Annual Report 2015 2

2015 Annual Report 2015 2 Contents Key Figures (consolidated accounts) 3 Directors’ Report 2015 4 Ganger Rolf ASA - Consolidated accounts 12 Ganger Rolf ASA - NGAAP accounts 48 Consolidated Income Statement 12 Income Statement (NGAAP) 48 Consolidated Statement of Comprehensive Income 13 Balance Sheet (NGAAP) 49 Consolidated Statement of Financial Position 14 Cash Flow Statement (NGAAP) 50 Statement of Changes in Equity 16 Accounting Policies 51 Consolidated Cash Flow Statement 17 Notes 52 Notes to the Consolidated Financial Statements 18 Note 1 – Personnel expenses, fees to the auditors 52 Note 1 – Reporting entity 18 Note 2 – Pension costs 53 Note 2 – Basis of preparation 18 Note 3 – Property, plant and equipment 56 Note 3 – Significant accounting policies 19 Note 4 – Subsidiaries 56 Note 4 – Determination of fair values 22 Note 5 – Shares in associated companies and Note 5 – Financial risk management 23 other investments 56 Note 6 – Operating segments 24 Note 6 – Bonds 58 Note 7 – Operating expenses 25 Note 7 – Receivables 58 Note 8 – Personnel expenses, fees to the auditors 26 Note 8 – Share capital and shareholders 59 Note 9 – Finance income and expenses 26 Note 9 – Liabilities 60 Note 10 – Income tax expense 27 Note 10 – Mortgages and guarantees 60 Note 11 – Property, plant and equipment 28 Note 11 – Tax 61 Note 12 – Investments in associates 29 Note 12 – Related party information 62 Note 13 – Other investments 33 Note 13 – Financial instruments 64 Note 14 – Deferred tax assets and liabilities 35 Note 14 – Cash and cash equivalents 66 Note 15 – Trade and other receivables 36 Note 15 – Dividend 66 Note 16 – Cash and cash equivalents 36 Note 16 – Other financial expenses 66 Note 17 – Earnings per share 36 Note 17 – Merger between Ganger Rolf ASA and Borgå AS 66 Note 18 – Interest bearing loans and borrowings 37 Note 19 – Employee Benefits 37 Note 20 – Deferred income 40 Note 21 – Trade and other payables 40 Note 22 – Financial Instruments 41 Note 23 – Related party information 44 Statements 67 Note 24 – Group of companies 46 Auditor’s Report 68 Note 25 – Subsequent events 46 Corporate Governance 70 Note 26 – Sale of ownership in UK wind farm portfolio 47 Fleet List as of 31 December 2015 73 Note 27 – Acquisition of associate 47 Addresses 74 2 Ganger Rolf ASA - Annual Report 2015 3 Key Figures (consolidated accounts) (Amounts in NOK million) 2015 2014 2013 Income statement Operating income 0.3 0.3 0.5 Operating result -66.0 -63.6 -47.8 Share of profit in associates -835.1 138.9 501.8 Net finance expense -47.1 -65.7 -95.8 Profit before tax -948.2 9.6 358.2 Tax expense 54.1 -4.4 -8.2 Net profit from continuing operations -894.1 5.2 350.0 Net result from discontinued operations 0.0 0.0 -102.5 Profit for the year -894.1 5.2 247.5 Profit for the year (shareholders of the parent) -894.1 5.2 247.5 Statement of financial position Non-current assets 9 034.9 7 456.4 6 480.8 Current assets 173.6 1 275.5 287.1 Equity 6 348.0 5 410.5 4 990.9 Non-current liabilities 1 446.6 1 873.8 893.2 Current liabilities 1 413.9 1 447.5 883.8 Total assets / total equity and liabilities 9 208.5 8 731.8 6 767.9 Liquidity Cash and cash equivalents per 31 December 1) 48.6 943.7 171.4 Net change in cash and cash equivalents 1) -895.1 772.3 -107.2 Net cash from operating activities 1) -116.8 -115.1 -146.4 Current ratio 2) 12 % 88 % 32 % Capital Equity-to-assets ratio 3) 69 % 62 % 74 % Share capital 42.3 42.3 42.3 Total number of shares outstanding 33 673 935 33 673 935 33 853 935 Key figures per share (Amounts in NOK) Market price 31 December 46.50 71.50 127.50 Dividend per share 0.00 3.00 8.40 1) In accordance with cash flow statement 2) Current assets as per cent of current liabilities 3) Equity as per cent of total assets Ganger Rolf ASA - Annual Report 2015 3 4 Directors’ Report 2015 Ganger Rolf ASA (the “Company”) is a company domiciled in In 2015 the Group of companies experienced increased rev- Norway. The consolidated financial statements of the Company enues denominated in Norwegian kroner within all business as at and for the year that ended 31 December 2015 comprise segments, except for Offshore wind, compared to the previous the Company, its subsidiary and associates (for accounting pur- year, partly due to the weakening of Norwegian kroner versus poses only in the following referred to as the “Group of compa- other currencies during the year. nies”). The Group of companies’ results The Company’s head office is in Oslo. The activities of the Group (2014 in brackets) of companies take place in several countries and the main of- All main investments are accounted for as associated compa- fices are in Norway, Sweden, Denmark, UK, Malta, Singapore and nies, in accordance with the equity method. The Company is a Bermuda. holding company. Revenues in 2015 were NOK 0.3 million (NOK 0.3 million) and EBIT were NOK -66 million (NOK -64 million). 2015 proved to be an eventful year for the business segments in which the Group of companies is involved. The year was the For 2015 associated companies were included with an aggre- second in a row that experienced a significant decline in the oil gate net result of NOK -835 million (NOK 139 million), of which prices. Growing expectations of a continued conservative invest- FOE with a result of NOK -737 million (NOK 208 million), FOR ment approach within the oil and gas industry were fulfilled, with NOK 82 million (NOK -36 million), FOO with NOK -75 million although perhaps to a larger extent than most would foresee. (NOK -5 million) and FOCL with NOK 36 million (NOK -60 million). The possibility of a prolonged downturn has gradually started The Company’s share of Bonheur ASA was included with a result to be taken into account by the affected industries. While on the of NOK -149 million (NOK 8 million). whole, lower energy prices should benefit the world economy, it will certainly not feel that way for some of the countries and Net financial items for the year were NOK -47 million (NOK -66 industries that have become used to rely on historically high million) and net result was NOK -894 million (NOK 5 million). prices. Results from the main activities In the electricity market, average annual electricity prices in Scan- The financial results below are presented on 100% basis and net dinavia and the UK in 2015 were down 29% and 4%, respectively, of intra-group eliminations. from the previous year. For the former, prices were the lowest in 15 years. Consequently, the viability of some electricity produc- Offshore drilling ers’ business fundamentals will be tested. Owners who have be- Offshore drilling comprises Fred. Olsen Energy ASA with subsidiar- come accustomed to regular dividend income streams may need ies (“FOE”), which is owned 26% within the Group of companies. to reconsider their expenditure priorities going forward. For the latter, i.e. the UK, amendments to the renewable energy subsidy The offshore fleet of FOE consists of three deep-water units and scheme are being implemented which may challenge the attrac- five mid-water semi-submersible drilling rigs in addition to one tiveness of constructing new renewable energy capacity. tender support vessel and one accommodation unit. The activities also include shipbuilding, ship repair, construction of off- In the cruise market, passenger yields have continued to in- shore wind foundations and engineering at the Harland & Wolff crease and coupled with the downturn in oil prices and corre- shipyard in Belfast, Northern Ireland. sponding reduced bunker expenses the prospects look better than previous years. The negative market development has continued through 2015, with the number of new drilling contracts reaching an- Within the offshore wind segment activity has been lower than other low point in 2015. The main contributing factors to the previous years; however, contract backlog is expected to in- current market climate are oversupply of oil, resulting in low crease the coming years following scheduled commencement oil prices as well as activity reduction and a strong focus on of several offshore wind farm constructions. cost among the Exploration and Production (E&P) companies. 4 Ganger Rolf ASA - Annual Report 2015 5 Directors’ Report 2015 In addition, there is an oversupply of floating drilling units Shipping/Offshore wind combined with significant numbers of new builds entering At the end of the year Shipping/Offshore wind comprised the the market. On top of this, too many deep-sea floating units holding company Fred. Olsen Ocean Ltd. with subsidiaries have been built beyond what the market needed even before (“FOO”), which is owned 50% within the Group of companies. the crisis. Indirectly through its subsidiary Fred. Olsen Windcarrier AS, FOO Operating revenues amounted to NOK 8 976 million (NOK 7 475 provides services in European waters for transportation, installa- million). Operating result before depreciation (EBITDA) was NOK tion and service of wind turbines utilizing the modern purpose 5 131 million (NOK 3 284 million) and operating result (EBIT) was built jack-up vessels Brave Tern and Bold Tern. NOK -2 627 million (NOK 933 million), including impairment loss- es of NOK 4 904 million (NOK 270 million). Fred. Olsen Windcarrier A/S (Denmark) is indirectly owned 87.75 % by FOO and operates a fleet of high-speed crew transfer vessels Net result after tax was NOK -2 820 million (NOK 796 million).

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