Vard Annual Report 2013 Compl Bookmarks

ANNUAL REPORT 2013
BUSINESS REVIEW
VARD is present in Norway,

Romania, Brazil, Vietnam,
Singapore, India, Croatia
and Poland.
10
Shipyards located
in four countries
Norway
Vard Aukra
Vard Brattvaag
Vard Brevik
Vard Langsten
Vard Sviknes
Romania
Vard Braila
Vard Tulcea
Contents
04
About VARD
18
Financial Highlights
48
Sustainability and
06
Testimonials
22
Signicant Events
08
CEO Letter
24
Operational Review
54
Risk Management
10
Chairmans Statement
32
Core Products and Services
56
Investor Relations
12
Board of Directors
44
Vessels Delivered
58
Outlook
14
Executive Management
46
Order Book
62
Contact Information
16
Shareholding and Corporate Structure
Social Responsibility
ANNUAL REPORT 2013
ANNUAL REPORT 2013
BUSINESS REVIEW
F I N A N C I A L A N D S TAT U T O R Y R E P O R T
VARDs Annual Report 2013 consists

of two sections: Business Review
and Financial and Statutory Report.
This is the Business Review section.
Brazil
Vard Niteri
Vard Promar
Vietnam
Vard Vung Tau
VARD has a number of

subsidiary companies in the
areas of design, electro, piping,
accommodation and handling
systems.
10 696
employees globally
Norway
Romania
Brazil
Vietnam
Singapore
Other
1,743
6,151
2,064
691
10
37
About VARD
VA R D A N N U A L R E P O R T 2 0 1 3
We are shipbuilders
All VARD employees are shipbuilders
at heart regardless of our role or
title, skill or location. Our maritime
heritage has taught us to think
creatively and seek new solutions.
VARD takes pride in the innovation
and technological development we
put into the advanced vessels we
build. The majority of our customers
work in the offshore industry,
which enters ever-deeper waters
and operates in ever-harsher
environments.
As the expectations towards solid
shipbuilding grow, VARD remains
focused on building specialized
vessels and long-term relationships
with our customers.
Every year, we build more than 20
offshore and specialized vessels.
30
Deliveries last ve years
We are proud that many of our

customers return to VARD as their
preferred shipbuilder:
During the past decade, the
vast majority of our customers
have returned to VARD to build
another vessel.
Three ship owners have each
built more than 30 vessels
with us.
As a leading global designer and
shipbuilder, close cooperation with
our customers is core to our business.
We take our promise to deliver cuttingedge innovation and technology
seriously. In all projects, we strive
to have an open and trust-based
dialogue with our customers to nd
suitable and satisfactory solutions.
New orders 2013
25
20
15
10
5
0
2013 ......................... 23
2012 ......................... 22
2011 ......................... 23
2010 ......................... 21
2009 ......................... 26
PSV ............................4
AHTS .........................0
OSCV .........................9
Other .........................2
Every day, we go to work to earn our

customers trust through hard work
and dedication. We deliver on our
promises, and our track record of
repeat business is proof of this.
We know that one of the main
reasons customers return to VARD
is the fact that they can trust us.
Our ten yards have one team of
employees sharing the same values,
goals and quality standards across
three continents.
Everything that we are can be
summarized in one simple
statement:
Our company is built on trust!
Large share of own design

- new orders 2013
VARD ....................... 11
Other .........................4
About VARD
Our values guide us

An integral part of our promise to
customers is our values, which
embody the essence of who we are
and why we are. Our common set of
values lies at the heart of everything
we do.
10,000 VARD employees are joined
in a common goal to earn customer
satisfaction and build advanced
vessels. Our customers are facing
growing challenges regarding
demanding operations and deeper
waters.
Craftsmanship is self-evident across
the company, from our proud history,
through to the recruitment of the
best engineers and workers, to
dedication, skills and the sharing of
best practice with our customers. No
details are overlooked. We take pride
in delivering high quality products
and services. Forever improving our
products and perfecting our vessels

is what our customers have come to
expect from VARD.
Fellowship is the appreciation
and respect we have for our
colleagues, customers and the local
communities in which our shipyards
are located. We care about each
individual, and we value diversity.
Health, safety and environment are
our rst priority - every employee
has the right to work in a safe
environment, and every community
has the right to exist in a safe and
hazard-free environment. VARD is
located in Norway, Romania, Brazil,
Vietnam, Singapore, India, Croatia,
and Poland. The diversity of these
cultures is what makes us one one
team sharing knowledge, goals
and interests, because we are all
shipbuilders at heart.
Salesmanship is about fullling our

customers needs by delivering the
best solution in an optimal and costeffective way. Customer satisfaction is
everyones responsibility. At all levels
of VARD, customer satisfaction gets
full attention. Only satised customers
can secure our future. We constantly
strive to be exible and agile, to deliver
on time, within budget and to the level
of quality promised. Identifying the
best solution to every task requires
an open mind towards new ways of
problem solving. It also requires trust
and belief in our employees to make
the necessary decisions to solve
customers needs quickly. Shipbuilding
is a competitive industry, and our
customers appreciate the quality,
cooperation and trust-based dialogue
we offer as demonstrated by the
repeat orders they place with VARD.
Craftsmanship
Fellowship
Salesmanship
We take pride in delivering

high quality products and
services
We truly care about the

individual, team and society
Customers satisfaction is
everyones responsibility
5
Testimonials
Every second week

a new VARD vessel is delivered
Each of our vessels is developed in partnership with our customers, and is built to meet their specic needs.
Together, we make important choices relating to design, outtting, systems and solutions. Jointly, we push
boundaries, and in close cooperation, we create sustainable operations and jobs both at sea and onshore.
Troms Lyra
for Troms Offshore
Far Spica
for Farstad Shipping
A Platform Supply Vessel (PSV) built

and equipped for operations in the
North Sea and in the Barents Sea.
A Platform Supply Vessel (PSV)

especially designed and developed
according to Farstads requirement.
I am very happy with the level

of cooperation and exibility
VARD showed through the entire
building process from design
to outtting.
Our values are at the core of

everything we do at Farstad.
Safety, Value creation, Reliability
and a strong focus on the
Environmental Challenge are
at the forefront of the longterm relationship we have with
VARD. A relationship which
has strengthened our joint
performance, both in regard
to creating safe jobs and in
becoming solid global players.
VARD has a professional

project organization which
delivered a complex project on
time and on budget.
sten Mortvedt
Managing Director
Troms Offshore Management
Karl-Johan Bakken
CEO
Farstad Shipping
Testimonials
Gadus Poseidon
for Havsk
Skandi Iceman
for DOF / Iceman
Island Duchess
for Island Offshore
Gadus Poseidon, the rst advanced

shing vessel in a series of three.
A highly Anchor Handling Tug

Supply vessel (AHTS). Built to
ice-class and equipped for
multi-role operations in harsh
arctic areas.
The second vessel in a series of

four modern Platform Supply
Vessels (PSV).
After six successful months,

the new trawlers have enabled us
to increase our yields and work
more efciently.
With a clean design and
a green passport, these new
vessels have been built for
the future as well as the
environment. Meanwhile, the
crews are reporting improved
onboard comfort levels.
Olav Holst-Dyrnes
CEO
HAVFISK ASA
I see VARD as DOFs preferred

partner - one of the closest we
have. Together, we have built
a range of state-of-the-art
vessels for the offshore market.
Our customers need the most
advanced vessels.
Mons Aase
CEO
DOF ASA
We look forward to adding yet

another magnicent vessel to our
eet, and are eager to see Island
Duchess in operation.
This is the 20th vessel to be
built for us by Vard Brevik. We are
therefore condent that quality
has been a top priority throughout
the construction process.
Hvard Ulstein
CEO
Island Offshore
CEO Letter
We build vessels and solutions with

our customers not just for them.
Mr. Roy Reite

Chief Executive Ofcer
and Executive Director
Dear Shareholders,
2013 has been an eventful year:
We recorded the highest new order
intake in more than ve years, and
had 41 vessels in the order book
at year end. We signed our largest
contract ever, with a total value of
NOK 6.5 billion. And we now are
10,000 employees at VARD. At the
same time, we have encountered
more profound challenges in our
operations than in recent years.
Containing rising costs

Over the past twelve months, the
rising cost of operations has been a
common theme across the offshore
industry and a key focus for us here
at VARD. Clearly, steadily growing
costs for the oil and gas industry are
not sustainable. At VARD, we are
committed to helping our customers,
the ship owners, serve the offshore
industry with new technology and

smarter solutions that can offset
rising cost levels. New design,
technology and smarter solutions
are important areas in which VARD
work to reduce vessel operating
costs.
Rising demand for

construction vessels
During 2013, we saw continuing
shifts in the advanced vessel market.
Of the 22 vessels we delivered during
the year, twelve were Platform
Supply Vessels (PSVs). Over the
past two years, the share of PSVs in
VARDs order book has more than
halved. In 2013, we signed contracts
for only four PSVs, but an impressive
nine Offshore Subsea Construction
Vessels (OSCVs).
The OSCVs cater to a subsea industry

operating in ever more demanding
waters, both in terms of depth and
challenging weather conditions. This
segment is exciting and during 2013
VARD signicantly strengthened our
presence in this high-end market.
Our ability to adjust to the changing
market demand demonstrates the
dynamic nature of our organization
as well as its exibility.
Investments, challenges
and opportunities
During 2013, we made several
investments that are critical for
the strategy, success and future
competitive position of the company.
We made large investments at
the Vard Tulcea yard in Romania,
upgrading the facilities to a state-ofthe-art shipyard. At our new shipyard
CEO Letter
in Brazil, we started operation as

planned and at year-end we had
more than 700 employees.
We also increased the capacity of
our Vietnamese operations.
The challenges we have seen
develop over the year at the Niteri
shipyard in Brazil are receiving full
management focus. The booming
Brazilian economy has led to high
employee turnover, which has
been challenging for VARD and its
subcontractors. The level of turnover
has lowered in 2013, but remains
higher than what we see in other
markets.
We are reaping the benets from
integrated project teams and a
high degree of manufacturing
automation, especially in Norway
and Romania. All of the 19 vessels

delivered from shipyards in Norway
in 2013 had their hulls built in
Romania. The yards in Romania
also provided initial stages of
outtting, with the more complex
outtting taking place in Norway.
An increasingly
international customer
base
Our daily focus is set on building
the optimal organization in terms
of safety, quality, efciency,
innovation and nancial stability.
These qualities are the foundation
of VARD, and are important to our
customers. The combination of our
long-term client base and the new
international customers is exciting
and promising.
Built on trust
VARDs customer promise is
Built on trust. This is reected
in all we do. We build vessels and
solutions with our customers not
just for them. We truly care for our
customers, our employees, the
communities in which we operate,
and our investors. Creating value
and protecting the interests of all
our stakeholders is our main task.
To succeed with this task, we ask for
your continued trust.
Sincerely,
Mr. Roy Reite

Chief Executive Ofcer and
Executive Director
Chairmans Statement
The focus going forward will be for VARD

and FINCANTIERI to work side-by-side
to realize synergies.
Mr. Giuseppe Bono

Chairman of the Board
Valued Shareholders,
My rst year working with VARD
whether it be cruise ships, naval
example, I see opportunities for
has come to a close. Following
vessels or high-end offshore support
closer cooperation and exchange
FINCANTIERIs acquisition of the
vessels. Thanks to such wide range
of best practices in areas such
majority of shares in VARD, and
of experiences developed over
as design and engineering,
my appointment as Chairman
the years we can now leverage on
procurement, production, power and
in March 2013, I have spent the
a variety of know-how and best
automation systems, and interior
rst year getting to know a highly
practices which is unique and
outtting of the vessels we build.
competent organization operating
represents our main competitive
Both in terms of geographical
in an innovative and dynamic but
advantage and a key asset for the
footprint, product range, and skills,
also challenging segment of the
future.
we will strengthen our combined
shipbuilding industry.
10
competitiveness. During these rst

In this context, the focus going
months of cooperation, we have
Both FINCANTIERI and VARD cater
forward will be for VARD and
worked hard and mobilized our
to highly specialized sectors, and
FINCANTIERI to work side-by-side
organizations, and we have already
each boasts a leadership position
to realize synergies and generate
seen the rst benets of working
in the major markets we serve,
value for all our Shareholders. For
together.
Chairmans Statement
I have strong condence in the VARD
and Shareholders for the trust
management team, who take a
and commitment you invest in us.
long-term perspective in their goals
Rest assured that our dedication
for the company, and have proven to
to continuing to serve you remains
be persistent in following through.
high.
I am condent that we will overcome

the operational challenges we have
experienced at one of our shipyards
Sincerely,
in Brazil. And I am condent that

we will develop new business
opportunities to strengthen and
grow the company.
Mr. Giuseppe Bono

On behalf of the Board of Directors,

I would like to express my sincere
appreciation to our Customers
11
Board of Directors
Board of Directors
Mr. Roy Reite

Chief Executive Ofcer and Executive Director
Mr. Sung Hyon Sok

Independent Director
Mr. Fabrizio Palermo

Non-Executive Director
Mr. Giuseppe Bono

Chairman of the Board and Non-Executive Director
Mr. Keen whye Lee

Independent Director
Mr. Pier Francesco Ragni

Non-Executive Director
1
MR. ROY REITE is the chief executive

ofcer and serves as executive
director of VARD. He has served
as president of the Company since
2001.
MR. SUNG HYON SOK serves as

an independent director of the
Company. Mr. Sok is also the
managing director of Money Werks
Capital Pte. Ltd.
Prior to that, he was yard director at

Vard Sviknes from 1999 to 2001, and
assumed various positions as project
manager, production manager and
technical manager from 1990 to
1995. Mr. Reite was also a business
consultant at Intentia International
AS from 1995 to 1999.
Mr. Sok started his career in

Goodmorning Shinhan Securities
Co. Ltd. between 1987 and 1998.
Thereafter, he was vice president
of ICAP (Singapore) Pte. Ltd. before
joining REFCO (Singapore) Pte.
Ltd. in 2005. Additionally, Mr. Sok
was president of World Hawk Eyes
Advisor Pte. Ltd. from 2005 to 2007
and senior vice president of AM
Fraser Securities Pte. Ltd. from
2007 to 2009.
He is presently the vice chairman of

the board of Sparebanken Mre, a
Norway-based bank.
Mr. Reite holds a Master of Science
degree from the Norwegian
University of Science and Technology.
12
Mr. Sok holds a Master of Science in

Finance degree from the University
of Lancaster, United Kingdom, and
a Master of Business Administration
Degree from the University of Hull,
United Kingdom.
MR. FABRIZIO PALERMO serves

as non-executive director of the
Company. Mr. Palermo is deputy
general manager and chief nancial
ofcer of FINCANTIERI S.p.A and
also serves as director of Fincantieri
USA Inc.
Mr. Palermo joined the Fincantieri
Group in 2005 as head of business
development and corporate nance
and was appointed chief nancial
ofcer in 2006 and deputy general
manager in 2011.
Prior to that, he was a strategic
consultant with McKinsey & Co. in
Milan from 1998 to 2005, specializing
in business combinations,
restructuring and reorganizations
for major Italian and European
industrial and nancial groups.
Mr. Palermo started his career in
1995 as a nancial analyst in London
in the Investment Banking Division
of Morgan Stanley. Mr. Palermo
graduated in Business Economics
with honors at La Sapienza
University of Rome, Italy.
Board of Directors
MR. GIUSEPPE BONO serves as

chairman of the board and nonexecutive director of the Company.
Mr. Bono has been chief executive
ofcer of FINCANTIERI S.p.A. since
2002.
MR. KEEN WHYE LEE serves as an

independent director of the Company.
Mr. Lee is the managing director of
Strategic Alliance Capital Pte. Ltd.,
a venture capital and investment
management advisory company.
From 1993 to 2002 Mr. Bono held

senior positions at Finmeccanica,
where he was appointed general
manager and interim head of Alenia
Difesa and Ansaldo (Finmeccanica
Group) in 1997. In 2000 he was
appointed CEO and general manager
of the group.
Prior to founding Strategic Alliance

Capital Pte. Ltd. in 1997, Mr. Lee
was managing director of Rothschild
Venture Asia Pte. Ltd. from 1990
to 1997, and associate director of
Kay Hian James Capel Pte. Ltd.
from 1987 to 1990. He was also
an Investment Manager of the
Government of Singapore Investment
Corporation from 1981 to 1985.
From 1971 to 1993 he worked in

EFIM where he held a number of key
roles with increased responsibility
until his appointment as general
manager in 1991. From 1963 to
1971, he worked in Omeca (Fiat
- Finmeccanica Group; taken
over by EFIM in 1968) as head of
administration, planning and control.
Mr. Bono holds a degree in Business
and Economics, and an honorary
degree in Naval Engineering.
Mr. Lee is also a director of various

companies, including public
companies listed on the SGX-ST such
as Ntegrator International Ltd and
Santak Holdings Limited.
Mr. Lee holds a Master in Business
Administration degree from the
Harvard Graduate School of Business
Administration in the U.S.
MR. PIER FRANCESCO RAGNI

serves as non-executive director
of the Company. Mr. Ragni is
head of business development of
FINCANTIERI S.p.A. and also serves
as director of several subsidiaries of
FINCANTIERI S.p.A.
Mr. Ragni joined the Fincantieri
Group in 2005 and was appointed
head of business development in
2006.
Prior to joining the Fincantieri
Group he was an investment
banker with Banca Nazionale del
Lavoro and Banca IMI, focusing
on mergers & acquisitions and
equity capital market transactions,
and a nancial analyst in the
corporate nance department of
PricewaterhouseCoopers, Milan.
Mr. Ragni graduated in Business
Economics at L. Bocconi University
of Milan, Italy.
13
MR. ROY REITE is the chief executive

ofcer and serves as executive director
of VARD. He has served as president of
the Company since 2001.
Roy Reite
Chief Executive Ofcer and
Executive Director
Prior to that, Mr. Reite was yard director

at Vard Sviknes from 1999 to 2001, and
assumed various positions as project
manager, production manager and
technical manager from 1990 to 1995.
Mr. Reite was also a business consultant
MR. STIG BJRKEDAL serves as

the head of business development and
strategy of VARD.
Mr. Bjrkedal has held this position
since 2006. Prior to that, he was the
vice president of deck machinery at
Rolls-Royce Marine in Norway, from
2001 to 2006.
Stig Bjrkedal
Executive Vice President
Business Development and
Strategy
Mr. Bjrkedal has extensive

management experience, having served
14
Mr. Reite is presently the vice chairman

of the board of Sparebanken Mre,
a Norway-based bank.
Mr. Reite holds a Master of Science
degree from the Norwegian University
of Science and Technology.
in different positions in various maritime

companies from 1993 to 2000, including
Vard Piping, Skipsteknisk and Ulstein
Brattvaag.
Mr. Bjrkedal holds a Bachelors degree
in Naval Architecture from University of
Mre og Romsdal in lesund, Norway,
and a Master of Management degree
from BI Executive School in Oslo,
Norway.
nancial ofcer of VARD. He joined the

Company in 2007 as vice president of
nance for VARDs operations in Brazil.
and had CFO assignments for Kvrner

Masa Yards In Finland and Warnow Werft
in Germany. Mr. Nielsen held various
nance positions in the process industry
from 1990 to 1997.
Previously, Mr. Nielsen was chief

nancial ofcer and head of investor
relations for Aker American Shipping
from 2005 to 2007, and its predecessor
Aker Philadelphia Shipyard from 2002
to 2005. From 1998 to 2002 he was CFO
for Kvrner Shipbuilding in London,
Mr. Nielsen holds a Master of Science

in Business degree from Bod Graduate
School of Business and an Executive
MBA degree from Temple University
in the U.S.A.
MR. JAN IVAR NIELSEN is the chief
Jan Ivar Nielsen

Executive Vice President and
Chief Financial Ofcer
at Intentia International from 1995

to 1999.
MR. MAGNE HBERG heads

marketing and sales in VARD.
Mr. Hberg rst joined VARD as a project
manager at Vard Langsten in 2001, and
became senior vice president overseeing
the sales and marketing department
at VARD in 2004. Between 1995 and
2001, Mr. Hberg held several positions
as senior project engineer at Aker
Maritime, where he was responsible for
different projects within the offshore oil
and gas industry.
Prior to that, Mr. Hberg acquired a

wealth of experience within the offshore
oil and gas business, having taken on
key engineering roles in Smedvig Drilling
from 1990 to 1994, and with Wilh.
Wilhelmsen from 1982 to 1989.
MR. KNUT OLA TVERDAL is the head

of strategy implementation at VARD. He
also oversees the shipyard operation in
Brazil. He joined the Company in 2000
and has extensive experience in the
shipbuilding industry having served as
yard director at Vard Aukra from 2005
to 2010.
Philadelphia Shipyard from 2003 to 2005,

as well as project manager from 2002 to
2003 and production manager from 2000
to 2002 at VARD.
Mr. Hberg holds a diploma in

Engineering from the lesund Maritime
College in Norway.
Magne Hberg
Marketing and Sales
Mr. Tverdal holds a Master of Science

degree from the Norwegian University of
Science and Technology in Trondheim.
Prior to that, Mr. Tverdal was vice

president of production at Aker
MR. MAGNE O. BAKKE is the head

of shipyard operations at VARD and
oversees the Norway, Romania and
Vietnam operations.
Previously, Mr. Bakke was director at
the Vard Sviknes yard from 2005 to
2009. Between 1984 and 2005, Mr. Bakke
gained in-depth and broad experience
in different business areas in the
MR. HOLGER DILLING is responsible

for investor relations at VARD, having
held that role since the time of the
Companys listing in Singapore. He
joined VARD from STX Europe, where
he had worked as vice president for
business development since 2008,
overseeing the IPO of VARD in 2010.
Prior to joining STX Europe, Mr. Dilling
has worked in the areas of market
analysis, business development and
Knut Ola Tverdal

Strategy Implementation
Aker Group, including Offshore Oil and
Gas Field Development and Drilling.
Mr. Bakke holds a Bachelor of Science
in Marine Technology degree from the
Aust-Agder State College of Engineering
in Norway.
Magne O. Bakke
Executive Vice President and
Chief Operating Ofcer
strategy in industrial and energy

related companies in Norway, including
Statkraft, Dyno Nobel and Elkem.
Mr. Dilling started his career in
management consulting, working
for The Boston Consulting Group in
Germany and Norway from 1997 to 2001.
Mr. Dilling holds a Master of Science in
Economics degree from University of
Wrzburg, Germany.
Holger Dilling
Investor Relations
15
Shareholding and
Corporate Structure
FINCANTIERI
S.p.A.
100%
Fincantieri
Oil & Gas S.p.A.
Other
shareholders
55.63%
Vard Holdings
Limited
(Singapore)
44.37%
Note: Simplied shareholding structure. Does not include dormant subsidiaries,

minority shareholdings and non-core businesses. In case of split ownership
within the group, only major shareholders are shown.
Shareholding structure as of 13 March 2014.
16
100%
Vard Group AS
(Norway)
Vard RO
Holding SRL
(Romania)
Vard Tulcea SA
(Romania)
Vard Braila SA
(Romania)
Vard Ship Repair

Braila SA
(Romania)
Vard Engineering
Constanta
(Romania)
Vard Electro
Braila SRL
(Romania)
Vard Electro
Brazil (Instalaes
Eltricas) Ltda.
(Brazil)
Vard Electrical
Installation and
Engineering
(India) Pte. Ltd.
Vard Niteri SA
(Brazil)
50.5%
Vard
Promar SA
(Brazil)
Vard
Singapore Pte Ltd.
(Singapore)
Vard
Design AS
(Norway)
Vard
Electro AS
(Norway)
Vard
Vung Tau Ltd.
(Vietnam)
51%
Vard Design
Liburna Ltd.
(Croatia)
Vard Electro
Tulcea SRL
(Romania)
Vard
Piping AS
(Norway)
51%
Vard
Accommodation
AS (Norway)
Vard
Accommodation
Tulcea SRL
(Romania)
Seaonics AS
(Norway)
Seaonics Polska
sp. z o.o.
(Poland)
Vard Brevik
Holding AS
(Norway)
Vard Offshore
Brevik AS
(Norway)
Vard Engineering
Brevik AS
(Norway)
17
Statement of Income
VARD reported consolidated revenues
of NOK 11.16 billion for the nancial
year 2013, in line with the NOK 11.13
billion in 2012.
The FY2013 EBITDA margin was down
from 13.2% in FY2012 to 6.1%, mainly
due to operational challenges at
the Vard Niteri shipyard. Operating
margin (operating prot to total
revenues) came in at 4.3%, down
from 11.7% for the full year 2012.

The decrease in prot also includes
a NOK 70 million write-down of
goodwill related to Vard Niteri SA in
second quarter of 2013. The goodwill
is now fully written off. Prot before
tax decreased from NOK 1.23 billion
in 2012 to NOK 497 million in 2013.
While results towards the end of
the year showed an improvement
compared to the rst six months,

the nancial performance of the
Group was negatively impacted by
delays and cost overruns at Vard
Niteri SA also in the second half
of 2013. Operations at the Groups
European shipyards were generally
stable, with recent investments in
Romania contributing to productivity
improvements.
Summary Statement of Income

Year ended 31 December 2013
Amounts in NOK million
2013
2012
Revenue
11,155
11,129
Materials, subcontract costs and others
(7,778)
(7,154)
Salaries and related costs
(2,129)
(1,953)
Other operating expenses
(562)
(549)
686
1,473
(206)
(168)
Operating prot
480
1,305
Financial income
123
129
(115)
(111)
98
497
1,225
(197)
(434)
300
791
EBITDA
Depreciation, impairment and amortization
Financial costs
Share of results of associates, net of tax
Prot before tax
Income tax expense
Prot for the year
* Earnings Before Interest (but including interest on construction loans), Tax, Depreciation and Amortization
18
Revenue (NOK million)

14,000
11,895
12,000
11,881
EBITDA and EBITDA margin

27%
2,700
12,401
11,129
11,155
2,355
2,400
24%
21%
2,100
10,000
1,800
8,000
1,500
6,000
1,200
4,000
900
19%
1,330
18%
1,473
300
0
2009
2010
2011
2012
2013
12%
13.2%
648
686
11.2%
600
2,000
15%
6.1%
5.4%
2009
2010
EBITDA (NOK million)
2011
2012
9%
6%
3%
0%
2013
EBITDA margin (%)
Balance Sheet
Total assets increased by 7.5%
from NOK 12.72 billion at the end of
2012 to NOK 13.67 billion at yearend 2013. This was mainly due to
an increase in property, plant and
equipment as well as in projects
under construction.
Non-current interest-bearing
receivables saw an increase from
NOK 82 million in 2012 to NOK 201
million in 2013 representing increase
in seller credits to clients.
Our cash position is at a healthy
level of NOK 1.75 billion despite
being down from NOK 2.44 billion
at the end of the preceding year.
The reduction is mainly due to the

investments in Romania and at the
new shipyard in Brazil, as well as the
negative contribution from operating
activities in the period.
Total equity increased by 15.3%
year-on-year to NOK 3.71 billion,
mainly due to the prot for the year
of NOK 300 million and a positive
effect from translation of foreign
operations of NOK 181 million.
towards larger and more complex

projects including turn-key delivery
of advanced topside equipment,
construction loans increased by
40.5% year-on-year to NOK 4.71
billion in FY2013. Constructions
loans, together with other current
loans and borrowings of NOK 305
million, make up the total of loans
and borrowings, current of NOK
5.01 billion.
Construction loans taken on in lieu

of progress payments from our
customers represent the major
part of nancing of vessels under
construction. As we saw a shift
19
Summary Balance Sheet

As at 31 December 2013
2013
2012
2,167
305
201
608
3,281
382
6,136
2,076
51
1,745
10,390
13,671
1,384
374
82
569
2,409
380
5,491
1,920
80
2,437
10,308
12,717
3,708
673
210
883
5,012
991
2,625
452
9,080
9,963
13,671
3,216
545
252
797
3,385
1,518
2,801
1,000
8,704
9,501
12,717
ASSETS
Property, plant and equipment
Intangible assets
Interest-bearing receivables, non-current
Other non-current assets
Total non-current assets
Inventories
Construction WIP in excess of prepayments
Trade and other receivables
Interest-bearing receivables, current
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES

Total equity
Loans and borrowings, non-current
Other non-current liabilities
Total non-current liabilities
Loans and borrowings, current
Prepayments in excess of construction WIP
Trade and other payables
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Cash Flows
Cash ows from operating activities
decreased by NOK 1.33 billion
year-on-year, to negative NOK 341
million for the full year 2013. The
main reason for the decrease is the
negative contribution to prot from
Brazilian operations, as well as more
capital tied up in ongoing projects
compared to the previous year.
20
Cash ows used for investing

activities amounted to NOK 853
million for the year, up from NOK 631
million in 2012. Major contributors to
this increase were higher investments
in property, plant and equipment
for productivity enhancements in
Romania and the construction of the
new shipyard in Brazil.
Cash ows from nancing activities

increased from NOK negative 956
million in 2012 to NOK 419 million
in 2013. While VARD in 2012 paid
dividends to its shareholders in
the amount of NOK 1.28 billion, no
dividends where paid in 2013, thus
explaining the signicant increase.
Net Cash1) (NOK million)
Cash and Cash Equivalents (NOK million)

2,851
3,000
3,064
2,805
3,000
2,541
2,437
2,500
2,000
1,500
2,500
1,745
1,393
2,000
1,858
1,500
1,000
1,000
500
500
987
767
2009
2010
Restricted cash
2011
2012
2013
Non-restricted cash
2009
2010
2011
2012
2013
1)
Cash and cash equivalents less sum of short-term and long-term

interest bearing liabilities, excluding construction nancing.
Summary Statement of Cash Flows

Year ended 31 December 2013
2013
Cash ows from operating activites
(341)
993
Cash ows used in investing activities
(853)
(631)
Cash ows from nancing activities
2012
419
(956)
Net change in cash and cash equivalents
(775)
(594)
Cash and cash equivalents at the beginning of nancial year
2,418
3,035
20
(23)
1,663
2,418
Effects of currency translation differences

Cash and cash equivalents excluding restricted cash
at the end of nancial year
Restricted cash at the end of nancial year
Cash and cash equivalents at the end of nancial year
82
19
1,745
2,437
21
Signicant Events
22
Signicant Events
Signicant Events
M A RCH
The new Chairman of the VARD
Board, Mr. Guiseppe Bono, was
appointed. As Chief Executive
Ofcer of FINCANTIERI S.p.A, one
of the worlds largest shipbuilding
groups, Mr. Bono brings a wealth
of experience and a truly global
perspective to the VARD Board.
The VARD name was introduced.
This name change from STX OSV
to VARD was the nal step in the
companys acquisition by Fincantieri.
With the name change, we also
introduced a new company prole
and new brand.
VARDs yard in Tulcea, Romania,
has seen a signicant investment
during the year. Already in March, ve
new facilities for sandblasting and
painting were completed. A new pipe
workshop, equipped with state-ofthe-art machines and robots, began
operations in November.
JUNE
VARD reached 10,000 employees.
This important milestone represents
an increase of almost 15 % in
employee numbers since 2010.
Vard Promar, the new VARD yard
located in northeast Brazil, began to
ramp-up production. This modern
yard, featuring the latest facilities, is
the foundation for VARDs sustainable
operations and future growth in
Brazil. The yard started operations
with building a series of eight LPG
carriers for Transpetro, Brazils
largest oil and gas transportation
company. Over the coming three
years, Vard Promar will also be

building two of the four pipe lay
support vessels commissioned by
DOF Subsea and Technip.
Also in June, at the Nor-Shipping
2013 conference, VARD launched its
new brand for the range of marine
products and solutions the SeaQ
Flexible Solutions.
JULY
VARD delivered the rst of three
shing vessels for Havsk. The
second vessel was delivered towards
the end of the year and the third was
delivered in early 2014. Our yards in
Romania and Norway have worked
closely together, sharing experiences,
opinions and skills on these projects.
A UGUST
VARD signed its biggest contract
ever for four pipe lay support vessels.
With a total value of some USD 1.1
billion (NOK 6.5 billion), the four
vessels have been commissioned
by DOF Subsea and Technip. Two of
the vessels will be built at the new
Vard Promar yard in Brazil. The hulls
of the other two will be built at Vard
Tulcea in Romania, ready for outtting
at Vard Sviknes in Norway.
DECEM BER
Vard Brattvaag was honoured by
a visit from Norwegian Minister of
Trade and Industry Monica Mland.
The Minister was given a tour of
Siem Daya 2, an offshore subsea
construction vessel built for Siem
Offshore that was also delivered
in December. Mland said: I am
impressed that VARD is in the lead
in the global market despite the fact
that Norway is a high-cost country.
We have world class employees.
VARD is a value-driven company
with a focus on taking care of each
other. This year, we invited current
employees and their families to
Christmas and New Year Parties.
The biggest party served 2,000 people
with a 600 metre self-serve buffet!
At Vard Vung Tau in Vietnam, a
number of employees received
awards, primarily in the area of
quality, innovation and safety. The
celebration took place at the year-end
party in January 2014.
Naming ceremony of the

trawler Gadus Poseidon in
lesund
Vard Tulcea has been

equipped with a high degree
of automation
Vessel for Transpetro under

construction at Vard Promar
Christmas party for employees

and families in Norway
Norwegian Minister of Trade

and Industry, Monica Mland,
visiting a vessel under
construction at Vard Brattvaag
The new ofce building at

Vard Sviknes was completed
in 2013
SEPTEMB E R
VARD delivered one of the most
sophisticated Anchor Handling Tug
Supply vessels (AHTS) ever built, the
Skandi Iceman. Built to ice class and
equipped for multi-role operations
in harsh and arctic areas, it has a
bollard pull capacity of 300 tonnes,
and an overall length of 94 metres
with a 24-metre beam.
23
CEO letter Review

Operational
VA R D
AN
VN
AR
UD
A LA N
RE
NPUOARLTR2E0P1O3 R T 2 0 1 3
Across three continents, in four countries, VARD has a total of ten modern
shipyards building advanced offshore vessels. In addition, several specialized
subsidiaries provide a range of products and services globally.
Our Global
Operations
Five of our yards, as well as the company headquarters, are based in Norway.
The others are located in Romania, Vietnam and Brazil. All of our subsidiary
companies also operate both in Norway and in several countries. This
geographic spread ensures that our customers get consistent high quality in
all markets we serve.
Even though VARD is geographically dispersed, the company has an
integrated project management organization. A dedicated project team
often structured across several countries, runs every shipbuilding project.
All teams operate globally, and benet from a free ow of know-how, skills
and information. The production systems at each of our yards are set up in
a similar fashion, enabling VARD to operate as a cohesive, integrated
multinational business, able to understand and tap into the strengths
of each yard and location.
10
Several specialized
subsidiaries providing
a range of products and
services globally
modern shipyards building advanced

offshore vessels in 4 countries
10 696
employees
N O R W A Y - R O M A N I A - B R A Z I L - V I E T N A M - S I N G A P O R E - I N D I A - C R O AT I A - P O L A N D
24
* Number of employees as of 31 December 2013
Operational Review
Testing and mounting of

Vard Electro products
Vessels under construction

at Vard Sviknes
NORWAY
1,743
employees
Vard Group (HQ)

Shipyards:
Vard Aukra
Vard Brattvaag
Vard Brevik
During 2013, the yards in Norway

delivered 19 specialized vessels.
The majority of these are advanced
vessels built for the very active
offshore industry. It includes highly
challenging projects such as the new
Skandi Iceman a modern deep sea
anchor handling vessel, designed to
deliver versatility and reliability in
the harshest of environments.
A decade had passed since VARD
last built any shing trawlers. This
year, however, we delivered three
new trawlers, which has renewed
our credentials in this market, and
takes us back to our roots. The
owners of these new shing trawlers
selected VARD because we build
vessels with an optimal hull design,
securing speed yet minimizing fuel
consumption. All three trawlers were
delivered with a fully automated
shing factory onboard and are,
Vard Langsten
Vard Sviknes
Other operations:
Vard Design
Vard Electro
or will soon be, operating in

Norwegian waters.
Four of the ve Norwegian yards
are located along the countrys
north-western coastline, within a
50-kilometer radius of the VARD
headquarters in the city of lesund.
The fth yard is only 160 kilometers
from Oslo, southwest of the outer
Oslofjord.
The area around the city of lesund
is a traditional maritime stronghold
of Norway. A number of leading
shipowners and world-class offshore
marine service companies, vessel
equipment manufacturers and
oil service companies have their
operations in the nearby fjords.
VARDs history and reputation help
us compete to hire the best and
most skilled workers. Although the
number of engineers and skilled
Vard Piping
Vard Accommodation
Vard Trading
Vard Engineering
Vard Offshore Brevik
Seaonics
workers in the area is relatively

high, the country faces an estimated
shortage of 16,000 engineers.
Consequently a record number of
engineers are now being educated
and trained, and VARD has a number
of training programmes in place.
Location is one of the main reasons
so many maritime innovations
originate from Norway. The Gulf
Stream warms the waters and
ensures that marinas remain icefree all year round. Researchers
have discovered that it is, in fact,
the chaos of the seas that warms
the country. If the waters were to
ow smoothly northwards along
the Norwegian coastline, far less
warmth would be delivered, and the
harbours would be frozen and less
accessible during winter months.
For centuries, shipbuilding has been
a way of life in this coastal area
25
Operational Review
Our Global Operations
ROMANIA
6,151
employees
and access to specialist skills is

the reason we choose to carry out
many of the more advanced stages
of the shipbuilding process at
VARDs Norwegian yards.
fully refurbished the ofce building.

This upgrade improves standards for
everyone, customers and employees
alike and accommodates a
20% increase in the number of
engineering staff during the year.
There is a tendency in the market

for vessels to become progressively
larger. To meet this new demand,
we recently completed the extension
of the outtting quay at the Vard
Langsten yard and can now
outt vessels of up to 200 metres
in length. At another yard, Vard
Sviknes, we increased capacity and
VARD IN NORWAY
VARD IN ROMANIA
Key events in 2013
Key events in 2013
19 deliveries
Delivered our rst shing
trawlers in a decade
Focus on efciency improvements and cost reductions to
meet market demand
26
Production started at our new

facilities: three blasting and
painting halls, pipe workshop,
two assembly lines and two
quay cranes
For more than a decade, our Romanian

yards have been part of VARD. Our
two Romanian yards specialize in
hull manufacturing and early stage
outtting. Upon completion, the hulls
are typically towed over a threeto-four week period to one of our
Norwegian yards for completion.
However, certain vessel types can
also be delivered, fully outtted from
Romania.
The integration of the Romanian
and Norwegian yards is a denite
benet for VARD and our customers.
It means that for man-hour-intensive
operations we enjoy denite costefciencies. Also, the Romanian yards
are closely involved in the planning
and engineering work prior to contract
awards.
One of our subsidiary specialist
companies, Vard Electro, manufactures
electrical components and provides
Operational Review
Efcient team work at Vard

Sviknes
Pipe workshop with a high degree

of automation at Vard Tulcea
Precision cutting in the

prefabrication hall at Vard Tulcea
Shipyards:
Vard Tulcea
Vard Braila
installation services through its own

subsidiary companies in Romania.
Similarly, both Vard Piping and Vard
Accommodation have operations in
Romania.
During 2013, the engineering
division of the VARD Tulcea yard
was restructured and merged with
the piping department. As part of
this change, 34 engineers were
transferred to a newly established
company called Vard Engineering
Constanta allowing them to develop
their specialism in detail engineering.
At Vard Tulcea yard, we also built
ve new facilities for sandblasting
and painting. By moving these
work procedures indoors, we have
signicantly reduced our emissions
and our energy consumption, and
have been able to begin recycling
abrasives. This has had a positive
impact on our employees and the
Other operations:
Vard Electro Tulcea

Vard Electro Braila
Vard Accommodation Tulcea
local community in Tulcea whilst

also increasing our productivity and
improving our quality.
The new pipe workshop at Vard
Tulcea began operations in November
2013. Equipped with state-of-theart machines (robots), VARD enjoys
enhanced production efciencies
throughout the value chain, from
assembly lines to micro panel lines.
The upgrades include pipe-bending
machines, welding machines, cutting
machines, sand blasting machines,
automated pipe storage racks and
automated conveyor belts. All of
this equipment is operated from an
advanced computer-based control
system. All pipe production will be
moved, phase-by-phase, from the
old pipe production facilities to the
new workshop. The investment in
new machines has been signicant,
and will ensure higher levels of
precision with greater consistency
Vard Ship Repair Braila

Vard Engineering Constanta
and increased efciency.

The integration of production at our
yards in Romania and Norway is also
reected in the close cooperation
among our engineering teams. The
training of our Romanian engineers
includes exchange programmes both
in Norway and Brazil, which leads to
many joint projects.
Our subsidiary, Vard Design, also
benets from close integration
between the Norwegian and the
Romanian teams. The Norwegians,
for example, work on the cost
estimates while the Romanians
develop the 3D models. When the
classication drawings are approved,
the Romanians then develop the
production drawings. This exchange
of capacity and competencies is
determined according to the order
intake and time schedules at each
location.
27
Operational Review
The new
Vard Promar
yard under
construction
First LPG
carrier being
built at Vard
Promar
BRAZIL
2,064
Shipyards:
Vard Niteri
Vard Promar
Other operations:
Vard Electro Brazil
employees
Over the past decade, Brazil has

experienced a booming oil and gas
market. VARD has had shipbuilding
operations in the country for the
past 13 years, and we have a strong
position in this market.
Vard Niteri
Vard Niteri, located in the vicinity
of Rio de Janeiro, became part of
VARD in 2001. The yard delivered
one vessel in 2013 with four more
currently under construction.
Two of these are scheduled to be
delivered in rst half of 2014, one in
the second half of the year and the
fourth vessel in the rst quarter of
2015. The main focus at Vard Niteri
is completion of the vessels under
contract, which have experienced
delays. To resolve the situation,
we have strengthened the project
organization and the management
team has been revitalized. Employee
28
turnover has been relatively high at

Niteri in the last years. This gure
was signicantly reduced in 2013,
but the level is still considered to be
high and is a constant focus for the
local management. However, the
employment market in and around
Rio is stretched, especially for skilled
workers.
Vard Promar
During 2013, the new yard Vard
Promar in Suape has been ramping
up towards full production. This is a
modern yard with all new facilities
and, as per our plans, production
commenced in June 2013. The yard
will have a three hundred tonne
gantry crane installed in mid-2014.
Ultimately, it will become a fullscale yard capable of operating
independently of subcontractors.
We will however use subcontractors
if and when that is considered to
be the best solution. Once it is

fully ramped up, Vard Promar will
be the foundation for sustainable
operations and future growth in
Brazil.
In 2011, Vard Promar entered into
a contract for the building of a
series of eight LPG carriers for
Transpetro, Brazils largest oil and
gas transportation company. In 2013,
VARD signed the largest contract in
the groups history to build four Pipe
Laying Support Vessels (PLSV) for
DOF Subsea and Technip a project
that strengthens our long-term
relationships with both clients. Two
of these PLSVs will also be built at
Vard Promar and are due for delivery
before the end of 2017. The other
two vessels will have their hulls
built by Vard Tulcea in Romania and
will be outtted by Vard Sviknes in
Norway. Given that all four vessels
Operational Review
are of a similar type, there is close

cooperation and we expect to see
strong synergies between VARDs
Brazilian and Norwegian operations.
By the end of 2013, Vard Promar
had 700 employees in place, and
we expect this gure to increase to
around 1,200-1,300 employees by the
end of 2014, as the organization is
put in place. This means that about
50 new employees will be recruited,
trained and integrated each month.
Vard Promar is located near Recife,
in the north east of Brazil, where the
employment market is more stable
than in the Rio area. Consequently,
we do not expect to see the same
high levels of turnover even though
it is a challenge to nd qualied
shipbuilding engineers in Brazil
but easier to recruit blue-collar
workers.
VARD does not have plans for further

large new investments in Brazil in
the forthcoming years. However,
there could be some investments
related to further optimization of
Vard Promar, such as extensions
of production halls to move more
production undercover.
VARD IN BRAZIL
Key events in 2013
Delivered one PSV for

Siem Offshore
Operational ramp-up at
Vard Promar
Vard Promar extends
order book with two PLSVs
29
Operational Review
Naming ceremony of Far Starling

in Singapore
The recently expanded oating

dock at Vard Vung Tau
VIETNAM
Shipyards:
Vard Vung Tau
691
employees
The Vard Vung Tau yard in Vietnam

is a fully integrated shipyard, which
takes projects from hull construction
all the way through to delivery. VARD
has has operated this yard since
2008, and during these six years,
nine vessels have been delivered.
Today, the yard possesses a strong
core team with local competence in
most key disciplines.
The engineers working at VARD

are also used for projects at other
VARD yards. Shared IT system as
well as common Quality Assurance
procedures strengthen the group
integration and cooperation across
borders. Transfer of knowledge is
a key asset when using common
systems for common operations,
independent of location.
Vard Vung Tau is well-equipped

to undertake complex project
management which fully conforms
with the same standards as the rest
of the VARD family. During 2013, the
yard enjoyed a signicant increase in
the numbers of engineers indeed,
the engineering division almost
doubled in size during the year.
VARD also sees that the local work

force enjoys working at a yard that
is part of an international group.
There is high focus on compliance
with Health, Safety and Environment
(HSE). Conditions such as overtime
compensation, holidays, are areas
of focus. The Vietnam yard also
serves as a positive role model for
execution of internal routines and
HSE measures and the low level of
sick leave suggests that employees
are well looked after.
In contrast to Norway and Brazil,

there is no shortage of skilled
workforce in Vietnam, be it engineers
or other skilled workers.
30
In fact, the Vard Vung Tau yard enjoys

the lowest levels of sick-leave of
any VARD operation with 2.2%
sick leave in 2013 compared to the
company average of 2.7%.
During 2013, the oating dock at
Vard Vung Tau was expanded to
accommodate the launch of vessels
of up to 120 metres (compared with
a previous limit of 100 metres).
Additionally, new ofce buildings
were completed during last year to
house the increased number of new
engineers.
VARD IN VIETNAM
Key events in 2013
2 deliveries
Increase of newly hired
engineers
Floating dock expanded
Operational Review
System
testing
onboard a
VARD vessel
SINGAPORE
INDIA
CROATIA
10 employees
10 employees
20 employees
Registered ofce: Vard Holdings

Sales ofce: Vard Singapore
Other operations:
Vard Electrical
Installation & Engineering
Other operations:
VARDs Singaporean operations are

mainly nancial and administrative.
In the city of Cochin, we have a

specialist subsidiary, Vard Electrical
Installation & Engineering. This
company provides a foothold for the
supervision and services for our
customers in India and other Asian
countries. The team has extensive
experience in the elds of electrical
installation, power and automation.
We combine innovative concepts
and cutting-edge technologies with
design and engineering, and we
install performance-enhancing,
environmentally responsible and
cost-effective solutions.
Vard Design Liburna was acquired

in 2012. The company, which is
based in Rijeka, offers design and
engineering capacity in the area of
offshore ship design. The company
currently employs 17 engineers.
Our holding company is listed on

the Singapore Stock Exchange and
a sales ofce is in place to support
the Asia-Pacic market. Some of
our toughest competitors are Asian
shipyards, and it is important to
have a presence in this region. Our
employees at this ofce aim to build
relationships with offshore vessel
owners to ensure we take advantage
of the growth potential in this area.
Our subsidiary in Singapore also
functions as a holding company
for Vard Vung Tau, our shipyard in
Vietnam.
Vard Design Liburna
POLAND
7 employees
Other operations:
Seaonics Polska
VARDs subsidiary Seaonics

established Seaonics Polska in May
2013. Seaonics is a high-end provider
of integrated equipment and solutions
for subsea construction. Seaonics
Polska employs seven engineers who
provide engineering services. The
company is located in the maritime
cluster of Poland situated in Gdansk.
31
CEO letter
Core
ProductsV Aand
R DServices
ANNUAL
V
RAER
PD
O RATN 2
N0U1A3L R E P O R T 2 0 1 3
Launching SeaQ Quality at Sea

1
Over generations, VARD has built

ever-more advanced vessels
featuring high-tech marine solutions.
Reecting our commitment to better
serve the needs of our customers,
we have acquired and established
several specialist product and
solution companies. Each of these
have a deep understanding and broad
experience within their segments,
and a strong focus on developing
advanced, tailor-made solutions.
These solutions are developed and
sold by VARDs specialist companies.
In our world, nothing can be called
an innovation until it has been tried
and tested. Our SeaQ products and
solutions are installed on several
hundred vessels.
solutions from other providers.

These solutions benet not only
VARDs customers, but also the
customers of other shipbuilders. In
fact, we already see healthy interest
in them, demonstrating that they are
competitive and fulll market needs
and expectations.
VARD has extensive experience
supplying customers with equipment
packages based on our own quality
solutions, or those from third-party
suppliers. Every SeaQ solution can be
delivered individually or as part of a
larger, integrated package.
The SeaQ solutions cover ve main
categories:
SeaQ Power
At this years Nor-Shipping
conference in Oslo in June, we
launched the SeaQ Flexible Solutions
product line, encompassing design,
integrated systems, marine
electronics and electrical systems,
and accommodation. The high
quality SeaQ solutions conform to
the highest industry standards, are
scalable, and are compatible with
32
SeaQ Power includes a complete

set of intelligent power systems
that generate, distribute and control
power onboard vessels. Within this
category, you will nd, among others,
switchboards, propulsion systems,
converters, electrical motors,
generators, and transformers. Vard
Electro has a long track record
working with all elements of power
Launch of the new brand

SeaQ Flexible Solutions at
Nor-Shipping 2013 in Oslo
systems for vessels, developing

reliable power system solutions and
components adapted to various types
of vessels and in line with customers
preferences.
SeaQ Control
SeaQ Control is a set of seamlessly
integrated control systems, designed
to improve usability and enhance the
vessels performance at sea. Systems
in this product category include
integrated automation systems,
power management systems, energy
management systems, blackout
prevention systems and bridge
and ECR consoles. Working closely
with our customers, we select the
optimal components for premium
performance for each assignment
whilst overcoming all engineering
and integration challenges.
We are proud to reveal that more
than one hundred vessels currently
in operation in various parts of
the world are equipped with an
Integrated Automation System from
SeaQ Flexible Solutions. These
solutions are also delivered
by Vard Electro.
Core Products and

CEO
Services
letter
Flexible Solutions
by
SeaQ Bridge
SeaQ Cabin
Handling systems
The SeaQ Bridge products include

a wide selection of navigation
and communication products
controlled and operated from the
vessels bridge, such as navigation
systems, bridge alert management
systems, manoeuvering chairs,
communication systems and
infotainment centres. Our solutions
are based on a strong understanding
of industry standards and classication requirements in the eld of
bridge performance. An additional
benet for our customers is the fact
that Vard Electro acts as a single
point of contact for the delivery,
maintenance and service.
Our vessels have custom-made

cabins. The new and innovative SeaQ
cabin system is t for todays crew
expectations. The focus is on silent
cabins to ensure high-quality living
while away from home. We can t
two one-person cabins into the space
of a traditional two-person cabin.
The production and installation of
these cabins is standardized and
modulized. Our concept offers
optimal utilization of space and has
led to a more standardized cabin
area layout, with a highly efcient
design and building process. These
solutions are delivered by Vard
Accomodation.
Another solution category is our

high-end integrated equipment and
solutions for subsea construction
are delivered by our VARD subsidiary
company, Seaonics.
The products provide simplied
handling operations for the marine
and offshore industry. They include
module handling and well intervention
systems, deck cranes and AHC
subsea construction cranes, launch
and recovery systems, active heave
compensated winches, deck
machinery, and drilling and
tensioning systems.
33
Platform Supply Vessels
We design and build a complete range of Platform Supply

Vessels (PSV). PSVs are commonly referred to as the trucks of the sea, as they are designed
to transport cargo to and from offshore oil rigs and platforms. PSVs are able to perform a variety of
tasks to support offshore operations; our PSVs are designed with focus on cargo capacity and excellent
manoeuvering capabilities combined with low fuel consumption.
34
Far Spica
VARD has delivered

ship designs in the VARD 1-SERIES*
65
* Ship designs sold in the period 2005 - 2013
>> SELECTED DELIVERIES 2013
Troms Lyra* for Troms Offshore
Demarest Tide* for Tidewater
Siem Atlas for Siem Offshore
>> ORDERS 2013
*
for Simon Mkster
for Carlotta Offshore
35
Anchor Handling Tug Supply Vessels We design and build technologically

advanced Anchor Handling Tug Supply vessels (AHTS) capable of operations in the harshest environments.
AHTS vessels mainly perform anchor handling duties and towage of offshore drilling units and oating
production units. AHTS vessels need free deck space to run necessary operations, but they have the
exibility to carry cargo and bulk in tanks placed below deck.
36
Skandi Iceman
for Iceman
VARD has delivered

30
>> DELIVERY 2013
for Iceman
>> SELECTED DESIGNS
37
Offshore Subsea Construction Vessels
We design and build highly advanced

Offshore Subsea Construction Vessels (OSCV) for the oil and gas industry. These complex vessels perform
subsea operations and maintenance work, and include pipelaying, subsea construction, diving support,
ROV support, well intervention and well stimulation vessels.
38
VARD 3 03 and VARD 3 16

for DOF Subsea and Technip
VARD has delivered

31
>> SELECTED DELIVERIES 2013
Siem Daya 1 for Siem Offshore
Skandi Bergen* for DOF
Siem Daya 2 for Siem Offshore
*
for Harkand Group
>> SELECTED ORDERS 2013
*
for Solstad Offshore and
Ocean Installer
* Vessels under construction / delivered with VARDs former design names
39
Fishing Vessels We design and build advanced shing vessels like stern trawlers. These
vessels are developed for the best balance between energy consumption and catch efciency. They are
tailor-made for the sh species caught and may operate worldwide. With ice strengthened hull they may
also catch species along the ice rim, both in Arctic and Antarctic waters.
40
VARD has delivered

Gadus Poseidon
for Havsk
* Ship designs sold in the period 2011 2013
>> DELIVERIES 2013
Gadus Njord* for Havsk
Gadus Poseidon* for Havsk
>> SELECTED DESIGNS
* Vessel delivered with VARDs former design names
41
Other Specialized Vessels
We design and build other specialized vessels, such as

research and coast guard vessels, special purpose cable layers, seismic vessels and icebreakers.
We deliver different types of vessels and ship designs, most of them adapted to customer-specic
requirements.
42
VARD 9 01
for Orange Marine
VARD has delivered

* Ship designs sold in the period 2004 2013
>> SELECTED DESIGNS
Field Support Vessel
Icebreaking Support Vessel
Seismic Research Vessel
Seismic Research Vessel
Large Extent Oil Recovery Vessel
43
Vessels Delivered
Vessels Delivered in 2013

VARD has ten shipyards on three continents. Our specialty is advanced offshore vessels which are always tailor-made.
Each vessel is a unique combination of ship design, production and outtting. VARDs focus is on innovative solutions,
production efciency, integrated manufacturing systems and a strong and long-term customer base. We offer
customers a wider variety of choices.
Platform Supply Vessels (PSV)

Far Sitella
Troms Lyra
Lundstrom Tide
Fanning Tide
Demarest Tide
Far Spica
Far Starling
Skandi Hugen
Island Crown
Island Duke
Island Duchess
Siem Atlas
751
756
761
762
763
769
770
780
784
795
796
PRO 29
Farstad Shipping
Troms Offshore
Tidewater
Tidewater
Tidewater
Farstad Shipping
Farstad Shipping
DOF
Island Offshore
Island Offshore
Island Offshore
Siem Offshore
PSV 08
PSV 08
PSV 09 CD
PSV 09 CD
PSV 09 CD
PSV 08 CD
PSV 08
MRV 05/ROV
UT 776 CD
UT 717 CD
UT 717 CD
PSV 09 CD
Siem Daya 2
S
Troms Lyra
Skandi Iceman
Fanning Tide
Island Duke
44
Eidsvaag Pioner
Vard Vung Tau

Vard Brevik
Vard Sviknes
Vard Sviknes
Vard Aukra
Vard Langsten
Vard Vung Tau
Vard Aukra
Vard Brevik
Vard Brevik
Vard Brevik
Vard Niteri
Vessels Delivered
Offshore Subsea Construction Vessel (OSCV)

Skandi Bergen
Siem Daya 1
Siem Daya 2
776
793
794
DOF
Siem Offshore
Siem Offshore
OSCV 11
VARD 3 11
VARD 3 11
Vard Sviknes
Vard Brattvaag
Vard Brattvaag
Anchor Handling Tug Supply Vessels (AHTS)

Far Senator
Far Statesman
Skandi Iceman
786
787
799
Farstad Shipping
Farstad Shipping
Iceman
UT 731 CD
UT 731 CD
VARD 2 12
Vard Langsten
Vard Langsten
Vard Sviknes
768
772
788
789
Eidsvaag
Remy Fiskeriselskap
Havsk
Havsk
NVC-401-LNG
ST-117
FV 01
FV 01
Vard Aukra
Vard Langsten
Vard Brattvaag
Vard Brattvaag
Other specialized vessels

Eidsvaag Pioner
Hopen
Gadus Poseidon
Gadus Njord
Far Senator
Island Duchess
Skandi Hugen
M
Skandi Bergen
Gadus Poseidon
Hopen
45
Order Book
Order Book Development

the total number of vessels, the
mix was broader than in 2012 as
we also delivered three Anchor
Handling Tug Supply vessels (AHTS),
three Offshore Subsea Construction
Vessels (OSCVs) and four other
specialized vessels (one forage
carrier and two shing trawlers).
At the end of 2013, the VARD order

book amounted to NOK 19.4 billion,
compared to NOK 15.1 billion at the
end of 2012. This includes contracts
for 41 vessels scheduled for delivery
between 2014 and 2017 of which
23 will be VARD design.
During 2013, we delivered 22 vessels
globally. 19 vessels delivered from
our Norwegian yards, with two
from Vietnam and one from Brazil.
Vessels delivered from Norway had
their hulls produced at one of our
two Romanian shipyards.
Order intake for 2013 was the

highest since 2007, with contracts
signed for nine OSCVs, four PSVs
and two other specialized vessels.
Besides new vessels, the order
intake for the year amounting to a
total of NOK 14.2 billion includes
the contract value of variation
orders, as well as the sale of design
and equipment packages to third
parties. This success in the market
Twelve of the vessels completed

during 2013 were Platform Supply
Vessels (PSVs). Although these
accounted for more than half of
Order intake (NOK million)
enabled VARD to extend its order

book length year-on-year for the rst
time in three years, and record the
highest year-end order book since
2008.
The years order intake conrms
a trend observed since the end
of 2012, with a shift to larger and
more complex vessels, mainly
driven by demand from the subsea
construction market. While the
number of contracted vessels
decreased, the average value per
vessel increased by more than fty
percent reecting the higher share
of large and complex OSCV orders
secured.
Order book (NOK million)
14,174
15,000
19,356
20,000
12,555
16,411
11,117
17,031
16,675
15,096
15,000
9,501
10,000
10,000
5,000
4,458
5,000
27
28
16
15
vessels
vessels
vessels
vessels
vessels
2009
2010
2011
2012
2013
46
2009
2010
2011
2012
2013
Order Book
ORDER BOOK DEVELOPMENT

Order book
Deliveries
Order intake
Order book
31 Dec. 2012
2013
2013
31 Dec. 2013
Norway/Romania
32
19
12
25
Brazil
13
14
48
22
15
41
Order book
Deliveries
Order intake
Order book
31 Dec. 2012
2013
2013
31 Dec. 2013
18
12
10
OSCV
13
Other
15
13
Total
48
22
15
41
By country
Vietnam
Total
By vessel type
AHTS
PSV
Order book delivery schedule as of 31 December 2013 (number of vessels)
2017
2016
10
2015
23
2014
22
2013
10
Delivered
15
20
25
47
Sustainability and Social Responsibility
Towards Vision Zero
Sustainability and social

responsibility in our daily
operations
At VARD, sustainability and corporate
responsibility are closely integrated
with the way we run our company.
VARDs new name was launched at
the start of 2013. And, at the same
time, we clearly articulated our values
of Craftsmanship, Fellowship
and Salesmanship. This work was
positively received, but there is still
work to do in integrating these values
into the daily routines of every VARD
employee. The values link the history
of our company with the new VARD.
They show that we care deeply about
our employees, our customers and
the communities in which we operate.
Our ongoing focus on safety and
security, encompassing the reduction
of accidents, sick leave and
48
environmental damage, is keeping us

on a steady course towards a more
sustainable business.
Our ultimate goal is that VARD
should bring tangible benets to our
employees and local communities,
as well as our investors and owners
and that the company should leave
a minimal environmental footprint.
We therefore have a long-term
perspective on maintaining and
steadily improving the integrity of
our company.
Although we acknowledge that our
business has a direct impact on the
environment, the entire management
team recognizes the importance of
environmental conservation. And,
across the company, we have a
formal programme to sustain and
protect the environment.
We also recognize that we have a

responsibility towards our employees,
suppliers, customers, partners
and to the communities in which
we operate indeed, we are as
dependent on them as they are on
us. Our sustainability and social
responsibility work is governed by
our Health Safety & the Environment
(HSE) handbook. Within this, all of our
related initiatives and guidelines are
clearly outlined, helping the entire
company to contribute to the goal of
zero accidents for our employees,
the environment, and any of VARDs
assets.
Our ultimate aspiration is summed
up by the term Vision Zero
whereby we aim to avoid all
fatal accidents, personal injuries,
unplanned incidents and damage
to the environment.
The international standards

As part of our proactive HSE
initiatives, VARD is on course to
comply with the four international
standards that we deem important for
our business. These ISO standards
are not specic to our sector, but
we see them as relevant to our
sustainability focus and a useful
framework to address quality, social
accountability, health, safety and
environmental management.
They also correspond to our ambition
to operate in a way that exceeds
social, ethical, nancial and legal
expectations. A large proportion of
our business is linked to the offshore
exploration industry, and this has a
particular focus of HSE attention. For
example, we see a tendency among
offshore companies to prefer certied
suppliers. Increasingly, nancial
institutions also prefer certication.
In other words, there are both internal

and external factors motivating us
to prioritize sustainability and social
responsibility.
The ISO standards also reect the
three core values at VARD, namely:
Craftsmanship, Fellowship and
Salesmanship. Craftsmanship is
about the quality of our products and
services. Fellowship is about truly
caring for the individual, the team and
society. Salesmanship is about our
responsibility to the customer and
ensuring that customer expectations
are met.
ISO 9001 quality
All ten VARD yards, plus our largest
specialist subsidiary companies, are
certied according to ISO 9001:2008.
Four of the yards received this
certication during 2013. When
it comes to quality, VARD has
consistently demonstrated our ability

to provide vessels that meet customer
requirements and expectations. We
aim to enhance customer satisfaction
through the effective application
of this ISO standard, including
processes for continual improvement
and conformity with customer and
regulatory requirements.
We innovate, create and seek new
solutions to ensure customer
satisfaction which is every
employees responsibility at VARD.
ISO 26000 social accountability
SA 8000 was implemented at Vard
Vung Tau in Vietnam during 2013,
and we are on track to achieve
certication for our Brazilian
operations in 2014. This ISO standard,
also referred to as SA 8000, is
founded on guidelines from the
International Labor Organization, and
49
draws on various international human

rights declarations. It therefore
concerns our relationship with the
societies and environments in which
we operate covering issues such as
child labour, discrimination, working
hours and remuneration. A major oil
company is currently undertaking
an audit related to this standard at
one of our customers. This audit also
extends to VARD as a supplier, and its
results will be useful to our ongoing
compliance work as todays ship
owners prefer to do business with
fully certied suppliers.
OHSAS 18001 Occupational
health and safety
OHSAS 18001:2007 was implemented
across three of VARDs operations in
2012, demonstrating our commitment
to a safe and healthy working
environment. We continually identify
and control health and safety risks to
50
reduce the potential for accidents and

to improve our overall performance.
The combination of ISO 26000 and
OHSAS 18001 is increasingly used
to measure the overall performance
of our company. We are therefore
committed to operating in an
ethical and transparent way in
order to safeguard the health and
welfare of our employees and other
stakeholders. We have a range of
evidence to demonstrate the success
of our HSE initiatives in reducing
reported accidents and levels of
absenteeism.
So far, three of our yards have
been certied to OHSAS 18001. Our
ambition is for all of our yards to
achieve this certication.
During 2013, we were subject to ve
audits conducted by customers, with
positive results.
ISO 14001 environmental

management
In order to improve our internal
processes and minimize any harmful
effects on the environment, VARD has
implemented ISO 14001:2004 the
worlds most recognized standard for
environmental management. We have
established a long-term programme
towards full certication. As part of
being certied, our environmental
management systems will be audited
by an acknowledged certication
society.
Over a number of years, VARD has
implemented a range of proactive
and tangible HSE initiatives. Our most
important allies in this have been our
trade union partners and, judging
from employee and society feedback,
our efforts have been noticed in the
regions where we operate.
tabletop emergency exercise has

been conducted. We have also
entered into an agreement with a
mutual marine insurance company,
the Norwegian Hull Club in Bergen,
Norway, who will engage in a review
of our emergency response plans.
The guidelines for our Code of
Conduct have also been revised, and
this was one of the main topics on
the agenda of our Annual Executive
Management Meeting in October
2013. This is work in progress, and is
tightly integrated with the revision of
our emergency response plans.
Year-end party at
Vard Vung Tau
A steady decline in
sick leave
In 2013, VARD exceeded more

than 10,000 employees
Over the past ve years, VARD has

enjoyed a steady decline in levels
of sick leave which runs contrary to
broad industry trends.
Emergency response
During 2013, we substantially updated
our emergency response plans, and
this work will continue into 2014.
In order to align and simplify
emergency response processes
across all locations, VARD recently
selected a new IT solution. One
More specically, sick leave fell from

4.5 % in 2007 to 3.0 % in 2012. During
2013 the gure fell yet further to
reach 2.7 %. We are encouraged by
this positive performance, and hope
to see the trend continue into 2014
and beyond.
LTI rate (number of Lost Time Injuries per million

hours work)
3.9
One of the success factors is our

continued effort to handle absenteeism on an individual basis and to
engage in wider initiatives to promote
employee health and wellbeing.
We see the same positive trend in the
area of personal injuries. In 2007, our
lost time injury rate was at 6.8 (down
from 8.9 only the year before). By
2012, the gure had fallen sharply to
2.1, and stands at 1.8 for 2013.
One of the main reasons for this
improvement is our focus on HSE and
quality management. Management
constantly monitors proactive HSE
initiatives across all our yards, and
has motivated employees to report
incidents.
During 2013, the number of reported
incidents almost doubled, whereas
the number of accidents almost
halved. This parallel development
in two important HSE indicators
suggests that the improvements we
have put in place have had a tangible
impact in reducing the actual number
of accidents.
Sick leave
4%
3.8%
3.1%
3.2
3.0%
3.0%
2.7%
3%
2.2
2.1
1.8
2%
1%
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
51
A new registration software has been

launched, which should improve and
share best practices across all yards.
Management is actively using a range
of formal processes and systems to
address sustainability and corporate
responsibility issues. These issues lie
at the core of our business planning
process as reected by their
inclusion in our monthly reporting
processes and by scrutiny in regular
business reviews.
Motivation secures success

At the heart of VARDs success
are our employees. Engaged,
motivated and skilled employees
are a prerequisite for continued
growth and satised customers.
Our management is determined to
improve existing employee policies
and to ensure that all employees,
regardless of their location, are
given equal opportunities for career
development and success. Our
policy of transparency, openness
and fairness has given VARD the
employer of choice accolade at
many locations.
In Norway and Brazil, we experience
tough competition for talent.
Despite this, VARD has recruited
52
the employees we need and want.

We work with local and national
authorities to provide education and
training something that young
and more experienced employees
alike value when deciding to change
employer.
Some examples of this work include:
50 students were selected by
VARD to undergo training at Senai
(a network of local colleges for
vocational training) in Brazil.
After the training is complete,
the selected students are offered
employment with VARD, mainly in
the production area. VARD funds
the initiative.
Also in Brazil, VARD participated
in a network run by government
agencies (Dream Learn Work) to
help students attain qualications
for employment. VARD hires a
number of students from the DLW
programme each year.
Between August and November
2013, 70 leaders at our new yard
in Promar, Brazil, underwent a
leadership training programme
to further their skills and attain
management qualications.
In Norway, VARD trains around 60

apprentices annually, and organizes
the largest such programme in
the region. We train new workers
in order to strengthen the quality
of operations at our yards. We
also offer an attractive stipend
for certied workers to continue
their studies towards a bachelors
degree. We develop shipbuilders
from the ground up because we
rely on these people to further build
our company.
VARD also hosts a two-year
management trainee programme
for recent graduates. The trainees
are part of a national trainee
programme run by the Norwegian
Shipowners Association
(Rederiforbundet).
Together with Olympic Shipping,
VARD funds three university
lecturers. These academics aim to
make education more practical and
convey to the students the realities
of the shipbuilding profession. It is
important for VARD to improve the
quality of the engineering education
at local universities on the west
coast of Norway where our yards
are located.
According to our estimates, for each

person employed at any of our ten
yards, an additional ve jobs in the
local community depend indirectly
on VARD. We take this responsibility
seriously, and engage in sponsorship
activities in sports, education and
other community activities.
During the past year, we hosted a
series of Open Vessel events, in
which we invited our neighbours in
our local communities for a complete
tour of our new vessels. These events
have proved very popular. Local
communities typically watch each
new vessel take shape over a period
of maybe three-to-four years and
welcome the opportunity to see the
nal result before the nished ship
sails off to new waters.
Also in special circumstances
affecting the countries where we
operate, VARD tries to help. Following
the oods in Vietnam in November,
VARD contributed USD 25,000 to
local relief work. This was donated
in cooperation with the local trade
union, which also collected additional
aid from our employees.
Environmental
sustainability
Over many generations, we have
been aware of how the environment

and our business co-exist and
we continually strive to improve
procedures and routines in order to
minimize our environmental impact.
Waste management, noise
abatement, minimal emissions,
and the construction of eco-friendly
vessels are among the areas where
we focus. We also promote an open
dialogue on environmental issues
with employees, authorities, our local
communities, and other interested
parties.
VARD is in close dialogue with public
authorities on issues concerning
the environment, and inspections
are conducted on a regular basis.
Remarks have been minor and have
been handled locally as part of our
everyday business.
Recycling of waste from shipbuilding
and maintenance is a key priority.
In 2011, a comprehensive waste
management framework was put into
place. By the end of 2013, the level of
recycling was 73 %.
Another source of pollution in our
industry is the discharge of foreign
ballast water. From an environmental
point of view, it is better to use fresh
water as ballast. Organisms in fresh
water die when they are ushed into

sea. For the past two years, VARD has
only used fresh water.
Two examples of environmental
initiatives in 2013:
Romania
At the Tulcea yard in Romania, we
have built ve new indoor facilities for
sandblasting and painting. By moving
these procedures indoors, we have
signicantly reduced our emissions
and our energy consumption, and we
have been able to recycle abrasives.
This has had a positive impact on our
employees and the local community
in Tulcea, as well as the planet
whilst also increasing our productivity
and improving our quality.
Brazil
The new Promar shipyard in Brazil
started operations in June 2013,
and the construction of its sewage
treatment facility was completed.
As we are acutely aware of its
environmental impact, the entire
facility is fully compliant with the
strictest of local and international
environmental codes. By the end of
2013, around 700 employees were
working at the new yard. By the end
of 2014, we expect it to employ around
1,200-1,300 people.
53
Risk Management
Risk management is key
Human resource risk

As an industry, shipbuilding relies
heavily on the availability of skilled
personnel. Recruitment and retention
are interrelated. Operating from
ten shipyards on three continents, a
strong and consistent employer brand
enables us to attract and retain a
healthy number of skilled personnel.
By demonstrating that we live
according to our value Fellowship,
we believe VARD will stand out as an
attractive employer in the regions
in which we operate, allowing us to
recruit a growing number of highly
qualied employees.
Our HR team monitors the business
cycle to identify and mitigate all
HR-related risks. For example, our
industry faces tough competition for
talent, and VARD continually strives
to be the employer of choice in the
regions where we operate. We have
also implemented a company-wide
succession project that has identied
replacement candidates for all
key positions, and identied those
employees with the potential to excel
and grow into key positions. This
is important in order to ensure the
stability of our operations and enable
the transfer of know-how.
Most of our workers are members of
trade unions. Our management aims
54
to maintain a healthy relationship

with these unions. We have a
continuous dialogue with all key
stakeholders, and aim to secure
their early involvement in all matters
related to our workforce.
Given the complexity of the markets
in which VARD operates, we recently
saw the need to strengthen the
management and improve the
project organization at our Niteri
yard in Brazil. We have also made
signicant efforts to ensure that
learnings can be transferred from
project to project. For example, at
Promar, our new shipyard in Brazil,
an organizational ramp-up has been
achieved by bringing in supervisors
from elsewhere in the group and
the organization now consists of a
strong mix of local and international
talent.
Operational risk
Fixed price contracts are
commonplace in shipbuilding.
Typically, these contracts are agreed
up to three years before a nished
vessel is delivered, and it is our
responsibility to ensure that all of the
terms are met. Consequently, our
contracts undergo a tough qualityscreening process.
While contract terms will always
remain xed, the costs of labour,
materials, machinery and equipment

may change. To mitigate the
associated risks, VARD procures as
many as 60 % of key components at
the time the contract is signed. High
on our priority list are vital parts such
as engines, winches and propulsion
systems.
As well as securing certain prices
in order to mitigate nancial risks,
we also need to remain agile and
exible. We maintain cost exibility by
engaging subcontractors in periods
of high activity. Also, when it comes
to procurement, our position as a
global leader in building advanced
vessels gives us certain economies of
scale. All in all, risk management is
an integral part of our wider project
management disciplines.
Our group is reliant on the ability to
calculate and manage the complexity
of all project components and stages,
including man-hours, scheduling,
and workload at our yards. The
group therefore has well-established
processes and project management
tools in place, and we aim to
progressively rene the way that we
work. Managements full attention
is now on strengthening these
processes in our Brazilian operations,
where we have experienced
challenges during the past year.
Risk Management
We are improving the way we operate

through a tighter follow-up of existing
risk management processes, and
implement new routines where
necessary.
Finance and
investment risk
Building an advanced vessel entails
the commitment of signicant
amounts of capital yet standard
European payment structures only
allow for 10-20 % of a full contract
price to be paid from contract signing
and throughout the construction of
the vessel, with the remainder being
paid upon delivery. The contracts
typically involve signicant guarantee
requirements. From VARDs side,
this is related to advance payments
received, suppliers and contractual
performance. From the clients
side, this is related to payment of
the vessel - typically a combination
of corporate guarantees and bank
guarantees. VARD is dependent
on being able to arrange such
guarantees.
This payment model exposes VARD
to large loans from our main banks,
which are approved on a projectby-project basis. Customers and
contracts are carefully screened
before contracts are signed in order

to minimize the associated risks, and
VARDs ongoing nancial exposure is
constantly monitored.
Occasionally, VARD invests in
special purpose companies. These
enable us to have a minority stake
in a shipbuilding project, or to offer
sellers credit for a smaller portion
of the nancing. We would normally
target exit from such arrangements
one to three years after a vessel has
been delivered.
VARD has invested signicantly
in a new yard in Brazil as well as
other major facility improvements
in Romania and Vietnam, and is
dependent on arranging long term
nancing for these assets.
Exchange rate uncertainty is another
facet of our nancial risk exposure.
Where contract prices and costs
are both in the same currency,
our currency exposure is relatively
limited. For those contracts with
more signicant exchange rate
exposure, we use forward foreign
currency contracts. These forward
contracts are only ever used as a
hedging tool and never for trading
purposes.
Market risk
The uncertain macro-economic
environment, potentially lower
demand for energy as a result of
lower economic growth, uctuating
oil and gas prices, and the threat of
rising cost and lower E&P investment
in the oil and gas industry are all
market risk factors relevant to VARDs
operations.
In line with new regulations forcing
them to strengthen their balance
sheets, banks have become more
conservative in their lending, which
could reduce some of our clients
access to bank loans. All these
factors inuence our customers
incentives as well as their ability to
place orders for new offshore and
specialized vessels.
To meet these challenges, VARD is
focusing on our strong fundamentals;
innovative solutions, production
efciency, integrated manufacturing
system and a strong and long-term
customer base. We have a constant
focus on stabilizing our order book to
ensure long-term visibility and avoid
uctuations in our business cycle.
VARD has enjoyed a record high order
intake during 2013.
55
Investor Relations
Engaging the Investor Community
In communicating with investors,

VARD can rely on a well-established
network of relationships and
communication channels.
Mr. Holger Dilling
Investor Relations
Commitment to high
standards of investor
communication
VARDs work in investor relations is
guided by two main principles: Timely
and transparent information about
the Companys state of affairs, and
strict adherence to high standards
of corporate governance. Both are
equally important in maintaining the
trust and support of the investment
community, which is a key element
for the long-term success of VARD
as a listed company.
As we saw the nancial results of the
Company come under pressure from
the middle of 2013, we stepped up
efforts to communicate in more detail
the difcult operating environment
at one of our shipyards in Brazil, and
other factors affecting performance.
At the same time, we have aimed
to provide a balanced picture, also
highlighting the many positives seen
throughout the year, such as the
stable operations VARD has enjoyed
elsewhere across our network,
and the very strong order book
development.
56
Reaching out to investors

In communicating with investors also
during challenging times, VARD can
rely on a well-established network
of relationships and communication
channels.
The Company continues to enjoy
broad coverage by equity research
analysts, representing a mix of
Singapore-based, regional and
international brokerages and
research houses. Good relations and
frequent interaction with analysts
enable us to reach out to institutional
and private investors alike. We also
arranged for analysts to visit our
shipyards during the year, including
those in Brazil, enabling them to
deliver rst-hand impressions and
insights for the benet of the wider
investment community.
Non-deal roadshows and investor
conferences again proved to be
important meeting places for
interaction with institutional
shareholders and potential
investors. In 2013, VARD arranged or
participated in numerous meetings
in key locations such as Singapore,

Hong Kong, Kuala Lumpur, London
and New York.
Our communication to private
investors focuses on the media in
Singapore. Working with the local
press in addition to international
newswires and nancial media,
we aim to make key information
available to the many shareholders
we have in Singapore. Corporate
press releases and announcements
are posted via Singapore Exchanges
online portal, SGXNET, before they
are disseminated to our distribution
list in a timely manner. Our company
website, www.vard.com, is another
channel used to disseminate
information quickly and efciently.
All our press releases, along with
nancial reports, information on our
order book and other useful facts are
presented in a comprehensive and
easily accessible format.
In addition to the Annual General
Meeting held in April last year, VARD
also held an Extraordinary General
Meeting in October. Both meetings
Investor Relations
Total Shareholder Composition

100
2.7%
13.7%
80
Institutional Shares by Geography
2.0%
21.8%
27.5%
46.1%
6.7%
8.0%
20.6%
60
60
40
0.0%
1.9%
100
80
20.9%
62.7%
55.6%
20
1)
0
31.12.2012
40
Institutional investors
Substantial shareholders1)
20
31.12.2013
presented excellent opportunities for

shareholders to meet and discuss
not only with management, but also
members of the Board. Being the
rst such VARD-related meetings for
the then newly-appointed Chairman
and Directors, the AGM and EGM
also served as a forum for gathering
useful feedback from shareholders
and understanding their concerns.
Furthermore, in putting to vote a
proposal for an Interested Person
Transactions (IPT) Mandate, the
Company underlined the signicance
of good corporate governance and
transparency in its interaction with
the new majority shareholder.
With a view to further emphasize and
intensify our commitment to retail
shareholders, we recently signed
an agreement with the Securities
Investors Association of Singapore
(SIAS), opening up a new channel
for shareholder communication.
VARD also supports SIAS corporate
governance initiatives.
10.7%
Other
Private and small investors
2012: STX Europe and Och-Ziff

2013: Fincantieri Oil&Gas
12.6%
12.9%
8.5%
9.0%
12.0%
32.3%
11.8%
Evolution of the
shareholder base
2013 saw signicant changes in the
shareholder base. Most importantly,
Fincantieri Oil & Gas acquired the
majority of shares in VARD from STX
Europe; following the mandatory
general offer completed on 13 March
2013, Fincantieri holds 55.63% of
the shares. At the same time, the
second largest shareholder, still
holding 11.9% of the share capital as
at the end of 2012, also reduced its
stake and ceased to be a substantial
shareholder. With no other
substantial shareholder present, free
oat in the Companys shares was
more than 44% for most of last year.
Shareholdings of private and small
shareholders continued to increase
during the year, amounting to as
North America
Other Europe
United Kingdom
Other Asia &
Australia
Hong Kong
Singapore
31.12.2012
In all our efforts, we are supported by

a team of dedicated investor relations
advisors in Singapore, who also act
as a rst point of contact for any
inquiries from investors, the media or
other interested parties. We welcome
and encourage you to get in touch.
Rest of world
31.12.2013
much as 21.8% of shares at the end

of 2013. Most of these continue to be
domiciled in Singapore. In addition,
Singapore-based institutional
investors have again taken the lead as
the largest group among institutional
shareholders with 32.3%, surpassing
North American shareholders with
27.5%.
Taking a long-term
perspective
As the market environment continues
to evolve rapidly, we are especially
grateful to those shareholders who
have continued to put their faith in
VARD even in turbulent times, and
who share the managements belief
in the Companys solid fundamentals
and healthy long-term prospects.
At the same time, we are keenly
aware that trust needs to be rebuilt
with the investment community. We
are committed to doing so through
continued focus on timely and
transparent communication, high
standards of governance, and active
dialogue with all investors.
57
Outlook
Outlook
Positive fundamentals for
PSVs and AHTS
Better than expected is how
international ship and offshore
broking rm RS Platou describes
the development of the OSV market
during the past year1). Increasing
offshore activity in the North Sea,
as evidenced by a rising rig count,
helped boost PSV demand in 2013,
only mitigated by a signicant growth
in the PSV eet. Supply growth
continues to be high, but demand
aided by a strong drilling order book
is also record high, and the market
has absorbed the new deliveries
surprisingly well so far. Rising
offshore activity is not restricted to
the North Sea. Discoveries in deep
water have been especially bountiful,
and signicant numbers of deep
water mobile offshore drilling units
coming to the market will require PSV
support.
An increasing rig count, coupled
with limited eet growth, is also the
best indication that a long-awaited
rebound in the market for large AHTS
could nally materialize in 2014.
1)
58
RS Platou, The Platou Report, February 2014.
AHTS demand is further bolstered by

an upswing in offshore construction
activity as a result of high committed
upstream investments, and by
increased offshore activity in the
Arctic regions, including drilling
campaigns offshore Greenland and
in the Kara Sea, all of which require
modern, high-end tonnage suited to
harsh environments.
Despite these positive fundamentals,
there is some uncertainty surrounding
oil companies continued willingness
to grow their exploration and
production spending, as cost in the
oil and gas industry is on the rise
and many players are refocusing
their activities. For VARD, this means
intensifying our efforts to help clients
seek the most cost effective solutions,
through innovative vessel designs that
guarantee improved fuel efciency
and high up-time in operations, as
well as competitiveness in our own
operations.
Burgeoning offshore subsea

construction market
2013 has been an active year in the
subsea market in terms of number
of newbuilding orders, and this trend
is expected to continue. Increasing
water depths and larger subsea
structures require larger and more
advanced vessels. A maturing subsea
infrastructure requires more capacity
for inspection, maintenance and
repair. The large subsea contractors
command record order books, while
they are being challenged by newer,
specialized players trying to partake
in the growing business. In addition,
several sub-segments of the market,
such as pipe laying and diving
support, face capacity constraints in
light of the full subsea order books.
As in the markets for smaller
offshore support tonnage, the focus
in the subsea industry is on highly
specied vessels that help the oil
companies curb cost by enabling
particularly efcient operations.
Therefore, the outlook for offshore
subsea construction vessels
continues to be positive even as
Outlook
exploration and production spending

growth slows down.
VARD has won a substantial part
of the new subsea vessel orders
world-wide last year, and has taken
a leading position in this segment,
with all new contracts for large
OSCVs being based on own designs.
Notably, this was achieved in the
face of intense competition from
yards in Asia and Europe. In doing
so, the Group has demonstrated its
exibility and adaptability to new
market circumstances. Innovation
power, a focus on customer needs,
and delivery reliability are expected to
continue to be key drivers of success
in this industry.
Focus on strengthening
protability and growth
Having laid the foundations with a
solid order book based on strong
relationships with an enlarged,
diversied global client base, VARDs
main objective in 2014 is to translate
these opportunities into protable
growth.
In Europe, this means reaping the

benets of the recent investments
into advanced production technology
in Romania to reduce cost. Our
yards in Norway are charged with
mastering larger and more complex
projects with an increasing share of
turn-key delivery of advanced topside
equipment, while still maintaining
a leading edge also in the mediumsized vessel segments.
In Vietnam, a track record of superior
project execution has nally been
rewarded with a string of new
orders, leading not only to better
yard utilization, but asserting the
shipyards own right as a bridgehead
for VARDs operations in the Asia
Pacic region. In addition, through
the investments made during the past
year, Vard Vung Tau is ready to take
on larger projects in the future.
In Brazil, all eyes will continue to be
on the turnaround in Niteri, while
the new shipyard Vard Promar is
becoming increasingly important. A
successful ramp-up of operations
at Promar during 2014 is crucial to

VARDs long-term ambitions in Brazil.
While building a large organization
from scratch especially in a difcult
operating environment such as Brazil
is no easy task, progress on the
rst projects under construction is
encouraging.
All over the world, our shipyard
operations benet from our strengths
in design, engineering and project
management, understanding
customers needs and working with
them to develop innovative solutions.
VARD is committed to further
growing its presence in these high
value-added areas, both in terms of
products and services offered, and
geographical reach.
Through the combined efforts of our
dedicated staff and the trust put in
us by our clients, VARD expects to
reassert its leading position in the
market for high-end vessels for the
offshore industry while improving
overall nancial performance in 2014.
59
60
Newbuilding at sea trial

61
Contact Information
Contact Information
REGISTERED OFFICE
HEAD OFFICE
Vard Holdings Limited

50 Rafes Place
#32-01 Singapore Land
Tower
Singapore 048623
Tel: + 65 6536 5355
Fax: + 65 6536 1360
Vard Group AS
P.O. Box 76
NO-6001 lesund, Norway
Tel: + 47 70 21 06 00
mail@vard.com
www.vard.com
SHIPBUILDING
Vard Aukra
Nerbvegen 102
NO-6480 Aukra, Norway
Tel: + 47 70 21 06 00
aukra@vard.com
Vard Brattvaag
Strandgata 74
NO-6270 Brattvg, Norway
Tel: + 47 70 21 06 00
brattvaag@vard.com
Vard Brevik
P.O. Box 15
NO-3991 Brevik, Norway
Tel: + 47 35 51 87 00
brevik@vard.com
Visiting address:
Strmtangveien 17 D
Vard Langsten
NO-6393 Tomrefjord,
Norway
Tel: + 47 70 21 06 00
langsten@vard.com
Vard Sviknes
NO-6280 Svik, Norway
Tel: + 47 70 21 06 00
soviknes@vard.com
Vard Braila SA
Celuozei Street 1A
RO-810282 Braila, Romania
Tel: + 40 239 607 000
braila@vard.com
62
Vard Tulcea SA
22, Ing. Dumitru Ivanov
Street
RO-820242 Tulcea, Romania
Tel: + 40 240 534 918
tulcea@vard.com
Vard Vung Tau Ltd.
No. 6, Dong Xuyen IP,
Rach Dua Ward,
VN-76999 Vung Tau,
Vietnam
Tel: + 84 (0)64 3615 600
vungtau@vard.com
Vard Niteri SA
Praa Alcides Pereira
1 - Parte Ilha da Conceio
- Niteri - RJ
CEP: 24.050-350,Brazil
Tel: + 55 212 7189 090
niteroi@vard.com
Vard Promar SA
AE Zona Industrial
Porturia ZIP
Ilha de Tatuoca, SN
Ipojuca, PE
BR- Zip: 55590-000
Brazil
Tel: +55 81 3561-2500
promar@vard.com
Visiting address:
Molovegen 6
ELECTRICAL
ENGINEERING,
INSTALLATION, POWER &
AUTOMATION
Vard Electro AS
Keiser Wilhelms gt. 22
Tel: + 47 70 21 06 00
electro@vard.com
Vard Electro AS
NO-6280 Svik, Norway
Tel: + 47 70 21 07 50
electro@vard.com
Vard Electro Brazil
Instalaes Eltricas Ltda.
Rua Jos Figueiredo,
5- Centro
24030-055 Niteri-RJ, Brazil
Tel: + 5521 3628 5087
electro.brazil@vard.com
Vard Electro Braila SRL
Celuozei Street 1A
RO-810282 Braila, Romania
Tel: + 40 239 607 336
electro.braila@vard.com
Vard Electro Tulcea SRL
22, Ing. Dumitru Ivanov
Street
Electrical Section
RO-820242 Tulcea, Romania
Tel: + 40 240 534 026
electro.tulcea@vard.com
Vard Electrical Installation
and Engineering (India)
Pte. Ltd.
3-B, 3rd Floor
K G Oxford Business Centre
39/4609, Sreekandath Road
Ravipuram, Ernakulam
Kochi-682 016, India
Tel: + 91 484 2355 430
electro.india@vard.com
DESIGN & ENGINEERING

Vard Design AS
P.O. Box 76
Tel: + 47 70 21 06 00
design@vard.com
Visiting address:
Brunholmgt. 1B
Vard Design Liburna Ltd.
Fiorella La Guardie
51000 Rijeka, Croatia
Tel: + 385 51 344 237
design.liburna@vard.com
Vard Engineering lesund
P.O. Box 76
Tel: + 47 70 21 06 00
engineering.alesund@
vard.com
Visiting address:
Molovn. 5
Vard Engineering Brevik AS
Strmtangvn. 19
Tel: + 47 35 51 87 00
engineering.brevik@
vard.com
Vard Engineering
Constanta SRL
Mamaia Boulevard
NO 243 245
900540 Constanta, Romania
Tel: +40 241 515 558
engineering.constanta@
vard.com
Contact Information
ACCOMMODATION
PIPE SYSTEMS AND SERVICES
HANDLING SYSTEMS
ADDITIONAL ACTIVITIES
Vard Accommodation AS
Johangarden Nringspark
Tennfjordvegen 113
NO-6264 Tennfjord, Norway
Tel: + 47 70 21 06 00
accommodation@vard.com
Vard Piping AS
Johangarden Nringspark
Tennfjordvegen 113
NO-6264 Tennfjord, Norway
Tel: + 47 70 21 06 00
piping@vard.com
Seaonics AS
Nedre Strandgt. 29
Tel: + 47 71 39 16 00
mail@seaonics.com
Vard Singapore Pte. Ltd

3 Temasek Avenue
#20-03 Centennial Tower
Singapore 039190
Tel: + 65 6836 0813
singapore@vard.com
Vard Accommodation
Tulcea SRL
22, Ing. Dumitru Ivanov Street
RO-820 242 Tulcea, Romania
Tel: + 40 240 534 542
accommodation.tulcea@
vard.com
Seaonics Polska Sp. z o.o.

ul. Trzy Lipy 3
80-172, Gdask,
Polska
Tel: +48 58 739 64 60
poland@seaonics.com
Vard Brevik Holding AS

P.O. Box 15
Tel: + 47 35 51 87 00
Visiting address:
Strmtangvn. 21
Vard Offshore Brevik AS
Industrivn. 12
NO-3940 Porsgrunn, Norway
Tel: + 47 35 93 20 25
offshore.brevik@vard.com
Multifag AS
Frednesya 21
3933 Porsgrunn
Telefon: +47 800 35 500
post@multifag.no
www.multifag.no
Design:
Circulation:
Printed by:
I&M Kommunikasjon AS
10,000
Equal Brand Design
Photos/3D: VARD, Sigve Aspelund/Tinagent.no, Ocean Visuals, Harald M.

Valderhaug, Johan Holmquist, Fincantieri, Ole Walter Jacobsen,
Peder Otto Dybvik, Shutterstock, Solstad Offshore, EMAS,
JSC Circle Marine Invest.
63
www.vard.com
ANNUAL REPORT 2013

Contents
Contents
67
Corporate Information
68
Corporate Governance Report
76
Directors Report
79
Statement by Directors
80
Independent Auditors Report
81
Consolidated Statement of Financial Position
82
Consolidated Statement of Comprehensive Income
83
Consolidated Statement of Changes in Equity
85
Consolidated Statement of Cash Flows
86
Notes
140
Appendix - IPT Mandate
155
Statistics of Shareholdings
157
Notice of Annual General Meeting
VARDs Annual Report 2013

consists of two sections:
Business Review and Financial
and Statutory Report.
This is the Financial and Statutory Report.
66
ANNUAL REPORT 2013
ANNUAL REPORT 2013
BUSINESS REVIEW
Board of Directors
Giuseppe Bono, Chairman and Non-Executive Director
(Appointed on 15 March 2013)
Roy Reite, Chief Executive Officer and Executive Director
Sung Hyon Sok, Independent Director
Keen Whye Lee, Lead Independent Director
Fabrizio Palermo, Non-Executive Director
Pier Francesco Ragni, Non-Executive Director
Audit Committee
Keen Whye Lee, Chairman
Sung Hyon Sok
Pier Francesco Ragni (Appointed on 15 March 2013)
Nominating Committee
Sung Hyon Sok, Chairman
Keen Whye Lee
Giuseppe Bono (Appointed on 15 March 2013)
Head Office
Vard Group AS
P.O. Box 76
Tel. +47 70 21 06 00
mail@vard.com
www.vard.com
Visiting address
Molovegen 6,
Share Registrar/Share Transfer Agent
Boardroom Corporate & Advisory Services Pte. Ltd.
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
Telephone: +65 6536 5355
Fax: +65 6536 1360
Remuneration Committee
Sung Hyon Sok, Chairman
Keen Whye Lee
Fabrizio Palermo (Appointed on 15 March 2013)
Auditors
PricewaterhouseCoopers LLP
8 Cross Street #17-00
PWC Building
Singapore 048424
Secretary
Elizabeth Krishnan
Audit Partner-in-Charge
Maurice Loh (Appointed in 2013)
Registered Office
50 Raffles Place
Singapore 048623
Telephone: +65 6536 5355
Fax: +65 6536 1360
Investor Relations Advisors

Newgate Communications Singapore
24 Raffles Place
#16-03A Clifford Centre
Singapore 048621
Telephone: +65 6532 0606
Newgate Communications London
33 King William Street
London EC4R 9AS
Telephone: +44 (0) 20 7680 6550
Email: vard@newgatecomms.com
67

The directors and management of Vard Holdings Limited (the Company) are committed to high standards of corporate
governance and have adopted the principles set out in the Code of Corporate Governance 2012 (the Code) which forms
part of the Continuing Obligations of the Listing Manual of the Singapore Exchange Securities Trading Limited (SGX-ST).
Where there are deviations from the Code, appropriate explanations are provided.
THE BOARDS CONDUCT OF AFFAIRS

The principal functions of the Board are:
1) providing entrepreneurial leadership and approving board policies, corporate strategies, key operational initiatives,
financial objectives of the Group and monitoring the performance of management;
2) overseeing the processes for evaluating the adequacy of internal controls, risk management, financial reporting and
compliance;
3) ensuring the Groups compliance with laws, regulations, policies, directives, guidelines and internal code of conduct;
4) approving the nomination of directors and appointment of key personnel;
5) approving annual budgets, major funding, investments, divestment proposals and monitoring operations;
6) approving the remuneration packages for the Board and key executives;
7) ensuring accurate, adequate and timely reporting to, and communication with shareholders; and
8) assuming the role for the satisfactory fulfilment of social responsibilities of the Group.
The Board has adopted a charter setting out rules and procedures for its self governance. Certain functions have been
delegated by the Board to three main sub-committees (Audit, Nominating and Remuneration Committees), which
operate under clearly defined terms of reference. The Chairman of the respective committees reports the outcome of
committee meetings to the Board.
Matters that are specifically reserved for the full Board to decide are those involving a conflict of interest for a substantial
shareholder or a director, material acquisitions and disposal of assets, corporate or financial restructuring and share
issuances, dividends and other returns to shareholders and matters that require Board approval.
The Board conducts scheduled meetings on a quarterly basis. Ad-hoc meetings are held where necessary, to address
significant issues. Where expedient, board meetings are held by way of teleconference, which is permitted by the Articles
of Association of the Company. The attendance of the directors at meetings of the Board and Board Committees for
FY2013 is as follows:
Name of Directors
Giuseppe Bono*
Roy Reite
Fabrizio Palermo*
Pier Francesco Ragni*
Sung Hyon Sok
Keen Whye Lee
Kyung Jin Hong#
Ho Nam Yi#
Byung Ryoon Woo#
Board
No. of
meetings
Attendance
5
8
5
5
8
8
2
2
2
4
8
5
5
8
8
1
2
1
Audit
Committee (AC)
No. of
Attenmeetings
dance
N/A
N/A
N/A
4
7
7
N/A
N/A
2
N/A
N/A
N/A
4
7
7
N/A
N/A
2
Remuneration
Committee (RC)
No. of
Attenmeetings
dance
N/A
N/A
2
N/A
2
2
N/A
0
N/A
N/A
N/A
2
N/A
2
2
N/A
0
N/A
Nominating
Committee (NC)
No. of
Attenmeetings
dance
2
N/A
N/A
N/A
3
3
1
N/A
N/A
1
N/A
N/A
N/A
3
3
1
N/A
N/A
N/A: Not Applicable

* Messrs Giuseppe Bono, Fabrizio Palermo and Pier Francesco Ragni were appointed as Directors and members of NC, RC and AC respectively on 15 March 2013.
#Messrs Kyung Jin Hong, Ho Nam Yi and Byung Ryoon Woo resigned as Directors on 13 March 2013.
Upon joining the Board, a director is provided with an orientation to familiarize him with the Groups business, operations
and the relevant regulations and governance requirements.
68
The Company adopts a policy whereby directors are encouraged to request further explanation, briefings or informal
discussion on any aspect of the Groups operations or business issues from management. The directors are also briefed
on new updates in the requirements of the SGX-ST, Companies Act or other regulations/statutory requirements from
time to time. They are encouraged to participate in seminars and training programmes in connection with their duties,
funded by the Company. The directors have open invitations to visit and have visited some of the Groups operating
facilities to enable them to obtain a better perspective of the business and to enhance their understanding of the Groups
operations.
BOARD COMPOSITION AND GUIDANCE

The Board presently consists of six directors and the Board considers this number to be appropriate for the current scope
of operations of the Group. Messrs Keen Whye Lee and Sung Hyon Sok are non-executive independent directors.
Mr. Roy Reite is an executive director and the Chief Executive Officer of the Company. The other members of the Board
are Messrs Giuseppe Bono, Pier Francesco Ragni and Fabrizio Palermo, who were appointed on 15 March 2013 as
non-executive non-independent directors. Mr. Giuseppe Bono is the Chairman of the Board of Directors. Mr. Keen Whye
Lee is the Lead Independent Director.
The background of each director is set out on pages 12 to 13. None of the directors are related to one another. The Board
comprises directors with a broad range of commercial experience including expertise in shipbuilding industry, financial,
capital and investment management. Together, they bring a wide range of expertise, technical skills and relevant
experience to the Group. There is sufficient independent element on the Board. This is to ensure that there is effective
representation for shareholders and issues of strategy, performance and resources are fully discussed and examined to
take into account long-term interest of shareholders, employees, customers, suppliers and the industry in which the
Group conducts its business.
Mr. Keen Whye Lee as the Lead Independent Director, leads and co-ordinates the activities of the independent directors.
He is the principal liaison on board issues between the independent directors and the Chairman.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

The roles of the Chairman and the Chief Executive Officer (CEO) are separate and the positions are held by separate
persons who are not related. There is a division of responsibility between the Chairman and the CEO. The Chairman leads
the Board and bears responsibility for the workings of the Board of Directors, the governance process of the Board of
Directors, scheduling Board meetings and setting the Board meeting agenda in consultation with the CEO. The Chairman
reviews most Board papers before they are presented to the Board of Directors and ensures that Board members are
provided with adequate and timely information.
The CEO is the most senior executive in the Group and is responsible for strategic goals and day-to-day management of
the Group.
BOARD MEMBERSHIP
The Nominating Committee (NC) comprises three directors, namely Mr. Sung Hyon Sok (Chairman of the NC),
Mr. Giuseppe Bono (appointed on 15 March 2013) and Mr. Keen Whye Lee. Mr. Sung Hyon Sok and Mr. Keen Whye Lee
are independent directors.
The scope and responsibilities of the NC include:
1) identifying, reviewing and recommending candidates for nomination for appointment and reappointment of directors,
senior executive staff and the members of the various committees;
2) reviewing the Board structure, size and composition and making recommendations to the Board with regard to any
adjustments that are deemed necessary;
3) reviewing the strength and assessing the effectiveness of the Board as a whole;
4) determining on an annual basis the independent status of directors;
5) making recommendations to the Board for the continuation (or otherwise) in services of any director who has reached
the age of seventy;
6) deciding whether or not a director is able to and has been adequately carrying out his duties as a director of the
Company, particularly when he has multiple board representations;
7) overseeing the management, development and succession planning of the Group; and
8) identifying training and professional development programs for directors.
69
During the financial year under review, the NC considered and recommended the appointment of Mr. Giuseppe Bono,
Mr. Fabrizio Palermo and Mr. Pier Francesco Ragni to the Board as non-independent and non-executive directors.
The Board accepted the NCs recommendation.
The NC assessed and recommended to the Board, the directors to be re-elected pursuant to the Companys Articles of
Association at the Annual General Meeting.
The NC determines the independence of directors annually in accordance with the guidelines set out in the Code and is of
the opinion that the Board is able to exercise objective judgment on corporate affairs independently and that the Boards
decision-making process is not dominated by any individual or small group of individuals. Although the Directors have
multiple listed-company board representations and/or other principal commitments, the Board has considered and is
satisfied that each of them is able to and has adequately carried out his duties as a director of the Company.
BOARD PERFORMANCE
The NC evaluates the performance of the Board and the committees annually based on objective performance criteria.
The performance evaluation is aimed at giving directors an opportunity to gauge their effectiveness individually and
collectively. It also helps to ensure continual improvement in the Boards decision-making process as it provides a
benchmark by which future performance can be measured.
ACCESS TO INFORMATION
Management will provide all directors with Board/Board Committee reports prior to the respective meetings. As a
general rule, papers on specific subjects are sent to the Board in advance and are issued, where possible, in a timely
manner to enable the directors to obtain further explanations where necessary so that they are adequately informed prior
to the meetings. Amongst others, the report provides information on the Companys performance, financial position and
prospects.
The Company Secretary attends all Board and Board Committee meetings. The Company Secretary is responsible for
ensuring that procedures are followed and that the Company has complied with the requirements of the Companies Act
and all other rules and regulations that are applicable to the Company. Directors have independent access to the
Company Secretary at all times.
PROCEDURES FOR DEVELOPING REMUNERATION POLICIES

LEVEL AND MIX OF REMUNERATION
The Remuneration Committee (RC) comprises three directors, namely Mr. Sung Hyon Sok (Chairman of the RC),
Mr. Fabrizio Palermo (appointed on 15 March 2013) and Mr. Keen Whye Lee. Mr. Sung Hyon Sok and Mr. Keen Whye Lee
are independent directors.
The RCs responsibilities include:
1) recommending a framework of executive remuneration for the Board and key executives; and
2) reviewing and recommending to the Board the remuneration packages and terms of employment of the CEO and
senior executives of the Group.
There is a formal and transparent procedure for fixing the remuneration packages of individual directors. No director is
involved in deciding his own remuneration. In addition to the RCs responsibilities as stated above, the RC is also
responsible for reviewing and recommending to the Board, the remuneration packages for all directors, taking into
account the current market circumstances and the need to attract directors of experience and good standing.
As part of its review, the RC will cover all aspects of remuneration including but not limited to directors fees, salaries,
allowances, bonuses, shares and benefits-in-kind.
The RC and the Board are of the view that the remuneration of the directors is adequate but not excessive in order to
attract, retain and motivate them to run the Company successfully.
70
Non-executive directors including the Chairman have no service contracts. The CEOs contract, which commenced on
1 October 2010, has no fixed term. His service contract contains non-competition and non-solicitation clauses, which are
binding on him for a period of 6 months and 12 months respectively after the cessation of his employment with the
Company.
The CEOs remuneration package includes pension contributions. It also includes a discretionary bonus to be determined
by the RC and recommended to the Board.
The Companys share option scheme (the Scheme) provides the Company with the means to use share options as part
of a compensation plan for attracting competent employees as well as promoting staff retention by providing an
opportunity for eligible Group employees to participate in the equity of the Company. The Scheme is administered by the
RC. All outstanding share options granted under the Scheme expired on 13 August 2013. Details on the Scheme are
provided in the Directors Report.
DISCLOSURE OF REMUNERATION PAID TO DIRECTORS AND KEY EXECUTIVES

A breakdown showing the level and mix of each individual directors remuneration paid for FY2013 (in percentage terms)
is as follows:
Name of Director
Remuneration1)
Fees2) (%)
Salary3) (%)
S$1,946,000
S$72,000
S$60,000
100%
100%
42%
-
Roy Reite5)
Keen Whye Lee
Sung Hyon Sok
1)
2)
3)
4)
5)
Bonus3) (%) Other Benefits4) (%) Total (%)

54%
-
4%
-
100%
100%
100%
Rounded off to the nearest thousand dollars.

These fees are subject to approval by shareholders as a lump sum at the AGM.
Salary relates to FY2013. Bonus disclosed in relation to FY2012 paid in 2013.
Other benefits are inclusive of allowances and pensions.
In addition to the total remuneration above, options for 4,500,000 shares were granted to Mr. Roy Reite on 9 May 2011. On 27 May 2013, 3,000,000 share options were exercised
and settled by payment of Equivalent Value in Cash of S$375,000 in lieu of issuing shares. The remaining 1,500,000 share options expired on 13 August 2013. Details of the share
options are disclosed in the Directors Report.
The RC ensures that the remuneration package of employees related to executive directors and controlling shareholders
of the Group are in line with the Groups staff remuneration guidelines and commensurate with their respective job scope
and level of responsibilities. The aim of the RC is to motivate and retain such executives and ensure that the Group is able
to attract the best talent in the market in order to maximize shareholders value.
The table below shows the range of gross remuneration (in percentage terms) of the top six executives (executives who
are not directors) (the Top Six Executives):
Remuneration band & name of executives
S$750,000 to S$999,999
Jan Ivar Nielsen
Magne Bakke
Magne Hberg
Stig Bjrkedal
Knut Ola Tverdal
S$500,000 to S$749,999
Holger Dilling
Salarya) (%)
Bonusa) (%)
Other Benefitsb) (%)
Totalc) (%)
54%
54%
54%
54%
54%
44%
44%
44%
44%
44%
2%
2%
2%
2%
2%
100%
100%
100%
100%
100%
60%
34%
6%
100%
a) Salary relates to FY2013. Bonus disclosed in relation to FY2012 paid in 2013.

b) Other benefits are inclusive of allowances and pensions.
c) In addition to remuneration disclosed above, share options were granted on 9 May 2011 (Mr. Jan Ivar Nielsen: 1,200,000 share options; Mr. Magne Bakke: 1,200,000 share
options; Mr. Magne Hberg: 1,200,000 share options; Mr. Stig Bjrkedal: 1,200,000 share options; Mr. Knut Ola Tverdal: 1,200,000 share options; Mr. Holger Dilling: 450,000
share options). During FY2013, a part of the share options granted, were exercised and settled by payment of Equivalent Value in Cash in lieu of issuing shares. The remaining
share options expired on 13 August 2013.
71
The aggregate amount of termination, retirement and post-employment benefits that may be granted to the CEO and the
Top Six Executives is S$3,542,000. Directors (other than the CEO) are not entitled to such benefits. The total remuneration
paid to the Top Six Executives in FY2013 amounted to S$4,864,000.
Mr. Magne Reite, father of Mr. Roy Reite, Director and Chief Executive Officer of the Company, is an employee of the
Group, whose remuneration exceeded S$50,000 during the financial year ended 31 December 2013. His remuneration
was in the band of S$250,000 to S$300,000.
ACCOUNTABILITY
The results and other relevant information on the Company, are disseminated via SGXNET and are also available on the
Companys website at www.vard.com.
In presenting the periodic announcement of the results, the Board aims to provide shareholders with a balanced and
comprehensible assessment of the Groups performance, financial positions and prospects on a quarterly basis.
To enable the Board to fulfill its responsibilities, management reports are made available regularly to all the directors
that include updates on the performance of the Company and all its subsidiaries. The management is accountable to the
Board and the Board is accountable to shareholders.
AUDIT COMMITTEE
The Audit Committee (AC) comprises three directors, namely Mr. Keen Whye Lee (Chairman of the AC), Mr. Pier
Francesco Ragni (appointed on 15 March 2013) and Mr. Sung Hyon Sok. Mr. Keen Whye Lee and Mr. Sung Hyon Sok are
independent directors.
The principal responsibilities of the AC include:
1) recommending to the Board of Directors the external auditors to be nominated, and approving the compensation of
the external auditors. It also reviews the scope and results of the audit, its cost-effectiveness, and the independence
and objectivity of the external auditors;
2) reviewing with management, the significant risks or exposures that exist and the steps management have taken to
manage such risks to the Company, and with the external auditors the audit plan and areas of audit focus;
3) reviewing with the Chief Financial Officer and external auditors at the completion of the full year financial results of
the Group:
a) any significant findings and recommendations of the external auditors together with managements responses
thereto;
b) the external auditors evaluation of the system of internal controls;
c) the external auditors reports;
d) the assistance given by management and the staff of the Company to the external auditors, including any concerns
encountered during the course of audit;
e) interested person transactions (IPTs) falling within the scope of Chapter 9 of the Listing Manual;
4) reviewing quarterly and full year financial statements for submission to the Board for its approval;
5) considering legal and regulatory matters that may have a material impact on the financial statements, related
exchange compliance policies and reports received from regulators.
Minutes of the AC meetings are submitted to the Board for its information and review. To create an environment for open
discussion on audit matters, the AC meets with the external auditors, without the presence of Management, at least once
a year. The AC assesses changes in accounting standards and issues that have an impact on the financial statements
with the Auditors.
The AC noted that there were no non-audit services provided by PricewaterhouseCoopers LLP in FY2013.
72
INTERNAL CONTROLS AND INTERNAL AUDIT

The Board believes in the importance of maintaining a sound system of internal controls to safeguard the interests of
shareholders and the Companys assets. The Board has approved a set of internal controls that set out approval limits for
expenditure and transactions to be incurred in the ordinary course of business including hedge transactions.
In performing its functions, the AC:
a) had full access to and assistance of the management and the discretion to invite any director and executive officer to
attend its meetings;
b) had been given reasonable resources to enable it to discharge its functions properly; and
c) had the express powers to conduct or authorize investigation into any matters within its terms of reference.
The Board, in concurrence of the AC, is of the view that the existing internal controls are adequate and effective in
addressing financial, operational, compliance and information technology risks. In addition, the Board recognizes that no
cost effective internal control system will preclude all errors and irregularities, as a system is designed to manage rather
than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute
assurance against material misstatement and loss.
Risk management and evaluation takes place as an integral part of the Companys strategic planning process. The Board
is cognizant of the importance of internal audit, and is currently in the process of establishing an internal audit function.
For the financial year under review, the Chief Executive Officer and the Chief Financial Officer have provided assurance to
the Board that the financial records of the Company have been properly maintained and the financial statements give a
true and fair view of the operations and finances and that an effective risk management and internal control system has
been put in place.
WHISTLE-BLOWING POLICY
Management has put in place a whistle-blowing policy, whereby employees and any other persons may, in confidence,
raise concerns about possible improprieties on matters of financial reporting or other matters. The objective for such
arrangement is to ensure independent investigation of such matters and for appropriate follow-up action.
COMMUNICATION WITH SHAREHOLDERS

GREATER SHAREHOLDER PARTICIPATION
Major developments on the Company and its business operations are communicated to shareholders via SGXNET and are
also available on the Companys website at www.vard.com. The Company does not practise selective disclosure. Price
sensitive information is first publicly released before the Company meets with any group of investors or analysts.
Quarterly and annual results are released on SGXNET within the mandatory period.
All shareholders of the Company will receive the Annual Report of the Company and notice of AGM within the mandatory
period. The notice of AGM is also advertised in a prominent newspaper. The Articles of the Company permit a shareholder
to appoint one or two proxies to attend and vote in his stead. The Company has not amended its Articles to provide for
absentee voting methods, which call for elaborate and costly implementation of a foolproof system, the need for which
does not arise presently. As recommended by the Code, all resolutions at general meetings will be voted by poll.
Each item of special business included in the notice of the general meetings is accompanied, where appropriate, by an
explanation for the proposed resolution. Separate resolutions are proposed for each separate issue at the meeting.
The Chairmen of the Board Committees are present and available to address questions relating to the work of their
respective Board Committees at general meetings. Shareholders are given the opportunity to air their views and ask
directors, management and external auditors questions regarding the Company.
73
DEALINGS IN SECURITIES
The Company has adopted an internal Code of Best Practices on Securities Transactions (Code) to provide guidance to
its officers with regard to dealings in the securities of the Company in compliance with principles of Rule 1207(19) of the
Listing Manual of the SGX-ST.
In general, officers are encouraged to hold shares in the Company but the listed issuer and its officers are prohibited
from dealing in shares:
in the period commencing two weeks before the announcement of the quarterly financial results or one month before
the announcement of the financial statements of the financial year, as the case may be, and ending on the dates of the
announcement of the relevant results.
at any time while in possession of price-sensitive information.
Directors and employees are expected not to deal in the Companys securities on short-term considerations and to
observe insider trading laws at all times. All senior managers of the Company are required to notify their dealings in the
Companys shares within two market days of transaction.
INTERESTED PERSON TRANSACTIONS (IPTS)

The Company has adopted an internal policy in respect of any transaction with interested person and has set out the
procedures for review and approval of the Companys IPTs.
The IPT mandate for IPTs with STX Corporation Co., Ltd. and its associates was not renewed and therefore expired on
23 April 2013. On 3 October 2013, the Company obtained a general mandate for IPTs with the Fincantieri Group.
The aggregate value of the transactions conducted during the financial year are as follows:
Aggregate value of all
interested person
transactions during the
financial year under review
(excluding transactions
less than S$100,000 and
transactions conducted
under shareholders
mandate pursuant to
Rule 920)
Aggregate value of all

interested person
transactions conducted
under shareholders
mandate pursuant
to Rule 920 (excluding
transactions less than
S$100,000)
NOK
NOK
Annual Brand Fee Royalties to STX Corporation Group
3,692,000
Sub-total
3,692,000
Management service agreement with STX Norway Flor AS
2,300,000
Sub-total
2,300,000
25,955,573
25,955,573
3,692,000
28,255,573
STX Corporation Group
STX Europe Group
Fincantieri Group
Rental agreement floating barge
Sub-total
Total
74
MATERIAL CONTRACTS
There were no material contracts involving the interests of any director or controlling shareholder of the Company, not
being contracts entered into in the ordinary course of business, entered into by the Company during the period under
review, except as disclosed in the audited accounts.
USE OF PROCEEDS
The Company raised total net proceeds of NOK 606 million from the issuance of 180,000,000 new ordinary shares of
S$0.79 each from the IPO in 2010. The Company utilized the proceeds as follows:
Amount
allocated
(NOK
million)
Amount
utilized
in 2010
(NOK
million)
Amount
utilized
in 2011
(NOK
million)
Amount
utilized
in 2012
(NOK
million)
Amount
utilized
in 2013
(NOK
million)
Balance
(NOK
million)
Construction of a second shipyard in Brazil
84
35
39
10
Expansion of yard capabilities in Norway
19
19
227
10
99
118
Use of proceeds
Improvement of manufacturing capacity and equipment at

Vung Tau (Vietnam) and Tulcea (Romania)
Expansion of power and automation capabilities at
Vard Electro AS, including potential acquisitions
65
22
38
Investments in emerging markets, including potential acquisitions
65
30
33
R&D, including potential acquisitions of design/engineering companies 61
22
16
15
General corporate purposes and working capital
85
85
606
30
162
162
166
86
Total net proceeds
The total amount utilized as at 31 December 2013 is NOK 520 million. The utilization is in accordance with the intended
use of proceeds of the initial public offering and in accordance with the amounts allocated, as stated in the Prospectus.
OTHERS
The Company and its Singapore-incorporated subsidiary are audited by PricewaterhouseCoopers LLP. Significant
foreign-incorporated subsidiaries are audited by other member firms of PricewaterhouseCoopers.
Associated companies are audited by PricewaterhouseCoopers AS, Ernst & Young AS, BDO AS, Deloitte AS and
Revisjonsselskapet AS, as disclosed on page 107 of this Annual Report.
The Company is in compliance with Rules 712 and 716 of the Listing Manual.
75
Statutory Financial Reports
Directors Report
The Directors present this report to the members of the Company together with the audited financial statements for
the financial year ended 31 December 2013. The consolidated financial statements have been presented on the basis
described in note 1 to the audited financial statements.
1. DIRECTORS
The directors in office at the date of this report are as follows:
Mr. Giuseppe Bono, Chairman (appointed on 15 March 2013)
Mr. Roy Reite, Chief Executive Officer and Executive Director
Mr. Fabrizio Palermo, Non-Executive Director (appointed on 15 March 2013)
Mr. Pier Francesco Ragni, Non-Executive Director (appointed on 15 March 2013)
Mr. Keen Whye Lee, Lead Independent Director
Mr. Sung Hyon Sok, Independent Director
2. DIRECTORS INTERESTS IN SHARES AND DEBENTURES

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the
Act), particulars of interests of directors who held office at the end of the financial year (including those held by
their spouses and infant children) in shares, debentures, warrants and share options in the Company and in related
corporations (other than wholly-owned subsidiaries) are as follows:
Name of Directors and corporation
in which interests are held
Mr. Roy Reite
Vard Holdings Ltd
- options to subscribe for ordinary shares of the company
Holdings at beginning
of the year
Holdings at
end of the year
4,500,000
nil
Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares,
debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the
financial year, or at the end of the financial year.
There were no changes in any of the above mentioned interests in the Company between the end of the financial year
and 21 January 2014.
3. ARRANGEMENT 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
objects are, or one of whose objects is, 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.
4. DIRECTORS CONTRACTUAL BENEFITS

Since the end of the 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 as disclosed in the accompanying financial
statements or in this report.
76
5. SHARE OPTIONS
At the Extraordinary General Meeting held on 27 April 2011, a share option scheme (the Scheme) for employees
(including the Chief Executive Officer) of the Company and its subsidiaries, was approved by the shareholders.
The Scheme is administered by the Remuneration Committee (the Committee) comprising Mr. Sung Hyon Sok,
Mr. Keen Whye Lee and Mr. Fabrizio Palermo (appointed on 15 March 2013).
On 9 May 2011, the Company granted 17,070,000 options to a number of employees out of the total 17,700,000 options
available under the Scheme, whereby options could be exercised by the participants, in accordance with a vesting
schedule and at exercise prices determined by the Committee. No options were granted at a discount. However as a
result of the Mandatory Unconditional Cash Offer from Fincantieri Oil & Gas S.p.A., participants holding unexercised
options were entitled to exercise such options in the period commencing on the date of the offer and ending latest
6 months thereafter, whereupon any option then remaining unexercised immediately lapsed and became null and void.
Accordingly, during FY2013, a total number of 10,340,000 share options were exercised and settled in cash. No options
were granted during FY2013.
Details of share options granted to Mr. Roy Reite, Executive Director, are as follows:
Options granted
during FY2013
Aggregate options granted

since commencement of the
Scheme to 31 December 2013
Aggregate options exercised

Aggregate options
outstanding as at
31 December 2013
Nil
4,500,000
3,000,000
Nil
No options were granted to controlling shareholders of the Company and their associates. Participants other than
directors, controlling shareholders and their associates, who have received 5% or more of the total number of options
available under the Scheme are as follows:
Name of participant
Jan Ivar Nielsen
Magne Bakke
Stig Bjrkedal
Knut Ola Tverdal
Magne Hberg
Options granted
during FY2013
Aggregate options granted

Aggregate options exercised

Aggregate options
outstanding as at
31 December 2013
Nil
Nil
Nil
Nil
Nil
1,200,000
1,200,000
1,200,000
1,200,000
1,200,000
800,000
800,000
800,000
800,000
800,000
Nil
Nil
Nil
Nil
Nil
No options were granted to directors or employees of the parent company and its subsidiaries. All outstanding options
expired on 13 August 2013.
77
6. AUDIT COMMITTEE
The members of the Audit Committee during the year were:
Mr. Keen Whye Lee (Chairman), Lead Independent Director
Mr. Sung Hyon Sok, Independent Director
Mr. Byung-Ryoon Woo, Non-Executive Director (resigned on 13 March 2013)
Mr. Pier Francesco Ragni, Non-Executive Director (appointed on 15 March 2013)
The Audit Committee as at the date of this report comprises Mr. Keen Whye Lee, Mr. Sung Hyon Sok and Mr. Pier
Francesco Ragni. The Audit Committee performs the functions specified in Section 201B of the Act, the SGX Listing
Manual and the Code of Corporate Governance.
In performing its functions, the Audit Committee met with the Companys auditors to discuss the scope of their work,
the results of their examination and evaluation of the Companys internal accounting control system.
The Audit Committee also reviewed the following:
assistance provided by the Companys officers to the external auditors;
quarterly nancial information and annual nancial statements of the Group and the Company prior to their
submission to the directors of the Company for adoption; and
interested person transactions (as dened in Chapter 9 of the SGX Listing Manual).
The Audit Committee has full access to management and is given the resources required for it to discharge its
functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings.
The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and
non-audit fees.
The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended
to the Board of Directors that the auditors, PricewaterhouseCoopers LLP, be nominated as auditors at the forthcoming
Annual General Meeting of the Company.
7. INDEPENDENT AUDITORS
The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
____________________
Mr Giuseppe Bono
____________________
Mr. Roy Reite
Chief Executive Officer and Executive Director
17 March 2014
78
Statement by Directors
IN OUR OPINION:
a) the financial statements set out on pages 81 to 139 are drawn up 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 2013 and the results, changes in equity and cash flows of the
Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and
Singapore Financial Reporting Standards; 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.
The Board of Directors has, on the date of this statement, authorized these financial statements for issue.
On behalf of the Board of Directors
____________________
Mr Giuseppe Bono
____________________
Mr. Roy Reite
17 March 2014
79
Independent Auditors Report to the Members

of Vard Holdings Limited
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Vard Holdings Limited (the Company) and its subsidiaries
(the Group) set out on pages 81 to 139, which comprise the consolidated statement of financial position of the Group
and statement of financial position of the Company as at 31 December 2013, the consolidated statement of
comprehensive income, statement of changes in equity and statement of cash flows of the Group for the year then ended,
and a summary of significant accounting policies and other explanatory information.
MANAGEMENTS 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.
AUDITORS 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 auditors 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 entitys preparation of financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by 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 2013, 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 the subsidiary
incorporated in Singapore, of which we are the auditors, have been properly kept in accordance with the provisions of the
Act.
PricewaterhouseCoopers LLP
Public Accountants and Chartered Accountants
Singapore, 17 March 2014
80
Consolidated Statement of Financial Position

(All amounts in NOK millions unless otherwise stated)
Group
Note
2013
4
5
6
7
8
9
10
11
12
Company
Restated
2012
2013
2012
2,167
305
383
62
201
80
79
4
3,281
1,384
374
418
11
82
18
121
1
2,409
2,142
600
2,742
2,140
600
2,740
14
15
16
9
17
382
6,136
2,076
51
1,745
10,390
13,671
380
5,491
1,920
80
2,437
10,308
12,717
47
67
114
2,856
50
24
74
2,814
18
18
18
18
4,138
(3,190)
167
2,573
3,688
20
3,708
4,138
(3,190)
15
2,188
3,151
65
3,216
4,138
(1,411)
116
2,843
2,843
4,138
(1,411)
17
60
2,804
2,804
19
11
12
20
21
673
61
3
32
114
883
545
85
35
5
127
797
2
2
19
15
22
5,012
991
2,625
202
249
1
9,080
9,963
13,671
3,385
1,518
2,801
437
556
7
8,704
9,501
12,717
6
5
11
13
2,856
4
5
1
10
10
2,814
ASSETS
Non-current assets
Intangible assets
Investment in subsidiary
Investment in associates
Other investments
Interest-bearing receivables, non-current
Other receivables
Deferred tax assets
Pension assets
Total non-current assets
Current assets
Inventories
Construction WIP in excess of prepayments
Interest-bearing receivables, current
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Paid up capital
Restructuring reserve
Other reserves
Retained earnings
Total equity attributable to equity holders of the Company
Non-controlling interests
Total equity
Non-current liabilities
Loans and borrowings, non-current
Deferred tax liabilities
Pension liability
Other payables
Provisions, non-current
Total non-current liabilities
Current liabilities
Loans and borrowings, current
Prepayments in excess of construction WIP
Income tax payable
Provisions, current
Total current liabilities
Total liabilities
Total equity and liabilities
18
21
23
The accompanying notes form an integral part of these financial statements.

81
Consolidated Statement of Comprehensive Income

Group
2012
11,129
(7,154)
(1,953)
(168)
(549)
1,305
27
27
123
(115)
8
129
(111)
18
9
497
(98)
1,225
28
(197)
300
(434)
791
181
(3)
(77)
1
Items that may not be reclassified subsequently to profit or loss:

Net revaluation of vessels in associates
Defined benefit plan actuarial gains and losses
Other comprehensive income for the year, net of income tax
Total comprehensive income for the year
(6)
7
179
479
98
(1)
21
812
Profit for the year attributable to:

Equity holders of the Company
Profit for the year
357
(57)
300
804
(13)
791
Total comprehensive income attributable to:

Equity holders of the Company
Total comprehensive income for the year
535
(56)
479
825
(13)
812
0.30
0.30
0.68
0.68
Financial income
Financial costs
Net
Profit before tax
Income tax expense
Profit for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Income tax on other comprehensive income
Earnings per share (expressed in NOK)

Attributable to Equity holders of the Company
Basic
Diluted
82
Restated
2013
11,155
(7,778)
(2,129)
(206)
(562)
480
Revenue
Materials, subcontract costs and others
Salaries and related costs
Other operating expenses
Operating profit
Note
24
25
4,5
26
28
29
29
(3,190)
(3,190)
Restructuring
reserve
4,138
Transactions with owners

Cost of share-based payments
Cancellation of option scheme
Dividends paid to non-controlling interests
Cash subscribed by non-controlling shareholders
Changes in non-controlling interests
Total transaction with owners
At 31 December 2013
4,138
Paid up
capital
Comprehensive income
Profit for the year
Total comprehensive income
At 1 January 2013
Group
177
177
(177)
Currency
translation
reserve
167
(6)
(6)
173
Fair
value
reserve
9
(28)
(19)
19
Share
option
reserve
2,573
20
1
21
357
7
364
2,188
Retained
earnings
3,688
9
(8)
1
2
357
178
535
3,151
Total equity
attributable
to equity
holders of
the Company
20
(1)
14
(2)
11
(57)
1
(56)
65
Noncontrolling
interests
3,708
9
(8)
(1)
14
(1)
13
300
179
479
3,216
Total
equity

83
84
4,138
(3,190)
(3,190)
4,138
(3,190)
Restructuring
reserve
4,138
Paid up
capital
Transactions with owners

Cost of share-based payments
Final dividends paid in respect of FY2011
Special dividends paid for FY2012
Changes in non-controlling interests
Other adjustments
Total transaction with owners
At 31 December 2012 (as restated)
Comprehensive income
Profit for the year
Total comprehensive income for the year (as restated)
At 1 January 2012
Retrospective adjustment upon voluntary change in
accounting policy (Note 2e)
Retrospective adjustment upon adoption of FRS19 R
Total at 1 January 2012 (as restated)
Group
(177)
(76)
(76)
(101)
(101)
Currency
translation
reserve
173
98
98
78
75
(3)
Fair
value
reserve
12
12
19
Share
option
reserve
(548)
(729)
12
79
(1,186)
2,188
804
(1)
803
(79)
(9)
2,571
2,659
Retained
earnings
12
(548)
(729)
12
79
(1,174)
3,151
804
21
825
(1)
(9)
3,500
3,510
Total equity
attributable
to equity
holders of
the Company
(3)
50
(12)
35
65
(13)
(13)
43
43
Noncontrolling
interests
12
(551)
(729)
50
79
(1,139)
3,216
791
21
812
(1)
(9)
3,543
3,553
Total
equity

Consolidated Statement of Cash Flow

2013
Group
2012
497
1,225
(42)
(2)
4
206
(28)
9
(9)
635
(40)
(2)
9
168
(3)
12
98
1,467
(2)
(1,172)
6,076
(4,720)
(283)
(182)
(320)
32
(24)
164
3,261
(2,290)
(177)
(746)
84
1,739
Interest received
Interest paid
Income tax paid
Cash flows from operating activities
46
(7)
(412)
(341)
30
(10)
(766)
993
Investing activities
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Purchase of intangible assets
Issuance of new non-current interest bearing receivables
Issuance of new short-term interest bearing receivables
Proceeds from repayment of short term interest-bearing receivables
Acquisition of subsidiary, net of cash acquired
Acquisition of equity interest in associates
Changes in other investments
Cash flows used in investing activities
6
(811)
(6)
(60)
(46)
90
(11)
(15)
(853)
5
(403)
(81)
(6)
(142)
(4)
(631)
447
(30)
14
(2)
(9)
(1)
419
393
(72)
50
(1)
(1,278)
(48)
(956)
Net increase in cash and cash equivalents

Effects of currency translation difference on cash and cash equivalents
Cash and cash equivalents at beginning of financial year
(775)
20
2,418
(594)
(23)
3,035
Cash and cash equivalents excluding restricted cash at end of financial year
Restricted cash at end of financial year
Cash and cash equivalents at end of financial year
1,663
82
1,745
2,418
19
2,437
Operating activities
Profit before tax
Note
Adjustments for:
Net interest income
Gain on disposal of property, plant and equipment, net
Unrealized foreign exchange loss
Change in pension assets and liabilities
Share-based payment expenses
Operating cash flows before movements in working capital
Inventories
Construction work in progress
Proceeds from construction loans
Repayment of construction loans
Provisions
Cash generated from operations
32
Financing activities
Proceeds from loans and borrowings
Repayment of loans and borrowings
Purchase of non-controlling interest in subsidiary
Cash settlement of employee share options
Dividends paid, net of withholding tax
Change in other financial liabilities
Cash flows from financing activities
17

85
Notes
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
The financial statements were authorised for issue by the Board of Directors on 17 March 2014.
1 Corporate information
GENERAL INFORMATION
The Company (Registration No. 201012504K) is a company incorporated in Singapore. The address of its registered
office is at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623.
The financial statements of the Group as at and for the year ended 31 December 2013 comprise the Company and
its subsidiaries (together referred to as the Group and individually as Group entities) and the Groups interest in
associates.
The principal activities of the Company during the financial year are mainly that of an investment holding company.
The Company also provides support services to its subsidiaries, including the provision of performance and repayment
guarantees on the construction contracts. The principal activities of its subsidiaries are described in Note 36 to the
financial statements.
2 Basis of preparation
(A) STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS).
(B) BASIS OF MEASUREMENT

The financial statements have been prepared on the historical cost basis except as otherwise described in the notes
below.
(C) FUNCTIONAL AND PRESENTATION CURRENCY

The Companys functional currency is the Norwegian Kroner (NOK). The financial statements of the Group and the
statement of financial position of the Company are presented in Norwegian Kroner (NOK) and all amounts have been
rounded to the nearest million, unless otherwise stated.
(D) USE OF ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with FRSs requires the management to make judgements,
estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets,
liabilities, revenues and expenses. Actual results may ultimately differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are
accounted for in the period in which the estimates are revised and any future periods affected.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment within the next financial year are included in the following notes:
Revenue recognition
The Group uses the percentage-of-completion (POC) method to account for construction work in progress. The use of
this method requires the Group to estimate the stage of completion of contract activity and also estimate the outcome of
86
a contract at each reporting date. Revenue recognition depends on variables such as development in steel prices, cost of
other factor inputs, extent of calculated contingencies, developments in projects and shipyard capacity.
The scope of variation orders and acceptance of claims by customers may affect revenue estimates. Uncertainties about
revenue estimates will also be affected by the Groups previous experience from similar construction projects. Generally,
there are greater uncertainties related to revenue estimates of new constructions, new designs and new yards. Events,
changes in assumptions and managements judgement will affect recognition of revenue in the current period.
Impairment assessment of goodwill

In accordance with FRS, goodwill is tested annually for impairment or more frequently when there is an indication of
a possible impairment. The recoverable amount of a cash generating unit is estimated each year at the same time.
The recoverable amount of a cash generating unit is the higher of its fair value less costs to sell and its value in use. In
assessing value in use, the estimated future cash flows of the cash generating unit are discounted to their present value.
The calculations require the use of estimates and assumptions relating to cash flows and discount rates.
Generally, there will be uncertainties related to cash flow estimates. The degree of uncertainty will depend on certainty
of the order backlog and market development, uncertainties in prices related to different factor inputs and to what extent
the prices are hedged. Events, changes in assumptions and the managements judgement will affect the evaluation of the
recoverable amounts of the cash-generating units. The carrying amount of goodwill is disclosed in Note 5 to the financial
statements.
Income taxes
The Group is subject to income tax in several jurisdictions. Considerable judgement is required when determining the
global allocation of income taxes. The Group has many transactions and calculations where the final outcome may be
uncertain. The Group accounts for its expected tax liabilities based on estimates. When final outcomes differ from the
original estimations, the deviations in the estimations will affect the tax expense and provision in the period in which the
re-estimation is made. The carrying amount of income tax payable at 31 December 2013 is NOK 202 million.
Deferred tax assets relating to losses carried forward are recognized when it is probable that the losses carried forward
may be utilized. The evaluation of probability is based on historical earnings, expected future margins and the size of
order backlog for the relevant entity. Any deviations in the probability evaluation will affect the deferred tax asset amount.
The carrying amount of deferred tax balances is disclosed in Note 11.
Post-employment benefits
The present value of defined benefit pension plans depends on several factors which include actuarial and financial
assumptions. Any changes in assumptions affect calculations of the present value of the obligations and future pension
costs.
The Group estimates the discount rate at the end of each year. The rate is used to discount future cash flows related
to future defined benefit obligations. The discount rate is determined by reference to government bonds or market
yields on high quality corporate bonds at the reporting date. The currency and term of the bonds shall be consistent
with the currency and estimated term of the post-employment benefit obligations. Other assumptions by management
used in the calculation of the present value of defined benefit plans are based on market values and best estimates.
Assumptions related to turnover and salary increase reflect the managements historical experience with operations.
The carrying amount of post employment benefits is disclosed in Note 12.
Provisions
The provision for warranties is based on estimates from known and expected warranty work and contractual
obligations for further work to be performed after completion. The warranty expense incurred could be higher or lower
than the provision made. The carrying amount and movements in provision for warranties are detailed in Note 21.
Other significant provisions relate to project risks and uncertainties, legal proceedings and clean-up costs whose
bases of the estimates and movements are detailed in Note 21 and Note 38, respectively.
87
Notes

The Group reviews the residual values and useful lives of property, plant and equipment at each reporting date in
accordance with the accounting policy in Note 3(d). The estimation of the residual amount and useful lives involves
significant judgement. During the year, there were no revisions made to the useful lives and residual values of the
Groups property, plant and equipment.
(E) CHANGES IN ACCOUNTING POLICIES

With effect from 1 January 2013, the Group and the Company have adopted all the new and revised Financial Reporting
Standards (FRSs) and Interpretations of FRSs (INT FRSs) that are relevant to its operations and are effective for annual
periods beginning on 1 January 2013. Except as disclosed below, the adoption of the new or revised FRSs and INT
FRSs did not result in any significant changes to the accounting policies of the Group and the Company, and has no
material effect on the amounts reported for the current or prior periods.
Amendment to FRS 1 Presentation of Items of Other Comprehensive Income

The Group has adopted the amendment to FRS 1 on 1 January 2013. The amendment is applicable for annual periods
beginning on or after 1 July 2012 (with early adoption permitted). It requires items presented in other comprehensive
income to be separated into two groups, based on whether or not they may be recycled to profit or loss in the future.
FRS 113 Fair Value Measurement

FRS 113 aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single
source of fair value measurement and disclosure requirements for use across FRSs. The requirements do not extend
the use of fair value accounting but provide guidance on how it should be applied where its use is already required or
permitted by other standards within FRSs.
The adoption of FRS 113 does not have any material impact on the accounting policies of the Group. The Group has
incorporated the additional disclosures required by FRS 113 into the financial statements.
FRS 19 Employee Benefits (revised)

On 1 january 2013, the Group has adopted FRS 19 Employee Benefits (revised), which revises certain principles of the
current FRS 19, including the elimination of the option to defer recognition of re-measurement gains and losses for
defined benefit plans and requiring these re-measurements to be presented in other comprehensive income.
These amendments have been applied retrospectively and comparable figures for 2012 have been restated. The effect of
the adoption of the standard was an increase to pension liabilities of NOK 10 million with the offset to retained earnings
and other comprehensive income by NOK 9 million and NOK 1 million respectively. The change in pension expense for the
comparable year 2012 was insignificant.
During 2013 the Group has cancelled two out of the three defined benefit plans, moving the employees to defined
contribution plans.
Voluntary change in accounting policy

The Company has reassessed its investments in certain shipowning entities to classify these as investments in
associated companies. Those investments have previously been classified as available for sale financial assets. The
Company has concluded that classification as investments in associated companies provides reliable and more relevant
information regarding the nature of these investments.
The above changes have been implemented retrospectively effective for all periods presented. The table below illustrate
the impact to the financial statement line items, including changes to basic and diluted earnings per share.
88
STATEMENT OF FINANCIAL POSITION

Non-current assets
Investment in associates
Other investments
Total
Equity
Other reserves
Retained earnings
Total
STATEMENT OF COMPREHENSIVE INCOME
Net revaluation of vessels in associates
Earnings per share (expressed in NOK)
Attributable to Equity holders of the Company
Basic
Diluted
2012
As previously
reported
2012
2012
Reclassification
As restated
114
316
430
304
(305)
(1)
418
11
429
(161)
2,375
2,214
176
(177)
(1)
15
2,198
2,213
(98)
(98)
98
98
0.76
0.76
(0.09)
(0.09)
0.67
0.67
In respect of the retrospective adjustment made, the Group has not presented the statement of financial position at
1 January 2012 as the impact on that statement of financial position is not material.
The Group has also assessed that the impact on the current period of the voluntary change in accounting policy is not
material.
3 Significant accounting policies

The accounting policies described below have been applied consistently to all periods presented in these financial
statements, and have been applied consistently by Group entities, except as explained in Note 2(e), which addresses
changes in accounting policies.
(A) BASIS OF CONSOLIDATION

Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date
on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential
voting rights that are currently exercisable.
The Group measures goodwill at the acquisition date as:
- the fair value of the consideration transferred; plus
- the recognized amount of any non-controlling interests in the acquiree; plus
- if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree,
over the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
89
Notes
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such
amounts are generally recognized in profit or loss.
Any contingent consideration payable is recognized at fair value at the acquisition date. If the contingent consideration
is classified as equity, it is not re-measured and settlement is accounted for within equity. Otherwise, subsequent
changes to the fair value of the contingent consideration are recognized in profit or loss.
When share-based payment awards (replacement awards) are required to be exchanged for awards held by the
acquirees employees (acquirees awards) and relate to past services, then all or a portion of the amount of the
acquirers replacement awards are included in measuring the consideration transferred in the business combination.
This determination is based on the market-based value of the replacement awards compared with the market-based
value of the acquirees awards and the extent to which the replacement awards relate to past and/or future service.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
acquirees net assets in the event of liquidiation are measured either at fair value or at the non-controlling interests
proportionate share of the recognized amounts of the acquirees identifiable net assets, at the acquisition date. The
measurement basis taken is elected on a transaction-by-transaction basis. All other non-controlling interests are
measured at acquisition-date fair value or, when applicable, on the basis specified in another standard.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
Acquisition of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and
therefore no goodwill is recognized as a result. Adjustments to non-controlling interests arising from transactions that
do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.
Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted
by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling
interests even if doing so causes the non-controlling interests to have a deficit balance.
Acquisition from entities under common control

Business combinations arising from transfers of interests in entities that are under the control of the shareholder that
controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative
year presented or, if later, at the date that common control was established; for this purpose comparatives are
restated. The assets and liabilities acquired are recognized at the carrying amounts recognized previously in the Group
controlling shareholders consolidated financial statements. The components of equity of the acquired entities are
added to the same components within Group equity and any gain/loss arising is recognized directly in equity.
Loss of control
Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling
interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of
control is recognized in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is
measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee
or as an available-for-sale financial asset depending on the level of influence retained.
90
Investments in associates (equity-accounted investees)

Associates are those entities in which the Group has significant influence, but not control, over the financial and
operating policies of these entities. Significant influence is presumed to exist when the Group holds between 20% and
50% of the voting power of another entity.
Investments in associates are accounted for using the equity method (equity-accounted investees) and are recognized
initially at cost. The cost of the investments includes transaction costs.
The consolidated financial statements include the Groups share of the profit or loss and other comprehensive income
of the equity-accounted investees, after adjustments to align the accounting policies of the equity-accounted investees
with those of the Group, from the date that significant influence or joint control commences until the date that
significant influence ceases.
When the Groups share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the
investment, together with any long-term interest that form part thereof, is reduced to zero, and the recognition of
further losses is discontinued except to the extent that the Group has an obligation to fund the investees operations or
has made payments on behalf of the investee.
Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from
transactions with equity-accounted investees are eliminated against the investment to the extent of the Groups
interest in the investees. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent
that there is no evidence of impairment.
Subsidiaries and associates in the separate financial statements

Investments in subsidiaries and associates are stated in the Companys statement of financial position at cost less
accumulated impairment losses.
(B) FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of cash generating units
(CGUs) at exchange rates at the dates of the transactions. The functional currencies of the significant subsidiaries are
NOK, USD, RON and BRL. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting
period are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss
on monetary items is the difference between amortized cost in the functional currency at the beginning of the year,
adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at
the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items
in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date
of the transaction. Foreign currency differences arising on retranslation are recognized in profit or loss, except for the
following differences which are recognized in other comprehensive income arising on the retranslation of:
- available-for-sale equity instruments (except on impairment in which case foreign currency differences that have
been recognized in other comprehensive income are reclassified to profit or loss);
- a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is
effective; or
- qualifying cash flow hedges to the extent the hedge is effective.
91
Notes
Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition,
are translated to NOK at exchange rates at the end of the reporting period. The income and expenses of foreign
operations, excluding foreign operations in hyperinflationary economies, are translated to NOK at the weighted
average exchange rate for the period. Goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and are translated at the exchange rates at the
end of the reporting period.
Foreign currency differences are recognized in other comprehensive income, and presented in the foreign currency
translation reserve (translation reserve) in equity. However, if the foreign operation is a non-wholly-owned subsidiary,
then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a
foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount
in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When
the Group disposes of only part of its investment in an associate or jointly controlled entity that includes a foreign
operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is
reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely
in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that are considered to
form part of a net investment in a foreign operation are recognized in other comprehensive income, and are presented
in the translation reserve in equity.
(C) FINANCIAL INSTRUMENTS

Non-derivative financial assets
The Group initially recognizes loans and receivables and deposits on the date that they are originated. All other
financial assets (including assets designated at fair value through profit or loss) are recognized initially on the trade
date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial
assets that is created or retained by the Group is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize
the asset and settle the liability simultaneously.
The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through
profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets.
Financial assets at fair value through profit or loss
A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as
such upon initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages
such investments and makes purchase and sale decisions based on their fair value in accordance with the Groups
documented risk management or investment strategy. Attributable transaction costs are recognized in profit or loss
as incurred. Financial assets designated at fair value through profit or loss are measured at fair value, and changes
therein, which takes into account any dividend income, are recognized in profit or loss.
Financial assets designated at fair value through profit or loss comprise equity securities that otherwise would have
been classified as available for sale.
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There are no financial assets at fair value through profit or loss at the reporting date.
Held-to-maturity financial assets
There are no held-to-maturity financial assets at the reporting date.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any
impairment losses.
Loans and receivables comprise cash and cash equivalents and trade and other receivables (excluding advances to
suppliers and derivative financial instruments).
Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months or less
from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the
Group in the management of its short-term commitments. For the purpose of the statement of cash-flows, pledged
deposits are excluded whilst bank overdrafts that are repayable on demand and that form an integral part of the
Groups cash management are included in cash and cash equivalents.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are
not classified in any of the above categories of financial assets. Available-for-sale financial assets are recognized
initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are
measured at fair value and changes therein, other than impairment losses and foreign currency differences on
available-for-sale debt instruments, are recognized in other comprehensive income and presented in the fair value
reserve in equity. When an investment is derecognized, the gain or loss accumulated in equity is reclassified to profit or
loss.
Available-for-sale financial assets comprise equity securities.
Non-derivative financial liabilities

The Group initially recognizes debt securities issued and subordinated liabilities on the date that they are originated.
Financial liabilities for contingent consideration payable in a business combination are recognized at the acquisition
date. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognized
initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the
instrument.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.
Financial liabilities for contingent consideration payable in a business combination are initially measured at fair value.
Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
Financial assets and liabilities are offset and the net amount presented on the statement of financial position when,
and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize
the asset and settle the liability simultaneously.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial
liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortized cost using the effective interest method.
Other financial liabilities comprise loans and borrowings, bank overdrafts, and trade and other payables.
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Notes
Share capital
Ordinary shares
Ordinary shares are classified as paid-up capital in equity. Incremental costs directly attributable to the issue of
ordinary shares are recognized as a deduction from equity, net of any tax effects.
Derivative financial instruments, including hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency risk exposures.
On initial designation of the derivative as the hedging instrument, the Group formally documents the relationship between
the hedging instrument and the hedged item, including the risk management objectives and strategy in undertaking the
hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the
hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an
ongoing basis, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the
fair value or cash flows of the respective hedged items attributable to the hedged risk, and whether the actual results of
each hedge are within a range of 80% to 125%. For a cash flow hedge of a forecast transaction, the transaction should be
highly probable to occur and should present an exposure to variations in cash flow that could ultimately affect reported
profit or loss.
Derivatives are recognized initially at fair value; attributable transaction costs are recognized in profit or loss as
incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted
for as described below.
Fair value hedges

The Group has entered into currency forwards that are fair value hedges for currency risk arising from contractual
commitments (firm commitments) with respect to values of construction contracts or costs related to contracts
in foreign currencies (hedged item). The fair value changes on the hedged item resulting from currency risk are
recognized in profit or loss. The fair value changes on the effective portion of currency forwards designated as fair
value hedges are recognized in profit or loss within the same line item as the fair value changes from the hedged item.
The fair value changes on the ineffective portion of currency forwards are recognized separately in profit or loss.
Currency risk arising from construction contracts is evaluated for each contract. The hedge is accounted for under the
concept of a firm commitment. This implies that a percentage-of-completion contract is a firm commitment until the
asset under construction is completed and transferred to the customer.
Cash flow hedges

There are no cash flow hedges at the reporting date.
Intra-group financial guarantees in the separate financial statemements

Financial guarantees are financial instruments issued by the Company, on behalf of its subsidiaries, that require the
issuer to make specified payments to reimburse the holder for the loss it incurs because a specified debtor fails to
meet payment when due in accordance with the original or modified terms of a debt instrument.
Financial guarantees are recognized initially at fair value and are classified as financial liabilities. Subsequent
to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative
amortization and the amount that would be recognized if they were accounted for as contingent liabilities. When
financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantee is
transferred to profit or loss.
(D) PROPERTY, PLANT AND EQUIPMENT

Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
However, this does not apply to vessels, and vessels under construction, owned by associated companies which are
subject to revaluation. Refer separate paragraph Vessels below.
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Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes:
- the cost of materials and direct labour;
- any other costs directly attributable to bringing the assets to a working condition for their intended use;
- when the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and
removing the items and restoring the site on which they are located; and
- capitalized borrowing costs.
Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related
equipment is capitalized as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment, and is recognized net within other income/
other expenses in profit or loss.
Vessels
Vessels and vessels under construction owned by associated companies are initially recognized at cost and are
subsequently carried at the revalued amount less accumulated impairment losses.
Vessels and vessels under construction are revalued by independent professional valuers on a yearly basis and
whenever their carrying amounts are likely to differ materially from their revalued amounts. When a vessel or a
vessel under construction is revalued, any accumulated impairment losses at the date of revaluation are eliminated
against the gross carrying amount of the asset. The net amount is then restated to the revalued amount of the
asset. Revaluations of vessels and vessels under construction owned by associated companies are presented within
investment in associates.
Increases in carrying amounts arising from revaluation, including currency translation differences, are recognized
in other comprehensive income, unless they offset previous decreases in the carrying amounts of the same asset, in
which case, they are recognized in profit or loss as results from investments in associated companies. Decreases in
carrying amounts that offset previous increases of the same asset are recognized in other comprehensive income. All
other decreases in carrying amounts are recognized in profit or loss.
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognized in the carrying amount of
the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and
its cost can be measured reliably. The carrying amount of the replaced component is derecognized. The costs of the
day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.
Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed and if a component has a useful life that is different from the remainder of that asset, that component is
depreciated separately.
Depreciation is recognized as an expense in profit or loss on a straight line basis over the estimated useful lives of
each component of an item of property, plant and equipment, unless it is included in the carrying amount of another
asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated.
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Notes
Depreciation is recognized from the date that the property, plant and equipment is installed and is ready for use, or in
respect of internally constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives are as follows:
Machinery and vehicles
Buildings
Leasehold land
Quays/docks
3-20 years
20-50 years
Lease period of 4 - 40 years
33-50 years
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted if
appropriate.
The estimated useful lives of vessels owned by associates are 25-30 years. Those vessels are carried at their revalued
amounts subsequent to initial recognition, less any accumulated impairment losses.
(E) INTANGIBLE ASSETS

Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement of
goodwill at initial recognition, see Note 3(a) Business combinations.
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses. In respect of associates, the carrying amount
of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is
not allocated to any asset, including goodwill, that forms part of the carrying amount of the associates.
Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognized in profit or loss as incurred.
Development activities involve a plan or design for the production of new or substantially improved products and
processes. Development expenditure is capitalized only if development costs can be measured reliably, the product or
process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and
has sufficient resources to complete development and to use or sell the asset. The expenditure capitalized includes
the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended
use, and capitalized borrowing costs. Other development expenditure is recognized in profit or loss as incurred.
Capitalized development expenditure is measured at cost less accumulated amortization and impairment losses.
Other intangible assets

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less
accumulated amortization and accumulated impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is
recognized in profit or loss as incurred.
Amortization
Amortization is calculated based on the cost of the asset, less its residual value.
96
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets,
other than goodwill, from the date that they are available for use. The estimated useful lives are as follows:
Other intangible assets
4-10 years
Other intangible assets comprises sundry licenses and patents, as well as a beneficial lease agreement acquired
through the acquisition of a business.
Amortization methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if
appropriate.
(F) LEASED ASSETS

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as
finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value
and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to that asset.
Other leases are operating leases and are not recognized in the Groups statement of financial position.
(G) INVENTORIES
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the first-in
first-out (FIFO) principle and includes expenditure in acquiring the inventories and other costs incurred in bringing
them to their existing location and condition. The cost of finished goods and work in progress comprises raw materials,
direct labour, other direct costs and an appropriate share of production overheads based on normal operating capacity.
Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency
purchases of inventories.
Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and
selling expenses.
(H) CONSTRUCTION CONTRACTS IN PROGRESS

A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets
that are closely interrelated or interdependent in terms of their design, technology and functions or their ultimate
purpose or use.
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are
recognized as revenue and expenses, respectively, by reference to the stage of completion of the contract activity at the
reporting date (percentage-of-completion method). When the outcome of a construction contract cannot be estimated
reliably, contract revenue is recognized 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 recognized as an expense
immediately.
Contract revenue comprises the initial amount of revenue agreed in the contract as well as variation orders and claims
that can be measured reliably. A variation order or a claim is only included in contract revenue when it is probable that
the customer will approve the variation order or negotiations have reached an advanced stage such that it is probable
that the customer will accept the claim.
The stage of completion is measured generally by reference to the ratio of contract costs incurred to date to the
estimated total costs for the contract. Costs incurred during the financial year in connection with future activity 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 statement of financial position unless it is not
probable that such contract costs are recoverable from the customers, in which case, such costs are recognized as an
expense immediately.
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Notes
At the reporting date, the aggregated costs incurred plus recognized profit (less recognized losses) on each contract
is compared against the progress billings. Where the cumulative costs incurred plus the recognized profits (less
recognized losses) exceed progress billings, the balance is presented as due from customers on construction
contracts. Where progress billings exceed the cumulative costs incurred plus recognized profits (less recognized
losses), the balance is presented as due to customers on construction contracts.
Progress billings (net of advances received) are included within trade receivables. Advances received (net of progress
billings made) are included within prepayments in excess of construction WIP (liabilities).
(I) IMPAIRMENT
Non-derivative financial assets
A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to
determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence
indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative
effect on the estimated future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency
by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise,
indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or
issuers in the Group, economic conditions that correlate with defaults or the disappearence of an active market for a
security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its
cost is objective evidence of impairment.
Loans and receivables

The Group considers evidence of impairment for loans and receivables at a specific asset level. All individually
significant loans and receivables are assessed for specific impairment.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between
its carrying amount and the present value of the estimated future cash flows, discounted at the assets original
effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against loans
and receivables or securities. Interest on the impaired asset continues to be recognized. When a subsequent event
(e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is
reversed through profit or loss.

Impairment losses on available-for-sale financial assets are recognized by reclassifying the losses accumulated in
the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss
is the difference between the acquisition cost, net of any principal repayment and amortization, and the current fair
value, less any impairment loss recognized previously in profit or loss. Changes in cumulative impairment provisions
attributable to application of the effective interest method are reflected as a component of interest income. If, in
a subsequent period, the fair value of an impaired available-for-sale debt security increases and the increase can
be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is
reversed. The amount of the reversal is recognized in profit or loss. However, any subsequent recovery in the fair value
of an impaired available-for-sale equity security is recognized in other comprehensive income.
Non-financial assets
The carrying amounts of the Groups non-financial assets, other than inventories and deferred tax assets, are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then
the assets recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset
or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell.
98
In assessing value in use, the estimated future cash flows are discounted to their present value using an after tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into
the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash
inflows of other assets or CGU. Subject to an operating segment ceiling test, for the purposes of goodwill impairment
testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is
performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired
in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the
combination.
The Groups corporate assets do not generate separate cash inflows and are utilized by more than one CGU. Corporate
assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of
the CGU to which the corporate asset is allocated.
Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated first
to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying
amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized
in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized.
Goodwill that forms part of the carrying amount of an investment in an associate is not recognized separately, and
therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested
for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired.
(J) NON-CURRENT ASSETS HELD FOR SALE

Non-current asssets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily
through sale rather than through continuing use, are classified as held for sale. Immediately before classification as
held for sale, the assets or components of a disposal group, are generally measured in accordance with the Groups
accounting policies. Thereafter, the assets, or disposal group, are generally measured at the lower of their carrying
amount and fair value less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill, and
then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial
assets, deferred taxes and employee benefit assets, which continue to be measured in accordance with the Groups
accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on
remeasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment
loss.
Intangible assets and property, plant and equipment once classified as held for sale or distribution are not amortized
or depreciated. In addition, equity accounting of associates ceases once classified as held for sale or distribution.
(K) EMPLOYEE BENEFITS

The Group has both defined contribution plans and benefit plans.
Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions
to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods
during which related services are rendered by employees.
99
Notes
Defined benefit plans

Defined benefit plans are post-employment benefit benefit pension plans other than defined contribution plans.
Defined benefit plans typically define the amount of benefit that an employee will receive on or after retirement, usually
dependent on one or more factors such as age, years of service and compensation.
The liability recognized in the balance sheet in respect of a defined benefit pension plan is the present value of the
defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for
unrecognized past-service costs. The defined benefit obligation is calculated annually by independent actuaries using
the projected unit credit method. The present value of the defined benefit obligation is determined by discounting
the estimated future cash outflows using market yields of high quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and have tenures approximating to that of the related post-employment
benefit obligations.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period when they arise.
Past service costs are recognized immediately in profit or loss.
Termination benefits
Termination benefits are recognized as an expense when the Group is committed demonstrably, without realistic
possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement
date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination
benefits for voluntary redundancies are recognized as an expense if the Group has made an offer of voluntary
redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.
If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.
Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee, and the obligation can be estimated reliably.
Share-based payment transactions

The grant date fair value of share-based payment awards granted to employees is recognized as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the
awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related
service and non-market performance conditions are expected to be met, such that the amount ultimately recognized
as an expense is based on the number of awards that meet the related service and non-market performance
conditions at the vesting date.
(L) PROVISIONS
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is
recognized as finance cost.
Warranties
A provision for warranties is recognized when the underlying products or services are sold. The provision is recognized
for completed contracts based on past experience and industry averages for defective products, over the applicable
warranty periods.
100
Restructuring
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and
the restructuring either has commenced or has been announced publicly. Future operating losses are not provided
for.
Site restoration
In accordance with applicable legal requirements, a provision for site restoration in respect of contaminated land
and seabed, and the related expense, is recognized when the land and seabed is contaminated.
(M) REVENUE
Revenue comprises the fair value of the consideration received or receivable for the rendering of services and the sale
of goods in the ordinary course of the Groups activities. Revenue is presented, net of value-added tax, rebates and
discounts, and after eliminating transactions within the Group. Revenue is recognized as follows:
Revenue from construction contracts

Contract revenue is recognized by reference to the stage of completion of the contract activity at the reporting date.
The stage of completion is measured generally by reference to the contract costs incurred to date, as compared to the
estimated total costs for the contract.
Please refer to Note 3(h) Construction Contracts for the elaboration of accounting policy for revenue from
construction contracts.
Interest income
Interest income arising from financial instruments is recognized on a time-proportion basis using the effective interest
method.
Revenue from sales of goods

Sale of goods primarily relates to the sale of automated systems by a subsidiary group.
Upon the sale of design and equipment packages, an assessment is made of the stage of completion and the
remaining work. If a significant portion of the value creation has taken place, the related portion of income is
recognized immediately, and the rest of the income is recognized over the period of the projects completion.
Rendering of services
Revenue from rendering of services is recognized in profit or loss in proportion to the stage of completion of the
transaction at the reporting date.
(N) LEASE PAYMENTS

Lease payments
Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the
lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the
lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction
of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.
Determining whether an arrangement contains a lease

At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. This will
be the case if the following two criteria are met:
- the fulfilment of the arrangement is dependent on the use of a specified asset or assets; and
- the arrangement contains a right to use the asset(s)
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Notes
At inception of the arrangement, the Group separates payments and other consideration required by such an
arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group
concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability
are recognized at an amount equal to the fair value of the underlying asset. Subsequently, the liability is reduced
as payments are made and an imputed finance charge on the liability is recognized using the Groups incremental
borrowing rate.
Contingent rents are recognized as an expense in profit or loss when incurred.
(O) FINANCE INCOME AND FINANCE COSTS

Finance income comprises foreign exchange gains, interest income on funds invested (including available-for-sale
financial assets), dividend income, gains on the re-measurement to fair value of any pre-existing interest in an
acquiree, gains on hedging instruments that are recognized in profit or loss and reclassifications of net gains
previously recognized in other comprehensive income. Interest income is recognized as it accrues in profit or loss,
using the effective interest method. Dividend income is recognized in profit or loss on the date that the Groups right to
receive payment is established.
Finance costs comprise foreign exchange losses, interest expense on borrowings, unwinding of the discount on
provisions and deferred consideration, fair value losses on financial assets at fair value through profit or loss and
contingent consideration, losses on hedging instruments that are recognized in profit or loss and reclassifications of
net losses previously recognized in other comprehensive income.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
recognized in profit or loss using the effective interest method.
(P) TAX
Tax expense comprises current and deferred tax. Current tax and deferred tax is recognized in profit or loss except to
the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive
income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
temporary differences related to investments in subsidiaries to the extent that it is probable that they will not
reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.
The measurement of deferred taxes reflects the tax consequenses that would follow the manner in which the Group
expects, at the end of the reporting period. Deferred tax is measured at the tax rates that are expected to be applied
to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the
reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized
simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realized.
102
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax
positions and whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities
are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and
prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about
future events. New information may become available that causes the Group to change its judgement regarding the
adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a
determination is made.
(Q) EARNINGS PER SHARE

The Group presents basic and dilluted earnings per share data for its ordinary shares. Basic earnings per share is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the year, adjusted for any own shares held. Dilluted earnings per share
is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number
of ordinary shares outstanding, adjusted for own shares held, for the effects of all dillutive potential ordinary shares,
which comprise share options granted to employees.
(R) SEGMENT REPORTING

An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Groups
other components. All operating segments operating results are reviewed regularly by the Groups CEO (the Chief
Operating Decision Maker) to make decisions about resources to be allocated to the segment and to assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the Groups CEO include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the
Companys headquarters), head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and
intangible assets other than goodwill.
(S) NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS NOT ADOPTED

Below are the mandatory standards, amendments and interpretations to existing standards that have been published,
and are relevant for the Groups accounting periods beginning on or after 1 January 2013 or later periods and which
the Group has not early adopted:
Applicable for the Groups 2014 financial statements

FRS 110 Consolidated Financial Statements, replaces all of the guidance on control and consolidation in FRS 27
Consolidated and Separate Financial Statements and INT FRS 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 will apply FRS 110 from 1 January 2014, but this is
not expected to have any significant impact on the financial statements of the Group.
FRS 112 Disclosures of interest in Other Entities, requires disclosure of information that helps financial statement
readers to evaluate the nature, risks and financial effects associated with the entitys interests in (1) subsidiaries,
(2) associates, (3) joint arrangements and (4) unconsolidated structured entities.
The Group will apply FRS 112 prospectively from 1 January 2014. FRS 112 will not result in any changes to the Groups
accounting policies but will require more disclosures in the financial statements.
There are no other FRSs or interpretations that are not yet effective that would be expected to have a material impact
on the Group.
103
Notes
4 Property, plant and equipment (PPE)

Machinery
and vehicles
Buildings
Land
Quays/
docks
Assets under
construction
Total
880
72
(111)
(92)
749
908
27
(95)
(40)
(33)
767
58
2
(3)
57
170
4
(1)
40
(7)
206
37
438
(4)
471
2,053
543
(207)
(139)
2,250
749
229
(19)
1
19
979
767
127
22
(1)
(1)
49
963
57
2
4
63
206
19
(1)
(2)
12
234
471
471
(1)
19
960
2,250
846
22
(21)
(1)
103
3,199
Accumulated depreciation
At 1 January 2012
Depreciation
Disposals
Currency translation differences
At 31 December 2012
592
79
(108)
(71)
492
414
30
(94)
(18)
332
1
1
35
10
(1)
(3)
41
1,042
119
(203)
(92)
866
At 1 January 2013
Depreciation
Impairment losses
Disposals
At 31 December 2013
492
81
7
(15)
17
582
332
36
(1)
28
395
1
1
2
41
6
6
53
866
124
7
(16)
51
1,032
Carrying amounts
At 1 January 2012
At 31 December 2012
At 31 December 2013
288
257
397
494
435
568
57
56
61
135
165
181
37
471
960
1,011
1,384
2,167
Group
Cost
At 1 January 2012
Additions
Disposals
Reclassifications
At 31 December 2012
At 1 January 2013
Additions
Acquisitions through business combinations
Disposals
Other
Reclassifications
At 31 December 2013
As at the reporting dates, the Company did not have property, plant and equipment (PPE).
At 31 December 2013, PPE of the Group with the carrying amount of NOK 700 million (2012: NOK 481 million) are
pledged as security to secure the Groups borrowings (see Note 19). This involves all categories of PPE for the
Norwegian yards as well as in the category of machinery and vehicles for the Brazilian yards.
Property, plant and equipment under construction - Group
The 2013 increase in both Buildings, Machinery and Vehicles are mainly related to investments in Romania. The
investments are made to increase yard capacity and productivity. The increase in assets under construction is mainly
related to the new yard in Brazil.
Included within is NOK 60 million of borrowing costs capitalized for the construction of the new yard.
Impairment loss
In FY2013, the impairment loss of NOK 7 million in Machinery and Vehicles are related to asset write-down of a steel
processing shop and a floating dock at the yard in Niteroi, Brazil, as the assets are no longer in use.
104
5 Intangible assets
Goodwill
Other
intangibles
Total
465
5
470
32
2
(2)
32
497
2
5
(2)
502
At 1 January 2013
Additions acquired separately
Disposals and other adjustments
At 31 December 2013
470
470
32
6
(1)
2
39
502
6
(1)
2
509
Accumulated amortization and impairment losses

At 1 January 2012
Amortization for the year
Impairment loss
At 31 December 2012
58
47
(1)
104
24
2
(2)
24
82
2
47
(3)
128
At 1 January 2013
Amortization for the year
Impairment loss
At 31 December 2013
104
72
176
24
2
1
1
28
128
2
73
1
204
Carrying amounts
At 1 January 2012
At 31 December 2012
At 31 December 2013
407
366
294
8
8
11
415
374
305
Impairment
loss
Currency
translation
differences
Balance at
31.12.13
Group
Cost
At 1 January 2012
Additions acquired separately
Acquisition of subsidiaries
At 31 December 2012
The carrying amounts of goodwill are allocated to the following CGUs:
Business entities
Vard Group AS including
the Romanian sub-group
Vard Niteri SA
Total
Business entities
Vard Group AS including
the Romanian sub-group
Vard Niteri SA
Total
CGU:
CGU 1
CGU 2
CGU:
CGU 1
CGU 2
Balance at
01.01.13
Additions
Other
adjustments*
295
71
366
1
(1)
-
(2)
(70)
(72)
294
294
Balance at
01.01.12
Additions
Other
adjustments
Impairment
loss
Currency
translation
differences
Balance at
31.12.12
290
117
407
5
5
(47)
(47)
1
1
295
71
366
* Other adjustments due to roundings
105
Notes
IMPAIRMENT LOSS
FY2013
In 2013, impairment loss of NOK 70 million represents a write-down of the remaining goodwill in the subsidiary Vard
Niteri SA, a wholly owned subsidiary of Vard Group AS. During the first six months of FY 2013 the margins were
impacted by further delays and cost overruns at the yard due to lower than expected productivity and additional costs
for outsourcing of hull construction activities to subcontractors. The adverse development triggered an updated
impairment test of goodwill resulting in the write-down to zero of the remaining goodwill for the yard as of Q2 2013.
Loss of NOK 2 million represents impairment loss of goodwill due to liquidation of AJA Ship Design SA, a partly owned
subsidiary of Vard Braila SA in Romania.
FY2012
In 2012, the impairment loss of NOK 47 million represents impairment loss of goodwill in the subsidiary Vard Niteri
SA, a wholly owned subsidiary of Vard Group AS. The impairment loss is considered appropriate based on financial
performance in 2012 and the limited remaining operational period for the yard due to the expiry of the lease (and
expected consolidation of Brazil activities at the new yard). The write-down was identified when performing the annual
impairment test of goodwill at year end.
IMPAIRMENT TESTS FOR GOODWILL

The Group has defined two CGUs with goodwill which are its shipyards in Norway and Romania (CGU 1) and the
shipyard in Niteri (CGU 2), and all goodwill relates to these CGUs. With regards to CGU 1: All of these shipyards
have the same management, who is central in the allocation of contracts. As shipyards in Romania are mainly hull
producers, there is a high degree of dependency between these shipyards and the outfitting shipyards in Norway.
Accordingly, shipyards at different locations are not defined as separate CGUs.
An impairment test has been performed for the CGUs at 31 December 2013 and 31 December 2012 to assess whether
impairment existed. Based on the calculations performed, there is no impairment in the value of goodwill for CGU 1.
CGU 2 was subject to a write down of NOK 70 million during Q2 2013.
The recoverable amount of the entities within the CGUs has been determined based on value in use calculations. Value
in use is calculated based on cash flow projections derived from financial budgets, business plans and strategical
figures approved by senior management covering the period of 2014 to 2018 (2012: 2013 to 2017). The determination
of budget and strategical figures are based on long term construction contracts and their expected margins, and
expectations of new contracts. This is reflected in the budget and business plan figures.
The discount rate for CGU 1, which is based on the CGUs weighted average cost of capital (WACC), applied to cash
flows for the impairment test at 31 December 2013 are 8.1%. Terminal value is based on long term strategical figures,
however adjusted for cyclical fluctuations, and using a growth rate of 2.0% in the terminal year. For the impairment
test performed as of Q2 2013 for CGU 2, the discount rate (WACC) applied was 14.8% while growth rate was set at zero
percent. The assumptions related to the impairment test at 31 December 2012 were discount rate of 10.0% and 15.8%
respectively for CGU 1 and 2, and 2.0% growth rate for CGU 1 in the terminal year and zero percent for CGU 2.
Unless a long lasting situation occurs with low capacity utilization or significantly lower margins than what has
been assumed for the period after 2013, realistic sensitivity calculations do not indicate any additional significant
impairment in value of goodwill.
106
6 Investment in subsidiary
Unquoted shares, at cost
At 1 January
Deemed contribution (Note 13)
Others
At end of financial year
2013
Company
2012
2,140
2
2,142
2,130
12
(2)
2,140
For newly incorporated subsidiaries during the year, as well as aquisitions of subsidiaries and non-controlling
interests, refer to Note 32. Details of the Groups significant subsidiaries are set out in Note 36.
7 Investment in associates
Company
Restated
2013
Movements of investments in associates
Balance at 1 Jan (as restated)
Share of fair value reserves
Share of results
Additions
Disposals
Dividends
Balance at 31 December
2013
Associates and
country of incorporation
Reporting
date
418
6
9
15
(65)
383
Name of
auditor
Mkster Supply AS (Norway)
31/12/2013
Mkster Supply KS (Norway)

Island Offshore LNG AS (Norway)
Island Offshore LNG KS (Norway)
Rem Supply AS (Norway)
31/12/2013
31/12/2013
31/12/2013
31/12/2013
Ernst &
Young AS
Ernst &
Young AS
PwC AS
PwC AS
PwC AS
Castor Drilling Solution AS

(Norway)
Olympic Green Energy KS
(Norway)
Olympic Subsea KS (Norway)
DOF Iceman AS (Norway)
Bridge Eiendom AS (Norway)
31/12/2013
PwC AS
31/12/2013
31/12/2013
31/12/2013
31/12/2013
BDO AS
BDO AS
PwC AS
Deloitte AS
AS Dameco (Norway)
31/12/2013
Taklift AS (Norway)
Brevik Technology AS (Norway)
Total
BDO AS
Revisjons31/12/2013 selskapet AS
31/12/2013
2012
PwC AS
279
98
(98)
141
(2)
418
Principal
activity
%
interest
held**
Total
assets*
Shipping
40%
14
Shipping
Shipping
Shipping
Shipping
Offshore
drilling
technology
36%
30%
27%
27%
371
29
890
763
248
607
487
70
120
119
6
2
10
34%
15
13
(2)
Shipping
Shipping
Shipping
Real estate
Machine
works/
services
Floating
Crane
Holding of
technology
rights
30%
35%
50%
50%
438
540
114
70
364
280
92
69
51
81
38
5
(14)
27
(2)
-
34%
25%
19
14
34%
1
3,266
1
2,156
516
28
Total
liabilities* Revenue*
Profit/
(loss) for
the year*
107
Notes
2012
Associates and
country of incorporation
Reporting
date
Name of
auditor
Mkster Supply AS (Norway)
31/12/2013
Mkster Supply KS (Norway)

Island Offshore LNG AS (Norway)
Island Offshore LNG KS (Norway)
Rem Supply AS (Norway)
31/12/2013
31/12/2013
31/12/2013
31/12/2013
Ernst &
Young AS
Ernst &
Young AS
PwC AS
PwC AS
PwC AS
Castor Drilling Solution AS

(Norway)
Olympic Green Energy KS
(Norway)
Olympic Subsea KS (Norway)
DOF Iceman AS (Norway)
Bridge Eiendom AS (Norway)
31/12/2013
PwC AS
31/12/2013
31/12/2013
31/12/2013
31/12/2013
BDO AS
BDO AS
PwC AS
Deloitte AS
AS Dameco (Norway)
31/12/2013
Taklift AS (Norway)
Brevik Technology AS (Norway)
Total
BDO AS
Revisjons31/12/2013 selskapet AS
31/12/2013
PwC AS
Principal
activity
%
interest
held**
Total
assets*
Shipping
40%
14
Shipping
Shipping
Shipping
Shipping
Offshore
drilling
technology
36%
30%
27%
49%
395
24
918
797
277
687
530
54
27
107
(2)
(2)
(12)
4
23%
17
(5)
Shipping
Shipping
Shipping
Real estate
Machine
works/
services
Floating
Crane
Holding of
technology
rights
30%
35%
50%
50%
452
509
56
71
367
297
31
69
17
82
3
(40)
5
1
(2)
34%
25%
19
14
34%
1
3,275
1
2,266
309
(51)
Total
liabilities* Revenue*
Profit/
(loss) for
the year*
* The financial information provided in the table above is not adjusted for the percentage ownership held by the Group, is unaudited and are
estimates provided by management of each entity. As a result of this, the profit/loss figures reported in the Statement of Comprehensive
Income, as our share of profit in associates, will consist of this years estimates +/- any deviations between prior period estimate and actual
figures reported by the associated companies for that same period.
** The percentage interest held shows direct ownership in the associated company.
8 Other investments
Group
Restated
Non-current investments
Available for sale financial assets:
- Equity securities
Total
REM Offshore ASA

Moldekraft AS
Klosterya Vest Holding AS
Shares in other companies
Total
2013
Share %
5%
8%
6%
n/m
2013
52
5
3
2
62
2012
62
62
11
11
Share %
0%
8%
6%
n/m
2012
5
3
3
11
The equity securities have been subject to a fair value assessment and no significant changes to fair values were
identified.
108
9 Interest-bearing receivables
Non-current
Interestbearing receivables due from:
-Related parties
-Third parties
Total
Current
Interestbearing receivables due from:
-Related parties
-Third parties
Total
Lowest
interest
rate
2013
Highest
interest
rate
NIBOR
NIBOR
+ 2%
+ 3%
NIBOR
NIBOR
+ 2%
+ 3%
NIBOR
NIBOR
+ 2%
+ 3%
NIBOR
NIBOR
+ 2%
+ 3%
Group
Amounts
144
57
201
51
-
Lowest
interest
rate
2012
Highest
interest
rate
NIBOR
NIBOR
Amounts
37
+ 2%
+ 3%
NIBOR
NIBOR
+ 2%
+ 3%
45
82
n/m
n/m
NIBOR
NIBOR
+ 2%
+ 7,5%
80
80
51
These interest-bearing receivables are non-trade in nature and are unsecured. The non-current receivables are not
expected to be repaid within the next 12 months.
Amounts due from related parties pertain mainly to associated companies.
Company
2013
2012
Interest
Interest
rate Amounts
rate
Amounts
Non-current
Interestbearing receivables due from
Vard Group AS
3m NIBOR
+ 2%
3m NIBOR
600
600
+ 2%
The non-current interest-bearing receivables consists of a loan that is repayable based on 3 months written notice.
The loan is not expected to be repaid in 2014.
10 Other receivables
Prepayments
Deposits
VAT, taxes & other social expenses
Derivative financial instruments (note 31)
Other receivables
Total
Group
2013
24
2
17
32
5
80
2012
8
3
7
18
This is not applicable for the Company.
109
Notes
11 Deferred tax assets and liabilities

(A) RECOGNIZED DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES:
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.
Deferred tax assets and deferred tax liabilities are related to the following items:
Assets
Group
Employee benefits
Projects under construction
Tax losses
Accounts receivable
Provisions
Others
Total
2013
70
(7)
16
79
2012
10
5
(67)
9
1
154
9
121
2013
5
(118)
1
55
(4)
(61)
Liabilities
2012
(6)
(18)
(1)
1
7
(68)
(85)
(B) MOVEMENT IN TEMPORARY DIFFERENCES DURING THE YEAR

Group
At 1 January 2013
(Charged)/credited to profit or loss
Other adjustments
At 31 December 2013
At 1 January 2012
(Charged)/credited to profit or loss
At 31 December 2012
Property,
plant and
equipment
Employee
benefits
Construction
work in
progress
Tax
losses
Others
Total
4
71
75
5
(5)
-
(85)
(40)
(125)
8
13
(5)
16
2
(1)
1
161
(106)
55
(59)
55
(4)
36
(13)
(5)
18
2
2
4
8
(3)
5
(135)
50
(85)
8
8
9
(7)
2
115
46
161
(59)
1
(1)
(59)
(52)
89
(1)
36
Trade
receivables Provisions
(C) UNRECOGNIZED DEFERRED TAX ASSETS

Deferred tax assets have not been recognized in respect of unreocognised tax losses amounting to NOK 226 million
(2012: NOK 48 million), which do not have expiry dates.
Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable
profits in certain of the Groups subsidiaries will be available against which the Group can utilize the benefit therefrom.
The tax losses are subject to agreement by the tax authorities and compliance with the tax regulations in the
respective countries in which the entities of the Group operate.
110
12 Pension assets and pension liabilities

Vard Holdings Limited has no employees, and hence no pension arrangements.
The Groups Norwegian companies mainly cover their pensions through group pension plans in life insurance
companies. The pension plans are either defined benefit plans or group contribution plans. The defined benefit plans
are accounted for according to FRS 19R Employee Benefits as of 1 January 2012. Comparable figures have been
restated accordingly. Refer also note 2 e).
The Groups companies outside Norway have pension plans based on local practice and regulations.
The Group also has uninsured pension liabilities for which provisions have been made.
Actuarial calculations have been made to determine pension liabilities and pension expenses in connection with the
Groups defined benefit plans. During 2013 the Group cancelled two out of three remaining defined benefit plans. The
plan that remains is only covering retired employees.
The following assumptions have been used in the calculations:
Group
Assumptions
Expected return
Discount rate
Wage growth
Social security base adjustment
Pension adjustment
Expected remaining lifetime
Age
20
40
60
80
2013
2.20%
2.20%
3.25%
3.00%
0.00%
2012
4.00%
4.00%
3.75%
3.50%
0.60%
Men
68
47
26
9
Women
72
50
29
11
Group
Expenses recognized in profit or loss

Current service cost
Gain from change in demographic assumptions
Cancellation of defined benefit plans
Net pension expenses
Contribution plans (employers contribution)
Total net pension expenses
2013
4
(7)
(10)
(13)
40
27
2012
4
(3)
1
41
42
111
Notes
Group
Net pension funds and liabilities
Net present value of funded obligations
Adjustment to equity from adopting FRS 19R
Defined benefit obligation unfunded plans
Present value of net obligations
Net pension expense
Remeasurement through Other Comprehensive income
Employers contribution
Cancellation of defined benefit plans
Net liability recognized on statement of financial position
Presented as:
Non-current asset
Non-current liability
Total
2013
15
15
4
(7)
(3)
(10)
(1)
2012
5
9
23
37
4
(3)
(4)
34
4
(3)
1
1
(35)
(34)
Group
Movements in the fair value of plan assets

Fair value of plan assets as of 1 January
Expected return
Paid in premium
Actuarial gain and losses
Benefit payments
Transfer to new defined contribution plan
Cancellation of defined benefit plan
Fair value of plan assets as of 31 December
2013
26
1
2
(1)
(22)
(5)
1
Changes in net liability recognized on the

statement of financial position are as follows:
Net liability as of 1 January
Adjustment to equity from adopting FRS 19R
Net expense recognized
Pension contribution
Change in liability related to AFP-scheme
Net liability as of 31 December
2013
34
(13)
(3)
(19)
(1)
The major categories of plan assets as a percentage

of total plan assets are as follows:
Bonds
Money market
Equity instruments and shares
Property
Others
Total
112
2012
23
1
3
(1)
26
Group
2012
28
9
1
(4)
34
Group
2013
51%
19%
13%
18%
0%
100%
2012
53%
19%
9%
18%
1%
100%
13 Share-based payment arrangements

Description of the share-based payment arrangements
At 31 December 2013, following the cancellation of the share option scheme effective on 13 August 2013, the Group
does not have any share-based payment arrangements.
On 9 May 2011, the Company granted 17,070,000 options to a number of employees out of the total 17,700,000 options
available within the Scheme. The share option scheme has been accounted for according to FRS 102. During 2013 a
total number of 10,940,000 options were exercised and settled by payment of equivalent value in cash, amounting to
NOK 9 million, in leu of issuing shares. The remaining share options expired on 13 August 2013.
Employee expenses
Equity-settled share-based payment:
Share options
Total employee expenses
2013
2012
9
9
12
12
14 Inventories
Group
Inventories comprise the following items:
Raw materials
Work in progress
Finished goods
Total
2013
362
18
2
382
2012
324
52
4
380
Raw materials comprise mainly steel plates and steel profiles, pipes and pipe fittings, tools and consumables which
are used in the Groups construction projects.
15 Construction work in progress

Aggregate costs incurred and attributable
profits recognized (less losses recognized) to-date
Progress billings
Total
Presented as:
Current asset
Current liability
Total
Advances received on construction contracts
Provisions for loss on contracts
Group
2013
2012
8,236
(3,091)
5,145
6,835
(2,862)
3,973
6,136
(991)
5,145
3,091
(924)
5,491
(1,518)
3,973
2,862
(357)
No retention sums are included in progress billings. This is not applicable for the Company.
113
Notes
Group
Provisions for loss on contracts
At 1 January
Additional provisions
Amounts used
Unused amounts reversed during the period
At 31 December
2013
357
1,004
(340)
(97)
924
2012
92
393
(73)
(55)
357
The provision amounts are recorded as reduction of construction in progress in the statement of financial position.
16 Trade and other receivables

Trade and other receivables consist of the following items:
Group
Trade receivables (a)
Allowance for impairment of trade receivables
Total
2013
263
(55)
208
2012
322
(29)
293
Advances to suppliers
VAT and tax receivables
Receivables from related parties (b)
Derivative financial instruments and firm commitments (c)
Other receivables (d)
Total
1,019
323
20
457
49
2,076
1,055
237
261
74
1,920
For the Company, trade and other receivables consists of short term intercompany receivables toward Vard Group AS,
Vard Promar SA and Vard Singapore Pte Ltd of NOK 47 million (2012: NOK 50 million).
(a) At 31 December 2013, trade receivables for the Group did not include any retention sums relating to construction
work in progress or completed contracts.
(b) The amounts due from related parties are interest-free, unsecured and repayable on demand.
(c) The amounts includes market value of derivatives for hedging and hedged firm commitments.
(d) Other receivables contain sundry receivables owing from external parties.
114
17 Cash and cash equivalents

Group
2013
188
1,557
1,745
Short-term investments with maturity less than three months

Cash and bank deposits
Company
2013
2012
67
24
67
24
2012
137
2,300
2,437
Of the total cash and bank balances as of 31 December 2013, an amount of NOK 82 million (2012: NOK 19 million)
is held in fully restricted escrow accounts, which is mainly security for guarantees made to customers on prepaid
installments and restricted bank accounts for employees tax deductions.
18 Capital and reserves

GROUP AND COMPANY
Paid up capital
On 1 January and 31 December
Ordinary shares
2013
2012
No. of shares
Amount (NOK
No. of shares
Amount (NOK
(millions)
millions)
(millions)
millions)
1,180
4,138
1,180
4,138
The ordinary shares issued by the Company have no par value and carry equal rights to voting, distribution of
profits and dividends and to the residual assets of the Company in liquidation.
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one
vote per share at meetings of the Company.
Issue of ordinary shares

There were no ordinary shares issued in FY013. There are no treasury shares.
The Group issued share options in FY2011 (see Note 13). No shares or share options were issued in FY2013. A total
number of 10,940,000 share options were exercised during FY2013 with settlement in cash (see Note 13).
GROUP
The restructuring reserve as presented in the Groups consolidated financial statements represents the difference
between the cost of the acquisition for the restructuring and the amount of share capital of Vard Group AS at the date
of acquisition.
Currency translation reserve

The currency translation reserve comprises foreign currency differences arising from the translation of the financial
statements of foreign operations, as well as from the translation of monetary items that form part of the Groups net
investment in a foreign operation.
Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets, as
well as the Groups share of fair value reserve of its associated companies, until the investments are derecognized or
impaired.
115
Notes
Share option reserve

Share option reserve represents the equity-settled share options. The reserve is made up of the cumulative value of
services received from employees relating to such awards.
COMPANY
The restructuring reserve presented in the Companys statement of financial position at 31 December 2013 comprises
the difference between the cost of acquisition of the Vard Group AS combined group recorded in accordance with FRS
27.38B, and the paid up capital of the Company issued for the acquisition.
Dividends
During FY2013 the Company did not pay any dividends to owners of the company (NOK 1,277 million in FY2012). The
Directors have not recommended a payment of a dividend for FY2013.
The following tax exempt (one-tier) dividends were declared and paid by the Group and Company:
Group and Company

Paid by the Company to owners of the Company
Final dividend paid for prior financial year (a):
Special dividend paid for current financial year (b):
Total
Paid by a subsidiary to non-controlling interests
Paid by a subsidiary to non-controlling interests (c):
Total
2013
2012
Amount
Amount
(NOK millions) (NOK millions)
-
548
729
1,277
1
1
3
3
(a) 10.0 Singapore cents per qualifying share in FY2012

(b) 13.0 Singapore cents per qualifying share in FY2012
(c) Dividends paid to minorities in subsidiary companies.
This relates to the non-controlling interests in those subsidiaries (refer Note 36) where the Group owns less than 100%
of the equity shares.
19 Loans and borrowings

This note provides information about the contractual terms of the Groups interestbearing loans and borrowings. For
more information about the Groups exposure to interest rates and foreign currency risks, see Note 31.
Group
Current
Construction loan facilities (b)
Term loan facilities (a)
Total
116
2013
4,707
305
5,012
2012
3,351
34
3,385
Group
2013
673
673
Non-current
Term loan facilities (a)
Total
2012
545
545
Term loan facilities

-Norway
-Brazil
Total
2013
171
502
673
Non-current
2012
173
372
545
Current
2013
19
286
305
2012
27
7
34
(A) TERM LOAN FACILITIES

Innovation Norway
Vard Group AS has six secured loans with Innovation Norway as of 31 December 2013 (2012: six). The three most
material loans are NOK 37 million, NOK 36 million and NOK 21 million and mature respectively in 2025, 2024 and
2020. All of the loans, totalling NOK 125 million (2012: NOK 131 million), have fixed interest rates. The fixed rate loans
carry rates between 3.6% and 4.4%. All Innovation Norway loans are considered low risk secured loans. The loans
are secured by investments and fixed assets such as property, plant and equipment.
Nordea Bank
The long term Nordea Bank credit facility agreement is a USD 15 million investment facility to Vard Singapore Pte. Ltd.
The loan was used towards financing of investments with the purpose of building the Vietnam shipyard. The loan is
secured by pledge of shares and a parent guarantee issued by the Company, and matures in late 2014 and interest rate
is LIBOR + 1.125% p.a.
Brazil
With the purpose of modernization of the shipyard in Niteri, the Brazilian entity has a USD 1.9 million loan from the
Brazilian Development Bank (BNDES). A USD 0.9 million loan from FINAME, one of more integral subsidiaries of
BNDES, is used for equipment investments. The final installments of the loans mature in 2016. These facilities carry
interest rates between 3.5% and 10.0%, and are secured by fiduciary of shipyard equipment and machines.
In addition, Vard Niteri SA has short term credit facilities of USD 30 million and BRL 25 million with Ita BBA SA and
Banco do Brasil SA, respectively. Also, Vard Niteri SA has a long term yard construction loan facility of USD 1.6 million
and several minor long term loans in USD, total facility 0.35 million and BRL, total facility 1,8 million. These facilities
carry interest rates between 3.5% and 10.0%, and are secured by fiduciary lien of equipment.
Also, Vard Promar SA has a long term financing agreement of BRL 154 million maturing in 2029 (interest rate is 3.5%
for local content and 4.5% on imported content). The loan will be secured by mortgage and statutory lien of ownership
of land, machinery and equipment.
(B) CONSTRUCTION LOAN FACILITIES

Construction loan facilities
- Vard Group AS
- Vard Niteri SA
- Vard Promar SA
- Vard Singapore/Vietnam
Total
2013
2,453
1,852
402
4,707
2012
1,863
1,387
92
9
3,351
117
Notes
Construction loan facilities

Fixed rates
Variable rates
Total
Interest rates 2013

Lowest
Highest
3.50%
4.50%
2.50%
3.60%
2013
2,254
2,453
4,707
2012
1,480
1,871
3,351
Construction loan facilities are project specific and these borrowings are secured by the vessels under construction.
The facilities are drawn down as the construction of the projects progresses. The loans will be fully repaid from
the proceeds received from the client upon the delivery of the completed vessels. More specifically, the Groups
construction loan facilities consist of the following (by entity):
Vard Group AS
Vard Holdings Ltd Groups Norwegian shipyards have established framework agreements with a Norwegian bank
stipulating loan terms, conditions, and structures. Construction financing for projects is established on a
project-by-project basis within the agreed-upon frameworks. The Romanian yards are largely financed via the Groups
Norwegian yards in the form of partial payments on hull building contracts. Nordea Bank Norge ASA was per year end
2013 the provider of all construction financing to the Norwegian shipyards. As of 31 December 2013 the Nordea facility
consisted of a construction facility, a guarantee facility and a flexible facility (e.g. to bridge financing pending approval
of a construction loan) of NOK 3,392, NOK 500 and NOK 150 million, respectively. The NOK 500 million facility includes
guarantees in connection with sale of design and equipment packages in the aggregate amount of up to NOK 200
million. In addition to the maximum drawdown within the NOK 4,042 million frame, restrictions to minimum working
capital of NOK 900 million and minimum equity of NOK 2,100 million apply per 31 December 2013. Each construction
loan is due at delivery of the vessel.
Vard Niteri SA
Vard Niteri SA has a construction financing with BNDES and Banco do Brasil SA on a project-by-project basis. Vard
Group AS and Vard Holdings Ltd. provide guarantees related to these agreements.
As of 31 December 2013, the BNDES construction financing applies to three shipbuildings and Bando do Brasil SA
applies to one shipbuilding project. The construction loans are due at delivery of the vessel. At 31 December 2013,
the BNDES and Banco do Brasil SA project financing facilities were limited to USD 250 million and USD 62 million,
respectively.
Vard Vung Tau Ltd
Vard Vung Tau Ltd. has a construction financing agreement with Nordea Bank in Singapore established by the holding
company Vard Singapore Pte. Ltd. Vard Holdings Ltd and Vard Group AS provides guarantees related to this agreement.
This construction facility works more like a working capital facility and for specific projects being the shipbuilding
projects in Vard Vung Tau Ltd. This is a revolving multi-currency facility subject to approval by Nordea and limited to
USD 15 million as of 31 December 2013.
Vard Promar SA
Vard Promar SA has construction financing with Banco do Brasil SA on a project-by-project basis. Vard Holdings
Limited will provide guarantees related to this agreement. As of 31 December 2013, the Banco do Brasil construction
financing applies to the shipbuilding of eight vessels (EP-01 to EP-08). At 31 December 2013, Banco do Brasil SA
project financing facilities were limited to BRL 289 million (local content) and USD 72 million (imported content).
The fair values of the loans and borrowings are disclosed in Note 31. The carrying amounts of current borrowings and
non-current borrowings bearing variable market rates approximate their fair values.
118
C) COVENANTS
Some of the Groups loan agreements are subjected to covenant clauses, whereby the Group is required to meet
certain key financial ratios on working capital and book value of equity. The Group complied with the borrowing
covenants throughout each of the periods presented in the financial statements.
20 Other payables (non-current)

Other non-current payables consists mainly of liabilities on hedge derivatives. The other payables owing from
third-parties are unsecured, interest free, and no payment is expected within the next 12 months.
21 Provisions
Other non-current payables consists mainly of liabilities on hedge derivatives. The other payables owing from
third-parties are unsecured, interest free, and no payment is expected within the next 12 months.
Group
At 1 January 2013
Provisions made during the year
Provisions utilized during the year
Provisions reversed during the year
At 31 December 2013
Representing:
Noncurrent
Current
Total
Group
At 1 January 2012
Provisions made during the year
Provisions utilized during the year
Provisions reversed during the year
At 31 December 2012
Representing:
Noncurrent
Current
Total
Warranties
(Note A)
281
142
(84)
(169)
9
179
Others
402
(112)
(112)
6
184
Total
683
142
(196)
(281)
15
363
18
161
179
96
88
184
114
249
363
Warranties
(Note A)
348
226
(124)
(164)
(5)
281
Others
400
191
(155)
(28)
(6)
402
Total
748
417
(279)
(192)
(11)
683
38
243
281
89
313
402
127
556
683
Other provisions include environmental clean-up costs of NOK 75 million (2012: NOK 75 million) and legal claims of
NOK 21 million (2012: NOK 62 million), as well as several other liabilities faced during the normal course of business,
and provided for according to FRS 37, totalling NOK 89 million (2012: NOK 265 million).
119
Notes
(A) WARRANTIES
Provisions for warranties relate to completed contracts and contractual guarantee work after vessel delivery. The
warranty period is normally one to two years, but some of the provisions may relate to a longer period.
Provisions for warranties are recognized based on past observable data for corresponding projects and experience
analysis.
22 Trade and other payables

Group
Trade payables
Accrued expenses
Salary and social costs
VAT
Derivative financial instruments and firm commitments*
Other liabilities
Total
2013
1,386
434
158
167
444
36
2,625
2012
1,540
684
160
139
241
37
2,801
2013
4
2
6
Company
2012
4
4
* The amounts includes market value of derivatives for hedging and hedged firm commitments.
23 Other current liabilities

NOK 1 million in other current liabilities for the year 2013 represents sundry liability to external parties. At 31
December 2012, other current liabilities of NOK 7 million consisted of NOK 3 million payable to STX Europe AS and
NOK 4 million payable to STX Corporation Co., Ltd.
24 Revenue
Group
Construction contract revenue
Sale of goods
Rendering of services
Total
120
2013
10,944
66
145
11,155
2012
10,700
108
321
11,129
25 Salaries and related costs

Group
Salaries and wages
Social security contributions
Pension costs (Note 12)
Other expenses
Total
2013
1,679
314
27
109
2,129
2012
1,477
303
42
131
1,953
Directors fees amounting to NOK 0.6 million are included in salaries and related costs paid to directors of the
Company during the financial year (2012: NOK 0.6 million). Remuneration to key management personnel are disclosed
in Note 35.
26 Other operating expenses

Group
Other operating expenses include:
Auditors remuneration:
- auditors of the Company
- other auditors
Non-audit fees:
- other auditors
Rent and leasing expenses (Note 34)
Office and administration expenses
Research and development
Travel and employee expenses
Marketing and communication
Repair and maintenance
IT expenses
Consultants and other external sevices
Sundry operating expenses
Total
2013
2012
1
7
1
6
2
52
107
7
57
42
87
63
48
89
562
3
38
121
13
74
30
58
48
42
115
549
Other operating expenses are mainly related to expenses incurred by Vard Group AS (45% in FY2013 and 46% in
FY2012).
121
Notes
27 Financial income and financial costs

Group
Financial income
Interest income on loan and receivables, including bank deposits
Foreign exchange gain
Other financial income
Total
Financial costs
Interest expense on loans and borrowings
Foreign exchange loss
Losses on financial receivables
Bank charges
Other financial expenses
Total
Net financial items
2013
2012
51
70
2
123
53
72
4
129
(9)
(79)
(20)
(6)
(1)
(115)
8
(13)
(57)
(37)
(2)
(2)
(111)
18
28 Income tax expenses

The Group is subject to income tax on an entity basis on profit arising or derived from the tax jurisdictions in which the
Group entities are domiciled and operate.
(A) INCOME TAX RECOGNIZED IN PROFIT OR LOSS

Group
122
2013
2012
Current tax expense:

Current year
Over provision in respect of prior years
Total
(217)
33
(184)
(532)
9
(523)
Deferred tax expense:

Origination and reversal of temporary differences
Over provisions in respect of prior years
Changes in tax rates
Changes in recognized tax losses
Total
Total income tax expense
(27)
3
(1)
12
(13)
(197)
91
(2)
89
(434)
(B) INCOME TAX RECOGNIZED IN OTHER COMPREHENSIVE INCOME
Group
Before
tax
2013
Tax
(expense)/
benefit
Net
of tax
101
80
181
(3)
(3)

Exchange differences on
translation of foreign operations
Income tax on translation exchange difference
on monetary items considered as part of the
Groups net investment in foreign subsidiary
Total
Before
tax
2012
Tax
(expense)/
benefits
Net
of tax
101
(19)
(19)
77
178
(58)
(77)
1
1
(57)
(76)
(C) RECONCILIATION OF EFFECTIVE TAX RATE

%
Profit before tax

Tax at the domestic rates applicable to profits
in the countries where the Group operates
Over provision in respect of prior years
Income not subject to tax
Non deductible expenses
Utilization of previously unrecognized tax assets
Tax losses for which no deferred income tax
asset was recognized
Other deferred tax asset items not recognized
Withholding tax
Change in tax rates
Total income tax expense in profit or loss
2013
Amount
497
2012
Amount
1,225
(5.2%)
7.2%
14.1%
(8.2%)
0.6%
(26)
36
70
(41)
3
(26.0%)
0.6%
0.4%
(2.8%)
1.6%
(318)
7
5
(34)
20
(35.8%)
(12.3%)
(0.2%)
0.2%
39.6%
(178)
(61)
(1)
1
(197)
(3.9%)
0.0%
(5.4%)
0.0%
35.4%
(48)
(66)
(434)
The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.
123
Notes
29 Earnings per share and diluted earnings per share

The Groups basic and diluted earnings per share are calculated as follows:
Group
Restated
Net profit attributable to ordinary shareholders of the Company

Weighted average number of shares (million)
Basic earnings per share (NOK per share)
Basic earnings per share (SGD cents per share)
2013
357
1,180
0.30
6.27
2012
804
1,180
0.68
14.92
Adjusted weighted average number of shares (million) (in millions)

Diluted earnings per share (NOK per share)
Diluted earnings per share (SGD cents per share)
1,180
0.30
6.27
1,182
0.68
14.89
31/12/13
4.8089
31/12/12
4.5570
Exchange rates:
SGD/NOK
The SGD amounts are translated from NOK based on the exchange rates prevailing at the reporting date as shown above.
30 Operating segments
(A) REPORTABLE SEGMENTS
The application of FRS 108 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker, which for the Group is the
CEO, to make decisions about resource allocation and performance assessment.
The main business activity and core business of the Group is design and construction of offshore and specialized
vessels. This segment comprises all vessels that traditionally have been built within the Group. This is the core
business of the Group and the Group is neither actively pursuing nor engaging in other areas of business. Therefore,
management is of the view that the Group has only one single reportable segment.
(B) GEOGRAPHICAL INFORMATION

The Group has activity in seven (2012: seven) countries and principally in Norway. In presenting geographical
information, segmental revenue is based on the geographical location of companies within the Group. Segmental assets are based on the geographical location of the assets and the expenditure incurred.
Revenue
Norway
Romania*
Singapore
Vietnam**
Brazil
Other countries
Total
2013
9,444
90
383
1,232
6
11,155
2012
9,046
106
536
1,436
5
11,129
Non-current assets
2013
2012
1,399
1,273
584
382
30
201
166
1,067
588
3,281
2,409
* Revenue in Romania only relates to external revenues.

** Revenues from Singapore and Vietnam must be considered in total, as Vietnam operates principally as a subcontractor
of the Singapore company.
124
(C) MAJOR CUSTOMERS

The Group has a few single customers which have generated revenue individually of 10% or more of the Groups
revenue:
Customer 1
Customer 2
Customer 3
Customer 4
Total
%
19%
15%
14%
12%
2013
2,136
1,719
1,556
1,363
6,774
%
19%
5%
26%
10%
2012
2,075
556
2,844
1,084
6,559
31 Financial risk management objectives and policies

OVERVIEW
The main risks arising from the Groups financial instruments are credit risk, market risk (mainly interest rate risk
and foreign currency risk) and liquidity risk. The Group enters into derivative transactions, primarily forward foreign
currency contracts, to manage the Groups exposure risks arising from its operations and sources of finance. It is the
Groups policy that no trading of derivatives shall be undertaken.
The Board of Directors reviews and agrees policies for managing each of these risks.
CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Groups loans and receivables.
The Group has an established process to evaluate the creditworthiness of its prospective customers. An internal credit
review and rating is carried out on the prospective customers prior to contract signing. The Group requires customers
to have the necessary funding in place at signing of the shipbuilding contract. In instances where the customers
funding is not in place, the Group would, where appropriate, obtain collaterals, including bank guarantees and letters
of credit, from customers.
There is no significant concentration of credit risk on outstanding financial instruments as at the reporting date.
The Groups maximum exposure to credit risk is represented by the carrying values of each financial asset, including
derivative financial instruments with positive fair values, as follows:
Interest-bearing receivables (Note 9)

Other receivables less dervative financial
instruments, non-current (Note 10)
Trade and other receivables less derivative financial instruments,
advances to suppliers, VAT and tax receivables (Note 16)
Derivative financial instruments (Note 10, 16)
Cash and cash equivalents (Note 17)
Total
2013
252
Group
2012
162
2013
600
Company
2012
600
48
18
228
242
1,745
2,515
293
199
2,437
3,109
47
67
714
50
24
674
125
Notes
Cash and cash equivalents are placed in banks and financial institutions which are regulated. Trade and other
receivables that are not past due are with counterparties with good collection track record and credit rating with the
Group.
The Group has construction WIP in excess of prepayments that are unbilled. The counterparties have good collection
track records and a positive credit rating with the Group.
The age analysis of trade receivables that are not impaired is as follows:
Group
Not Due
0 - 30 days
31 - 120 days
121 - 365 days
More than 365 days
Total
2013
80
48
39
41
208
2012
84
66
100
43
293

Allowance for impairment losses for trade receivables:
Group
Gross amount
Less: Allowance for impairment losses
Total
At 1 January
Allowance made/(written back)
Utilized
At 31 December
2013
263
(55)
208
2012
322
(29)
293
29
37
(11)
55
35
(2)
(4)
29

Trade receivables that are individually determined to be impaired at the reporting date relate to non-shipbuilding
receivables.
Based on historic defaults rates, the Group believes that, apart from the above impaired receivables, no impairment
allowance is necessary in respect of trade receivables not past due and past due due to the good credit records of the
Groups customers.
Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Groups and the Companys financial
instruments will fluctuate because of changes in market interest rates.
The Groups exposure to fluctuations in interest rate relates primarily to construction loan facilities. Interest rate risk
is managed on an on-going basis with the primary objective of limiting the extent to which net interest expense could
be affected by adverse movements in interest rates.
126
Normally the Group will enter into construction loans with floating rates in Norway and Singapore/Vietnam and fixed
rate construction loans in Brazil (as fixed rate loan facilities are more commonly available in Brazil than floating rate
loan facilities).
No derivative financial instruments are entered into to manage the interest rate risks of the Group.
At the reporting date, the interest rate profile of the Groups interest bearing financial instruments was:
2013
Group
2012
Company
2013
2012
Fixed rate instruments

Financial assets (cash and cash equivalents)
Financial liabilities (loans and borrowings)
470
3,048
292
1,989
Variable rate instruments

Financial assets (cash and cash equivalents)
Financial assets (Interest bearing receivables)
Financial liabilities (loans and borrowings)
1,275
252
2,637
2,145
162
1,940
67
600
-
24
600
-
Sensitivity analysis
A change of 50 basis points (bp) in interest rates at reporting date would have affected profit or loss by the amounts
shown below. This analysis assumes that all other variables remain constant.
Group
Profit and loss
50bp
50bp
increase
decrease
Company
Profit and loss
50bp
50bp
increase
decrease
31 December 2013
Variable rate instruments (net)
Cash flow sensitivity (net)
(4)
(4)
4
4
2
2
(2)
(2)
31 December 2012
Variable rate instruments (net)
Cash flow sensitivity (net)
1
1
(1)
(1)
2
2
(2)
(2)
Foreign currency risk

As a part of the operations take place in countries other than Norway (such as Romania, Singapore, Vietnam and
Brazil), the Groups financial performance can be affected, especially by movements in the EUR/NOK and USD/NOK
currency rates as well as local (functional) currency versus foreign currencies. Where contract prices and costs are in
the same foreign currency, there is an economic hedge and the currency exposure of such contracts is mitigated.
The Group utilizes forward foreign currency contracts to hedge its currency risk for contracts in foreign currencies
where exposure is significant. The Group uses forward contracts purely as a hedging tool and does not use forward
foreign currency contracts for trading purposes.
127
Notes
The Groups and Companys exposure to foreign currency risk when compared to functional currencies are as follows:
Group
Financial assets
Total financial assets
Financial liabilities
Loans and borrowings
Total financial liabilities
Net financial assets / (liabilities)
EUR
31 December 2013
USD
SGD
EUR
31 December 2012
USD
SGD
17
159
176
30
73
103
213
565
778
45
17
61
5
5
(92)
(92)
84
(2,768)
(280)
(3,048)
(2,945)
(162)
(162)
617
(1,486)
(1,486)
(1,425)
Amounts in the table are in NOK million and recalculated with foreign currency rate as of 31 December.
A significant portion of the net USD liability is naturally hedged against the foreign exchange from anticipated USD sale
transactions.
Company
Financial assets
EUR
-
31 December 2013
USD
SGD
1
1
EUR
31 December 2012
USD
SGD
5
5
Amounts in the table are in NOK million and recalculated with foreign currency rate as of 31 December.
The assessment of the foreign currency exposure is based on the Groups and Companys monetary items.
Sensitivity analysis
A strengthening of the following foreign currencies as indicated below against the functional currencies of the
Company and its subsidiaries at the reporting date for the Groups and Companys monetary items, including monetary
forward foreign currency contracts, would have increased/(decreased) profit and loss by the amounts shown below.
This analysis is based on foreign exchange rate variances that the Group considered to be reasonably possible at the
end of the reporting period. This analysis also assumes that all other variables remain constant.
USD (5% strengthening)

EUR (5% strengthening)
Total
Group 1
2013
2012
(447)
(111)
99
33
(348)
(78)
Group 2
2013
(112)
3
(109)
2012
(54)
16
(38)
1) Including derivatives held for hedging.

2) Excluding derivatives held for hedging.
The effect of foreign currency risk is immaterial for the Company.

A weakening of the above foreign currencies against the functional currencies of the Company and its subsidiaries at
the reporting date would have equal but opposite effects on the above currencies to the amounts shown above, on the
basis that all other variables remain constant.
128
Derivatives currency
The Group utilizes forward contracts to hedge currency risk. The table below summarizes the notional amounts of all
the contracts in the Group separated into the relevant currencies.
Group
NOK
USD
EUR
Other
Total buy
Buy
9,525
612
3,996
1,730
15,863
2013
Sell
4,372
9,934
1,345
15,651
Net
5,153
(9,322)
2,650
1,730
211
Buy
2,410
523
1,318
682
4,933
2012
Sell
1,833
2,089
858
11
4,791
Net
577
(1,566)
460
671
142
Liquidity risk
Liquidity risk is the risk that the Group will encounter in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group monitors its net operating cash flows based
on individual construction contracts. The Groups objective is to maintain a balance between continuity of funding and
flexibility through the use of available credit facilities and construction financing.
129
Notes
The table below analyses the maturity profile of the Groups and Companys financial liabilities (including derivative
financial instruments) based on the gross contractual undiscounted cash flow:
Group
At 31 December 2013
Nonderivative financial liabilities
Trade and other payables (Note 22)
Construction loans (Note 19)
Loans and borrowings (Note 19)
Total
At 31 December 2012
Construction Loans (Note 19)
Loans and borrowings (Note 19)
Other current liabilities (Note 23)
Total
Company
At 31 December 2013
Total
At 31 December 2012
Total
Carrying
amount
Total
contractual
cash flow
Within
1 year
Within
1 5 years
> 5 years
(2,149)
(4,707)
(978)
(7,834)
(2,149)
(4,909)
(1,152)
(8,210)
(2,149)
(4,909)
(380)
(7,438)
(319)
(319)
(453)
(453)
(2,560)
(3,351)
(579)
(7)
(6,497)
(2,560)
(3,501)
(751)
(7)
(6,819)
(2,560)
(3,501)
(54)
(7)
(6,122)
(237)
(237)
(460)
(460)
Carrying
amount
Total
contractual
cash flow
Within
1 year
Within
1 5 years
> 5 years
(6)
(6)
(6)
(6)
(6)
(6)
(4)
(4)
(4)
(4)
(4)
(4)
The Company has issued financial guarantees in relation to certain of the Groups activities which involves advance
payment guarantees (customers, suppliers), foreign exchange guarantees, construction loan guarantees and
minor performance bonds. However, based on materiality, none of these have been recognized and included in
the above table, given that the counterparties are not gaining access to a new asset pool or significant enhanced
creditworthiness.
130
Accounting classification and fair values
Fair value disclosures

The fair values of financial assets and financial liabilities, together with the carrying amounts shown in the statement
of financial position, are as follows:
Group
31 December 2013
Financial assets
Other investments
receivables
Other non-current receivables
Interest-bearing receivables
Total
Non-current loans and borrowings
Other non-current payables
Current loans and borrowings
Total
31 December 2012
Financial assets
Other investments
receivables
Other non-current receivables
Interest-bearing receivables
Non-current loans and borrowings
Other non-current payables
Current loans and borrowings
Total financial liabilities
Note
Fair
value
Hedging
instruments
Fair
value
Availablefor-sale
Amortized
cost
Loans and
receivables
Amortized
cost
Financial
liabilities
Total
carrying
amount
Fair
value
62
62
62
9
10
16
9
17
32
210
242
62
201
48
208
51
1,745
2,253
201
80
418
51
1,745
2,557
201
80
418
51
1,745
2,557
19
20
22
19
23
(32)
(229)
(261)
(673)
(5,012)
(1)
(5,686)
(673)
(32)
(229)
(5,012)
(1)
(5,947)
(575)
(32)
(229)
(5,012)
(1)
(5,849)
11
11
11
9
10
16
9
17
199
199
11
82
18
74
80
2,437
2,691
82
18
273
80
2,437
2,901
82
17
273
80
2,437
2,900
19
20
22
19
23
(96)
(96)
(545)
(5)
(96)
(3,385)
(7)
(4,038)
(545)
(5)
(96)
(3,385)
(7)
(4,038)
(515)
(5)
(96)
(3,385)
(7)
(4,008)
Interest rates used for determining fair value

The interest rates used to discount estimated cash flows, when applicable, are based on managements best estimates
and the discount rates are the market interest rates for a similar instrument at the reporting date. The discount rates
used for non-current loans and borrowings for both years were 2%-6%.
131
Notes
Fair value hierarchy

The table below analyses financial instruments carried out at fair value, by valuation methods as at 31 December 2013
and 2012.
Group
At 31 December 2013
Assets
Forward contracts used for hedging (non-current)
Forward contracts used for hedging (current)
Total assets
Level 1
Level 2
Level 3
Total
52
32
210
294
10
10
62
32
210
304
Liabilities
Forward contracts used for hedging (non-current)
Forward contracts used for hedging (current)
Total liabilities
Total
(32)
(229)
(261)
33
10
(32)
(229)
(261)
43
At 31 December 2012
Assets
Forward contracts used for hedging
Total assets
199
199
11
11
11
199
210
Liabilities
Forward contracts used for hedging
Total liabilities
Total
(96)
(96)
103
11
(96)
(96)
114
The Company has no financial assets or liabilities carried at fair value.

The different levels of the fair value hierarchy are as follows:
Level 1 Fair values are measured based on quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 Fair values are measured using 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 3 Fair values are measured using inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
The following table shows a reconciliation from the beginning balances to the ending balances for fair value
measurements in Level 3 of the fair value hierarchy:
31 December 2013
At 1 January
Purchases
Write-down
At 31 December
Available for sale

financial assets
2013
2012
11
7
52
4
(1)
62
11
The fair value changes of Level 3 available-for-sale financial assets are considered immaterial.
132
DETERMINATION OF FAIR VALUES

Securities
The fair value of the available-for-sale equity instruments cannot be fair valued based on observable market data,
since the equity instruments held by the Group are not traded in an active market. Hence, the equity instruments are
included in level 3.
Derivatives
Fair value of forward foreign currency contracts is determined using the forward exchange rates at the reporting
date.
32 Acquisition of subsidiary and non-controlling interests

ACQUISITION OF SUBSIDIARIES IN 2013
Johangarden AS
On 28 June 2013, the Group acquired 100 percent of Johangarden AS (JGAS), a company incorporated in Norway. The
new subsidiary is based in Tennfjord, outside lesund and has two employees. Consequent to the acquisition, JGAS
became a subsidiary of Vard Electro AS, which is wholly-owned by Vard Group AS, a 100 percent held subsidiary of the
Company. JGAS owns busines premises in Tennfjord and Vard Electro AS will consolidate part of its operations at the
facilities owned by JGAS.
Consideration transferred
The consideration for the transaction was NOK 12.4 million, fully paid at closing, the consideration was satisfied in
cash.
Identifiable assets acquired and liabilities assumed

Non-current liabilities incl. long term loan
Total identifiable net assets and book value
Note
4
2013
11
1
1
(10)
(1)
2
Purchase price allocation

An excess value related to land and premises was recognized as a result of the acquisition as follows:
Note
Total consideration transferred
Book value of identifable net assets
Excess value related to land and premises
2013
12
(2)
10
The allocation of excess value to land and premises is based on a fair value appraisal of the property obtained in
relation to the acquisition of the company.
133
Notes
ACQUISITION OF SUBSIDIARIES IN 2012

Vard Design Liburna Ltd. (Liburna)
On 13 January 2012, the Group acquired 51 percent of Liburna Inzenjering d.o.o. (Liburna Engineering Ltd), a company
incorporated in Croatia. The new subsidiary is based in Rijeka and has 11 employees. Consequent to the acquisition,
Liburna became a subsidiary of Vard Design AS, which is wholly-owned by Vard Group AS, a 100 percent held
subsidiary of the Company. Liburna is an engineering company specializing in ship design, mainly focusing on offshore
vessels. Liburna is a long-time subcontractor of Vard Design AS and the acquisition is in line with the Groups strategy
of increasing its engineering capacity. Liburna was renamed as Vard Design Liburna Ltd.
Acquisition-related costs
The Group only incurred an insignificant amount of acquisition-related costs and this is included in other operating
expenses in the Groups statement of comprehensive income.
Newly incorporated subsidiaries during the year
The following subsidiaries have been incorporated during FY2013:
Vard Engineering Constanta SRL
On 29 August 2013, the Group, through Vard RO Holding SRL (70 %) and Vard Braila SA (30%), established Vard
Engineering Constanta SRL, with the purpose of strengthening engineering capacity in the Group by capitalizing on
engineering capacity available in Romania. The company is located in Constanta, Romania with a share capital of NOK
2,560 thousand.
Seaonics Polska sp. z o.o.
On 14 May 2013, the Group, through Seaonics AS (100%), established Seaonics Polska sp. z o.o., with the purpose
of developing ship automation systems. The company is located in Gdansk, Poland with a share capital of NOK 5
thousand.
Acquisition of non-controlling interests

In January 2013 the Group continued to acquire minority shares in Vard Tulcea SA. In total an additional 0.55 percent
interest was aquired for a total of NOK 1,4 million in cash, increasing the ownership from 99.44 percent to 99.99
percent. The shares were acquired at a fixed price of RON 5 per share.
33 Capital management
The primary objective of the Groups capital management is to ensure that it maintains healthy capital ratios so as to
maintain investors, creditors and market confidence and to support and sustain future development of the business.
The Group seeks to maintain a healthy balance between higher returns that might be possible with higher levels of
borrowings, and the advantages and security afforded by a sound capital position.
All companies in the Group shall have net working capital that is sufficient to finance construction projects during a
normal to high level activity period. Financing of major investments and acquisitions shall as far as possible be done by
long term debt, with a maturity profile that corresponds to the useful life of the investment.
Capital consists of paid up capital, other reserves, retained earnings and non-controlling interests of the Group. The
Board of Directors monitors the return of capital as well as the level of dividends to the shareholders. There were no
changes in the Groups approach to capital management during the year.
Except from covenant requirements as described in Note 19, neither the Company nor any of its subsidiaries are
subject to externally imposed capital requirements. There are no breach of covenants as of 31 December 2013.
134
34 Operational lease commitments

Non-cancellable operating lease rentals are payable as follows:
Group
Within one year
Between one and five years
More than five years
Total
2013
49
132
26
206
2012
32
90
25
147
Vard Holdings Limited did not have any lease commitments as of 31 December 2013 and 2012.
The Groups non-cancellable operating lease relate primarily to yard lease which has a remaining lease period of four
years. The subsidiary Vard Brevik Holding AS leases yard and office premises and the lease has a non-cancellable
remaining period of four years. The leases have options for renewal.
During the financial year, an amount of NOK 52 million was recognized as an expense in profit or loss in respect of
operational leases (NOK 38 million in FY2012).
35 Related parties
Non-cancellable operating lease rentals are payable as follows:
(A) PARENT AND ULTIMATE HOLDING COMPANY

At the reporting date, Fincantieri Oil & Gas S.p.A is the immediate holding company of the Company. The ultimate
holding company is Cassa Depositi e Prestiti S.p.A., incorporated in Italy.
At 31 December 2012, the immediate holding company was STX Europe AS, and the ultimate holding company was STX
Corporation Co., Ltd, incorporated in South Korea. STX Europe AS sold its interest in the Company to Fincantieri Oil &
Gas S.p.A on 23 January 2013.
(B) TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL

Key management personnel compensation
The Groups principles relating to remuneration to the Groups key management personnel are to cultivate a
performance-based corporate culture based on the Groups values, and to motivate contribution to good financial
performance and greater value creation for the shareholders of the Group. The Groups key management personnel
participate in the Groups collective pension plan, under which all employees are entitled to a pension contribution
amounting to 2.5% of salary up to 12 times the social security base amount. In addition, the Groups executive
management team and other senior managers have an additional 2.5% salary pension contribution. During FY2013,
the stock option scheme for the key management in the Group was cancelled (see Note 13).
135
Notes
Remuneration to key management personnel of the Group during the year is as follows:
Group
Numbers in NOK thousand
Base salary
Variable pay
Other benefits
Pension benefit
Total
2013
16,375
14,548
345
681
31,949
2012
14,132
6,550
268
747
21,697
(C) OTHER RELATED PARTY TRANSACTIONS

The following transactions took place between the Group and related parties, who are not members of the Group,
during the financial year on terms agreed between the parties concerned:
TRANSACTIONS AND AGREEMENTS WITH RELATED PARTIES

Sales of goods and services
Sales of construction contracts and engineering services to other related parties
Guarantee commission, associates
Sales of vessels and services to associates
Total sales of goods and services
2013
2
1
462
465
2012
2
988
990
Purchases of goods and services

Cost of goods and services from associates
Other operating expenses, parent company
Other operating expenses, other related parties
Total purchases of goods and services
2013
(5)
(4)
(9)
2012
(4)
(22)
(2)
(28)
(26)
(26)
Agreements entered into without impact on cost or revenues in 2013

Agreements entered into with parent company
Total agreements entered into without impact at cost or revenues in 2013
Sales of vessels and services to associates, mainly relates to sales of vessels and where the share of profit is
eliminated in the group, see also note 7.
A Barge rental agreement with Fincantieri is classified in the table as agreements entered into with parent company.
The agreement did not have any cost impact in FY2013 and will be related to a barge hire from Fincantieri to be used in
production in Romania.
In FY2012, brand fees and commission fees related to financial guarantees, provided by the former owner STX Europe
AS, was classified as other operating expenses.
For both FY2013 and FY2012, the transactions with other related parties refer to companies in the group of the
former parent company, STX Europe AS. Entities which are controlled or significantly influenced by the Groups key
management personnel and their close family members are also considered as other related parties.
Outstanding balances receivable from/payable to related parties are disclosed in Notes 9, 16 and 19 accordingly.
The former holding company, STX Europe AS, had during the owner period guaranteed various corporate loans,
construction loans, advance payment bonds and suppliers on behalf of the Group. There are no remaining guarantees
as of 31 December 2013 (2012: NOK 26 million).
136
36 Group of companies
The subsidiaries included in the Vard Holdings Limited Group at 31 December 2013 were as follows:
Name of the company
Vard Group AS
Subsidiaries of Vard Group AS
Vard Electro AS
Vard RO Holding SRL
Vard Niteri SA
Vard Promar SA
Estaleiro Quissam Ltda
Vard Singapore Pte. Ltd
Vard Design AS
Vard Accommodation AS
Vard Piping AS
Vard Brevik Holding AS
Seaonics AS
Aakre Eigendom AS
Subsidiaries of Vard Piping AS
Vard Piping Tulcea SRL
Subsidiaries of Vard Design AS
Vard Design Liburna Ltd
Subsidiaries of Vard Electro AS
Vard Electro Tulcea SRL 1)
Vard Electro Brazil Ltda 2)
Vard Electro Braila SRL
Vard Electrical Installation and Engineering
(India) Private Limited 3)
Johangarden AS
STX Brevik Philadelphia
Subsidiaries of Vard RO Holding SRL
Vard Tulcea SA
Vard Braila SA 4)
- Braila Ship Repair SA 5)
- AJA Ship Design SA
Vard Engineering Constanta SRL 6)
Subsidiary of Seaonics AS
- Seaonics Polska sp. z o.o. 7)
Subsidiary of Vard Singapore Pte. Ltd
Vard Vung Tau Ltd
Subsidiary of Vard Accommodation AS
Vard Accommodation Tulcea SRL 8)
Subsidiaries of Vard Brevik Holding AS
Multifag AS 9)
- Brevik Elektro AS
Brevik Support AS
Vard Engineering Brevik AS
Vard Offshore Brevik AS
Ronor AS
- Scanrom SRL
Place of incorporation
and business
1) Vard Electro AS 99.73%, Vard Accommodation Tulcea 0.23%

2) Vard Electro AS 99%, Vard Group AS 1%
3) Vard Electro AS 99%, Vard Electro Tulcea SRL 1%
4) Vard RO Holding SRL 94.12%, Vard Group AS 5.88%
5) Vard Braila SA 68.58%, Vard Brevik Holding AS 31.42%
Norway
Norway
Romania
Brazil
Brazil
Brazil
Singapore
Norway
Norway
Norway
Norway
Norway
Norway
Romania
Croatia
Principal activities
Effective equity
held by the Group
2013
2012
%
%
Shipbuilding
100
100
Electrical / automation installation

Holding company
Shipbuilding
Shipbuilding
Project development
Sales, trading and engineering
Project development and ship design
Accommodation installation
Pipe installation
Holding and parent company
Ship automation systems
Accommodation facilities
100
100
100
51
51
100
100
100
100
100
51
100
100
100
100
51
51
100
100
100
100
100
51
100
Pipe installation
100
100
51
51
Ship design
Romania
Brazil
Romania
Electrical installation
100
100
100
100
100
100
India
Norway
USA
Real Estate
Dormant
100
100
100
100
100
Shipbuilding
Shipbuilding
Ship repair and maintenance
Ship engineering
Engineering
99
100
100
60
100
99
100
100
60
n/a
51
n/a
Shipbuilding
100
100
Romania
Accommodation installation
100
100
Norway
Norway
Norway
Norway
Norway
Norway
Romania
Onshore industrial services and installation

100
100
Ship services
100
Engineering
70
Offshore industrial services and installation
100
Dormant
100
Liquidated
Dormant
100
100
100
70
100
100
100
Romania
Romania
Romania
Romania
Romania
Poland
Vietnam
Ship automation systems
6) Established in FY 2013. Vard RO Holding SRL 70%, Vard Braila SA 30%

7) Established in FY 2013
8) Vard Accommodation AS 98.18%, Vard Electro Tulcea SRL 1.82%
9) Changed the name from Vard Grenland Industri AS in FY2013
PricewaterhouseCoopers LLP are the auditors of the Singapore-incorporated subsidiary. Other member firms of PWC
International are auditors of all significant foreign-incorporated subsidiaries except where auditors need not be appointed.
137
Notes
37 Post balance sheet events

No significant post balance sheet events have occured in the period from 31 December 2013 up to the date of issuing
these financial statements.
38 Contingencies and capital commitments

Guarantee obligations
As part of its ordinary operations, completion guarantees and guarantees for advance payments from customers
(refundment guarantees) are issued. Such guarantees typically involve a financial institution that writes the guarantee
vis--vis the customer.
Project risks and uncertainties

The Groups operations are subject to long term contracts, many of which are fixed-price, turnkey contracts that are
awarded on a competitive bidding basis. Failure to meet schedule or performance guarantees or increases in contract
costs can result in non-recoverable costs, which could exceed revenues realized from the applicable project. When a
project is identified as loss-making, forecasted loss is provisioned for according to FRS 11. The accounting treatment
is based on detailed project forecasts carried out by management on a monthly basis based on experience, events and
best judgement at each reporting date. Inevitably, such circumstances and information may be subject to change in
subsequent periods and thus the eventual outcome may be better or worse than the assessments made in drawing up
periodical financial reports.
Legal proceedings
With its extensive worldwide operations, companies included in the Group are in the course of its activities involved
in numerous legal disputes. Provisions have been made to cover the expected outcome of the disputes to the extent
that negative outcomes are likely and reliable estimates can be made. However, the final outcome of these cases will
always be subject to uncertainties and resulting liabilities may exceed booked provisions. As of the reporting date, the
Group is not part of any major ongoing legal dispute, which could have a material impact on the financial statements,
and not already provided for.
Capital and other commitments

In relation to the participation of minority stakes in various of its own shipbuilding projects (Note 8), the Group is
committed to additional equity participation. Some construction contracts contain a commitment to provide seller
credit. In relation to the construction of the new shipyard through the subsidiary Vard Promar SA, the Group has an
additional capital commitment. The total capital commitments are summarized in the table below:
Capital and other commitments
Equity participation
Seller credit
Capital commitment related to Vard Promar SA
Total capital and other commitments
2014
25
225
17
267
In relation to equity participation, the intention is to exit within one to three years from the time of delivery.
138
2015
100
100
Clean-up costs
The Groups operations are subject to numerous national and supra-national environmental regulations, including
removal and clean-up of environmental contamination. Although there have to date been no indications that the
Group have failed to comply with applicable environmental rules, regulations or permits, current concentration limits
for hazardous material will apply to historical contamination, and any further studies or changes in concentration
limits may result in further clean-up operations or protective measures being imposed in the future. The costs related
to such clean-up or protective measures may be significant and could have a material adverse effect on our business,
financial condition and results of operations. Although the cost related to this can be material, the Group expects that
the potential cost related to this can be covered within existing provisions and normal operations without any material
negative impact.
139
Appendix IPT Mandate

Appendix in relation to the proposed renewal of the IPT Mandate
(Incorporated in the Republic of Singapore)

(Company Registration No. 201012504K)
Directors:
Mr. Giuseppe Bono
Mr. Roy Reite
Mr. Fabrizio Palermo
Mr. Keen Whye Lee
Mr. Sung Hyon Sok
(Chairman of the Board and Non-Executive Director)

(Chief Executive Officer and Executive Director)
(Non-Executive Director)
(Non-Executive Director)
(Independent Director)
(Independent Director)
Registered Office:
50 Raffles Place
Singapore 048623
21 March 2014
To the Shareholders of Vard Holdings Limited

1.
Introduction
The Company has issued the Notice of AGM in relation to the AGM of the Company to be held on 7 April 2014, which is
set out on pages 157 to 159 of the 2013 Annual Report. Ordinary Resolution 8 under the heading Special Business as
set out in the Notice of AGM is an ordinary resolution relating to the renewal of the IPT Mandate.
The purpose of this Letter is to provide Shareholders with information relating to the proposed renewal of the IPT
Mandate and to seek Shareholders approval for the proposal at the 2014 AGM. All defined terms in this Letter have
their meanings as ascribed in the Definitions section on pages 143 and 144, unless otherwise stated.
Further details of the IPT Mandate are set out in the Annex to this Letter.
If you are in any doubt as to the contents herein or as to the course of action that you should take, you should consult
your stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.
The SGX-ST takes no responsibility for the accuracy of any statements or opinions made or reports contained in this
Letter.
2.
2.1
The proposed renewal of the IPT mandate

The Existing IPT Mandate
The IPT Mandate was adopted at the extraordinary general meeting of the Company on 3 October 2013 to allow the
Company, its subsidiaries and its associated companies which are considered to be entities at risk within the
meaning of Rule 904 of the Listing Manual, to enter into certain Mandated Transactions with the interested persons
set out in the IPT Mandate. The IPT Mandate is subject to annual renewal.
140
As at the Latest Practicable Date, Fincantieri O&G holds approximately 55.63% of the Companys Shares.
Fincantieri O&G is a wholly owned subsidiary of Fincantieri. The aforementioned companies are accordingly controlling
shareholders of the Company and are therefore, together with their respective associates, interested persons for the
purposes of Chapter 9 of the Listing Manual.
2.2
Duration of the Renewed IPT Mandate
The rationale for the IPT Mandate, the scope of the IPT Mandate, the benefit of the IPT Mandate to Shareholders, the
classes of Mandated Interested Persons, the categories of Mandated Transactions and the Review Procedures in
respect of which the IPT Mandate is sought to be renewed remain unchanged and are as set out in the Annex to this
Letter.
The Directors propose that the IPT Mandate be renewed at the 2014 AGM on the terms of ordinary Resolution 8 to be
proposed at the 2014 AGM and (unless revoked or varied by the Company in general meeting) to continue in force until
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. Approval from Shareholders will be sought for the renewal of the IPT Mandate at the next and
each subsequent AGM of the Company, subject to satisfactory review by the Audit Committee of its continued
application to the Mandated Transactions.
2.3
Audit Committees Statements
Pursuant to Rule 920(1)(c) of the Listing Manual, the Audit Committee, comprising Mr. Keen Whye Lee, Mr. Sung Hyon
Sok and Mr. Pier Francesco Ragni, confirms that:
(a)
the Review Procedures have not changed since Shareholders last approved the IPT Mandate at the extraordinary
general meeting of the Company held on 3 October 2013; and
(b)
the Review Procedures are sufficient to ensure that the Mandated Transactions will be carried out on normal
commercial terms and will not be prejudicial to the interests of the Company and its minority Shareholders.
If, during the periodic reviews by the Audit Committee, the Audit Committee is of the view that the Review Procedures
are inadequate or inappropriate to ensure that the Mandated Transactions will be carried out on normal commercial
terms and will not be prejudicial to the interests of the Company and its minority Shareholders, or in the event of any
amendment to Chapter 9 of the Listing Manual, it will in consultation with the Board of Directors take such action as it
deems proper in respect of such procedures and/or modify or implement such procedures as may be necessary and
direct the Company to revert to Shareholders for a fresh mandate based on new guidelines and procedures for
transactions with Mandated Interested Persons.
2.4
Disclosures
Disclosures will be made in the Companys annual report of the aggregate value of all interested person transactions
conducted with interested persons pursuant to the IPT Mandate during the current financial year, and in the annual
reports for subsequent financial years during which the IPT Mandate continues in force, in accordance with the
requirements of Chapter 9 of the Listing Manual. The Company will also announce the aggregate value of transactions
conducted pursuant to the IPT Mandate for the financial periods that it is required to report on pursuant to Rule 705
of the Listing Manual (which relates to quarterly reporting by listed companies) within the time required for the
announcement of such report.
3.
Directors recommendations
The Independent Directors, having considered, inter alia, the terms, rationale for and benefits of the IPT Mandate and
taken into account the Audit Committees statements in paragraph 2.3 above, are of the opinion that the proposed
renewal of the IPT Mandate is in the best interests of the Company. Accordingly, the Independent Directors
recommend that Shareholders vote in favour of ordinary Resolution 8 relating to the proposed renewal of the
IPT Mandate as set out in the Notice of AGM.
141
Mr. Giuseppe Bono, Mr. Fabrizio Palermo and Mr. Pier Francesco Ragni are nominees of Fincantieri O&G. Accordingly,
they are not considered independent for the purposes of the IPT Mandate.
4.
Absention from voting
In accordance with the requirements of Chapter 9 of the Listing Manual, Fincantieri O&G, being a controlling
shareholder, is regarded as an interested person in relation to the IPT Mandate and will abstain from voting and has
undertaken to ensure that its respective associates will abstain from voting on ordinary Resolution 8 in relation to the
renewal of the IPT Mandate at the 2014 AGM. Such persons will also decline to accept nominations to act as proxy to
attend and vote at the 2014 AGM in respect of the said ordinary resolution unless the Shareholders appointing them
have given specific instructions as to the manner in which their votes are to be cast in respect of the said resolution.
5.
Inspection of documents
The following documents are available for inspection at the registered office of the Company at 50 Raffles Place,
#32-01 Singapore Land Tower, Singapore 048623, during normal business hours on any weekday (public holidays
excluded) from the date of this Letter up to and including the date of the 2014 AGM:
(a)
the 2013 Annual Report; and
(b)
the Memorandum and Articles of Association of the Company.
6.
Directors responsibility statement
The Directors collectively and individually accept full responsibility for the accuracy of the information given in this
Letter and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Letter
constitutes full and true disclosure of all material facts about the IPT Mandate, the Company and its subsidiaries, and
the Directors are not aware of any facts the omission of which would make any statement in this Letter misleading.
Where information in this Letter has been extracted from published or otherwise publicly available sources or obtained
from a named source, the sole responsibility of the Directors has been to ensure that such information has been
accurately and correctly extracted from these sources and/or reproduced in this Letter in its proper form and context.
Yours faithfully
For and on behalf of the Board of Directors of
Roy Reite
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Definitions
In this Letter, the following definitions apply throughout unless otherwise stated:
Except where the context otherwise requires, the following definitions apply:
2013 Annual Report
The annual report of the Company for the financial year ended 31 December 2013
2014 AGM
The forthcoming annual general meeting of the Company to take place at Pan
Pacific Singapore, Occans 3, 4 and 5, on 7 April 2014 at 10:00 a.m.
Act
The Companies Act, Chapter 50 of Singapore, as amended from time to time
AGM
An annual general meeting of the Company
Audit Committee
The audit committee of the Company for the time being
Board or Board of Directors
The board of directors of the Company for the time being
CDP
The Central Depository (Pte) Limited
Chief Executive Officer
The chief executive officer of the Company for the time being
Chief Financial Officer
The chief financial officer of the Company for the time being
Chief Operating Officer
The chief operating officer of the Company for the time being
Company
Compliance Committee
Has the meaning ascribed to it in paragraph 5(a) of the Annex to this Letter
Director
A director of the Company for the time being
Executive Officer
An executive officer of the Company for the time being
Fincantieri
FINCANTIERI S.p.A.
Fincantieri Group
Fincantieri, its subsidiaries and associated companies, excluding the Group
Fincantieri O&G
Fincantieri Oil & Gas S.p.A.
Group
The Company and its subsidiaries
HVAC
Has the meaning ascribed to it in paragraph 3 of the Annex to this Letter
Independent Directors
Directors who are deemed independent for the purposes of the IPT Mandate being
Mr. Roy Reite, Mr. Keen Whye Lee and Mr. Sung Hyon Sok
IPT Mandate
The general mandate approved by Shareholders pursuant to Chapter 9 of the

Listing Manual for the Group to enter into the Mandated Transactions
Latest Practicable Date
The latest practicable date prior to the printing of this Letter, being 17 March 2014
Listing Manual
The listing manual of the SGX-ST, as may be amended, varied or supplemented

from time to time
143
Mandated Interested Persons
Mandated Transactions
Notice of AGM
The notice of the AGM dated 21 March 2014
Review Procedures
The methods or procedures for determining the transaction prices for Mandated
Transactions as set out in the IPT Mandate
Securities and Futures Act
The Securities and Futures Act, Chapter 289 of Singapore, as amended from time
to time
SGX-ST
Singapore Exchange Securities Trading Limited
Shareholders
Registered holders of Shares except that where the registered holder is CDP, the
term Shareholders shall, in relation to such Shares, mean the persons whose
direct securities accounts maintained with CDP are credited with the Shares
Shares
Ordinary shares in the capital of the Company
subsidiary
Has the meaning ascribed to it in Section 5 of the Act
S$
Singapore dollars
% or per cent.
Per centum or percentage
Words importing the singular shall, where applicable, include the plural and vice versa and words importing the
masculine gender shall, where applicable, include the feminine and neuter gender and vice versa. References to
persons shall, where applicable, include corporations.
Any reference in this Letter to any enactment is a reference to that statute or enactment for the time being amended
or re-enacted. Any term defined under the Act, the Securities and Futures Act or the Listing Manual or any statutory
modification thereof and used in this Letter shall, where applicable, have the meaning assigned to it under the Act, the
Securities and Futures Act or the Listing Manual or any statutory modification thereof, as the case may be, unless
otherwise provided.
Any reference to a time of day in this Letter shall be a reference to Singapore time unless otherwise stated.
144
Annex IPT mandate

1.
Introduction
1.1 Chapter 9 of the Listing Manual

Chapter 9 of the Listing Manual applies to transactions which a company listed on the SGX-ST or any of its subsidiaries
or associated companies which is considered to be an entity at risk within the meaning of Rule 904(2) of the Listing
Manual, proposes to enter into with a counter-party who is an interested person of the listed corporation within the
meaning of Rule 904(4) of the Listing Manual.
1.2 Definitions under Chapter 9 of the Listing Manual
The following definitions are contained in the Listing Manual:
An approved exchange means a stock exchange that has rules which safeguard the interests of shareholders
against interested person transactions according to similar principles in Chapter 9 of the Listing Manual.
An associate in relation to any director, chief executive officer or controlling shareholder means (a) his immediate
family (that is, the spouse, child, adopted child, step-child, sibling or parent), (b) the trustees of any trust of which he
or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object, and (c) any
company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more, and, in
relation to a controlling shareholder which is a company, means its subsidiary or holding company or a subsidiary of
such holding company or a company in the equity of which it and/or such other company or companies taken together
(directly or indirectly) have an interest of 30% or more.
An associated company means a company in which at least 20% but not more than 50% of its shares are held by the
listed company or the group.
A controlling shareholder means a person who holds (directly or indirectly) 15% or more of the total number of
issued shares excluding treasury shares in the company or one who in fact exercises control over the company.
An entity at risk means:
(a)
the listed company;
(b)
a subsidiary of the listed company that is not listed on the SGX-ST or an approved exchange; or
(c)
an associated company of the listed company that is not listed on the SGX-ST or an approved exchange,
provided that the listed group, or the listed group and its interested person(s), has or have control over the
associated company.
An interested person means a director, chief executive officer or controlling shareholder of the listed company or an
associate of any such director, chief executive officer or controlling shareholder.
An interested person transaction means a transaction between an entity at risk and an interested person.
1.3 General requirements
Rule 905 of the Listing Manual states that a listed company must make an immediate announcement of any interested
person transaction of a value equal to, or more than, 3% of the groups latest audited consolidated net tangible assets,
or if the aggregate value of all transactions entered into with the same interested person during the same financial
year amounts to 3% or more of the groups latest audited consolidated net tangible assets, the listed company must
make an immediate announcement of the latest transaction and all future transactions entered into with that same
interested person during that financial year.
Rule 906 of the Listing Manual states that a listed company must also obtain Shareholder approval for any interested
person transaction of a value equal to, or more than (a) 5% of the groups latest audited consolidated net tangible
assets; or (b) 5% of the groups latest audited consolidated net tangible assets, when aggregated with other
transactions entered into with the same interested person during the same financial year. However, a transaction
145
which has been approved by Shareholders, or is the subject of aggregation with another transaction that has been
approved by Shareholders, need not be included in any subsequent aggregation.
In line with the rules set out in Chapter 9 of the Listing Manual, a transaction with a value of less than S$100,000 is not
considered material and is not taken into account for the purposes of this Annex.
1.4 Shareholders general mandate
Rule 920 of the Listing Manual also permits a listed company to seek a mandate from its shareholders for recurrent
transactions with interested persons of a revenue or trading nature or those necessary for its day-to-day operations
such as the purchase and sale of supplies and materials, but not in respect of the purchase or sale of assets,
undertakings or businesses, that may be carried out with the interested persons. Transactions conducted under such
a mandate are not subject to Rules 905 and 906 of the Listing Manual. The general mandate is subject to annual
renewal.
2.
Classes of mandated interested persons
The IPT Mandate which will apply to the Groups interested person transactions set out below, will be carried out with
Fincantieri and its associates (the Mandated Interested Persons). The Mandated Interested Persons are deemed to
be interested persons pursuant to Chapter 9 of the Listing Manual and any transaction between the Group and any of
them will, subject to the exceptions provided in Chapter 9 of the Listing Manual, be an interested person transaction.
3.
Mandated transactions
The IPT Mandate will cover the following categories of interested person transactions:
(a)
(b)
the sale of goods to the Group, including:

(i)
blocks, sections, hulls, pre-outfitted units and vessels;
(ii)
raw materials such as steel, piping and electrical cables;
(iii)
engines, marine systems components and equipment and other components, including heating, ventilation
and air conditioning (HVAC) systems and accommodation units and components for interior outfitting of
vessels;
(iv)
spare parts and other minor equipment in respect of sub-paragraphs (a)(i), (ii) and (iii) above; and
(v)
installation and commissioning of the components under sub-paragraphs (a)(i), (ii), (iii) and (iv) above.
the provision of services to the Group, including:

(i)
corporate services, such as finance, treasury, business development, tax, legal, internal audit, IT support
services, HR management and staff training, quality, industrial and engineering development,
communications and public relations and provision of office space and other spaces in fairs, exhibitions
and trade shows;
(ii)
ship design and engineering consultancy services provided by Fincantieri Group personnel both within and
without the Groups premises;
(iii)
software licensing;
(iv)
repair, modification, maintenance, servicing, overhaul and other technical and after sales services;
(v)
lease of equipment or assets;
(vi)
procurement services for equipment and raw materials;
(vii)
exchange of personnel; and
(viii) docking services;

146
(c)
(d)
(e)
(f)
the entry into financial, treasury and insurance transactions, including:

(i)
borrowing of funds by the Group on a short-term or medium term basis;
(ii)
placement of funds by the Group on a short-term or medium term basis;
(iii)
entry into any foreign exchange, interest rate, commodity or any other derivative transaction for hedging
purposes; and
(iv)
provision of insurance cover for the Groups business;
the sale of goods by the Group, including:

(i)
block, sections, hulls, pre-outfitted units and vessels;
(ii)
marine systems components and equipment, offshore handling systems, electrical systems and
automation software and systems;
(iii)
piping equipment, HVAC systems and accommodation units and components for interior outfitting of
vessels;
(iv)
spare parts and other minor equipment related to sub-paragraphs (d)(i), (ii) and (iii) above; and
(v)
installation and commissioning of the components under sub-paragraphs (d)(i), (ii), (iii) and (iv) above;
the provision of services by the Group, including:

(i)
corporate services, such as business development, HR management and staff training, IT support services,
quality, industrial and engineering development, communications and public relations and provision of
office space and other spaces in fairs, exhibitions and trade shows;
(ii)
vessels design and engineering consultancy services provided by Group personnel both within and without
Fincantieri Groups premises;
(iii)
procurement services for equipment packages and raw materials;
(iv)
software licensing;
(v)
lease of equipment and assets;
(vi)
(vii)
docking services; and
the provision of corporate guarantees and other credit support for the benefit of the Group, including:
(i)
refund guarantees;
(ii)
performance guarantees including but not limited to performance bonds and guarantees given in
connection with the sale of vessels; and
(iii)
security for credit facilities,
(collectively, the Mandated Transactions.)
147
The Mandated Transactions are transactions of a revenue or a trading nature or those necessary for the Groups
day-to-day operations such as the purchase and sale of supplies and materials, but not in respect of the purchase or
sale of assets, undertakings or businesses. Non-Mandated Transactions will remain subject to the requirements
under Chapter 9 of the Listing Manual, in particular, Rules 905 and 906 of the Listing Manual.
4.
Rationale for the IPT Mandate and benefits to the Group
The Mandated Transactions are entered into or to be entered into by the Group in the ordinary course of business. They
are recurring transactions which are likely to occur with some degree of frequency or arise at any time and from time
to time.
The IPT Mandate and subsequent renewal on an annual basis will eliminate the need to convene separate general
meetings from time to time to seek Shareholders approval as and when potential interested person transactions
arise, thereby reducing substantially the administrative time and expenses in convening such meetings, without
compromising the corporate objectives and adversely affecting the business opportunities available to the Group.
The IPT Mandate is intended to facilitate these transactions, provided that they are carried out on normal commercial
terms and are not prejudicial to the Company and its minority Shareholders. The Directors are of the view that the
Group will be able to benefit from such transactions with the Mandated Interested Persons.
The Group will benefit from having access to competitive quotes from, or transacting with, the Mandated Interested
Persons in respect of services and goods procured. The IPT Mandate will also allow the Group to enjoy economies of
scale in the procurement of services and goods. Further, it will facilitate a more lean and efficient administrative
set-up as the Group will be able to utilise the personnel of the Mandated Interested Persons for certain corporate
services.
Disclosure will be made in the Companys annual report of the aggregate value of transactions conducted pursuant to
the IPT Mandate and otherwise during the financial year under review, and in the annual reports for the subsequent
financial years during which the IPT Mandate is renewed and remains in force.
5.
Guidelines and review procedures for the Mandated Transactions
(a)
To ensure that the Mandated Transactions are carried out at arms length, on normal commercial terms and will
not be prejudicial to the interests of the Company and its minority Shareholders, the Group has put in place the
following procedures for the review and approval of interested person transactions under the IPT Mandate:
(i)
sale of goods and provision of services to the Group

In relation to any transaction proposed to be carried out with the Mandated Interested Persons for:
(1)
(2)
the sale of goods to the Group, including:

(A)
(B)
raw materials such as steel, piping and electrical cables;
(C)
engines, marine systems components and equipment and other components, including HVAC
systems and accommodation units and components for interior outfitting of vessels;
(D)
spare parts and other minor equipment in respect of sub-paragraphs (i)(1)(A), (B) and (C) above;
and
(E)
installation and commissioning of the components in sub-paragraphs (i)(1)((A), (B), (C) and (D)
above,
the provision of services to the Group, including:

(A)
148
corporate services, such as finance, treasury, business development, tax, legal, internal audit,
IT support services, HR management and staff training, quality, industrial and engineering
development, communications and public relations and provision of office space and other
spaces in fairs, exhibitions and trade shows;
(3)
(B)
ship design and consultancy services provided by Group personnel both within and without
Fincantieri Groups premises;
(C)
software licensing;
(D)
repair, modification, maintenance, servicing, overhaul and other technical and after services;
(E)
lease of equipment or assets;
(F)
procurement services for equipment and raw materials;
(G)
(H)
docking services; and
the entry into financial, treasury and insurance transactions including:

(A)
borrowing of funds by the Group on a short-term or medium term basis;
(B)
placement of funds by the Group on a short-term or medium term basis;
(C)
entry into any foreign exchange, interest rate, commodity or any other derivative transaction for
hedging purposes; and
(D)
provision of insurance cover,
the Group will satisfy itself that the actual fees paid or payable for the services provided or goods sold are
fair and reasonable and that the terms extended by the Mandated Interested Person to the Group are no
less favourable than the terms offered by the Mandated Interested Person to third parties.
For services provided and goods supplied to the Group in relation to shipbuilding, such as hulls,
pre-outfitted units and vessels, ship design services, docking services and the sale of shipbuilding parts,
the project team in charge of that particular shipbuilding project will obtain quotations from the Mandated
Interested Person and at least two (2) unrelated third party service providers or suppliers.
For placement of funds with any Mandated Interested Person by the Group of its funds, the Company will
require that quotations be obtained from such Mandated Interested Person and at least two (2) other
potential counterparties for terms offered by such counterparties for deposits of an amount and currency
and for a period equivalent to that of the funds to be placed by the Group. The Group will only place its
funds with such Mandated Interested Person if the terms quoted are no less favourable than the terms
quoted by the other potential counterparties for equivalent amounts.
For borrowing of funds from any Mandated Interested Person by a Company within the Group, the Company
will require that quotations be obtained from such Mandated Interested Person and at least two (2)
potential counterparties of the borrowing company within the Group for terms offered by such
counterparties for loans of an amount and currency and for a period equivalent to that of the funds to be
borrowed by such borrowing company within the Group. The Group will only borrow funds from such
Mandated Interested Person provided that the terms quoted are no less favourable than the terms quoted
by the other potential counterparties for equivalent amounts.
For forex, swaps and options transactions with any Mandated Interested Person by the Group, the Company
will require that rate quotations be obtained from such Mandated Interested Person and at least two (2)
other potential counterparties. The Group will only enter into such forex, swaps or options transactions
with such Mandated Interested Person provided that such terms quoted are no less favourable than the
terms quoted by the other potential counterparties.
149
For the provision of insurance cover by any Mandated Interested Person to the Group, the Company will
require that quotations be obtained from such Mandated Interested Person and at least two (2) other
potential counterparties. The Group will only enter into such insurance transactions with such Mandated
Interested Person if the terms quoted by the Mandated Interested Person are no less favourable than the
terms quoted by the other potential counterparties.
For other services, such as corporate services, and goods, the Chief Financial Officer or a senior
management executive from the relevant department will obtain quotations from the Mandated Interested
Person(s) and at least two (2) unrelated third party service providers or suppliers. Such third party service
providers or suppliers will include those which have provided or supplied similar services or goods to the
Group previously, or any service provider or supplier which is able to provide or supply similar services or
goods.
Quotations from these third party service providers and suppliers are obtained in order to provide a basis
of comparison to ensure that the price and terms offered by the Mandated Interested Person(s) are
comparable to those offered by unrelated parties for the same or substantially similar type of services or
goods, and the price and terms offered by unrelated parties are not more favourable than the price and
terms offered by the Mandated Interested Person(s).
The project team, Chief Financial Officer or senior management executive will select the quotation received
from the Mandated Interested Person(s) if the terms (including price) of such quotation are not less
favourable than those offered by unrelated third party service providers or suppliers. The transaction will
then be subject to the approval of the relevant authority based on the quantum of the transaction. Please
refer to paragraph 5(b) for further details.
As some of the shipbuilding-related services and goods are of a specialised nature, and have to comply
with specific technical requirements and standards, there may, from time to time and depending on the
specific transaction, be few unrelated third party service providers or suppliers of such services or goods.
All employees who procure such specialised goods and services and who search for quotations of the
same must have the relevant expertise, experience and knowledge to review the quotations and make
recommendations. Such quotations shall be subject to the selection process and approvals set out in
the paragraphs above.
For certain corporate services, it may be impracticable to obtain third party quotations as the Mandated
Interested Persons are staffed by employees with the relevant experience and expertise for the provision of
these services and the intention of the Company is not to outsource such services and for such services to
be provided by personnel within the Group, if such services are not provided by the Mandated Interested
Persons. Such corporate services will be typically charged on a cost plus basis.
Where it is impracticable to obtain such third party quotations, or where such third party quotations are not
available, or where it is not practicable or appropriate in the circumstances to make reference to prevailing
market rates or prices, the Group may enter into transactions for the provision of services or sale of goods
by Mandated Interested Persons provided that the terms (including price) received from the Mandated
Interested Person(s) have been reviewed and approved by a committee comprised of three (3) senior
management executives who do not have any interest, whether direct or indirect, in relation to the
transaction and who are familiar with the operations of the Group (the Compliance Committee).
The Compliance Committee as at the Latest Practicable Date is made up of (I) Chief Financial Officer,
Mr. Jan Ivar Nielsen, (II) Chief Operating Officer, Mr. Magne O. Bakke, and (III) General Counsel, Mr. Stian
S. Tennfjord. The Compliance Committee will evaluate and weigh the commercial benefits of, and rationale
for, transacting with the Mandated Interested Person(s) before proceeding with the transactions.
In reviewing the terms of the transaction, the Compliance Committee will evaluate such terms in
accordance with prevailing industry norms (including the reasonableness of the terms), and will take into
account the Groups usual business practices and pricing policies and all relevant factors including the
circumstances relating to the need to obtain such services or goods.
150
The Compliance Committee may at its discretion defer the approval of the transactions to the Audit
Committee where such transactions fall within the threshold limits set out in paragraph 5(b)(iii) of this
Annex or where any of the members of the Compliance Committee (I) are interested persons in respect of
the Mandated Transactions, (II) have an interest, whether direct or indirect, in relation to those Mandated
Transactions, and/or (III) are not considered independent in relation to those Mandated Transactions.
The factors which (I) the project team, Chief Financial Officer or senior management executive from the
relevant department will take into account when considering quotations from the Mandated Interested
Person(s) and unrelated third parties or (II) the Compliance Committee will take into account when
reviewing the terms received from the Mandated Interested Person(s) when third party quotes are not
available, include, but are not limited to, the following: price, delivery and payment criteria, accessibility of
the service providers or suppliers, past performance of service providers or suppliers, quality of the
services or goods and compliance of the services or goods with industry standards;
(ii)
sale of goods and provision of services by the Group

In relation to any transaction proposed to be carried out with Mandated Interested Persons for:
(1)
(2)
the sale of goods by the Group, including:

(A)
(B)
marine systems components and equipment, offshore handling systems, electrical systems
and automation software and systems;
(C)
piping and HVAC systems and accommodation units and components for interior outfitting of
vessels;
(D)
spare parts and other minor equipment in respect of sub-paragraphs (ii)(1)(A), (B) and (C)
above; and
(E)
installation and commissioning of the components in respect of sub-paragraphs (ii)(1)(A), (B),

(C) and (D) above;
the provision of services by the Group, including:

(A)
corporate services, such as business development, HR management and staff training, IT

support services, quality, industrial and engineering development, communications and public
relations and provision of office space and other spaces in fairs, exhibitions and trade shows;
(B)
vessels design and engineering consultancy services provided by Group personnel both within
and without Fincantieri Groups premises;
(C)
procurement services for equipment packages and raw materials;
(D)
software licensing;
(E)
lease of equipment and assets;
(F)
(G)
docking services,
such transactions shall where possible, be made at the prevailing rates or prices and carried out on
normal commercial terms that are no more favourable than those extended to unrelated third persons or
otherwise in accordance with industry norms. Where available, two (2) comparable third party quotes shall
be obtained in determining the prevailing market rates or prices.
151
Where prevailing market rates or prices are not available, whether due to the nature of the services or
goods to be provided, or the unavailability or impracticability of obtaining comparable third party quotes or
otherwise, or it is not practicable or appropriate in the circumstances to make reference to prevailing
market rates or prices, the Groups pricing for such services or goods will be determined by the
Compliance Committee in accordance with the Groups usual business practices and pricing policies and
taking into account all relevant factors including the circumstances relating to the need to provide such
services or goods and any other direct or incidental benefit or detriment to the Group in providing such
services or goods to the Mandated Interested Persons.
The Compliance Committee may at its discretion defer the approval of the transactions to the Audit
Committee where such transactions fall within the threshold limits set out in paragraph 5(b)(iii) of this
Annex or where any of the members of the Compliance Committee (I) are interested persons in respect of
the Mandated Transactions, (II) have an interest, whether direct or indirect, in relation to those Mandated
Transactions, and/or (III) are otherwise not considered independent in relation to those Mandated
Transactions; and
(iii)
provision of corporate guarantees and other credit support for the benefit of the Group
In relation to the provision of corporate guarantees or other credit support (such as security interests,
indemnities or letters of comfort) by the Mandated Interested Persons, such transactions shall only be
entered into if the members of the Board (other than those who are not independent of the relevant
Mandated Interested Persons) are of the view that it is in the interests of the Group to do so.
In particular, the fee charged by the Mandated Interested Persons for the provision of corporate guarantees
or other credit support shall not be more than the lowest of the rates quoted by the Groups principal
bankers for guarantees or credit support of an equivalent amount and tenure. The Company shall also take
into consideration other factors, including but not limited to the terms of the relevant corporate guarantees
or credit support, processing requirements, operation requirements and risks and other pertinent factors.
(b)
Threshold limits
In addition to the review procedures, the Group will review and approve the Mandated Transactions as follows:
(i)
transactions amounting from S$100,000 to 1.5% of the latest audited consolidated net tangible assets of
the Group will be reviewed and approved by a Director, Chief Financial Officer or an Executive Officer of the
Group (who has relevant experience and authority);
(ii)
transactions amounting from above 1.5% to 3% of the latest audited consolidated net tangible assets of the
Group will be reviewed and approved by the Board of Directors; and
(iii)
transactions exceeding 3% of the latest audited consolidated net tangible assets of the Group will be
reviewed and approved by the Audit Committee.
Any of the persons referred to in paragraphs 5(b)(i), (ii) and (iii) of this Annex may, as he deems fit, request for
additional information pertaining to the transaction from independent sources or advisors, including the
obtaining of valuations from independent professional valuers. If any of the persons referred to in paragraphs
5(b)(i), (ii) and (iii) of this Annex (I) is an interested person in respect of that particular Mandated Transaction to be
reviewed, (II) has an interest, whether direct or indirect, in relation to that particular Mandated Transaction, and/
or (III) is otherwise not considered independent in relation to that particular Mandated Transaction, he will, and
will undertake to ensure that his associates will, abstain from any decision-making in respect of that particular
Mandated Transaction.
The threshold limits stated in paragraphs 5(b)(i), (ii) and (iii) of this Annex apply to Mandated Transactions only.
Non-mandated interested person transactions will be subject to the review procedures stated in paragraph 5(c)
of this Annex and Rules 905 and 906 of the Listing Manual.
152
(c)
Other review procedures

The Audit Committee will also review all interested person transactions including Mandated Transactions to
ensure that the prevailing rules and regulations of the SGX-ST (in particular, Chapter 9 of the Listing Manual) are
complied with. Interested person transactions which are not within the ambit of the IPT Mandate will be subject
to Rules 905 and 906 of the Listing Manual.
The Group has also implemented the following procedures for the identification of interested person transactions
(including Mandated Transactions) and interested persons (including Mandated Interested Persons) and the
recording of all interested person transactions:
(i)
the Compliance Committee will maintain two (2) registers of all transactions (including all transactions
below S$100,000) carried out with interested persons including Mandated Interested Persons (recording
the basis and the quotations, if any, obtained to support such basis on which these transactions are
entered into, whether mandated or non-mandated). One register is maintained to record Mandated
Transactions and the other register is maintained to record interested person transactions which are not
classified as Mandated Transactions. The registers shall be submitted to the Audit Committee for review on
a quarterly basis;
(ii)
by the end of each month, each member of the Group will submit details of all interested person
transactions entered into or existing interested person transactions that are renewed or revised during that
month to the Compliance Committee. The Compliance Committee will reconcile the registers of interested
person transactions based on the submissions by the various members of the Group. On a quarterly basis,
the Compliance Committee will submit a report to the Audit Committee of all recorded interested person
transactions, and the basis of such transactions, entered into by the Group. The Audit Committee shall
review such interested person transactions at its quarterly meetings subject to the requirement under the
review procedures for any such interested person transactions to be approved by the Audit Committee
prior to the entry thereof. The outcome of such review shall be documented and filed in the registers of
interested person transactions; and
(iii)
the Companys annual internal controls plan shall incorporate a review of all interested person
transactions, including the established review procedures for the monitoring of all such transactions
including transactions with Mandated Interested Persons, whether they are new interested person
transactions or existing interested person transactions that have been renewed or revised during the
relevant financial year pursuant to the IPT Mandate.
In addition, the Audit Committee shall also review from time to time such internal controls and review
procedures for interested person transactions to determine if they are adequate and/or commercially practicable
in ensuring that the transactions between the Group and interested persons are conducted on normal
commercial terms and not prejudicial to the interests of the Company and the minority Shareholders. In
conjunction with such review, the Audit Committee will also ascertain whether the established review procedures
have been complied with. Further, if during these reviews the Audit Committee is of the view that the internal
controls and review procedures for interested person transactions are inappropriate or not sufficient to ensure
that the interested person transactions will be on normal commercial terms and not prejudicial to the interests
of the Company and the minority Shareholders, the Audit Committee will take such actions as it deems
appropriate and/or institute additional procedures as necessary to ensure that the interested person
transactions will be on normal commercial terms and not prejudicial to the interests of the Company and its
minority Shareholders, and pursuant to Rule 920(1)(b)(vii) of the Listing Manual, seek a fresh Shareholders
mandate based on new internal controls and review procedures for transactions with the Mandated Interested
Persons. The Board of Directors and the Audit Committee will have overall responsibility for determining the
review procedures with the authority to delegate to individuals or committees within the Group as they deem
appropriate.
153
6.
Validity period of the IPT Mandate
If approved at the 2014 AGM, the IPT Mandate will take effect from the date of the passing of the ordinary resolution in
respect of the IPT Mandate to be voted on by the Shareholders at the 2014 AGM and will (unless revoked or varied by
the Company in a general meeting) continue to be in force until the subsequent AGM, or the expiration of the period
within which the next AGM is required by law to be held, whichever is the earlier. The Company intends to seek the
approval of Shareholders for the renewal of the IPT Mandate annually. The renewal of such general mandate shall
be subject to the satisfactory review by the Audit Committee of its continued application to any interested person
transactions.
7.
Disclosure to Shareholders
Pursuant to Rule 920(1)(a) of the Listing Manual:

(a)
disclosure will be made in the annual report of the Company, giving details of the aggregate value of all
interested person transactions conducted with interested persons pursuant to the IPT Mandate during the
financial year under review and in the annual reports for the subsequent financial years during which the IPT
Mandate is in force, as required by the provisions of the Listing Manual;
(b)
announcements will be made with regard to the aggregate value of interested person transactions conducted
pursuant to the IPT Mandate for the financial periods which the Company is required to report on pursuant to
Rule 705 of the Listing Manual within the time required for the announcement of such report; and
(c)
the names of the interested persons and the corresponding aggregate value of the interested person
transactions will be presented in the following format (pursuant to Rule 907 of the Listing Manual):
Name of interested person
154
Aggregate value of all interested

person transactions during the
financial year under review
(excluding transactions less than
S$100,000 and transactions
conducted under the IPT Mandate)
Aggregate value of all interested

person transactions conducted
under the IPT Mandate (excluding
transactions less than S$100,000)
As at 17 March 2014
Class of equity securities
Ordinary shares
Number of equity securities

1,180,000,000
Voting Rights
One vote for each share
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
Number of Shareholders
8
5,428
3,308
23
8,767
%
0.09
61.92
37.73
0.26
100.00
Number of Shares
1,140
34,323,186
138,435,969
1,007,239,705
1,180,000,000
%
0.00
2.91
11.73
85.36
100.00
%
55.63
-
Deemed Interest
656,471,268
656,471,268
656,471,268
%
55.63
55.63
55.63
SUBSTANTIAL SHAREHOLDERS
(As recorded in the Register of Substantial Shareholders)
Fincantieri Oil & Gas S.p.A.

FINCANTIERI S.p.A.(1)
Fintecna S.p.A. (1)
Cassa Depositi e Prestiti S.p.A. (1)
Direct Interest
656,471,268
-
Note:
(1)
By virtue of Section 4 of the Securities and Futures Act, Chapter 289 of Singapore, these entities are deemed to be
interested in the shares held by Fincantieri Oil & Gas S.p.A. in the Company. The relationship of the said entities is
as follows:
(i) FINCANTIERI S.p.A. is the immediate holding company of Fincantieri Oil & Gas S.p.A.
(ii) Fintecna S.p.A. holds 99.4% of FINCANTIERI S.p.A.
(iii) Cassa Depositi e Prestiti S.p.A. is the immediate holding company of Fintecna S.p.A.
155
TWENTY LARGEST SHAREHOLDERS

No.
Name of Shareholders
Number of Shares
1.
2.
HSBC (SINGAPORE) NOMINEES PTE LTD
728,529,268
61.74
CITIBANK NOMINEES SINGAPORE PTE LTD
100,306,989
8.50
3.
4.
DBS NOMINEES (PRIVATE) LIMITED
39,188,271
3.32
DBSN SERVICES PTE. LTD.
38,006,470
3.22
5.
UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED
22,385,770
1.90
6.
RAFFLES NOMINEES (PTE) LIMITED
14,142,858
1.20
7.
OCBC SECURITIES PRIVATE LIMITED
12,190,000
1.03
8.
BNP PARIBAS SECURITIES SERVICES SINGAPORE BRANCH
9,869,009
0.84
9.
UOB KAY HIAN PRIVATE LIMITED
8,012,000
0.68
10.
HL BANK NOMINEES (SINGAPORE) PTE LTD
3,909,000
0.33
11.
MAYBANK KIM ENG SECURITIES PTE. LTD.
3,771,000
0.32
12.
CIMB SECURITIES (SINGAPORE) PTE. LTD.
3,080,000
0.26
13.
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
2,972,000
0.25
14.
ABN AMRO NOMINEES SINGAPORE PTE LTD
2,900,000
0.25
15.
PHILLIP SECURITIES PTE LTD
2,747,180
0.23
16.
OCBC NOMINEES SINGAPORE PRIVATE LIMITED
2,506,000
0.21
17.
KOH WOON PUAY OR TAN CHWEE GUAN
2,234,000
0.19
18.
HENG SIEW ENG
2,117,000
0.18
19.
YAP MUI CHENG,ANGELA
20.
CITIBANK CONSUMER NOMINEES PTE LTD

TOTAL
2,071,000
0.18
1,750,000
1,002,687,815
0.15
84.98
PERCENTAGE OF SHAREHOLDING IN PUBLICS HANDS

Approximately, 44.37% of the Companys shares are held in the hands of the Public. Accordingly, the Company has
complied with Rule 723 of the Listing Manual of the SGX-ST.
156

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Vard Holdings Limited (the Company) will be held at
Pan Pacific Singapore, Oceans 3, 4 and 5, 7 Raffles Boulevard, Marina Square, Singapore 039595, on Monday, 7 April
2014 at 10:00 a.m. for the following purposes:
AS ORDINARY BUSINESS
1.
To receive and adopt the Directors Report and the Audited Accounts of the Company for the financial year ended
31 December 2013 together with the Auditors Report thereon.
(Resolution 1)
2.
To re-elect the following Directors of the Company retiring pursuant to Article 94 of the Articles of Association
of the Company:
Mr. Keen Whye Lee
(Resolution 2a)
(Resolution 2b)
Mr. Keen Whye Lee will, upon re-election as a Director of the Company, remain as the Lead Independent
Director, the Chairman of the Audit Committee and a member of the Nominating Committee and the
Remuneration Committee, and will be considered independent.
Mr. Pier Francesco Ragni will, upon re-election as a Director of the Company, remain as a member of the Audit
Committee and will be considered non-independent.
3.
To re-appoint Mr. Giuseppe Bono pursuant to Section 153(6) of the Companies Act, Chapter 50, to hold office
from the date of this Annual General Meeting until the next Annual General Meeting.
(Resolution 3)
Mr. Giuseppe Bono will, upon re-appointment as a Director of the Company, remain as the Chairman of the
Board of Directors and a member of the Nominating Committee and will be considered non-independent.
4.
To approve the payment of Directors fees of S$500,000 for the financial year ending 31 December 2014, to be
paid quarterly in arrears. (2013: S$200,000.)
(Resolution 4)
5.
To approve an additional Directors fees of S$200,000 for the financial year ended 31 December 2013.
(Resolution 5)
6.
To re-appoint PricewaterhouseCoopers LLP as the Auditors of the Company and to authorize the Directors of the
Company to fix their remuneration.
(Resolution 6)
7.
To transact any other ordinary business which may properly be transacted at an Annual General Meeting.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolution as an Ordinary Resolution, with or without any
modifications:
8.
Authority to issue shares

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore
Exchange Securities Trading Limited, the Directors of the Company be authorized and empowered to:
(a)
(i)
issue shares in the Company (shares) whether by way of rights, bonus or otherwise; and/or
157
(ii)
make or grant offers, agreements or options (collectively, Instruments) that might or would require
shares to be issued, including but not limited to the creation and issue of (as well as adjustments to)
options, warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the
Directors of the Company may in their absolute discretion deem fit; and
(b)
(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in
pursuance of any Instruments made or granted by the Directors of the Company while this Resolution was
in force,
provided that:
(1)
the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or
granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not
exceed fifty per centum (50%) of the total number of issued shares (excluding treasury shares) in the
capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate
number of shares to be issued other than on a pro rata basis to shareholders of the Company shall not
exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the
capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(2)
(subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited)
for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph
(1) above, the percentage of issued shares (excluding treasury shares) shall be based on the total number
of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this
Resolution, after adjusting for:
(a)
new shares arising from the conversion or exercise of any convertible securities;
(b)
new shares arising from exercising share options or vesting of share awards which are outstanding
or subsisting at the time of the passing of this Resolution; and
(c)
any subsequent bonus issue, consolidation or subdivision of shares;
(3)
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of
the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless
such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles
of Association of the Company; and
(4)
unless revoked or varied by the Company in a general meeting, such authority shall continue in force until
the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is earlier.
[See Explanatory Note (i)]

9.
(Resolution 7)
Renewal of Shareholders Mandate for Interested Person Transactions

That for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited:
(a)
158
approval be and is hereby given for the Company, its subsidiaries and associated companies or any of
them to enter into any of the transactions falling within the categories of Mandated Transactions (as
defined in the Appendix to the Annual Report dated 21 March 2014 (the Appendix)) with any of the
Mandated Interested Persons (as defined in the Appendix), provided that such transactions are carried out
on normal commercial terms and in accordance with the review procedures of the Company for such
Mandated Transactions as set out in the Appendix (the Shareholders Mandate);
(b)
the Shareholders Mandate shall, unless revoked or varied by the Company in a general meeting, continue
in force until the conclusion of the next Annual General Meeting of the Company or the date by which the
next Annual General Meeting of the Company is required by law to be held, whichever is earlier; and
(c)
the Directors of the Company and/or any of them be and are hereby authorized to complete and do all such
acts and things (including executing all such documents as may be required) as they and/or he may
consider necessary, desirable or expedient, incidental or in the interests of the Company to give effect to
the Shareholders Mandate and/or this Resolution as they may deem fit.
[See Explanatory Note (ii)]
(Resolution 8)
By Order of the Board

Elizabeth Krishnan
Company Secretary
Singapore, 21 March 2014
Explanatory Notes:
(i)
The Ordinary Resolution 7 in item 8 above, if passed, will empower the Directors of the Company, effective until
the conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General
Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a
general meeting, whichever is the earlier, to issue shares, make or grant Instruments convertible into shares
and to issue shares pursuant to such Instruments, up to a number not exceeding, in total, 50% of the total
number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be
issued other than on a pro-rata basis to shareholders.
For determining the aggregate number of shares that may be issued, the total number of issued shares
(excluding treasury shares) will be calculated based on the total number of issued shares (excluding treasury
shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new
shares arising from the conversion or exercise of any convertible securities or share options or vesting of share
awards which are outstanding or subsisting at the time when this Ordinary Resolution is passed and any
subsequent bonus issue, consolidation or subdivision of shares.
(ii)
The Ordinary Resolution 8 proposed in item 9 above, if passed, will renew the mandate authorizing the Company,
its subsidiaries and associated companies, or any of them, for the purposes of Chapter 9 of the Listing Manual,
to enter into certain interested person transactions as described in the Appendix to the Annual Report and will
empower the Directors of the Company to do all acts necessary to give effect to the Shareholders Mandate. This
authority will, unless previously revoked or varied by the Company in a general meeting, expire at the conclusion
of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the
Company is required by law to be held, whichever is the earlier. Please refer to the Appendix for further details.
Notes:
1.
A Member entitled to attend and vote at the Annual General Meeting (the Meeting) is entitled to appoint not
more than two proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company.
2.
The instrument appointing a proxy must be deposited at the Registered Office of the Company at 50 Raffles
Place, #32-01 Singapore Land Tower, Singapore 048623 not less than forty-eight (48) hours before the time
appointed for holding the Meeting.
159
160
161
162
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163
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ANNUAL REPORT 2013

VARD is present in Norway,

Core Products and Services

Shareholding and Corporate Structure

ANNUAL REPORT 2013

ANNUAL REPORT 2013

VARDs Annual Report 2013 consists

Vard Vung Tau

VARD has a number of

Deliveries last ve years

We are proud that many of our

New orders 2013

Every day, we go to work to earn our

Large share of own design

Our values guide us

products and perfecting our vessels

Salesmanship is about fullling our

We take pride in delivering

We truly care about the

Every second week

A Platform Supply Vessel (PSV) built

A Platform Supply Vessel (PSV)

I am very happy with the level

Our values are at the core of

VARD has a professional

Gadus Poseidon, the rst advanced

A highly Anchor Handling Tug

The second vessel in a series of

After six successful months,

I see VARD as DOFs preferred

We look forward to adding yet

We build vessels and solutions with

Mr. Roy Reite

Containing rising costs

industry with new technology and

Rising demand for

The OSCVs cater to a subsea industry

in Brazil, we started operation as

and Romania. All of the 19 vessels

Mr. Roy Reite

The focus going forward will be for VARD

Mr. Giuseppe Bono

whether it be cruise ships, naval

example, I see opportunities for

has come to a close. Following

vessels or high-end offshore support

closer cooperation and exchange

FINCANTIERIs acquisition of the

vessels. Thanks to such wide range

of best practices in areas such

majority of shares in VARD, and

of experiences developed over

as design and engineering,

the years we can now leverage on

procurement, production, power and

in March 2013, I have spent the

a variety of know-how and best

automation systems, and interior

rst year getting to know a highly

practices which is unique and

outtting of the vessels we build.

competent organization operating

represents our main competitive