taking our quantum leap - swiber holdings limitedswiber.listedcompany.com/misc/ar2012.pdf ·...

SWIBER HOLDINGS LIMITEDRegistration No. 200414721N12 International Business Park

Swiber@IBP #04-01Singapore 609920Tel (65) 6505 0800Fax (65) 6505 0802www.swiber.com

SWIBER HOLDINGS LIMITED ANNUAL REPORT 2012

TAKING OUR QUANTUM LEAP

SWIB

ER

HO

LDIN

GS LIM

ITED

AN

NU

AL REPO

RT 2012

A WORLD-CLASS COMPANY IN THE OFFSHORE INDUSTRY

TRUST

We are trusted for our integrity, honesty, re l iabi l i t y, fa i rness and sincerity in working with our partners, customers and

employees.

DETERMINATION We are determined to succeed and will always rise up to any challenge and be renowned for our resolve in solving any problems faced by us or our

clients and partners.

EXCELLENCE We excel in everything that we do and are committed to delivering jobs of the highest quality, exceeding our customers'

expectations.

AFFIRMATION We aff irm and recognise the contributions made by our partners, clients and employees to the success of our business. We value our employees, encourage their contributions and develop them to their fullest potential. We practice the 101% principle in affirmation – finding the 1% we can affirm, and

giving it 100% of our attention.

RESPECT We respect and value each other's views. We respect the laws of the countries we operate in and the confidentiality of information provided by our cl ients and

employees. We win as a team.

Designed and produced by

(65) 6578 6522

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

01

A world-class company in the offshore industry

Swiber Holdings Limited ("Swiber" or together with its subsidiaries, the "Group"), is at the heartbeat of the dynamic offshore oil and gas industry. Swiber is a world-class integrated construction and support services provider that offers a wide range of offshore Engineering, Procurement, Installation and Construction (EPIC) services, marine support, and subsea support solutions across the Asia Pacific, the Middle East, and Latin America.

Founded in 1996 and listed on the Singapore Exchange Securities Trading Limited ("SGX-ST") on November 8, 2006, Swiber continues to be dedicated to building the company into a leader in the offshore oil and gas industry. Today, Swiber has achieved an eminent position amongst global offshore oil and gas industry players and continues to set a blazing trail.

Swiber has an extensive and growing operating fleet of 61 vessels, comprising 46 offshore vessels and 15 construction vessels. Swiber's strong workforce consists of more than 2,800 employees with over 40 different nationalities in offices strategically positioned worldwide.

The Group has been highly esteemed by customers for service that epitomises excellence, safety, innovation and value – attributes that Swiber has won several accolades with.

Swiber was featured on Forbes Asia's "Best under a Billion" list in 2008, an honour given to the top 200 Asia Pacific companies with consistent growth in both sales and profits over three years. Swiber continues to ascend the ranks of the nation's "Top 100 Brands" in the Brand Finance's Annual Report of "Singapore's Intangible Assets and Brands" with AA- Rating consecutively for 2010 to 2012. In 2012, Swiber emerged a winner in the Singapore Corporate Governance Award of the Securities Investors Association (Singapore) ("SIAS"). All these reaffirm Swiber's rapid growth as an EPIC player that is well-positioned to capitalise on the upswings of the offshore oil and gas sphere.

The Group's steady commitment to the core values of Trust, Respect, Affirmation, Determination and Excellence will continue to guide Swiber as it continues to capitalise on the world's growing energy demands.

CORPORATE PROFILE

CONTENTSVision, Mission, Values

Corporate Profile 1

4 Core Businesses 8

Swiber's Fleet 10

Stronger Presence and NetworkOur Locations, Partnerships and Alliances 14Smooth Delivery for Greater Growth 16

Group Financial Highlights 18

Message from the Executive Chairman 20

Message from the Group CEO and President 24

Board of Directors/Senior Management 29

Core Philosophies 35– QHSE Philosophy– EE Philosophy– CSI Philosophy

Corporate Social Responsibility 36

Corporate Structure 38

Corporate Information 40

Corporate Governance Report 41

Report of the Directors and Financial Statements 58

Statistics of Shareholdings 138

Notice of Annual General Meeting 140

Proxy Form

VISIONTo become an integrated niche energy company by 2015.

MISSIONTo serve our stakeholders and clients in the energy industry with accountability and excellence by synergising the best of skills, knowledge and equipment with people of high Cause No Harm (CNH) values and strong Emotional Excellence (EE) mindset.

QUANTUM LEAP

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

03

ORDER BOOK HITS

US$1.35BILLIONWe made a quantum leap in FY2012, achieving new heights and making further breakthroughs.

Our order book hit US$1.35 billion, a clear testimony of our proven track record of strong execution and technical expertise that meet the exacting needs of global oil and gas players.

Market-wise, we made a breakthrough into the exciting Latin American market and will continue to be driven by an undaunting spirit to cross new frontiers.

Our engineering capabilities and asset strength was at their best display with a successful use of the float-over method for offshore field development in India – a first by any company in Southeast Asia and a first in this country.

With a passion to deliver quality solutions to world-class players, we will continue to raise the bar as we make that quantum leap ahead.

SURGING FORWARD

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

05

Swiber’s growth story is built upon the dedication and determination of our team of experienced professionals. We synergise the best of skills, knowledge and equipment with people with the same mindshare – Cause No Harm values and a strong Emotional Excellence attitude.

Our top-notch workforce has proven an ability to service world-class oil majors with challenging offshore projects that require precise execution and timely deliveries.

This, coupled with the ability to handle major and complex projects given our large fleet size of modern and comprehensive range of vessels, will put us in good stead to surge forward towards greater heights.

Young and Dynamic Vessels

61Fleet of

40 nationalities

Diverse talentbase of more than

2,800 in

ONE NOTCH UP

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

07

4Integrated businessunits offering top-notch support solutions to the offshore oiland gas industry

Swiber’s proven ability and success in executing challenging offshore construction projects is evident across Swiber’s four business units: Swiber Offshore Construction Services, Newcruz Offshore Marine Services, Kreuz Offshore Subsea Services and Equatoriale Offshore Development Services. Through these four business units, Swiber provides a comprehensive suite of services to support exploration, field development and production. The four business units are highly complementary and offer dynamic synergies, thereby presenting a solid value proposition to our customers.


08

CORE BUSINESSES

SWIBER OFFSHORE CONSTRUCTION SERVICES

Swiber Offshore Construction Services provides a complete suite of services encompassing Engineering, Procurement, Installation and Construction (“EPIC”). With our team of highly experienced engineers and project managers, in addition to our extensive fleet of modern construction and support vessels, we are able to deliver integrated and innovative solutions to a wide and diverse range of projects, even in the most challenging offshore environments.

NEWCRUZ OFFSHORE MARINE SERVICESNewcruz Offshore Marine Services provides a full spread of services that are highly complementary to our offshore EPIC business. These services include extensive offshore support services, comprehensive yard facilities with a growing capability for ship repair, conversion and construction..SERVICES:

• Offshore marine transportation

• Charter of offshore mar ine support vessels

• Provision of dive support vessels

• Shipyard facilities

• Ship repair and maintenance services

• Shipbuilding services

• Start up and commissioning

• Operations and maintenance

FY2012 HIGHLIGHTS:

• Secured a 5-year contract from an oil major in the Middle East for charter of marine support vessels

• Secured a 3-year charter contract for a construction vessel for an inspection, repair and maintenance project in the Gulf of Mexico

FY2013 OUTLOOK:

• The demand for offshore marine services is sustained by continued Exploration and Production activities by oil and gas companies

SERVICES:• Project management and engineering• Procurement services• Platform construction• Transportation and installation of fixed

offshore platforms• Transportation and installation of

subsea pipelines• Floating Production Systems• Subsea field commissioning• FPSO, FSO, CALM Buoy• Mooring installation services

FY2012 HIGHLIGHTS:

• Successful completion of the first floatover operation with the B-193 Field Development Project in India for national company, ONGC

• Establ ished strong presence in Mexico, through Mexico-based office, Swiber Offshore Mexico S.A. de

C.V. and instituted joint venture company, Dragados -Sw iber Offshore S.A.P.I de C.V. with a company incorporated in Mexico

FY2013 OUTLOOK:

• With global crude oi l pr ices consistent ly hover ing above US$80 per barrel in 2012, oil and gas companies will continue to aggressively invest in capital i n t e n s i v e E x p l o r a t i o n a n d Production projects

• Increased activity in the Exploration and Production sector will be the primary driver in pushing the global oil and gas capital expenditure (capex) to increase from $1,036 billion in 2012 to $1,201 billion in 2013, registering a growth of 15.9%. (Global Data, Oil & Gas Capital Expenditure Outlook, August 23, 2012)

FY2013 STRATEGY:

• Strengthen our position as an experienced and reputable offshore service provider in the market to bid for major contracts

• Maintain prudence in managing business operations and cost efficiencies

• Continue to focus on penetrating into new markets

• Exploring new opportunities to leverage on strong track record

FY2013 STRATEGY:

• Active cost management by reducing use of third party vessels

• Active delivery of new support vessels

• Actively penetrate the Asia Pacific, Middle East, and Latin America markets

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

09

CORE BUSINESSES

KREUZ OFFSHORE SUBSEA SERVICES

Kreuz Offshore Subsea Services provides offshore subsea construction and installation solutions as well as Inspection, Repair and Maintenance (“IRM”) to complement our offshore EPIC services with a formidable team of divers and Remotely Operated Vehicle (“ROV”) operators.

EQUATORIALE OFFSHORE DEVELOPMENT SERVICESThrough Equatoriale Offshore Development Services, we offer upstream oil and gas engineering, project management, Front End Engineering Design ("FEED") and detailed design services to major oil and gas companies. Since 2008, we have established specialists' engineering capabilities in the areas of Subsea, Umbilicals, Risers and Flowlines ("SURF"), transportation and installation engineering and naval architecture with proven records. Projects have been successfully delivered in Singapore, Brunei, India, Thailand, Vietnam, Malaysia, Indonesia, Myanmar, Australia and Mexico.

SERVICES:

• Subsea pipeline, flexible, umbilical, cable and riser detail design and third party endorsement services

• Offshore fixed and floating structures detailed design and third party endorsement services (SPM Buoys, fixed platforms, subsea modules.)

SERVICES:

• Subsea construction and installation solutions which support new offshore projects

• Subsea IRM of existing offshore oil and gas field structures

FY2012 HIGHLIGHTS:

• Successfully transferred to Main Board on October 2012

• Secured subsea contracts totalling to approximately US$160 million

• A c q u i re d a s e c o n d D y n a m i c Positioning Multi-Purpose Support Vessel (“DP 2 MSV”) Kreuz Installer

FY2013 STRATEGY:

• Leveraging on our extensive engineering expertise, explore new business opportunities such as offshore wind farm engineering, transportation and installation services

• Explore new innovative engineering so lu t ions w i th re sea rch and development

• Continue the growth of engineering operations into new countries regionally and globally

• D e v e l o p n e w c l i e n t s f r o m international and national oi l companies

FY2013 OUTLOOK:

• Capital expenditure for subsea market in As ia is expected to increase in FY2013, as compared to the previous years, with Malaysia, Indonesia, China and India expected to drive subsea demand.

FY2013 STRATEGY:

• Build and acquire state-of-the-art assets to be well-positioned for deepwater and shallow water markets worldwide. A shipbuilding contract was signed in February 2 0 1 3 t o b u i l d a n d a c q u i re a new DP MSV

• Penetrate into the Middle East and West Africa markets

• Execute projects on schedule and within budget

• Continue to provide top-class quality services with excellent safety record to clients.

• Subsea structures detailed design and installation engineering (SSIV, PLEM, PLET, etc.)

• Engineering serv ices for offshore transportation and installation projects (floatover detailed design, mooring detailed design, pipelaying engineering and offshore heavy lifting engineering)

• Ship design and marine engineering (new-build, conversion and repair)

• Secondment of specialist's engineers to projects

FY2012 HIGHLIGHTS:

• Developed engineering solution for the successful floatover installation for the B193 project in India


10

SWIBER'S FLEET

From just 10 vessels in 2006, Swiber has expanded dynamically to own and operate a young fleet of 61 modern, well-equipped vessels as at March 2013, comprising 46 offshore support vessels and 15 construction vessels to strengthen our market presence, reduce our reliance and thus charter costs, on third party vessels and provide turnkey solutions to our Clients’ needs.

FLEET FULFILLMENT PLAN UP TO 2013– Current Fleet of 61 Vessels– 62 Vessels by 2013

CONSTRUCTION VESSELS FY07 FY08 FY09 FY10 FY11 FY12 1Q13 FY13FJack-up barge 1 1 - - - - - -Pipelay barge 1 1 3 3 3 3 3 3Derrick pipelay barge - - 1 3 3 3 3 3Derrick crane barge 1 1 1 1 1 - - -Derrick pipelay accommodation work barge - - - - - - 1 1Derrick crane accommodation work barge - - - - - - - 1Dive support accommodation work barge - 1 3 3 3 4 3 3Submersible launch barge 2 1 1 1 1 3 3 3DP2 Dive support vessel - - - 1 1 1 2 2TOTAL 5 5 9 12 12 14 15 16SUPPORT VESSELS FY07 FY08 FY09 FY10 FY11 FY12F FY12F FY13FCargo/ Flat top barge 10 11 17 16 12 12 12 12Utility/ Towing tug 4 4 3 4 4 6 6 6AHTS/ AHT 9 12 14 19 23 28 28 28TOTAL 23 27 34 39 39 46 46 46GRAND TOTAL 28 32 43 51 51 60 61 62

THE CONSTRUCTION FLEET

S/N VESSEL NAME ACCOMMODATION / CRANE LIFTING CAPACITY

CLASS YEAR BUILT

PIPELAY BARGE

1 Swiber Conquest 280 men / 300 T BV 2007

2 Swiber Concorde 248 men / 450 T ABS 2008

3 1MAS-300 300 men / 300 MT ABS 2010

DERRICK PIPELAY BARGE

4 Swiber PJW3000 310 men / 3,000 T ABS 2010

5 Swiber Resolute 300 men / 1,100 MT ABS 2009

6 Aziz 300 men / 500 MT ABS 2009

DERRICK PIPELAY ACCOMMODATION WORK BARGE

7 Swiber Triumphant 300 men / 300 MT ABS 2012

DIVE SUPPORT ACCOMMODATION WORK BARGE

8 Kreuz Glorious 286 men / 60 T ABS 2006

9 Swiber Victorious 300 men / 300 T ABS 2009

10 Kreuz Supporter 120 men / 200 T ABS 2006

DP2 SUBSEA CONSTRUCTION & DIVE SUPPORT VESSEL

11 Swiber Atlantis 150 men / 10-100 T ABS 2010

12 Kreuz Installer 98 men / 20-155 T DNV 1981/1995

S/N VESSEL NAME GRT/NRT TONNES CLASS YEAR BUILT

SUBMERSIBLE LAUNCH BARGE

13 Holmen Arctic 10,850 / 3,255 T BV 2006

14 Holmen Pacific 41,500 / 34,400 T BV 2011 (Q4)

15 Holmen Atlantic 21,000 / 16,600 T BV 2011 (Q4)

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

11

SWIBER'S FLEET

CONSTRUCTION VESSELS

Swiber PJW3000 Swiber Resolute Swiber Conquest

Swiber Concorde 1MAS-300 Aziz

Swiber Triumphant Kreuz Glorious Swiber Victorious

Kreuz Supporter Swiber Atlantis Kreuz Installer

Holmen Artic Holmen Pacific Holmen Atlantic


12

SWIBER'S FLEET

THE SUPPORT FLEET

S/N VESSEL NAME BHP / BP CLASS YEAR BUILTANCHOR HANDLING TUG

1 Swiber Anna 3,500 BHP/43T BP BV & BKI 20072 Swiber Explorer 4,000 BHP/50T BP BV 20073 Swiber Navigator 4,000 BHP/50T BP BV 20074 Vallianz Hope 4,200 BHP/52T BP BV 20085 Swiber Bhanwar 4,750 BHP/58T BP BV 20096 Swiber Singapore 4,750 BHP/60T BP BV 20077 Swiber Gallant 5,000 BHP/60T BP GL 20068 Swiber Valiant 5,000 BHP/60T BP GL 20069 Swiber Lina 5,150 BHP/65T BP ABS 2011

ANCHOR HANDLING TUG/SUPPLY10 Swiber Ada 5,000 BHP/66T BP BV 200811 Swiber Torunn 5,000 BHP/68T BP BV 200812 Swiber Sandefjord 5,000 BHP/66T BP BV 200913 Swiber Oslo 5,000 BHP/68T BP BV 200914 Swiwar Challenger 5,150 BHP/68T BP BV 200715 Swiwar Venturer 5,150 BHP/63T BP ABS 200716 Swiwar Victor 5,150 BHP/63T BP ABS 2007

ANCHOR HANDLING TUG/SUPPLY (DP1)17 Rawabi 1 5,150 BHP/66T BP BV 201118 Rawabi 2 5,150 BHP/66T BP BV 201219 Rawabi 3 5,150 BHP/65T BP ABS 201220 Rawabi 4 5,150 BHP/65T BP ABS 201221 Rawabi 5 5,150 BHP/65T BP ABS 201222 Rawabi 6 5,150 BHP/65T BP ABS 201223 Rawabi 7 5,150 BHP/65T BP ABS 201224 Rawabi 8 5,150 BHP/65T BP ABS 2012

ANCHOR HANDLING TUG/SUPPLY (DP2)25 Swiber Else-Marie 10,800 BHP/130T BP ABS 200926 Swiber Anne-Christine 10,800 BHP/136T BP ABS 200927 Swiber Mary-Ann 10,800 BHP/135T BP ABS 201028 Swiwar Surya 10,800 BHP/135T BP ABS 2010

TOWING TUG29 Swiber Raven 3,200 BHP/36T BP GL 200930 Swiber Charlton 3,200 BHP/42T BP BV 2010

UTILITY VESSEL31 Swiber Pearl 700BHP/10T BP BV 199632 Swiber Peacock 700BHP/10T BP BV 199633 Swiber Carina 2,400 BHP NKK 200934 Swiber 99 2,500 BHP/30T BP BV & BKI 1998

FLAT TOP CARGO BARGE35 Swiber 123 270/81 BKI 200636 Swiber 255 2,294/689 GL 200637 Swiber 282 2,572/772 GL 200738 Kreuz 231 1,469/440 BV 200839 Kreuz 232 1,469/440 BV 200840 Kreuz 241 1,830/549 GL 200641 Kreuz 281 3,427/1,028 ABS 200842 Kreuz 282 3,427/1,028 ABS 200843 Kreuz 283 3,427/1,028 ABS 200844 Kreuz 284 3,427/1,028 ABS 200845 Newcruz 331 4955/1486 ABS 201146 Newcruz 332 4955/1486 ABS 2011

VESSELS TO BE DELIVERED

S/N VESSEL NAME ACCOMODATION / CRANE LIFTING CAPACITY

CLASS DELIVERY

1 Derrick Crane Accommodation Work Barge 320 men / 4,200 T BV 2013

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

13

SWIBER'S FLEET

SUPPORT VESSELS

Swiber Valiant Swiber Lina Swiber Ada

Swiber Torunn Swiber Oslo Swiber Trader

Swiber Else-Marie Swiber Anne-Christine Swiber Surya

Swiber Anna Rawabi 1 Rawabi 2

Swiber Carina Swiber Pearl Swiber Peacock


14

STRONGER PRESENCE AND NETWORKOUR LOCATIONS, PARTNERSHIPSAND ALLIANCES

GEOGRAPHICAL PRESENCEHeadquartered in Singapore with offices and joint ventures established in Brunei, India, Indonesia, Malaysia, Middle East and Mexico.

BRAZIL

MEXICO

Our strategic cross-border presence gives us the proximity necessary to swiftly service our international clientele and allows us to capitalise on high-growth markets in and beyond the region. We have also partnered with reputable organisations to strengthen our local networks and further solidify our market position.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

15

STRONGER PRESENCE AND NETWORK OUR LOCATIONS, PARTNERSHIPS

AND ALLIANCES

MALAYSIA

CHINA

VIETNAM

INDONESIA

EUROPE

INDIA

MIDDLE EAST

WEST AFRICA

AUSTRALIA

AMANANAETNAMYANMAR

BRUNEI

AYSIAYAYAYAYAYAYAAAAALALALALALALLLLLSINGAPORE

Markets where Swiber has offices/presence

Markets we are targetting


16

Swiber was awarded over US$1.7 billion worth of contracts, including joint venture projects in FY2012, a testament to Swiber’s strong relationships with leading global oil and gas players.

PROJECT WINS

FEBRUARY 2012• Vessel chartering for major oil producer

in the Middle East – US$38 million

• Offshore construction and vessel chartering for existing client – US$216 million

MARCH 2012• Offshore construction works for the

procurement, transportation, and installation of pipeline for Oil major from Gulf of Mexico – US$273 million

JUNE 2012• E n g i n e e r i n g , p r o c u r e m e n t ,

construction and installation works for an Oil Major in Southeast Asia – US$175 million

• Offshore construction projects and vessel chartering services, inclusive of optional terms, in Asia Pacific and the Middle East – Over US$830 million (inclusive of joint venture)

NOVEMBER 2012• EPCIC work in Southeast Asia – US$100

million

• Charter of construction vessel for work in Latin America – US$43 million

SMOOTH DELIVERYFOR GREATER GROWTH

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

17

VESSEL DELIVERIES

• Took delivery of two Submersible Transport, Floatover and Launch Barges, Holmen Pacific (34,400T/41,500T) and Holmen Atlantic (16,600T/21,000T)

• Took delivery of a 300 MT Derricks/ Pipelay Accommodation Work Barge, Swiber Triumphant

• Took delivery of a 1,700m2 deck space, Dynamic PositioningMulti-Purpose Support Vessel ("DP MSV") Kreuz Installer

• Took delivery of eight 5,150 BHP/60T BP Dynamic Positioning Anchor Handling Tug Supply Vessels ("DP AHTS"), Rawabi 1, 2, 3, 4, 5, 6, 7 and 8

• Took delivery of two 700 BHP/10T BP Utility Vessels, Swiber Pearl and Swiber Peacock

SSS BSWIBSWSSWIBSWIBSWIBWWWWWWWWIBSWIBWISWIBBWIBBBSWIBSWIBSSSSWIBSSWWIBWSWSWIBWSWWSWIBBWIBBBSSSSSSWWWWWWWWSWW BBBBSSSSSWWWWIBWWSW BBBSWIBWIBBSSSWWWWWW BBBSSSSWSWWWWWWWWSWIBWIBBBBWWWWWWIBWWW BBBWWWWW BBSSWWWWWWW BBBSSSSWWWWWIBWWWIBW BBBBBSSSSSWWWWWWW BBBSSSSSWWWWWWIBBBBBBBBBSSWIBSSWWWWWW BBBBBBSSSWWWWWW BSWWWSSWSWWW BBBSSSSWW BSWIBSSSSWW BBBBSWWWW BBBBBEEERRRRRRRERRRRRRRRERERRRRRRRRERRRERRRERRREERREREERR RRREERRRRRRRRERRRRRRRRRERRRRRRRRRRRRRRRRRRRRHOLDHOLDHHOHHOHOLLLLLLDLDDLDHOLDDDDDHHHOHHOLDHOLLLLLOLDDDHOLDDDDDHHOLDDDHOLDHOH LLLDDDDDHOHOLLLLLLLDDDDDDDHOLDLLLLLDDDDDLLLLLDDDDHH LLLLLDDDDHOLLLLLLDDDDHOLLLDDDDDDHOLLLLDDLDDDHOLLLDHHOHOLHO DH LDH LLDLLLLH LLLDDDHOLLDDINGINGNGNGSNGSNGSNNGGINGGNGNGSNGSSSSSSINGSSIIINGINNNNNGINGGGGSSSSSIINGNNNNGSIINGNGNGGNGSGSSINGSSINGSINNNNINGSGGSINGSSININGGGSSINIINGNNINNGGSSSSINGSNGNGNNNGINGNNNNNIINGSSSNGSN SSSNNNNGGSSSINGI GSINNIN SSINGNNN SNGGSNGSNGGSSINNGSSSINNNN SSSSSS

LIMILIMILILIMLLLLLLLIIMIMMMLIMMMMMMMMMLIMMLIMMILIMILLLLLLIIMMMMIMIILILILLLLLIMIMMMMMLIMLLLIMMMLIMMMLLLLIMMMLIMIMILLLLIMIMMMILLLLIMLLIMIMMLLLL MMILLIMIMLIMMMMMIMILLLLLIMMMMIMLLL MMMML MMMLLLLLLL MMMMMMILLLL MMMLIMMMLLLLIMMMLLL MMMMMMMLLLLL MMMMMMM TEDTEDTTTTTTTEDTTEDTEDEDEEETEDTEDDDDDDTEDDDTTTTTEDTTEDEEEEDDDTEDDTTTTTTTTTEEEDEDDDDTTTTTTEDDEDDDTTTEEDDDTTTTTEDTTTEDDDDDTTTTTEDDDTTETTTTTTT DDDTT DDDDDTTT DDTTTEDDDDD TTTEDTEDDTTTT DDDTTTEDDDDDDDTETTTEDDDTTTTTTEDDDTTEDDDDTTTTTEEDDTTTEDANNANNAANAAAAANNANNUANNANNUNNNNNNNNUNNNNNNNNUNANNUNNNNNUNNUUUUUUUUUNUUUANAAANNUANNNNNNNANNUNANNUUUUUUUUNNUANNUAAAANNNNNNNNNNNUUNNUUUUUUNUUUAAAANNNNNNNUUUUAAAANNAANNNNUNNNUNNNNNNNNNNNNNUNNUUUUUUANNUAANNUAANNUNNNUNNNNNANNUNNUUUUUUUUUANNUANNANNNUNNUNUNNUUUUUUUAAANNUAANNNNUUUUUUAAAAANNUNUUUUAAA UUAN UUUUUAAAN UUUUAANNUUUUUAAAANNUUAANNNUUUUUUAAANNUUAAANNNNNNUUUUNNNNUUUUUUAAAALLLLLLLLLLLALLLLLLLAALLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLALLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

REPOREPOREPORRREEEEEEEREPOOOOEPOEEEEEEEREPOOOREPOEPOEE OOEPORREEEEEEEEE OEPOEEEEPOOOOORREEEEPORREEEEERREEEREPOORREEE OREEEEEPORRREEERREEEEPOREPORE OOREE OOOREEEE OREPORRREEEE OOOREEEEEE OOREPORRRREEEEEEE OEEEE OORTRTRT 2RRTRT 2RT 2TTTTRT RTRTTT T T 222RTRTRRRT 2TTTTTTT RRRRTTTRTTT 222RT RT RRTTTRT 2RRRRRTTTTTTT 222RTTTTRTTTT 22RTTTTRTTTT 22TTTTTT 22TTTTTRTTTTRT 2TTRRRTTTTRRTT 2TRT 2T 2TTTTTTT 22RRRTT 22RRTT 20120001201220001201222220122012000 2222222 000012000 2 201222220000000 22220 2222222201200 2222200 222200000 2222222222220000 222012201200001222220 2200122222222000 22220000 222200120 22220122220 222000 22222222000 2222000000

11171717111171777777717777711117111777771771117777177171171111777777171177771117717711771771777777177711171177711777771111177777717771177111771771771717171177771717177771777171711177

Swiber’s strategies for continued growth are to expand our geographical markets, expand our offshore capabilities and expand our armada of marine assets. With solid growth strategies in place, Swiber is well-positioned to meet targets, deliver long-term growth and achieve new milestones.


18

Revenue: FY2012

US$952.2M45.5%

INCREASEfrom US$654.5m in FY2011

Gross Profit: FY2012

US$151.8M34.4%

INCREASE from US$112.9m in FY 2011

Net Profit: FY2012

US$62.5M48.3%

INCREASE from US$42.2m in FY 2011

SEGMENT BREAKDOWN

Revenue(US$’M)

FY2010FY2009

Swiber Offshore Construction Services

Newcruz Offshore Marine Services

Kreuz Offshore Subsea Services

Others

300

250

200

150

100

50

0

253.0

111.6

14.214.6

400

350

300

250

200

150

100

50

0

372.1

73.0

2.618.0

FY2012

800

700

600

500

400

300

200

100

0

692.8

95.943.7

119.9

FY2011

500

400

300

200

100

0

499.5

52.9

10.6

91.6

GROUP FINANCIAL HIGHLIGHTS

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

19

FY08 FY12FY11FY10FY09FY08 FY12FY11FY10FY09

FY08 FY12FY11FY10FY09

Revenue(US$’M)

Net Profit(US$’M)

Cash and Cash Equivalents(US$’M)

Earnings Per Share(US Cents)

Cash and Cash Equivalents: FY2012

US$129.5M11.2%

INCREASE from US$116.5m in FY2011

EPS (US cents) (Basic): FY2012

7.8 US CENTS23.8%

INCREASE from 6.3 US cents in FY2011

FY08 FY12FY11FY10FY09

428.4 465.7393.4

952.2

654.5

74.7

137.8

83.2

129.5

116.5

39.5 39.439.0

62.5

42.2

9.2

7.47.47.8

6.3

GROUP FINANCIAL HIGHLIGHTS


20

MESSAGE FROM THE EXECUTIVE CHAIRMAN

“Our order book stood at approximately US$1.35 billion as we were able to win larger contracts from our clients. This is a strong and significant endorsement of the trust that our clients have in us.”

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

21


Dear Shareholders,

It is my great pleasure to present to you our Annual Report for 2012.

Despite the recession in the European economy and the uncertainty from the Fiscal Cliff in the US, the oil and gas industry had a robust year last year, as international oil prices stayed firm and demand from emerging economies continued to grow. To satisfy this growing thirst for oil, the industry’s capex spending broke US$1 trillion for the first time in history, representing approximately 14% growth year-on-year1.

At Swiber, we have been fortunate to be able to catch this rising tide,


– A Year of Further Breakthroughs

2012 also marked several major mi les tones for us . We made a breakthrough into the Latin American market with contract wins of over US$300 million in the Gulf of Mexico. Latin America, being an emerging market with strong fundamentals for long-term growth, is a region of interest to Swiber. In October 2012, we joined opinion and business leaders at the IE Singapore’s Latin Asia Business Forum 2012 in sharing how Singapore can contribute to this region’s growth to over 350 delegates from more than 10 different Latin American countries.

reporting record revenue and net profit for our shareholders. Our revenue grew 45.5% to US$952.2 million, while net profit rose 48.3% to US$62.5 million. We are now just a short distance away from crossing US$1 billion in revenue.

As of February 2013, our order book stood at approximately US$1.35 billion. This was achieved as we were able to win larger contracts from our clients. Given that we have only crossed the major milestone of US$1 billion order book in 2011, this is a strong and significant endorsement of the trust that our clients have in us.

1 Global Information Inc., January 22, 2013

“As we step into a new dimension

of growth, Swiber will continue to

be a steward of excellent corporate

governance practices across our

operations.”


22


Another noteworthy breakthrough was the successful completion of the B-193 Field Development Project in India for the country’s national oil company, Oil and Natural Gas Corporation Ltd. (ONGC). This is a major feat for us as it marks the first time that any company has used floatover methods for offshore field development in India. It is a strong endorsement of our excellent engineering capabilities and asset strength. We feel even more gratified that for a project of this size and complexity, we have been able to use most of our in-house assets. With its success, we are primed to further capitalise on the upswings in the offshore oil and gas industry in India and beyond.

On the corporate front, we are honoured to have won the “Singapore Corporate Governance Award”, conferred to us by Security Investors Association Singapore (SIAS), in the Small Cap category. The award is a testimony of our firm belief in corporate transparency and affirmation of our efforts in putting in place best practices in corporate governance.

We also continue to review our processes to improve each aspect of corporate governance to be in line with best practices. Swiber’s board is mindful of the interests of our stakeholders and we are pleased that our efforts have been recognised by the investment community. As we step into a new dimension of growth, Swiber will continue to be a steward of excellent corporate governance practices across our operations.

To strengthen our balance sheet to fund our continued expansion, we undertook a share placement of 101.1 million new ordinary shares, representing 20% of our share capital in March last year. We also successfully issued S$80 million in Senior Perpetual Securities in September. All these

were to ensure that we have the appropriate capital structure to finance our growth. They also demonstrated the confidence of the capital markets on the future prospects of Swiber.

OUTLOOK

Looking ahead, we remain optimistic on the outlook for the oil and gas industry. With oil prices stable at current level, it makes economical sense for oil majors to continue to spend capex on Exploration & Production (E&P). Industry estimates suggest that total industry capex in 2013 will grow again to US$1.2 trillion2. Chevron, one of the US oil majors, alone would be spending more than US$33 billion3.

2 Global Information Inc., January 22, 20133 US Companies plan to increase capex this year – Business Times, Feb 25, 2013

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

23


To our business partners and clients, my greatest thanks for the close partnership and your faith and trust in us. Last but not least, to our shareholders, a big “Thank You!” for your unwavering support all these years.

Finally, I want to give thanks and praise to God for his abundant grace and faithfulness to me and to Swiber. Indeed we have been richly blessed, and we could not have accomplished all these without His providence. To Him be all the glory.

Raymond Kim GohExecutive Chairman

We are particularly excited about the offshore E&P developments in Mexico and Brazil. Since Mexico’s sole oil operator Pemex announced the country’s first production licensing round in more than 70 years in 2011, many blocks have been tendered to international bidders. Analysts4 are forecasting capital spending in the region to increase 15% in 2013 from the previous year, partly driven by a significant step-up in activities by PEMEX. In Brazil, the oil fields off the coast such as Campos Basin, Santos Basin and Sergipe-Alagoas Basin, also offer tremendous opportunities for EPIC work.

Closer to home, Indonesia’s energy regulator BPMigas have approved 12 oil and gas development plans that contemplate approximately US $830 million of investment into the Indonesian oil and gas sector in 2012. Myanmar Oil and Gas Enterprise had also said that 25 new offshore oil-and-gas exploration blocks will be up for auction by April 2013. These developments in the region are attracting many international operators to expand oil exploration and production activity in Asia and generating tremendous excitement among industry players that there could be another giant oil field waiting to be found in Asia.

These developments are setting the stage for greater demand for offshore services, including platform, pipeline and subsea installation, inspection, repair and maintenance work. With our track record of strong

execution, technical expertise and a large fleet size of modern and comprehensive range of vessels, these are opportunities that Swiber is well-positioned to capture.

WORD OF THANKS

As we look back on all that we have achieved, we recognise that it would not have been possible without the support of our various stakeholders.

To our Board of Directors, I would like to extend my heartfelt gratitude for your invaluable contribution and commitment. To our management team and staff, our sterling performance bears testimony of your hard work and dedication, we would not be where we are without your dedication.

4 Barclays Capital 2013 Forecast – E&P spending

“Swiber has delivered a record-high revenue and net profit, firmly based on solid fundamentals that we’ve built upon since our listing over six years ago.”


24

MESSAGE FROM THE GROUP CEO AND PRESIDENT

“Our net profit surged 48.3% to US$62.5 million in FY2012 from US$42.2 million in FY2011, in tandem with a 45.5% jump in revenue to US$952.2 million from US$654.4 million over the same period.”

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

25

MESSAGE FROM THE GROUP CEO AND

PRESIDENT

US$ MILLION FY2012 FY2011 CHANGE (%)

Revenue 952.2 654.4 45.5

Gross profit 151.8 112.9 34.4

Profit before tax 95.0 69.4 36.9

Net profit 62.5 42.2 48.3

EPS (US cents) 7.8 6.3 23.8

NAV per share (US cents) 68.8 71.1 -3.3

In FY2012, Swiber also saw its share of profit from associates and joint ventures surge over 6.1 times to hit US$17.8 million, from US$2.5 million in FY2011. The increase was due to the delivery of positive results from the Group's associates in Indonesia and certain joint ventures.

Dear Shareholders,

O n b e h a l f o f t h e B o a r d a n d Management, I am pleased to share that in FY2012, Swiber has delivered a record-high revenue and net profit, firmly based on solid fundamentals that we've built upon since our listing over six years ago. Our net profit surged 48.3% to US$62.5 million in FY2012 from US$42.2 million in FY2011, in tandem with a 45.5% jump in revenue to US$952.2 million from US$654.4 million over the same

period.

FY2012 – RECORD-HIGH REVENUE AND NET PROFIT SINCE LISTINGThe strong revenue growth was driven by various offshore construction contract wins in Latin America and Southeast Asia.

In March 2012, we secured our first contract in Mexico for offshore construction work, and started to recognise revenue from Latin America. The revenue that has been recognised for work performed in Latin America for 2012 amounted to US$171.0 million, close to 18% of the Group's topline in FY2012.

Swiber's topline in FY2012 also grew on the back of Southeast Asia's revenue contribution of US$445.5 million, as Swiber had won projects for execution in Brunei and Indonesia. Southeast Asia made up close to half of the Group revenue in FY2012 while South Asia and others contributed to over 35% of the Group revenue.

Notwithstanding higher cost of sales that was in line with the rise in revenue, our gross profit held steady at a healthy level of 15.9% for FY2012. Our gross margin also remained within expectations at 15.9%.

28.8

171.0

306.9

445.5

South AsiaSoutheast AsiaLatin AmericaOthers

Revenue by Geography in FY2012(US$’M)


26


Swiber's other operating income decreased by 31.7% to US$24.4 million in FY2012 from US$35.7 million in FY2011 as the last corresponding period included higher fair value gains from convertible bonds.

Other operating expenses, on the other hand, rose sharply to US$2.1 million in FY2012, mainly due to foreign exchange losses. At the same time, in line with business expansion, higher bank borrowings and issuance of debt securities, the Group incurred higher administrative expenses of US$60.9 million and finance costs of US$36.0 million respectively in FY2012, which had some impact on bottomline.

HEALTHY FINANCIAL POSITION AND INCREASED BALANCE SHEET FLEXIBILITYGiven the surge in earnings in FY2012, Swiber's basic earnings per share was higher at 7.8 US cents. Return on Equity ("ROE") also rose to 9.4% in FY2012. At the same time, Return on Asset ("ROA") grew to 3.2% as at 31 December 2012.

Swiber's cash and cash equivalents in FY2012 rose to US$129.5 million in FY2012. During the year under review, we raised US$308.8 million for vessel acquisition to support our business expansion and for general corporate funding purposes.

In March 2012, we successfully issued placement shares of up to 101,071,000 new ordinary shares at an issue price of S$0.635 per share. The proceeds of this Placement will be used to finance the general working capital requirements of the Group.

U n d e r o u r S $ 7 0 0 , 0 0 0 , 0 0 0 Multicurrency Medium Term Note Programme ("Programme"), we issued fixed rate notes on three separate occas ions -S$85,000,000 notes with interest of 6.25% per annum; S$75,000,000 notes with interest of 7.0% per annum; and S$150,000,000 notes with interest of 5.80% per annum. We also issued S$10,000,000 tap notes with an interest of 6.25% per annum.

Subsequently, we have updated the Programme to provide that in addition to notes, perpetual securities may also be issued under the Programme, the maximum aggregate perpetual amount of securities that may be

issued under the updated Programme ( w h e n a d d e d t o t h e p r i n c i p a l amount of securities outstanding) is increased from S$700,000,000 to S$1,000,000,000.

In September 2012, we successfully issued S$80,000,000 senior perpetual securities with an interest of 9.75% per annum.

STRONG CONTRACT WINS IN FY2012In the aspect of contract wins, FY2012 was a remarkable year. We secured our first contract in February 2012, worth US$216.0 million with additional US$38.0 million under our joint venture in the Middle East. These contracts signaled Swiber's further breakthrough into the Middle East market.

Swiftly in the next month, Swiber secured a sizeable contract through a local collaboration with Mexico-based Dragados Offshore ("Dragados"), totalling approximately US$273.0 million for offshore construction work in the Gulf of Mexico.

In June 2012, Swiber was awarded a US$175.0 million contract from Indonesia through a joint bid with consortium partner. The contract was for offshore engineering, procurement,

“One of the factors for Swiber’s success in FY2012 is our corporate strategy of geographical expansion through strategic alliances and joint ventures.”

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

27

MESSAGE FROM THE GROUP CEO AND

PRESIDENT

construction and installation works, specifically for platforms, pipelines and existing facilities in Indonesia.

S w i b e r ' s w i n n i n g m o m e n t u m continued to gain traction. In that same month, Swiber continued to clinch a series of significant awards in Asia Pacific and the Middle East totaling to over US$830.0 million for offshore construction projects and vessel chartering services, inclusive of optional items, in Asia Pacific. This also included a letter of award through our joint venture company to charter out a spread of support vessels in the Middle East.

In November 2012, Swiber scored a g a i n , s e c u r i n g a U S $ 1 0 0 . 0 million contract in Southeast Asia for Engineer ing, Procurement , C o n s t r u c t i o n , I n s t a l l a t i o n & Commissioning ("EPCIC") works. We also won a separate US$43.0 million contract in Latin America for the chartering of a construction vessel.

Overall, we are proud to have been awarded contracts amounting to over US$1.7 billion in FY2012. Our order book as of February 2013 also stood at approximately US$1.35. billion. This undoubtedly attests to the industry's preference for Swiber's complementary and comprehensive su i t e o f se r v i c es , wh ich when put together, offers a solid value proposition to our customers.

SWIBER'S GROWING INTERNATIONAL PRESENCEOne of the factors for Swiber's success in FY2012 is our corporate strategy of geographical expansion through strategic alliances and joint ventures. At the initial phase of our business growth, we were focusing on

the Southeast Asia market, a region where we have familiarity and in-depth knowledge. To be successful in a foreign market, Swiber has built strategic alliances with reputable partners that share similar values and vision as Swiber. With Swiber's technical exper t i se and asset -strength to fulfill complex projects' requirements and with our partners' strong local expertise in their region, Swiber has successfully built its presence and expanded its market reach to South Asia, the Middle East, and Latin America, apart from Southeast Asia.

In line with our corporate strategy, the Group incorporated a new wholly-owned subsidiary in Mexico, Swiber Offshore Mexico S.A. de C.V ("SOM") in April 2012. The principal activity of SOM is to engage in engineering, procurement, construct ion and installation of subsea pipelines. The Group also subscribed for 49% of equity interest in Dragados-Swiber Offshore S.A.P.I De C.V. ("Dragados- Swiber"). Dragados Swiber engages i n e n g i n e e r i n g , p ro c u re m e n t , construction and installation of subsea pipeline in the Gulf of Mexico.

We bel ieve that our w ide and diversified international presence allows us to leverage on the different offshore working seasons that various regions provide. This also leads to a better utilisation of our assets and scheduling of manpower in terms of project management.

“We believe that with our young and modern fleet now 61-vessel strong, Swiber presently has one of the largest fleet of vessels for shallow waters in the world.”


28


OUR GROWING BUSINESSIn addition to Swiber achieving a record revenue and net profit in FY2012, we are also proud to have successfully performed our f irst floatover operation in India. The extensive scope of work for this complex project involved floatover installation of a 13,000 MT AP process platform and an 8,000 MT AQ living quarter platform, as well as installation of bridges and flares.

T h e s u c c e s s f u l c o m p l e t i o n demonstrated that Swiber not only offers a solid value proposition, we are also able to deliver complex engineering solutions brilliantly, using in-house assets.

RENEWING OUR YOUNG AND MODERN FLEETWe believe that with our young and modern fleet now 61-vessel strong, comprising 46 offshore support vessels and 15 construction vessels, Swiber presently has the largest fleet of vessels for shallow waters -in the world.

We took delivery of two of our construction vessels in 2012 – the Holmen Pacific, a 34,400T/41,500T Submersible Transport, Floatover and Launch Barge, and the Holmen A t l a n t i c , a 1 6 , 6 0 0 T / 2 1 , 0 0 0 T Submersible Transport, Floatover and Launch Barge in FY2012. With these two vessels, Swiber had performed the first float-over installation project in India.

Swiber is now at the tail-end of our vessel expansion blueprint and we look forward to tak ing delivery of a 4,200 MT Derrick Crane Accommodation Work Barge in 2013.

However, as we move forward, we will continue to take steps in keeping our fleet strong.

Our extensive and growing operating fleet of 61 vessels enables Swiber to offer a wide range of offshore EPIC and marine support services beyond Southeast Asia to encompass the South Asia, the Middle East and Latin America regions.

A QUANTUM LEAP INTO THE FUTUREOver the years, Swiber has focused on building our vessel fleet and our human talents, laying our growth pipelines firmly. We believe that success is built on a strong team that shares the same passion for excellence. This in-house unity of purpose exudes deep confidence, and gives us the ability to make winning bids, clinching numerous and larger contracts over the years.

In our endeavour to diversify our geographical scope of work, we will not compromise on maintaining and improving our world-class standard of services. We will continue to uphold top-in-class service to our stakeholders and clients in the energy industry with accountability and excellence.

I t i s a l s o no t e w o r t h y t ha t f o r exemplary corporate governance and transparency practices throughout the year, we have emerged as a winner for Securities Investors Association (Singapore) ("SIAS")'s Singapore Corporate Governance Award in October 2012. We are indeed pleased to be awarded this honour and will continue to raise this torch high.

Oi l pr ices expected to remain sustainable and major oil and gas companies are continuing to drive offshore exploration and production capital expenditure, presenting a promising outlook for the Company.

Swiber is indeed primed to further capitalise on the upswings in the international offshore oil and gas industry. As we move forward, we continue to be grounded in our strategies for success. We look forward to delivering positive results to our stakeholders as we take our quantum leap into the future.

Francis Wong Chin SingGroup Chief Executive Officer and President

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

29

BOARD OF DIRECTORS

RAYMOND KIM GOHExecutive ChairmanChairman, Executive CommitteeDate of Appointment: November 12, 2004Last Re-elected: April 29, 2011

Mr. Raymond Goh founded the Swiber Group in 1996 and was appointed to the Board on November 2004. As the Executive Chairman, Mr. Goh is the key figure in leading Swiber’s overall business, operations and marketing aspects in the region. He sets the long-term growth strategy and spearheads growth initiatives to expand the Group’s resources, develop new markets and invest in new vessel designs and technology. Being an industry veteran with close to two decades of experience, Mr. Goh is currently also the Non-Executive Chairman of Vallianz Holdings Limited and Kreuz Holdings Limited. At the same time, Mr. Goh is active in grassroot community activities, serving as a patron of the Punggol North Citizen’s Consultative Committee and as Chairman of the School Advisory Board (SAC) for Westwood Primary School. Mr. Goh graduated from Murdoch University in Australia with a Bachelor of Commerce (Honours) degree.

FRANCIS WONG CHIN SINGExecutive Director and Group CEODate of Appointment: November 29, 2005Last Re-elected: April 30, 2010

Mr. Francis Wong joined Swiber in 2005 and was appointed to the Board in November 2005. As Swiber’s Group CEO and President, Mr. Wong has been charting Swiber’s corporate and strategic directions as well as steering its operations. With his strong financial background, Mr. Wong has put in place strong financial controls for the Group to support its rapid expansion regionally and globally, and into new business operations. In support of the Group’s investments, he also sits on the Board of Kreuz Holdings Limited as a Non-Executive Director. Active in his professional field, Mr. Wong is a fellow member of the Institute of Chartered Secretaries and Administrators and a fellow certified practicing accountant of CPA Australia. He is also a chartered accountant certified by the Malaysian Institute of Accountants and the New Zealand Institute of Chartered Accountants. Mr. Wong holds a Bachelor of Commerce degree from Australia’s Deakin University in 1988 and a Master of Commerce in Accounting from the University of Auckland in 1990.

JEAN PERSExecutive DirectorDate of Appointment: November 29, 2005Last Re-elected: April 18, 2012

Mr. Jean Pers joined Swiber in 2002 to develop the offshore EPIC business, and was appointed to the Board of Directors in 2005. Mr. Pers is currently the President and CEO of Equatoriale Offshore Development Services. He brings with him close to 35 years of engineering and operational experience in the offshore EPIC business, He had an illustrious career in the industry, previously heading the Marine Department at IKL Indonesia and being advisor to Voies Navigables de France and the Navigation Authority, which controls most of French navigable rivers and canals. Mr. Pers graduated from Ecole Nationale Ingenieurs in France in 1974 with an Engineer diploma. Since 1988, Mr. Pers has been a member of CNEDIES Centre National des Experts, an organization that provides expertise to analyse the causes of industrial accidents.

NITISH GUPTAExecutive DirectorDate of Appointment: March 19, 2009Last Re-elected: April 18, 2012

Mr. Nitish Gupta joined Swiber in 2006 as the Executive Vice President of the Offshore Construction Services Division and was appointed Chief Executive Officer of the unit in 2008. In March 2009, he was appointed to the Board of Directors. Having worked for a number of established offshore oil and gas construction companies since 1992, Mr. Gupta has extensive industry experience in India, Southeast Asia and the Middle East. Mr. Gupta graduated from Delhi College of Engineering, Delhi University in India with a Bachelor in Civil Engineering (Honours).


30

BOARD OF DIRECTORS

YEO JEU NAMLead Independent Non-Executive DirectorChairman, Audit CommitteeChairman, Remuneration CommitteeDate of Appointment: September 29, 2006Last Re-elected: April 29, 2011

Mr. Yeo Jeu Nam, has more than 30 years of consultancy experience. Mr Yeo sits on the board of Vallianz Holdings Limited and Frencken Group Limited as an Independent Non-Executive Director. Before founding Radiance Consulting Pte. Ltd., of which Mr. Yeo is currently its Managing Director, he was a Senior Consulting Partner with Ernst & Young Consultants where he headed the Strategy and Transformation practice as well as the HR Consulting practice for more than 12 years. He was also previously a Director at PwC Consulting where he headed their Public Sector Consulting practice. He graduated from the National University of Singapore with a Bachelor of Arts and a Bachelor of Social Sciences (Class ll Upper, Honours). Mr Yeo is also an alumnus of INSEAD.

OON THIAN SENGIndependent Non-Executive DirectorChairman, Nominating CommitteeDate of Appointment: September 29, 2006Last Re-elected: April 18, 2012

Mr. Oon Thian Seng is an advocate and solicitor, being one of the founding partners of TS Oon & Bazul, Singapore and sole proprietor of Oon & Partners LLP, Malaysia. He was appointed to the Board of Directors of Swiber in 2006. Mr. Oon holds a Bachelor of Laws (Honours) degree from the University of Warwick and a Master of Laws from the London School of Economics, University of London in England. Mr. Oon was admitted to the Bar of England and Wales in 1991 and as an Advocate and Solicitor of the Supreme Court of Singapore in 1993 and the High Court of Malaya in 2001.

CHIA FOOK ENGIndependent Non-Executive DirectorDate of Appointment: June 17, 2009Last Re-elected: April 30, 2010

Mr. Chia Fook Eng was appointed as an Independent Director on Swiber’s Board of Directors in 2009. Prior to his appointment, Mr. Chia served as an Advisor to Swiber’s Board of Directors on matters relating to the Group’s business. Mr. Chia comes from a strong marine engineering background, bringing with him more than 40 years of management experience in the marine and the oil and gas industry, working for established engineering and construction companies in Singapore and the Asia Pacific region. Mr. Chia holds a Bachelor of Science Degree in Mechanical Engineering from National Cheng Kung University and a Diploma in Management Studies from Graduate School of Business, University of Chicago.

YEO CHEE NENGNon-Executive DirectorDate of Appointment: November 12, 2004Last Re-elected: April 29, 2011

Mr. Darren Yeo joined the Group in 2003. Mr. Yeo is the President and CEO of Newcruz Offshore Marine Services and is responsible for the management and development of the Group’s offshore marine support business operations. He brings with him over 2 decades of industry experience under his belt. He was appointed Chief Executive Officer of Vallianz Holdings Limited on November 30, 2012. Mr. Yeo graduated from the National University of Singapore in 1993 with a Bachelor of Engineering degree. He later obtained a diploma in Marketing from the Singapore Institute of Management in 1995.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

31

SWIBER CORPORATE SERVICES MANAGEMENT TEAM

FRANCIS WONG CHIN SINGGroup CEO and President

Mr. Francis Wong is an Executive Director and the Group CEO and President of Swiber. His profile can be found on page 29 of the Annual Report.

LEONARD TAYGroup CFO and Vice-President

Mr. Leonard Tay who was an Independent Non-Executive Director and Audit Committee Chairman on the Board of Swiber since 2006 took on the role of Vice President and Group CFO in 2009. Mr. Tay is deeply involved in the strategic planning and management of the Group’s financial directives and fiscal policies. Mr. Tay has over a decade of financial management experience under his belt. Prior to his appointment to the Swiber Board in 2006, he was an Executive Director and Chief Financial Officer of Altitude Trust Management Pte. Ltd., the trustee manager of Altitude Aircraft Leasing Trust. He has also spent nine years in public accounting with the Big Four accounting firms. Mr. Tay holds a Bachelor’s degree in Business from Monash University and is a member of the Institute of Certified Public Accountants of Singapore, CPA Australia and the Singapore Institute of Directors.

DEEPAK KINGSLEYGeneral Counsel and Vice-President

Mr. Deepak Kingsley joined Swiber in 2008 as the General Counsel. In the role, Mr. Kingsley oversees the Group’s legal affairs and advises the Chairman and the management on such matters. Prior to joining Swiber, Mr. Kingsley was heading the Legal Department of Nippon Steel Engineering Co. Ltd. covering Southeast Asia. Mr. Kingsley has over 20 years of legal experience and has headed legal departments and has served as counsel to other large construction and engineering companies. Mr. Kingsley is a qualified Advocate in India and a Solicitor in Hong Kong. Mr. Kingsley holds a Bachelor of Laws degree and a Bachelor of Commerce degree from University of Madras.

JOHN SWINDENChairman of Advisory Board, Business Development

Mr. John F. Swinden joined Swiber in July 2011 as Chairman to Advisory Board, Business Development. Mr. Swinden has close to 40 years of leadership and industry experience prior to his service with Swiber. He had previously co-founded Cal Dive International, which is now known as Helix and served in senior key positions at J. Ray McDermott, Oceaneering International Inc. and Horizon Offshore Contractors. He was also President and a co-founder of Maritime Offshore, a marine construction company that is based in Houston, Texas. Mr. Swinden attended St. Mary’s College in England and the British Naval Diving School.


32

SWIBER OFFSHORECONSTRUCTION SERVICESMANAGEMENT TEAM

NITISH GUPTACEO

Mr. Nitish Gupta is an Executive Director of Swiber and the CEO of the Offshore Construction Services Division. His profile can be found on page 29 of the Annual Report.

SANJAY ANANDCOO

Mr. Sanjay Anand joined Swiber in September 2010 and is currently the Chief Operating Officer and is responsible for the overall management of the following project functions: Project Management, Project Controls including Cost Control, Planning and Document Control; Procurement; Subcontracts; and Contract Administration. Mr. Anand brings to Swiber over thirty years of experience in project management, design engineering, onshore/offshore construction, cost engineering, contract administration, proposals and estimating. Mr. Anand graduated from Delhi College of Engineering, Delhi University in India with a Bachelor in Civil Engineering in the year 1981.

STEPHEN CHURCHVP Fleet Management and Yard Services

Mr. Stephen Church joined Swiber in March 2007 and has risen within the ranks to become VP for Fleet Management and Yard Services. He has close to 35 years of industry experience, covering all facets of the offshore construction field, including subsea pipelaying, riser setting, jacket and deck installation, rig moves, heavy lifts, SBM installation and maintenance, topside maintenance and hook-up. Mr. Church is a graduate of University of Otago, New Zealand with Bachelor of Commerce degree, Major in Accounting.

RAJESHKUMAR V PANCHALVP T&I Projects and Operations

Mr. Rajesh Panchal joined Swiber in September, 2008. He currently serves as the Vice President for Project Operations and Transportation & Installation (T&I) Projects and is responsible for the execution of offshore projects. Mr. Panchal has close to 20 years of experience in the oil and gas industry and has worked on a variety of offshore projects in India, Middle East, Asia and North America.

JOSEPH CHENVP Brunei

Mr. Joseph Chen joined Swiber in 2007 to spearhead operations in Brunei Darussalam and drive the Group’s expansion, strategic alliances and activities in the Asia Pacific region. With 40 years of management experience, he has held various senior administrations and business management positions in the oil and gas related construction industry in Brunei. He holds a Master of Business Administration Degree, University of Southern Cross, Australia (Best Graduate) and a Business Diploma in Industrial Administration, School of Accountancy and Business Studies, UK.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

33

KREUZ OFFSHORESUBSEA SERVICES

MANAGEMENT TEAM

KURUSH PHIROZE CONTRACTORPresident and CEO

Backed by more than 27 years of experience in the offshore industry, Mr. Kurush Contractor joined the Group in August 2008. He is the President and CEO of Kreuz Offshore Subsea Services and has been in charge of the establishment, organisation and strategic growth of the Group’s offshore subsea business operations. Mr. Contractor is also currently an Executive Director and the CEO of Kreuz Holdings Ltd. He has strong hands-on experience, being a qualified commercial deep sea diver certified by the Health and Safety Executive of United Kingdom, and has received various technical qualifications for saturation diving, NDT, diving medicine and supervisor training. Mr. Contractor graduated from Bombay University, India with a Bachelor of Science degree majoring in Chemistry, Physics and Mathematics.

CYRUS CAMAVice President, Operations

Mr. Cyrus Cama has been in the subsea construction industry since 1991 and joined as the VP for Operations in June 2008 where he is responsible for leading the offshore subsea operations. He has held several posts as diver, project coordinator and project manager for several subsea projects in India, Middle East, Southeast Asia and Europe carried out by companies such as Rockwater Limited, Coflexip Stena Offshore Inc., Global Industries Limited, Stolt Comex Seaway and Subtec Middle East Ltd.

SHELDON HUTTONVice President, Installations

Mr. Sheldon Hutton joined the Swiber Group in June 2008 and is responsible for the offshore subsea installation projects. With close to 35 years of industry experience, he has played a vital role in major project completions for Hyundai, Shell, Exxon, British Petroleum, Petro Canada and Global Industries amongst many others. Mr. Hutton is instrumental in developing and pioneering methods for providing cost effective and successful completions of various kinds of subsea construction and installation works, enabling oil companies and producers to get online faster and safely. Mr. Hutton graduated from Seneca College in welding technology.


34

EQUATORIALE OFFSHORE DEVELOPMENT SERVICESMANAGEMENT TEAM

JEAN PERSPresident and CEO

Mr. Jean Pers is an Executive Director of Swiber and the President and CEO of the offshore development services divisions. His profile can be found on page 29 of the Annual Report.

YONG KUEK KIENCOO, Engineering

Mr. KK Yong joined PAPE Engineering in December 2012 as the Chief Operating Offi cer and he has 28 years of offshore upstream oil & gas experience. Prior to joining the company, Mr. Yong held key management positions in INTECSEA as the Operation Director of Singapore (Asia/Middle East region) and Project Director of the Netherlands office (Europe/Africa region). His role is to focus on the continual growth of the operation, strengthening of engineering delivery and development of new specialist capabilities, in line with the company’s goals towards pursuing projects in SURF (subsea, umbilicals, risers and fl owlines), deepwater, and offshore structures. Mr. Yong graduated from the University of Texas at Arlington (USA) in spring 1984 with a Bachelor of Science (Honours) in Civil Engineering.

LEONARD TAYExecutive Director

Mr. Leonard Tay is the Group CFO and Vice-President of Swiber. His profile can be found on page 31 of the Annual Report.

NEWCRUZ OFFSHOREMARINE SERVICES MANAGEMENT

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

35

QUALITY, HEALTH, SAFETY, AND ENVIRONMENT (QHSE) PHILOSOPHY: CAUSE NO HARM (CNH)

Delivering consistent and superior quality products and services as well as Health, Safety, and Environmental performance is paramount to Swiber’s aspiration in becoming an integrated niche energy company. Swiber’s QHSE management entails the following:

• Meeting or exceeding customer’s expectations by regularly collecting and analysing customer feedback;

• Promoting continual improvement by managing processes and resources in a planned, efficient and controlled manner;

• Continually improving the effectiveness of the QHSE system by establishing annual objectives;

• Ensuring that all employees and subcontractors understand the importance of their roles in contributing to the success of QHSE performance;

• Providing frequent communication of QHSE results and successful milestones;

• Promoting the well-being of all employees, encouraging team spir i t , act ive part ic ipat ion and effect ive communication throughout the organisation;

• Contributing to the profitability of the company through the Risk and Opportunity Knowledge Management System, collecting learning points and sharing best practices;

• Regularly reviewing the effectiveness of the QHSE Management System and company QHSE Policies by the management;

• Ensuring all business risks are identified and controlled;

• Ensuring compliance with internal QHSE processes and statutory requirements.

In order to deliver consistent, superior results, Swiber’s QHSE Management System is certified to ISO 14001:2004 for environmental management, ISO 9001:2008 for quality management and OHSAS 18001:2007 for the occupational health and safety management. In addition, its modern fleet is certified to the International Maritime Organisation’s ISM Code and its diving division is a certified contractor member of the International Marine Contractors Association (IMCA).

At the core of the QHSE management system lies an unwavering commitment to Cause No Harm. Cause No Harm is a concept and philosophy adopted by Swiber to reflect our business ethics and strategy. Everything we do will have, as our first consideration, the idea that it must cause no harm. Cause No Harm to ourselves as individuals, other people, our equipment whether owned or leased, materials, others assets, the environment in which we work, the planet as a whole and future generations who will inherit the legacies we leave behind.

Cause No Harm is integral to, and complements Swiber’s core TRADEmark values of Trust, Respect, Affirmation, Determination, and Excellence. It forms the foundation on which this company is built and expanded upon to achieve our vision and beyond. It takes our thinking away from short-term gains to sustainable, ethical ideas and actions that benefit everyone. In short, it moves us away from egocentricity to global-centricity, where we consider the impact of our actions broadly and take responsibility for the outcomes. The company continues to nurture this as a core value and through an ongoing education programme and guidance, it inculcates this as part of our company’s culture.

HR PHILOSOPHY: EMOTIONAL EXCELLENCE (EE)

Swiber strives to be an Emotionally Excellent organisation, where its leaders and employees exhibit a high level of emotional excellence, which allows the organization to connect with its most important asset – its people.

Being aware of our EQ and taking the necessary steps to develop it to its optimum, leads to Emotional Excellence (EE). EE enables the creation of excellent human relationships by keeping oneself and others highly motivated, engaged and committed at work and in their personal lives. Practicing EE at the workplace allows us to deal and support each other in the right way, enabling us to perform at a higher level in order to achieve the goals of the organisation collectively.

OPERATIONAL EXCELLENCE PHILOSOPHY: CONTINUOUS SWIBER IMPROVEMENT (CSI)

CSI is our management and operations improvement system inspired by the Kaizen/Lean & Theory of Constraints ("TOC") management philosophies. This improvement of standardised activities and processes aims to eliminate waste and remove the constraints in business processes to increase efficiencies. TOC focuses on the few elements which govern the performance of the organisation as a whole. It is based on the assumption that any system, no matter how complex it seems, is governed by just a few elements. Identifying the system’s constraints and managing them accordingly produces fast-paced results and fosters harmony throughout the system.

Working with a global company of TOC experts, we are implementing the most developed, updated, and tested TOC body of knowledge, providing a synergy of its various applications to bring Swiber a holistic solution that delivers unprecedented performance and bottom-line results. With TOC, we aim to accelerate cash flow and profit, and strengthen the company for exponential growth.

CORE PHILOSOPHIES


36

CORPORATE SOCIALRESPONSIBILITY

SWIBER GIVES BACKAmong the numerous Corporate Soc ia l Responsibility ("CSR") efforts that Swiber and its subsidiaries and overseas offices have embarked on for the past years, Swiber has focused on supporting education and the needs of the disadvantaged youth and the elderly. This has led to partnerships and scholarship programmes with several organisations like Northview Primary School – Singapore, Ahuva Good Shepherd – Singapore, Komunitas Harapan Esok – Indonesia, Pusat Ethan – Brunei, Phoenix Association – Myanmar, Lions Befrienders Service Association for the Elderly – Singapore, Toa Payoh Care Corner – Singapore, Lakeside Family Center – Singapore.

Volunteer work and fund-raising efforts worked hand in hand to sustain the different activities that were embarked on last year – as Swiber continues to strive to be a responsive and caring company with various communities. Our Brunei office led the way in caring for the environment with its Beach Cleaning in Kuala Belait and Tree Planting campaigns. Meanwhile, the relationship remains strong for the private individuals that Swiber has embraced as family: a handicapped, single father, his daughter and a wheelchair-bound young man are now permanent members at Swiber’s corporate social events. A congenitally ill baby who was confined for almost a year in Singapore has now returned healthy and strong back to her family in Jakarta. Swiber has also received much support from its business partners, PT Karya Alfa Omega of Indonesia and Kaizen Institute of Japan to build the Swiber GK Village in the Philippines. This community of 64 homes, completed last September, was purely funded by private donations. A turn-over ceremony was held in October 2012, graced by Gawad Kalinga founder, Mr. Tony Meloto, Mexico Ambassador to Singapore, Ambassador Antonio Villegas, Kaizen Institute CEO, Mr. Brad Schmidt and Swiber Group CEO & President, Mr. Francis Wong.

Phoenix Scholars, Myanmar

Tree Planting, Brunei

Harapan Esok Scholars , Indonesia

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

37

CORPORATE SOCIALRESPONSIBILITY

Swiber is a member of Singapore Compact for Corporate Social Responsibility for three years now and last year, we participated in their Young CSR Leaders Award program. It is aimed to create CSR awareness and engage the youth early on by attaching tertiary students in Singapore with companies to help analyse and propose CSR programs & practices among Small and Medium Enterprises ("SMEs"). Indeed, being able to give back is a privilege that Swiber is grateful for. This positively compels everyone in the organisation to keep doing well in what we do so we can continue to do good for others.

Kuala Belait Beach Cleaning, BruneiSwiber GK Village, Philippines

Pusat Ethan, Brunei

Toa Payoh Care Corner, Singapore


38

CORPORATE STRUCTURE

OFFSHORECONSTRUCTION

SERVICES

RawabiSwiber

OffshoreServicesLimited

(BVI)

50%

RawabiSwiber

OffshoreServicesCo. Ltd.(Saudi)

50%

RawabiSwiber

OffshoreMarine

Pte. Ltd.(Singapore)

50%

AlamSwiber

Offshore (M)Sdn. Bhd.(Malaysia)

50%

SwiberOffshore

ConstructionPte. Ltd.

(Singapore)

100%

Swiber Marine Pte.

Ltd.(Singapore)

100%

Dragados-Swiber

OffshoreS.A.P.I. De

C.V.(Mexico)(Note 2)

SwiberCorporateServicesPte. Ltd.

(Singapore)

100%

SWIBER HOLDINGS LIMITED

SwiberOffshoreMarine


100%

SwiberPJW3000


100%

SwiberAtlantis Pte. Ltd.

(Singapore)

100%

Alam Swiber

DLB 1 (L)Inc

(Labuan)

49%

SwiberOffshore

(India)PrivateLimited(India)

PT. RajawaliSwiber

Cakrawala(Indonesia)

ResolutePte. Ltd.

(Singapore)

VallianzHoldingsLimited

(Singapore)

PT. SwiberBerjaya

(Indonesia)

HolmenHeavyliftOffshore Pte. Ltd.

(Singapore)

HolmenKaizen Ltd.

(BVI)

SwiberEngineering

Ltd.(Labuan)

100%

SwiberOffshore

Mexico S.A. De C.V.(Mexico)(Note 1)

100%

SwiberOffshore

Mexico S.A. De C.V.(Mexico)(Note 1)

100%

Key Subsidiary

Key Joint Venture

Key Associate

Kreuz Engineering Limited has direct interest of 1% in the entity

Kreuz Engineering Limited and Kreuz Subsea Pte Ltd have direct interest of 1% in the entity respectively

Note 1

Note 2

SwiwarOffshore

Pte. Limited

(Singapore)

50%

49%

49%49%49%23%49%28.88%49%

VictoriousLLC

(MarshallIslands)

49%

VallianzMarine


49%33.3%

PJW 3000LLC

(MarshallIslands)

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

39

CORPORATE STRUCTURE

OFFSHOREMARINE SERVICES

OFFSHOREDEVELOPMENT

SERVICES

OFFSHORESUBSEA SERVICES

OffshoreEngineeringResourcesPte. Ltd.

(Singapore)

25%

KreuzSubsea (B)Sdn. Bhd.(Brunei)

KSSEngineering

Ltd.(Labuan)

NewcruzInternational


100%

KreuzHoldingsLimited

(Singapore)

57.5%

EquatorialeInternational


100%

NewcruzOffshoreMarine


100%

NewcruzShipbuilding

&Engineering


100%

KreuzSubseaPte. Ltd.

(Singapore)

EquatorialeServicesPte. Ltd.

(Singapore)

PAPEEngineering


80%

KreuzSubseaMarine


100% 100%

100% 100%100%

KreuzEngineering

Limited(Labuan)

100%


40

CORPORATE INFORMATION

BOARD OF DIRECTORSRaymond Kim Goh, Executive Chairman

Francis Wong Chin Sing, Executive Director

and Group Chief Executive Officer

Jean Pers, Executive Director

Nitish Gupta, Executive Director

Yeo Chee Neng, Non-Executive Director

Yeo Jeu Nam, Lead Independent

Non-Executive Director

Chia Fook Eng, Independent


Oon Thian Seng, Independent


COMPANY SECRETARYLee Bee Fong

EXECUTIVE COMMITTEERaymond Kim Goh, Chairman

Francis Wong Chin SingJean PersNitish GuptaKurush Phiroze Contractor

AUDIT COMMITTEEYeo Jeu Nam, Chairman

Chia Fook EngOon Thian SengFrancis Wong Chin Sing

REMUNERATION COMMITTEEYeo Jeu Nam, Chairman

Chia Fook EngOon Thian Seng

NOMINATING COMMITTEEOon Thian Seng, Chairman

Yeo Jeu NamChia Fook Eng

REGISTERED OFFICE12 International Business ParkSwiber@IBP #04-01Singapore 609920T: +65 6505 0800F: +65 6505 0802www.swiber.com

SHARE REGISTRARBoardroom Corporate & AdvisoryServices Pte Ltd50 Raffles PlaceSingapore Land Tower #32-01Singapore 048623

PRINCIPAL BANKERSAmBank (M) Berhad22nd FloorBangunan Ambank GroupNo. 55, Jalan Raja Chulan50200 Kuala Lumpur, Malaysia

Australia and New Zealand Banking Group Limited10 Collyer Quay #22-00Ocean Financial CentreSingapore 049315

Bank of America Merrill Lynch9 Raffles Place #18-00Republic Plaza Tower 1Singapore 048619

Chinatrust Commercial Bank Co., Ltd8 Marina View #33-02Asia Square Tower 1Singapore 018960

CIMB Bank Berhad50 Raffles Place #09-01Singapore Land TowerSingapore 048623

Citibank N.A.3 Temasek AvenueCentennial TowerSingapore 039190

DBS Bank Limited12 Marina BoulevardMarina Bay Financial Centre Tower 3Singapore 018982

Deutsche Bank AGOne Raffles Quay#16-00 South TowerSingapore 048583

ICICI Bank Limited9 Raffles Place #50-01 Republic PlazaSingapore 048619

Malayan Banking Berhad2 Battery RoadMaybank TowerSingapore 049907

Qatar National Bank SAQOne Temasek Ave #22-03Millenia TowerSingapore 039192

RHB Bank Bhd90 Cecil Street #03-00RHB Bank BuildingSingapore 069531

The Bank of East Asia, Limited60 Robinson RoadBEA BuildingSingapore 068892

The Hongkong and Shanghai Banking Corporation Limited 21 Collyer Quay#04-01 HSBC BuildingSingapore 049320

The Siam Commercial Bank Public Company Limited8th Floor, Zone B9 Ratchadapisek RoadChatuchakBangkok 10900

United Overseas Bank Limited80 Raffles PlaceUOB PlazaSingapore 048624

FINANCE COMPANIESCaterpillar Financial Services Asia Pte. Ltd.14 Tractor RoadSingapore 627873

GE Capital Services Pte Ltd72 Anson RoadLevel 5 Anson HouseSingapore 079911

AUDITORSPricewaterhouseCoopers LLP8 Cross Street#17-00 PWC BuildingSingapore 048424Partner-in-charge: Lee Chian Yorn(Appointed with effect from financial year ended 31 December 2011)

INVESTOR RELATIONSDolores Phua/Pearl LamCitigate Dewe Rogerson, i.MAGE55 Market Street #02-01/02Singapore 0489411 T: +65 6534-5122F: +65 6534-4171

CORPORATE GOVERNANCE REPORT

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

41

Swiber Holdings Limited (the “Company”) and the Board of Directors (the “Board”) consider good corporate governance to be the trademark of a well-managed organization. The focus of the Company’s governance framework, which is formulated on the Company’s vision and mission, is to promote accountability and transparency. The Board and Management are committed to maintaining a high standard of corporate governance within the Group and adopt practices based on the Code of Corporate Governance 2005 (the “Code”). On 2 May 2012, the Monetary Authority of Singapore (the “MAS”) issued a revised Code of Corporate Governance (the “Revised Code”), which takes effect with respect to Annual Reports of listed entities relating to financial years commencing from 1 November 2012. As at the date of this Report, the Company is in compliance with the Code and is working to adopt the new changes of the Revised Code where appropriate so as to strengthen corporate governance practice and foster greater corporate disclosure, where it is applicable and practical to the Group. The Company recognizes the importance of good governance for continued growth and investors confidence.

In line with the commitment by the Company to maintaining high standards of corporate governance, the Company will continually review its corporate governance processes to strive to fully comply with the Code.

The Board is pleased to report compliance of the Company with the Code and Mainboard Listing manual of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) (the “Listing Manual”) where applicable except where otherwise stated.

BOARD MATTERS

Principle 1: Board’s Conduct of AffairsEvery company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board.

The Board’s primary role is to protect and enhance long-term shareholder value. Apart from its statutory duties and responsibilities, the Board sets the strategies for the Group, oversees the executive management and affairs of the Group. It reviews and advises on overall strategies, policies and objectives, sets goals, supervises Management, monitors business performance and goals achievement, and assumes responsibility for overall corporate governance of the Group to ensure that the Group’s strategies are in the interests of the Company and its shareholders.

The Board is also responsible for the following corporate matters:

(a) Approval of quarterly, half-yearly and year-end results announcements;(b) Approval of the annual report and accounts;(c) Convening of shareholders’ meetings;(d) Major investments and funding;(e) Interested person transactions;(f) Material acquisitions and disposal of assets;(g) Corporate strategic direction, strategies and action plans;(h) Issuance of policies and key business initiatives; and(i) Consider sustainability issues such as social and environmental factors as part of its strategic formulation.

The Board meets on a regular basis and as and when necessary to address any specific significant matters that may arise, if physical meeting is not possible, the Article of Association of the Company provides for directors to conduct meetings by tele-conferencing or video-conferencing. While the Board considers directors’ attendance at Board meetings to be important, it should not be the main criteria to measure their contributions. The Board also takes into account the contributions by board members in other forms including periodical reviews, provisions of guidance and advice on various matters relating to the Group.



42

In recognition of the high standard of accountability to our shareholders, the Board has established various Board committees, namely, Audit Committee (“AC”), Nominating Committee (“NC”), Remuneration Committee (“RC”) and Executive Committee (“Exco”). These committees function within clearly defined terms of references and operating procedures, which will be reviewed on a regular basis by the Board. The effectiveness of each committee will also be constantly reviewed by the Board.

EXECUTIVE COMMITTEE

The Exco was established under the leadership of the Executive Chairman and comprises of representatives from the main business units. The Exco is a formal committee and is charged with supporting the Executive Chairman and the Group Chief Executive Officer (“CEO”) in delivering the Group’s long term strategic plans, annual business plans and major corporate projects, handling of operating matters that are significant or involve questions of principle, and in ensuring a good internal flow of information.

The Exco comprises the following members:

Raymond Kim Goh, Executive Chairman, Swiber Corporate (Chairman)Francis Wong Chin Sing, Group CEO and President, Swiber CorporateNitish Gupta, CEO, Offshore Construction ServicesKurush Phiroze Contractor, CEO and President, Offshore Subsea ServicesJean Pers, CEO and President, Offshore Development Services

The Exco meets regularly and exercises its powers and authority, taking into consideration the best interest of the Group. The Exco shall meet at such times and places as the Exco shall deem advisable on the call of the Chairman of the Exco, the Chairman of the Board, the Group CEO, or, in their absence, by any member of the Exco.

The main responsibilities of the Exco include:

(a) to formulate the Group’s strategic development initiatives, direct the Group in its widest context and ensures sound operation of general Group management;

(b) to ensure implementation, checking and coordination of the Group’s strategic plans in the areas of research and development, operations, financial, administrative, risk and legal issues, human resources and investment;

(c) to review, recommend and confirm presidential appointments to the Group;(d) to establish policies for the Group and make sure those are followed through with at all times;(e) to consider cross-business major project issues; identify, manage and mitigate business risks;(f) to promote and maintain the TRADEmark values of the Group, namely Trust, Respect, Affirmation,

Determination and Excellence;(g) to monitor working capital and cash collection and prioritise the allocation of capital;(h) to promote the principles inherent in the Group becoming an Integrated Global Enterprise;(i) to ensure co-ordination across the Group; identify gaps, issues and conflicts and commission appropriate

resolutions;(j) to foster relations with global clients and improve existing client associations;(k) to consider promotions and succession planning; and(l) to undertake other roles and responsibilities as directed by the Group CEO.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

43

The Exco is guided by and practises the following principles:

(a) Provide clear vision and a sense of direction(b) Articulate a strategy(c) Establish and live the corporate values(d) Lead by example(e) Align individual and company goals(f) Encourage and respond to feedback(g) Coach and support to deliver peak performance(h) Behave consistently and in accordance with the Group’s TRADEmark values(i) Promote empowerment(j) Encourage and stimulate change(k) Aim to give praise(l) Work as a team to deliver corporate success(m) Become a global business

During the financial year, the number of meetings held and the attendance of each member of the Board and Board committees’ meetings are as follows:

Board AC NC RC

Number of scheduled meetings held 4 5 2 2

Directors Number of meetings attended

Raymond Kim Goh 4/4 NA NA NA

Francis Wong Chin Sing 4/4 4/5 NA NA

Jean Pers 2/4 NA NA NA

Nitish Gupta 3/4 NA NA NA

Yeo Chee Neng 4/4 NA NA NA

Yeo Jeu Nam 4/4 5/5 2/2 2/2

Oon Thian Seng 3/4 4/5 1/2 1/2

Chia Fook Eng 4/4 5/5 2/2 2/2

The Directors of the Company are provided with continuing briefings from time to time and are kept updated on relevant new laws and regulations, including directors’ duties and responsibilities, corporate governance and developing trends, insider trading and financial reporting standards so as to enable them to discharge to properly discharge their duties as Board or Board committee members.



44

Briefings and updates provided for directors during FY2012 were:

• The external auditors briefed the AC members on developments in accounting and governance standards.

• In February and August 2012, Board members were briefed by external auditors and Company Secretary on the amendments to the Listing Manual and the Revised Code.

• In November 2012, the Board members were briefed by the Company Secretary on the MAS introduction of the new disclosure of interest regulatory regime to streamline and enhance the existing disclosure requirements in listed entities by directors and substantial shareholders. The new regime took effect on 19 November 2012.

• The CEO and Chairman update the Board members on business and strategic developments of the Group and overview of industry trends at the regular scheduled meetings and ad hoc Board meetings. Directors can request for further explanations, briefings or information on any aspects the Group’s business issues from Management.

Principle 2: Board Composition and GuidanceThere should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

The Board comprises eight directors of whom four are Executive Directors, one is an Non-Executive Director and three are Independent Non-Executive Directors, with the Independent Non-Executive Directors making up of not less than one third of the Board, thus providing a strong and independent element on the Board capable of exercising objective judgment.

Each year, the NC reviews the size and composition of the Board and Board committees. The Board considers the present Board size and the number of Board committees to be sufficient for effective decision-making. The Board has the requisite mix of expertise and experience, and collectively possesses the necessary core competencies for effective functioning and informed decision-making and is appropriate for the nature and scope of the Group’s operation. Each director has been appointed based on the strength of his calibre, experience and stature and is expected to bring a valuable range of experience and expertise to contribute to the development of the Group’s strategies and the performance of its business.

All Directors are subject to retirement and re-election at least once every three years. The independence of each Independent Non-Executive Director is reviewed annually by the NC. The NC adopts the Revised Code’s definition of what constitutes an Independent Director in its review. The NC is of the view that the three Independent Non-Executive Directors (who represent one-third of the Board) are independent.

None of the Independent Non-Executive Director of the Company has been appointed as Director to the Company’s principal subsidiaries. The Board and the Management are of the view that the current Board structures of the principal subsidiaries of the Company are well organized and constituted. The Board will from time to time make the appropriate corporate decisions to consider the appointment of the Independent Non-Executive Director to the Company’s principal subsidiaries.

As and when required, the Independent Directors will hold a meeting without the presence of Management and Executive Directors, in order to facilitate a more effective check on the Management and/or the Executive Directors.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

45

The criteria for independence are determined taking into account the definition provided in the Revised Code and also the followings:

(a) The Board will assess the independence of directors regularly. For the avoidance of doubt, only Non-Executive Directors (that is, a director who is not a member of management) can be considered independent.

(b) The Board will endeavour to consider all of the circumstances relevant to a director in determining whether the director is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company.

(c) Amongst the circumstances considered by the Board will be a range of factors, including that a director or his immediate family member:

(i) is not being employed by the Company or of its related companies for the current or any of the past three financial years;

(ii) is not a substantial shareholder or an immediate family member (being a spouse, child, adopted child, step-child, brother, sister and parent) of a substantial shareholder of the Company;

(iii) is not a director who is or has been directly associated with a substantial shareholder of the Company in the current or any of the past three financial years;

(iv) is not an immediate family member who is, or has been in any of the past three financial years, employed by the Company or of its related companies whose remuneration is determined by the RC;

(v) has not accept any compensation from the Company or any of its related companies other than compensation for board service for the current or immediate past financial year;

(vi) is not a substantial shareholder of or a partner in (with 5% or more stake), or an executive officer of, or director of any organization to which the Company made or any of its subsidiaries made, or from which the company or any of its subsidiaries received significant payment or material services in excess of S$200,000 in the current or immediate past financial year.

(d) Each director is responsible for notifying the Chairman and the Company Secretary about any external positions, appointments or arrangements that could result in the director not being “independent”.

The profiles of each of the directors are set out on pages 29 and 30 of this Annual Report.

Principle 3: Chairman and Chief Executive OfficerThere should be a clear division of responsibilities at the top of the company, the working of the Board and the executive responsibility of the company’s business, which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

Mr Raymond Kim Goh continues to serve as the Executive Chairman of the Group and play an active role in mapping out the directions for Swiber’s growth at a strategic level. He promotes culture of openness and debate within the Board and between the Board and Management. He exercises control over the quality and timeliness of information flow between the Board and Management. In addition, he provides close oversight, guidance, advice and leadership to the CEO and Management. At annual general meetings (“AGM”) and other shareholder meetings, the Chairman plays a pivotal role in fostering constructive dialogue between shareholders, the Board and Management.



46

Mr Francis Wong Chin Sing, the Group CEO and President, leads the Management in setting strategies, objectives and missions and is responsible for the day-to-day operations of the Group. He ensures that the Board members are provided with accurate and timely information.

The separation of the roles of Chairman and CEO is to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. The Chairman and CEO are not related. The division of responsibilities and functions between the two has been demarcated with the concurrence of the Board.

Mr Raymond Kim Goh’s and Mr Francis Wong Chin Sing’s performance and remuneration will be reviewed annually by the NC and the RC, whose members also comprised only of Independent Non-Executive Directors of the Company. As such, the strong independent element on the Board ensures decisions are not based on a considerable concentration of power in a single individual. With the existence of various committees with power and authority to perform key functions, the Board believes that there are adequate safeguards in place against an uneven concentration of power and authority in a single individual.

Mr Yeo Jeu Nam is the Lead Independent Non-Executive Director of the Company to whom concerns may be conveyed to as and when the need arises. His appointment as the Lead Independent Director is required for the Company where the Chairman is part of the Management team and is not independent director.

NOMINATING COMMITTEE

Principle 4: Board MembershipThere should be a formal and transparent process for the appointment of new directors to the Board.

The Board reviews the composition of the Board and Board committees annually, having regard to the performance and contribution of each individual director.

The NC comprises Mr Oon Thian Seng, Mr Yeo Jeu Nam and Mr Chia Fook Eng as members who are Independent Non-Executive Directors. Mr. Oon Thian Seng is the Chairman of the NC.

The NC is responsible for:

(a) appointment and re-appointment of directors (including Independent Directors) taking into consideration each director’s contribution and performance;

(b) determining annually whether or not a director is independent;(c) deciding whether or not a director is able to and has been adequately carrying out his duties as a director;

and(d) proposing a set of objective performance criteria to the Board for approval and implementation, to evaluate

the effectiveness of the Board as a whole and the contribution of each director to the effectiveness of the Board.

New directors are appointed by way of a board resolution, after the NC has approved their nomination. In its search and selection process for new directors, other than through formal search, the NC taps on the resources of directors’ personal contacts and recommendations of potential candidates and appraises the nominees to ensure that the candidates possess relevant experience and have the calibre to contribute to the Group and its businesses, having regard to the attributes of the existing Board and the requirements of the Group.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

47

Recommendation of Nomination and Re-nomination of Directors

The NC is responsible for reviewing and recommending all nominations and re-nominations of Directors. All directors are subject to retirement in accordance with the provisions of the Company’s Articles of Association whereby one third of the directors are required to retire (or if their number is not a multiple of three, the number nearest to but not less than one third) and subject themselves for re-election by shareholders at every AGM. A new director who is appointed by the Board is subject to re-election by shareholders at the next AGM following his appointment and, thereafter, shall not be taken into account in determining the number of directors who are to retire by rotation.

At the forthcoming AGM, the NC had nominated and recommended that Mr Francis Wong Chin Sing, Mr Yeo Chee Neng and Mr Chia Fook Eng will retire by rotation pursuant to the Company’s Articles of Association. All of them, being eligible for re-election, have offered themselves for re-election.

Each member of the NC abstains from voting on any resolutions and making any recommendation and/or participating in respect of matters in which he has an interest.

All directors are required to declare their board representation, as at the date of this Annual Report, their directorships and chairmanships in other listed companies both current and those held over in the preceding three years are as follows:

Name of directors Present Past (for the last 3 years)

Raymond Kim GohKreuz Holdings Limited

Vallianz Holdings Limited–

Francis Wong Chin Sing Kreuz Holdings Limited –

Jean Pers – –

Nitish Gupta – –

Yeo Chee Neng Vallianz Holdings LimitedKreuz Holdings Limited

(alternate director to Mr Francis Wong Chin Sing)

Yeo Jeu NamVallianz Holdings Limited Frencken Group Limited

EDMI Limited

Oon Thian Seng – –

Chia Fook Eng – –



48

Principle 5: Board PerformanceThere should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

The Group implemented the Board-approved evaluation process and performance criteria to assess the performance of the Board as a whole as well as the contribution of each individual director.

At the date of this Annual Report, the NC has adopted a formal process to assess the effectiveness of the Board and the Board committees as a whole. The qualitative measures include the effectiveness of the Board in its monitoring role and the attainment of the strategic objectives set by the Board. The evaluation exercise is carried out by way of a performance evaluation checklist, which is circulated to the Board members for completion and thereafter for the NC to review and determine the actions required to improve the corporate governance of the Company and effectiveness of the Board as a whole.

A review of the Board’s performance is undertaken collectively by the Board annually and informally on a continuous basis by the NC with input from the other Board members. Renewals or replacement of Board members, when it occurs, do not necessarily reflect their contributions to date, but may be driven by the need to position and shape the Board in line with the medium term needs of the Company and its business.

The performance of the Board is evaluated using agreed criteria, aligned as far as possible with appropriate corporate objectives. The criteria include board structure, board processes, board roles and responsibilities, conduct and performance of its principle functions and duties.

Assessment of individual director’s performance is undertaken by the NC. Some factors considered in the individual review are director’s attendance and participation in and outside meetings, the quality of director’s intervention and industry and business knowledge made by the director.

The NC is aware that some of the Directors do hold multiple directorships as each of them are required to disclose their other directorships to the Board, upon appointment and cessation. Therefore, the NC will from time to time, evaluate their performance to ensure that each Director is able to carry out his duties effectively, taking into consideration the Director’s others board representation and principal commitments. The NC reviewed, taking into account the individual performance assessment and their actual conduct on the board, and is satisfied that the Directors with multiple board representations have given adequate time and attention to the Company affairs during the year under review.

ACCESS TO INFORMATION

Principle 6: Access to InformationIn order to fulfill their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis.

The Board and the Board committees are furnished with management reports containing complete, adequate and timely information, and papers containing relevant background or explanatory information required to support the decision-making process. Management team and the Company’s auditors would also provide additional information on the matters for discussion.

All directors have separate and independent access to senior management and to the Company Secretary. The Company Secretary administers and prepares minutes of the Board and the Board committees’ meetings and assists the Chairman in ensuring that the Board procedures are followed and that applicable statutory and regulatory rules and regulations are complied with.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

49

The appointment and the removal of the Company Secretary are subject to the Board’s approval as a whole.

The directors, in furtherance of their duties, are entitled to take independent professional advice at the expense of the Company when necessary.

When a director is first appointed to the Board, an orientation program is arranged for him to ensure that he is familiar with the Company’s business and governance practices.

REMUNERATION MATTERS

Principle 7: Procedures for Developing Remuneration PoliciesThere should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

The RC comprises Mr Yeo Jeu Nam, Mr Oon Thian Seng and Mr Chia Fook Eng who are Independent Non-Executive Directors. Mr Yeo Jeu Nam is the Chairman of the RC.

The RC is responsible for:

(a) recommending to the Board a framework of remuneration for the directors and key executives;(b) determining specific remuneration package for each Executive Director; and(c) reviewing all aspects of remuneration, including directors’ fees, salaries, allowances, bonuses, the options to

be issued under the share option scheme, the awards to be granted under the share plan and other benefit in-kind.

The Chairman of the RC reviews, for recommendation to the Board, the specific remuneration package for the Executive Directors and key executives or senior management. There are appropriate and meaningful measures in place for the purpose of assessing the performance of Executive Directors and key executives or senior management. In determining remuneration packages of Executive Directors and key executives or senior management, the RC will ensure that directors and key executives or senior management are adequately but not excessively rewarded. The RC will consider, in consultation with the Board, amongst other things, their responsibilities, skills, expertise and contributions to the Company’s performance and whether the remuneration packages are competitive and sufficient to ensure that the Company is able to attract and retain the best available executive talent. Each member of the RC does not participate in any decision concerning his own remuneration.

In reviewing and recommending the remuneration of non-executive director and independent directors, the RC will consider, in consultation with the Board, the level of contribution, taking into account factors such as effort and time spent, and responsibilities of the non-executive directors and independent directors. The RC will ensure that the non-executive director and independent directors are not over compensated to the extent that their independence may be compromised.

The independent directors hold shares in the Company to ensure their interests are aligned with the shareholders’ interests.



50

Principle 8: Level and Mix of RemunerationThe level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

The Company sets remuneration packages to ensure that it is competitive and sufficient to attract, retain and motivate directors and senior management of the required experience and expertise to run the Group successfully.

In addition to the above, the Company ensures that the performance-related remuneration were implemented to ensure that the interests of the shareholders are aligned with and in order to promote the long-term success of the Company.

The Company had taken appropriate and meaningful measures in assessing the executive directors’ and key management personnel’s performance.

Long-term incentive schemes are generally encourage for the executive directors and key management personnel. The RC had reviewed the executive directors and key management personnel who are eligible for benefits under the long-term incentive schemes. The long-term incentives schemes of the Company including the Swiber Employee Share Option Scheme and Swiber Performance Share Plan.

Other than the above, the Executive and Non-Executive Directors receive directors’ fees, in accordance with their level of contributions, taking into account factors such as responsibilities, effort and time spent for serving on the Board and the Board committees. The directors’ fees are recommended by the Board for approval at the AGM.

The Executive Directors of the Company, Mr Raymond Kim Goh, Mr Francis Wong Chin Sing, Mr Jean Pers, Mr Nitish Gupta and Mr Yeo Chee Neng (prior to his re-designation a Non-Executive Director with effect from 1 December 2012) have entered into separate service agreements with the Company which are reviewed annually (unless otherwise terminated by either party giving not less than six months’ notice to the other). The service agreements cover the terms of employment and specifically, the salaries and bonuses.

The Independent Non-Executive Directors do not have any service agreements with the Company. Except for directors’ fees, which have to be approved by shareholders at AGMs, the Independent Non-Executive Directors do not receive any other forms of remuneration from the Company.

Principle 9: Disclosure on RemunerationEach company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

51

The following table shows a breakdown of the annual remuneration (in percentage terms) of directors of the Company for the financial year under review:

Remuneration Band and Name of Directors Salary

Performancelncentives(1)/

Bonus(2)

Directors’fees

Others Benefits Total

% % % % %

S$500,000 and above

Raymond Kim Goh 86 – 4 10 100

Francis Wong Chin Sing 76 – 4 20 100

Jean Pers 90 – 6 4 100

Yeo Chee Neng* 89 – 6 5 100

Nitish Gupta 77 – 6 17 100

Below S$150,000

Yeo Jeu Nam – – 100 – 100

Chia Fook Eng – – 100 – 100

Oon Thian Seng – – 100 – 100

* re-designated as a Non-Executive Director with effective from 1 December 2012

Notes:

(1) Performance incentives refer to long term cash incentive plan and long term performance driven award.

(2) Bonus is short term cash incentive plan and is a sum of money or given in addition to usual compensation, normally for

outstanding performance and service for certain period.

To maintain confidentiality of staff remuneration matters and for competitive reason, the names of the key executives of the Group are not disclosed in this Annual Report. The following shows the annual remuneration of the top 10 key executives of the Group (who are not directors or the CEO) for the financial year under review:

(a) Six key executives received remuneration of more than S$450,000.

(b) Four key executives received remuneration of more than S$250,000 but less than S$449,999.

The Company does not have any employee who is immediate family member of a Director or the CEO, whose remuneration exceeded S$150,000 for the financial year ended 31 December 2012.

Details of the share options and awards under the Swiber Employee Share Option Scheme and Swiber Performance Share Plan can be found on pages 59 to 61.



52

ACCOUNTABILITY AND AUDIT

Principle 10: AccountabilityThe Board should present a balanced and understandable assessment of the company’s performance, position and prospects.

The Company provides the shareholders with quarterly and annually financial report which include a detailed and balanced explanation and analysis of the Company’s performance, position and prospects on a quarterly basis. The Board is provided with appropriately detailed management reports on a quarterly basis.

For quarterly financial statements, the Board provides a negative assurance confirmation to shareholders, in line with the Listing Manual. For the full-year financial statements, the Board provides an opinion that the Group’s internal controls, addressing financial, operational and compliance risks, are adequate. This is based on the internal controls established and maintained by the Company and the Group, work performed by the internal and external auditors, and reviews performed by Management, various Board Committees and the Board.

The Board ensures that all relevant regulatory compliances and updates will be highlighted from time to time to ensure adequate compliances with the regulatory and relevant government authorities.

Principle 11: Audit CommitteeThe Board should establish an audit committee with written terms of reference which clearly set out its authority and duties.

The AC comprises Mr Yeo Jeu Nam, Mr Oon Thian Seng, Mr Chia Fook Eng and Mr Francis Wong. Save for Mr Francis Wong, an Executive Director of the Company, the other three members of the AC are Independent Non-Executive Directors. Mr Yeo Jeu Nam is the Chairman of the AC.

The AC is responsible for:

(a) reviewing the audit plans of the Company’s external auditors;(b) reviewing the reports of the Company’s external auditors;(c) reviewing the co-operation given by the Company’s officers to the external auditors;(d) reviewing the financial statements of the Company and its subsidiaries before their submission to the Board;(e) reviewing and recommending to the Board, the quarterly, half-yearly and annual announcements as well as

the related press releases on the results and financial positions of the Company and the Group;(f) nominating the Company’s external auditors for re-appointment including recommending to the Board their

remuneration and terms of engagement;(g) nominating the Company’s internal auditors for re-appointment including recommending to the Board on

their remuneration and terms of engagement;(h) approving the Company’s internal audit plans;(i) reviewing the reports of the Company’s internal auditors;(j) reviewing interested person transaction (if any);(k) reviewing and assessing the adequacy and effectiveness of the Group’s system of internal controls and

regulatory compliance through discussion with Board, Management, internal and external auditors;(l) reviewing and considering transactions in which there may be potential conflicts of interests between the

Group and its interested persons and recommending whether those who are in a position of conflict should abstain from participating in any discussion or deliberations of the Board or voting on resolutions of the Board or the shareholders in relation to such transactions;

(m) a reviewing and approving procedures to hedge the exposure to foreign currency fluctuations (if any); and(n) reviewing the findings of internal investigations into matters where there is any suspected fraud or irregularity

or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on the Group’s results of operation and/or financial position.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

53

The AC has the express power to conduct or authorize investigations into any matters within its terms of reference, has full access to and co-operation by Management. The AC has full discretion to invite any other directors or executive officers to attend its meetings and to ensure that reasonable resources are available to enable it to discharge its function properly. As at the date of this Annual Report, the AC has met with the external and internal auditors separately without the presence of Management to review any area of audit concern. Ad-hoc AC meetings may be carried out from time to time, as circumstances require.

The Company has implemented a whistle blowing policy which will provide well-defined and accessible channels in the Group through which employees may raise concerns about improper conduct within the Group. The AC will review arrangements by which staff of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The AC’s objectives are to ensure that arrangements are in place for the independent investigation of such matters and for appropriate follow-up action. There have been no reported incidents pertaining to whistle-blowing for FY2012.

The Group has outsourced its internal audit function to an international public accounting firm, Messrs Moore Stephens LLP. The internal auditors carry out their duties as set out in their engagement terms, together with review and audit on the Company’s design and implementation of the internal controls to the extent as set out in their annual internal audit plan. Any internal control issues will be highlighted and noted during their audit review and their recommendations will be reported to the AC during the AC quarterly meeting. As at the date of this Annual Report, the AC has met with the internal auditors separately without the presence of Management to review any area of audit concern.

Statutory audit review and the implementation of the Company’s material internal controls are reviewed by the Company’s external auditors, Messrs PricewaterhouseCoopers LLP (“PwC”) to the extent set out in their audit plan. Any material non-compliance and internal control weaknesses noted during their audit, and the external auditors’ recommendations to address such non-compliance and weaknesses, will be reported to the AC.

Any material non-compliances and internal control weaknesses will be followed up by the Management as part of Management’s role in the review of the Company’s internal control systems. The Board is satisfied that the Company’s internal controls are adequate.

The AC reviews the scope and results of the audit work, the cost effectiveness of the audit and the independence and objectivity of the external auditors. During the financial year under review, the AC has reviewed the independence of external auditors including the volume of all non-audit services provided to the Group, and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. The AC is pleased to recommend the re-appointment of PwC as external auditors of the Company at the forthcoming AGM.

The Group has appointed different auditors for its overseas subsidiaries. The Board and the AC are satisfied that the appointment would not compromise the standard and effectiveness of the audit of the Group. Accordingly, the Company has complied with Rule 712 and Rule 716 of the Listing Manual of the SGX-ST in the appointment of its external auditors.

The aggregate amount of agreed fees to be paid to the external auditors for the financial year under review is S$723,000 which comprises of audit fee of S$480,000 and non-audit fee of S$243,000. The AC has recommended the re-appointment of the external auditors at the forthcoming AGM.



54

In order to ensure that the AC is able to fulfill its responsibilities, Management provides Board members with management reports and updates of the accounting standards, regulations and issues which have direct impact on the financial statements. This is to ensure that all relevant information including the material events and transactions are circulated to AC as and when they arise.

In addition to that, whenever necessary, senior management staff will be invited to attend the AC meetings to answer queries and provide detailed insights into their areas of operations. The AC is kept informed by Management on the status of on-going activities between Board meetings. Where a decision has to be made before a Board meeting, a directors’ resolution is done in accordance with the Articles of Association of the Company and the AC are provided with all necessary information to enable them to make informed decisions.

The AC has full access to and co-operation by the Management and has been given resources to enable the AC to discharge its functions properly. The external and internal auditors have unrestricted access to the AC.

The AC has been provided with the phone numbers and email particulars of the Company’s senior management and Company Secretary to facilitate access.

As at the date of this report, none of the former partner or director of the Company’s external auditors’ firm has been appointed as a member of the AC.

INTERNAL CONTROLS AND AUDITS

Principle 12: Internal ControlsThe Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.

The Board annually reviews the adequacy and effectiveness of the Group’s risk management and internal controls framework, including financial, operational, compliance and information technology controls.

On an annual basis, the Company’s internal auditors prepare an audit plan which complements that of the external auditors, so as to review the adequacy and effectiveness of the system of internal controls of the Group. These include operational, financial and compliance controls. The internal auditors follow up these recommendations to ensure that Management has implemented them on a timely and appropriate manner and reports to the AC periodically. In addition, the external auditors will highlight and report to the AC at the AC meetings, of any material internal control weaknesses which have come to their attention in the course of their statutory audit. All audit findings and recommendations made by the internal and external auditors are reported to the AC.

Financial, operational and compliance assessment checklists, which takes into account the significant operational, regulatory compliances and guidance and financial risks, were also prepared and reviewed by the Management, CEO and Chief Financial Officer (“CFO”); in order to assist the AC and the Board to assess the adequacy of the risk management and internal control systems of the Group.

With the presence of the Exco who meets regularly, the Board is able to receive the feedback and response on the risks and legal issues which will affect the Group in terms of operational risks, on timely basis.

For the financial year under review, the CEO and the CFO have provided their confirmation and assurance to the Board on the integrity of the financial statements for the Company and that they give a true and fair view of the Company’s operations, finances and effectiveness of the Company’s risk management and internal controls systems.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

55

Based on the internal controls established by and maintained by the Company, the assurance provided by the CEO and the CFO, the work performed by the internal and external auditors and reviews performed by Management and various Board committees and the Board, the Board, with the concurrence of the AC, is of the opinion that the Company’s risk management and internal controls in place in addressing the financial, operational and compliance risks are adequate as at 31 December 2012.

The system of internal controls and risk management established by the Company provides reasonable, but not absolute, assurance that the Company will not be adversely affected by any event that can be reasonably foreseen as it strives to achieve its business objectives. The Company is also consistently improving the Company’s internal controls and to adopts the recommendations which were highlighted by the internal and external auditors to further safeguard the Company’s internal controls.

Principle 13: Internal AuditThe company should establish an internal audit function that is independent of the activities it audits.

The Board supports the need of an internal audit function where its primary objective is to maintain a system of internal controls and processes to safeguard shareholders’ investment and the Group’s assets. The internal auditors’ primary role is to assist the Board and Management to review the effectiveness of the key internal controls, including financial, operational and compliance controls, and risk management on an ongoing basis and to provide an independent and objective evaluation of the adequacy and effectiveness of risk management, controls and governance processes. The internal auditor team is expected to meet the standards set by nationally or internationally recognized professional bodies including the standards for the Professional Practice of Internal Auditing of the Institute of Internal Auditors.

The internal auditors’ primary line of reporting is to the Chairman of the AC. Procedures are in place for internal auditors to report independently their findings and recommendations to the AC. The AC will review the internal audit plan, the scope and findings of internal audit procedures during the year and the internal auditors’ reports on a quarterly basis. The AC is satisfied that the internal audit is adequately resourced and has appropriate standing within the Group.

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

The Board is mindful of its obligations to provide its shareholders with timely disclosure of material information presented in a fair and objective manner.

The Company does not practise selective disclosure. In line with the continuing obligations of the Company pursuant to the Listing Manual of the SGX-ST, the Board’s policy is that all shareholders would be equally informed of all major developments and/or transactions impacting the Group. The Company is committed to disclosing as much relevant information as it possible, in a timely, fair and transparent manner, to its shareholders.



56

Quarterly results of the Company will be published through the SGXNET, news releases and the Company’s website. All information on the Company’s new initiatives will be first disseminated via SGXNET followed by a news release, which will also be available on the Company’s website. Price sensitive information is first publicly released, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Results and annual reports are announced or issued within the period prescribed by the SGX-ST and are available on the Company’s website. The Company notifies the date of the release of its quarterly results at least five days prior to the date of the results announcements through the SGXNET. The release of such timely and relevant information is crucial to good corporate governance and enables shareholders to make informed decisions in respect of their investments in the Company.

The Company has an investor relations team and supported by external consultant firm in promoting communication with shareholders and analysts. Contact information of the internal and external investor relations teams are made available on the Company’s website.

The AGM of the Company is a principal forum for dialogue and interaction with all shareholders. All shareholders will receive the annual report of the Company and notice of AGM. At the AGM, shareholders will be given the opportunity to voice their views and to direct questions regarding the Group to the directors. The Chairmen of the AC, NC and RC would be present at the AGMs to answer any question relating to the work of these committees. The external auditors are also present to address shareholders’ queries about the conduct of the audit and preparation and content of the auditors’ report.

Shareholders are given the right to vote on the resolutions at general meetings. Each item of special business included in the notice of the meeting is accompanied, where appropriate, by an explanation for the proposed resolution. The Company provides for separate resolutions at general meetings on each distinct issue will be carried in a separate resolution. The results of all general meetings of the Company are notified and released through SGXNET after the meetings. Proxy form is sent with the notice of general meeting to all shareholders so that those shareholders who are unable to attend the general meeting in person can appoint a proxy or proxies to attend and vote on their behalf. The Company’s Articles of Association allow a shareholder of the Company to appoint up to two proxies to attend and vote at all general meetings on his/her behalf. As the authentication of shareholder identity information and other related security issues still remain a concern, the Company will not implement voting in absentia by mail, email or fax.

INTERESTED PERSON TRANSACTIONS

The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC and that the transactions are carried out on an arm’s length basis. There were no material interested person transactions entered into by the Group for the financial year under review.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

57

MATERIAL CONTRACTS

Save for the service agreements entered into between the Executive Directors and the Company, there was no material contract entered into by the Company and its subsidiaries involving the interests of any director or controlling shareholders subsisting at the end of the financial year ended 31 December 2012.

DEALINGS IN SECURITIES

The Company has adopted an internal code on dealings in securities. Directors, senior management and employees (collectively “Officers”) of the Group who have access to price-sensitive, financial or confidential information are not permitted to deal in the Company’s securities during the periods commencing two weeks before announcement of the Group’s quarterly results and one month before the announcement of the Group’s yearly results and ending on the date of announcement of such result, or when they are in possession of unpublished price-sensitive information on the Group. In addition, the Officers of the Company are advised not to deal in the Company’s securities for a short term considerations and are expected to observe the insider trading laws at all times even when dealing in securities within the permitted trading periods. Officers are to consult with the Group CFO or Company Secretary before trading in Company’s securities and to confirm annually that they have complied with and not in breach of the code. The Board is kept informed when a Director trades in the Company’s securities.

RISK MANAGEMENT POLICIES AND PROCESSES

The Company does not have a risk management committee. The senior management assumes the responsibility of the risk management function. The senior management regularly assesses and reviews the Group’s business and operational environment in order to identify areas of significant business and financial risks, such as credit risks, foreign exchange risks, liquidity risks and interest rate risks, as well as appropriate measures to control and mitigate these risks.

OTHER CODES

The Company has a Code of Business Conduct for Employees that sets the responsibilities, policies as well as standard and ethical conduct expected of employees. The Code of Business Conduct covers all aspects of the business operations of the Company such as confidentiality of information, insider trading, gifts, gratuities or bribes and dishonest conduct. Employees are required to observe and maintain high standards of integrity, as well as compliance with laws and regulations and company policies.


58

REPORT OF THE DIRECTORSFor the financial year ended 31 December 2012

The directors present their report together with the audited financial statements of the Group for the financial year ended 31 December 2012 and statement of financial position of the Company as at 31 December 2012.

DIRECTORS

The directors of the Company in office at the date of this report are as follows:

Raymond Kim GohFrancis Wong Chin SingJean PersNitish GuptaYeo Chee NengYeo Jeu NamOon Thian SengChia Fook Eng

ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate other than as disclosed under Share Options on pages 59 to 61 of this report.

DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

According to the register of directors’ shareholdings kept by the Company pursuant to Section 164 of the Companies Act, Cap. 50, none of the directors holding office at the end of the financial year had any interests in the shares or debentures of the Company or its related corporations except as follows:

Holdings registered in name of director or nomineeAt 1 January

2012At 31 December

2012At 21 January

2013

Swiber Holdings Limited(Ordinary shares)

Raymond Kim Goh 26,206,000 42,800,000 42,800,000Francis Wong Chin Sing 13,333,333 13,333,333 13,333,333Jean Pers 16,544,000 35,200,000 35,200,000Nitish Gupta 5,000,000 5,000,000 5,000,000Yeo Chee Neng 30,100,000 35,100,000 35,100,000Yeo Jeu Nam 30,000 30,000 30,000Oon Thian Seng 30,000 30,000 30,000Chia Fook Eng 15,000 15,000 15,000

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

59


DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (Continued)

Holdings registered in name of director or nominee

Related corporationAt 1 January

2012At 31 December

2012At 21 January

2013

Kreuz Holdings Limited(Ordinary shares)

Raymond Kim Goh 1,000,000 1,000,000 1,000,000Francis Wong Chin Sing 1,000,000 1,000,000 1,000,000Jean Pers 1,000,000 1,000,000 1,000,000Nitish Gupta 1,000,000 1,000,000 1,000,000Yeo Jeu Nam 150,000 150,000 150,000Oon Thian Seng 90,000 90,000 90,000Chia Fook Eng 150,000 150,000 20,000

None of the directors holding office at the end of the financial year had any deemed interest in the shares or debentures of the Company or its related corporations.

DIRECTORS’ CONTRACTUAL BENEFITS

Since the end of previous financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except for salaries, bonuses and other benefits as disclosed in the accompanying financial statements. Certain directors received remuneration from related corporations in their capacity as directors and/or executives of those related corporations.

SHARE OPTIONS

(a) Options to take up unissued shares

Swiber Employee Share Option Scheme

On 29 September 2006, the Company adopted the Swiber Employee Share Option Scheme (“Scheme”) to grant share options to eligible employees (including executive directors) and non-executive directors (including independent directors) of the Company and its subsidiaries. Under the Scheme, the executive directors who are controlling shareholders and their respective associates shall not be eligible to participate in the Scheme.

The Scheme is administered by Share Options Committee comprising the following members:

Yeo Jeu NamChia Fook EngOon Thian SengRaymond Kim Goh

The Scheme shall continue in operation for a maximum period of 10 years commencing from 29 September 2006, provided always that the Scheme may continue for any further period thereafter with the approval of the shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required.


60


SHARE OPTIONS (Continued)

(a) Options to take up unissued shares (Continued)

Swiber Employee Share Option Scheme (Continued)

The Share Options Committee has the absolute discretion to grant options with an exercise price at a discount to a price (“Market Price”) equal to the average of the last dealt prices for the shares on the Singapore Exchange Securities Trading Limited for the five consecutive market days immediately preceding the relevant date of grant of the options (subject to a maximum limit of 20%) or at Market Price. The options may be exercisable after the first anniversary from the date of grant if offer price is not at a discount or after the second anniversary from the date of grant if offer price is at a discount. The total number of shares over which options may be granted under the Scheme on any date, when added to the number of shares issued and issuable in respect of all options granted under the Scheme and all awards granted under Swiber Performance Share Plan and all shares, option or awards granted under any other share option schemes or share plans of the Company shall not exceed 15% of the issued share capital, excluding treasury shares, of the Company on the date preceding the date of the relevant grant. The options granted under the Scheme will have a life span of five years. Options granted may lapse or be exercised earlier in circumstances which includes the termination of the employment of the participants in the group, the bankruptcy of the participants, the death of the participants, a take-over or winding up of the Company.

(b) Unissued shares under option

Swiber Employee Share Option Scheme

Details of share options are disclosed in Note 24 to the financial statements.

The number of unissued ordinary shares of the Company under option in relation to the Scheme outstanding at the end of the financial year was as follows:

Date of grant

No. of unissued ordinary shares under option at

31 December 2012 Exercise price Exercise period

26 January 2011 15,000,000 S$0.9726 January 2012 to

25 January 2016

The details of share options granted under the Scheme to the directors of the Company are as follows:

Name of DirectorOptions granted during the year

Aggregate options granted since

commencement of Scheme to 31 December

2012

Aggregate options exercised since commencement

of Scheme to 31 December

2012

Aggregate options

outstanding as at

31 December 2012

Raymond Kim Goh – 5,000,000 – 5,000,000Francis Wong Chin Sing – 3,000,000 – 3,000,000Jean Pers – 2,000,000 – 2,000,000Nitish Gupta – 2,000,000 – 2,000,000Yeo Chee Neng – 2,000,000 – 2,000,000Yeo Jeu Nam – 400,000 – 400,000Oon Thian Seng – 300,000 – 300,000Chia Fook Eng – 300,000 – 300,000

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

61


SHARE OPTIONS (Continued)

(b) Unissued shares under option (Continued)

Swiber Employee Share Option Scheme (Continued)

Except as disclosed above, no options have been granted to controlling shareholders of the Company or their associates.

During the financial year, no participants to the Scheme has received options which represents 5% or more of the total number of shares under option available under the Scheme and no shares were issued at a discount to the market price.

Swiber Performance Share Plan

The Swiber Performance Share Plan (the “Plan”) was approved by the shareholders on 29 September 2006. The purpose of the Plan is to provide eligible participants with an opportunity to participate in the equity of the Company and to motivate them towards excellence performance and to maintain high level of contribution to the Group. Full-time employees of the Group (including executive directors) and non-executive directors (including independent directors) are eligible to participate in the Plan. Under the Plan, the executive directors who are controlling shareholders and their respective associates shall not be eligible to participate in the Plan.

The Plan is administered by the Awards Committee comprising the following members:

Yeo Jeu NamChia Fook EngOon Thian SengRaymond Kim Goh

The total number of new Swiber shares which may be issued pursuant to the awards granted on any date and total number of existing shares which may be purchased from the market for delivery pursuant to awards granted under the Plan, when added to the number of new Swiber shares issued and issuable or existing shares delivered and deliverable in respect of all awards granted under the Plan, all options granted under the Scheme and all shares, options or awards granted under any other share scheme of the Company shall not exceed 15% of the number of issued shares, excluding treasury shares, of the Company on the day preceding the date of awards. The Plan is designed to reward the participants by the issue of fully-paid shares free of charge according to the extent to which they complete certain time-base service conditions or achieve their performance targets over set performance periods. The Awards Committee has the absolute discretion to determine the eligible participants in the Plan.

Details of share awards are disclosed in Note 24 to the financial statements.

During the financial year, 1,031,666 treasury shares of the Company were re-issued pursuant to the Plan.

Date of grant At 1 January 2012 Granted Vested At 31 December 2012

26 January 2011 3,095,000 – (1,031,666) 2,063,334


62


AUDIT COMMITTEE

At the end of financial year, the Audit Committee comprises three independent non-executive directors and one executive director:

Yeo Jeu Nam (Chairman)Oon Thian SengChia Fook EngFrancis Wong Chin Sing

The financial statements, accounting policies and system of internal accounting controls are the responsibility of the Board of Directors acting through the Audit Committee.

The Audit Committee has met five times during the financial year and has reviewed the following, where relevant, with the executive directors and the external and internal auditors of the Company:

(a) the audit plans and results of the internal auditors’ examination and evaluation of the Group’s systems of internal accounting controls;

(b) the Group’s financial and operating results and accounting policies;

(c) the financial statements of the Company and the consolidated financial statements of the Group before their submission to the directors of the Company and external auditors’ report on those financial statements;

(d) the quarterly, half-yearly and annual announcements as well as the related press releases on the results and financial position of the Company and the Group;

(e) the co-operation and assistance given by the management to the Group’s external auditors;

(f) the re-appointment of the external auditors of the Group; and

(g) the adequacy and effectiveness of the Group’s system of internal controls and regulatory compliance.

The Audit Committee has full access to and has the co-operation of the management and has been given the resources required for it to discharge its function properly. It also has full discretion to invite any director and executive officer to attend its meetings. The independent auditors have unrestricted access to the Audit Committee.

The Audit Committee has recommended to the Board that the independent auditor, PricewaterhouseCoopers LLP, be nominated for re-appointment at the forthcoming Annual General Meeting of the Company.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

63


INDEPENDENT AUDITOR

The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.

On behalf of the directors

RAYMOND KIM GOHDirector

FRANCIS WONG CHIN SINGDirector

25 March 2013


64

STATEMENT OF THE DIRECTORSFor the financial year ended 31 December 2012

In the opinion of the directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 66 to 137 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2012 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and

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

On behalf of the directors

RAYMOND KIM GOHDirector

FRANCIS WONG CHIN SINGDirector

25 March 2013

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

65

INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF SWIBER HOLDINGS LIMITED AND ITS SUBSIDIARIES

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Swiber Holdings Limited (the “Company”) and its subsidiaries (the “Group”) set out on pages 66 to 137, which comprise the statements of financial position of the Group and of the Company as at 31 December 2012, the consolidated income statement, consolidated statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

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

AUDITOR’S RESPONSIBILITY

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

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

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

OPINION

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2012, and of the results, changes in equity and cash flows of the Group for the financial year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.

PricewaterhouseCoopers LLPPublic Accountants and Certified Public Accountants

Singapore, 25 March 2013


66

STATEMENT OF FINANCIAL POSITIONAs at 31 December 2012

Group Company

Note 2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

ASSETS

Current assetsCash and cash equivalents 4 129,499 116,458 8,805 8,476Trade receivables 5 519,895 276,660 – –Other receivables 6 232,216 118,832 560,425 764,116Inventories 7 169,199 91,696 – –Derivative financial instruments 9 2,803 – 2,795 –Construction contract work-in-progress 26,761 4,768 – –

1,080,373 608,414 572,025 772,592

Non-current assetsDerivative financial instruments 9 1,558 – 1,558 –Investments in associates 10 97,225 110,447 33,336 33,428Investments in joint ventures 11 21,938 20,238 – –Investments in subsidiaries 12 – – 249,638 249,628Other receivables 6 88,398 82,808 37,614 16,305Property, plant and equipment 13 678,161 552,736 303 583Goodwill 14 309 309 – –

887,589 766,538 322,449 299,944

Total assets 1,967,962 1,374,952 894,474 1,072,536

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

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

67

STATEMENT OF FINANCIAL POSITIONAs at 31 December 2012

Group Company

Note 2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

LIABILITIES

Current liabilitiesTrade payables 15 165,333 154,782 – –Other payables 16 327,293 98,106 104,868 462,180Income tax liabilities 30,116 8,608 – 143Bank borrowings 17 202,988 105,757 – –Derivative financial instruments 9 16 – 16 –Notes payables 18 185,732 128,445 185,732 128,445Convertible bonds 19 – 102,570 – 102,570Finance leases 20 3,897 4,384 66 184

915,375 602,652 290,682 693,522

Non-current liabilitiesDerivative financial instruments 9 3,818 3,908 122 3,855Bank borrowings 17 100,198 76,625 – –Notes payables 18 233,274 151,330 233,274 151,330Convertible bonds 19 36,196 – 36,196 –Finance leases 20 4,314 7,840 129 225Deferred income tax liabilities 21 9,208 9,005 18 19

387,008 248,708 269,739 155,429

Capital, reserves and non-controlling interestsShare capital 22 208,246 158,006 208,246 158,006Treasury shares 23 (1,643) (2,507) (1,643) (2,507)Perpetual capital securities 25 63,627 – 63,627 –Hedging reserve 24 (12,387) (1,991) (7,612) (1,991)Translation reserve 24 (378) 538 – –Equity reserve 24 (7,584) (8,206) – –Employees’ share option reserve 24 4,236 4,009 4,236 4,009Retained earnings 227,356 209,314 67,199 66,068

Eq uity attributable to owners of the Company and perpetual capital securities holders 481,473 359,163 334,053 223,585

Non-controlling interests 184,106 164,429 – –

Total equity 665,579 523,592 334,053 223,585

Total liabilities and equity 1,967,962 1,374,952 894,474 1,072,536



68

CONSOLIDATED INCOME STATEMENTFor the financial year ended 31 December 2012

Group

Note 2012 2011

US$’000 US$’000

Revenue 26 952,234 654,487

Cost of sales (800,415) (541,541)

Gross profit 151,819 112,946

Other operating income 29 24,375 35,713Administrative expenses (60,906) (58,523)Other operating expenses (2,125) (787)Finance expenses 30 (35,954) (22,433)Share of profits of associates and joint ventures 10,11 17,788 2,489

Profit before tax 94,997 69,405

Income tax expense 31 (32,460) (27,227)

Profit for the year 62,537 42,178

Attributable to:Owners of the Company 45,681 32,067Perpetual capital securities holders 1,712 –Non-controlling interests 15,144 10,111

62,537 42,178

Earnings per share (in US cents):Basic 32 7.80 6.34

Diluted 32 6.53 3.72


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

69

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the financial year ended 31 December 2012

Group

2012 2011

US$’000 US$’000

Profit for the year 62,537 42,178

Other comprehensive income:Cash flow hedges – Fair value losses (11,035) (2,467) – Reclassification 1,718 2,180Currency translation differences on translation of foreign operations (916) 30Share of other comprehensive income of: – Associates (1,026) – – Joint Ventures (53) –

Other comprehensive income for the year, net of tax 51,225 41,921

Total comprehensive income attributable to:Owners of the company 34,369 31,810Perpetual capital securities holders 1,712 –Non-controlling interests 15,144 10,111

Total 51,225 41,921



70

STATEMENT OF CHANGES IN EQUITYFor the financial year ended 31 December 2012

GROUP

Share capital

Treasury shares

Hedging reserve

Translation reserve

Equity reserve

Employees’ share

option reserve

Retained earnings

Equity attributable to owners

of the Company

Perpetual capital

securities

Equity attributable to owners

of the Company

and perpetual

capitalsecurities

holders

Non-controlling

interests Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Balance at 1 January 2012 158,006 (2,507) (1,991) 538 (8,206) 4,009 209,314 359,163 – 359,163 164,429 523,592Total comprehensive income for the year – – (10,396) (916) – – 45,681 34,369 1,712 36,081 15,144 51,225Proceeds from shares issued 50,240 – – – – – – 50,240 – 50,240 – 50,240Value of employee services receired for issue of share options – – – – – 1,028 – 1,028 – 1,028 – 1,028Performance shares awarded using treasury shares – 864 – – (63) (801) – – – – – –Change of interest in subsidiary – – – – 685 – (14,198) (13,513) – (13,513) 12,633 (880)Redemption of preference shares issued by a subsidiary – – – – – – – – – – (8,100) (8,100)Dividends paid on preference shares issued by a subsidiary – – – – – – (6,331) (6,331) – (6,331) – (6,331)Dividends relating to FY2012 payable – – – – – – (7,110) (7,110) – (7,110) – (7,110)Issuance of perpetual capital securities net of transaction cost – – – – – – – – 61,915 61,915 – 61,915

Balance at 31 December 2012 208,246 (1,643) (12,387) (378) (7,584) 4,236 227,356 417,846 63,627 481,473 184,106 665,579

Balance at 1 January 2011 158,006 (2,507) (1,704) 508 (8,206) – 179,569 325,666 – 325,666 30,606 356,272Total comprehensive income for the year – – (287) 30 – – 32,067 31,810 – 31,810 10,111 41,921Value of employee services received for issue of share options – – – – – 4,009 – 4,009 – 4,009 – 4,009Preference shares issued by a subsidiary – – – – – – – – – – 123,750 123,750Change of interest in subsidiary – – – – – – – – – – (38) (38)Dividends paid on preference shares issued by a subsidiary – – – – – – (2,322) (2,322) – (2,322) – (2,322)

Balance at 31 December 2011 158,006 (2,507) (1,991) 538 (8,206) 4,009 209,314 359,163 – 359,163 164,429 523,592


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

71

CONSOLIDATED STATEMENT OF CASH FLOWSFor the financial year ended 31 December 2012

Group

2012 2011

US$’000 US$’000

Operating activities Profit after income tax 62,537 42,178 Adjustments for: Allowance for impairment of receivables 827 – Income tax expenses 32,460 27,227 Bad debts written off 77 31 Reversal of doubtful debt expenses – (115) Depreciation of property, plant and equipment 28,064 20,801 Employees’ share options/awards expense 1,028 4,009 Property, plant and equipment written off – 31 Interest income (5,692) (2,197) Finance costs 44,533 22,433 Fa ir value loss of derivative financial instrument not

designated as hedge instruments – 15 Fa ir value gain on financial liabilities designated

as fair value through profit or loss (2,035) (11,243) Unrealised currency translation losses (3,768) 5,042 Gain on disposal of property, plant and equipment (3,816) (1,007) Gain on disposal of assets held for sale – (830) Gain on disposal of subsidiaries (963) (788) Gain on disposal of associate (4,309) – Share of profit of associates and joint ventures (17,788) (2,489)

Change in working capital, net of effects from acquisition and disposal of subsidiaries: 131,155 103,098 Trade receivables (244,138) (25,151) Construction work-in-progress (21,993) (3,207) Inventories (77,504) (71,472) Other assets and receivables (276,031) (69,672) Trade payables (13,296) 83,384 Other payables 467,463 31,943

Cash (used in)/generated by operations (34,344) 48,923

Income taxes paid (10,991) (20,070) Interest expense paid (23,801) (12,809)

Net cash (used in)/generated by operating activities (69,136) 16,044



72

CONSOLIDATED STATEMENT OF CASH FLOWSFor the financial year ended 31 December 2012

Group

Note 2012 2011

US$’000 US$’000

Investing activities Interest income received 980 2,197 Dividend received from associates 10 9,107 8,646 Proceeds from disposal of property, plant and equipment 26,926 20,282 Proceeds from disposal of assets held for sale – 2,164 Disposal of subsidiary (2,976) 115 Proceeds from disposal of associates 5,200 – Purchases of property, plant and equipment (Note A) (168,578) (171,932) Investment in subsidiaries – (38) Investment in associates – (18,786) Acquisition of subsidiary 38 (11,836) – Dividend paid on preference shares issued by a subsidiary (4,781) –

Net cash used in investing activities (145,958) (157,352)

Financing activities Pledged deposits 1,881 869 Proceeds from issuance of notes payables 255,296 135,773 Proceeds from issuance of ordinary shares 50,239 – Repayment of obligations under finance leases (4,753) (7,649) Redemption of convertible bond (61,982) – Redemption of notes payables (140,000) (78,680) Redemption of preference shares issued by a subsidiary (8,100) – Net proceed from issuance of perpetual capital securities 61,915 – Loan to associates (32,000) – New bank loans raised 549,612 240,046 Repayments of bank loans (455,422) (169,459) Proceeds from issuance of shares by a subsidiary 13,171 –

Net cash generated by financing activities 229,857 120,900

Net increase/(decrease) in cash and cash equivalents 14,763 (20,408)Cash and cash equivalents at the beginning of the year 103,388 123,908Effects of exchange rate changes on the cash balance held in foreign currencies 159 (112)

Cash and cash equivalents at the end of the year 4 118,310 103,388

Cash and cash equivalents consists of:Cash at bank 4 118,164 103,249Fixed deposits 11,296 13,161Cash on hand 39 48

129,499 116,458Less: Pledged cash placed with banks (11,189) (13,070)

Total 118,310 103,388

Notes to the consolidated statement of cash flows(A) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of US$263,856,000

(2011: US$297,553,000) of which US$485,000 (2011: US$1,871,000), US$93,851,000 (2011: nil), and nil (2011: US$123,750,000) were acquired under finance lease acquisition of subsidiary and redeemable preference share arrangements respectively. US$942,000 additions during the financial year remained unpaid and is included in other payables and accruals at the end of the financial year.


SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

73

NOTES TO FINANCIAL STATEMENTSFor the financial year ended 31 December 2012

1. GENERAL INFORMATION

Swiber Holdings Limited (the “Company”) is listed on the Singapore Exchange and incorporated and domiciled in Singapore. The address of its registered office is 12 International Business Park, #04-01 Swiber@IBP, Singapore 609920.

The principal activity of the Company is that of an investment holding company. The principal activities of its associates, joint ventures and subsidiaries are disclosed in Notes 10, 11 and 12 respectively.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”) under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.

Interpretations and amendments to published standards effective in 2012

On 1 January 2012, the Group adopted the new or amended FRS and Interpretations of FRS (“INT FRS”) that are mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS.

The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the accounting policies of the Group and Company and had no material effect on the amounts reported for the current or prior financial years.

2.2 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sales of goods and rendering of services in the ordinary course of the Group’s activities. Revenue are presented, net of value-added tax, rebates and discounts, and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that the collectability of the related receivables is reasonably assured and when the specific criteria for each of the Group’s activities are met as follows:

Construction contracts

Please refer to the paragraph “Construction contracts” (Note 2.9) for the accounting policy for revenue from construction contracts.

Charter hire income

Charter hire income from vessels, derived from the offshore marine support business, is recognised on a straight-line basis over the term of the charter agreement.


74


2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

2.2 Revenue recognition (Continued)

Diving services

Revenue generated from sub-sea diving support services includes project supervision and engineering tasks. Revenue from rendering of services is recognised when services are completed.

Rendering of service

Engineering, shipbuilding and repair work income from short-term contracts is recognised as and when service is rendered.

Revenue from engineering and shipbuilding long-term contracts are recognised in accordance with the Group’s accounting policy on construction contracts (Note 2.9).

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Dividend income

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

2.3 Group accounting

(a) Subsidiaries

(i) Consolidation

Subsidiaries are entities over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and statement of financial position. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

75



2.3 Group accounting (Continued)

(a) Subsidiaries (Continued)

(ii) Acquisitions

The acquisition method of accounting is used to account for business combinations by the Group.

The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the (ii) fair value of the identifiable net assets acquired is recorded as goodwill. Please refer to the paragraph “Intangible assets – Goodwill” for the subsequent accounting policy on goodwill.

(iii) Disposals

When a change in the Group ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard.

Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost and its fair value is recognised in profit or loss.

Please refer to the paragraph “Investments in subsidiaries, joint ventures and associates” for the accounting policy on investments in subsidiaries in the separate financial statements of the Company.


76




(b) Transactions with non-controlling interests

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are accounted for as transactions with equity owners of the Company. Any difference between the change in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised within equity attributable to the equity holders of the Company.

(c) Associates

Associates are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses, if any.

(i) Acquisitions

Investments in associates are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associates represents the excess of the cost of acquisition of the associate over the Group’s share of the fair value of the identifiable net assets of the associate and is included in the carrying amount of the investments.

(ii) Equity method of accounting

In applying the equity method of accounting, the Group’s share of its associates’ post-acquisition profits or losses are recognised in profit or loss and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from the associates are adjusted against the carrying amount of the investments. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations to make or has made payments on behalf of the associate.

When the Group sells assets to an associate, the Group recognises only the portion of gains on the sale of assets that is attributable to the interest of the other venturers. The Group recognises the full amount of any loss when the sale provides evidence of a reduction in the net realisable value of current assets or an impairment loss.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transactions provide evidence of an impairment of the assets transferred. The accounting policies of associates have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

77




(c) Associates (Continued)

(iii) Disposals

Investments in associates are derecognised when the Group loses significant influence. Any retained equity interest in the entity is remeasured at its fair value. The difference between the carrying amount of the retained interest at the date when significant influence is lost and its fair value is recognised in profit or loss.

Gains and losses arising from partial disposals or dilutions in investments in associates in which significant influence is retained are recognised in profit or loss.

Please refer to the paragraph “Investments in subsidiaries, joint ventures and associates” for the accounting policy on investments in associates in the separate financial statements of the Company.

(d) Joint ventures

The Group’s joint ventures are entities over which the Group has contractual arrangements to jointly share control over the economic activity of the entities with one or more parties. The Group’s interest in joint ventures is accounted for in the consolidated financial statements using equity method.

In applying the equity method of accounting, the Group’s share of its joint ventures’ post-acquisition profits or losses are recognised in profit or loss and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from the associates are adjusted against the carrying amount of the investments. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations to make or has made payments on behalf of the joint venture.

When the Group sells assets to a joint venture, the Group recognises only the portion of gains or losses on the sale of assets that is attributable to the interest of the other venturers. The Group recognises the full amount of any loss when the sales provides evidence of a reduction in the net realisable value of current assets or an impairment loss.

The accounting policies of joint ventures have been changed where necessary to ensure consistency with the accounting policies adopted by the Group.

Please refer to the paragraph “Investments in subsidiaries, joint ventures and associates” for the accounting policy on investments in joint ventures in the separate financial statements of the Company.


78



2.4 Financial assets

(a) Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held-to-maturity, and available-for-sale. The classification depends on the nature of the asset and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and in the case of assets classified as held-to-maturity, re-evaluates this designation at each balance sheet date.

(i) Financial assets at fair value through profit or loss

Financial assets designated as at fair value through profit or loss at inception are those that are managed and their performances are evaluated on a fair value basis, in accordance with a documented Group investment strategy. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables are presented as “trade receivables” (Note 5) and “cash and cash equivalents” (Note 4) on the balance sheet.

(iii) Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. If the Group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale. They are presented as non-current assets, except for those maturing within 12 months after the balance sheet date which are presented as current assets.

(iv) Available-for-sale financial assets

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

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

79



2.4 Financial assets (Continued)

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade date – the date on which the Group commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a financial asset, the difference between the carrying amount and the sale proceeds is recognised in profit or loss. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to profit or loss.

Trade receivables that are factored out to banks and other financial institutions with recourse to the Group are not derecognised until the recourse period has expired and the risks and rewards of the receivables have been fully transferred. The corresponding cash received from the financial institutions is recorded as borrowings.

(c) Initial measurement

Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately as expenses.

(d) Subsequent measurement

Available-for-sale financial assets and financial assets at fair value through profit or loss, are subsequently carried at fair value. Loans and receivables and held-to-maturity financial assets are subsequently carried at amortised cost using the effective interest method.

Changes in the fair values of financial assets at fair value through profit or loss including the effects of currency translation, interest and dividends, are recognised in profit or loss when the changes arise.

Interest and dividend income on available-for-sale financial assets are recognised separately in income. Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in foreign currencies are analysed into currency translation differences on the amortised cost of the securities and other changes; the currency translation differences are recognised in profit or loss and the other changes are recognised in other comprehensive income and accumulated in the fair value reserve. Changes in the fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in other comprehensive income and accumulated in the fair value reserve, together with the related currency translation differences.


80



2.4 Financial assets (Continued)

(e) Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

(i) Loans and receivables/Held-to-maturity financial assets

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in profit or loss.

The impairment allowance is reduced through profit or loss in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods.

(ii) Available-for-sale financial assets

In addition to the objective evidence of impairment described in Note 2.4(e)(i), a significant or prolonged decline in the fair value of an equity security below its cost is considered as an indicator that the available-for-sale financial asset is impaired.

If any evidence of impairment exists, the cumulative loss that was previously recognised in other comprehensive income is reclassified to profit or loss. The cumulative loss is measured as the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any impairment loss previously recognised as an expense. The impairment losses recognised as an expense on equity securities are not reversed through profit or loss.

(f) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

81



2.5 Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.

Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method.

2.6 Derivative financial instruments and hedging activities

A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates each hedge as either: (a) fair value hedge; (b) cash flow hedge; or (c) net investment hedge.

Fair value changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in profit or loss when the changes arise.

The Group documents at the inception of the transaction the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategies for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives designated as hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items.

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

Cash flow hedge

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

The fair value changes on the effective portion of interest rate swaps designated as cash flow hedges are recognised in other comprehensive income, accumulated in the fair value reserve and reclassified to profit or loss when the hedged interest expense on the borrowings is recognised in profit or loss. The fair value changes on the ineffective portion of interest rate swaps are recognised immediately in profit or loss.


82



2.7 Fair value estimation of financial assets and liabilities

The fair values of financial instruments traded in active markets (such as exchange traded and over-the-counter securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices.

The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions that are existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as discounted cash flow analysis, are also used to determine the fair values of the financial instruments.

The fair values of currency forwards are determined using actively quoted forward exchange rates. The fair values of interest rate swaps are calculated as the present value of the estimated future cash flows discounted at actively quoted interest rates. The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying amounts.

2.8 Financial guarantees

The Company has issued corporate guarantees to banks for borrowings of its subsidiaries. These guarantees are financial guarantees as they require the Company to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with the terms of their borrowings.

Financial guarantees are initially recognised at their fair values plus transaction costs in the Company’s balance sheet.

Financial guarantees are subsequently amortised to profit or loss over the period of the subsidiaries’ borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the unamortised amount. In this case, the financial guarantees shall be carried at the expected amount payable to the bank in the Company’s balance sheet.

Intra-group transactions are eliminated on consolidation.

2.9 Construction contracts

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

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

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

83



2.9 Construction contracts (Continued)

The stage of completion is measured by reference to the physical proportion of contract work completed, or to the proportion of contract costs incurred to date to the estimated total costs for the contract. Costs incurred during the financial year in connection with future activities on a contract are excluded from the costs incurred to date when determining the stage of completion of a contract. Such costs are shown as construction contract work-in-progress on the balance sheet unless it is not probable that such contract costs are recoverable from the customers, in which case, such costs are recognised as an expense immediately.

At the balance sheet date, the cumulative costs incurred plus recognised profit (less recognised loss) on each contract is compared against the progress billings. Where the cumulative costs incurred plus the recognised profits (less recognised losses) exceed progress billings, the balance is presented as due from customers on construction contracts within “trade receivables”. Where progress billings exceed the cumulative costs incurred plus recognised profits (less recognised losses), the balance is presented as due to customers on construction contracts within “trade payables”.

Progress billings not yet paid by customers and retentions by customers are included within “trade receivables”. Advances received are included within “trade payables”.

2.10 Leases

(a) When the Group is the lessee:

The Group leases motor vehicles and certain plant and machinery under finance leases and vessels, land dormitories and certain plant and machinery under operating leases from non-related parties.

(i) Lessee – Finance leases

Leases where the Group assumes substantially all risks and rewards incidental to ownership of the leased assets are classified as finance leases.

The leased assets and the corresponding lease liabilities (net of finance charges) under finance leases are recognised on the balance sheet as plant and equipment and borrowings respectively, at the inception of the leases based on the lower of the fair value of the leased assets and the present value of the minimum lease payments.

Each lease payment is apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is recognised in profit or loss on a basis that reflects a constant periodic rate of interest on the finance lease liability.

(ii) Lessee – Operating leases

Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessors) are recognised in profit or loss on a straight-line basis over the period of the lease.

Contingent rents are recognised as an expense in profit or loss when incurred.


84



2.10 Leases (Continued)

(b) When the Group is the lessor:

The Group leases equipment under finance leases and building and certain vessels under operating leases to non-related parties.

(i) Lessor – Finance leases

Leases where the Group has transferred substantially all risks and rewards incidental to ownership of the leased assets to the lessees, are classified as finance leases.

The leased asset is derecognised and the present value of the lease receivable (net of initial direct costs for negotiating and arranging the lease) is recognised on the balance sheet and included in “other receivables”. The difference between the gross receivable and the present value of the lease receivable is recognised as unearned finance income.

Each lease payment received is applied against the gross investment in the finance lease receivable to reduce both the principal and the unearned finance income. The finance income is recognised in profit or loss on a basis that reflects a constant periodic rate of return on the net investment in the finance lease receivable.

Initial direct costs incurred by the Group in negotiating and arranging finance leases are added to finance lease receivables and recognised as an expense in profit or loss over the lease term on the same basis as the lease income.

(ii) Lessor – Operating leases

Leases where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognised in profit or loss on a straight-line basis over the lease term.

Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on the same basis as the lease income.

Contingent rents are recognised as income in profit or loss when earned.

2.11 Dividends to Company’s shareholders

Dividends to the Company’s shareholders are recognised when the dividends are approved for payment.

2.12 Non-current assets held for sale

Non-current assets classified as assets held-for-sale are carried at the lower of carrying amount and fair value less costs to sell if their carrying amount is recovered principally through a sale transaction rather than through continuing use. The assets are not depreciated or amortised while they are classified as held-for-sale. Any impairment loss on initial classification and subsequent measurement is recognised as an expense. Any subsequent increase in fair value less costs to sell (not exceeding the accumulated impairment loss that has been previously recognised) is recognised in profit or loss.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

85



2.13 Inventories

Inventories are carried at the lower of cost and net realisable value. Cost for consumables and spare parts are determined using the weighted average method and pipe lines using the first-in, first-out method. Cost of work-in-progress comprises direct materials and, where applicable, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in ordinary course of business, less the estimated costs of completion and applicable variable selling expenses.

2.14 Property, plant and equipment

(a) Measurement

(i) Property, plant and equipment

Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses.

(ii) Components of costs

The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Cost also includes borrowing costs (refer to Note 2.16 on borrowing costs).

(b) Depreciation

Construction-in-progress is not depreciated. Depreciation on other items of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

Useful livesLeasehold property – Over the term of the leaseVessels – 18 years, net of residual valueFurniture and equipment – 3 to 5 yearsMotor vehicles – 10 yearsDrydocking – 3 yearsCranes and machineries – 20 years

The estimated useful lives, residual value and depreciation method are reviewed at each balance sheet date, with the effect of any changes in estimate accounted for on a prospective basis.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is no certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and its useful life.

Depreciation on property, plant and equipment under construction-in-progress, which includes costs for vessels under construction, commences when these assets are ready for its intended use.


86



2.14 Property, plant and equipment (Continued)

(c) Subsequent expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in profit or loss when incurred.

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in profit or loss within “gain or loss on disposal of property, plant and equipment”.

2.15 Intangible assets

Goodwill on acquisition

Goodwill on acquisitions of subsidiaries and businesses on or after 1 January 2010 represents the excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over (ii) the fair value of the net identifiable assets acquired.

Goodwill on acquisition of subsidiaries and businesses prior to 1 January 2010 and on acquisition of joint ventures and associates represents the excess of the cost of the acquisition over the fair value of the Group’s share of the net identifiable assets acquired.

Goodwill on subsidiaries is recognised separately as intangible assets and carried at cost less accumulated impairment losses. Goodwill on associates and joint ventures are included in the carrying amount of the investments.

Gains and losses on the disposal of subsidiaries, joint ventures and associates include the carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retained profits in the year of acquisition and is not recognised in profit or loss on disposal.

2.16 Borrowing costs

Borrowing costs are recognised in profit or loss using the effective interest method except for those costs that are directly attributable to the assets under construction. This includes those costs on borrowings acquired specifically for assets under construction, as well as those in relation to general borrowings used to finance the assets under construction.

Borrowing costs on general borrowings are capitalised by applying a capitalisation rate to construction or development expenditures that are financed by general borrowings.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

87



2.17 Impairment of non-financial assets

(a) Goodwill

Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that the goodwill may be impaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating-units (“CGU”) expected to benefit from synergies arising from the business combination.

An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.

An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.

(b) Property, plant and equipment

Investments in subsidiaries, associates and joint ventures

Property, plant and equipment and investments in subsidiaries, associates and joint ventures are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss.

An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense, a reversal of that impairment is also recognised in profit or loss.


88



2.18 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

Other provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised in the statement of comprehensive income as finance expense.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss when the changes arise.

2.19 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities.

(a) Borrowings

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(b) Convertible foreign currency bonds

Convertible foreign currency bonds are designated as a financial liability at fair value through profit or loss. When the conversion option of the convertible foreign currency bonds is exercised, the carrying amounts of convertible foreign currency bonds are derecognised with a corresponding recognition of share capital.

2.20 Investments in subsidiaries, joint ventures and associates

Investments in subsidiaries, joint ventures and associates are carried at cost less accumulated impairment losses in the Company’s balance sheet. On disposal of such investments, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.

2.21 Employee compensation

Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset.

(a) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

89



2.21 Employee compensation (Continued)

(b) Share-based compensation

The Group operates an equity-settled, share-based compensation plan. The value of the employee services received in exchange for the grant of options is recognised as an expense with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on the date of the grant. Non-market vesting conditions are included in the estimation of the number of shares under options that are expected to become exercisable on the vesting date. At each balance sheet date, the Group revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period.

When the options are exercised, the proceeds received (net of transaction costs) and the related balance previously recognised in the share option reserve are credited to share capital account, when new ordinary shares are issued, or to the “treasury shares” account, when treasury shares are re-issued to the employees.

2.22 Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on the tax rates and tax laws that have been enacted or substantively enacted by the end of the balance sheet date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the end of the balance sheet date, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.


90



2.23 Currency translation

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in United States Dollars, which is the functional currency of the Company.

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the date of the transactions. Currency translation differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in profit or loss. However, in the consolidated financial statements, currency translation differences arising from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations, are recognised in other comprehensive income and accumulated in the currency translation reserve.

When a foreign operation is disposed of or any borrowings forming part of the net investment of the foreign operation is repaid, a proportionate share of the accumulated translation differences is reclassified to profit or loss, as part of the gain or loss on disposal.

Foreign exchange gains and losses that relate to borrowings are presented in the income statement within “finance cost”. All other foreign exchange gains and losses impacting profit or loss are presented in the income statement within “other losses – net”.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

(c) Translation of Group entities’ financial statements

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the reporting date;

(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) All resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such reserve.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates at the reporting date.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

91



2.24 Cash and cash equivalents

For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash on hand, deposits with financial institutions which are subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are presented as current borrowings on the balance sheet.

2.25 Share capital and treasury shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.

When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the consideration paid including any directly attributable incremental cost is presented as a component within equity attributable to the Company’s equity holders, until they are cancelled, sold or reissued.

When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share capital account if the shares are purchased out of capital of the Company, or against the retained profits of the Company if the shares are purchased out of earnings of the Company.

When treasury shares are subsequently sold or reissued pursuant to an employee share option scheme, the cost of treasury shares is reversed from the treasury share account and the realised gain or loss on sale or reissue, net of any directly attributable incremental transaction costs and related income tax, is recognised in the capital reserve.

2.26 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments.

3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS

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

Construction contracts

The Group uses the percentage-of-completion method to account for its contract revenue. The stage of completion is measured by reference to the contract costs incurred to date compared to the estimated total costs for the contract.

Significant assumptions are required to estimate the total contract costs that will affect the stage of completion and the contract revenue respectively. In making these estimates, management has relied on past experience and the work of specialists.


92


3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS (Continued)

Construction contracts (Continued)

Included in the contract revenue are revenue and unbilled receivables arising from variation work performed for customers when it is probable that the customers will approve the variation claims.

Significant judgement is required to estimate the probability of recovery of variation claims submitted to customers, which will affect the revenue and unbilled receivables recognised in relation to these variation claims. In making these estimates, management has relied on the work of external experts as well as past experience and discussions with customers.

If the percentage of completion on uncompleted contracts at the balance sheet date increases/decreases by 1% from management’s estimates, the Group’s revenue will increase/decrease by US$8,940,000.

If the estimated total contract costs of uncompleted contracts increase/decrease by 1% from management’s estimates, the Group’s profit will decrease/increase by US$7,838,000 and US$7,755,000 respectively.

Impairment of investment in, and amounts due from, associates and joint ventures

The Group assesses whether at each reporting date there is objective evidence that investment in associates and joint ventures are impaired. In considering whether the associates and joint ventures are impaired, the Group has made its assessment based on estimates. It involves the consideration of the performance of the associates and joint ventures and the market conditions in which the associates and joint ventures operate in. This affects the Group’s share of net assets of the associates and joint ventures. Management has evaluated the recoverability of the investments based on such estimates and is confident that no allowance for impairment is necessary.

If the performance of the associates and joint ventures and/or market conditions were to deteriorate which will affect the Group’s share of net assets of the associates and joint ventures, impairment may be required. The carrying amounts of the investment in, and other receivables due from associates and joint ventures at the end of the reporting period are disclosed in Notes 10, 11 and 6 respectively.

Impairment of loans and receivables

Management reviews its loans and receivables for objective evidence of impairment at least quarterly. Significant financial difficulties of the debtor, the probability that the debtor will enter bankruptcy, and default or significant delay in payments are considered objective evidence that a receivable is impaired. In determining this, management makes judgement as to whether there is observable data indicating that there has been a significant change in the payment ability of the debtor, or whether there have been significant changes with adverse effect in the technological, market, economic or legal environment in which the debtor operates in.

Where there is objective evidence of impairment, management makes judgements as to whether an impairment loss should be recorded as an expense. In determining this, management uses estimates based on historical loss experience for assets with similar credit risk characteristics. The methodology and assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduce any differences between the estimated loss and actual loss experience.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

93


3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS (Continued)

Share-based compensation

The Group’s equity-settled, share-based compensation plan is significant and the amount of the employee services received in exchange for the grant of options recognised as an expense forms a significant component of total expenses charged to profit or loss. At each balance sheet date, the Group reviews and revises its estimates of the number of shares under options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period.

If the actual number of shares under options that are expected to become exercisable on the vesting date differs by 10% from management’s estimates, total profit will be approximately US$23,000 higher or lower.

Uncertain Tax Positions

The Group is subject to income taxes in numerous jurisdictions. In determining the Group’s income tax liabilities, management is required to assess whether the Group’s operations create permanent establishments, and the resulting appropriate tax rates to be applied, in certain jurisdictions. In addition, management is required to estimate the amount of capital allowances and the deductibility of certain expenses at each tax jurisdictions. Management believes that the Group’s tax positions as at balance sheet date is sustainable.

4. CASH AND CASH EQUIVALENTS

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Cash at bank and on hand 118,203 103,297 8,805 8,476Short-term bank deposits 11,296 13,161 – –

129,499 116,458 8,805 8,476

For the purpose of presenting the consolidated statement of cash flows, cash and cash equivalents comprise the following:

Group

2012 2011

US$’000 US$’000

Cash and bank balances (as above) 129,499 116,458Less: Bank deposits pledged (11,189) (13,070)

Cash and cash equivalents per consolidated statement of cash flows 118,310 103,388

Bank deposits are pledged in relation to the security granted for certain borrowings (Note 17).


94


4. CASH AND CASH EQUIVALENTS (Continued)

Acquisition and disposal of subsidiaries

(a) In 2012, the Company disposed 51% of its equity interest in its subsidiary, Holmen Heavylift Offshore Pte Ltd to third parties. Subsequent to the disposal, Holmen Heavylift Offshore Pte Ltd. is no longer a subsidiary but remains as an associate of the Group.

(b) In 2012, the Company disposed 51% of its equity interest in its subsidiary, Holmen Kaizen Limited, to third parties. Subsequent to the disposal, Holmen Kaizen Limited is no longer a subsidiary but remains as an associate of the Group.

Details of the disposals were as follows:

Carrying amounts of assets and liabilities disposed of

2012

US$’000

AssetsProperty, plant and equipment 85,288Trade and other receivables 194,431Cash and cash equivalents 2,976

282,695

LiabilitiesTrade and other payables 252,142Borrowings 31,545

283,687

Net liabilities derecognised 992

Gain on disposal:Cash consideration received –Net liabilities derecognised 992

Gain on disposal 992

The gain on disposal of the subsidiaries is charged to current year profit or loss in the income statement.

2012

US$’000

Net cash outflow arising on disposal:Cash consideration received –Cash and cash equivalents disposed of (2,976)

(2,976)

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

95


5. TRADE RECEIVABLES

Group

2012 2011

US$’000 US$’000

Trade receivables – non related parties 249,599 141,885Trade receivables – Associates 62,246 18,908 – Joint ventures 29,862 6,688

92,108 25,596Less: Allowance for impairment of receivables – non-related parties (Note 35(b)(ii)) (11,014) (9,779)

330,693 157,702Construction contracts – Due from customers (Note 8) 189,202 118,958

519,895 276,660

Certain subsidiaries of the Group have factored trade receivables with carrying amounts of US$14,864,000 (2011: US$49,081,000) to a bank in exchange for cash during the financial year ended 31 December 2012. The transaction has been accounted for as a collateralised borrowing as the bank has full recourse to those subsidiaries in the event of default by the debtors (Note17).

6. OTHER RECEIVABLES

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Deposits 852 1,516 6 13Prepayments 34,184 10,516 15,024 85Capitalised vessel costs 32,802 49,762 – –Lease receivables (Note (a)) – 2,562 – –Non-trade receivables due from: – Non-related parties 34,217 60,354 9,159 22,247 – Associates 63,456 19,330 40,928 14,150 – Joint ventures 59,402 57,600 10,692 – – Subsidiaries – – 477,029 743,926Loans to: – Associates 65,201 – 45,201 – – Joint venture 30,500 – – –

320,614 201,640 598,039 780,421Less: Non-current portion (Note (b)) (88,398) (82,808) (37,614) (16,305)

232,216 118,832 560,245 764,116

Non-trade balances due from associates, joint ventures and subsidiaries as at balance sheet date are unsecured, interest free and repayable on demand, other as disclosed in Note (b) below.

Loans to associates and a Joint ventures bear interest of 6% per annum, and has no fixed term of repayment.


96


6. OTHER RECEIVABLES (Continued)

Note (a)Lease receivables

The Group leases equipment to non-related parties under finance leases which was terminated in the current financial year.

Group

2012 2011

US$’000 US$’000

Gross receivables due – 3,068Less: Unearned finance income – (506)

Net investment in finance leases – 2,562

Note (b)Non-current portion of the Group’s other assets and receivables mainly relates to:

(i) Capitalised vessel costs amounting to US$28,097,000 (2011: US$41,974,000) which is amortised over the lease term of the underlying vessels;

(ii) Advances to third parties of US$14,000,000 (2011: US$19,475,000) which bear fixed interest rate at 3.5% (2011: 3.5%) per annum and will be repayable within two to eight years;

(iii) An amount due from an associate US$5,000,000 (2011: US$5,000,000) which bears fixed interest rate at 3.5% (2011: 3.5%) per annum and will be repayable within five years; and

(iv) An amount due from third parties of US$8,700,000 (2011: US$16,305,000) which interest rate is repriced at 3 months interval and will be repayable within seven to eight years. The Company’s non-current portion of other receivables as at balance sheet date includes the above as well as an amount due from a subsidiary of US$6,313,000 (2011: US$ nil) for which interest rate is re-priced at 3 month an amount interval and will be repayable in eight years.

(v) Loans to associates of US$32,601,000 which bear fixed interest at 6% per annum with no fixed term of repayment. The Group does not intend to demand settlement of these amounts within twelve months from the balance sheet date. The Company’s non-current position of other receivables as at balance sheet date includes US$22,601,000 of the above loans to associates.

The fair values of non-current other receivables are computed based on cash flows discounted at market borrowing rates of 2.6% (2011: 2.9%). The fair values are as follows:

Group

2012 2011

US$’000 US$’000

Advances to third parties (Note ii) 12,169 16,473Amount due from an associate (Note iii) 4,389 4,333Amount due from third parties (Note iv) 8,700 16,305Loans to associates (Note v) 28,372 –

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

97


7. INVENTORIES

Group

2012 2011

US$’000 US$’000

Pipelines 109,854 26,026Consumables and spares 10,481 8,437Work-in-progress 48,864 57,233

169,199 91,696

The cost of inventories recognised as an expense and included in “cost of sales” amounts to US$243,236,000 (2011: US$60,740,000).

8. CONSTRUCTION CONTRACTS

Group

2012 2011

US$’000 US$’000

Aggregate costs incurred and profits recognised (less losses recognised) to date on uncompleted construction contracts 1,074,704 555,576Less: Progress billings (897,999) (436,618)

176,705 118,958

Presented as:Due from customers on construction contracts (Note 5) 189,202 118,958Due to customers on construction contracts (Note 15) 12,497 –

Advances received on construction contracts (Note 15) – 9,050

Due from customers on construction contracts include unbilled receivables arising from variation claims on construction contracts submitted to customers amounting to US$92,748,000 (2011: US$42,157,000).


98


9. DERIVATIVE FINANCIAL INSTRUMENTS Group Company

Fair value Fair valueContract notional amount Asset Liability

Contract notional amount Asset Liability

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

2012Current

Cash-flow hedgesCross currency interest rate swap contracts 119,760 2,795 – 119,760 2,795 –

Non-hedging instrumentsCross currency interest rate swap contracts 65,456 – 16 65,456 – 16Currency forwards 6,210 8 – – – –

Non-current

Cash-flow hedgesCross currency interest rate swap contracts 136,874 1,558 – 136,874 1,558 –Interest rate swap contracts 30,000 – 3,696 – – –

Non-hedging instruments:Cross currency interest rate swap contracts 98,184 – 122 98,184 – 122

Group Company Fair value Fair value



US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

2011Non-current

Cash-flow hedgesCross currency interest rate swap contracts 286,505 – 3,855 286,505 – 3,855

Non-hedging instrumentsCross currency interest rate swap contracts 5,700 – 5 – – –Currency forwards 29,167 – 48 – – –

The Group utilises cross currency interest rate swap contracts to hedge variable interest payments and eventual settlement on notes payables and bank borrowings that will mature between February 2013 to October 2017. Fair value gains and losses on the cross currency interest rate swaps recognised in the other comprehensive income are reclassified to profit or loss over the period of the borrowings.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

99


10. INVESTMENTS IN ASSOCIATES

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Equity investment as at cost 33,336 33,428

Beginning of financial year 110,447 57,190Addition during the year 6 51,085Reclassified (to)/from subsidiaries (19,676) 109Disposals (887) –Share of profits 17,454 10,639Currency translation differences 14 70Share of movement in hedging reserves (Note 24) (1,026) –Dividend received (9,107) (8,646)

End of financial year 97,225 110,447

Details of associates held by the Group as at the balance sheet date are as follows:

Name of associate

Country of incorporation and operation Equity holding Principal activities

2012 2011

% %

Vallianz Holdings Limited (1) (a) Singapore 28.9 28.9 Investment holding

PT Swiber Berjaya (2) Indonesia 49 49 Vessel owning and chartering

PT Rajawali Swiber Cakrawala(2) Indonesia 23 49 Offshore marine engineering

Swiber Offshore (India) Private Limited (3)

India 49 49 Operator and charterer of vessels

Resolute Pte Ltd (1) Singapore 49 49 Investment holding

Holmen Heavylift Offshore Pte Ltd (9) (d)

Singapore 49 – Investment holding

Holmen Kaizen Ltd (b) British Virgin Islands

49 – Vessel owning and chartering


100


10. INVESTMENTS IN ASSOCIATES (Continued)

Name of associate


2012 2011

% %

Held by subsidiariesVictorious LLC (4) Marshall Islands 49 49 Vessel owning and

chartering

Offshore Engineering Resources Pte Ltd (5)

Singapore 25 25 HR and engineering consultancy services

PT Kreuz Berjaya (6) Indonesia 49 49 Offshore marine engineering

PJW 3000 LLC (7) Marshall Islands 33.3 33.3 Vessel owning, operating and chartering

Vallianz Marine Pte Ltd (1) Singapore 49 49 Vessel owning and chartering

SWP Engineering Pte Ltd (6) Singapore 49 49 Engineering services

Atlantis Navigation AS (8)(c) Norway – 49.3 Vessel chartering

Dragados-Swiber Offshore S.A.P.I de C.V.(10)(b)

Mexico 49 – Offshore marine engineering

(1) Audited by Deloitte & Touche LLP, Singapore.(2) Audited by Ernst & Young, Indonesia.(3) Audited by Devesh K Shah & Co, India.(4) Audited by Ernst & Young, New York.(5) Audited by LTC LLP, Singapore.(6) Not required to be audited by law in its country of incorporation and not material to the group’s results and

financial position.(7) Audited by PricewaterhouseCoopers LLP, Singapore.(8) Audited by Deloitte AS, Norway.(9) Audited by Baker Tilly TFW.(10) Audited by Deloitte Mexico

Notes

(a) Listed on Singapore Exchange Securities Trading Limited – Catalist.(b) Incorporated during the year.(c) Reclassified to subsidiaries during the year (Note 12)(d) Reclassified from subsidiaries during the year (Note 4)

The summarised financial information of associates, not adjusted for the proportion of ownership interest held by the Group, is as follows:

Group

2012 2011

US$’000 US$’000

Assets 1,184,987 660,360Liabilities 900,934 418,189Revenue 486,901 133,181Net profit for the year 48,805 28,377Share of associates contingent liabilities incurred jointly with other investors 29,233 29,233

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

101


11. INVESTMENTS IN JOINT VENTURES

Group

2012 2011

US$’000 US$’000

Beginning of financial year 20,238 18,504Addition during the year 714 10,024Share of profit/(losses) 334 (8,150)Currency translation differences 705 (140)Share of movement in hedging reserves (Note 24) (53) –


Details of the Group’s joint ventures as at balance sheet date are as follows:

Name of joint venture

Country of incorporation and operation Equity holding Principal activity

2012 2011

% %

Rawabi Swiber Offshore Marine Pte Ltd (1)

Singapore 50 50 Vessel owing and chartering

Rawabi Swiber Offshore Services Co. Ltd (2)

Saudi Arabia 50 50 Offshore marine engineering

Rawabi Swiber Offshore Services Limited (3)

British Virgin Islands

50 50 Offshore marine engineering and vessel chartering

Alam Swiber DLB 1 (L) Inc (4) Malaysia 49 50 Operate and manage vessel

Alam Swiber Offshore (M) Sdn Bhd (4)

Malaysia 50 50 Engineering and technical support services

Swiwar Offshore Pte Limited(1) Singapore 50 50 Vessel owning and chartering

(1) Audited by PricewaterhouseCoopers LLP, Singapore.(2) Audited by Deloitte & Touche, Bakr Abulkhair & Co, Saudi Arabia.(3) Not required to be audited by law in its country of incorporation and not material to the group’s results and

financial position.(4) Audited by Ernst & Young, Malaysia.


102


11. INVESTMENTS IN JOINT VENTURES (Continued)

The following amounts represent the Group’s share of the assets and liabilities and income and expenses of the joint ventures which would be included in the consolidated statement of financial position and statement of comprehensive income should the line-by-line format of proportionate consolidation be used.

Group

2012 2011

US$’000 US$’000

Assets – Current assets 49,085 19,978 – Non-current assets 165,104 250,798

214,189 270,776

Liabilities – Current liabilities 128,387 181,420 – Non-current liabilities 73,602 48,880

201,989 230,300

Net assets 12,200 40,476

Group

2012 2011

US$’000 US$’000

Revenue 74,728 13,995Expenses (74,175) (22,145)

Profit/(loss) for the year 553 (8,150)Tax expense (228) –

Profit/(loss) after tax 325 (8,150)

Capital commitments in relation to interest in joint venture 147,000 23,800

Proportionate interest in joint venture’s capital commitments 73,500 11,900

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

103


12. INVESTMENTS IN SUBSIDIARIES

Company

2012 2011

US$’000 US$’000

Quoted equity shares, at cost 121,009 121,009Unquoted equity shares, at cost 128,629 128,619

249,638 249,628

Details of the Company’s significant subsidiaries as at the balance sheet date are as follows:

Name of subsidiary


2012 2011

% %

Swiber Offshore Construction Pte Ltd

Singapore 100 100 Offshore marine engineering

Swiber Offshore Marine Pte Ltd Singapore 100 100 Vessel owning and chartering

Kreuz Holdings Limited (1) (a) Singapore 57.5 63.2 Investment holding

Swiber Rahaman Sdn Bhd (2) Brunei 51 51 Offshore marine engineering and vessel chartering

Swiber Corporate Services Pte Ltd

Singapore 100 100 Provision of corporate services

Swiber Atlantis Pte Ltd (c) Singapore 100 – Vessel owning and chartering

Held by subsidiariesSwiber Engineering Ltd (6) Malaysia 100 100 Offshore marine

engineering and vessel chartering

Newcruz Shipbuilding & Engineering Pte Ltd

Singapore 100 100 Building of ships, tankers and other ocean-going vessels


104


12. INVESTMENTS IN SUBSIDIARIES (Continued)

Name of subsidiary


2012 2011

% %

Held by subsidiaries (Continued)Newcruz Offshore Marine Pte Ltd Singapore 100 100 Vessel owning and

chartering

Equatoriale Services Pte Ltd Singapore 100 100 Provision of drilling services

Kreuz Subsea Pte Ltd (1) Singapore 100 100 Subsea services

Kreuz Subsea Marine Pte Ltd (1) Singapore 100 100 Vessel owning and chartering

KSS Engineering Ltd (2) Malaysia 100 100 Subsea services

Kreuz Subsea (B) Sdn Bhd (3) Brunei 100 100 Subsea services

PAPE Engineering Pte Ltd Singapore 80 80 Offshore marine engineering

Swiber Offshore Mexico S.A. De C.V.(4) (c)

Mexico 100 – Offshore marine engineering

Atlantis Navigation AS (5) (b) Norway 100 – Vessel chartering

All the subsidiaries were audited by PricewaterhouseCoopers LLP, Singapore unless otherwise indicated as follows:

(1) Audited by Deloitte & Touche LLP, Singapore.(2) Audited by Deloitte & Touche, Malaysia.(3) Audited by Deloitte & Touche, Brunei.(4) Audited by PricewaterhouseCoopers, Mexico(5) Not audited as in liquidation process.(6) Not required to be audited by law in its country of incorporation.

Notes(a) Listed on Singapore Exchange Securities Trading Limited (“SGX-ST”). Transferred from the SGX-ST Catalist to

SGX-ST Main Board with effective from 8 October 2012.(b) Reclassified from associates during the year (Notes 10 and 38).(c) Incorporated during the year.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

105


13. PROPERTY, PLANT AND EQUIPMENT

Construction-in-progress Vessels Drydocking

Cranes and machineries

Leasehold property

Motor vehicles

Furniture and

equipment Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Group

Cost:At 1 January 2011 145,313 132,972 1,223 8,248 8,846 2,228 46,229 345,059Additions 76,085 179,967 1,499 144 31,084 237 8,537 297,553Disposals (725) (20,443) (528) – (1,205) (331) (190) (23,422)Disposal of subsidiary – (21,650) – – – – (9) (21,659)Written off (30) – – – – – (75) (105)Transfer (11,752) 5,445 – – – – 6,307 –Exchange differences (62) (5) – (37) (71) (1) (510) (686)

At 31 December 2011 208,829 276,286 2,194 8,355 38,654 2,133 60,289 596,740Additions 143,403 6,976 7,764 9,823 – 239 1,800 170,005Acquisition of subsidiary – 93,851 – – – – – 93,851Disposals (26,251) (2,112) (178) (734) – (280) (48) (29,603)Disposal of subsidiary – (85,288) – – – – – (85,288)Written off – – – – – – (17) (17)Transfer (1,119) 997 – 72 – – 50 –Exchange differences 107 25 – 1,027 353 2 112 1,626Reclassification of assets (38,931) 39,178 – 47,233 1,198 (83) (48,595) –

At 31 December 2012 286,038 329,913 9,780 65,776 40,205 2,011 13,591 747,314

Construction-in-progress Vessels Drydocking

Cranes and machineries

Leasehold property

Motor vehicles

Furniture and

equipment Total


Group

Accumulated depreciation:At 1 January 2011 – 10,414 1,126 626 1,191 680 14,129 28,166Depreciation – 11,540 375 424 1,336 220 6,906 20,801Disposals – (3,760) (184) – (37) (106) (60) (4,147)Disposal of subsidiary – (575) – – – – – (575)Written off – – – – – – (74) (74)Exchange differences – (4) – (21) (64) – (78) (167)

At 31 December 2011 – 17,615 1,317 1,029 2,426 794 20,823 44,004Depreciation – 16,910 685 5,649 2,221 223 2,376 28,064Disposals – (3,218) (45) (103) – (157) (48) (3,571)Written off – – – – – – (17) (17)Exchange differences – 17 – 257 313 1 85 673Reclassification of assets – (1,803) – 11,249 3,749 (83) (13,112) –

At 31 December 2012 – 29,521 1,957 18,081 8,709 778 10,107 69,153

Carrying amount:At 31 December 2012 286,038 300,392 7,823 47,695 31,496 1,233 3,484 678,161

At 31 December 2011 208,829 258,671 877 7,326 36,228 1,339 39,466 552,736


106


13. PROPERTY, PLANT AND EQUIPMENT (Continued)

Motor vehicles

Furniture and office

equipment Total

US$’000 US$’000 US$’000

Company

Cost: At 1 January 2011 611 2,683 3,294 Additions – 86 86

At 31 December 2011 611 2,769 3,380 Disposals (110) – (110)

At 31 December 2012 501 2,769 3,270

Accumulated depreciation: At 1 January 2011 211 2,098 2,309 Depreciation 64 424 488

At 31 December 2011 275 2,522 2,797 Depreciation 54 179 233 Disposals (63) – (63)

At 31 December 2012 266 2,701 2,967

Carrying amount: At 31 December 2012 235 68 303

At 31 December 2011 336 247 583

During the financial year, the Group acquired property, plant and equipment with an aggregate cost of US$263,856,000 (2011: US$297,553,000) of which US$485,000 (2011: US$1,871,000) and Nil (2011: US$123,750,000) were financed by finance leases and proceeds receivable from redeemable preference shares respectively. US$942,000 pertaining to the acquisition of plant and equipment remained unpaid and is included in other payables and accruals at the financial year end.

The carrying amounts of the Group’s and Company’s property, plant and equipment at balance sheet date includes an amount of US$12,184,000 (2011: US$16,570,000) and US$236,000 (2011: US$442,000) respectively in respect of assets held under finance leases (Note 20).

The Group has pledged certain vessels, and equipment with carrying amounts of approximately US$169,455,000 (2011: US$201,520,000) on bank borrowings granted to the Group.

The Group’s and Company’s property, plant and equipment include capitalised borrowing costs of US$10,297,000 (2011: US$9,838,000).

Included in disposal of construction-in-progress is an amount of US$1,775,000 that has been recognised in cost of sales relating to project costs during the financial year ended 31 December 2012.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

107


14. GOODWILL

Group

2012 2011

US$’000 US$’000

Cost 309 309

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (“CGUs”) that are expected to benefit from that business combination.

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the CGUs are determined based on value in use. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

Cash flow projections used in the value-in-use calculations were based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period were extrapolated using an estimated growth rate of 5% (2011: 5%) per annum. The growth rate did not exceed the long-term average growth rate in which the CGU operates. The rate used to discount the forecast cash flows is 10% (2011: 10%) per annum.

There is no impairment charge recognised for the financial years ended 31 December 2012 and 31 December 2011.

15. TRADE PAYABLES

Group

2012 2011

US$’000 US$’000

Trade payables to: – Non-related parties 132,174 143,443 – Associates 19,908 82 – Joint ventures 754 89

152,836 143,614


108


15. TRADE PAYABLES (Continued)

Group

2012 2011

US$’000 US$’000

Construction contracts – Due to customers (Note 8) 12,497 – – Advances received (Note 8) – 9,050

12,497 9,050

Deposits received from customers – 2,118

Total trade payables 165,333 154,782

16. OTHER PAYABLES

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Other payables – non-related parties 22,445 24,060 8,282 5,227Non-trade payables to: – Associates 149,203 7,277 6,996 2,501 – Joint ventures – 273 – – – Subsidiaries – – 72,154 442,519Accruals 155,645 66,496 17,436 11,933

327,293 98,106 104,868 462,180

Non-trade payables due to associates, joint ventures and subsidiaries as at balance sheet date are unsecured, interest free and repayable on demand.

17. BANK BORROWINGS

Group

2012 2011

US$’000 US$’000

Current 202,988 105,757Non-current 100,198 76,625

303,186 182,382

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

109


17. BANK BORROWINGS (Continued)

The exposure of the bank borrowings of the Group to interest rate changes and the contractual repricing dates at the balance sheet date are as follows:

Group

2012 2011

US$’000 US$’000

Repricing dates in:Less than 1 year 299,806 163,0921 – 5 years 3,380 6,090More than 5 years – 13,200

303,186 182,382

Fair value of non-current bank borrowings

Group

2012 2011

US$’000 US$’000

Bank borrowings 100,066 75,107

The fair values above are determined from the cash flow analyses, discounted at market borrowing rates of an equivalent instrument at the balance sheet date which the directors expect to be available to the Group as follows:

Group

2012 2011

US$’000 US$’000

Bank borrowings 2.64% 2.91%

The bank borrowings are secured by:

(i) First legal mortgage over certain vessels and equipment,

(ii) Assignment of all marine insurances in respect of the vessels mentioned above, and

(iii) Assignment of earnings/charter proceeds in respect of the vessels mentioned above.

(iv) Lessors title to the lease assets


110


18. NOTES PAYABLES

Group and Company

2012 2011

US$’000 US$’000

Current portion:Due within 1 year 185,732 128,445

Non-current portion:Due within 2 – 4 years 233,274 151,330

419,006 279,775

At the end of the balance sheet date, the Company has five series of notes maturing in August 2013, October 2013, July 2014, June 2015 and July 2016 respectively, amounting to S$520,000,000 (equivalent of US$425,000,000).

Simultaneously, cross currency interest rate swap contracts were established in relation to certain issued bonds creating an effective cash flow hedge against the foreign currency and interest rate movement on the notes issued. The interest rate swap contracts exchange floating rate interest in Singapore Dollars to fixed rate interest in United States Dollars.

19. CONVERTIBLE BONDS

Group and Company

2012 2011

US$’000 US$’000

Nominal value of convertible bonds issued 35,600 100,000Fair value through profit or loss 596 2,570

36,196 102,570

The convertible bonds were issued on 16 October 2009. On issue, the bonds were convertible at S$1.14 per share. The convertible bonds may be converted at the option of bondholders at any time from 26 November 2009 to 6 October 2014, at an initial conversion price of S$1.14, into fully paid-up ordinary shares of the Company at the fixed exchange rate of US$1.00 = S$1.44. The conversion price will be reset on each interest payment date based on the average market price, defined as the volume weighted average price of shares for up to 20 consecutive trading days immediately preceding the relevant reset date. On 16 April 2012, the conversion price had been reset downwards to S$0.84 per share.

The fair value of the bonds are based on quoted market price of the bonds as at end of the respective reporting period.

On 16 October 2012, the Company has redeemed convertible bonds in cash with a nominal value of US$64,400,000.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

111


20. FINANCE LEASES

The Group leases certain plant and equipment, and motor vehicles from non-related parties under finance leases. The lease agreements do not have renewal clauses but provide the Group with options to purchase the leased assets at nominal values at the end of the lease term.

Minimumlease payments

Present value of minimum lease payments

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Group

Not later than one year 4,227 4,876 3,897 4,384Between one and five years 4,549 8,411 4,314 7,840

8,776 13,287 8,211 12,224Less: Future finance charges (565) (1,063) – –

Present value of lease liabilities 8,211 12,224 8,211 12,224

Company

Not later than one year 82 208 66 184Between one and five years 167 290 129 225

249 498 195 409Less: Future finance charges (54) (89) – –

Present value of lease obligations 195 409 195 409

The Group and Company’s obligations under finance leases are secured by the lessors’ title to the lease assets.

21. DEFERRED INCOME TAXES

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting, are shown on the balance sheet as follows:

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Deferred income tax liabilities – To be settled within one year 253 – 18 19 – To be settled after one year 8,955 9,005 – –

9,208 9,005 18 19


112


21. DEFERRED INCOME TAXES (Continued)

Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses of US$31,627,000 (2011: US$35,675,000) and capital allowances of US$52,000 (2011: US$22,000) at the balance sheet date which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation.

The movement in deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) is as follows:

Group

Deferred income tax liabilities

2012 2011

Accelerated tax

depreciation

Accelerated tax

depreciation

US$’000 US$’000

Beginning of financial year 17,924 4,218Currency translation differences (25) –(Credited)/charged to profit or loss (3,758) 13,706


Group

Deferred income tax assets

Provisions Tax losses Other Total

US$’000 US$’000 US$’000 US$’000

2012Beginning of financial year (49) (8,870) – (8,919)Charged/(credited) to profit or loss 49 3,961 (404) 3,606Acquisition of subsidiary – 380 – 380

End of financial year – (4,529) (404) (4,933)

2011Beginning of financial year (107) (2,317) – (2,424)Charged/(credited) to profit or loss 58 (6,553) – (6,495)

End of financial year (49) (8,870) – (8,919)

Company

Deferred income tax liabilities

2012 2011

Accelerated tax

depreciation

Accelerated tax

depreciation

US$’000 US$’000

Beginning of financial year 19 72Credited to profit or loss (1) (53)

End of financial year 18 19

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

113


22. SHARE CAPITAL

Group and Company

2012 2011 2012 2011

Number of ordinary shares US$’000 US$’000

Issued and paid up: 609,421,000 508,350,000 208,246 158,006

Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends.

On 21 March 2012, the Company issued 101,071,000 ordinary shares for a total consideration of US$51,582,000. The newly issued shares rank pari passu in all respects with the previously issued shares.

23. TREASURY SHARES

Group and Company

2012 2011 2012 2011

Number of ordinary shares US$’000 US$’000

Beginning of financial year 2,995,000 2,995,000 2,507 2,507Treasury shares re-issued (1,031,666) – (864) –

End of financial year 1,963,334 2,995,000 1,643 2,507

Pursuant to the Swiber Performance Share Plan, the Company re-issued 1,031,666 (2011: nil) treasury shares on 26 January 2012 at nil consideration.

24. OTHER RESERVES

Hedging Reserve

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Beginning of financial year (1,991) (1,704) (1,991) (1,704)Fair value losses (11,035) (2,467) (7,339) (2,467)Reclassification to profit and loss – Finance expenses (Note 30) 1,718 1,576 1,718 1,576 – Other operating expenses – 604 – 604Share of associates’ fair value losses on cash flow hedge (Note 10) (1,026) – – –Share of joint venture’s fair value losses on cash flow hedge (Note 11) (53) – – –

End of financial year (12,387) (1,991) (7,612) (1,991)


114


24. OTHER RESERVES (Continued)

Translation Reserve

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Beginning of financial year 538 508 – –Reclassification on disposal of subsidiaries – (2) – –Ne t currency translation differences of

financial statements of foreign subsidiaries, joint ventures and associates (914) 33 – –

Less: Non-controlling Interests (2) (1) – –

(916) 32 – –

End of financial year (378) 538 – –

Equity reserve

Group

2012 2011

US$’000 US$’000

Beginning of financial year (8,206) (8,206)

Performance shares awarded using treasury shares (63) –

Reclassification on dilution of a subsidiary 685 –

End of financial year (7,584) (8,206)

During the year, there is a change in interest arising from placement of 50,000,000 shares in the capital of a listed subsidiary.

Employees’ Share Option Reserve

(a) Swiber Employee Share Option Scheme (“Scheme”)

Share options were granted to directors of the Group under the Scheme, which became operative on 29 September 2006.

The terms of the exercise of options are set out in the Directors’ Report under the caption “Swiber Employee Share Option Scheme”.

On 26 January 2011, options to subscribe for 15,000,000 ordinary shares of the Company at an exercise price of S$0.97 per ordinary shares were granted pursuant to the Scheme. The Options have a one year vesting period and are exercisable from 26 January 2012 and expire on 25 January 2016.

The fair value of options granted on 26 January 2011, determined using the Black Scholes Model, was US$3,261,000. The significant inputs into the model were the share price of S$0.965 at the grant date, the exercise price of S$0.97, standard deviation of expected share price returns of 53%, the option life shown above and the annual risk-free interest rate of 1.54%. The volatility measured as the standard deviation of expected share price returns was estimated based on statistical analysis of share prices over the last two years.

No options were granted in the financial year ended 31 December 2012.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

115


24. OTHER RESERVES (Continued)

Employees’ Share Option Reserve (Continued)

(b) Swiber Performance Share Plan (“Plan”)

Share awards were granted to directors of the Group under the Plan, which became operative on 29 September 2006.

The terms of the share awards are set out in the Directors’ Report under the caption “Swiber Performance Share Plan”.

On 26 January 2011, 3,095,000 ordinary shares of the Company were granted pursuant to the Plan. These share awards have a 3-year vesting period commencing from the date of the grant. The fair value of these share awards was determined based on the share price of S$0.965 at the grant date.

Movement:

Group and Company

2012 2011

US$’000 US$’000

Beginning of financial year 4,009 –

Share options – 3,261Share awards 1,028 748Issue of treasury shares (801) –


25. PERPETUAL CAPITAL SECURITIES

On 25 September 2012, the Company issued S$80 million 9.75% perpetual capital securities at an issue price of 100 per cent.

Holders of these perpetual capital securities are conferred a right to receive distribution on a semi-annual basis from their issue date at the rate of 9.75% per annum, subject to a step-up rate from 25 September 2015. The Company has a right to defer this distribution under certain conditions.

The perpetual capital securities have no fixed maturity and are redeemable in whole, but not in part, at the Company’s option on or after 25 September 2015 at their principal amount together with any accrued, unpaid or deferred distributions. While any distributions are unpaid or deferred, the Company or any of its subsidiaries, will not declare, pay dividends or make similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank.


116


26. REVENUE

Group

2012 2011

US$’000 US$’000

Revenue from construction contracts 692,768 499,526Charter hire income 95,137 52,870Diving services 120,675 91,566Others 43,654 10,525

952,234 654,487

27. EXPENSES BY NATURE

Group

2012 2011

US$’000 US$’000

Purchases of inventories 317,677 75,023Depreciation of property, plant and equipment 28,064 20,801Directors’ fees 587 564Employee compensation (Note 28) 34,767 37,097Impairment loss of accounts receivables 827 –Bad debts written off 77 31Rental of equipment 13,067 12,438

28. EMPLOYEE COMPENSATION EXPENSE

Group

2012 2011

US$’000 US$’000

Salaries, bonuses and other benefits 30,574 30,540Employer’s contribution to defined contribution plans including Central Provident Fund 1,873 1,213Staff welfare 1,292 1,335Share based compensation expense (Note 24(b)) 1,028 4,009

34,767 37,097

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

117


29. OTHER OPERATING INCOME

Group

2012 2011

US$’000 US$’000

Net gain on disposal of associates, joint venture and subsidiaries 5,272 788Gain on disposal of property, plant and equipment 3,816 1,007Gain on disposal of assets held for sale – 830Interest income 980 2,197Sale of scrap metal 44 352Fair value gains on financial liabilities designated as fair value through profit or loss 2,035 11,243Realised gain on interest rate swap – 2,566Claim received – 13,634Net foreign exchange gains 4,299 –Interest charged to: – associates 2,214 – – joint ventures 2,498 –Others 3,217 3,096

24,375 35,713

30. FINANCE EXPENSES

Group

2012 2011

US$’000 US$’000

Interest expense on: Bank borrowings 16,888 15,463 Bills payable 5,313 4,515 Finance leases 510 485 Note payables and convertible bonds 21,822 10,232

44,533 30,695Cash flow hedges, reclassified from hedging reserve (Note 24) 1,718 1,576

46,251 32,271Less: Interest capitalised in construction-in-progress (10,297) (9,838)

35,954 22,433

Borrowing costs on general financing were capitalised at a rate of 6% (2011: 6%).


118


31. INCOME TAXES

(a) Income tax expense

Group

2012 2011

US$’000 US$’000

Tax expense attributable to profit is made up of:

Current income tax 32,459 20,230Deferred income tax 203 7,211

32,662 27,441Over provision in prior financial years (202) (214)

32,460 27,227

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the Singapore standard rate of income tax as follows:

Group

2012 2011

US$’000 US$’000

Profit before tax 94,997 69,405Share of profits of associates and joint ventures (Note 10, 11) (17,788) (2,489)

77,209 66,916

Tax calculated at tax rate of 17% (2011: 17%) 13,126 11,376Deferred tax benefits not recognised – 6,078Utilisation of previously unrecognised tax losses (688) –Income not subject to tax (11,773) (10,224)Expenses not deductible for tax purposes 6,034 5,791Effect of different tax rates of subsidiaries operating in other jurisdictions 25,996 14,839Others (33) (419)

32,662 27,441

(b) The tax credit relating to each component of other comprehensive income is as follows:

2012 2011

Before tax Tax credit After tax Before tax Tax credit After tax

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Fair value losses and reclassification adjustments on cash flow hedges (11,225) (1,908) (9,317) (346) 59 (287)Currency translation differences on translation of foreign operations (6) – (6) 30 – 30

Other comprehensive income (11,231) (1,908) (9,323) (316) 59 (257)

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

119


32. EARNINGS PER SHARE

(a) Basic earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year.

Group

2012 2011

Net profit attributable to equity holders of the Company (US$’000) 45,679 32,067Weighted average number of ordinary shares outstanding for basic earnings per share (’000) 585,511 505,355

Basic earnings per share (in US cents) 7.80 6.34

(b) Diluted earnings per share

For the purpose of calculating diluted earnings per share, profit attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding are adjusted for the effects of all dilutive potential ordinary shares.

Convertible bonds are assumed to have been converted into ordinary shares at issuance and the net profit is adjusted to eliminate the interest expense and fair value gains less the tax effect.

Diluted earnings per share attributable to equity holders of the Company is calculated as follows:

Group

2012 2011

Net profit attributable to equity holders of the Company (US$’000) 45,679 32,067Interest expense on convertible bonds, net of tax (US$’000) 4,219 4,150Fair value gains on convertible bonds designated as fair value through profit or loss (US$’000) (1,974) (11,243)

Net profit used to determine diluted earnings (US$’000) 47,924 24,974Weighted average number of ordinary shares outstanding for basic earnings per share (’000) 585,511 505,355Adjustment for convertible bonds (’000) 148,744 166,667

734,255 672,022

Diluted earnings per share (in US cents) 6.53 3.72

Share options and awards were not included in the computation of diluted earnings of share because they were anti-dilutive.


120


33. CAPITAL COMMITMENTS

Group

2012 2011

US$’000 US$’000

Commitments to contracts for the acquisition of property, plant and equipment 59,504 209,599

34. OPERATING LEASE COMMITMENTS – WHERE THE GROUP IS A LESSEE

The Group leases land, apartments, equipment and vessels from non-related parties under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses, and renewal rights.

The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities are as follows:

Group

2012 2011

US$’000 US$’000

Not later than one year 103,973 140,155Between two and five years 319,225 394,625Later than five years 143,724 246,254

566,922 781,034

35. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Group’s activities expose it to market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability of financial markets on the Group’s financial performance. The Group uses financial instruments such as cross currency interest rate swaps, currency forwards and foreign currency borrowings to hedge certain financial risk exposures.

The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Group. Financial risk management is carried out by a central treasury department (“Group Treasury”) in accordance with the policies set by the Board of Directors.

(a) Market risk

(i) Currency risk

The Group operates in Asia with dominant operations in Singapore, Malaysia, Brunei and India. Entities in the Group regularly transact in currencies other than their respective functional currencies (“foreign currencies”).

Currency risk arises within entities in the Group when transactions are denominated in foreign currencies such as the Singapore Dollar (“SGD”), United States Dollar (“USD”), Malaysian Ringgit (“MYR”), Euro (“EUR”), Brunei Dollar (“BND”), Mexican Peso (“MXN”) and Indian Rupees (“INR”). Group Treasury manages the overall currency exposure mainly by entering into currency forwards with banks.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

121


35. FINANCIAL RISK MANAGEMENT (Continued)

Financial risk factors (Continued)

(a) Market risk (Continued)

(i) Currency risk (Continued)

The Group’s currency exposure based on the information provided to key management is as follows:

Group

Singapore Dollars

United States

DollarsMalaysian

Ringgit EuroBrunei Dollars

Mexican Peso

IndianRupees Others Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

2012Financial assetsCash and cash equivalents 7,051 118,950 14 12 2,157 119 499 697 129,499Trade receivables 7,416 511,168 81 582 86 – – 562 519,895Other receivables 680 224,698 – – 29 27,328 9 32 252,776Receivables from subsidiaries 12,501 1,659,560 22,297 – – 1,299 – – 1,695,657

27,648 2,514,376 22,392 594 2,272 28,746 508 1,291 2,597,827Financial liabilitiesBorrowings 476,464 290,073 – – 62 – – – 766,599Trade payables 24,768 100,415 223 1,207 377 1,054 3,111 2,269 133,424Other payables 19,521 270,011 5 1,731 158 35,230 302 335 327,293Payables from subsidiaries 12,501 1,659,560 22,297 – – 1,299 – – 1,695,657

533,254 2,320,059 22,525 2,938 597 37,583 3,413 2,604 2,922,973Net financial (liabilities)/assets (505,606) 194,317 (133) (2,344) 1,675 (8,837) (2,905) (1,313) (325,146)Effect of derivative financial instruments 256,634 – – – – – – – 256,634

Currency exposure (248,972) 194,317 (133) (2,344) 1,675 (8,837) (2,905) (1,313) (68,512)

Cu rrency exposure of financial (liabilities)/assets net of those denominated in the respective entities’ functional currencies (244,617) (59,113) (133) (2,344) 1,665 (8) (2,905) (1,313) (308,768)

Singapore Dollars

United States

DollarsMalaysian

Ringgit EuroBrunei Dollars

IndianRupees Others Total


2011Financial assetsCash and cash equivalents 6,541 105,507 21 97 1,423 1,744 1,125 116,458Trade receivables 2,881 153,519 78 528 276 – 420 157,702Other receivables 1,172 136,640 – 1 25 103 1,905 139,846

10,594 395,666 99 626 1,724 1,847 3,450 414,006Financial liabilitiesBorrowings 344,369 232,506 – – 76 – – 576,951Trade payables 18,428 112,622 178 1,957 774 10,980 1,293 146,232Other payables 3,164 18,993 3 150 169 8,725 406 31,610

365,961 364,121 181 2,107 1,019 19,705 1,699 754,793Net financial (liabilities)/assets (355,367) 31,545 (82) (1,481) 705 (17,858) 1,751 (340,787)Effect of derivative financial instruments 365,943 – – – – – – 365,943

1

Currency exposure 10,576 31,545 (82) (1,481) 705 (17,858) 1,751 25,156

Cu rrency exposure of financial (liabilities)/assets net of those denominated in the respective entities’ functional currencies (58,119) – (82) (1,481) 675 – – (59,007)


122






Company

Singapore Dollars

United States

Dollars Others Total

US$’000 US$’000 US$’000 US$’000

2012Financial assetsCash and cash equivalents 1,462 7,343 – 8,805Other receivables 75,859 507,150 – 583,009

77,321 514,493 – 591,814Financial liabilitiesBorrowings 419,200 36,197 – 455,397Other payables 6,577 98,290 – 104,867

425,777 134,487 – 560,264Net financial (liabilities)/assets (348,456) 380,006 – 31,550Effect of derivative financial instruments 256,634 – – 256,634

Currency exposure (91,822) 380,006 – 288,184

Cu rrency exposure of financial liabilities net of those denominated in the respective entities’ functional currencies (91,822) – – (91,822)

2011Financial assetsCash and cash equivalents 798 7,678 – 8,476Other receivables 229 780,094 – 780,323

1,027 787,772 – 788,799Financial liabilitiesBorrowings 280,184 102,570 – 382,754Other payables 818 449,414 9 450,241

281,002 551,984 9 832,995Net financial (liabilities)/assets (279,975) 235,788 (9) (44,196)Effect of derivative financial instruments 279,776 – – 279,776

Currency exposure (199) 235,788 (9) 235,580

Cu rrency exposure of financial liabilities net of those denominated in the respective entities’ functional currencies (199) – – (199)

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

123






If the SGD, MYR, EUR, BND, INR and MXN change against the USD by 1% (2011: 8%), 1% (2011: 5%), 7% (2011: 6%), 1% (2011: 8%), 12% (2011: 9%) and 3% (2011: Nil) respectively with all other variables including tax rate being held constant, the effects arising from the net financial liability/asset position will be as follows:

Increase/(Decrease)

2012 2011

Profit after tax

Other comprehensive

incomeProfit

after tax

Other comprehensive

income

US$’000 US$’000 US$’000 US$’000

GroupSGD against USD – Strengthened (2,446) – (4,845) – – Weakened 2,446 – 4,845 –

MYR against USD – Strengthened (1) – (4) – – Weakened 1 – 4 –

EUR against USD – Strengthened (164) – (88) – – Weakened 164 – 88 –

BND against USD – Strengthened 17 – 56 – – Weakened (17) – (56) –

INR against USD – Strengthened (349) – (1,607) – – Weakened 349 – 1,607 –

MXN against USD – Strengthened (1) – – – – Weakened 1 – – –

CompanySGD against USD – Strengthened (918) – (17) – – Weakened 918 – 17 –

(ii) Cash flow and fair value interest rate risks

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. The Group has no significant variable interest-bearing assets, except for amounts due from third parties as disclosed in Note 6.


124





(ii) Cash flow and fair value interest rate risks(Continued)

The Group’s and Company’s exposure to cash flow interest rate risks arises mainly from non-current variable rate borrowings. The Group manages these cash flow interest rate risks using floating-to-fixed interest rate swaps.

The Group’s and Company’s borrowings at variable rates on which effective hedges have not been entered into are denominated mainly in SGD. If the SGD interest rates had increased/decreased by 0.5% (2011: 0.5%) with all other variables including tax rate being held constant, the profit after tax would have been lower/higher by US$1,156,000 (2011: US$577,000) as a result of higher/lower interest expense on these borrowings. Other comprehensive income would have been higher/lower by US$1,462,000 (2011: US$558,000) mainly as a result of higher fair value of interest rate swaps designated as cash flow hedges of variable rate borrowings.

(b) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The major classes of financial assets of the Group and of the Company are bank deposits and trade receivables. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate credit standing and history to mitigate credit risk. For other financial assets, the Group adopts the policy of dealing only with high credit quality counterparties.

As the Group and the Company do not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet, except as follows:

Company

2012 2011

US$’000 US$’000

Corporate guarantees provided to banks on borrowings 250,443 128,572

The trade receivables of the Group comprise 5 debtors (2011: 5 debtors) that represented approximately 50% of trade receivables.

The credit risk for trade receivables based on the information provided to key management is as follows:

By geographical areas

Group

2012 2011

US$’000 US$’000

East Asia 7,217 32,578South East Asia 260,329 102,098South Asia 51,721 9,477Others 11,426 13,549

330,693 157,702

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

125




(b) Credit risk (Continued)

By geographical areas (Continued)

(i) Financial assets that are neither past due nor impaired

Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group.

(ii) Financial assets that are past due and/or impaired

There is no other class of financial assets that is past due and/or impaired except for trade receivables.

The age analysis of trade receivables past due but not impaired is as follows:

Group

2012 2011

US$’000 US$’000

Past due by:Less than three months 74,935 35,676Three to six months 40,963 26,179More than six months 70,484 25,977

186,382 87,832

The carrying amount of trade receivables individually determined to be impaired and the movement in the related allowance for impairment is as follows:

Group

2012 2011

US$’000 US$’000

Past due more than six months 15,909 15,330Less: Allowance for impairment of receivables (Note 5) (11,014) (9,779)

4,895 5,551

Beginning of financial year 9,779 10,506Amount written back during the year – (115)Allowance (utilised)/made during the year 827 (626)Currency translation difference 408 14

11,014 9,779


126




(c) Liquidity risk

Prudent liquidity risk management includes maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. At the balance sheet date, assets held by the Group and the Company for managing liquidity risk included cash and short-term deposits as disclosed in Note 4.

Management monitors rolling forecasts of the Group’s and the Company’s liquidity reserve (comprises undrawn borrowing facility and cash and cash equivalents (Note 4)) on the basis of expected cash flow. This is generally carried out at local level in the operating companies of the Group in accordance with the practice and limits set by the Group. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Group’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring liquidity ratios and maintaining debt financing plans.

The table below analyses non-derivative financial liabilities of the Group and the Company into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

Less than 1 year

Between 1 and 5 years

Over 5 years

US$’000 US$’000 US$’000

GroupAt 31 December 2012Trade and other payables (460,717) – –Borrowings (416,156) (342,065) (24,972)

At 31 December 2011Trade and other payables (177,839) – –Borrowings (262,393) (342,846) (26,638)

Less than 1 year


Over 5 years

US$’000 US$’000 US$’000

CompanyAt 31 December 2012Trade and other payables (104,868) – –Borrowings (209,336) (262,653) –Financial guarantee contracts (196,044) (57,359) (24,972)

At 31 December 2011Trade and other payables (450,240) – –Borrowings (151,967) (277,693) –Financial guarantee contracts (73,390) (31,911) (23,271)

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

127




(c) Liquidity risk (Continued)

The table below analyses the derivative financial instruments of the Group and the Company for which contractual maturities are essential for an understanding of the timing of the cash flows into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than 1 year


US$’000 US$’000

GroupAt 31 December 2012Gross-settled interest rate swaps – Receipts 206,876 254,220 – Payments (209,271) (262,524)

Net-settled currency forwards – Net cash outflows (23) –

At 31 December 2011Gross-settled cross currency interest rate swaps – Receipts 14,156 11,309 – Payments (15,828) (12,826)

Net-settled interest rate swaps – Net cash inflows – 228

Net-settled currency forwards – Net cash outflows – (133)

Less than 1 year


US$’000 US$’000

CompanyAt 31 December 2012Gross-settled interest rate swaps – Receipts 206,811 253,976 – Payments (207,781) (256,902)

At 31 December 2011Gross-settled interest rate swaps – Receipts 14,156 11,309 – Payments (15,828) (12,826)


128




(d) Capital risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.

Management monitors capital based on a gearing ratio. The Group and the Company are also required by the banks to maintain a gearing ratio of not exceeding 2.0 times (2011: 2.0 times). The Group’s and Company’s strategies, which were unchanged from 2011, are to maintain gearing ratios below 2.0.

The gearing ratio is calculated as total borrowings divided by total equity.

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Total borrowings 766,599 576,951 455,397 382,754Total equity 665,579 523,592 334,053 223,585

Gearing ratio 1.2 1.1 1.4 1.7

The Group and the Company are in compliance with all externally imposed capital requirements for the financial years ended 31 December 2011 and 2012.

(e) Fair value measurements

The following table presents assets and liabilities measured at fair value and classified by level of the following fair value measurement hierarchy:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

(b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and

(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

129




(e) Fair value measurements (Continued)

Level 1 Level 2 Level 3 Total

US$’000 US$’000 US$’000 US$’000

GroupAt 31 December 2012LiabilityDerivative financial instruments – 3,834 – 3,834Convertible bonds 36,196 – – 36,196

36,196 3,834 – 40,030

AssetDerivative financial instruments – 4,361 – 4,361

At 31 December 2011LiabilityDerivative financial instruments – 3,908 – 3,908Convertible bonds 102,570 – – 102,570

102,570 3,908 – 106,478

CompanyAt 31 December 2012LiabilityDerivative financial instruments – 138 – 138Convertible bonds 36,196 – – 36,196

36,196 138 – 36,334

AssetDerivative financial instruments – 4,353 – 4,352

At 31 December 2011LiabilityDerivative financial instruments – 3,855 – 3,855Convertible bonds 102,570 – – 102,570

102,570 3,855 – 106,425

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial liabilities held by the Group is the current bid price. These instruments are included in Level 1.

The fair value of financial instruments that are not traded in an active market is determined by dealer quotes provided by third party financial institutions as at balance sheet date. These financial instruments are classified as Level 2.


130




(f) Financial Instruments by category

The carrying amount of the different categories of financial instruments is as disclosed on the face of the balance sheet and in Note 9 and Note 19 to the financial statements, except for the following:

Group Company

2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Loans and receivables 902,170 414,006 591,814 782,436Financial liabilities at amortised cost 1,227,316 652,223 560,264 730,424

36. RELATED PARTY TRANSACTIONS

In addition to the information disclosed elsewhere in the financial statements, the following transactions took place between the Group and related parties at terms agreed between the parties:

2012 2011

US$’000 US$’000

Revenue from construction contracts and charter hire – Associates 98,932 44,845 – Joint ventures 4,265 6,951Interest income charged to – Associates 3,033 – – Joint ventures 2,498 –

Purchase of services from – Associates 97,019 65,918 – Joint ventures 13,728 7,735

Outstanding balances at 31 December 2012, arising from sale/purchase of goods and services, are unsecured and receivable/payable within 12 months from balance sheet date and are disclosed in Notes 5 and 6, and Notes 15 and 16 respectively.

Key management personnel compensation

Key management personnel compensation is as follows:

Group

2012 2011

US$’000 US$’000

Short-term benefits 8,165 8,485Post-employment benefits 75 66Share based compensation expense (Note 24(b)) 138 4,009

8,378 12,560

Details on directors’ remuneration are disclosed in the Corporate Governance Report.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

131


37. SEGMENT INFORMATION

Management has determined the operating segments based on the reports reviewed by the Executive Committee (“Exco”) that are used to make strategic decisions. The Exco comprises the Executive Chairman, Group Chief Executive Officer and Chief Executive Officers of each business segment.

Reportable segments

The Group’s reportable segments are as follows:

Swiber Offshore Construction Services (“SOCS”) – Provision of a full suite of offshore construction services

Newcruz Offshore Marine Services (“NOMS”) – Provision of offshore marine support services that are complementary to offshore EPIC services

Kreuz Offshore Subsea Services (“KOSS”) – Provision of commercial saturation and air diving services

The Exco considers the business from both a geographic and business segment perspective. Geographically, management manages and monitors the business in three geographic regions, namely, South Asia, Southeast Asia, and Latin America. All geographic regions are engaged in engineering, charter hire and diving services.

Other services included ship repair services, corporate and offshore development services. These are not included within the reportable operating segments as they are not separately reported to the Exco. The results of these operations are included in the “Others” column.


132


37. SEGMENT INFORMATION (Continued)

The segment information provided to the Exco for the reportable segments are as follows:

SOCS NOMS KOSS Others Eliminations Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

2012RevenueExternal sales 692,770 95,908 119,904 43,652 – 952,234Inter-segment sales 18,861 22,301 72,729 – (113,891) –

Total revenue 711,631 118,209 192,633 43,652 (113,891) 952,234

ResultsSegment result 58,486 (5,130) 45,015 (1,390) – 96,981

Unallocated income 16,182Finance expenses (35,954)Share of profits of associates and joint ventures 17,788

Profit before tax 94,997Income tax expense (32,460)

Profit for the year 62,537

Other informationAdditions to property, plant and equipment 179,817 47,633 27,909 6,975 262,334Unallocated additions to property, plant and equipment 1,522

263,856

Depreciation 11,601 3,035 7,692 5,333 27,661Unallocated depreciation 403

28,064

AssetsSegment assets 1,105,953 243,847 215,332 83,784 1,648,916Unallocated assets 319,046

Consolidated total assets 1,967,962

LiabilitiesSegment liabilities 987,720 18,806 25,349 80,838 1,112,713Unallocated liabilities 189,670

Consolidated total liabilities 1,302,383

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

133



SOCS NOMS KOSS Others Eliminations Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

2011 (Restated)RevenueExternal sales 499,526 52,870 91,566 10,525 – 654,487Inter-segment sales 12,112 108,780 62,234 12,274 (195,400) –

Total revenue 511,638 161,650 153,800 22,799 (195,400) 654,487

ResultsSegment result 75,350 (17,544) 37,787 (9,348) – 86,245

Unallocated income 3,104Finance expenses (22,433)Share of profits of associates and joint ventures 2,489

Profit before tax 69,405Income tax expense (27,227)

Profit for the year 42,178

Other informationAdditions to property, plant and equipment 221,306 31,346 3,553 41,055 297,260Unallocated additions to property, plant and equipment 293

297,553

Depreciation 5,972 4,532 5,800 3,858 20,162Unallocated depreciation 639

20,801

AssetsSegment assets 925,973 112,905 132,927 64,316 1,236,121Unallocated assets 138,831

Consolidated total assets 1,374,952

LiabilitiesSegment liabilities 241,839 74,312 80,675 48,474 445,300Unallocated liabilities 406,060

Consolidated total liabilities 851,360


134



Prior year information had been restated to be consistent with current year’s presentation.

Inter-segment pricing is determined on mutually agreed terms. The revenue from external parties reported to the Exco is measured in a manner consistent with that in the consolidated income statement.

The Exco assesses the performance of the operating segments based on profits before tax. Finance expenses are not allocated to segments, as this type of activity is driven by the Group Treasury, which manages the cash position of the Group.

The amounts provided to the Exco with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. Segment assets and liabilities include all operating assets and liabilities used by the segments.

Geographical information

Revenue (1)

Non-current assets (2)

US$’000 US$’000

2012South Asia 306,948 –South East Asia 445,527 857,443Latin America 171,002 179Others (3) 28,757 31

952,234 857,653

2011South Asia 387,469 –South East Asia 182,081 766,486Others (3) 84,937 52

654,487 766,538

(1) Analysis of the Group’s sales is by geographical location of customers, irrespective of the origin of the work/

services.

(2) Analysis of the carrying amount of segment assets and additions to the property, plant and equipment analysed

by the geographical area in which the assets are located.

(3) Others comprise of operations in Europe, Southern Caribbean, Middle East and East Asia.

Revenues of approximately US$219,377,000 (2011: US$358,700,000) are derived from a single external customer. These revenues are attributable to the SOCS segment.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

135


38. BUSINESS COMBINATIONS

On 16 August 2012, the Group acquired 49.5% equity interest in Atlantis Navigation AS (“Atlantis”), bringing its total interest in Atlantis to 98.8%. On 31 August 2012, the Group acquired a further 1.2% equity interest in Atlantis and Atlantis became a wholly-owned subsidiary of the Group. The principal activities of Atlantis are that of vessel owning and chartering. As a result of the acquisition, the Group is expected to expand its vessel fleet.

Details of the consideration paid, the assets acquired and liabilities assumed and the effects on the cash flows of the Group, at the acquisition date, are as follows:

US$’000

(a) Purchase consideration

Investment in associate, at cost 12,979Cash paid 18,739Loss arising in respect of step up acquisition (29)Total purchase consideration 31,689

Consideration transferred for the business 31,689

(b) Effect on cash flows of the Group

Cash paid (as above) 18,739Less: cash and cash equivalents in subsidiary acquired (6,903)

Cash outflow on acquisition 11,836

At fair value

US$’000

(c) Identifiable assets acquired and liabilities assumed

Cash and cash equivalents 6,903Property, plant and equipment (Note 13) 93,851Deferred tax assets 380

Total assets 101,134

Trade and other payables 11,628Borrowings 57,817

Total liabilities 69,445

Total identifiable net assets 31,689

Consideration transferred for the business 31,689


136


38. BUSINESS COMBINATIONS (Continued)

(d) Acquisition-related costs

Acquisition-related costs of US$9,600, are included in “administrative expenses” in the consolidated statement of comprehensive income and in operating cash flows in the consolidated statement of cash flows.

(e) Revenue and profit contribution

The acquired business contributed revenue of US$2,355,000 and net profit of US$533,000 to the Group from the period from 1 July 2012 to 31 December 2012.

Had Atlantis been consolidated from 1 January 2012, consolidated revenue and consolidated profit for the year ended 31 December 2012 would have been US$8,980,000 and US$3,095,000 respectively.

39. CONTINGENT LIABILITIES

The Company has issued corporate guarantees to banks for borrowings of certain subsidiaries and related companies. These bank borrowings amount to US$250,443,000 (2011: US$128,572,000) at balance sheet date.

Management is of the view that the fair value of corporate guarantees issued by the Company is not significant.

40. EVENTS AFTER THE REPORTING PERIOD

1) Pursuant to the Swiber Performance Share Plan, the Company re-issued 1,031,666 treasury shares on 28 January 2013 at nil consideration. The cost of treasury shares re-issued amounted to US$864,000.

2) On 5 March 2013, Swiber Engineering Limited, wholly-owned subsidiary of the Company, incorporated a wholly-owned subsidiary, ACS Marine Offshore, with an initial issue share capital of Euro 20,000. The newly incorporated subsidiary will be principally engaged in offshore engineering and construction services.

3) On 19 March 2013, a total 15,000,000 options (“Options”) were granted to the directors of the Company at an exercise price of S$0.64 per share under the Swiber Employee Share Option Scheme. The Options granted are exercisable after the first anniversary of the date of grant of the Options.

DirectorsOptions granted

Raymond Kim Goh 5,000,000Francis Wong Chin Sing 3,000,000Jean Pers 2,000,000Nitish Gupta 2,000,000Yeo Chee Neng 2,000,000Yeo Jeu Nam 400,000Oon Thian Seng 300,000Chia Fook Eng 300,000

4) On 19 March 2013, a total of 6,000,000 shares awards were granted under the Swiber Performance Share Plan to certain employees of the Group. One third of the share awards granted shall be vested in each year on the anniversary of the date of the share awards.

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

137


41. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS

Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Group’s accounting periods beginning on or after 1 January 2013 or later periods and which the Group has not early adopted:

• FRS 110 Consolidated Financial Statements (effective for annual periods beginning on or after 1 January 2014)

FRS 110 replaces all of the guidance on control and consolidation in FRS 27 “Consolidated and Separate Financial Statements” and SIC 12 “Consolidation – Special Purpose Entities”. The same criteria are now applied to all entities to determine control. Additional guidance is also provided to assist in the determination of control where this is difficult to assess. The Group has yet to assess the full impact of FRS 110 and intends to apply the standard from 1 January 2014.

• FRS 111 Joint Arrangements (effective for annual periods beginning on or after 1 January 2014)

FRS 111 introduces a number of changes. The “types” of joint arrangements have been reduced to two: joint operations and joint ventures. The existing policy choice of proportionate consolidation for jointly controlled entities has been eliminated and equity accounting is mandatory for participants in joint ventures. Entities that participate in joint operations will follow accounting much like that for joint assets or joint operations currently. The Group has yet to assess the full impact of FRS 111 and intends to apply the standard from 1 January 2014.

• FRS 112 Disclosure of Interests in Other Entities (effective for annual periods beginning on or after 1 January 2014)

FRS 112 requires disclosure of information that helps financial statement readers to evaluate the nature, risks and financial effects associated with the entity’s interests in (1) subsidiaries, (2) associates, (3) joint arrangements and (4) unconsolidated structured entities. The Group has yet to assess the full impact of FRS 112 and intends to apply the standard from 1 January 2014.

• FRS 113 Fair Value Measurement (effective for annual periods beginning on or after 1 January 2013)

FRS 113 provides consistent guidance across IFRSs on how fair value should be determined and which disclosures should be made in the financial statements. The Group has yet to assess the full impact of FRS 113 and intends to adopt the standard from 1 January 2013.

42. AUTHORISATION OF FINANCIAL STATEMENTS

These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of Swiber Holdings Limited on 25 March 2013.


138

STATISTICS OF SHAREHOLDINGSAs at 6 March 2013

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholdings No. of Shareholders % No. of Shares %

1 – 999 9 0.09 3,113 0.001,000 – 10,000 6,380 60.46 39,541,654 6.5010,001 – 1,000,000 4,133 39.17 162,838,700 26.761,000,001 and above 30 0.28 406,105,865 66.74

TOTAL 10,552 100.00 608,489,332 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name No. of Shares %

1 DBS NOMINEES PTE LTD 123,153,156 20.242 HSBC (SINGAPORE) NOMINEES PTE LTD 70,270,412 11.553 CITIBANK NOMINEES SINGAPORE PTE LTD 48,433,348 7.964 SWISSCO INTERNATIONAL PTE LTD 24,600,000 4.045 HONG LEONG FINANCE NOMINEES PTE LTD 16,275,000 2.676 DBSN SERVICES PTE LTD 13,099,928 2.157 MAYBANK NOMINEES (SINGAPORE) PRIVATE LIMITED 12,011,000 1.978 UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 11,249,000 1.859 OCBC SECURITIES PTE LTD 11,071,000 1.8210 PHILLIP SECURITIES PTE LTD 10,562,000 1.7411 UOB KAY HIAN PTE LTD 8,879,000 1.4612 YEO CHUNG SUN 8,000,000 1.3113 RAFFLES NOMINEES (PTE) LIMITED 7,704,478 1.2714 MAYBANK KIM ENG SECURITIES PTE LTD 5,456,250 0.9015 DB NOMINEES (SINGAPORE) PTE LTD 3,925,417 0.6516 HENDRIK EDDY PURNOMO 3,764,000 0.6217 BNP PARIBAS SECURITIES SERVICES SINGAPORE BRANCH 3,204,500 0.5318 CIMB SECURITIES (SINGAPORE) PTE LTD 3,195,000 0.5319 NITISH GUPTA 3,000,000 0.4920 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 2,557,000 0.42

TOTAL 390,410,489 64.17

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

139

STATISTICS OF SHAREHOLDINGSAs at 6 March 2013

Total number of issued shares excluding treasury shares : 608,489,332Total number and percentage of treasury shares : 931,668 (0.15%)Class of shares : Ordinary sharesVoting shares : One vote per share

SUBSTANTIAL SHAREHOLDERS

Substantial shareholders of the Company (as recorded in the Register of Substantial Shareholders) as at 6 March 2013:

Direct Interest Indirect InterestName No. of shares %* No. of shares %*

Raymond Kim Goh 42,800,000 7.03 – –Yeo Chee Neng 35,100,000 5.77 – –Jean Pers 35,200,000 5.78 – –Pang Yoke Min – – 54,745,000 9.001

Notes:

* Computed based on 608,489,332 shares, being the total number of issued voting shares of the Company (excluding treasury

shares).1 Registered in the name of Citibank Nominees Singapore Pte Ltd.

FREE FLOAT

As at 6 March 2013, the percentage of shareholdings of the Company held in the hands of the public was approximately 69 per cent and therefore Rule 723 of the Listing Manual is complied with.


140

NOTICE OF ANNUAL GENERAL MEETING

SWIBER HOLDINGS LIMITED(Incorporated in the Republic of Singapore)(Company Registration No. 200414721N)

NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM”) of Swiber Holdings Limited (the “Company”) will be held at 12 International Business Park, Swiber@lBP #03-02 Singapore 609920, on Friday, 19 April 2013, at 10:00 a.m. for the following purposes:

ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and Audited Financial Statements of the Company for the year ended 31 December 2012 together with the Auditors’ Report thereon. (Resolution 1)

2. To re-elect the following directors of the Company (“Director”) retiring pursuant to Article 93 of the Articles of Association of the Company:

Mr Francis Wong Chin Sing (Resolution 2)Mr Yeo Chee Neng (Resolution 3)Mr Chia Fook Eng (Resolution 4)

Mr Francis Wong Chin Sing will, upon re-election as a Director, remain as an Executive Director and Group CEO of the Company and member of the Audit Committee.

Mr Yeo Chee Neng will, upon re-election as a Director, remain as a Non-Executive Director of the Board.

Mr Chia Fook Eng will, upon re-election as a Director, remain as a Member of the Nominating, Remuneration and Audit Committees. He will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

3. To approve the payment of Directors’ fee of US$310,000.00 for the financial year ending 31 December 2013 (2012: US$310,000). (Resolution 5)

4. To re-appoint Messrs PricewaterhouseCoopers LLP as the Company’s Auditors and to authorise the Directors to fix their remuneration. (Resolution 6)

5. To transact any other ordinary business which may properly be transacted at an AGM.

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:

6. Authority to allot and issue shares

“THAT, pursuant to Section 161 of the Companies Act, Chapter 50 of Singapore (the “Companies Act”) and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (the “Listing Manual”), authority be and is hereby given to the Directors to:

(a) allot and issue shares in the Company (the “Shares”); and

(b) issue convertible securities and any Shares pursuant to convertible securities

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

141


(whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors shall in their absolute discretion deem fit, provided that the aggregate number of Shares (including any Shares to be issued pursuant to the convertible securities) to be issued pursuant to such authority shall not exceed fifty per cent. (50%) of the total number of issued Shares excluding treasury shares of the Company for the time being and that the aggregate number of Shares to be issued other than on a pro rata basis to the then existing shareholders of the Company (including any Shares to be issued pursuant to the convertible securities) will not exceed twenty per cent. (20%) of the total number of issued shares excluding treasury shares of the Company for the time being. Unless prior shareholder approval is required under the Listing Manual, an issue of treasury shares will not require further shareholders’ approval, and will not be included in the aforementioned limits. Unless revoked or varied by the Company in general meeting, such authority shall continue in full force until the conclusion of the next AGM of the Company or the date by which the next AGM is required by law to be held, whichever is earlier, except that the Directors shall be authorised to allot and issue new Shares pursuant to the convertible securities notwithstanding that such authority has ceased.

For the purposes of this Ordinary Resolution and Rule 806(3) of the Listing Manual, the total number of issued Shares excluding treasury shares is based on the total number of issued Shares excluding treasury shares of the Company at the time this Ordinary Resolution is passed after adjusting for:

(i) new Shares arising from the conversion or exercise of convertible securities;

(ii) new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time of the passing of this Ordinary Resolution, provided the options or awards were granted in compliance with the rules of the Listing Manual; and

(iii) any subsequent bonus issue, consolidation or subdivision of Shares.”

[See Explanatory Note (i)] (Resolution 7)

7. The Proposed Renewal of the Share Buyback Mandate

“THAT,

(1) for the purposes of the Companies Act (as defined in Ordinary Resolution 7) approval be and is hereby given generally and unconditionally for the exercise by the Directors of all the powers of the Company to purchase or otherwise acquire Shares not exceeding in aggregate the Maximum Limit (as hereafter defined), at such price(s) as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), whether by way of:

(a) market purchase(s) (“Market Purchase”), transacted on the Singapore Exchange Securities Trading Limited (“SGX-ST”) through the ready market, through one or more duly licensed stock brokers appointed by the Company for the purpose; and/or

(b) off-market purchase(s) (“Off-Market Purchase”) effected pursuant to any equal access scheme(s) in accordance with Section 76C of the Companies Act, as may be determined or formulated by the Directors as they consider fit, which scheme(s) shall satisfy all conditions prescribed by the Companies Act;

and otherwise in accordance with all other laws and regulations and rules of the SGX-ST as may for the time being be applicable (the “Share Buyback Mandate”);

(2) unless varied or revoked by the members of the Company in a general meeting, the authority conferred on the Directors pursuant to the Share Buyback Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the date of the passing of this Ordinary Resolution and expiring on:


142


(a) the date on which the next AGM is held or required by law to be held;

(b) the date on which the purchases or acquisitions of Shares by the Company pursuant to the Share Buyback Mandate are carried out to the full extent mandated; or

(c) the date on which the authority conferred by the Share Buyback Mandate is revoked or varied by the Shareholders in a general meeting, whichever is the earliest;

(3) in this Ordinary Resolution:

“Maximum Limit” means that number of issued Shares representing 10% of the total number of issued Shares as at the date of the passing of this Ordinary Resolution unless the Company has effected a reduction of the share capital of the Company in accordance with the applicable provisions of the Companies Act, at any time during the Relevant Period, in which event the total number of issued Shares shall be taken to be the total number of issued Shares as altered (excluding any treasury shares that may be held by the Company from time to time);

“Relevant Period” means the period commencing from the date on which the last AGM was held and expiring on the date the next AGM is held or is required by law to be held, whichever is the earlier, after the date of the passing of this Ordinary Resolution; and

“Maximum Price”, in relation to a Share to be purchased or acquired, means the purchase price (excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses) to be paid for a Share which shall not exceed:

(a) in the case of a Market Purchase, 105% of the Average Closing Price (hereinafter defined); and

(b) in the case of an Off-Market Purchase pursuant to an equal access scheme in accordance with Section 76C of the Companies Act, 120% of the Average Closing Price, where:

“Average Closing Price” means the average of the closing market prices of a Share for the last five (5) Market Days (a “Market Day” being a day on which the SGX-ST is open for trading in securities) on which transactions in the Shares are recorded on the SGX-ST immediately preceding the date of the Market Purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the Off-Market Purchase, and deemed to be adjusted in accordance with the Listing Manual for any corporate action which occurs after the relevant five (5) Market Days period; and

“date of the making of the offer” means the day on which the Company announces its intention to make an offer for an Off-Market Purchase, stating therein the purchase price (which shall not be more than the Maximum Price for an Off-Market Purchase calculated on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase; and

(4) the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they and/or he may consider necessary, expedient, incidental or in the interests of the Company to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution.”

[See Explanatory Note (ii)] (Resolution 8)

SWIBER HOLDINGS

LIMITED ANNUAL

REPORT 2012

143


8. Authority to grant options and issue Shares under the Swiber Employee Share Option Scheme

“THAT, pursuant to Section 161 of the Companies Act (as defined in Ordinary Resolution 7), the Directors of the Company be and are hereby authorised to offer and grant options in accordance with the Swiber Employee Share Option Scheme (the “Scheme”) and to issue such Shares as may be required to be issued pursuant to the exercise of the options granted under the Scheme provided always that the aggregate number of Shares to be issued pursuant to the Scheme, when added to the number of shares issued and issuable in respect of all options granted under the Scheme, all awards granted under the Swiber Performance Share Plan and all shares, options or awards granted under any other share option schemes or share plans of the Company, shall not exceed fifteen per cent. (15%) of the total number of issued Shares excluding treasury shares of the Company from time to time.”

[See Explanatory Note (iii)] (Resolution 9)

9. Authority to allot and issue Shares under Swiber Performance Share Plan

“THAT, pursuant to Section 161 of the Companies Act (as defined in Ordinary Resolution 7), the Directors of the Company be and are hereby authorised to grant awards in accordance with the provisions of the Swiber Performance Share Plan (the “Plan”) and to allot and issue from time to time such Shares as may be required to be issued pursuant to the Plan provided always that the aggregate number of Shares to be issued pursuant to the Plan, when added to the number of shares issued and issuable or existing shares delivered and deliverable in respect of all awards granted under the Plan, all options granted under the Swiber Employee Share Option Scheme and all shares, options or awards granted under any other share scheme of the Company, shall not exceed fifteen per cent. (15%) of the total number of issued Shares excluding treasury shares of the Company from time to time.”

[See Explanatory Note (iv)] (Resolution 10)

By Order of the Board

Lee Bee FongCompany Secretary

Singapore, 4 April 2013


144


Explanatory Notes:

(i) The Ordinary Resolution 7 proposed in item 6 above, if passed, will empower the Directors from the date of the above Meeting until the date of the next AGM, to allot and issue Shares and convertible securities in the Company. The aggregate number of Shares (including any Shares issued pursuant to the convertible securities) which the Directors may allot and issue under this Resolution will not exceed fifty per cent. (50%) of the total number of issued Shares excluding treasury shares of the Company. For issues of Shares other than on a pro rata basis to all Shareholders, the aggregate number of Shares to be issued will not exceed twenty per cent. (20%) of the total number of issued Shares excluding treasury shares of the Company. This authority will, unless previously revoked or varied at a general meeting, expire at the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is earlier. However, notwithstanding the cessation of this authority, the Directors are empowered to issue Shares pursuant to any convertible securities issued under this authority.

(ii) The Ordinary Resolution 8 proposed in item 7 above, if passed, renews the Share Buyback Mandate and will authorise the Directors from the date of the above Meeting until the date of the next AGM, or the date by which the next AGM of the Company is required by law to be held or the date on which such authority is revoked or varied by the Shareholders in a general meeting, whichever is the earliest, to purchase up to 10% of the total number of issued Shares in the capital of the Company. Please refer to the Letter to Shareholders dated 4 April 2013 appended to the Annual Report for details.

(iii) The Ordinary Resolution 9 proposed in item 8 above, if passed, will empower the Directors to grant options and to allot and issue Shares upon the exercise of such options in accordance with the Swiber Employee Share Option Scheme.

(iv) The Ordinary Resolution 10 proposed in item 9 above, if passed, will empower the Directors to grant awards and to allot and issue Shares in accordance with the Swiber Performance Share Plan.

Notes:

1. A member entitled to attend and vote at the AGM is entitled to appoint not more than two proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or attorney.

3. The instrument appointing a proxy must be deposited at the registered office of the Company at 12 International Business Park, Swiber@IBP, #04-01, Singapore 609920 not less than forty-eight hours (48) before the time for holding the AGM.

PROXY FROM

SWIBER HOLDINGS LIMITED(Incorporated in the Republic of Singapore)(Company Registration No. 200414721N)

IMPORTANT:1. For investors who have used their CPF monies to buy Swiber

Holdings Limited shares, the Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

I/We (Name)

of (Address)being a member/members of Swiber Holdings Limited (the “Company”) hereby appoint:

Name AddressNRIC/Passport

NumberProportion of

Shareholdings (%)

and/or (delete as appropriate)

Name AddressNRIC/Passport

NumberProportion of

Shareholdings (%)

or failing him/her/them, the Chairman of the meeting as my/our proxy/proxies to attend and vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting of the Company (the “Meeting”) to be held at 12 International Business Park, Swiber@IBP, #03-02, Singapore 609920, on Friday, 19 April 2013, at 10:00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/her/their discretion, as he/she/they will on any matter arising at the Meeting:

No. Resolutions Relating to: For Against

1. Directors’ Report and Audited Financial Statements for the year ended 31 December 2012

2. Re-election of Mr Francis Wong Chin Sing

3. Re-election of Mr Yeo Chee Neng

4. Re-election of Mr Chia Fook Eng

5. Approval of Directors’ fees of US$310,000.00 for the financial year ending 31 December 2013

6. Re-appointment of Messrs PricewaterhouseCoopers LLP as Auditors

7. Authority to allot and issue shares

8. Proposed Renewal of the Share Buyback Mandate

9. Authority to grant options and issue shares under the Swiber Employee Share Option Scheme

10. Authority to allot and issue shares under the Swiber Performance Share Plan

Dated this day of 2013

Total Number of Shares Number of Shares

In CDP Register

In Register of Members

Signature(s) of Member(s)or, Common Seal of Corporate Member

IMPORTANT: PLEASE READ NOTES OVERLEAF

NOTES

1. A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote in his stead.

2. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.

3. A proxy need not be a member of the Company.

4. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register and registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all shares held by the member.

5. The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 12 International Business Park, Swiber@IBP, #04-01, Singapore 609920, not less than 48 hours before the time set for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.

7. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

GENERAL:

The Company shall be entitled to reject a proxy form which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the proxy form. In addition, in the case of shares entered in the Depository Register, the Company may reject a proxy form if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

This page has been intentionally left blank

A WORLD-CLASS COMPANY IN THE OFFSHORE INDUSTRY

TRUST

We are trusted for our integrity, honesty, re l iabi l i t y, fa i rness and sincerity in working with our partners, customers and

employees.

DETERMINATION We are determined to succeed and will always rise up to any challenge and be renowned for our resolve in solving any problems faced by us or our

clients and partners.

EXCELLENCE We excel in everything that we do and are committed to delivering jobs of the highest quality, exceeding our customers'

expectations.

AFFIRMATION We aff irm and recognise the contributions made by our partners, clients and employees to the success of our business. We value our employees, encourage their contributions and develop them to their fullest potential. We practice the 101% principle in affirmation – finding the 1% we can affirm, and

giving it 100% of our attention.

RESPECT We respect and value each other's views. We respect the laws of the countries we operate in and the confidentiality of information provided by our cl ients and

employees. We win as a team.

Designed and produced by

(65) 6578 6522

SWIBER HOLDINGS LIMITEDRegistration No. 200414721N12 International Business Park

Swiber@IBP #04-01Singapore 609920Tel (65) 6505 0800Fax (65) 6505 0802www.swiber.com



SWIB

ER

HO

LDIN

GS LIM

ITED

AN

NU

AL REPO

RT 2012

taking our quantum leap - swiber holdings limitedswiber.listedcompany.com/misc/ar2012.pdf ·...

Documents