Scana — Annual Report 2015

Apr 20, 2016

ANNUAL REPORT 2015

CONTENTS

KEY FIGURES	3
SCANA INDUSTRIER ASA IN BRIEF	4
COMMENTS FROM THE CEO	5
PRESENTATION OF THE PORTFOLIO	6
SCANA ENERGY AB	7
SCANA PROPULSION AS	8
SCANA PROPERTY AS	9
SCANA SKARPENORD AS	10
SCANA OFFSHORE AS	11
SCANA STEEL BOOFORGE AB	12
DIRECTORS' REPORT	13
CORPORATE GOVERNANCE	20
CONSOLIDATED FINANCIAL STATEMENTS	24
NOTES	28
SCANA INDUSTRIER ASA FINANCIAL STATEMENTS	64
NOTES	67
DECLARATION BY THE BOARD OF DIRECTORS AND THE CEO	73
AUDITORS' REPORT	74
PRESENTATION OF THE BOARD	76
PRESENTATION OF THE MANAGEMENT & INVESTMENT DIRECTORS	77
CONTACT DETAILS	Back page

KEY FIGURES

KEY PERFORMANCE INDICATORS

(NOK million)	2015	2014
SALES AND EARNINGS
Order inflow	1 031	973
Orders in hand	439	530
Operating revenue	1 172	1 196
EBITDA	-17	-51
EBIT	-69	-124
Net profit/loss	-72	-265
CAPITAL AND FINANCING
Total assets	902	1 080
Equity ratio	20.2%	14.3%
Net interest-bearing debt	285	363
SHARE
Share price as at 31 December 2015	0.71	2.95
Earnings per share	-0.77	-3.53
EMPLOYEES
Total number of employees as at 31 December 2015	639	958

SCANA INDUSTRIER ASA IN BRIEF

Scana Industrier ASA is an industrial investment company with its head office in Stavanger. The company aims to generate value through professional and active ownership of existing and future portfolio companies. Scana Industrier ASA's organisation consists of a CEO, a Finance Department led by the CFO and a team of investment directors and analysts. The Board has the flexibility to choose between employing or hiring in resources as it deems appropriate. A long-term agreement has been entered into with consulting company Converto AS, which brings expertise and capacity both to the portfolio companies and to the head office in Stavanger.

THE TRANSITION TO INVESTMENT COMPANY

In spring 2015, the Board of Scana Industrier ASA voted to convert the business from a Nordic industrial group into an industrial investment company. This was the consequence of the Scana group in reality having been a collection of relatively different companies and business areas that were only bound together through ownership and financing. An analysis carried out by Converto AS and in-depth evaluations conducted by Scana's management and Board concluded that there were few synergies between the companies in the group. They also found that these companies would have a better chance of a positive value development as independent portfolio companies with Scana Industrier ASA as an active and competent owner.

Scana's most important task as an industrial investment company and owner of the portfolio companies is to establish a clear ownership agenda, specify a strategic direction, and have specific plans for the value creation and value realisation for every single portfolio company. Within this framework, each portfolio company is independently responsible for its own operations and development. Scana exerts its direct influence mainly by appointing the Chairman of the Board of each company and by leading the Board work, as well as following up on the management between Board meetings. In addition, Scana will supply support and resources for special processes.

Scana has established an investment team for each portfolio company, led by an investment director who is also the Chairman of the Board of the respective portfolio company. The investment directors maintain a close dialogue with the CEO and CFO, by means of both formal reporting structures and ongoing discussions on key issues. It is an objective for each portfolio company to have the optimal Board composition based on its business and its strategic and market position. In autumn 2015, new Boards were appointed for the portfolio companies, consisting of internal Scana resources, representatives from Converto AS and external industry experts.

PORTFOLIO COMPANIES

The portfolio consists of six portfolio companies, which to a certain extent follow the earlier division into business areas. The portfolio companies Scana Energy AB, Scana Propulsion AS and Scana Property AS are in effect a continuation of the previous business areas of the same names. The businesses that were formerly in the business areas of Scana Offshore and Scana Other have been established as three new portfolio companies, namely Scana Offshore AS, Scana Skarpenord AS and Scana Steel Booforge AB. Scana Energy AB, Scana Propulsion AS and Scana Property AS are holding companies with their own operating subsidiaries, while Scana Offshore AS, Scana Skarpenord AS and Scana Steel Booforge AB are operating companies without the subsidiaries. Scana Industrier ASA also owns 49 per cent of Korean company Scana Korea Hydraulics Ltd (through Scana Trading AS), which cooperates closely with Scana Skarpenord AS. For this reason, Scana Korea Hydraulics Ltd is considered part of the portfolio company Scana Skarpenord AS.

*Sold after balance sheet date. **Company name changed from Scana Offshore Vestby to Scana Offshore 19.02.2016.

COMMENTS FROM THE CEO

2015 was an eventful year for both Scana and for me personally. Having spent just over two years as Chairman of the company, I took up the role of CEO in September. I'm very pleased and enthusiastic about leading the company through a demanding restructuring process. It is an exciting and challenging task that lies ahead and I have great confidence that we will bring out the underlying values that exist within the company.

Major changes have been implemented to make the company more robust in a difficult market. Scana has gone from being an industrial group to an industrial investment company with six independent portfolio companies. Value creation at the portfolio companies will be secured through active and professional ownership.

As part of the restructuring of Scana, we implemented a successful share issue process in the spring and we entered into a new financing agreement with the bank syndicate. In doing so, we have now laid a good foundation for Scana to properly implement the new strategy. I am very pleased with the good cooperation and the trust that both shareholders and the banks have shown in us, and I will do my utmost to prove us worthy of this trust in the future.

In order to reduce costs and the level of risk, the most loss-making companies have been removed from the portfolio. The winding-up process for Scana Steel Stavanger was completed in spring 2015, and Scana Steel Söderfors was sold. Scana Machining was sold after the balance sheet date and has been taken over by the Motala Verkstad Group. Scana Zamech in Poland has entered into bankruptcy. Properties have been separated from their respective operating companies and brought together in the portfolio company Scana Property, which drives the active development of the property portfolio. A significant amount of debt has been paid off in order to increase the company's robustness. This process will continue until a level of debt is reached that can be justified by the earning potential of the portfolio companies.

In order to overcome financial challenges and to improve market position, major cost-reduction measures were implemented in 2015 at several of the portfolio companies. Sales functions have been enhanced and optimised, while at the same time overall staffing has been reduced.

A major part of Scana's activities is related to the oil and gas industry. Falling oil prices affect the level of activity and increase price competition. This presents challenges for several of the portfolio companies. Scana's financial performance is affected by write-downs and negative operating results. At the same time, we are seeing improvements in underlying operations for several of the companies. This trend is expected to strengthen further as a result of the measures implemented.

M&A activities will generally be a core part of the business for Scana as an investment company. The portfolio companies are undergoing continuous development under the leadership of our investment directors, and the opportunities for realising the investments are evaluated continually. The companies have different degrees of maturity in terms of possible realisation and several of the portfolio companies have the potential to be ready for sale in 2016. The timing of sales will be influenced by the economic situation in the various market segments and by our overall objective of further reducing interest-bearing debt.

Our employees have shown a great willingness and ability to contribute to profitability throughout 2015. As a result, several of our companies are showing significant improvement. I would like to say a big thank you here to all those who have contributed to the new Scana, where we now see significant potential to generate value for our shareholders.

Regards

Bjørn Torkildsen CEO

PRESENTATION OF THE PORTFOLIO

SCANA ENERGY AB

Scana Energy AB consists of Scana Steel Björneborg AB and Scana Subsea AB. Scana Machining AB was sold after the balance sheet date and has been taken over by the Motala Verkstad Group.

Scana Steel Björneborg AB and Scana Subsea AB are located in Sweden. The companies each have a long history, and have specialised in different areas of production. Sales and revenue come from five industrial business areas: oil and gas, the maritime sector, the power-generating industry, renewable energy and the defence industry.

Scana Energy delivers high-quality steel products, applications and complete solutions with various degrees of completion in a range of shapes and steel qualities, always to the customer's requirements and specifications.

Besides forged, rotation-symmetrical, long and thin components with a high technical content, the company also delivers raw forged and semi-finished products. The key products are shafts, rotors, risers and joints, as well as forged steel for tools manufacturers. The sizes vary from a few tonnes up to 45 tonnes of machined weight. The company places an emphasis on research and development in order to further increase the quality of its products.

Production takes place at Scana Energy's own production facilities, which include smelting plants, forges, rolling mills and foundries, as well as heat treatment and machining equipment. Production is of a high standard and complies with ISO-certified quality assurance systems. The business is characterised by a high level of metallurgical expertise and a strong market position.

Scana Energy delivers and offers its solutions to the global market.

Revenue: NOK 539 million Headed by: Sören Andersson Number of employees: 293

Head office: Björneborg, Sweden Other locations: Represented in the USA, China, Turkey, Italy, France and India.

Chairman of the Board: Leif Rosén Board Members: Øyvind Tørlen, Bjørn Torkildsen and Jarle Fjetland

SCANA PROPULSION AS

Scana Propulsion AS is a leading supplier of propulsion equipment to the global shipbuilding market.

The company has its origins in the well-established companies Volda Mekaniske Verksted AS and Mar-El AS. Volda Mekaniske Verksted started out making engines and propellers all the way back in 1913 and the company later broadened its portfolio to include gears and tunnel thrusters. Mar-El has been producing control systems for propulsion equipment since 1974. The companies were acquired by Scana Industrier in 1998 and 1996 respectively. In addition to the development and production of propulsion equipment, Scana Propulsion has a high level of competence and resources within service and modifications.

Scana Propulsion has sales and service companies in Singapore, China, the USA and Brazil, as well as sales representatives in South Korea, Chile, Turkey and Iceland.

PROPULSION SYSTEMS

Scana Propulsion delivers propulsion systems for most types of offshore vessels, tankers, container ships, fishing vessels, well boats, passenger ships, speed boats and yachts. Fuel savings and environmental considerations are central to the development of new propulsion concepts, which can provide significant savings in vessel operation. Scana Propulsion has particularly long experience in the engineering and production of gears and propeller equipment with control systems for advanced vessels in offshore, fishing and the speedboat/passenger ship segment.

The products are marketed globally by the company's own sales team, as well as in cooperation with agents and strategic partners. Sales, marketing, engineering, production, project management and service are carried out by companies in Norway, while project follow-up, sales and service are supplemented from local offices.

INNOVATIVE SOLUTIONS

Scana Propulsion has positioned itself as a leading supplier of advanced propulsion equipment and control systems. With the addition of innovative solutions, including in the field of Permanent Magnet technology, and continuous product development within established product areas, Scana Propulsion provides effective propulsion systems for the shipping fleet of tomorrow that meet stringent requirements for fuel consumption and environmental considerations.

Scana Propulsion sees good growth potential for the company's new products as a result of the authorities' requirements for green shipping in a global context.

Over the course of 2014 and 2015, the company implemented significant restructuring and cost-reduction measures that have had positive results for the business.

Revenue: NOK 318 million Headed by: Inge Bøen Number of employees: 179 Head office: Volda, Norway Other locations: Norway (Dalen), China (Shanghai), Brazil (Rio de Janeiro), USA (Mandeville, Louisiana), Singapore, South Korea, Turkey, Chile and Iceland

Chairman of the Board: Øyvind Tørlen Board Members: Bjørn Torkildsen, Oddbjørn Eliassen, Bjørn Ytrestøyl (Employee representative) and Leif Tore Telseth (Employee representative)

SCANA PROPERTY AS

Scana Property AS was established in 2012 and is a holding company for property companies in Norway and Sweden. The company will drive shareholder value through the ownership, management, development and sale of properties. The companies under Scana Property AS manage around 90,000 square metres of property in total and many of Scana Industrier's portfolio companies lease facilities from Scana Property AS. Some of the building stock is also leased to external parties from various industries.

For operation-independent properties, added value will chiefly be realised through regulation and re-regulation, project development and sale of properties. For operation-dependent properties where other Scana portfolio companies have activities, the property portfolio will be managed and operated in the best possible way for both owners and tenants.

INDUSTRIAL AND COMMERCIAL PROPERTY

Scana Property AS manages properties in Jørpeland in Strand municipality, east of Stavanger, through three subsidiaries. The properties mainly consist of industrial premises, steel mills, machine halls and office premises, as well as a substantial building plot area for further development. There is also around two square kilometres of unused land (isolated area), as well as a cabin area with around 20 plots at Liarvatn, north-east of Jørpeland. The leased part of the property portfolio has external tenants, with the new steel mill operator the largest of these.

Strand municipality is adopting a new development plan for the area that will be a major factor in terms of the opportunities for development and value creation. The plan defines areas for industrial, commercial and residential property. Scana anticipates that the ferry-free road crossing between Ryfylke and Jæren ("Ryfast") will result in Jørpeland becoming more attractive both as a business area and a residential area and that this may have a positive impact on the property market in Strand municipality.

In Volda, subsidiary Scana Eiendom Volda AS owns around 9,000 square metres of floor space, mainly consisting of industrial premises on a leasehold site. The property is currently leased out in its entirety to Scana Volda AS on a long-term lease.

In Karlskoga in Sweden, subsidiary Scana Property AB has a substantial property portfolio that is leased to both Scana-owned companies and external tenants. The properties include industrial, logistics and office premises with a high level of occupancy.

APARTMENTS

Fjordbris AS is the only company that focuses solely on residential property and it is owned 50.1 per cent by Scana Property AS and 49.9 per cent by Strand Eiendomsutvikling AS. The company's property is in Jørpeland and is currently approximately 4,000 square metres in size. There is also the potential for expansion, which could make the total fully developed area around 22,000 square metres. The aim is to develop a housing project with 250–300 apartments. The project is being considered by Strand municipality and the final development decisions will depend on the approved area development plan and final expansion permission, as well as satisfactory market growth and project profitability.

Revenue: NOK 22 million Headed by: Raymond Gabrielsen Number of employees: 2

Head office: Stavanger, Norway Other locations: Strand, (Norway), Volda (Norway), Karlskoga (Sweden) Chairman of the Board: Tom Ivar Sætremyr Board Member: Kjetil Flesjå

SCANA SKARPENORD AS

Scana Skarpenord AS was established in the late 1960s as a division of Norsk Hydro, Rjukan Fabrikker. In 1986, Skarpenord left Norsk Hydro and became an independent company. Three years later, the company was acquired by Scana Industrier. Scana Skarpenord is a leading supplier of hydraulic and pneumatic valve control systems for the oil, gas and shipbuilding industries.

The company is located in Rjukan, and also has a service office in Shanghai, China. Scana Industrier ASA owns 49 per cent of Scana Korea Hydraulic Ltd, which markets Scana Skarpenord's products to the shipbuilding industry in South Korea. The company is also represented in Brazil and the USA.

OWN DESIGN

Scana Skarpenord supplies (gas-based) valve control systems based on the company's key products, which are hydraulic and pneumatic actuators mounted directly on valves. The actuators are of our own design and are manufactured at Rjukan. The control systems for the actuators include control panels, magnetic valve blocks, hydraulic oil generators and PC-based or PLS-based terminals for system operation and indication.

Tailored solutions and customisation are the company's speciality, often with short delivery times. The company has also recently expanded its service into the aftermarket for the oil and gas industry.

REFIT AND UPGRADING

Operators, valve suppliers and maintenance, modifications and operations companies (MMOs) with markets in the offshore industry represent an increasing proportion of Scana Skarpenord's customer base. Refit and upgrading of older offshore installations, vessels and rigs also represent an increasing share of the company's activities.

The main market for new construction of ships and floating offshore installations is currently in South Korea, China, Singapore, and Brazil. The company also supplies equipment to customers in Europe, Russia and North America. Hydraulic actuators and their control systems are also supplied to valve producers and suppliers of gas handling systems for LPG and LNG vessels.

Revenue: NOK 122 million Headed by: Tony André Håvelsrud Number of employees: 66

Head office: Rjukan, Norway Other locations: South Korea, China (Shanghai), Brazil and the USA

Chairman of the Board: Kjetil Flesjå Board Members: Tom Ivar Sætremyr, Pål Lauluten (employee representative) and Stian Sætre (employee representative)

SCANA OFFSHORE AS

Low operating expenses and high flexibility are paramount for Scana Offshore AS, which delivers innovative system solutions for offloading, anchoring, swivels and other turret-related equipment for floating production and storage vessels.

It was in 1953 that Scana Offshore was established as a mechanical engineering and manufacturing company under the name Brødrene Johnsen AS. In 1990, the company began delivering manufacturing and engineering services to Marine Consulting Group, which later became both Hitec Marine and Advanced Production and Loading (APL).

INTERNATIONAL CUSTOMER BASE

In the 1990s, the company delivered bow-loading manifolds, linear winches and turrets as a subcontractor. The deliveries were combined with proprietary swivels, ball valves and larger hydraulic compensators. Based on its experience as a subcontractor, the company also began to deliver its own offloading systems and mooring winches in 2005. Later, the company also developed new types of swivels and turret systems.

In 2011, Scana Offshore received an order for 16 offloading systems for Ecovix in Brazil. The systems were to be installed on eight FPSOs for Petrobras. The company subsequently delivered several other offloading systems, including to Teekay. Since 2013, the company has introduced several new products within the categories of mooring winches and chain stoppers. These products are delivered to Yinson Production and Dana Petroleum, among other customers.

CLOSE TO CUSTOMERS

Scana Offshore has a small and efficient organisation and it focuses on low operating expenses and high flexibility. The company has its own resources for sales and marketing, engineering, purchasing and project management, as well as for commissioning and service. All production is carried out by approved suppliers at cost-effective locations. There are around 20 engineers and graduate engineers among the company's total of 25 employees. These have expertise in structure, mechanics, hydraulics, electrics and instrumentation.

Continuous efforts are made to analyse the market and to be in position at the customer's site early in the project phase. There are good opportunities in this phase to make suggestions that could reduce the customer's costs by providing simple and robust technical solutions.

CHALLENGING MARKET SITUATION

The company's main strategy is to deliver cost-effective system solutions for floating production units for traditional FPSOs and FSOs, as well as production units for LNG.

Individual related products are also supplied within pull-in and hang-off of high voltage cable and umbilical.

The current market situation with low oil prices and a need for alternative, cost-effective solutions provides Scana Offshore with more opportunities than ever. The oil companies and FPSO operators are extremely interested in good, cost-saving solutions.

Revenue: NOK 108 million Headed by: Torkjell Lisland Number of employees: 25

Head office: Vestby, Norway Other locations: Represented in Brazil, Houston, Singapore and South Korea.

Chairman of the Board: Øyvind Tørlen Board Members: Bjørn Torkildsen and Anders Holm

SCANA STEEL BOOFORGE AB

Scana Steel Booforge AB is a leading manufacturer of large forklift truck arms that can lift in excess of 10 tonnes. Its expertise in open die forging enables the company to manufacture larger forks and other forged products according to any specification, with stringent demands for strength.

Since 2009, Booforge also manufactures masts and lifting carriages, and thus is able to supply complete lifting systems for forklift trucks in the heavy segment.

The company has extensive expertise and large capacity in the heat treatment of larger steel components.

INTERNATIONAL MARKET

The company is mainly aimed at forklift truck and machine manufacturers, as well as other steelworks. The company also has customers in oil and gas. Customers are primarily located in the Nordic region, but the company also supplies the international market through its distribution network.

WELL-ESTABLISHED BRAND

Scana Steel Booforge has a well-established brand in lifting solutions for heavier forklift trucks. The company also has a well-developed sales network and substantial strength thanks to its own research and development department. This puts the company in a good position to achieve future growth.

Revenue: NOK 98 million Headed by: Per Sand Number of employees: 68 Head office: Karlskoga, Sweden Chairman of the Board: Leif Rosén Board Members: Øyvind Tørlen, Bjørn Torkildsen and Jarle Fjetland

DIRECTORS' REPORT

Scana Industrier is a Nordic industrial investment company with a broad portfolio of businesses. The company is run by six employees at the head office in Stavanger. As well as using its own resources, the company has signed a long-term agreement with Converto AS, which supplies additional expertise and capacity.

The current portfolio of companies is a result of the reorganisation of the previously integrated industrial group into independent companies. The portfolio ranges from Swedish steel industry to Norwegian industry geared towards maritime business and the offshore industry. It also includes a substantial property portfolio. Both the transition to investment company and the portfolio of companies are described in detail elsewhere in this report.

Scana Industrier aims to be an active owner that contributes to shareholder value in the portfolio companies through active ownership. This means close involvement in strategic issues and in areas that are important for shareholder value. The companies are operationally independent with their own Boards and management, which are responsible for operations and development.

PORTFOLIO COMPANIES

• SCANA ENERGY AB
• SCANA PROPULSION AS
• SCANA PROPERTY AS
• SCANA SKARPENORD AS
• SCANA OFFSHORE AS
• SCANA STEEL BOOFORGE AB

STRATEGY

Scana Industrier shall create value for its shareholders over time through a positive share price trend and the payment of dividends. The basis for this will be to ensure the best possible value development in the portfolio companies.

Shareholder value will be created at the portfolio companies through professional and active ownership. Part of this work involves implementing good exit processes when it is appropriate to dispose of a portfolio company

Scana Industrier has defined its guiding core values as:

• Setting clear goals and committing to achieving these.
• Basing decisions on facts and knowledge.
• Execute with force and speed.
• Being clear and open in our communications.

Based on these values, the company works to achieve the following overall objectives:

• Create good returns for the company's shareholders.
• Be financially strong, with the goal of making the investment company debt-free so that all debt is contained in cash-generating operating companies.
• Be an attractive owner for businesses that are seeking active and professional ownership.
• Be an attractive employer for highly qualified people.
• The investment company must be a cost-effective yet competent organisation.

To achieve these overall objectives, Scana Industrier has defined some basic guiding principles:

• Scana Industrier only invests in companies where our ex-

perience and knowledge enable us to create added value through active ownership.

• Portfolio companies are sold when new owners are in a better position to develop value further.
• Scana must always understand and manage risk in a professional manner.
• Capital must be managed as effectively as possible. This means that surplus liquidity is normally paid to shareholders in the form of dividends, while capital requirements related to future new investments are met through share issues.

MARKET OUTLOOK

Most of Scana's portfolio companies have direct or indirect exposure to the oil and gas industry and are therefore currently experiencing demanding markets. A major cut in investments at the oil companies is having a knock-on effect back through the value chain, leading to a drastic decline in contracting for new rigs, vessels and installations, with an associated reduction in demand for the supplier industry. For Scana Propulsion, this has resulted in an almost complete halt to contracting for new offshore vessels at Norwegian shipyards. Increased new construction activity in other vessel segments and a high level of service activity compensates for some, but not all, of the decline. Scana Energy is also experiencing reduced demand from the oil and gas sector, which, combined with a general overcapacity in the steel sector, is contributing to a challenging market situation for this portfolio company.

Scana Offshore is also being affected by the downturn in the oil sector and is experiencing strong competition and price pressure in relation to the contracts that are out for tender. However, the company is experiencing strong demand for several of its solutions within the FPSO and FSO segments.

Scana Skarpenord is experiencing a relatively high level of activity in gas freight, which is the company's most important market. However, there is strong competition and considerable price pressure in this industry. The market situation in the offshore sector is demanding, but the company has niche products for individual customers, an area in which there is growing demand.

Scana Property has a stable market situation for the leased property portfolio. The value of the properties in Jørpeland may be affected by the outcome of the new area development plan that is expected to be adopted this year, as well as the general property market in the region. The development in the real estate market over the past year has been negative and the Stavanger region has been hit hard by the downturn in the oil sector. The value from a long-term development perspective, however, is less dependent on short-term market fluctuations, although a negative sentiment may restrict available options and shareholder value in the short term.

IFRS

International Financial Reporting Standards (IFRS) are used as the prevailing accounting policies for the consolidated financial statements. These standards have been adopted by the EU.

OPERATION AS A GOING CONCERN

The annual financial statements have been prepared on the basis of the going concern assumption and the Board confirms that this assumption is valid.

In July 2015, a refinancing agreement was signed with the existing bank syndicate, wherein the loan agreement is extended by three years. The refinancing agreement consists of a term loan of SEK 292 million with a five-year repayment profile and no installments until 31 December 2016. The first instalment of SEK 14.7 million is due on 22 March 2017. Subsequent instalments will be payable quarterly until final maturity on 22 June 2018. Interest on the loan is paid quarterly. See notes 17 and 23 of the consolidated financial statements for further details.

As a condition of the debt refinancing, a share issue was also carried out with net proceeds of NOK 92 million after transaction costs. The funds were made available in early July 2015. At the same time, the banks also released restricted funds of NOK 20 million.

The consolidated result for the year is a loss of NOK 72 million, which is lower than expected. Consolidated equity as at 31 December 2015 is NOK 182 million, while the group's liquidity reserve is NOK 121 million and consists of unrestricted funds (NOK 100 million) plus the unused portion of the approved bank overdraft. See also notes 15 and 22.

Improvements in profit levels from underlying operations and cash flows

The going concern assumption is also based on the expectation that the financial outcome of and cash flow from operations will improve in future. The management and the Board believe that the measures noted below and other processes will help to achieve and ensure the profitability of the businesses. But there still remains uncertainty with regard to the underlying cash flows, because of uncertainty about when the market will turn around, how quickly the cost-saving measures will have a positive effect on operations and what the results of the measures implemented to promote sales will be.

The management and the Board are of the opinion that the group will gradually regain profitability in its portfolio companies through ongoing and implemented strategic and operational measures. Sale of companies and underlying assets contributes to strengthening the group's capital structure:

• 1. The company recently signed an agreement to sell its shares in Scana Machining AB. The transaction is considered appropriate for the group as Scana Machining AB has incurred significant losses for the group over the past few years; it will also help to reduce Scana's liquidity risk and operational risk, as well as its guarantee obligations. See note 27.
• 1. Scana Steel Söderfors AB was sold in early 2015. The company has delivered negative results for several years. The sale of Scana Steel Söderfors AB has reduced the group's liquidity risk and operational risk. See note 27.
• 1. In the first quarter of 2015, Scana Steel Stavanger AS applied for a winding-up order following several years of poor financial results. The winding-up of Scana Steel Stavanger AS has reduced the group's liquidity risk and operational risk. See note 27.
• 1. In summer 2015, Scana Zamech Sp. z o.o. (Poland) applied for a winding-up order. This company has also delivered negative results in recent years. This development will help to reduce the company's liquidity risk. See note 27.
• 1. Scana Energy implemented two cost-reduction programmes during 2015. The first phase has been completed and mainly consisted of making 32 employees redundant. The second phase, which is mainly related to redundancies and reducing production costs by NOK 30 million, has begun and is expected to take full effect from the beginning of the third quarter of 2016. Overall, the cost measures are expected to have an effect of NOK 50 million per year once the measures are in full effect.
• 1. Scana Propulsion has adopted cost measures of NOK 6 million to improve profitability through redundancies and temporary lay-offs.
• 1. In addition to the above measures, there is greater focus on sales efforts in order to increase sales in both existing and new markets.

INCOME STATEMENT

Consolidated revenue for 2015 amounts to NOK 1,172 million, which corresponds to a fall of NOK 24 million compared with 2014. The group achieved earnings before depreciation and amortisation (EBITDA) of NOK -17 million, which represents an improvement of NOK 34 million compared with 2014, but is lower than expected. Adjusted for capital gains in 2014 relating to the property portfolio, EBITDA has improved by NOK 60 million compared to the previous year.

The income statement for 2015 includes write-downs and restructuring totalling NOK 38 million. These are related to the following income statement items:

• Write-down of net assets in connection with Scana Zamech's winding-up order application of NOK 6 million, of which NOK 1 million relates to non-current assets.
• Restructuring undertaken at Scana Energy during 2015 amounts to NOK 6 million.
• Write-downs were made of inventories in the amount of NOK 5 million and deferred tax asset in the amount of NOK 11 million at Scana Machining AB.
• Write-downs were made in relation to development costs and non-current assets at Scana Volda AS in the amount of NOK 5 million.
• The provision for bad debts in connection with a project at Scana Propulsion was increased by NOK 5 million.

The group's net interest expenses amounted to NOK 20 million in 2015.

The loss before tax from continuing operations was NOK -87 million. The recognised tax expense for the year from continuing operations amounted to NOK 6 million.

Profit after tax from discontinued operations was NOK 21 million and relates, among other things, to the gain from the final settlement of the sale of Offshore Service and the partial settlement of the bankruptcy estate of Scana Steel Stavanger AS. See note 27 for further details.

The group's total loss for the year was NOK -72 million, of which NOK -0.5 million is attributable to non-controlling interests. This amounts to earnings per share of NOK -0.77 compared to NOK -3.53 per share in 2014.

BALANCE SHEET

The balance sheet total as at 31 December 2015 was NOK 902 million, which is a fall of NOK 177 million on the previous year.

The group's net interest-bearing debt at the end of 2015 was NOK 285 million, taking into account cash and cash equivalents. Gross interest-bearing debt was recognised at NOK 395 million, which is a reduction of NOK 44 million from the same date in 2014. The group obtained a deferral of the instalment due on 31 January 2015 until the share issue was completed. The group has complied with the loan terms following refinancing and the debt was classified as non-current on the balance sheet date.

Recognised equity as at 31 December 2015 is NOK 182 million, which corresponds to an equity per share of NOK 1.70 and an equity ratio of 20.2 per cent. Equity per share was calculated on the basis of 107,511,831 shares, which is the number of shares in the company at year-end.

Intangible assets at the end of 2015 were recognised at NOK 17 million, of which goodwill amounted to NOK 3 million. Unrecognised deferred tax assets amount to NOK 102 million.

CASH FLOW

Net cash flow from operating activities was NOK 48 million. The difference between the operating result and cash flow from operating activities was mainly due to depreciation, amortisation and write-downs, settlement relating to discontinued operations and changes in working capital.

During 2015, ordinary investments were made in the amount of NOK 17 million. Non-current assets (mainly property) were sold for NOK 4 million. Businesses were sold for NOK 5 million, as referred to in note 27. Net cash flow from investing activities was NOK -8 million.

Net cash flow from financing activities was NOK -6 million. In summer 2015, Scana Industrier ASA carried out a share issue that raised NOK 92 million net. The company paid off debt in the amount of NOK 43 million in 2015. Fjordbris AS entered into a loan agreement with a minority shareholder for NOK 5 million. The group has paid net interest amounting to NOK 20 million and paid off current interest-bearing debt in the amount of NOK 35 million. The group's cash and cash equivalents as at 31 December 2015 amount to NOK 113 million, of which NOK 11 million is ring-fenced funds. See notes 15 and 22 for further details.

PORTFOLIO COMPANIES

SCANA ENERGY AB

Scana Energy AB consists of Scana Steel Björneborg AB and Scana Subsea AB. Scana Machining AB was sold after the balance sheet date and has been taken over by the Motala Verkstad Group. Scana Steel Björneborg AB and Scana Subsea AB are located in Sweden. The company's sales and revenue come from five industrial business areas: oil and gas, the maritime sector, the power-generating industry, renewable energy and defence.

2015 was characterised by a sharp reduction in investment on the company's markets, which was mainly the result of low oil and energy prices, as well as low economic growth in Europe. There was an impact on the oil and gas markets and power generation in particular, but order inflow in the marine sector was also significantly affected and fell by eight per cent. The company's key customers gradually reduced their activity over the course of the year and on several occasions also their forecasts. Total revenue at Scana Energy fell by five per cent to NOK 539 million.

Over the past few years there have not been any major reductions in production capacity among the manufacturers of processed products. Combined with lower demand, this means that even tougher price competition is to be expected over the coming year.

The gross margin fell from 21 per cent in 2014 to 15 per cent in 2015. Over the same period, EBITDA fell from NOK 12 million to NOK -26 million in the previous year. NOK 6 million of this fall relates to non-recurring costs associated with staffing reductions and pensions. There were also inventory write-downs of NOK 5 million.

In order to handle this special and sometimes extreme market situation, two cost-reduction programmes were launched in 2015. Once fully implemented, these programmes will have an annual effect of NOK 50 million. The programmes have focused on establishing a more cost-effective and consolidated organisational structure. Other cost-reduction measures have included renegotiating contracts with subcontractors, as well as other purchasing contracts.

Over the course of the year, the organisation has successfully increased the number of sales agents and distributors in several European countries such as Italy, France and Turkey. It has also introduced a portfolio of high-performance steel and clean steel grades under the VIP brand, which is adapted to suit various applications. The desired effect of these new steel products and the organisation's ability to differentiate itself in the market will be important for Scana Energy given the current situation. Despite the very low level of activity in the oil and gas industry, two major contracts to supply risers were won during the year, worth SEK 67 million.

KEY PERFORMANCE INDICATORS	2015	2014
(Amounts in NOK million)
Operating revenue	539	567
EBITDA	(26)	12
EBIT	(50)	(33)
Order inflow	506	496
Orders in hand	249	240

SCANA PROPULSION AS

Scana Propulsion AS's revenue ended at NOK 318 million in 2015, a decrease of 4.1 per cent compared to 2014. The reduction came in activities associated with the delivery of new systems, while service-related activities have increased.

The company's EBITDA rose from NOK -3 million in 2014 to NOK 21 million in 2015. The positive trend is the result of increased revenue within service and the implementation of cost-reduction measures.

The offshore market has been significantly weakened in recent years due to the sharp fall in oil prices and reduced investments in the sector. The overcapacity in available tonnage is expected to continue throughout 2017 and new tonnage is therefore only being contracted in rare cases. This has led to a decline in the company's order inflow. The order inflow fell from NOK 332 million in 2014 to NOK 246 million in 2015. The company's orders in hand at the end of 2015 amounted to NOK 87 million, compared to NOK 154 million at the end of 2014.

The company is actively working to improve its competitiveness within vessel segments other than offshore by strengthening its own sales organisation, reducing costs and focusing more on efficient project implementation. It is expected that the company will increase its order inflow within vessel segments associated with fishing and aquaculture, defence and coast guard, inshore freight and trade. The increasing level of activity on the ferry market and other passenger transport is also providing growing demand for the company's remote control products.

The cost reductions implemented have resulted in fewer employees in both operational and administrative functions. At the end of 2015, the employees at Scana Propulsion corresponded to 179 FTEs, compared to 217 FTEs at the end of 2014, and 247 in August 2013 when the cost-reduction work began. As a result of the low order backlog, the company laid off employees temporarily at the start of 2016.

A generally difficult market for the company must also be expected in 2016. The forecasts available for global shipbuilding activity show levels that are lower than what has been normal for the past 15 years. In particular, the number of offshore vessels that will be built in 2016 is expected to be very low. In terms of the company's service activity, the future trend is generally difficult to predict, but active efforts will be made to ensure that the positive trend of 2015 will continue in order to achieve increased activity outside the offshore segment and with key customers.

KEY PERFORMANCE INDICATORS	2015	2014
(Amounts in NOK million)
Operating revenue	318	331
EBITDA	21	(3)
EBIT	7	(19)
Order inflow	246	332
Orders in hand	87	154

SCANA PROPERTY AS

The total revenue of the subsidiaries under Scana Property AS was NOK 22 million in 2015, compared to NOK 42 million in 2014. The large fall in revenue is because the figures for 2014 included substantial capital gains on property sales in the subsidiary Scana Eiendom Jørpeland AS. Pure rental income in 2015 was NOK 21 million, compared to NOK 15 million in 2014. The increase in rental income is attributable to Scana Volda Eiendom AS, which was established in 2015 with rental income from Scana Volda AS, and to a new lease for the steelworks property in Jørpeland. Capital gains recognised in 2015 amounted to NOK 1 million.

Total EBITDA in 2015 came to NOK 9 million, compared to NOK 29 million in 2014. The above capital gains in 2014 also explain the large fall in EBITDA from 2014 to 2015, where almost all revenue was rental income.

The large properties in the portfolio have a high level of occupancy with stable tenants and no significant maturity this year. 2016 is the first year with full-year rental of the steelworks property in Jørpeland. This will lead to an increase in rental income. Contractual rent adjustments are also expected to provide income growth this year. Through Scana Property AB, the company has some vacant office premises in Karlskoga. There is currently a weak market for such premises in the area and no significant income contribution is expected from this part of the portfolio in the short term.

During the first half of 2016, Strand municipality is expected to adopt a new area development plan and city centre plan that also covers Scana Property's properties in Jørpeland. Scana Property is considering various options for the development of the area, depending on the constraints and opportunities the new area development plan provides.

In 2016, the company will optimise earnings from the leased building stock by adjusting leases where possible, and by implementing strict cost control. Some individual parcels and smaller properties that do not provide continuous earnings or are not deemed to have significant potential value may be sold. The company otherwise adopts an opportunistic approach towards the sale of other properties, including those that are leased out. Sale of these may also be considered if this would add value for Scana Industrier.

From a longer-term perspective, the development of the properties in Jørpeland is an important priority area for Scana Property. The company is looking at various strategic options, which will be dependent on a number of factors, including the final area development plan and the market trend in the region. Options may include developing the properties itself, strategic or financial partnerships and the sale of larger or smaller parts of the portfolio.

KEY PERFORMANCE INDICATORS	2015	2014
(Amounts in NOK million)
Operating revenue	22	42
EBITDA	9	29
EBIT	5	27

SCANA SKARPENORD AS

The company's revenue in 2015 amounted to NOK 122 million, an increase of 13.8 per cent on 2014. The changes in revenue within the segments were as follows: Marine O&G increased by 10 per cent, Scana Korea Hydraulic increased by 9 per cent, Spare parts and service increased by 53 per cent, while Offshore decreased by 30 per cent.

EBITDA rose by 7.4 per cent compared to 2014, ending at NOK 4 million. Working capital rose by 41.7 per cent over the course of 2015 and amounted to NOK 20 million at year-end. This rise is mainly due to an increase in stock of NOK 4 million and a reduction in trade payables of NOK 10 million during the course of the year.

Deliveries to two companies that supply equipment packages to the gas freight market account for 40 per cent of revenue. Both companies confirm that there will be increased activity in this segment again in 2016, but with a shift from LPG to LNG. Scana Skarpenord has achieved a strong position in this segment and has a close and mutually beneficial relationship with both suppliers. It is expected that revenue from this segment will continue to be high.

Spare parts and service to the existing customer base account for 20 per cent of revenue and this revenue is relatively stable and predictable. The channels into this market go either directly to shipping companies and ship operators or through agents and business partners. The company has increased its sales focus in an effort to further increase revenue in this market.

Sales to the South Korean shipyard market via the sister company in South Korea, Scana Korea Hydraulic (Scana owns 49% of the company), account for 15 per cent of revenue. Revenue at Scana Korea amounted to NOK 135 million, with a profit for the year of NOK 13 million. The financial statements are recognised in the consolidated financial statements using the equity method, with a profit share of NOK 6 million in 2015. Despite a general decline in the shipbuilding market in South Korea and the larger shipyards in this market facing financial challenges, Skarpenord has so far had stable revenue here and was slightly ahead of budget in 2015. However, this revenue is expected to decline in 2016. Skarpenord works closely with Scana Korea Hydraulic to secure new orders and cost-saving measures have been initiated to enhance the competitiveness of the companies in this market.

Revenue in the other markets in the marine segment is stable. There is a strong increase in tendering activity on the Chinese market and an increase in order inflow is therefore expected from this market in the future.

Revenue from the offshore segment represents only 10 per cent of total revenue, so offshore deliveries are not currently a critical part of activities in Rjukan. However, there has been a sharp reduction in order inflow from this segment over the past year. In the second quarter of 2015, measures were initiated to increase sales to this market and in the past six months this has resulted in a sharp rise in the number of requests and tenders submitted in this segment. In the third quarter, the focus on sales was further strengthened by allocating a dedicated sales resource to the Norwegian offshore market. It is expected that order inflow from this segment will increase gradually in 2016.

KEY PERFORMANCE INDICATORS	2015	2014
(Amounts in NOK million)
Operating revenue	122	107
EBITDA	4	4
EBIT	3	2
Order inflow	96	125
Orders in hand	28	53

SCANA OFFSHORE AS

Scana Offshore's revenue ended at NOK 108 million in 2015, a fall of 28.2 per cent compared to 2014. The fall in revenue is linked to the company's delivery in Brazil in connection with the supply of offloading systems for eight FPSOs, as delivery of the project nears completion. Otherwise the company has worked on several larger deliveries within offloading and anchoring systems in 2015.

The company's EBITDA fell from NOK 16 million in 2014 to NOK 13 million in 2015. This negative trend is mainly related to the fall in revenue. In 2014, EBITDA as a percentage of revenue was 10.5 per cent, compared to 12 per cent in 2015.

The current market situation with low oil prices and a need for alternative, cost-effective solutions provides Scana Offshore with more opportunities than before. The oil companies and FPSO operators are extremely interested in good, cost-saving solutions. The company's order inflow increased from NOK -69 million in 2014 to NOK 104 million in 2015. This included a downward adjustment of contracts in Brazil in connection with a changed scope of work. The company's orders in hand at the end of 2015 amounted to NOK 66 million, compared to NOK 70 million at the end of 2014.

The company is actively working to improve its competitiveness by analysing the market and getting into position early in the contracting phase. This work gives the company an opportunity to propose simple and robust technical solutions that are cost-saving for customers. Scana Offshore has a small and efficient organisation, which helps keep the company's ongoing operating expenses low.

At the end of 2015 there were 25 FTEs employed at Scana Offshore, compared to 27 FTEs at the end of 2014. The company has not replaced staff who have left, but has allocated their tasks within the framework of existing personnel.

A challenging market is generally expected in 2016 due to low oil prices. At the same time, this provides the company with excellent opportunities to win new contracts as our customers seek cost-effective and robust technical solutions. In 2016, Scana Offshore will have an even greater focus on the market for service and maintenance, an approach which is expected to provide a good platform in the long term.

KEY PERFORMANCE INDICATORS	2015	2014
(Amounts in NOK million)
Operating revenue	108	151
EBITDA	13	16
EBIT	10	12
Order inflow	104	(69)
Orders in hand	66	70

SCANA STEEL BOOFORGE AB

Revenue at Scana Steel Booforge AB fell by two per cent in 2015 compared to the previous year and ended at NOK 98 million. The decline in the oil and gas industry has had a negative impact on the order inflow for open die forging and heat-treated products. However, the company has seen an increase in revenue over the past year for the product groups of forks and lifting equipment.

The EBITDA margin fell from 4.6 per cent in 2014 to 0.2 per cent in 2015. Overall EBITDA was NOK 0 million. Profitability was weaker due to the aforementioned market climate in 2015. The company has also had large expenses in connection with a tragic work accident.

In the period ahead, Scana Steel Booforge will increase its market activity within open die forging and heat-treated products, with a particular focus on gaining new customers.

The market for forks and lifting equipment is expected to remain stable in the future. The company will concentrate on developing the business outside the Nordic region and will focus in particular on developing its own designs within the segment of carriages for forklift trucks and wheel loaders.

2015	2014
98	100
0	5
(4)	1
80	89
9	13

RISK MANAGEMENT

Scana Industrier's most significant risk is linked to the fundamental economic situation and developments in the global market. The companies have implemented a number of measures in order to address the change in activity seen in recent years. These include stepping up the marketing and sales effort, reductions in workforce and costs, restructuring operations and selling or shutting down some companies.

In addition to the risk associated with their own projects, several of the portfolio companies are exposed to risk associated with the uncertain price trend for raw materials such as scrap steel and alloys, as well as an uncertain electricity price trend. Scana Industrier has opted for market-based and contractual hedging against fluctuations in some of the risk areas.

The company is also exposed to financial risk:

Currency risk

Scana Industrier hedges its net currency exposure to the Norwegian krone and Swedish krona (NOK and SEK). The company's economic situation means that currency hedging is only a short-term measure. Fluctuations in exchange rates after the time of hedging affect sales income and operating profit. However, these changes are balanced by corresponding effects in the financial items in the financial statements. Scana Industrier is mainly exposed to fluctuations between NOK and SEK through its holdings in Swedish portfolio companies. Some of the non-current liabilities are therefore drawn in SEK in order to counteract the SEK exposure of the company's equity. Yet the trends in NOK and SEK in relation to EUR, USD and GBP will over time have a major impact on the portfolio companies' competitiveness, margin outlook and operating profit.

Liquidity risk

Securing good financial maneuverability is an important aim of Scana Industrier. The company is continuously working to reduce the financial risk, including through close monitoring of liquidity projections and programmes to optimise working capital.

The portfolio companies are responsible for their own liquidity management. At group level, Scana Industrier oversees the liquidity situation in the short and long term through monitoring of and active dialogue with the portfolio companies. As at 31 December 2015, the group had bank deposits of NOK 113 million, of which NOK 11 million was in a restricted bank account. See note 15. The group had utilised credit facilities in the amount of NOK 83 million from an overdraft facility of NOK 104 million. In total, the liquidity reserve for the group as at 31 December 2015 was NOK 121 million. See note 22.

The syndicate loan, including bank overdraft, matures on 22 June 2018. For further details, see note 23 on financial instruments and note 28 on operation as a going concern.

Credit risk

Scana Industrier's portfolio companies have guidelines for ensuring that orders are not entered into with customers who have had major payment problems and for ensuring that outstanding amounts do not exceed defined credit limits.

The company regards its greatest risk exposure to be the carrying amount of trade receivables (see note 13) and other receivables (see note 14). The operating companies in Europe have credit insurance with Euler Hermes Norge for some of the trade receivables in order to cover the exposure to credit risk. Within the portfolio companies Scana Energy, Scana Propulsion, Scana Skarpenord and Scana Offshore, the majority of the deliveries are otherwise to financially sound shipyards and customers. The shipyards in China and South Korea are to a great extent owned by the state. Within Scana Propulsion, Scana Skarpenord and Scana Offshore, service and after sales services are provided to leading global players, with the credit risk considered limited here. Increased activity is expected within new projects and expansions. Historic losses are very limited.

The counterparty in electricity derivatives is Vattenfall Power Management AB. The credit risk associated with derivatives is considered to be low.

CORPORATE SOCIAL RESPONSIBILITY

The investment company Scana Industrier ASA is responsible for having general guidelines in place that apply to its portfolio companies. Each individual company is responsible for adding supporting guidelines adapted to the activities and the industry in which it operates.

Scana's portfolio companies must operate in an economically, socially and environmentally responsible manner. Corporate social responsibility must play a key role in the companies' planning and execution of services. The companies must comply with international conventions and protocols relating to business, ethical guidelines and safety procedures.

Scana Industrier's corporate social responsibility guidelines have five main priority target areas:

• Human rights
• Corruption
• Discrimination
• Health and safety
• Environmental impact

Human rights

Scana Industrier and its portfolio companies must actively ensure that the activities they carry out do not violate fundamental human rights. Human values such as integrity, honesty, justice and respect are fundamental to exercising corporate social responsibility.

Scana Industrier and its portfolio companies have not experienced any events in 2015 that are indicative of a breach of these values and will in 2016 to promote the safeguarding of good human values and prevailing rights.

Corruption

Scana Industrier and its portfolio companies must at all times comply with the laws, guidelines and regulations that apply in each country and region in which the companies and their subsidiaries are located. The companies must also pay taxes and duties, as well as implementing measures to prevent corruption and mismanagement. Scana Industrier has a zero tolerance policy with regard to corruption and encourages its employees to report any suspected breaches.

Discrimination

Scana Industrier and its portfolio companies actively work to promote the objectives of the Norwegian Gender Equality Act. This work focuses on processes relating to recruitment, promotions, development opportunities and protection against harassment, as well as salary and working conditions. It is also the companies' objective to be a workplace free of disability-based discrimination.

Health and safety

It is Scana Industrier's express aim to ensure safe working conditions and to provide a good work environment where employees flourish and develop their skills. Several of the investment company's portfolio companies in Norway offer apprenticeships to help young people enter the world of work and to support the development of specialist skills in society. Scana Industrier supports the right of employees to join trade unions and trade organisations.

Employees

Scana Industrier had six employees at the end of 2015, including one woman. The company works to promote equal development opportunities and for there to be no discrimination of any kind. This is described in the company's ethical guidelines and also applies to all Scana Industrier's portfolio companies.

Scana Industrier and the portfolio companies had 639 employees as at 31 December 2015, a reduction of 178 since the previous year-end. Women account for 12 per cent of employees, while 88 per cent are men.

Distribution of women and men at each company:

	Scana Industrier	Scana Energy AB	Scana Propulsion AS	Scana Property AS	Scana Offshore AS	Scana Skarpenord AS	Scana Steel Booforge AB
Women	1	30	22	0	8	11	7
Men	5	263	157	2	17	55	61

There is a large majority of men at all companies, something which can be attributed to historical and industrial traditions. Women are represented on the management teams of all the portfolio companies, with the exception of Scana Property. Scana Industrier complies with the gender representation requirement of the Norwegian Public Limited Companies Act, with two of its five Board Members being women.

Absence due to illness at Scana Industrier was 2.3 per cent in 2015. Absence due to illness for Scana Industrier and the portfolio companies as a whole was 4.8 per cent in 2015. Absence due to illness at most portfolio companies was low in 2015. There was one fatal accident in 2015.

Detailed injury and absence due to illness statistics:

	Scana Industrier	Scana Energy AB	Scana Propulsion AS	Scana Property AS	Scana Offshore AS	Scana Skarpenord AS	Scana Steel Booforge AB
H-value (TRIF)	0	18.3	9.5	0	0	20.9	45.9
Fatal accidents	0	0	0	0	0	0	1
Absence due to illness	2.3%	4.5%	4.4%	0%	2.1%	8.6%	5.3%

The H-value for Scana Industrier as a whole was 17.7 in 2015. H-value: number of reportable injuries per one million hours worked.

Environmental impact

Scana Industrier's portfolio companies have obtained concessions for their operations and their impact on the external environment does not exceed that specified in the discharge permits granted. The companies work to limit discharge and emissions, waste to landfill and other negative environmental effects.

Waste from production is sorted and handled according to regulations, as well as being recycled where possible. The companies in the steel business area buy large quantities of scrap for remelting and are thereby also prominent in the recycling industry.

Per Anders Ravnestad Chairman of the Board Carl Christian Krefting Board Member

Stavanger, 15 March 2016

Elisabeth Line Saupstad Board Member

Sindre Ertvaag

Board Member

Martha Kold Bakkevig Board Member

Bjørn Torkildsen CEO

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE REPORT

The principles for corporate governance are specified by the Board of Scana Industrier ASA. The principles are based on the Norwegian Code of Practice for Corporate Governance published by the Norwegian Corporate Governance Board (NUES) and are designed to ensure that the companies' business management is in line with general and recognised interpretations and standards, and that the companies operate in compliance with relevant legislation and regulations. Information on the code of practice can be found at www.nues.no.

Scana Industrier is listed on the Oslo Stock Exchange and is subject to Norwegian securities legislation and stock exchange regulations. Information about current regulations for listed companies can be found at www.oslobors.no.

BUSINESS

Scana Industrier has the following adopted aims: to own and operate industrial and commercial enterprises and activity associated therewith, and to own and operate real property. The company's aim encompasses further investment in other companies in order to promote the company's interests.

Scana Industrier is a Nordic industrial investment company with a broad portfolio of businesses. The company aims to generate value through professional and active ownership of existing and future portfolio companies.

This means close involvement in strategic issues and in areas that are important for shareholder value. The companies are operationally independent with their own Boards and management, which are responsible for operations and development.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

COMPANY EQUITY AND DIVIDEND

Equity

The Board and management regularly check that the group's equity is appropriate to the goals, strategies and risk profiles of the companies. The group's recognised equity as at 31 December 2015 was NOK 182 million. Further information about financial risk is provided in note 22 to the consolidated financial statements.

Dividend

Scana Industrier's shareholder policy is to give its shareholders a competitive return in the form of dividends and an increase in market value. Scana will pursue a conservative share issue policy in which the interests of existing shareholders are given precedence.

Satisfactory long-term growth and financial performance should provide shareholders with a good total value trend over time. The company's dividend policy must consider the need to maintain adequate levels of capital and allow for added value through new investments. Based on this, the Board believes it is appropriate that the long-term dividend constitutes one-third of the profit for the year. The remainder will ensure growth and a satisfactory level of equity.

The General Meeting determines the annual dividend, following a proposal by the Board.

Authorisation to issue new shares

Authorisation for the Board to acquire own shares

To ensure flexibility in connection with any acquisitions, the Board is authorised to acquire own shares.

Authorisation for the Board to issue new shares

To ensure flexibility in connection with a) any acquisitions, b) strengthening the company's capital structure, c) targeted share issues to the company's senior employees and d) implementation of a share splice, the Board is authorised to carry out one or more targeted capital increases for the following purposes:

• Authorisation for a capital increase in connection with the completion of any acquisitions
• Capital increase in connection with the strengthening of the company's capital structure
• Capital increase in connection with targeted share issues to the company's senior employees
• Capital increase to enable the implementation of a share splice.

Share option scheme for employees

Frameworks for option schemes and schemes for allocating shares to employees will be dealt with and approved by the General Meeting. As at 31 December 2015, there is no share option scheme for employees.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

EQUAL TREATMENT OF SHAREHOLDERS AND RELATED-PARTY TRANSACTIONS

Scana Industrier ASA has one class of shares, with each share carrying one vote at the General Meeting. Each share has a nominal value of NOK 1.00. The company's transactions in its own shares must normally take place on the stock exchange or at market price. Particular care must be taken with regard to transactions with others where Scana Industrier's shareholders, Board Members, management or related parties have a financial or personal interest. If the transaction is not of an insignificant nature/size, an assessment must be made by an independent third party.

With regard to shares held by Board Members and senior employees, please see notes 10 and 24 to the consolidated financial statements. Guidelines have been prepared to ensure that the Board Members and senior employees obtain prior approval and report any trading of Scana shares.

Scana Industrier has its own insider regulations that must be signed by all those on the insider list.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

FREE TRADABILITY

The shares in Scana Industrier ASA are listed on the Oslo Stock Exchange and are freely tradable. The Articles of Association do not impose any kind of trading restrictions.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

GENERAL MEETING

The General Meeting is the supreme governing body of the company and an important forum for cooperation between the company's shareholders, Board and management. Scana Industrier has established routines and procedures for the General Meeting that are in accordance with the guidelines provided in the Norwegian Code of Practice for Corporate Governance. The notice of meeting and the minutes are available on the company's website, www.scana.no, under "Investor Information".

Notice of the General Meeting is given at least 21 days in advance, in accordance with the regulations and code of practice. Notice of the agenda and the election committee's opinion are available from the same date. The agenda has been prepared with sufficient detail for shareholders to be able to familiarise themselves with, and decide on, the issues to be discussed. The company's financial calendar is published at the Oslo Stock Exchange and on the company's website.

Registration for the General Meeting can take place by post, fax or e-mail. The Board encourages as many of the company's shareholders as possible to attend the General Meeting, or to allow themselves to be represented by proxy. Information about the procedure for voting by proxy, proxy forms and information about persons appointed to vote as a proxy on behalf of the shareholders follows with the notice.

Scana's General Meetings must be attended by at least the Chairman of the Board, the chair of the election committee and the auditor. The management is represented by at least the CEO and the CFO. The General Meeting is chaired by the Chairman of the Board. Elections to the Board or other bodies of the company are structured to allow voting for individual candidates. The results of the elections at the General Meeting are published immediately after the General Meeting has been held.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

ELECTION COMMITTEE

The company shall have an election committee consisting of at least three members, who are to be elected by the General Meeting. The election committee will prepare the General Meeting's election of Board Members, propose candidates for the Board and recommend the level of remuneration for Board Members to the General Meeting. The General Meeting may adopt instructions for the work of the election committee.

The members are:

Henning Stephansen Bjørn Dahle Hans Eide

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

COMPOSITION AND INDEPENDENCE OF THE BOARD

Composition

The Board must consist, in accordance with Article 6 of the Articles of Association, of three to seven members who are elected by the General Meeting for two years at a time. The age limit for Board Members is 68; Board Members must step down at the first Annual General Meeting after reaching the age limit. As adopted at the Annual General Meeting in 2010, the company's entire Board shall perform the duties and functions of the audit committee in accordance with the requirements of the Norwegian Public Limited Companies Act at any given time. The Board does not have any employee representatives and no members of the company management sit on the Board. Scana Industrier ASA does not have a corporate assembly.

The composition of the Board should reflect the necessary skills that are relevant to the company's operations. Current Board instruction include a requirement for industry knowledge and relationships, an understanding of technology, international experience, market knowledge and experience in economics, finance and capital markets.

The Board currently consists of five people. Of these, Per Ravnestad (Chairman of the Board), Sindre Ertvaag and Carl Christian Krefting are significant shareholders or represent companies that are significant shareholders in Scana Industrier ASA. A more detailed presentation of the Board Members is provided on page 76 of the annual report.

Independence

The composition of the Board must ensure that the interests of all shareholders and the company's need for expertise, capacity and diversity are reflected. The Board instruction require at least two of the Board Members elected by the shareholders to be independent of the company's main shareholders.

The instruction further state at least half of the Board must be independent of the company's management and material business connections. Of the five members of the Board, Martha Kold Bakkevig and Elisabeth Saupstad are independent of the company's significant shareholders. The entire Board is considered to be independent of the company's management and business connections. An overview of shares owned by the Board Members and senior employees is presented in Note 24.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

WORK OF THE BOARD OF DIRECTORS

Board meetings

The Board shall normally hold six to eight ordinary Board meetings per year according to a separate schedule that is drawn up each year. The Chairman of the Board may convene extraordinary Board meetings as deemed necessary. The CEO may convene an extraordinary Board meeting with the agreement of the Chairman of the Board. The Chairman may decide whether individual Board matters can be discussed via a conference call or by other means. In 2015, there were 22 Board meetings held.

The CEO should attend Board meetings, but cannot be a member of the Board. The CFO also usually attends the meetings. The Board is otherwise free to summon other members of the company's management to the Board meetings.

The Chairman of the Board is responsible for leading the Board meetings. in his/her absence, the meeting is chaired by the Deputy Chairman of the Board. If both are absent, a Board member is elected to chair the meeting.

Duties of the Board

The company's Board has overall responsibility for the management and control of the company. The Board must adopt the company's strategy, budgets and business plans and at all times keep itself informed about the company's operations and financial performance. The Board is responsible for the adequate monitoring of the company's operations, financial statements and liquidity. The Board must monitor the company's management and ensure that the CEO performs the duties of the CEO in accordance with current instructions. At its discretion, the Board may issue additional guidelines for the company's operations.

The CEO is responsible for the preparation and documentation of issues to be discussed by the Board. It is important that these preparations are of good quality and are sent to the Board Members at least one week before the Board meeting so that the Board has an adequate basis for discussions and decisions.

Minutes should be kept of each Board meeting and contain, among other things, a description of each matter that has been discussed, what decision the Board has made and the basis of the decisions made in each case.

Audit committee

The entire Board serves as the audit committee in order to ensure the broadest possible expertise within the committee. This composition differs from NUES and was adopted at the company's General Meeting in 2010.

Deviations from the Norwegian Code of Practice for Corporate Governance: See the section on audit committee.

RISK MANAGEMENT AND INTERNAL CONTROL

The Board ensures that the company has sound internal control and appropriate risk management systems in relation to the nature and scope of the business, and the Board undertakes an annual review of the internal control system and the significant risk areas. The objective is to have a comprehensive risk management process for the investment company Scana Industrier ASA that also takes into account risk areas at the individual portfolio companies. Risk management is therefore followed up by both the CEO and the Board of Scana Industrier ASA as well as the Boards and management of the portfolio companies. The Board conducts an annual review of the group's main risk areas and internal control systems.

The reporting and monitoring procedures are adapted in line with the organisation's development. In connection with the conversion from industrial group to industrial investment company, the procedures have been modified to reflect the formal and real adjustment in the areas of responsibility within the group. This means that the Board and management of each portfolio company have independent responsibility for internal control and risk management at their respective companies. Operational risk management is thereby delegated to the portfolio companies. The annual examination by the Board of Scana Industrier ASA includes a review of the overall risk situation and risk management system of each portfolio company and the aggregated operational risk in the portfolio.

The Board and the management of Scana Industrier ASA focus mainly on risk management and control relating to its role as the owner of the portfolio companies and the factors that may affect the value of the investments or otherwise provide exposure to the company's balance sheet, liquidity and reputation. These include liquidity development and liquidity requirements, guarantee exposure, risks in major customer contracts at the portfolio companies, interest and currency risk, the quality of the portfolio companies' reporting and processes related to the acquisition and sale of companies, as well as reputation risk.

A joint financing solution has been established for Scana Industrier ASA and its portfolio companies. This means that the primary responsibility for financial risk management lies with the investment company. A system has also been established, whereby each portfolio company is allocated a certain share of the total available liquidity in line with its anticipated capital requirement. Scana Industrier ASA also retains a portion of the liquidity, which is used for the investment company's own purposes and also as available liquidity, which can be supplied to the portfolio companies under certain circumstances. Liquidity development and forecasts are reported regularly by the portfolio companies to the investment company and reviewed by the Board at each Board meeting.

The portfolio companies are exposed to currency risk, both together and individually. With portfolio companies in Norway and Sweden that have subsidiaries in several countries, the various companies have different currency positions and some of these may offset of boost one another. A joint system has therefore been established to hedge currency risk at group level. Responsibility for interest rate hedging also lies with the investment company as part of the joint financing solution. See the annual financial statements for further details.

The portfolio companies have their own finance and control departments, with the exception of Scana Property, which purchases these services from Scana Industrier ASA. The finance and control department of Scana Industrier ASA is responsible for the consolidation of the group's accounts and reports and for reporting to the Board, banks, shareholders and the capital market. The department also provides specialist assistance to the portfolio companies and performs the control and risk management tasks that are the responsibility of the investment company.

The Board believes that Scana's overall strategy, guiding principles, organisational structure and ethical guidelines help to ensure a satisfactory control environment.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

REMUNERATION OF THE BOARD

The remuneration of the Board must reflect the responsibility and expertise of the Board, as well as the time spent and the complexity of the business. The remuneration of the Board is not profit-related. See note 10 for further information regarding the remuneration of the Board.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

REMUNERATION FOR SENIOR EMPLOYEES

The Board has determined remuneration guidelines for senior employees, which specify the main principles of the company's wage policy for management. The salary and other remuneration of the CEO are established at a Board meeting and presented to the General Meeting for information purposes. See note 10 for further information regarding remuneration for senior employees.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

INFORMATION AND COMMUNICATION

Scana Industrier must provide the stock market with relevant and complete information to enable the balanced and accurate pricing of the share. The company places great emphasis on having an open dialogue with the stock market and the media.

This is achieved through stock exchange announcements, press releases, quarterly presentations and presentations for analysts and investors. The company's website (www.scana. no) contains information for investors. This includes annual reports, quarterly reports and company presentations.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

COMPANY TAKEOVER

Scana has no defence mechanisms to protect against company takeover in the company's articles of association. There are also no obstacles to limit acquisitions of the company's shares.

No general principles have been established for the way in which Scana will act in the event of any takeover bids, apart from the fact that the Norwegian Code of Practice for Corporate Governance will have a normative function.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

AUDITOR

The General Meeting appoints an independent external auditor and sets their fee. Scana Industrier's policy is to use the same auditors in all portfolio companies where practically possible, and where Scana alone can decide this.

The external auditor must confirm to the General Meeting that the group's annual financial statements have been submitted in accordance with current legislation and regulations. The auditor also attends Board meetings that deal with the financial statements. Meetings may be arranged between the Board and auditor without the presence of the CEO or other representatives of the group management. In line with requirements for the independence of the auditor, Scana Industrier will only to a limited extent use the appointed external auditor for work other than the statutory financial audit.

Scana Industrier does not have its own internal auditing department, but uses resources from an external audit firm if the need for such audits arises.

Deviations from the Norwegian Code of Practice for Corporate Governance: None.

SCANA GROUP INCOME STATEMENT

Period 1 January – 31 December (NOK 1000)	Note	2015	2014
Operating revenue:
Sales revenue	3/13	1 156 009	1 162 834
Other revenue	5	14 407	6 097
Profit from the sale of property, plant and equipment	9	1 567	27 292
Total operating revenue		1 171 983	1 196 223
Operating expenses:
Raw materials and consumables	12/27	382 949	437 708
Change in stocks of FG and WIP	12	43 707	-77 858
Salary and social security costs	10/11	432 726	437 897
Depreciation/amortisation and write-downs	8/9	51 786	73 079
Other operating expenses	5/13/20/27	330 001	449 827
Total operating expenses		1 241 169	1 320 653
Operating profit/loss		-69 186	-124 430
Financial income and expenses:	17/22
Income from interests in associates	4	6 532	-492
Interest income		3 518	4 400
Interest expense	17	-23 556	-27 451
Net currency gain/loss ( - )		1 622	26 407
Other financial income/expense (-)	5	-6 260	-12 492
Net financial items		-18 144	-9 628
Profit/loss before tax – continuing operations		-87 330	-134 058
Tax expense	6	6 005	-11 500
Profit/loss for the year – continuing operations		-93 335	-122 558
Profit/loss for the year – discontinued operations (after tax)	27	21 011	-142 803
Profit/loss for the year		-72 324	-265 361
The profit/loss for the year is distributed as follows:
Owners of the parent company	7	-71 777	-265 361
Non-controlling interests		-547	0
Profit/loss for the year		-72 324	-265 361
Earnings per share	7	-0.77	-3.53
Earnings per diluted share	7	-0.77	-3.53

SCANA GROUP STATEMENT OF COMPREHENSIVE INCOME

Profit/loss for the year		-72 324	-265 361
Other comprehensive income (which may be reclassified as profit/loss for the year in later periods)
Net movement in fair value of cash flow hedges	6/23	3 716	1 802
Net gain/loss on hedge of net investment	6	-14 015	-427
Exchange difference on translations of foreign operations		18 490	12 678
Total other comprehensive income		8 191	14 053
Comprehensive income		-64 133	-251 308
The comprehensive income is distributed as follows:
Owners of the parent company		-63 586	-251 308
Non-controlling interests		-547	0
Comprehensive income		-64 133	-251 308

SCANA GROUP BALANCE SHEET

(NOK 1000)	Note	31.12.15	31.12.14
Non-current assets:
Intangible assets	8	16 692	25 714
Property, plant and equipment	9	397 861	405 769
Shares in associates	4	27 482	22 297
Other non-current assets	14	5 803	3 979
Total non-current assets		447 838	457 759
Current assets:
Inventories	12/27	135 765	204 943
Trade receivables	13/21	164 633	225 340
Derivatives	22/23	88	467
Other current receivables	14	27 059	45 797
Bank deposits and cash	15	110 513	75 879
Assets held for sale	27	16 567	69 474
Total current assets		454 625	621 900
Total assets		902 463	1 079 659
Equity:
Paid-in capital	16	704 404	612 435
Other equity		-522 308	-458 721
Equity before non-controlling interests		182 096	153 714
Non-controlling interests		192	240
Total equity		182 288	153 954
Non-current liabilities:
Debt to credit institutions	17/20/22	264 161	4 923
Pension obligations	11	879	950
Deferred tax	6	21 101	22 538
Derivatives	22/23	0	10 604
Other non-current liabilities		0	1 980
Total non-current liabilities		286 141	40 995
Current liabilities:
Debt to credit institutions	17/20/22	130 903	433 879
Trade payables	19/21	90 294	161 981
Advances from customers	13	27 940	54 327
Tax payable	6	76	246
Derivatives	22/23	15 589	3 086
Liabilities held for sale	27	19 854	56 323
Other current liabilities	18	149 378	174 868
Total current liabilities		434 034	884 710
Total equity and liabilities		902 463	1 079 659

Stavanger, 15 March 2016

Per Anders Ravnestad Chairman of the Board

Carl Christian Krefting Board Member

Elisabeth Line Saupstad Board Member

Sindre Ertvaag

Board Member

Martha Kold Bakkevig Board Member

Bjørn Torkildsen CEO

SCANA GROUP CASH FLOW STATEMENT

(NOK 1000)	Note	2015	2014
Cash flow from operating activities:
Profit/loss before tax – continuing operations		-87 330	-134 058
Profit/loss before tax – discontinued operations	27	-10 472	-130 586
Tax paid	6	-1 165	-1 856
Profit (-)/loss – continuing operations	4/8/9	-2 713	-26 268
Profit (-)/loss – discontinued operations	27	0	-390
Depreciation/amortisation and write-downs	8/9	52 628	178 837
Unrealised foreign currency gain/loss		-1 300	22 269
Interest income		-3 518	-4 401
Interest expense		23 606	28 737
Differences between paid and expensed pension costs		-85	-1 521
Change in trade receivables/advances from customers	13	44 610	-12 406
Change in inventories	12/27	43 057	27 973
Change in trade payables	19	-28 106	21 022
Change in accruals	14/18	18 796	21 556
Net cash flow from operating activities		48 008	-11 092
Cash flow from investing activities:
Sale of non-current assets	8/9	4 481	39 657
Purchase of non-current assets	8/9	-16 551	-45 826
Sale of business	4/27	5 372	137 849
Cash and cash equivalents of discontinued operations	27	-2 945	-3 864
Paid-in capital in associates and other shares	4	-306	-2 130
Dividend received from other companies	4	2 315	1 851
Net cash flow from investing activities		-7 634	127 537
Cash flow from financing activities:
Proceeds from new non-current interest-bearing debt	17	4 755	0
Repayment of non-current interest-bearing debt	17	-43 400	-4 975
Repayment of current interest-bearing debt/change in cash drawn	17	-35 471	-66 960
Payments to/from non-controlling interests		499	0
Proceeds from issue of shares	16	91 969	0
Other financial expenses paid		-3 702	-5 548
Interest received		3 519	4 400
Interest paid		-23 901	-30 518
Net cash flow from financing activities		-5 732	-103 601
Net cash flows		34 642	12 844
Cash and cash equivalents at beginning of period		77 664	63 495
Exchange difference in cash and cash equivalents		301	1 325
Cash and cash equivalents at end of period		112 607	77 664
Change in cash and cash equivalents	15/27	34 642	12 844

SCANA GROUP STATEMENT OF CHANGES IN EQUITY

								Reserve
					Other		Reserve for	for		Non
		Share	Own	Share	paid-in	Other	translation	changes		controlling	Total
(NOK 1000)	Note			capital shares premium	capital	equity	differences	in value	Total	interests	equity
Equity as at 1 January 2014		75 118		-11 284 647	252 681	-204 441	11 690	-14 665	405 019	240	405 259
Comprehensive income						-265 360	12 253	1 802	-251 305	0	-251 305
Equity as at 31 Dec. 2014		75 118		-11 284 647	252 681	-469 801	23 943	-12 863	153 714	240	153 954

							Reserve
				Other		Reserve for	for		Non
		Share	Own Share	paid-in	Other	translation	changes		controlling	Total
(NOK 1000)	Note		capital shares premium	capital	equity	differences	in value	Total	interests	equity
Equity as at 1 January 2015		75 118	-11 284 647	252 681	-469 801	23 943	-12 863	153 714	240	153 954
Comprehensive income					-71 777	4 474	3 716	-63 587	-547	-64 134
Change in paid-in capital	16	32 394	11 -1 768	61 332				91 969	499	92 468
Equity as at 31 Dec. 2015		107 512	0 282 879	314 013	-541 578	28 417	-9 147	182 096	192	182 288

NOTES – GROUP 2015

Note 1. Consolidated accounting policies 2015

General information

Scana Industrier ASA is located at Strandkaien 2 in Stavanger, Norway. The company is a public limited company that is listed on the Oslo Stock Exchange. Its activities are described in note 3. The consolidated financial statements for Scana Industrier ASA for 2015 were approved by the Board of Directors on 15 March 2016.

The consolidated financial statements are presented in Norwegian kroner (NOK), and all figures are rounded to the nearest thousand ('000) unless otherwise indicated.

Main principles

The consolidated financial statements for Scana Industrier ASA have been prepared in accordance with IFRS and the interpretations laid down by the International Accounting Standards Board, as approved by the EU.

The consolidated financial statements have been prepared on the basis of the going concern assumption. The annual financial statements consist of the income statement, statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity and notes to the financial statements. The most important consolidation and accounting policies followed in the preparation of the annual financial statements are as follows:

The consolidated financial statements are based on the principles of historical cost accounting, with the exception of the following items:

• Financial instruments at fair value through profit and loss, financial instruments available for sale which are recognised at fair value, loans and receivables and other financial obligations that are recognised at amortised cost.

The consolidated financial statements have been prepared in accordance with the standard accounting policies for similar transactions and events under otherwise similar circumstances.

Functional currency and presentation currency

The functional currency for the parent company Scana Industrier ASA is NOK, while the functional currency for the subsidiaries is their local currency.

Consolidation principles

The consolidated financial statements include the parent company Scana Industrier ASA and the companies over which Scana Industrier ASA has control. Control is normally achieved when the group owns more than 50% of shares in the company. Control can also be achieved where the group owns less than 50% of the voting shares through an agreement or by the group being in a position to exercise effective control over the company. Non-controlling interests form part of the group's equity.

Company mergers are recognised using the acquisition method of accounting. The acquisition cost is measured at the fair value of the assets acquired, the shares issued or the liabilities assumed at the acquisition date. Additional acquisition cost in excess of the fair value of the net assets in the acquired business is recognised as goodwill. Companies that are bought or sold during the course of the year are included in the consolidated financial statements from the date at which control was acquired and until control ceases.

Inter-company transactions and inter-company balances, including internal revenues and unrealised gains and losses, are eliminated. Unrealised gains relating to transactions with associates and joint ventures are eliminated through the group's share of the company/business. Similarly, unrealised losses are eliminated, but only to the extent that there are no indications of a loss of value for the assets sold internally.

Revenue

Revenue from the sale of goods is recognised when delivery takes place in accordance with the contract, i.e. the risk and potential gains associated with the goods have been transferred to the purchaser and the group has established a claim against the customer.

Revenue related to long-term construction contracts (projects) is recognised in line with the progress of the project, where the outcome of the project can be measured reliably. The stage of completion is calculated using the most suitable method for the individual contract, which is normally the costs incurred as a percentage of the expected total cost. If the outcome of the project cannot be measured reliably, only revenue equivalent to the project costs incurred is recognised as revenue. Any loss on a contract is recognised in full in the period in which it is established that the project will result in a loss.

Advances on construction contracts are classified on the balance sheet under current liabilities.

Dividends are recognised when the rights to receive a dividend are established.

Interest income is recognised as it is accrued.

Currency translation

Transactions in foreign currency are recognised using the exchange rate on the transaction date. Monetary items in foreign currency are translated using the exchange rate on the balance sheet date. Any exchange differences are recognised as financial items. Non-monetary items are translated at historical cost.

Balance sheet items at foreign subsidiaries are translated to NOK using the exchange rate as at 31 December. All items in the income statement are translated to NOK using the weighted average exchange rate per month, which is retrieved for the individual month from Norway's central bank, Norges Bank. Consolidation leads to currency translation differences, which are presented as other comprehensive income in the statement of comprehensive income. Exchange rate gains and losses relating to liabilities in foreign currency which are considered for accounting purposes to be hedge investments in foreign subsidiaries and the currency effects of monetary items which represent a portion of the net investment in the foreign subsidiaries are recognised as other comprehensive income in the statement of comprehensive income until the subsidiary is disposed of.

Intangible assets

Intangible assets with a definite life are depreciated over the anticipated useful life and are assessed for a possible write-down when there are indications that the value of the intangible assets may have been reduced. The depreciation period and method for intangible assets with a limited life are evaluated as a minimum at the end of each financial year. Changes to the anticipated useful life or anticipated pattern of use of the intangible assets are recognised by changing the depreciation period or method and are treated as changes to accounting estimates.

Goodwill

Goodwill arising on acquisition is valued at acquisition cost. This represents the portion of the total acquisition cost that exceeds the net fair value of identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is valued at the acquisition cost less any accumulated impairment. The group tests goodwill for impairment annually or when there are indications of a loss of value. Impairment testing is carried out for the cash-generating units with recognised goodwill. Recognised goodwill is compared with the recoverable amount. The recoverable amount is the higher of the net realisable value and the utility value.

Research and development expenditure

Expenditure on research is recognised on an ongoing basis. Development costs for an individual project are capitalised as intangible assets when it can be documented that:

• It is feasible to complete the development of the intangible asset such that it is available for use or sale
• The intangible asset is intended to be completed and used or sold
• The intangible asset can be used or sold
• The asset will generate future economic benefits
• The necessary resources to complete the development of the assets are in place and
• The development costs can be measured reliably.

Boards of the individual companies, and the way in which the intangible asset is expected to generate future cash flows for the group is to be documented.

Recognised development costs are reported on the balance sheet at acquisition cost less accumulated depreciation and write-downs. Recognised development costs are depreciated on a straight-line basis over the estimated useful life of the asset.

The carrying amount of the development costs is evaluated annually, or more frequently where there are indications of a reduction in value.

Gains and losses on the disposal of an intangible asset, calculated as the difference between the net realisable value and the carrying amount, are recognised in the income statement.

Property, plant and equipment

Property, plant and equipment are measured at acquisition cost, less accumulated depreciation and write-downs. When assets are sold or disposed of, the carrying amount is derecognised and any gains or losses are recognised in the income statement.

The acquisition cost of property, plant and equipment is the purchase price including fees, taxes and expenses directly linked to making the non-current asset ready for use. Expenses incurred once the non-current asset has been taken into use, such as ongoing maintenance, are recognised in the income statement, while other expenses, including larger-scale maintenance work that is expected to provide future economic benefit, are recognised on the balance sheet.

Properties and land are assets that will either be used by the group companies themselves or in order to obtain rental income and/or to increase value. Properties and land are recognised at acquisition cost. Costs associated with fixed property are capitalised where the criteria for recognition are met, while ongoing maintenance is expensed.

Depreciation is calculated using the straight-line method over the anticipated useful life of the non-current assets with the exception of land. The useful life, residual value and depreciation method for non-current assets are assessed once a year.

The group capitalises larger-scale scheduled maintenance and depreciates it against income in relation to the maintenance interval.

Larger spare parts and spare equipment are considered to be part of non-current assets when the group expects them to be used in more than one accounting period. Similarly, where the spare parts and spare equipment can only be used in connection with the non-current assets, they are recognised as part of these.

Impairment of non-current assets

The need for impairment of non-current assets is assessed when there are indications of a loss of value. Where the carrying amount of an asset is greater than its recoverable amount, the asset is written down in the income statement. The recoverable amount is the higher of the fair value less selling costs and the utility value (the discounted cash flow with continued use).

The fair value less selling costs is the value that can be realised on sale to an independent third party less the selling costs. The recoverable amount is determined separately for all non-current assets, but where this is not possible, it is determined together with the cash-generating unit with which the non-current assets are associated.

Write-downs recognised in the income statement from previous periods are reversed when there is information that the write-down is no longer necessary. Reversals are made via the income statement. No reversals are made, however, where this would mean that the carrying amount exceeds what the carrying amount would have been if ordinary depreciation had been applied.

Shares in associates

An associate is an entity over which the group has significant influence, but not control, over the financial and operational management (normally a share of ownership of between 20 and 50 per cent). The consolidated financial statements include the group's share of profits at associates according to the equity method from the point at which significant influence is achieved and until such influence ceases.

Where the group's share of losses exceeds the investment in an associate, the group's carrying amount is reduced to zero and further losses are not recognised in the income statement unless the group has an obligation to cover such losses.

Financial instruments

Investments and other financial instruments

Financial assets are classified either as financial instruments with ongoing recognition of changes in fair value or as hedges. The group determines the classification of its financial assets on initial recognition and, where permitted and appropriate, this classification is reassessed at the end of each financial year.

Loans and receivables are non-derivative financial assets with fixed or variable cash flows where market prices are not continuously applied. Such assets are recognised at amortised cost using the effective interest method. Gains or losses are recognised when the loans and receivables are disposed of or are considered to be lost.

Financial assets that are not recognised at fair value are valued on the balance sheet date in order to identify any possible loss of value.

Financial instruments and hedging

The group uses financial instruments (forward currency contracts, interest rate swaps and electricity derivatives) to hedge the risks associated with interest rates, exchange rates and fluctuations in the price of electricity. Such financial instruments are initially recognised at fair value on the date on which the contract is entered into and are valued in subsequent periods at fair value. A derivative is classified as an asset when its fair value is positive and as a liability when its fair value is negative.

The group's criteria for the classification of a derivative or other financial instrument as a hedging instrument are as follows:

• The hedge is expected to be highly effective in offsetting changes in fair value or cash flows for a specific object – the effectiveness of the hedge must be expected to be within the range of 80–125%
• The effectiveness of the hedge can be measured reliably
• Adequate documentation has been established on entering into the hedge
• For cash flow hedging, the future transaction must be likely, and
• The hedge is continuously evaluated and has been shown to be effective.

On entering into a hedging contract, the group documents the assets, liabilities or future transactions to which it wishes to apply hedge accounting, with associated risk-management targets and strategy. This documentation includes the identification of the hedging instrument, the hedged item or transaction, the type of risk that is being hedged and how the entity will assess the effectiveness of the hedging instrument with regard to offsetting the exposure to changes in the fair value of the hedged item or cash flows associated with the hedged risk. Hedges are expected to be highly effective with regard to offsetting changes in fair value or cash flows and are continuously assessed in order to determined whether they have actually been effective throughout the intended accounting period.

The group uses hedge accounting for cash flow hedges associated with the hedging of the future price of electricity and hedging future interest payments associated with external loans through interest rate swaps. Hedge accounting is also used to hedge currency effects on net investments in Swedish subsidiaries. Exchange gains/losses on loans that are used as hedging instruments for hedging net investment are recognised against comprehensive income.

The fair value of forward currency contracts is calculated in relation to the currency forward prices for contracts with similar terms. The fair value of interest rate swaps and electricity derivatives is determined on the basis of valuation input that is observable on the market, either directly or indirectly (level 2 in the valuation hierarchy).

Changes in the value of financial instruments that qualify for cash flow hedging are recognised as other comprehensive income in the statement of comprehensive income. Any ineffective elements of hedging are recognised in the income statement on an ongoing basis.

Gains and losses resulting from changes in the fair value of derivatives that do not qualify for hedge accounting are recognised in the income statement on an ongoing basis.

Gains and losses resulting from changes in the fair value of derivatives that do not qualify for hedge accounting are recognised in the income statement on an ongoing basis.

Interest-bearing loans and loan costs

Upon initial recognition, interest-bearing loans are recognised at fair value. Fair value is normally the transaction price less directly related transaction costs. In subsequent periods, interest-bearing loans are recognised at amortised cost using the effective interest method. Gains and losses are recognised in the income statement where liabilities are derecognised from the balance sheet as well as through ordinary amortisation.

Derecognition of financial assets and liabilities

A financial asset (or parts of a financial asset or parts of a group of similar financial assets) are derecognised from the balance sheet where:

• The rights to receive cash flows from the asset expire,
• The group has transferred its rights to receive cash flows from the asset and has either (a) transferred substantially all the risks and rewards of ownership of the asset or (b) neither transferred nor retained the majority of the risks and rewards of ownership of the asset, but has transferred control of the asset.

A financial liability is derecognised when the liability has been settled, cancelled or has expired. Where an existing financial liability is replaced by another from the same lender on significantly different terms, or where the terms of an existing liability are significantly amended, such a change or amendment will be treated as the original liability being derecognised from the balance sheet and a new liability being recognised on the balance sheet. The difference in the respective carrying amounts will be recognised in the income statement.

Inventories

Inventories, which comprise purchased goods and in-house manufactured products, are valued at the lower of the purchase/manufacturing cost and the expected net realisable value. The net realisable value is the estimated selling price from ordinary operations, less the estimated costs of completion, marketing and distribution. The acquisition cost is allocated using the FIFO method and includes expenses incurred on the acquisition of the goods and the cost of bringing the goods to their present condition and location. In-house manufactured goods include raw materials, energy, direct work and a portion of indirect costs, including maintenance and depreciation.

Trade receivables

Trade receivables are normally recognised at the original invoice amount. Provisions for bad debts are made when there are objective grounds to believe that the group will not be able to collect a receivable.

Earned revenue not yet received is classified on the balance sheet under trade receivables.

Cash and cash equivalents

Cash and cash equivalents on the balance sheet comprise cash and bank balances with an original term of three months or less. Bank deposits may also include ring-fenced funds that may have a maturity of more than three months but less than 12 months. See note 15.

With regard to the group's cash flow statement, cash and cash equivalents comprise cash and cash equivalents as defined above. The cash flow statement is prepared using the indirect method.

Non-current assets held for sale and discontinued operations

Non-current assets and liabilities are classified as held for sale if their carrying amount will be realised through a sales transaction rather than through continued use. This condition is considered to be met only if the sale is highly probable and the asset (or groups of assets and liabilities) are available for immediate sale in their current form. The management must have committed itself to a sale and the sale must be expected to take place within one year of the date of classification.

Assets and groups of assets and liabilities classified as held for sale are measured at the lower of the previous carrying amount and the fair value less selling costs. In the balance sheet, this is presented as "Assets held for sale" under "Total current assets" and "Liabilities held for sale" under "Total current liabilities".

Discontinued operations are defined as part of the business that either has been disposed of or is classified as held for sale and

• represents a separate, significant business or a separate, significant geographic area of operations that is judged to be significant both with regard to the size of the business and to whether the business is different to other businesses in the group or the segment in general,
• is part of an individual coordinated plan to dispose of a separate, significant business or a separate, significant geographic area of operation, or
• is a subsidiary acquired solely for resale.

Discontinued operations are presented separately from the results from continuing operations in the line "Profit/loss for the year – discontinued operations (after tax)" in the income statement. Profit or loss after tax from discontinued operations and gains or losses for assets or disposal groups are included in the statement line item. Additional specifications are given in the notes. Comparative figures for discontinued operations are revised accordingly.

Own shares

Holdings of own shares are recognised against equity at nominal value.

Leases

The group has entered into lease agreements as a lessee. Lease agreements are classified as finance or operating leases on the basis of a specific assessment of each lease.

For finance leases, an amount equivalent to the lower of the fair value and the present value of the minimum lease payment is reported on the balance sheet at the beginning of the lease period. The same depreciation period is used as for the group's other depreciable assets. Where there is no reasonable certainty that the group will take over the asset at the end of the lease period, the asset is depreciated over the shorter of the term of the lease and the asset's economic life.

Operating leases are expensed on a straight-line basis over the period of the lease.

Pensions

The group's pension schemes mainly consist of defined contribution pensions and contractual pension schemes for the group's Norwegian employees and defined benefit ("multi employer") plans for the group's Swedish employees.

For pension plans where the agreed payments are made by the group and where the pension asset plans are administered separately (defined contribution pension schemes), the annual payments/contribution are included in personnel costs.

Pension obligations are valued at the present value of future pension rights accrued on the balance sheet date on the basis of the linear accrual method and estimated final salary. The pension plan assets are valued at estimated market value. Net pension obligations (pension obligations less pension plan assets) are classified on the balance sheet as non-current liabilities, taking into account adjustments for net accumulated actuarial gains and losses. Recognised net obligations include employer's contributions.

The contractual pension scheme for the group's Norwegian employees and the defined benefit plans for the group's Swedish employees are regarded as so-called "multi-employer plans". These pension plans are treated as defined contribution pension plans in the financial statements, as the information required to treat the plans as defined benefit plans is not yet available from the life assurance company administering the pension plans. Once the required information is available and the pension plans are recognised as defined benefit plans in accordance with IAS 19, this may have a significant impact on the consolidated financial statements.

Tax

Deferred tax assets

Deferred tax assets are recognised on the balance sheet when it is probable that the group will have sufficient taxable surplus in future periods to make use of the tax assets. An assessment of whether deferred tax assets can be recognised, including deferred tax assets associated with loss to carry forward, is carried out separately within each individual tax regime. The companies recognise previously unrecognised deferred tax assets to the extent that it has become probable that the group will be able to make use of the deferred tax assets. Similarly, the group will reduce deferred tax assets to the extent that the group cannot adequately demonstrate that it will be able to make use of the deferred tax assets in future.

Deferred tax/tax asset on the balance sheet is recognised at nominal value and is calculated on the basis of temporary differences between the tax value and the carrying amount of assets and liabilities on the balance sheet date, adjusted for tax loss carryforward. Deferred tax assets or liabilities are assessed at the tax rates expected to apply to the period in which assets are realised or the liability is settled, based on tax rates and tax rules that have been adopted or largely adopted on the balance sheet date.

Tax payable and deferred tax are recognised directly against equity to the extent that the tax items relate to equity.

Tax payable

Receivables and payables relating to tax payable for the current and previous periods are valued at the amount which is expected to be paid to or from the tax authorities.

Provisions

Provisions are recognised when the group has an obligation (legal or constructive) as a result of a past event, it is probable (more probable than not) that the group will be required to settle the obligation through economic benefits and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is significant, provisions are discounted using a discounting rate before tax that reflects the risks specific to the obligation in question. In the event of discounting, the increase in provisions is recognised in the income statement as a financial expense, since the assumed earning point has moved closer.

Guarantee provisions are recognised when the underlying products are sold. The provisions are based on historical information about guarantees and a weighting of possible outcomes against the likelihood of them occurring.

Provisions for restructuring are recognised when the group has approved a detailed, formal restructuring plan and the restructuring has either begun or been announced.

Provisions for unprofitable contracts are recognised when the group's anticipated income from a contract is lower than the unavoidable costs incurred in order to meet the obligations under the contract.

Share-based payment

A share-based payment (incentive arrangement) has been entered into, valid from 1 September 2015 to 31 August 2018, for the management of Scana and Converto, to be settled in cash, although Scana may choose to have up to 50 per cent settled by issuing shares on the expiry date. See note 10 for further details.

The value of allotted options is allocated over the agreed period during which the employee earns the right to receive the options, or when services are purchased from external parties over the service period it is agreed that the share disbursement will cover. A Monte Carlo simulation is used to determine the value of the incentive agreement.

Contingent liabilities and assets

Contingent liabilities are not recognised in the annual financial statements. Significant contingent liabilities are disclosed with the exception of contingent liabilities where it is highly unlikely that the obligation will require settlement.

Contingent assets are not recognised in the financial statements, but are disclosed where it is probable that a benefit will accrue to the group.

Measurement of fair value

The group measures individual financial instruments at fair value on the balance sheet date. This applies to, among other things, derivatives such as interest rate swaps and electricity derivatives. The fair value of financial obligations measured at amortised cost is also reported.

Fair value is the price that would have been used to sell an asset or paid to transfer a liability on the primary market on the measurement date under the prevailing market conditions, regardless of whether the price is directly observable or estimated using another valuation technique.

Going concern

The annual financial statements are submitted under the going concern assumption; any uncertainty in this regard is discussed. See note 29.

Events after the balance sheet date

New information after the balance sheet date regarding the company's financial position at the balance sheet date is taken into account in the annual financial statements. Events after the balance sheet date which have no bearing on the company's financial position at the balance sheet date but which will affect the company's financial position in the future are disclosed where this is significant.

The accounting policies applied are consistent with those applied in previous accounting periods, with the exception of the changes to IFRS which have been implemented by the group in the current accounting period. Below is a list of the changes to IFRS applicable to 2015 which were relevant to the group, along with the effect these have had on the group's annual financial statements.

The following new and revised financial reporting standards and interpretations were applied for the first time in 2015:

IFRIC 21 Levies

IFRIC 21 Levies states that the event that gives rise to an obligation to pay a levy is the activity that triggers the payment of the levy, as identified by the legislation. IFRIC 21 further states that the obligation to pay a levy is recognised progressively if the obligating event occurs over a period of time (i.e. if the activity that triggers the payment of the levy, as defined by the legislation, occurs over time). If an obligation to pay a levy is triggered when a minimum threshold is reached, the liability arising from this obligation is recognised when the minimum activity threshold has been reached. IFRIC 21 must be implemented retrospectively. This represents levies of NOK 1.3 million for the group, which will be expensed in the first quarter of 2016. Of this, NOK 0.5 million can be re-invoiced.

The changes apply to annual financial statements beginning on 1 January 2016 or later. The group applied the changes for the first time to the annual financial statements for 2016. The changes cover:

IFRS 13 Fair Value Measurement

The change is applied prospectively and states that the portfolio exception in IFRS 13 may be used not only for financial assets and financial liabilities, but also for other contracts within the scope of IAS 39.

Changes to standards and interpretations with future effective dates The standards and interpretations relevant to the group that have been adopted up to the point at which the consolidated financial statements are prepared, but for which the effective date is in the future, are indicated below. The group intends to implement the relevant changes on the effective date, subject to the EU approving the changes prior to the preparation of the consolidated financial statements.

IFRS 9 Financial instruments

In July 2014, IASB published the final sub-project of IFRS 9 and the standard is now complete. IFRS 9 entails changes associated with classification and measurement, hedge accounting and write-downs. IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement. Those parts of IAS 39 that have not been changed as part of this project have been transferred and incorporated into IFRS 9.

The standard must be implemented retrospectively, with the exception of hedge accounting, but there is no requirement to draw up comparative figures. The rules for hedge accounting must largely be implemented prospectively, with a few exceptions. The group has no plans to implement the standard early. Based on a preliminary analysis, IFRS 9 is not expected to have a significant implementation effect for the group.

IFRS 15 Revenue from Contracts with Customers

The IASB and FASB have issued a new joint recognition standard: IFRS 15 – Revenue from Contracts with Customers. The standard replaces all existing standards and interpretations for recognition. The core principle of IFRS 15 is that income is recognised to reflect the transfer of agreed goods or services to customers, at an amount that reflects the payment to which the company expects to be entitled in exchange for those goods or services. With a few exceptions, the standard applies to all income-generating contracts with customers, and includes a model for calculating and measuring sales of individual non-financial assets (e.g. sale of property, plant and equipment). IFRS 15 must be implemented using either the full or modified retrospective method. Based on a provisional review of the possible implementation effect, the group does not expect IFRS 15 to have a significant impact on recognition within the group.

Equity method in separate financial statements – changes to IAS 27 This change introduces the option of using the equity method to recognise investments in subsidiaries, joint ventures and associates in a company's separate financial statements. The company must use the same method for each investment category. Companies that choose to use the equity method must apply the change retrospectively. The group uses the equity method. No changes are therefore expected.

Note 2. Estimate uncertainty and judgements

Estimates and judgements are evaluated on an ongoing basis and are based on historical experience and other factors, including forecasts of future events that are regarded as being probable under the present circumstances.

The group draws up estimates and makes assumptions/forecasts linked to the future. The accounting estimates that result from this will, by definition, rarely be completely in agreement with the final result. Furthermore, the choice of accounting policies and the exercising of judgement in relation to these may also affect the financial statements, e.g. in the assessment of whether discontinued operations are to be reported on a separate line. It is important to note that using different assumptions in the presentation of the financial statements could result in significant changes to the financial items reported. Estimates and assumptions/forecasts with a risk of leading to material adjustments of carrying amounts are discussed below.

Areas in which estimates play a significant role are:

Item	Note	Estimate/Assumptions	Carrying amount
Deferred tax assets	6	Assessment of ability to utilise tax positions in the future	0
Goodwill	8	Present value of future cash flows	2 641
Development costs	8	Present value of future cash flows	12 963
Property, plant and equipment	9	Recoverable amount and estimate of accurate remaining life	397 861
Inventories	12/27	Assessment of obsolescence	135 765
Trade receivables	13	Assessment of credit risk	133 643
Construction contracts	13	Degree of completion	30 990
Guarantee provisions	18	Accurate factual basis and adequately estimated	9 845
Assets and liabilities held for sale	27	Assessment of net recognised values against net purchase price	-3 287

The items above are described below:

Deferred tax assets

Deferred tax assets are recognised on the balance sheet when it is probable that there will be future taxable income and that the tax-reducing temporary differences or tax loss carryforwards can be deducted in this income. Estimates have been made of future cash flows in order to assess whether the deferred tax asset can be recognised on the balance sheet. The estimates are based on the assumptions used in approved budgets and forecasts. Changes in assumptions and estimates may necessitate the reduction of the deferred tax asset.

Deferred tax assets are primarily related to tax-reducing temporary differences and loss carryforwards in Norway. Some of the operations in the Scana Property segment have significant added value in underlying properties and are operationally independent of other operations at Scana. The remaining operations in Norway have returned negative tax results for several years and do not have an equivalent underlying added value. Overall, there is therefore significant uncertainty with regard to the future use of the associated tax positions and deferred tax assets are not recognised.

Property, plant and equipment and goodwill

The group carries out impairment tests annually on cash-generating units with goodwill and units showing indications of a loss in value. This is done on the basis of future cash flows and discount rates. Indications of impairment were identified in 2015, among other things as a result of negative results over time with regard to both intangible assets and property, plant and equipment at several cash-generating units. The estimated cash flows that form the basis of the impairment tests on assets assume a significant improvement in profits compared to last year at several of the portfolio companies. The cash flows used as a basis and the assumptions for these are based on the best estimate of the management and the Board of Directors. Both the management and the Board believe that these are realistic and achievable. Changes in these assumptions and estimates can lead to a write-down being recognised in the income statement. Where there are indications of a loss in value, the carrying amount is compared to the recoverable amount.

Development costs

The company capitalises development costs in accordance with the criteria for capitalisation in IAS 38. The present value of the expected cash flow is based on budgets and business plans. Development costs in the group are considered to have a limited lifetime and the estimates are based on a five-year horizon. Changes in these assumptions and estimates can lead to a write-down being recognised in the income statement. Where there are indications of a loss in value, the carrying amount is compared to the recoverable amount.

Inventories

Valued at the lower of the purchase/production cost and expected net realisable value. The net realisable value is the estimated selling price from continuing operations, less the estimated costs of completion, marketing and distribution. Similarly, changes in the management's basis for assessing the market value of the inventories could affect the valuation of these inventories. Changes in estimates related to the expected net realisable value could also lead to changes in product costs.

Trade receivables and other current receivables

Trade receivables and other current receivables are assessed on an ongoing basis, and are written down if there are objective criteria for the occurrence of a loss-triggering event that can be measured reliably and will affect the payment of the receivable. Changes in the manage-

Note 3. Segment information

Minor changes have been made to the segment distribution as a result of the group's reorganisation into an industrial investment company. The previous segment distribution of Energy, Propulsion, Property, Offshore and Other has been replaced with an updated segment distribution (portfolio companies) and any subsidiaries of these:

• Scana Energy consists of; Scana Energy AB, which owns 100% of shares in: Scana Steel Björneborg AB, Scana Subsea AB and Scana Machining AB (sold in 2016).
• Scana Propulsion consists of; Scana Propulsion AS, which owns 100% of shares in: Scana Shanghai Trading Co. Ltd, Scana Zamech Sp. z o.o. (wound up in 2015), Scana Volda AS which owns 100% of shares in Scana Singapore Pte. Ltd.

Scana Propulsion US Inc. is owned by Scana US Holding Inc.

• Scana Property consists of; Scana Property AS, which owns 100% of shares in: Scana Property AB, Scana Eiendom Volda AS, Scana Eiendom SSA AS and Scana Eiendom Jørpeland AS, and which owns 50.1% of shares in Fjordbris AS.
• Scana Skarpenord consists of; Scana Skarpenord AS
• Scana Offshore consists of; Scana Offshore AS
• Scana Booforge consists of; Scana Steel Booforge AB
• Head Office consists of;

Scana Industrier ASA owns 100% of shares in Scana US Holding Inc., Scana Trading AS, which owns all the shares in Scana Energy Holding AB, which owns 100% of shares in Scana Energy AB. ment's basis for the assessment of the credit risk may affect the estimated loss provision. In the same way, changes in market conditions, internal conditions at our customers, etc. can mean a final result that deviates from the provisions made for bad debts.

Construction contracts

When reporting construction contracts, assumptions are made regarding estimated costs and earnings, as well as the definition and measurement of degree of completion. Changes in these estimates may mean that the reporting of revenue and earnings deviates from the underlying value created, relative to the project's overall revenue and earnings. Consequently, earnings can be reported too early or too late in the project.

Guarantee provisions

The management estimates the provisions for future guarantee obligations based on information on historical guarantee requirements, together with other information used to calculate future guarantee obligations. Factors that can affect estimated obligations include unknown faults in completed deliveries.

Held for sale/Discontinued operations

As part of the sales process, it is assessed whether the sale is highly probable and will take place within a year. If the held for sale criteria are met, the assets and liabilities are classified as held for sale in the balance sheet. Net carrying amounts are also compared to the gross purchase price less debt and transaction costs. If net carrying amounts exceed the net purchase price, carrying amounts are written down. In cases where the business represents a significant part of the group and is a special division that e.g. supplies products that the rest of the group does not, profit/loss is revised using comparative figures on the line for discontinued operations in the income statement.

In addition, Scana Trading AS owns 49% of shares in Scana Korea Hydraulic Ltd.

Scana Industrier ASA owns 51% of shares in Scana do Brasil Ltd.

The main products in the portfolio company Scana Energy are forged products for the oil and gas, energy, marine, machine and tool industries. The portfolio company Scana Propulsion designs and manufactures propulsion systems, including propellers, propeller housings, shafts, gears, thrusters and control systems for the global shipbuilding market. Scana Propulsion is marketed as a complete equipment package supplier. Scana Property comprises the group's property companies. Scana Skarpenord is a leading supplier of hydraulic and pneumatic valve systems for the oil, gas and shipbuilding industries. Scana Offshore supplies its own products and components to the oil and gas industry. Scana Booforge produces and supplies masts, lifting carriages and complete lifting systems for forklift trucks in the heavy segment. "Head Office" includes the investment company Scana Industrier ASA, three holding companies and the Brazil office. The "Eliminations" column refers to eliminations between the portfolio companies.

The presentation coincides with the internal reporting to the Board. Income from sales to external customers and transactions with other portfolios are reported in each business area, and internal deliveries are recognised at estimated market value.

Scana Steel Stavanger AS (which was previously included in Scana Other Assets) presented a petition for a winding-up order in March 2015. Scana Steel Stavanger AS meet the requirements for reporting as discontinued operations and is therefore not included in the segment report as at 31 December 2015 (see note 27). Last year's figures have also been revised as a result of the winding-up process. Scana Zamech, which is included in the Scana Propulsion segment, presented a petition for a winding-up order in June 2015. The size and scope of the company are not deemed to meet the criteria for reclassification as discontinued operations.

Cash flow from operating activities includes cash flows, in the "Head Office" column, from discontinued operations as specified in note 27.

2015	Scana	Scana	Scana	Scana		Scana Scana Steel	Head	Elimi-
(NOK million)	Energy	Propulsion		Property Skarpenord	Offshore	Booforge	Office	nations	Total
External operating revenue	525.6	317.7	13.7	121.1	108.3	85.6	0.0	0.0	1 172.0
Internal operating revenue	13.2	0.0	8.6	0.6	0.1	12.1	8.1	-42.7	0.0
Total operating revenue	538.8	317.7	22.3	121.7	108.4	97.7	8.1	-42.7	1 172.0
Operating expenses	565.0	296.7	13.0	117.4	95.4	97.6	47.0	-42.7	1 189.4
EBITDA	-26.2	21.0	9.3	4.3	13.0	0.1	-38.9	0.0	-17.4
Depreciation/amortisation	24.0	7.4	4.0	1.8	3.3	3.7	1.1	0.0	45.3
Write-downs	0.0	6.5	0.0	0.0	0.0	0.0	0.0	0.0	6.5
Operating profit/loss (EBIT)	-50.2	7.1	5.3	2.5	9.7	-3.6	-40.0	0.0	-69.2
EBIT margin	-9 %	2 %	24 %	2 %	9 %	-4 %			-6 %
Net financial items									-18.1
Profit/loss before tax – continuing operations									-87.3
Tax									6.0
Profit/loss for the year – continuing operations									-93.3

	Scana	Scana	Scana	Scana		Scana Scana Steel	Head	Elimi
Balance sheet figures:	Energy	Propulsion		Property Skarpenord	Offshore	Booforge	Office	nations	Total
Assets	435.3	159.9	133.4	57.1	59.8	54.9	425.1	-423.0	902.5
Non-current liabilities	65.6	49.4	88.5	0.6	0.0	3.4	253.6	-175.0	286.1
Current liabilities	287.7	78.0	11.0	35.2	25.0	34.2	211.0	-248.1	434.0
Other segment information:
Intangible assets	7.1	8.8	0.0	0.0	0.4	0.4	0.0	0.0	16.7
Deferred tax assets	0.6	1.1	11.0	0.0	0.0	0.0	-11.7	-1.0	0.0
Property, plant and equipment	234.2	23.8	100.9	14.4	0.3	22.3	2.0	0.0	397.9
Inventories	67.0	34.6	0.0	14.7	1.5	17.8	0.2	0.0	135.8
Trade receivables	94.9	31.1	2.4	25.7	3.3	10.7	8.5	-12.0	164.6
Cash flows:
Operating activities Investments in property,	-1.9	73.2	-14.3	-4.9	0.5	-3.3	-1.3	0.0	48.0
plant and equipment	-10.2	-1.6	-1.9	0.0	-0.9	-1.6	-0.4	0.0	-16.6

2014 (NOK million)	Scana Energy	Scana Propulsion	Scana	Scana Property Skarpenord	Offshore	Scana Scana Steel Booforge	Head Office	Elimi- nations	Total
External operating revenue	492.2	330.0	33.3	104.7	149.0	87.0	0.0	0.0	1 196.2
Internal operating revenue	74.4	1.4	8.8	2.2	1.9	12.8	12.7	-114.2	0.0
Total operating revenue	566.6	331.4	42.1	106.9	150.9	99.8	12.7	-114.2	1 196.2
Operating expenses	554.2	334.2	13.3	102.9	135.0	95.2	126.9	-114.2	1 247.5
EBITDA	12.4	-2.8	28.8	4.0	15.9	4.6	-114.3	0.0	-51.4
Depreciation/amortisation	27.4	10.3	1.6	1.9	3.8	4.1	0.4	0.0	49.5
Write-downs	17.7	5.9	0.0	0.0	0.0	0.0	0.0	0.0	23.6
Operating profit/loss (EBIT)	-32.7	-19.0	27.2	2.1	12.1	0.5	-114.6	0.0	-124.4
EBIT margin	-6 %	-6 %	65 %	2 %	8 %	1 %			-10 %
Net financial items									-9.6
Profit/loss before tax – continuing operations									-134.1
Tax									-11.5
Profit/loss for the year – continuing operations									-122.6

	Scana	Scana	Scana	Scana		Scana Scana Steel	Head	Elimi
Balance sheet figures:	Energy	Propulsion		Property Skarpenord	Offshore	Booforge	Office	nations	Total
Assets	489.9	198.6	253.3	60.7	70.1	53.1	649.1	-695.1	1 079.7
Non-current liabilities	21.2	5.7	2.0	0.9	0.0	5.0	10.2	-4.0	41.0
Current liabilities	325.9	162.0	211.0	39.4	45.2	26.9	765.4	-691.1	884.7
Other segment information:
Intangible assets	7.7	14.4	0.0	0.0	3.1	0.5	0.0	0.0	25.7
Deferred tax assets	1.4	0.0	12.3	0.0	0.0	0.5	-10.2	-4.0	0.0
Property, plant and equipment	227.4	30.5	106.5	16.2	0.1	22.6	2.5	0.0	405.8
Inventories	103.1	42.3	0.0	10.9	1.6	16.9	30.1	0.0	204.9
Trade receivables	100.4	54.6	1.8	31.4	9.1	10.7	41.1	-23.8	225.3
Cash flows:
Operating activities Investments in property,	42.5	-55.8	-31.6	0.3	2.8	1.3	74.4	-45.0	-11.1
plant and equipment	-14.7	-7.5	-11.9	-1.2	-0.1	-1.3	-9.1	0.0	-45.8

GEOGRAPHIC AREA

The group companies are located in the following countries: Norway, Sweden, China, the USA, Poland, Brazil and Singapore. The USA, Poland, China, Brazil and Singapore are included in the "Other" column.

2015 (NOK million)	Norway	Sweden	Other	Eliminations	Total
External operating revenue	527.0	618.6	26.4	0.0	1 172.0
Internal operating revenue	12.3	3.9	14.5	-30.7	0.0
Total operating revenue	539.3	622.5	40.9	-30.7	1 172.0
Operating expenses	541.7	644.6	33.8	-30.7	1 189.4
EBITDA	-2.4	-22.0	7.0	0.0	-17.4
Depreciation/amortisation	15.2	29.7	0.4	0.0	45.3
Write-downs	5.4	0.0	1.1	0.0	6.5
Operating profit/loss (EBIT)	-23.0	-51.8	5.6	0.0	-69.2
EBIT margin	-4 %	-8 %	14 %	0 %	-6 %
Net financial items					-18.1
Profit/loss before tax – continuing operations Tax					-87.3 6.0
Profit/loss for the year – continuing operations					-93.3
Balance sheet figures:
Assets	584.0	510.9	7.8	-200.2	902.5
Non-current liabilities	264.7	83.7	2.9	-65.2	286.1
Current liabilities	231.7	326.8	10.4	-134.9	434.0
Other segment information:
Intangible assets	9.1	7.5	0.1	0.0	16.7
Deferred tax assets	0.0	0.0	0.0	0.0	0.0
Property, plant and equipment	119.9	277.6	0.4	0.0	397.9
Inventories	48.8	84.9	2.1	0.0	135.8
Trade receivables	68.0	105.0	3.4	-11.8	164.6
Cash flows:
Operating activities	73.6	-26.5	0.9	0.0	48.0
Investments in property, plant and equipment	-3.9	-12.3	-0.4	0.0	-16.6
2014 (NOK million)	Norway	Sweden	Other	Eliminations	Total
External operating revenue Internal operating revenue	572.0 30.6	591.7 13.0	32.5 18.9	0.0 -62.5	1 196.2 0.0
Total operating revenue	602.6	604.7	51.4	-62.5	1 196.2
Operating expenses	662.1	585.9	62.0	-62.5	1 247.5
EBITDA	-59.5	18.9	-10.8	0.0	-51.4
Depreciation/amortisation	15.5	33.0	1.0	0.0	49.5

Write-downs	5.9	17.7	0.0	0.0	23.6
Operating profit/loss (EBIT)	-80.9	-31.9	-11.6	0.0	-124.4
EBIT margin	-13 %	-5 %	-23 %	0 %	-10 %
Net financial items					-9.6
Profit/loss before tax – continuing operations Tax					-134.1 -11.5
Profit/loss for the year – continuing operations					-122.6

2014 (NOK million)	Norway	Sweden	Other	Eliminations	Total
Balance sheet figures:
Assets	709.0	698.0	70.2	-397.5	1 079.7
Non-current liabilities	14.8	25.9	0.3	0.0	41.0
Current liabilities	761.8	488.3	32.1	-397.5	884.7
Other segment information:
Intangible assets	17.5	8.2	0.0	0.0	25.7
Deferred tax assets	0.0	0.0	0.0	0.0	0.0
Property, plant and equipment	130.9	273.4	1.5	0.0	405.8
Inventories	78.2	120.0	6.7	0.0	204.9
Trade receivables	132.7	105.7	6.5	-19.6	225.3
Cash flows:
Operating activities	9.5	-26.3	5.7	0.0	-11.1
Investments in property, plant and equipment	-15.1	-30.6	-0.1	0.0	-45.8

SALES REVENUE BY COUNTRY

The breakdown of operating revenue is based on the location of the customer.

The group does not have operating revenue from individual customers exceeding 10 per cent of the group's operating revenue in 2015 and 2014.

(NOK million)	2015	2014
Denmark	23.6	15.1
Finland	20.2	13.7
France	4.9	9.4
Germany	169.0	160.0
Italy	17.6	14.7
Poland	3.0	20.8
Spain	1.9	12.4
Sweden	275.2	214.8
Netherlands	29.7	16.3
United Kingdom	100.3	143.4
Other EU countries	47.3	15.0
Total EU	692.7	635.6
Norway	157.1	192.7
Russia	2.0	1.9
Other European countries	13.7	9.4
Total Rest of Europe:	172.8	204.0
Canada	9.9	7.9
Other South America	2.8	3.3
Brazil	20.6	72.0
Other North America	67.6	99.9
Total Americas	100.9	183.1
China	50.6	61.6
Singapore	85.5	35.4
South Korea	39.8	19.6
Other Asian countries	7.1	14.3
Total Asia	183.0	130.9
Africa and Oceania	6.6	9.2
Total	1 156.0	1 162.8

Note 4. Investments in associates and other shares

Carrying amount of associates:	2015	2014
As at 1 Jan	22 297	20 254
Additions and deposits	0	2 130
Dividend	-2 315	-1 851
Share of profit/loss for the year	6 532	-492
Share of profit/loss not included in previous years/agio effects	968	1 994
Share of profit reclassified as discontinued operations	0	262
Total carrying amount of shares in associates	27 482	22 297

Scana Korea Hydraulic Ltd.

The group has a 49 per cent shareholding in Scana Korea Ltd, which is involved in the sale and production of hydraulic valve control systems. The company is located in Busan in South Korea. Scana has 33.33 per cent of the voting rights. The company is owned by Scana Trading AS and is included in the "Head Office" segment in the financial reporting. Follow-up otherwise takes place in the portfolio company Scana Skarpenord.

Associates; financial information 2015 (100% level):	Scana Korea Hydraulic Ltd.
Operating revenue	135 403
Profit/loss for the year	13 330
Non-current assets	55 788
Current assets	80 400
Non-current liabilities	-7 485
Current liabilities	-72 617
Equity	56 086

Associates; financial information 2014 (100% level):	Scana Korea Hydraulic Ltd.	Inpower AS
Operating revenue	183 503	14 476
Profit/loss for the year	5 212	-1 713
Non-current assets	64 823	3 580
Current assets	75 611	10 012
Non-current liabilities	-18 883	-800
Current liabilities	-78 711	-7 791
Equity	42 840	5 001

Other shares:

Inpower AS

Scana Propulsion AS owns 14.4 per cent (2014: 26.1 per cent) of the shares in Inpower AS, which is based in Kristiansund. The share of ownership being reduced to less than 20 per cent has entailed reclassification from associates to other shares. Via targeted share issues, Scana Propulsion AS has injected NOK 0.3 million into Inpower AS over the course of 2015 (2014: NOK 2.1 million). The company develops future-oriented technology for the companies under the Scana Propulsion AS umbrella and is part of the Propulsion segment. The carrying amount as at 31 December 2015 is NOK 1.0 million.

Note 5. Other comprehensive income

	2015	2014
Other operating revenue:
Rental income	13 708	7 933
Other operating revenue related to discontinued operations	0	-3 527
Other revenue	699	1 691
Total	14 407	6 097
Other operating expenses:
Operation and maintenance	63 049	57 092
Contract services	139 134	187 270
Rental costs	31 346	29 650
Fees and consultancy services	37 417	42 673
Travel and marketing costs	18 996	21 648
Office and administration costs	17 157	17 566
Insurance costs	3 938	4 550
Bad debts (see notes 13 and 14)	1 967	73 196
Grants and subsidies	-244	-390
Energy costs	3 457	3 697
Losses on sale of property, plant and equipment	61	601
Write-down of Zamech	5 329	0
Restructuring costs	0	631
Other operating expenses	8 394	11 643
Total	330 001	449 827

Auditor's fees: *)	2015	2014
Statutory audit, Ernst & Young	2 492	2 409
Equity transaction	146	161
Other audit services	1 786	2 061
Tax consulting	91	85
Total	4 515	4 716

*) Figures are exclusive of VAT.

Other financial income/expenses (-):	2015	2014
Amortisation costs	-2 319	-5 219
Financing costs	-2 121	-6 808
Realised and unrealised gains/losses on shares	-529	193
Other	-1 291	-658
Total	-6 260	-12 492

Note 6. Tax

	2015	2014
The tax expense for the year has been calculated as follows:
Tax payable	576	364
Change in deferred tax	5 429	-11 864
Tax expense for the year	6 005	-11 500
Of which outside Norway	-1 413	-11 094
Effective taxation rate	-6 %	4 %
Reconciliation of taxes against ordinary profit/loss before tax:
Profit/loss before tax – continuing operations	-87 330	-134 058
Profit/loss before tax – discontinued operations	-10 472	-130 586
Profit/loss before tax – total	-97 802	-264 644
27% of profit/loss before tax	-26 407	-71 454
Tax expense for the year	6 005	-11 500
Difference; due to	-32 412	-59 954
Permanent differences	-55 736	-42 867
Change in unrecognised deferred tax asset	47 111	-29 805
Effect of foreign activity as a result of different tax levels	-16 435	12 875
Tax related to net investment and share issue	-7 352	-157
Total	-32 412	-59 954

		Consolidated balance sheet
Breakdown of net deferred tax liabilities:	2015	2014
Non-current assets	36 278	35 544
Current assets	-17 356	-16 793
Pension obligations	0	-237
Liabilities	-2 241	-4 890
Tax loss carryforward	-98 005	-140 897
Unrecognised deferred tax asset	102 425	149 811
Net deferred tax liability	21 101	22 538
Deferred tax asset Norway 25%	98 980	137 986
Of which unrecognised	98 980	137 986
Net deferred tax asset Norway 25%	0	0
Net deferred tax asset Poland 19%	0	9 010
Of which unrecognised	0	9 010
Net deferred tax asset Poland 19%	0	0
Deferred tax asset China 25%	2 427	2 209
Of which unrecognised	2 427	2 209
Net deferred tax asset China 25%	0	0
Net deferred tax asset Singapore 17%	1 018	606
Of which unrecognised	1 018	606
Net deferred tax asset Singapore 17%	0	0
Net deferred tax asset	0	0
Net deferred tax Sweden 22%	21 101	22 538
Net deferred tax	21 101	22 538
Net deferred tax liability	21 101	22 538

Reconciliation of net deferred tax	2015	2014
Opening balance, net deferred tax	22 538	32 465
Change in tax against profit and loss	5 428	-9 400
Agio	1 043	-133
Deferred tax – discontinued operations	-134	-1 208
Tax recognised in other comprehensive income	-7 774	814
Closing balance, net deferred tax	21 101	22 538

Tax recognised in other comprehensive income:	2015	2014
Hedge accounting of net investment – included in Net gain/loss on hedge of net investment	-5 184	-157
Electricity derivatives – included in Net movement in fair value of cash flow hedges	-422	971
Share issue costs	-2 168	0
Total tax recognised in other comprehensive income	-7 774	814

Unrecognised deferred tax assets amount to NOK 102.4 million and are related to the portfolio companies Scana Propulsion (NOK 4.7 million), Scana Offshore (NOK 40.2 million), Scana Property (NOK 2.1 million) and Scana Head Office (NOK 55.4 million).

As at 31 December 2015, loss carryforwards in Norway amount to NOK 371.0 million (2014: NOK 457.8 million).

Future cash flows plan for the group's portfolio companies exiting the downturn they are currently experiencing, but operations in Norway have been returning negative tax results for several years. There is uncertainty associated with the future use of the tax losses, with the deferred tax asset consequently not being recognised in the balance sheet.

Note 7. Earnings per share

Ordinary earnings per share are calculated as the ratio between the profit/loss for the year that falls to the shareholders and the weighted average number of outstanding shares.

Earnings per diluted share is the profit/loss that falls to the shareholders and the weighted average number of outstanding shares is adjusted for all dilution effects related to share options. The "denominator" includes all share options that are "in-the-money" and can be exercised over the options' validity period in the current year.

	2015	2014
Profit/loss for the year (attributable to owners of the parent company)	-71 777	-265 361
Weighted average no. of shares*) Dilution effect:	93 294 731	75 107 793
Options/subscription rights	0	0
Weighted average no. of shares adjusted for dilution effect	93 294 731	75 107 793
Earnings per share – continuing operations	-0,99	-1,63
Earnings per share – discontinued operations	0,23	-1,90
Earnings per share	-0,77	-3,53

The earnings per diluted share are the same as the earnings per share.

*) In the weighted average number of shares, the effect of the company's weighted holding of own shares has been taken into account.

Note 8. Intangible assets

				Customer
	Patents		Development	relations/
Intangible assets 31.12.15	and licences	Goodwill	costs	Orders in hand	Total
Acquisition cost
Accumulated 1 Jan	7 304	43 955	85 772	26 647	163 678
Additions during the year	0	0	2 585	0	2 585
Translation differences	27	1 562	1 858	545	3 992
Disposals, discontinued operations	0	0	-4 921	0	-4 921
Disposals, continuing operations	-319	-23 049	-6 249	-27 192	-56 809
Accumulated 31 Dec	7 012	22 468	79 045	0	108 525
Depreciation/amortisation and write-downs
Accumulated 1 Jan	5 849	41 314	64 154	26 647	137 964
Depreciation/amortisation for the year – cont. operations	367	0	8 326	0	8 693
Write-downs for the year – continuing operations	0	0	3 308	0	3 308
Translation differences	27	1 562	1 464	545	3 598
Disposals, discontinued operations	0	0	-4 921	0	-4 921
Disposals, continuing operations	-319	-23 049	-6 249	-27 192	-56 809
Accumulated 31 Dec	5 924	19 827	66 082	0	91 833
Carrying amount at 31 Dec	1 088	2 641	12 963	0	16 692
Depreciation/amortisation period in no. of years	10 - 50	No depreciat./ amortisation	5	5

The straight-line method of depreciation/amortisation has been used.

				Customer
Intangible assets 31.12.14	Patents and licences	Goodwill	Development costs	relations/ Orders in hand	Total
Acquisition cost
Accumulated 1 Jan	7 341	72 134	82 723	32 416	194 614
Additions during the year	0	0	3 407	0	3 407
Translation differences	4	632	385	279	1 300
Disposals, discontinued operations	-27	-28 811	-743	-6 048	-35 629
Disposals, continuing operations	-14	0	0	0	-14
Accumulated 31 Dec	7 304	43 955	85 772	26 647	163 678
Avskrivninger og nedskrivninger
Akkumulert 01.01.	5 253	40 504	50 266	30 477	126 500
Årets avskrivninger videreført virksomhet	431	0	8 982	0	9 413
Årets nedskrivninger videreført virksomhet	175	0	4 282	0	4 457
Årets avskrivninger og nedskrivninger avviklet virksomhet	0	0	346	310	656
Omregningsdifferanser	5	810	379	316	1 510
Avgang avviklet virksomhet	-1	0	-101	-4 456	-4 558
Avgang videreført virksomhet	-14	0	0	0	-14
Accumulated 31 Dec	5 849	41 314	64 154	26 647	137 964
Carrying amount at 31 Dec	1 455	2 641	21 618	0	25 714
Depreciation/amortisation period in no. of years	10 - 50	No depreciat./ amortisation	5	5

The straight-line method of depreciation/amortisation has been used.

Disposals, continuing operations associated with goodwill and customer relations/orders in hand relate to the winding-up of Scana Zamech, which is part of Scana Propulsion. Recognised development costs for Scana Offshore amount to NOK 0.4 million and relate to technology associated with mooring and loading buoys. Scana Energy has recognised development costs of NOK 5.5 million associated with the development of steel grades. Scana Propulsion has recognised development costs associated with product technology corresponding to NOK 6.7 million. In addition, Scana Booforge has recognised development costs of NOK 0.4 million relating to fork equipment. Development costs are amortised over the anticipated useful life of the product.

Development costs for Scana Propulsion have been written down by NOK 3.3 million.

Goodwill by cash-generating unit:	2015	2014
Energy	1 565	1 565
Propulsion	1 076	1 076
Total	2 641	2 641

Note 9. Property, plant and equipment

	Machinery,	Buildings
Property, plant and equipment 31.12.15	equipment, etc.	and property	Land	Total
Acquisition cost
Accumulated 1 Jan	942 392	175 139	40 175	1 157 706
Additions during the year	9 558	2 713	1 696	13 967
Translation differences	49 439	9 668	1 286	60 393
Transfers	0	-1 886	1 886	0
Disposals, discontinued operations	-213 318	4 374	0	-208 944
Disposals, continuing operations	-71 935	-2 850	-1 886	-76 671
Accumulated 31 Dec	716 136	187 158	43 157	946 451
Depreciation/amortisation
Accumulated 1 Jan	689 894	53 824	8 220	751 938
Depreciation/amortisation for the year – continuing operations	29 204	6 587	804	36 595
Write-downs for the year – continuing operations	2 523	667	0	3 190
Deprec./amort. and write-downs for the year – discont. oper.	645	196	0	841
Translation differences	31 596	4 823	827	37 246
Disposals, discontinued operations	-214 313	6 789	0	-207 524
Disposals, continuing operations	-71 847	-1 849	0	-73 696
Accumulated 31 Dec	467 702	71 037	9 851	548 590
Carrying amount at 31 Dec	248 434	116 121	33 306	397 861
Depreciation/amortisation period in no. of years	5 - 40	40 - 50

The straight-line method of depreciation/amortisation has been used.

	Machinery,	Buildings
Property, plant and equipment 31.12.14	equipment, etc.	and property	Land	Total
Acquisition cost
Accumulated 1 Jan	1 135 963	339 081	46 420	1 521 464
Additions during the year	24 632	12 769	5 047	42 448
Translation differences	10 694	3 179	296	14 169
Disposals, discontinued operations	-226 868	-109 178	-10 474	-346 520
Disposals, continuing operations	-2 029	-70 712	-1 114	-73 855
Accumulated 31 Dec	942 392	175 139	40 175	1 157 706
Depreciation/amortisation
Depreciation/amortisation for the year – continuing operations	755 976	183 749	6 468	946 193
Write-downs for the year – continuing operations	32 233	6 223	1 638	40 094
Deprec./amort. and write-downs for the year – discont. oper.	19 115	0	0	19 115
Translation differences	68 496	30 649	5 957	105 102
Disposals, discontinued operations	7 301	2 040	195	9 536
Disposals, continuing operations	-192 775	-108 453	-5 987	-307 214
Avgang videreført virksomhet	-453	-60 384	-51	-60 889
Accumulated 31 Dec	689 893	53 824	8 220	751 937
Carrying amount at 31 Dec	252 499	121 315	31 955	405 769
Depreciation/amortisation period in no. of years	5 - 40	40 - 50

The straight-line method of depreciation/amortisation has been used.

Depreciation period for machinery, equipment, etc.:

5–10 years for office equipment, tools, vehicles and forklift trucks

15–20 years for laboratory and test equipment, as well as small production equipment

20–40 years for larger production machinery, electrical installations and transformers

The assets group for land includes investments in disposal sites and a dam used for cooling at Scana Energy's production facility. The investments are depreciated over a period of five years.

Impairment tests and valuations have been carried out for property, plant and equipment related to continuing operations. Write-downs have been implemented for property, plant and equipment totalling NOK 3.2 million for Scana Propulsion.

Property, plant and equipment associated with the companies in Norway and Sweden have been pledged, meaning that there are restrictions on disposals. The carrying amount of pledged assets is NOK 397.5 million as at 31 December 2015 (31 December 2014: NOK 404.4 million).

Financial leasing of machinery is included in property, plant and equipment in the amount of NOK 4.5 million as at 31 December 2015 (2014: NOK 10.5 million).

Impairment testing – method description

The group tests property, plant and equipment for each cash-generating unit (CGU) for impairment once a year or more frequently where there are any indications of a loss in value. Scana evaluates various impairment indicators in connection with impairment assessments, including the relationship between the market value on the Oslo Stock Exchange and the carrying amount. As at 31 December 2015, the market value of the company is lower than the carrying amount of equity, which indicates a possible need for the impairment of intangible assets including goodwill, as well as property, plant and equipment and other assets in the various CGUs. Several of the segments and the cash-generating units have also experienced a downturn on the market over a relatively long period.

The impairment tests estimate the utility value based on discounting of expected future cash flows. The cash flows are based on the budget and business plans determined by the management for the period 2016–2020. The estimates are based on a budgeting approach for the various cashgenerating units. For the subsequent period, the model assumes a terminal growth rate of 2–2.5 per cent, which reflects the long-term inflation expectations. Revenues are based on contracts entered into, the management assessment and external information about the potential for new agreements. The estimated operating margin for the period is increased on the basis of positive market growth forecasts. The group recognises impairment loss in the income statement where the estimated recoverable amount is lower than the recognised assets for the cash-generating unit.

Recoverable amount

Property, plant and equipment is written down to the recoverable amount where the recoverable amount is lower than the carrying amount of the asset. The utility value is the present value of future cash flows which are expected to arise from an asset or cash-generating unit. The group uses impairment testing if there are indications of a loss of value. The impairment tests are performed for the cash-generating units with an indication of a possible loss in value for recognised assets in property, plant and equipment.

Scana Energy

The portfolio company Scana Energy, which is also a cash-generating unit and consists of Scana Energy AB, Scana Steel Björneborg AB and Scana Subsea AB, has identified impairment indicators for recognised property, plant and equipment in the light of declining results over several periods.

Impairment testing for Scana Energy has been prepared on the basis of the method and principles described in the section above. The calculations are based on an average operating margin of 3.2 per cent for the full period. In combination with lower demand and an expectation of even tougher price competition in the coming year, the operating margin for 2016 and 2017 is expected to be around zero before a positive operating margin is expected again. The discount rate is set to 8.5 per cent before tax. The average growth rate is set to 5 per cent for the period 2016–2020, where a decline in revenue is expected in 2016 compared to 2015 before the trend is expected to turn around. Expected growth is then greatest over the following two years. The growth rate is set to 2 per cent in the final stage, which reflects the long-term inflation expectations in Sweden.

Scana Energy is experiencing reduced demand from the oil and gas market, a factor which, combined with a general overcapacity in the steel sector, is contributing to a challenging market situation with price pressure. Scana Energy has adjusted the cash flows downwards. The estimated cash flows that form the basis of the impairment test assume that the cost measures and the measures associated with the sales organisation will have the expected effect, but it is uncertain when they will have a positive effect on operations. Scana expects the market to turn around, but it is uncertain when the market will turn around and how high future growth will be. The cash flows used as a basis are based on the best estimate of the management and the Board of Directors. Scana is of the opinion that the impairment assessment is realistic and the objectives achievable, and that the carrying amounts of property, plant and equipment are therefore justified. As indicated in the sensitivity assessment below, the impairment test is sensitive to changes in the conditions that form the basis for the test, and relatively small changes could lead to impairments in the coming periods.

Scana Propulsion

Impairment testing for Scana Propulsion has been prepared on the basis of the method and principles described in the section above. Scana Volda, together with the sales companies, constitutes the largest cash-generating unit (CGU) in Scana Propulsion and is the CGU that has been tested for impairment and is referred to as Scana Propulsion below.

Impairment indicators have been identified on recognised property, plant and equipment in light of the fact that the CGU is experiencing a demanding market situation with a very low order inflow linked to contracts for new offshore vessels at Norwegian shipyards. As a result of the demanding market situation, an operating margin of around zero is expected for the first two years. Over the following years, a positive operating margin is anticipated. The calculations are based on an average operating margin of 1.6 per cent for the period. The discount rate is set to 9.4 per cent before tax. The average growth rate is set to 4.7 per cent for the period 2016–2020. This is based on an expected reduction in revenue for 2016 as a result of the low order inflow. Revenue is also expected to be at the same level for 2017, after which growth is expected to occur again. The growth rate is calculated at 2.5 per cent in the final stage, which reflects the long-term inflation expectations in Norway.

The estimated cash flows that form the basis of the impairment test assume a positive trend in profitability over the coming year. Increased new construction activity in vessel segments other than offshore vessels and high service activity are expected to contribute to positive cash flows in future. It is expected that the market within offshore vessels will gradually turn around and contribute to increased activity. Future cash flows reflect the best estimate of the management and the Board of Directors. Scana is of the opinion that the impairment assessment is realistic and the objectives achievable, and that the carrying amounts of property, plant and equipment are therefore justified. As indicated in the sensitivity assessment below, the impairment test is sensitive to changes in the conditions that form the basis for the test, and relatively small changes could lead to impairments in the coming periods.

Summarized the following key assumptions are used in the impairment tests:

	Scana Energy	Scana Propulsion
Operating margin	3.2 %	1.6 %
Discount rate (nominal before tax)	8.5 %	9.4 %
Rate of growth 2016 – 2020	5.3 %	4.7 %
Rate of growth after 2020 (corresponding to inflation)	2.0 %	2.5 %
Functional currency	SEK	NOK
Recoverable amount (numbers in functional currency)	325 468	76 222
Property, plant and equipment and working capital as at 31.12.15 (numbers in functional currency)	277 935	14 599

*Recoverable amount includes working capital

Sensitivity analysis

Sensitivity analyses in relation to impairment testing test for reasonable changes in the key assumptions. The table below shows how much the key assumptions can be reduced without resulting in impairment. For example, a decrease in the operating margin (with other assumptions remaining unchanged) at Scana Energy by more than 0.8 percentage points to a figure lower than 2.4% per cent will result in impairment. Changes in the key assumptions which are larger than shown in the table will result in impairment. The calculations are based on the same assumptions as in the table above. The table shows the variable's reduction measured as a percentage.

	Scana Energy	Scana Propulsion
Operating margin	-0.8 %	-1.4 %
Discount rate (nominal before tax)	1.2 %	7.5 %
Rate of growth 2016 – 2020	-1.6 %	-1.1 %
Headroom (numbers in functional currency)	47 533	61 623

Note 10. Payroll costs

Payroll costs:	2015	2014
Payroll costs	309 396	318 699
Employer's contributions	85 633	86 525
Pension costs	27 151	23 658
Insurance	2 450	430
Incentive arrangement	151	0
Other payroll and staff costs	7 945	8 585
Total payroll costs	432 726	437 897

Total payrolls costs in 2015 include NOK 3.9 million restructuring costs which are implemented.

Average no. of FTEs
Norway	265	294
Sweden	369	384
China	4	7
Poland	8	22
Other	12	13
Total average no. of FTEs	658	721

REMUNERATION TO KEY PERSONNEL (GROUP MANAGEMENT):

2015:				Pension
		Other benefits	premium deposits/
Name	Position	Salary	in kind	Pension	Fees	Total
Bjørn Torkildsen	CEO and former Chairman of the Board	1 000	6	80		1 086
Jan Henry Melhus	Retired acting CEO	2 724	199	489		3 412
Kjetil Flesjå	CFO	1 572	195	161		1 928
Total remuneration to key personnel		5 296	400	731	0	6 427

2014:				Pension
			Other	premium
			benefits	deposits/
Name	Position	Salary	in kind	Pension	Fees	Total
Bjørn Torkildsen	Chairman of the Board				831	831
Jan Henry Melhus	Acting CEO	2 631	178	65		2 874
Kjetil Flesjå	CFO	1 554	174	65		1 793
Total remuneration to key personnel		4 185	352	130	831	5 498

The table above does not include Board fees. The pension scheme for senior employees is a defined contribution plan.

The notice period for key personnel is three to six months. Severance pay agreements have been entered into with group management, which provide for a salary to be paid for six to 12 months after the notice period. Any salaries that are received from other work during the period in which severance payments are made will be deducted from the severance pay. Jan Henry Melhus will receive a salary during the notice period until the termination date on 30 April 2016. A severance payment will be made before the termination date.

A bonus scheme has been put into operation for the managing directors of the portfolio companies and group management. This is linked to meeting profit targets and to capital.

Board fees:

Fees totalling NOK 1,550 thousand were paid to the Board of Scana Industrier ASA in 2015, and NOK 100 thousand to the election committee. Board fees are paid annually in arrears and apply to the period from the 2014 Annual General Meeting to the 2015 Annual General Meeting. For the former Chairman of the Board and former Board Member, extraordinary additional remuneration of NOK 300 thousand and NOK 150 thousand is also included.

The Board fees are listed below.

Per Ravnestad	Chairman of the Board	200
Martha Kold Bakkevig	Deputy Chairman	200
Bjørn Torkildsen	Former Chairman of the Board	600
John Arild Ertvaag	Former Board Member	350
Elisabeth Saupstad	Board Member	200

Following the Extraordinary General Meeting held on 10 September 2015, John Arild Ertvaag and Bjørn Torkildsen are not members of the Board.

STATEMENT ON THE DETERMINATION OF SALARIES AND OTHER REMUNERATION FOR THE CEO AND OTHER SENIOR EMPLOYEES

Introduction

In accordance with Section 6-16a of the Norwegian Public Limited Companies Act, the Board is obliged to draw up a statement on the determination of salaries and other remuneration for the CEO and other senior employees.

The statement must contain guidelines for the determination of salaries and other remuneration, and include the main principles of the company's wage policy in relation to management.

Section 6-16a of the aforementioned Act also imposes a duty on the Board to provide a statement on the wage policy for management followed in the preceding financial year.

Employees covered by the guidelines

Scana Industrier ASA defines senior employees as the group chief executive and members of the group management team, as well as the managing directors of the group's subsidiaries. The guidelines may also be applied to other key personnel in the group.

Main principles of the company's wage policy for management

The main principle behind the company's wage policy for manage-

ment is that the basic salary should promote added value in the company and contribute to the mutual interests of the owners and senior employees. The basic salary should not be of such a nature or of such a scope that the company's reputation will be harmed.

As a leading player in its field, Scana Industrier ASA is dependent on offering salaries that can attract the most competent managers. The policy of the Board is that in order to secure the best possible leadership, salaries must be offered at levels that the individual is satisfied with, and which are competitive in an international market.

The basic salary for senior employees consists of a fixed and a variable component, which are both determined on a case by case basis.

Guidelines for salaries and other remuneration

4.1 Fixed salary

It is company policy that the salaries of management are principally paid as a fixed monthly salary that reflects the level of the individual's position and experience, including ordinary benefits in kind.

The fixed salary is determined according to the following:

• Experience and expertise
• The size of the company
• Competitive situation

4.2 Variable salary

Variable salary is set by the Chairman of the Board for the portfolio companies based on relevant key performance indicators (KPIs) in light of achieved results and estimates. Other target figures may apply based on the primary duties of the individual company. The total value of the variable salary should not normally exceed the value of the fixed salary. Bonus schemes for the management team will be partly linked to the company's profits and partly to an assessment of leadership ability.

4.3 Salary determination

The CEO's remuneration is determined by the Board. Salary adjustments for other senior employees are determined by the CEO with subsequent reporting to the Board.

The determination of salaries for senior employees must follow the same principles that apply to other employees with regard to annual ceilings for salary adjustments, adjustment dates and a total salary package consisting of a fixed and variable salary.

4.4 Other remuneration for senior employees

In addition to the basic salary, other remuneration may be paid to senior employees, including share allocations or other payments related to shares or the share price performance of the company or of other companies in the group.

The Board has decided that the share option programme will not be replaced with a new share option programme. Incentives for the company's senior employees will be provided through other schemes in accordance with the guidelines for remuneration.

4.5 Pension schemes and severance pay arrangements Pension plans should in principle be the same for managers as those generally determined for employees of the company.

46

Severance pay arrangements that are established upon departure from the company will be viewed in conjunction with the mutual option to terminate the employment relationship and other restrictive clauses in the individual's contract of employment. Severance pay arrangements will in principle be subject to deductions for income earned elsewhere.

Consequences for the company and shareholders

The wage policy for management in the financial year 2015 has been implemented in line with the above guidelines. The Board believes that the consequence of the guidelines is positive for the company and shareholders.

Incentive arrangement

The incentive-based payment provides an entitlement to a total bonus for the management of Scana and Converto of 12 per cent of any increase in the value of the shares in the company over three years in excess of an annual increase in value of 8 per cent.

• Bjørn Torkildsen will be entitled to up to 4.8 per cent.
• Converto will be entitled to up to 4.8 per cent.
• Other key persons as specified by the CEO may be entitled to up to 2.4 per cent.

The incentive arrangement is based on a share price for the company of NOK 1.

Note 11. Pension obligations

In accordance with Section 7-30a of the Norwegian Accounting Act, the companies in Norway are obliged to have a company pension plan in line with the Norwegian Act on Compulsory Occupational Pensions, and the companies have a pension plan that meets these requirements.

Defined benefit plan in Norway

The group's Norwegian companies are covered by a contractual pension scheme. The number of employees covered by this scheme is 265 individuals as at 31 December 2015 (2014: 383 individuals).

Defined contribution plan in Norway

Companies in Norway have defined contribution plans. The defined contribution plans cover all employees over the age of 20 working more than 20 per cent of a full-time position. The contributions represent 4–5 per cent of the annual salary between 1 and 6 base amounts and 8 per cent between 6 and 12 base amounts. The pension assets are invested in funds, administered by an insurance company and managed by the employee. As at 31 December 2015, the plans had 263 members (2014: 405 members).

There is a supplementary defined contribution pension for senior employees in addition to the group's defined contribution collective pension schemes. The pension scheme will cover annual salaries in excess of 12 base amounts, which are not covered by the defined contribution collective pension scheme. Financing takes place through the payment of fund units in DNB corresponding to the agreed monthly contribution. On the payment date, fund units will be sold to be paid monthly to the employee. Prepaid pension costs are recognised as non-current receivables and the liabilities are recognised as non-current liabilities. As at 31 December 2015, NOK 596 thousand has been recognised in prepaid pension costs/pension obligations (2014: 0).

Pension schemes in Sweden

There are two pension schemes in Sweden, an ordinary defined contribution plan and a defined-benefit multi-employer plan that is recognised as a defined contribution plan.

The arrangement applies at present to Bjørn Torkildsen and Converto from 1 September 2015 until 31 August 2018. The CEO must still be employed at the end of this period in order to be entitled to a success fee. However, the CEO still has the right to a success fee at the end of the period if his conditions of employment have been concluded if this is due to the company having dismissed the CEO, provided that the dismissal is not due to the employee's own circumstances constituting good cause for dismissal. The agreement applies correspondingly to Converto.

The arrangement may be settled in cash, but the company can choose to settle up to 50 per cent of the success fee in shares after the expiry date on 31 August 2018.

The value of the incentive agreement has been determined by means of a Monte Carlo simulation, which is a stochastic simulation method that can be used to generate future share prices.

Based on the simulations, this gives an indicative total option value of NOK 2.72 million, allocated as follows: The value of allotted options is allocated over the agreed period during which the employee earns the right to receive the options, or when services are purchased from external parties over the service period it is agreed that the share disbursement will cover.

The defined benefit plans are organised as multi-employer plans and are insured with Alecta. The necessary information for recognising the plans as defined benefit plans is not available. This is why the group has recognised the scheme as a contribution-based scheme. The reason for the lack of adequate information to recognise the scheme as a defined benefit scheme is that Alecta does not possess information on the distribution of earnings of pension rights between the different employers and is therefore not able to carry out a precise and reliable distribution of assets and liabilities to the respective employers. Nor does Alecta have any rules in place for how to treat any surplus or deficit that may arise. This is why the group has recognised the scheme as a contribution-based scheme.

Alecta estimates the group's expected contribution to the Alecta defined benefit plan in 2015 to be NOK 6.6 million (estimate for 2014 was NOK 6.6 million).

The defined benefit multi-employer plan covers 83 of 326 employees (2014: 108 of 526 employees).

The collective financing ratio measures the distribution of assets in relation to the insurance commitment. The insurance commitment consists of guaranteed commitments and a bonus distributed to insured parties and policyholders, calculated on the basis of Alecta's underwriting methods and assumptions, which are not the same as the methods and assumptions used to value defined benefit pensions in accordance with IAS 19.

According to Alecta's financing policy for defined benefit pensions, the level of the collective financing ratio may vary between 125 and 155 per cent. If the level deviates from the normal level, action must be taken to bring the financing ratio back to the normal level. When there is a low financing ratio, one measure might be to increase the agreed price for new subscriptions and extend the existing benefits. When there is a high financing ratio, one measure might be to introduce premium reductions. Alecta's financing ratio at the end of 2015 was 153 per cent (2014: 143 per cent).

The summary below shows Scana's participation share per:	31.12.15	31.12.14
The group's share of total savings premium for ITP 2 in Alecta*	0.00905 %	0.02009 %
The group's share of total number of active insured parties in ITP 2**	0.01661 %	0.02121 %

To the extent essential information is available and the schemes are reported as defined benefit plans in accordance with IAS 19, this could have an effect on the consolidated financial statements.

Pension schemes in China

The pension schemes for the group's Chinese employees are defined contribution plans in accordance with the company's statutory obligation to make payments to the Chinese authorities. As at 31 December 2015, the plans had four members.

	2015	2014
Recognised pension obligation 31 Dec	879	950

Of the recognised pension obligation, NOK 0 million (2014: NOK 0.4 million) relates to the obligation to pensioners under the contractual scheme and the shortfall in cover in relation to the old contractual pension scheme.

	2015	2014
Pension costs related to defined-benefit plans and the old contractual pension scheme in Norway:	544	-63
Pension costs related to defined-contribution plans in Norway:	9 092	8 319
Pension costs related to defined-contribution plans in China:	229	184
Pension costs related to defined-contribution and multi-employer plans in Sweden:	17 286	15 218
Total pension costs	27 151	23 658

Note 12. Inventories

	2015	2014
Raw materials	60 917	88 195
Semi-finished goods and work in progress	50 335	101 004
Finished goods	24 513	15 744
Total	135 765	204 943
Provision for obsolescence at 31 Dec	51 639	58 570
Change in provision for obsolescence for the year	-6 931	-55 953
Total pledged inventories	133 839	198 160

Provision for obsolescence was reduced in 2015 in connection with the realisation of previous provisions. An ongoing evaluation is made of specific obsolescence. Inventories are provided as security for interest-bearing loans. Write-downs of the inventories have been performed at Scana Machining AB. See details in note 27.

Changes in inventories of work in progress and finished goods in the balance sheet are different from changes in inventories shown in the income statement. This is due to currency translation.

Note 13. Trade receivables

	2015	2014
Nominal value of trade receivables	132 085	186 388
Earned, non-invoiced revenues	30 990	51 304
Trade receivables, associates	4 922	2 672
Provisions for bad debts	-3 364	-15 024
Total	164 633	225 340
Bad debt written off for the year	13 699	76 624
Bad debt recognised, including change in provisions	1 967	73 196

Age of receivables:	2015	2014
Non-overdue receivables	94 065	150 523
0–30 days	29 489	27 350
31–60 days	4 645	3 169
61–90 days	2 448	1 946
over 90 days	6 366	6 070
Trade receivables	137 013	189 058

Provisions for potential bad debts are based on individual assessments of every single item.

Construction contracts:

The table below shows accrued revenues and costs relating to construction contracts that are included in the income statement for the accounting period.

	2015	2014
Revenues linked to construction contracts in the financial year	420 183	640 624
Costs linked to construction contracts in the financial year	327 466	496 729
Gross margin in NOK	92 717	143 895
Gross margin as a percentage	22	22

The table below shows accrued revenues and costs relating to construction contracts that are not completed and delivered on the balance sheet date. A number of the contracts have a construction period of more than one year.

	2015	2014
Revenues linked to construction contracts in progress	745 881	817 379
Costs linked to construction contracts in progress	618 418	675 467
Gross margin in NOK	127 463	141 912
Gross margin as a percentage	17	17
	2015	2014
Invoiced revenues for construction contracts in progress (milestones)	398 458	460 196
Advances from customers	27 940	54 327

Note 14. Other assets and receivables

Other current receivables:	2015	2014
Receivables from the sale of property and companies	0	5 113
Prepaid costs	10 472	9 487
Advances to suppliers	3 049	1 696
Tax paid on account	4 152	3 677
SkatteFUNN funding	2 682	2 753
Other taxation	604	3 591
Value-added tax	4 849	14 001
Other current receivables	1 251	5 479
Total	27 059	45 797

Other non-current assets	2015	2014
Receivables from the sale of property	3 600	3 600
Prepaid pension costs	879	0
Other non-current assets	1 324	379
Total	5 803	3 979

The receivables is related to sale of property maturity in 2017.

Note 15. Bank deposits

Bank deposits:	2015	2014
Ordinary bank deposits	99 678	31 906
Ring-fenced funds	10 835	43 972
Total	110 513	75 879

Reconciliation of bank deposits with cash and cash equivalents in the cash flow statement:	2015	2014
Ordinary bank deposits	99 678	31 906
Ring-fenced funds	10 835	43 972
Bank deposits held for sale	2 094	1 785
Cash and cash equivalents	112 607	77 664

The group has bank deposits of NOK 110.5 million as at 31 December 2015. Of this sum of NOK 110.5 million, NOK 10.8 million is ring-fenced. Of these ring-fenced funds, NOK 5.4 million relates to the sale of properties and companies and will partly be used to pay instalments. The remaining portion of the ring-fenced funds, NOK 5.4 million, relates to a deposit account associated with a project for which the funds are released as the project progresses.

The group has drawn on NOK 82.5 million of the NOK 103.6 million overdraft facility as at 31 December 2015. The total liquidity reserve that can be used freely by the group was NOK 120.8 million as at 31 December 2015.

The cash and cash equivalents in China, Singapore and Brazil totalling NOK 1.5 million are not part of the group's cash pool. Bank guarantees have been issued for tax owed, which amounted to NOK 11.1 million as at 31 December 2015.

Note 16. Share capital and premiums

	Number of shares	Share capital	Share premium
No. of outstanding ordinary shares as at 31/12/2014	75 118 301	75 118	284 647
Write-down of nominal value of share capital from 1.00 to 0.10		-67 606	67 606
Capital increase – targeted share issue	1 000 000 009	100 000	0
Issue costs after tax			-5 863
Total shares before splice	1 075 118 310	107 512	346 391
Splice – 10 shares converted to 1	107 511 831
Total shares after splice	107 511 831	107 512	346 391
Used to cover uncovered losses			-63 512
No. of outstanding ordinary shares as at 31/12/2015	107 511 831	107 512	282 879

The nominal value of the shares is NOK 1.00. There is one class of shares, with all shares carrying equal voting rights. See note 26 for details of own shares.

Preference rights issue

The General Meeting decided on 26 May 2015 to carry out a capital reduction by reducing the nominal value per share from NOK 1.0 to NOK 0.10. The capital reduction was registered in Brønnøysund on 27 May 2015. A preference rights issue of NOK 100 million was then carried out by issuing 1,000,000,009 new shares at a price of NOK 0.10 per share. The issue was registered in Brønnøysund on 9 July 2015.

Splice

At the same general meeting, it was decided that a share splice would be carried out at a ratio of 10:1, which meant that 10 existing shares would give one new share after the share splice. The amendments to the Articles of Association resulting from the share splice were registered in the Norwegian Register of Business Enterprises on 9 July 2015. Following the share splice, the company therefore has 107,511,831 shares, each with a nominal value of NOK 1.00.

Cash flow

Capital received from the share issue less transaction costs before tax is reported in the cash flow statement at NOK 91,969 thousand.

Note 17. Interest-bearing debt

2015:	Nominal interest	Short-term	Long-term	Maturity
Financial leasing obligations	3M NIBOR + 5.0%/3M STIBOR + 0–3.25%	2 073	50
Bank overdraft	NIBOR + 3.75%	82 470	0
Factoring	STIBOR + 2.0%	44 560	0
Syndicate loan in SEK	STIBOR + 3.75%	0	259 356	22.06.18
Minority loan	3M NIBOR + 5.1%	0	4 755	31.12.17
Accrued interest		1 800	0
Total		130 903	264 161
2014:	Nominal interest	Short-term	Long-term	Maturity
Financial leasing obligations	3,53 % - 15,6 %	3 598	4 923
Bank overdraft	NIBOR + 3,75 % / 7,94%*	101 994	0
Factoring	STIBOR + 2,12 %	47 185	0
Syndicate loan in SEK	STIBOR + 3,75%	279 007	0	22.06.15
Accrued interest		2 095	0
Total		433 879	4 923

Syndicate loan in SEK

On 10 July 2015, the group signed a three-year extension of the financing package from 2012. The extension was implemented with a term loan of SEK 293 million including a rolling credit facility with an overdraft facility with a nominal value of NOK 110.0 million and a bank guarantee facility of NOK 90 million. The overdraft facility has been adjusted downwards to NOK 103.6 million as at the end of 2015. The bank guarantee facility will be reduced NOK for NOK on an ongoing basis as guarantees associated with Scana Steel Stavanger expire. The syndicate loan of SEK 293 million has a quarterly instalment profile of SEK 14.65 million per instalment starting from the first quarter of 2017. At the end of 2015, the syndicate loan had been reduced to SEK 249 million.

The loan is denominated in SEK and the interest rate charged is STI-BOR + a margin of 3.75 per cent. Interest is paid quarterly.

The financial loan conditions in the agreement are a minimum liquidity reserve of NOK 20 million at the end of the third and fourth quarters of 2015. From 1 January 2016, there is an ongoing requirement for a liquidity reserve of NOK 20 million. Before the end of 2016, a covenant will be negotiated for a 12-month rolling EBITDA to be measured quarterly from the first quarter of 2017.

Loan costs

Loan costs are the costs associated with establishing loan facilities and constitute the actual costs for each of the loans. The amortised cost method is used when reporting the cost against income over the period of the loan.

Factoring

The group has no counter-claim rights on factoring since the criteria for exclusion have not been met. As a result of this, factoring is recorded on the balance sheet as a gross amount.

Minority loan

Fjordbris AS has entered into a loan agreement amounting to NOK 4.8 million with a minority shareholder.

Note 18. Other current liabilities

	2015	2014
Guarantee provision	9 845	13 258
Salaries payable, holiday pay, VAT, etc.	79 861	100 967
Accrued non-invoiced expenses	32 666	26 524
Provision for landfill costs	12 429	10 811
Restructuring costs	3 883	624
Provisions made for commission costs	3 894	3 562
Royalties	668	1 038
Other current liabilities	6 132	18 084
Total	149 378	174 868

Liability case

Scana Volda AS was sued in France after a gearbox failed in 2010. The plaintiff is a shipowner insurer, which believes that Scana Volda AS's selection of components for the gearbox caused the gearbox to fail. The total claim is for NOK 45 million for damages and financial loss. Scana Volda AS believes that the original delivery was made in accordance with the client's specifications and that other conditions caused the damage. There were several court hearings in 2013, resulting in adjournments. There was also correspondence in 2014 and 2015, but the case has not been settled. Further court hearings are planned for 2016. Scana Volda AS has set aside NOK 3 million.

Note 19. Trade payables

	2015	2014
Trade payables	90 294	160 433
Trade payables, associates	0	1 548
Total	90 294	161 981
Age of receivables:	2015	2014
Non-overdue trade payables	40 925	83 740
0–30 days	38 015	55 426
31–60 days	7 211	11 250
61–90 days	1 475	3 850
over 90 days	2 668	7 715
Total trade payables	90 294	161 981

Note 20. Lease obligations

Operating leases:

The group has entered into a number of lease contracts for machinery, offices and other facilities with a remaining lease period of one to 10 years. These lease contracts are classified as operating leases. The contracts do not contain restrictions on the company's dividend policy or financing options. None of the assets that are leased are sublet. The reported leasing cost in 2015 was NOK 21.8 million (2014: NOK 28.2 million).

The figures apply to future minimum leases.

Operating leases:	2015	2014
Within one year	17 749	24 044
More than one year and less than five years	44 481	53 909
More than five years	23 045	9 517
Total	85 275	87 470

The group as lessee – financial leases:

The group's assets under financial lease contracts include machinery and equipment. In addition to the lease payments, the group has obligations relating to the maintenance and insurance of the assets. The remaining lease periods range from one to two years. None of the assets that are leased under non-cancellable financial lease contracts are sublet. The contracts do not contain restrictions on the company's dividend policy or financing options.

	2015		2014
Financial leases:	Carrying amount	Minimum payment	Carrying amount	Minimum payment
Within one year	2 073	2 073	3 598	3 648
After one year but not more than five years	50	50	4 923	4 923
More than five years	0	0	0	0
Carrying amount of leases	2 123	2 123	8 521	8 571

The free purchase amount of the larger financial and operational lease agreements amounts to NOK 87 million (2014: NOK 96 million). Minimum payments is instalment and interest in accordance with the respective lease agreements.

Note 21. Related-party transactions

Company with influence*:		Sale	Purchase	Receivables	Liabilities
Invenius AS *)	2015	0	0	0	0
	2014	0	831	0	0
Associates:		Sale	Purchase	Receivables	Liabilities
Scana Korea Hydraulic Ltd	2015 2014	20 430 18 951	319 200	4 922 2 622	0 1 547
Inpower AS **)	2014	1 397	600	50	0

*) Invenius AS is controlled by Bjørn Torkildsen, CEO.

**) The company is not considered to be a related party in 2015. The figures for 2014 are specified.

Related-party transactions are executed at the estimated market price. Outstanding receivables and liabilities are unsecured short-term interestfree items. Settlements are made in cash. The group has not issued any guarantees to its related parties. No provisions have been made for unsecured receivables as at 31 December 2015.

Note 22. Financial risk

Centralised risk management

Scana has a centralised finance function. The most important task is to secure the group's room to manoeuvre in the short and long term. The hedging of currency, interest and electricity price exposure is carried out in accordance with the group's policy and routines. This is done centrally by the Finance Department on the basis of the needs reported by the portfolio companies.

Financial risk

The group's activities are exposed to financial market risk, which mainly encompasses exchange rate risk, interest rate risk and fluctuations in the price of electricity. Furthermore, the group – primarily the steel area – is also exposed to trends in raw material prices such as scrap steel and alloys. Scana aims to reduce the risk associated with currency, interest and electricity prices by means of hedging instruments. The group has chosen not to hedge against any fluctuations in other raw material prices, since Scana believes that any increases in these prices can mostly be offset by increased sale prices, albeit with a certain time lag.

Currency risk

The group is exposed to exchange rate fluctuations since large parts of production, purchasing and sales take place abroad and/or in foreign currency. The group's internal banking function continuously monitors and reports the group's currency positions. The currency risk is estimated for each foreign currency and takes account of assets, liabilities and probable purchases and sales in the relevant currency. The company tries to reduce the net currency risk by means of forward contracts, deposits and/or borrowings in the relevant currencies. The main risks associated with currency in the group are related to future sales payments and the group's assets in foreign subsidiaries.

Interest rate risk

The group's interest rate risk is mainly associated with the group's debt portfolio. The risk is managed at group level. The group aims to offset major effects linked to changes in the market rate. Scana has therefore tied parts of the debt portfolio to fixed interest rates in order to curb short-term fluctuations in the market rate. The group's strategy is for at least 40 per cent of the company's interest-bearing debt to be secured at fixed interest rates. The group had a fixed rate of 53 per cent in 2015 (2014: 44 per cent) in relation to total interest-bearing debt. Scana's greatest exposure to interest rate fluctuations is related to STIBOR.

Price risk of electricity

The group has major electricity costs in relation to the production of its

goods, primarily in the steel segment. Scana protects itself from fluctuations in electricity prices by buying electricity derivatives for the portfolio companies Scana Energy and Scana Booforge. The group has an agreement with Vattenfall AB/Vattenfall Energy Trading AB to administer Scana's electricity derivatives with the aim of hedging future electricity prices in Sweden. The estimated electricity consumption is hedged by up to 100 per cent for the coming months, while the hedged share of estimated consumption is gradually lowered for periods further into the future.

Liquidity risk

Securing good financial room to manoeuvre is an important aim of the group. The group is continuously working to reduce the financial risk, including through close monitoring of liquidity development and programmes to reduce working capital.

The group has controlled the liquidity situation in the short and long term by monitoring and maintaining active dialogue with the portfolio companies. Strategic measures have been implemented to strengthen the operational units in the group and reduce working capital. In 2015, a share issue was carried out, which injected NOK 92 million net into the group. The group has bank deposits of NOK 110.5 million as at 31 December 2015. NOK 10.8 million is kept in a ring-fenced bank account, of which NOK 5.4 million is for the bank syndicate. The remaining portion of the ring-fenced funds, NOK 5.4 million, is in a deposit account for a project for which the funds are released as the project progresses. See also note 15 regarding bank deposits. The group has used NOK 82.5 million of its overdraft facility from an overdraft limit of NOK 103.6 million.

The financing agreement with the bank syndicate, including overdraft and guarantee facilities, expires on 22 June 2018.

Credit risk

The group has guidelines for ensuring that orders are not entered into with customers who have had major payment problems and for ensuring that outstanding amounts do not exceed defined credit limits.

The group regards its greatest risk exposure to be the carrying amount of trade receivables (see note 13) and other receivables (see note 14). The operating companies in Europe have credit insurance with Euler Hermes Norge for some of the trade receivables in order to cover the exposure to credit risk. Otherwise, the majority of the deliveries to the portfolio companies Scana Energy, Scana Propulsion, Scana Skarpenord and Scana Offshore are to financially sound shipyards and customers. The shipyards in China and South Korea are to a great extent

owned by the state. In the portfolio companies Scana Propulsion and Scana Skarpenord, service and after sales services are provided to leading global players, with the credit risk considered limited here. Increased activity is expected in the long term within new projects and expansions. Historic losses are limited.

Risk exposure is represented by the carrying amount of the financial assets (shown in note 23), including derivatives, on the balance sheet. The counterparty in currency contracts is DNB. The counterparty in electricity derivatives is Vattenfall AB/Vattenfall Energy Trading AB. The credit risk associated with derivatives is considered to be low.

The tables below show the sensitivity analysis for currency risk, price risk of electricity and interest rate risk. A sensitivity analysis has been carried out for the various market risks to which the group is exposed; it shows the effects of plausible changes to the various risks. Tax effects are not taken into consideration in the calculations.

Sensitivity analysis

Currency risk

The financial instruments that have currency effects are currency contracts, syndicate loans, trade receivables, trade payables and bank deposits. The table shows the effects of changes in the Norwegian krone (NOK) against foreign currency. If the NOK increases by 5 per cent against foreign currency, this will have a positive effect on profit linked to net assets of NOK 22.4 million. Correspondingly, if the NOK weakens against foreign currency, the effect on profit is negative. A change of 10 per cent will have an effect of NOK 44.8 million.

	Change in NOK	Effect on profit before tax	Effect on other comprehensive income
2015	5 %	22 410	5 134
	-5 %	-22 410	-5 134
2014	5 %	14 395	7 000
	-5 %	-14 395	-7 000

Price risk of electricity

The table below shows the effects linked to changes in electricity prices based on the portfolio of electricity derivatives that the group has on the balance sheet date. An increase in electricity prices will mean a positive change in value for profit and equity.

	Change in electricity price	Effect on profit before tax	Effect on other comprehensive income
2015	10 %	407	1 038
	-10 %	-407	-1 038
2014	10 %	455	3 177
	-10 %	-455	-3 177

Interest rate risk

The table below shows the effects associated with interest rate changes in the group on the balance sheet date.

The table shows that increased interest rates have a negative effect on profit.

	Change in interest	Effect on profit before tax	Effect on other comprehensive income
2015	1 %	-846	1 923
	-1 %	846	-1 923
2014	1 %	-1 629	3 400
	-1 %	1 629	-3 400

Note 23. Financial instruments

Hedging of currency risk

The group is subject to currency exposure in the form of net investment in its Swedish subsidiaries. This net investment is defined as Scana's share of the subsidiaries' equity and long-term loans to Swedish businesses. In order to protect against major currency fluctuations, Scana has taken out a loan in SEK. In accordance with the rules on the hedge accounting of net investments, currency gains/losses on this loan are recognised against other comprehensive income to the degree that the loan is offset by the net investment.

Since a significant part of the group's sales are carried out in foreign currencies, Scana is exposed to exchange rate fluctuations during the period from the time the sales contract is entered into to final payment by the customer. There is also a risk associated with future payments in foreign currency. In order to secure the group's net cash flow in the individual currencies, currency contracts are entered into that offset the estimated future incoming/outgoing payments. A NOK -14.0 million loss on hedging of net investments was recognised for 2015 (2014: NOK -0.4 million) and NOK 18.5 million in foreign currency translation differences (2014: NOK 12.7 million). Translation differences for discontinued operations that have been reclassified are dealt with in note 27.

Below is a summary of all open currency contracts as at 31 December 2015:

Currency	Net	Nominal value	Maturity	Unrealised gain/loss (-)
USD	Sale	2 500	2016	-791
EUR	Sale	1 000	2016	-323
Total				-1 114

Below is a summary of all open currency contracts as at 31 December 2014:

Currency	Net	Nominal value	Maturity	Unrealised gain/loss (-)
SEK	Sale	2 400	2015	-50
USD	Sale	3 200	2015	396
EUR	Sale	1 350	2015	-108
Total				238

Hedging of interest rate risk

Floating interest-bearing liabilities are hedged against changes in the interest rate level by entering into interest rate swaps. As at 31 December 2015, 81 per cent of the syndicate loan was hedged at a fixed interest rate. In 2010, the group entered into an interest rate swap with Nordea, where Scana receives variable rates of interest and pays fixed rates. Changes in the fair value of the agreement are recognised in comprehensive income in accordance with the accounting standard on hedge accounting. The interest rate swap matures in October 2016, while the interest-bearing debt matures in June 2018. Any inefficiencies are recognised in the income statement. For 2015, the hedge ratio is considered to be effective and the change in value associated with the effective part of the interest rate swap is recognised against other comprehensive income. As at 31 December 2015, the group has an interest rate swap totalling SEK 200 million, where the group pays a fixed interest rate and receives a variable rate. This agreement was extended in 2011 to October 2016 at a lower fixed interest rate.

Currency	Amount	Fixed interest rate	Maturity	Fair value
SEK	200 000	3.00 %	25.10.2016	-6 995

The variable interest rate is set each quarter and is based on the 3-month STIBOR. The interest rate swap entered into for cash flow hedging as at 31 December 2015 is NOK +4.3 million (2014: NOK -2.1 million), which is recognised in other comprehensive income.

Hedging of fluctuations in electricity prices

The group has major electricity costs in relation to the production of its goods. Scana protects itself from fluctuations in electricity prices by buying electricity derivatives for its Swedish subsidiaries. The group has an agreement with Vattenfall AB/Vattenfall Energy Trading AB to administer Scana's electricity derivatives with the aim of hedging future electricity prices. The estimated electricity consumption is hedged by up to 100 per cent for the coming months, while the hedged share of estimated consumption is gradually lowered for periods further into the future. As at 31 December 2015, electricity hedging is carried out for up to one year in the future. The value of electricity derivatives is calculated on the basis of the difference between the agreed future electricity price and the market's forward prices on the valuation date, multiplied by the hedged volume. The change in the fair value of electricity derivatives is recognised in other comprehensive income to the degree it satisfies the effectiveness requirements for hedge accounting in accordance with IAS 39. The ineffective portion of the changes in value is recognised in the income statement.

On the settlement of electricity derivatives, Scana receives a settlement amount from Vattenfall based on the difference between the agreed price in accordance with the electricity contracts and the price Scana has paid for its ongoing electricity consumption. This amount is recognised as other operating expenses in such a way that the expensed electricity consumption is based on the hedged electricity prices at all times.

The table below shows the effects on the income statement and the balance sheet. The figures are pre-tax.

Electricity derivatives:	2015	2014
Fair value as at 31 Dec	-7 668	-3 427
Recognised against other comprehensive income during the period	-5 324	-3 087
Hedging instruments removed from other comprehensive income during the period	-2 345	-340

The table below shows the maturity structure for financial obligations as at 31 December 2015. Maturity in the next 12 months is broken down quarterly and then on an annual basis. See the section related to liquidity risk, where the bank deposits on the balance sheet date are NOK 110.5 million.

	As at 31/12/2015	2016.1Q	2016.2Q	2016.3Q	2016.4Q	2017	2018	2019 <
Bank overdraft	-82 470						-82 470
Financial leases	-2 123	-518	-518	-518	-518	-50	0	0
Factoring	-44 560
Syndicate loan	-259 356					-61 384	-197 972
Trade payables	-90 294	-90 294
Forward contracts, derivatives	-15 501
Interest	-1 800	-2 501	-2 416	-2 416	-2 416	-8 800	-3 537
Total payments made		-93 313	-2 934	-2 934	-2 934	-70 234	-283 979	0

The overview do not include liabilities held for sale. See note 27 regarding liabilities held for sale.

	As at 31/12/2014	2015.1Q	2015.2Q	2015.3Q	2015.4Q	2016	2017	2018 <
Bank overdraft	-101 994		-101 994
Financial leases	-8 521	-900	-900	-900	-900	-2 876	-1 942	-105
Factoring	-47 185
Syndicate loan	-279 007		-279 007
Trade payables	-161 981	-161 981
Forward contracts, derivatives	-13 223
Interest	-2 095	-4 528
Total payments made		-167 409	-381 901	-900	-900	-2 876	-1 942	-105

Forward contracts and derivatives, except for the interest rate swap agreement, mature in the first quarter of 2016. The interest rate swap matures in the fourth quarter of 2016. Recognised net obligations are NOK 15.5 million. These net obligations are unrealised values and do not have any effect on liquidity. Actual interest payments relating to the existing loan agreement are included in the table.

Determining fair value:

The fair value of forward currency contracts is calculated according to the closing rate on the balance sheet date adjusted for an interest addition or deduction based on the interest rate difference between the respective currencies. For forward currency contracts and electricity derivatives, the basis is the present value of the cash flow. The fair value of cash, bank overdrafts and other interest-bearing debt is considered to be almost equal to the carrying amount, since these have a short maturity period and thereby give floating interest rates that are adjusted in line with changes in the general interest rate level. Likewise, the fair value of trade receivables and payables is considered to be equal to the carrying amount, since both items have a short maturity period and were entered into under normal conditions.

The fair value of interest rate swaps is calculated using the estimated discounted cash flow based on the market's forward interest rates on the valuation date, with an addition to reflect the bank's profit margins.

The table below shows how the different financial instruments are categorised, cf. IFRS 7 as at 31 December 2015.

The table below shows how the different financial instruments are categorised, cf. IFRS 7 as at 31 December 2015.

			Held for sale	Held for sale
		Fair value hierarchy	Change in value through	Hedging	Lending and	Available	At amortised	2015	2014
	Note	Level	profit or loss	instrument	receivables	for sale	cost	Total	Total
Financial assets
Bank deposits	15				110 513			110 513	75 879
Trade receivables	13				164 633			164 633	225 340
Other financial assets	14				27 059			27 059	45 797
Electricity derivatives		Level 2	0	0				0	4
Forward currency contracts		Level 2	88					88	463
Total			88	0	302 205	0	0	302 293	347 483
Financial liabilities
Trade payables	19						90 294	90 294	161 981
Advances from customers	13						27 940	27 940	54 327
Bank overdraft	15/17						82 470	82 470	101 994
Financial leases	17/20						2 123	2 123	8 521
Interest-bearing loans	17						310 471	310 471	328 287
Embedded derivatives			0					0	0
Forward currency contracts		Level 2	1 202					1 202	225
Interest rate swaps		Level 2		6 995				6 995	10 604
Electricity derivatives		Level 2	4 305	3 087				7 392	2 861
Total			5 507	10 082	0	0	513 298	528 887	668 800

Fair value – value hierarchy

Scana applies the following hierarchy when assessing and presenting the fair value of the financial instruments.

Level 1: Trading prices (unadjusted) in active markets for identical assets and liabilities.

Level 2: Input other than traded prices from active markets that are included in level 1, which can be observed for the asset or liability, either directly (as prices) or indirectly (derived from prices). In order to calculate the value of the electricity derivatives, the prices are obtained from Nord Pool. The exchange rates for calculating the value of open currency contracts are obtained from Norway's central bank, Norges Bank, on the balance sheet date.

Level 3: Input for the asset or liability that is not based on observable market data.

The table above shows the valuation hierarchy for details of the fair value of assets and liabilities.

There were no transfers in 2015 between levels 1 and 2 in the assessment of fair value, and no transfers to or from level 3 in the assessment of fair value.

Capital structure and equity

The main purpose of the investment company's composition and management of liabilities and equity is to ensure commercial room to manoeuvre in relation to the work of the investment company and the portfolio companies in both the short term and the long term. The group also aims for a reasonable (best possible) credit rating, and thereby competitive loan terms from lenders for Scana's activity. The investment company will support its commercial activity through effective asset management in relation to equity and liabilities, and thereby contribute to increasing the value for shareholders.

The investment company aims to have sufficient liquid funds and credit facilities to finance operating activities. This is achieved by maintaining high targets for operating activities and financial management. The investment company manages the capital structure and makes the necessary changes based on an ongoing assessment of the market and financial risk and the financial outlook for both the short term and the medium term (see note 17).

Note 24. Shares and shareholders

Scana Industrier ASA had 1,748 shareholders as at 31 December 2015. Foreign shareholders held shares totalling 1.9% of the share capital.

No. of shares held by Board Members and senior employees:
John Arild Ertvaag and Sindre Ertvaag* (through the company Camar AS)		22 891 023
Per Ravnestad	(through the companies International Oilfield Services AS and Panda AS)	6 238 937
Martha Kold Bakkevig	(through the company Kold Invest AS)	15 592
Bjørn Torkildsen	(through the company Invenius AS)	186 061
Carl Christian Krefting	(through the companies Krefting AS and Clean Ship AS)	9 420 796
Kjetil Flesjå		106 501

* John Arild Ertvaag was a Board Member until 10 September 2015. Sindre Ertvaag has been a Board Member since that date.

The 20 largest shareholders as at 31 December 2015:	Number of shares	% share
CAMAR A/S	22 891 023	21.3 %
KREFTING AS	9 220 796	8.6 %
STOLEN AS	8 796 043	8.2 %
INTERNATIONAL OILFIELD SERVICES AS	6 198 852	5.8 %
LEIF INGE SLETHEI AS	5 329 547	5.0 %
BEST INVEST AS	4 084 440	3.8 %
ARNE MORLAND	2 065 351	1.9 %
GUNNAR ØIE	1 841 662	1.7 %
VERKET INVESTERING AS	1 750 000	1.6 %
CLIPPER A/S	1 500 000	1.4 %
KRISTIAN FALNES AS	1 500 000	1.4 %
SPECTATIO INVEST AS	1 450 000	1.3 %
KJELL SIGVE LERVIK	1 350 000	1.3 %
SVERRE GUNNAR THALBERG	1 349 600	1.3 %
KJETIL WERNER GULLIKSEN	1 000 000	0.9 %
ARNE REINEMO	1 000 000	0.9 %
OLAV KRISTIAN FALNES	750 000	0.7 %
KNUT FOSSE AS	705 059	0.7 %
DAG SØNDERLAND	700 000	0.7 %
GUNNERS AS	600 000	0.6 %
Total holding for 20 largest shareholders	74 082 373	68.9 %
Other	33 429 458	31.1 %
Total number of shares	107 511 831	100.0 %

Distribution of shareholders by size of shareholding

Number of shares	No. of shareholders	Number of shares	Shareholding
1 - 1000	952	161 357	0.15 %
1 001 - 10 000	384	1 563 710	1.45 %
10 001 - 100 000	310	11 447 671	10.65 %
100 001 - 1 000 000	88	25 011 779	23.26 %
over 1 000 000	14	69 327 314	64.48 %

Quarterly share price data for 2015

Amounts in NOK	Q4 2015	Q3 2015	Q2 2015	Q1 2015
Opening price	0.79	1.60	2.58	2.95
Closing price	0.71	0.79	1.60	2.58
Return for the period	-10 %	-51 %	-38 %	-13 %
Highest closing price	0.86	1.50	2.54	4.81
Lowest closing price	0.71	0.69	1.10	2.37
Volume (in thousands of shares)	9 423	23 159	10 418	6 237

Note 25. Pledged assets and guarantees

	2015	2014
Pledged assets:
Of the group's recognised liabilities, the following was secured through pledges	393 264	436 707
Total pledged assets	393 264	436 707
Carrying amount of pledged items:
Trade receivables	132 407	170 429
Inventories	133 715	198 160
Machinery, equipment	248 119	251 910
Buildings, land	149 425	152 462
Total	663 666	772 960
Guarantee obligations:
Guarantees	129 349	152 811

The parent company guarantees amount to NOK 68 million and almost all of this sum is performance guarantees associated with product and service deliveries to the group's subsidiaries. A small proportion is associated with payment guarantees on behalf of the group's subsidiaries.

Of the bank guarantees, just over 20 per cent relate to advance payment guarantees. Non-delivery will entitle the customer to draw on the bank guarantee. Performance guarantees constitute 5 per cent. Faults with deliveries and an inability to correct faults will entitle the customer to draw on the guarantees. Around 20 per cent of the guarantees are "on demand" guarantees. In the event of non-payment the supplier can draw on the guarantee.

Note 26. Own shares

The Annual General Meeting held on 26 May 2015 granted the Board authorisation to acquire the company's own shares up to a nominal value of NOK 10,751. This authorisation is valid until the next Annual General Meeting in 2016. In 2015, the company did not trade own shares using the aforementioned authorisation granted by the Annual General Meeting of 2015.

	Number of shares	Amount
Holding of own shares as at 31 December 2014	10 508	11
Purchase/addition of own shares	0	0
Share splice relating to capital injection	-10 047	-10
Holding of own shares as at 31 December 2015	461	0

Note 27. Discontinued operations, net assets held for sale and other disposals

1.0 DISCONTINUED OPERATIONS

The group has following effects related to discontinued operations shown in the overview below:

		Discontinued operations
	2015	2014
Discontinued operations, Scana Steel Söderfors AB	-3 351	-96 740
Discontinued operations – Scana Steel Stavanger AS	14 359	-53 006
Discontinued operations – Offshore Service	10 003	6 943
Total profit/loss for the year – discontinued operations	21 011	-142 803

1.1 Sale of business – Scana Steel Söderfors AB

The group signed a contract to sell Scana Steel Söderfors AB on 30 January 2015. The sale took place on 5 February 2015. The company reported revenue corresponding to NOK 16 million in 2015 (2014: NOK 191 million) and had 142 employees on the transaction date.

As at 31 December 2014, the assets and liabilities of the sold business were presented as held for sale because the sale was considered to be highly probable on the balance sheet date. The business also represented a significant and special part of the group's activities. In light of this, the profit/ loss is shown as part of "Net profit/loss – discontinued operations" in the income statement. Comparative figures have been revised accordingly in the annual financial statements for 2014 and 2015.

The purchase price was SEK 30 million based on the Enterprise Value (EV), with cash and a debt-free balance sheet. The purchase price less debt and transaction costs measured against the assets on the balance sheet led to a write-down in 2014 corresponding to NOK 92.2 million. The sale gave the group a positive liquidity effect corresponding to NOK 1.3 million after adjustments for debt and transaction costs, and an accounting loss of NOK 2.7 million in the annual financial statements for 2015.

1.2 Winding-up – Scana Steel Stavanger AS

Steel Stavanger AS applied for a winding-up order on 4 March 2015.

Scana Steel Stavanger AS supplied special steel and high-alloy steel with stringent requirements for design and documentation. The company's customers were in the markets for oil and gas, energy and marine, as well as in the mining and mechanical industries. The company competed in markets for high-alloy forged products and complex, cast special components. Scana Steel Stavanger AS was the only company in the group with a foundry. The business represented a significant and special part of the group's activities. In light of this, the management's assessment is that the profit/loss should be presented as part of "Net profit/loss – discontinued operations" in the income statement. Comparative figures have been revised accordingly.

The results of Scana Steel Stavanger AS for 2015 are shown in the table below. In 2015, until the petition for a winding-up order was filed, the company's revenue amounted to NOK 45 million (2014: NOK 278 million) and it reported a loss before tax of NOK -9.7 million (2014: NOK -50.5 million). The company contributed cash flow from operations corresponding to NOK -11.5 million in 2015 (2014: NOK -63.6 million). See table in the note for other cash flow details for 2015.

The accounting effects resulting from the winding-up of Scana Steel Stavanger AS are a net gain of NOK 21.4 million, including a partial settlement from the bankruptcy estate of NOK 27.0 million.

Scana Steel Stavanger AS took part in the group's cash pool under the syndicate loan, and had withdrawn NOK 33 million from the cash pool on the winding-up date. The banks are expected to use the collateral pledged by Scana Steel Stavanger in full and that the sales proceeds from it will be used to pay down the bank debt. Scana Industrier ASA has received a partial settlement from the bankruptcy estate of NOK 27.0 million, which was paid down against the debt and reported as discontinued operations in the income statement. Further partial/final settlements from the bankruptcy estate will also go towards paying down the debt and could lead to a positive effect in the consolidated financial statements when settlement takes place.

1.3 Final settlement – Offshore Service

The final settlement for the sale of Offshore Service was paid in 2015 and amounted to NOK 3.5 million. The transaction was carried out in 2014. The accounting effect resulting from the final settlement is NOK 10 million in 2015 after reversal of provisions associated with the sale.

The table below shows which companies the discontinued operations are linked to and the accounting effects relating to profit/loss before tax and gains/losses.

		Söderfors	Stavanger		Offshore Service		Discont. operations
(NOK 1000)	2015	2014	2015	2014	2015	2014	2015	2014
Sales revenue	15 777	179 801	44 858	274 823	0	130 822	60 635	585 446
Other revenue	432	10 827	144	2 680	0	35	576	13 542
Profit from the sale of property, plant, equip.	0	390	0	0	0	0	0	390
Total operating revenue	16 209	191 018	45 002	277 503	0	130 857	61 211	599 378
Cost of materials	7 400	91 483	27 328	151 795	0	61 692	34 728	304 970
Salary and social security costs	5 791	65 149	14 939	100 523	0	39 558	20 730	205 230
Other operating expenses	3 355	35 945	10 753	62 996	0	16 635	14 108	115 576
EBITDA	-337	-1 559	-8 018	-37 811	0	12 972	-8 355	-26 398
Depreciation/Amortisation/Write-downs	851	90 969	-10	12 336	0	2 454	841	105 759
Operating profit/loss	-1 189	-92 528	-8 009	-50 147	0	10 518	-9 198	-132 157
Interest expense	50	722	0	347	0	217	50	1 287
Other financial items	320	1 244	-1 645	-743	0	-216	-1 325	284
Net financial items	370	1 966	-1 645	-396	0	1	-1 275	1 570
Profit/loss before tax – discont. operations	-819	-90 562	-9 653	-50 543	0	10 519	-10 472	-130 586
Tax	180	-6 178	2 603	-2 388	0	-3 468	2 783	-12 034
Profit/loss after tax – discontinued operations	-639	-96 740	-7 050	-52 931	0	7 051	-7 689	-142 620
Profit/loss	-2 712	0	21 409	-75	10 003	-108	28 700	-183
Profit/loss for the year – discont. operations	-3 351	-96 740	14 359	-53 006	10 003	6 943	21 011	-142 803

The financial statements have been revised in view of the winding-up of Scana Steel Stavanger AS in 2015. The revision associated with Scana Steel Söderfors AB and Offshore Service took place in the 2014 consolidated financial statements. The accounting figures for 2015 apply until the disposal of the businesses.

	Söderfors			Stavanger	Offshore Service		Discont. operations
(NOK 1000)	2015	2014	2015	2014	2015	2014	2015	2014
Cash flow
Net cash flow from operating activities	6 525	-20 733	15 459	-63 577	3 500	-1 602	25 484	-85 912
Net ordinary investments	-275	-7 361	0	-936	0	387	-275	-7 910
Liquidity of discontinued operations	-1 106	0	-14	0	0	-3 864	-1 120	-3 864
Net cash flow from investing activities	-1 381	-7 361	-14	-936	0	-3 477	-1 395	-11 774
Net cash flow from financing activities	-6 859	29 265	11 541	64 512	0	-1 161	4 682	92 616
Net cash flows	-1 715	1 171	26 986	-1	3 500	-6 240	28 771	-5 070
Translation differences	-1 021	0	0	0	0	9 414	-1 021	9 414
Reclassified from other compreh. income	-1 021	0	0	0	0	9 414	-1 021	9 414

2.0 OTHER EVENTS

2.1 Winding-up – Scana Zamech Sp. Z o.o.

In recent years, the company has been a sale and service company and was part of the Scana Propulsion segment. The company applied for a winding-up order in June 2015. A meeting of creditors was held on 30 July 2015 in Poland. The group is of the opinion that it no longer has control, and derecognised the assets and liabilities associated with Scana Zamech from the 2015 consolidated financial statements. The group believes that the company's size and type do not satisfy the criteria for presenting the results on the discontinued operations line.

Scana Zamech's results for 2015, along with comparative figures, are described in the section. In the first half of 2015, the company had revenue of NOK 13.3 million (2014: NOK 27.3 million) and reported a loss before tax of NOK -0.6 million (2014: NOK 2.6 million). Scana Zamech was based in Poland.

In light of the winding-up, a total loss of NOK 6.3 million in 2015 has been recognised in connection with the NOK 1.1 million write-down of noncurrent assets and the NOK 5.2 million write-down of net assets, largely associated with receivables and inventories, to zero. The company had bank deposits of NOK 1,825 thousand on the disposal date. See note 5. Any final settlement from the estate will be recognised in its entirety on the settlement date and will have a positive effect.

3.0 NET ASSETS HELD FOR SALE

3.1 Scana Machining – held for sale

There have been ongoing processes to sell the company for some time, and the share purchase agreement was signed on 8 February 2016. On this basis, the management believes on the balance sheet date that it is highly probable that the company will be sold within 12 months. As at 31 December 2015, assets and liabilities associated with Scana Machining AB (part of Scana Energy) are presented as held for sale. Scana Machining AB is not covered by the definition of "discontinued operations" based on the size and type of the company.

		Scana Steel
Balance sheet	Scana Machining AB	Söderfors AB
	2015	2014
Assets:
Property, plant and equipment	0	4 509
Inventories	7 772	23 834
Trade receivables	4 770	35 050
Other current receivables	1 931	4 296
Cash and bank	2 094	1 785
Assets held for sale	16 567	69 474
Liabilities:
Current interest-bearing liabilities	0	19 523
Trade payables	5 718	0
Advances from customers	5 495	22 087
Forward contracts, derivatives	277	576
Other current liabilities	8 364	14 137
Liabilities held for sale	19 854	56 323
Net assets held for sale	-3 287	13 151

At Scana Machining AB, deferred tax assets were written down by NOK 11.2 million and inventories by NOK 4.6 million in 2015.

4.0 OTHER COMPREHENSIVE INCOME

Translation difference reclassified to profit/loss – Scana Steel Söderfors AB	1 021
Translation difference reclassified to profit/loss – Scana Zamech	2 248
Translation difference included in other comprehensive income – Scana Machining AB as at 31 December 2015	2 581

Note 28. Going concern

The annual financial statements have been prepared on the basis of the going concern assumption and the Board confirms that this assumption is valid.

In July 2015, a refinancing agreement was signed with the existing bank syndicate, wherein the loan agreement is extended by three years. The refinancing agreement consists of a term loan of SEK 292 million with a five-year repayment profile and no payments until 31 December 2016. The first instalment of SEK 14.7 million is payable on 22 March 2017. Subsequent instalments will be payable quarterly until final maturity on 22 June 2018. Interest on the loan is paid quarterly. See notes 17 and 23 for further details.

As a condition of the debt refinancing, a share issue was also carried out with net proceeds of NOK 92 million after transaction costs. The funds were made available in early July 2015. At the same time, the banks also released ring-fenced funds of NOK 20 million. The group made a loss for the year of NOK 72 million; this financial outcome is lower than expected.

The group's equity as at 31 December 2015 is NOK 182 million and the group's liquidity reserve is NOK 121 million, consisting of unrestricted funds (NOK 100 million) in addition to an unused share of the approved bank overdraft. See note 15 and 22.

Improvements in profit levels from underlying operations and cash flows

The going concern assumption is also based on the expectation that the financial outcome of and cash flow from operations will improve in future. The management and the Board believe that the measures noted below and other processes will help to achieve and ensure the profitability of the businesses. But there still remains uncertainty with regard to the underlying cash flows, because of uncertainty about when the market will turn around, how quickly the cost-saving measures will have a positive effect on operations and what the results of the measures implemented to promote sales will be.

The management and the Board are of the opinion that the group will gradually regain profitability in its market segments through ongoing and implemented strategic and operational measures. One such measure is the sale of companies and underlying assets to help strengthen the group's capital structure. Measures implemented include the following:

• 1. The company recently signed an agreement to sell its shares in Scana Machining AB. The transaction is considered appropriate for the group as Scana Machining AB has incurred significant losses for the group over the past few years; it will also help to reduce Scana's liquidity risk and operational risk, as well as its guarantee obligations. See note 27.
• 1. Scana Steel Söderfors AB, which has delivered negative results for several years, was sold in early 2015. The sale of Scana Steel Söderfors AB has reduced the group's liquidity risk and operational risk. See note 27.
• 1. In the first quarter of 2015, Scana Steel Stavanger AS applied for a winding-up order following several years of poor financial results. The winding-up of Scana Steel Stavanger AS has reduced the group's liquidity risk and operational risk. See note 27.
• 1. In summer 2015, Scana Zamech Sp. z o.o. (Poland) applied for a winding-up order. This company has also delivered negative results in recent years. This development will help to reduce the company's liquidity risk. See note 27.
• 1. Scana Energy implemented two cost-reduction programmes during 2015. The first phase has been completed and mainly consisted of making 32 employees redundant. The second phase, which is mainly related to redundancies and reducing production costs by NOK 30 million, has begun and is expected to take full effect from the beginning of the third quarter of 2016. Overall, the cost measures are expected to have an effect of NOK 50 million per year once the measures are in full effect.
• 1. Scana Propulsion has adopted cost measures of NOK 6 million to improve profitability through redundancies and temporary lay-offs.
• 1. In addition to the above measures, there is greater focus on sales in order to increase sales in both existing and new markets.

Note 29. Events after the balance sheet date

Per Anders Ravnestad Chairman of the Board

Sindre Ertvaag Board Member

Sale of businesses

On 8 February 2016, Scana Industrier ASA signed a share purchase agreement with Motala Verkstad Group AB (MVG) regarding the disposal of Scana Machining AB. The sale took place through the subsidiary Scana Energy AB in Sweden. The sale was carried out on 1 March 2016, and was settled on the same day. The new owner assumed control of the company's day-to-day operations, as well as the existing organisation at the same time. A partnership agreement was established between Scana Energy and MVG. Scana Machining AB was bought by Scana in 2011 and is based in Kristinehamn, Sweden. In 2015, Scana Machining AB had revenue of NOK 65 million (2014: NOK 64 million) and a loss before tax of NOK 8 million (2014: NOK -35 million). The sale entails an accounting loss of NOK 15 million for the company, which was recognised in 2015.

Stavanger, 15 March 2016

Carl Christian Krefting Board Member

Martha Kold Bakkevig Board Member

Elisabeth Line Saupstad Board Member

Bjørn Torkildsen CEO

SCANA INDUSTRIER ASA INCOME STATEMENT

Period 1 January - 31 December (NOK 1000)	Note	2015	2014
Operating revenue	7	30 946	41 219
Operating expenses
Salary and social security costs	8	18 310	19 099
Depreciation/amortisation	3	874	320
Other operating expenses	8/11	31 622	109 987
Total operating expenses		50 806	129 406
Operating profit/loss		-19 860	-88 187
Financial income and expenses
Income from investment in subsidiaries	2	20 846	63 464
Interest income		2 668	3 559
Interest income intra-group	7	22 438	25 758
Impairment of shares/receivables in subsidiaries	2	-62 293	-90 234
Interest expense		-19 254	-24 487
Interest expense, intra-group	7	-749	-2 513
Other financial income (+)/other financial expenses (-)	17	-9 379	7 894
Net financial items		-45 723	-16 559
Profit/loss before tax expense		-65 583	-104 746
Tax expense	4	7 352	1 669
Profit/loss for the year		-72 935	-106 415
Distribution of profit for the year
Transferred to equity		-72 935	-106 415
Total		-72 935	-106 415

SCANA INDUSTRIER ASA BALANCE SHEET

(NOK 1000)	Note	31.12.15	31.12.14
Non-current assets:
Property, plant and equipment:
Machinery, inventory, buildings, etc.	3	2 008	2 778
Financial non-current assets:
Shares in subsidiaries	2	434 267	505 938
Other shares		0	100
Other non-current receivables	11	596	0
Loans to group companies	10	193 274	266 273
Total non-current assets		630 145	775 089
Current assets:
Receivables:
Receivables to group companies	10	135 810	162 555
Other current receivables	11	522	878
Total receivables		136 332	163 433
Bank deposits and cash	12	95 804	39 347
Total current assets		232 136	202 780
Total assets		862 281	977 869
Equity:
Paid-in capital:
Share capital	9	107 512	75 118
Own shares		0	-11
Share premium		282 879	284 647
Total paid-in capital		390 391	359 754
Total equity	5	390 391	359 754
Liabilities:
Other non-current liabilities:
Debt to credit institutions	13	259 355	0
Pension obligations	11	596	0
Non-current liabilities to group companies Other non-current liabilities	10 15	0 7 297	124 313 10 604
Total other non-current liabilities		267 248	134 917
Current liabilities:
Debt to credit institutions	13	82 470	381 000
Trade payables		1 003	2 491
Current liabilities to group companies Other current liabilities	10 16	110 460 10 709	79 852 19 855
Total current liabilities		204 642	483 198
Total equity and liabilities		862 281	977 869

Stavanger, 15 March 2016

Per Anders Ravnestad Chairman of the Board

Carl Christian Krefting Board Member

Elisabeth Line Saupstad Board Member

Sindre Ertvaag Board Member

Martha Kold Bakkevig Board Member

Bjørn Torkildsen CEO

SCANA INDUSTRIER ASA CASH FLOW STATEMENT

(NOK 1000)	2015	2014
Cash flow from operating activities Profit/loss before tax expense	-65 583	-104 746
Net profit/loss from investment in subsidiaries	68 447	26 770
Gains (-)/losses on the sale of non-current assets	0	0
Provisions for bad debts	35 296	73 378
Depreciation/amortisation	874	320
Change in current receivables	-50 165	-77 843
Change in trade payables	-1 488	-1 788
Change in other current liabilities and other accruals	12 934	37 168
Net cash flow from operating activities	315	-46 741
Cash flow from investing activities
Change in non-current receivables/group liabilities	1 422	40 137
Purchase of non-current assets	-105	-85
Sale of business	3 500	97 434
Investment in subsidiaries	0	-15 000
Net cash flow from investing activities	4 817	122 486
Net cash flow before financing activities	5 132	75 745
Cash flow from financing activities
Proceeds from new non-current interest-bearing debt to credit institutions	-43 400	0
Net interest payments/financial expenses	-1 469	-6 127
Repayment of current interest-bearing debt to credit institutions/change in cash drawings	4 225	-83 674
Capital increase	91 969	0
Net cash flow from financing activities	51 325	-89 801
Net cash flows	56 457	-14 056
Cash and cash equivalents as at 1 January	39 347	53 403
Cash and cash equivalents as at 31 December	95 804	39 347
Change in cash and cash equivalents	56 457	-14 056

SCANA INDUSTRIER ASA NOTES

Note 1. Accounting policies

The company financial statements submitted have been prepared in compliance with the provisions of the Norwegian Accounting Act and good accounting practice. The going concern assumption forms the basis for the preparation of the annual financial statements and valuation of the company's assets. The financial statements consist of an income statement, balance sheet, cash flow statement and notes. The annual financial statements constitute a whole. All figures in the financial statements are full NOK 1,000 unless otherwise stated.

Income and expenses

Income (revenue) is recognised as it is earned. Expenses are recognised in the same period as the related income. Direct transaction costs associated with taking out loans are allocated over the term of the loan using the amortised cost method.

Current receivables and current liabilities

Receivables and liabilities are classed as current assets and current liabilities if they are due for payment within one year of the balance sheet date.

Assets and liabilities in foreign currency

Transactions in foreign currency are recognised at the exchange rate at the time of the transaction. The company's cash and bank balances, receivables and liabilities in foreign currency are translated at the exchange rate on the balance sheet date.

Trade receivables

Trade receivables are recognised on the balance sheet after deduction for confirmed losses and provisions for covering anticipated losses.

Shares in subsidiaries

Investments in subsidiaries are valued using the cost method. Where the criteria for impairment are met, this will be recognised against profit/ loss. Dividends from subsidiaries that represent income earned are recognised as income. Dividends for which payment is made on the purchase of shares represent a repayment of invested capital and are reported as a reduction in investment.

Property, plant and equipment and depreciation

Property, plant and equipment is recognised on the balance sheet at historic acquisition cost less depreciation and impairment. Depreciation is calculated using the straight-line method on acquisition cost. When non-current assets are sold, gains are recognised as operating revenue and losses as operating expenses. Future discounted cash flows are used as a criterion for impairment.

Leases

Lease contracts are classified as finance or operating leases on the basis

of a specific assessment of each lease. The company only has operating assets that are defined as operating leases.

Tax

The tax expense in the income statement is the sum of the tax currently payable and the change in deferred tax linked to the accounting income for the year.

Deferred tax on the balance sheet is tax calculated at 25 per cent of the net tax-increasing temporary differences between the balance sheet values for accounting and tax purposes, after reconciliation of taxreducing temporary differences and loss carryforwards. Full provisions are made according to the liability method without discounting.

A deferred tax asset is recognised on the balance sheet, provided that the company can substantiate future earnings or tax-related transactions that defend the carrying amount.

Pensions and pension obligations

Employees are assured via a pension scheme in which agreed payments are made by the employer (contribution-based scheme) and included in the item salary and social security costs.

Financial instruments

The company uses different financial instruments to manage the group's currency and interest rate exposure. Accounting treatment is based on the intentions behind entering into these contracts.

Forward currency contracts are recognised on the balance sheet at fair value. Unrealised gains or losses linked to these contracts are recognised as they occur. The company uses hedge accounting for interest rate swaps that fulfil the criterion for hedge accounting.

The hedging of net investments is treated as hedge accounting. Unrealised currency gains or losses on loans that are included as hedging instruments for hedging net investments in Swedish subsidiaries are initially recognised on the balance sheet as a part of investment in subsidiaries and will only be recognised in the income statement on the disposal of the investment.

Cash flow statement

The cash flow statement is prepared according to the indirect method. Cash and cash equivalents comprises means of payment (cash/bank deposits) and current investments in securities (not shares) with a term of less than three months calculated from the time of acquisition.

Note 2. Shares

					Carrying amount
		Share of	Share of	Number	NOK as at
Shares in subsidiaries:	Acquired	ownership	votes	of shares	31/12/2015
Scana Propulsion AS (subgroup), Volda, Norway	2011	100 %	100 %	100 000	106 001
Scana Property AS (subgroup), Stavanger, Norway	2012	100 %	100 %	1 000 000	84 422
Scana Skarpenord AS, Rjukan, Norway	1989	100 %	100 %	7 000	11 363
Scana Offshore AS, Vestby, Norway	2006	100 %	100 %	2 600	49 000
Scana USA Holdings Inc. (subgroup), Houston, Texas, USA	2011	100 %	100 %	1 000	0
Scana Trading AS (subgroup), Stavanger, Norway	1987	100 %	100 %	115 000	183 481
Elimination of agio on net investments in subsidiaries				0	0
Total shares in subsidiaries					434 267

		Share of	Share of	Number
	Currency	Acquired	ownership	votes	of shares
Shares owned by subsidiaries:
Scana Steel Björneborg AB, Björneborg, Sweden	SEK	1993	100 %	100 %	80 000
Scana Machining AB, Kristinehamn, Sweden	SEK	2011	100 %	100 %	50 000
Scana Subsea AB, Kristinehamn, Sweden	SEK	2009	100 %	100 %	100
Scana Energy AB (subgroup), Kristinehamn, Sweden	SEK	2013	100 %	100 %	50 000
Scana Volda AS, Volda, Norway	NOK	1997	100 %	100 %	94 426
Scana Mar-El AS, Dalen, Norway	NOK	1996	100 %	100 %	100 000
Scana Singapore Pte Ltd, Singapore	SGD	1994	100 %	100 %	205 000
Scana Shanghai Trading Ltd, Shanghai, China	RMB	2011	100 %	100 %	N/A
Scana Eiendom SSA AS, Jørpeland, Norway	NOK	2013	100 %	100 %	1 529
Scana Eiendom Jørpeland AS, Jørpeland, Norway	NOK	2013	100 %	100 %	6 172
Scana Eiendom Volda AS, Volda, Norway	NOK	2014	100 %	100 %	300
Scana Property AB, Karlskoga, Sweden	SEK	1995	100 %	100 %	69 305
Fjordbris AS, Tau, Norway	NOK	2013	50,1 %	50,1 %	1 000
Scana Steel Booforge AB, Karlskoga, Sweden	SEK	1994	100 %	100 %	100 000
Scana Energy Holding AB (subgroup), Kristinehamn, Sweden	SEK	2013	100 %	100 %	100 000
Scana do Brasil Ind Ltda, Rio de Janeiro, Brazil	BRL	2009	100 %	100 %	10 000

The company tests the value of the shares for impairment where there are indications of a loss in value. The valuation uses the utility value. The utility value is based on the budget and business plans determined by the management for the period 2016–2020. The estimates are based on the 2016 budget and forecasts for 2017–2020 for each individual cash-generating unit. For the subsequent period, the model assumes a growth rate of 2.5 per cent, which is within the long-term expectations of the inflation target of Norway's central bank, Norges Bank, and 2.0 per cent for Sweden's central bank, Riksbanken. Revenues are based on contracts entered into, the management assessment and external information about the potential for new agreements. The estimated operating margin for the period is increased on the basis of positive market growth forecasts. The company recognises impairment loss in the income statement where the estimated recoverable amount is lower than the recognised assets or the cash-generating unit.

A write-down has been carried out on the shares in Scana Trading AS/ the net investment, totalling NOK 48.9 million, in connection with the impairment assessment of Scana Energy.

In summer 2015, Scana Industrier ASA decided to collect dividends from Scana US Holding Inc. in the amount of NOK 52.7 million. The shares in Scana US Holding Inc. were then written down by NOK 42.0 million. Write-downs of NOK 40.4 million were also carried out in connection with receivables from Scana Steel Stavanger AS. In the course of 2015, a partial settlement from the bankruptcy estate was received, and is reported on the same line in the income statement, "Impairment of shares/impairment of receivables", at NOK 27 million. See notes 9 and 27 to the consolidated financial statements for the description of the impairment tests and details of the company's sale.

Note 3. Property, plant and equipment

	Machinery, equipment, etc.
Acquisition cost
Accumulated acquisition cost as at 1 January 2015	6 810
Additions during the year	105
Disposals during the year	-5
Accumulated acquisition cost as at 31 December 2015	6 910
Depreciation/amortisation
Accumulated depreciation as at 1 January 2015	4 032
Depreciation for the year	874
Disposals during the year	-4
Accumulated depreciation as at 31 December 2015	4 902
Carrying amount as at 31 December 2015	2 008
Depreciation/amortisation period in no. of years	3 - 5

Annual rent for office premises (not recognised on the balance sheet) in 2015 was NOK 1,238 thousand.

Note 4. Tax

	2015	2014
Basis for current tax payable:
Profit/loss before tax expense	-65 583	-104 746
Permanent/Other differences	19 818	28 711
Change in temporary differences	3 016	69 971
Change in temporary differences, tax loss	42 749	6 064
Basis for current tax payable	0	0
Tax expense for the year:
Tax payable	0	0
Change in deferred tax	0	1 512
Tax recognised in equity	7 352	157
Tax expense for the year	7 352	1 669
Reconciliation of taxes against ordinary profit/loss before tax:
Tax expense for the year	7 352	1 669
27% of profit/loss before tax	-17 707	-28 281
Difference due to:	25 059	29 950
Permanent/Other differences	5 351	7 752
Profit/loss on investment in subsidiaries, tax recognised in equity	5 184	157
Tax on share issue cost recognised directly in equity	2 168	0
Changes not recognised on the balance sheet/reversed deferred tax asset	8 348	22 041
Change in tax rate	4 008	0

Specification of the basis for deferred tax:	2015	2014
Non-current assets	446	598
Receivables	-75 689	-73 378
Derivatives	-4 963	-4 913
Profit and loss account	-51	-64
Other liabilities	1 670	2 186
Tax loss carryforward	-121 820	-79 071
Total temporary differences	-200 407	-154 642
25% deferred tax (2014: 27%)	-50 102	-41 753
Of which recognised deferred tax asset	0	0
Unrecognised deferred tax asset	50 102	41 753

Deferred tax assets are not recognised on the balance sheet because there is uncertainty as to future use. There is no time limit on the right to present loss carryforwards.

Total tax recognised in equity	7 352	157
Share issue costs	2 168	0
Net investment	5 184	157
Tax recognised in equity:

Note 5. Equity

	Share capital	Own shares*	Share premium	Other equity	Equity
Equity as at 31 December 2014	75 118	-11	284 647	0	359 754
Profit/loss for the year			-63 499	-9 436	-72 935
Cash flow hedging				4 252	4 252
Net investment				5 184	5 184
Paid-in capital	32 394	11	61 731		94 136
Equity as at 31 December 2015	107 512	0	282 879	0	390 391

*The company has 461 own shares with a nominal value of NOK 1.00 per share.

Note 6. Guarantees

	2015	2014
Parent company guarantees and other guarantees	129 349	152 811

The parent company guarantees amount to NOK 68 million and almost all of this sum is performance guarantees associated with product and service deliveries to our subsidiaries. The company has issued a parent company guarantee to Scana Propulsion in connection with a loan to Scana Zamech. At the time of Scana Zamech's bankruptcy, the receivable had a nominal value of NOK 5.2 million. At the time of preparation of the financial statements, it is unclear whether the parent company guarantee will require the parent company to make any payments, and no provision has been made in the annual financial statements.

Note 7. Related-party transactions

NOK 30,946 of the operating revenue for the year constitutes charges made to subsidiaries, including group support. Of the net financial items for the year, NOK 22,438 constitutes interest from group companies and NOK 749 interest to group companies. See note 21 to the consolidated financial statements for details of related parties.

Note 8. Remuneration and fees

	2015	2014
Payroll costs	14 772	15 987
Employer's contributions	2 150	2 380
Pension costs	1 048	524
Other payroll and staff costs	340	207
Total payroll costs	18 310	19 099

Scana Industrier had six employees at the end of the year, including one woman. The average number of employees in 2015 was seven people. The company's pension scheme satisfies the requirements of the Norwegian Act on Compulsory Occupational Pensions. See note 10 to the consolidated financial statements for details of remuneration for senior employees.

Auditor's fees:*	2015	2014
Statutory audit	376	358
Other certification services	0	134
Other non-audit services	1 633	1 772
Tax consulting	33	99
Total	2 042	2 363

*Figures are exclusive of VAT

Note 9. Share capital

As at 31 December 2015, Scana Industrier ASA's share capital came to NOK 107,511,831, distributed across 107,511,831 shares at NOK 1.00 per share. There is one class of shares, with all shares carrying equal voting rights. See note 16 to the consolidated financial statements for details of share capital and premiums. See note 24 to the consolidated financial statements for details of shareholders.

Note 10. Loans, funding and receivables relating to group companies

The company has loan and funding agreements with subsidiaries. In addition, the company has current liabilities to subsidiaries that primarily relate to the group's cash pool. Inter-company loans are payable during the period from 2016 to 22 June 2018.

Note 11. Other receivables

Other current receivables totalling NOK 73.4 million relating to the sale of Leshan Scana Machinery Co. Ltd were written down to zero in 2014. The company is in the middle of a legal process to collect the debt from Leshan Scana Machinery Ltd. The non-current receivable of NOK 596 thousand relates to pensions. See details on pensions in note 11 to the consolidated financial statements.

Note 12. Bank deposits

Bank deposits and cash amount to NOK 95.8 million, of which NOK 5.3 million is in ring-fenced funds associated with the sale of companies and is used for paying instalments. The company has issued guarantees related to taxes owed.

Note 13. Current and non-current interest-bearing debt

	2015	2014
Bank overdraft	82 470	101 994
Syndicate loan, instalments due for payment within 12 months	0	279 006
Total current interest-bearing debt	82 470	381 000

Non-current liabilities amount to NOK 259,355 thousand as at 31 December 2015. See note 17 to the consolidated financial statements for details on interest-bearing debt.

Note 14. Pledged assets

	2015	2014
Of the company's interest-bearing liabilities, the following were secured through pledges	82 470	381 000
Carrying amount of pledged items:
Shares	434 267	505 938
Machinery, equipment	2 008	2 778
Total	436 275	508 716

Note 15. Financial instruments

Currency contracts:

Below is a summary of all open currency contracts as at 31 December 2015

				Unrealised
Currency	Net	Nominal value	Maturity	gains/losses (-)
SEK	Purchase	4 312	2016	232
USD	Purchase	4 230	2016	2 233
EUR	Sale	-1 556	2016	-54
GBP	Sale	-540	2016	-144
Total value of open currency contracts as at 31 December 2015			2 268

The forward contracts are included as part of the group's management of the exchange rate risk. See note 22 to the consolidated financial statements.

Interest rate swaps:

The company believes that holding parts of its liabilities at a fixed interest rate reduces the long-term risk. On this basis, interest rate swaps are used to swap variable interest for a fixed rate. When the fixed interest rate is lower than the variable rate, Scana receives and reports the difference in interest as income. When the fixed interest rate is higher than the variable rate, Scana pays and reports the difference in interest as a cost. Income/costs are accrued over the relevant interest period.

As at 31 December 2015, the company has an interest rate swap of SEK 200 million, where the company pays a fixed interest rate and receives a variable rate. The variable interest rate is set each quarter and is based on the 3-month STIBOR.

Currency	Amount	Fixed interest rate	Maturity	Fair value
SEK	200 000	3.00 %	25.10.2016	-6 995

Note 16. Other current liabilities

Of the other current liabilities, NOK 1,115 thousand constitutes public charges payable.

Note 17. Other financial income/expenses

The net other financial expenses of NOK 9.4 million consist of losses on currencies of NOK 105.8 million, gains on currencies of NOK 99.7 million and financial expenses of NOK 3.3 million.

Note 18. Events after the balance sheet date and going concern

See note 28 to the consolidated financial statements on operation as a going concern and note 29 on events after the balance sheet date.

Per Anders Ravnestad Chairman of the Board

Sindre Ertvaag Board Member

Stavanger, 15 March 2016

Carl Christian Krefting Board Member

Martha Kold Bakkevig Board Member

Elisabeth Line Saupstad Board Member

Bjørn Torkildsen CEO

DECLARATION BY THE BOARD OF DIRECTORS AND THE CEO

Today, the Board of Directors and the CEO have processed and approved the directors' report and annual financial statements for Scana Industrier ASA, the group and the parent company for 2015. The consolidated financial statements have been prepared in compliance with EU-approved IFRS and the associated interpretations, as well as with the additional Norwegian disclosure requirements pursuant to the Norwegian Accounting Act. The annual financial statements for the parent company have been prepared in compliance with the Norwegian Accounting Act and Norwegian good accounting practice as at 31 December 2015. The directors' report for the group and parent company is in line with the requirements of the Norwegian Accounting Act and Norwegian Accounting Standard 16 as at 31 December 2015.

To the best of our knowledge:

• the 2015 annual financial statements for the group and parent company have been drawn up in compliance with the applicable accounting standards
• the information disclosed in the financial statements provides a true and fair view of the group's and parent company's assets, liabilities and financial position and performance as a whole as at 31 December 2015
• the directors' report for the group and parent company provides a true and fair view of the performance, profit and position of the group and parent company, as well as the most central risk and uncertainty factors that the group faces.

Stavanger, 15 March 2016

Per Anders Ravnestad Chairman of the Board

Sindre Ertvaag Board Member

Carl Christian Krefting Board Member

Martha Kold Bakkevig Board Member

Elisabeth Line Saupstad Board Member

Bjørn Torkildsen

CEO

AUDITORS' REPORT 2015

Konklusjon om selskapsregnskapet Etter vår mening er selskapsregnskapet for Scana Industrier ASA avgitt i samsvar med lov og forskrifter og gir et rettvisende bilde av selskapets finansielle stilling per 31. desember 2015 og av dets resultater og kontantstrømmer for regnskapsåret som ble avsluttet per denne datoen i samsvar med regnskapslovens regler og god regnskapsskikk i Norge.

Konklusjon om konsernregnskapet Etter vår mening er konsernregnskapet for Scana Industrier ASA avgitt i samsvar med lov og forskrifter og gir et rettvisende bilde av konsernets finansielle stilling per 31. desember 2015 og av dets resultater og kontantstrømmer for regnskapsåret som ble avsluttet per denne datoen i samsvar med International Financial Reporting Standards som fastsatt av EU.

Presisering

Vi viser til årsberetningen, resultatregnskapet og note 28 i konsernregnskapet hvor det fremgår at konsernet har et negativt årsresultat på NOK 72 mill i 2015 og at resultatet er lavere enn forventet. Konsernet har inngått en refinansieringsavtale, men er avhengig av at resultater og kontantstrøm fra driften forbedres for å sikre fortsatt drift. Det er usikkerhet knyttet til når konsernet vil kunne oppnå lønnsomhet i virksomhetene. Som følge av dette er det også vesentlig usikkerhet om fortsatt drift. Årsregnskapet er avlagt under forutsetning om fortsatt drift og realisasjon av eiendeler og oppgjør av gjeld i normal drift. Det er ikke foretatt avsetninger eller nedskrivninger for eventuelle tap som kan oppstå om denne forutsetningen ikke lenger er tilstede. Dette forholdet har ingen betydning for vår konklusjon om regnskapet.

Uttalelse om øvrige forhold

Konklusjon om årsberetningen og om redegjørelser om foretaksstyring og samfunnsansvar Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, mener vi at opplysningene i

årsberetningen og i redegjørelsene om foretaksstyring og samfunnsansvar om årsregnskapet, forutsetningen om fortsatt drift og forslaget til disponering av resultatet er konsistente med årsregnskapet og i samsvar med lov og forskrifter.

Basert på vår revisjon av årsregnskapet som beskrevet ovenfor, og kontroll handlinger vi har funnet

nødvendig i henhold til internasjonal standard for attestasjonsoppdrag (ISAE) 3000 «Attestasjonsoppdrag som ikke er revisjon eller forenklet revisorkontroll av historisk finansiell informasjon», mener vi at styret og GEO har oppfylt sin plikt til å sørge for ordentlig og oversiktlig registrering og dokumentasjon av selskapets regnskapsopplysninger i samsvar med lov og god bokføringsskikk i Norge.

Stavanger, 16. mars 2016 ERNST & YOUNG AS

�t'--S,de-c� Tor Inge Skjellevik statsautorisert revisor

PRESENTATION OF THE BOARD

PER ANDERS RAVNESTAD, CHAIRMAN OF THE BOARD

Per Ravnestad (born 1952) has more than 30 years' experience from the oil and gas industry. Up until 2010, Ravnestad was Scana's group director for business development. Previously, he was a partner and managing director of International Oilfield Services AS (IOS). Ravnestad has also held a number of Board positions within global oil services, both with equipment manufacturers and with service providers. Ravnestad is a major shareholder in Scana.

CARL CHRISTIAN KREFTING

Carl Christian Krefting (born 1961) has studied at Denver University and the American College. He has a Bachelor of Arts in business administration from the American College London. Krefting has worked in the family business Krefting AS and in Strømme Ship Service ASA, including 25 years spent working as CEO. At present, Krefting is involved in group and external companies as an active owner. Through Board positions, he has experience of managing, purchasing and restructuring companies within maritime industry and branding for the consumer market.

MARTHA KOLD BAKKEVIG

Martha Kold Bakkevig (born 1962) has extensive experience of management, strategy, business development and Board work. She holds a doctorate (dr. scient) from the Norwegian University of Science and Technology (1995) and a doctorate (dr. oecon) from BI Norwegian Business School (2007). Bakkevig is CEO at the well service company DeepWell in Haugesund.

ELISABETH LINE SAUPSTAD

Elisabeth Saupstad (born 1968) has extensive experience of the hotel industry and has held a number of management positions at Nordic Choice Hotels, both as a director and, for several years, as Director of Operations for Comfort Hotels Norway. She has also worked as Director of Sales for Figgjo AS, both nationally and internationally. Saupstad also has experience of the oil sector as Managing Director of Add Consulting, a subsidiary of the Add Energy Group. She currently works as Director of Tourism for Region Stavanger, which is owned by 15 municipalities and 200 member companies.

SINDRE ERTVAAG

Sindre Ertvaag (born 1984) is investment director of the familyowned investment company Camar AS, and holds Board positions in a wide range of industries. He has also worked as an analyst at DNB, and during the period 2010 to 2012 he worked in corporate finance at First Securities (Swedbank), with a focus on companies in the oil services industry. Camar AS is Scana Industrier ASA's largest shareholder.

PRESENTATION OF THE MANAGEMENT

BJØRN TORKILDSEN, CEO

Bjørn Torkildsen (born 1962) has extensive experience in strategy and management and 30 years' experience in the oil and gas industry. He was President of the Canadian company Stolt-LN-Gaz from 2014 to 2015, Managing Director of Skangass from 2009 to 2013, and Managing Director of Lyse Infra from 2005 to 2008. Torkildsen has an degree in engineering from the former Norwegian Institute of Technology, with additional education within finance and management.

KJETIL FLESJÅ, CFO

Kjetil Flesjå (born 1967) has a Master of Science in Finance and came to Scana from Danske Bank in 2011. Flesjå has a solid background in banking and extensive experience with corporate finance processes, including acquisitions and sales processes, financial risk analyses, balance and liability strategies, plus extensive analysis experience.

PRESENTATION OF THE INVESTMENT DIRECTORS

LEIF ROSÈN, INVESTMENT DIRECTOR (SCANA ENERGY AB, SCANA STEEL BOOFORGE AB)

Leif Rosén has a Master of Science in industrial economics. Previous experience includes 13 years at the defence industry company Bofors, CEO of Scana Björneborg (1992–1999) and Managing Director of Avesta Sheffield and Outokumpu (1999– 2014). He is now a consultant and works as Chairman of the Board of several companies.

KJETIL FLESJÅ, INVESTMENT DIRECTOR (SCANA SKARPENORD AS)

Kjetil Flesjå (born 1967) has a Master of Science in Finance and came to Scana from Danske Bank in 2011. Flesjå has a solid background in banking and extensive experience with corporate finance processes, including acquisitions and sales processes, financial risk analyses, balance and liability strategies, plus extensive analysis experience.

TOM SÆTREMYR, INVESTMENT DIRECTOR (SCANA PROPERTY AS)

Tom Ivar Sætremyr is the investment director responsible for Scana Property. He works day to day at Converto AS, and his work as an investment director is included in Converto's mandate agreement with Scana Industrier ASA. He has been employed by Converto since 2013 and has worked in strategy, financing, transactions and Board work. He has experience of banking and finance from 15 years at Nordea, with the last few years spent as a bank manager with professional responsibility for the seafood sector. Sætremyr has a Master of Science in Finance from BI Norwegian Business School and a degree in naval architecture from the former Aalesund University College.

ØYVIND TØRLEN, INVESTMENT DIRECTOR (SCANA OFFSHORE AS, SCANA PROPULSION AS)

Øyvind Tørlen is the investment director responsible for Scana Propulsion and Scana Offshore. He is the CEO of Converto AS, and his work as an investment director is included in Converto's mandate agreement with Scana Industrier ASA. He has been employed at Converto since 2013. Tørlen has more than ten years' management experience from listed companies and over ten years' consulting experience within strategy and finance. Tørlen has a Master of Science in Finance from BI Norwegian Business School.

Scana Industrier ASA Strandkaien 2, P.o.box 878, N-4004 Stavanger, Norway Tel: +47 51 86 94 00, fax: +47 51 91 99 80 industrier@scana.no • www.scana.no

Scana Industrier ASA Strandkaien 2. P.o.box 878 N-4004 Stavanger, Norway Tel: +47 51 86 94 00

SCANA ENERGY

Scana Energy AB Varnumsleden 5 681 93 Kristinehamn, Sweden Tel: +46 550 251 00

Scana Steel Björneborg AB Kristinehamnsvägen 2 SE-680 71 Björneborg, Sweden Tel: +46 550 251 00

Scana Subsea AB c/o Scana Steel Björneborg AB Kristinehamnsvägen 2 SE-680 71 Björneborg, Sweden Tel: +46 550 253 90

SCANA PROPULSION

Scana Propulsion AS Hamnegata 24 P.o.box 205 N-6101 Volda, Norway Tel: +47 70 05 90 00

Scana Volda AS Hamnegata 24 P.o.box 205 N-6101 Volda, Norway Tel: +47 70 05 90 00

Scana Mar-El AS Storvegen 48 N-3880 Dalen, Norway Tel: 47 35 07 58 00

Scana Singapore Pte. Ltd. 21 Bukit Batok Crescent #18-73, WCEGA Tower Singapore 658065 Tel: +65 6872 2702

Scana Shanghai Trading Co. Ltd Room 107, Building 2, No. 3601, Dongfang Road, Pudong District, Shanghai 200125, P.R. China. Tel: +86 21 6288 8881

Scana Propulsion USA, Inc. 1990 Surgi Dr., Suite A, Mandeville LA 70448 Tel: (985) 778-0614, office

Scana Do Brasil Industrias Av. Paisagista jose da silva de azevedo neto 200, bloco 5, sala 133, barra da tijuca, Rio de janeiro, rj, 22775-056 Brazil

SCANA PROPERTY

Scana Property AS Strandkaien 2, P.o.box 878 N-4004 Stavanger, Norway Tel: +47 51 86 94 00

Scana Eiendom SSA AS Strandkaien 2, P.o.box 878 N-4004 Stavanger, Norway Tel: +47 51 86 94 00

Scana Eiendom Jørpeland AS Strandkaien 2, P.o.box 878 N-4004 Stavanger, Norway Tel: +47 51 86 94 00

Scana Eiendom Volda AS Strandkaien 2, P.o.box 878 N-4004 Stavanger, Norway Tel: +47 51 86 94 00

Scana Property AB P.o.box 55 SE-691 21 Karlskoga, Sweden Tel: +46 586 815 81

Fjordbris AS Strandkaien 2, P.o.box 878 N-4004 Stavanger, Norway Tel: +47 51 86 94 00

SCANA SKARPENORD

Scana Skarpenord AS Såheimsveien 2 N-3660 Rjukan, Norway Tel: +47 35 09 18 00

Scana Korea Hydraulic Ltd. 73, Goldrenroot-ro 130beon-gil, Juchon-myeon, Gimhae-si, Gyeongsangnam-do, Korea

Scana Skarpenord Shanghai Service Station Tel: 0086 21 64330818*3091/64156980*3091 Fax: 0086 21 64675223 Add: No.851,Zhongshan Nan Er Rd, Shanghai, P. R. China. Post Code: 200032

SCANA OFFSHORE

Scana Offshore AS Deliveien 10 1540 Vestby Tel: +47 64 95 65 00

SCANA STEEL BOOFORGE

Scana Steel Booforge AB P.o.box 55 SE-691 21 Karlskoga, Sweden Tel: +46 586 820 00