OPERATING EXPENSES

Amounts in NOK thousand 2 012 2011

Payroll 231 500 219 282

Pensions 30 291 23 003

Social security costs 60 045 59 954

Total payroll, fees and other staff costs 321 836 302 239

Administrative expenses 91 672 109 986

Rent and other operating expenses on leased property 27 155 25 710

Other operating expenses 27 937 33 027

Intergroup services 51 940 57 909

Ordinary depreciation 10 182 12 279

Total other operating expenses 208 887 238 912

Total operating expenses 530 723 541 151

Employee share ownership program

Employees were in 2012 offered to participate in the global employee share ownership program of Société Générale SA. SG Finans contributed to the purchase, limited to 1.000 Euro for each employee. Expenditure for this contribution has been classified as payroll, fees and other staff costs."

Fees paid to Ernst & Young AS and cooperating companies are made up as follows (excl VAT):

Amounts in NOK thousand 2012

Statutory audit 799

Other attestation services

Tax advice 43

Other non-audit services

Total 842

7. PENSIONS

SG Finans is obligated to follow the Act on Mandatory company pensions. The company’s pension scheme follows the requirement as included in the Act.

SG Finans AS have defined contribution plans for employees in Norway, Sweden and Denmark. The contributions comprise between 4,5 % and 11 % of salaries. As at December 31st, 2012, 358 members were covered by the plans.

Employees in Norway can also apply for an early retirement pension (AFP) at 62 years of age. The agreement also covers invalidity pension, spouse’s pension and children’s pension. There are also pension obligations to individual employees over and above the ordinary collective agreement. This applies to employees with a lower retirement age and employees with salary in excess of 12 G (G

= National Insurance basic amount), which are unfunded. The economic assumptions used in the collective scheme are specified below. Contributions to the AFP plan are included in the column ”unfunded”.

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Economic assumptions:

Percentage 2012 2011

Discount rate: 2,00 % 2,80 %

Expected return on assets 0,00 % 0,00 %

Growth in salary 4,00 % 4,00 %

Inflation 2,50 % 2,50 %

G - regulation 3,75 % 3,75 %

Growth in current pensions 3,75 % 3,75 %

Withdrawal tendency AFP 0 % 0 %

Pensions costs :

Amounts in NOK thousand Funded Unfunded Total 2012

Funded Unfunded Total 2011

Present value of pensions earned during the year 0 1 487 1 487 0 990 990

Interest cost of accrued pension liabilities 0 750 750 0 811 811

Expected return on plan assets 0 0 0 0 0 0

Plan change, curtailments 0 2 744 2 744 0 133 133

Difference between actual and estimated values 0 742 742 0 1 318 1 318

Net pension costs 0 5 723 5 723 0 3 252 3 252

The former multi-employer plan called AFP was terminated in February 2010 and the last chance of an early retirement in accordance with the old plan was December 31st, 2010 The profit from the termination has been accounted for in 2010 and is presented as a reduction of salary and personnel costs. A remaining accrual exists and is related to deductibles for employees that have performed an early retirement according to the old plan. When terminating the old AFP-plan it became apparent that there was a significant deficit in the plan.

The deficit must be carried by the participating companies through continuous payments of contribution in the next coming 5 years. The company’s share of this deficit has been estimated and accrued for in the financial statement.

As a replacement of the old plan a new AFP-plan has been established. The new AFP-AFP-plan is in the contrary to the old, not an early retirement plan, but a plan that gives a lifelong contribution to the ordinary pension. The employees can choose to exercise the new AFP plan starting at the age of

62 years, in addition to working, and it will continue accruing if working until the age of 67 years. The new AFP-plan is a defined benefit multi-company plan which is financed through contributions that are determined by a percentage of the employee’s earnings. There is currently no reliable measure and allocation of liabilities and assets in the plan. The plan is accounted for as a defined contribution plan where no accruals are made and the contributions are accounted for as they occur. Contributions are paid first in 2011. For 2012 the contribution is has been set to 1,75 % of the total payments between 1 G and 7,1 G to the employees. The plan will be unfunded and it is expected that the level of contribution will increase in the following years.

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Pension cost for 2012 amount to TNOK 5 723 from the defined benefit plans and TNOK24 567 from the contribution plans, and the total amounts to TNOK 30 290. Pension cost for 2011 amount to TNOK 3 252 from the defined benefit plans and TNOK 19 751 from the contribution plans. In total TNOK 23 003 is recorded for in 2011.

Pension liabilities in balance sheet

Amounts in NOK thousand Unfunded Total 2011 Funded Unfunded Total 2012

Plan assets at market value 0 0 0 0 0

Estimated pension liabilities 33 396 33 396 0 28 319 28 319

Net pension liability 33 396 33 396 0 28 319 28 319

Actuarial gains (-)/losses -13 621 -13 621 0 -10 048 -10 048

Plan change, curtailment 1 147 1 147 0 -1 597 -1 597

Settlement 0 0 0 0 0

Recognised pension liability 20 923 20 923 0 16 674 16 674

The company's share of the deficit related to the old AFP has been estimated and accrued for. The accrual is presented as a pension liability. The total pension liability is TNOK 22 990 at year end 2012.

Pension liability:

The elimination of the corridor method mean that actuarial gains and losses must be recognised in other comprehensive income (OCI) in the period incurred. The company will implement the new standards as of January 1st, 2013. Following the changes, an effect of TNOK 15 083 is estimated as shown by the tables below. The effect will be recognised in other comprehensive income January 1st, 2013.

Amounts in NOK thousand 2012 2011 2010 2009 2008

Opening balance 28 319 23 570 47 642 260 735 174 026

Total service cost 1 487 990 1 260 25 359 15 962

Interest cost 750 811 1 047 12 554 10 674

Payments from internal book -1 474 -1 850 -2 302 -4 241 -3 676

Payments from plan assets 2 611 0 -28 906 0 0

Settlement, curtailment 0 -79 -808 -135 706 0

Actuarial gains/(loss) 4 314 4 876 5 637 -111 059 63 748

Ending balance 36 007 28 319 23 570 47 642 260 735

Actuarial gain/(loss) -15 083 -11 645 -8 252 -6 264 -86 362

Plan assets

Amounts in NOK thousand 2012 2011 2010 2009 2008

Opening balance 0 0 0 106 291 109 165

Expected return on plan assets 0 0 0 5 296 5 444

Employee contributions 0 0 0 24 118 17 748

Payment from plan assets 0 0 0 0 0

Settlement, curtailment 0 0 0 -135 706 0

Actuarial gain/(loss) 0 0 0 0 -26 066

Ending balance 0 0 0 0 106 291

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Historical disclosure information

Amounts in NOK thousand 2012 2011 2010 2009 2008

Gross pension liability 31.12 36 007 28 319 23 570 47 642 260 735

Plan assets, fair value 31.12 0 0 0 0 106 291

Net pension liability 36 007 28 319 23 570 47 642 154 444

Actuarial gain/(loss) -15 083 -11 645 -8 252 -6 264 -86 362

Experience adjustment expressed as percentage of

plan liability 0,0 % 18,4 % 0,0 % -9,9 % 2,2 %

Experience adjustment expressed as percentage of

plan asset 0,0 % 0,0 % 0,0 % 0,0 % 24,5 %

Plan asset information

Percentage 2012 2011 2010 2009 2008

Cash 0 % 0 % 0 % 0 % 12 %

Equity 0 % 0 % 0 % 0 % 6 %

Bond 0 % 0 % 0 % 0 % 61 %

Real estate 0 % 0 % 0 % 0 % 17 %

Other 0 % 0 % 0 % 0 % 4 %

Total 0 % 0 % 0 % 0 % 100 %

Return on asset

Percentage 2012 2011 2010 2009 2008

Booked 0 % 0 % 0,00 % 4,80 % 2,20 %

Value adjusted 0 % 0 % 0,00 % 5,50 % 0,50 %

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