A1062 and

• under the symbol DOCKW on NYSE Euronext

Amsterdam, ISIN code BMG2786A2052.

The date of Dockwise’s fi rst listing at the Oslo Stock

Exchange was 2 October 2007 at a price of 25 NOK.

The date of Dockwise’s secondary listing at NYSE

Euronext was 3 December 2009 at a price of EUR 21.90.

Each share carries one vote. All shares rank equally in

all respects and will be eligible for any dividend that

may be declared on the shares. Dockwise has not

issued any preference shares.

Dividend

Dividends may be declared or distributed to the

shareholders from “contributed surplus”, if there are

reasonable grounds for believing that a) Dockwise is

not, and would not after the payment be, unable to pay

its liabilities as they become due; and b) the realizable

value of Dockwise’s assets would not thereby be less

than the aggregate of its liabilities and its issued share

capital and share premium accounts. Contributed

surplus (section 54(2) of the Companies Act (Bermuda)

1981) includes proceeds from donated shares, credits

resulting from the redemption or conversion of shares

at less than the amount set up as nominal capital and

donations of cash and other assets of Dockwise.

Dockwise is one of the few companies in the world

capable of managing the simultaneous loading,

transport and discharge of two nuclear powered

submarines on board one vessel.


Fair disclosure

Dockwise applies a disclosure policy aiming immediate,

widespread and clear communication on issues that

can affect the decision of investors to invest or divest

in the Company. In this policy, all shareholders are

treated equally. The policy foresees in a possibility to

qualify as an Insider, once aware of price-sensitive

information before this is published. At Dockwise,

all employees are qualifi ed as an Insider. Insiders

commit themselves to strict trading regulations

including amongst others, closed periods around public

fi nancial- or trading statements. Insiders are only

Share distribution

As of 31 December 2009, 6,959,707 shares were

administered in Euroclear Nederland and 13,684,073

shares in VPS.

Broker fi rm Name analyst Nationality

Recommendation

31 December 2009

Barclays Capital Mick Pickup United Kingdom Overweight

Carnegie Frederik Lunde Norway Outperform

Fearnley Haakon Magne Ore Norway Buy

Kempen & Co Tom Ackermans the Netherlands Buy

Nordea Jørgen Andreas Lande Norway Buy

Pareto Erik Bergoo Norway Buy

Rabo Securities Frank Claassen the Netherlands Buy

RBS Mark Hesselink the Netherlands Buy

Simmons & Co Stephen Williams United Kingdom Neutral

Theodoor Gilissen Peter Heijen the Netherlands Buy

Name Capital interest Voting power

HAL Investments, Rotterdam the Netherlands 3,612,678 18%

Sankaty Advisors, Boston USA 2,270,067 11%

Project Holland Fonds, Amsterdam The Netherlands 1,791,714 9%

Grantham Mayo Van Otterloo, Boston USA 867,019 4%

Franklin Templeton, London United Kingdom 830,386 4%

Stavanger fondsvorfaltning/Skagen, Stavanger Norway 746,130 4%

ODIN Forvaltning, Oslo Norway 623,700 3%

Invesco, London United Kingdom 613,913 3%

Holberg, Bergen Norway 545,684 3%

allowed to trade shares immediately after public

statements have been made and assuming there is at

that moment no other undisclosed price-sensitive

information. The trading window for Insiders closes on

the fi rst day of the quarter, following the publication of

a fi nancial quarterly release.

Analyst followers

At the end of 2009 ten sell-side analysts covered

Dockwise with research.

According to the information available as per 31

December 2009 the following shareholders hold a

major (3% or larger) stake in Dockwise:


Performance of Dockwise per share

USD NOK EUR

(amounts in USD million, unaudited) 2009 2008 2009 2008 2009 2008

EPS* 2.773 3.813 17.461 21.530 1.994 2.606

EPS Adjusted* 4.771 5.576 30.046 31.488 3.431 3.811

EPS** 1.772 2.276 11.160 12.850 1.274 1.555

EPS Adjusted** 3.049 3.328 19.203 18.793 2.193 2.274

* Based on average number of shares (IFRS)

** Based on actual number of shares as at 31 December 2009

Share price performance

Relative to indexes and peer group, the Dockwise shares showed the following performance:

300

250

200

150

100

50

0

300

250

200

150

100

50

0

1 J

an '0

9

1 J

an '0

9

10

Feb

'09

10

Feb

'09

22

Mar

'09

22

Mar

'09

1 M

ay '0

9

1 M

ay '0

9

10

Jun

'09

10

Jun

'09

20

Jul

'09

20

Jul

'09

29

Aug

'09

29

Aug

'09

8 O

ct '0

9

8 O

ct '0

9

17

Nov

'09

17

Nov

'09

27

Dec

'09

27

Dec

'09

Dockwise OSEBX MSCI world Dockwise Saipem Technip

Acergy Woodgroup


Debt

Long term debt in Dockwise’s balance sheet amounted

to USD 693 million at the end of the year under review

(2008: USD 1,025 million). The terms and conditions

of the long term debt are defi ned in the Senior

Facilities Agreement Dockwise has with a consortium

of banks and investors. The debt is traded over the

counter. Compared to the situation at the end of 2008,

the debt has been reduced by approximately USD 332

million. The reduction in 2009 was realized through:

• Pay back at 100% from free cash fl ows:

USD 93.2 million

• Buy back at in average 74% from free cash fl ows:

USD 8.1 million

• Pay back at 100% from capital raise:

USD 103.2 million

• Buy back at in average 96% from capital raise:

USD 127.3 million

This resulted in the long term debt position of USD

693 million at 31 December 2009 as specifi ed in the

table on page 38 of this Annual Report.

Costs of the debt comprise of LIBOR and a margin

of in average some 2%. LIBOR is largely fi xed at

approximately 4% through interest swaps.

The capital raise, debt reduction and listing on NYSE

Euronext Amsterdam, were followed by lender consent

and waiver from some of the SFA covenants.

This resulted in an adjustment to some of the

conditions of the Senior Facilities Agreement.

The most important changes are:

• The limit for Dockwise to issue guarantees was

increased from USD 35 million to USD 100 million;

• The limit for liabilities related to joint ventures was

increased from USD 20 million to USD 75 million;

• The requirement to provide the debt holders with

monthly fi nancial statements was eliminated;

• The restrictions with respect to acquisitions and

divestments were relaxed/eliminated;

• Adjustment of quarterly tested ratios on a rolling

annual basis as indicated in the table on page 39

of this Annual Report.

Investor Contact

Fons van Lith, Manager Investor Relations

T: +31 [0]76 - 548 41 16

M: +31 [0]6 - 51 31 49 52

E: [email protected]


Fleet and other assets

Fleet overview

Dockwise currently operates a Heavy Marine

Transportation (HMT) fl eet of 20 semi-submersible

vessels of different concepts and designs, the largest

of which can transport loads up to 73,000 tonnes.

The fl eet includes fi ve fl at-deck, open-stern HMT

vessels (two Type I and three Type II) and ten HMT

vessels (six Type II and four Type III), which are mainly

deployed for transporting drilling rigs and offshore

structures. Additionally, there are two dock-type vessels

(Type IV) that are used primarily for transporting cargoes

in the various segments. The three Type V vessels are

dedicated to the transport of yachts.

• All of the vessels are crewed and managed by

Anglo-Eastern.

• All of the vessels are owned by single ship

companies within the Dockwise group.

• All the vessels are registered in the Netherlands

Antilles and sail under the fl ag of the Netherlands

Antilles.

• Dockwise is permanently optimizing the mix of its

fl eet composition. In 2009 both vessels Dock

Express 10 and Dock Express 12 were sold.

• MS3 resumed duty in 2009.

The average age of Dockwise's fl eet is approximately

20 years; Dockwise seeks to extend the lifetime of the

fl eet by periodically undertaking lifetime extension

programs for certain vessels.

The Transshelf on route to the Zvezda yard in the

Primorsky region near Vladivostok.


Type Specifi cations Name of vessel Width (M) Length (M)

Cargo deck

space (sqm) Tons Built

Retire date

after life time

extension

Type I Flat Deck with

open stern

Blue Marlin 63 225 11,227 76,051 2000 2030

Mighty Servant 1 50 190 7,500 40,190 1983 2023

Type II Flat Deck with

open stern

Mighty Servant 3 40 181 5,600 27,720 1981 2023

Black Marlin 42 218 7,480 57,021 1999 2025

Transshelf 40 173 5,280 34,030 1987 2017

Converted tanker Transporter 45 217 5,785 54,000 1990 2027

Target 45 217 5,785 54,000 1990 2027

Treasure 45 217 5,785 54,000 1990 2028

Talisman 45 217 5,785 54,000 1993 2028

Trustee 45 217 5,785 54,000 1991 2029

Triumph 45 217 5,785 54,000 1992 2028

Type III Flat deck with

tanker capacity

Swan 32 181 4,000 32,650 1982 2021-23

Swift 32 181 4,000 32,187 1983 2021-23

Tern 32 181 4,000 32,650 1982 2021-23

Teal 32 181 4,000 32,187 1984 2021-23

Type IV Dock-type Enterprise 29 158 2,700 8,727 1984 2014

Explorer 31 159 2,823 10,763 1984 2017

Type V Dedicated

yacht carriers

Super Servant 3 32 139 3,712 14,138 1982 2017

Super Servant 4 32 169 4,672 17,600 1982 2017

Yacht Express 32 209 5,163 16,250 2007 2034


open cargo deck provides a solution for transporting

the heaviest semi-submersible drilling units, harsh

environment deepwater jack-up rigs and large offshore

and onshore structures. The movable buoyancy casings

on both the port and starboard side of the vessel can

be positioned forward to give a clear open deck for

stern skid-on or roll-on loading and discharging

operations. The Mighty Servant 1 was widened and

lengthened in 1998 and in 2003 the main engines

were renewed to maintain a reliable service.

Type II vessels

Key characteristics:

• Average speed: 12-13 knots

• Deck: Length: 130-157 meters, width: 40-45 meters

• Cargo capability: 30,000-40,000 tonnes

Dockwise currently operates three purpose-built Type II

semi-submersible vessels with large fl at decks and

open sterns. In 2009, Dockwise's Type II vessels

mainly transported jack-up rigs and offshore structures.

In addition, the T-Class Vessels (Transporter, Target,

Treasure, Talisman, Trustee and Triumph) are operating

as Type II Heavy Marine Transportation vessels after

completing their conversion from Suez max oil tankers.

Black Marlin is a vessel designed for carrying

extremely heavy cargoes as well as loading large

fl oating cargoes. Equipped with a special ballasting

system, the Black Marlin is specifi cally designed for

fl oat-over, fl oat-on/fl oat-off, roll-on/roll-off, skid-on/

skid-off and lift-on/lift-off methods. Advanced structural

design allows for increased cargo stowage possibilities

by moving the portside buoyancy casing.

Type I vessels





Dockwise’s two Type I vessels are large, purpose-built,

semi-submersible vessels with large fl at decks and

open sterns. Type I vessels are capable of carrying the

largest and heaviest cargoes in the Heavy Marine

Transport market primarily because they are not limited

by stern structures. For certain projects, such as the

transport of spar buoys, there is at present no

alternative to Type I vessels because of the sheer size

of the spar buoys. In 2009, Type I vessels were

primarily involved in transporting offshore structures,

jack-up rigs and semi-submersible rigs.

Blue Marlin is the largest Heavy Marine Transportation

vessel in the world. This vessel has 11,227 square

meters of unobstructed cargo deck space and can carry

fully integrated, extremely heavy and large offshore and

onshore structures and drilling rigs of up to 73,000

tonnes (the largest cargo transported to date was BP’s

Thunder Horse, the world's largest fl oating platform at a

total weight of almost 60,000 tonnes). The Blue Marlin

has carried cargoes such as the U.S. radar system

SBX (Sea-Based X-Band Radar) for Boeing and the U.S.

Navy. As the largest Heavy Marine Transportation

vessel in the world, Blue Marlin provides the Company

with the exclusive capacity to transport the largest and

most complex cargoes in the world.

Mighty Servant 1 has also been engineered to carry

extremely heavy cargoes. A specially strengthened


positioned on the stern. Swan, Swift, Tern and Teal are

virtually identical. Their 126.6 x 31.7 meter fl at decks

can support heavy cargoes weighing up to 25,000

tonnes. By submerging, these vessels can load and

discharge cargo with the fl oat-on/fl oat-off method.

By ballasting, they can load and discharge cargoes

using the roll-on/roll-off, skid-on/skid-off and lift-on/

lift-off methods, or any combination of these methods.

In 2009, Type III vessels were principally employed in

transporting small jack-up rigs, P&MI and smaller

offshore structures.

Type IV vessels





Dockwise owns two semi-submersible purpose-built

dock-type vessels. Type IV vessels, transported mainly

P&MI, small offshore structures and military cargoes.

Enterprise has a deck with 9.55 meter-high walls and a

stern door and is suitable for transporting fl oating and

non-fl oating cargo. The vessel can either be submerged

or ballasted to level with the quay for loading and

discharging.

Non-fl oating cargoes can be loaded over the vessel's

stern using the roll-on/roll-off, skid-on/skid-off and

lift-on/lift-off methods or any combination of these

methods. Floating cargoes can also be fl oated in and

out via the 24 meter-wide stern.

Transshelf has an unobstructed deck area of

5,280 square meters. Floating cargoes with a draft of

up to nine meters can be loaded with the fl oat-on/

fl oat-off method by utilizing the vessel's ballast system.

The Transshelf is also designed for fl oat-overs.

Mighty Servant 3 was designed to support cargoes

with an overhang on three sides by removing the aft

buoyancy casings and using counter-ballast weight.

The Mighty Servant 3 re-entered active service on

7 August 2009.

Transporter, Target, Treasure, Talisman, Trustee and

Triumph are Suez max oil tankers that have been

converted into semi-submersible, Heavy Marine

Transportation vessels used to primarily transport

jack-ups and other cargoes such as dredging

equipment and cranes. These vessels have 130 x

44.5 meter decks and can support heavy cargoes up

to 35,000 tonnes. By submerging, they can load and

discharge a cargo using the fl oat-on/fl oat-off, roll-on/

roll-off, skid-on/skid-off and lift-on/lift-off methods, or

any combination of these methods.

Type III vessels



• Deck: Length: 126.6 meters, width: 31.7 meters


Dockwise owns four Type III vessels, which are smaller

semi-submersible vessels with superstructures


Lifetime extension program

Dockwise contemplates spending approximately

USD 20 million per annum on its lifetime extension

program. A lifetime extension program can extend the

life of the vessels, depending on the type, by fi ve to

twenty years. The Company believes that its lifetime

extension program is made possible, in part, because

its vessels are maintained at a very high standard

throughout their originally expected lifetimes.

Management of the vessels

Dockwise has an umbrella management agreement

with Anglo- Eastern for the crew, maintenance,

operations and management of its Heavy Marine

Transportation fl eet. In accordance with this agreement,

Anglo Eastern has the responsibility for crew

management, accounting, marine operations and

liaising with port agents and maintenance of the

vessels. Under the umbrella management agreement,

Anglo Eastern is entitled to a fi xed management fee per

vessel per year. Most of the crews are from Latvia and

Ukraine and are generally employed subject to the laws

of those countries. The agreement with Anglo Eastern

was renewed for a 3- year period in December 2009.

Explorer is a twin-propelled, semi-submersible dock-

type vessel suited for handling fl oating and roll-on/

roll-off cargo's loaded by the stern. Dock-type vessels

have closed decks with the purpose of cargo protection

and are only capable of loading via the stern.

The Explorer is successfully utilized in the

transportation of luxury yachts by Dockwise Yacht

Transport over the past years.

Type V vessels (yacht carriers)





Type V vessels refer to yacht carriers, which are

semi-submersible vessels that allow the on- and

off-loading of yachts. Dockwise operates four yacht

carriers (one Type IV vessel and three Type V vessels).

The purpose-built Yacht Express was added to the fl eet

in 2007. All of Dockwise's yacht carriers feature dock

walls, which protect yachts from adverse weather

during marine transport. With decks up to 146 meters

long, each of these carriers is capable of transporting

a large number of yachts.


An excellent example of the Company’s

Transportation and Installation expertise is

the August, 2009 major fl oat-over installation

of the MDPP offshore production platform.

Dockwise, acting as the main contractor for

CPOC, the operator, completed the 19,000 tonnes

(20,944 s.ton) installation successfully utilizing

its very own multi-disciplinary project team.

The Company has been dedicated to preparations

since the contract’s award in August, 2007.

Dockwise managed the custom-designs of the

fabrication of leg mating units and deck support

units, the mating and mooring analyses and

the synchronization of transport. After outfi tting

the Black Marlin with grillage and skid beams,

the giant module was skidded on board in

Singapore. The Black Marlin safely transported the

structure off the shores of Thailand and Malaysia

where the fl oat-over installation successfully took

place. The successful execution of this transport

and fl oat-over installation is a major milestone,

further securing Dockwise’s industry position as

an independant force in the realm of full-scope

marine projects.

CPOC


Complete Transpor t & Installation


Corporate Governance

Board members’ Terms of Offi ce and Benefi ts

The term of offi ce for Board members is two years.

In the interest of continuity of Board composition,

a rotation schedule has been established in which half

of the Board is resigning in a certain year. The rotation

schedule is inserted on page 14 of this annual report.

The remuneration of the Board Members is determined

by the General Meeting of Shareholders upon the

recommendation of the Nomination Committee.

No contracts have been entered into with any of the

Board members entitling them to any benefits upon

termination of their function as member of the Board.

However, André Goedée is entitled to benefits upon

termination of his function as Chief Executive Officer,

see “Employment and Severance Agreements of

Executive Management” below.

Employment and Severance Agreements of Executive

Management

Unless otherwise terminated, the employment

agreement with each Chief Offi cer terminates on the

first day of the month in which the Chief Offi cer reaches

the age of 65. The employment agreement may be

terminated earlier by Dockwise with a notice period of

six months or by the Chief Offi cer with a notice period

of three months. In the event of early termination of his

employment agreement, the Chief Offi cer is subject to

a non-competition and non-solicitation provision

applicable for 12 months after the termination.

In addition, the employment agreement of Mr. Goedée

stipulates that if the employment agreement is

terminated by Dockwise for reasons other than for

cause, and Dockwise requires Mr. Goedée to be

bound by these non-competition and non-solicitation

Highlights:

• Executive Management strengthened with the

addition of CFO Peter Wit

• Access to capital market increased through secondary

listing on NYSE Euronext Amsterdam

Dockwise is committed to good corporate governance.

To demonstrate this commitment, the Board of

Directors adopted a Corporate Governance Policy to

ensure effi cient management and control over the

operations of the Dockwise group of companies.

To create this effi cient management and control,

Dockwise continuously develops and improves systems

for communication, monitoring, accountability and

incentives that enhance and maximize corporate profit,

long-term health, continuity and overall success of the

business of the Dockwise Group. Furthermore

Dockwise adopted Rules of Procedure for the Board

of Directors of Dockwise, a Disclosure Policy and an

Insider Trading Policy. Dockwise’s Corporate

Governance Policy is based on the Bermuda

Companies Act, the Company’s Bye-laws and the

corporate governance requirements as set out in the

Norwegian Securities Trading Act, the Norwegian

Securities Trading Regulations and Oslo Børs Member

Rules. The Norwegian Code of Practice for Corporate

Governance (Norsk anbefaling for eierstyring og

selskapsledelse, hereinafter the “Norwegian Code of

Practice”) applies to Dockwise.


Officer, the Chief Commercial Officer, the Chief

Operating Officer and the Chief Financial Officer of

the Company and establishing guidelines for the

remuneration of the other Senior Managers of the

Company. The Remuneration Committee consists of

Rutger van Slobbe (chairman) and Adri Baan.

The Remuneration Committee had two meetings in

2009, which were attended by all members.

Project committee

The Project Committee assists the Board in reviewing

projects with a value larger than USD 25 million.

The projects will be presented to the Project Committee

on a case-by-case basis and the Project Committee will

give its recommendations to the Board. The ultimate

responsibility for approving contracts with a value over

USD 25 million remains with the Board. The Project

Committee is composed of two members: Tom Ehret

(chairman) and Adri Baan. The Project Committee had

two meetings in 2009, which were attended by all

members.

Nomination committee

The Nomination Committee assists the General

Meeting of Dockwise in determining the composition

and remuneration of the Board. The Nomination

Committee is responsible for evaluating the balance of

skills, knowledge and experience on the Board as well

as the size, structure and composition of the Board,

retirements and appointments of new members of the

Board (whether as addition or replacements to the

current composition) and will make appropriate

recommendations to the Annual General Meeting of

Shareholders on such matters. In addition,

the Nomination Committee is responsible for making

recommendations to the shareholders at the Annual

General Meeting of Shareholders as to remuneration to

be paid to Board members. The Nomination Committee

is currently composed of two members: Wim van Vonno

provisions, Mr. Goedée will be entitled to receive

compensation equalling 1⁄12 of his annual gross

base salary for each month that the non-competition

provision limits his possibilities of employment

elsewhere. Such compensation is no longer due

once Mr. Goedée has found alternative employment

or has reached the age of 65.

Board Committees

Audit Committee

The Audit Committee assists the Board in financial

reporting, external and internal audits and controls,

including preparation and reviewing of Dockwise’s

annual consolidated financial statements, reviewing

and monitoring the extent of the non-audit work

undertaken by external auditors, advising on the

appointment of external auditors and reviewing the

effectiveness of Dockwise’s internal audit activities,

internal controls and risk management systems.

The ultimate responsibility for reviewing and approving

Dockwise’s Annual Report and accounts and the

half-yearly reports remains with the Board of Directors.

The Audit Committee is composed of three members

of the Board who are independent of the management:

Jaap van Wiechen (chairman), Rutger van Slobbe and

Adri Baan. Adri Baan and Jaap van Wiechen joined the

audit committee during the year under review since

Bert Bekker and Menno Antal both resigned from the

Board during 2009. The Audit Committee had four

meetings in 2009, which were attended by all members.

One of these meetings was also attended by the

Company's auditor to discuss 2008 annual accounts.

Remuneration committee

The Remuneration Committee assists the Board in

determining its responsibilities in relation to

remuneration, including making recommendations to

the Board on the remuneration of the Chief Executive


legal owner of the shares and issued depositary receipts

to the participants. Total holdings of the foundation

amount to approximately 517,668 or 2.5%. In addition,

certain former shareholders in OKI and ODL, acquired

shares in Dockwise Ltd. directly. It has been decided to

include all Dockwise employees in this foundation.

For ownership of shares by Members of Executive

Management, reference is made to note 16 in the

Consolidated Financial Statements of this Annual

Report.

Norwegian Code of Practice

In accordance with the rules of the Oslo Stock

Exchange, Dockwise is primarily subordinated to the

Norwegian Code of Practice.

(chairman) and Adri Baan. Mr. Wim van Vonno is due

to resign at the AGM 2010, however he is eligible for

reappointment. The Nomination Committee had two

meetings in 2009, which were attended by all

members.

Board and Management Shareholdings

At 31st December 2009 members of the Board own

shares in Dockwise as follows:

Adri Baan: 1,540 shares

André Goedée: 166,893 shares, of which 29,795

are unvested and liable for taxes.

The Chief Executive Offi cer owns approximately 0.8% of

the Company’s shares through a Dutch-registered

Foundation under the name of Stichting

Administratiekantoor Dockwise. The Foundation is the

1. Implementation and reporting on corporate

governance code

The Board of Directors must ensure that the Company

implements sound corporate governance. The board of

directors must provide a report on the Company’s

corporate governance in the annual report. The report

must cover every section of the Code of Practice.

If the Company does not fully comply with this Code

of Practice, this must be explained in the report.

The board of directors should defi ne the Company’s

basic corporate values and formulate ethical guidelines

in accordance with these values.

2. Business

The Company’s business should be clearly defi ned in

its articles of association. The Company should have

clear objectives and strategies for its business within

the scope of the defi nition of its business in its articles

of association. The annual report should include the

business activities clause from the articles of

association and describe the Company’s objectives

and principal strategies.

Dockwise is committed to good corporate governance

and has therefore amongst others adopted a Corporate

Governance policy and Rules of Procedure for the

Board of Directors. Dockwise applies the Norwegian

Code of Practice as amended 21 October 2009.

There are no deviations from Section 1 of the Code of

Practice.

The object of the business of the Dockwise Group is

defi ned in the Company’s memorandum of association

and the Company profi le on page 6 of this annual

report provides a further description of the business

activities, the objectives and strategy of the Company.

There are no deviations from section 2 of the Code of

Practice.

Principle set forth in the Norwegian code of

practice

Dockwise implementation


Dockwise targets a net debt to EBITDA ratio of 2.5.

During the year under review USD 250 million equity

was raised to repay and buy back debt. At the end of

2009, the net debt to EBITDA ratio with 2.9 was

considered by the Board to be an adequate ratio.

Dockwise’s objective is to yield a competitive return on

invested capital to the shareholders through a

combination of dividends and increase in share-price.

Dockwise’s general dividend policy is disclosed in the

Company’s Corporate Governance Policy. A dividend

policy will be presented to the Annual General Meeting

in 2010.

The Board is authorized to increase the share capital

of the Company for a period limited to the date of the

next annual general meeting. The authorization serves

general corporate purposes

There is a deviation from section 3 of the Code of

Practice, in that respect that the mandate is proposed

for general corporate purposes.

There is only one class of shares in Dockwise.

In case of an increase in share capital any waiver of

pre-emptive rights will be justifi ed. The interests of all

shareholders will be taken into account and all

shareholders will be treated fairly.

As set forth in the Corporate Governance Policy of

Dockwise any material transactions between Dockwise

and any of the Dockwise shareholders, Board members

or senior management or close associates of such

persons, will be subject to a valuation from an

independent third party. As a general rule, a

transaction will be considered material if it exceeds 5%

of the issued share capital of the Company.

3. Equity and dividends

The Company should have an equity capital at a level

appropriate to its objectives, strategy and risk profi le.

The board of directors should establish clear and

predictable dividend policy as the basis for the

proposals on dividend payments that it makes to the

general meeting. The dividend policy should be

disclosed. Mandates granted to the board of directors

to increase the Company’s share capital should be

restricted to defi ned purposes. If the general meeting

is to consider mandates to the board of directors for

the issue of shares for different purposes, each

mandate should be considered separately for the

meeting. Mandates granted to the board should be

limited in time to no later than the date of the next

annual general meeting. This should also apply to

mandates granted to the board for the Company to

purchase its own shares.

4. Equal treatment of shareholders and transactions

with close associates

The Company should only have one class of shares.

Any decision to waive the pre-emption rights of existing

shareholders to subscribe for shares in the event of an

increase in share capital must be justifi ed.

Any transactions the Company carries out in its own

shares should be carried out either through the stock

exchange or at prevailing stock exchange prices if

carried out in any other way. If there if limited liquidity

in the Company’s shares, the Company should consider

other ways to ensure equal treatment of all

shareholders. In the event of any not immaterial

transactions between the Company and shareholders,

members of the board of directors, executive personnel

or close associates of any such parties, the board

should arrange for a valuation to be obtained from an


practice



Rules and procedures for notifi cation to the Board by

Directors and Executive Management in case of any

material direct or indirect interest in any transaction

entered into by Dockwise are set forth in the Corporate

Governance Policy, the Bye-laws and the Bermuda

Companies Act.


Practice.

The shares in Dockwise are in general freely

transferable. However the Bye-laws of Dockwise provide

that the Board may decline to register the transfer of

any share in the register of shareholders, or if required,

refuse to direct any registrar appointed by Dockwise to

register the transfer of any interest in a

share where such transfer would result in 50% or more

of the shares or votes being held, controlled or owned

directly or indirectly by individuals or legal persons

resident for tax purposes in Norway or, alternatively,

such shares or votes being effectively connected to a

Norwegian business activity, in order to avoid the

Company being deemed a Controlled Foreign Company

(CFC) pursuant to Norwegian tax rules. The right will

only be used for the purpose of avoiding CFC taxation,

and not in any way to treat investors differently.

The slight deviation from section 5 of the Code of

Practice is justifi ed in the best interest of the

shareholders.

A shareholder or group of shareholders representing

not less than 10% of the current issued and

outstanding share capital of Dockwise may require that

the Board convenes an extraordinary general meeting.

Pursuant to the Corporate Governance Policy of

Dockwise the Board shall send notices of general

meetings no later than 21 days prior to the meeting

and will observe that the notice and any supporting

material, such as the agenda, recommendations of the

Nomination Committee and other documents are

independent third party. This will not apply if the

transaction requires of the Public Companies Act.

Independent valuations should also be arranged in

respect of transactions between companies in the

same group where any of the companies involved have

minority shareholders. The Company should operate

guidelines to ensure that members of the board of

directors and executive personnel notify the board if

they have any material direct or indirect interest in any

transaction entered into by the Company.

5. Freely negotiable shares

The Company’s shares must, in principle, be freely

negotiable. Therefore, no form of restriction on

negotiability should be included in a Company’s articles

of association.

6. General Meetings

The board of directors should take steps to ensure that

as many shareholders as possible may exercise their

rights by participating in general meetings of the

Company, and that general meetings are an effective

forum for the views of shareholders and the board.

Such steps should include:

• Making the notice calling the meeting and the

support information on the resolutions to be

considered at the general meeting, including the

recommendations of the nomination committee,


practice



suffi ciently detailed and comprehensive. Notices of

general meetings and the supporting material are

made available on the Company’s website on the same

day as said information is sent to the shareholders.

Shareholders who are unable to attend may vote by

proxy. Proxy may also be given to the Chief Executive

Offi cer or the Secretary to the Board. A proxy form will

be attached to the notice of the general meeting.

The general meeting is presided by the chairman or the

deputy chairman of the board (Bye-law 20.8). Members

of the Board, the Nomination Committee and the

auditor are present at the annual general meeting.

Minutes of the meeting are published on the corporate

website and through the notifi cation system of Oslo

Børs. The minutes are kept available for inspection in

the Company’s offi ces in Breda.


Practice.

Dockwise operates a Nomination Committee

appointed by the general meeting, see Bye-law 23.4

and page 61 of this annual report. One of the two

members of the Nomination Committee is also Board

member, the other member, being the Chairman,

is independent from the Board of Directors.

There are no deviations from section 7 of the

Code of Practice.

available on the Company’s website no later than

21 days prior to the date of the general meeting.

• Ensuring that the resolutions and supporting

information distributed are suffi ciently detailed and

comprehensive to allow shareholders to form a view

on all matters to be considered at the meeting.

• Setting any deadline for shareholders to give notice

of their intention to attend the meeting as close to

the date of the meeting as possible.

• The board of directors and the person chairing the

meeting making appropriate arrangements for the

general meeting to vote separately on each candidate

nominated for election to the Company’s corporate

bodies.

• Ensuring that the members of the board of directors

and the nomination committee and the auditor are

present at the general meeting.

• Making arrangements to ensure an independent

chairman for the general meeting.

Shareholders who cannot attend the meeting in person

should be given the opportunity to vote. The Company

should:

• Provide information on the procedure for

representation at the meeting through a proxy.

• Nominate a person who will be available to vote on

behalf of shareholders as their proxy.

• To the extent possible prepare a form for the

appointment of a proxy, which allows separate voting

instructions to be given for each matter to be

considered by the meeting and for each of the

candidates nominated for election.

7. Nomination committee

The Company should have a nomination committee,

and the general meeting should elect the chairperson

and members of the nomination committee and should

determine the committee’s remuneration.

The nomination committee should be laid down in the

Company’s articles of association. The members of the

nomination committee should be selected to take into

account the interests of shareholders in general.

The majority of the committee should be independent

of the board of directors and the executive personnel.

At least one member of the nomination committee

should not be a member of the corporate assembly,


practice



Dockwise does not have a corporate assembly as this

is not a corporate body under the Bermuda Companies

Act.

The Board of Directors has collective responsibility for

the success of the Company. The Board of Directors

presently consists of 7 persons, the majority of which

is independent from the Executive Management and

material business contacts (see director profi les on

page 15 of this annual report). The requirement as to

independence from the Company’s main shareholders

(owning more than 10% of the shares) is also fulfi lled.

See page 14 of this annual report.

The Chief Executive Offi cer is a member of the Board of

Directors. He may not be elected Chairman. The

appointment of the Chief Executive Offi cer to the Board

is considered to enhance continuity, the fl ow

of information and interactions between the Board and

the management. In order to strengthen and ensure

adequate procedures regarding certain matters as

described under item four “Board Committees”,

Dockwise operates an Audit Committee, a

Remuneration Committee and a Project Committee

consisting solely of persons being independent of

the Executive Management.

committee of representatives or the board. No more

than one member of the nomination committee should

be a member of the board of directors, and any such

member should not offer himself for re-election.

The nomination committee should not include the

Company’s chief executive or any other executive

personnel. The nomination committee’s duties are to

propose candidates for election to the corporate

assembly and the board of directors and to propose

the fees to be paid to members of these bodies.

The nomination committee should justify its

recommendations. The Company should provide

information on the membership of the committee and

any deadline for submitting proposals to the

committee.

8. Corporate assembly and Board of Directors:

composition and independence

The composition of the corporate assembly should be

determined with a view to ensuring that it represents a

broad cross-selection of the Company’s shareholders.

The composition of the board of directors should

ensure that the board can attend to the common

interest of all shareholders and meets the Company’s

need for expertise, capacity and diversity. Attention

should be paid to ensuring that the board can function

effectively as a collegiate body. The composition of the

board of directors should ensure that it can operate

independently of any special interest. The majority of

the shareholder-elected members of the Board should

be independent of the Company’s executive personnel

and material business contacts. At least two members

of the Board elected by shareholders should be

independent of the Company’s main shareholder(s).

The board of directors should not include executive

personnel. If the board does include executive

personnel, the Company should provide an explanation

for this and implement consequential adjustments to

the organizations of the work of the board, including

the use of board committees to help ensure more

independent preparation of matters for discussion by

the board, cf. Section 9. The chairman of the board of

directors should be elected by the general meeting so

long as the Public Companies Act does not require that

the Chairman must be appointed either by the


practice



Directors are elected by the general meeting.

The general meeting also elects the Chairman of the

Board, not being the Chief Executive Offi cer. The

general meeting may, in accordance with Bermuda

Companies Act, authorize the Board to fi ll any vacancy

in their number left unfi lled at a general meeting.

Pursuant to the Bye-laws, Directors shall hold offi ce for

a period of two years unless otherwise resolved by the

general meeting.

The deviation from section 8 of the Code of Practice is

intended to enhance continuity, the fl ow of information

and interactions between the Board and the Company’s

management. Dockwise has established Board

Committees to help ensure more independent

preparation of matters for discussion by the Board.

Provisions on the role, the proceedings and

confi dentiality obligations of the Board as well as

division of responsibilities are set forth in the Rules of

Procedure for the Board of Directors. Pursuant to these

procedures the Board shall annually prepare plans and

evaluate performance and achievement.

In order to ensure that the preparation of Board

matters relating to fi nancial reporting and remuneration

is dealt with in an appropriate manner, Dockwise

operates an Audit Committee and a Remuneration

Committee, both consisting solely of Directors being

independent of the management.

There are no deviations from section 9 of the Code

Practice.

corporate assembly or by the board of directors as a

consequence of an agreement that the Company shall

not have a corporate assembly. The term of offi ce for

members of the board of directors should not be longer

than two years at a time. The annual report should

provide information to illustrate the expertise of the

members of the board of directors, and information on

their record of attendance at board meetings.

In addition, the annual report should identify which

members are considered to be independent. Members

of the board of directors should be encourages to own

shares in the Company.

9. The work of the Board of Directors

The board of directors should produce an annual plan

for its work, with particular emphasis on objectives,

strategy and implementation. The board of directors

should issue instructions for its own work as well as

for the executive management with particular emphasis

on clear internal allocation of responsibilities and

duties. In order to ensure a more independent

consideration of matters of a material character in

which the chairman of the board is, or has been,

personally involved, the board’s consideration of such

matters should be chaired by some other member of

the board. The Public Companies Act stipulates that

large companies must have an audit committee.

The entire board of directors should not act as the

Company’s audit committee. Smaller companies should

give consideration to establishing an audit committee.

In addition to the legal requirements on the

composition of the audit committee etc., the majority of

the members of the committee should be independent.

The board of directors should also consider appointing

a remuneration committee in order to help ensure

thorough and independent preparation of matters

relating to compensation paid to the executive

personnel. Membership of such a committee should be

restricted to members of the Board are independent of

the Company’s executive personnel. The board of

directors should provide details in the annual report of

any board committees appointed. The board of

directors should evaluate its performance and

expertise annually.


practice



The obligations with regard to internal control and

systems for risk management are further described in

the Corporate Governance Policy and Rules of

Procedure for the Board of Directors. Such matters are

subject to annual review. Please refer to section “Risk

management” in this annual report. The Chief Executive

Offi cer and the Chief Financial Offi cer shall give balanced

presentations to the Board at least once per year on all

risks of material signifi cance and on how the internal

control system handles these risks. In its annual review

of risks and control procedures, the Board focuses on:

• changes from previous year’s reports;

• extent and quality of management procedures for

monitoring risks and internal control systems;

• extent and frequency of management reporting and

quality thereof;

• material shortcomings or weaknesses that could

impact fi nancial results or standing; and

• functionality of reporting procedures. The Board is

updated on the fi nancial situation of the Company in

each Board meeting and receives monthly Board

reports on the fi nancial situation. Board members

have free access to executives, employees and

books and records of the Company.


Practice.

The remuneration of the members of the Board is

determined by the general meeting upon

recommendation of the Nomination Committee.

The annual remuneration of the individual Board

members is disclosed in the annual report, see page

142 of this annual report.


Practice.

10. Risk management and internal control

The board of directors must 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. Internal

control and the systems should also encompass the

Company’s corporate values and ethical guidelines.

The board of directors should carry out an annual

review of the Company’s most important areas of

exposure to risk and its internal control agreements.

The board of directors should 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 fi nancial reporting.

11. Remuneration of the Board of Directors

The remuneration of the board of directors should

refl ect the board’s responsibility, expertise, time

commitment and the complexity of the Company’s

activities. The remuneration of the board of directors

should not be linked to the Company’s performance.

The Company should not grant share options to

members of its board. Members of the board of

directors and/or companies with which they are

associated should not take on specifi c assignments for

the Company in addition to their appointment as a

member of the board. If they do nonetheless take on

such assignments this should be disclosed to the full

board. The remuneration for such additional duties

should be approved by the board. Any remuneration in

addition to normal directors’ fees should be specifi cally

identifi ed in the annual report.


practice



The Board determines the remuneration of the

Executive Management upon recommendation for such

remuneration by the Remuneration Committee.

The Board establishes guidelines for the remuneration of

management of the Company upon recommendation for

such guidelines by the Remuneration Committee. Both

the management’s remuneration and said guidelines

will be communicated to the annual general meeting.

The incentive scheme of Dockwise may include

share-options if approved by the general meeting.

In such case the Board is authorized to grant share-

options under such scheme and report on an annual

basis to the general meeting if and how many share-

options have been granted.

No share-options will be granted to Board members,

although such share-options may be granted to the

Chief Executive Offi cer also if he is a Board member.


Practice.

Annual reports, interim results, quarterly results,

press releases, stock exchange notifi cations, investor

presentations and other possible price sensitive

information will be timely and accurately distributed to

shareholders and other subscribers through the Oslo

Børs Distribution Network. Simultaneously this

information is made available on the Company’s

website. On a yearly basis, the Company publishes a

fi nancial calendar and an overview of releases in the

past calendar year. All releases are archived on the

Company’s website. The Company adopted a disclosure

policy which is available on the Company’s website.

Guidelines for contact with shareholders other than

through general meetings are set forth in the Corporate

Governance Policy of Dockwise.

There are no deviations from section

13 of the Code of Practice.

12. Remuneration of executive personnel

The Board of Directors is required by law to established

guidelines for the remuneration of the executive

personnel. These guidelines are communicated to the

annual general meeting. The guidelines for the

remuneration of the executive personnel should set out

the main principles applied in determining the salary

and other remuneration of the executive personnel.

The guidelines should help to ensure convergence of

the fi nancial interests of the executive personnel and

the shareholders. Performance-related remuneration of

the executive personnel in the form of share options,

bonus programmes or the like should be linked to value

creation for shareholders or the Company’s earnings

performance over time. Such arrangements, including

share option arrangements, should incentivise

performance and be based on quantifi able factors over

which the employee in question can have infl uence.

13. Information and communications

The board of directors should establish guidelines

for the Company’s reporting of fi nancial and other

information based on openness and taking into

account the requirement for equal treatment of

participants in the securities market. The Company

should publish an overview each year of the dates for

major events such as its annual general meeting,

publication of interim reports, public presentations,

dividend payment date if appropriate, etc. All information

distributed to the Company’s shareholders should be

published on the Company’s web site at the same time

as it is sent to shareholders. The board of directors

should establish guidelines for the Company’s contact

with shareholders other than through general meetings.


practice



Guiding principles on how the Board will act in case of

a take-over bid are set forth in the Corporate

Governance Policy of Dockwise, in which the further

recommendations of the Code of Practice are

implemented. In the case of a take-over bid, the

members of the Board will follow the recommendations

in the Code of Practice and use their best effort to

ensure that all the shareholders of the Company are

treated equally.


Practice.

14. Take-overs

The board of directors should establish guiding

principles for how it will act in the event of a take-over

bid. During the course of a take-over process, the

board of directors and management of both the party

making the offer and the target Company have an

independent responsibility to help ensure that

shareholders in the target company are treated equally,

and that the target company's business activities are

not disrupted unnecessarily. The board of the target

company has a particular responsibility to ensure that

shareholders are given suffi cient information and time

to form a view of the offer. The board of directors

should not seek to hinder or obstruct take-over bids for

the Company's activities or shares unless there are

particular reasons for this. In the event of a take-over

bid for the Company's shares, the Company's board of

directors should not exercise mandates or pass any

resolution with the intention of obstructing the take-

over bid unless this is approved by the general meeting

following announcement of the bid. If an offer is made

for a Company’s shares, the Company’s board of

directors should issue a statement evaluating the offer

and making a recommendation as to whether

shareholders should or should not accept the offer.

If the board fi nds itself unable to give a recommendation

to shareholders on whether or not to accept the offer,

it should explain the background for not making such a

recommendation. The board’s statement on a bid

should make it clear whether the views expressed are

unanimous, and if this is not the case it should explain

the basis on which specifi c members of the Board have

excluded themselves from the board’s statement.

The board should consider whether to arrange a

valuation from an independent expert. If any member

of the board or executive personnel, or close

associates of such individuals, or anyone who has

recently held such a position, is either the bidder or

has a particular personal interest in the bid, the board

should arrange an independent valuation in any case.

This shall also apply if the bidder is a major

shareholder. Any such valuation should be either

appended to the board’s statement, be reproduced in

the statement or be referred to in the statement.


practice



The Corporate Governance Policy and the Rules of

Procedure of the Board of Directors of Dockwise

provide that Dockwise’s auditor shall be present at

Board meetings when necessary for evaluation of the

Company’s fi nancial status and in any event at least

once annually in connection with approval and signing

of the annual report.

At these meetings, the auditor reviews any material

changes in the Company’s accounting principles,

comments on estimated fi gures of material importance

and reports all material matters on which there has

been disagreement between the auditor and the

management of the Company.


Practice.

Any transaction that is in effect a disposal of the

Company’s activities should be either appended to the

board’s statement, be reproduced in the statement or

be referred to in the statement. Any transaction that is

in effect a disposal of the Company's activities should

be decided by a general meeting, except in cases

where such decisions are required by law to be decided

by the corporate assembly.

15. Auditor

The auditor should submit the main features of the

plan for the audit of the Company to the audit

committee annually. The auditor should participate in

meetings of the board of directors that deal with the

annual accounts. At these meeting the auditor should

review any material changes in the Company’s

accounting fi gures and report all material matters on

which there has been disagreement between the

auditor and the executive management of the Company.

The auditor should at least once a year present to the

audit committee a review of the Company's internal

control procedures, including identifi ed weaknesses

and proposals for improvement. The board of directors

should hold a meeting with the auditor at least once a

year at which neither the chief executive nor any other

member of the executive management is present.

The board of directors should establish guidelines in

respect of the use of the auditor by the Company’s

executive management for services other than the

audit. The board of directors must report the

remuneration paid to the auditor at the annual general

meeting, including details of the fee paid for audit work

and any fees paid for other specifi c assignments.


practice


72

The Dockwise proposal scan, part of ColibriWeb,

triggers early identifi cation of minimum risk

management requirements during the early proposal

phase. It recognizes three types of projects (A, B and C),

differentiated between contractual and operational

scope, management responsibilities and liabilities.

Type A projects cover (traditional) transportation

contracts concluded on the basis of a standard

Heavycon Agreement without additional services and/

or liabilities. These contracts are subject to a

qualitative process of key-threat identifi cation and risk

management follow-up. The main risks (key threats)

and opportunities are identifi ed and Risk Register and

Performance Indicator Highlight Reports are subject to

regular review and approval by the Project Board.

An experienced Project Manager manages 15 to 20 of

these projects in different stages of execution.

Type B projects are extended scope projects with an

additional scope of services subject to a semi-

quantitative process of risk-analysis and risk

management. Extra risk management efforts and risk

mitigating actions are required. For category B projects,

an integral project risk analysis is performed identifying

risks, opportunities and control measures for all

applicable technical and non-technical risk aspects

within the project scope. As part of risk management

follow-up, all initial and residual risk levels for relevant

project result parameters are quantifi ed and mitigation

actions are selected. The integral Risk Register and

Performance Indicator Highlight Reports are subject to

regular review and approval by the Project Board.

An experienced project manager manages up to fi ve of

these projects in different stages of execution.

Risk Management


Enterprise risk management

Dockwise performs pro-active risk management in its

portfolio of proposals and projects, which it considers

the key towards enterprise wide risk management

(ERM) for the Company. In addition to this Project risk

management function, the Dockwise ERM framework

comprises integrated processes for Security risk

management, Business risk management, Corporate

risk management and Risk based auditing.

For active risk identifi cation, risk control and risk

reporting purposes, a set of risk management support

functions and support systems have been developed:

• A framework of risk management procedures, work

instructions and training;

• A project Board and Security Counsel; supervising all

projects;

• A risk Audit Committee;

• An integrated risk management and planning &

control cycle;

• ColibriWeb: Online desktop risk management and

quantitative risk analysis system;

• Squirrel: Annual audit of the Dockwise risk and risk

management excellence level.

Project and portfolio risk management

From the start, all projects require a pro-active risk

management process which is engaged throughout the

proposal and execution stages in order to safely realize

budget and planning objectives. Risks associated with

Heavy Marine Transport differ from risks associated

with Transportation & Installation of offshore structures

or onshore industrial projects. All risks can affect

business, operations, fi nancial conditions and future

prospects.


Type C projects are multi-disciplinary marine and

onshore Transport & Installation projects with raised

Dockwise liabilities due to contractual liquidated

damages and overall project management

responsibilities. In addition to Type B risk management

requirements, these projects are subject to a regime of

full quantitative risk analysis. Quantitative risk

modeling techniques have become an integrated part

of Dockwise’s cost estimation and project planning

processes and are subject to regular review and

approval by the Project Board. An experienced project

manager manages one or two of these projects.

Top-5 risks in category C projects

1. Health, safety and/or environmental incident

The overall HSES risk is reduced by establishing a

safety culture and by timely involving experienced

HSES engineers from the commercial phase

onwards, securing follow-up on Dockwise’s internal

HSES Management System as well as follow-up on

Client specifi c requirements.

2. Qualifi cation and contracting process

In general, Dockwise is willing to accept increased

responsibility and liability in category C transport

management projects, however a general principle in

the Company’s contracting philosophy is that both

the client and Dockwise should be held responsible

for the risks for which either one is the most

capable party to manage the risk and related

technical and non-technical control measures.

This risk for Dockwise is mitigated by introducing the

Risk Register as an explicit part of the contracting

process, to speed up contract negotiations and by

involving skilled commercial and operational experts

in the contracting process to explain a preferable

risk split using best practices and other examples.

Top-5 risks in category A and B projects

1. Timing of vessel and cargo availability

This risk is mitigated via a functional and project

specifi c notifi cation mechanism, which is acceptable

to the client and Dockwise along with maintaining a

feasible vessel planning.

2. Services arranged by client available, on time and as

per specifi cation.

This risk is mitigated via explicit contract

qualifi cation and regular expediting by experienced

Operations Management as part of work preparation.

3. Cargo lay-out as per drawing

When drawings are incorrect, cargo protrusions may

damage or even penetrate the deck of the vessel,

causing damage, or even fl ooding and sinking of the

vessel. This risk is mitigated by establishing and

maintaining direct contact between the client and

Dockwise’s engineers to identify any such

protrusions via diver inspections - prior to and during

the loading process.

4. Reliability of signifi cant weather data

This risk is mitigated by close involvement of

Dockwise’s engineering departments during the

entire project lifecycle from the commercial phase

onwards. Frequently this may result in the selection

of a longer, but safer voyage route.

5. Last minute expenses on procurements

This introduces a commercial exposure for Dockwise

as additional costs. These additional costs are not

always covered under the contract with the client.

This project and business risk is gradually reduced

by the development and pro-active involvement of

Dockwise’s Procurement & Subcontracting

Department.

Top-5 risks in category A and B projects

1. Timing of vessel and cargo availability

2. Services arranged by Client available on time and

as per specifi cation.

3. Cargo lay-out as per drawing

4. Reliability of signifi cant weather data

5. Last minute expenses on procurements.

Top-5 risks in category C projects

1. Health, safety and/or environmental incident

2. Qualifi cation and contracting process

3. Cargo not available due to fabrication delays

4. Cargo exceeds load-out and/or transportation limits

5. Spot market contracting and availability of qualifi ed

support spreads


For this purpose, the Security Council acts as a

separate entity without ties to the Project Board or

commercial process.

Business and Corporate risk management

Business and corporate risk management is the

process of early identifi cation and follow-up on risks

and opportunities emerging in economic or reputational

terms from technical, commercial and general market

developments (strategic) as well as from internal

business processes (tactical).

Key risks for the Dockwise group are related to

possible non-compliance with local regulations and

subsequent government litigation, the general ability to

maintain all vessels in their respective Class (certifi ed

and properly outfi tted for all sorts of operations), the

above mentioned staff risk and the security threat for

people and assets when working in security exposed

regions (crime, piracy & terrorism).

Prospects and business results depend largely on

developments in the Oil & Gas industry and the

willingness and ability of Oil & Gas companies to invest

in exploration and production of new Oil & Gas fi elds.

This willingness and ability are driven by

macroeconomics and geopolitical factors beyond the

control of Dockwise. They are subject to business

cycles and volatility. To mitigate the risk of operating in

a cyclical Oil & Gas market, Dockwise aims to provide

services that bridge different cycles in the Oil & Gas

industry. The Company also provides services to other

marine related industries and the Military, which also

have their own cycles and macroeconomic

dependencies.

3. Cargo not available due to fabrication delays

This risk is mitigated by maintaining a fl exible but

feasible notifi cation mechanism between the client

(and yard) and Dockwise.

4. Cargo exceeds load-out and/or transportation limits

In general Dockwise mitigates this risk by

establishing clear contractually defi ned interface

responsibilities between the yard, the client and

Dockwise and by regularly performing site visits and

audits on fabricator’s locations.

5. Spot market contracting and availability of qualifi ed

support spreads

This risk is mitigated by maintaining a detailed

overview and network of operators around the globe

and by anticipating on cost overruns in Dockwise’s

internal quotations. Availability of qualifi ed tugs is

frequently a problem and sometimes remains a ‘last

minute surprise’. This risk is mitigated by

maintaining a historic record of support spreads

used in various operations and by (when possible)

performing audits on a spread of support vessels.

The Project Board monitors quality and compliance with

project risk management processes from the business

acquisition phase onwards. As a result, the Project

Board controls the overall risk level of the proposals

and projects portfolio.

When a project or vessel transit crosses security

exposed regions, the Security Council is involved in

bid/no-bid decision making in the commercial phase

and becomes responsible for monitoring developing

regional Security Conditions. Furthermore, it approves

the technical and non-technical measures identifi ed to

mitigate the security risk exposure for crew and assets.


4. Competition could either enter the market or expand

existing capacity

Dockwise could face additional supply of vessels in

the Heavy Marine Transport industry that could

materially adversely affect Dockwise’s competitive

position and the rates it can charge for its services.

5. One catastrophic or multiple, big safety events

involving people and vessel assets

Although HSES management is a top priority for

Dockwise management and employees, the nature

of Dockwise’s business is aware that safety risks

may occur. When multiple serious incidents would

occur during a limited period of time, this would not

only cause a direct impact on business continuity,

but this would also have a strong impact on

Dockwise’s market reputation and the valuation of

the Company by shareholders. To mitigate this risk,

drills on HSES procedures and work instructions and

project specifi c HSES management plans are given

fi rst priority.

6. Failure to maintain one or multiple vessels ‘in Class’

This risk is mitigated by pro-actively investing in

lifetime extension programs for part of the fl eet and

by pro-actively performing vessel audits and the

planning of robust time windows for dockings as

part of vessel portfolio planning.

7. Dockwise may fail to successfully expand both its

Transportation & Installation of offshore structures

and onshore modules business or to manage the

risks associated with operating such businesses.

8. Non compliance by employees or subcontractors.

Top business and corporate risks

1. Business is dependent on capital expenditures by

Oil & Gas companies and general economic conditions

Dockwise business largely depends on the

robustness of the Oil & Gas industry, on the ability

of oil companies to fund the exploration and

production of Oil & Gas fi elds, actual price levels

and anticipated growths in global Oil & Gas demand.

Factors infl uencing this robustness are beyond

Dockwise control, but may cause short term and

long term material adverse effects on business and

results of operations. This risk is reduced by actively

exploring new markets, with focus on onshore civil

works and special projects.

2. Dockwise operates in a maritime environment, which

is subject to the forces of nature as well as

environmental and climatological risks that could

cause damage to, loss of, or suspension of

operations of Dockwise’s vessels and could result in

reduced levels of offshore activity.

3. Crime, piracy, terrorism and war could have a

materially negative impact on business continuity

Dockwise operations are exposed to acts of crime,

piracy, terrorism and war in regions characterized as

‘war risk zones’ by the Joint War Committee, but

also in a number of other regions around the globe.

To mitigate the Company’s overall security risk,

Dockwise established a Security Counsel and

implemented a Security risk management process

which forms an integrated part of project

management from the commercial stage onwards.

Generic and project specifi c security measures are

implemented for each transit through - or loading &

discharge operation inside a security exposed

region.

Top business and corporate risks

1. Capital expenditure by Oil & Gas companies

2. Forces of nature, environmental &

climatological risks in a maritime environment

3. Crime, piracy, terrorism and war

4. New or expanding competition

5. Safety events

6. “In class” status of vessels

7. Successful expansion in T&I or

Logistical Management

8. Non-compliance


related costs. Dockwise does not accept liability with

respect to cargoes it carries, nor consequential

damages irrespective of their nature.

Risk based auditing

Risk based auditing allows Dockwise to focus internal

and external audits on ‘real risk areas’, by using risk

information from all enterprise levels, gathered in

ColibriWeb. This provides Management and the Board

with recommendations for improvement or change on

any desirable enterprise management level within the

Company.

Derivatives

The Group manages its exposure to currency risks and

interest rate risks by using derivatives. A currency risk

policy of managing the 12-months position of mainly

the Euro with hedging is applied to a maximum of 80%

of the net cash fl ows. Forward contracts and zero-cost

collar options are used to hedge the Groups’ euro

exposure. The Group adopts an interest rate policy of

ensuring that at least 80 percent of its exposure to

changes in interest rates on borrowings is on a fi xed

rate basis. This is achieved by entering into interest

rate swaps. For more detailed information reference is

made to note 25 in the Consolidated Financial

Statements.

Insurance

Dockwise maintains insurance policies to cover risks

relating to damages to, or loss of, its heavy lift vessels

and its equipment. Moreover, Dockwise insures many

liabilities that may arise through the course of its

normal business operations.

All vessels are insured under policies for damage and/

or loss of the hull and machinery and for claims arising

from collisions. Dockwise insures each vessel for at

least its market value plus an increased value.

Dockwise’s basic war policy also covers the fl eet for

losses due to war and acts of terrorism, except when

these vessels operate in excluded warzones, in which

case additional war risk insurance is taken out.

Those additional premiums are generally charged to

Dockwise’s customers.

Dockwise also maintains protection and indemnity

policies for all vessels for third party claims arising

from carriage of goods and for claims arising from the

operation of owned and chartered vessels including

injury or death to crew, passengers or others, for

damage to property of third parties, for pollution arising

from oil and other substances and salvage and other

The fully renewed and reinstated Mighty Servant

3 rejoined the Dockwise Fleet with the most

up-to-date safety and operational standards.

Examples of changes made to the vessel include

modifi cations to the ballasting system and

heightening of the casings on the aft of

the vessel.


Consolidated Financial Statements 78

Company Financial Statements 133

Other information 145

Financial Statements 2009

78 Consolidated Financial Statements 2009

Consolidated Financial

Statements 2009

Consolidated Income Statement for the Year ended 31 December 2009 79

Consolidated Statement of Comprehensive Income

for the Year ended 31 December 2009 80

Consolidated Balance Sheet as at 31 December 2009 81

Consolidated Statement of changes in Equity 82

Consolidated Statement of Cash Flows 84

Notes to the Consolidated Financial Statements 85


For the Year ended 31 December 2009

(× USD 1,000)

Note 2009 2008

6 Revenue 478,041 456,583

7 Direct costs (315,144) (281,508)

Gross profi t 162,897 175,075

8 Other income 3,410 4,813

9 Administrative expenses (53,861) (50,338)

5 Profi t from operations 112,446 129,550

Financial income 2,612 2,653

Financial expense (77,000) (85,439)

11 Net fi nancing costs (74,388) (82,786)

Profi t / (Loss) before income tax 38,058 46,764

12 Income tax credit / (expense) (1,477) 212

5 Profi t / (loss) for the period 36,581 46,976Attributable to:

Equity holders of the Company 36,581 49,976

5 Profi t / (loss) for the period 36,581 49,976

Earnings per share:21 Basic earnings per share (in USD) 2.773 3.813

21 Diluted earnings per share (in USD) 2.764 3.811

Consolidated Income Statement


Consolidated Statement of Comprehensive Income


(× USD 1,000)

Note 2009 2008

Profi t / (Loss) for the period 36,581 46,976

Other comprehensive income:Effective portion of changes in fair value of cash fl ow hedges 5,732 (24,156)

Net change in fair value of cash fl ow hedges transferred to profi t or loss 3,593 –

Other comprehensive income, net of income tax 9,325 (24,156)

Total comprehensive income 45,906 22,820

Attributable to:

Equity holders of the Company 45,906 22,820

Total comprehensive income 45,906 22,820


As at 31 December 2009

(× USD 1,000)

Note 31 Dec 2009 31 Dec 2008

Assets

Non-current assets13 Property, plant and equipment 941,941 1,008,245

14 Intangible assets 598,288 613,529

15 Employee benefi ts 4,008 2,726

1,544,237 1,624,500Current assets

17 Inventories 20,561 16,909

12 Current tax assets – 242

18 Trade and other receivables 70,232 90,679

19 Cash and cash equivalents 51,858 21,372

142,651 129,202

5 Total assets 1,686,888 1,753,702

Equity and liabilities

Equity

Capital and reserves attributable to equity holders of the CompanyIssued share capital 103,219 229,755

Share premium 783,008 420,580

Reserves (36,328) (45,454)

Retained earnings (28,218) (75,647)

Unappropriated result 36,581 46,976

20 Total equity 858,262 576,210

Liabilities

Non-current liabilities22 Non-current interest-bearing borrowings 670,253 991,345

670,253 991,345Current liabilities

22 Current maturities of interest-bearing borrowings 9,393 10,000

24 Trade and other payables 147,387 175,491

12 Income tax liabilities 1,113 –

23 Provisions 480 656

158,373 186,147

Total liabilities 828,626 1,177,492

5 Total equity and liabilities 1,686,888 1,753,702

Consolidated Balance Sheet


Attributable to equity holders of the Company

(x USD 1,000)

Issued

share

capital

Share

premium

Hedging

reserve

Reserve

own

shares

Retained

earnings

Unappro-

priated

result Total

Balance at 1 January 2008 229,755 420,580 (20,612) – – (75,773) 553,950

Total comprehensive income for the period

Profi t or loss – – – – – 46,976 46,976

Other comprehensive incomeEffective portion of changes in fair value of

cash fl ow hedges – – (24,156) – – – (24,156)

Total other comprehensive income – – (24,156) – – – (24,156)

– –

Total comprehensive income for the period – – (24,156) – – 46,976 22,820

Transactions with owners, recorded directly in equity

Contributions by and distributions to ownersEquity-settled share-based payment transactions – – – – 126 – 126

Own shares acquired – – – (686) – – (686)Addition to reserves – – – – (75,773) 75,773 –

Total contributions by and distributions to owners – – – (686) (75,647) 75,773 (560)

Transactions with owners, recorded

directly in equity – – – (686) (75,647) 75,773 (560)

Balance at 31 December 2008 229,755 420,580 (44,768) (686) (75,647) 46,976 576,210

Consolidated Statement of changes in Equity



(x USD 1,000)

Issued

share

capital

Share

premium

Hedging

reserve

Reserve

own

shares

Retained

earnings

Unappro-

priated

result Total

Balance at 1 January 2009 229,755 420,580 (44,768) (686) (75,647) 46,976 576,210Total comprehensive income for the period

Profi t or loss – – – – – 36,581 36,581

Other comprehensive incomeEffective portion of changes in fair value of

cash fl ow hedges – – 5,732 – – – 5,732

Net change in fair value of cash fl ow hedges

transferred to profi t or loss – – 3,593 – – – 3,593

Total other comprehensive income – – 9,325 – – – 9,325

Total comprehensive income for the period – – 9,325 – – 36,581 45,906


directly in equity

Contributions by and distributions to ownersIssue of ordinary shares related to direct

placements 98,415 28,360 – – – – 126,775

Issue of ordinary shares related to secondary

offering 84,707 24,410 – – – – 109,117

Capital reduction (309,658) 309,658 – – – – –

Equity-settled share-based payment transactions – – – – 453 – 453

Own shares acquired – – – (199) – – (199)

Addition to reserves – – – – 46,976 (46,976) –

Total contributions by and distributions to owners (126,536) 362,428 – (199) 47,429 (46,976) 236,146


directly in equity (126,536) 362,428 – (199) 47,429 (46,976) 236,146

Balance at 31 December 2009 103,219 783,008 (35,443) (885) (28,218) 36,581 858,262

Consolidated Statement of changes in Equity


Consolidated Statement of Cash Flows


(× USD 1,000)

Note 2009 2008

Cash fl ows from operating activities

Profi t from operations 112,446 129,550

Adjustments for:

13 - Depreciation property, plant and equipment 85,045 66,376

14 - Amortization and impairment loss intangible assets 11,368 5,179

8 - Gain on sale of PPE (3,410) (4,813)

15 - Decrease / (Increase) employee benefi ts (1,282) (1,650)

20 - Equity settled share based payments 453 126

Operating cash fl ow before movements in working capital 204,620 194,768

17 Decrease / (Increase) inventories (3,652) (1,511)

18 Decrease / (Increase) current receivables 20,588 1,877

24 (Decrease) / Increase current liabilities (26,735) 42,247

23 (Decrease) / Increase in provision (176) (1,638)

Cash generated by operations 194,645 235,743

11 Interest (paid) / received (62,519) (79,383)

Transaction costs related to borrowings (1,300) –

12 Income tax received / (paid) 865 (379)

(62,954) (79,762)

Net cash generated from operating activities 131,691 155,981

Cash fl ows from investing activities

13 Acquisition of property, plant and equipment (24,907) (219,338)

14 Acquisition of intangible assets (2,683) (3,955)

14 Adjustment to the cost of previously recognized business combinations 8,232 –

13 Proceeds from disposal of fi xed assets 8,000 13,876

Net cash used in investing activities (11,358) (209,417)

Cash fl ows from fi nancing activities

22 New loan facilities and shareholders' loan net of bank fees – 80,000

22 Repayment of borrowings (325,540) (20,000)

20 Proceeds of issue of share capital 249,072 –

Transaction costs related to share issue (13,180) –

20 Purchase of own shares (199) (686)

Net cash from (used in) fi nancing activities (89,847) 59,314

Net increase / (decrease) in cash and cash equivalents 30,486 5,878

19 Cash and cash equivalents at beginning of the year 21,372 15,494

Cash and cash equivalents at end of the year 51,858 21,372


Reporting entity

Dockwise Ltd. (the “Company” or “Dockwise”) is a company incorporated under the laws of Bermuda and is

domiciled in The Netherlands. Dockwise is listed at both the Oslo Stock Exchange (OSE) and NYSE Euronext

Amsterdam (Euronext). The address of the Company’s registered offi ce is Canon’s Court, 22 Victoria Street,

Hamilton HM 12 Bermuda. The head offi ce of Dockwise is located at Lage Mosten 21 Breda, the Netherlands.

The Consolidated Financial Statements of Dockwise as at and for the year ended 31 December 2009 comprise

Dockwise and its subsidiaries (together referred to as the “Group” and individually as “Group entities”).

The Dockwise Group is one of the world’s leading integrated heavy lift services providers.

Basis of preparation

A. Statement of Compliance

These Consolidated Financial Statements have been prepared in accordance with International Financial Reporting

Standards (IFRSs) as adopted by the European Union (EU-IFRS).

The fi nancial statements were approved and authorized for issue by the Board of Directors on 4 March 2010.

B. Basis of measurement

The Consolidated Financial Statements have been prepared on the historical cost basis, except that derivative

fi nancial instruments and plan assets of defi ned benefi t pension plans are valued at fair value.

The methods used to measure fair values are discussed further in note 4.

C. Functional and presentation currency

Dockwise reports in United States Dollars (USD) in view of the concentration of operational revenues and

expenditures in this currency. The USD is also Dockwise’s functional currency. Apart from using natural hedges,

Dockwise hedges its transaction exposure versus the Euro in general 12 months in advance using forward contracts

and zero cost collar options. All fi nancial information is presented in thousands of USD unless stated otherwise,

and has been rounded to the nearest thousand.

D. Use of estimates and judgments

The preparation of fi nancial statements in conformity with IFRSs requires management to make judgments,

estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities,

income and expenses. The estimates and associated assumptions are based on historical experience and various

other factors that are believed to be reasonable under the circumstances; the results of which form the basis of

making the judgments about carrying values of assets and liabilities that are not readily apparent from other

sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognized in the period in which the estimate is revised if the revision affects only that period or in the period

of the revision and future periods if the revision affects both current and future periods.

Judgments made by management in the application of IFRSs that have signifi cant effect on the fi nancial statements

and estimates with a signifi cant risk of material adjustment in the next year are discussed in note 31.

1

2

Notes to the Consolidated Financial Statements


E. Changes in accounting policies

Starting as of 1 January 2009, the Group has changed its accounting policies in the following areas:

• Accounting for borrowing costs;

• Determination and presentation of operating segments;

• Presentation of fi nancial statements.

Accounting for borrowing costs

In respect of borrowing costs relating to qualifying assets for which the commencement date for capitalization is on

or after 1 January 2009, the Group capitalizes borrowing costs directly attributable to the acquisition, construction

or production of a qualifying asset as part of the cost of that asset. Previously the Group immediately recognized all

borrowing costs as an expense. This change in accounting policy was due to the adoption of IAS 23 Borrowing Costs

(2007) in accordance with the transitional provisions of such standard; comparative fi gures have not been restated.

The change in accounting policy had no impact on the annual accounts and earnings per share in 2009.

Determination and presentation of operating segments

The introduction of the “management approach” in IFRS 8 Operating Segments which became mandatory for the

Group’s 2009 fi nancial statements has no impact on the reportable operating segment. The Group’s senior

management is informed on a regular basis on two business segments being Dockwise Heavy Lift and Dockwise

Yacht Transport. These are the reportable segments. The introduction of the “management approach” had no

impact on the annual accounts in 2009.

Presentation of fi nancial statements

The Group applies revised IAS 1 Presentation of Financial Statements (2007), which became effective as of 1

January 2009. As a result, the Group presents in the Consolidated Statement of changes in Equity all owner

changes in equity.

Comparative information has been revised accordingly so that it also is in conformity with the revised standard.

Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings per share.

Signifi cant accounting policies

The accounting policies set out below have been applied as at and for the period ended 31 December 2009

presented in these Consolidated Financial Statements and have been applied consistently by Group entities.

A. Basis of Consolidation

Subsidiaries

Subsidiaries are entities controlled by Dockwise. Control exists when Dockwise or its subsidiaries have the power,

directly or indirectly, to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its

activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into

account. The fi nancial information of subsidiaries is included in the Consolidated Financial Statements from the

date that control commences until the date that control ceases.

3


Transactions eliminated on consolidation

Intragroup balances and transactions and any unrealized gains and losses arising from intragroup transactions

are eliminated in preparing the Consolidated Financial Statements.

B. Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate effective on the date of the

transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are

translated to USD at the foreign exchange rate effective on that date. Foreign exchange differences arising on

translation are recognized in the income statement. Non-monetary assets and liabilities that are measured in terms

of historical cost in a foreign currency are translated using the exchange rate on the date of the transaction.

Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated

to USD at foreign exchange rates effective on the dates the fair value was determined.

Financial information of foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition,

are translated to USD at foreign exchange rates effective on the balance sheet date. The revenues and expenses of

foreign operations are translated to USD at rates approximating the foreign exchange rates effective on the dates of

the transactions. Foreign currency translation differences are recognized directly in equity.

C. Financial instruments

Non-derivative fi nancial instruments

Non-derivative fi nancial instruments comprise trade and other receivables, cash and cash equivalents, loans and

borrowings and trade and other payables. These non-derivative fi nancial instruments are recognized initially at fair

value plus any directly attributable transaction costs. Subsequent to initial recognition these non-derivative fi nancial

instruments are measured at amortized cost using the effective interest method, less any impairment losses.

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on

demand and form an integral part of the Group’s cash management are included as a component of cash and cash

equivalents for the purpose of the statement of cash fl ows.

Derivative fi nancial instruments

The Group uses derivative fi nancial instruments to hedge part of its exposure to foreign exchange and interest rate

risks arising from operational and fi nancing activities. In accordance with its treasury policy, the Group does not hold

or issue derivative fi nancial instruments for trading purposes.

Derivative fi nancial instruments are recognized initially at fair value. Subsequent to initial recognition, derivative

fi nancial instruments are stated at fair value. The gain or loss on re-measurement to fair value is recognized

immediately in profi t or loss.

However, where derivatives qualify for cash fl ow hedge accounting, the effective part is recognized in a hedging

reserve (part of equity). In case option contracts are used in a cash fl ow hedge accounting relationship, the time

value related part of the fair value change is recognized in the income statement immediately.


Hedging

Where a derivative fi nancial instrument is designated as a hedge of the variability in cash fl ows of a recognized

asset or liability, or a highly probable forecasted transaction, the effective part of any gain or loss on the derivative

fi nancial instrument is recognized directly in equity. When the forecasted transaction subsequently results in the

recognition of a non-fi nancial asset or non-fi nancial liability, the associated cumulative gain or loss is removed from

equity and is included in the initial cost or other carrying amount of the non-fi nancial asset or liability. If a hedge of a

forecasted transaction subsequently results in the recognition of a fi nancial asset or a fi nancial liability, the

associated gains and losses that were recognized directly in equity are reclassifi ed into profi t or loss in the same

period or periods during which the asset acquired or liability assumed affects profi t or loss (i.e., when interest

income or expense is recognized). For cash fl ow hedges, other than those covered by the preceding two policy

statements, the associated cumulative gain or loss is removed from equity and recognized in the income statement

in the same period or periods during which the hedged forecast transaction affects profi t or loss. The ineffective

part of any gain or loss is recognized immediately in the income statement. When a hedging instrument expires or is

sold, terminated or exercised or the entity revokes designation of the hedge relationship, but the hedged forecast

transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognized in

accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to

take place, the cumulative unrealized gain or loss recognized in equity is recognized immediately in the income

statement.

Share capital

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of ordinary shares and

share options are recognized as a deduction from equity, net of any tax effects. When share capital recognized as

equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, is, net of tax

effects, recognized as a deduction from equity. Repurchased shares are classifi ed as treasury shares and are

presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount

received is recognized as an increase in equity, and the resulting surplus or defi cit on the transaction is transferred

to / from retained earnings.

D. Property, plant and equipment

Property, plant and equipment comprise the following categories:

• Heavy transport and other vessels;

• Other operating assets;

• Assets not in use;

• Assets under construction.

All items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses

(see accounting policy I “Impairment”). Cost includes expenditure that is directly attributable to the acquisition of an

asset and as from January 2009, directly attributable borrowing costs. Depreciation is charged to the income

statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and

equipment.

The residual values and useful lives are reviewed, and adjusted if not insignifi cant, annually on balance sheet date.

Subsequent costs

The Group recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part

of such an item when that cost is incurred if it is probable that the future economic benefi ts embodied with the item


will fl ow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced items

is derecognized. All other costs are recognized in the income statement as an expense as incurred.

Heavy transport and other vessels

In accordance with IAS 16 (Property, Plant and Equipment), the Group has adopted the component approach for the

heavy transport and other vessels under which different components have different economic lives.

The estimated useful lives of these components are as follows:

• Hull 30 years and up to 50 years after Life Time Extension

• Accommodation 30 years

• Electrical machinery 20 years

• Engines 30 years

• Ballast tank/systems 30 years

• Navigations 5 years

• Auxiliary machines 20 years

• Safety equipment 20 years

• Survey & docking 5 years

If components of assets are replaced (e.g. in case of a Life Time Extension), the old component is derecognized and

the new component is capitalized.

Other operating assets

Other operating assets consist mainly of computer equipment and sea fastening equipment, as far as the life cycle

is more than 1 year. These assets are valued at cost, less straight-line depreciation based on the estimated

economic lives. Sea fastening equipment with a useful life shorter than 1 year is included in inventories.

Assets not in use

Assets not in use are valued at cost less accumulated depreciation and impairment losses if any.

Assets under construction

Assets under construction are valued at cost including as from January 2009, directly attributable borrowing costs.

Assets under construction are transferred to the applicable asset category within property, plant and equipment

when the specifi c asset is completed and brought into use.

E. Intangible assets

General

Intangible assets comprise the following categories:

• Goodwill;

• Trade names;

• Customer relationships;

• Backlog;

• Technology;

• Computer software.


Intangible assets are capitalized if they are acquired by the Group from third parties. Development expenditure for

software is capitalized only if these costs can be measured reliably, the software is technically and commercially

feasible, future economic benefi ts are probable, and the Group intends to and has suffi cient resources to complete

development and use the software. All intangible assets are stated at cost less accumulated amortization (except

goodwill and trade names) and impairment losses (see accounting policy I, “Impairment”).

Expenditure on internally generated goodwill and brands is recognized in the income statement as an expense as

incurred.

Subsequent expenditure

Subsequent expenditure on capitalized intangible assets is capitalized only when it increases the future economic

benefi ts embodied in the specifi c asset to which it relates. All other expenditure is expensed as incurred.

Goodwill

Goodwill represents the excess of the cost of an acquisition over the net fair value of the Group’s share of the

identifi able assets, liabilities and contingent liabilities of the acquired companies at the date of acquisition.

Goodwill is tested annually for impairment (see accounting policy I, “Impairment”) and carried at cost less

accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal

of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units (“CGU’s”) for the purpose of impairment testing. In this respect the

Group has identifi ed two CGU’s, being Dockwise Heavy Lift and Dockwise Yacht Transport. The goodwill arisen from

the acquisition of OKI and ODL is allocated to the CGU of Dockwise Heavy Lift as this business combination is

completely for the benefi t of the Heavy Transport activities.

Trade names

The trade names of the above-mentioned CGU’s and OKI and ODL were acquired in 2007. These trade names are

shown at cost. The capitalized trade names have an infi nite useful life and are therefore not amortized. They are

tested annually for impairment (see accounting policy I, “Impairment”) and carried at cost less accumulated

impairment losses.

Customer relationships

The customer relationships of the Yacht Transport-business and OKI and ODL was acquired in 2007. These

customer relationships are recognized at cost, less accumulated straight-line amortization based on the estimated

useful life of 10 years respectively and impairment losses (see accounting policy I, “Impairment”).

Backlog

The backlog of the above-mentioned CGU’s and OKI and ODL were acquired in 2007. Backlog was shown at cost

less accumulated amortization and impairment losses (see accounting policy I, “Impairment”). The backlog of

Dockwise Heavy Transport and OKI / ODL was amortized in line with the realization of the contracts included in the

backlog. The backlog of Dockwise Yacht Transport was amortized in 1 year on a straight-line basis.

Technology

The technology of OKI and ODL was acquired in 2007. This technology is recognized at cost less accumulated

straight-line amortization over the estimated useful life of 11 years and impairment losses (see accounting policy I,

“Impairment”).


Computer software

Acquired computer software is capitalized on the basis of the costs incurred to acquire and bring to use the specifi c

software. These costs are amortized on a straight-line basis over the estimated useful life of 3 years.

F. Employee benefi ts

Defi ned contribution plans

Obligations for contributions to defi ned contribution pension plans are recognized as an expense in the income

statement as incurred.

Defi ned benefi t plans

The Group’s net obligation in respect of defi ned benefi t pension plans is calculated separately for each plan by

estimating the amount of future benefi t that employees have earned in return for their service in the current and

prior periods; that benefi t is discounted to determine its present value, less the fair value of any plan assets. The

discount rate is the yield at the balance sheet date on AA credit rated bonds that have maturity dates approximating

to the terms of the Group’s obligations. The calculation is performed by a qualifi ed actuary using the projected unit

credit method.

When the benefi ts of a plan are improved, the portion of the increased benefi t relating to past service by employees

is recognized as an expense in the income statement on a straight-line basis over the average period until the

benefi ts become vested. To the extent that the benefi ts vest immediately, the expense is recognized immediately in

the income statement.

In respect of actuarial gains and losses that arise in calculating the Group’s obligation in respect of a plan, to the

extent that any cumulative unrecognized actuarial gain or loss exceeds 10 per cent of the greater of the present

value of the defi ned benefi t obligation and the fair value of plan assets, that portion is recognized in the income

statement over the expected average remaining working lives of the employees participating in the plan. Otherwise,

the actuarial gain or loss is not recognized.

Where the calculation results in a benefi t to the Group, the recognized asset is limited to the net total of any

unrecognized actuarial losses and past service costs and the present value of any future refunds from the plan or

reductions in future contributions to the plan.

Short-term benefi ts

Short-term employee benefi t obligations are measured on an undiscounted basis and are expensed as the related

service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus plans if

the Group has a present or constructive obligation to pay this amount as a result of past service provided by the

employee and the obligation can be estimated reliably.

Share based payments

The grant date fair value of share-based payment awards is recognized as personnel expenses, with a corresponding

increase in equity over the period that the employees become unconditionally entitled to the shares.

At each balance sheet date the Group revises its estimates of the number of shares that are expected to vest. It

recognizes the impact of the revision of original estimates, if any, in the income statement with a corresponding

adjustment to equity.


G. Inventories

Inventories mainly consist of bunker and lubricants stocks on board the vessels, sea fastening inventories and

spare parts. The costs of inventories are based on the average cost principle and include expenditure incurred in

acquiring the inventories and bringing them to their existing location and condition. Inventories are stated at the

lower of cost and net realizable value.

H. Trade and other receivables

Work-in-progress is valued in proportion to the stage of completion of projects on the balance sheet date. The

balance of work in progress to be invoiced less advance payments received is recognized in other receivables

(positive balance), or in current liabilities as deferred income or advances on contracts (negative balance).

I. Impairment

Financial assets

A fi nancial asset is assessed at each reporting date to determine whether there is any objective evidence that it is

impaired. A fi nancial asset is considered to be impaired if objective evidence indicates that one or more events have

had a negative effect on the estimated future cash fl ows of that asset.

An impairment loss in respect of a fi nancial asset measured at amortized cost is calculated as the difference

between its carrying amount, and the present value of the estimated future cash fl ows discounted at the original

effective interest rate. All impairment losses are recognized in profi t or loss. An impairment loss is reversed if the

reversal can be related objectively to an event occurring after the impairment loss was recognized. For fi nancial

assets measured at amortized cost, the reversal is recognized in profi t or loss.

Non-fi nancial assets

The carrying amounts of the Group’s non-fi nancial assets, other than inventories (see accounting policy G,

“Inventories”), assets arising from employee benefi ts (see accounting policy F, “Employee benefi ts”) and deferred

tax assets (see accounting policy O, “Income tax”), are reviewed on each reporting date to determine whether there

is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For

goodwill and intangibles that have indefi nite lives or that are not yet available for use, the Company assesses at the

end of each reporting period whether there is any indication for impairment. Irrespective of whether there is any

indication of impairment the Company annually tests the intangible assets with an indefi nite useful life and

intangible assets not yet available for use for impairment by comparing its carrying amount with its recoverable

amount.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less

costs to sell. In assessing value in use, the estimated future cash fl ows are discounted to their present value using

a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to

the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets

that generates cash infl ows from continuing use that are largely independent of the cash infl ows of other assets or

groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of

impairment testing, is allocated to cash-generating units that are expected to benefi t from the synergies of the

combination.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its

estimated recoverable amount. Impairment losses are recognized in the income statement.


Impairment losses recognized in respect of cash-generating units are allocated fi rst to reduce the carrying amount

of any goodwill allocated to cash-generating units and then, to reduce the carrying amount of the other assets in the

unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized

in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer

exists. An impairment loss is reversed if there has been a change in the estimates used to determine the

recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying

amount that would have been determined, net of depreciation or amortization, if no impairment loss had been

recognized.

J. Capital and reserves

The capital and reserves of the Group consist of:

• Issued share capital;

• Share premium;

• Reserves;

• Retained earnings;

• Unappropriated result.

Share capital consists of ordinary shares. Dividends are recognized as a liability in the period in which they

are declared.

K. Interest-bearing borrowings

The parts of the borrowings falling due after more than 12 months after balance sheet date are recognized as

non-current liabilities. The amounts due within 12 months after balance sheet date are classifi ed within current

liabilities.

L. Trade and other payables

Trade and other payables are recognized initially at fair value. Subsequent to initial recognition they are stated at

amortized cost.

M. Revenue

Revenue from transportation services rendered is recognized in the income statement in proportion to the stage of

completion of a voyage on the balance sheet date. The stage of completion is assessed by reference to the number

of days sailed prior to the balance sheet date compared to the total days sailing expected to be required for each

individual contract. Revenue related to engineering and installation projects in progress is recognized in the income

statement in proportion to the stage of completion. The stage of completion is determined by Project Management

based on the cost incurred on projects, compared to the total expected cost in respect of the projects.

No revenue is recognized if there are signifi cant uncertainties regarding recovery of the consideration due or

associated costs.


N. Expenses

Foreign exchange differences

Foreign exchange gains and losses are allocated to the line item “Administrative expenses” in the Consolidated

Income Statement. Fair value changes on fi nancial instruments used in cash fl ow hedge relationships are accounted

for as described in note 3c.

Operating lease payments

Payments made under operating leases are recognized in the income statement on a straight-line basis over the

term of the lease. Lease incentives received are recognized in the income statement as an integral part of the total

lease expense.


Net fi nancing costs comprise interest payable on borrowings calculated using the effective interest rate method,

interest receivable on funds invested, dividend income, and fair value changes on hedging instruments that are

recognized in the income statement.

Interest income is recognized in the income statement as it accrues, using the effective interest method. Dividend

income is recognized in the income statement on the date the Group’s right to receive payments is established.

Provisions

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that

can be estimated reliably, and it is probable that an outfl ow of economic benefi ts will be required to settle the

obligation. Additions and releases from provisions are recognized under the heading “Direct costs” or

“Administrative expenses” which ever is relevant.

O. Income tax

Income tax on the profi t or loss for the year comprises current and deferred tax. Income tax is recognized in the

income statement except to the extent that it relates to items recognized directly in equity, in which case it is

recognized in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially

enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. The major part

of the Group’s income is taxed under the Dutch tonnage tax regime.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the

carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation

purposes. Temporary differences relating to investments in subsidiaries to the extent that they will probably not

reverse in the foreseeable future are not accounted for. The amount of deferred tax provided is based on the

expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates

enacted or substantially enacted on the balance sheet date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profi ts will be available

against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable

that the related tax benefi t will be realized. Additional income taxes that arise from the distribution of dividends are

recognized at the same time as the liability to pay the related dividend.


P. Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated

by dividing the profi t or loss attributable to ordinary shareholders of the Company by the weighted average number of

ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profi t or loss attributable

to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all

dilutive potential ordinary shares, which comprise share grants to employees.

Q. Segment reporting

A segment is a distinguishable component of the Group that is engaged in providing related services (business

segment), which are subject to risks and rewards that are different from those of other segments. The Group’s

primary format for segment reporting is based on business segments.

Segment information is presented in respect of the Group’s business segments which are based on the Group’s

management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can

be allocated on a reasonable basis. Inter-segment pricing is determined on an arm’s length basis. Segment capital

expenditures are the total costs incurred during the period to acquire property, plant and equipment, and intangible

assets other than goodwill.

R. New standards and interpretations not yet adopted

The following are new IFRS standards, amendments and interpretations (excluding any improvements to existing

IFRSs) not yet effective for the year ended 31 December 2009, and have not been applied in preparing these

consolidated fi nancial statements:

Amendments to IFRS 2 – Group Cash-settled Share-based Payment Transactions

IFRS 2 was amended to clarify scope and accounting for group cash-settled share-based payment transactions in

the separate fi nancial statements of the entity receiving the goods or services when that entity has no obligation

to settle the share-based payment transaction.

These amendments are not expected to have a material impact for the Group.

IFRS 3 – Revised IFRS 3 (Revised 2008) Business Combinations

The IASB issued a revised version of the business combinations standard. Some of the main changes to the

standard are as follows:

• The revised standard also applies to business combinations involving only mutual entities and to business

combinations achieved by contract alone.

• The defi nition of a business has been amended to clarify that it can include a set of activities and assets that are

not being operated as a business, as long as an acquirer is capable of operating the set as a business.

• All business combinations are accounted for by applying the acquisition method (previously the purchase method).

• The acquirer can elect to measure any non-controlling (previously minority) interest at fair value at the acquisition

date, or at its proportionate interest in the fair value of the identifi able assets and liabilities of the acquiree, on a

transaction-by-transaction basis.

• Subsequent recognition of deferred tax benefi ts acquired in a business combination that did not satisfy the

criteria for recognition at the acquisition date would be recognised in profi t or loss.


This standard applies prospectively, i.e., the carrying amount of any assets and liabilities that arose under business

combinations prior to the application of IFRS 3 (2008) are not adjusted for the application of the new standard.

However, as an exception, the subsequent adjustment of deferred tax benefi ts recognised in a business combination

accounted for under IFRS 3 (2004) is accounted for under the revised standard. The revised standard applies to

acquisitions with a date on or after the beginning of the fi rst annual period beginning on or after 1 July 2009. In

addition, IFRS 3 (2008) cannot be applied earlier than an annual period beginning on or after 30 June 2007. If an

entity early adopts IFRS 3 (2008), then the amendments to IAS 27 (2008) also are applied at the same time.

These revisions are not expected to have a material impact for the Group.

IFRS 9 – Financial Instruments

The fi rst chapters of this new standard on accounting for fi nancial instruments will replace IAS 39 Financial

Instruments: Recognition and Measurement.

The standard contains two primary measurement categories for fi nancial assets:

• amortized cost;

• fair value.

Financial assets are classifi ed into one of these categories on initial recognition.

A fi nancial asset is measured at amortized cost if the following conditions are met:

• it is held within a business model whose objective is to hold assets in order to collect contractual cash fl ows, and

• its contractual terms give rise on specifi ed dates to cash fl ows that are solely payments of principal and interest

on the principal outstanding.

All other fi nancial assets are measured at fair value.

This standard is not expected to have a material impact for the Group.

IAS 24 – Related Party Disclosures (revised 2009)

The changes introduced by IAS 24 (2009) relate mainly to the related party disclosure requirements for government-

related entities, and the defi nition of a related party. This revision is not expected to have a material impact for the

Group.

IAS 27(Amended 2008) – Consolidated and Separate Financial Statements

The amendments to IAS 27 (2008) refl ect changes to the accounting for non-controlling (minority) interest and deal

primarily with the accounting for changes in ownership interests in subsidiaries after control is obtained, the

accounting for the loss of control of subsidiaries, and the allocation of profi t or loss to controlling and non-controlling

interests in a subsidiary.


Amendment to IAS 32 – Classifi cation of Rights Issues

The amendment requires that rights, options or warrants to acquire a fi xed number of the entity’s own equity

instruments for a fi xed amount of any currency are equity instruments if the entity offers the rights, options or

warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments.



Amendment to IAS 39 – Financial Instruments: Recognition and Measurement: Eligible Hedged Items

The amendments to IAS 39 clarify how to apply existing principles in determining eligible hedged risks and portions.


IFRIC 12 – Service Concession Arrangements

This interpretation provides guidance to private sector entities on certain recognition and measurement issues

that arise in accounting for public-to-private service concession arrangements.

This interpretation is not expected to have a material impact for the Group.

Amendments to IFRIC 14 – Prepayments of a Minimum Funding Requirement

The amendment to IFRIC 14 removes unintended consequences arising from the treatment of prepayments when

there is a minimum funding requirement (MFR). The amendment results in prepayments of contributions in certain

circumstances being recognized as an asset rather than an expense.


IFRIC 15 – Agreements for the Construction of Real Estate

This interpretation deals with the accounting for revenue arising from agreements for the construction of real estate.


IFRIC 17 - Distributions of Non-Cash Assets to Owners

This interpretation provides guidance in respect of distributions of non-cash assets to owners by focusing on the

measurement of the dividend payable.


IFRIC 18 - Transfers of Assets from Customers

This interpretation deals with the accounting for contributed property, plant and equipment by “access providers”

(i.e., by the entity receiving the contribution).


IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments

This interpretation deals with how entities should measure equity instruments issued in a debt for equity swap.

It addresses the accounting for such a transaction by the debtor only.


It should be noted that not all above mentioned, new IFRS standards, amendments to standards and interpretations

have been endorsed by the EU.

Determination of fair values

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both

fi nancial and non-fi nancial assets and liabilities. Fair values have been determined for measurement and / or

disclosure purposes based on the following methods. Where applicable, further information about the assumptions

made in determining fair values is disclosed in the notes specifi c to those assets or liabilities.

4


Property, plant and equipment

The fair value of property, plant and equipment recognized as a result of a business combination is based on market

values. The market value of the vessels is based on external valuation reports.

Intangible fi xed assets

The fair value of trade names acquired in a business combination is based on the discounted estimated royalty

payments that have been avoided as a result of the trade name being owned. The fair value of the other intangible

assets is based on the discounted cash fl ows expected to be derived from the use and eventual sale of the assets.

Inventory

The fair value of inventory, mainly consisting of bunkers and lubricants on board of the vessels, sea fastening

inventories and spare parts, acquired in a business combination is determined based on quoted market prices for

similar items.

Derivatives

The fair value of forward exchange contracts is estimated by discounting the difference between the contractual

forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate

(based on government bonds).

The fair value of interest rate swaps is estimated by discounting estimated future cash fl ows based on the terms

and maturity of each contract and using market interest rates for a similar instrument at the measurement date.

The fair value of the currency options is calculated as the difference between striking price, spot price, current

volatility rate and market interest rate.

The (over the counter) derivatives used by the Company are classifi ed as level 2 in the IFRS 7 hierarchy.

Non-derivative fi nancial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principle

and interest cash fl ows, discounted at the market rate of interest at the reporting date. For fi nance leases the

market rate of interest is determined by reference to similar lease agreements.

Share-based payments

For the determining the fair value of the share based payment plans the Black-Scholes formula is used.

Measurement inputs include share price on measurement date, expected volatility, risk-free interest rate, dividend

yield, and the term of the options.

Segment reporting

Business segments

The Group comprises the following business segments:

• Dockwise Heavy Lift vessels (DHL). This segment focuses on the marine heavy transport market

(transport and offshore installation).

• Dockwise Yacht Transport (DYT). This segment focuses on the transportation of all types of yachts.

5


Geographical areas

As the Group’s customers are spread over the world and the projects locations are not bound to specifi c

Geographical areas for individual customers, the Group has no segments in geographical areas. The fl eet of the

Company operates on a global basis.

In the table below the segmental information for the years 2009 and 2008 is presented for Dockwise Heavy Lift

vessels (DHL) and Dockwise Yacht Transport (DYT).

Information about reportable segments Heavy Lift Yacht Transport Consolidated

(x USD 1,000) 2009 2008 2009 2008 2009 2008

Total external revenues 434,217 403,570 43,824 53,013 478,041 456,583

Intersegment revenue - - - - - -

Total segment revenue 434,217 403,570 43,824 53,013 478,041 456,583

Reportable segment profi t / (loss) before interest

and income tax 121,958 131,961 (9,512) (2,411) 112,446 129,550

Net fi nancing costs (74,388) (82,786)

Income tax credit / (expense) (1,477) 212

Profi t / (Loss) for the period 36,581 46,976

Heavy Lift Yacht Transport Eliminations Consolidated

(x USD 1,000) 2009 2008 2009 2008 2009 2008 2009 2008

Segment assets 1,640,788 1,721,798 116,161 123,748 (70,061) (91,844) 1,686,888 1,753,702

Segment liabilities 758,072 1,135,746 140,615 133,590 (70,061) (91,844) 828,626 1,177,492

Capital expenditure 24,666 214,394 2,924 8,899 – – 27,590 223,293

Depreciation 71,843 56,225 13,202 10,151 – – 85,045 66,376

Amortization of intangible assets 6,126 4,040 1,242 1,139 – – 7,368 5,179

Impairment loss of intangible

assets – – 4,000 – – – 4,000 –


Revenue

(x USD 1,000) 2009 2008

Dockwise Heavy Lift 434,217 403,570

Offshore / Onshore projects 60,764 40,502 Heavy Marine Transport 373,453 363,068

Dockwise Yacht Transport 43,824 53,013

Total revenue 478,041 456,583

Direct costs

Direct costs consist of depreciation and amortization, contract related expenses and vessel operating expenses,

which include fuel, sea fastening materials, harbor dues, canal passages, subcontractors, crew, vessel maintenance

and insurances.

A breakdown of these costs is as follows:

(x USD 1,000) 2009 2008

Contract related expenses 168,591 163,198

Vessel operating expenses 50,140 46,755

Depreciation of property, plant and equipment 85,045 66,376

Amortization and impairment loss of intangible assets 11,368 5,179

315,144 281,508

Other income

Other income includes the net book profi t realized on the divestment of the vessels Dock Express 10 and Dock

Express 12 and amounts to USD 3,410 (2008: net book profi t on divestment mid sections USD 4,813).

6

7

8


Administrative expenses

A breakdown of the administrative expenses is as follows:

(x USD 1,000) 2009 2008

Personnel expenses of management and offi ce staff 19,062 21,671

Other general and administrative expenses 34,799 28,667

53,861 50,338

The personnel expenses include USD 1.2 million redundancy expenses (2008: nil). The other administrative

expenses in 2009 include non-recurring items for an amount of USD 5.7 million with respect to the listing at the

NYSE Euronext Amsterdam in December 2009 and pre-acquisition costs. The expenses refl ect the weakening dollar

during the period, particularly since G&A costs are largely made up of Euro-denominated expenses.

Employee benefi t expenses

A breakdown of the employee benefi t expenses is as follows:

(x USD 1,000) 2009 2008

Wages and salaries 39,686 41,476

Social security contributions 2,256 1,669

Contributions to defi ned contribution plans 944 902

Expenses relating to defi ned benefi t plans 1,881 1,379

44,767 45,426

Wages and salaries include USD 453 (2008: USD 126) relating to share based payments.

The employee benefi t expenses are included in the following items of the income statement:

(x USD 1,000) 2009 2008

Direct costs (crew on board vessels) 25,705 23,755

Administrative expenses (management and offi ce staff) 19,062 21,671

44,767 45,426

For the remuneration of key management reference is made to note 11 of the Company Financial Statements.

9

10


The average number of employees, excluding the crew from the ship manager Anglo Eastern, in 2009 was 315

(2008: 289), which can be divided as follows:

FTE’s 2009 2008

Crew on board vessels 1 5

Management and offi ce staff 314 284

315 289

A breakdown of the employees employed inside respectively outside the Netherlands is as follows:

FTE’s 2009 2008

Inside the Netherlands 197 187

Outside the Netherlands 118 102

315 289


The net fi nancing costs recognized in profi t and loss are as follows:

(x USD 1,000) 2009 2008

Interest income 378 2,653

Result on Debt Buy Back transactions 2,234 –

Financial income 2,612 2,653

Interest expense on fi nancial liabilities measured at amortized costs (67,847) (85,439)

Net change in fair value of cash fl ow hedges transferred to profi t or loss (3,593) –

Consent fee and write-offs of capitalized loan fees (5,560) –

Financial expenses (77,000) (85,439)

Net fi nancing costs (74,388) (82,786)

11


The result on Debt Buy Back transactions refl ects the difference between the nominal amount of the debt bought

back and the actual cash payment less the write-off of the relevant part of the capitalized loan fees and related

transaction costs.

The interest income relates to interest over the Escrow account for the MS3 receivable and bank deposits. All the

above fi nancial income and expenses relate to assets and liabilities not at fair value.

The changes in fair value of derivatives recognized directly in equity are as follows:

(x USD 1,000) 2009 2008

Effective portion of changes in fair value of cash fl ow hedges 5,732 (24,156)

Recognized in:Hedging reserve 5,732 (24,156)

Income tax expense

A breakdown of the income tax expense is as follows:

(x USD 1,000) 2009 2008

Current period 1,605 201

Prior periods (178) (413)

Current tax expense / (credit) 1,477 (212)

Deferred tax expense – –

Total income tax expense / (credit) in income statement 1,477 (212)

12


(x USD 1,000) 2009 2008

Profi t / (loss) for the period 36,581 46,976

Income tax expense / (credit) 1,504 66

Tonnage tax expense 151 135

Prior year (178) (413)

Total income tax expense / (credit) 1,477 (212)

Profi t / (loss) excluding tax expense 38,058 46,764

Income tax using the Company's domestic tax rate 25.50% 9,705 0% –

Effect of tax rates in foreign jurisdictions and tonnage tax (21.62%) (8,228) (0.45%) (212)

3.88% 1,477 (0.45%) (212)

Reconciliation of effective tax rate

The majority of the income of the Group is taxable in the Netherlands (2008: majority taxable in Bermuda at 0%).

The shipping activities are taxable under the Dutch tonnage tax system whereas the Group’s fi nancing activities are

mainly taxable in a separate Dutch fi scal unity. The majority of the tax paid in respect of foreign jurisdictions relates

to the subsidiaries OKI and ODL in the United States.

Current tax assets and liabilities

The income tax liabilities of USD 1,113 represents the amount of income taxes payable (2008: USD 242 receivable)

in respect of current and prior periods that exceed payments made.

Deferred tax assets

Deferred tax assets amounting to USD 39 million (2008: USD 29 million) relating to tax losses from the Group’s

fi nancing activities are not recognized as the fi scal unity incurring these losses is not expected to generate suffi cient

income to compensate these losses.



The movement schedule of Property, plant and equipment is as follows:

(x USD 1,000) Heavy trans–

port and

other vessels

Other

operating

assets

Assets not

in use

Assets under

construction Total

Costs

Opening balance 2008 719,689 11,644 3,266 148,338 882,937

Additions 2008 203,710 6,398 – 9,230 219,338

Disposals 2008 – – – (9,063) (9,063)

Transfer from trade and other receivables – – – 26,764 26,764

Transfer 138,696 – (3,266) (135,430) –

Closing balance 2008 1,062,095 18,042 – 39,839 1,119,976

Opening balance 2009 1,062,095 18,042 – 39,839 1,119,976

Additions 2009 13,434 6,271 – 5,202 24,907

Disposals 2009 (20,514) (104) – – (20,618)

Transfer to intangible fi xed assets – (1,830) – (753) (2,583)

Transfer 38,869 – – (38,869) –

Closing balance 2009 1,093,884 22,379 – 5,419 1,121,682

Depreciation and impairment losses

Opening balance 2008 (44,667) (688) – – (45,355)

Depreciation 2008 (62,209) (4,167) – – (66,376)

Closing balance 2008 (106,876) (4,855) – – (111,731)

Opening balance 2009 (106,876) (4,855) – – (111,731)

Depreciation 2009 (79,839) (5,206) – – (85,045)

Reversal of depreciation on disposed assets 16,015 104 – – 16,119

Transfer to intangible fi xed assets – 916 – – 916

Closing balance 2009 (170,700) (9,041) – – (179,741)

Carrying amounts

Closing balance 2008 955,219 13,187 – 39,839 1,008,245

Closing balance 2009 923,184 13,338 – 5,419 941,941

The depreciation in 2009 includes USD 3,000 relating to a book loss on the derecognition of one of the thrusters of

the Yacht Express (Heavy Transport and other vessels).

13


Assets not in use (‘Mighty Servant 3’)

On 6 December 2006 one of Dockwise’s heavy transport vessels, the ‘Mighty Servant 3’ (‘MS3’) sank near

the coast of Angola and consequently has been out of service since. The MS3 has returned into service in

August 2009. In 2008 and 2009 the Group invested USD 12.1 million to improve the MS3.

Assets under construction

The assets under construction, valued at cost, comprise the following:

(x USD million) 31 Dec 2009 31 Dec 2008

Test press OKI 4.9 –

Mighty Servant 3 – 39.3

Other 0.5 0.5

5.4 39.8

Security

As at 31 December 2009, the heavy transport vessels with a carrying amount of USD 923,184 are subject to a

registered debenture to secure bank loans (see note 22 “Non-current interest-bearing borrowings”).


Intangible assets

The movement schedule of intangible assets is as follows:

(x USD 1,000)

Goodwill

Trade-

names

Customer

relation-

ships Backlog

Techno-

logy

Computer

software Total

Cost

Opening balance 2008 548,559 34,870 23,436 35,762 7,700 1,097 651,424

Additions 2008 – – – – – 3,955 3,955

Disposals 2008 – – – (35,762) – – (35,762)

Closing balance 2008 548,559 34,870 23,436 – 7,700 5,052 619,617

–

Opening balance 2009 548,559 34,870 23,436 – 7,700 5,052 619,617

Adjustment to the cost of previously recognized

business combinations (8,232) – – – – – (8,232)

Additions 2009 – – – – – 2,683 2,683

Disposals 2009 (34) – – – – (4,096) (4,130)

Transfer from tangible fi xed assets – – – – – 2,583 2,583

Closing balance 2009 540,293 34,870 23,436 – 7,700 6,222 612,521

Amortization and impairment losses

Opening balance 2008 – – (1,593) (34,474) (292) (312) (36,671)

Amortization 2008 – – (2,349) (1,288) (702) (840) (5,179)

Disposals 2008 – – – 35,762 – – 35,762

Closing balance 2008 – (3,942) – (994) (1,152) (6,088)

Opening balance 2009 – – (3,942) – (994) (1,152) (6,088)

Amortization 2009 – – (2,335) – (700) (4,333) (7,368)

Impairment loss 2009 (34) – (3,966) – – – (4,000)

Disposals 2009 34 – – – – 4,105 4,139

Transfer from tangible fi xed assets – – – – – (916) (916)

Closing balance 2009 – – (10,243) – (1,694) (2,296) (14,233)

Carrying amounts

Closing balance 2008 548,559 34,870 19,494 – 6,706 3,900 613,529

Closing balance 2009 540,293 34,870 13,193 – 6,006 3,926 598,288

14


The amortization in 2009 includes USD 2,000 relating to a book loss on the derecognition of Computer software.

In 2009 an amount of USD 4,000 was impaired for the Cash Generating Unit (CGU) Dockwise Yacht Transport for

the asset classes Goodwill (USD 34) and Customer Relationships (USD 3,966). The impairment refl ects current and

expected disappointing trading conditions mainly as a result of the economic worldwide downturn for this CGU.

Impairment testing for cash-generating units containing goodwill and/or tradenames

For the purpose of impairment testing, goodwill and trade names are allocated to the Group’s business segments

which represent the lowest level within the Group at which these intangibles are monitored for internal management

purposes.

The aggregate carrying amounts of goodwill and trade names allocated to each unit are as follows:

(x USD 1,000) 2009 2008

Goodwill

Trade-

names Goodwill

Trade-

names

Dockwise Heavy Lift 540,293 26,057 548,525 26,057

Dockwise Yacht Transport – 8,813 34 8,813

540,293 34,870 548,559 34,870

Value in use is determined by discounting the future cash fl ows generated from the continuing use of the unit and is

based on the following key assumptions:

• Cash fl ows are projected based on actual operating results and the 5-year business plan.

• Cash fl ows for a further period do not exceed the useful life of 50 years on a vessel basis. Cash fl ows after the

5-year business plan were extrapolated using a constant growth rate of 2% for Dockwise Heavy Lift and 3% for

Dockwise Yacht Transport, which does not exceed the long-term average rate for the industry. Management

believes that this forecast period was justifi ed due to the estimated useful life of the vessels. Vessels are

expected to have a 20-year Life Time Extension after 30 years.

• At the end of the extended life time of the vessels a cash-in is considered for the scrap value of the respective

divested vessels.

• A pre-tax discount rate of 9.0% (2008: 10.0%) was applied in determining the recoverable amount of the units.

The discount rate was estimated based on a weighted average cost of capital, which was based on an industry

average cost of equity.

The values assigned to the key assumptions represent management’s assessment of future trends in the Heavy Lift

and Yacht Transport Industry and are based on both external sources and internal sources.

The above estimates are particularly sensitive in the following areas:

• An increase of 1 percentage point in the discount rate used would have decreased the net recoverable amount for

the Dockwise Heavy Lift segment by USD 278,391 and for the Dockwise Yacht Transport segment by USD 11,948.

Such an increase would not lead to an impairment of goodwill for Dockwise Heavy Lift and to an impairment loss

of USD 11,294 for Dockwise Yacht Transport.

• A 1 percent decrease in future expected lower gross profi t in absolute number would have decreased the net

recoverable amount for the Dockwise Heavy Lift segment by USD 49,031 and for the Dockwise Yacht Transport

segment by USD 3,312 resulting in an impairment loss of USD 2,658.


Employee benefi ts

The Group makes contributions to two defi ned benefi t pension plans. Employees that joined the Group up till 2003

are entitled to a fi nal pay plan, whereas employees joining the Group after 2003 are entitled to an average pay plan.

The plan is reinsured with an external insurance company (Nationale Nederlanden).

15.1 Balance sheet

The amounts recognized in the balance sheet are determined as follows:

(x USD 1,000) 2009 2008

Present value of funded obligations 17,175 13,736

Fair value of plan assets (15,325) (12,267)

Present value of net obligations 1,850 1,469

Unrecognized actuarial gains and losses (5,858) (4,195)

Employee benefi t liability (asset) (4,008) (2,726)

Movements in the net employee benefi ts liability (asset) recognized in the balance sheet are as follows:

(x USD 1,000) 2009 2008

Net (asset) / liability for defi ned benefi t obligations at opening balance (2,726) (1,076)

Contributions paid (3,049) (3,177)

Expense recognized in the income statement 1,680 1,282

Actuarial losses (gains) recognized in income statement 201 97

Currency (gain) / loss (114) 148

Net (asset) / liability for defi ned benefi t obligations at (4,008) (2,726)closing balance

Movements in the defi ned benefi t obligations are as follows:

(x USD 1,000) 2009 2008

Opening balance 13,736 14,519 Service cost 1,234 1,305

Interest cost 747 771

Actuarial (gains) and losses 979 (1,969)

Benefi ts paid – (164)

Currency (gain) / loss 479 (726)

Closing balance 17,175 13,736

15


Movements in the fair value of plan assets are as follows:

(x USD 1,000) 2009 2008

Opening balance 12,267 12,887 Expected return on plan assets 301 794

Actuarial gains / (losses) (719) (3,780)

Contributions paid 3,049 3,177

Benefi ts paid – (164)

Currency gain / (loss) 427 (647)


15.2 Income statement

The amounts recognized in the income statement are as follows:

(x USD 1,000) 2009 2008

Current service cost 1,234 1,305

Interest cost 747 771

Expected return on plan assets (301) (794)

Recognized actuarial losses / (gains) 201 97

1,881 1,379

The expenses are all included in the “Administrative expenses” in the income statement.

15.3 Actuarial assumptions

The principal actuarial assumptions were as follows:

(x USD 1,000) 2009 2008 2007

Discount rate 5.10% 5.50% 5.40%

Expected return on plan assets 5.10% 5.50% 5.40%

Future salary increase (incl. infl ation adjustment) 3.00% 3.00% 5.00%

Future pension increases n/a n/a n/a

GBM/V GBM/V GBM/V

Mortality tables used 2005-2050 2005-2050 2005-2050

The retirement age within the Group is set at the age of 65.


15.4 Historical information

(x USD 1,000) 2009 2008 2007

Present value of defi ned benefi t obligation 17,175 13,736 14,519

Fair value of plan assets 15,325 12,267 12,887

Defi cit / (surplus) in the plan 1,850 1,469 1,632

Experience adjustment arising on plan liabilities (7) 729 –

Experience adjustment arising on plan assets (482) (3,132) (3,748)

The Group expects USD 3.2 million in contributions to be paid in respect of the funded defi ned benefi t

plans in 2010.


As part of the buy-out by 3i, Executive and Senior management and key employees of Dockwise Transport N.V. were

able to buy Dockwise shares based on a management participation agreement through Stichting

Administratiekantoor Dockwise. As a result management and (former) key-employees hold 517,668 shares through

this foundation at 31 December 2009.

As part of the OKI and ODL transaction management and key employees of these two companies received 344,567*

shares of which at 31 December 2009 17,141* shares are still subject to certain representations

and warranties and will be fully released from escrow in 2010.

As from 2008, the board of directors has awarded conditional shares with a vesting period of 3 years subject to

continued employment to Executive managers upon signing of their employment agreement. Under this agreement,

in 2008, Martin Adler has been conditionally awarded 10,027* shares with a vesting period of 3 years and

additionally in 2009 related to his 2008 performance 10,172* shares. Under the same arrangement Peter Wit has

in 2009 been conditionally awarded 24,633* shares with a vesting period of 3 years.

In 2009 the board of directors has approved a new performance related share based long-term incentive plan for

Executive, Senior Management and certain key employees (the “LTI”). The conditions under which shares are

awarded to Executive, Senior Managers and key employees under the LTI are still subject to approval by the general

meeting of shareholders. Under the LTI, the board of directors has the discretionary power to award conditional

shares with a vesting period of 3 years subject to continued employment and performance conditions.

During 2009 André Goedée, Peter Wit and Martin Adler have been awarded conditional shares under the proposed

LTI with a maximum underlying value of 100% of their annual base salary. Under the same LTI certain key employees

have been awarded conditional shares with an underlying value ranging up to 50% of their annual base salary.

This represents an expected total number of 69,636 shares.

16

* After reverse stock split


The terms and conditions relating to the grant of the shares are as follows:

Grant date Employee entitled Number of shares** Vesting conditions

1 May 2008 Executive Management 10,027 3 year’s service

27 February 2009 Executive Management 10,127 3 year’s service + TSR + EVA performance

1 September 2009 Executive Management 24,633 3 year’s service

January 2010 Executive and Senior Management 69,636* 3 year’s service

* Final number dependent on the fi rst 15 days of trading in January 2010.

** After reverse stock split.

The expenses related to the arrangement with Executive managers and the LTI can be summarized as follows:

(x USD 1,000) 2009 2008

Restricted share award Executive managers 345 126

LTI special restricted share award 108 –

Total expense recognized as personnel expenses 453 126

Inventories

Inventories include fuel, lubricants, spare parts and sea fastening amounting to USD 20,561 (2008: USD 16,909).

In 2009 fuel, lubricants, spare parts and sea fastening recognized as direct costs amounted to USD 73,825 (2008:

USD 94,840). No inventories are stated at fair value less costs to sell. Furthermore no inventories are subject to

retention of title clauses. In 2009 and 2008 no write-down of inventories was accounted for.

17


Trade and other receivables

A breakdown of trade and other receivables is as follows:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Trade receivables 40,757 26,110

Less: allowance for impairment (5,091) (329)

Trade receivables - net 35,666 25,781

MS3 receivables 8,658 26,635

Work in progress to be invoiced 17,471 16,297

Other receivables 3,001 8,166

Prepayments 4,275 11,600

Fair value derivatives 1,161 2,200

70,232 90,679

The MS3 receivables of USD 8,658 (2008: USD 26,635) relate to salvaging, transportation and other reinstatement

costs which are to be reimbursed by the former shareholder. Dockwise was compensated up to early May 2009 for

the missed Net Charter Income (revenues less contract related costs) of the MS3 by the former shareholders of

Dockwise Transport N.V.

Disputed receivable Mighty Servant 3

The Company has a claim of an amount of USD 44 million on the former shareholders of Dockwise Transport N.V.

related to the reinstatement of the Mighty Servant 3 and is currently being disputed by the former shareholders of

Dockwise Transport N.V. The former shareholders of Dockwise Transport N.V. are of the opinion that the released

escrow amounts are deemed to be compensation for any liability to this claim.

In June 2009 the remaining escrow amount (USD 34 million) related to the reinstatement of the Mighty Servant 3

was released to the Company and has been accrued and presented as a deduction of MS3 receivables of the

Company. The Company disputes the view of the former shareholders of Dockwise Transport N.V. that the released

amount covers the reinstatement of the Mighty Servant 3. The Company believes that its legal position on this issue

is correct and intends to fully pursue its claim, but no assurances can be given us to the outcome of this dispute.

Fair value derivatives

The fair value of derivatives of USD 1,161 (2008: USD 2,200) expires within 1 year.

18


Cash and cash equivalents

A breakdown of cash and cash equivalents is as follows:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Cash in bank and at hand 51,858 21,372

Cash and cash equivalents in the statement of cash fl ows 51,858 21,372

Capital and reserves attributable to the equity holders of the Company

Issued share capital

On 19 October 2009 Dockwise announced a balance sheet reinforcement which included an equity raising by a

directed placement and a subsequent offering. The equity raising resulted in the following changes in the number

of common shares:

• A direct placement of 37,732,920 new common shares to 5 existing shareholders;

• A direct placement of 60,681,660 new common shares to 3 new shareholders;

• A subsequent offering of 84,705,600 new common shares to existing shareholders following a rights issue.

The total number of outstanding common shares including the existing number of shares prior to the equity raising

(229,755,438) was 412,875,618. On 2 December 2009 a reduction of authorized and issued share capital of 4:1

was performed and a reverse stock split of 20:1 was performed.

After these events, at 31 December 2009, the authorized share capital comprised 25,000,000 ordinary shares of

USD 5 each. In total 20,643,780 (December 2008: 11,487,771) shares are issued and fully paid up. All shares

rank equally with regard to the Company’s residual assets. The holders of ordinary shares are entitled to receive

dividends as declared from time to time and are entitled to one vote per share at meetings of shareholders of

Dockwise.

The movement schedule of the number of ordinary shares (restated for the reverse stock split) is as follows:

Number of ordinary shares 2009 2008

On issue at opening balance - fully paid 11,487,771 11,487,771

Direct placement 4,920,729 –

Secondary offering 4,235,280 –

On issue at closing balance - fully paid 20,643,780 11,487,771

Share premium

The increase of the share premium reserve as a result of the capital reduction and the share issues includes

USD 13,180 for transaction related costs which were deducted from the proceeds of the shares issued in 2009.

19

20


Hedging reserve

Hedging reserve USD 35,443 negative (2008: USD 44,768 negative) comprises the effective portion of the

cumulative net change in the fair value of cash fl ow hedging instruments in respect of hedged transactions that have

not yet occurred.

Reserve own shares

The reserve own shares USD 885 negative (2008: USD 686 negative) comprises the cost of the Company’s shares

held by the Company for the purpose of servicing a share based payment plan for Executive management.

At 31 December 2009 the Group held 20,199 (2008: 8,966) of the Company’s shares for the purpose of a share

based payment plan for Executive management.

Dividends

In 2009 no dividends were paid. After the balance sheet date no dividend payments were approved.

Earnings per share

The calculation of 2009 basic earnings per share at 31 December 2009 amounting to USD 2.773 (2008: USD

3.813) was based on the profi t attributable to ordinary shareholders of USD 36,581 (2008: USD 46,976) and a

weighted average number of ordinary shares outstanding of 13,194,011 (2008: 12,320,796) calculated as follows:

Number of shares 2009 2008

Issued ordinary shares as at 1 January 12,317,238 12,326,858

Effects of:

Direct placement 538,799 –

Secondary offering 348,113 –

Purchase own shares (10,139) (6,062)

Weighted average 13,194,011 12,320,796

The calculation of 2009 diluted earnings per share at 31 December 2009 was based on profi t attributable to

ordinary shareholders of USD 36,581 (2008: USD 46,976) and a weighted number of ordinary shares outstanding

after adjustment for the effect of dilutive potential ordinary shares of 121,893 and amounts to USD 2.764

(2008: USD 3.811).

21


Non-current interest-bearing borrowings

This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For

more information about the Group’s exposure to interest rate and foreign currency risk, see note 25 “Financial risk

management”. A breakdown of interest-bearing borrowings is as follows:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Non-current liabilities

Non-current interest-bearing borrowings 670,253 991,345

670,253 991,345

Current liabilities

Current maturities of interest-bearing borrowings 9,393 10,000

9,393 10,000

Interest-bearing borrowings 679,646 1,001,345

The movement schedule of the Interest-bearing borrowings is as follows:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Opening balance 1,001,345 937,841 New Loan facilities – 80,000

Repayment of borrowings - Revolving Credit Facility – (20,000)

Repayment of borrowings - Scheduled (9,646) –

Repayment of borrowings - Debt Buy Back (cash) (129,091) –

Repayment of borrowings - Debt Buy Back (non-cash) (6,276) –

Repayment of borrowings - Divestment plant, property and equipment (8,000) –

Repayment of borrowings - Mandatory (178,803) –

Amortization of loan fees (non-cash) 10,117 3,504

Closing balance 679,646 1,001,345

At 31 December 2009, the Group has drawn four bank loans with an aggregate original nominal amount of USD

1,024,500. The bank loans are secured over the shares of all signifi cant subsidiaries and over heavy transport

vessels with a carrying amount of USD 923,184 (see note 13, “Property, plant and equipment”).

The outstanding balance excluding capitalized bank fees (USD 13,037) amounts to USD 692,683 as at

31 December 2009 (31 December 2008: USD 1,003,128). The secured bank loans bear a variable interest,

based on LIBOR plus an applicable margin of 1.25% to 4.50%. The loans mature between 2013 and 2016.

22


Terms

The key fi nancial covenants in the Senior Facilities Loan Agreement (‘SFA’) can be summarized as follows:

• the cash fl ow cover as of 31 December 2009 (i.e. the ratio of (a) consolidated cash fl ow to (b) consolidated net

charges payable in terms of interest and principal on loan facilities, including fi nance or capital leases) for any 12

months period commencing on the fi rst day of any calendar quarter shall not be less than 1:1;

• the interest cover (i.e. the ratio of (a) the consolidated, normalized EBITDA (*) to (b) the consolidated net payable/

earned interest) for any 12 months period commencing on the fi rst day of any calendar quarter shall not be less

than 2.25:1 (from 31 December 2009 and at all times);

• the leverage ratio (i.e. the ratio of (a) the consolidated total net debt to (b) the consolidated, normalized EBITDA

(*)) calculated on the last day of any 12 months period commencing on the fi rst day of any calendar quarter shall

not be higher than 4.0:1 (from 31 December 2009 and decreasing);

* The EBITDA has to be normalized for specifi c items as defi ned in the loan agreement. For this reason the EBITDA for the calculation of the covenants cannot be derived from

the fi gures in this annual report.

Provisions

The movement schedule of provisions is as follows:

(x USD 1,000) Restructuring Onerous contract Total

Opening balance 2009 656 – 656

Provisions made / (released) during the period 1,225 389 1,614

Provisions used during the period (1,790) – (1,790)

Closing balance 2009 91 389 480

Non-current – – –

Current 91 389 480

91 389 480

The restructuring costs relate to a reorganization provision. Due to a relocation of the selling offi ce in Houston (USA)

the Group has ceased to use this offi ce space. The obligation for future payments has been provided for as onerous

contract as the contract was a non-cancellable lease.

23


Trade and other payables

A breakdown of trade and other payables is as follows:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Other trade payables 24,032 3,621

Fair value derivatives 39,316 46,968

Deferred income 39,741 35,884

Advances on contracts 12,027 10,564

Investment obligations – 21,346

Non-trade payables and accrued expenses 32,271 57,108

Due within 1 year 147,387 175,491

The investment obligations related to the contractual obligations for the Triumph and Trustee after delivery of the

vessels. For the contractual maturities of the derivatives reference is made to note 25 ”Financial Risk Management”.

Financial risk management

Overview

The Group has exposure to the following risks from its use of fi nancial instruments:

• Credit risk

• Liquidity risk

• Market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives,

policies and processes for measuring and managing risk, and the Group’s management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk

management framework.

The Group’s risk management policies are established to identify and analyze the risk faced by the Group, to set

appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and

systems are reviewed regularly to refl ect changes in market conditions and the Group’s activities.

Credit risk

Credit risk is the risk of fi nancial loss to the Group if a customer or counterpart to a fi nancial instrument fails to

meet its contractual obligations, and arises principally from the Group’s receivables from customers.

Trade and other receivables

The Group has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit

evaluations are performed on new customers requiring credit over a certain amount, although usually freight income is

invoiced and paid before discharging. Project management and engineering contracts are largely based on pre-fi nancing

by customers in order to limit the credit risk. The Group does not require collateral in respect of fi nancial assets.

24

25


Investments

Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal to or

better than the Group. Transactions involving derivative fi nancial instruments are with counterparties with sound

credit ratings. Given their high credit ratings, management does not expect any counterparty to fail to meet its

obligations.

The maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset, including

derivative fi nancial instruments, in the balance sheet.

Guarantees

The Group’s policy is to provide fi nancial guarantees in respect of long-term contracts for pre-paying customers and

fi nancial guarantees in relation to the yards with respect to the construction or conversion of vessels e.g.

Exposure to credit risk

The carrying amount of fi nancial assets represents the maximum credit exposure. The maximum exposure to credit

risk at the reporting date was:

Carrying amount

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Trade and other receivables excluding derivatives 69,071 88,479

Derivatives 1,161 2,200

Cash and cash equivalents 51,858 21,372

122,090 112,051

The trade and other receivables excluding derivatives include receivables totaling USD 8,658 (2008: USD 26,635)

in relation to the sinking of the MS3 (see note 18 for further information on this receivable). The maximum exposure

to credit risk for trade receivables at the reporting date by kind of trade debtors was:

Carrying amount

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Dockwise Heavy Lift 68,685 87,988

Dockwise Yacht Transport 386 491

69,071 88,479

The trade receivables from the Heavy Transport segment are receivables from industrial customers and for the Yacht

Transport segment receivables mainly from private individuals. Since the individual contract values in the Heavy

Transport segment are relatively high the outstanding trade receivables are due from a relative small number of

customers. To a large extent the credit risk for both segments is mitigated as the majority of the freight is paid prior to

discharging. As at 31 December 2009 the largest individual outstanding trade receivable amounts to USD 12 million.


As of 31 December 2009, receivables with a total amount of USD 5,091 (2008: USD 329) were impaired.

The impairment allowance is based on an individual assessment of the recoverable amounts of the receivables.

An impairment allowance of USD 4,762 (2008: reversal USD 182) in respect of trade receivables was recognized in

”Revenue”. The ageing of the impaired receivables as of 31 December 2009 is:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

< 1 year 3,979 113

1-2 years 896 –

2-5 years 216 216

> 5 years – –

5,091 329

The movement in the allowance for impairment during 2009 is as follows:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Opening balance 329 5,029

Impairment loss / (release) recognized 4,762 (182)

Receivables written off – (4,518)

Closing balance 5,091 329

The allowance accounts in respect of trade receivables are used to record impairment losses unless the Group is

satisfi ed that no recovery of the amount receivable is possible; at that point the amount considered irrecoverable is

directly written off against the allowance.

As at 31 December 2009 trade receivables of USD 12,045 (2008: USD 20,996) are overdue, but not impaired as

this amount is largely received in 2010. The ageing of these receivables is as follows:

(x USD 1,000) 31 Dec 2009 31 Dec 2008

< 6 months 9,884 19,980

6-12 months 1,329 921

> 1 year 832 95

12,045 20,996


Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its fi nancial obligations as they fall due. The Group’s

approach to managing liquidity is to ensure, as far as possible, that it will always have suffi cient liquidity to meet its

liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking

damage to the Group’s reputation. The Group incorporated a short-term and a long-term cash fl ow projection

procedure in order to manage future cash fl ows.

The Group’s operational cash fl ow is largely based on pre-fi nancing by customers in order to cover its operational

direct expenses. In addition, the Group holds a Revolving Credit Facility of USD 60 million that can be drawn down

to meet short-term fi nancing needs. The applicable interest rate on this facility is LIBOR plus 125 basis points.

The following are the contractual maturities of fi nancial liabilities, including interest payments and excluding the

impact of netting agreements.

31 December 2009

Carrying

amount

Contrac-

tual

cash fl ows

6 months

or less

6-12

months

1-2

years

2-5

years

More

than

5 years(x USD 1,000)


Secured bank loans 679,646 (793,906) (13,741) (13,706) (29,654) (62,335) (674,470)

Trade and other payables* 108,071 (108,071) (108,071) – – – –

–

Derivative fi nancial liabilities –

Interest rate swaps used

for hedging 38,941 (70,226) (11,957) (11,631) (26,146) (20,492) –

European currency options (1,161) 469 571 (102) – – –

Forward exchange contracts used

for hedging infl ow 375 (189) – (189) – – –

825,872 (971,923) (133,198) (25,628) (55,800) (82,827) (674,470)

* Excludes derivatives (shown separately).


31 December 2008

Carrying

amount

Contrac-

tual

cash fl ows

6 months

or less

6-12

months

1-2

years

2-5

years

More

than



Secured bank loans 1,001,345 (1,481,272) (40,297) (40,297) (161,426) (247,974) (991,278)

Trade and other payables* 128,523 (128,523) (128,523) – – – –

Derivative fi nancial liabilities

Interest rate swaps used for

hedging 46,968 (64,620) (11,833) (11,096) (17,183) (24,508) –

European currency options (900) 4,122 2,888 1,234 – – –

Forward exchange contracts used

for hedging infl ow (1,300) 1,230 1,444 (214) – – –

1,174,636 (1,669,063) (176,321) (50,373) (178,609) (272,482) (991,278)


The following table indicates the periods in which the cash fl ows associated with derivatives that are cash fl ow hedges

are expected to occur. This table is also indicative for the moment cash fl ows will affect the income statement.

31 December 2009

Carrying

amount

Expected

cash fl ows

6 months

or less

6-12

months

1-2

years

2-5

years

More

than


Interest rate swaps

Assets – 4,517 804 768 1,574 1,371 –

Liabilities (38,941) (74,743) (12,761) (12,399) (27,720) (21,863) –

European currency options

Assets 1,161 30,251 25,930 4,321 – – –

Liabilities – (29,782) (25,359) (4,423) – – –

–

Forward exchange contracts Assets – 7,099 – 7,099 – – –

Liabilities (375) (7,288) – (7,288) – – –

(38,155) (69,946) (11,386) (11,922) (26,146) (20,492) –


31 December 2008

Carrying

amount

Expected

cash fl ows

6 months

or less

6-12

months

1-2

years

2-5

years

More

than


Interest rate swaps:

Assets – 31,493 6,264 5,619 8,704 10,906 –

Liabilities (46,968) (96,113) (18,097) (16,715) (25,887) (35,414) –


Assets 900 40,637 20,875 19,762 – – –

Liabilities – (44,759) (23,763) (20,996) – – –

Forward exchange contracts

Assets 1,300 20,644 6,453 14,191 – – –

Liabilities – (21,874) (7,897) (13,977) – – –

(44,768) (69,972) (16,165) (12,116) (17,183) (24,508) –

Market risk

Currency risk

The Group is exposed to currency risk on purchases and to a small extent to sales that are denominated in a

currency other than the U.S. Dollar (USD), the functional currency of the major Group entities. The currency in which

these transactions primarily are denominated is Euro.

The Group applies a policy of managing the 12-months position of mainly the Euro with hedging being applied to a

maximum of 80% of the net cash fl ows. The Group uses forward contracts and zero-cost collar options to hedge its

exposure.

Interest on borrowings is denominated in USD which matches the cash fl ows generated by the underlying operations

of the Group. This provides an economic hedge and no derivatives are entered into.

In respect of other monetary assets and liabilities denominated in other foreign currencies than Euro the Group

ensures that its net exposure is kept to an acceptable level. These assets and liabilities are not material in respect

of the total activities of the Group.

The Group’s investments in non-USD denominated subsidiaries are not hedged as those currency positions are

considered to be long-term in nature.


Exposure to currency risk

The Group’s exposure to foreign currency risk was as follows based on notional amounts:

31 December 2009 31 December 2008

(x 1,000) EUR GBP NOK EUR CAN SGD

Bank account 8,628 - - - - –

Trade and other receivables 494 - - 2,036 393 –

Trade payables (3,220) (182) (2,476) (7,357) - –

Gross balance sheet exposure 5,902 (182) (2,476) (5,321) 393 –

Estimated forecast sales 2010 / 2009 – – – - 6,674 –

Estimated forecast purchases 2010 / 2009 (31,300) – – (33,700) – (11,000)

Gross exposure (25,398) (182) (2,476) (39,021) 7,067 (11,000)

Forward exchange contracts 31,500 – – 29,200 (6,526) 9,855

Net exposure 6,102 (182) (2,476) (9,821) 541 (1,145)

The following signifi cant exchange rates applied during the year:

USD 31 Dec 2009 31 Dec 2008

Average rate Euro/USD 1.396 1.477

Reporting date mid-spot rate Euro/USD 1.439 1.400

Sensitivity analysis

A 10% weakening of the USD against below mentioned currencies at 31 December would have (decreased) /

increased equity and profi t or loss by the amounts shown below. This analysis assumes that all other variables, in

particular interest rate, remain constant.

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Effect on income statement profi t or (loss):

Euro 849 (745)

Canadian dollar – 32

Singapore dollar – –

British pound (29) –

Norwegian crone (42) –

A 10% strengthing of the USD against the Euro at 31 December would have had the equal but positive effect on the

amounts shown above, on the basis that all other variables remain constant.


Interest rate risk

The Group adopts a policy of ensuring that at least 80 percent of its exposure to changes in interest rates on

borrowings is on a fi xed rate basis. This is achieved by entering into interest rate swaps.

At the reporting date the interest rate profi le of the Group’s interest-bearing fi nancial instruments was:

Variable rate instruments

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Financial assets 51,858 21,372

Financial liabilities (692,683) (1,024,500)

Fair value sensitivity analysis

The Group does not account for any fi xed rate fi nancial assets and liabilities at fair value through profi t and loss, and

the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge

accounting model.

A decrease of 100 basis points in interest rates at the reporting date would have increased (or decreased) equity

and profi t or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign

currency rates, remain constant.

(x USD 1,000) Profi t or loss Equity

31 December 2009

Variable rate instruments (519) –

Interest rate swap – (757)

Cash fl ow sensitivity (net) (519) (757)

31 December 2008

Variable rate instruments 2,600 –

Interest rate swap – (965)

Cash fl ow sensitivity (net) 2,600 (965)

Fuel price risk

The Group includes fuel escalation clauses in its contracts in order to minimize the exposure to increasing fuel prices.


Fair values

The fair values of fi nancial assets and liabilities, together with the carrying amounts shown in the balance sheet,

are as follows:


(x USD 1,000) Carrying amount Fair value Carrying amount Fair value

Trade and other receivables * 69,071 69,071 88,479 88,479

Cash and cash equivalents 51,858 51,858 21,372 21,372

Interest rate swaps used for hedging

Assets – – – -

Liabilities (38,941) (38,941) (46,968) (46,968)


Assets 1,161 1,161 900 900

Liabilities – – – -

Forward exchange contracts used for hedging

Assets - – 1,300 1,300

Liabilities (375) (375) – –

Non-current interest-bearing borrowings (670,253) (683,290) (991,345) (1,014,500)

Trade and other payables * (108,071) (108,071) (128,523) (128,523)

Current maturities of interest-bearing borrowings (9,393) (9,393) (10,000) (10,000)

(704,943) (717,980) (1,064,785) (1,087,940)

Unrecognised (loss) gain (13,037) (23,155)


Basis for determining fair value

The basis for determining fair values in the table above is discussed in note 4.


Interest rates used for determining fair value

The interest rates used to discount estimated cash fl ows, where applicable, are based on the relevant market

interest rate at the reporting date and were as follows:

In % 31 Dec 2009 31 Dec 2008

Derivatives 0.25 1.46

Loans and borrowings 0.25 1.46

Forecasted transactions

The Group classifi es its currency options and forward exchange contracts as cash fl ow hedges and states them at

fair value. The notional amounts and fair values of the contracts outstanding as per 31 December 2009 are as

follows:


(x USD 1,000) Notional amount Fair value Notional amount Fair value

Participating forward EUR/USD, 100% purchased

call option part 30,216 1,161 40,880 900

Participating forward EUR/USD, 50% sold put

option part 15,108 – 20,440 –

Forward contracts to sell CAD/USD – – 5,349 1,198

Forward contracts to sell SDG/USD – – 6,847 102

Forward contracts to sell EUR/USD 15,108 (375) – –

The remaining time to maturity does not exceed one year. The maturity dates of the individual call option contracts

match the estimated underlying cash fl ow pattern. The maturity dates are equally divided over the year.

The fair value of the (participating) forwards at 31 December 2009 is USD 786 (2008: USD 2,200), of which

USD 1,161 is included in Trade and other receivables (note 18) and USD 375 negative is included in Trade and

other payables (note 24) as part of the fair value derivatives.


Hedging

The Group adopts a policy of ensuring that part of its exposure to changes in interest rates on borrowings is on a

fi xed rate basis. Interest rate swaps, denominated in USD, have been entered into to achieve an appropriate mix of

fi xed and fl oating rate exposure within the Group’s policy. The notional amounts and fair values of the outstanding

six swaps can be specifi ed as follows:


(x USD 1,000) Notional amount Fair value Notional amount Fair value

Floating to fi xed swapsMaturing 31 December 2009, fi xed at 3.87% 15,000 – 15,000 (398)

Maturing 30 June 2010, fi xed at 4.73% 159,200 (2,972) 179,200 (7,780)





Maturing 30 June 2012, fi xed at 1.88% 150,000 (1,227) – (900)

763,044 (38,941) 743,000 (46,968)

The fair value of the swaps at 31 December 2009 is USD 38,941 (2008: USD 46,968) presented as a liability in

Trade and other payables (note 24) as part of the fair value derivatives.

Interest-bearing borrowings

Fair value is calculated based on discounted expected future principal and interest cash fl ows.

Trade and other receivables and payables

For receivables and payables with a remaining life of less than one year, the notional amount is deemed to refl ect

the fair value. All other receivables and payables are discounted to determine the fair value.

Capital management

The Board’s policy is to maintain a strong capital base and aim for an optimal solvency ratio. If the cash fl ow of the

Company after investment opportunities in the worldwide organization, commercial projects, people and assets is

suffi cient, dividends will be paid out to shareholders in order to insure long term shareholder value creation. Neither

the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

In 2009, based on this policy, the board decided to issue USD 250 million of new capital to reinforce its capital

structure.


Operating leases

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

Operating leases

(x USD 1,000) 31 Dec 2009 31 Dec 2008

Less than one year 3,671 3,646

Between one and fi ve years 9,457 10,570

More than fi ve years 3,961 6,330

17,089 20,546

The Group leases offi ces in Breda (The Netherlands), Houston (USA), Shanghai (China), Busan (Korea), Perth

(Australia) and Fort Lauderdale (USA) and a warehouse in Breda (The Netherlands). Furthermore the Company has

entered into lease agreements for company cars. All lease commitments are categorized as operating lease. The

offi ce leases typically run for a period of fi ve to ten years, with an option to renew the lease after that date. Car

leases run for a period of four years.

During the year ended 31 December 2009, USD 4,420 (2008: USD 3,874) was recognized as an expense in the

income statement in respect of operating leases.

Capital commitments

As at 31 December 2009, the Group has remaining investment commitments for a total value of approximately USD

4 million (2008: USD 19 million including a contract to reinstate the Mighty Servant 3).

Contingencies

28.1 Bank Guarantees

At 31 December 2009, the Group has bank guarantees with a total amount of USD 28.1 million

(2008: USD 20.2 million) of which USD 9.4 million is outside the Revolving Facility of USD 60 million

(2008: USD 60 million).

28.2 Litigation

Some Group companies are, as a result of their normal business activities, involved either as plaintiffs or

defendants in claims. Based on the information presently available and management’s best estimate the fi nancial

position of the Group is not likely to be signifi cantly infl uenced by any of these matters. Should the actual outcome

differ from the assumptions and estimates, the fi nancial position of the Group would be impacted.

26

27

28


Related parties

The Group has a disputed receivable on the former shareholders of Dockwise Transport N.V. related to the Mighty

Servant 3 (see note 18). The Board of Directors and members of the Executive Management are defi ned as related

parties.

29.1 Related party transactions

There were no transactions with related parties in 2009 and 2008.

During the year 2009 and 2008 the Group received no charges from related parties and neither did the Group recharge

certain amounts to related parties, except for the remuneration of Board of Directors and Executive Management.

Group entities

Control of the Group

Dockwise Ltd. (“Dockwise”) is listed at both the Oslo Stock Exchange (OSE) and NYSE Euronext Amsterdam

(Euronext).

List of Group companies (legal entities)

The following group companies are included in the consolidation:

Name

Country of

incorporation

Ownership interest

31 Dec 2009 31 Dec 2008

Dockwise Ltd. Bermuda 100% 100%

Delphi Acquisition Holding S.A. * Luxembourg – 100%

Delphi Acquisition Holding B.V. The Netherlands 100% 100%

Delphi Acquisition Holding I B.V. The Netherlands 100% 100%

Delphi Finance A B.V. The Netherlands 100% –

Delphi Finance B B.V. The Netherlands 100% –

Dockwise Transport N.V. Netherlands Antilles 100% 100%

Dockwise Transport B.V. The Netherlands 100% 100%

Dockwise Shipping B.V. The Netherlands 100% 100%

Dockwise B.V. The Netherlands 100% 100%

Dockwise U.S.A. LLC United States of America 100% 100%

Dockwise Shanghai China 100% 100%

Dockwise Korea YH Korea 100% 100%

Dockwise Australia PTY-Ltd. Australia 100% 100%

Dockwise Transport Nigeria Ltd. Nigeria 100% 100%

Dockwise Transport Services Brasil Ltda. Brasil 100% 100%

Dockwise Shipping B.V. (Singapore Branch) Singapore 100% –

Dockwise Transport Services S.A. de C.V. Mexico 100% –

Dockwise OOO ** Russia 100% –

Dockwise Malaysia Sdn Bhd Malaysia 50% –

DYT Netherlands B.V. The Netherlands 100% 100%

Dockwise Yacht Transport USA LLC United States of America 100% 100%

Dockwise Yacht Transport (France) Sarl *** France 100% 100%

DYT Europe SRL Italy 100% 100%

Offshore Kinematics Holding Inc. United States of America 100% 100%

Offshore Kinematics Inc. United States of America 100% 100%

29

30


Name

Country of

incorporation

Ownership interest

31 Dec 2009 31 Dec 2008

Ocean Dynamics LLC United States of America 100% 100%

Ocean Dynamics China 100% 100%

Super Servant 3 B.V. The Netherlands 100% 100%

Super Servant 4 B.V. The Netherlands 100% 100%

Transshelf B.V. The Netherlands 100% 100%

Mighty Servant 1 B.V. The Netherlands 100% 100%

Mighty Servant 3 B.V. The Netherlands 100% 100%

Dock Express 10 B.V. **** The Netherlands 100% 100%

Dock Express 12 B.V. **** The Netherlands 100% 100%

Swan B.V. The Netherlands 100% 100%

Swift B.V. The Netherlands 100% 100%

Teal B.V. The Netherlands 100% 100%

Tern B.V. The Netherlands 100% 100%

Black Marlin B.V. The Netherlands 100% 100%

Blue Marlin B.V. The Netherlands 100% 100%

Dockwise Enterprise B.V. The Netherlands 100% 100%

Dockwise Explorer B.V. The Netherlands 100% 100%

Yacht Express B.V. The Netherlands 100% 100%

Dockwise Transporter B.V. The Netherlands 100% 100%

Target B.V. The Netherlands 100% 100%

Talisman B.V. The Netherlands 100% 100%

Treasure B.V. The Netherlands 100% 100%

Triumph B.V. The Netherlands 100% 100%

Trustee B.V. The Netherlands 100% 100%

* Company liquidated in the course of 2009

** Incorporation in process

*** Liquidation in process

**** Vessel has been sold in the course of 2009


Accounting estimates and judgments

Management discussed the development, selection and disclosure of the Group’s critical accounting policies and

estimates and the application of these policies and estimates.

Valuation of the Group’s Heavy Transport vessels

In accordance with IAS 16 (Property, Plant & Equipment), the Group has adopted the component approach for the

heavy transport and other vessels under which different components have different economic lives.

• Hull 30 years and up to 50 years after Life Time Extension

• Accommodation 30 years

• Electrical machinery 20 years

• Engines 30 years

• Ballast tank/systems 30 years

• Navigations 5 years

• Auxiliary machines 20 years

• Safety equipment 20 years

• Survey & docking 5 years

The estimation could change signifi cantly as a result of technical innovations and competitor actions in response to

severe industry cycles. In case it appears that actual useful lives are less than previously estimated lives,

management will adjust the depreciation period. Moreover, management will write off or write down technically

obsolete or non-strategic (components of) assets that have been sold or put out of service.

In calculating the book values of the vessels, management has also taken into account certain residual values,

which are based on the scrap value.

Impairment testing for cash-generating units containing goodwill and tradenames

The impairment testing for cash-generating units containing goodwill and tradenames requires a number of

estimates and judgments in order to calculate the net present value of future cash fl ows such as the development

of revenues and costs, future investments, residual values at the end of the useful life of vessels, the discount rate

etc. The key assumptions used for the impairment testing of goodwill and tradenames are discussed in note 14

“Intangible assets”.

Defi ned benefi t pension obligations

The present value of the Group’s pension obligations depends on a number of factors that are determined on an

actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for

pensions include the discount rate. Any changes in the assumptions will impact the carrying amount of pension

obligations. The calculation of the pension obligations is performed by a qualifi ed actuary.

Management determines the appropriate discount rate at the end of each year. This is the interest rate that should

be used to determine the present value of estimated future cash outfl ows, which are expected to be necessary to

settle the pension obligations. In determining the appropriate discount rate, management considers the interest

rates of high-quality corporate bonds that are denominated in the currency in which the pension benefi ts will be paid,

and that have terms to maturity approximating the terms of the related pension liability.

Other key assumptions for pension obligations are based in part on current market conditions.

Additional information is disclosed in note 15 “Employee benefi ts”.

31



Company Balance Sheet as at 31 December 2009 134

Company Income Statement for the Year ended 31 December 2009 135

Notes to the Company Financial Statements 136

134

Company Balance Sheet

As at 31 December 2009

(× USD 1,000)

Note 31 Dec 2009 31 Dec 2008

Assets

Non-current assets3 Property, plant and equipment – 71

4 Financial fi xed assets 853,818 467,749

853,818 467,820Current assets

5 Receivables from group companies 23,333 121,550

Trade and other receivables – 299

Cash and cash equivalents 330 58

23,663 121,907

Total assets 877,481 589,727

Equity and liabilities

Equity

Capital and reserves attributable to equity holders of the CompanyIssued share capital 103,219 229,755

Share premium 783,008 420,580

Reserves (36,328) (45,454)

Retained earnings (28,218) (75,647)

Unappropriated result 36,581 46,976

6 Total equity 858,262 576,210

Liabilities

Current liabilitiesTrade and other payables 1,427 157

5 Payables to group companies 17,094 13,098

Income tax liabilities 66 –

Other payables and accrued expenses 632 262

Total liabilities 19,219 13,517

Total equity and liabilities 877,481 589,727



Company Income Statement


Note (× USD 1,000) 2009 2008

Share in result from participating interests, after tax 43,510 50,089

Other income (expenses) after tax (6,929) (3,113)

Profi t / (loss) for the period 36,581 46,976

136

Reporting entityIn the context of the Company Financial Statements, “the Company” refers to Dockwise Ltd.

Signifi cant accounting principlesRegarding the principles for recognition and measurement of assets and liabilities and determination of the profi t

(hereinafter referred to as principles for recognition and measurement) in the Company Financial Statements,

Dockwise Ltd. uses the option provided in Section 362, sub 8 of Book 2 of the Dutch Civil Code. This means that

the principles for recognition and measurement are the same as those applied for the Consolidated Financial

Statements of the Dockwise Group. These Consolidated Financial Statements have been prepared in accordance

with International Financial Reporting Standards as adopted by the European Union (EU-IFRS). For a detailed

description of the accounting principles applied reference is made to the Consolidated Financial Statements,

with the exception of the following:

(I) Financial fi xed assets

The fi nancial fi xed assets include the participating interests in group companies. The participating interests in group

companies are stated at equity value less a provision for impairment, if applicable.

(II) Current assets and liabilities

With regard to the accounting principles for current assets and liabilities reference is made to the Notes on the

Consolidated Financial Statements.

(III) Receivables from group companies

The receivables from participating interests in group companies are recognized initially at fair value plus any directly

attributable transaction cost. Subsequent to initial recognition they are stated at amortized cost less a provision for

impairment. A provision for impairment is established when there is objective evidence that the Company will not be

able to collect all amounts due according to the original terms of the loan agreements. The amount of the provision

is the difference between the carrying amount of the loans and the present value of estimated future cash fl ows.

The amount of the provision is recognized in the income statement.

(IV) Result from participating interests

The share in the result of participating interests consists of the share of the Company in the result of these

participating interests. Results on transactions, with the transfer of assets and liabilities between the Company and

its participating interests and between participating interests, are not recorded insofar these are unrealized.

If there is no further explanation provided to the items in the company balance sheet and the company profi t and

loss account reference is made to the relevant notes in the Consolidated Financial Statements.

1

2

Notes to the Company Financial Statements



Disclosures to items of the Company Financial Statements


Property, plant and equipment include “Other operating assets”. The movement schedule is as follows:

Other operating assets

(× USD 1,000) 2009 2008

Cost

Opening balance 71 –

Additions – 71

Disposals (71) –

Closing balance – 71

Depreciation and impairment losses

Opening balance – –

Depreciation 2009 (71) –

Reversal of depreciation on disposed assets 71 –

Closing balance – –

Carrying amounts

Closing balance – 71

3

138

Financial fi xed assets

The fi nancial fi xed assets include participating interests in group companies. At 31 December 2009 the Company

directly holds all the shares in Delphi Acquisition Holding B.V., the Netherlands and at 31 December 2008 the

Company directly held all the shares in Delphi Acquisition Holding SA, Luxembourg. On 18 December 2009 Delphi

Acquisition Holding SA was liquidated. The movement schedule is as follows:

Participating interests in group companies

2009 2008(x USD 1,000)

Opening balance 467,749 441,816

Equity contributions 362,582 -

Share in result of participating interests 43,510 50,089

Adjustment purchase price allocation (8,232) -

Investments 252 -

Divestments (21,368) -

Other movements 9,325 (24,156)

-


The other movements relate to fair value adjustments of interest rate swaps included directly in equity of operating

companies.

Receivables and payables from group companies

Receivables and payables from group companies are unsecured in nature and bear no interest.

4

5



Shareholders’ equity

Movements in shareholders’ equity during 2009, before appropriation of the net profi t, are as follows:


(x USD 1,000)

Issued

share

capital

Share

premium

Hedging

reserve

Reserve

own

shares

Retained

earnings

Unappro-

priated

result Total

Opening balance 2008 229,755 420,580 (20,612) – – (75,773) 553,950

Total recognized income and expense – – – – – 46,976 46,976

Appropriation of result – – – – (75,773) 75,773 –

Effective portion of changes in fair value of

cash fl ow hedges – – (24,156) – – – (24,156)

Purchase own shares – – – (686) – – (686)

Share based payments – – – – 126 – 126

Closing balance 2008 229,755 420,580 (44,768) (686) (75,647) 46,976 576,210

Opening balance 2009 229,755 420,580 (44,768) (686) (75,647) 46,976 576,210

Issue of ordinary shares related to direct placement 98,415 28,360 – – – – 126,775

Issue of ordinary shares related to secondary offering 84,707 24,410 – – – – 109,117

Capital reduction (309,658) 309,658 – – – – –

Effective portion of changes in fair value of

cash fl ow hedges – – 5,732 – – – 5,732

Net change in fair value of cash fl ow hedges

transferred to profi t or loss – – 3,593 – – – 3,593

Share based payments – – – – 453 – 453

Own shares acquired – – – (199) - – (199)

Appropiation of result – – – – 46,976 (46,976) –

Total recognized income and expense – – – – – 36,581 36,581

Closing balance 2009 103,219 783,008 (35,443) (885) (28,218) 36,581 858,262

On 19 October 2009 the Company announced a balance sheet reinforcement which included an equity raising by a

directed placement and a subsequent offering. The equity raising resulted in the following changes in the number of

common shares:

• A direct placement of 37,732,920 new common shares to 5 existing shareholders;

• A direct placement of 60,681,660 new common shares to 3 new shareholders;

• A subsequent offering of 84,705,600 new common shares to existing shareholders following a rights issue.

6

140

The total number of outstanding common shares including the existing number of shares prior to the equity raising

(229,755,438) was 412,875,618. On 2 December 2009 a reduction of authorized and issued share capital of 4:1

was performed and a reverse stock split of 20:1 was performed.

After these events, at 31 December 2009, the authorized share capital comprised 25,000,000 ordinary shares of

USD 5 each. In total 20,643,780 (December 2008: 11,487,771) shares are issued and fully paid up. All shares

rank equally with regard to the Company’s residual assets. The holders of ordinary shares are entitled to receive

dividends as declared from time to time and are entitled to one vote per share at meetings of shareholders of

Dockwise.

The movement schedule of the number of ordinary shares (restated for the reverse stock split) is as follows:

Number of ordinary shares 2009 2008

On issue at opening balance - fully paid 11,487,771 11,487,771

Direct placement 4,920,729 –

Secondary offering 4,235,280 –

On issue at closing balance - fully paid 20,643,780 11,487,771

Share premium

The increase of the share premium reserve as a result of the capital reduction and the share issues includes

USD 13,180 for transaction related costs which were deducted from the proceeds of the shares issued in 2009.

Hedging reserve

Hedging reserve USD 35,443 negative (2008: USD 44,768 negative) comprises the effective portion of the

cumulative net change in the fair value of cash fl ow hedging instruments in respect of hedged transactions that have

not yet occurred.

Reserve own shares

The reserve own shares USD 885 negative (2008: USD 686 negative) comprises the cost of the Company’s shares

held by the Company for the purpose of servicing a share based payment plan for Executive Management. At 31

December 2009 the Group held 20,199 (2008: 8,966) of the Company’s shares for the purpose of a share based

payment plan for Executive Management.

Dividends

In 2009 no dividends were paid. After the balance sheet date no dividend payments were approved.

Personnel

Throughout 2009 (and 2008) the Company employed no personnel.

7




In regards to the Share based payments to staff and the Board of Directors, we refer to note 16 of the Consolidated

Financial Statements.

Off-balance sheet commitments

As at 31 December 2009 and 31 December 2008, the Group has no capital commitments or other contingencies.

For off-balance sheet commitment for the Group reference is made to Note 27 and Note 28 of the Consolidated

Financial Statements.

Fiscal entity

The company constitutes a fi scal entity with its subsidiaries for turnover tax; the standard conditions prescribe that

all companies of the fi scal entity are liable for the turnover tax payable as of 1 October 2009. The company is not

part of the fi scal entities for income tax purposes within the Group.

Fees of the auditor

With reference to Section 2:382a (1) and (2) of the Dutch Civil Code, the fees for the fi nancial year due to

Company’s external auditor, KPMG Accountants N.V. in the Netherlands, and other KPMG member fi rms amounted to

USD 1,096 for 2009 (2008: USD 1,019). The fees as included under other general and administration expenses in

the income statement can be specifi ed as follows:

2009 2008

(x USD 1,000)

KPMG

Accountants

N.V.

KPMG

other Total

KPMG

Accountants

N.V.

KPMG

other Total

Audit of the annual report 530 – 530 289 – 289

Other audit assignments 385 – 385 29 – 29

Tax services – – – – – –

Other non-audit activities 181 – 181 16 685 701

1,096 – 1,096 334 685 1,019

8

9

10

142

Remuneration of Board of Directors and Executive Management

11.1 Remuneration of Board of Directors

The remuneration, including pension obligations as intended in Section 2:383 of the Dutch Civil Code, which were

charged in the fi nancial year to the Company and group companies, amounted to USD 602,000 in 2009

(2008: USD 696,000) for the Board of Directors and USD 2,397,000 in 2009 (2008: 4,647,000) for the Executive

Management.

The compensations of Board of Directors in 2009 are as follows:

2009

Base salary

Bonus paid in

the year Other benefi ts

Total salary

and other

taxable income

Pension

premium Total(x USD)

A. Baan 140,000 – – 140,000 – 140,000

A. Goedée – – – – – –

M. Antal 1 70,000 – – 70,000 – 70,000

B. Bekker 2 35,000 – – 35,000 – 35,000

T. Ehret 84,000 – – 84,000 – 84,000

D. McNease 84,000 – – 84,000 – 84,000

R. van Slobbe 98,000 – – 98,000 – 98,000

P. F. Tali 84,000 – – 84,000 – 84,000

J. van Wiechen 3 7,000 – – 7,000 – 7,000

602,000 – – 602,000 – 602,000

1 pro rata (ending date: October 2009)

2 pro rata (ending date: May 2009)

3 pro rata (starting date: December 2009)

The compensations of Board of Directors in 2008 are as follows:

2008

Base salary

Bonus paid in


Total salary

and other

taxable income

Pension


A. Baan 148,000 – – 148,000 – 148,000

A. Goedée – – – – – –

M. Antal 89,000 – – 89,000 – 89,000

B. Bekker 89,000 – – 89,000 – 89,000

T. Ehret 89,000 – – 89,000 – 89,000

D. McNease 89,000 – – 89,000 – 89,000

R. van Slobbe* 103,000 – – 103,000 – 103,000

P. F. Tali 89,000 – – 89,000 – 89,000

696,000 – – 696,000 – 696,000

* Includes remuneration for the Audit Committee and remuneration for the Remuneration Committee.

11



Since the remuneration of Mr. André Goedée only relates to his function as CEO, his remuneration is disclosed

in the remuneration of Executive Management personnel in note 11.2. The remuneration of the Board members

is fi xed in Euro. The above mentioned USD amounts have been derived by multiplying these Euro amounts with

the average USD/Euro rate.

11.2 Remuneration of Executive Management, including Board of Directors

The compensations of Executive Management, including Board of Directors, in 2009 are as follows:

2009

Base salary

Bonus paid

in the year* Other benefi ts

Total salary

and other

taxable income

Pension


Board of Directors 602,000 - - 602,000 - 602,000

A. Goedée 454,000 191,000 42,000 687,000 132,000 819,000

P. Wit1 116,000 81,000 1,000 198,000 - 198,000

M. Adler 335,000 285,000 3,000 623,000 80,000 703,000

R. Strijland 279,000 60,000 3,000 342,000 137,000 479,000

C. Mennen2 140,000 30,000 2,000 172,000 26,000 198,000

1,926,000 647,000 51,000 2,624,000 375,000 2,999,000

1 pro rata (starting date: September 2009)

2 pro rata (ending date: August 2009)

* includes share based payment charge

The compensations of Executive Management, including Board of Directors, in 2008 are as follows:

2008

Base salary

Bonus paid in


Total salary

and other

taxable income

Pension


Board of Directors 696,000 - - 696,000 - 696,000

A. Goedée 480,000 790,000 11,000 1,281,000 156,000 1,437,000

C. Mennen1 37,000 25,000 1,000 63,000 4,000 67,000

M. Adler 2 223,000 573,000 2,000 798,000 43,000 841,000

R. Strijland3 246,000 320,000 25,000 591,000 82,000 673,000

S. Malfl iet4* 532,000 993,000 38,000 1,563,000 66,000 1,629,000

2,214,000 2,701,000 77,000 4,992,000 351,000 5,343,000

1 pro rata (starting date: November 2008)

2 pro rata (starting date: May 2008)

3 pro rata (starting date: March 2008)

4 pro rata (ending date: November 2008)

* remuneration also includes 2009 contractual obligations

144

Breda, the Netherlands 4 March 2010

A. Goedée (Chief Executive Offi cer)

P. Wit (Chief Financial Offi cer)

M. Adler (Chief Commercial Offi cer)

R. Strijland (Chief Operations Offi cer)

Board of Directors

A. Goedée

A. Baan

R.P.M. van Slobbe

P.F. Tali

T. Ehret

D.F. McNease

J. van Wiechen



Other information

Appropriation of result as provided for by the Articles of Association 146

Group companies 146

Auditor’s Report 147

146 Other information 2009

Appropriation of result as provided for by

the Articles of Association

Provisions in the Articles of Association (article 35 Dividends and other payments) governing the appropriation of profi t

Dividends may be declared or distributed to the shareholders from “contributed surplus”, if there are reasonable

grounds for believing that a) Dockwise is not, and would not after the payment be, unable to pay its liabilities as they

become due; and b) the realizable value of Dockwise’s assets would not thereby be less than the aggregate of its

liabilities and its issued share capital and share premium accounts. Contributed surplus (section 54(2) of the

Companies Act (Bermuda) 1981) includes proceeds from donated shares, credits resulting from the redemption or

conversion of shares at less than the amount set up as nominal capital and donations of cash and other assets of

Dockwise.

The Board of Directors may award, at its discretion, the payment of future dividends on shares as stated in the

Bye-laws. This is subject to Bermuda law. The amount of such dividends will be determined in light of the Company’s

earnings and cash fl ow, capital requirements, fi nancial condition and prospects, applicable contractual restrictions

and other factors the Board of Directors deems relevant.

Proposal for profi t appropriation

The General Meeting of Shareholders will be asked to approve the following appropriation of the 2009 profi t after

tax: an amount of USD 36,581 to be added to the retained earnings.

Group companies

Reference is made to the list of Group companies in note 30 of the Consolidated Financial Statements.


Auditor’s Report

To the shareholders and Board of Directors of Dockwise Ltd.

Report on the fi nancial statements

We have audited the accompanying fi nancial statements 2009 of Dockwise Ltd., Hamilton, Bermuda. The fi nancial

statements consist of the consolidated fi nancial statements and the company fi nancial statements. The consolidated

fi nancial statements comprise the consolidated balance sheet as at 31 December 2009, the consolidated income

statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and

the consolidated statement of cash fl ows for the year then ended, and the notes, comprising a summary of signifi cant

accounting policies and other explanatory information. The company fi nancial statements comprise the company

balance sheet as at 31 December 2009, the company income statement for the year then ended and the notes.

Management’s responsibility

Management is responsible for the preparation and fair presentation of the fi nancial statements in accordance with

International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the

Netherlands Civil Code, and for the preparation of the management board report in accordance with Part 9 of Book

2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal

control relevant to the preparation and fair presentation of the fi nancial statements that are free from material

misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making

accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on the fi nancial statements based on our audit. We conducted our audit

in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the

audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of

material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments,

the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial

statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,

as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit

opinion.

Opinion with respect to the consolidated fi nancial statements

In our opinion, the consolidated fi nancial statements give a true and fair view of the fi nancial position of Dockwise

Ltd. as at 31 December 2009, and of its result and its cash fl ows for the year then ended in accordance with

International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the

Netherlands Civil Code.

148 Other information 2009

Opinion with respect to the company fi nancial statements

In our opinion, the company fi nancial statements give a true and fair view of the fi nancial position of Dockwise Ltd.

as at 31 December 2009, and of its result for the year then ended in accordance with Part 9 of Book 2 of the

Netherlands Civil Code.

Report on other legal and regulatory requirements

Pursuant to the legal requirement under 2:393 sub 5 part f of the Netherlands Civil Code, we report, to the extent of

our competence, that the management board report is consistent with the fi nancial statements as required by

2:391 sub 4 of the Netherlands Civil Code.

Rotterdam, 4 March 2010

KPMG ACOUNTANTS N.V.

H. Heijnraets RA

150

List of Defi nitions and Abbreviations

CAGR Compound Annual Growth Rate

CAPEX Capital Expenditures

CPOC Carigali Pttepi Operating Company

DYT Dockwise Yacht Transport

DMU Deck Mating Unit

EBITDA Earning Before Interest Tax Depreciation & Amortization

EFQM European Foundation of Quality Management

EPIC Engineering, Procurement, Installation and Construction

ERM Enterprise wide Risk Management

Euroclear Dutch centralized securities custody and administration system

EVA Economic Value Added

FEED Front- End Engineering and Design

FID Final Investment Decision

FLDP Future Leadership Development Program

FPSO Floating Production Storing & Offl oading

GDP Gross Domestic Product

Heavycon Agreement Standard transportation contract for heavy and voluminous cargoes

HMT Heavy Marine Transport

HSE Health Safety and Environment

HSES Health Safety Environment & Security

IMCA International Marine Contractors Association

IMO International Maritime Organization

IACS International Association of Classifi cation Societies

IPO Initial Public Offering

ISAP Increased Safety Awareness Program

ISM International Safety Management

ISO International Organization for Standardization

ISPS International Ship and Port Security

KNRM Koninklijke Nederlandse Redding Maatschappij

(Royal Netherlands Sea Rescue Institution)

LDP Leadership Development Program

LIBOR London InterBank Offered Rate

150150

151

LITF Lost Time Incident Frequency

LMU Leg Mating Unit

LNG Liquefi ed Natural Gas

LTI Lost Time Incidents

LTIP Long Term Incentive Plan

MARPOL The International Convention for the Prevention of Pollution from Ships

MDPP Deck MuDa Processing Platform Deck

MSCI Morgan Stanley Capital International

MTC Medical Treatment Case

Octopus Name of the motion monitoring system that measures vessel motions during

a voyage

ODC Ocean Dynamics China

ODL Ocean Dynamics LLC

OHSAS Occupational Health and Safety Assessment Series

OKI Offshore Kinematics Inc.

OSEBX The Oslo Børs Benchmark Index

OTC Market Over-The-Counter market (direct trading of fi nancial instruments between two parties)

P&M Port & Marine

P&MI Port & Marine Infrastructures

QHSE Quality Health Safety and Environment

QHSES Quality Health Safety Environment and Security

RWC Restricted Work Case

SECA Sulfur Emission Control Area

Solas The international Convention for the Safety of Life at Sea

SS Semi Submersible

STOP Safety Training Observation Program

T&I Transport & Installation

TLP Tension Leg Platform

TRIR Total Recordable Incident Rate

TSR Total Shareholder Return

USD United States Dollar

VPS Norwegian centralized securities custody and administration system


152

Worldwide Offi ces

Dockwise Yacht Transport

1535 S.E. 17th Street

Suite 200

FORT LAUDERDALE, FL 33316

USA

Tel: +1 954 525 87 07

Fax: +1 954 525 87 11

www.yacht-transport.com

[email protected]

Italy

Dockwise Yacht Transport

Corso Paganini 39/2

16125 GENOVA

Italy

Tel: +39 010 2789411

Fax: +39 06 91594458

[email protected]

China

Suite 521B, Shanghai Centre

1376, Nanjing Xi Lu

Jingan District

SHANGHAI 200040

China

Tel: +86 [21] 6279 83 00

Fax: +86 [21] 6279 83 98

[email protected]

Contact

The Netherlands

Lage Mosten 21

4822 NJ BREDA

PO Box 3208

4800 DE BREDA

The Netherlands

Tel: +31 (0)76 548 41 00

Fax: +31 (0)76 548 42 99

[email protected]

USA

The Atrium at Park Ten

16340 Park Ten Place

Suite 200

HOUSTON, TX 77084

USA

Tel: +1 713 934 73 00

Fax: +1 713 934 73 33

Dockwise USA:

[email protected]

Ocean Dynamics (ODL):

www.oceandyn.com

[email protected]

Offshore Kinematics (OKI):

www.offshorekinematics.com

[email protected]

Dockwise Representatives

152

153

Nigeria

Contact via offi ce The Netherlands:

Tel: +31 (0)76 548 41 00

Fax: +31 (0)76 548 42 99

[email protected]

Mexico

Contact via offi ce USA:

Tel: +1 713 934 73 00

Fax: +1 713 934 73 33

[email protected]

Malaysia (in incorporation)

3A, 1st Floor, Jalan Snuker 13/28

Tadisma Business Park, Seksyen 13

40100 Shah Alam, Selangor

Malaysia

Tel: +60 3 5510 10 73

Fax: +60 3 5519 30 24

[email protected]

Bermuda

Canon’s Court

22 Victoria Street

PO Box HM 1179

Hamilton HM EX

Bermuda

[email protected]

Representatives

Norway

Capricorn Offshore

[email protected]

Japan

Heisei Shipping Agencies

[email protected]

Italy

Intermare

[email protected]

Argentina

Wijsmuller Argentina

[email protected]

Ocean Dynamics China (ODC)

30C Seascape Plaza No.18

Taizi Road Shekou Nanshan

District ShenZhen

GUANGDONG 518067

China

Tel: +86 (0)755 2667 58 21

Fax: +86 (0)755 2667 58 21

[email protected]

South Korea

1st Floor Sejong Telecom

1453 Woo-Dong Haeundae-Gu

BUSAN 612-020

Korea

Tel: +82-51 580 92 35

Fax: +82-51 580 92 40

[email protected]

Australia

Suite 4, Lvl 1, 610 Murray Street

WEST PERTH, WA 6005

PO Box 268

WEST PERTH, WA 6872

Australia

Tel: +61 (0)8 9322 43 30

Fax: +61 (0)8 9322 37 52

[email protected]

Brazil

Rua da Assembleia 10/2008

Cep 20011-000 RIO DE JANEIRO RJ

Brazil

Tel: +55 21 8702 6666

[email protected]

Singapore

7 Temasek Boulevard

#43-02A Suntec Tower One

SINGAPORE 038987

Singapore

Tel: +65 6884 5950

Fax: +65 6884 5951

[email protected]

Russia (in incorporation)

Savvinskaya Naberezhnaya 15

119345 Moskou

Russia

Tel: +7 495 287 80 76

Fax: +7 495 287 80 77

[email protected]


154154

Colophon:

Coordination and planning: Pieter Brouwers

Design and production: Phasis Communication Works

Print: Chevalier

Annual Report 2009

Dockwise Ltd.Bermuda incorporatedLage Mosten 214822 NJ Bredatel: +31 76 548 41 00www.dockwise.com

Dockw

ise Annual Report 2

009

360 9030

dockwise annual report 2009 - bourse€¦ · dockwise ltd. • annual report 2009 3 message from...

Documents