Note 14 - Related Party Transactions

The Company’s largest shareholder, Siem Europe S.a r.l, with a holding of 83 %, and its parent company, Siem Industries Inc., are defined as related parties. The Company has an obligation to Siem Industries Inc., for a fee of USD 250K for 2016 (2015: USD 300K). This fee is the remuneration for the services of the two of the Board members. This fee also covers office in the Cayman Islands and administrative costs.

Details related to transactions, loans and remuneration to the Executive Management and the Board of Directors are set out in Note 19. For the Parent, all subsidiaries listed in Note 6 are also defined as related parties.

For other related parties, the following transactions were carried out:

Sales of services

Consolidated

(Amounts in USD 1,000)

2016

2015

Service to entity where director has ownership

26,150

21,493

Total

26,150

21,493

Above service is provided to companies in which a Board member has an interest. Kristian Siem is the Chairman of Siem Industries Inc., which is controlled by a trust whose potential beneficiaries include members of Kristian Siem’s immediate family. Siem Industries holds an interest in Subsea 7. Siem Offshore LLC, 100% owned by the Company and Siem AHTS Pool AS, 78% owned by the Company, have charted vessels to Subsea 7 during 2016. The amount for 2016 also include management services delivered to Siem Industries and to subsidiaries of Siem Europe S.A R.L.

Purchase of service

Consolidated

(Amounts in USD 1,000)

2016

2015

Service from related parties

4,425

5,925

Service from entity where director has ownership

234,709

60,559

Total

239,134

66,484

Service delivered from related parties is mainly cost for technical management, corporate management and delivered crew. The service is supported to Siem Meling Offshore DA, 51% owned by the Company, and is delivered by its partner in Siem Offshore DA.

Service from entity where director has ownership consist of instalment according to shipbuilding contracts with Flensburger Schiffbau-Gesellschaft and management fee from Siem Capital UK Ltd, both owned 100% by Siem Europe S.a r.l.

Balance items following purchase and sale of service

Consolidated

(Amounts in USD 1,000)

2016

2015

Accounts receivables

3,642

2,081

Accounts payable

222

250

Loans to related parties

Consolidated

(Amounts in USD 1,000)

2016

2015

Loan to associates

At January 1

17,069

233

Drawings

-

18,278

Instalments

-18,600

-51

Interest charged

498

511

Interest received

-1,047

-4

Exchange rate variations

2,233

-1,897

At December 31

153

17,069

The Company holds a long-term loan to Rovde Industripark AS and a long-term loan to Siem Industries Inc.The loan to Siem Industries Inc was repaid end of 2016. Siem Offshore Invest AS owns 50% of Rovde Industripark AS.

Loans to related parties

Consolidated

(Amounts in USD 1,000)

2016

2015

Short-term loan to related parties

At January 1

5,786

-

Drawings

-

5,684

Instalments

-

-

Interest expenses

284

102

At December 31

6,070

5,786

In 2015 the Company provided a short-term loan to Research Developement & Financial Consultant Ltd. The borrower is the 49% owner of Siem Offshore Ghana International AS. The loan is on markets term of interest.

Liability to related parties

Consolidated

(Amounts in USD 1,000)

2016

2015

Loan to associates

At January 1

60,830

-

Reclassification

-

60,158

Drawings

30,566

590

Instalments

-30,000

-

Interest expenses

2,330

2,086

Interest paid

-2,583

-1,956

Exchange rate variations

-1

-49

At December 31

61,142

60,830

Liability to related parties

Consolidated

(Amounts in USD 1,000)

2016

2015

Short-term loan to related parties

At January 1

-

60,158

Reclassification

-

-60,158

At December 31

-

-

Long-term liability

The long-term liability consist of two fasilities. The Company has a long-term credit facility provided by Siem Industries Inc. and Siem Meling Offshore DA has drawn a long-term liability from its partner in Siem Meling Offshore DA.

Short-term liability

End of 2014, a short-term liability of USD 60 million was drawn by Siem Offshore Inc. under a credit facility provided by Siem Industries Inc. In 2015, the parties have agreed to change the terms of the liability from a short-term liability to a long-term liability. This is reflected in the tables above as reclassification.

The liability is on market term of interest.

Following transactions with related parties were carried out for the parent company

Sales of service

Consolidated

(Amounts in USD 1,000)

2016

2015

Service to subsidiaries

601

-

Service to associates

264

145

Total

865

7,415

Purchase of service

Consolidated

(Amounts in USD 1,000)

2016

2015

Service to subsidiaries

6,754

7,415

Service to associates

-

-

Total

6,754

7,415

Sales to subsidiaries and associates consists of guarantee provisions to Siem Offshore Rederi AS, Siem Offshore Contractors GmbH and Secunda Canada LP.

Service from subsidiaries consists of administrative and corporate services provided by Siem Offshore Management AS. All terms used for above transactions are at arms’ length.

Year-end balances arising from sales and purchases

PARENT COMPANY

(Amounts in USD 1,000)

2016

2015

Receivables from related parties

Subsidiaries

1,027

1,129

Associates

327

522

Total

1,354

1,651

Payables from related parties

Subsidiaries

3,353

4,576

Associates

-

-

Total

3,353

4,576

Loans to related parties

PARENT COMPANY

(Amounts in USD 1,000)

2016

2015

Loan to associates

At January 1

21,870

21,748

Reclassification

34,723

-

Drawings

-

-

Instalments

-1,950

-

Interest expenses

1,045

502

Interest paid

-

-

Exchange rate variations

44

-380

At December 31

55,732

21,870

Loans to related parties

At January 1

-

4,498

Reclassification

-

143

Drawings

-

-

Instalments

-

-4,761

Interest expenses

-

61

Interest paid

-

-61

Exchange rate variations

-

121

At December 31

-

-

Total long-term loans to related parties

2016

2015

At January 1

21,870

26,246

Reclassification

34,723

143

Instalments

-1,950

-4,761

Interest expenses

1,045

563

Interest paid

-

-61

Exchange rate variations

44

-259

At December 31

55,732

21,870

The long-term loan to subsidiaries on 31 December 2016, is held against Siem Offshore do Brasil SA and Siem AHTS Pool AS.

Loan provided to associates, Siem Offshore Contractors GmbH, a company owned 100% by the subsidiary Siem Offshore Invest AS, was repaid during 2015.

All loans are on market terms of interest.

Short-term loan to related parties

PARENT COMPANY

(Amounts in USD 1,000)

2016

2015

Short-term loan to related parties

At January 1

7,090

6,984

Reclassification

-

-

Drawings

-

-

Instalments

-

-

Interest expenses

327

106

Interest paid

-

-

Exchange rate variations

-

-

At December 31

7,417

7,090

The short-term loan to related parties on 31 December 2016, is held against Siem Offshore do Brasil SA and Research Developement & Financial Consultant Ltd. The borrower is 49% owner of Siem Offshore Ghana International AS.

All loans are on market terms of interest.

Board Of Directors

Financial Statements

Notes