VALZ HLDG : VHL - Annual Report FP2023

Financial Period ended 31 December 2023

OUR VALUES

INSPIRING TRUST:

Constructing Solid Partnerships

Of Collaboration

SYSTEMATIC VIGOUR:

Every Meticulous Detail Grounded

in Executional Excellence

ADAPTIVE SOLUTIONS:

Meeting Evolving Challenges

With Dynamic Solutions

CONTENTS

1	We Are Vallianz	18	Corporate Social Responsibility
2	Core Business	19	Sustainability Highlights
3	Corporate Structure	20	Corporate Information
4	Geographical Presence	21	Corporate Governance
6	Chairman's Message		Statement
10	Financial Review	40	Financial Statements
12	Developments in Sustainable	124	Statistics of Shareholdings
	Solutions	126	Notice of Annual General Meeting
14	Vallianz Fleet	129	Disclosure of Information on
15	Financial Highlights		Director Seeking Re-election
16	Board of Directors		Proxy Form

This annual report has been reviewed by the Company's Sponsor, RHT Capital Pte. Ltd. ("Sponsor"), for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited ("SGX-ST"). It has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document.

The contact person for the Sponsor is Mr Khong Choun Mun, Registered Professional, RHT Capital Pte. Ltd. at 36 Robinson Road, #10-06 City House, Singapore 068877, [e-mail].

WE ARE

VALLIANZ

Engineering Tomorrow: Sustainable Solutions for a Brighter Future

Vallianz Holdings Limited ("Vallianz" and together with its subsidiaries, the "Group") is a well-established provider of offshore support vessels ("OSVs") and integrated offshore marine solutions to serve the ever-changing needs of the global energy industry.

For close to 30 years, the Group has answered the needs of the global energy industry through well-implemented integrated offshore marine solutions with a progressive yet pragmatic vision and a team of highly motivated industry experts working in close collaboration with its customers.

We are a publicly listed enterprise registered in Singapore with an international footprint, spanning across markets in the Middle East and Asia Pacific. To provide adaptive solutions in an environment of rapidly evolving needs,

Vallianz has a fleet of 14 OSVs which comprise anchor handling tugs with supply capabilities, submersible launch barges and flat top cargo barges.

The Group also owns a shipyard in Batam, Indonesia, which serves as a marine base for vessel docking, repairs and maintenance works. Our shipyard possesses strong in-house fabrication and engineering capabilities such as shipbuilding and fabrication works, which are part of the downstream services that are fully dedicated to supporting our subsidiaries, partners and customers. This further enhances our value proposition by broadening the spectrum of our marine services and takes us closer to our core focus on delivering operational and service excellence.

Financial Period ended 31 December 2023

1

CORE

BUSINESS

SPECIALISED OFFSHORE SUPPORT

MARINE TECHNOLOGY

Vallianz currently owns and operates 14 OSVs, which are available for charter to fulfil the growing demand of the global offshore energy market. The Group's vessels are deployed for offshore projects in the Middle East and Asia Pacific. To enhance our market competitiveness, we are focused on forging trusting partnerships with our customers, instilling systematic vigour to deliver executional excellence, and creating adaptive solutions to respond to our customers' evolving needs. The Group is continually assessing plans to expand our range of vessels and modernise our fleet to the latest standards.

HEAVY TRANSPORT VESSELS

Vallianz provides a fleet of two Submersible Heavy Lift Transport, Float-over & Launch Barges with Overall Length ranging from 140 to 160 Metres, Deadweight Capacity from 19,000 Tonnes up to 42,000 Tonnes, Advanced Ballast System up to 12,500 m3/hr and Deck Immersion of up to 11 Meters.

These barges are capable of performing a wide range of Offshore Operations, including Float-over Method Topside Installation up to 25,000 Tonnes, Jacket Launch up to 15,000 Tonnes, Submersible Heavy Lift and Transport of Floating Cargo up to 42,000 Tonnes.

The multi-functional architecture makes it simple and quick to configure for any unique project requirement, allowing for rapid mobilization and deployment.

SHIPBUILDING, ENGINEERING & FABRICATION

The Group's subsidiary, PT. United Sindo Perkasa, operates a shipyard located in the Kabil Industry Zone of Batam, Indonesia, which provides full end to end solutions for all aspects of shipbuilding, ship conversions and ship repairs, with vessels ranging from OSVs like Anchor Handling Tug Boats ("AHTS") and Multi-Purpose Support Vessels ("MPSV") to Research Vessels and even Offshore Floating Fish Farms. The shipyard is supported by a specialised in-house engineering division which allows the Group to provide turnkey engineering solutions and services to our clients. Leveraging on our expertise in shipbuilding and engineering, we provide fabrication services for offshore and onshore structures such as pipe and pipe spool fabrication and installation as well as structure steel fabrication for our customers in the marine and renewable sectors.

Vallianz believes that in this ever-changing marine climate, vessel digitalisation and alternative marine technology are the pillars of a sustainable marine future. As such, the Group works with our customers and partners to provide advanced solutions such as marine electrification using battery systems, alternative fuel and green design turnkey engineering solutions, as well as vessel digitalisation using digital remote monitoring systems.

RENEWABLES & SUSTAINABLE ENERGY

Vallianz supports decarbonization by embracing industry-leading advancements within our existing business lines and infrastructure to work positively for more efficient, reliable, and sustainable operations. We are aligned with various progressive energy and solution partners to bring about a sustainable future.

Vallianz has embarked on harnessing the power of renewables to support our energy transformation journey through the alignment with various portfolios in the wind and alternative energy sectors, designing our vessels with zero emission or net-zero emission capabilities in mind, through the incorporation of battery solutions and alternative fuels integration.

Vallianz is also broadening its services in offshore renewables by the provision of Service Operations Vessels ("SOV"), Crew Transfer Vessels ("CTV"), DP2 Heavy Transport Vessels ("HTV") and light fabrication for offshore wind structures such as monopiles and jackets.

2

VALLIANZ HOLDINGS LIMITED

CORPORATE STRUCTURE

VALLIANZ HOLDINGS LIMITED

Vallianz International

Pte Ltd

100%

Vallianz Corporate

Services Pte Ltd

100%

Resolute Pte Ltd

51%

Vallianz Marine Mexico,

S.A. De C.V

49%

Vallianz Prestige

Pte Ltd

100%

Vallianz Energy

Shipbuilding Pte Ltd

100%

Vallianz Investment

Capital Pte Ltd

100%

Rawabi Vallianz

International Company

Newcruz International

Pte Ltd

100%

PTSB Holdings

Pte Ltd

100%

Vallianz Offshore

Capital Mexico, A. De

C.V. SOFOM, E.N.R.

100%

Hamilton Offshore

Services Pte Ltd

100%

OER Holdings

Pte Ltd

100%

Holmen Heavylift

Offshore Pte Ltd

75%

Samson Engineering

Limited

100%

Vallianz Marine

Pte Ltd

100%

Samson Marine

Pte Ltd

100%

Vallianz Offshore

Marine Pte Ltd

100%

Newcruz Shipbuilding &

Engineering Pte Ltd

100%

Holmen Arctic

Pte Ltd

100%

Holmen Atlantic

Pte Ltd

100%

Holmen Pacific LLC

100%

0.01%

Limited (In Liquidation)

50%

Rawabi Vallianz

Offshore Services

Company

19.8%

Vallianz

Shipbuilding &

Engineering Pte Ltd

100%

Deepsea Leader

Venture (L) Inc

49%

Jetlee Shipbuilding &		PT United Sindo
Engineering Pte Ltd		Perkasa

100%95.2%

MDSV 1 (L) Inc

100%

OLV Offshore Services

(M) SDN BHD

100%

Financial Period ended 31 December 2023

3

GEOGRAPHICAL

PRESENCE

SERVING MAJOR ENERGY AND NATIONAL OIL COMPANIES WORLDWIDE.

4

VALLIANZ HOLDINGS LIMITED

From our headquarters in Singapore, Vallianz has developed local presence in key geographical markets to provide fast, effective support and adaptive solutions to our customers to better capture business opportunities in the global energy industry.

Today, the Group's market presence extends into the Middle East and Asia Pacific. We have established offices in Singapore and Indonesia.

MIDDLE

EAST

ASIA

PACIFIC

SINGAPORE

BATAM, INDONESIA

Financial Period ended 31 December 2023

5

CHAIRMAN'S

MESSAGE

To build long-term sustainability, we are revitalising our core businesses in vessel ownership and chartering as well as fabrication and shipyard services to expand market share and tap into the transformation of the energy industry.

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VALLIANZ HOLDINGS LIMITED

DEAR SHAREHOLDERS,

On behalf of the Board of Directors, I am pleased to present Vallianz's annual report for the nine months ended 31 December 2023 ("FP2023"). This FP2023 report follows a change of the Company's financial year-end from 31 March to 31 December.

For the year 2023, the global economy plodded along as it remained shrouded in a fog of ambiguity caused by geopolitical tensions in Eastern Europe and Middle East, persistent inflationary woes, elevated interest rates and tight credit conditions.

Notwithstanding the uncertain economic backdrop, the global demand for energy remained firm. Project activities in the conventional offshore oil and gas ("O&G") industry and offshore renewable energy sector continued to be brisk, which buoyed the market demand for offshore service providers across the supply chain. As the offshore marine industry continues to recover after a prolonged downturn, Vallianz is working to shape and revitalise our core businesses in offshore support vessel ("OSV") chartering services and shipbuilding to tap opportunities in both the conventional offshore O&G and burgeoning offshore renewable energy markets. At the same time, the Group is constantly looking at modernising our fleet, advancing our technologies and solutions to capitalise on emerging market trends that are arising from the decarbonisation and digitalisation trajectory for the global marine industry. Indeed, we have in recent years formed various strategic partnerships that will push the Group to new frontiers and strengthen our platform for long term growth.

FINANCIAL PERFORMANCE FOR FP2023

During FP2023, the Group's revenue increased by 44% to US$214.7 million compared to US$149.2 million for the 12 months ended 31 March 2023 ("FY2023"). This was driven mainly by the Shipyard and Newbuild Management Services segment ("Shipyard business"), which offset a decrease in revenue from our Vessel Chartering and Management segment ("Vessel Chartering business").

In line with increased revenue, the Group's gross profit improved by 49% to US$18.4 million in FP2023 compared to FY2023. This was attributed mainly to better gross profit contributions from our Shipyard business as well as our Vessel Chartering business which benefited from higher average daily charter rates and tight cost control.

As a result, the Group reduced its operating loss significantly to US$2.1 million in FP2023 compared to US$6.7 million in FY2023. Excluding a one-timewrite-off of US$2.9 milllion for a vessel under construction, the Group would have recorded an

operating profit in FP2023. At the bottomline, the Group registered net profit attributable to owners of the Company of US$1.7 million in FP2023. Despite the shorter reporting period, this marked a turnaround from the net loss attributable to owners of the Company of US$9.4 million posted in FY2023.

A GLOBAL ECONOMIC AND ENERGY OUTLOOK

In its latest World Economic Outlook released in January 2024, the International Monetary Fund ("IMF") said the risks to the global economy are now broadly balanced and the likelihood of a hard landing has receded.

While IMF is projecting the global economy to grow 3.1% in 2024 and 3.2 % in 2025, these forecasts are below the historical average of 3.8% for the years between 2000 and 2019.

For the global oil market, the Organisation of the Petroleum Exporting Countries ("OPEC") indicated in its February 2024 Monthly Oil Market Report that oil demand grew by a considerable 2.5 million barrels per day (mb/d) to 102.1 mb/d in 2023, driven mainly by economic activity in non-OECD countries and led by a strong rebound from COVID-19-related lockdowns in China. OPEC is forecasting world oil demand in 2024 to grow by 2.3 mb/d to 104.4 mb/d compared to 2023.

The OSV market continued improving during 2023 on the back of demand growth and tight supply of available vessels. According to Clarksons Research, its proprietary OSV Rate Index, which tracks OSV day rates, rose by 30% to reach a 15-year high of 180 points at the end of 2023 and projected to climb even higher in 2024. Clarksons Research also found that OSV utilisation rates have risen above 70%.

To be sure, offshore energy capital expenditures ("capex") are expected to remain elevated in 2024 according to Rystad Energy. With crude oil prices projected to stay above $80 in 2024, Rystad Energy believes that oil and gas capex will grow marginally. Together with the expansion of offshore wind installations, the total offshore investments are estimated to increase by 17% in 2024 compared to 2023. Rystad Energy also said that offshore wind and floating solar will contribute almost 19% of the offshore capex in 2024 as wind and solar installation's share of the power generation mix continues to expand.

The flow of investments into the offshore O&G and wind energy sectors will undoubtedly augur well for the offshore rig and OSV markets. Notwithstanding these positive indicators, the Group intends to adopt a measured approach and cautiously optimistic stance as global economic uncertainties, higher interest rates and tighter access to financing could impede the offshore industry's recovery.

Financial Period ended 31 December 2023

7

CHAIRMAN'S MESSAGE

Like other OSV operators and shipbuilders, the Group has also experienced an escalation in operating costs for crew and manpower, fuel and equipment. To mitigate these challenges, we will continually evaluate and implement initiatives that help to raise our operational efficiency and enable effective cost control.

RIDING ON THE OFFSHORE ENERGY

INDUSTRY'S GROWTH

To be in a prime position to benefit from growth opportunities, the Group is staying the course to strengthen its core businesses and expand market share while positioning itself for the transformation of the global energy industry.

Vessel Chartering Business

Our OSV fleet is actively utilised at various offshore engineering, procurement, construction and installation projects across Asia and the Middle East regions. To address the market demand for OSVs to support activities in the offshore O&G sector, the Group added three new vessels to its fleet during FP2023 and plans to further expand its fleet in FY2024.

Besides increasing capacity, Vallianz is accelerating digitalisation and adoption of innovative marine technologies to deliver cutting-edge solutions and stay ahead of the curve.

A case in point is the implementation of a real- time monitoring solution on our newly acquired vessel, Vallianz Prestige in 2022. This digital solution revolutionises the Group's operations as it enhances the safety and efficiency of our vessel by supporting our crew and monitoring operations remotely, thus saving time, energy, and resources.

The complete digital solution also comprises integrated remote monitoring for vessel performance which includes equipment navigation, communication and fuel monitoring. These information are relayed back to our centralized V-Hub at the Group's headquarters in Singapore. Following the successful implementation on Vallianz Prestige, the Group intends to gradually roll out this complete digital solution on other vessels in our fleet.

Shipyard Business

The Shipyard Business has seen a significant uptick in newbuild projects that led to a doubling of revenue in FP2023. Backed by strong in-house fabrication and engineering capabilities, we believe our shipyard in Batam, Indonesia is well positioned to ride on the increased demand for new vessels. Our expertise covers high value end-to-end services in all aspects of shipbuilding, ship conversions and ship repairs, for vessels ranging from OSVs to Research Vessels and Offshore Floating Fish Farms. The shipyard's impressive track record in the construction of Multi-Purpose and Accommodation Vessels, and Harbour, Mooring and Docking Tugs has attracted inquiries from international customers across Asia, the Middle East and Europe for potential projects.

During the years 2022 and 2023, we completed deliveries of a Multi-Purpose and Accommodation Vessel, Crane Boat and Docking Tugs that have been deployed for projects of national oil companies in the Middle East ("NOC"). The Group is also building additional OSVs, including Service Accommodation Vessel, jack-up liftboats and various Anchor Handling Supply Tugs, as well as an aluminium security boat for one of the NOC's projects. Among the shipbuilding projects are also three research vessels for the Fisheries Research Institute of Taiwan. To- date, the Group has substantially completed two research vessels.

Tapping offshore Wind Market and Emerging Trends to Grow Core Businesses

To facilitate future development of our core businesses, the Group has set out on a path to extend our solutions and market reach beyond the conventional offshore O&G industry to the renewable offshore wind energy arena. In recent years, Vallianz has formed strategic partnerships with leading international marine companies to build specialised vessels that are poised to make an impact in the global offshore wind industry.

Firstly, the Group sealed an alliance with Ulstein Design & Solutions B.V., Shift Clean Energy and Bureau Veritas to develop a heavy transport vessel ("HTV") that will be capable of transporting monopiles, jackets, transition pieces and turbine

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VALLIANZ HOLDINGS LIMITED