2013 Annual Report 2013

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Offshore drilling

Offshore drilling consists of the Ganger Rolf Group of companies’ ownership of 26.0 % in the offshore drilling contractor Fred. Olsen Energy ASA (together with subsidiaries “FOE”), which is listed on Oslo Stock Exchange. FOE owns and operates a fleet of three deepwater units, including the newbuild Bolette Dolphin, which was delivered from the yard in February 2014, and five mid-water semi-submersible drilling rigs in addition to one tender support vessel and one accommodation unit. A harsh envi-ronment semi-submersible drilling rig is under construction at Hyundai Heavy Industries Co., Ltd., Korea and is scheduled to be delivered in 3 quarter 2015. In addition FOE owns the ship yard Harland & Wolff in Belfast.

FOE was established in 1997 through the merg-er of the offshore activities of Gangmerg-er Rolf ASA and Bonheur ASA and was listed on Oslo Stock Exchange in October the same year.

Dolphin Drilling Ltd., based in Aberdeen, Scot-land, Dolphin Drilling AS in Stavanger and Dolphin Drilling Pte. Ltd in Singapore form the main part of FOE’s drilling division. It is recog-nized as a medium-sized international drilling operator and has had a leading position within offshore drilling services for more than 35 years. The principal activities of Harland and Wolff Group Plc. (H&W) include offshore wind foun-dations, ship repair, engineering and design and construction/conversion of floating pro-duction and drilling vessels for the offshore oil and gas industry.

In 2013, FOE generated operating revenues of NOK 7 022 million and operating result before depreciation (EBITDA) was NOK 3 358 million.

Renewable energy

The investments within renewable energy are organized through the Group of companies’ 50% ownership of Fred. Olsen Renewables AS with subsidiaries (“FOR”). FOR is primarily en-gaged in development, construction and oper-ation of wind farms. By the end of the year the installed capacity in operation was 428 MW. The wind farm portfolio also includes 76 MW under construction in Scotland, consents for

additional 816 MW onshore in the UK, Swe-den and Norway and 50% of the consented offshore wind project Codling, of which the share of the potential capacity is approxi-mately 500 MW.

FOR’s operating revenues in 2013 amounted to NOK 726 million, based on an annual pro-duction of 1 112 GWh. Operating result before depreciation (EBITDA) was NOK 522 million.

Ganger Rolf ASA (the “Company”) is domiciled in Norway and listed on Oslo Stock Exchange. The

consolidated financial statements of the Company as at and for the year ended 31 December 2013

comprise the Company, its subsidiaries and associates (for accounting purposes only in the following

referred to as the “Group of companies”). The Company has investments in several business activities,

based upon its long term commitment to shipping, offshore drilling, renewable energy and cruise.

Investments are normally made in cooperation with the listed parent company Bonheur ASA. At

year-end 2013 the main investments are within the following business segments:

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Other investments includes the ownership of 17.6 % of NHST Media Group AS, which com-prises four main business segments, DN (the business newspaper Dagens Næringsliv and TDN Finans), Direct relations (My Newsdesk and ddp direct), Global (TradeWinds, Up-stream, Intrafi sh and Recharge) and Nautical Charts. The Group of companies also has an ownership of 6.3 % in the property develop-ment company Koksa Eiendom AS.

Other investments

Cruise

Caribbean and ex UK cruises to Scandinavia, Mediterranean and Canary Islands. In 2013 the company carried about 93 500 passengers. Operating revenues in 2013 amounted to NOK 1 470 million and operating result before depreciation (EBITDA) was NOK 65 million. The cruise business is managed through

the Group of companies’ 50% ownership of First Olsen (Holdings) Ltd. and its subsidiary Fred. Olsen Cruise Lines Ltd. in Ipswich, UK (“FOCL”). FOCL operates 4 cruise ships with an overall berth capacity of approximately 3 700 passengers. Off ering cruise holidays from 2 to 108 nights FOCL provides a diverse range of cruises to attract its passengers. The ships’ itineraries include inter alia long voyages (e.g. round the world), fl y/cruises to the

Shipping / Off shore wind

Wind Service A/S, operates a modern fl eet of crew transfer vessels used in conjunction with the construction and maintenance of off shore wind farms. UFN together with the subsidiary Universal Foundation A/S (Denmark, 82% owned) develops and delivers integrated turnkey solutions around its unique Universal Foundation suction bucket offshore wind turbine foundation. FOL is through its subsidiary Clune Pte Ltd., owner and operator of the 2010 built Suezmax crude carrier “Knock Clune” (dwt 163 000).

Operating revenues in 2013 amounted to NOK 1 017 million and operating result before depreciation (EBITDA) was NOK 193 million. The shipping / off shore wind activities are

organized through the Group of companies’ 50% ownership in First Olsen Ltd. (“FOL”). FOL is 100% owner of Fred. Olsen Windcarrier AS with subsidiaries (“FOW”) and Universal Foundation Norway AS (“UFN”).

FOW operates two modern self-propelled jack-up vessels specially designed for transportation and installation of off shore wind turbines. Global Wind Service A/S, a Danish limited company owned 51% by Fred. Olsen Windcarrier AS, is an international supplier of qualifi ed and skilled personnel to the global wind turbine industry. Fred. Olsen Windcarrier A/S (Denmark), owned 50/50 by Fred. Olsen Windcarrier AS and Global

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Ganger Rolf ASA (the “Company”) is a company domiciled in Norway. The consolidated financial statements of the Company as at and for the year that ended 31 December 2013 comprise the Company, its subsidiaries and associates (for accounting purposes only in the following referred to as the “Group of com-panies”).

The Company’s head office is in Oslo. The activities of the Group of companies take place in several countries and the main of-fices are in Norway, Sweden, Denmark, UK, Malta, Singapore, Bermuda and Brazil.

The year 2013 saw strong positive developments in many fi-nancial markets, but looking under the surface, challenges con-tinue to hamper economic growth in many parts of the world. Economic growth in the Euro Area was uneven, but on average remained negative. Economic growth for the world as a whole slowed down from the previous year. Growth rates in world trade volumes remained positive and more or less unchanged. The continuation of very accommodative central bank policies have so far failed to ignite a full-fledged economic recovery, and falling unemployment rates have in some cases been a result of statistical adjustments rather than job creation.

Average annual electricity prices in Scandinavia and the UK were up 22% and 12%, respectively, from the previous year. The aver-age Brent crude price was down 3% from the previous year and has thus hovered around an average price of USD 110 per barrel for the last three years. Lack of sufficient profit margins at the current oil price levels has contributed to some companies in the oil industry taking a somewhat more conservative approach to new explorations and developments.

Natural gas and electricity price differentials are expected to be in favor of the United States for the next decades, which will be a boon to their production of energy intensive goods. The European Union and Japan will under current expectations see the opposite unfold. A transition to a low-carbon economy will require further investments in renewable energy. Together with the countries’ respective support schemes, the electricity prices need to provide renewable energy producers, such as ourselves, with sufficient returns if the countries’ targeted amount of new projects are to be constructed. To reach the goals for renewable energy production, the stakeholders will need to aim for in-creased technology efficiency. The need will be to use the most productive power producing technology at the most optimal sites. This will require cooperation and mutual understanding between the authorities and producers. Renewable energy producers will need to continue to reduce the costs of power

production. Some countries have seen concerns about the fis-cal consequences and affordability of their renewable energy targets. Finding cost-efficient support schemes will become in-creasingly important as time goes by. Capital is scarce and will, not surprisingly, flow to the countries which can offer the most predictable and high returns.

In 2013 the Group of companies experienced increased revenues compared to the previous year and the overall financial position continued to be satisfactory. Revenues from Offshore Drilling were at similar levels as the previous year, while Cruise experi-enced a decline. High revenue growth rates were achieved for the segments Renewable Energy and Shipping/Offshore wind. The transport and installation vessels within Shipping/Offshore wind performed satisfactorily during the year. A challenging market and impairments within Cruise, as well as higher cost levels within Offshore Drilling, however, resulted in lower oper-ating results compared with 2012.

Following the voluntary offer in June 2013 from Yinson Produc-tion Ltd. to acquire all shares of Fred. Olsen ProducProduc-tion ASA (FOP), the business segment Floating Production was reclassi-fied as per second quarter 2013, until completion of the sale in December 2013, as an investment held for sale in Ganger Rolf ASA’s consolidated financial position. The segment is ac-cordingly presented as discontinued operations in the income statement. The settlement of the voluntary offer was completed on 20 December 2013. First Olsen Ltd., the holder of 61.54% of the total issues shares in FOP, received in total NOK 612.8 million for their shares.

In October 2013 an agreement was entered into with Glastad Invest AS by which Bonheur ASA and Ganger Rolf ASA subse-quently transferred their shareholding interests (66.9 million shares) in GenoMar AS, a company engaged in tilapia fish farm-ing in Malaysia, China and the Philippines, to Glastad Invest AS.

Comments on operations of associated companies

The offshore fleet of Fred. Olsen Energy ASA with subsidiaries (FOE) consists of three deepwater units and five mid-water semi-submersible drilling rigs in addition to one tender support vessel and one accommodation unit. A new semi-submersible drilling rig for harsh environment is scheduled to be delivered in third quarter 2015. The company’s activities also include shipbuild-ing, ship repair, construction of offshore wind foundations and engineering at the Harland & Wolff shipyard in Belfast, Northern Ireland.

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The offshore drilling market began 2013 in robust shape with strong demand experienced in our domestic UK and Norwegian markets as well as internationally in deepwater. However, during the second half of 2013 oil companies were starting to experi-ence difficulties in their efforts to continue to grow spending plans. The effects have been seen in recent drilling contracts in-dicating some softening of rates and an acceptance of shorter term contracts.

Fred. Olsen Renewables AS with subsidiaries (FOR) continued to develop its wind farm activities in the UK, Sweden, Norway and offshore Ireland. In 2013 the construction of Rothes II wind farm (41.4 MW) was completed and the construction of the 76 MW wind farm Mid Hill commenced with expected completion in 2014. During the year the Norwegian projects Gilja, Fálesrášša and Gismarkvik were consented. In the UK FOR acquired an ad-ditional 50% of Brockloch Rig Wind Limited increasing its owner-ship to 100%. This company has the rights to the Windy Standard II wind farm project. During the year FOR divested all of its activi-ties in Canada. FOR continues its efforts to acquire more acreage suited for wind power in selected regions.

Fred. Olsen Cruise Lines Ltd. with subsidiaries (FOCL) owned and operated four cruise vessels during 2013; MV Black Watch, MV Braemar, MV Boudicca and MV Balmoral. The fleet’s total capac-ity is 3 700 berths.

FOCL continues to focus on innovative cruise itineraries and new destinations and through its tailored shore excursion program; the customer is given the opportunity to enjoy a range of visual, active or cultural experiences.

The year was adversely affected by unprecedented ticket dis-counting during the summer and poor performance from cruis-es to the Eastern Mediterranean and Egypt during the winter. This resulted in a 7 % reduction in net revenues. Operating costs remained flat year on year.

During 2013 First Olsen Ltd. had in operation the suezmax tank-er “Knock Clune” (2010 built, dwt 163 000). The tanktank-er has been employed in the spot market throughout the year.

In February 2013 a subsidiary of Fred. Olsen Windcarrier AS took delivery of the second modern offshore wind turbine installa-tion vessel, named “Bold Tern,” built by the Lamprell shipyard in Dubai. Together with the sister vessel “Brave Tern”, which was de-livered from the same yard in October 2012, the jack-up vessels have been engaged on projects in European waters for transpor-tation and installation of wind turbines. The vessels have been

well received by the market and demonstrated strong capabili-ties for efficient offshore wind transport and installation work. The performance of the vessels on the completed installation projects in 2013 has contributed to a more efficient develop-ment of offshore wind in Germany.

Fred. Olsen Windcarrier A/S (Denmark), a subsidiary of Fred. Olsen Windcarrier AS, operates a modern fleet of high-speed crew transfer vessels built for safe and efficient transport of goods and personnel to and from offshore wind farms. During 2013 the vessels have been contracted to utilities and develop-ers of European offshore wind farm projects.

Global Wind Service A/S, a Danish limited company owned 51% by Fred. Olsen Windcarrier AS, is an international supplier of highly qualified and skilled technicians to the global wind turbine industry. The company provides a wide range of instal-lation and maintenance services both onshore and offshore. Global Wind Service A/S launched in October 2013 its eighth operational business unit, located in South Africa, to comple-ment its other operations in Denmark, the United Kingdom, the Netherlands, Germany, Poland, Romania and Turkey.

Universal Foundation Norway AS, a wholly owned company by First Olsen Ltd, together with the subsidiary Universal Founda-tion A/S (Denmark, 82% owned) develops an integrated turnkey solution around its unique Universal Foundation suction bucket offshore wind foundation. In 2013 the company delivered two projects consisting of three foundations with complete meteor-ological masts in UK waters based on the Universal Foundation technology,of which one is awaiting further instructions from the client as to its final installation. The meteorological masts are an integral part of the company’s comprehensive qualification process in readiness for commercial projects for foundations for offshore wind turbines from 2015 onwards.

Bonheur ASA and Ganger Rolf ASA have both received a deci-sion of change regarding the taxable income for 2006. The tax authorities claim that the split of the convertible bonds into or-dinary bonds together with an option to purchase shares at the conversion price equates to realization of the convertible bond and is therefore taxable. The position of the companies is that gain on the option to purchase shares is free of tax (“Fritaksmod-ellen”). The position taken by the tax authorities led to a payable tax in 2011 of NOK 121 and NOK 112 million for Ganger Rolf ASA and Bonheur ASA respectively and was expensed in 2011. The tax authorities gained support for their view both by the court (Tingretten) in January 2012 and in the Court of Appeal (Lag-mannsretten) in December 2013. The decision at the Court of

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Appeal has been appealed to the Supreme Court (Høyesterett) in February 2014.

In 1999 there was a reorganization of the structure and owner-ship of shares in a subsidiary of Bonheur ASA and Ganger Rolf ASA. According to the tax authorities gain on shares on this in-tragroup transaction was taxable. Based on this the subsidiary company has paid NOK 51 million in tax. The company appealed the decision to the court (Tingretten). The tax authorities gained support for their view by the court in April 2013 but the com-pany has appealed the decision to the Court of Appeal (Lag-mannsretten).

Bonheur ASA and Ganger Rolf ASA have both from the tax au-thorities received a draft decision of change regarding the tax-able income for 1999, based on the same case mentioned above. The tax authorities claim that the companies should have been taxed on gain on shares when reorganizing the ownership of Barient NV back in 1999. No penalty tax has been notified. The draft decision received in February 2014, 14 years after the re-organization took place, lead to a possible payable tax of totally NOK 105 million. The amount was reflected in recognized in-come tax expense for 2012.

For more detailed information, see note 23 – Contingencies and provisions

Comments to the annual accounts

(2012 in brackets)

All main investments are accounted for as associated compa-nies, in accordance with the equity method. The Company is a holding company. Revenues in 2013 were NOK 0.5 million (NOK 2 million) and EBIT were NOK -48 million (NOK -45 million).

For 2013 associated companies were included with an aggre-gate net result of NOK 502 million (NOK 475 million), of which FOE with a result of NOK 453 million (NOK 496 million) and First Olsen Ltd. with NOK 69 million (NOK -80 million). Cruise was included with a result of NOK -318 million (NOK -42 million). Bonheur ASA was included with a result of NOK 53 million (NOK 69 million) and FOR with a result of NOK 184 million (NOK -14 million).

Net financial items for the year were NOK -96 million (NOK -21 million) and net result was NOK 247 million (NOK 383 million).

Results from the main activities

In the following, the results for 2013 (on 100 % basis) are com-mented upon.

Offshore drilling

Offshore drilling comprises Fred. Olsen Energy ASA with subsidi-aries (“FOE”), which is owned 26.0 % by the Company.

Operating revenues amounted to NOK 7 022 million (NOK 6 877 million). Operating result before depreciation (EBITDA) was NOK 3 358 million (NOK 3 533 million).

Net result after tax was NOK 1 735 million (NOK 1 824 million).

Renewable energy

Renewable energy consists of Fred. Olsen Renewables AS with subsidiaries (“FOR”), which is 50 % owned by the Company. FOR owns five wind farms in operation in Scotland (Crystal Rig, Crys-tal Rig II, Rothes, Rothes II and Paul´s Hill) and one wind farm (Lista) in operation in Norway. In addition, FOR has a number of consented wind farms in Scotland, Norway and Sweden.

Operating revenues were NOK 726 million (NOK 513 million) and the annual production was 1 112 GWh (840 GWh).

Operating result before depreciation (EBITDA) was NOK 522 mil-lion (NOK 335 milmil-lion).

Operating result (EBIT) amounted to NOK 280 million (NOK 127 million), while net result was NOK 367 million (NOK -28 million).

Shipping/Offshore wind

At the end of the year Shipping/Offshore wind consisted of 50% ownership in the holding company First Olsen Ltd. with subsidi-aries, including Fred. Olsen Windcarrier AS and Universal Foun-dation Norway AS.

Total revenues in 2013 amounted to NOK 1 017 million (NOK 522 million). Operating result before depreciation (EBITDA) was NOK 193 million (NOK -29 million). Operating result (EBIT) was NOK 37 million (NOK -115 million) and net result was NOK 137 million (NOK -175 million).

Cruise

Cruise is owned through First Olsen (Holdings) Ltd., which is 50 % owned within the Group of companies, and its subsidiary Fred. Olsen Cruise Lines Ltd. in Ipswich, UK (“FOCL”). During 2013 FOCL operated four cruise ships.

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The total number of passenger days in 2013 were 1 194 393 (1 283 549) and FOCL carried 94 700 passengers (2012: 93 500).

Operating revenues were NOK 1 470 million (NOK 1 628 million). Operating result before depreciation (EBITDA) was NOK 65 mil-lion (NOK 193 milmil-lion). An impairment of NOK 410 milmil-lion was made on book value of the cruise vessels at year-end due to the weak market conditions within the UK cruise industry. Operat-ing result (EBIT) was NOK -613 million (NOK -19 million) and net result was NOK -637 million (NOK - 85 million).

Other investments

Other investments mainly consists of the ownership of 17.6 % in NHST Media Group AS and 6.3 % in Koksa Eiendom AS (previous-ly named IT Fornebu Properties AS). Until November 2013 the segment Other Investments also included 43.2% of GenoMar AS.

GenoMar AS

GenoMar AS, a company engaged in tilapia fish farming in Ma-laysia, China and the Philippines. The shares in the company was per end of October transferred to Glastad Invest AS, with a total booked loss for Ganger Rolf Group of companies in 2013 of NOK 42 million, of which NOK - 13 million was the company’s result from January till November and NOK 5 million book loss on the share transfer. Finally the Company sold it’s loans to GenoMar AS to the new owners, with a booked loss of NOK 24 million.

NHST Media Group AS

NHST Media Group AS comprises four main business segments, DN (the business newspaper Dagens Næringsliv and TDN Fi-nans), Direct relations (MyNewsdesk and ddp direct), Global (TradeWinds, Upstream, Intrafish and Recharge) and Nautical Charts. The market share and number of copies sold for most of the publications in total has been relatively stable with a net in-crease in total circulation revenues. The sale of new digital prod-ucts continues to grow and now represent 25% of total turnover.

Operating revenues for the year were NOK 1 237 million (NOK 1 200 million). Operating result was NOK 9.3 million (NOK 44 million), and net result before tax was NOK 7.2 million (NOK 40 million).

Koksa Eiendom AS (previously IT Fornebu Properties AS)

Bonheur ASA and Ganger Rolf ASA each hold 6.3% of the shares in Koksa Eiendom AS. In December 2013 an agreement was made to sell 100% of both the Portal building, the Terminal building, underground parking space related to those buildings and the new Profile building (finished in the Autumn of 2013) for NOK 1.8 billion to a company of which Technopolis Plc (a

Finn-ish listed property company) holds 70% and Koksa Eiendom AS holds 30% of the shares.

In addition to the 30% ownership in the Technopolis Plc, Koksa Eiendom AS still owns 30% of the shares of Martin Lingesvei 33 AS which consists of the building built for Statoil’s regional office in Oslo and an appurtenant parking facility, 50% of the Scan-dic hotel next to the Statoil building, 50% of the company that in the future may build a marina near the Statoil building and 100% of some buildings around the Koksa area.

During 2013 Koksa Eiendom AS distributed dividends of NOK 855 million, of which Bonheur and Ganger Rolf combined re-ceived NOK 108 million.

Capital and financing

Investments during the year are mainly related to Offshore Drill-ing (FOE), Renewable Energy (FOR) and Fred. Olsen Windcarrier AS (new builds).

Within FOE, capital expenditures amounted to NOK 1 251 mil-lion, mainly related to new builds, class renewal surveys and general upgrades.

FOR had capital expenditures of NOK 855 million in the year, mainly related to the construction of Mid Hill and Rothes II wind farms.

Within the shipping segment capital expenditures in 2013 amounted to NOK 228 million, which is mainly related to the construction of the two transport and installation vessels for offshore wind turbines and the crew vessels.

Investments were financed by cash from operations and bank credit facilities.

Interest bearing debt of the Group of companies as per 31 De-cember 2013 was NOK 1 504 million. Cash and cash equivalents amounted to NOK 171 million.

Corporate Governance

Corporate governance principles of the Company are aligned with the principles founded by the Norwegian Code of Practice for Corporate Governance. The board is of the opinion that the Company complies with the above principles. The board aims to maintain a framework of good control and corporate gov-ernance. A description of the Company’s compliance with the above is presented on pages 74 to 76.

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Directors’ Report 2013

Corporate Social Responsibility

The Company has investments in companies within several business segments and is not directly engaged in significant business activities on its own, except through direct and indi-rect shareholding in a variety of companies with different risks related to Corporate Social Responsibilities. The Company is rep-resented on the boards of each main subsidiary and monitors the subsidiaries’ Corporate Social Responsibilities and compli-ance with the overriding guidelines of the Group of companies through the work of the boards. The Company has no employ-ees and the day to day administrative services are performed by Fred. Olsen & Co. Each main subsidiary has established its own Corporate Social Responsibility guidelines which are available on the entity’s web site. The overriding guidelines of the Group of companies are expanded and further regulated by each of these subsidiaries to reflect the nature of their business.

It is the Group of company’s policy to conduct business in accordance with the letter and spirit of the law and with the overriding ethical standards of good business conduct includ-ing nondiscrimination behavior, human rights, workers’ rights, social aspects, environmental issues and anti-corruption. This is described in the respective company’s Code of Conduct, which is available on the relevant company’s web site and to all em-ployees.

The Group of companies has not had any major incident related to human rights, working rights, environmental issues or cor-ruption during 2013 and will continue to strengthen the work to secure there are no incidents in these areas which are in breach of the Group of companies’ Corporate Social Responsibility poli-cies in the future.

See: www.bonheur.net, www.ganger-rolf.com, www.fredolsen-energy.com, www.fredolsen-renewables.com, www.fotl.no, www.fredolsencruises.com.

Financial market risk

See also Note 5. The Group of companies is exposed to certain financial risks related to its activities. These are mainly currency risks, interest rate risks, risks related to oil price and electricity prices. The financial risks are continuously monitored and from time to time financial instruments are used to economically hedge such exposures.

There is also a credit risk related to customers within the indi-vidual companies and risks associated with the general develop-ment of international financial markets.

Currency risk

The Group of companies’ financial statements are presented in NOK. Revenues consist primarily of USD, GBP, EUR and NOK with USD as the dominant currency. The majority of the USD revenues are within FOE. The expenses are primarily in USD, GBP, EUR and NOK. As such, earnings are exposed to fluctuations in the cur-rency market. However, in the longer term parts of the curcur-rency exposure are neutralized due to the majority of the debt and a large part of expenses being denominated in the same curren-cies as the main revenues. Forward exchange contracts are from time to time entered into to further reduce currency exposures.

Interest rate risk

The Group of companies is exposed to interest rate fluctuations, as loans are frequently based on floating interest rates. By the turn of the year, parts of the outstanding loans had been hedged against interest fluctuations through interest rate swap agree-ments.

Oil price

The Group of companies is exposed to fluctuations in bunker prices, which are fluctuating according to the oil price. This ex-posure is primarily within the cruise and tanker operations, but is also influencing the Offshore drilling segment. By the end of the year, there were some short-term financial contracts out-standing relating to securing part of the bunker costs for the year 2014.

Electricity price

Until 2010 FOR has not been exposed to short-term fluctua-tions of spot electricity prices due to the contract structures related to FOR’s wind farms in operation, whereby the contract prices are based on fixed electricity prices. However, the contract structures related to the Group of companies’ wind farms which commenced operation after 2010 are based on fluctuating elec-tricity prices. Consequently the Group of companies’ results are increasingly impacted by spot electricity prices; mainly in the UK, but also in Scandinavia. At present no financial contracts have been entered into to reduce overall exposure.

Credit risk

The Group of companies continuously evaluates the credit risk associated with customers and, when considered necessary, requires certain guarantees. As such, the credit risk is consid-ered to be moderate. The customer base within the oil and off-shore wind service activities is mostly international oil and en-ergy companies. As to the customers within renewable enen-ergy, these are large electricity distributors. Credit risk within FOCL is regarded low, due to cruise tickets being paid in advance.

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Research and development activities

Within the various main business segments there are ongoing developments of technologies and methods in cooperation with various supplier communities and engineering compa-nies. Within the offshore industry this relates to offshore drilling. As for renewable energy, the relevant companies are working closely with leading suppliers of turbine technology on pro-grammes to increase efficiency and regularity. There is a close relationship with the supplier industry on programs to optimize operations and minimize environmental consequences.

The Group of companies has investments in Universal Founda-tion A/S, Denmark which has developed a type of foundaFounda-tion for offshore wind installations and in ScotRenewables Ltd., a company developing a device for tidal renewable energy in the Orkney Islands.

The organization, work environment and equal opportunities

The Company is a holding company and does not have any em-ployees whilst the task as managing director is held by Anette S. Olsen; the proprietor of Fred. Olsen & Co. Administrative services are supplied by Fred. Olsen & Co. in accordance with an agree-ment on administrative services (see below, as well as Note 8).

Working environment

The Board of Directors considers the working conditions and the working environment to be satisfactory. Health, Safety and Environmental (HSE) – activities are being managed within the individual business segments and in accordance with relevant industry norms. All business segments work systematically and preventively with HSE measures. The work takes place on a con-tinuous basis and has functioned satisfactorily through the year.

The Group of companies is actively working to keep absence due to sickness at a low level. For further information of work-ing environment within the Group of companies, please refer to each of the main associates’ description of its Corporate Social Responsibility on the web site.

Equal opportunities

At the end of the year the Group of companies does not have any employees, whilst the position of managing director is held by Anette S. Olsen; the proprietor of Fred. Olsen & Co. 50 % of the board of directors of the Company is female.

External environment

Through its main interests, the Group of companies is engaged in activities which may involve a possible risk for the environ-ment.

Safety and environment are given high priority by the various operations and efforts are made on a continuous basis to pre-vent situations which might involve damage to health and envi-ronment. Important elements of this work are safe and rational operations, an active maintenance programme and an adequate handling of waste. Ongoing efforts are also made in order to im-prove and further develop the safety and environment culture on all levels.

All vessels are operated by experienced operators of good standing in accordance with the Group of companies’ safety and quality requirements.

Activities within the offshore oil and gas industry involve opera-tions in areas which are environmentally vulnerable. Some of the Group of companies’ operations, in particular those related to the use of fossil fuel, effluents and emissions during operations and the risk of oil spills, may influence the external environment negatively. Safe and rational operations and active maintenance programs are aimed at contributing to avoid accidents which may lead to damage to the external environment. All such op-erations are sought kept in accordance with company standards and within the rules and regulations in force in those areas and countries where the operations are taking place and in coop-eration with operators within the various domains. Waste from processing and operations may directly, and indirectly through chemical reactions, influence the environment balance nega-tively. There is a continuous focus on reducing the use of dan-gerous chemicals, replacing these by more environment friendly alternatives.

At the same time, the Group of companies operates within re-newable energy, primarily through the construction and opera-tion of wind farms. The wind farms are subject to strict conces-sion rules by the authorities in the countries in question. Wind power replaces more polluting energy sources and contributes to improve the environment, both locally and globally.

No incidents have occurred during the year causing serious damage to the external environment.

Subsequent Events

On 21 February 2014, Fred. Olsen Energy ASA (FOE), announced that Bolette Dolphin Pte. Ltd., a subsidiary of FOE, had taken delivery of the ultra-deepwater drillship Bolette Dolphin from Hyundai Heavy Industries Co. Ltd. The drillship will shortly mobi-lize to West Africa to commence drilling operations for Anadarko Petroleum Corporation.

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Directors’ Report 2013

On 14 February 2014, Bold Tern Ltd. a ship owning company which is indirectly owned on a 50/50 basis by Bonheur ASA and Ganger Rolf ASA, announced that it has been awarded a con-tract with the US company “Deepwater Wind Block Island LLC” to install 5 large 6 MW Alstom wind turbines offshore off Rhode Island, USA. The work will be performed using Fred. Olsen Wind-carrier’s jack-up vessel “Bold Tern”. The contract will be carried out in third quarter 2016 and the duration of the employment is a firm period of 65 days, plus extensions for up to 48 days. This installation contract will be one of the first commercial offshore wind installations in US waters.

On 14 February 2014, Fred. Olsen Energy ASA announced that the company had completed a new senior unsecured bond is-sue of NOK 1 100 million in the Norwegian bond market with maturity in February 2019, priced at 3 months NIBOR plus 3.00 per cent.

On 7 March 2014, Fred. Olsen Windcarrier International Ltd., which is indirectly owned 50/50 by Bonheur ASA and Ganger Rolf ASA, has been awarded an additional transport and instal-lation contract by the German company Global Tech I Offshore Wind GmbH for the installation vessel “Bold Tern”.The Bold Tern will join her sister vessel Brave Tern, which commenced work on the Global Tech I wind farm project in December 2013, for the transport and installation work of Areva 5MW wind turbines and associated equipment in the German exclusive economic zone (EEZ). The contract for Bold Tern commences immediately and is expected to last for about four months. The scope of work in-cludes the provision of installation technicians from Global Wind Service A/S (DK) a company indirectly owned 51% by Bonheur ASA and Ganger Rolf ASA.

On 1 April 2014, Fred. Olsen Renewables AS received consent for construction and development of Kalvvatnan vindkraftverk in Bindal municipality of Nordland county. The consent is for 225 MW installed capacity.

On 2 April 2014, First Olsen Ltd. which is owned 50/50 by Bon-heur ASA and Ganger Rolf ASA, has entered into an agreement for sale of the suezmax tanker “Knock Clune”. Delivery of the ves-sel to the buyer is expected to be end April/early May 2014. The sale will produce a book gain of approximately USD 2.5 million.

Outlook

The offshore drilling market began 2013 in robust shape with strong demand experienced in our domestic UK and Norwegian markets as well as internationally in deep water. However,

dur-ing the second half of 2013 oil companies were startdur-ing to expe-rience difficulties in their efforts to continue growing spending plans. The effects have been softening market rates and more short term contracts.

FOR holds a wind farm portfolio onshore under development in the range of 1 500 - 2 000 MW, of which 816 MW is consent-ed. The remaining are projects with secured land and ongoing project development. In addition, FOR holds a 50 % stake in a consented project of approximately 500 MW offshore Ireland (Codling).

2013 was a record year in Europe for offshore wind installations, with 1 567 MW of new capacity grid connected according to the European Wind Energy Association. A total of 2 080 wind tur-bines were installed and connected to the electricity grid in 69 offshore wind farms in 11 countries across Europe. New capacity will continue to be installed and the expectation for offshore wind generated power capacity installed per year is steady for 2014 and 2015. The main market will remain to be in Northern Europe, but it is expected that the US, France and Japan from 2016 onwards will increase their activities within offshore wind.

The recent development in Ukraine and Crimea and the focus on dependence of gas from Russia has reopened the discussion of securing energy supply to Europe. This may further increase the need for more renewable energy, including wind power. In Norway, the debate regarding electrification of the oil and gas installations on the Norwegian Continental Shelf may also pro-vide opportunities for developing more wind farm projects at the west coast of Norway.

For the cruise industry the number of British passengers who de-cided to take an ocean cruise in 2013 was 1.79 million represent-ing an increase of 5% from 2012. Cruise holidays now represent about 4.7% of all foreign holidays taken. Despite a sharp decline in the volume of foreign holidays taken in the period 2007 to 2012, the volume of UK cruises has grown year on year. The UK economy has prevented revenue growth but with the relatively low level of market penetration there is growth potential as the economy moves positively forward.

The board emphasizes that there are normally significant uncer-tainties in predicting future development.

Other information

The Company’s profit before tax was NOK -78 million, a decrease of NOK 299 million as compared to 2012.

(13)

The Company received dividend of NOK 59 million from Bon-heur ASA. In addition, the Company received dividends from Fred. Olsen Energy ASA of NOK 346 million.

Net result was NOK -100 million, which is proposed to be allo-cated as follows:

For dividends NOK 284 million From retained earnings NOK -384 million Total allocated NOK -100 million

The annual accounts for 2013 have been prepared based on the going concern assumption. The Board of Directors are of the

view that the annual accounts present a true and fair view of the Company’s as well as the Group of companies’ position at the end of the year as defined by International Financial Report-ing Standards (IFRS) for the Group of companies and NGAAP for the parent company. The Company’s total capital as per 31 De-cember 2013 was NOK 4 611 million. The Company’s cash, cash equivalents and current receivables amount to NOK 394 million.

Dividend/Annual General Meeting

With regard to the Annual General Meeting in 2014, the Board of Directors is proposing a dividend payment of NOK 8.40 per share. The Annual General Meeting is scheduled for Wednesday 28 May 2014.

Oslo, 4 April 2014

Ganger Rolf ASA - The Board of Directors

Fred. Olsen Anna-Synnøve Bye Helen Mahy Andreas Mellbye

Chairman Director Director Director

Anette S. Olsen

(14)

14

Consolidated Income Statement

Ganger Rolf ASA - Group of companies

For the period 1 January - 31 December

(Amounts in NOK 1 000) Note 2013 2012 *)

Revenues 352 414

Gain on sale of property, plant and equipment 11 118 1 543

Total operating income 470 1 957

Operating expenses 7 -46 457 -44 810

Total operating expenses -46 457 -44 810

Operating loss before depreciation -45 987 -42 853

Depreciation 11 -1 775 -1 940

Operating loss -47 762 -44 793

Share of profit in associates 12 501 751 475 389

Interest income 12 720 13 103

Other finance income 68 928 82 907

Finance income 9 81 648 96 010

Interest expense -104 740 -107 537

Other finance expense -72 736 -9 070

Finance expense 9 -177 476 -116 607

Net financial items -95 828 -20 597

Profit before tax 358 161 409 999

Tax income / -expense (-) 10 -8 179 -33 736

Net profit from continuing operations 349 982 376 263

Net result from discontinued operations 28 -102 513 6 959

Profit for the year 247 469 383 222

Attributable to:

Shareholders of the parent 247 469 383 222

Profit for the year 247 469 383 222

Basic earnings per share (NOK) 17 7.31 11.32

Basic earnings per share - Continuing operations (NOK) 17 10.34 11.11 Basic earnings per share - Discontinued operations (NOK) 17 -3.03 0.21

(15)

For the period 1 January - 31 December

(Amounts in NOK 1 000) Note 2013 2012 *)

Profit for the period 247 469 383 222

Other comprehensive income

Items that will not be reclassified to profit or loss

Actuarial gains/(losses) on pension plans -26 350 16 607

Other comprehensive income for the period -6 262 -36 741

Total items that will not be reclassified to profit or loss -32 612 -20 134

Items that may be reclassified subsequently to profit or loss Hedging effects:

- Effective portion of changes in fair value of interest hedges 22 129 11 Fair value effects related to financial instruments:

- Net change in fair value of available-for-sale financial assets 16 700 -1 142 - Net change in fair value of available-for-sale financial assets

transferred to profit or loss 0 137

Other comprehensive income from associates 178 208 -237 142

Other comprehensive income due to cross ownership 38 179 -7 571

Income tax on other comprehensive income 19 37

Total items that may be reclassified subsequently to profit or loss 233 235 -245 670

Other comprehensive income for the period, net of income tax 200 623 -265 804

Total comprehensive income for the period 448 092 117 417

Attributable to:

Shareholders of the parent 448 092 117 417

Total comprehensive income for the period 448 092 117 417

(16)

Consolidated Statement of Financial Position

(Amounts in NOK 1 000) Note 31.12.2013 31.12.2012 *) 01.01.2012 *)

ASSETS

Non-current assets

Deferred tax asset 14 752 40 140 42 199

Real estate 23 424 24 883 27 469

Other fixed assets 11 895 12 333 12 840

Property, plant and equipment 11 35 319 37 216 40 309

Investments in associates 12 6 097 749 6 136 713 5 585 182

Investments in other shares 13 267 569 254 239 254 108

Bonds 13 4 542 4 629 4 763

Other receivables 13 63 959 146 508 396 161

Pension funds 19 10 881 16 711 20 025

Financial fixed assets 6 444 700 6 558 800 6 260 239

Total non-current assets 6 480 771 6 636 156 6 342 747

Current assets

Trade receivables 881 1 725 1 624

Other receivables 114 814 5 455 3 980

Trade and other receivables 15 115 695 7 180 5 604

Cash and cash equivalents 16 171 426 278 664 95 955

Total current assets 287 121 285 844 101 559

Total assets 6 767 892 6 922 000 6 444 306

(17)

(Amounts in NOK 1 000) Note 31.12.2013 31.12.2012 *) 01.01.2012 *) EQUITY AND LIABILITIES

Equity

Share capital 42 317 42 317 42 317

Additional paid in capital 25 920 25 920 25 920

Total paid in capital 68 237 68 237 68 237

Retained earnings 4 922 705 4 758 986 4 844 693

Total equity 4 990 942 4 827 223 4 912 930

Liabilities

Employee benefits 19 135 218 107 557 117 042

Deferred tax liabilities 14 45 16 238 19 909

Interest bearing loans and borrowings 18 703 823 1 373 123 1 169 501

Other non-current liabilities 20 54 101 12 865 15 293

Total non-current liabilities 893 187 1 509 783 1 321 745

Current tax 14 53 000 68 000 26 990

Trade and other payables 20,21 830 763 516 994 182 641

Total current liabilities 883 763 584 994 209 631

Total liabilities 1 776 950 2 094 777 1 531 376

Total equity and liabilities 6 767 892 6 922 000 6 444 306

*) Restated, see note 2e, employee benefits and note 28, discontinued operations, for details.

Oslo, 4 April 2014

Ganger Rolf ASA - The Board of Directors

Fred. Olsen Anna-Synnøve Bye Helen Mahy Andreas Mellbye

Chairman Director Director Director

Anette S. Olsen Managing Director

(18)

Statement of Changes in Equity

Share Own Share Translation Hedging Fair value Retained Total (Amounts in NOK 1 000) Capital shares premium reserve reserve reserve earnings equity

Balance at 1 January 2012,

as previously reported 42 317 0 25 920 -128 875 -776 65 895 5 107 094 5 111 575

Impact of changes in accounting policies -198 645 -198 645

Restated balance at 1 January 2012 42 317 0 25 920 -128 875 -776 65 895 4 908 449 4 912 930 Total comprehensive income for

the period (restated) -564 690 12 -968 683 063 117 417

Dividends to shareholders -203 124 -203 124

Restated balance at 31 December 2012 42 317 0 25 920 -693 565 -764 64 927 5 388 388 4 827 223

Balance at 1 January 2013 42 317 0 25 920 -693 565 -764 64 927 5 388 388 4 827 223 Total comprehensive income for the period 387 691 129 16 719 43 554 448 092

Dividends to shareholders -284 373 -284 373

Balance at 31 December 2013 42 317 0 25 920 -305 874 -635 81 646 5 147 569 4 990 942

Share capital

Par value per share NOK 1.25 Number of shares issued 33 853 935

Shares outstanding and dividends 2013 2012

Number of shares outstanding at 1 January 33 853 935 33 853 935

Purchase of own shares 0 0

Number of shares outstanding at 31 December 33 853 935 33 853 935

Number of own shares at 31 December 0 0

Total dividends per share 8.40 8.40

The board will propose to the Annual General Meeting on 28 May 2014 to approve a dividend of NOK 8.40 per share.

Translation reserve

The reserve represents exchange differences resulting from the consolidation of associates having functional currencies other than NOK.

Hedging reserve

The reserve comprises the effective portion of cumulative net change in the fair value of cash flow hedging instruments related to hedged trans-actions that have not yet occurred.

Fair value reserve

The reserve includes the cumulative net change in the fair value of available-for-sale investments until the investment is derecognised.

Own shares

In May 2013 the Board of Directors was given an authorization by the Annual General Meeting of Ganger Rolf ASA to acquire up to 3 385 394 own shares, corresponding to 10% of the share capital of the company. There was no acquisition of own shares in 2013.

(19)

(Amounts in NOK 1 000) Note 2013 2012 *) Cash flow from operating activities

Net result after tax 247 469 383 222

Adjustments for:

Depreciation 11 1 775 1 940

Impairment of financial assets, accrued costs not paid 10 546 16 451

Unrealized foreign exchange gains (-) / losses -33 -15 111

Investment income -69 431 -14 766

Interest expenses 104 740 107 537

Share of profit from associates 12 -501 751 -475 389

Net gain (-) / loss on sale of property, plant and equipment 11 -118 -1 543

Net gain (-) / loss on sale of investments 29 030 -58 054

Tax income (-) / -expense 10 8 179 33 736

Operating profit before changes in working capital and provisions -169 594 -21 977 Increase (-) / decrease in trade and other receivables 928 223

Increase / decrease (-) in current liabilities 4 078 -36 742

Cash generated from operations -164 588 -58 496

Interest paid -84 335 -88 922

Tax paid 0 5 696

Net result from discontinued operations 102 513 -6 959

Net cash from operating activities -146 410 -148 681

Cash flow from investing activities

Proceeds from sale of property, plant and equipment 312 3 203

Proceeds from sale of investments 3 232 116 619

Interest received 8 259 7 287

Dividends received 512 841 400 169

Acquisitions of property, plant and equipment -52 -506

Change in other investments 161 632 -558 167

Net cash from investing activities 686 224 -31 395

Cash flow from financing activities

Increase in borrowings 303 110 843 963

Repayment of borrowings -665 789 -278 054

Dividends paid -284 373 -203 124

Net cash from financing activities -647 052 362 785

Net increase in cash and cash equivalents -107 238 182 709

Cash and cash equivalents at 1 January 278 664 95 955

Cash and cash equivalents at 31 December 16 171 426 278 664

(20)

Notes to the Consolidated Financial Statements

Ganger Rolf ASA (the “Company”) is a company domiciled in Norway. The address of the Com-pany’s registered office is Fred Olsens gate 2, Oslo. The consolidated financial statements of the Company as at and for the year ended 31

December 2013 comprise the Company and its subsidiaries (together referred to as the “Group of companies” and individually as “Group of compa-ny entities”) and the Group of companies’ interest in associates. The Group of companies is

prima-rily involved in investments within Energy serv-ices, Renewable energy and Shipping / Offshore wind. The company is a subsidiary of Bonheur ASA and the investments are in general made on a 50/50 basis together with Bonheur ASA.

Note 1 – Reporting entity

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with Interna-tional Financial Reporting Standards (IFRSs) and its interpretations, as adopted by the Eu-ropean Union and the disclosure requirements following from the Norwegian Accounting Act, that are mandatory to apply at 31.12.2013. The financial statements were approved by the Board of Directors on 4 April 2014. The financial statements will be published on 30 April 2014. Final approval of the financial statements is performed by the General Meet-ing scheduled at 28 May 2014.

IFRSs and its interpretations that are issued prior to 4 April 2014 and that are not yet mandatory as at 31.12.2013, are not applied by the Group of companies – i.e. IFRS 10 and 12, amendments to IAS 27, 32 and 36, IFRIC 21 and IFRS 9. The new and amended standards and interpretations are not expected to have a significant impact on the reported numbers. Implementation of IFRS 13 has resulted in change of measurement categories for fi-nancial instruments and IFRS 7 has result-ed in change of fair value disclosure. The amended IAS 19 has resulted in change of how actuarial gains and losses and the de-fined benefit obligation are recognised in the statement of comprehensive income and the statement of financial position. Amendments to IAS 1 has resulted in change in how items of other comprehensive income are grouped based on whether they will be re-classified subsequently to profit or loss when specific conditions are met or will not be re-classified subsequently to profit or loss.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis ex-cept for the following:

derivative financial instruments are meas-ured at fair value

available-for-sale financial assets are meas-ured at fair value

non-derivative bond loan (amortised cost) The methods used to measure fair values are discussed further in note 4.

(c) Functional currency and presentation currency

These consolidated financial statements are presented in Norwegian Kroner (NOK), the functional currency of Ganger Rolf ASA. All financial information presented in NOK has been rounded to the nearest thousand.

(d) Use of estimates and judgments

The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assump-tions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and judgments are continually eval-uated and are based on historical experience and other factors, including expectations of future events that are believed to be reason-able under the circumstances. Reassessment of accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Judgments made by management in the ap-plication of IFRSs that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the following notes:

Note 10 Income tax expenses Note 11 Property, plant and equipment Note 13 Other investments

Note 14 Deferred tax assets and liabilities

Note 19 Employee benefits

Note 23 Contingencies and provisions

(e) IAS 19 Employee Benefits (amended)

The amended IAS 19 has changed the meas-urement principles of expected return on plan assets and removed the accounting policy choice for recognition of actuarial gains and losses using the corridor method. Actuarial gains and losses will be recognized immedi-ately in other comprehensive income corre-spondingly affecting the net benefit liability or asset in the statement of financial position. The impact on the Group is quantified below. The effective period is for annual periods be-ginning on or after 1 January 2013. The follow-ing table summarizes the financial effects of IAS 19 restated.

Restated Consolidated Statement of Financial Position:

(Amounts in NOK 1 000)

31.12.12 01.01.12 Pension assets 16 711 20 025 Deferred tax assets 40 140 42 199 Investments in

associates 6 136 713 5 585 182 Employee benefit liability -107 555 -117 042 Deferred tax liabilities 0 0 Equity 4 827 223 4 912 930 Changes:

Pension assets -33 658 -33 607 Investments in associates -96 531 -117 197 Employee benefit liability -27 209 -47 840 Deferred tax assets 0 0 Net decrease in retained

earnings -157 399 -198 645 Decrease in pension cost 7 070

Net Income in

Comprehensive income 41 246

(21)

The accounting policies set out below have been applied consistently to all periods pre-sented in these consolidated financial state-ments, and have been applied consistently by Group of company entities.

(a) Basis of consolidation (i) Subsidiaries

Subsidiaries are entities controlled by the Company. The consolidated financial state-ments include the Company and its subsidi-aries (the Group of companies). The Company normally consolidates subsidiaries when it has the ability to exercise control through owner-ship, directly or indirectly, of more than 50 % of the voting power as set out in the Norwe-gian Public Limited Liability Companies Act § 1-3. In addition, the Company must also consider other arrangements that provide the Company the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its ac-tivities as determined under IFRS.

(ii) Associates (investments accounted for using the equity method)

Associates are those entities in which the Group of companies has significant influence, but not control, over the financial and operat-ing policies. Significant influence is presumed to exist when the Group of companies holds between 20 and 50 percent of the voting pow-er of anothpow-er entity. Associates are accounted for using the equity method and are initially recognised at cost. The Group of companies’ investment includes goodwill identified on ac-quisition, net of any accumulated impairment losses. The consolidated financial statements include the Group of companies’ share of the income and expenses and equity movements of equity accounted investees, after adjust-ments to align the accounting policies with those of the Group of companies, from the date that significant influence commences until the date that significant influence ceases. When the Group of companies’ share of losses exceeds its interest in an equity accounted investee, the carrying amount of that inter-est (including any long-term invinter-estments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group of companies has an obligation or has made payments on behalf of the associate.

Group of company entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign curren-cies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effec-tive interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabili-ties denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retrans-lation are recognised in profit or loss, except for differences arising on the retranslation of avail-able-for-sale equity instruments, or qualifying cash flow hedges, which are recognised in other comprehensive income (see (ii) below).

(ii) Foreign operations

The assets and liabilities of foreign subsidiar-ies with other functional currency than NOK, are translated into NOK at the exchange rate at the balance sheet date. Revenues and ex-penses are translated using average quarterly foreign exchange rate, which approximates exchange rates on the dates of the transac-tions. Foreign exchange differences arising on translation are recognised directly as a separate component of equity. When a foreign operation is disposed of, in part or in full, the relevant amount of the component in equity is transferred to profit or loss.

(c) Financial instruments

(i) Non-derivative financial instruments

Non-derivative financial instruments com-prise investments in equity and debt securi-ties, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are rec-ognised initially at fair value plus, for instru-ments not at fair value through profit or loss, The investment in Bonheur ASA is accounted

for using the equity method and is consoli-dated with 20.7%. Most of Bonheur’s invest-ments are between 20 and 50 percent and the entities are accounted for using the equity method. Of that reason Ganger Rolf Group of companies consolidates Bonheur with invest-ments accounted for using the equity method and not Bonheur Group of companies with Ganger Rolf as a subsidiary.

(iii) Transactions eliminated on consolidation

Intra-group of companies’ balances and trans-actions, and any realised and unrealised in-come and expenses arising from intra-group of companies’ transactions, are eliminated in preparing the consolidated financial state-ments. Unrealised gains arising from transac-tions with associates are eliminated against the investment to the extent of the Group of companies’ interest in the investee. Unrealised losses are eliminated in the same way as unre-alised gains, but only to the extent that there is no evidence of impairment.

(iv) Discontinued operation

A discontinued operation is a component of the Group of companies’ business, the opera-tions and cash flows of which can be clearly distinguished from the rest of the Group of companies and which:

represents a separate major line of busi-ness or geographical area of operations; is part of a single co-ordinated plan to

dis-pose of a separate major line of business or geographical area of operations; or is a subsidiary acquired exclusively with a

view to re-sale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale.

When an operation is classified as a discontin-ued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation had been discontinued from the start of the comparative year.

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are

trans-lated to the respective functional currencies of ...the note continues on the next page Note 3 – Significant accounting policies

(22)

Notes

any directly attributable transaction costs. Subsequent to initial recognition non-deriv-ative financial instruments are measured as described below.

Cash and cash equivalents comprise cash bal-ances and call deposits.

Accounting for finance income and expense is discussed in note 9.

Available-for-sale financial assets

The Group of companies’ investments in eq-uity securities and certain debt securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, are recognised in other comprehensive income. When an in-vestment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss. Other

Other non-derivative financial instruments, including financial liabilities, are recognised initially at fair value and any directly attribut-able transaction costs. Subsequent to initial recognition, assets and liabilities are measured at amortised cost using the effective interest method, less any impairment losses.

(ii) Derivative financial instruments

The Group of companies holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. De-rivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described below.

An embedded derivative is separated from the host contract and accounted for as a derivative if: the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the combined instrument is not measured at fair value with changes in fair value recognised in profit or loss. After separation the derivative and the host contract are measured in accord-ance with their respective principles of valu-ation.

tive evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial as-set measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calcu-lated by reference to its fair value.

Impairment losses in respect of available-for-sale financial assets are recognised in other comprehensive income. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in other compre-hensive income is transferred to profit or loss. An impairment loss is recognised in profit or loss if the decline in fair value below cost is sig-nificant or prolonged. A decline of at least 20 percent or for a period of at least nine months is considered significant and prolonged, re-spectively.

An impairment loss is reversed if the reversal can be related objectively to an event occur-ring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised in other comprehensive income.

(ii) Non-financial assets

The carrying amounts of the Group of compa-nies’ non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

(f) Employee benefits (i) Defined benefit plans

IAS 19R changed the measurement princi-ples of expected return on plan assets and removed the accounting policy choice for recognition of actuarial gains and losses us-ing the corridor method. Actuarial gains and losses are recognised in other comprehensive Cash flow hedges

Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised in other comprehensive income to the extent that the hedge is effec-tive. To the extent that the hedge is ineffective, changes in fair value are recognised in profit or loss.

Economic hedges

When derivative financial instruments is not a part of a qualifying hedge relationship, chang-es in the fair value are recognised immediately in profit or loss.

(d) Property, plant and equipment (i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated deprecia-tion and accumulated impairment losses. Cost includes expenditure that is directly attribut-able to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for separately.

Gains and losses on disposal of an item of property, plant and equipment are deter-mined by comparing the proceeds from dis-posal with the carrying amount of property, plant and equipment and are recognised in profit or loss.

(ii) Depreciation

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.

The estimated useful lives for the current and comparative periods are as follows:

Buildings 25 years Machinery and Equipment 3 to 10 years

Cars 5 years

IT Equipment 3 years Furniture and fixtures 5 years

(e) Impairment (i) Financial assets

A financial asset is assessed at each reporting date to determine whether there is any

2013 Annual Report 2013

Contents

Offshore drilling

Renewable energy

Ganger Rolf ASA (the “Company”) is domiciled in Norway and listed on Oslo Stock Exchange. The

consolidated financial statements of the Company as at and for the year ended 31 December 2013

comprise the Company, its subsidiaries and associates (for accounting purposes only in the following

referred to as the “Group of companies”). The Company has investments in several business activities,

based upon its long term commitment to shipping, offshore drilling, renewable energy and cruise.

Investments are normally made in cooperation with the listed parent company Bonheur ASA. At

year-end 2013 the main investments are within the following business segments:

Other investments

Cruise

Shipping / Off shore wind

Directors’ Report 2013

Directors’ Report 2013

Consolidated Income Statement

Consolidated Statement of Financial Position

Statement of Changes in Equity

Notes to the Consolidated Financial Statements

Notes