Financial risks

The Group's activities expose it to a variety of financial risks: market risk (currency risk, fair value interest rate risk and cash), credit risk and liquidity risk. The Group's overall risk management policy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial results. Group does not use derivative instruments to hedge risk exposures.

Risk management is handled by Group management under policies approved by the Board. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group's operating units. The board establishes written policies for overall risk management, as well as specific areas such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

The following describes the Group's estimated risk exposure and related risk management. Market risk

(a) Foreign exchange risk

Exchange rate fluctuations affect the Group’s financial results through translation of the profit and loss accounts and balance sheets of foreign subsidiaries to Norwegian krone (translation exposure). (b) Interest rate risk relating to cash flows and fair values

As the Group has no significant interest-bearing assets, the Group's revenues and cash flows from operating activities are substantially independent of changes in market interest rates. The Group's interest rate risk arises from long-term borrowings as a whole is at fixed interest rates. Borrowings issued at fixed rates expose the Group to interest rate risk in respect of fair value. In both 2014 and 2013, the Group's borrowings were set at a fixed interest rate and in Swedish krona (SEK).

Credit risk

Credit risk is managed on group level, with the exception of credit risk relating to outstanding accounts receivable. Each group company is responsible for monitoring and analysing the credit for each new customer before the standard terms of payment and delivery offered. Due to the end customer structure, AINMT deems this risk as fairly low.

Liquidity risk

Liquidity risk is the risk that the Group may not have sufficient liquid financial resources to meet its obligations when they fall due, or would have to incur excessive costs to do so. The Group assesses, monitors and manages its liquidity needs on an ongoing basis. With respect to the bond raised in the first quarter of 2014, AINMT deems this risk as fairly low.

The table below analyses the Group's financial liabilities classified according to the time on the closing date until the contractual maturity date. The amounts shown in the table are the contractual undiscounted cash flows.

NOK thousands Less than

1 year

Between 1 and 2

years 2 and 5 year Between More than 5 years

Borrowings, including interest payments 139 069 139 069 1778 138 -

Trade payables 28 280 - - -

Other current liabilities 171 450 - - -

Corporate identity nr 913 192 354 Notes to the Financial Reports

Similar to other companies in the industry, the Group assesses capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total gross borrowings (including current borrowings and non-current borrowings in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as equity in the consolidated balance sheet plus net debt.

NOK thousands 2014 2013

Total gross borrowings (note 21) 1 433 655 405 407

Less cash and cash equivalents (note 18) -1 027 542 -35 115

Net debt 406 113 370 292

Total equity 947 416 343 357

Total capital 1 353 529 713 349

Debt/total capital ratio 30% 52%

Fair value calculation

Financial instruments carried at fair value are analyzed based on the classification in the fair value hierarchy. The different levels are defined as follows:

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) - Other observable for the asset or liability other than quoted prices included in Level 1, either

directly (i.e. as prices) or indirectly (i.e. derived from prices) (level 2).

- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3)

The following table shows the Group's financial liabilities measured at amortized cost in the balance sheet as at 31 December 2014 and which should be disclosed if the fair value.

NOK thousands Book value Level 1 Level 2 Level 3 Total

High-Yield bond

ISIN NO 001 0705601 1 426 350 1 390 186 - - 1 390 186

Financial instruments, level 1

Fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices from an exchange, broker, industry group, pricing service or regulatory agency are readily and regularly available and those prices represent actual and regularly occurring market transactions on an arm's length away. The quoted market price used for financial assets is the current bid price. These instruments are included in level 1.

The High-Yield bond of SEK 1,5 billion is amortization-free and runs with 9,75% interest. Maturity date is 19 March 2019.

Financial instruments, level 2

Fair value of financial instruments not traded in an active market (such as OTC derivatives) is determined using valuation techniques. Herewith market data, where it is available, is used as far as possible and company-specific information is used as little as possible. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The group has no financial instruments classified as level 2.

Corporate identity nr 913 192 354 Notes to the Financial Reports

Sensitivity analysis

The company has a debt of SEK 1,5 billion (the High Yield bond). The impact of currency fluctuations towards NOK has immediate effect in the profit and loss statement as well as the equity.

As per 31 December 2014, the SEK 1 500 million debt expressed in NOK amounted to 1 426 million. Should the NOK be strengthened with 10% to SEK this would imply that the liability is decreased to NOK 1 296 million and give the corresponding positive NOK 130 million effect to the equity. A 10% weaker NOK to SEK would instead increase the liability to NOK 1 569 million and consequently have the equal negative NOK -143 million impact on the profit and loss statement and equity.

With regards to the translation of foreign operations functional currencies to the presentation currency, the effect on equity as per 31 December 2014 from a 10% stronger NOK to SEK and DKK would give a lower equity with NOK 7 million while a 10% weaker NOK to SEK and DKK would imply a stronger equity with NOK 8 million.