in review 2014

MESSAGE FROM THE CEO As Stanford Marine Group’s CEO, I am proud to see the outstanding results achieved this year by our firm along with the significant opportunities for further expansion of our marine businesses. With a remarkable EBITDA of USD 65 million on revenue of USD 257 million, the Stanford Marine Group has once again delivered a notable financial performance that we are all proud of.

Since 2014 has been a successful year with positive sustained growth in our core Marine activities, we are pleased to report an increase of 12.3% in revenue and 11.5% in EBITDA. The businesses in the Group, be it the Offshore Support Vessel Chartering business or the Ship Building and Repair business, have all contributed greatly to this development and growth.

Stanford Marine has expanded in terms of vessel deliveries and penetrating or consolidating new markets. We have seen this in South East Asia and West Africa, for example. We also successfully managed to continue with the 2013 trend of 92% fleet utilization and to secure 38 new contracts as well as 59 contract extensions throughout the year, a reflection of the high quality service we provide to our clients and of the trust they place in us.

In 2014, we operated a diverse fleet of 46 vessels across the Middle East, South East Asia and Africa (41 owned and 5 under management). Stanford Marine’s relentless focus on health and safety resulted in achieving a milestone for the company in January: 15 million man hours without an LTI (Lost Time Incident). The company strives to implement new strategies in terms of health and safety, such as the ‘Eye on Safety’ observation cards. Our target of 10,000 cards was surpassed to 23,000 cards which reflect the enthusiasm of our crew and the attention they pay to health and safety implementation in their work. This has been appreciated by our clients and thoroughly embraced by our crew members resulting in improved levels of safety awareness. With a large and modern fleet, professional management team and certified HSEQ management systems, Stanford Marine reaffirms its position as one of the world class providers in the industry. These results would not have been possible without the hard work of our teams, both onshore and offshore, whom I would like to thank and salute for their exceptional efforts and work ethic.

Grandweld’s 30 years birthday was marked in 2014. Its record to date consists of more than 12,500 ship repair and docking jobs and more than 100 deliveries of new build vessels.

The company completed and delivered 16 new vessels to their owners in 2014, such as a 100 ton bollard pull AHTS to Halul Offshore, 3 seismic support vessels to Bourbon Offshore, 4 aluminium crew boats to Cotemar out of Mexico, and 1 crane workboat to Kuwait Oil

KEy FiGuRES

EBITDAUSD million

RevenueUSD million

CAPEXUSD million

* Acquisition of MMPL

Elias Nassif,President and CEOSTANFORD MARINE GROUP

AREAS OF OPERATION

CAGR 2009-2014 19.6%

2009

105126

2010 2011

177

2013

228.9

2014

257

2012

231

2009

20.536.9

2010 2011

48.1

2013

58.3

2014

65

2012

59CAGR 2009-2014 26.0%

2009

158.3

*MMPL

79.6

2010 2011

71.2

2013

110.2

2014

49.9

2012

67.7

KEy STATISTICS

Employees End 2014

Ships Built And Delivered in 201416

3306

Ship Repair And Maintenance Jobs Performed in 2014

Offshore Supply Vessels in Operation End 201446

635

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Company. The design and Engineering department continues to produce an ever evolving optimal design for the 42m Aluminium Crew Boat. The fact that we build and deliver vessels to diverse geographies is a testament of Grandweld’s workmanship and trusted design. The Ship Repair and Maintenance business has also had a successful year in 2014, consolidating the results of the previous year and benefiting from the increase in available space in the new yard at Dubai Maritime City.

We are proud to continue making a positive change and difference on critical issues such as education, health and wellness, economic development and environmental sustainability. Year on year, we continue to sponsor initiatives outside our company such as the financial support to the Al Noor Training Centre for Children with Special Needs, the Rashid Paediatric Therapy Centre, and The Angel Appeal. Moreover, we broadened our sponsorships this year and supported the project of renewing and enhancing the Ligula Hospital in Mtwara. At SMG we believe that acting responsibly and giving back to society make us a more effective organization.

Looking ahead, we anticipate that events in 2015 will have an impact on aspects of our business. We have all been experiencing a steady decline in the price of oill during the second half of 2014. Oil prices plummeted from a peak of USD 115/bbl in June 2014 to USD 57/bbl on Dec 31, 2014.

If this trend continues in 2015 and the price of oil continues to drop below the USD 60/bbl mark, it could mean a direct impact on our chartering business as we will feel the squeeze on the charter rates, let alone risk of contract cancellations, it will also directly affect the shipbuilding business. Indirectly, on the other hand, we will certainly get impacted by the Euro-zone crisis and the slow-down of the global economy. Despite the negatives, I remain optimistic that we will pull through the year ahead. We have a strong base of solid charter contracts at Stanford and a robust order book for our shipbuilding business. Moreover, our operational efficiencies are continuously evolving; thanks to the dedicated individuals who strive to make it better each and every time.

In summary, I would like to thank the SMG team for their continued support and hard work in making 2014 a year to be proud of. I would also like to thank our shareholders for their ongoing guidance and cooperation in delivering the full potential of the company.

Elias Nassif,President and CEOSTANFORD MARINE GROUP

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SENiOR MANAGEMENTBOARd OF diRECTORS

Ahmed BadreldinSenior PartnerAbraaj Capital

Huda Ali Redha Al LawatiPartner / CIO MENA

Abraaj Capital

Waqar SiddiqueSenior Partner Abraaj Capital

Hani RamadanDirector

Waha Capital

Ibrahim Al BinaliDirector

Waha Capital

Darren ReevesGeneral Manager

Stanford

Mohd. SamhaGeneral Manager

Gmmostech

Elias NassifChief Executive OfficerStanford Marine Group

N. S. RamjeeChief Financial OfficerStanford Marine Group

Jamal AbkiGeneral Manager

Grandweld

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For Stanford Marine, 2014 was a year which echoed the momentum of the previous years, and as such was characterised by success across all areas of the business and in our various geographies.

Our fleet of 41 owned, and 5 cross chartered vessels, enjoyed a strong average utilisation of 92% for the year. 38 new charter-parties were signed and entered into, with a further 59 contract extensions exercised. Of special note was the entry to the Angolan market with the Stanford Hawk on a 5 year (+2yr +2yr) charter with Total Angola, as well as the modifications completed on the Ark Oslo to increase her GT to 1600 through increased

accommodation, and her subsequent commencement of a charter with Carigali HESS in Malaysia.

From a safety perspective, we achieved 15million man hours without a Lost Time Injury in early 2014. This represented over 4 years of operations on our vessels by the 1500 active crew members on our books. This is an achievement which we are

very proud of and helps explain how our crew retention exceeds 75% year on year.

The technical uptime of the fleet reached record levels in 2014, with the vessels being available from a technical perspective over 98% of the year. This figure clearly highlights the value added by an effective planned maintenance system. 18 vessels were docked

over the course of the year: these included PSV’s, AHTS’s and crew boats and almost all of them were docked in Dubai under the supervision of Grandweld.

There were two new builds delivered in 2014. The Stanford Mustang is a 50m DP2 utility vessel with 60T bollard pull. She was built specifically for a long term contract with Maersk Oil of Qatar. The

vessel is unique in that it has a very low air draft and a collapsible mast, which allows it to pass under the bridges of the charterer’s offshore production complex. The Stanford Eagle is a 75m DP2 PSV and is a sister of the Hawk which we took delivery of in late 2013.

The year saw Stanford Marine continue to cement its objective of being the prime offshore support vessel provider of the Middle East and expand globally in through a phased and strategic approach.

OFFSHORE SERViCE VESSELS

2003

11

2004

16

2001

8

2005

18

2002

10

2006

18

2007

20

2008

21

2009

32

2010

35

2011

40

2012

42

2013

43

2014

46

*incl. vessels under management

Vessels in operation*

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Stanford Marine Fleet

PLATFORM SuPPLy VESSELSName Built Length (m) DWT Specifications

Stanford Bateleur 2013 87 5145 DP2, FiFi 1

Stanford Buzzard 2011 87 5145 DP2, FiFi 1

Stanford Hawk 2013 75 3300 DP2, FiFi 1

Stanford Eagle 2014 75 3300 DP2, FiFi 1

Merlin 2010 70 2750 DP2, FiFi 1

Stanford Hudhud 2011 58 1350 DP1, FiFi 1

Stanford Goshawk 2011 58 1350 DP1, FiFi 1

Stanford Caracara 2011 58 1350 DP1, FiFi 1

Stanford Osprey 2011 58 1350 DP1, FiFi 1

Stanford Condor 2011 58 1350 DP1, FiFi 1

Stanford Kite 2010 58 1350 DP1, FiFi 1

Stanford Gold 2000 56 960 -

FAST SuPPORT iNTERVENTiON VESSELSName Built Length (m) BHP

Stanford Maya 2011 42 4350

Stanford Puma 2009 41 4200

Stanford Dove 2009 41 4200

Stanford Nile 2009 41 4200

Stanford Tyne 2009 41 4200

Stanford Tigris 2009 41 4200

Stanford Rhine 2009 41 4200

Stanford Swan 2008 41 4050

Firebird-1 2007 36 4050

Firecrest 2007 36 4050

OFFSHORE SERViCE VESSELS

ANCHOR HANdLiNG TuG SuPPLyName Built Length (m) BHP Specifications

Stanford Alpha 2008 59.25 5150 65T BP, FiFi 1

Stanford Bravo 2008 58.7 5150 65T BP, FiFi 1, DP1

Stanford Challenger 2005 58.7 4750 64T BP, FiFi 1

Stanford Mariner 2 2002 56 4000 53T BP, FiFi 1

ANCHOR HANdLiNG TuG Name Built Length (m) BHP Specifications

Waha Mermaid 2006 50 5500 70T, FiFi 1

Stanford Pride 2000Rebuilt 2012

37.44 5400 55T BP47T BP, DP1

Stanford Bream 2009 48 5150 65T

Stanford Mermaid 2007 49 5150 71T BP, FiFi 1

Stanford Seal 2007 38 5000 60T, FiFi 1

Stanford Mustang 2014 50 4300 60T, DP2

Stanford Energy 2000 37 3150 45T BP

CREW / uTiLiTy SuPPLy VESSELSName Built Length (m) BHP

Stanford Hunter 2013 57 3300

Stanford Provider 2008 48 2400

Stanford Harrier 1991 39.63 2040

Sea Robin 1989 39.63 2040

Stanford Swift 2004 33.5 2100

In addition to its own fleet, Stanford Marine manages a number of vessels for other Owners.

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SHiP BuiLdiNG & REPAiRIn 2014, Grandweld Shipyards celebrated its 30th anniversary. During its long and exciting journey, Grandweld successfully delivered more than 100 newbuild vessels and completed more than 12,500 ship repair/conversion projects for both local and international clients.

2014 was a significant growth year for Grandweld Shipyards marking a 15% increase in revenue compared to 2013. Grandweld’s shipbuilding division delivered 16 newbuild vessels to new and existing clients, including AHTS vessels to Halul Offshore-Qatar, 3 seismic support vessels to Bourbon, 4

aluminum crew boats to Cotemar- Mexico, and 1 Crane Workboat delivered to Kuwait Oil Company.

The ship repair division witnessed a busy year with regular dry-docking repairs and conversion projects for various clients operating in the region. Some of the major conversion projects in 2014 include: the conversion of the Khalfan-Mutawa Marine, Bourbon Surfer-Bourbon offshore, and DMS Challenger for Topaz Marine.

In 2014, Mr. Jamal Abki, General Manager of Grandweld Shipyards, was honoured by the International Maritime Club with the IMC Golden Helm Excellence Award for his personal contribution to the maritime industry. Grandweld Shipyards was awarded for the best marketing campaign at SMEM (Seatrade Middle East Maritime Exhibition) in 2014 and honoured by the

Permanent Committee for Labour Affairs in Dubai, chaired by Major General Obaid Muhair bin Suroor, Deputy Director General of GDRFA-Dubai, for their commitment and implementation to best in class HSE rules and regulations.

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Health, Safety and Environmental (HSE) performance continues to be one of the highest priorities within Stanford Marine Group.

The Group operates mature HSE management systems that have been designed to meet local and international requirements and all statutory obligations. The Group’s systems are accredited to ISO 9001, 14001 and OHSAS 18001 standards, and Stanford Marine is also certified to the International Safety Management (ISM) code.

In 2014, safety performance has once again improved. Stanford Marine achieved 15 million man hours without a Lost Time Incident (LTI) at the beginning of January. Unfortunately, this was closely followed by an LTI which occurred at the end of the 1st quarter, the first in over 3 years. Overall HSE statistics improved with a 60% reduction in the Total Recordable Incident Rate (TRIR) over 2013. Further success was witnessed by the ‘Eye on Safety’ observation card program. With a target of 10,000 cards for the year, the total received was over 23,000, a tremendous contribution from Stanford’s crew.

Grandweld is now seeing the results of the significant systems it has put in place for worker safety. The TRIR was reduced by over 47% compared to 2013. In terms of workers’ welfare, Grandweld was honored by the Permanent Committee for Labour Affairs in Dubai for their commitment and implementation of HSE rules and regulations across their labour accommodation centers in Dubai.

Operating safely is a core value at SMG. This can only be achieved through an unswerving commitment by all employees to HSE management and implementation.

Acting responsibly is embedded in how we do business. We inculcate responsibility and awareness into each individual at the organization in order to achieve positive outcomes. SMG does not restrict its ‘Giving back’ to the Marine industry; rather, we aim to impact the broader local community through education, health and wellness, economic development and environmental sustainability initiatives.

Year after year, SMG continues to support Al Noor Training Center for Children with Special Needs, Rashid Pediatric

Therapy Centre and The Angel Appeal. We always seek new avenues for generating sustainability awareness and support. This year we sponsored Ligula Hospital in Mtwara. Our support is not restricted to financial contributions only as we encourage our employees to participate in responsible activities within their community.

We strive to operate our business in an enlightened way and integrate sustainability into the core of our business. We are proud of our employees’ contribution this year and look forward to bigger and better initiatives in the years to come.

TRIR* for Stanford Marine

* Total Recordable Incident Rate per 200,000 manhours

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0.480.420.44

0.760.88

0.120.22 0.14 0.19

0.07

STANFORd MARiNE GROuP HSE CORPORATE SOCiAL RESPONSiBiLiTy

In addition to our financial support for The Angel Appeal we provided the seafarers with SMG t-shirts, The Angel Appeal team were kind enough to wrap the t-shirts and hand them out to the Seafarers.

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