Norlandia Health & Care Group AS, prospectus of 13 June 2017

Registration Document

Prospectus

Norlandia Health & Care Group AS

Registration Document

Oslo, 13 June 2017

Joint Managers:

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Important information

The Registration Document is based on sources such as annual reports and publicly available information and forward looking information based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for the Company's and Guarantor’s (including subsidiaries and affiliates) lines of business.

A prospective investor should consider carefully the factors set forth in chapter 1 Risk factors, and elsewhere in the Prospectus, and should consult his or her own expert advisers as to the suitability of an investment in the bonds.

This Registration Document is subject to the general business terms of the Joint Managers, available at their respective websites (www.abgsc.no, www.dnb.no and www.pareto.no).

The Joint Managers and/or affiliated companies and/or officers, directors and employees may be a market maker or hold a position in any instrument or related instrument discussed in this Registration Document, and may perform or seek to perform financial advisory or banking services related to such instruments. The Joint Managers’ corporate finance department may act as manager or co-manager for this Company and/or Guarantors in private and/or public placement and/or resale not publicly available or commonly known. Copies of this Registration Document are not being mailed or otherwise distributed or sent in or into or made available in the United States. Persons receiving this document (including custodians, nominees and trustees) must not distribute or send such documents or any related documents in or into the United States.

Other than in compliance with applicable United States securities laws, no solicitations are being made or will be made, directly or indirectly, in the United States. Securities will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The distribution of the Registration Document may be limited by law also in other jurisdictions, for example in Canada, Japan and in the United Kingdom. Verification and approval of the Registration Document by the Norwegian FSA (“Finanstilsynet”) implies that the Registration Document may be used in any EEA country. No other measures have been taken to obtain authorisation to distribute the Registration Document in any jurisdiction where such action is required.

The Norwegian FSA has controlled and approved the Registration Document pursuant to the Norwegian Securities Trading Act, § 7-7. The Norwegian FSA has not controlled and approved the accuracy or completeness of the information given in the Registration Document. The control and approval performed by the Norwegian FSA relates solely to descriptions included by the Company according to a pre-defined list of content requirements. The Norwegian FSA has not undertaken any form of control or approval of corporate matters described in or otherwise covered by the Registration Document. The Registration Document was approved on 14 June 2017. The Registration Document is valid for 12 months from the approval date.

The Registration Document together with a Securities Note and any supplements to these documents constitutes the Prospectus.

The content of the Prospectus does not constitute legal, financial or tax advice and potential investors should seek legal, financial and/or tax advice.

Unless otherwise stated, the Prospectus is subject to Norwegian law. In the event of any dispute regarding the Prospectus, Norwegian law will apply.

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TABLE OF CONTENTS:

1 Risk factors ...... 4 2 Definitions ...... 8 3 Persons responsible ...... 10 4 Statutory Auditors ...... 11 5 Information about the issuer ...... 12 6 Business overview ...... 20 7 Organizational structure ...... 30 8 Trend information ...... 32 9 Administrative, management and supervisory bodies ...... 34 10 Board practices...... 39 11 Major shareholders ...... 40 12 Financial information concerning the issuer's assets and liabilities, financial position and profits and losses ...... 41 13 Material contracts ...... 44 14 Third party information and statement by experts and declarations of any interest ...... 45 15 Documents on display ...... 47 Joint Managers' disclaimer ...... 48 Annex 1 Interim and annual reports ...... 49 Annex 2 Articles of Association ...... 50

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1 Risk factors Investing in bonds issued by Norlandia Health & Care Group AS and guaranteed by the Initial Guarantors involves inherent risks.

As the Company is the parent company of the Group, including but not limited to the Initial Guarantors, and primarily a holding company, the risk factors for Norlandia Health & Care Group AS and the Initial Guarantors are deemed to be equivalent for the purpose of this Registration Document.

Prospective investors should consider, among other things, the risk factors set out in the Prospectus, including those set out in both the Registration Document and the Securities Note(s), before making an investment decision. The risks and uncertainties described in the Prospectus are risks of which Norlandia Health & Care Group AS is aware and that Norlandia Health & Care Group AS considers to be material to its business. If any of these risks were to occur, Norlandia Health & Care Group AS’ and/or the Initial Guarantors’ business, financial position, operating results or cash flows could be materially adversely affected, and Norlandia Health & Care Group AS and/or the Initial Guarantors could be unable to pay interest, principal or other amounts on or in connection with the bonds. Prospective investors should also read the detailed information set out in any accompanying Securities Note(s), and reach their own views prior to making any investment decision.

An investment in the bonds is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment.

Industry and regulatory risks Market risk - the Group's business, results of operations and financial conditions depend principally upon conditions prevailing for childcare and care services in the Nordic region, in particular, public policies and the political climate. Furthermore, the demand for the Group’s services will be dependent on inter alia the birth rates and the longevity in the regions where the Group operates. Integration services will in addition to political decisions be affected by geopolitical situations, which may lead to reduced number of immigrants and asylum seekers. Demand for private care services may decrease depending on a number of demographic and economic factors.

Political risks - the Group’s operations are subsidized by public authorities. Changes in the political climate or framework legislation for such subsidies may have a materially adverse effect on the Group’s business model, operations and financial condition.

Regulatory framework – the Group’s operations are subject to legal framework, which may change in the future. Changes in the framework legislation and conditions of operating preschools, nursing homes, reception centers or other parts of the Groups business and operations, such as profit restrictions similar to that proposed in Sweden through sou 2016:78, dividend restrictions or restrictions on private ownership, may significantly and adversely impair the Group`s liquidity and business model, which could have a material adverse effect on the Group.

Demographic development – the market for the Group’s services within preschools is dependent on the demand for childcare, which in turn is dependent on the birth rate in the relevant areas. A different demographic development than previously seen, can have a material adverse effect on the future market, which may negatively affect the Group's profitability and financial situation.

Safety regulations - the Group’s industry is subject to statutory safety regulations. Additional or changes in the requirements of the operation of child care and care services or changes in respect of such services’ safety, may have a material adverse effect on the Group’s business, operating results and financial condition.

Immigrant and asylum institute – the Group's operations within integration services relies on the need for temporary housing of immigrants and asylum seekers. If the current European immigrant and asylum institute were to be replaced with alternative methods of dealing with migration, temporary housing in the countries in which the Group operates could be made superfluous, which in turn will significantly reduce the demand for the Group's accommodation services. Similarly, if the countries in which the Group operates implement politics, which directly or indirectly limits the intake of immigrants and asylum seekers, the demand for the group's accommodation services could be significantly reduced.

Withholding tax - in October 2015, the Norwegian government issued a white paper describing a tax reform for the period 2016-2018. This white paper stated that the government will consider introducing a withholding tax on interest payments from Norway. The white paper stated that such proposal will be subject to a hearing process before any new legislation is adopted. In the event that any such withholding tax obligations are implemented and

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Registration Document the issuer therefore become obligated by law to withhold or deduct Norwegian tax, the terms and conditions of the bonds do not require the issuer to pay additional amounts (gross up) in respect of such withholding or deduction.

Operational and Group specific risks Operational legal requirements - the Group operates in a regulated market and is therefore affected by changes in laws, regulations and governmental interpretations and practices. The Group must comply with, and is affected by, extensive and complex laws and regulations at a national, regional and local level. These laws and regulations relate, among other things, to access of services, the quality of such services, qualifications and obligations of co- workers and employees, pricing and operating guidelines. If the Group fails to comply with applicable laws or regulations, it may entail limitations in the operations of the Group, increased operative costs or costs as a result of fines or other sanctions. Such failure by the Group may also trigger counterparties’ rights to terminate or amend contracts with the Group.

Operating risk - the Group is dependent on renewing current contracts as they expire and/or obtaining new contracts at acceptable terms in order to maintain and/or increase its revenues. The Group has experienced an increased pressure on price and quality in especially its Swedish care services lately, and believes that this trend will continue. In addition, the Group is exposed to initial vacancies upon establishment of new preschools, nursing homes or patient hotels and missing on its cost estimates when participating in tenders. There can be no guarantee that the Group is able to renew contracts as they expire or obtain new contracts to replace such expired contracts or to cover newly established operations. Prolonged vacancies may have a material adverse effect on the Group’s operations, results and financial condition. The Group is currently participating in a tender process related to assisted living services in Oslo. This is a continuous frame agreement starting from 1st of September 2017 with a voucher model for the users and their relatives. The transformation to voucher model will take time. This tender replaces all ongoing contracts in Oslo representing approximately 20% of Aberia Healthcare AS’ revenues. The potential loss of such a frame agreement will have an adverse effect on the consolidated performance of the Group. Furthermore, the city council in Oslo has expressed that it will restrict private service providers when entering into new contracts. The city council has stated that it will not renew nursing home contracts with private parties when their current contracts lapse, and that new contracts will be given to municipality controlled entities. The city council has also stated that it will consider profit restrictions in new preschool contracts. The political decisions in Oslo may influence other Norwegian municipalities, even without new national legislation.

Competitive businesses – several of the Group's subsidiaries operate in competitive industries in highly competitive markets. The highly competitive nature of the businesses has led to a significant pressure on price and quality for the Group's services, and may continue to do so in the future.

Reputation risk – the Group or any of the Group’s subsidiaries may become subject to inspections and negative publicity relating to private operators in each of the Group’s business segments. One of the operating companies of the Group, Hero Sverige AB, has been subject to media scrutiny after a PWC report concluded “it could not be excluded” that Hero Sverige had unduly benefitted from inexplicit and to a certain degree non-existent contract documentation. Although currently no formal involvement in the case, the Group may suffer from reputation risk, which may have a material adverse effect on the Group’s operations, results and financial condition. Similarly, the Group's reputation may also be negatively affected if there is a quality breach in the operations in one of Group's subsidiaries.

Operating costs - the Group’s operating and maintenance costs will not necessarily fluctuate in proportion to its operating revenues.

Dependency on key personnel - the Group has recruited and intends to continue to recruit skilled professionals with appropriate experience and expertise. The successful development and performance of its business depends on its ability to attract and retain such personnel, in respect of which no assurances can be given.

Acquisition strategy – the Group may not be successful in implementing its acquisition strategy. Furthermore, when acquiring other existing businesses, the Group may not discover all potential liabilities within such business through its customary due diligence, in which case the Group may be responsible for liabilities related to actions/omissions which took place prior to the Group acquired such business

Litigation risk – due to the scale and complexity of the Group's operations, the Group may be subject to litigation that could have a material adverse effect on the Group's business, results of operations, cash flow and financial conditions, because of potential negative outcomes, the costs associated with prosecuting or defending such lawsuits, and the diversion of management's attention to these matters.

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Liquidity – the Group's major cost is salary. Generally, the Group pays out salary to its employees one month ahead of it receiving payment for its services. This model may prevent the Group from expanding its operations in periods, which it is deemed desirable to expand as the Group may not have sufficient liquidity.

Work environment – the Group will employ approximately 8,500 employees. A high percentage of sick-leave could lead to significant costs for the Group.

Tenancy – the Group does not own the properties it uses for its operational services, but have entered into long term lease agreements with various lessors. If the Group is unable to renew its lease agreements as they expire, or enter into new lease agreements for similar properties, the Group will need to close down its operations in geographical areas which otherwise contain a high demand for the Group's services. Furthermore, as the Group has entered into long-term lease agreements, it may not be able to terminate such agreements if it experiences a decrease in demand for its services in any geographical area. The Group may thus be required to continue its operations in unprofitable areas. Decreasing or low numbers of immigrants and asylum seekers – the Group's integration services depend on a steady flow of immigrants and asylum seekers, which require care services in the regions in which the Group operates. If the number of immigrants and asylum seekers decrease or declines, or if the national or regional governments find permanent housing for the immigrants or asylum seekers more rapidly, then there will be less demand for the Group's integration services.

Geopolitical situations – integration services will in addition to political decisions be affected by geopolitical situations, which may lead to reduced number of immigrants and asylum seekers.

Financing risks Ability to service debt and other obligations - the financial leverage of the Group may have adverse consequences, including the need to manage the Group’s businesses in a way to service its debt and other financial obligations. Should the financing of the Group not be sufficient to meet its obligations, the Group may be forced to; (i) reduce or delay capital expenditures; (ii) sell assets or businesses at unanticipated times and/or at unfavorable prices or other terms; (iii) seek additional equity capital; or (iv) restructure or refinance its debt. There can be no assurance that such measures would be successful or adequate to meet debt and other obligations as they fall due, or would not result in the Group being placed in a less competitive position.

Contractual restrictions - the Group’s existing or future debt arrangements could limit the Group’s liquidity and flexibility in obtaining additional financing, in pursuing other business opportunities or corporate activities or the Group’s ability to declare dividends to its shareholders or pay interests and down payments on existing debt as it falls due. The Group’s existing loan arrangements contain, and any future borrowing arrangements may contain, covenants and event of default clauses, including cross default provisions and restrictive covenants and performance requirements, such as equity ratio, interest cover ratio, loan-to-value of property and change of control provisions, which could affect the operational and financial flexibility of the Group. The satisfaction of these restrictive covenants and performance requirements could be affected by factors outside of the Group’s control, such as a slowdown in economic activity. Such restrictions could affect, and in many respects limit or prohibit, among other things, the Group’s ability to pay dividends or meet its debt obligations, incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could further limit the Group’s ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There is no assurance that such restrictions will not materially and adversely affect the Group’s ability to finance its future operations or capital needs. The Group’s future cash flows could be insufficient to meet all of its debt obligations and contractual commitments. To the extent that the Group is unable to repay its indebtedness as it becomes due or at maturity, the Group could need to refinance its debt, raise new debt, sell assets or repay the debt with the proceeds from equity offerings.

Additional capital requirements - the Group may require additional capital in the future due to unforeseen liabilities or in order for it to take advantage of opportunities for acquisitions, joint ventures or other business opportunities that may be presented to it. There can be no assurance that the Group will be able to obtain necessary financing in a timely manner, on acceptable terms or at all.

Leasing obligations – the Group has entered into several long-term real estate leasing contracts which represents a substantial off-balance sheet liability.

Corporate structure - the Group is a holding group and is dependent on cash flow from its subsidiaries to meet its obligations. Thus, an inability to transfer cash from the subsidiaries due to inter alia contractual obligations, law, defaults, insolvency within the Group or otherwise, may result in, even though the Group may have sufficient resources on a consolidated basis to meet its obligations, which the Group may not be permitted to provide funds for the payment of its obligations. Such inability could adversely affect the Group's ability to fulfill its obligations under the bonds and the value of the bonds.

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Uninsured losses and liabilities - the Group’s insurance coverage may under certain circumstances not protect the Group from all potential losses and liabilities that could result from its operations. The occurrence of a loss or liability against which the Group or its subsidiaries are not fully insured, could reduce its revenues or otherwise impair its ability to meet its obligations under its indebtedness.

Foreign exchange rate risk - the Group has operations in Norway, Sweden, Finland and the Netherlands, and may enter new geographies in the future. Currency fluctuations may have a material adverse effect on the Group’s financial condition, results of operation and liquidity.

Credit risk - the Group is exposed to the credit risks and counterparty risks of its customers and certain other third parties. Non-payment or non-fulfillment by the Group's customers or other parties could have a material adversely effect on the Group's business, results of operations and financial conditions, which in turn may adversely affect the Group's ability to fulfill its obligations under the bonds and the value of the bonds.

Interest rate risks – the Group has financing arrangements with floating interest rate. An increase in the reference interest rates may have a material adverse effect on the Group’s financial condition, results of operation and liquidity.

Tax-related risk – the Group operates across serval geographies and are subject to serval local and national tax law regimes. As of the date of this presentation, the Group is not aware of any changes to tax laws that would have a material adverse effect on the Group’s operations, results and financial condition. In the future, adverse changes to local or national tax laws in the geographies where the Group operates could a material adverse effect on the Group’s financial condition, results of operation and liquidity.

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2 Definitions

Company / Issuer / Norlandia / Norlandia Health & Care Group / Norlandia Health & Care Group AS Norlandia Health & Care Group AS, a Norwegian limited liability company organized under the laws of Norway, with company registration number 917 933 367.

Board of Directors The board of directors of the Company

Bond Agreement Means bond agreement between the Issuer and Nordic Trustee ASA dated 14 December 2016.

EBITDA Earnings before interest, tax, depreciation and amortization

Group Means the Issuer and all its Subsidiaries from time to time

Group Company Means any Person (as defined in the Bond Agreement) which is a member of the Group.

Guarantors Means the Initial Guarantors and any Operating Group Company which subsequently becomes a Material Group Company

Hero Mottak Operator of reception centres, part of the Hero Group

IFRS International Financial Reporting Standards

Initial Material Group Companies Means any other Subsidiaries than the Initial Guarantors of the Issuer which will prior to the first release of funds from the Escrow Accounts (as defined in the Bond Agreement) be nominated as Material Group Companies by the Issuer, based on the Q3 2016 accounts of the Operational Group, (and where required calculated on a pro forma basis for the Operational Group as if paragraph (a) of the Group Reorganisation was completed prior to 1 January 2016).

Initial Guarantors Means Kidsa Drift AS (incorporated in Norway with reg. no. 915 272 002); Norlandia Care Group AS (incorporated in Norway reg. no. 992 036 540); Hero Group AS (incorporated in Norway with reg. no. 912 507 262); Aberia Healthcare AS (incorporated in Norway with reg. no 995 366 479); and Care Properties AS (incorporated in Norway with reg. no. 999 595 146)

ISIN International Securities Identification Number

Joint Managers ABG Sundal Collier ASA, DNB Bank ASA, DNB Markets and Pareto Securities AS

Material Group Company Means the Issuer, the Initial Guarantors, any Initial Material Group Companies and any Subsidiary of the Issuer which has subsequently been designated as a Material Group Company by the Issuer pursuant to the Bond Agreement clause 13.12

NOK Norwegian kroner

Operating Group Means the Issuer and all its Subsidiaries from time to time, excluding the Property Companies

Operating Group Company Means any Person (as defined in the Bond Agreement) which is a member of the Operating Group.

Property Company Means a company which is conducting operations in the ordinary course of business, purchased, acquired or incorporated and existing and owned

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(directly or indirectly) by the Property Holding Company and not by any other member of the Operating Group: (a) for the main purpose of owning, developing, renting out to another Group Company or selling real property; and (b) owning shares in another Property Company, having incurred Property Debt (as defined in the Bond Agreement) in respect of real property and/or conducting any combination of business set out in paragraph (a) above,

provided that if the Property Company is not operating the commercial operations on the respective real property, it shall not qualify as a Property Company if such operations are transferred to, or the real property is leased out to, any other company than (a) a Property Company, or (b) an Operating Group Company.

Property Holding Company Means Care Properties AS, a company existing under the laws of Norway with registration number 999 595 146, and being a directly wholly owned Subsidiary (as defined in the Bond Agreement) of the Issuer which is a holding company that does not trade, carry on any business or own any material assets, except for (a) providing administrative services to other Property Companies of a type customarily provided by a holding company, (b) owning shares in one or more Property Companies, (c) owning cash and cash equivalents, and (d) granting permitted financial support to other Group Companies.

Prospectus The Registration Document together with a securities note describing the terms of the bonds

Registration Document This document dated 13 June 2017

Securities Note Document to be prepared for each new issue of bonds under the Prospectus

Subsidiary Means a company over which another company has Decisive Influence (as defined in the Bond Agreement)

VPS or VPS System The Norwegian Central Securities Depository, Verdipapirsentralen

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3 Persons responsible

3.1 Persons responsible for the information Persons responsible for the information given in the Registration Document are as follows: Norlandia Health & Care Group AS, c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway

3.2 Declaration by persons responsible Responsibility statement: Norlandia Health & Care Group AS confirms that, taken all reasonable care to ensure that such is the case, the information contained in the registration document is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import.

Oslo, 13 June 2017

Norlandia Health & Care Group AS

______Kristian A. Adolfsen Roger Adolfsen

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4 Statutory Auditors

4.1 Names and addresses

Company The Company’s auditor for 2016 has been BDO AS, Munkedamsveien 45A, N-0250 Oslo, Norway.

BDO AS is member of The Norwegian Institute of Public Accountants.

Initial Guarantors Kidsa Drift AS The company’s auditor for 2015 and 2016 has been BDO AS, Munkedamsveien 45A, N-0250 Oslo, Norway.

BDO AS is member of The Norwegian Institute of Public Accountants.

Norlandia Care Group AS The company’s auditor for 2015 and 2016 has been BDO AS, Munkedamsveien 45A, N-0250 Oslo, Norway.

BDO AS is member of The Norwegian Institute of Public Accountants.

Hero Group AS The company’s auditor for 2015 and 2016 has been BDO AS, Kniveveien 31, N-3036 Drammen, Norway.

BDO AS is member of The Norwegian Institute of Public Accountants.

Aberia Healthcare AS The company’s auditor for 2015 and 2016 has been BDO AS, Munkedamsveien 45A, N-0250 Oslo, Norway.

BDO AS is member of The Norwegian Institute of Public Accountants.

Care Properties AS The company’s auditor for 2015 and 2016 has been BDO AS, Munkedamsveien 45A, N-0250 Oslo, Norway.

BDO AS is member of The Norwegian Institute of Public Accountants.

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5 Information about the issuer

5.1 History and development of the Issuer and the Initial Guarantors

5.1.1 Legal and commercial name The legal name of the Issuer is Norlandia Health & Care Group AS, its commercial name is Norlandia Health & Care Group.

The legal name of one of the Initial Guarantors is Kidsa Drift AS, its commercial name is Kidsa Drift.

The legal name of one of the Initial Guarantors is Norlandia Care Group AS, its commercial name is Norlandia Care Group.

The legal name of one of the Initial Guarantors is Hero Group AS, its commercial name is Hero Group.

The legal name of one of the Initial Guarantors is Aberia Healthcare AS, its commercial name is Aberia Healthcare.

The legal name of one of the Initial Guarantors is Care Properties AS, its commercial name is Care Properties.

5.1.2 Place of registration and registration number The Issuer is registered in the Norwegian Companies Registry with registration number 917 933 367.

Kidsa Drift AS is registered in the Norwegian Companies Registry with registration number 915 272 002.

Norlandia Care Group AS is registered in the Norwegian Companies Registry with registration number 992 036 540.

Hero Group AS is registered in the Norwegian Companies Registry with registration number 912 507 262.

Aberia Healthcare AS is registered in the Norwegian Companies Registry with registration number 995 366 479.

Care Properties AS is registered in the Norwegian Companies Registry with registration number 999 595 146.

5.1.3 Date of incorporation The Issuer was incorporated on 23 September 2016.

Kidsa Drift AS was incorporated on 20 March 2015.

Norlandia Care Group AS was incorporated on 27 November 2007.

Hero Group AS was incorporated on 14 August 2013.

Aberia Healthcare AS was incorporated on 24 February 2010.

Care Properties AS was incorporated on 2 January 2013.

5.1.4 Domicile and legal form The Company is a public limited liability company primarily organized under the laws of Norway, including the Public Limited Companies Act. Pursuant to the listing agreement between the Oslo Stock Exchange and the Company, in particular, the Norwegian Securities Trading Act and the Norwegian Stock Exchange Regulations will apply. See also section 7.1 Description of Group that issuer is part of. The Company's registered address is c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway. The Company has no telephone number at its registered office according to the Norwegian Companies Registry. The Company's telephone number is +47 22 98 97 40.

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Kidsa Drift is a public limited liability company primarily organized under the laws of Norway, including the Public Limited Companies Act. See also section 7.1 Description of Group that issuer is part of. The company's registered address is c/o Norlandia, Øvre Vollgate 13, N-058 Oslo, Norway. The Company has no telephone number at its registered office according to the Norwegian Companies Registry. The Company's telephone number is +47 55 20 76 60.

Norlandia Care Group AS is a public limited liability company primarily organized under the laws of Norway, including the Public Limited Companies Act. See also section 7.1 Description of Group that issuer is part of. The company's registered address is Verkstedveien 1, N-8008 Bodø, Norway. The Company has no telephone number at its registered office according to the Norwegian Companies Registry. The Company's telephone number is +47 22 98 97 00.

Hero Group AS is a public limited liability company primarily organized under the laws of Norway, including the Public Limited Companies Act. See also section 7.1 Description of Group that issuer is part of. The company's registered address is Rådhusgata 23, N-0158 Oslo, Norway. The Company has no telephone number at its registered office according to the Norwegian Companies Registry. The Company's telephone number is +47 51 51 74 70.

Aberia Healthcare AS is a public limited liability company primarily organized under the laws of Norway, including the Public Limited Companies Act. See also section 7.1 Description of Group that issuer is part of. The company's registered address is Øvre Vollgate 13, N-0158 Oslo, Norway. The Company has no telephone number at its registered office according to the Norwegian Companies Registry. The Company's telephone number is +47 22 98 97 00.

Care Properties AS is a public limited liability company primarily organized under the laws of Norway, including the Public Limited Companies Act. See also section 7.1 Description of Group that issuer is part of. The company's registered address isc/o Adolfsen Group, Rådhusgata 23, N-0158 Oslo, Norway. The Company has no telephone number at its registered office according to the Norwegian Companies Registry. The Company's telephone number is +47 22 98 97 40.

5.1.5 Recent events

Company There are no recent events related to Norlandia Health & Care Group AS which to a material extent are relevant for the evaluation of the company’s or the issuers solvency.

Initial Guarantors Kidsa Drift AS There are no recent events related to Kidsa Drift AS which to a material extent are relevant for the evaluation of the company’s or the issuers solvency.

Norlandia Care Group AS On 18 January 2017, Norlandia Care Group settled the Senior Secured Bond Issue 2013/2018 repaying NOK 507 million to the bond holders. The transaction had a material effect on the Group’s total balance by decreasing cash and debt on both sides of the balance sheet. There are no other recent events related to Norlandia Care Group AS which to a material extent are relevant for the evaluation of the company’s or the issuers solvency.

Hero Group AS Hero Group revenues continued to decline during Q4’16 as expected. The decline is primarily related to the reception centers in Norway where previously communicated cancellations started to take effect in November. The company has received further cancellations from both UDI and Migrationsverket (Sweden) during Q4’16 and Q1’17 as a result of low influx of asylum seekers to the Nordic region. The cancellations will have a material negative effect on 2017 activity and financial results. The decline is partly offset by continued strong activity within other integration services such as interpretations and education. The newly acquired unit in Finland is contributing with positive figures and continues the topline growth. Hero Group has also recently signed three contracts for operation of reception centers in Germany. The contracts are in line with the Group’s strategy of geographical expansion and risk diversification and represents an important milestone for Hero.

Aberia Healthcare AS On 15 March 2017, Aberia invested in Drive for life Holding AS with subsidiaries. The investment strengthens Aberia’s position within the child-care segment and is of strategic importance for the company to achieve its future

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Registration Document ambitions. Aberia Healthcare has also recently signed an agreement to acquire 51% of the shares of Marcus Assistans AB and Östgöterlands Humansassistans AB. The two Swedish companies offer user controlled personal assistance (NO: BPA) and are located in Örebro. The companies have combined revenues of SEK ~130 million and will be consolidated in the group figures as per 1 June 2017.

Care Properties AS The Board of Directors of Norlandia Health & Care Group has decided to fund Care Properties with NOK 50 million through the combination of an equity issue and loans. The funding will further be used to fund fully owned subsidiaries of Care Properties, which in turn will invest in and develop real estates. The funding is in line with the Group’s communicated strategy of developing properties related to the Group’s operating activities through single purpose vehicles within Care Properties. The transaction will be concluded during Q2’17. There are no other events related to Care Properties which to a material extent are relevant for the evaluation of the company’s or the issuers solvency.

5.1.6 The issuer’s objects and purposes

Company The purpose of Norlandia Health & Care Group AS is to invest in and own companies operating within the healthcare services industry. The company shall further be able to invest in shares, bond loans and other financial instruments.

Initial Guarantors Kidsa Drift AS Kidsa Drift`s purpose is to operate preschools and adjacent activities within the child care sector.

Norlandia Care Group AS Norlandia Care Group’s purpose within the care division is to operate nursing homes, elderly care units, homecare, patient hotels and other adjacent activities within the care sector. Within the preschool division the group’s purpose is to operate preschools and adjacent activities within the child care sector. The group`s purpose is also to participate in real estate investments and development projects.

Hero Group AS Hero Group’s purpose is to invest in companies operating reception centres and providing services related to interpretation and education for integration purposes.

Aberia Healthcare AS Aberia Healthcare’s purpose is to operate within the health- and care services industry, specifically within the individual and family segment, and participate in companies with adjacent activities.

Care Properties AS Care Properties’ purpose is to develop and invest in real estate and adjacent activities.

5.2 Investments

5.2.1 Recent principal investments

Company There are no principal investments made in Norlandia Health & Care Group AS since publishing the 2016 Annual Report for the Group.

Initial Guarantors Kidsa Drift AS There are no principal investments made in Kidsa Drift AS since publishing the 2016 Annual Report for Norlandia Health & Care Group.

Norlandia Care Group AS There are no principal investments made in Norlandia Care Group since publishing the 2016 Annual Report for Norlandia Health & Care Group.

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Hero Group AS There are no principal investments made in Hero Group since publishing the 2016 Annual Report for Norlandia Health & Care Group.

Aberia Healthcare AS Reference is made to item 5.1.5 Recent events, above, describing the recent acquisitions within Aberia Healthcare AS. There are no other principal investments made in Aberia Healthcare since publishing the 2016 Annual Report for Norlandia Health & Care Group.

Care Properties AS There are no principal investments made in Care Properties AS since publishing the 2016 Annual Report for Norlandia Health & Care Group.

5.2.2 Principal future investments

Company Reference is made to item 5.1.5 Recent events, describing the funding of Care Properties AS, involving an equity issue of up to NOK 50 million. There are no other principle future investments within Norlandia Health & Care Group AS, on which the management bodies have made firm commitments.

Initial Guarantors Kidsa Drift AS There are no principle future investments within Kidsa Drift AS, on which the management bodies have made firm commitments.

Norlandia Care Group AS The group has entered into a total of 18 new rental contracts for new preschools. These preschools will open in the time period January 2017 until August 2019. One new rental contract for a new care unit has been agreed upon. This is an own management unit which will open in August 2019. There are no other principle future investments within Norlandia Care Group AS, on which the management bodies have made firm commitments.

Hero Group AS There are no principle future investments within Hero Group AS, on which the management bodies have made firm commitments.

Aberia Healthcare AS There are no principle future investments within Aberia Healthcare AS, on which the management bodies have made firm commitments.

Care Properties AS The Group has made a decision to invest in three real estate projects in Sweden, related to operations within the Individual & Family segment. The facilities will be used as group houses for people with certain dysfunctions and are expected to be operational from end of 2018 and beginning of 2019. The Group is committed to pay SEK 20 million for the land, whereas the total project cost for the three properties is estimated to be SEK 61 million. Care Properties has not yet received offers from contractors for the construction work. Hence, the total project cost may deviate from the estimates presented. The below table sets out the committed amounts per project and the corresponding estimates on construction cost.

Case Cost of land Construction cost Total Sollentuna 7,000,000 13,000,000 20,000,000 Uppland Väsby 9,000,000 14,000,000 23,000,000 Åkersberga 4,000,000 14,000,000 18,000,000 Total investments 20,000,000 41,000,000 61,000,000

The projects will managed through a single purpose vehicle owned by Norlandia Fastighetsutvikling AB (a company which will be 100% owned by Care Properties AS).

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5.2.3 Anticipated sources of funds

Company The commitments related to the funding of Care Properties, as described in item 5.1.5, will be funded with available liquidity in Norlandia Health & Care Group AS.

Initial Guarantors Kidsa Drift AS Not applicable.

Norlandia Care Group AS The commitments related to rental contracts are limited and will be funded with operating cash flow.

Hero Group AS Not applicable.

Aberia Healthcare AS The commitments related to the future acquisitions described under item 5.2.1 will be funded with loans provided by the parent, Norlandia Health & Care Group.

Care Properties AS The commitments related to real estate projects as described under point 5.2.2 Care Properties AS will be funded with equity and debt. The equity will be contributed from Care Properties AS. There is an ongoing process related to bank financing of the projects.

5.3 Selected financial information

5.3.1 Selected financial information for interim periods Selected financial information for interim periods is unaudited.

Company Consolidated key figures Q1 2017 Q1 2016 NOK thousand Revenues and other income 1,240 1,370 EBITDA 70 80 Operating profit (EBIT) 51 60 Net profit before tax -0 47 Net profit after tax 0 37 Cash & cash equivalents 472 300 Equity ratio 13.3 % 36.9 %

Initial Guarantors Kidsa Drift AS Key figures Q1 2017 Q1 2016 NOK thousand Revenues and other income EBITDA -42 -34 Operating profit (EBIT) -42 -34 Net profit before tax -1,331 -2,945 Net profit after tax - - Cash & cash equivalents 32,518 12,146 Equity ratio 20.8 % 18.9 %

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Norlandia Care Group AS Key figures Q1 2017 Q1 2016 NOK thousand Revenues and other income 2,269 2,400 EBITDA 56 31 Operating profit (EBIT) 43 18 Net profit before tax -7,606 -5,514 Net profit after tax -7,606 -5,514 Cash & cash equivalents 45,384 979 Equity ratio 30.1 % 34.7 %

Hero Group AS Key figures Q1 2017 Q1 2016 NOK thousand Revenues and other income - - EBITDA -1,420 -153 Operating profit (EBIT) -1,420 -153 Net profit before tax -1,858 -1,016 Net profit after tax -1,858 -1,016 Cash & cash equivalents 642 174 Equity ratio 44.8 % 60.4 %

Aberia Healthcare AS Key figures Q1 2017 Q1 2016 NOK thousand Revenues and other income 4,619 3,145 EBITDA 696 542 Operating profit (EBIT) 683 542 Net profit before tax 3,463 1,130 Net profit after tax 2,597 848 Cash & cash equivalents 12,691 22,443 Equity ratio 44.4 % 67.0 %

Care Properties AS Key figures Q1 2017 Q1 2016 NOK thousand Revenues and other income - - EBITDA - -6 Operating profit (EBIT) - -6 Net profit before tax - -6 Net profit after tax - -6 Cash & cash equivalents 1 1 Equity ratio N/A N/A

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5.3.2 Selected historical financial information

Company Consolidated key figures 2016 2015 NOK thousand Revenues and other income 5,177,521 3,940,414 EBITDA 380,786 244,027 Operating profit (EBIT) 285,362 169,107 Net profit before tax 231,845 303,947 Net profit after tax 194,937 277,349 Cash & cash equivalents 1,060,241 345,749 Equity ratio 11.4 % 38.1 %

Initial Guarantors Kidsa Drift AS Key figures 2016 2015 NOK thousand Revenues and other income EBITDA -154 -438 Operating profit (EBIT) -177 -441 Net profit before tax -9,136 497 Net profit after tax -6,870 -633 Cash & cash equivalents 42,693 11,800 Equity ratio 17.8 % 19.7 %

Norlandia Care Group AS Key figures 2016 2015 NOK thousand Revenues and other income 9,601 9,126 EBITDA -1,532 -68 Operating profit (EBIT) -1,583 -111 Net profit before tax 136,077 162,976 Net profit after tax 121,388 159,747 Cash & cash equivalents 35,421 1,191 Equity ratio 30.7 % 35.2 %

Hero Group AS Key figures 2016 2015 NOK thousand Revenues and other income - - EBITDA -1,549 -463 Operating profit (EBIT) -1,549 -463 Net profit before tax 92,233 27,657 Net profit after tax 69,086 20,191 Cash & cash equivalents 685 1,449 Equity ratio 43.9 % 60.8 %

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Aberia Healthcare AS Key figures 2016 2015 NOK thousand Revenues and other income 17,967 12,359 EBITDA -2,469 1,617 Operating profit (EBIT) -2,529 1,587 Net profit before tax 54,054 200 Net profit after tax 40,754 521 Cash & cash equivalents 18,995 219 Equity ratio 38.4 % 48.3 %

Care Properties AS Key figures 2016 2015 NOK thousand Revenues and other income - 4 EBITDA -22 -12 Operating profit (EBIT) -22 -12 Net profit before tax -22 -12 Net profit after tax -22 -12 Cash & cash equivalents 1 1 Equity ratio N/A N/A

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6 Business overview

6.1 Principal activities

6.1.1 Principal activities

Company Norlandia Health & Care Group AS is a provider of healthcare services in Northern Europe. The company was established in 2016 as part of a large restructuring of Hospitality Invest AS, resulting in a large and fully owned subsidiary of Hospitality Invest AS, comprising all the operating companies within the health- and care sector. In 2016, the Group had operations in four countries; Norway, Sweden, Finland and the Netherlands. About 80% of the operations is located in Norway and Sweden, and the headquarter is located in Oslo. The Group operates under four different brands; Norlandia, Kidsa, Aberia and Hero, and delivers services within the four segments; Preschools, Care, Integration Services and Individual & Family.

Initial Guarantors Kidsa Drift AS Kidsa Drift AS consists of 28 preschools in the municipality of Bergen with a capacity of 2000 children. The preschools are located in populated areas in the Bergen-region high density of families with children. 70 % of the preschools in Bergen is privately held and Kidsa is the largest privately held operator in Bergen. With an overall stable population growth and increasing share of children attending preschools, the Kidsa preschools are well positioned in Bergen.

Norlandia Care Group AS

Norlandia Care Group is a leading operator of healthcare- and preschool units in the Nordics. The Group operates 231 units per 31.12.2016, including preschools, elderly care centers and patient hotels. The Group has operations in Norway, Sweden, Finland and the Netherlands, with headquarter in Oslo. The Group employs more than 5 350 people and had consolidated revenues of NOK 3,088 million in 2016.

Preschools Norlandia Preschools controls a total of 182 preschools (per Preschool units by country (31.12.16) 31.12.16) with 12,718 children. 60 of the units are operated in Norway, making Norlandia among the six largest Norwegian providers. The preschools are predominantly 37 located in cities with either strong urbanization or stable city districts dominated by families with children or both. 60

Norlandia Preschools has experienced significant growth over the past years, both organically and through 35 acquisitions. The growth has been strongest in Sweden, where the company operates 60 units (per 31.12.16) and in the Netherlands, where Norlandia operates 37 units. The 50 company has also established a solid foothold in Finland with 35 units. NO SE FI NE

Care Norlandia Care provides individually focused care and has grown to become one of the largest Nordic providers with 49 units and 3,297 residents per 31.12.2016. A majority of the elderly care units are located in Sweden (39) with the remaining located in Norway (7). The service offering involves full operation of nursing homes including staffing of care personnel.

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28 of the units in Sweden were added through the acquisition Care units by country (31.12.16) of Kosmo AB in February 2015. The transaction was based on a strategic decision to establish a solid position in the 1 Swedish elderly care market. For Norway and Sweden the 8 group’s market share for elderly care homes is ~13% and ~9%, respectively.

Norlandia also operates patient hotels in the proximity to hospitals in Norway, Sweden and Finland. The Group currently operates three patient hotels, making Norlandia a considerable provider in the Nordic market. Patient hotels offers a unique customer value proposition for public authorities as it provides a large cost saving potential for 40 hospitals.

During 2016, Norlandia Care Group entered the Norwegian NO SE FI home care market through the acquisition of Oslo Helse og Omsorg AS. The company currently has 113 employees, serving 674 users (per 31.12.16).

Hero Group AS Hero Group is provider of integration services in Northern Europe. Hero was established in 1987 and has grown to become the largest private provider of care services related to forced migrants, refugees and asylum seekers in the Nordics. The group has extensive competence and experience acquired through 30 years of operations. The service offering includes;  Reception centers for asylum seekers  Interpretation services  Training and education services

Reception centers The activities within Hero Mottak was ramped up considerably following the dramatic increase in number of arrivals to the Nordic countries during Q4’15 and Q1’16. The activity slowed down during 2016, and the reception capacity has been reduced correspondingly. The group had close to 60 centers in Norway and Sweden per year- end 2016, offering services to more than 4,400 people. Cancellations from UDI and Migrationsverket during 2016 and in the beginning of 2017 has resulted in a rapid downscaling of the overall capacity in Norway and Sweden. Hero has gone from 81 ordinary reception centers at peak level in 2016 to 26 at end of Q1’17.

The group is currently in the process of establishing a presence in Germany and has during 2017 won three tender contracts, all expected to commence operation in the period June – August 2017.

A growing part of Hero Group’s activity is the more late cyclical and stable integration services such as education and interpretation. The group provides care services to immigrants and asylum seekers.

Education: Education services includes preparation of immigrants for the Scandinavian labour market through cultural adaptation, providing formal competence and job application. The services also included use of real life job situations as the arena for training and development. The activities within this segment has grown significantly over the past years with number of unique users of 2,402 in 2016.

Interpretation: Hero Group is also a large provider of interpretation services, handling more than 500 assignments per day. The group has a network of several thousand freelance translators covering ~110 languages. The work is performed in communication between foreigners’ and representatives of the municipality, schools, legal system, hospitals, etc. The number of assignments has grown rapidly since 2014, reaching over 200,000 unique assignments. The market volumes are slightly lower going into 2017 as the overall activity level is lower, however, these are services which will be required as long as there are linguistic challenges.

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Number of unique course users Number of interpretation assignments 201,395

2,500 2,402 149,634 1,916

69,093

2014 2015 2016 2014 2015 2016

Aberia Healthcare AS Aberia Healthcare AS is a Nordic provider of health-, welfare- and care services for children and young as well as people with physical and mental disabilities. The company was established in 2010 and has grown to become a significant player in the Nordic market. The group has over 700 employees and offers services to more than 200 individuals. The services provided in Norway and Sweden are divided in three main segments: services related to childcare institutions and foster homes; services for people within all age groups with physical and mental disabilities; and respite care and personal assistance. Most of the contracts in the group are with the government, municipalities or city district authorities.

Units and end users (per 31.12.16) Revenue split by country (2016)

14 %

80 180

9 26 86 %

NO SE

Aberia has experienced solid growth through 2015 and 2016, driven by strong underlying demand and increasing market shares, achieved through tender wins and acquisitions.

Care Properties AS Gain on real estate transactions (NOK million): A part of Norlandia’s business model has always been to develop care related real estate and to acquire companies within its core segments. 99

Following an acquisition or development, Norlandia typically retains the commercial operation of the 75 property, while divesting the property with a yield compression as a result of an attached lease with Norlandia. 44 Companies within Norlandia Health & Care Group AS 32 have sold properties with a booked profit of 20 NOK 273m through 19 transactions (incl. portfolio sale) over the last five years. The group intends to systemize these operations in the future through Care Properties AS. None of the profits gained so far have 2012 2013 2014 2015 2016 been booked in Care Properties AS.

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6.1.2 Significant new products and activities

Company There are no significant new products and activities in Norlandia Health & Care Group AS.

Initial Guarantors Kidsa Drift AS There are no significant new products and activities in Kidsa Drift AS.

Norlandia Care Group AS The Group has acquired a 50% stake of a medical clinic in Tønsberg, LHL-Klinikkene Oseberg - Norlandia AS. This is a joint venture with LHL.

Hero Group AS There are no significant new products and activities in Hero Group AS.

Aberia Healthcare AS There are no significant new products and activities in Aberia Healthcare AS.

Care Properties AS There are no significant new products and activities in Care Properties AS.

6.2 Principal markets

6.2.1 Market perspectives

Company Norlandia Health & Care Group AS is a diversified group within the care service sector, currently operating within five main segments and present in five countries. The operations in Norway and Sweden represent a significant share of revenues, however, the group’s operations in Finland and the Netherlands have been growing quickly. Presence in multiple segments in several countries offers a diversification and protection from changes to a specific political and/or regulatory landscape, as well as a flexibility in terms of growth opportunities. The group has a communicated growth strategy, involving growth within existing markets and segments, broadening of the service offering in existing markets, and entry into new geographical regions. The below table sets out the service offering within each geographical market.

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Initial Guarantors Kidsa Drift AS

Kidsa Drift AS is a pure preschool operator in Norway and subject to national regulation and demographical trends, as well as local market development in Bergen. Norlandia Care Group AS is also a significant operator within the preschool market, with operations in Norway, Sweden, Finland and the Netherlands. The below text captures the market characteristics for the all markets in which Norlandia is operating, and in detail covering the Norwegian market.

Stable preschool attendance: Preschool attendance The Nordic preschool market is characterized by a % high attendance level, with 90% in Norway, 84% in 100% Sweden and 64% in the Netherlands (all numbers as 95% per year end 2015, except Netherlands which is per 90% year end 2014). There is a potential for increased 85% attendance in Finland and the Netherlands, but also 80% in Norway if home support (No: kontantstøtte) 75% is reduced, and Sweden if the unemployment rate 70% 65% goes down and immigrant attendance goes up. 60% 55% 50% 2007 2008 2009 2010 2011 2012 2013 2014 2015 Norway Sweden Finland Netherlands

Source: SSB. OECD, Swedish National Agency for Education and SCB and Statistics Finland, National Institute for Health and welfare

Stable private sector penetration: The penetration level of private operators varies % greatly in the various countries. Norway has been 100% steady at around 53% over the past years, whereas 90% Sweden has been at 20% and growing. Private 80% penetration in Finland has been low but is expected 70% to rise rapidly as many municipalities are 60% implementing the service voucher model. The entire 50% market in the Netherlands is operated by private 40% players, however, many non-profit foundations. 30% 20% Accelerated urbanization: 10% Accelerating urbanization, immigration and a general 0% population growth is driving demand for preschool 2007 2008 2009 2010 2011 2012 2013 2014 2015 services in urban areas. Norway Sweden Finland Netherlands

Source: SSB. OECD, Swedish National Agency for Education and SCB and Statistics Finland, National Institute for Health and welfare

The Norwegian market: Number of children in Norwegian preschools (0-6 years) The Norwegian preschool market 350 287 dynamics, with respect to attendance 300 277 283 286 286 284 262 270 rates and private market penetration, 250 235 250 224 have been stable for several years. The 205 213 193 198 number of children in Norwegian 200 preschools has stabilized around ~285k, representing a participation rate of 150 ~90%. 100

50

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: SSB

Key features of the Norwegian regulatory regime:

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 From 1 January 2009, all Norwegian children between 1-5 years have a statutory right to a place in a preschool  The key element of preschool legislation is that private and public preschools are entitled to the same subsidies, making capacity utilization the most important variable affecting revenues  The average cost per child in public preschools is the basis for the support to private units in the same municipality as preschools are organized to break-even  The distributions were previously handled centrally but are now done by each local municipality  Private preschools face equal minimum requirements with regards to space, service requirements and employees per enrolled child  Parents can be charged a maximum of NOK 2,730 per month (11 months / year)

The Swedish market: Number of children in Swedish preschools (0-6 years) The dynamics of the Swedish 700 644 100% 580 586 592 preschool market have also been 552 566 572 600 517 530 542 fairly stable over the past years. 482 489 487 495 80% 446 458 472 Total number of children enrolled 500 417 433 has increased steadily to 400 60% approximately 496.000 in 2015, 300 40% representing an attendance rate 200 of 84%. The private market has 20% 100 been active in building up capacity, hence increasing private 0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020e penetration from 17% in 2007 to Children in age 1-5 Total number of enrolled children Participation nearly 20% in 2015. Source: Swedish National Agency for Education and SCB

Key feature of the Swedish regulatory regime:  A preschool must always comply with Swedish Education Act, regardless of who it is run by  The municipalities are obliged to reimburse private preschools, provided that the provider concerned meets the relevant quality requirements. The municipality is responsible for assuring that a sufficient number of preschools are offered to the public  The reimbursement model for private providers equals the municipality’s budgeted costs of running such services in addition to a standard amount for administrative costs (3% of other total costs) and VAT (6% of other total costs incl. the administrative addition)  The reimbursement level is valid for one year at a time  In addition to the municipal reimbursement, preschools are also financed by parental fees, subject to certain family features

Norlandia Care Group AS Favourable demographics driving fundamental demand: The Nordics, as the rest of Europe, are faced with the challenge of an asymmetric demographic growth significantly skewed towards a larger elderly population. The number of people over 80 years of age is expected to grow by 58% from 2015 to 2030 in Norway and 64% in Sweden in the same time period. Two major drivers for the growth are; 1) post World War II baby boom generation soon turning 80; and 2) increased life expectancy on the back of medical and technological development.

Population over 80 years in Norway and Sweden (in thousand people)

823 346 502 219

2015 2030E 2015 2030E

Source: SSB, SCB

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High political priority with continuously growing public spend:

All of the Nordic countries rank in the world Total healthcare spending – Norway (NOKbn) top 10 in terms of healthcare spending per 350 11 311 capita. Total healthcare spending in Norway 292 300 274 11 has seen a stable increase from NOK 116bn 260 245 10 250 220 231 in 2000 to NOK 311bn in 2015, an annual 208 189 10 growth of ~7% on average. Nursing care 200 175 157 166 spending constitutes some ~15% of the total 141 149 9 150 116 125 spending. Sweden has seen a slightly 9 100 slower growth rate of ~5% in the same 15- 8 year period, to a total of SEK 460bn. 50 8 0 7 For “primary care” (e.g. nursing care and 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Norway % of GDP home care), spending growth rate has been 4.5% p.a. in Norway and 1.2% in Sweden in the period 2005-2013. In general, a relatively Total healthcare spending – Sweden (SEKbn) 500 460 12 large portion of Nordic healthcare is funded 438 by the public sector and many 450 403 419 390 11 responsibilities are placed with the local 400 350 299 authorities or governments. Total healthcare 282 294 10 300 253 266 costs are now exceeding 10% of GDP in 232 241 250 215 227 9 both Norway (~10%) and Sweden (~11%). 199 200 176 8 This development is expected to drive the 150 need for more private providers who seeks 100 7 to provide the same or better quality at a 50 lower cost. However, the penetration of 0 6 private providers is still very low both in 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Norway and Sweden, representing a Sweden % of GDP significant growth potential for private Source: OECD Statistics, SSB, SCB, Orpea and Attendo (OECD dataseries broken in 2012 in Sweden. providers and a cost saving potential for the Figures until 2010 are not directly comparable with figures from 2011 and onwards. government and municipalities.

Hero Group AS Increasing long term trend of global refugees and asylum seekers

According to the UN, there are currently more than Global number of asylum seekers (million) 65 million people forcibly displaced, some 22 million 3.2 refugees and 10 million stateless people globally. The development in the number of refugees and asylum-seekers has been vast – the number of 1.8 refugees is up ~60% to ~16 million from 2012-2015, 1.2 1.0 0.9 0.9 and the number of asylum-seekers is up ~250% in 0.7 0.7 0.8 0.8 the same period, reaching 3.2 million on a global basis. However, European countries have for many 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 months experienced a declining number of people Source: OECD (stats.oecd.org/) seeking asylum. The main reason is the agreement entered into between EU and Turkey which was enforced as per 20 March 2016. The agreement, in combination with efficient border control in e.g.

Macedonia, has effectively closed down the Western Balkan Route. This route was primarily used by people from Syria, Afghanistan and Iraq. These refugees are currently trapped in Turkey, Lebanon and Jordan.

The influx of asylum seekers to the Nordics have been through a rollercoaster, with a dramatic increase in 2015 and a correspondingly dramatic decline in 2016. The number of people arriving in Norway is currently at a historical low, resulting in contract cancellations from UDI.

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The demand for more late cycle services such as Number of arrivals in Norway interpretation and education is still high and is 35000 expected to remain high, however not completely inelastic to changes in the number of arrivals. 30000

25000

20000

15000

10000

5000

0

Source: UDI

Aberia Healthcare AS Aberia Healthcare is operating within several segments, including childcare, foster homes, assisted living and rehabilitation. Norway is the main market, currently representing about 90 of the company’s operations.

The Norwegian childcare and foster home segments Norwegian municipalities’ spend on homecare are characterized by few large contract counterparts issuing frame agreements to the private operators. Non-profit operators have historically been prioritized; however there is a trend towards equal treatment of non-profit operators and commercial operators, driven by new EU-directives. The total private share of services provided is ~50%, and has been stable for 30 years. The recent influx of asylum seekers has also resulted in an increased demand for long-term foster home capacity due to a high number of traumatized immigrants. Source: SSB

The market for home care services has been increasing steadily for the past years and is expected to continue the trend.

The Swedish market: Total market size incl public2): The Swedish market has also been increasing with total expenses for Swedish municipalities growing from SEK ~22bn in 2005 to SEK ~38bn in 2014, representing a CAGR of 6.3%. The growth is driven by increased demand and increased complexity in services. The private market has absorbed much of the growth, increasing private penetration from 28% in 2007 to 34% in 2014.

Source: SSB, Statistics Sweden, Barne-, ungdoms- og familiedirektoratet

1) Market for individuals and family care includes the expense items in the municipalities’ financing of children and adolescents care, care for adults with addiction, short‐ time housing/care, special housing (outside LSS) as well as refugee reception

Main competitors for Aberia Healthcare: - Humana - Aleris - Attendo

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- Team Olivia - Frösunda - Ambea - Unicare - Longship

Care Properties AS Care Properties will focusing on real estate development within the segments described above and will be subject to the same market drivers.

6.2.2 Statements regarding competitive position

Company The Company has a solid position in all segments in which it is operating. Each operating company’s competitive position in their respective markets is described under Initial Guarantors below.

Initial Guarantors Kidsa Drift AS Kidsa Drift AS consists of 28 preschools in the municipality of Bergen with a capacity of 2,000 children. This makes Kida the largest private operator in the region. The largest competitor is Akasia, operating 18 preschools with capacity for approximately 1,500 children. Most of the units in Kidsa are located in areas with strong demand and high utilization, whereas selected units are located in areas with overcapacity and low utilization.

Norlandia Care Group AS The Preschools division of Norlandia Care Group consists of 182 preschools with a capacity of approximately 12,700 children. The units are located in Norway, Sweden, Finland and the Netherlands. The Norwegian preschool market is fragmented with a total number of units of 6,087 per 2015, of which 53% operated by private players. The six largest private companies operate approximately 530 units, representing under 10% of the total market.

The largest private preschool operators in Norway are:  Trygge Barnehager  Læringsverkstedet  Espira  Norlandia  Kanvas

The Swedish market is also highly fragmented, however, with a lower private penetration. The largest private preschool operators in Sweden are:  AcadeMedia  Atvexa  Norlandia

In Finland, Norlandia operates 37 units with a capacity of 2710 children, making Norlandia a top 3 private operator. The largest operator in Finland is Touhula.

The Care division of Norlandia Care Group provide individually focused elderly care and has grown to become one of largest Nordic providers with the majority of homes located in Sweden (39 homes) and the remaining (7 homes) located in Norway. Norlandia Care Group is well positioned to benefit from an aging population, increased penetration from private providers and taking market shares from smaller providers.

The largest providers of elderly care services in the Nordic countries are:  Attendo  Humana  Vardaga  Norlandia  Aleris

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Hero Group AS With reference to section 6.2.1, Hero Norway is today the largest supplier of reception centres with a market share of 32%. In regards to Interpretation and Integration services Hero has a lower market share as these areas are under high pressure of competition, where price and technology are key factors in succeeding in tenders.

Hero has also over the last year seen a shift in quality requirements in tenders, where ISO 9001:2015 or other quality systems are mandatory. Due to this Hero is now working towards to be certified within the second half of 2018.

Per Q1’17, there were a total of 95 ordinary reception centers in operation, of which Hero Norge operated 26 units. The below table provides an overview of the competitive picture within the reception segment in Norway.

Number of ordinary reception centers per 31.03.17 Operator Units Share Hero Norge 26 27.4 % Link 8 8.4 % Norsk Folkehjelp 4 4.2 % Stiftelsen SANA 4 4.2 % Per Bendiksen 3 3.2 % GTP Tor E. Svendsen 3 3.2 % Norsk Mottaksdrift 3 3.2 % Levanger kommune 3 3.2 % Nordnorsk Mottaksdrift 2 2.1 % Kristiansand kommune 2 2.1 % Salangen kommune 2 2.1 % Sunndal kommune 2 2.1 % Other 33 34.7 % Total 95 100.0 %

Hero has had a position in the Swedish market, however, as the demand for reception center capacity is reduced, Migrationsverket has been cancelling contracts and taking over most of the operations. One direct competitor is Fretex which has grown to become a significant player. There are also a lot of institutions providing a broad range of educational services.

The market for education is less homogenous with many different operators, of which very few solely focusing on education and integration services directed towards immigrants. Competitors within education includes Treider, Sonans, Folkeuniversitetet, Lingu Stavanger, Euroskolen and Hadelandprodukter.

Aberia Healthcare AS Aberia has a strong market position within the segments it operates, with a clear number 3 position in the Norwegian market with a market share of 10 %. We are in the strong belief that we will enter 2018 as the second largest private supplier in Norway. Aberia has just recently established a footprint in Sweden and the goal is to be in the top three within 5 years. The company is experiencing strong organic growth, especially within the assisted living segment.

Care Properties AS Not relevant.

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7 Organizational structure

7.1 Description of group that issuer is part of Norlandia Health & Care Group AS is a fully owned subsidiary of Hospitality Invest AS. Hospitality Invest AS is a private investment company with a diversified portfolio within four main segments; Care, Staffing, Hotel Operations and Real Estate. Norlandia Health & Care Group AS was established by Hospitality Invest AS to consolidate all of its holdings within the health and care segment. Consequently, Norlandia Health & Care Group represents the Care-segment within Hospitality Invest.

The Company is a limited liability company headquartered in Oslo, Norway. The Company is the parent company of the Group and primarily a holding company with limited operating activities.

As per year end 2016 the Group had about 8,400 employees in Norway, Sweden, Finland and the Netherlands. The Group offered its services through 210 preschools, 46 care centers, 3 patient hotels, 84 integration services units and 90 individual & family.

The Group includes the five main operating companies; Norlandia Care Group AS, Kidsa Drift AS, Hero Group AS, Aberia Healthcare AS and Care Properties AS. All operating companies are defined as Initial Guarantors.

The diagram below shows the formal Group structure as per year end 2016:

Hospitality Invest AS

100%

Norlandia Health & Care Group AS

100% 100% 100% 100%

Norlandia Care Kidsa Hero Care Group AS Drift AS Group AS Properties AS

Operating Operating Operating SPVs companies companies companies

100%

Aberia Healthcare AS

Operating companies

7.2 Issuer dependent upon other entities

Company As a parent company of the Group and primarily a holding company, the Company is dependent upon all of the companies listed in clause 7.1. Therefore, the profit of the Company makes it dependent on the results of the operations of the Company's subsidiaries. The CEO of the Group is employed in Company. Other than this, there are currently no services offered from the Company to its subsidiaries.

The Company offers loans to the Initial Guarantors, replacing former bank debt in the various Initial Guarantors. The Intercompany Loans are subject to standardized loan agreements and regulated under the obligations under

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Registration Document the FRN Senior Secured Bonds NOK 2,500,000,000 2016/2021 with ISIN code NO0010780604 and NO0010780612.

The Company has received an unconditional and irrevocable guarantee from the Initial Guarantors for the responsibility of the Company’s obligations under the FRN Senior Secured Bonds NOK 2,500,000,000 2016/2021 with ISIN code NO0010780604 and NO0010780612.

Initial Guarantors Due to each Initial Guarantor being a parent company and primarily a holding company, each company is dependent upon all of its operating companies (or special purpose vehicles, in the case of Care Properties AS). Therefore, the profit of each the Initial Guarantors makes it dependent on the results of the operations of the company’s subsidiaries (or special purpose vehicles).

Kidsa Drift AS Kidsa Drift is dependent on long term financing from the Company. Other than this, Kidsa Drift is not dependent on its parent company nor any of its sister companies.

Norlandia Care Group AS Norlandia Care Group is dependent on long term financing from the Company. Other than this, Norlandia Care Group is not dependent on its parent company nor any of its sister companies. The operating companies in Norlandia Care Group purchase management services from the management companies Norlandia Care Group AS, Norlandia Care AS, Norlandia Preschools AS, Norlandia Services AB, Norlandia Services AS and Norlandia Support AS. These services include among other IT, Marketing, Controlling, Accounting Services and other management services.

Hero Group AS Hero Group is dependent on long term financing from the Company. Other than this, Hero is not dependent on its parent company nor any of its sister companies.

Aberia Healthcare AS Aberia Healthcare is dependent on long term financing from the Company. Other than this, Aberia is not dependent on its parent company nor any of its sister companies.

Care Properties AS Care Properties is dependent on long term financing from the Company. Care Properties is intended to develop and own real estate projects related to the operations of the other operating companies within the Group. As such, Care Properties is to a certain extent dependent on the other operating companies’ ability to come up with relevant projects.

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8 Trend information

8.1 Statement of no material adverse change

There has been no material adverse change in the prospects of the Issuer or the Guarantors since the date of its last published audited financial statements. For further information, see clause 11.6 (“Significant change in the Group’s financial or trading position”).

8.2 Outlook

Company There are no significant known trends that will have material adverse effect on the current financial year for Norlandia Health & Care Group. The Group is, however, exposed to several risk factors as described under the segments specific descriptions below.

Initial Guarantors Kidsa Drift AS There are no significant known trends that will impact the current financial year. However, the company is exposed to risk, both market risk, political risk and operational risk. The company’s business, results of operations and financial conditions depend principally upon conditions prevailing for child care and care services in Norway, in particular, public policies and the political climate. Furthermore, the demand for the company’s services will be dependent on inter alia the birth rate in the municipality of Bergen. Furthermore, the company’s operations are subsidized by public authorities. Changes in the political climate or framework legislation for such subsidies may have a materially adverse effect on the company’s business model, operations and financial condition. In addition, the company is exposed to initial vacancies upon establishment of new preschools.

Norlandia Care Group AS Norlandia Care Group is exposed to the development within the preschool- and elderly care segment. There are no significant known trends that will impact the preschool operations of the company. The market sentiment within elderly care has been more challenging and is expected to remain challenging throughout this financial year. Focus on price in public tender processes, in combination with solid competition, is putting pressure on the company’s margins. The company is further exposed to general risk factors such as market risk, political risk and operational risk. The company’s business, results of operations and financial conditions depend principally upon conditions prevailing for childcare and care services in the Nordic region and the Netherlands, in particular, public policies and the political climate. Furthermore, the demand for the company’s services will be dependent on inter alia the birth rate and the longevity in the regions where the company operates. Furthermore, the company’s operations are subsidized by public authorities. Changes in the political climate or framework legislation for such subsidies may have a materially adverse effect on the company’s business model, operations and financial condition. The company is dependent on renewing current contracts as they expire and/or obtaining new contracts in order to maintain and/or increase its revenues. In addition, the company is exposed to initial vacancies upon establishment of new preschools, nursing homes or patient hotels.

Hero Group AS Hero Group is expected to experience a solid drop in revenues within reception centers throughout the current financial year, whereas interpretation and education services are expected to continue their solid growth path, replacing part of the shortfall within reception centers. Hero Group has just established a presence in Germany and within a short period won three reception center contracts. Market intelligence indicates that there will be high tender activity in the German market in 2017, which may lead to further contract wins. Integration services in general are further exposed to general risk factors such as market risk, political risk and operations risk. The activity level within reception centers will in addition to political decisions be affected by geopolitical situations, which may lead to reduced number of immigrants and asylum seekers.

Aberia Healthcare AS Aberia Healthcare is experiencing increased activity within the assisted living segment, however, the segment comprising childcare institutions and foster homes has seen a weak development during the beginning of 2017. The activity within this segment is expected to increase throughout the current financial year, but start-up costs on new contracts may lead to weaker margins. Aberia Healthcare is further exposed to general risk factors such as market risk, political risk and operational risk. The political risk for the segment offering assisted living is considered to be limited. There are no major changes in the political environment or the general financial conditions expected to have a negative impact on the financial position of the company.

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Care Properties AS There are no significant known trends that will impact the current financial year for Care Properties. However, the company is exposed to risk, both market risk, political risk and operational risk. Care Properties will be exposed to the general development of the real estate market, the demand for all services provided by its sister companies and the development of interest rates in the Nordic countries.

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9 Administrative, management and supervisory bodies

9.1 Information about persons

Company Board of directors The table below set out the names of the board of directors of the Company:

Name Position Business address Kristian A. Adolfsen Chairman c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway Roger Adolfsen Member c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway Åge Jan Danielsen Member c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway Ingvild Ragna Myhre Member c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway

Kristian Arne Adolfsen Kristian Arne Adolfsen (born 1961) is the founder and Chairman of Norlandia Health & Care Group AS. He is a business graduate from BI Norwegian business school and holds a master in business and administration (MBA) from the University of Wisconsin. Kristian Adolfsen has extensive experience from the hospitality and care service industry, having founded and managed several companies within the sector over the past decades. Adolfsen has broad experience from various boards of directors, and currently holds numerous board positions.

Roger Adolfsen Roger Adolfsen (born 1964) is currently a member of the Board of Directors of Norlandia Health & Care Group AS and CEO of Hospitality Invest AS. Adolfsen is a business graduate from BI Norwegian business school and holds a Master in Business and Administration (MBA) from the University of Wisconsin. Adolfsen has extensive experience from the hospitality and care service industry, having founded and managed several companies within the sector over the past decades. Adolfsen has broad experience from various boards of directors, and currently holds numerous board positions.

Åge Jan Danielsen Åge Jan Danielsen (born 1942) is currently a member of the Board of Directors of Norlandia Health & Care Group AS. He holds a Bachelor in Economics from the University of Oslo and is a partner in the consultancy firm Rådgiverne LOS. He formerly held the position as Managing Director of the National Hospital in Norway from 1997 to 2008. He has also served as Chief Executive of Nordland County, Director of Nordland regional college, Secretary General for the Norwegian Ministry of Defence and Managing Director of Statskonsult. In addition, he has had, and continues to hold, a number of directorships in public and private enterprises. He served as Chairman of the Board of Norlandia Care Group in the period 2008 – 2017.

Ingvild Ragna Myhre Ingvild Ragna Myhre (born 1957) holds a Master’s degree in Electrical Engineering from the Norwegian University of Science and Technology in Trondheim (NTNU). She has previously held the positions as Managing Director of Alcatel Telecom, Telenor Mobile and Network Norway.She has had, and continues to hold, a number of directorships in public and private enterprises.

Management The table below set out the names of the members of the Management of the Company:

Name Position Business address Yngvar Tov Herbjørnssønn CEO c/o Norlandia, Øvre Vollgate 13, N-0158 Oslo, Norway Kristoffer Lorck CFO c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway

Yngvar Tov Herbjørnssønn Yngvar Tov Herbjørnssønn (born 1981) is currently the Chief Executive Officer of Norlandia Health and Care Group. Herbjørnssønn has held several positions within Norlandia Care Group AS over the past years, including the position as CEO, Deputy CEO and Organization Director, as well as Chief Operating Officer of the Preschools divisions. He has a Master of Laws from the University of Oslo and Bachelor in Administration and Logistics from

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Registration Document the Royal Naval Academy, Bergen. He also has operating experience from the Armed Forces where he also held the position as lead negotiator for the Military Academy Trained Officers Association (KOL/Akademikerne).

Kristoffer Lorck Kristoffer Lorck (born 1979) is currently the Chief Financial Officer of Norlandia Health & Care Group AS. Lorck holds a Master of Science in Business and Economics from the NHH Norwegian School of Economics. Joined Hospitality invest in 2015 and has previously worked ten years in corporate finance, of which eight years with Pareto Securities, focusing on M&A and financing across a broad range of sectors. He has also served as Second Lieutenant in the Royal Norwegian Navy.

Kidsa Drift AS Board of directors The table below set out the names of the board of directors of the company:

Name Position Business address Yngvar Tov Herbjørnssønn Chairman c/o Norlandia, Øvre Vollgate 13, N-0158 Oslo, Norway Even Carlsen Member c/o Norlandia, Øvre Vollgate 13, N-0158 Oslo, Norway

Yngvar Tov Herbjørnssønn Please see curriculum vitae for Yngvar Tov Herbjørnssønn above, under Company.

Even Carlsen Even Carlsen (born 1961) is currently member of the Board of Directors of Kidsa Drift AS. Carlsen is the co- founder of Tromsø Barnehagedrift AS, which later merged into Acea AS. He contributed to the development of the company as the chief executive officer from 2003-2008. Carlsen participated in the start-up of the Private Kindergartens National Association (Nw: Private Barnehagers Landsforbund) and was on the board of directors. Carlsen has had various board positions within private companies and is currently member of the board of directors in Otiga Group AS.

Management The table below set out the names of the members of the Management of the Company:

Name Position Business address Inger Marie Guddal Einan Managing c/o Norlandia, Øvre Vollgate 13, N-0158 Oslo, Norway Director Martine Starefoss Finance c/o Norlandia, Øvre Vollgate 13, N-0158 Oslo, Norway Andersen Director

Inger Marie Guddal Einan Inger Marie Guddal Einan (born 1974) is currently Managing Director of Kidsa Drift AS. Einan is educated as preschool teacher from Bergen University College and has attended the national management program for preschool managers at NHH Norwegian School of Economics. Einan has worked as an educator in preschools since 1998.

Martine Starefoss Andersen Martine Starefoss Andersen (born 1982) is currently Finance Director of Kidsa Drift AS. Andersen holds a Bachelor in accounting from Oslo and Akershus University College of applied Science. Prior to joining Kidsa Drift in 2008, Andersen worked as an accountant with RSM Hasner Kjelstrup og Wiggen AS.

Norlandia Care Group AS Board of directors The table below set out the names of the board of directors of the company:

Name Position Business address Yngvar Tov Herbjørnssønn Chairman Verkstedveien 1, N-8008 Bodø, Norway Kristian A. Adolfsen Member Verkstedveien 1, N-8008 Bodø, Norway Kristoffer Lorck Member Verkstedveien 1, N-8008 Bodø, Norway

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Yngvar Tov Herbjørnssønn Please see curriculum vitae for Yngvar Tov Herbjørnssønn above, under Company.

Kristian Arne Adolfsen Please see curriculum vitae for Kristian A. Adolfsen above, under Company.

Kristoffer Lorck Please see curriculum vitae for Kristoffer Lorck above, under Company.

Management The table below set out the names of the members of the Management of the Company:

Name Position Business address Yngvar Tov Herbjørnssønn CEO Verkstedveien 1, N-8008 Bodø, Norway Olav Andre Braaten CFO Verkstedveien 1, N-8008 Bodø, Norway

Yngvar Tov Herbjørnssønn Please see curriculum vitae for Yngvar Tov Herbjørnssønn above, under Company.

Olav Andre Braaten Olav Andre Braaten (born 1975) is currently the Chief Financial Officer of Norlandia Care Group AS. Prior to assuming his current position Braaten was Head of Controlling for Norlandia Care Group. Braaten is a state authorized public accountant and holds a Master’s degree in accounting and auditing from the Norwegian Business School ( BI), and Master of Science in Industrial Economics from Norwegian University of Science and Technology (NTNU). Braaten has previously held positions as Senior Financial Controller in Tele2, Manager in PwC-Deals and PwC-Auditing and Consultant at Accenture.

Hero Group AS Board of directors The table below set out the names of the board of directors of the company:

Name Position Business address Yngvar Tov Herbjørnssønn Chairman c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway Kristian A. Adolfsen Member c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway Kristoffer Lorck Member c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway

Yngvar Tov Herbjørnssønn Please see curriculum vitae for Yngvar Tov Herbjørnssønn above, under Company.

Kristian Arne Adolfsen Please see curriculum vitae for Kristian A. Adolfsen above, under Company.

Kristoffer Lorck Please see curriculum vitae for Kristoffer Lorck above, under Company.

Management The table below set out the names of the members of the Management of the Company:

Name Position Business address Tor Brekke CEO c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway Torleiv Broch-Austvoll CFO c/o Hospitality Invest AS, Rådhusgata 23, N-0158 Oslo, Norway

Tor Brekke Tor Brekke (born 1969) is currently Chief Executive Office in Hero Group AS. He is a licenced psychologist with additional studies in philosophy from the University of Oslo (UiO), and a certified specialist in industrial and organizational psychology. Prior to joining Hero in 2008, Brekke worked seven years with NAV/Aetat, holding various positions, including Regional Manager in Stavanger and Rogaland. He has also worked as psychologist and consultant for a variety of companies and government institutions.

Torleiv Broch-Austvoll Torleiv Broch-Austvoll (born 1970) is currently Chief Financial Officer of Hero Group AS. He holds an Executive MBA degree, Bachelor Degree in Business and a Degree in Social Science and Personnel Management. Prior to

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Registration Document joining Hero Group in 2016, he worked approximately 20 years within finance and accounting. After 9 years in KPMG, he has held management positions in companies which have been in significant restructuring and growth phase both nationally and internationally. He also has experience as lecturer at BI Stavanger (Norwegian Business School).

Aberia Healthcare AS Board of directors The table below set out the names of the board of directors of the company:

Name Position Business address Kristian Arne Adolfsen Chairman Rådhusgata 23, N-0158 Oslo, Norway Roger Adolfsen Member Rådhusgata 23, N-0158 Oslo, Norway Nina Hjørdis Torp Høisæter Member Øvre Vollsgate 13, N-0158 Oslo, Norway

Kristian Arne Adolfsen Please see curriculum vitae for Kristian A. Adolfsen above, under Company.

Roger Adolfsen Please see curriculum vitae for Roger Adolfsen above, under Company.

Nina Hjørdis Torp Høisæter Nina Torp Høisæter (born 1956) is currently Chief Executive Officer and member of the board of Aberia Healthcare AS. Prior to assuming her current position Høisæter was Chief Executive Officer at Norlandia Care AS for twelve years. Høisæter has an education within nursing (RN) from the University of Stavanger and public healthcare management from the University of Oslo. She also has a major within psychology and sociology from South Dakota School of Mines and Technology. Høisæter has held various board positions within the confederation of Norwegian Enterprises ("NHO") (Nw: Næringslivets Hovedorganisasjon). She is currently a board member at Pioneer Property Group ASA, NHO Oslo/Akershus and Chairman of the board of directors of Health and Welfare within NHO Service.

Management The table below set out the names of the members of the Management of the Company:

Name Position Business address Nina Hjørdis Torp Høisæter CEO Øvre Vollsgate 13, N-0158 Oslo, Norway Iver Andreas Heggen CFO Øvre Vollsgate 13, N-0158 Oslo, Norway

Nina Hjørdis Torp Høisæter Please see curriculum vitae for Nina Hjørdis Torp Høisæter above, under Company.

Iver Andreas Heggen (born 1984) Heggen is currently Cheif Financial Officer at Aberia Healthcare AS. Heggen holds a Master of Science in Economics and Business Administration from NHH Norwegian School of Economics and a Master of Science in Accounting and Auditing from the Norwegian School of Management (BI). Prior to assuming his current position, Heggen was manager at PwC for five years.

Care Properties AS Board of directors The table below set out the names of the board of directors of the company:

Name Position Business address Kristian Arne Adolfsen Chairman c/o Adolfsen Group, Rådhusgata 23, N-0158 Oslo, Norway Roger Adolfsen Member c/o Adolfsen Group, Rådhusgata 23, N-0158 Oslo, Norway

Kristian Arne Adolfsen Please see curriculum vitae for Kristian A. Adolfsen above, under Company.

Roger Adolfsen Please see curriculum vitae for Roger Adolfsen above, under Company.

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Management Care Properties AS is a newly established entity and there is currently no management in place in the company. The table below set out the names of the members of the Management of the Company:

9.2 Administrative, management and supervisory bodies conflicts of interest

Company There are no potential conflicts of interest between any duties to the company or the board of directors or the company’s management, and their private interests or other duties.

Initial Guarantors Kidsa Drift AS There are no potential conflicts of interest between any duties to the company or the board of directors or the company’s management, and their private interests or other duties.

Norlandia Care Group AS There are no potential conflicts of interest between any duties to the company or the board of directors or the company’s management, and their private interests or other duties.

Hero Group AS There are no potential conflicts of interest between any duties to the company or the board of directors or the company’s management, and their private interests or other duties.

Aberia Healthcare AS There are no potential conflicts of interest between any duties to the company or the board of directors or the company’s management, and their private interests or other duties.

Care Properties AS There are no potential conflicts of interest between any duties to the company or the board of directors or the company’s management, and their private interests or other duties.

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10 Board practices

10.1 Audit committee

Company The Company has established an Audit Committee according to the listing requirements of Oslo Stock Exchange. The Audit Committee consisting of one board representative in addition to one external committee member. The committee has established routines and instructions for their work, including an annual plan for its tasks, with recurring topics to ensure continuous improvement and control.

Members of the Company’s Audit Committee are as follows: Roger Adolfsen (see description under Board of Directors above) Ingvild Myhre (see description under Board of Directors above)

The Audit Committee’s Mandate The Audit Committee shall support the Board in its execution of its responsibility of oversight over the management and safeguarding of the Company’s resources. The Audit Committee shall review financial information that is reported to investors, regulatory bodies and other stakeholders and oversee the work of the external auditors and review their qualifications and independence.

The Audit Committee follows up internal control in connection with quarterly reviews of the Group’s financial reporting. The Chief Financial Officer and the Company’s Head of Accounting also attend the meetings. The Audit Committee will meet four times per year, of which at least one meeting will include the Company’s external auditor. The auditor will present a report reviewing the Company’s accounting principles, risk management and internal control routines. The auditor shall also confirm its independence in writing to the Audit Committee.

Initial Guarantors The figures of all Initial Guarantors are included in the Consolidated Financial Statements for the Group. Consequently, the Initial Guarantors are subject to the same internal control routines and the same reporting regimes as the Company. No separate Audit committees exist for the Initial Guarantors.

10.2 Statement of compliance

The Issuer and the Initial Guarantors are limited liability companies organized under Norwegian law with a governance structure based on Norwegian corporate law. The companies’ corporate governance model is structured to provide a foundation for long-term value creation and to ensure control.

The Issuer has a one-tier board with four directors, including the two largest shareholders and two independent directors. The governance structure is further based on the Norwegian Code of Practice for Corporate Governance, available at www.nues.no, and the Company is continuously seeking to adopt a larger part of the recommendations. The Company’s corporate governance principles are determined by the Board of Directors and are set fourth in the Company’s management documents. The Company is currently in the process of establishing a unified set of corporate governance principles to be applied by the Company and the Initial Guarantors.

The Initial Guarantors all have (or are in the process of changing to) a one tier board consisting three board members, including Yngvar Tov Herbjørnssønn (Group CEO), Kristian A. Adolfsen (Group Chairman) and Kristoffer Lorck (Group CFO).

On 21 April 2016, the Board of Directors of Norlandia Health & Care Group AS approved the Annual Report 2016 including the audited Consolidated Financial Statements for the Group. The financial statements are, to the best of the Board’s knowledge and based on the Board’s best opinion, presented in accordance with International Financial Reporting Standards and the information provided in the financial statements give a true and fair view of the Company’s and Group’s assets, liabilities, financial position and result for the period. The financial report provides an accurate view of the development, performance and financial position of the Company and the Group, and includes a description of the key risks and uncertainties the Group is facing.

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11 Major shareholders

11.1 Ownership

Company As of 31 March 2017 the share capital of Norlandia Health & Care Group AS amounted to NOK 300,000,000 divided into 30,000,000 shares at a nominal value of NOK 10.0 each. All shares are owned by Hospitality Invest AS.

Hospitality Invest AS is directly and indirectly controlled by Kristian A. Adolfsen, controlling 45.58% of the shares, and Roger Adolfsen, controlling 45.58% of the shares. Hospitality Invest has adopted the corporate governance principles included in the Norwegian Code of Practice for Corporate Governance, dated 23 October 2012 with changes dated 30 October 2014, available at www.nues.no, and is continuously seeking to adopt a larger part of the recommendations.

Norlandia Health & Care Group is in process of applying a unified set of corporate governance principles based on the Norwegian Code of Practice for Corporate Governance, available at www.nues.no. The Company will continuously seek to adopt a larger part of the recommendations.

All Initial Guarantors are fully owned by the Company.

11.2 Change in control of the company

There are no arrangements, known to the Company or Initial Guarantors, the operation of which may at a subsequent date result in a change in control of the Company or Initial Guarantors, respectively.

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12 Financial information concerning the issuer's assets and liabilities, financial position and profits and losses

12.1 Historical Financial Information

Company Norlandia Health & Care Group AS’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as approved by the European Union, their interpretations adopted by the International Accounting Standards Board (IASB) and the additional requirements of the Norwegian Accounting Act as of 31st December 2013.

The Group’s accounting policies are shown in the Annual Report 2016, pages 30-36, Note 1.

According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements, this information is incorporated by reference.

The annual reports are attached as Annex 1 A.

Annual Report 2016 Norlandia Health & Care Group AS

Income Statement Page 25 Balance sheet Page 26-27 Statement of Cash flow Page 29 Notes Page 30-60

Kidsa Drift AS The financial statements of Kidsa Drift AS have been prepared in accordance with the Norwegian accounting act and accounting principles generally accepted in Norway (NGAAP).

The company’s accounting policies is shown in the annual report for 2016 of Kidsa Drift AS, page 6, in the accounting policy note.

According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements, this information is incorporated by reference to the annual report for 2015 and annual report for 2016 of Kidsa Drift AS. The annual reports are attached as Annex 1 B.

Annual Report Annual Report 2015 2016 Kidsa Drift AS

Income Statement Page 2 Page 3 Balance sheet Page 3-4 Page 4-5 Statement of Cash flow N/A N/A Notes Page 5-8 Page 6-10

Norlandia Care Group AS The financial statements of Norlandia Care Group AS have been prepared in accordance with the Norwegian accounting act and accounting principles generally accepted in Norway (NGAAP).

The company’s accounting policies is shown in the annual report for 2016 of Norlandia Care Group AS, page 9, note 1.

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According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements this information is incorporated by reference to the annual report for 2015 and annual report for 2016 of Norlandia Care Group AS. The annual reports are attached as Annex 1 C.

Annual Report Annual Report 2015 2016 Norlandia Care Group AS

Income Statement Page 5 Page 5 Balance sheet Page 6-7 Page 6-7 Statement of Cash flow Page 8 Page 8 Notes Page 9-16 Page 9-16

Hero Group AS The financial statements of Hero Group AS have been prepared in accordance with the Norwegian accounting act and accounting principles generally accepted in Norway (NGAAP).

The company’s accounting policies is shown in the annual report for 2016 of Hero Group AS, page 5, note 1.

According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements this information is incorporated by reference to the annual report for 2015 and annual report for 2016 of Hero Group AS. The annual reports are attached as Annex 1 D.

Annual Report Annual Report 2015 2016 Hero Group AS

Income Statement Page 4 Page 2 Balance sheet Page 5-6 Page 3-4 Statement of Cash flow Page 7 N/A Notes Page 8-15 Page 5-8

Aberia Healthcare AS The financial statements of Aberia Healthcare AS have been prepared in accordance with the Norwegian accounting act and accounting principles generally accepted in Norway (NGAAP).

The company’s accounting policies is shown in the annual report for 2016 of Aberia Healthcare AS, page 7, note 1.

According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements this information is incorporated by reference to the annual report for 2015 and annual report for 2016 of Aberia Healthcare AS. The annual reports are attached as Annex 1 E.

Annual Report Annual Report 2015 2016 Aberia Healthcare AS

Income Statement Page 5 Page 4 Balance sheet Page 6-9 Page 5-6 Statement of Cash flow Page 10 N/A Notes Page 11-15 Page 7-10

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Care Properties AS The financial statements of Care Properties AS (named Alad Eiendom in 2015) have been prepared in accordance with the Norwegian accounting act and accounting principles generally accepted in Norway (NGAAP).

The company’s accounting policies is shown in the annual report for 2016 of Care Properties AS, page 5, note 1.

According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements this information is incorporated by reference to the annual report for 2016 and annual report for 2016 of Care Properties AS. The 2015 annual report is unaudited. The annual reports are attached as Annex 1 F.

Annual Report Annual Report 2015 2016 Care Properties AS

Income Statement Page 3 Page 3 Balance sheet Page 7 Page 4 Statement of Cash flow N/A N/A Notes Page 4-6 Page 5-7

12.2 Financial statements See section 12.1 Historical Financial Information. 12.3 Auditing of historical annual financial information

12.3.1 Statement of audited historical financial information The historical financial information has been audited as follows:

For 2015 and 2016: Norlandia Health & Care Group AS, Norlandia Care Group AS, Hero Group AS, Aberia Healthcare AS and Kidsa Drift AS For 2016 only: Care Properties AS

A statement of audited historical financial information is given in:

 The annual report for 2016 of each of the Initial Guarantors: Company Page Attached as Annex 1 no. Kidsa Drift AS 1-10 B. Norlandia Care Group AS 1-19 C. Hero Group AS 1-12 D. Aberia Healthcare AS 1-12 E. Care Properties AS 1-10 F.

 The annual report for 2015 of each of the Initial Guarantors: Company Page Attached as Annex 1 no. Kidsa Drift AS 11-20 B. Norlandia Care Group AS 20-37 C. Hero Group AS 13-29 D. Aberia Healthcare AS 13-29 E. Care Properties AS 11-17 F.

12.4 Age of latest financial information

12.4.1 Last year of audited financial information

For the Company, the last year of audited financial information is 2016. For the Initial Guarantors, the last year of audited financial information is 2016.

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12.5 Legal and arbitration proceedings Hero Group AS There is an ongoing arbitration process between Hero Group and the two former owners of Hero Tolk AB. The Sellers is accused of providing false information in the sales process and consequently accused of breach of the Share Purchase Agreement. The financial outcome of the process is not considered to be material, and provisions are made for a potential loss. The arbitration proceedings are scheduled to commence 16 June 2017 in Stockholm.

Hero Group has received a law suit from a land owner of a former emergency reception center. A lease agreement between Hero Group and the land owner was terminated by Hero Group following UDI’s approach to Hero Group, informing the company that the properties were operated by the land owner without the public requirements in place. The land owner has accused Hero Group of terminating the lease contract without proper cause. The legal proceedings are scheduled for 22-23 August 2017 in Stavanger District Court.

Except from the above the Company and the Initial Guarantors are not aware of any ongoing, pending or threatened governmental, legal or arbitration proceedings during the previous 12 months that may have or have had in the recent past a significant effect on the Company and the Initial Guarantors and/or the Company’s or the Initial Guarantors’ financial position or profitability. 12.6 Significant change in financial or trading position There has been no significant change in the financial or trading position of Company or the Initial Guarantors since the end of the last financial period for which annual and interim financial information has been published.

13 Material contracts Neither the Company nor any Initial Guarantor has entered into any material contracts outside the ordinary course of business for the two years prior to the date of this Prospectus.

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14 Third party information and statement by experts and declarations of any interest

14.1 Third party information Part of the information given in this Registration Document has been sourced from a third party. It is hereby confirmed that the information has been accurately reproduced and that as far as Norlandia Health & Care Group AS is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. The following table lists such third parties:

Kind of information Publicly Name of third Business Qualifications Material interest available party address in the Company Clause 6.2.1 Market perspectives Preschool Yes, free of SSB Akersveien 26, Responsible None attendance, charge N-0277 Oslo, for official Norwegian Norway statistics in preschools, Norway population over 80 years, total healthcare spending, Norwegian municipalities’ spend on homecare, total market size incl public Preschool Yes, free of OECD 2, rue Andre Organisation None attendance, charge Pascal, 75775 for economic population over 80 Paris Cedex 16, co-operation years, global number France and of asylum seekers development Preschool Yes, free of Swedish S-106 20 Administrative None attendance, Swedish charge National Stockholm, authority for preschools Agency for Sweden the public Education school system, publicly organised preschooling, school-age childcare and for adult education Preschool Yes, free of SCB, Statistics P.O. Box 24300, Responsible None attendance, Swedish charge Sweden S-104 51 for official preschools, Stockholm, statistics in population over 80 Sweden Sweden years, population over 80 years, total market size incl public Preschool Yes, free of Statistics Työpajankatu 13 Responsible None attendance charge Finland FI-00580 for official Helsinki, Finland statistics in Finland Preschool Yes, free of National P.O Box 30, FI- Research and None attendance charge Institute for 00271 Helsinki, development Health and Finland institute under welfare the Finnish Ministry of Social Affairs

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and Health Population over 80 Yes, free of Orpea 12 rue Jean Provider of None years charge Jarues, CS care services 10032, France Population over 80 Yes, free of Attendo P.O. Box 715 Provider of None years charge 172 17 care services Danderyd, Sweden Number of arrivals in Yes, free of UDI P.O Box 8108 Responsible None Norway charge Dep., N-0032 for processing Oslo, Norway applications from foreign nationals who wish to visit or live in Norway, the running of asylum reception centres and expulsion cases. Total market size incl Yes, free of Barne-, P.O. Box 2233, The None public charge ungdoms- og N-3103 Norwegian familiedirektor Tønsberg, directorate for atet Norway children, youth and family affairs

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Registration Document

15 Documents on display

The following documents (or copies thereof) may be inspected for the life of the Registration document at the registered offices of the Issuer and the Initial Guarantors, according to clause 5.1.4, respectively:

(a) the memorandum and articles of association of the company; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the company's request any part of which is included or referred to in the Registration Document; (c) the historical financial information of the company and its subsidiary undertakings for each of the two financial years preceding the publication of the Registration Document.

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Joint Managers' disclaimer

ABG Sundal Collier ASA, DNB Bank ASA, DNB Markets and Pareto Securities AS (together the "Joint Managers") have assisted the Company in preparing this Registration Document. The Joint Managers have not verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and the Joint Managers expressly disclaim any legal or financial liability as to the accuracy or completeness of the information contained in this Registration Document or any other information supplied in connection with bonds issued by Norlandia Health & Care Group AS or their distribution. The statements made in this paragraph are without prejudice to the responsibility of the Company. Each person receiving this Registration Document acknowledges that such person has not relied on the Joint Managers or on any person affiliated with it in connection with its investigation of the accuracy of such information or its investment decision.

Confidentiality rules and internal rules restricting the exchange of information between different parts of the Joint Managers may prevent employees of the Joint Managers who are preparing this Registration Document from utilizing or being aware of information available to the Joint Managers and/or affiliated companies and which may be relevant to the recipient’s decisions.

Oslo (Norway), 13 June 2017

ABG Sundal Collier ASA DNB Bank ASA Pareto Securities AS

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Annex 1 Interim and annual reports

A. Company

B. Kidsa Drift AS

C. Norlandia Care Group AS

D. Hero Group AS

E. Aberia Healthcare AS

F. Care Properties AS

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Norlandia Health & Care Group AS Annual Report 2016

tec tec hnology hnology

ANNUAL REPORT 2016 1 Content

3 Introduction 4 CEO remarks 6 Key figures 8 Group history 10 Preschools 12 Care 14 Immigration services 16 Individual & family 18 New and developing preschool markets 20 Board of directors 21 Board of directors’ report 25 Consolidated Statement of Comprehensive Income 26 Consolidated statement of financial position 28 Consolidated statement of changes in equity 29 Consolidated statement of cash flows 30 Notes to the consolidated statements

2 NORLANDIA HEALTH & CARE GROUP AS Structured for growth

Norlandia Health & Care Group was founded to strengthen future prospects and enable synergies between companies with similar ambitions within the same ultimate ownership. All four groups of companies – Preschools, Care, Hero and Aberia – offer solutions to core needs of our societies. Quality and dignity are the hallmarks of their services.

ANNUAL REPORT 2016 3 CEO remarks

I am proud to present this very first an- adoption of new methods. Monopolies nual report from the newly created entity are rarely advantageous to society or Norlandia Health & Care Group (NHC). to consumers, whether the monopolies NHC was created towards the end of are public or private. Competition brings 2016 when the ownership of Norlandia transparency and sheds light on ineffi- Care Group, Hero, Aberia and Kidsa was ciencies and suboptimal service delivery. concentrated in this new corporation. We need private enterprise to challenge In the months since the company was the practices of the public sector to created, I have worked with the manage- maintain a cohesive society with broad ment teams of each of the four operating support for tax-funded welfare services. groups to assess areas of synergies and In fields such as healthcare, elderly potential operational efficiencies. We will care, education and childcare, access Yngvar Tov Herbjørnssønn conduct in-depth analyses and explore to services should be equal and the Norlandia Health & Care Group new territories during the year 2017. services should be of very good quality. CEO On the delivery side, citizens should be In my conversations with the dedicated concerned that their tax money is spent employees of all our operating groups, as efficiently as possible. In order to get it has become clear that these five core the most out of the public spend, society values are indeed common denominators: should seek a mix of commercial, ideal Quality, dignity, reliability, innovation, and public providers. and efficiency. OUTLOOK Our work has supported the notion that there is a strong industrial logic to the Preschools integration of the four broad opera- Our preschool operations are present in tions that constitute NHC. The activities Norway, Sweden, Finland and the Nether­ encompass core welfare services. lands. We seek differentiation from our competitors by emphasizing our desire There are many synergies. Our end users to stimulate children to become more tend to be in a phase of their life when curious, more eager to discover and more they are more fragile. As such, our em- creative. ployees have much in common in terms of how they approach and how they We will supplant inefficient businesses in communicate with users. all markets. We seek growth through the acquisition of new properties in urban Hero is 30 years old, and has a proud areas and we work systematically to heritage as an operator of reception cent- increase occupancy at existing units. ers. Back in the 90s, Hero pioneered a model for user involvement in reception Care center management. Now, we are ready In Sweden, the tender market in the field to export this model to other European of nursing homes continues to be very countries both on sites and through other active. Own operation of elderly care models for distribution of expertise. units is also a market that sees significant activity in Sweden. In Norway, mean- In all countries where we operate, there while, the tender market is rather slow. is ongoing debate about the role of pri- Instead, it seems that the home care vate enterprise in the delivery of welfare market appears to be an attractive one. services. Our message is that we and our We expect the home care market to be competitors drive innovation and the strong over the long term strong due to

4 NORLANDIA HEALTH & CARE GROUP AS fundamental conditions. People generally We are currently in the process of estab- have a preference to stay in their own lishing reception centers in Germany and homes into very old age. Also, there is a look forward to contribute with our skills political desire for the same, motivated and experience in this very large market. mostly by expected cost savings. Individual & family - Aberia We expect one driver of care increasingly We will seek growth primarily through being delivered in the home rather than actively bidding for local tenders. The in institutions is the increased prolifera- market is expected to increase, particu- tion of sophisticated welfare technology. larly within assisted care. We expect to Greater user acceptance of self-care, be able to generate organic growth at tolerance of monitoring technologies, our newly acquired units. The market in ever lower prices for sensors, processors which Aberia operates continues to be and data storage, increased ability to a rather fragmented one. We foresee a process, analyze and act on data – these consolidation within the segment, and are all factors that will propel this evolu- plan on being one of the companies driv- tion relentlessly forward. ing that process. A resulting challenge will be to rapidly realize the potential for While the home market today is rather operational synergies. fragmented and immature, we foresee a trend toward greater demands for quality THE FUTURE systems and documented procedures. As I am very optimistic about the prospects in the nursing home market, society will for Norlandia Health & Care Group. We come to expect evidence-based practices serve society in areas that are complex that are well documented in electronic and challenging. The forces of demogra- journal systems. phy will make the wisdom of using our services ever more evident. An attitude Adequate financing for home care needs of curiosity and a bold orientation to to be provided for this area to grow. Cur- developing the enterprise augurs well for rently, the sector suffers from unpredict- the aggressive employment of digital so- ability and significant differences between lutions to enhance customer experiences, municipalities. There are also surprising lighten the workload and cut costs. discrepancies between municipal cost lev- els and contributions to private operators. Fundamental to all operations of NHC is the profound appreciation of the dignity Integration services - Hero of the individual. We work diligently to We see the potential for rapid growth train new and old employees in the think- within education. Across Europe, we see ing expressed in our value statements. a large market with demand for a broad The great quality experienced by our end spectrum of training activities to inte- users will be the best testament to our grate immigrants in the workforce. success.

We believe there is substantial potential for organic growth from the current plat- form in the areas of translation. In 2016, Yngvar Tov Herbjørnssønn we acquired an interpreter service in Fin- CEO land. Our ability to skillfully use technol- ogy to efficiently deploy the capabilities will be useful. We have translators with a mastery of a great number of languages.

ANNUAL REPORT 2016 5 2 6 2 Key figures 22,500 3 NUMBER OF USERS 3 2

Employees Revenue per segment* 10 Preschools 27% Care 33% Integration services 30% Individual & family 10% 8,400 Property 0% *Sum of percentages may deviate from 100% due to rounding

Markets

9 Norway Sweden Finland The Netherlands

6 2

Revenues 8 13 32 7 18 6 9 7 5,177 433 32 11 7 2 59 MNOK UNITS 7 15 20 6 23 Segments

8 7 2

Preschools Care Integration Individual & Property Preschools Elderly care services family Acquisition and sale Schools of real estate Patient hotels Reception centres/ Child care/foster homes Out of school care Development and Home care accommodation Assisted living sale of real estate Education User controlled personal Interpretation assistance (BPA) 37 Rehabilitation 6 NORLANDIA HEALTH AND CARE GROUP AS 2 6 2 Locations 3

3 2

Preschools Care Integration services 10 Individual & family

9

6 2

8 13 32 7 18 6 9 7 32 11 7 2 59 7 15 20 6 23

8 7 2

37

ANNUAL REPORT 2016 7 Group history

Kristian and Roger Norlandia Care AS Adolfsen and The two brothers, was established as partners establish Kristian and Roger Adolfsen, a spin off from preschool company acquire their first hotel Norlandia Hotels & Resorts ACEA Holding AS 1990 1997 2008

1995 2007 Kristian and Roger Adolfsen The Nordic private equity acquire twelve additional sponsor FSN Capital acquires hotels in the period 45% of Norlandia Care AS from 1990 to 1995 and establish the Norlandia brand in 1995

8 NORLANDIA HEALTH & CARE GROUP AS NCG acquires Kosmo, a major Swedish FSN Capital exits elderly care operator Norlandia Care AS. Norlandia Care Group AS Kristian and Roger (NCG) is created as a Adolfsen acquire merger between a controlling stake Norlandia Care AS and in preschool ACEA Holding AS company Kidsa 2011 2015

2010 2014 2016 Kristian and Roger Kristian and Roger Kristian and Roger Adolfsen establish Adolfsen acquire a majority Adolfsen acquire all minority Aberia Healthcare stake of integration services stakes in NCG, Hero, with partners company Hero Group Aberia and Kidsa and from ISS merge them to form the new Norlandia Health & Care Group AS

ANNUAL REPORT 2016 9 Preschools

Our project Knowledge & innovation has Norlandia’s competence policy program been a central part of our work through has been an important part of our work 2016. Key goals of this identity project during 2016 in Norway and this process are to get an even greater number of is ongoing in Sweden in 2017. The overall competent and dedicated people to goal of the policy is to emphasize that want to work with us and to have more unit managers should help to mobilize parents want their children to go to one and develop the competence that exists, of our preschools. We have worked with so that the individual’s competence has Know­ledge & innovation in Norway and the possibility to develop and be used Kristin Voldsnes Sweden since 2015 and it was launched properly. This helps us ensure that we Norlandia Care Group internally in both countries in 2016. have the right person in the right place! COO Preschools We launched Knowledge & innovation externally in early 2017. Our ambition for Our ambitions for further growth in Knowledge & innovation is that children Sweden and Norway are high. But we will who attend a Norlandia preschool will grow sensibly, putting quality first. Com- develop a greater level of curiosity, a panies acquired by Norlandia should feel stronger drive to explore, and a more well taken care of in their new family. intense urge to create new ideas. Our slogan is “Let the discoveries begin!” We will continue our work on becoming the preferred provider. We want to see a Norlandia Quest is an annual event, and smile on each child’s face when they walk an integral part of Knowledge & innova- through the doors to our preschools. tion. The event unites all the preschools in Norlandia in all countries where we Norway operate in a common project with the Currently we care for around 6800 child­ aim of creating commitment, enthusi- ren in 88 preschools in Norway, counting asm and joy. In 2016/2017 the theme both Norlandia and Kidsa. was film. The children got to explore the medium of film in different ways – they In Bergen we own Kidsa – a company watched films, learned about making that runs and develops 28 preschools. A movies and also got to make films them- common feature for the Kidsa preschools selves. This was an exciting and creative is that they strive to operate on children’s event for both the children and our em- terms. This means that the individual ployees. Norlandia Quest also generated child’s wishes, needs and resources have a great deal of publicity for us. an impact on the development of the pedagogical work in preschools. In 2016 we launched a program for systematic and critical reflection on own In 2016 Kidsa experienced some nega- practices. The program was implemented tive publicity when questions about the in both Norway and Sweden. The pro- company’s finances appeared in media. gram is meant to function as a tool for This led to Bergen municipality conduct- our pedagogical staff members in order ing a financial review, which concluded to strengthen the adult role. The feed- that there was absolutely no reason for back has been positive. We believe that any reactions. systematic and thorough reflection on our pedagogic work lays the foundation In 2016 we have fully renovated Glass­ for good educational quality. verket preschool in Bærum municipality. The original building is from 1894 and in this refurbishing process it has been important for us to preserve the building’s

10 NORLANDIA HEALTH & CARE GROUP AS Share of NHC 27%

Key figures

Number of units 210 Number of employees 3176 Average number FTEs* 2638 Number of users 14669

*Full time employees

original features. The result is a modern 2016 has been an important year for our systems and management approaches preschool with a universal design where preschool operations in Sweden. of Norlandia. The mission of Kids2home we have taken care of a part of our cul- We have taken a major step in developing is to “make families with small children tural heritage. the organisation with the establishment happier by making their everyday life of a new regional management structure. easier”. All of our Kids2home sites have It was encouraging to see that we experi- This means that we have divided the been built according to the same physical enced improvement in parent surveys at Swedish operation into three regions, layout, which is designed for preschool preschools in Oslo that earlier have been each with its own region manager. operations. We pay significant attention run by the city, like Ospa, Frydenlund and Having three regions which has the size to all matters related to food: Our food Bjørnåsen. and management capacity to develop tend to be biodynamically produced and and integrate new preschools marks the cooked on site. It is also possible for Paradiset preschool in Nordland has start of a new era for us in Sweden. parents to purchase take-home dinners. shown impressive and targeted work on In addition to the organisational develop­ prevention of sick leave among employ- ment we also celebrated our 50th In Staffanstorp, Skåne, we have an ees. In 2016 Paradiset preschool had preschool operation in Sweden and the operation with an interesting concept record low sickness absence. Employees launch of Knowledge & innovation at our that delivered good results in 2016. state that the good working environment operations. Lilla och stora Emilia is both a preschool and the feeling of being a part of a family and a school. All learning at this site is makes them happy at work. This is an We had several exciting start-ups in based on the interaction between the inspiration to the rest of our organisation. Sweden last year. Two of them were children, the environment and the teach- Eventyrsbåten and Ferdinand preschools ers. Own experiences and the children’s Sweden which are both Kids2home preschools. own curiosity form the basis for learning. Currently we care for a little more than We have worked with integrating Kids­ 3300 children at 50 preschools in Sweden. 2home since the acquisition in 2015. The integration project has focused on how to let the concept benefit from the

ANNUAL REPORT 2016 11 Care

Since merging all our elderly care divisions at Oppsalhjemmet has presented our work in Norway and Sweden and patient hotels with the program at several conferences into one in the fall of 2015, we have been abroad. One major conference was the working on exploiting all the synergies be- National Forum on Quality Improvement tween these business areas and countries. in Health Care in Orlando, Florida held by In 2016 we started our journey on develop- the Institute for Healthcare Improvement ing from being a traditional health and care (IHI). Oppsalhjemmet will participate in provider to an innovative, forward-looking the program’s key priority area for 2017, division. Welfare technology, extended emphasizing nutrition. Hulda Gunnlaugsdottir home care and meeting the need for sev- Norlandia Care Group eral health care workers will dominate our In 2016 we continued implementing COO Care future operations within Care. Five wishes for dignity, a Norlandia concept developed at Oppsalhjemmet. We are proud of our work with the Five wishes is a so-called living will, which Patient Safety Program throughout 2016. enables residents and their families to The program will be implemented at all make distinct choices about treatment, of our nursing homes in Norway and care provision and end of life support. Sweden. We are also working on including We are now cooperating with Lovisenberg this program in our home care services. hospits on developing the concept so that we can make it available at several Enabling elderly people to live at home as nursing homes. Developing multicultural long as possible is something municipalities dialogue tools is part of this work. in Norway, Sweden and Finland are prior- itizing. Home care services will be a major In accoradance with Oslo municipality’s focus for us in 2017, and in the years to new policy of running their own nursing come, in all three countries. In Norway we homes, Madserudhjemmet was reverted are already well established in this area. to the city of Oslo in 2016 as expected.

Elderly care Norway In Oslo, there are four health houses, and In Norway, the government continues the we run one of them; Ullern Health House. development of the Coordination Reform The health houses are a consequence (samhandlingsreformen). As a conse- of legislation pushing responsibilities for quence, Norlandia Care has expanded its certain patient groups from the hospitals core business from being only a provider over to the municipalities. The health of instution-based elderly care to more houses have patients who need short-time broadly relieving the public sector. With treatment or rehabilitation. In 2017, we our innovative thinking and practical ori- moved into a new, modern and environ- entation, we can assist public health and mentally efficient nursing home. For the care services to implement changes that coming year we will work on incorporating society needs fast. welfare technology at Ullern Health House and finding the right synergies between A major priority for us is to implement the the health house, nursing homes and our Patient Safety Program in all of our nursing home care services. homes in order to increase patient safety and satisfaction. We have continued to One of our new areas of activity within cooperate with the Norwegian Directorate welfare technology is safety alarms. We of Health Services regarding this program participated in a tender competition on through 2016. Oppsalhjemmet was the providing safety alarm services in Asker and first nursing home in Norway to adopt this Bærum municipalities, and we are proud of program. Stephan Ore, the head physician becoming number two in that competition.

12 NORLANDIA HEALTH & CARE GROUP AS Share of NHC 33%

Key figures

Number of units 49 Number of employees 2650 Average number FTEs 2123 Number of users 3297

*Full time employees

Getting established with solid technological Recruiting qualified employees is a priority The Kosmolandia project was completed collaboration partners has been important to us. We contribute extensively to educa- in 2016. This project was about integrating to us in order to enter this segement. tion in the care field in Norway. With over Kosmo into Norlandia and has involved a 100 students from various fields of study, great number of people. It has resulted We acquired 100% of Oslo Helse og Om- including medicine, in training at our in Norlandiasättet, where the best parts sorg in 2016, and as of January 1, 2017 operations we contribute to recruit and from Kosmo and the existing Norlandia the operation was included as a part of ensure competence for the future. concept have been brought together. Norlandia and rebranded to Norlandia Home Care. This acquisition makes us Elderly care Sweden Patient hotels one of the largest home care providers in It is a tough and competitive market in Our patient hotels at St. Olav in Trond- Norway. Early in 2017 we got a concession Sweden, characterized by a large number heim, Årstaviken in Stockholm and for operating in three municipalities in of tenders and challenging expectations. Tampere in Finland have had a stable Nedre Romerike and in Bergen. A major Limiting profits or dividends in the elderly year through 2016. Development and effort was made in late 2016 and early care sector is still a part of the political innovation was the headline of our pa- 2017 to document quality procedures in debate. The Reepalu commission tient hotel conference which was held in Oslo Helse and Omsorg consistently with suggested severe limitations for private 2016. Employees from Norway, Sweden the rest of Norlandia. As a result, we are provision of elderly care services. and Finland participated with the aim proud of being one of the very few pro- to come up with ways of developing the viders of home care services to become We have decided to pursue building concept of patient hotels further. We will ISO certified in Norway. our own nursing homes in Sweden. For continue this work in 2017. 2017 our aim is to initiate three building We have acquired Oseberg Medical Clinic projects. In February 2017 we signed the As of March 2017 we are participating in in Tønsberg in collaboration with the first contract with a contractor which two new tenders in Finland, in Turku and well-known patient and caregiver organi- will build our first operation. This will be Tampere. And we are looking into several zation LHL (Landsforeningen for hjerte- a building containing a nursing centre possible operations in Norway, Finland og lungesyke). This acquisition gives us an and a kindergarten, which is part of our and the UK. entry into specialist health service. “Welfare in a box” concept.

ANNUAL REPORT 2016 13 Integration services

In 2017, we celebrate our 30th anniver- centres. Meeting people with respect and sary. We look back at our eventful and empowering people through knowledge unique history within our field with pride, and responsibility is an important part where quality always has been a major of our philosophy. We experience great priority. We opened our first reception results with Sammen for sikkerhet. centre in 1987 in Ytre Arna in Bergen, The concept is also well known outside to accommodate refugees arriving from Norway. After the mass sexual assault Chile. Today we are the largest operator scandal in Köln in 2015 we had a large of reception centres in Scandinavia and number of media requests from around Tor Brekke one of the largest in the world. We offer the world. They all wanted to learn more Hero services aimed towards asylum seekers, about our concept. CEO refugees and immigrants. We are proud to be the only company in Norway that In Hero, we experience a willingness to can offer a continuum of services for contribute, great employee engagement these groups. From the time when they and a special ability to mobilize our forces first arrive in Norway, continuing with when needed. These strong features are their stay at a reception centre, and fur- all a part of the legacy left by our former ther on to integration in society through leader, Ahmed Bozgil, who passed away employment and education. in 2013. Bozgil himself was a refugee; he came to Norway as a political refugee Over the years we have developed a from Turkey in 1986. He had a clear idea ground-breaking method where we let and vision about how a reception centre the residents get involved in operating should be run. the reception centres; this approach has greatly influenced the development of the Since the change of ownership in 2014, Norwegian reception system. In the year when we became part of the company 2002 resident participation was imple- Hospitality Invest, we have experienced mented as a government requirement at continued growth in Norway and the all Norwegian reception centres. Believing establishment of Hero Sweden the same in empowerment and regarding our resi- year. dents as valuable resources continue to be an important part of our mindset and In addition to our reception centres, our approach. Because of our commitment to core business also consists of language resident involvement we are also consid- services and education centres in Norway ered a trusted partner for the Norwegian and Sweden. Hero Tolk was established in Directorate of Immigration (UDI). 2005, offering interpretation services. In 2006 we established Hero Kompetanse, In 2011, we developed a concept named where we support the development of Sammen for sikkerhet (Together for competence throughout the process from safety). The core element of the concept being a job seeker to becoming a wanted is that we as part of our commitment to resource in the workplace. resident participation talk with refugees and asylum seekers about Norwegian In 2016 Hero Tolk and Hero Kompetanse gender roles in dialogue groups. Initially were established as separate corpora- the purpose of this project was to pre- tions, and both companies had very good vent sexual assault and rape. The main activity and revenue levels in their first idea behind the concept is to engage year as separate corporations. participants in an effort for safety. The dialogue groups are now well incorporat- ed in information work in the reception

14 NORLANDIA HEALTH & CARE GROUP AS Share of NHC 30%

Key figures

Number of units 84 Number of employees 1844 Average number FTEs 1189 Number of users 4393

*Full time employees

Helsingin Tulkkipalvelut Oy, a company Throughout 2016 the number of asylum offering interpretation services, was seekers in Norwegian reception centres acquired in 2016 and rebranded as Hero has been halved. In late January of 2016, Tolk Oy. This acquisition gave us impor- almost 29,000 residents were housed in tant access to the Finnish market for centres in Norway. In January of 2017, interpreting services. the figure was just below 13,000.

The major European refugee crisis in In 2017 we plan to continue our growth 2015 contributed to the establishment in Sweden and Finland. We are also of several thousand new spots at Hero excited about expanding to Germany. reception centres in Norway and Sweden. In the beginning of 2017 we recieved This increase continued into the first confirmation that we had won three half of 2016. Then, in the second half of contracts to operate reception centres 2016, several of our reception centres in Germany. were closed down as the number of arrivals dropped to the lowest levels Our core business deals with some of in many years. We established the last the most urgent social tasks that modern reception centres in June and received democracies face: Migration, integra- the first contract terminations in August. tion and employment. Our model of The tremendous change of course was successful integration through resident very demanding for the organization. participation and cooperating closely Close cooperation with health and safety with different public agencies has been representatives and employee repre- proven to function well. We will continue sentatives was given high priority during to seek to export our model so that our this process. best practices are spread and developed in more countries in Europe.

ANNUAL REPORT 2016 15 Individual & family

Since the foundation in 2010 Aberia’s an increasing demand for respite care, philosophy has been to assist people throughout the country. with needs for support to live their lives with dignity. All our services are provided Within care services and respite care ser- within the Scandinavian welfare model. vices we operate as a private enterprise in This includes children, youth and adults. the public sector. We have approximately Our core service offering is divided into 20 tender processes going on at all times. two main categories. One area is focused We provide services for people who have on child welfare, family homes, foster special needs or who are unable to take Nina Torp Høisæter care and minor refugees in Norway and care of themselves and are dependent on Aberia Healthcare in Sweden. The other main area is care practical or personal assistance in order to CEO services and respite care services, which undertake everyday tasks. We have flexible we offer nationwide in Norway. working schedules enabling efficient op- erations and at the same time maintaining The child welfare sector in Norway is high quality services. complex. 54.000 children and youths between 0 and 22 years are in need of We are dedicated to proper employee per- some level of care services. 40 % is taken formance in the broadest sense, with high care of outside of their homes, either in quality and dignity for everyone involved. foster care or in institutions, whereas 60% We strive to be good role models in leader- is taken care of by their own families with ship at all levels. An expressed ambition is assistance from service providers. to strengthen the job enrichment for our personnel; we expect to improve the ser- The Norwegian state and the municipality vice to those we provide care for as a result. of Oslo are responsible for all childcare in We are continuously working on quality institutions in Norway. They are operating improvement. We recognize employee through their own services and through satisfaction as an essential part of our qual- tenders. This market has three types of ity work, because there is a lot of research providers: Private, non-profit and govern- which shows that job enrichment and mental. The private part of the market quality correlate. Permanent employment is driven by four major players: Aleris, Hu- and our commitment to having the majority mana, Team Oliva and Aberia Healthcare. of our employees in full-time positions are important elements in creating dedicated We are able to provide a sustainable quality and satisfied employees. due to predictability and stability for the children in our care. We achieve this In 2016 we have conducted surveys on because of loyal and highly competent employee satisfaction and customer staff with predictable working schedules. satisfaction, both with satisfying results. Our devotion to quality also shows in Average score on both surveys were the results of external supervisions from around 85 % satisfaction. different external authorities. In 2016 we had no deviations in any of our child We dedicate significant effort towards welfare institutions. improvement in treatment practices, pro- viding meaningful activities and the right There are almost 63.000 people who care for those we are responsible for. It is need care around the clock in Norway. rewarding to see that our work provides 22.000 are taken care of in their own great benefits to individuals and to society. homes and 41.000 are cared for in institu- tions. These numbers are expected to Aberia in Norway increase for all age groups. There is also We experienced a great breakthrough in

16 NORLANDIA HEALTH & CARE GROUP AS Share of NHC 10%

Key figures

Number of units 90 Number of employees 728 Average number FTEs 509 Number of users 186

*Full time employees

Norway in 2016 after years of entrepre- try, of which 85 % in private care. Aberia Aberia in Sweden neurship. Several events gave us great made a huge contribution to help these Aberia has operated in Sweden for several results in quality, personal satisfaction minor refugees. We worked closely with years, mainly within child welfare. Aberia and financially. We won a large tender the municipalities to help a significant is now ready for growth in our core seg- with The Norwegian Directorate for part of this group finding safe homes in ments. We are well prepared for growth Children, Youth and Family Affairs. The communities throughout Norway. At the within child welfare services and family contract was signed in November and will end of the year we just had a few children homes for 2017. Establishing sheltered probably run for six years. In addition to left in our care. Our important work for housing and respite care services are this large contract, we also won several these vulnerable children led to a new also included in our scheduled plans for municipal tenders around the country. framework agreement with the state. operations in Sweden.

We also made several acquisitions in We have great expectations for the coming In both Norway and Sweden Aberia make 2016 and we are pleased to see that we year. Two large tenders from the Health important contributions to create and continue to expand. Stenimed AS was and Welfare Agency in the municipality preserve a sustainable welfare state. acquired in April, a company providing of Oslo are scheduled for 2017. Under We are creative and innovative, and we nationwide living and care services for the terms of this contract it is left up to experience that our way of working is people with special needs. In September the users to make their own choice of perceived as an inspiration to the public we bought Jentespranget AS, a child wel- care provider. This means we have to work sector. We benefit society through adop- fare institution located in Stord. This is a differently and with higher intensity on tion and spreading of innovative methods small company with a solid reputation and marketing our services, in addition to our con- and use of new technologies at our insti- an exciting concept targeting girls only, tinuous work on improving user satisfaction. tutions. We eagerly seek digital solutions with the aim to make them independent throughout our operations. Aberia has and capable of taking care of themselves. Our achievements and new acquisitions a solid reputation and we are proud to during 2016 have brought us to a point have leaders and owners who put quality At the start of 2016 there were 736 minor where we are ready to expand all of our and dignity first. refugees in care centres all over the coun- services nationwide in Norway in 2017.

ANNUAL REPORT 2016 17 New and developing preschool markets

Key figures* – The Netherlands

Number of units 37 Number of employees 475 Average number FTEs** 221 Number of users 2710

Mark Peschier Country manager

* Figures included in Preschool presentation on page 11 **Full time employees

The Netherlands and efficiently can become an integrated Ahead of the general election in March, part of Norlandia, thus taking advan- there was a slightly hesitant attitude in tage of our systems. Alternatively, the the market about how a possible new acquisition targets may be more mature government would organize childcare companies that we can exchange knowl- in the future. This has influenced some edge with. initiatives in our growth strategy. The final composition of the new government Early in 2016, Kindex was rebranded coalition will also influence and possibly to Norlandia; name and brand were give some new directions to our strategy changed, and a concept in line with that in the Netherlands. of Norlandia is being established through divisional exchange of knowledge. Nevertheless, we are pleased to see that our operations have experienced signifi- Quickly understanding customer behaviour cant growth also in 2016 and according and predicting their needs is important, to our plans. We are proud of successfully particularly as we operate in a tougher passing the ISO certification in 2016. market in the Netherlands than in Nor- Our kindergartens in the Dutch market way or Sweden. We continue to deliver are a solid and robust part of Norlandia on quality and operational excellence. and they continue to have a strong finan- The systematic work with quality in the cial foundation. Netherlands still impresses us, and has spread throughout the Norlandia system. When acquiring new entities, it has been important for us to find companies that There are many similarities between Nor- are a good match with us. This may entail way, Scandinavia, and the Netherlands, that they have operations which quickly especially in terms of employee attitudes

18 NORLANDIA HEALTH & CARE GROUP AS Key figures* – Finland

Number of units 35 Number of employees 279 Average number FTEs** 268 Number of users 1992

Olli Lehtisalo Country manager

* Figures included in Preschool presentation on page 11. **Full time employees

and culture at the workplace. Sharing Finland The introduction of our employee survey competencies among employees and In 2016 the Finnish economy showed Great place to work was well received. transferring valuable practices from one signs of recovery. This has a significant ef- The results were positive and they gave place to another is something we have fect on the market. In politics, the munic- us some good indications for future made sure to benefit from in 2016. ipalities and the national administration development. has continued to search for new solutions Urban areas in the Nordic countries in order to speed up the recovery and Overall, Finland shows strengthened are likely to be influenced by European reverse the descending economy. revenue and profit due to an impres- solutions in more densely populated sive turnaround initiative of our Finnish areas. The knowhow of combining Nordic The service voucher system has contin- management. For new acquisitions in welfare solutions - securing good quality ued to grow in 2016. This changes the Finland our strategy has not changed. independently of social and economic dynamics of the sector and gives a larger We are especially looking at well-run status – with effective central European part of the population the possibility to businesses with long traditions which are service models, provides a growth model afford private care. under pressure to deliver on increasing we believe is needed both in our core expectations. Through 2016 we have also markets of the Nordics and in our new It is evident to us that private kinder- focused on establishing relationships and and developing markets. gartens are more cost effective than the key partnerships that will enable us to public kindergartens in Finland and at the grow further through our own new build- Good cooperation and a mutual under- same time they also provide great quality ing program. We see that there is great standing between the Nordic countries and customer experience. We continued potential for further growth and that we and the Netherlands forms part of our work in 2016 to prepare for ISO certifica- are on the right track. We are thinking rather ambitious growth strategy for the tion for our Finnish operations. long-term, building solid operations with future. good quality for both children and par- We have rebranded our Tenava operations ents in the least mature private childcare in Finland to Norlandia at the beginning of market of the Nordics. 2017. The process has been successful and well received by the employees.

ANNUAL REPORT 2016 19 The board of directors

Kristian Adolfsen Founder and Chairman of the Board of Directors Kristian has an MBA from the University of Wisconsin and a Master of Science in Business Administration from the Norwegian Business School, BI (siviløkonom). He has more than 30 years of business experience. He has founded a number of companies within the Adolfsen Group and holds several directorships.

Roger Adolfsen Founder and Member of the Board of Directors Roger has an MBA from the University of Wisconsin and a Master of Science in Business Administration from the Norwegian Business School, BI (siviløkonom). He has 30 years of extensive experience in business and real estate development, including 27 years in his own business. He has founded a number of companies within the Adolfsen Group.

Åge Danielsen Member of the Board of Directors Åge Danielsen was the Chairman of Norlandia Care Groups Board of Directors and has held the same position in ACEA since 2008. Åge has a degree in Economics and is a partner in the Consultancy Partnership Radgiverne LOS / A20 Partners AS. He formerly held the positon of Managing Director of the Norwegian Rikshospitalet from 1997 to 2008. He was the CEO of Nordland Regional College, CEO of Nordland County Administration, Secretary General for the Norwegian Ministry of Defence and Manag- ing Director of Statskonsult. In addition, he has had, and continues to hold, a number of directorships in public and private enterprises.

Ingvild Myhre Member of the Board of Directors Ingvild qualified as a Chartered Electro- Engineer at the Norwegian University of Science and Technology (NTNU). She was formerly the Managing Director of Alcatel Telecom, Telenor Mobile and Network Norway. Ingvild is currently self-employed. She has had, and continues to hold, a number of directorships in public and private enterprises.

20 NORLANDIA HEALTH & CARE GROUP AS The board of directors’ report 2016

Reorganization and refinancing initiated and is expected to be concluded Over the last years, we have observed a with a listing on Oslo Stock Exchange positive development across all the care within end of 1H 2017. segments in which we are operating, and at the same time, all companies have The restructuring and refinancing has entered into new geographical areas. We created a major player within the Nordic strongly believe that the core segments in care service sector, which will be even which we operate will continue to experi- stronger and more robust than before. ence a positive trend in the Nordic and The new bond loan offers additional European countries in the years to come. liquidity and creates a stable platform In order to arrange for the continued for further growth, both organically and growth within the care segments, Hospi- through new acquisitions. The Group will tality Invest ( ultimate mother company strive to utilize synergies between the of the ownership sphere) went through various operating groups, improving the a major restructuring process in 2016 quality of the Group’s services further involving consolidation of all holdings and at the same time continue to be an within the preschools, care, individual & efficient and reliable service provider to family and integration services segments our contract counterparts. under a fully-owned and newly incorpo- rated subsidiary named Norlandia Health Operations & Care Group AS (“NHC”). Norlandia Health & Care Group AS is a provider of healthcare services in North- As part of the reorganization, NHC ac- ern Europe. During 2016, the Group had quired all outstanding minority share- operations in four countries; Norway, holdings in Norlandia Care Group AS, Sweden, Finland and the Netherlands. Aberia Healthcare AS, Hero Group AS About 80% of the operations is located in and Kidsa Drift AS, resulting in a clean Norway and Sweden, and the headquar- corporate structure with fully owned ter is located in Oslo. The Group operates subsidiaries under NHC. The new group under four different brands; Norlandia, will become a leading player in the Nordic Kidsa, Aberia and Hero, and delivers private care market with more than eight services within the four segments; Pre- thousand employees and revenues of schools, Care, Integration Services and more than NOK 5 billion. As part of the Individual & Family. restructuring, outstanding bank- and bond debt in the four operating compa- Preschools nies, amounting to NOK 844 million was The Preschools segment includes the refinanced, including the NOK 650 million preschool activities within Norlandia bond loan issued by Norlandia Care Preschools AS and Kidsa Barnehager AS. Group AS (OSE: NCG01). The segment includes over 210 preschool units in Norway, Sweden, Finland and The transactions were financed through the Netherlands, with close to 15,000 the issuance of a new bond loan consist- kids and 3,200 employees. The segment ing of a NOK-tranche of NOK 750 million has experienced solid growth over the at a rate of NIBOR + 450 basis points and past years, both through acquisitions and a SEK-tranche of SEK 1 100 million at a through establishing new units. rate of STIBOR + 450 basis points. The loan is a senior secured callable bond Care with maturity in 2021 and a maximum The Care segment provides individually loan amount of NOK 2 500 million. A list- focused care and has grown to become ing process for the bond loan has been one of the largest Nordic providers

ANNUAL REPORT 2016 21 with close to 50 units, more than 3,300 The group was established in 2010 and Staff costs increased from NOK 2,557.7 residents and over 2,650 employees. has grown to become a significant player million in 2015 to NOK 3,352.9 million in 40 of the units are located in Sweden, in the Nordic market. The group has over 2016, implying a 0.1 percentage point de- 7 in Norway and 1 in Finland. The 700 employees and offers services to crease in staff cost, measured as percent segment experienced a challenging year more than 180 individuals. The services of revenues. The EBITDA margin for the in 2016 with loss of certain contracts in are divided in three main segments: year 2016 ended at 7.4 % compared to both Sweden and Norway. In addition, Aberia #UNG offering services related to 6.2 % in 2015. increased focus on price in recent tender childcare institutions and foster homes; processes, in combination with a high Aberia #PROFF focusing on care services Cash flow from operating activities de- level of competition, is putting pressure for people within all age groups with creased from NOK 262.6 million in 2015 on operating margins. physical and mental disabilities; and Abe- to NOK 249.3 million in 2016. Net cash ria Samson offering respite care and per- used in investing activities declined from Integration Services sonal assistance. Most of the contracts NOK -183.6 million in 2015 to NOK -33.3 The integration services are offered in the group are with the government, million in 2016. Net cash received from through Hero Group AS. Hero Norge was municipalities or city district authorities. financing activities amounted to established in 1987 and has grown to be- The company has a growth strategy and NOK 512.1 million, primarily relating to come the largest private provider of care is actively seeking growth through tender the issuance of a new bond loan. services related to forced migrants, refu- processes and acquisitions. gees and asylum seekers in the Nordics. The Group’s liquidity reserve as of The group has extensive competence and Real estate 31.12.2016 amounted to NOK 1,060.2 experience acquired through 30 years of The Real estate operations have so far million. The Group also has additional operations. The service offering includes; been operated as an integrated part of reserves through tap issue possibilities • Reception centers for asylum seekers the respective segments, but was recently on the bond loan. • Interpretation services established as a separate operating seg- • Training and education services ment. All existing real estate within the The Group’s long-term debt amounted group are planned sold or transferred to to NOK 2,058.7 million, of which NOK The group had more than 60 centers in the newly established company named 2,272.0 million is bond loans in Norlandia Norway and Sweden per year-end 2016 Care Properties AS. All future initiatives Health & Care Group. with a total capacity for offering services related to purchase, development and to approximately 10,000 people. sale of real estate will be handled by this Total assets of the Group increased from segment. NOK 3,277.5 million in 2015 to NOK The Integration services segment has 4,239.3 million in 2016. The equity ratio been through a turbulent year with Comments to the consolidated decreased from 38.1% in 2015 to 11.4% record high influx of asylum seekers in financial statements in 2016. The significant decrease in the beginning of 2016 and record low The Group’s revenues increased from equity ratio relates to the restructuring of number of arrivals at the end of the year. NOK 3,940.4 million in 2015 to NOK the Group completed in December 2016. The dramatic changes in the market con- 5,177.5 million in 2016. The figures are For a detailed description, please see ditions has been a massive challenge for not directly comparable, as the 2015 note 11 in the Financial statement. the organization, however, the group has financial statement did not include full managed their tasks well and remains year operations for Aberia Healthcare. The Group’s financial position is sound an important partner to the immigration Moreover, the segment Integration and adequate to settle short-term obliga- authorities in both Norway and Sweden. Services experienced a significant growth tions with the Group’s liquid assets. compared to 2015. Net profit decreased Individual & family from NOK 277.3 million in 2015 to NOK The consolidated financial statements The services within the Individual & 194.9 million in 2016. Last year’s profit have been prepared in accordance with family segment are provided by Aberia included a gain of NOK 149.9 million International Financial Reporting Stand- Healthcare AS - a Nordic provider of relating to the sale of shares in PPP III. ards (IFRSs) as adopted by EU. There health-, welfare- and care services for were no material changes in accounting children and young as well as people with policies during the year affecting the physical and mental disabilities. Group’s consolidated financial statements.

22 NORLANDIA HEALTH & CARE GROUP AS Use of Alternative Performance Measures flat development of revenues as some will handle management, development Alternative Performance Measures (APM) existing contracts are phased out and and sale of properties in the future. is understood as a financial measure replaced by new tenders won. Continued of historical or future financial perfor- pressure on margins may lead to a tem- An identified risk within this segment is mance, financial position, or cash flows, porary decline in the segments overall the proposed changes in the Swedish tax other than a financial measure defined margin level. Growth initiatives within regime, which may have a negative effect or specified in the applicable financial own projects and health care technology on future profits within this segment, if reporting framework. Norlandia Health may contribute on the positive side. The implemented. & Care Group reports certain alternative long term underlying drivers within the performance measures in its financial segment continue to remain very solid. There are no other known events ex- reports as a supplement to the financial pected to have significant effect on the statements reported in accordance with The Integration services segment is Group’s performance in 2017. IFRS. The APMs are used consistently expected to see a solid drop in revenues over time and accompanied by com- within Reception Centers, whereas Inter- Financial risk paratives for the corresponding previous pretation and Education are expected to Overall view on objectives and strategy periods. continue their solid growth path, replac- The Group is exposed to financial risk in ing part of the shortfall within Reception different areas, including exchange rate Definitions: Centers. The Group has just established risk. The goal is to reduce the financial EBITDA: Earnings Before Interest, Tax, a presence in Germany and within a risk as much as possible. The Group’s cur- Depreciation and Amortization short period won three Reception Center rent strategy does not include the use of EBIT: Earnings Before Interest and Tax contracts. Market intelligence indicates financial instruments to hedge exchange Total Net Debt: As used in the incur- that there will be high tender activity in rate risk; however, each company in the rence test; total interest bearing debt, the German market in 2017, which may Group is continuously assessing this. less back-to-back loans towards Pioneer lead to further contract wins. We expect Property Group, less cash and cash limited contribution from these activities Market risk equivalents in 2017 as the entry into a new market The Group’s business, results of opera- will require some investments, however, tions and financial conditions depend Going concern it may lead to a positive contribution in on conditions prevailing for childcare In accordance with the Norwegian Ac- 2018 and onwards. and care services in the Nordic region, in counting Act §3-3a, we confirm that the particular, public policies and the political financial statements have been prepared The Individual & Family segment is climate. The demand for the Group’s under the assumption of a going concern. expected to get a soft start to the year services will be dependent on inter alia This assumption is based on profit fore- on the back of a challenging environment the birth rates and the longevity in the casts for 2017 and the Group’s long-term within childcare services in Norway and regions where the group operates. Inte- strategic forecasts. The Group’s economic Sweden. However, the Company has won gration services will in addition to politi- and financial position is sound. a large contract in the childcare segment cal decisions be affected by geopolitical which is expected to increase the group’s situations, which may lead to reduced Future challenges and market outlook market share in second half of 2017. number of immigrants and asylum seek- We expect to see fairly stable develop- We continue to see strong demand for ers. Demand for private care services ment of the operations during 2017. The assisted living services and expect to see may decrease depending on a number of Preschools segment is expected to con- continued growth within the segment. demographic and economic factors. tinue a stable growth through the launch We expect the ongoing market consolida- own projects as well as acquisition of tion to continue and will seek to be an Exchange rate risk new units. Continuous focus on improv- active participant in the process. The Group has operations in Norway, ing quality and efficiency is expected to Sweden, Finland and the Netherlands, support a stable margin development The Real Estate segment is expected and is expected to enter new geographies going forward. to develop as planned in 2017. Several in the future. Currency fluctuations may properties are planned sold during 2017, have a negative effect on the Group’s The Care segment is expected to have which will generate profits. The Group financial conditions and results of a more challenging year. We expect a is also building up an organization which operations. The Group is predominantly

ANNUAL REPORT 2016 23 exposed to the SEKNOK exchange rate as The working environment and the Important events after the balance the financial statements are presented employees sheet date in NOK and around 40% of revenues are Average number of employees (FTE) in On 18 January 2017 Norlandia Care generated in SEK. However, the Group the Group amounted to 6,459 in 2016. Group settled the Senior Secured Bond has a corresponding share of costs in The working environment is considered Issue 2013/2018 repaying NOK 507 mil- SEK and about 58% of its bond debt is to be good and efforts for improvements lion to the bond holders. The transaction denominated in SEK, both representing are made on an ongoing basis. The Group had a material effect on the Group’s total natural hedges to the operations. The aims to be a workplace with equal op- balance by decreasing cash and debt on Group as a small but growing exposure portunities and seeks to prevent gender both sides of the balance sheet. to the EURNOK exchange rate as opera- discrimination in all aspects of our opera- tions in the Netherlands and Finland are tions. Leave of absence is an important Statement from the Board of Directors. growing. The Group is monitoring the performance indicator and is measured The financial statements are, to the best exposure and will consider to hedge this throughout the Group’s operational of our knowledge and based on our best exposure in the future. The Group is fur- entities, but not on a consolidated basis. opinion, presented in accordance with ther exposed to changes in interest rates There has been no significant leave of International Financial Reporting Stand- as most long-term debt in the Group is absence in the parent company during ards and the information provided in subject to floating interest rates. The 2016. the financial statements give a true and Group has not established any interest fair view of the Company’s and Group’s rate hedging mechanisms. Environmental report assets, liabilities, financial position The Group’s operations are not harmful and result for the period. The financial Credit risk to the environment and are not regulated report provides an accurate view of the The risk of losses on receivables is consid- by any licenses related to waste handling. development, performance and financial ered very low in the Group as a considerable position of the Company and the Group, part of revenues is towards governmental Allocation of income in the and includes a description of the key risks entities and municipalities. The Group parent company and uncertainties the Group is facing. has not yet experienced significant losses Norlandia Health & Care Group AS’ on receivables. (parent) had a net result in 2016 of NOK -18,708,991. The Board of Directors Liquidity risk has proposed the net loss of Norlandia The Group’s liquidity is good, enabling Health & Care Group AS to be allocated each Group company to handle both as follows: short-term and long-term debt, as well as Loss transferred from Other equity: finance further growth. NOK 18,708,991

Oslo, 20 April 2017

Board of Directors of Norlandia Health & Care Group AS

Kristian A. Adolfsen Roger Adolfsen Åge Danielsen Ingvild Myhre Chairman of the Board Member of the Board Member of the Board Member of the Board

Yngvar Tov Herbjørnssønn CEO

24 NORLANDIA HEALTH & CARE GROUP AS Consolidated Statement of Comprehensive Income

Norlandia Health & Care Group — for the year ended 31 December 2016 (Amounts in NOK thousand)

Note 2016 2015 Revenue 4 5 062 726 3 895 165 Other operating income 4 114 794 45 249 Net operating revenue 5 177 521 3 940 414

Raw materials and consumables used 226 791 228 707 Staff costs 5 3 352 905 2 557 711 Depreciation and amortisation expense 8,9 95 424 74 920 Other operating expenses 1 217 039 909 968 Total operating expenses 4 892 159 3 771 307

Profit from operations 285 362 169 107

Finance income 6 37 034 28 677 Finance expense 6 -113 554 -61 097 Share of post-tax profits of associates 11 23 003 167 260 Net finance -53 517 134 840

Profit before tax 231 845 303 947

Tax expense 7 -36 908 -26 598

Profit 194 937 277 349

Other comprehensive income

Items that will not be reclassified to profit or loss Remeasurements of post employment benefit obligations 19 -8 835 46 073 Deferred tax on remeasurement of post employment benefit obligation 16 2 209 -12 440

Items that may be subsequently reclassified to profit or loss Currency translation differences -23 495 15 226

Total other comprehensive income -30 121 48 859

Total comprehensive income 164 816 326 208

Profit controlling interests 95 142 160 814 Profit non-controlling interests 99 795 116 535 194 937 277 349

Total comprehensive income controlling interests 75 907 191 625 Total comprehensive income non-controlling interests 88 910 134 583 164 816 326 208

ANNUAL REPORT 2016 25 Consolidated statement of financial position

Norlandia Health & Care Group — for the year ended 31 December 2016 (Amounts in NOK thousand)

ASSETS Note 2016 2015 01.01.2015*

Non-current assets Property, plant and equipment 8 425 297 356 564 324 642 Deferred tax asset 16 27 691 15 324 24 741 Intangible assets 9 2 121 421 1 683 458 1 415 610 Investement in associated companies 11 38 589 403 898 196 739 Other investments 3 15 104 - 110 Other receivables 13,21 100 494 132 850 241 008 Total non-current assets 2 728 595 2 592 094 2 202 849

Current assets Inventories 4 287 6 504 2 989 Trade and other receivables 13,21 446 132 333 117 207 017 Cash and cash equivalents 22 1 060 241 345 749 325 025 Total current assets 1 510 659 685 370 535 031

Total assets 4 239 254 3 277 464 2 737 880 *Refers to note 11

26 NORLANDIA HEALTH & CARE GROUP AS Consolidated statement of financial position

Norlandia Health & Care Group — for the year ended 31 December 2016 (Amounts in NOK thousand)

EQUITY AND LIABILITIES Note 2016 2015 01.01.2015*

Equity attributable to owners of the parent Share capital 14 300 000 - - Other equity 181 389 796 400 637 059 Total equity attributable to owners of the parent 481 389 796 400 637 059

Non-controlling interest 458 453 110 360 504 Total equity 481 847 1 249 511 997 563

Non-current liabilities Pension liabilities 19 97 146 64 224 107 797 Loans and borrowings 15 2 058 739 1 020 280 961 669 Derivative financial liabilities 12 1 379 2 115 3 147 Deferred tax liability 16 191 003 178 253 159 919 Provisions 2 360 4 829 - Total non-current liabilities 2 350 626 1 269 701 1 232 531

Current liabilities Trade and other payables 16,17 854 769 739 818 495 244 Loans and borrowings 15 507 553 5 826 4 517 Taxes payable 16 44 460 12 609 8 025 Total current liabilities 1 406 781 758 253 507 786

Total liabilities 3 757 407 2 027 953 1 740 318

Total equity and liabilities 4 239 254 3 277 464 2 737 880 *Refers to note 11

Oslo, 20 April 2017

Board of Directors of Norlandia Health & Care Group AS

Kristian A. Adolfsen Roger Adolfsen Åge Danielsen Ingvild Myhre Chairman of the Board Member of the Board Member of the Board Member of the Board

Yngvar Tov Herbjørnssønn CEO

ANNUAL REPORT 2016 27 Consolidated statement of changes in equity

Norlandia Health & Care Group — for the year ended 31 December 2016 (Amounts in NOK thousand)

Retained Translation Non-controlling Share capital Share premium earnings differences interests Total equity

31 December 2014 - - 636 364 695 360 504 997 563

Comprehensive Income for the year Profit - - 174 821 - 102 528 277 349 Other comprehensive Income - - 15 585 15 226 18 048 48 859

Total comprehensive Income for the year - - 190 407 15 226 120 576 326 208

Contributions by and distributions to owners Distribution to owners - - -16 604 - -9 396 -26 000 Acquisition of shares from non-controlling interests - - -10 921 - -18 573 -29 493 Acquisition of subsidiary from controlling shareholder - - -18 767 - - -18 767 Total contributions by and distributions to owners - - -46 291 - -27 969 -74 260

31 December 2015 - - 780 480 15 921 453 110 1 249 511

Comprehensive Income for the year Profit - - 95 142 - 99 795 194 937 Other comprehensive Income - - -4 298 -15 239 -10 585 -30 121 Total comprehensive Income for the year - - 90 844 -15 239 89 211 164 817

Contributions by and distributions to owners Incorporation 30 - - - - 30 Capital increase 3 366 270 -295 746 - - 70 527 Capitalization issue 299 967 -299 967 - - - - Increased non-controlling interest from business combinations (Note 20) - - -5 950 - 50 333 44 383 Acqusition of non-controlling interest Hospitality invest - - 20 294 - -20 294 - Distribution to owners - - -55 760 - -32 824 -88 583 Acquisition of shares from non-controlling interest (note 11) - - -88 437 - -539 079 -627 516 Consideration for shares in subsidiaries (Note 11) - - -331 321 - - -331 321 Total contributions by and distributions to owners 300 000 66 303 -756 919 - -541 864 -932 480

31 December 2016 300 000 66 303 114 405 682 457 481 847

28 NORLANDIA HEALTH & CARE GROUP AS Consolidated statement of cash flows

Norlandia Health & Care Group — for the year ended 31 December 2016 (Amounts in NOK thousand)

Note 2016 2015

Cash flows from operating activities Profit for the year 194 937 277 349 Adjustments for: Depreciation of property, plant and equipment 8 58 837 63 747 Gain on sale of assets 4 -50 857 -26 003 Amortisation of intangible fixed assets 9 36 587 11 174 Share of post-tax profits of associates 11 -23 003 -167 260 Changes in fair value of financial instruments 12 -737 -974 Interest income/interest expense and financial items 76 519 39 031 Income tax expense 7 36 908 31 904

Changes in working capital Changes in accounts receivable and payables -71 678 -57 740 Increase in inventories 2 547 -1 968 Increase in trade and other payables 5 107 118 358 Increase in provisions and employee benefits -3 303 2 014 Cash generated from operations 261 864 289 632

Income taxes paid -12 609 -27 025 Net cash flows from operating activities 249 256 262 607

Investing activities Cash received from sale of assets 136 900 72 014 Purchases of property, plant and equipment 8 -118 941 -136 915 Net investment in shares in associates 11 130 342 -39 899 Net investment in shares in subsidiaries 20 -190 001 -200 588 Net changes in financial receivables 21 3 887 110 401 Interest received 6 4 536 11 371 Net cash used in investing activities -33 277 -183 615

Financing activities Payments of long-term loan to finance institutions 15 -219 405 -10 311 Changes in short-term loan to finance institutions 15 488 327 -10 505 Proceeds from long-term borrowings from finance institutions 15 1 058 047 64 914 Interest paid 6 -63 928 -48 642 Payment to non-controlling interest -627 516 -29 493 Distribution to owners 11 -88 583 -26 000 Purchase of shares from non-controlling interests 11 -34 826 Net cash (used in)/from financing activities 546 941 -60 038

Net increase in cash and cash equivalents 762 919 18 954 Cash and cash equivalents at beginning of year 14 345 749 325 025 Exchange (losses)/gains on cash and cash equivalents -13 602 1 771 Cash and cash equivalents at end of year 1 060 241 345 749

ANNUAL REPORTANNUAL 2013 REPORT 2016 29 Notes to the consolidated statements

1 ACCOUNTING POLICIES

Basis of preparation The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated. The consolidated financial statements have been prepared under the historical cost convention, as modified by valuing financial derivative instruments at fair value through profit or loss.

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by the European Union (“adopted IFRSs”).

Norlandia Health & Care Group AS was established in December 2016. This was done by transferring the shares in Norlandia Care Group AS, Hero Group AS, Aberia Healthcare AS and Kidsa Barnehager AS, from Hospitality Invest to a newly incorporated and 100% owned subsidiary.

The transfer to the newly incorporated subsidiary is considered to be a common control transaction outside the scope of IFRS 3 Business Combinations. IFRS 3 Business Combinations does not provide specific guidance on how to account for common control transactions. Norlandia Health & Care Group has established policies to account for these transactions in order to present his- torical figures as if the Group had prepared separate financial statements in the past. Book values have been used to account for all restructuring transactions as if the reorganisation occurred at the beginning of the first period presented. For more detail on the reorganisation see note 11.

The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group’s accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 2.

Changes in accounting policies a) New standards, interpretations and amendments effective from 1 January 2016

• Clarification of acceptable methods of depreciation and amortisation - Amendments to IAS 16 and IAS 38 • Annual improvements to IFRSs 2012 - 2014 cycle • Disclosure initiative - amendments to IAS 1.

The adoption of these amendments did not have any impact on the current period or any prior period and is not likely to affect future periods. b) New standards, interpretations and amendments not yet effective

There are several new and amended standard issued by the IASB that are not yet effective. The most significant of these are as follows: • IFRS 9, ‘Financial instruments’ - 1 January 2018 • IFRS 15, ‘Revenue recognistion’ - 1 January 2018 • IFRS 16, ‘Leases’ - 1 January 2019

With the exception of IFRS 16 these standards and amendments are not expected to have material impact on the financial state- ments. There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

30 NORLANDIA HEALTH & CARE GROUP AS More on IFRS 16 Leases IFRS 16 contains a single lessee accounting model, which eliminates the distinction between operating and finance leases from the perspective of the lessee. All contracts that meet the definition of a lease, other than short term leases and leases of low value items for which a lessee has the option not to apply the measurement and presentation requirements of IFRS 16, will be recorded in the statement of financial position with a “right of use” asset and a corresponding liability. The asset is subsequently accounted for as property, plant and equipment or investment property and the liability is unwound using the interest rate inherent in the lease. IFRS 16 has an effective date of 1 January 2019, with early application permitted only if IFRS 15 has also been adopted.

The Group has significant leases commitment relating to current leases, detailed in note 18. At initial application the Group will have to recognize a significant lease liability and a significant right of use asset. The implementation is expected to have a nega- tive impact on equity since the unwinding of the lease liability would not be linear. In the income statement lease payment cur- rently presented in other operating expenses will be replaced by increased depriciations and increased intrest expenses, which would have a significant effect on earnings before interest, tax, deprication and amortization.

The Group has not yet completed the analysis of the impact of IFRS 16.

Applied principles

Revenue recognition Revenue is measured at the fair value of the consideration received or receivable, net of returns and discounts. The Group recog- nizes revenue from the sale of products or the rendering of services when the following conditions are met: • The amount of revenue and related costs can be measured reliably; • The significant risks and rewards of ownership have been transferred to customers and there is no continuing management involvement with the goods; and • The recovery of the consideration is probable.

Basis of consolidation Where the company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements- pre sent the results of the company and its subsidiaries (“the Group”) as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the state- ment of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehen- sive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Non-controlling interests The Group initially recognise any non-controlling interest in the acquiree at fair value.

Goodwill Goodwill represents the excess of the cost of a business combination over, the Group’s interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired and, the total acquisition date fair value of the identifiable assets, liabilities and contingent liabilities acquired.

The cost of a business combination comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree.

Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classi- fied as a financial liability, remeasured subsequently through profit or loss. Direct costs of acquisition are recognised immediately as an expense.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

ANNUAL REPORT 2016 31 Impairment of non-financial assets (excluding inventories and deferred tax assets) Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances in- dicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest Group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units (‘CGUs’). Goodwill is allocated on initial recognition to each of the Group’s CGUs that are expected to benefit from the synergies of the combination giving rise to the goodwill.

Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other compre- hensive income. An impairment loss recognised for goodwill is not reversed.

Foreign currency Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate (their “functional currency”) are recorded at the rates ruling when the transactions occur. The functional currency of the parent company and all subsidiaries is NOK. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date.

Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss. Exchange gains and losses arising on the retranslation of monetary available for sale financial assets are treated as a separate component of the change in fair value and recognised in profit or loss. Exchange gains and losses on non-monetary available for sale financial assets form part of the overall gain or loss recognised in respect of that financial instrument.

Financial assets The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Group has not designated any of its financial assets as hedging instruments or held to maturity.

The Group’s accounting policy for each category of financial assets is as follows:

Fair value through profit or loss This category comprises only in-the-money derivatives (see “Financial liabilities” section for out-of-money derivatives). They are carried in the statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the finance income or expense line. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Loans and receivables These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value plus transaction costs that are directly -at tributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

The Group’s loans and receivables comprise trade and other receivables and cash and cash equivalents in the consolidated state- ment of financial position.

32 NORLANDIA HEALTH & CARE GROUP AS Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank over- drafts are shown within loans and borrowings in current liabilities on the consolidated statement of financial position.

Financial liabilities The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was ac- quired. None of the Group’s financial liabilities are designated as hedging instruments.

Other than financial liabilities in a qualifying hedging relationship (see below), the Group’s accounting policy for each category is as follows:

The Group’s accounting policy for each category of financial liabilities is as follows:

Fair value through profit or loss This category comprises only out-of-the-money derivatives (see “Financial assets” for in the money derivatives). They are car- ried in the consolidated statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income. The Group does not hold or issue derivative instruments for speculative purposes, but for hedging purposes. Other than these derivative financial instruments, the Group does not have any liabilities held for trading nor has it designated any financial liabilities as being at fair value through profit or loss.

Other financial liabilities Other financial liabilities include the following items:

Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. Interest expense in this context includes initial transaction costs and premia- pay able on redemption, as well as any interest or coupon payable while the liability is outstanding.

Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.

IFRS 13 fair value measurement hierarchy IFRS 13 requires certain disclosures which require the classification of financial assets and financial liabilities measured at fair value using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurement. The fair value hierarchy has the following levels: • quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); • inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and • inputs for the asset or liability that are not based on observable market data (unobservable inputs)(Level 3).

The level in the fair value hierarchy within which the financial asset or financial liability is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the three levels.

Share capital Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

The Group’s ordinary shares are classified as equity instruments.

Borrowing costs Interest incurred on bank loan used to fund the assets under construction with a construction period exceeding 12 months is be- ing capitalised as part of its cost, net of interest received on cash drawn down yet to be expended. The Group does not incur any other interest costs that qualify for capitalisation.

ANNUAL REPORT 2016 33 Retirement benefits: Defined contribution schemes Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate.

Retirement benefits: Defined benefit schemes Defined benefit scheme surpluses and deficits are measured at: “the fair value of plan assets at the reporting date; less plan liabilities calculated using the projected unit credit method discounted to its present value using yields available on high quality corporate bonds that have maturity dates approximating to the terms of the liabilities; plus unrecognised past service cost

Actuarial gains and losses are recognized in other comprehensive income as they arise.

Past service costs are recognised directly in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time. In this case, the past service costs are amortised on a straight line basis over the vesting period.

Leased assets Where substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to the Group (a “finance lease”), the asset is treated as if it had been purchased outright. The amount initially recognised as an asset is the lower of the fair value of the leased property and the present value of the minimum lease payments payable over the term of the lease. The corresponding lease commitment is shown as a liability. Lease payments are analysed between capital and inter- est. The interest element is charged to the consolidated statement of comprehensive income over the period of the lease and is calculated so that it represents a constant proportion of the lease liability. The capital element reduces the balance owed to the lessor.

Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an “operating lease”), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight-line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.

Externally acquired intangible assets Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives.

Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques (see section related to critical estimates and judgements below).

Internally generated intangible assets (development costs) Expenditure on internally developed products is capitalised if it can be demonstrated that: • it is technically feasible to develop the product for it to be sold; • adequate resources are available to complete the development; • there is an intention to complete and sell the product; • the Group is able to sell the product; • sale of the product will generate future economic benefits; and • expenditure on the project can be measured reliably.

Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products developed. The amortisation expense is included within the depreciation and amortisation expense line in the consolidated statement of comprehensive income.

Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recog- nised in the statement of comprehensive income as incurred.

34 NORLANDIA HEALTH & CARE GROUP AS Deferred taxation Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on: • the initial recognition of goodwill; • the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the trans- action affects neither accounting or taxable profit; and • investments in subsidiaries and jointly controlled entities where the Group is able to control the timing” of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the report- ing date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabili- ties and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either: • the same taxable group company; or • different group entities which intend either to settle current tax assets and liabilities on a net basis, or” to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

Dividends Dividends are recognised when they become legally payable.

Property, plant and equipment Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs and the estimated present value of any future unavoidable costs of dismantling and removing items. The cor- responding liability is recognised within provisions.

Freehold land is not depreciated. Depreciation on assets under construction does not commence until they are complete and available for use. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. Expected useful economic is as follows: Land and buildings 10-40 years Furniture, fixtures and equipment 3-30 years

Inventories Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condi- tion.

Weighted average cost is used to determine the cost of ordinarily interchangeable items.

Non-current assets held for sale and disposal groups Non-current assets and disposal groups are classified as held for sale when: • they are available for immediate sale; • management is committed to a plan to sell; • it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn; • an active programme to locate a buyer has been initiated; • the asset or disposal group is being marketed at a reasonable price in relation to its fair value; and a sale is expected to complete within 12 months from the date of classification.

Non-current assets and disposal groups classified as held for sale are measured at the lower of: • their carrying amount immediately prior to being classified as held for sale in accordance with the Group’s accounting policy; and fair value less costs to sell.

ANNUAL REPORT 2016 35 Following their classification as held for sale, non-current assets (including those in a disposal group) are not depreciated.

The results of operations disposed during the year are included in the consolidated statement of comprehensive income up to the date of disposal.

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographi- cal area of operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of, has been aban- doned or that meets the criteria to be classified as held for sale.

Discontinued operations are presented in the consolidated statement of comprehensive income as a single line which comprises the post-tax profit or loss of the discontinued operation along with the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on disposal of the assets or disposal groups constituting discontinued operations.

Government grants Grants for revenue expenditure are presented as income the Group. Where retention of a government grant is dependent on the Group satisfying certain criteria, it is initially recognised as deferred income. When the criteria for retention have been satisfied, the deferred income balance is released to the consolidated statement of comprehensive income.

Provisions The Group has recognised provisions for liabilities of uncertain timing or amount including those for onerous leases, warranty claims, leasehold dilapidations and legal disputes. The provision is measured at the best estimate of the expenditure required to settle the obligation at the reporting date, discounted at a pre-tax rate, reflecting current market assessments at the time of the remaining lease term, value of money and risks specific to the liability. In the case of leasehold dilapidations, the provision takes into account the potential that the properties in question may be sublet for some or all of the remaining lease term.

Cash flow statement The cash flow statement is derived using the indirect method.

Cash flows from investing and financing activities are presented separatly. Operating activities comprise both monetary and non-monetary items. Interest income and interest expenses are presented as part of operating activities with the exception of interest paid and received which is separated and presented as financial activities.

Cash and cash eqvivalents comprise of bank deposits.

2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Judgements and estimates

(a) Impairment of goodwill The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is de- termined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. More information including carrying values is included in note 10. Any significant modification of market conditions could translate into an inability to recover the carrying amounts of non-financial assets; and resolt in an impairment charge in the income statement

(b) Useful lives of property, plant and equipment and intangible assets Measurement of property, plant and equipment and intangible assets with finite useful lives requires estimates for determining the asset’s expected useful lives and residual values. Management judgement is required to determine the components and the depreciation.

36 NORLANDIA HEALTH & CARE GROUP AS (c) Income taxes The Group is subject to income tax in only one jurisdiction. Significant judgement is required in determining the provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determi- nation is uncertain. As a result, the Group recognises tax liabilities based on estimates of whether additional taxes and interest will be due. These tax liabilities are recognised when, despite the Group’s belief that its tax return positions are supportable, the Group believes that certain positions are likely to be challenged and may not be fully sustained upon review by tax authori- ties. The Group believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgements about future events. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact income tax expense in the period in which such determination is made.

Deferred tax assets are recognized when it is considered probable that deductible temporary differences will be recovered in the foreseeable future. To the extent that future taxable income and the application of existing tax laws in each jurisdiction differ significantly from the Group’s estimate, the ability of the Group to realize the deferred tax assets could be impacted.

Such judgements and estimates are based on the facts and information available to the management of the Group. Changes in facts and circumstances may require the revision of previous estimates, and actual results could differ from these estimates.

3. FINANCIAL INSTRUMENTS - RISK MANAGEMENT

The Group is exposed through its operations to the following financial risks: • Credit risk • Fair value or cash flow interest rate risk • Foreign exchange risk • Other market price risk • Liquidity risk

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note de- scribes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and process- es for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

Principal financial instruments The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows: • Trade receivables • Cash and cash equivalents • Trade and other payables • Bank overdrafts • Floating-rate bank loans • Interest rate swaps • Cross currency interest rate swaps

ANNUAL REPORT 2016 37 A summary of the financial instruments held by category is provided below:

Financial assets Financial assets at fair value through Loans and profit or loss receivables 2016 2015 2016 2015 Cash and cash equivalents - - 1 060 241 345 749 Trade and other receivables - - 446 132 333 117 Other long term receivables/investments 15 104 - 100 494 132 850 Total financial assets 15 104 - 1 606 866 811 716

Financial liabilities Financial liabilities at fair value through Financial liabilities profit or loss at amortised cost 2016 2015 2016 2015 Trade and other payables - - 854 769 739 818 Loans and borrowings - - 2 566 292 1 026 106 Derivative 1 379 2 115 - - Total financial liabilities 1 379 2 115 3 421 061 1 765 924

Financial instruments measured at fair value Fair value measurements at 31 December using Level 1 Level 2 2016 2015 2016 2015 Financial assets Derivative financial assets - FVTPL - - - - Total financial assets - - - -

Financial liabilities Derivative financial liabilities - FVTPL - - 1 379 2 115 Total financial liabilities - - 1 379 2 115

General objectives, policies and processes The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s finance function. The Board receives monthly reports from the Group Financial Controller through which it reviews the effectiveness of the processes put in place and the appropriate- ness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. Further details regarding these policies are set out below:

Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices.

Most of the Group’s revenues are from (public) authorities. Credit risk related to these customers are minimal.

Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating “A” are accepted.

Further disclosures regarding trade and other receivables, which are neither past due nor impaired, are provided in note 13.

38 NORLANDIA HEALTH & CARE GROUP AS Market risk Market risk arises from the Group’s use of interest bearing and foreign currency financial instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors (other price risk).

Fair value and cash flow interest rate risk The Group is exposed to cash flow interest rate risk from long-term borrowings at variable rate. The Group has currently no Group policy restricting the level of interest risk exposure. The level of interest risk is monitored centrally. Local operations are not permitted to borrow long-term from external sources. Although the board accepts that this policy neither protects the Group entirely from the risk of paying rates in excess of current market rates nor eliminates fully cash flow risk associated with variability in interest payments, it considers that it achieves an appropriate balance of exposure to these risks.

During 2016 and 2015, the Group’s borrowings at variable interest rate were denominated in NOK and SEK.

Based on the various scenarios the Group has the possibility to manage its cash-flow interest rate risk by using floating-to-fixed interest rate swaps (quantitative disclosures are given in note 12).The Group has not pursued an active strategy in order to mitigate any interest rate risk. Normally the Group has raised long-term borrowings at floating rates and only to a minor extent swapped them into fixed.

The ratio of floating interest bearing debt and interest rate swaps was as follows: 2016 2015 Floating interest bearing borrowings 2 566 292 1 026 106 Face value interest rate swaps 39 564 34 944 Ratio 1.5 % 3.4 % Net exposure interest rate risk 2 526 728 991 162

Sensitivity A change in the interest rate curve will result in a changed interest cost for the net exposure, in addition the change in fair value for the interest rate swaps will have a significant impact on the Group financial statements. The effect on interest payments for a 0.5% change is presented below Interest Effect on Effect on expense P&L Equity Effect of a 0.5% increase 12 829 9 622 9 622 Effect of a 0.5% decrease -12 829 -9 622 -9 622

Foreign exchange risk The Group has operations in Norway, Sweden, Finland and the Netherlands. Currency fluctuations may have a negative effect on the Group’s financial conditions and results of operations. The Group is predominantly exposed to the SEK/NOK exchange rate as the financial statements are presented in NOK and around 40% of revenues are generated in SEK. However, the Group has a corresponding share of costs in SEK and about 58% of its bond debt is denominated in SEK, both representing natural hedges to the operations. The Group has a small but growing exposure to the EURNOK exchange rate as operations in the Netherlands and Finland are growing. The Group is monitoring the exposure and will consider hedging this exposure in the future.

Other market price risk There are no other significant marked risk exposure on financial instruments.

Liquidity risk Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 45 days. The Group also seeks to reduce liquidity risk by fixing interest rates (and hence cash flows) on a portion of its long- term borrowings, this is further discussed in the ‘interest rate risk’ section above.

ANNUAL REPORT 2016 39 The Board receives rolling 12-month cash flow projections on a monthly basis as well as information regarding cash balances. At the end of the financial year, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances.

The liquidity risk of each Group entity is managed centrally by the Group treasury function. A major focus for the treasury function is to ensure that there are sufficient liquidity for downpayment on non current borrowings when they are due. In 2015 non-current borrowings were restructured. Shareholder loan was settled and future payment plan on borrowings was adjusted. The Group treasury assesses the terms for borrowings on a ongoing basis, when needed the necessary adjustments are put into place.

The following table sets out the contractual maturities of financial liabilities: Between Between Between Between 1 and 12 1 and 2 2 and 3 3 and 5 Over months year year years 5 years At 31 December 2016 Trade and other payables 854 769 - - - - Loans and borrowings 507 107 - - 1 771 991 286 747 Total 1 361 876 - - 1 771 991 286 747

Capital Disclosures The Group monitors “adjusted capital” which comprises all components of equity (i.e. share capital, share premium, non-controlling interest, retained earnings, and revaluation reserve) other than amounts in the cash flow hedging reserve.

The Group’s objectives when maintaining capital are: “to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.”

The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Consistent with others in the industry, the Group monitors capital on the basis of the debt to adjusted capital ratio. This ratio is calculated as net debt adjusted capital as defined above. Net debt is calculated as total debt (as shown in the consolidated state- ment of financial position) less cash and cash equivalents.

Due to recent market uncertainty, the Group’s strategy is to preserve a strong cash base and achieve a equity to total capital ra- tio of approximately 15-25%. The objective of this strategy is to secure access to finance at reasonable cost by maintaining a high credit rating. The debt-to-total-capital ratios at 31 December 2016 and at 31 December 2015 were as follows: 2016 2015 Loans and borrowings 2 566 292 1 026 106 Less: cash and cash equivalents 1 060 241 345 749 Net interest bearing debt 1 506 051 680 357

Total equity 481 847 1 249 511 Total capital (excluding working capital) 4 239 254 3 277 464 Debt to equity ratio 3.1 0.5 Equity ratio (%) 11.4% 38.1%

40 NORLANDIA HEALTH & CARE GROUP AS 4. SEGMENT INFORMATION, REVENUE AND OTHER OPERATING INCOME

The Group has four reportable segments in accordance with the reporting requirements i IFRS 8. The reportable segments are: • Preschools • Care • Integration services • Individual & family

Integration Individual & Other / 2016 Preschools Care services Family Eliminations Total Operating revenues 1 355 648 1 650 675 1 534 882 509 479 12 042 5 062 726 Other revenues 58 786 70 704 314 2 229 -17 239 114 794 Total operating revenues 1 414 434 1 721 379 1 535 196 511 708 -5 196 5 177 521

Raw materials and consumables used 36 077 33 301 127 214 30 056 142 226 791 Staff costs 929 723 1 323 982 714 646 348 443 36 110 3 352 905 Depreciation and amortisation expense 33 425 25 959 26 856 7 555 1 628 95 424 Other operating expense 322 266 271 092 572 205 92 141 -40 664 1 217 039 Total operating expenses 1 321 491 1 654 334 1 440 922 478 195 -2 784 4 892 159

Profit from operations 92 943 67 045 94 274 33 513 -2 413 285 362

Finance income 1 817 6 341 1 014 13 806 14 056 37 034 Finance expense -21 144 -19 064 -7 031 -7 481 -58 834 -113 554 Share of post-tax profits from associates - 23 003 - - - 23 003 Net finance -19 328 10 280 -6 016 6 325 -44 778 -53 517 Profit before tax 73 615 77 324 88 258 39 838 -47 190 231 845

Integration Individual & Other / 2015 Preschools Care services Family Eliminations Total Operating revenues 1 161 012 1 709 237 956 590 - 68 326 3 895 165 Other revenues 13 231 25 116 - - 6 902 45 249 Total operating revenues 1 174 244 1 734 352 956 590 - 75 228 3 940 414

Raw materials and consumables used 30 999 42 100 180 665 - -25 056 228 707 Staff costs 813 484 1 321 704 370 945 - 51 577 2 557 711 Depreciation and amortisation expense 30 251 26 125 16 646 - 1 898 74 920 Other operating expense 262 822 310 606 330 200 - 6 340 909 968 Total operating expenses 1 137 556 1 700 535 898 456 - 34 759 3 771 307

Profit from operations 36 687 33 817 58 134 - 40 469 169 107

Finance income 36 037 6 116 861 - -14 337 28 677 Finance expense -17 562 -346 -8 554 - -34 635 -61 097 Share of post-tax profits from associates - - - - 167 260 167 260 Net finance 18 475 5 770 -7 693 - 118 288 134 840 Profit before tax 55 162 39 587 50 441 - 158 757 303 947

Revenues by major customers Most of the revenues stems from public authorities.

Other operating income 2016 2015 Gain on sale of assets 50 857 25 116 Other 63 937 20 133 Total other operating income 114 794 45 249

ANNUAL REPORT 2016 41 Sale leaseback transactions with Pioneer Property Group ASA Gain on sale of assets in 2016 and 2015 relates to a sale leaseback transaction with the related party Pioneer Property Group ASA. The assets subject to the transaction were buildings used in the preschool- and care operation. In connection with the transaction, a lease contract was entered into. The lease term is between 15 and 20 years, with an option for an extention of 10 more years.

Sales price 136 900 71 925 Booked value of assets 93 399 46 810 Gain 43 501 25 116

The gain of NOK 7 356 351 relates to a divestment of back-office function.

5. STAFF COSTS 2016 2015 Staff costs (including directors) comprise: Wages and salaries 2 673 254 1 990 609 Defined contribution pension cost 128 184 94 351 Defined benefit pension cost (note 19) 36 623 46 884 Other benefits 40 911 25 662 Social security contributions and similar taxes 473 932 400 206 Remuneration to Board of Directors - - Total payroll and related costs 3 352 905 2 557 711

Average number of employees 6 118 4 989

2016 2015 CEO compensation Salary and bonus 667 - Total compensation CEO 667 -

CEO was appointed during 2016 in Norlandia Care Group AS. Remuneration represents salary and bonus for 4 months in 2016. As the Group was established in December 2016, no key management group has been identified for years 2016 and 2015.

Audit fees The following amounts have been recognised as audit fees and related services during the period

2016 2015 Audit 7 043 3 535 Tax services - 19 Attestation services 1 586 75 Other services 1 621 2 214 Total 10 250 5 842

42 NORLANDIA HEALTH & CARE GROUP AS 6. FINANCE INCOME AND EXPENSE

Recognised in profit or loss 2016 2015 Finance income Interest received on bank deposits and receivables 4 536 12 232 Other finance income 27 479 15 413 Gain on derivatives classified as held for trading - 1 032 Foreign exchange gain 5 019 - Total finance income 37 034 28 677

Finance expense 2016 2015 Loss on derivatives classified as held for trading 1 486 - Interest expense on financial liabilities measured at amortised cost 63 928 50 402 Other financial expenses 5 032 10 695 Foreign exchange loss 43 108 - Total finance expense 113 554 61 097

Net finance income recognised in profit or loss -76 519 -32 420

The above financial income and expense include the following in respect of assets (liabilities) not at fair value through profit or loss:

2016 2015 Total interest income on financial assets 4 536 12 232 Total interest expense on financial liabilities 63 928 50 402

7. TAX EXPENSE 2016 2015 Current tax expense Current tax on profits for the year 50 384 19 215 Adjustment for under provision in prior periods - - Total current tax expense 50 384 19 215

Deferred tax expense Origination and reversal of temporary differences (Note 16) -127 45 130 Changes not recognised in profit and loss -13 859 -36 029 Unrecognised deferred tax assets 511 -1 718 Total deferred tax expense -13 476 7 383

Income tax expense 36 908 26 598

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in Norway ap- plied to profits for the year are as follows: 2016 2015 Profit for the year 194 937 277 349 Income tax expense -36 908 -26 598 Profit before income taxes 231 845 303 947

Expected tax charge based on the standard rate of Norwegian corporation tax at the domestic rate of 25/27 % 57 961 82 066 Gains not taxable/ Equity accounted associated companies -15 590 -52 435 Change in tax rate for deferred tax -6 517 -539 Expenses not deductible for tax purposes 749 2 257 Effect of different tax rates foreign subisdiaries -206 -524 Effect of unrecognised deferred tax assets in an asset acquistion 511 -4 226 Total tax expense 36 908 26 598

ANNUAL REPORT 2016 43 8. PROPERTY, PLANT AND EQUIPMENT Furniture, Land and Work in fixtures and buildings progress equipment Total Accumulated cost Balance at 1 January 2015 258 676 2 621 159 584 420 881 Additions 41 698 4 808 70 152 116 657 Disposals -43 017 - -19 863 -62 881 Acquired through business combinations 22 790 - - 22 790 Balance at 31 December 2015 280 147 7 429 209 873 497 448

Balance at 1 January 2016 280 147 7 429 209 873 497 448 Additions 61 067 12 055 45 818 118 941 Acquired through business combinations 51 175 - 21 769 72 944 Disposals -65 605 -129 -17 527 -83 261 Balance at 31 December 2016 326 785 19 355 259 933 606 072

Accumulated depreciation Balance at 1 January 2015 -16 987 - -78 807 -95 795 Depreciation charge for the year -13 993 - -31 097 -45 090 Disposals - - - - Balance at 31 December 2015 -30 980 - -109 905 -140 885

Balance at 1 January 2016 -30 980 - -109 905 -140 885 Depreciation charge for the year -17 802 - -35 681 -53 483 Impairment of fixed assets - - -5 354 -5 354 Disposals 12 081 - 6 866 18 946 Balance at 31 December 2016 -36 701 - -144 074 -180 775

Net book value At 31 December 2015 249 167 7 429 99 968 356 564

At 31 December 2016 290 084 19 355 115 858 425 297 Interest capitalised during the year amounted to tNOK nil (2015: tNOK nil).

Property, plant and equipment pledged as security for liabilities. 2016 2015 Land and buildings, including work in progress 309 439 256 596 furniture, fixtures and equipment - - Other investments - - Trade and other receivables - - Inventories - - Bank deposits - - 309 439 235 147

44 NORLANDIA HEALTH & CARE GROUP AS 9. INTANGIBLE ASSETS Other intangible Goodwill assets Total Accumulated cost Balance at 1 January 2015 818 237 613 842 1 432 079 Acquired through business combinations 210 502 73 385 283 887 Translation differences 14 179 3 451 17 630 Disposals - - - Balance at 31 December 2015 1 042 918 690 678 1 733 596

Balance at 1 January 2016 1 042 918 690 678 1 733 596 Acquired through business combinations 431 887 81 105 512 992 Translation differences -22 718 -10 347 -33 066 Disposals -5 377 - -5 377 Balance at 31 December 2016 1 446 711 761 435 2 208 146

Accumulated amortisation and impairment Balance at 1 January 2015 - -20 308 -20 308 Amortisation charge for the year - -29 830 -29 830 Balance at 31 December 2015 - -50 138 -50 138

Balance at 1 January 2016 - -50 138 -50 138 Amortisation charge for the year - -36 587 -36 587 Balance at 31 December 2016 - -86 726 -86 726

Net book value At 31 December 2015 1 042 918 640 539 1 683 458

At 31 December 2016 1 446 711 674 710 2 121 421

The Group has no contractual commitments for development costs.

Current estimates of useful economic life of intangible assets are as follows: Goodwill Indefinite Other intangible asset 5 - 20 years

10. GOODWILL AND IMPAIRMENT

Impairment testing for cash-generating units (CGU) containing goodwill

The material amount of goodwill is allocated as follows beetween four CGU’s: 2016 Preschools 1 062 000 Care 704 259 Integration services 143 943 Individual & family 211 219 Total goodwill & intangible assets 2 121 421

IMPAIRMENT TEST FOR THE PRESCHOOL CGU

Cash flow projections and assumptions For the Preschool CGU the model was based on a 5 year forecast of discounted cash flow plus a terminal value (calculated by Gordon’s model). The net discounted cash flows were calculated before tax.

The NPV-model included the following assumptions:

ANNUAL REPORT 2016 45 The estimated cash flows included in the impairment test include a five year projection based on the long term business plan. Estimated cash flow projections beyond the period covered by the most recent long term business plan are derived by extrapo- lating the projections based on the forecasts using a growth rate of 2 % for subsequent years.

Discount rate assumptions The required rate of return was calculated by use of the WACC methodology. The input data of the WACC was chosen by indi- vidual assessment of each parameter. Information from representative sources, peer groups etc. was used to determine the best estimate. The WACC was calculated to 9.7 % pre tax. The following parameteres were applied: • Risk free rate: 1.4 %. Based on market rate for covered bonds. • Beta: 1.17 - based on unlevered beta for industry peer group. • Market Risk Premium: 5 % (post tax). Based on market sources • Cost of debt: 5.9 % Based on risk free rate plus risk component (4.5 %) • Capital structure: equity ratio of 60 %.

Sensitivity analysis The following sensitivity analysis were carried out to test wheter changes in relevant parameters would influence the conclusion:

1. Changes in cash flows: The analysis showed that a decline in free cash flow in excess of 33% was necessary to change the conclusion. The result indi- cated that there had to be a significant decline in the market situation to trigger impairment.

2. Changes in discount rates: The analysis showed that an increase in discount rate to 12.5 % was needed to change the conclusion. The result indicated that the test was robust in terms of the level of discount rate.

Impairment - test result and conclusion Value in use for the CGU’s exceeds carrying amount. The impairment test indicated no requirement to write down.

IMPAIRMENT TEST FOR THE CARE CGU

Cash flow projections and assumptions For the Care CGU the model was based on a 5 year forecast of discounted cash flow plus a terminal value (calculated by Gordon’s model). The net discounted cash flows were calculated before tax. The NPV-model included the following assumptions:

The estimated cash flows included in the impairment test includes a five year projection based on the long term business plan. Estimated cash flow projections beyond the period covered by the most recent long term business plan are derived by extrapo- lating the projections based on the forecasts using a growth rate of 2 % for subsequent years.

Discount rate assumptions The required rate of return was calculated by use of the WACC methodology. The input data of the WACC was chosen by individual assessment of each parameter. Information from representative sources, peer groups etc. was used to determine the best estimate. The WACC was calculated to 9.7 % pre tax. The following parameteres were applied: • Risk free rate: 1.4 %. Based on market rate for covered bonds. • Beta: 1.17 - based on unlevered beta for industry peer group. • Market Risk Premium: 5 % (post tax). Based on market sources • Cost of debt: 5.9 % Based on risk free rate plus risk component (4.5 %) • Capital structure: equity ratio of 60 %.

Sensitivity analysis The following sensitivity analysis were carried out to test wheter changes in relevant parameters would influence the conclusion:

1. Changes in cash flows: The analysis showed that a decline in free cash flow in excess of 11 % was necessary to change the conclusion. The result indicated that there had to be a moderate decline in the market situation to trigger impairment.

46 NORLANDIA HEALTH & CARE GROUP AS 2. Changes in discount rates: The analysis showed that an increase in discount rate to 10.65 % was needed to change the conclusion. The result indicated that the test was to some extent robust in terms of the level of discount rate.

Impairment - test result and conclusion Value in use for the CGU’s exceeds carrying amount. The impairment test indicated no requirement to write down.

IMPAIRMENT TEST FOR THE INTEGRATION SERVICES CGU

Cash flow projections and assumptions For the Integration Services CGU the model was based on a 5 year forecast of discounted cash flow plus a terminal value (calculated by Gordon’s model). The net discounted cash flows were calculated before tax. The NPV-model included the follow- ing assumptions:

The estimated cash flows included in the impairment test includes a five years projection based on the long term business plan. Estimated cash flow projections beyond the period covered by the most recent long term business plan are derived by extrapo- lating the projections based on the forecasts using a growth rate of 2 % for subsequent years.

Discount rate assumptions The required rate of return was calculated by use of the WACC methodology. The input data of the WACC was chosen by individual assessment of each parameter. Information from representative sources, peer groups etc. was used to determine the best estimate. The WACC was calculated to 9.7 % pre tax. The following parameteres were applied: • Risk free rate: 1.4 %. Based on market rate for covered bonds. • Beta: 1.75 - based on unlevered beta for industry peer group. • Market Risk Premium: 5 % (post tax). Based on market sources • Cost of debt: 5.9 % Based on risk free rate plus risk component (4.5 %) • Capital structure: equity ratio of 40 %.

Sensitivity analysis The following sensitivity analysis were carried out to test wheter changes in relevant parameters would influence the conclusion:

1. Changes in cash flows: The analysis showed that a decline in free cash flow in excess of 65 % was necessary to change the conclusion. The result indicated that there had to be a significantly decline in the market situation to trigger impairment.

2. Changes in discount rates: The analysis showed that an increase in discount rate to 27.1 % was needed to change the conclusion. The result indicated that the test was robust in terms of the level of discount rate.

Impairment - test result and conclusion Value in use for the CGU’s exceeds carrying amount. The impairment test indicated no requirement to write down.

IMPAIRMENT TEST FOR THE INDIVIDUAL & FAMILY CGU

Cash flow projections and assumptions For the Iindividual & Family CGU the model was based on a 5 year forecast of discounted cash flow plus a terminal value (calculated by Gordon’s model). The net discounted cash flows were calculated before tax. The NPV-model included the follow- ing assumptions:

The estimated cash flows included in the impairment test includes a five years projection based on the long term business plan. Estimated cash flow projections beyond the period covered by the most recent long term business plan are derived by extrapo- lating the projections based on the forecasts using a growth rate of 2 % for subsequent years.

ANNUAL REPORT 2016 47 Discount rate assumptions The required rate of return was calculated by use of the WACC methodology. The imput data of the WACC was chosen by individual assessment of each parameter. Information from representative sources, peer groups etc. was used to determine the best estimate. The WACC was calculated to 9.7 % pre tax. The following parameteres were applied: • Risk free rate: 1.4 %. Based on market rate for covered bonds. • Beta: 1.33 - based on unlevered beta for industry peer group. • Market Risk Premium: 5 % (post tax). Based on market sources • Cost of debt: 5.9 % Based on risk free rate plus risk component (4.5 %) • Capital structure: equity ratio of 40 %.

Sensitivity analysis The following sensitivity analysis were carried out to test wheter changes in relevant parameters would influence the conclusion:

1. Changes in cash flows: The analysis showed that a decline in free cash flow in excess of 25 % was necessary to change the conclusion. The result indicated that there had to be a significantly decline in the market situation to trigger impairment.

2. Changes in discount rates: The analysis showed that an increase in discount rate to 15.0 % was needed to change the conclusion. The result indicated that the test was robust in terms of the level of discount rate.

Impairment - test result and conclusion Value in use for the CGU’s exceeds carrying amount. The impairment test indicated no requirement to write down.

11. SUBSIDIARIES AND ASSOCIATES

The reorganisation Norlandia Health & Care Group AS was established in December 2016. This was done by transferring the shares in Norlandia Care Group AS, Hero Group AS, Aberia Healthcare AS and Kidsa AS, from Hospitality Invest to a newly incorporated 100% owned subsidiary (Norlandia Health & Care Group AS).

The reorganisation included the following transactions

Norlandia Care Group AS 49.76 % of the shares in Norlandia Care Group AS was recieved as a contribution in kind from Hospitality Invest AS. 14.11 % of the shares in Norlandia Care Group AS was purchased from Hospitality Invest AS for NOK 200 332 028. The consideration to the parent is presented as a reduction in equity in 2016. The remaining shares were aquired from the non-controlling shareholders for NOK 513 406 872. Hospitality Invest AS had a controlling interest in Norlandia Care Group AS at 01.01.2015. The 2015 figures include Norlandia Care Group from 01.01.2015.

Hero Group AS 57.54 % of the shares in Hero Group AS was purchased from Hospitality Invest AS for NOK 89 212 744. The consideration to the parent is presented as a reduction in equity in 2016. The remaining shares were aquired from the non-controlling shareholders for NOK 65 271 689. Hospitality Invest AS had a controlling interest in Hero Group AS at 01.01.2015. The 2015 figures include Hero Group from 01.01.2015.

Aberia Healthcare AS 23.21 % of the shares in Aberia Healthcare AS were purchased from Hospitality Invest AS for NOK 41 776 308. The consideration to the parent is presented as a reduction in equity in 2016. The remaining shares were aquired from the non-controlling share- holders for NOK 48 271 698. Hospitality Invest AS aquired a controlling interest in Aberia Healthcare in January 2016 (see note 20). Aberia Healthcare is included in the financial figures from January 2016. The net carrying amount of assets and liabilities of NOK 112 000 000 is presented as a reduction of the negative equity effect of the share purchase in December.

48 NORLANDIA HEALTH & CARE GROUP AS Kidsa Barnehager AS 100 % of the shares in Hero Group AS was purchased from Hospitality Invest AS/Kidprop AS for NOK 67 000 000. The considera- tion to the parent is off set by the net carrying value of assets and liabilities acquired. presented a reduction direclty in equity in 2016. Hospitality Invest AS/Norlandia Health & Care AS acquiered a controlling interest in Kidsa AS Decembert 2016 (see note 20). Kidsa AS is included in the financial figures from December 2016.

Sale of shares in Pioneer Property Group AS As part of the reorganisation Norlandia Care Group AS sold their shares in Pioneer Property Group AS (PPG ) for NOK 200 332 006 to Hospitality Invest. The transaction resulted in a loss of NOK 2 322 000 included in the income statement.

Sale of shares in Scandia Healthcare AS/Personalhuset AS As part of the reorganisation Norlandia Care Group AS sold their shares in Scandia Healtcare AS and Personalhuset AS for NOK 49 567 679 to Hospitality Invest. The transaction resulted in a gain of NOK 22 694 151 included in the income statement.

The transactions with Hospitality Invest AS were settled on a net basis. The subsidiaries of Norlandia Health & Care Group AS, all of which have been included in these consolidated financial statements are as follows: Country of Place of Ownership Name incorporation office interest 2016 2015 Norlandia Care Group AS Norway Oslo 100 % 63.6 % Kidsa Drift AS Norway Bergen 100 % 16.0% Hero Group AS Norway Stavanger 100 % 57.5%

Material operating companies Norlandia Barnehagene AS Norway Gardermoen 100 % 100 % Norlandia Barnehagene II AS Norway Gardermoen 100 % 100 % Norlandia Förskolor AB Sweden Stockholm 100 % 100 % Tenava Holding OY Finland Helsinki 100 % 100 % Kindex B.V. Netherlands Voorschoten 100 % 100 % Aberia Healthcare AS Norway Oslo 100 % 50.0 % Norlandia Care Norge AS Norway Gardermoen 100 % 100 % Norlandia Care OY Finland Tampere 100 % 100 % Norlandia Care AB Sweden Stockholm 100 % 100 % Kosmo AB Sweden Stockholm 100 % 100 % Hero Norge AS Norway Stavanger 100 % 100 % Hero Sverige AB Sweden Stockholm 100 % 100 % Steni-Holding AS Norway Moss 100 % 0 %

Investment in associated companies 2016 2015 Investment in associates as of 01.01 403 898 196 739 Share of post-tax profits of associates 20 611 167 260 Gain on transfers to subsidiaries 2 392 - New investment in associates 6 705 39 899 Transfer to subsidiaries -57 969 - Other changes - - Disposal of investment in associates - 337 047 - Investment in associates as of 31.12 38 589 403 898

The majority of the shares in PPG have been realised during 2016 and the remaing portion have been reclassified to other investments. The majority of share of post-tax profits from associates mainly relates to the disposal of Personalhuset AS. The shares inn PPP III AS were sold in 2015 to a gain of NOK 149,920,250. The shares in PPG were acquired in May 2015. The statement of comprehensive income includes only a 20.05 % portion of the result for the last seven months of the year.

ANNUAL REPORT 2016 49 12. DERIVATIVE FINANCIAL INSTRUMENTS 2016 2015 Derivative financial assets Derivatives not designated as hedging instruments: - - - Interest rate swaps - - Total derivatives not designated as hedging instruments - -

Total derivative financial assets - - Less non-current portion - Interest rate swaps - - Current portion - -

The fair value of a derivative financial instrument is split between current and non-current depending on the remaining maturity of the derivative contract.

The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the consolidated statement of financial position. 2016 2015 Derivative financial liabilities Derivatives not designated as hedging instruments: - Interest rate swaps 1 379 2 115 Total derivatives not designated as hedging instruments 1 379 2 115

Total derivative financial liabilities 1 379 2 115 Less non-current portion - - - Interest rate swaps -938 -2 115 Current portion 441 -

List of contracts Expiry Nominal Currency 2016 2015 amount Fair value Fair value DNB NOK NOK Interest rate swap 03.04.2017 3 214 NOK -57 -192 Interest rate swap 01.10.2018 4 063 NOK -284 -489 Interest rate swap 01.02.2017 4 194 NOK -294 -480 Interest rate swap 01.10.2018 10 041 NOK -91 -490 Interest rate swap 02.01.2017 10 016 NOK -89 -465 Interest rate swap 01.10.2018 4 294 NOK -301 - Interest rate swap 01.10.2018 3 742 NOK -261 - Adjustment Total DnB 39 564 -1 379 -2 115

TOTAL 39 564 -1 379 -2 115

50 NORLANDIA HEALTH & CARE GROUP AS 13. TRADE AND OTHER RECEIVABLES 2016 2015 Trade receivables 285 890 190 040 Less: provision for impairment of trade receivables -3 507 -883 Trade receivables - net 282 383 189 158 Other receivables 264 243 276 809 Total financial receivables classified as loans and receivables 546 626 465 967

Prepayments Other receivables Note Total trade and other receivables 546 626 465 967 Less: non-current portion - Loan to related parties 21 88 244 103 683 Less: non-current portion - Other receivables 12 250 29 167 Current portion 446 132 333 117

The fair values of trade and other receivables classified as loans and receivables are not materially different to their carrying values.

The Group does not hold any collateral as security.

Movements on the Group provision for impairment of trade receivables are as follows: 2016 2015 At 1 January 883 912 Provided during the year 2 122 236 Receivable written off during the year as uncollectible -203 -912 Reversal of provisions prior years 704 647 At 31 December 3 507 883

The movement on the provision for impaired receivables has been included in the cost of sales line in the consolidated state- ment of comprehensive income.

Other classes of financial assets included within trade and other receivables do not contain impaired assets.

Aging analysis on trade receivables Not due (less more than Total than 30 days) 30-60 days 60-90 days 90 days 2016 282 383 250 027 24 234 645 7 477 2015 189 158 173 160 11 314 734 3 950

14. SHARE CAPITAL, SHAREHOLDERS, DIVIDENDS AND RESEVES

Share capital (Amounts in NOK) 2016 2016 2015 2015 Number NOK Number NOK Ordinary shares of NOK 10 each 30 000 000 300 000 000 0 0 Total 30 000 000 300 000 000 0 0

Shareholders All shares are owned by Hospitality Invest AS as listed below. Hospitality Invest AS 30 000 000 100,00 % Total 30 000 000 100,00 %

Kristian A. Adolfsen holds, directly and indirectly, 45.03 % of the shares in Hospitality Invest AS Roger Adolfsen holds, directly and indirectly, 44.68% of the shares in Hospitality Invest AS

ANNUAL REPORT 2016 51 The following describes the nature and purpose of each reserve within equity: Reserve Description and purpose Share premium Amount subscribed for share capital in excess of nominal value. Retained earnings All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.

15. LOANS AND BORROWINGS

The book value and fair value of loans and borrowings are as follows: Book Fair Book Fair value value value value 2016 2016 2015 2015 Non-Current Interest bearings loans 2 565 846 2 565 846 1 023 358 1 023 358 Total non current 2 565 846 2 565 846 1 023 358 1 023 358

The currency profile of the Group’s loans and borrowings is as follows: (Currency in NOK) 2016 2015 NOK 1 515 526 1 023 358 SEK 1 050 320 0 Total 2 565 846 1 023 358

Borrowings as of 31.12.2016 Interest Amount Due date Debt to Husbanken 1.510%-2.869% 151 030 2030-2043 Bond issued 2013/2014 3 mnd NIBOR + 5.0% 507 107 10.04.2018* Bond issued 2016/2021 NIBOR +4.5% 1 771 992 2021 Other property debt 102 859 Other long term debt 32 858 Total 2 565 846 * The bond has been called and repayed in January 2017 in connection with a succesfull placement of a new bond.

16. DEFERRED TAX

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 24 %. The movement on the deferred tax account is as shown below: 2016 2015 At 1 January -162 929 -125 148 Recognised in profit and loss - - Tax expense 13 476 -1 752 Recognition of previously unrecognised deferred tax assets - - Recognised in other comprehensive income -1 859 -12 440 -151 312 -139 339

Arising on business combination -12 000 -23 589 At 31 December -163 312 -162 929

Deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise to deferred tax assets where the directors believe it is probable that these assets will be recovered.

The movements in deferred tax assets and liabilities (prior to the offsetting of balances within the same jurisdiction as permitted by IAS 12) during the period are shown below.

Details of the deferred tax liability, amounts recognised in profit or loss and amounts recognised in other comprehensive income are as follows:

52 NORLANDIA HEALTH & CARE GROUP AS (Charged)/ credited (Charged)/ to profit credited to Asset Liability Net or loss equity 2016 2016 2016 2016 2016 Fixed assets 1 808 -169 272 -167 464 11 065 -15 745 Accounts receivable 701 - 701 309 147 Inventory - - - - - Pensions 20 616 -73 20 543 -2 436 7 051 Financial instruments 331 - 331 913 - Profit and loss account - -4 281 -4 281 94 -3 600 Provisions - -18 083 -18 083 -1 809 -1 713 Tax loss carried forward 7 168 - 7 168 5 851 -

Tax asset/(liabilities) 30 625 -191 709 -161 084 13 987 -13 859 Set off of tax -706 706 - - Unrecognised deferred tax asset -2 228 - -2 228 -511 Net tax assets/(liabilities) 27 691 -191 003 -163 312 13 476

2015 2015 2015 2015 2015 Fixed assets - -162 784 -162 784 6 838 -16 742 Accounts receivable 246 - 246 -4 - Inventory - - - - - Pensions 15 928 - 15 928 -736 -12 440 Financial instruments 529 -1 111 -582 243 - Profit and loss account - -776 -776 22 - Provisions 1 -14 562 -14 561 -7 715 -6 847 Tax loss carried forward 1 318 - 1 318 1 318 - Tax asset/(liabilities) 18 021 -179 232 -161 211 -35 -36 029 Set off of tax -979 979 - - - Unrecognised deferred tax asset -1 718 - -1 718 -1 718 - Net tax assets/(liabilities) 15 324 -178 253 -162 929 -1 752

The unused tax losses and deductible temporary differences can be carried forward indefinitely. 2016 Taxes payable in consolidated Statement of Comprehensive Income 50 384 Prepaid tax 5 925 Taxes payable in Statement of Financial Position 44 460

Taxes payable for the year 2016 will be eliminated through the use of group-contribution to the ultimate parent.

17. TRADE AND OTHER PAYABLES 2016 2015 Trade payables 138 667 145 373 Tax and social security payments 167 846 93 304 Other short term debt 548 255 501 141 Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost 854 769 739 818

Book values approximate to fair value at 31 December 2016 and 2015.

ANNUAL REPORT 2016 53 18. LEASES

Operating leases - lessee The Group leases the majority of its offices, hotels, preschools and nursing homes. All lease agreements are classified as operat- ing leases as the lease period does not cover most of the useful life of the assets, and the minimum lease payment does not cover most of the fair value of the assets.

The total future value of minimum lease payments is due as follows: 2016 2015 Not later than one year 380 176 331 215 Later than one year and not later than five years 759 470 215 748 Later than five years 1 629 845 1 082 082 Total 2 769 492 1 629 045

For the financial year 2016 total operating lease amounted to NOK 507.920 thousand.

19. RETIREMENT BENEFITS

At 31.12.2016, a total of 7,137 employees in the Group are included in a defined contribution plan. The plan is in accordance with the laws and regulations concerning obligatory pension plans. The costs in conncetion with the plan are recognized in accordance with premiums paid.

The Group’s defined benefit plan through 2016 includes 1,261 employees. The plan involves lifelong pension from 67 years. The pension plans are accounted for in accordance with IAS 19 Employee benefits. Defined benefit plans give rise to defined future payments. These are mainly dependent on number of years of service, salary level at retirement and the level of payments received from Social Security. The obligations are covered through an insurance company.

2016 2015 Pension costs for defined contribution schemes 128 184 84 996

Details of the Group’s defined benefit schemes are as follows:

Reconciliation to consolidated statement of financial position 2016 2015 Fair value of plan assets 193 337 188 043 Present value of funded obligations 258 388 252 267 Change in net obligation as a result of business combination 32 095 - Net pension obligation 97 146 64 224

Reconciliation of plan assets 2016 2015 At 1 January 178 414 166 905 Expected return 3 380 2 118 Contributions by Group 39 927 37 222 Benefits paid -2 124 -2 522 Actuarial gain/(loss) -6 878 -13 045 Settlements -18 644 -1 954 Administration fees -737 -681 Change as a result of business combination 118 109 - At 31 December 311 446 188 043

54 NORLANDIA HEALTH & CARE GROUP AS Reconciliation of plan liabilities 2016 2015 At 1 January 242 638 274 699 - - Interest cost 7 032 6 455 Current service cost 38 311 42 359 Benefits paid -2 124 -2 522 Actuarial (gain)/loss 3 112 -61 665 Social security tax -2 813 -2 766 Settlements -27 769 -4 293 Change as a result of business combination 150 204 - At 31 December 408 592 252 267

2016 2015 Actuarial gains and losses recognised in OCI 9 381 33 633

Pension cost (defined benefit plan) 2016 2015 Current service cost 30 217 40 312 Net interest cost 1 215 311 Administration costs 2 633 1 754 Accured social security tax 2 559 4 507 Net pension cost 36 623 46 884

Principal actuarial assumptions 31.12.2016 31.12.2015 Discount rate on plan liabilities 2.60 % 2.70 % Expected increase in pensionable salary 2.50 % 2.50 % Future G-increase 2.25 % 2.25 % Future pension increase 1.48 % 1.48 % Turnover 2.70 % 2.70 % Social security tax 14.10 % 14.10 %

20. ACQUISITIONS DURING THE PERIOD AND COMPLETED PRIOR PERIODS

Acquistions during 2016 Two major acquisitions were completed during 2016, the acquisition of Aberia Healthcare AS and Steni-Holding AS. Both in the Individual & Family segment. There were also completed several minor acquistions in the Preschool business and Integration services business. The consideration transferred was allocated beetween net assets received, Goodwill and Customer contracts, resulting in an addition to intangible assets of total NOK 512,992 thousand.

Acquistion of Aberia Healthcare AS On January 3rd 2016 the Group acquired an additional 5% of the shares in Aberia Healthcare AS, making it a controlling invest- ment and as such re-classified from an associate to subsidiary. The company’s principal activites are operating child care, foster homes and assisted living.

ANNUAL REPORT 2016 55 Details of the fair value og identified assets and liabilties acquired, purchase consideration and goodwill are as follows. Book value Adjustment Fair value NOK NOK NOK Deferred tax asset 1 827 - 1 827 Property plant and equipment 13 091 - 13 091 Trade mark - 25 117 25 117 Customer contracts - 39 227 39 227 Financial assets 12 782 - 12 782 Inventories 330 - 330 Receivables 38 843 - 38 843 Cash 25 941 - 25 941 Long term debt -51 863 - -51 863 Payables -65 997 - -65 997 Deferred tax obligation - -14 156 -14 156

Total net assets -25 046 50 188 23 314

Fair value of the consideration paid: Cash consideration on 5.09 % stake 5 700

Fair value on 100 % basis 112 000 Total consideration 112 000

Goodwill in NOK 88 686 The goodwill arising on the Aberia Healthcare AS acqusition is not deductable for tax purposes.

The main factor leading to the recognition of goodwill is: - The presence of certain intangible assets, such as the assembled workforce of the aquired entity, which do not qualify for separate recognition.

Acquistion of Steni-Holding AS On April 22nd 2016 the Group acquired 100% of the shares in Steni-Holding, a company whose principal activity is operating integration services for minor refugees. The principal reason for the acquistion was to strenghten the posistion of the Group in the Norwegian market.

Details of the fair value og identified assets and liabilties acquired, purchase consideration and goodwill are as follows. Book value Adjustment Fair value NOK NOK NOK Deferred tax asset - - - Property plant and equipment 46 183 - 46 183 Intangible assets 99 - 99 Financial assets 2 140 - 2 140 Inventories - - - Receivables 17 836 - 17 836 Cash 16 386 - 16 386 Long term debt -34 116 - -34 116 Payables -21 746 - -21 746 Deferred tax obligation -1 997 - -1 997

Total net assets 24 785 - 24 785

56 NORLANDIA HEALTH & CARE GROUP AS Fair value of the consideration paid: Cash consideration 80 015 Total consideration 80 015

Goodwill in NOK 55 230

The goodwill arising on the Steni-Holding AS acqusition is not deductable for tax purposes.

The main factors leading to the recognition of goodwill are: - The presence of certain intangible assets, such as the assembled workforce of the aquired entity, which do not qualify for sepa- rate recognition.

Since the acquistion date, Steni-Holding AS has contributed MNOK 103.6 to Group revenues and MNOK 16.0 to Group profit. If the transaction occured on January 1 2016, Steni-Holding would have contributed MNOK 167.5 to Group revenues and MNOK 24.7 to Group profit.

Acquistion of Kidsa Barnehager AS On 20th December 2016 the Group acquired 100% of the shares in Kidsa Barnehager AS, a company whose principal activity is operating preschools. The principal reason for the acquistion was to strenghten the Group’s presence in the western parts of Norway.

Details of the fair value og identified assets and liabilties acquired, purchase consideration and goodwill are as follows. Book value Adjustment Fair value NOK NOK NOK Deferred tax asset - - - Property plant and equipment 6 451 - 6 451 Intangible assets 183 297 -183 297 - Financial assets 9 476 - 9 476 Inventories - - Receivables 15 663 - 15 663 Cash 51 144 - 51 144 Pension oblifation -11 275 -20 821 -32 096 Long term debt -60 445 - -60 445 Payables -65 631 - -65 631 Deferred tax obligation -1 713 5 202 3 489

Total net assets 126 966 -198 916 -71 950

Fair value of the consideration paid: Cash consideration 67 000 Total consideration 67 000

Goodwill in NOK 138 950

The goodwill arising on the Kidsa Barnehager AS acqusition is not deductable for tax purposes.

The main factors leading to the recognition of goodwill are: - The presence of certain intangible assets, such as the assembled workforce of the aquired entity, which do not qualify for separate recognition.

Since the acquistion date, Kidsa Barnehager AS has contributed MNOK 0,- to Group revenues and MNOK 0,- to Group profit. If the transaction occured on the January 1st 2016, Kidsa Barnehager AS would have contributed MNOK 336.0 to Group revenues and MNOK 9.2 to Group profit.

Acquistions during 2015 Two major acquisitions were completed during 2015, the acquisition of Kosmo AB in Care business and K2H Førskolor AB and

ANNUAL REPORT 2016 57 K2H Skåne AB, both in the Preschools business. There were also completed several minor acquistions in the Preschool business. The consideration transferred was allocated beetween the net assets received, Goodwill and Customer relationships, resulting in an addition to goodwill and customer relationships of total NOK 281.259.478.

Acquistion of Kosmo AB On 03.02.2015 the Group acquired 100% of the shares in Kosmo AB, a company whose principal activity is operating nursing homes. The principal reason for the acquistion was to strenght the posistion of the Group in the Swedish market. Details of the fair value og identified assets and liabilties acquired, purchase consideration and goodwill are as follows. Book value Adjustment Fair value SEK SEK SEK Property plant and equipment 21 313 - 21 313 Customer contracts - 72 650 72 650 Inventories 1 686 - 1 686 Receivables 97 628 - 97 628 Cash 73 961 - 73 961 Payables -124 301 - -124 301 Bank loan -8 250 - -8 250 Deferred tax liabiltity -6 537 -15 983 -22 520

Total net assets 55 500 56 667 112 167

Fair value of the consideration paid: Cash 252 981 Total consideration - - 252 981

Goodwill (SEK) 140 814 Goodwill in NOK 129 225

The goodwill arising on the Kosmo AB acqusition is not deductable for tax purposes.

Acquistion costs of SEK 678 187 arose as a result of the transaction. These have been recognised as part of administrative expenses in the statement of comprehensive income.

The main factors leading to the recognition of goodwill are. - The presence of certain intangible assets, such as the assembled workforce of the aquired entity, which do not qualify for separate recognition.

Since the acquistion date, Kosmo AB has contributed MNOK 779.6 to Group revenues and MNOK 30.0 to Group profit. If the transaction occured on the January 1, 2015, Kosmo AB would have contributed MNOK 850.5 to Group revenues and MNOK 32.7 to Group profit.

Acquistion of K2H (K2H Førskoler AB and Ke Skåne AB) On 01.07.2015 the Group acquired 100% of the shares in K2H, a company whose principal activity is operating preschools. The principal reason for the acquistion was to strenght the posistion of the Group in the Swedish market.

Details of the fair value og identified assets and liabilties acquired, purchase consideration and goodwill are as follows. Book value Adjustment Fair value SEK SEK SEK Property plant and equipment 3 417 - 3 417 Receivables 3 788 - 3 788 Cash 14 433 - 14 433 Payables -14 194 - -14 194 Bank loan -1 739 - -1 739 Deferred tax liabiltity Total net assets 5 706 - 5 706

58 NORLANDIA HEALTH & CARE GROUP AS Fair value of the consideration paid Cash 52 818 Total consideration 52 818

Goodwill in SEK 47 113 Goodwill in NOK 44 555

The goodwill arising on the Kosmo AB acqusition is not deductable for tax purposes.

Acquistion costs of SEK 629 066 arose as a result of the transaction. These have been recognised as part of administrative expenses in the statement of comprehensive income.

The main factors leaing to the recognition of goodwill are. - The presence of certain intangible assets, such as the assembled workforce of the aquired entity, which do not qualify for separate recognition.

Since the acquistion date, K2H has contributed MNOK 56.7 to Group revenues and MNOK 0.8 to Group profit. If the transaction occured on the January 1, 2015, K2H would have contributed MNOK 104.8 to Group revenues and MNOK 3.0 to Group profit.

Total acquistions 2015 If both the acqusition of Kosmo AB and K2H had occured on the January 1, 2015 the revenue would have been MNOK 3 102 and the Group profit for 2015 would have been MNOK 243.8. In addition to the acqusitions of Kosmo and K2H a minor acquistion gave rise to an additional goodwill of NOK 17.200.000.

21. TRANSACTIONS WITH RELATED PARTIES

In addition to the transactions rescreibed in note 11, the financial statements include the following transactions with related parties.

Related party Relation to the Group Benn Eidissen Shareholder of Eidissen Consult AS, board member in the Group (2015) Even Carlsen Owner of Grafo AS, board member in the Group (2015) Kristian Adolfsen Shareholder in Hospitality Invest AS, board member in the Group Roger Adolfsen Shareholder in Hospitality Invest AS, board member in the Group Eidissen Consult AS Major shareholder 18.1% (2015) Grafo AS Major shareholder 18.1% (2015) Hospitality Invest AS Major shareholder 100% in 2016 (63.8 % in 2015) Acea Properties AS Owned by Eidissen Consult AS, Grafo AS, Klevenstern AS and Mecca Invest AS Pioneer Property Group ASA Significant ownership interest from the same shareholders Vestfjorden AS Own by Eidissen Consult AS, Grafo AS, Klevenstern AS and Mecca Invest AS

Transaction with related parties (Amounts in NOK) 2016 2015 Receivables from related parties

Pioneer Property Group ASA 79 769 143 527 Vestfjorden AS - 10 257 Acea Properties AS (with subsidiaries) - 25 022 Total receivable related parties 79 769 178 806

Interest received Pioneer Property Group AS 1 729 3 513 Interest received from related parties 1 729 3 513

ANNUAL REPORT 2016 59 Sale of assets to related parties 2016 2015 Sale of property to Pioneer Public Properties IV AS (see note 4) 136 900 71 925

Rent of properties from related parties Rent of properties from Pioneer Property Group ASA 59 380 59 567

22. CASH AND CASH EQUIVALENTS 2016 2015 Cash related to payroll tax witholdings 66 684 58 415 Unrestricted cash 993 557 287 334 Total cash and cash equivalents 1 060 241 345 749

23. DESCRIPTION OF COVENANT

The new senior secured bond issued in December 2016 includes a financial covenant which is subject to incurrence testing. Certain actions and transactions, inter alia issuance of new debt and payment of dividends, is subject to the satisfaction of an incurrence test. The incurrence test considered satisfied provided that:

Total Net Debt / EBITDA = not greater than 3.75

The Group, at the date of the Financial Statements, has not undertaken any actions or transactions triggering an incurrence test. For further details regarding the incurrence test, we refer to the Group’s Bond Loan Agreement.

24. EVENTS AFTER THE REPORTING DATE

On January 18, 2017 Norlandia Care Group settled the Senior Secured Bond Issue 2013/2018, repaying NOK 507 million to the bond holders. The transaction will have a material effect on the Group’s total balance by decreasing cash and debt on both sides of the balance sheet.

23. DESCRIPTION OF COVENANT (slett calculation)

The new senior secured bond issued in December 2016 comprise of a financial covenant which is limited to incurrence testing. Thus certain actions and transactions shall be subject to an incurrence test. The incurrence based covenant is limited to the fol- lowing:

Total Net Debt / EBITDA = not greater than 3.75

The Group, at the date of the Financial Statements, has not undertaken any actions or transactions triggering an incurrence test and remains in compliance with the terms set out in the bond agreement.

60 NORLANDIA HEALTH & CARE GROUP AS Independent auditor’s report

ANNUAL REPORT 2016 61 62 NORLANDIA HEALTH & CARE GROUP AS ANNUAL REPORT 2016 63 Norlandia Health & Care Group AS

Head Office Øvre Vollgate 13 0158 Oslo Norway April 2017

64 NORLANDIA HEALTH & CARE GROUP AS Appendix 1 B

Årsregnskap 2016 for Kidsa Drift AS

Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Årsberetning 2016

Virksomhetens art Selskapet inngår i et konsern med Hospitality Invest AS som konsernspiss. Selskapets virksomhet er eierskap i datterselskap som eier og driver barnehager, herunder finansiering av slike selskaper. Kidsa Drift AS eier og driver, gjennom sine helheide datterselskap, 28 barnehager i Bergen kommune.

Utvikling i resultat og stilling 2016 2015 Driftsinntekter 0 0 Driftsresultat -176 863 -441 086 Årsresultat -7 088 104 -632 791

31.12.2016 31.12.2015 Balansesum 333 027 541 339 459 857 Egenkapital 59 911 896 67 000 000 Egenkapitalprosent 18,0% 19,7%

Selskapet har foretatt en endring i konsernstruktur, noe som gjenspeiles i selskapets driftsresultat. Årsregnskapet gir en rettvisende oversikt over utviklingen i foretaket, for resultatet i regnskapsåret og stillingen ved regnskapsårets slutt.

Fortsatt drift Styret bekrefter at forutsetningen om fortsatt drift er til stede og lagt til grunn ved utarbeidelse av regnskapet. Det har ikke inntruffet andre forhold etter regnskapsårets slutt som har betydning for regnskapet.

Forsknings- og utviklingsaktiviteter Selskapet driver ikke med FoU-aktiviteter, og har ikke hatt slike aktiviteter i regnskapsåret.

Arbeidsmiljø og personale/Likestilling Selskapet har ingen ansatte og har heller ikke hatt ansatte i regnskapsåret. Selskapets styre består av 2 menn.

Miljørapport Det er ingen forhold ved selskapets virksomhet som har påvirkning på det ytre miljø.

Årsresultat og dekning av årsunderskudd Styret foreslår følgende dekning av årsunderskuddet, som er på kr -7 088 104:

Fremført udekket tap -7 088 104

Totalt -7 088 104

Oslo, 12. mai 2017

______Yngvar Tor Herbjørnssønn Even Carlsen Styrets leder Styremedlem Appendix 1 B

Kidsa Drift AS

Resultatregnskap

Note 2016 mar 15-des 15

DRIFTSINNTEKTER OG DRIFTSKOSTNADER Driftsinntekter Sum driftsinntekter 0 0 Driftskostnader Avskrivning på varige driftsmidler 3 23 200 3 200 Annen driftskostnad 4 153 663 437 886 Sum driftskostnader 176 863 441 086 DRIFTSRESULTAT (176 863) (441 086)

FINANSINNTEKTER OG FINANSKOSTNADER Finansinntekter Renteinnt. fra foretak i samme konsern 5 0 1 024 709 Annen renteinntekt 573 316 24 795 Annen finansinntekt 2 499 857 7 376 775 Sum finansinntekter 3 073 173 8 426 279 Finanskostnader Rentekostn. til foretak i samme konsern 5 9 187 674 4 815 695 Annen rentekostnad 2 882 159 2 132 147 Annen finanskostnad 249 875 540 537 Sum finanskostnader 12 319 708 7 488 379 NETTO FINANSPOSTER (9 246 535) 937 900

ORDINÆRT RES. FØR SKATTEKOSTNAD (9 423 397) 496 814

Skattekostnad på ordinært resultat 6 (2 335 293) 1 129 605

ORDINÆRT RESULTAT (7 088 104) (632 791)

ÅRSRESULTAT (7 088 104) (632 791)

OVERF. OG DISPONERINGER Avgitt konsernbidrag 0 3 009 790 Overføringer annen egenkapital 0 (3 642 580) Fremføring av udekket tap (7 088 104) 0 SUM OVERF. OG DISP. (7 088 104) (632 790)

Årsregnskap for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Balanse pr. 31.12.2016

Note 31.12.2016 31.12.2015

EIENDELER ANLEGGSMIDLER Immaterielle eiendeler Utsatt skattefordel 6 2 330 293 0 Sum immaterielle eiendeler 2 330 293 0 Varige driftsmidler Driftsløsøre, inventar, verktøy, kontorm. 3 89 600 112 800 Sum varige driftsmidler 89 600 112 800 Finansielle anleggsmidler Investeringer i datterselskap 7 267 470 243 281 836 403 Lån til foretak i samme konsern 5 8 475 551 31 003 231 Sum finansielle anleggsmidler 275 945 794 312 839 634 SUM ANLEGGSMIDLER 278 365 687 312 952 434 OMLØPSMIDLER Fordringer Fordringer på konsernselskap 5 2 193 657 14 707 743 Andre kortsiktige fordringer 9 774 870 0 Sum fordringer 11 968 527 14 707 743 Bankinnskudd, kontanter o.l. 42 693 327 11 799 679 SUM OMLØPSMIDLER 54 661 854 26 507 422 SUM EIENDELER 333 027 541 339 459 856

Årsregnskap for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Balanse pr. 31.12.2016

Note 31.12.2016 31.12.2015

EGENKAPITAL OG GJELD EGENKAPITAL Innskutt egenkapital Selskapskapital 1,2 67 000 000 67 000 000 Sum innskutt egenkapital 67 000 000 67 000 000 Opptjent egenkapital Udekket tap 2 (7 088 104) 0 Sum opptjent egenkapital (7 088 104) 0 SUM EGENKAPITAL 59 911 896 67 000 000

GJELD LANGSIKTIG GJELD Avsetning for forpliktelser Utsatt skatt 6 0 5 000 Sum avsetning for forpliktelser 0 5 000 Annen langsiktig gjeld Gjeld til kredittinstitusjoner 0 60 000 000 Langsiktig gjeld til konsernselskap 5 222 937 737 180 428 777 Øvrig langsiktig gjeld 0 27 429 503 Sum annen langsiktig gjeld 222 937 737 267 858 280 SUM LANGSIKTIG GJELD 222 937 737 267 863 280 KORTSIKTIG GJELD Leverandørgjeld 1 451 23 891 Betalbar skatt 0 11 395 Kortsiktig gjeld til konsernselskap 5 44 415 638 4 534 866 Annen kortsiktig gjeld 5 760 819 26 426 SUM KORTSIKTIG GJELD 50 177 908 4 596 578 SUM GJELD 273 115 645 272 459 858 SUM EGENKAPITAL OG GJELD 333 027 541 339 459 858

Oslo, 12. mai 2017

______Yngvar Tor Herbjørnssønn Even Carlsen Styrets leder Styremedlem

Årsregnskap for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Noter 2016

Regnskapsprinsipper

I årsregnskapet er alle poster verdsatt og periodisert i overensstemmelse med regnskapslovens bestemmelser og reglene som følger av god regnskapsskikk for små foretak.

Klassifisering Eiendeler bestemt til varig eie og bruk, samt fordringer med forfall mer enn ett år etter balansedagen er medtatt som anleggsmidler. Øvrige eiendeler er klassifisert som omløpsmidler. Gjeld som forfaller senere enn ett år etter regnskapsperiodens utløp er oppført som langsiktig gjeld. Alle fordringer og all gjeld knyttet til varekretsløpet er klassifisiert som kortsiktige poster uavhengig av forfallstid. Finansielle investeringer er klassifisiert som omløpsmidler og vurdert til virkelig verdi.

Varige driftsmidler og avskrivninger Varige driftsmidler er vurdert til historisk kost etter fradrag for bedriftsøkonomiske avskrivninger som er beregnet på grunnlag av kostpris og antatt økonomisk levetid.

Fordringer Fordringer er oppført i balansen med fordringens pålydende etter fradrag for konstaterte og forventede tap. Avsetning til tap gjøres på grunnlag av individuelle vurderinger av de enkelte fordringene.

Skattekostnad og utsatt skatt Skattekostnad er knyttet til det regnskapsmessige resultat og består av betalbar skattt og endring i utsatt skatt. Utsatt skatt i resultatregnskapet er skatt beregnet på endringer i midlertidige forskjeller mellom skattemessige og regnskapsmessige verdier. I stedet for å vise årets skattemessige disposisjoner brutto i regnskapet, bokføres skatteeffekten som en del av årets skattekostnad. Utsatt skatt avsettes som langsikrig gjeld i balansen. I den grad utsatt skattefordel overstiger utsatt skatt, medtas utsatt skattefordel iht god regnskapsskikk.

Driftsinntekter og kostnader Inntektsføring skjer etter opptjeningsprinsippet som normalt vil være leveringstidspunktet for varer og tjenester. Kostnader medtas etter sammenstillingsprinsippet, dvs at kostnader medtas i samme periode som tilhørende innteker inntektsføres.

Konsernkontoavtale med selskapets bankforbindelse Det er inngått avtale med selskapets bankforbindelse om styring av likviditet gjennom et konsernkontosystem. Ordningen går ut på at ett av selskapene i konsernet (Kidsa Drift AS) står som innehaver av en hovedkonto, mens andre selskaper i konsernet har hver sine underkonti tilknyttet hovedkontoen. Saldoen på hovedkontoen tilsvarer nettoen av samlet innestående og trekk på underkontiene. Mellomværende mellom selskapet som er innehaver av hovedkontoen og de andre konsernselskapene utgjør et låneforhold mellom selskapene og klassifisieres som kortsiktige fordring/gjeld til selskap i samme konsern. Se note 5.

Noter for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Noter 2016

Note 1 - Selskapskapital Selskapet har 67000000 aksjer hver pålydende kr 1, samlet aksjekapital utgjør kr 67 000 000. Selskapet har kun en aksjeklasse. Aksjene eies 100 % av Norlandia Health Care group AS. Konsernregnskap utarbeides av Hospitality Invest AS (Rådhusgata 23,0158 OSLO)

Note 2 - Egenkapital Aksjekapital / Udekket Sum selskapskapital tap egenkapital

Pr 1.1. 67 000 000 0 67 000 000 Anvendt til årsresultat -7 088 104 -7 088 104 Pr 31.12. 67 000 000 -7 088 104 59 911 896

Note 3 - Avskrivning på varige driftsmidler Avskrivningstablå

Driftsløsøre, inventar, verktøy, kontorm.

Anskaffelseskost pr. 1/1 116 000 Anskaffelseskost pr. 31/12 116 000

Akk. av/nedskr. pr 1/1 3 200 + Ordinære avskrivninger 23 200 Akk. av/nedskr. pr. 31/12 26 400

Balanseført verdi pr 31/12 89 600

Prosentsats for ord. avskr. 20-20

Noter for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Noter 2016

Note 4 - Annen driftskostnad - Ansatte, godtgjørelser m.m. Selskapet har ytet godtgjørelse til revisor med følgende beløp: I år I fjor Revisjon 18 750 22 500 Andre tjenester 24 375 45 875 Totalt 43 125 68 375

Selskapet har ingen ansatte. Det er ikke utbetalt honorar til styret. Det er ikke ytt lån eller stillet sikkerhet for ledende personer.

Note 5 - Renteinnt. fra foretak i samme konsern Fordringer og gjeld til konsernselskaper inngår med følgende beløp i regnskapspostene: 2016 2015 Mellomværende Årets mottatte konsernbidrag, kortsiktig fordring 2 193 657 14 707 74 Langsiktig (rentebærende) lån 8 475 551 31 003 231 Langsiktig (rentebærende) gjeld 222 937 737 207 858 281 Annen kortsiktig gjeld, konsernkonto 44 415 638 411 866

Transaksjoner Årets renteinntekter 0 1 024 709 Årets rentekostnader 9 187 674 4 815 695

Noter for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Noter 2016

Note 6 - Skattekostnad på ordinært resultat

Spesifikasjon av årets skattegrunnlag: 2016

Resultat før skattekostnader -9 423 397 Permanente og andre forskjeller -2 499 817 Endring i midlertidige forskjeller 4 640 Mottatt konsernbidrag 2 193 657 Begrensning av rentefradrag mellom nærstående 9 437 549 Inntekt -287 368

Spesifikasjon av årets skattekostnad: 2016

Beregnet skatt av årets resultat 0 = Sum betalbar skatt 0 + endring i utsatt skatt -5 000 + endring i utsatt skattefordel -2 330 293 = Ordinær skattekostnad -2 335 293

Betalbar skatt i balansen består av: = Betalbar skatt i balansen 0

Utsatt skatt/utsatt skattefordel 2016 2015 + Driftsmidler inkl. goodwill 15 360 20 000 - Fremført rentefradrag 9 437 549 0 = Grunnlag utsatt skatt -9 422 189 20 000 Utsatt skatt 0 5 000 Negativt grunnlag utsatt skatt 9 422 189 0 = Grunnlag utsatt skattefordel 9 422 189 0 Utsatt skattefordel 2 261 325 0

Noter for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B

Kidsa Drift AS

Noter 2016

Note 7 - Investeringer i datterselskap

Selskapet har aksjer i følgende datterselskaper: Eier- Stemme- Årsresultat Balanseført Datterselskap, kontorsted: andel % rett % siste år EK siste år Kidsa Barnehager AS, Bergen 100,00 % 100,00 % 10 719 386 177 130 428 Kidsa Strømme AS, Oslo 100,00 % 100,00 % -25 435 29 375

Aksjene er oppført til historisk kostpris. Selskapet, Kidsa Drift AS, er morselskap i underkonsern og kan etter renskapslovens § 3-7 unnlate å utarbeide konsernregnskap, da de inngår i konsernregnskapet til konsernspiss.

Noter for Kidsa Drift AS Organisasjonsnr. 915272002 Appendix 1 B Appendix 1 B Appendix 1 B Appendix 1 B

Resultatregnskap Kidsa Drift AS

Note 2015

Driftskostnader Avskrivning av driftsmidler og immaterielle eiendeler 6 3 200 Annen driftskostnad 3 437 886 Sum driftskostnader 441 086

Driftsresultat (441 086)

Finansinntekter og finanskostnader Annen renteinntekt 24 795 Annen finansinntekt 7 376 775 Renteinntekt fra foretak i samme konsern 7 1 024 709 Rentekostnad til foretak i samme konsern 7 4 815 695 Annen rentekostnad 2 132 147 Annen finanskostnad 540 537 Resultat av finansposter 937 900

Resultat før skattekostnad 496 815

Skattekostnad 5 1 129 605

Årsresultat 4 (632 790)

Overføringer Avsatt konsernbidrag 3 009 790 Avsatt til annen egenkapital (3 642 580) Sum overføringer (632 790)

Kidsa Drift AS Side 1 Appendix 1 B

Balanse Kidsa Drift AS

Eiendeler Note 2015

Anleggsmidler Varige driftsmidler Driftsløsøre, inventar o.a. utstyr 6 112 800 Sum varige driftsmidler 112 800

Finansielle anleggsmidler Investeringer i datterselskap 8 281 836 405 Lån til foretak i samme konsern 7 31 003 231 Sum finansielle anleggsmidler 312 839 636

Sum anleggsmidler 312 952 436

Omløpsmidler Fordringer Fordring på selskap i samme konsern 7 14 707 743 Sum fordringer 14 707 743

Bankinnskudd, kontanter o.l. 11 799 679 Sum omløpsmidler 26 507 422

Sum eiendeler 339 459 858

Kidsa Drift AS Side 2 Appendix 1 B Appendix 1 B

Noter Kidsa Drift AS

Note 1 - Regnskapsprinsipper

I årsregnskapet er alle poster verdsatt og periodisert i overensstemmelse med regnskapslovens bestemmelser og reglene som følger av god regnskapsskikk for små foretak.

Klassifisering Eiendeler bestemt til varig eie eller bruk, samt fordringer med forfall mer enn ett år etter balansedagen er medtatt som anleggsmidler. Øvrige eiendeler er klassifisert som omløpsmidler. Gjeld som forfaller senere enn ett år etter regnskapsperiodens utløp er oppført som langsiktig gjeld. Alle fordringer og all gjeld knyttet til varekretsløpet er klassifisert som kortsiktige poster uavhengig av forfallstid. Finansielle investeringer er klassifisert som omløpsmidler og vurdert til virkelig verdi.

Varige driftsmidler og avskrivninger Varige driftsmidler er vurdert til historisk kost etter fradrag for bedriftsøkonomiske avskrivninger som er beregnet på grunnlag av kostpris og antatt økonomisk levetid.

Fordringer Fordringer er oppført i balansen med fordringens pålydende etter fradrag for konstaterte og forventede tap. Avsetning til tap gjøres på grunnlag av individuelle vurderinger av de enkelte fordringene.

Skattekostnad og utsatt skatt Skattekostnaden er knyttet til det regnskapsmessige resultat og består av betalbar skatt og endring i netto utsatt skatt. Utsatt skatt i resultatregnskapet er skatt beregnet på endringer i midlertidige forskjeller mellom skattemessige og regnskapsmessige verdier. I stedet for å vise årets skattemessige disposisjoner brutto i regnskapet, bokføres skatteeffekten som en del av årets skattekostnad. Utsatt skatt avsettes som langsiktig gjeld i balansen. I den grad utsatt skattefordel overstiger utsatt skatt, medtas utsatt skattefordel i balansen iht god regnskapsskikk.

Driftsinntekter og kostnader Inntektsføring skjer etter opptjeningsprinsippet som normalt vil være leveringstidspunktet for varer og tjenester. Kostnader medtas etter sammenstillingsprinsippet, dvs. at kostnader medtas i samme periode som tilhørende inntekter inntektsføres.

Note 2 - Aksjonærer

Aksjekapitalen består av en aksjeklasse à 67 000 000 aksjer, hver pålydende kr 1. Aksjene eies av Kidprop AS med 99,96 % og øvrige med 0,04 %. Konsernregnskap utarbeides i Kidprop AS (Rådhusgata 23, 0158 Oslo).

Note 3 Ansatte, godtgjørelser m.m.

Selskapet har ingen ansatte. Det er ikke betalt honorar til styret.

Selskapet er ikke pliktig til å ha tjenestepensjonsordning etter lov om obligatorisk tjenestepensjon.

Revisor Kostnadsført revisjonshonorar utgjør kr 22 500. I tillegg kommer andre tjenester med kr 45 875. Appendix 1 B

Noter Kidsa Drift AS

Note 4 - Egenkapital

Aksjekapital Annen EK / Sum udekket tap Egenkapital 01.01. 0 0 0 Stiftelse 30 000 0 30 000 Gjeldskonvertering 66 970 000 0 66 970 000 Avgitt konsernbidrag -3009790 -3009790 Mottatt konsernbidrag 3642580 3642580 Årets resultat 0 -632790 -632790 Egenkapital 31.12 67 000 000 0 67 000 000

Note 5 - Skatt

Årets skattekostnad 2015

Resultatført skatt på ordinært resultat: Betalbar skatt 11 395 Betalbar skatt på konsernbidrag 1 113 210 Endring i utsatt skatt / utsatt skattefordel 5 000 Skattekostnad ordinært resultat 1 129 605

Betalbar skatt i årets skattekostnad: Ordinært resultat før skatt 496 815 Permanente forskjeller -7 376 775 Endring i midlertidige forskjeller -20 000 Konsernbidrag 11 065 163 Avgitt konsernbidrag -4 123 000 Skattemessig resultat 42 203

Betalbar skatt i balansen: Betalbar skatt på årets resultat -1 862 989 Betalbar skatt på mottatt konsernbidrag 2 987 594 Betalbar skatt på avgitt konsernbidrag -1 113 210 Sum betalbar skatt i balansen 11 395

Skatteeffekten av midlertidige forskjeller og underskudd til fremføring som har gitt opphav til utsatt skatt og utsatte skattefordeler, spesifisert på typer av midlertidige forskjeller:

2015 Varige driftsmidler 20 000 Fordringer 0 Sum 20 000 Akkumulert fremførbart skattemessig underskudd 0 Grunnlag utsatt skatt / skattefordel 20 000

Utsatt skatt / skattefordel (25 %) 5 000 Appendix 1 B

Noter Kidsa Drift AS

Note 6 - Anleggsmidler

Driftsløsøre, Sum inventar o.a utstyr Anskaffelseskost pr. 01.01 0 0 Tilgang kjøpte anleggsmidler 116 000 116 000 Anskaffelseskost 31.12 116 000 116 000 Akkumulerte avskrivninger 31.12 3 200 3 200 Bokført verdi 31.12 112 800 112 800

Årets ordinære avskrivninger 3 200 3 200 Økonomisk levetid 5 år

Note 7 - Transaksjoner og mellomværende med foretak i konsern

2015 Mellomværender Kortsiktig fordring 14 707 743 Langsiktig (rentebærende) lån 31 003 231 Langsiktig (rentebærende) gjeld 207 858 281 Kortsiktig gjeld 411 866

Transaksjoner Renteinntekter 1 024 709 Rentekostnader 4 815 695 Appendix 1 B

Noter Kidsa Drift AS

8Note - Aksjer og andeler i andre foretak m.v.

Egenkapital Resultat Finansielle driftsmidler Eierandel 31.12.2015 2015 Kidsa Allestadhaugen AS 100% 1 674 161 -2 534 Kidsa Barnehager AS 100% 75076183 76800870 Kidsa Breistein AS 100% -970465 122887 Kidsa Brønndalen AS 100% 644 730 -138 793 Kidsa Christinegård AS 100% 1 032 006 71 228 Kidsa Eidsvåg AS 100% 1293921 -65934 Kidsa Erleveien AS 100% 973 452 -40 719 Kidsa Festtangen AS 100% 5719638 1057404 Kidsa Haukedalen AS 100% 2140339 814016 Kidsa Hylkje AS 100% 18364731 11386347 Kidsa Inndalen AS 100% 614 127 45 649 Kidsa Kokstad AS 100% 10783211 8946446 Kidsa Ladegården AS 100% 6140173 13087531 KidsaLøvåsbakkenAS 100% 1628639 40 994 Kidsa Midtbygda AS 100% 1124883 -176239 Kidsa Myrdal AS 100% 4342354 2006680 Kidsa Nyhavn AS 100% 812 626 85 141 Kidsa Olsvikfjellet AS 100% 678 823 -190 631 Kidsa Ospeli AS 100% 1755928 338948 Kidsa Sandgotna AS 100% 7687405 10926782 Kidsa Slettebakken AS 100% 1 235 714 111 686 Kidsa Sølvberget AS 100% 1157750 -1 064 Kidsa Tertitten AS 100% 389 898 -184 569 Kidsa Toppemyr AS 100% 572 216 -66 122 Kidsa Varden AS 100% 612 274 -31 295 Kidsa Vågedalen AS 100% 2419008 284760 Kidsa Øvre Sædal AS 100% 11427200 14024728 Kidsa Øvsttun AS 100% 7915779 10727413 Kidsa Øyrane AS 100% 7493006 1915551 Sum 174 739 710 151 897 161

Aksjer i datterselskap er vurdert etter kostmetoden.

Konsernregnskap utarbeides i morselskapet Kidprop AS (Rådhusgata 23, 0158 Oslo).

Note 9 - Langsiktig gjeld

Kidsa Drift AS har et banklån på NOK 60 mill. Lånet har en løpetid på 5 år fra 2015 og skal tilbakebetales med kvartalsvise avdrag. Lånet er sikret med pant i aksjene i datterselskap med NOK 282 mill. Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C

BDO A5 Kniveveien 31 BDO 3036 Drammen

Uavhengig revisors beretning

Ti[ generatforsamlingen i Nortandia Care Group AS

Uttatelse om revisjonen av årsregnskapet

Konklusjon

Vi har revidert Nortandia Care Group AS' årsregnskap som består av balanse per 31. desember 2016, resultatregnskap og kontantstrømoppstitting for regnskapsåret avstuttet per denne datoen og noter ti[ årsregnskapet, herunder et sammendrag av viktige regnskapsprinsipper.

Etter vår mening er det medføtgende årsregnskapet avgitt i samsvar med lov og forskrifter og gir et rettvisende bitde av selskapets finansietle stitting per 31. desember 2016, og av dets resultater for regnskapsåret avsluttet per denne datoen i samsvar med regnskapstovens regter og god regnskapsskikk i Norge.

Grunntag for konklusjonen

Vi har gjennomført revisjonen i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder de internasjonate revisjonsstandardene lnternationaI Standards on Auditing (l5A- ene). Våre oppgaver og ptikter i henhotd tiI disse standardene er beskrevet i Revisors oppgaver og ptikter ved revisjon av årsregnskapet. Vi er uavhengige av setskapet stik det kreves i lov og forskrift, og har overholdt våre øvrige etiske forptiktetser i samsvar med disse kravene. Etter vår oppfatning er innhentet revisjonsbevis titstrekketig og hensiktsmessig som grunntag for vår konklusjon.

Annen informasjon

Ledelsen er ansvarlig for annen informasjon. Annen informasjon består av årsberetningen, men inkluderer ikke årsregnskapet og revisjonsberetningen.

Vår uttatetse om revisjonen av årsregnskapet dekker ikke annen informasjon, og vi attesterer ikke den andre informasjonen.

I forbindelse med revisjonen av årsregnskapet er det vår oppgave å lese annen informasjon med det formål å vurdere hvorvidt det foretigger vesenttig inkonsistens metlom annen informasjon og årsregnskapet, kunnskap vi har opparbeidet oss under revisjonen, e[[er hvorvidt den tilsynelatende inneholder vesentlig feilinformasjon.

Dersom vi konkluderer med at den andre informasjonen inneholder vesenttig feilinformasjon er vi påtagt å rapportere det. Vi har ingenting å rapportere i så henseende

Styrets og dagtig [eders ansvar for årsregnskapet

Styret og dagtig teder (tedetsen) er ansvartig for å utarbeide årsregnskapet i samsvar med lov og forskrifter, herunder for at det gir et rettvisende bitde i samsvar med regnskapstovens regter og god regnskapsskikk i Norge. Ledelsen er også ansvarlig for slik

Uavhengig revisors beretning 2016 Nortandia Care Group AS - Side 1 av 3 Appendix 1 C BDO

intern kontroll som den finner nødvendig for å kunne utarbeide et årsregnskap som ikke inneholder vesenttig feitinformasjon, verken som føtge av mistigheter etler fei[.

Ved utarbeidetsen av årsregnskapet må ledelsen ta standpunkt tiI setskapets evne til fortsatt drift og opptyse om forhotd av betydning for fortsatt drift. Forutsetningen om fortsatt drift skal legges til grunn for årsregnskapet så lenge det ikke er sannsynlig at virksomheten vit bti awiktet.

Revisors oppgaver og ptikter ved revisjonen av årsregnskapet

Vårt måt med revisjonen er å oppnå betryggende sikkerhet for at årsregnskapet som helhet ikke innehotder vesentlig feilinformasjon, verken som følge av misligheter e[ter utitsiktede fei[, og å avgi en revisjonsberetning som innehotder vår konklusjon. Betryggende sikkerhet er en høy grad av sikkerhet, men ingen garanti for at en revisjon utført i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder lSA-ene, atttid vit avdekke vesentlig feitinformasjon som eksisterer. Feitinformasjon kan oppstå som følge av mistigheter etler utitsiktede fei[. Feitinformasjon btir vurdert som vesenttig dersom den enkettvis etter samtet med rimetighet kan forventes å påvirke økonomiske bestutninger som brukerne foretar basert på årsregnskapet.

Som del av en revisjon i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder ISA-ene, utøver vi profesjonelt skjønn og utviser profesjonetl skepsis gjennom hete revisjonen. I tittegg:

identifiserer og anstår vi risikoen for vesentlig feitinformasjon i regnskapet, enten det skytdes mistigheter eller utitsiktede feit. Vi utformer og gjennomfører revisjonshandlinger for å håndtere stike risikoer, og innhenter revisjonsbevis som er tilstrekkelig og hensiktsmessig som grunnlag for vår konktusjon. Risikoen for at vesenttig feitinformasjon som følge av mistigheter ikke btir avdekket, er høyere enn for feilinformasjon som skyldes utitsiktede feit, siden mistigheter kan innebære samarbeid, forfalskning, bevisste utelatetser, uriktige fremstittinger e[ter overstyring av intern kontrott.

opparbeider vi oss en forståetse av den interne kontrotl som er retevant for revisjonen, for å utforme revisjonshandlinger som er hensiktsmessige etter omstendighetene, men ikke for å gi uttrykk for en mening om effektiviteten av setskapets interne kontrol[.

evatuerer vi om de anvendte regnskapsprinsippene er hensiktsmessige og om regnskapsestimatene og tithørende noteopplysninger utarbeidet av ledelsen er rimelige.

a konkluderer vi på hensiktsmessigheten av ledelsens bruk av fortsatt drift- forutsetningen ved avleggelsen av regnskapet, basert på innhentede revisjonsbevis, og hvorvidt det foretigger vesentlig usikkerhet knyttet til hendetser etler forhold som kan skape tviI av betydning om selskapets evne til fortsatt drift. Dersom vi konktuderer med at det eksisterer vesentlig usikkerhet, kreves det at vi i revisjonsberetningen henleder oppmerksomheten på titteggsopptysningene i

Uavhengig revisors beretning 201ó Nortandia Care Group AS - Side 2 av 3 Appendix 1 C BDO

regnskapet, etler, dersom slike titteggsopptysninger ikke er titstrekketige, at vi modifiserer vår konklusjon om årsregnskapet og årsberetningen. Våre konklusjoner er basert på revisjonsbevis innhentet inntiI datoen for revisjonsberetningen. Etterfølgende hendelser elter forhotd kan imidtertid medføre at selskapet ikke fortsetter driften.

a evatuerer vi den samtede presentasjonen, strukturen og innholdet, inktudert titteggsopptysningene, og hvorvidt årsregnskapet representerer de underliggende transaksjonene og hendelsene på en måte som gir et rettvisende bitde.

Vi kommuniserer med styret blant annet om det ptantagte omfanget av revisjonen og til hvilken tid revisjonsarbeidet skal utføres. Vi utvekster også informasjon om forhotd av betydning som vi har avdekket i løpet av revisjonen, herunder om eventuelte svakheter av betydning i den interne kontrotten.

Uttatelse om øvrige lovmessige krav

Konktusjon om årsberetningen Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, mener vi at opptysningene i årsberetningen om årsregnskapet, forutsetningen om fortsatt drift og forslaget til anvendetse av overskuddet er konsistente med årsregnskapet og i samsvar med lov og forskrifter.

Konklusjon om registrering og dokumentasjon Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, og kontrolthandlinger vi har funnet nødvendig i henhotd tiI internasjonal standard for attestasjonsoppdrag (ISAE) 3000 "Attestasjonsoppdrag som ikke er revisjon etler forenklet revisorkontroll av historisk finansiell informasjonÞ, mener vi at ledetsen har oppfytt sin ptikt tit å sørge for ordentlig og oversiktlig registrering og dokumentasjon av setskapets regnskapsopplysninger i samsvar med tov og god bokføringsskikk i Norge.

Drammen, 10. mai 2017 BDO AS Or#{ft!. statsautorisert revisor

Uavhengig revisors beretning 2016 Nortandia Care Group AS - Side 3 av 3

BDO Æ, et norsk aksjeselskap, er dettaker i BDO lnternationat Limited, et engetsk selskap med begrenset ansvar, og er en det av det intemasjonale nettverket BDO, som består av uavhengige selskaper i de enkette [and. Foretaksregisteret: NO 993 606 650 MVÄ. Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 C Appendix 1 D Appendix 1 D Appendix 1 D Appendix 1 D Appendix 1 D Appendix 1 D Appendix 1 D Appendix 1 D Appendix 1 D Appendix 1 D

BDO AS Kniveveien 31 BDO 3036 Drammen

Uavhengig revisors beretning

Ti[ generatforsamtingen i Hero Group AS

Uttatetse om revisjonen av årsregnskapet

Konktusjon

Vi har revidert Hero Group AS' årsregnskap som består av balanse per 31. desember 2016, resuttatregnskap for regnskapsåret avsluttet per denne datoen og noter ti[ årsregnskapet, herunder et sammendrag av viktige regnskapsprinsipper.

Etter vår mening er det medfølgende årsregnskapet avgitt i samsvar med lov og forskrifter og gir et rettvisende bilde av setskapets finansielle stitting per 31. desember 2016, og av dets resuttater for regnskapsåret avsluttet per denne datoen i samsvar med regnskapslovens regler og god regnskapsskikk i Norge.

Grunnlag for konktusjonen

Vi har gjennomført revisjonen i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder de internasjonate revisjonsstandardene lnternationaI Standards on Auditing (l5A- ene). Våre oppgaver og plikter i henhotd til disse standardene er beskrevet i Revisors oppgaver og ptikter ved revisjon av årsregnskapet. Vi er uavhengige av selskapet stik det kreves i lov og forskrift, og har overholdt våre øvrige etiske forpliktelser i samsvar med disse kravene. Etter vår oppfatning er innhentet revisjonsbevis tilstrekkelig og hensiktsmessig som grunnlag for vår konktusjon.

Annen informasjon

Ledelsen er ansvarlig for annen informasjon. Annen informasjon består av årsberetningen, men inkluderer ikke årsregnskapet og revisjonsberetningen.

Vår uttatetse om revisjonen av årsregnskapet dekker ikke annen informasjon, og vi attesterer ikke den andre informasjonen.

I forbindetse med revisjonen av årsregnskapet er det vår oppgave å lese annen informasjon med det formåt å vurdere hvorvidt det foretigger vesentlig inkonsistens meltom annen informasjon og årsregnskapet, kunnskap vi har opparbeidet oss under revisjonen, eller hvorvidt den titsynelatende inneholder vesenttig feitinformasjon.

Dersom vi konkluderer med at den andre informasjonen inneholder vesenttig feilinformasjon er vi påtagt å rapportere det. Vi har ingenting å rapportere i så henseende.

Styrets og daglig leders ansvar for årsregnskapet

Styret og dagtig teder (tedelsen) er ansvarlig for å utarbeide årsregnskapet i samsvar med lov og forskrifter, herunder for at det gir et rettvisende bitde i samsvar med regnskapslovens regter og god regnskapsskikk i Norge. Ledetsen er også ansvarlig for slik intern kontroll som den finner nødvendig for å kunne utarbeide et årsregnskap som ikke inneholder vesentlig feilinformasjon, verken som føtge av mistigheter etler feit.

Uavhengig revisors beretning 2016 Hero Group AS - Side 1 av 3 Appendix 1 D BDO

Ved utarbeidelsen av årsregnskapet må ledetsen ta standpunkt tiI setskapets evne til fortsatt drift og opplyse om forhold av betydning for fortsatt drift. Forutsetningen om fortsatt drift skal legges tiI grunn for årsregnskapet så lenge det ikke er sannsyntig at virksomheten vit bti awiklet.

Revisors oppgaver og ptikter ved revisjonen av årsregnskapet

Vårt måt med revisjonen er å oppnå betryggende sikkerhet for at årsregnskapet som helhet ikke inneholder vesentlig feilinformasjon, verken som følge av misligheter e[ter utitsiktede feit, og å avgi en revisjonsberetning som inneholder vår konklusjon. Betryggende sikkerhet er en høy grad av sikkerhet, men ingen garanti for at en revisjon utført i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder ISA-ene, atttid vit avdekke vesenttig feitinformasjon som eksisterer. Feilinformasjon kan oppstå som føtge av mistigheter etler utitsiktede fei[. Feitinformasjon blir vurdert som vesenttig dersom den enkeltvis e[[er samlet med rimetighet kan forventes å påvirke økonomiske beslutninger som brukerne foretar basert på årsregnskapet.

Som del av en revisjon i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder ISA-ene, utøver vi profesjonett skjønn og utviser profesjonetl skepsis gjennom hete revisjonen. I tittegg:

a identifiserer og anstår vi risikoen for vesenttig feitinformasjon i regnskapet, enten det skyldes misligheter etler utitsiktede feit. Vi utformer og gjennomfører revisjonshandtinger for å håndtere slike risikoer, og innhenter revisjonsbevis som er titstrekketig og hensiktsmessig som grunnlag for vår konklusjon. Risikoen for at vesentlig feitinformasjon som føtge av mistigheter ikke btir avdekket, er høyere enn for feilinformasjon som skytdes utilsiktede fei[, siden mistigheter kan innebære samarbeid, forfatskning, bevisste utetatelser, uriktige fremstittinger etter overstyring av intern kontrolt.

opparbeider vi oss en forståelse av den interne kontroll som er retevant for revisjonen, for å utforme revisjonshandtinger som er hensiktsmessige etter omstendighetene, men ikke for å gi uttrykk for en mening om effektiviteten av setskapets interne kontroIt.

a evaluerer vi om de anvendte regnskapsprinsippene er hensiktsmessige og om regnskapsestimatene og tithørende noteopptysninger utarbeidet av ledetsen er rimetige.

a konkluderer vi på hensiktsmessigheten av ledetsens bruk av fortsatt drift- forutsetningen ved avleggetsen av regnskapet, basert på innhentede revisjonsbevis, og hvorvidt det foretigger vesenttig usikkerhet knyttet tiI hendetser etler forhotd som kan skape tvil av betydning om setskapets evne til fortsatt drift. Dersom vi konktuderer med at det eksisterer vesentlig usikkerhet, kreves det at vi i revisjonsberetningen henleder oppmerksomheten på titteggsopptysningene i regnskapet, e[ter, dersom stike titteggsopptysninger ikke er titstrekketige, at vi modifiserer vår konktusjon om årsregnskapet og årsberetningen. Våre konklusjoner er basert på revisjonsbevis innhentet inntil datoen for revisjonsberetningen.

Uavhengig revisors beretning 2016 Hero Group AS - Side 2 av 3 Appendix 1 D BDO

Etterføtgende hendelser etter forhotd kan imidlertid medføre at selskapet ikke fortsetter driften.

evaluerer vi den samtede presentasjonen, strukturen og innhotdet, inkludert titteggsopptysningene, og hvorvidt årsregnskapet representerer de undertiggende transaksjonene og hendelsene på en måte som gir et rettvisende bitde.

Vi kommuniserer med styret btant annet om det plantagte omfanget av revisjonen og til hvilken tid revisjonsarbeidet skal utføres. Vi utvekster også informasjon om forhotd av betydning som vi har avdekket i løpet av revisjonen, herunder om eventuetle svakheter av betydning i den interne kontrotlen.

Uttatetse om øvrige lovmessige krav

Konklusjon om årsberetningen

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, mener vi at opplysningene i årsberetningen om årsregnskapet og forutsetningen om fortsatt drift er konsistente med årsregnskapet og i samsvar med lov og forskrifter.

Konktusjon om registrering og dokumentasjon Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, og kontrollhandtinger vi har funnet nødvendig i henhold til internasjonal standard for attestasjonsoppdrag (ISAE) 3000 -Attestasjonsoppdrag som ikke er revisjon etler forenktet revisorkontrotl av historisk finansietl informasjono, rr€rìêr vi at ledelsen har oppfytt sin ptikt tit å sørge for ordenttig og oversikttig registrering og dokumentasjon av setskapets regnskapsopptysninger i samsvar med lov og god bokføringsskikk i Norge.

Drammen, 1 5. mars 2017 BDO AS C*c/?f/,-t Ove G. Bøhn statsautorisert revisor

Uavhengig revisors beretning 2016 Hero Group AS - Side 3 av 3

BDO AS, et norsk aksjeselskap, er dettaker i BDo lnternational Limited, et engetsk setskap med begrenset ansvar, og er en det av det intemasjonate nettverket BDO, som består av uavhengige setskaper i de enkette tand. Foretaksregisteret: NO 993 ó06 ó50 MVA. Appendix 1 D

Hero Group AS

201,5

Organisasjonsnutnmer 9t2 507 262

-Ärsberetning -Ärsregnskap -Resultatregnskap -Balanse

- Kontant strømopp stil ling -Noteopplysninger -Revisjonsberetning Appendix 1 D

Hero Group AS

ÅnsnnnnrNlNc zots

Virksomhetens art og hvor den drives Hero Group er et holdingselskap, der konsernets virksomhet i hovedsak er drift av asylmoftak i Norge og Sverige. I tillegg omfatter virksomheten i konsernet tolketjenester, en kompetanieavdeling innãn flyktningsfaglige spørsmåI, drift av barnehager i tilknytting til asylmottak og investerinf i fast eiendom. Selskapet har sitt fonetningskontor i Oslo kommune.

Fortsatt drift Ä'rsregnskapet for 2015 for Hero Group AS er satt opp under forutsetning om fortsatt drift. Det bek¡eftes herved at forutsetningen om fortsatt drift er til stede.

Utvilding, resultat og stilling Arsregnskapet for 2015 for Hero Group AS viser et årsoverskudd for morselskapet på kr 20 190 858.

Etter styrets oppfatning gir årsregnskapet med tilhørende noter et reffvisende bilde av resultatet for 2015 og stillingen pr.31.12.2015. Det har ikke inntrådt forhotd etter regrskapsårets slutt som har betydning ved bedømmelsen av selskapet.

Arbeidsmiljø, diskriminering og likestilling Det er ingen ansatte i morselskapet. Konsernet hadde ved utgangen av året 1285 ansatte. Sykefraværet 0/o. har i 2015 vært på 7,06 Styret anser arbeidsmiljøet som bra og det iverksettes løpende tiltak på dette området. Det har ikke forekommet eller blitt rapport alvorlige arbeidsuhell eller ulykker i løpet av året. Konsernet har som mål å være en arbeidsplass hvor det råder full likestilling, og Èonsernets ansatte er jevnt fordel mellom kvinner og menn. Hero er opptatt av mangfold i arbeidslivet og ca.4TYn av de ansatte har flyktning- eller innvandrerbaþrunn.

Ytre miljø Konsernets virksomhet har ingen innvirkning på det ¡re miljø. Det er således ikke iverksatt eller planlagt spesielle tiltak på detre området.

Forskning og utvikling Konsernet har ingen forsknings- og utviklingsaktiviteter.

Konsernforhold Konsernet omfatter morselskapet Hero Group AS og de heleide datterselskapene Hero Norge AS, Hero Sverige AB, Oppdal Holding AS, GHT Eiendom AS, Hero Kompetanse AS, Hero Tolk-A.S og Snactuaria Eiendom AS, samt Rognan Trollskogen Barnehage AS, Oppdal Destinasjonsuwikling Ai og Adman 100 Språk AB, Sanctuaria Fastigheter AB som eies 100 %o av nevnte ãatterselskaper. I tillegg består konsernet av Torget ANS (100 Yo eiet av Oppdal Destinasjonsutvikling AS) og Carc3, Bruk AB og (100 o/o eiet av Sanctuaria Fastigheter AB).

Konsernets resultatregnskap for 2015 viser et overskudd på kr 25 546 744. Appendix 1 D

Fremtidig utvikling Fremtidig utvikling i konsernet avhenger for en stor del av ankomsten av asylsøkere til Norge og Sverige. Utsiktene for årene fremover er vanskelig å forutsi, men det forventes at ankomstene vil være noe lavere enn i 2015. Vi regner med en fortsatt oppgang i inntekter på Hero tolk og Hero kompetanse i2015. Fra 1.1.2016 er Hero Tolk og Hero Kompetanse fisjonert ut i egne aksjeselskaper. Det forventes at Hero Sverige vil øke omsetningen og få lønnsom drift i2016. Selskapet har i dag ca. 15 mottak i full drift hvor 12 av mottakene er opprettet i2.halvâr2015.

Finansiering og likviditet Konsernet er i en god likviditetsmessig og finansiell stilling. Egenkapitalandelen pr. 31.12.2015 er på 20,3Vo. Ved utgangen av regnskapsåret var konsernets rentebærende gjeld kr 121 916925. Den rentebærende gjelden har i det vesentlige flytende rente og konsernet er derfor eksponert mot endring i rentenivået.

Oslo, 1. mars 2016 I styret for Hero Group AS ûe) Even Carlsen Kristian Adolfsen Styrets leder Styremedlem /, b."il* Tuft Tor Brekke Daglig leder Appendix 1 D

Resultatregnskap - mor/konsern Hero AS Morselskap 2015 2014 Note 2015 2014

Driftsin ntekter og driftskostnader

Driftsinntekter 0 0 Salgsinntekt 936929 188 456 828 827 0 0 Annen driffsinntekt 19 660 403 13 336 886 0 Sum driftsinntekter 10, ll 956 589 591 470165713

Driftskostnader 0 0 Varekostnad 180 665 057 t7 87s 728 0 0 Lønnskostnad 13 370 944 640 213 480 4At 0 0 Avskrivning av driffsmidler og im ) 27 040770 20 320 035 0 0 Nedskrivning av driftsmidler og in 2 0 343 343 463 36s 215 036 Annen drifrskostnad l3 330 199 882 209 2t8 755 -ãr¡-ffi --t¡3i036-' Sum driftskostnader 908 850 349 46tZ3A262 -463 365 -2ts 036 Driftsresultat 47 739242 8927 451

F'inansinntekter og finanskostnader 33 5t5 089 82969241 Inntekt pâ investering i datterselsk 0 0 s25 099 5 124 Annen renteinntekt 860 586 797 43',1 5 890 322 s 759 328 Annen rentekostnad 7 69s 789 613224s 30 000 0 Annen finanskostnad 858 458 27 28 119 866 mîßt Resultat av finansposter -7 ó93 661 -s 334 835

27 656 501 77 000 001 Ordinært resultat før skattekostnac 40 045 581 3 592616 7 465 643 -7mmõr0 Skattekostnad på ordinært resultat 7 t4 498 837 -3 838 424 Jo'T eo-',ffi', Ordinært resultat 25546744 7 43t040

20 190 858 77 000 001 Årsresultat 25546744 7 43t040

Overføringer 20 190 858 ri777 000 00r Avsatt til annen egenkapital 2s s46744 7 431 040 ã-ttõ'ffi' o-o-õTo- 2ss46744 7 431040

AS Slde I Appendix 1 D

Balanse - mor/konsern Hero Group AS Morselskap Konsern 2015 2014 Note 201s 20t4

Eiendeler

Anleggsmidler Immalerielle eiendeler 0 0 Forskning og utvikling 2 734 998 0 0 0 Utsatt skattefordel 7 0 3 838 424 0 0 Goodwill ) 107 a20 936 99 152 008 0 U Sum immaterielle eiendeler to7 755934 ffi

Varige driftsmidler 0 0 Tomter, bygninger o.a. fast eien 2, 8 64229 268 60 187 652 0 0 Driftsløsøre, inventar o.a. utst¡¡r 2, I 46 194 70t 2995r 432 0 I Sum varige driftsm idler llt 423 969 9U 139 {tE4

Finansielle anleggsmidler 194 500 027 186 569 009 Investeringer i datterselskap 3,8 0 0 22723 781 2 000 000 Lån til foretak i samme konsem 0 0 0 0 Investeringer i aksjer og andeler 4 t62375 I l0 000 3 025 000 0 -I¡Ei6-t{oe-' Andre langsiktige fordringer I 18 389 493 18 015 642 ø24s-'-s-o-E Sum finansielle anleggsmidler 18 551 868 t8t25 642 -ïEfæoõI' ffi Sum anleggsmidler 236 731 77t 2tl 2ss ls8

Fordringer 0 0 Kundefordringer 49 307 8s6 4l 610 007 0 0 Andre kortsiktige fordringer 34 342784 I 084 838 33 781 887 94 st 330 Andre kortsiktige konsernfordri 0 0 33 781 887 94 451 330 Sum fordringer E3 650 640 49 69484s

Bankinnskudd, kontanter o.l. 1 449 439 3M 1t9 Bankinnskudd, kontanter o.l. 9 n 2 635 804 43 664223

3523t 326 94 795 449 Sum omløpsmidler 196286 444 93 3s9 068

2SS 134 2E3364 458 Sum eiendeler 433 0 l8 215 304614226

S¡de I Appendix 1 D

Balanse - mor/konsern Hero Group AS Morselskap Konsern 20ts 20t4 Note 2015 20t4

Egenkapital og gield Innskutt egenkapital 57 500 000 s? 500 000 Aksjekapital 5 57 500 000 57 500 000 57 500 000 57 500 000 Sum innskutt egenkapital 57 s00 000 s7 s00 000

Opptjent egenkapital 97 827 906 71 00A029 Annen egenkapital 30315753 5 848 891 97 827 906 77 004 029 Sum opptjent egenkapÍtal 30 315 753 5 848 891

155 327 906 134 500 029 Sum egenkapitol 6 ffi 63 348 891

Gjeld Avsetning for forpliktelser 0 0 Pensj onsforpliktelser l3 2 745 t82 966 0 0 Utsatt skatt 7 2943 665 0 0 0 Sum avsetning for forpliktelsr 2946 4r0 182966

Annen langsiktig gield 0 45 619 819 Cjeld til konsemselskap 0 0 77 500 000 90 000 000 Cjeld til kredittinstitusjoner 8 107 140405 r19 868 972 t4'176 520 t2 ss3 200 Øvrig langsiktig gield 14 776 520 12sfi204 92276520 r48 173 019 Sum annen langsiktig gield 121916925 132422r72

Kortsiktig gield 107 082 32 500 Leverandørgield 79 79s 966 15 061 498 7 465 643 0 Betalbar skatt 7 7 716747 0 0 0 Skyldig offentlige avgifter 3l 233 891 t7 089 256 302983 658 910 Annen kortsiktig g,eld l5 t0t s92 s23 76 s09 443 7 4757l,4 691 410 Sum kortsiktig gield ffi Tof6-6-0-iE7 100 lsz 228 ffi Sum gield

255 480 134 283 364 458 Sum egenkapital og gield 433 0r8 zrs 304 614226

Oslo,01.03.2016 Styret i Hero Group AS ( il Styrets leder Styremedlem

ln

Daglig leder

GroupAS Side 2 Appendix 1 D

Hero Group AS

Kontsntstrømoppstilling

20ts 2014 Kontantstrømmer fra operasjonelle aktiviteter +/- Resultat før skattekostnad 40 045 581 3 5926t6 - Periodens betalte skatt +/- Taplgevinst ved salg av anleggsmidler -33 t03 + Ordinære avskrivninger 27 040770 20320 03s + Nedskrivning anleggsmidler 343 343 +/- Endring kundefordringer -r23 668 895 .41 610 007 +/- Endring leverandørgjeld 64 734 468 15 0ór 498 +/- Endring i forskjell mollom kostnadsført pensjon og inn-/utbetal Effekt av valutakursendringer 396 060 +/- Endring i andre tidsavgrensningsposter r27 628335 85 696827 = Netto kontantstrom fra operasjonelle ¡ktiviteter t35747 ts6 83 800 372

Konta ntstrømmer fra investeringsaktiviteter + Innbetalinger ved salg av varige driftsmidter 89 los - Utbetalinger ved kjøp av varige driftsmidler -55 985 582 -209 954 470 + Innbetalinger ved salg av aksjer og andeler - Utbetalinger ved kjøp av aksjer og andeler -ll0 000 - Endring langsiktige fordringer -373 8sl -18 015 642 +/- Endring investeringer i aksjer og andoler - Netto kontantslrøm fr¡ investeringsaktiviteter -56270328 -228 080 1I2

Kont¡ntstrømmer fra fi nansieringsaktiviteter + Irurbetalinger ved opptak av ny langsiktig gield t32 422 172 + Innbetalinger ved opptak av ny kortsiktig gjeld - Utbetatinger ved nedbetaling av langsiktig gietd -10 505 247 - Ulbealinger ved nedbetaling av kortsiktig gield + Innbetalinger av egenkapital 57 500 000 - Utbetalinger av utbytte -l 978 209 : Netto kont¡ntstrøm fr¡ fi nansleringsaktiviteter -r0 505 247 187 943 963

= Netto ondring i trontanter og kontantekvivalenter 68 971 581 43 664223 + Bcholdning sv kontanter og kontantekvivalenter l.l. 43 664223 0 = Eeholdning av kont¡nter og kontantekvivalenter 31.12. 112 635 804 43 664223 Appendix 1 D

HERO GROUP AS Noter til regnskapet 2015

1. Regnskapsprinsipper

Arsregnskapet er satt opp i samsvar med regnskapslovens bestemmelser, Det er utarbeidet etter norske regnskapsstandarder og anbefalinger til god regnskapsskikk.

Driftsin ntekter og d riftskostnader Inntektsføring skjer etter oppd€ningsprinsippet som normalt vil være leveringstidspunktet for vartr og tjenester. Kostnader medtas etter sammenslillingsprinsippeq dvs at kostnader mcdtas i samme periode som tilhørende inntektcr inntektsføres.

Skatt Skattekostnaden i rcsuhatregnskapet omfatter både periodens betalbare skatt og endring i utsatt skatt. Utsatt skatt er beregnet med 25o/apr.31.12.2015 og27lopr.3l.l2,20l4 pågrunnlagavdemidlertidige fonkjellersomeksisterermetlomregnskapsmessige og skattcmcssigc vcrdicr, samt ligningsmcssig undcrskudd til fremføring ved utgangen av regnskapsåret. SkateøÈende og skattereduserende midlertidige forskjeller som reverserer eller kan reversere i samme periode er utlign€t og netloført. Utsatt skatt på merverdier i forbindelse med oppkiøp av datterselskap blir ikke utlignet.

Klassifisering og vurdering av balanseposter Anleggsmidler omfatter eiendeler bestemt til varig eie og bruk. Anleggsmidler er vurdert til anskaffelseskost. Varige driftsmidler balanseføres og avskrives over drifrsmidlets økonomiske levetid. Varige driñsmidler nedskrives til gienvinnbart beløp ved verdifall som forventcs ikke à være forbigående. Gjenvinnbart beløp er det høyeste av netto salgsverdi og verdi i bruk. Verdi i bruk er nåverdi av fremtidige kontantstrømmer knyttet til eiendelen. Nedskrivninger rev€rscres når grunnlaget for nedskrivning ikke lenger er til stede,

Omløpsmidler og kortsihig gjeld omfatter normalt poster som forfaller til betaling inncn ett ár etter balansedagen, samt postcr som knytter seg til varekretsløpet. Omløpsmidler vurderes til laveste verdi av anskaffelseskost og antatt virkelig verdi,

Fordringer Kundefordringer og andre fordringer oppføres til pålydende etter fradrag for avsetning til forventet tap. Avsebring lil tap giøres pâ. grunnlag av en individuell vurdering for dc enkelte fordringcne.

Aksjer i datterselsknp Investering i datterselskap er vurdert etter kostmetoden i selskapsregnskapet,

Valuta Pengeposter i utenlôndsk valuta vurderes etter kursen på balansedagen. Ikke - pengeposter som måles til historisk verdi uttrykt i utenlandsk valuta omregnos til tíl valutakuts på bansaksjonstidspunktet. Ikke - pengeposter som måles til virkelig verdi uttrykt i utenlandsk valut4 omregnes til valutakurs pâ måletidspunktet. Transaksjoner i utenlandsk valuta omregnes til kursen pâ transaksjonstidspunktet Valutakurs endringer resultatføres løpende i regnskapsperioden

Kontantstrømoppstill in g Kontantstrømoppstillingen er utarbeidet etter den indirekte metode. Konlanter og kontantekvivalenter omfatter kontanter, bankinnskudd og andrc kortsiktige, likvide plasseringer. Appendix 1 D

HERO GROUP AS Noter til regnskapet 2015

l. Regnskapsprinsipper (forts,)

Konsolideringsprinsipper Regnskapet omfatter morselskapet Hero Croup AS og følgende datterselskaper:

Ervervet Eisrandel Hero Norge AS 21.02.2014 100 % I-Icro Svcrigc AIì 07.05.2014 l00o/o Oppdal Holding AS t2.r2.2014 100% GHTEiendomAS 01. l0.20lJ 100 % Hcro Tolk AS 0t. i0.20 r 5 100 % Hero KompetanseAS 0l.10.2015 100 % SanctuariaEiendom AS 0l,10.20t5 t00%

Aksjer Í datterselskap er konsolídert etter oppkjøpsmetoden. Selskaper som er kjøpt eller solgt i løpet av regnskapsáret inkluderes i konsemregnskapet fra det tidspunkt konholl oppnås og inntil kontroll opphører. Fordringer og gjeld mellom konsernselsk&pene er el¡minert ved konsolidering. Det samme gielder transaksjoner av intern karakter.

Datterselskapene Hero Norge AS og Oppdal Holding AS har i tillegg følgonde datterselskaper som cr konsolidert i konsemregnskapet: Ervervet Eierandel Oppdal DestinasjonsutviklingAS 12.12.2014 l00o/o Rognan Trollskogen Bamehage AS 21,02.2014 l0}o/o Adman 100 Språk AB 01.08.2015 lùOo/o

Oppdal Holding AS har i tillegg følgende datterdatterselskaper som er konsolidert i konsernregnskapet:

Erve¡r'ef Eier¡ndel Torget ANS t2.12.20t4 1000/o

Fusjon Ðet er gjennomført følgende frrsjongr i konsemet med virkning fra 0l,0t.20151

Overtrkende setskap Overdragende selskap Organisasjonsnummer Hero Croup AS Hero Holding AS 982 44ó 058

Fusjoner cr regnskapsført som kontinuitct ved vidcreføring av balanseførtc verdier i overdragende selskap i samsv* med regnskapslovcn $ 5.6.

2. Varlgo driftsmidler, Immaterielle eiendeler

Konsern Goodwill Forrkning Bygninger Driftløsøre, Sum og ufvikling inventar o.l. Anskaffelseskost 0 1.01. 108 401 20ó 62377 5',19 39 l?5 685 209954 469 Tilgang l9 522448 734998 6 814 800 28 913 336 55 985 582 Avgang .50t 000 -501 000 Anskaffelseskost 3 1. I 2. Al*. avskrivnlnger -209027t8 -4963 ll0 At393320 47259 148 Balanseført verdi 31.12. ro7 {tzo 93ó 734998 642;29268 46 t9470l zlE 179 903

Årets avskivninger 1 I 653 520 2773 184 t26t4 066 27 040',170

Avskrivningssats l0 o/o 2-10% l0 -25o/o Avskrivningsplan Lineær Lineæ¡ Lineær Økonomisk levctid l0 l0-50 tu 4-10 ûr Endring i avskivningsplan Nei Nei Neí

Goodwill i forbindelse med erverv av datterselskap anses å ha verdi ut over 5 år, .-Virksomhetsns-inntjening'erogsâ vurdert'som-tilfredsstillendciet-langsiktigperspektiv:'

2 Appendix 1 D

HERO GROUP AS Noter til regnskapet 2015

3. Invcsteringer i datterselskaper

Morselskap

Hero Group AS har følgende datterse¡skaper pr 31.12,2015:

Forretnings- Eier/stemme- Egenkapital Ärets resul¡t Egenkrpital kontor andel pr. 01 01. pr .31.12 Hero Norge,4.S Stavanger 100% 6533 lt5 4402t 487 I 532 39s Oppdal Holding A,S Oslo l0Oo/o 1 899 670 -22183 3758782 Hero SverigeAB Stockholm l00o/o t 033937 -l 98ó 4t3 t 057 607 GHT Eicndom AS Oslo 100% 746 404 776 4ø4 Sanetuaria Eicndom AS Stavanger 100 % 3 30 003 Hcro Kompetanso AS Oslo t00 % 3 30 003 Ilero Tolk AS Stavanger 100% -) 30 003

Aksjer i dattcrsclskaper cr balanseført etter kostmetoden.

Konsern Selskaper hvor konsemets eierandel er over 50olo er konsolidert.

4. lnvesteringer i aksjer og andelcr i andre selskaper

Langsiktige investeringer i aksjer og andeler i andre selskaper er balanseført til anskaffelseskost.

5. Aksjekapital

Aksjekapitalen bestâr av 57 500 000 ordinære aksjer À kr l.

Morselskap Aksjekapitalen i l-lero Group AS eies av følgende aksjonæro

Antsll Eierandel I{ospitality Invsst AS 33 084 270 57,540/o Eidissen Consult AS 9 361 6ts 16,280/o Grafo AS 9 361 615 16,28% Tuft Invest AS 5 692 500 9,900/o @

Sclskapet har en aksjeklæse og alle aksjer har lik stemmerett.

Alajer direlirte og indirokte eiet av styremedlemmer og daglig leder jfr RL $ ? - 26

Eierandel Even Carlsen styrets leder 16,280/o K¡istian Adolßen styrcmedlom 24,020/o Ronald Tuft styremeldem 9,9Ayo

6. Egenkapltal

Morselskap Annen Aksjekapital egenkapital SUM Egenkapital pr 01.01, 57 500 000 77 000029 134 500 029 Fusjon 637 018 637 018 A¡ets resultat 20 r90 858 20 190 858 Egenkapital 31.12, s7 s00 000 97 827 905 155 327 905

Konsern Annen Aksjekapitrl egenkapifal SUM Egenkapital pr 01,01. 57 500 000 5 848 89r 63 348 89r Ä¡els_r,esulfal_ 25 546744 25 s46 744 Ncttopcnsjon ført mot EK t8022t ßa22t Valutajustering -526870 -526870 Konigeringer i underkonsern Sverige -733 233 -733 233 Egenkapttal 31.12. s7 500 000 30 3rs 753 87 8ls 7s3

3 Appendix 1 D

IIERO GROUP AS Noter til regnskapet 2015

7. Skatter

Spesifikasjon av midlertidlge forskjeller og beregning ¡v utsatt skatt:

Morsolskrp 31.12.2015 st.t2,20t4

Akkumulcrt frcmførbart underskudd 0 -59'.t2 Inngår ikke i beregningen av utsatt skatt 0 5 972 Grunnlag for beregning ¡v utsatt skatt 0 t

Ufsatt skatt (25 Yo I 27 o/o) 0 0

Konsern 31.12.2015 3t.t2.2AM

Driffsmidler 9 501't73 6n9l6t Utestående fordringer -100 000 291 554 Gevinst - og tapskonto 2 385 820 2982277 Andre avsetninger -2745 -t82966 Skattemessig fremførbaû underskudd -10 185 -23 586413 Grunnlag for beregning av ut¡¡tt sk¡tt tt774663 -142t6381

o/o) Utsatt skatt (25 Yo I 27 2943665 -3838 424

Ärets skattepliktige lnntekt for morselskapet: 2015 z0'j Ordinært rcsultat før skatt 27 6s6søt ?7 000 001 Permanente fors\ieller -82969 24t Endring midlertidigc fors(ieller 0 0 Mottatt konsernbidrag 5969240 Anvendelse av fremførbart underskudd -5 97t Skattepliktigs inntekt 27 650 530 0

Beto¡bsr skatt pû årets resultat 7 465643 0

Ä.rets skattekostn¡d:

Morselskap Konsern

20t5 20t4 2015 20t4

7 46s643 0 Betalbar skatt pá årcts resultat 7 7t6747 00 Endring utsatt skatt 6782089 -3 838 424 7 465643 0 Årets skflttekostnad ffi

4 Appendix 1 D

IIERO GROUP AS Noter til regnskapet 2015

8. Fordringor, gjeld, panfstillelser og glrantier m.v.

Morselskap Konsern

2015 20t4 2015 2014 3 025 000 Fordringer med forfall sencre enn ett år 18 389 493 l8 0¡5 642

0 0 Gjeld som forfaller til betaling senere enn fem år 14372400 14 g35 400

Gjeld som er sikret ved pant o.l. 77 500 000 90 000 000 Gjcld til krcditinstitusjoner 105 6497t2 I I 972 7? s00 000 90 000 000

Balanseførf verdi sv eiendeler som er stillet som sikkerhet for denne giotd

193 480 976 185 669 958 Aksjer i datterselskap Drillsløsøre 0 40 796 Bygg og tomter 40 j82 531 4l 397 715 r93 480 185 669 976 958 süz sJl 41 43E 511

9. Bankinnskudd

Morsolskap Konsern 201s 20t4 20t5 20t4 0 0 Bundne bankinnskudd utgiør: t1 8429t0 8927 688

10. Salgsinntekter

Konsern

Fordeling av konsemets salgsínntekter:

Geogralisk fordeling 2015 20t4 Norge 880 324 st7 464043 463 Sverige 76265 074 6122250 956 589 sgl 410t65713 Pr virksomhetsområde Mottaksdrift 842047 6t2 393 801 034 Kompctanseenhet/lolk 99 6t1 966 61 832 393 Bamchager t4 924 0t3 t4289264 Camping 24.3A23 9s6 s89 591 470t65714

Note 11. Offentlig tilskudd 2015 2014 Offentlig tilskudd Hero Norge AS 6 304 553 l0 054 439 Offentlig tilskudd Rognan Trollskogen Barnchage AS 6 976 77s 6078732

Offentlíge tilskudd er definert i forhold til antall bam og alder på barnet og er klassifisert som salgsinntekt i resultatregnskape¡

12. Fln¡nsiell risiko

Renlor

5 Appendix 1 D

ITERO GROUP AS Noter til regnskapet 2015

13. Lønnskostnader, antell rnsatte, godtgiørelse, lån til ¡ns¡tte m.m.

Morselskap Konsern

20t5 2014 2015 20t4 Lønnskostnador m.m: Lønninger 3t42s9 790 t'16628 012 Arbcidsgiveravgift 35 409 090 22342707 Pensjonskostnader 9 355 090 5 423 646 Innleìd arbeidskraft 6 03r 808 5 276 218 Andre ytelser 5 888 862 3 809 8r8 0 0 370944640 2r3480 401

0 0 Gjonnomsnittlig antall årsverk 678 492

Godtgiørelse til revisor utgiør eks. mv¡. : t?t 750 Revisj on inkl regnskapsteknisk bistand 535 63s 406 556 65 000 Andre tjenester I 213 598 t 263 965 t7t150 65 000 1749233 t67052t

Det er ikJce utbctalt lønn eller annen godtgiørelse til sgret i 2015.

Det er utbetalt lønn og annen godtgiørelsc med kr 1.675.000 i 2015 til daglig leder for ha¡s ansetttelscsforhold i selskapets datterselskap Flero Norge AS.

Morselskapet er ikke pliktig til å ha tjenestepensjonsordning etter lov om obligatorisk tjenesiepensjon. Pcnsjonsordning i dattcrsclskap tilftedsstiller lovens kav.

Konsemet har innskuddsbasert pensjonsordn¡ng f'or de ansatte hvor premien blir kostnadslørt løpende.

Konscmet har noen ansatte i gammel AFP ordning (bchandles som ytelscsbasert ordning).

Rcntekostnad av pensjonsfoçliktelsen 2015 20t4 Arbeidsgiveravgift 240s 16935 Ärets resultatføring av eslimatavvik 2 388 Sum 339 -137 068 2744 -117 745

Netto pensjonsgield inngående balanse 2015 2014 Resultatført pensjonskostnad t82966 762 545 Aktuarielt tap/gevinst 2745 -lt7 745 Pensjonsutbetalinger Arbeidsgiveravgift -160 356 404 484 Sum -226t0 -57 350 2745 t82966 Økonomíske forutsetninger Diskonteringsrente 2015 20t4 Forv€ntet lønnstegulering 2,70% 3 n/o Forventet uttakstilbøyelighet 2,50o/o 3% Forventet pensjonsøkning 100,00 % l0Ao/o Forventet G-reguiering 2,250/o 3 o/o Forventet årlig avgang 2,25 o/o 3 o/¡ 2,000/o 2o/o

6 Appendix 1 D

HERO GROUP AS Noter til regnskapet 2015

t4. Transrksjoner med nærstående parter

Transaksjoner mellom næntående parter slq¡er kun påfonetningsmessig grunnlag. Selskapet har konsemfordring og konserngjeld som ftemkommer på egr¡e linjer i balanse og rcsullatrcgnskapet, Det er ikke foretatt rcnteberegning i 2015.

15. Annen kortsiktig qield

I posten annen kortsiktig gield for 201 5 inngår alle fordringer (inkl. kundefordringer) og gleld mot UDI, som følger: 2015 2AM Reñrsjonskrav 83 346971 38 2ó3 555 Kundefordringer 115971A46 Forskudd 23t 998720 73 853 020 Nettogield ffi

16, Huslelekontrakter - 2015

Konsemet leier stønc bygningar og m¡ndre leiligheter med oppsigelsestid pâ l-6 mnd. Varigheten va¡ierer avhengig av kontraklene med UDf.

Mottak Sted Varighet Oppsigelse Arn¡ Bergen GK 2 3mnd Ama Bergen diverse teiligheter l-3mnd giensidig. Alt¡ Alt¡ diverse leiligheter 3 mnd giensidiq Alta EM Alta hovedbygg 5 år 3 mnd Førde Førde Hornesvn.36/38/40 6mnd giensidig Førde Førde diverse leíligheter 3 mnd giensidig Førde EM Førde hovedbygg 3 mnd giensidig Bodø Bodø diverse leiligheter 3-6 mnd Sandnes Sandnes diverse hus 3 mnd giensidig Sandnes EM Sandnes hovedbygg 3 mnd q.iensidig S¡uda Sauda diverse leiligheter 3 +3 år 3 mnd giensidig Oddn Odda diverse leiligheter 3 mnd Stavanger Stavanger diverse leillgheter 3 mnd Aiensidig Etnedal Etnedal 2 lfovedbygg 3 mnd Gronq Grong diverse leiligheter 2-3 mnd giensidlg Haugalandet Haugesund diverse leiligheter 2'4 mnd leiotaker Heiane Stord brakkerigger 3mnd gicnsidig Heimly Lenvik Hovedbygg 4 år 3mnd Heímly Lenvik diversc leiligheter 2-3 mnd giensidig Andøy Andøya 2 Hovedbyqg 3 år 3 mnd qien¡ldig Sulitjelma Fauske Hovedbygg 3 mnd giensidig Suli{ielma Fauske leiligheter 3 mnd giensidig Bolkesiø Bolkcsiø Hovedbygg 3 mnd giensidig Hå Hå Hovedbygg 3 mnd Hå EM Hå Hovedbygg 3 mnd Brenn{iell Storfiord Hovedbygg 6 mnd Jarlen Hemne hybelhus 3 mnd giensidig Jarlen Hemne diverse leiligheter 3-6 mnd giensidtg Jarlen EM llemne hovedbygg 3 mnd Aiensidis Merflker EM Meråker hovedbygg 3 mnd glensidig Skien Skien divcrse leiligheter 3 mnd giensidig Yanq Vang Grindaheim 4mnd leier/6md utl Vang Vang diverse feíligheter I mnd giensidig Hvalstad Asker Skaugumilson 6mnd qiensidig Rognan Rognan Fredheim 6mnd giensftlig Sauda Sauda diverse leiligheter 3 mnd Stango Stange hovedbygg 6 år 3 mnd qiensidig Årdal Ärdal divcrse toilighoter 3 mnd eiensidig Strand Str¿nd diverse leiligheter 3 mnd giensidig Steinkjer Steinkjer diversc leiligheûer 3 mnd giensidig *Steinkjer-EM-.-.--Stehkie¿*-hovedbyeg------3,mnd.--

7 Appendix 1 D

HERO GROTIP AS Noter til regnskapet 2015

16. Husleiekontrakter - 2015 (forts.)

Sund Sund Klokkarheimen 3mnd leier/6md utl Sund Sund diverse leiligþeter 3 mnd giensidig K¡istiansund Kristiansund diverse leiligheter 3 mnd giensidig Namsos Namsos diverse leiligheter 3 mnd giensidig Trondheim Trondheim diverse leilighcter 3 mnd giensidig Alesund Ä,lesund divcrse leíligheter l-6 mnd giensidig Tromsø Tromsø diverse leiligheter 3 mnd giensidig Tromsø EM Tromsø hovedbygg 3 mnd gjensidig HoveEM Arendal hovedbygg 3 mnd giensidig Lødlngen EM Lødingen Ilovedbygg 3 mnd giensidis Lødingen Lødingen Hovedbygg 3 mnd qiensídig Lødingen Lødingen diverse leiligheter 3 nnd giensidig Kongsberg Kongsberg diverse leiligheter 3 mnd giensidig Kompetanse Bergen Kontor - undervirning 4ât Kompetanse Oslo Kontor - undervisning 6 mnd gieneidig Kompetanse Stavanger Kontor - undervisning 4Âr l2 mnd giensidig Veswågøy Vestvågøy 2 Hovedbygg 3 mnd VcstvÂgeiy Vestvågøy diverse leilighoter 3 mnd giensidig Vestvågøy EM Vestvûgøy hovedbygg 4år 2 mnd Akershagan Stange Kontorer 6 mnd Administas.ion Bergen Kontorer 3 mnd gicnsidig Administrasjon Stavanger lâr

De uthevedo li4iene er hoved leiested. De andre er tilleggskonhakter. Appendix 1 D

Ttf : 32 88 21 50 Kniveveien 31 Fax: 32 88 21 90 3036 Drammen BDO www,bdo.no

Til generalforsamlingen i Hero Group AS

Revisors beretning

Uttalelse om årsregnskapet

Vi har revidert årsregnskapet for Hero Group AS som består av setskapsregnskap, som viser et overskudd på kr 20 190 858, og konsernregnskap, som viser et overskudd på kr 25 546 744. Selskapsregnskapet og konsernregnskapet består av batanse per 31. desember 2015, resuttatregnskap og kontantstrømoppstitting for regnskapsåret avsluttet per denne datoen, og en beskrivetse av vesenttige anvendte regnskapsprinsipper og andre noteopplysninger.

Styret og daglig leders ansvar for årsregnskapet

Styret og dagtig teder er ansvarlig for å utarbeide årsregnskapet og for at det gir et rettvisende bitde i samsvar med regnskapslovens regler og god regnskapsskikk i Norge, og for stik intern kontrott som styret og dagtig leder finner nødvendig for å mutiggjøre utarbeidelsen av et årsregnskap som ikke inneholder vesenttig feilinformasjon, verken som føtge av mistigheter etler feit.

Revìsors oppgaver og plikter

Vår oppgave er å gi uttrykk for en mening om dette årsregnskapet på bakgrunn av vår revisjon. Vi har gjennomført revisjonen i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder lnternationaI Standards on Auditing. Revisjonsstandardene krever at vi etterlever etiske krav og plantegger og gjennomfører revisjonen for å oppnå betryggende sikkerhet for at årsregnskapet ikke innehotder vesentlig feilinformasjon.

En revisjon innebærer utførelse av handtinger for å innhente revisjonsbevis for betøpene og opplysningene i årsregnskapet. De valgte handlingene avhenger av revisors skjønn, herunder vurderingen av risikoene for at årsregnskapet inneholder vesenttig feilinformasjon, enten det skytdes mistigheter elter fei[. Ved en stik risikovurdering tar revisor hensyn tiI den interne kontrolten som er relevant for setskapets utarbeidetse av et årsregnskap som gir et rettvisende bitde. Formåtet er å utforme revisjonshandtinger som er hensiktsmessige etter omstendighetene, men ikke for å gi uttrykk for en mening om effektiviteten av setskapets interne kontroll. En revisjon omfatter også en vurdering av om de anvendte regnskapsprinsippene er hensiktsmessige og om regnskapsestimatene utarbeidet av ledetsen er rimetige, samt en vurdering av den samlede presentasjonen av årsregnskapet.

Etter vår oppfatning er innhentet revisjonsbevis tilstrekketig og hensiktsmessig som grunntag for vår konktusjon.

BDO AS, et norsk aksjesetskap, er dettaker i BDO lnternationat Limited, et engelsk setskap med begrenset ânsvâr, og er en det av det internasjonate BDO-nettverket, som består av uavhengige seÌskaper i de enkette tand. Foretaksregisteret: NO 993 606 650 MVA. Appendix 1 D BDO

Konklusjon

Etter vår mening er årsregnskapet avgitt i samsvar med lov og forskrifter og gir et rettvisende bitde av selskapet og konsernet Hero Group AS'finansielle stilting per 31. desember 2015 og av deres resuttater og kontantstrømmer for regnskapsåret som ble avsluttet per denne datoen i samsvar med regnskapstovens regter og god regnskapsskikk i Norge.

Uttalelse om øvrige forhold

Konklu sj on om ö rsbe r e tni ngen

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, mener vi at opptysningene i årsberetningen om årsregnskapet og forutsetningen om fortsatt drift er konsistente med årsregnskapet og er i samsvar med lov og forskrifter.

Konklusjon om regìstrering og dokumentasjon

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, og kontrotthandtinger vi har funnet nødvendig i henhold tiI internasjonaI standard for attestasjonsoppdrag ISAE 3000 "Attestasjonsoppdrag som ikke er revisjon etler forenktet revisorkontro[[ av historisk finansietl informasjon" mener vi at ledelsen har oppfytt sin ptikt til å sørge for ordenttig og oversiktlig registrering og dokumentasjon av setskapets regnskapsopplysninger i samsvar med lov og god bokføringsskikk i Norge.

Drammen, 1. mars2016

BDO AS

ö,r/Af /,,t Ove G. Bóhn Statsautorisert revisor

BDO AS, et norsk aksjeselskap, er dettaker i BDO lnternationat Limited, et engelsk setskap med begrenset ansvar, og er en del av det internasjonale BDO-nettverket, som består av uavhengìge setskaper i de enkelte [and. Foretaksregisteret: NO 993 ó0ó 650 MVA. Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E

BDO A5 Kniveveien 31 BDO 3036 Drammen

Uavhengig revisors beretning

Ti[ generatforsamtingen i Aberia Healthcare AS

Uttaletse om revisjonen av årsregnskapet

Konktusjon

Vi har revidert Aberia Healthcare A5' årsregnskap som består av balanse per 31. desember 2016, resuttatregnskap og kontantstrømoppstilling for regnskapsåret avstuttet per denne datoen og noter ti[ årsregnskapet, herunder et sammendrag av viktige regnskapsprinsipper.

Etter vår mening er det medføtgende årsregnskapet avgitt i samsvar med lov og forskrifter og gir et rettvisende bitde av setskapets finansietle stilting per 31. desember 2016, og av dets resultater og kontantstrømmer for regnskapsåret avsluttet per denne datoen i samsvar med regnskapslovens regler og god regnskapsskikk i Norge.

Grunntag for konklusjonen

Vi har gjennomført revisjonen i samsvar med tov, forskrift og god revisjonsskikk i Norge, herunder de internasjonale revisjonsstandardene lnternational Standards on Auditing (l5A- ene). Våre oppgaver og ptikter i henhotd tit disse standardene er beskrevet i Revisors oppgaver og plikter ved revisjon av årsregnskapet. Vi er uavhengige av setskapet stik det kreves i lov og forskrift, og har overholdt våre øvrige etiske forptiktetser i samsvar med disse kravene. Etter vår oppfatning er innhentet revisjonsbevis titstrekketig og hensiktsmessig som grunnlag for vår konktusjon.

Annen informasjon

Ledelsen er ansvartig for annen informasjon. Annen informasjon består av årsberetningen, men inktuderer ikke årsregnskapet og revisjonsberetningen.

Vår uttalelse om revisjonen av årsregnskapet dekker ikke annen informasjon, og vi attesterer ikke den andre informasjonen.

I forbindelse med revisjonen av årsregnskapet er det vår oppgave å tese annen informasjon med det formål å vurdere hvorvidt det foretigger vesentlig inkonsistens metlom annen informasjon og årsregnskapet, kunnskap vi har opparbeidet oss under revisjonen, etler hvorvidt den titsynelatende inneholder vesentlig feitinformasjon.

Dersom vi konkluderer med at den andre informasjonen inneholder vesentlig feilinformasjon er vi påtagt å rapportere det. Vi har ingenting å rapportere i så henseende

Styrets og dagtig leders ansvar for årsregnskapet

Styret og dagtig teder (ledetsen) er ansvartig for å utarbeide årsregnskapet i samsvar med lov og forskrifter, herunder for at det gir et rettvisende bitde i samsvar med regnskapslovens regler og god regnskapsskikk i Norge. Ledelsen er også ansvarlig for stik intern kontroll som den finner nødvendig for å kunne utarbeide et årsregnskap som ikke innehotder vesentlig feitinformasjon, verken som føtge av mistigheter e[ter feit.

Uavhengig revisors beretning 2016 Aberia Healthcare AS - Side 1 av 3 Appendix 1 E BDO

Ved utarbeidelsen av årsregnskapet må ledetsen ta standpunkt til selskapets evne til fortsatt drift og opptyse om forhold av betydning for fortsatt drift. Forutsetningen om fortsatt drift skal legges tiI grunn for årsregnskapet så lenge det ikke er sannsyntig at virksomheten vit bti awiklet.

Revisors oppgaver og ptikter ved revisjonen av årsregnskapet Vårt måt med revisjonen er å oppnå betryggende sikkerhet for at årsregnskapet som hethet ikke innehotder vesenttig feitinformasjon, verken som føtge av misligheter e[ter utitsiktede fei[, og å avgi en revisjonsberetning som innehotder vår konklusjon. Betryggende sikkerhet er en høy grad av sikkerhet, men ingen garanti for at en revisjon ulført i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder ISA-ene, atttid vit avdekke vesenttig feilinformasjon som eksisterer. Feitinformasjon kan oppstå som følge av mistigheter etter utitsiktede feit. Feitinformasjon blir vurdert som vesentlig dersom den enkettvis etler samtet med rimelighet kan forventes å påvirke økonomiske bestutninger som brukerne foretar basert på årsregnskapet.

Som del av en revisjon i samsvar med lov, forskrift og god revisjonsskikk i Norge, herunder ISA-ene, utøver vi profesjonett skjønn og utviser profesjonell skepsis gjennom hele revisjonen. I tittegg:

a identifiserer og ans[år vi risikoen for vesentlig feilinformasjon i regnskapet, enten det skytdes mistigheter elter utilsiktede feit. Vi utformer og gjennomfører revisjonshandlinger for å håndtere stike risikoer, og innhenter revisjonsbevis som er titstrekkelig og hensiktsmessig som grunnlag for vår konktusjon. Risikoen for at vesenttig feitinformasjon som følge av mistigheter ikke btir avdekket, er høyere enn for feilinformasjon som skytdes utilsiktede fei[, siden mistigheter kan innebære samarbeid, forfatskning, bevisste utelatetser, uriktige fremstittinger e[ter overstyring av intern kontroll.

opparbeider vi oss en forståelse av den interne kontrotl som er relevant for revisjonen, for å utforme revisjonshandtinger som er hensiktsmessige etter omstendighetene, men ikke for å gi uttrykk for en mening om effektiviteten av setskapets interne kontrol[.

a evaluerer vi om de anvendte regnskapsprinsippene er hensiktsmessige og om regnskapsestimatene og tithørende noteopptysninger utarbeidet av tedetsen er rimetige.

a konktuderer vi på hensiktsmessigheten av ledetsens bruk av fortsatt drift- forutsetningen ved avleggelsen av regnskapet, basert på innhentede revisjonsbevis, og hvorvidt det foretigger vesentlig usikkerhet knyttet tit hendetser e[ter forhold som kan skape tvit av betydning om selskapets evne til fortsatt drift. Dersom vi konktuderer med at det eksisterer vesenttig usikkerhet, kreves det at vi i revisjonsberetningen henteder oppmerksomheten på titteggsopptysningene i regnskapet, elter, dersom slike titteggsopptysninger ikke er titstrekkelige, at vi modifiserer vår konklusjon om årsregnskapet og årsberetningen. Våre konklusjoner er basert på revisjonsbevis innhentet inntiI datoen for revisjonsberetningen.

Uavhengig revisors beretning 2016 Aberia Heatthcare AS - Side 2 av 3 Appendix 1 E BDO

Etterfølgende hendetser elter forhotd kan imidlertid medføre at selskapet ikke fortsetter driften.

a evatuerer vi den samlede presentasjonen, strukturen og innhotdet, inktudert titteggsopptysningene, og hvorvidt årsregnskapet representerer de undertiggende transaksjonene og hendelsene på en måte som gir et rettvisende bitde.

Vi kommuniserer med styret blant annet om det plantagte omfanget av revisjonen og til hvitken tid revisjonsarbeidet skal utføres. Vi utveksler også informasjon om forhold av betydning som vi har avdekket i løpet av revisjonen, herunder om eventuelle svakheter av betydning i den interne kontrolten.

Uttatetse om øvrige lovmessige krav

Konklusjon om årsberetningen

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, mener vi at opplysningene i årsberetningen om årsregnskapet, forutsetningen om fortsatt drift og forstaget tit anvendelse av overskuddet er konsistente med årsregnskapet og i samsvar med lov og forskrifter.

Konktusjon om registrering og dokumentasjon

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, og kontrotthandtinger vi har funnet nødvendig i henhold tiI internasjonal standard for attestasjonsoppdrag (ISAE) 3000 "Attestasjonsoppdrag som ikke er revisjon eller forenktet revisorkontrot[ av historisk finansietl informasjon>, mener vi at [edelsen har oppfytt sin ptikt tit å sørge for ordentlig og oversiktlig registrering og dokumentasjon av selskapets regnskapsopptysninger i samsvar med lov og god bokføringsskikk i Norge.

Drammen, 29. mars2017 BDO AS ,ãn^f-lt. statsautorisert revisor

Uavhengig revisors beretning 2016 Aberia Healthcare AS - Side 3 av 3

BDO Æ, et norsk aksjeselskap, er deltaker i BDO lnternational Limited, et engelsk setskap med begrenset ansvar, og er en det av det internasjonate nettverket BDO, som består av uavhengige setskaper i de enkette tand. Foretaksregisteret: NO 993 606 650 ¡¡VÄ. Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 E Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F

BDO AS Kniveveien 31 BDO 3036 Drammen

Uavhengig revisors beretning

Ti[ generalforsamtingen i Care Properties AS

Uttatelse om revisjonen av årsregnskapet

Konktusjon

Vi har revidert Care Properties AS'årsregnskap som består av batanse per 31. desember 2016, resultatregnskap for regnskapsåret avsluttet per denne datoen og noter tiI årsregnskapet, herunder et sammendrag av viktige regnskapsprinsipper.

Etter vår mening er det medfølgende årsregnskapet avgitt i samsvar med lov og forskrifter og gir et rettvisende bitde av selskapets finansiette stitting per 31. desember 2016, og av dets resultater for regnskapsåret avstuttet per denne datoen i samsvar med regnskapstovens regler og god regnskapsskikk i Norge.

Grunnlag for konktusjonen

Vi har gjennomført revisjonen i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder de internasjonate revisjonsstandardene lnternationaI Standards on Auditing (lSA- ene). Våre oppgaver og plikter i henhotd tit disse standardene er beskrevet i Revisors oppgaver og ptikter ved revisjon av årsregnskapet. Vi er uavhengige av setskapet slik det kreves i lov og forskrift, og har overholdt våre øvrige etiske forpliktelser i samsvar med disse kravene. Etter vår oppfatning er innhentet revisjonsbevis tilstrekketig og hensiktsmessig som grunnlag for vår konklusjon.

Annen informasjon

Ledetsen er ansvartig for annen informasjon. Annen informasjon består av årsberetningen, men inkluderer ikke årsregnskapet og revisjonsberetningen.

Vår uttatetse om revisjonen av årsregnskapet dekker ikke annen informasjon, og vi attesterer ikke den andre informasjonen.

I forbindelse med revisjonen av årsregnskapet er det vår oppgave å lese annen informasjon med det formål å vurdere hvorvidt det foretigger vesentlig inkonsistens mellom annen informasjon og årsregnskapet, kunnskap vi har opparbeidet oss under revisjonen, elter hvorvidt den titsynelatende innehotder vesenttig feitinformasjon.

Dersom vi konktuderer med at den andre informasjonen inneholder vesentlig feilinformasjon er vi påtagt å rapportere det. Vi har ingenting å rapportere i så henseende.

Styrets ansvar for årsregnskapet

Styret (tedetsen) er ansvarlig for å utarbeide årsregnskapet i samsvar med lov og forskrifter, herunder for at det gir et rettvisende bitde i samsvar med regnskapslovens regler og god regnskapsskikk i Norge. Ledetsen er også ansvartig for stik intern kontrotl som den finner nødvendig for å kunne utarbeide et årsregnskap som ikke inneholder vesenttig feitinformasjon, verken som føtge av mistigheter elter feil.

Uavhengig revisors beretning 2016 Care Properties AS - Side 1 av 3 Appendix 1 F BDO

Ved utarbeidelsen av årsregnskapet må ledetsen ta standpunkt tiI setskapets evne til fortsatt drift og opptyse om forhold av betydning for fortsatt drift. Forutsetningen om fortsatt drift skat legges tiI grunn for årsregnskapet så lenge det ikke er sannsynlig at virksomheten vit bti awiklet.

Revisors oppgaver og plikter ved revisjonen av årsregnskapet

Vårt måt med revisjonen er å oppnå betryggende sikkerhet for at årsregnskapet som helhet ikke inneholder vesenttig feilinformasjon, verken som følge av mistigheter elter utitsiktede feil, og å avgi en revisjonsberetning som innehotder vår konklusjon. Betryggende sikkerhet er en høy grad av sikkerhet, men ingen garanti for at en revisjon ulført i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder ISA-ene, atttid vit avdekke vesenttig feilinformasjon som eksisterer. Feitinformasjon kan oppstå som føtge av misligheter etler utitsiktede feit. Feitinformasjon btir vurdert som vesenttig dersom den enkettvis elter samtet med rimelighet kan forventes å påvirke økonomiske bestutninger som brukerne foretar basert på årsregnskapet.

Som del av en revisjon i samsvar med [ov, forskrift og god revisjonsskikk i Norge, herunder ISA-ene, utøver vi profesjonelt skjønn og utviser profesjonell skepsis gjennom hele revisjonen. I tittegg:

identifiserer og anstår vi risikoen for vesenttig feitinformasjon i regnskapet, enten det skyldes mistigheter eller utitsiktede feit. Vi utformer og gjennomfører revisjonshandlinger for å håndtere slike risikoer, og innhenter revisjonsbevis som er titstrekketig og hensiktsmessig som grunntag for vår konklusjon. Risikoen for at vesenttig feitinformasjon som følge av mistigheter ikke btir avdekket, er høyere enn for feilinformasjon som skyldes utitsiktede fei[, siden misligheter kan innebære samarbeid, forfatskning, bevisste utetatetser, uriktige fremstittinger e[[er overstyring av intern kontrott.

opparbeider vi oss en forståetse av den interne kontroll som er retevant for revisjonen, for å utforme revisjonshandtinger som er hensiktsmessige etter omstendighetene, men ikke for å gi uttrykk for en mening om effektiviteten av selskapets interne kontrott.

evatuerer vi om de anvendte regnskapsprinsippene er hensiktsmessige og om regnskapsestimatene og tithørende noteopplysninger utarbeidet av ledelsen er rimelige.

a konktuderer vi på hensiktsmessigheten av ledetsens bruk av fortsatt drift- forutsetningen ved avleggelsen av regnskapet, basert på innhentede revisjonsbevis, og hvorvidt det foretigger vesentlig usikkerhet knyttet tiI hendelser etter forhold som kan skape tviI av betydning om setskapets evne tit fortsatt drift. Dersom vi konkluderer med at det eksisterer vesenttig usikkerhet, kreves det at vi i revisjonsberetningen henleder oppmerksomheten på titteggsopptysningene i regnskapet, e[[er, dersom slike titteggsopptysninger ikke er titstrekketige, at vi modifiserer vår konklusjon om årsregnskapet og årsberetningen. Våre konklusjoner er basert på revisjonsbevis innhentet inntiI datoen for revisjonsberetningen.

Uavhengig revisors beretning 2016 Care Properties AS - Side 2 av 3 Appendix 1 F BDO

Etterfølgende hendelser etler forhold kan imidlertid medføre at selskapet ikke fortsetter driften.

evaluerer vi den samlede presentasjonen, strukturen og innholdet, inktudert titteggsopptysningene, og hvorvidt årsregnskapet representerer de undertiggende transaksjonene og hendelsene på en måte som gir et rettvisende bitde.

Vi kommuniserer med styret btant annet om det ptanlagte omfanget av revisjonen og tit hvitken tid revisjonsarbeidet skal utføres. Vi utvekster også informasjon om forhold av betydning som vi har avdekket i tøpet av revisjonen, herunder om eventuetle svakheter av betydning i den interne kontrolten.

Uttatelse om øvrige lovmessige krav

Konktusjon om årsberetningen

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, mener vi at opplysningene i årsberetningen om årsregnskapet og forutsetningen om fortsatt drift er konsistente med årsregnskapet og i samsvar med lov og forskrifter.

Konktusjon om registrering og dokumentasjon Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, og kontrolthandlinger vi har funnet nødvendig i henhotd tiI internasjonal standard for attestasjonsoppdrag (ISAE) 3000 "Attestasjonsoppdrag som ikke er revisjon e[ter forenklet revisorkontrot[ av historisk finansietl informasjon>, mener vi at ledelsen har oppfytt sin ptikt til å sørge for ordentlig og oversikttig registrering og dokumentasjon av selskapets regnskapsopplysninger i samsvar med lov og god bokføringsskikk i Norge.

Drammen, 11. mai2017 BDO AS

") statsautorisert revisor

Uavhengig revisors beretning 2016 Care Properties AS - Side 3 av 3

BDO 45, et norsk aksjesetskap, er dettaker i BDO lntemationat Limited, et engetsk selskap med begrenset ansvar, og er en del av det internasjonate nettverket BDO, som består av uavhengige setskaper i de enkette [and. Foretaksregisteret: NO 993 60ó ó50 MVA. Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Appendix 1 F Norlandia Health & Care Group AS, prospectus of 13 June 2017

Registration Document

Annex 2 Articles of Association

A. Company

B. Kidsa Drift AS

C. Norlandia Care Group AS

D. Hero Group AS

E. Aberia Healthcare AS

F. Care Properties AS

50 of 50

Vedtekter for Norlandia Health & Care Group AS

§ 1

Selskapets foretaksnavn er Norlandia Health & Care Group AS. Selskapet er et aksjeselskap.

§ 2

Selskapets forretningskontor er i Oslo kommune.

§ 3

Selskapets virksomhet er å investere i selskaper innenfor Helse og omsorgssektoren. Videre skal selskapet kunne eie – direkte og/eller indirekte- aksjer, obligasjoner og andre finansielle instrumenter og alt som er beslektet eller står i forbindelse med dette.

§ 4

Selskapets aksjekapital er NOK 30 000 fordelt på 30 000 aksjer, hver pålydende NOK 1.

§ 5

Selskapets styre skal ha fra 1 til 5 medlemmer etter generalforsamlingens nærmere beslutning, hvorav én er formann og velges for 1 år ad gangen.

Selskapets firma tegnes av styremedlemmene hver for seg.

§ 6

Ordinær generalforsamling holdes hvert år innen utgangen av juni måned. Ekstraordinær generalforsamling avholdes når styret finner det nødvendig eller det forlanges av revisor eller 1/3 av aksjonærene. Styret innkaller til generalforsamling med minst 14 dagers skriftlig varsel til aksjonærene.

Det påligger den ordinære generalforsamling å behandle følgende saker:

1. Styrets årsberetning.

2. Fastsetting av resultatregnskap og balanse, herunder treffes beslutning om overskuddets anvendelse eller underskuddets dekning, samt utdeling av utbytte.

3. Fastsettelse av styrets og revisors godtgjørelse.

4. Valg av styre.

5. Valg av styrets formann

6. Eventuelt andre saker som er nevnt i innkallingen.

§ 7

For øvrig henvises til den til enhver tid gjeldende aksjelovgivning.

Dato: 24.11.2016

Side 1 av 1

VEDTEKTER

FOR

KIDSA DRIFT AS

12.12.2016

§ 1 Selskapets navn er Kidsa Drift AS.

§ 2

Selskapets forretningskontor er i Oslo kommune,

§ 3

Eie og drive barnehager, samt hva hermed står i forbindelse.

§ 4

Selskapets aksjekapital er NOK 67 000 000, fordelt på 67 000 000 aksjer, hver pålydende NOK 1.

§ 5

Selskapets styre består av mellom to og seks medlemmer, etter generalforsamlingens nærmere bestemmelse. Alle styremedlemmene velges av generalforsamlingen.

§ 6

Selskapets firma tegnes av to styremedlemmer i fellesskap, eller Kristian A. Adolfsen og Roger Adolfsen hver for seg. Styret kan meddele prokura.

§ 7

På den ordinære generalforsamling skal følgende saker behandles og avgjøres: 1. Styrets årsberetning. 2. Fastsetting av resultatregnskap og balanse, herunder treffes beslutning om overskuddets anvendelse eller underskuddets dekning. 3. Valg av styre. 4. Valg av styrets leder. 5. Valg av revisor. 6. Andre saker som etter lov eller vedtekter hører inn under generalforsamlingen.

§ 8

Selskapets aksjer skal ikke være registrert i Verdipapirregisteret.

§ 9

Overdragelse av aksjer i selskapet krever ikke samtykke fra styret og er ikke underlagt noen andre omsetningsbegrensninger.

______

VEDTEKTER FOR

HERO GROUP AS

(Sist endret 5. mai 2014)

§1 Selskapets navn er Hero Group AS.

§2 Selskapets forretningskontor er i Oslo kommune

§3 Selskapets formål skal være investering i aksjer og hva som hermed står i forbindelse,

herunder delta i andre selskaper med liknende virksomhet.

§4 Selskapets aksjekapital er NOK 10.000 fordelt på 10.000.000 aksjer pålydende

NOK 1.

§5 Selskapets styre skal bestå av en til fem styremedlemmer etter generalforsamlingens

Nærmere beslutning. Styret kan meddele prokura.

§6 Selskapets firma tegnes av styrets leder alene.

§7 Selskapets aksjer er fritt omsettelige. Aksjelovens regler om forkjøpsrett og krav til

Styresamtykke gjelder ikke.

§8 Den årlige ordinære generalforsamlingen skal behandles og avgjøre følgende saker:

(1) Godkjennelse av årsregnskapet og årsberetning, herunder utdeling av

utbytte.

(2) Valg av styre.

(3) Fastsettelse av godtgjørelse til styrets medlemmer.

(4) Andre saker som etter lov eller vedtekter hører under generalforsamlingen.

VEDTEKTER FOR ABERIA HEALTHCARE AS Pr 13. desember 2016

§ 1

Selskapets formål er å drive virksomhet innenfor helse- og omsorgsektoren, samt hva hermed står i forbindelse, herunder å delta i andre selskaper med lignende virksomhet.

§ 2

Selskapets navn er Aberia Healthcare AS.

§ 3

Selskapets forretningskontor er i Oslo.

§ 4

Selskapets aksjekapital er kr. 112.000.000,- fordelt på 112.000.000 aksjer à kr. 1,-, fullt innbetalt og lydene på navn.

§ 5

Selskapets styre skal ha fra 1 til 6 medlemmer etter generalforsamlingens nærmere beslutning, hvorav én er formann og velges for 1 år ad gangen.

Selskapets firma tegnes av styreformannen og ett styremedlem i fellesskap. Styret kan meddele prokura.

§ 6

Ordinær generalforsamling holdes hvert år innen utgangen av juni måned. Ekstraordinær generalforsamling avholdes når styret finner det nødvendig eller det forlanges av revisor eller 1/3 av aksjonærene. Styret innkaller til generalforsamling med minst 14 dagers skriftlig varsel til aksjonærene.

Det påligger den ordinære generalforsamling å behandle følgende saker:

1. Styrets årsberetning.

2. Fastsetting av resultatregnskap og balanse, herunder treffes beslutning om overskuddets anvendelse eller underskuddets dekning, samt utdeling av utbytte.

3. Valg av styre.

Side 1 av 2

4. Valg av styrets formann.

5. Fastsettelse av styrets og revisors godtgjørelse.

6. Eventuelt andre saker som er nevnt i innkallingen.

§ 7

Overdragelse av aksjer i selskapet krever ikke samtykke fra styret og er ikke underlagt noen andre omsetningsbegrensninger.

______

Side 2 av 2