The Board of Directors
P.O. Box 309
South Church Street
Enquiries to: Tine Svae
Dir. line. +47 22 93 97 84
Our reference: 14/10134
Finanstilsynet has reviewed certain aspects of the 2013 financial statements of Siem Industries Inc. (Siem Industries). Reference is made to correspondence in the matter, including meeting held 16. September 2014.
Siem Industries has bonds listed on the Oslo Stock Exchange. The 2013 financial statements were prepared in accordance with IFRS. Through the review, and as described in this letter, Finanstilsynet has made certain recommendations relating to the financial reporting.
The Siem Industries Group is diversified with several subsidiaries. The company also has significant investments in several associates, accounted for using the equity method in the consolidated financial statements.
According to Siem Industries, many of the bond investors are domiciled in the US. The presentation and structure of the financial statements has been chosen with special regard to these investors. Through the review, various items have been raised by Finanstilsynet, focusing on the general presentation in the financial statements.
In IAS 1 Presentation of Financial Statements no. 17 and 113, there are certain requirements related to the presentation of the financial statements. The purpose of the requirements is to enable users of the financial statements easy and understandable access to information. IAS 13.99 requires the use of a tabular format for all fair value disclosures.
Based on the requirements in IAS 1, Finanstilsynet recommends Siem Industries to reconsider the structure in the financial statements. The company is recommended to split information related to transactions in subsidiaries from information regarding transactions and operations in associates.
Siem Industries is also recommended to provide information relating to transactions effected by associates in a separate note, as the effect in the financial statements is found as a one line item in either the profit or loss or the balance sheet. More detailed and accessible information regarding subsidiaries and associates will enable readers to better understand the effects that the specific transactions have on the statement of comprehensive income or balance sheet of the company, and also better understand the risks for Siem Industries.
Finanstilsynet also recommends Siem Industries to be entity specific, and include information on how an accounting policy is applied and describe the judgments that are made by management when applying the accounting policies.
The financial statements of Siem Industries are comprehensive and contain a lot of information.
According to IAS 1.31, an entity need not provide a specific disclosure required by an IFRS if the information is not material. Finanstilsynet recommends Siem Industries to remove information that is not relevant to the entity.
Finanstilsynet has not considered whether the above matters are subject to the securities legislation's provisions regarding the requirement to disclose inside information in accordance with the Securities Trading Act section 5-2 subsection (1) and section 3-2. Finanstilsynet expects the undertaking to consider its requirement to disclose inside information on a continuous basis.
Finanstilsynet has forwarded a copy of this letter to the issuer's appointed auditor and to Oslo Børs.
On behalf of Finanstilsynet.
Gaute S. Gravir
Head of Section
Cathrine Husebye Rein