O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

Upon completion of the technical repair or conversion works, we submit a Work Done Report for the
ship owners’ records, which forms part of the Inspection Record.
A six-month warranty period for workmanship is typically granted to our customers in respect of our ship
repair and conversion works.
Quality Management and Safety Systems (QMS)
Our shipyard in Batam has been awarded the ISO 9001 certification that is attributable to our stringent
QMS and procedures. The ISO 9001 certification scheme provides certification for the Singapore standard ISO
9001, which specifies the requirements for a quality management system for any firm that needs to
demonstrate its ability to consistently provide products that meet customer and applicable regulatory requirements
and aims to enhance customer satisfaction. It recognises companies that have demonstrated continuous
and effective operation of a quality management system which meets the ISO 9001 standards and the terms
and conditions of the certification scheme.
Our QMS and procedures are observed at all stages of the shipbuilding and ship repair and conversion
processes. An inspection and test plan is normally presented to the buyer or class representative as guidance.
Throughout the newbuilding period, all stages of the construction processes are inspected by the classification
society to ensure conformity to the plans that have been approved. Any non-conformity in material or
workmanship raised by buyer’s representative or class surveyor will be rectified to ensure conformity to the
contractual and technical specifications.
Ship Chartering
Our ship chartering business began in April 2007 and is largely focused on the chartering of offshore
support vessels.
Our Charters and Strategic Partnerships
As at the Latest Practicable Date, our fleet comprises five 3,600 bhp tugboats, and five 10,000 dwt highdeck
loading barges. We are also building nine vessels to be completed by 2009, which we intend to add to
our chartering fleet. These vessels consist of two maintenance vessels, five tugs and two work barges with
accommodation for 300 people. We intend to retain ownership of these vessels and deploy them on bareboat
or time charters. The market for our chartering activities of our tugboats and barges is currently in the Middle
East as our main customers are based in that region.
We have entered into three strategic partnerships with third parties, to which we sell some of the vessels
that we build. We retain 49.0% interest in each of these three strategic partnerships and our strategic partners
manage and operate these vessels on a time or bareboat charter basis. For example, in July 2007, we entered
into an agreement with Swiss Overseas Invest Ltd. and ABC Maritime, to form our associated company, West
African Invest Ltd. (“WAIL”). Swiss Overseas Invest Ltd. is a shipping investment vehicle company
incorporated in St. Vincent and the Grenadines. ABC Maritime is a company incorporated in Switzerland and
is a provider of international shipping related services. We sold “Otto 1” and “Otto 2”, work barges with
accommodation for 300 people, to wholly-owned subsidiaries of WAIL which charters out Otto 1 under time
charter in West Africa. Otto 2 is expected to be delivered by December 2008. We entered into a similar
agreement with Aries Offshore Services Norway AS in December 2007, to form our associated company Aries
Offshore Singapore Pte. Ltd. (“Aries”). Aries Offshore Services Norway AS is incorporated in Norway and is
involved in various aspects of the shipping business. We sold four 5,150 bhp AHTS vessels in December 2007
to Aries. On 2 May 2008, we entered into a similar strategic partnership with GC Rieber, and pursuant to the
joint venture agreement that we entered into with GC Rieber, we have sold four PSVs to our associated
companies Polar Marine I and Polar Marine II. GC Rieber is a company incorporated in Norway and it is
listed on the Oslo stock exchange. It is involved in the business of offshore support, marine seismic operations
and ice-strengthened support and research. See ‘‘— Significant Shipbuilding Projects — Order Book”.
By entering into such strategic partnerships, we seek to achieve a long term steady flow of income from
vessel charters by retaining ownership of vessels while at the same time tap into the expertise of the strategic
partners who are involved in chartering of different types of offshore vessels in different markets and
locations.
According to the agreements entered into with these three strategic partners, in general, the risks and
returns in relation to chartered income and subsequent sale of vessels will be shared between us and the
strategic partner in the proportion of the equity interest held by each of the parties.
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