changes 1996 changes in the portfolio in 1996reports.huginonline.com/hugin/801267.pdfchanges 1996 1...

C H A N G E S 1 9 9 6

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Changes in the portfolio in 1996

Investment disposals 1996

AS AalesundfiskAalesundfisk is a traditionalfishery company engaged in fishfarming, production and trading.The company supplies a totalrange of sea food products, andhas operations in Norway, Den-mark and France. The company’smajor market is Europe, but theUSA, South America and the FarEast are also of importance.Norsk Vekst's involvement willserve to strengthen the com-pany’s capital base and focus onstrategic direction: the objectiveis to position the company tobenefit from the imminent struc-tural changes in this industry.

Amount invested: NOK 30.4 millionNorsk Vekst's interest: 33.3 percent1996 turnover: NOK 385 million

Synnøve Finden Meierier ASSynnøve Finden Meierierproduces a well known range ofbranded Norwegian specialitycheeses. The new product«Synnøve Gulost» introducedafter the opening of a new andmodern creamery in Alvdal inJune last year has proved to be asignificant success, offeringhigh quality at a competitiveprice. Synnøve Finden Meierieris now well established as oneof the major new competitors ina market where the farmers’ co-operatives have so far had anear-monopoly position.

Amount invested: NOK 8 millionNorsk Vekst's interest: 41.3 percent1996 turnover: NOK 43 million

Powel Data ASThe company is by NordicStandards a dominant player inthe market for developing andimplementing software forelectricity producers anddistributors. Major productsinclude analytical tools fordistribution networks and turn-key solutions for optimisingdistribution from generationplant through to the end user.Software for the growingmarket of trading in powergeneration capacity is a new andinteresting product area.

Amount invested: NOK 10 millionNorsk Vekst's interest: 40.6 percent1996 turnover: NOK 15 million

NODECO ASReceived from sale of equity interest: NOK 143.5 million

Gain on sale: NOK 115 million

IDÉ SKEIDAR ASReceived from sale of equity interest: NOK 150 million

Gain on sale: NOK 70 million

FALKEN ASReceived from sale of

equity interest: NOK 55.5 millionGain on sale: NOK 31.5 million

KALDNES EIENDOMReceived from sale of

equity interest: NOK 40.7 millionGain on sale: NOK 19.2 million

* See definitions key figures page 18

Norsk Vekst added a number of promising new investments to its portfolio during 1996. Although the dealflow was good,the market conditions during the year made it appropriate to focus on realization of the results of previous years’ work.Significant companies in the portfolio reached a maturity which made it natural for Norsk Vekst to exit, and the ownershipinterests were sold at prices which represented significant profits. Over the past four years Norsk Vekst has obtained anaverage annual return of 32%*) on the capital invested in portfolio companies projects. The significant changes in theNorsk Vekst portfolio are summarised below.

New portfolio companies in 1996

Main Figures

Increase in market value development (incl. accumulated dividend)*

Asset distribution per 31.12.

M A I N F I G U R E S

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Operating revenues 242.9 81.5 101.4 118.9Operating profit 213.9 56.0 62.7 60.7Net financial result 9.1 28.4 13.8 29.1Profit after tax 181.5 84.3 76.5 75.7Dividend 114.0 67.3 61.3 -Earnings per share (NOK) 27.20 12.65 12.54 12.62Dividend per share (NOK) 17.10 10.10 9.20 -Book equity per share at 31.12 (NOK) 107.55 97.45 97.25 100.78

Main figures from the accounts

AMOUNTS IN NOK MILL. 1996 1995 1994 1993

M A I N F I G U R E S

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INTEREST (%) COST PRICE (NOK MILL) SECTOR

Investment portfolio per 31.12.

Business distribution per 31 December

Selmer 15.55 91,234 ConstructionMerkantildata 10.00 46,869 Information technologyA/S EDB 45.59 37,500 Information technologyKaldnes Heavy Lift Trucks 100.00 31,500 Heavy lift truck productionELVA-FDF as 35.00 31,457 Induction technologyAalesundfisk 33.34 30,364 Fish processing and distributionFramnæs Engineering 100.00 27,997 Offshore engineeringPan Fish 21.43 24,375 Fish farmingScandinavian Retail Group 7.74 23,839 Clothing distributionMaXware 46.44 17,540 SoftwareCorrOcean 33.77 15,000 InstrumentationPowel Data 40.63 9,880 SoftwareSynnøve Finden Meierier 41.30 8,013 Dairy productsCogen 60.00 7,080 Energy production OTHERSIntra Media 17.50 10,000 Digital communicationMultimedia Norge 40.00 0,500 SoftwareTotal investment portfolio 413,148

T H I S I S N O R S K V E K S T

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This is Norsk Vekst

Norsk Vekst has gained experience from a broadrange of businesses and processes, and through itsinvestments has enabled a number of companies toachieve improvements in their financial resourcesand management skills. Norsk Vekst's involvementhas assisted companies to make the right strategicdecisions and has played a key role in mergers,acquisitions and restructurings.

Norsk Vekst has focused on industrial andtrading companies, and concentrating on companieswhich has a competitive advantage in theirtechnology, market position or management skillsand which offer significant potential fordevelopment, preferably in growing markets.

Investments typically range in size from NOK25 million to NOK 100 million with an investmenthorizon of 3 - 5 years.

The goal is to contribute to a significantincrease in the value of the portfolio companies. Toobtain this, Norsk Vekst takes an active role

through its board representation and exercisesconsiderable influence in strategic as well as othermajor decisions. Where necessary Norsk Vekstassists companies to recruit competentmanagement, and can itself provide commercialand financial expertise. Norsk Vekst believes inpartnership, and undertakes all its investments inco-operation and agreement with management andshareholders.

Funds which are not invested in portfoliocompanies are included in Norsk Vekst's financialinvestments, which consist mainly of good qualityand liquid interest-bearing securities. Financialinvestments also include shares in former portfoliocompanies where the active ownership period hasended and the shares are liquid, and in additionfrom time to time includes industrial propertiesacquired from portfolio companies in connectionwith restructuring operations.

The management of Norsk Vekst; from left:

Jarle Gundersen, Lars A. Grinde, Øyvind

Aasbø and Trond Bjørnøy.

Norsk Vekst is a listed investment company which provides equity capital, expertise and business network for thedevelopment of industrial, trading and service companies which have a significant potential for growth and profitability. Norsk Vekst has a share capital of NOK 717 million and manages assets of almost NOK 1 billion.

B O A R D O F D I R E C T O R S

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Report of the Board of Directors

ResultsNorsk Vekst recorded a profit before tax for 1996of NOK 223.0 million against NOK 84.3 millionin 1995. The profit for 1996 includes gainstotalling NOK 235.5 million from the sale ofinterests in Nodeco AS, Falken AS, Idé SkeidarAS and of the Kaldnes industrial properties. Thesales proceeds was NOK 400.9 million. At 31December 1996 Norsk Vekst had unrealised gainson listed shares totalling NOK 221.7 millionwhich are not shown as income in the accounts.

At 31 December 1996 the book value of theequity was NOK 717.1 million. Financialinvestments at 26 February 1997 totalled NOK275.3 million divided between NOK 217.8 millionin liquid assets, NOK 49.7 million in shares, andNOK 7.8 million in industrial properties takenover from portfolio companies.

The accounts have been prepared inaccordance with the same principles as in 1995. Inaccordance with previous years' principles,consolidated accounts have not been prepared.Reference is made to the description of accountingprinciples in the notes to the accounts.

Investments in portfolio companiesThere was a good inflow of new potential projectsin 1996. The level of new investments wasnonetheless lower than in 1996, due in part toattention being focused on the significantdisposals which took place during the year.Norsk Vekst invested NOK 48.3 million in 1996in the following new portfolio companies:

Synnøve Finden Meierier AS (8,0),A/S Aalesundfisk (30,4) and Powel Data AS (9,9)

Investments in 1996 relate mainly to foodproduction and processing, as well as furtherinvestments in the information technology sectorand fisheries. In these sectors extensive structuralchanges are taking place which create attractiveinvestment opportunities.

Norsk Vekst sold interests in portfoliocompanies and industrial buildings representing atotal gain of NOK 235.5 million in 1996. FalkenAS and Idé Skeidar AS were sold somewhatearlier than expected, having been held forapproximately one year. These companiesdeveloped well during this period, and at the sametime structural changes in their respectiveindustries made changes in the ownershipstructure essential. Norsk Vekst disposed of itsinterests in these companies in agreement with theother owners thereby creating a new strategicplatform from which the companies will be able tocontinue to develop.

Nodeco increased its annual turnover duringthe period of Norsk Vekst's ownership from NOK30 million to NOK 190 million and took asignificant market share in the market for down-hole oil well equipment in the North Sea. Furtherexpansion had to come from new marketselsewhere in the world, as well as investing in newproduct areas. With this in mind Norsk Vekstinvestigated the possibility of a partnership withan international company. As a result of thisprocess the shareholders of Nodeco AS receivedan offer for the entire company from the Houston

• In 1996 Norsk Vekst realised gains totalling NOK 235.5 million from sales of the portfolio companies Nodeco AS, Falken AS,Idé Skeidar AS and of the Kaldnes industrial properties. The sales proceeds amounted to NOK 400.9 million for Norsk Vekst.

• Norsk Vekst invested a total of NOK 83.6 million in three new and existing portfolio companies.

• The market value of the Norsk Vekst share during 1996 increased considerably. The increase in value was 62.7%including dividend payment.

• The Board proposes a dividend of NOK 17.10 per share for 1996, totalling NOK 114.0 million. The yield was 12.6%based on the average share price during the year.

• The legal reserve in Norsk Vekst's accounts was NOK 117 million at year end, at which level it will be possible to distribute almost 100% of profits from 1997 onwards in accordance with the company's current dividend policy.

THE YEAR 1996


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based company Weatherford Enterra. In NorskVeksts opinion, this offer represented a good pricefor Nodeco’s shareholders and the best way forthe Nodeco group to continue its development.

The sale demonstrated that the company hadparticular strategic value, and Norsk Vekst playeda positive role in making this apparent. NorskVekst achieved a very good return on itsinvestment.

Other companies in the investment portfolioalso progressed well in general during 1996.Amongst others Kaldnes Heavy Lift Trucks(KHLT) showed a positive development,particularly in the second half of the year after anoperational and financial restructuring. The risksassociated with the investment in KHLT has beengreatly reduced during the past year.

Norsk Vekst is considering the possibility of astock exchange listing for 2-4 of the companies inthe investment portfolio during 1997, includingCorrOcean and Pan Fish.The Board of Directors considers the risk level inthe aggregate investment portfolio to be verylimited.

OrganisationNorsk Vekst had 9 employees at the end of 1996and there were no changes during the year.Reference is made to note 10 regarding theremuneration of the company's directors, auditorand managing director.The company's working environment and itsinterface with the external environment fulfil therequirements set by the authorities.

Shareholder mattersAt 31 December 1996 the share register showed792 shareholders holding a total of 6,666,667shares.

The main shareholders are:Shareholder %Norwegian State (Ministryof Industry and Energy) 33.59Aksjefondet Avanse 5.68Arendal Fossekompani ASA 5.01Hafslund Invest ASA 3.83Norsk Hydro ASA 3.74Others 48.15TOTAL 100.00

At the same date 244,700 (3.67%) of the shareswere registered to holders resident outsideNorway.The Norwegian state has informed that it intendsto reduce its ownership interest in Norsk Vekstfrom the current 33.6% in connection with theestablishment of a new venture capital fund. Notimetable for the disposal has been given.

Turnover in the Norsk Vekst share increasedduring 1996. Shares traded during February 1997at prices between NOK 220 and NOK 235 pershare. Adjusted for the dividend paid in 1996 thepresent share price represents an increase in valueof approximately 105% since the 31 December1995.

In accordance with Norsk Vekst's dividendpolicy, 80% of the annual profit is to bedistributed. However, due to account of the size ofthe profit for 1996 the Companies Act requires alarger allocation to legal reserve than this policywould allow. Based on the proposed application ofprofit for 1996 the legal reserve will grow to NOK117.1 million at 31 December 1996. The Board of

Kåre Moe,

styreformann

Roar Arntzen Christian Falck-Pedersen Bernt J. Fossum

The Board of Directors of Norsk Vekst


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Directors' proposes a dividend for 1996 of NOK114.0 million, equivalent to NOK 17.10 per share.After the allocation for this dividend the value ofthe book equity per share of the company wasNOK 107.6 at 31 December 1996.

Prospects for 1997Norsk Vekst has significant funds available fornew investments in 1997. A high level ofinvestment activity is expected for the current year.Providers of equity capital have shown anincreased interest in unlisted companies, andincreased competition is expected for new projects.Norsk Vekst's good market position, its welldeveloped investment concept and its considerableexperience indicates that Norsk Vekst can expectto do well in the competition for new projects.

Norsk Vekst intends to give moreconsideration to investment projects with aNordic dimension, although Norway willcontinue to be the primary market for newinvestments.

Application of profitNorsk Vekst has a profit for 1996 of NOK181.461 million after tax.The Board of Directors proposes to the AnnualGeneral Meeting the following allocations andtransfers:(figures in 000's):

Allocation to legal reserve NOK 67,461Dividend NOK 114,000TOTAL NOK 181,461

Oslo, February 26 1997

Kåre Moe Roar Arntzen Christian Falck-PedersenChairman

Bernt J. Fossum Kaare M. Gisvold Jon R. Gundersen

Kari Kveseth

Øyvind AasbøManaging Director

Kaare M. Gisvold Jon R. Gundersen Kari Kveseth

Profit and Loss Account

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OPERATING REVENUES 1 242,878 81,459

OPERATING COSTS

Salaries, social security, pension costs etc. 10 17,668 10,908

Other administration costs 6,493 9,111

Ordinary depreciation 3 3,260 3,777

Realised loss, portfolio companies 1,577 1,710

TOTAL OPERATING COSTS 28,998 25,506

OPERATING PROFIT 213,880 55,953

FINANCIAL INCOME AND COSTS

Financial income 9,345 29,026

Financial costs 264 664

NET FINANCIAL ITEMS 9,081 28,362

PROFIT BEFORE TAX 222,961 84,315

Tax charge 6 41,500 -

PROFIT AFTER TAX 181,461 84,315

Application of profit:

Proposal for allocations and transfers of the profit for the year:

Dividend 114,000 67,333

Legal reserve 67,461 16,982

TOTAL ALLOCATED 181,461 84,315

A C C O U N T S

AMOUNTS IN NOK 1,000 NOTE 1996 1995

Balance Sheet per 31 December

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A C C O U N T S

AMOUNTS IN NOK 1,000 NOTE 1996 1995

ASSETS

CURRENT ASSETS:

Cash, bank deposits and certificates 2 217,847 143,806

Shares 4 438,671 528,926

Short-term receivables 5 216,461 27,271

TOTAL CURRENT ASSETS 872,979 700,003

FIXED ASSETS:

Long-term receivables 8 13,451 11,250

Other fixed assets 3 918 24,980

TOTAL FIXED ASSETS 14,369 36,230

TOTAL ASSETS 887,348 736,233

LIABILITIES AND EQUITY

SHORT-TERM LIABILITIES:

Dividend allocation 114,000 67,333

Trade debt 522 988

Payroll tax, social security etc. 12,634 6,599

Other short-term liabilities 1,571 11,378

Taxes 6 41,500 -

TOTAL SHORT-TERM LIABILITIES 170,227 86,298

TOTAL LONG-TERM LIABILITIES - 275

EQUITY:

Share capital 600,000 600,000

Legal reserve 117,121 49,660

TOTAL EQUITY 7 717,121 649,660

TOTAL LIABILITIES AND EQUITY 887,348 736,233

Guarantee liabilities 9

CASH FLOW FROM OPERATING ACTIVITIES:

A = Provided from the year's activities (1) 255,140 (135,201)

CASH FLOW FROM INVESTMENT ACTIVITIES:

+/- Change in short-term/long-term receivables (191,391) (17,737)

- Investments in fixed assets (276) (1,195)

+ Sale of fixed assets(sale price) 40,914 747

B = NET cash flow from investment activities (150,753) (18,185)

CASH FLOW FROM FINANCING ACTIVITIES:

+/- Change in short-term debt 37,262 7,143

+/- Change in long-term debt (275) (6,174)

Dividend paid (67,333) (61,333)

+/- Effect of merger and secondary offering 0 (15,716)

C = NET cash flow from financing activities (30,346) (76,080)

A+B+C NET CHANGE IN CASH DURING THE YEAR 74,041 (229,468)

+ Cash at 1 January 143.806 373,272

= Cash at 31 December 217,847 143,806

(1) PROVIDED FROM THE YEAR'S ACTIVITIES

Profit before tax 222,961 84,315

Gain/(loss) on sale of fixed assets (19,837) (601)

Change in shares in portfolio companies 90,256 (222,692)

Provision for loss on portfolio companies 0 0

Ordinary depreciation 3,260 3,777

Tax payable (41,500) 0

Provided from the year's activities 255,140 (135,201)

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A C C O U N T S

Cash Flow Analysis

AMOUNTS IN NOK 1,000 1996 1995

The accounts have been prepared in accordancewith generally accepted accounting principles inNorway. The accounting principles are unchangedin relation to 1995. The most importantaccounting principles which the company followsare described below.

Shares in portfolio companiesConsolidated statements have not been preparedbecause the purpose of investments in subsidiariesis to dispose of all or parts of the relevantinvestment after restructuring and developmenthas taken place. This is in accordance with NorskVekst's accounting practice since it wasestablished and is also considered to be inaccordance with generally accepted accountingprinciples on the basis that such investments aretemporary by nature and should thus be includedunder current assets.

Shares in portfolio companies are treated ascurrent assets and include both subsidiaries andminority investments. These holdings are valuedat the lower of cost price and market value, basedon a total evaluation of all investments. Howeverindividual investments are written down wherethis is considered necessary due to a permanentfall in value.

Income recognition principlesOperating revenues include dividends and gainson the sale of shares in portfolio companies.Other operating revenues relate to rental income,directors' fees from portfolio companies and gainson the sale of fixed assets.

Gains on the sale of shares in portfoliocompanies are booked to income in the year thesale takes place. Rental income is booked asincome at the date earned. Invoiced commonexpenses are included in rental income.

Receivables due from portfolio companiesReceivables due from portfolio companies arealso treated as current assets and are valued at thelower of par value and the expected recoverableamount. Receivables are also valued in relation tothe share value of the relevant company.

Bonds and securitiesBonds and securities are valued at the lower ofcost price and market value on the balance sheetdate, adjusted for hedging transactions whichrelate to the securities.

Other short-term receivablesOther short-term receivables are entered at theirexpected value and reduced for irrecoverableitems.

Receivables and liabilities in foreign currenciesShort-term liabilities/receivables are valued at thehigher/lower of the transaction rate and the rate at31 December.

Fixed assetsFixed assets are stated at cost less ordinarydepreciation. Ordinary depreciation is based onthe expected economic life of the asset.

Pension costs and pension liabilitiesPension costs and pension liabilities are includedin the profit and loss account and balance sheet inaccordance with the preliminary Norwegianaccounting standard. The net pension cost for theyear consists of pension entitlements earnedduring the period (allowing for future salarygrowth), plus estimated interest on the amount ofthe liability to provide such pension benefits, lessthe estimated return on the pension funds and theimpact of any deviations from the assumptionsunderlying the pension arrangement. The netpension cost is classified entirely under salarycosts in the accounts. In valuing pension fundsand accrued liabilities, estimates are used whenclosing the accounts which are adjusted each yearin accordance with actuarial calculations.

Tax chargeThe tax charge in the profit and loss accountconsists both of tax payable for the period and thechange in deferred tax. The change in deferred taxreflects future tax payable which arises as a resultof the year's activities. Deferred tax is the taxrelating to the accumulated result which falls duefor payment in later periods. Deferred tax iscalculated on net positive timing differencesbetween accounting and tax balance sheet valuesafter setting off negative timing differences andlosses carried forward using the liability method.

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A C C O U N T S

Accounting Principles

Note 1 - Operating revenues

The company’s operating revenues include gains on the sale of shares in portfolio companies totalling NOK 235.5 million. Otheroperating revenues relate to share dividends and fees from portfolio companies, rental income from properties as well as gains on thesale of fixed assets.

Note 2 - Cash, bank deposits, certificates

AMOUNTS IN NOK 1,000 COST PRICE AT 31.12.96 MARKET VALUE AT 31.12.96

Certificates 25,017 25,017

Cash and bank deposits 192,830 192,830

Total 217,847 217,847

Cash and bank deposits include deposits on blocked tax deduction accounts of NOK 561,864

Note 3 - Long-term fixed assets

CARS, FITTINGS BUILDINGS LAND ANDAMOUNTS IN NOK 1,000 MACHINERY ETC. AND PLANT HOUSING TOTAL

Cost at 1 January 10,402 22,607 1,166 34,175Additions in the year 276 - - 276Disposals in the year 2,537 22,607 1,166 26,310

Cost at 3l December 1996 8,141 - - 8,141Accumulated ordinary depreciation 7,223 5,232 - 12,455Book value at 3l December 1996 918 - - 918

Ordinary depreciation for the year 1,467 1,793 - 3,260Ordinary depreciation rates 10%-33% 3% - 5%

INVESTMENTS IN AND SALES OF LONG-TERM FIXED ASSETS IN THE LAST 5 YEARS

AMOUNTS IN NOK 1,000 1996 1995 1994 1993 1992INVESMENT SALE INVESTMENT SALE INVESTMENT SALE INVESTMENT SALE INVESTMENT SALE

Cars, fittings, machinery etc. 276 40,914 1,130 747 86 2,681 608 264 584 738

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N O T E S

Notes

Note 4 - Shares

AMOUNTS IN NOK 1,000 SHARE INTEREST NUMBER PAR BOOK MARKETCAPITAL OF SHARES VALUE VALUE VALUE*

PORTFOLIO COMPANIESSelmer ASA 273,264 15,55% 850,000 50 91,234 188,275Merkantildata ASA 59,751 10,00% 1,216,684 5 46,869 141,135A/S EDB 18,427 45,59% 8,400,000 1 37,500Kaldnes Heavy Lift Trucks AS 31,500 100,00% 31,500 1,000 31,500ELVA-FDF AS 4,512 35,00% 15,795 100 31,457AS Aalesundfisk 664 33,34% 221,496 1 30,364Framnæs Engineering AS 5,000 100,00% 50,000 100 27,997Pan Fish AS 1,750 21,43% 750,000 0,5 24,375Scandinavian Retail Group ASA 22,895 7,74% 177,140 10 23,839MaXware AS 11,240 46,44% 1,491,603 3,5 17,540CorrOcean AS 15,100 33,77% 5,100,000 1 15,000Intra Media AS 3,326 17,50% 74,847 10 10,000Powel Data AS 6,400 40,63% 260,000 10 9,880Synnøve Finden AS 5,690 41,30% 2,350 1,000 8,013Cogen AS 10,000 60,00% 6 1,000,000 7,080Multimedia Norge AS 550 40,00% 440 500 500

Total 413,148

FINANCIAL INVESTMENTSElkjøp Norge ASA 71,600 3,49% 250,000 10 16,780 47,125Hinderveien 5 AS 220 100,00% 2,203 100 4,406Petropark Holding AS 4,115 69,60% 28,640 100 3,437Other 900

Total 25,523

Book value, shares 438,671

* Market value as at 31 December 1996 is only given for listed shares. No estimated market value is given for unlisted shares.

Note 5 - Short-term receivables

AMOUNTS IN NOK 1,000 RECEIVABLES LOANS TOTAL

Receivables due from portfolio companies:Kaldnes Eiendom AS 37,461 12,767 50,228Framnæs Installasjon AS - 2,250 2,250Cogen AS 622 - 622Nodeco AS 141,310 2,204 143,514*Pan Fish AS 266 4,530 4,796Synnøve Finden AS 216 5,309 5,525Powel Data AS 213 - 213AS Aalesundfisk - 7,635 7,635Other 36 - 36

Sub total 180,124 34,695 214,819

Other short term receivables 1,643 - 1,643

Total 181,767 34,695 216,461

* Norsk Vekst’s share of the proceeds from the sale of the assets and liabilities of Nodeco AS. 13

N O T E S

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N O T E S

Note 6 - Taxes

Set out below is a specification of the difference between the profit before tax in the accounts and the taxable income base figure forthe year.Taxable income base


Profit before tax 222,961 84,315Permanent differences (5,695) 7,332Change in timing differences (34,113) (16,403)Tax loss carried forward (24,778) (75,244)

Taxable income base for the year 158,735 0

Tax cost


Tax payable 43,326 -Unused allowances carried forward (1,958) -

Tax payable 41,368 -Change in deferred tax 132 -

Tax cost 41,500 -

Set out below is a specification of the timing differences and the loss carried forward. Deferred tax is calculated on the basis of timingdifferences between accounting and tax values which exist at the end of the financial year.

Deferred tax


Current assets (27,619) (50,722)Fixed assets 4,380 3,540Other differences 23,709 13,539Tax loss carried forward 0 (24,778)

Total timing differences 470 (58,421)

Deferred tax 132

Other differences arise mainly from the gains and losses account.

Note 7 - Changes in equity

AMOUNTS IN NOK 1,000 SHARE CAPITAL LEGAL RESERVE TOTAL EQUITY

Equity at 3l December 1995 600,000 49,660 649,660Dividend - (114,000) (114,000)Profit for the year - 181,461 181,461

Equity at 31 December 1996 600,000 117,121 717,121

Note 8 - Pensions

The employees in the company are members of collective service pension schemes. The service pension schemes are defined as “netschemes” which do not link the company’s liabilities to any changes in social security liabilities. The company has, against thebackground of the distinction drawn in the new accounting standards between benefit plans and contribution plans, chosen to treat theservice pension schemes as benefit plans. The company’s legal liabilities will not be affected by such accounting treatment.

In addition, the company has some uninsured pension liabilities. These relate to 8 Kaldnes employees.

With this exception, pension benefits from Kaldnes are covered by closed schemes: a workers’ pension fund, an executives’ pension fundand also a pension agreement with Storebrand. The schemes are self-funding. The executives’ pension fund relates to several Kaldnescompanies. In addition to it being self-funding, the companies also, under the Articles, have the right to terminate payment of theannual premium. The closed schemes are not included in the calculation since they are not co-ordinated with the pension scheme inNorsk Vekst.

On calculation of future pensions the following assumptions have been used:Discount rate 7.00%Earnings growth 3.30%Pension increases 2.50%Adjustment of social security fund’s base amount 3.30%Return on pension funds 8.00%Employers’ social security contributions 14.10%

The year’s pension cost is arrived at as follows:


- Present value of the year’s pension earnings 298 255+ Adjusted for transfer amount on implementation 0 51- Interest on pension obligations 447 466+ Expected return on pension funds 551 488Amortisation of effect of deviations from estimates (7) 0Employers’ social security contributions (233) 0

Pension surplus/(expense) 46 (182)

Pension liabilities and pension funds at 31 December:


Balance 31 December 1996:Pension obligations 6,954 7,286Pension funds 7,598 7,011

Net pension funds/(obligations) 644 (275)

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N O T E S

Note 9- Mortgages and guarantee liabilities

In connection with the sale of Jarlsø AS, Norsk Vekst undertook to issue a guarantee for an operating credit, overdraft and guaranteefacility totalling NOK 10.6 million. The guarantee expires at the latest on 1 September 1999. Under certain circumstances the guaranteelimit can be increased by NOK 3.2 million. Norsk Vekst has subrogated rights to the lender’s mortgage if the guarantee is called.

Norsk Vekst has an overdraft facility with Den norske Bank of NOK 50,000,000 and a drawing facility of NOK 50,000,000. Therewere no drawings outstanding on the overdraft facility at 31 December 1996. The borrower has undertaken not to pledge its assets(property and/or income). This negative pledge clause does not prevent the borrower from acquiring assets which are pledged providedthat the charge on the relevant asset does not exceed 90% of the asset’s sale value at the date of acquisition.

Following the merger with Framnæs Rauma AS, Norsk Vekst assumed responsibility for an unconditional guarantee of NOK1,750,000 relating to an overdraft facility provided by Den norske Bank to Framnæs Installasjon AS. Norsk Vekst will be released fromthe obligation before 1 April 2001.

Senior employees of AS Aalesundfisk have an option to sell in total 14,286 shares to Norsk Vekst at a price of NOK 140 per share.This put option can be exercised at any time up to 18 March 1998. However the option is cancelled if AS Aalesundfisk is listed on thestock exchange before this expiry date.

Andreas Marheim and Marheim Holdings AS have committed themselves to sell 60,000 shares in Scandinavian Retail Group ASA toNorsk Vekst at a price of NOK 145, and Norsk Vekst is similarly committed to purchase these shares from Andreas Marheim andMarheim Holdings AS. The parties have entered into the agreement on the understanding that a merger will take place betweenScandinavian Retail Group ASA and Knut Haug AS, Andreas Marheim AS, and Marheim Tekstil AS. The parties have agreed thatregistration of the appropriate share transfer with the Norwegian Registry of Securities (VPS) should take place in March 1997.

Norsk Vekst is committed to purchase, in whole or part, the 72,000 shares of Powel Data owned by ABB Kraft AS, Siemens AS andBailey Norge AS if the owners so request at any time up to 10 March 1997. The price for any such purchase would be NOK 38 per share.

Norsk Vekst has committed itself to provide a subordinated loan to Powel Data within a limit of NOK 10 million. The loan can at any time beconverted into ordinary shares. The conversion price is set at NOK 50 per share. The loan and conversion rights expire on 17 December 1998.

Note 10 - Remuneration of Directors, auditor and Managing Director of Norsk Vekst

Remuneration paid to members of the Board in 1996 amounted to NOK 525,000.Fees to the auditor expensed for 1996 were NOK 151,500.In 1996 the Managing Director received NOK 1,000,000 in salary and NOK 913,000 in bonus.On resignation the Managing Director has the right on certain terms to salary for a period of 12 months in addition to the period ofnotice period.

Note 11 - Shares owned by the Board and Managing Director, including shares owned by companies

under their control

DIRECTOR SHARES

Bernt J. Fossum 138,259Christian Falck-Pedersen 55,000Kåre Moe 17,000Kaare M. Gisvold 5,000Jon R. Gundersen 500Roar Arntzen -Kari Kveseth -

Managing Director 25,900Auditor -

TOTAL 241,659

16

N O T E S

To the Annual General Meeting ofNorsk Vekst ASA

We have audited the Annual Accounts of Norsk Vekst ASA for 1996, showing net income of NOK181,461,000. The Annual Accounts, which consist of the Board of Directors’ report, statement ofincome, balance sheets, statement of cash flows and notes, are the responsibility of the Board ofDirectors and the Managing Director.

Our responsibility is to examine the company’s Annual Accounts, its accounting records and theconduct of its affairs.

We have conducted our audit in accordance with applicable laws, regulations and generally acceptedauditing standards. We have performed the auditing procedures we considered necessary to determinethat the Annual Accounts are free of material errors or omissions. We have examined, on a test basis,the accounting material supporting the financial statements, the appropriateness of the accountingprinciples applied, the accounting estimates made by management and the overall presentation of theAnnual Accounts. To the extent required by generally accepted auditing standards we have alsoevaluated the company’s asset management and internal controls.

The appropriation of net income, as proposed by the Board of Directors, complies with the requirementsof the Joint Stock Companies Act.

In our opinion, the Annual Accounts have been prepared in conformity with the Joint Stock CompaniesAct and present fairly the company’s financial position as of 31 December 1996 and the result of itsoperations for the fiscal year in accordance with generally accepted accounting principles.

ARTHUR ANDERSEN & Co.

_______________________

Erling RønnebergState Authorised Public Accountant (Norway)

Oslo,26 February 1997

17

A U D I T O R ’ S R E P O R T

Auditor’s Report

K E Y F I N A N C I A L F I G U R E S

18

Key Financial Figures

1996 1995 1994 1993

Operating revenues (NOK m.) 242.9 81.5 101.4 118.9Operating profit (NOK m.) 213.9 56.0 62.7 60.7Net financial result (NOK m.) 9.1 28.4 13.8 29.1Profit before tax (NOK m.) 223.0 84.3 76.5 89.8Profit after tax (NOK m.) 181.5 84.3 76.5 75.7Dividend (NOK m.) 114.1 67.3 61.3 -Average number of shares 6,666,667 6,666,667 6,101,077 6,000,000Number of shares at 31 December 6,666,667 6,666,667 6,666,667 6,000,000Earnings per share (NOK) 27.23 12.65 12.54 12.62Dividend per share (NOK) 17.10 10.10 9.20 -Investment portfolio at 31 December (NOK m.) 431.4 508.4 277.9 303.2Financial investments at 31 December (NOK m.) 415.9 222.4 423.0 317.9Book value of equity at 31 December (NOK m.) 717.0 649.7 648.4 604.7Book equity per share at 31 December (NOK) 107.55 97.45 97.25 100.78Gross return on investment portfolio (%) 52.1 21.7 28.3 24.3Accumulated average gross return (%) 32.1 24.1 26.2 24.3Net return on investment portfolio (%) 48.8 17.9 23.2 20.5Return on equity (%) 26.6 13.0 12.2 13.4Administration costs (%) 1.9 1.9 2.2 2.2Investments in portfolio companies (NOK m.) 108.4 297.8 114.8 69.1Disposals of portfolio companies (NOK m.) 395.4 95.5 143.0 259.3Share price at 31 December (NOK) 177.5 116.0 82.0 -Market capitalisation at 31 December (NOK m.) 1,183.3 773.3 546.7 -

Gross return:The gross return includes gains on the realisation ofshares in portfolio companies, dividends, directors’ feesand other income directly related to the investmentportfolio. An adjustment has been made in thecalculation of gross return for all realised losses and netprovisions for losses on investments in portfoliocompanies. The return on the company’s financialinvestments is not included in the gross return.

Net return:Gross return less the company’s administration costs

Administration costs:Administration costs include all costs associated with theoperation of Norsk Vekst, including the administrationof financial investments, and is made up of personnelcosts, office rent, legal assistance, consultancy fees andthe costs of running the office. Costs which are directlyrelated to property management and profit relatedbonuses to the company’s management are not includedin administration costs.

Investment portfolio:Investment in portfolio companies in the form of sharesor other equity instruments, including convertible loans.The investment portfolio is valued at book value incalculating key figures. In addition, committed facilitiesare included.

Financial investments:Financial investments consist mainly of liquid interest-bearing securities, a small holding in listed shares as

well as shares in companies which are about to be listedor have recently been listed. Ordinary, short-term,interest bearing loans to portfolio companies andindustrial properties taken over from portfoliocompanies are also included in financial investments.

Gross return (%):Gross return as a percentage of the average investmentportfolio. The average is calculated on the basis of thebook value of the investment portfolio per quarter.

Accumulated average gross return (%):The average is calculated on the basis of the gross returnin % for each year weighted by the investment portfolio.As an example the figure for 1996 is the average grossreturn for the period 1993-1996.

Net return (%):Net return as a percentage of the average investmentportfolio. The average is calculated on the basis of thebook value of the investment portfolio per quarter

Equity return (%):Profit after tax as a percentage of average equity. Theaverage is calculated on the basis of book equity at1 January and 31 December of the financial year.

Administration costs (%):Administration costs as a percentage of average totalassets. The average is calculated on the basis of the bookvalue of total assets at 1 January and 31 December ofthe financial year.

Key figures: Definitions

Development in market value and share priceNorsk Vekst's shares were first listed on the OsloStock Exchange on 5 January 1995 at a closingprice of NOK 82.00 per share. The share price atthe end of 1995 and 1996 was NOK 115.00 andNOK 177.50 per share respectively. DuringFebruary 1997 the share has been traded on theOslo Stock Exchange at NOK 235.00 per share.

The price development of the Norsk Vekstshare is shown in the graph above.

The closing share price on the first day of listingon the Stock Exchange gave Norsk Vekst a marketcapitalisation of NOK 546.7 million as at 5 January1995. During 1995 a total of NOK 61.3 millionwas paid in dividends. The market capitalisation ofNorsk Vekst on 31 December 1995 was NOK773.3 million. If the dividend paid is included,Norsk Vekst therefore increased its market value by287.9 million in 1995. In 1996 dividend paidamounted to NOK 67.3 million, whilst the marketvalue at 31 December 1996 was NOK 1,183.3million. Including the dividends paid, Norsk Veksthas increased its market value by a total of NOK765.2 million from the date of its first listing to 31December 1996. This is equivalent to an increase of140%.

Norsk Vekst does not publish net asset valuecalculations. Reference is made to securitiescompanies which follow the Norsk Vekst share,such as Alfred Berg, Fondsfinans and Karl JohanFonds, produce their own commentary and analysisfor the individual companies in the investmentportfolio.

Capital base and dividend policyNorsk Vekst has a capital base consisting of sharecapital of NOK 600 million plus a legal reservewhich, when fully established in accordance withthe requirements of the Companies Act, willamount to NOK 120 million. In addition it hasborrowing capacity for up to the equivalent of 40%of book equity. Any increase in equity beyondNOK 720 million must be approved by theshareholders.

According to Norsk Vekst's dividend policy80% of the annual profit is paid in dividends untilthe legal reserve satisfies the requirements of theCompanies Act, i.e. NOK 120 million. Thereafterthe entire annual profit will be distributed asdividends. In view of the size of the profit in 1996the Companies Act requires a larger allocation tolegal reserve than this policy would produce. Onthe basis of the profit for the year the legal reservewill be NOK 117.1 million at the 1996 year end.

Norsk Vekst endeavours to provide a compe-titive direct yield to shareholders in the form ofdividends. However, Norsk Vekst's profit arisesmainly from the sale of portfolio companies. Divi-dends may therefore vary considerably from year toyear. The Board has proposed a dividend for 1996of NOK 17.10 per share. Dividends of NOK 9.20and NOK 10.10 per share were paid in 1994 and1995 respectively. The proposed dividend for 1996is equivalent to 9.7% of the share price at31 December 1996. It is expected that the 1996dividend will be paid to shareholders on 9 April.

Shareholder Information

S H A R E H O L D E R I N F O R M A T I O N

19

Development in value

S H A R E H O L D E R I N F O R M A T I O N

20

Information policyThe company wishes to maintain goodcommunications with the Oslo Stock Exchange,shareholders and the financial markets in general.Shareholders and the wider financial market will bekept informed of the company's developmentthrough annual and quarterly reports, as well asreleases of information to the Oslo Stock Exchangeand the press. Norsk Vekst also holds presentationsfor investors and analysts during the year.

Bonus scheme for the company’s managementThe established bonus scheme for senior manage-ment of Norsk Vekst provides that 5% of the profitfor the year, after tax and the deduction of a calcu-lated risk-free return on the company's book equityat the start of the financial year, is paid as manage-ment bonuses. Bonuses paid in any one year arelimited to a maximum of the recipient's annualsalary, and half of the amount paid after tax is to beapplied in buying shares in Norsk Vekst with alock-up period of currently two years. Thecompany does not have a share option scheme.

Shareholder compositionAt the end of 1996 there were a total of 792 share-holders. Shareholders resident outside Norwayaccount for 3.67% of the total number of shares.

Tax mattersAccording to the Norwegian tax rules the cost priceof the Norsk Vekst share must be adjusted upwardsor downwards by a so-called RISK amount in orderto calculate the taxable gains or losses on thedisposal of shares. The rules only apply to investorsresident in Norway. The cost price of the sharesmust be adjusted for a RISK amount which iscalculated for each shareholder from the date ofpurchase. The estimated RISK amount for 1996 isNOK -8.67 per share.

Norsk Vekst had no tax liability in 1996, 1995or 1994, due in part to the availability of tax lossesto carry forward. The financial profit has provided abasis for the payment of dividends. Dividends are atthe outset tax-free for Norwegian shareholders,although the cost price for tax purposes is adjusteddownwards since the dividend has not been paid onthe basis of a taxed profit. Investors who partici-pated in the issue in Norsk Vekst by using negativebalances in 1989 obtained approval from theMinistry of Finance in 1992 for a cost price for taxpurposes of NOK 100 after the share split of 1:10.

RISK amounts1994 NOK -9.121995 NOK -9.151996 NOK -8.67 (estimated)

1. Norwegian Ministry of Industry and Energy 2.240.000 33,592. Aksjefondet Avanse 379.310 5,683. Arendals Fossekompani ASA 334.300 5,014. Hafslund Invest ASA 255.600 3,835. Norsk Hydro ASA 250.000 3,746. Skogan Gård AS 241.441 3,627. Must AS 241.440 3,628. Storebrand Livsforsikring 224.600 3,369. Gjensidige Livsforsikring 183.580 2,75

10. Foinco Invest AS 133.259 1,9911. Samvirke Livsforsikring 112.000 1,6712. Norsk Hydros Pensjonskasse 100.000 1,4913. A/S Skarv 71.500 1,0714. Sundt Petter C.G. 71.460 1,0715. Meieribrukets Pensjonskasse 68.000 1,0116. City of Oslo Pension Fund 64.000 0,95

17. Gjensidige Skadeforsikring 62.100 0,9318. Ticon AS 55.000 0,8219. Bergesen D.Y. ASA 50.000 0,7420. The Northern Trust Company 49.000 0,73

Others 1.480.077 22,20 Total 6.666.667 100,00

NAME TOTAL SHARES PERCENT

Norsk Vekst's 20 largest shareholders at 31 December 1996 were:

M A N A G E M E N T A N D B O A R D

21

Kåre Moe68, has been the Chairman of Norsk Vekst since1989. He holds a degree in business and works as acompany consultant in addition to holding positionsas Chairman and Board member in a number ofNorwegian companies. Moe has both executiveand, as Chairman of the Board, non-executiveexperience in shipping, commerce, banking,insurance and research in Norway and abroad.

Roar Arntzen49, has been a member of the Board of Norsk Vekstsince 1989. Arntzen is an engineering graduate ofthe Norwegian Institute of Technology and isManaging Director of SINTEF. Previous positionsinclude Managing Director of Autronica A/S, andArntzen has a wide experience from industry,construction and civil engineering and commerce.

Christian Falck-Pedersen43, has been a member of the Board of Norsk Vekstsince 1995. Falck-Pedersen has an MIM (Master ofInternational Management) from Phoenix, Arizonaand Oxford, England and a law degree from OsloUniversity. Falck-Pedersen is Managing Director ofTicon AS, and is a member of the Board of UnitorASA among others and is chairman of the NHOcommittee for family owned companies.

Bernt J. Fossum66, has been a member of the Board of NorskVekst since 1992. Fossum is a business economicsgraduate and also has an MBA from the HarvardGraduate School of Business Administration.

Fossum was previously Managing Director ofFoinco Invest A/S, a Board member andManaging Director of Stormbull A/S andChairman of the Board of Norges Grossistforbund.He holds a number of board positions inNorwegian industry and society.

Kaare M. Gisvold53, has been a member of the Board of Norsk Vekstsince 1990. He holds an engineering degree and anengineering doctorate from the Norwegian Instituteof Technology. Gisvold is the Managing Directorof Golar-Nor Offshore A/S, the Chairman of theBoard of Adresseavisen ASA; a Board member ofMeråker Brug AS and member of the corporateassembly of Arendals Fossekompani ASA.

Jon R. Gundersen63, has been a member of the Board of Norsk Vekstsince 1992. Gundersen is a supreme court lawyerand partner of the law firm Lund Gundersen & CoAS. He is Chairman of, among others, StorebrandASA and Arendals Fossekompani ASA and is ViceChairman of Norske Skog ASA.

Kari Kveseth53, has been a member of the Board of Norsk Vekstsince 1995. Kveseth holds MSc. and PhD. degreesin chemistry from the University of Oslo. Kvesethwas a director in NTNF from 1986 and is today adirector of the Norwegian Research Council and is,among other positions, the head of the NorwegianSpace Centre's Council and deputy and a member ofForsvarets Forskningspolitiske råd.

Management and Board of Directors

Øyvind Aasbø46, has been Managing Director of Norsk Vekstsince 1 May 1995. He has been employed by NorskVekst since 1993. Aasbø is an engineering graduateof the Norwegian Institute of Technology and has abusiness degree from the Norwegian school ofManagement. Previous positions include ManagingDirector of Lincoln Norweld AS.

Trond Bjørnøy40, is a Director of Norsk Vekst. He has been em-ployed by Norsk Vekst since 1989. Bjørnøy is busi-ness economics graduate of the Norwegian Schoolof Economics and Business Administration, and haspreviously worked for, among others, Selmer SandeAS, Grindlays Bank plc, and Eksportfinans AS.

Lars A. Grinde35, is the Finance Director of Norsk Vekst. He hasbeen employed by Norsk Vekst since 1991.Grinde holds a graduate degree in business fromSt. Gallen Business School, Switzerland and is anauthorised public accountant. He has previouslyworked for Price Waterhouse AS among others.

Jarle Gundersen44, is a Director of Norsk Vekst. Gundersen is abusiness economics graduate of the NorwegianSchool of Management. Gundersen has workedfor, among others, the NPC group, and sub-sequently as finance director of Aker a.s

MANAGEMENT

BOARD OF DIRECTORS

Selmer is Norway's leadingbuilding and civil engineeringcontractor.

Norsk Vekst has investedNOK 91.2 million in Selmer(first investment 1994), and hasa 15.6% interest in thecompany. Norsk Vekst isSelmer's largest shareholder.

ResultsThe group recorded a profitbefore tax of NOK 162.7million in 1996 as against NOK121.6 million in 1995, animprovement of 33.8%. Thegroup's result was somewhatbetter than expected, thanks toits work with a long-termprogramme of measures toimprove profitability as well asfavourable market conditions.Operating revenues increasedfrom NOK 3,769.1 million in1995 to NOK 4,166.1 million in1996, an increase of just below11%. This increase in turnovercomes from both building

works and the subsidiaries'activities

Business descriptionSelmer's building businessincreased sales from NOK2,009.2 million in 1995 to NOK2,278.0 million in 1996, anincrease of 13.4%. The buildingmarket continued to grow in1996 by some 3%, as comparedto growth of 11% in 1995.Selmer's building operationrecorded a good improvementin profit from NOK 54.1million in 1995 to NOK 91.1million in 1996. All thegeographic units in the divisionshowed an increase in profit,and this can be attributedmainly to the continuingprocess of improvement in thecompany.

Selmer's civil engineeringoperations reported turnover ofNOK 1,326.7 million in 1996 asagainst NOK 1,324.3 million inthe previous year. The supplyof new civil engineeringcontracts in Norway was at thesame level as in the previousyear. The competitive situationeased somewhat during thecourse of the year, althoughthere is still strong competitionin bidding for new contracts.Profit before tax amounted toNOK 58.4 million as againstNOK 52.9 million in 1995, ofwhich the 1995 figure includesa one-off profit of NOK 15.6million.

The aggregate turnover ofsubsidiaries and associatedcompanies was higher in 1996than in 1995. Sales by sub-sidiaries increased by NOK120.4 million, and profit beforetax rose from NOK 7.3 millionin 1995 to NOK 9.0 million in1996. Platzer Bygg GöteborgAB was acquired as of1 October 1996 and reported aturnover of NOK 122.1 million

in the fourth quarter with abreak-even result.

The programme to sell offproperty investments continuedin 1996. The book value ofinvestment properties was NOK24.6 million at the end of 1996.

Continuing growth in theNorwegian economy bodes wellfor a good and stable year forbuilding and constructionmarkets in 1997. The companyexpects the house buildingmarket to continue to grow in1997, whilst the market for newcommercial properties isexpected to flatten out. Civilengineering activities areexpected to see a high level ofactivity in 1997. At the end ofthe year the group's total orderbook stood at NOK 3,550million as compared to NOK2,471 million a year earlier.The order book for building hasmaintained a stable levelthroughout 1996, whilst thecivil engineering order bookincreased markedly in thesecond half of the year.

The four largest Swedishconstruction companies are nowall established in Norway. Thishas not, however, caused animbalance of supply anddemand in the market, partlybecause their involvement hasbeen through the acquisition ofexisting Norwegian companies,and partly because there hasbeen sufficient growth in theNorwegian market to absorb acertain amount of increasedcapacity. The trend towardslarger companies will continue,and Selmer will continue towork to maintain its position asNorway's largest contractor.Selmer works with a continualprogramme of measures aimedat improving its competitive-ness, and the company expectsincreased sales and profits in1997.

(NOK mill) 1996 1995 1994

Sales 4.166 3.769 3.447Depreciation 80 68 59Operating profit 147 104 73Profit before tax 163 122 65Profit after tax 161 114 64Total assets 2.170 1.596 1.556Book equity 513 374 220

No. of employees 3.391 3.026 2.812Norsk Vekst's interest (%) 15,6Amount invested 91,2

Chairman Jan T. JørgensenManaging Director Sigmund BjørgumNorsk Vekst's representative on the Board: Trond Bjørnøy

Selmer ASA

22

P O R T F O L I O D E T A I L S

Main Figures: Selmer Group

Rena camp.

Merkantildata is a leadingsupplier and distributor ofinformation technologythroughout Scandinavia.

Norsk Vekst has investedNOK 46.9 million in Merkantil-data (first investment 1995)giving an interest in thecompany of ca. 10,0%.

ResultsMerkantildata recorded aprovisional profit before tax ofNOK 90.8 million in 1996 asagainst NOK 48.2 million in1995. Operating revenuesincreased from NOK 1,399.1million in 1995 to NOK 2,277.2million in 1996.

Business descriptionThe information technologymarkets of Norway and Swedencontinue to show strong growthin the product areas of greatestimportance for Merkantildata’sactivities. Above all there isincreasing demand for thesupply of complex systemswhich require great expertiseand broad experience in theirsupply and commissioning. Thisis increasing the focus ofattention on services andproducts in areas such as datastorage, communications andnetwork systems, and con-tributed to improved operatingmargins. However the marketfor PCs and standard productssold through dealers continues tobe weak, particularly in Sweden.Against this backgroundMerkantildata has chosen toslant its product mix in favour ofthe higher value added servicesand products. Sales of softwareincreased more slowly thanexpected. Delays in develop-ment work during 1996 causedhigher costs to be allocated tothe applications area.

Merkantildata’s business isorganised into four businessareas. The Technology activity,also known as systems inte-gration, covers sales of network-based solutions and associatedexpertise and services. Applica-tions covers the in-housedevelopment and sale of soft-ware and related consultancyservices. Products and servicesfor communications and net-works make up the third area.The fourth business area is thedistribution and sales of com-puting and communicationsproducts.

Merkantildata has grownthrough acquisition and mergerinto one of Scandinavia’s largestindependent computingsuppliers, with good geographiccoverage of Norway andSweden. The company hascreated a leading position foritself in those areas withininformation technology wherehigher value added servicespermit better margins. In thecourse of 1996 the company’sBoard has entered into mergeragreements with, amongstothers, MBS Fjerndata ASA inNorway and ComputerBusiness Syd Holding AB inSweden.

MBS Fjerndata is the parentcompany of a group involved insystems integration, training andcourses, which also sells serversand PCs as well as networkrelated products and services.The merger of the twocompanies will particularlystrengthen Merkantildata’sactivities in systems integrationand training in Norway. MBSFjerndata Holding AS wasconsolidated with Merkantildatafor accounting purposes witheffect from 1 January 1996.

Computer Business Syd isthe parent company of a systemsintegration business in Sweden.

Computer Business Syd ABowns the rights to theComputerLand trademark in Sweden andsells its servicesunder that name. Themerger will strengthenMerkantildata’s operationsin Sweden and contribute to thecompany’s basis for furtherdevelopment.

Merkantildata expectsincreased turnover and profits in1997, based on the significantmarket position the companyhas achieved in both theNorwegian and Swedish marketsfor products and services relatedto systems integration andcommunications.

23


(NOK mill) 1996* 1995 1994

Sales 2,277 1.399 1.032Depreciation 17 23 19Operating profit 96 50 21Profit before tax 91 48 19Profit after tax ** 47 19Total assets 1,060 609 439Book equity 369 171 96

No. of employees 915 640 566Norsk Vekst's interest (%) 10,0Amount invested 46,9

Managing Director Tom AdolfsenNorsk Vekst's representative on the Board: Øyvind Aasbø, Chairman* Post merger with MBS Fjerndata** Figure not available

Main Figures Merkantildata ASA

Merkantildata ASA

Merkantildata is a leading supplier

and distributor of information

technology throughout Scandinavia.

A/S EDB offers its customersconsultancy, computer opera-tions (computing power, FMand EDI), software and net-working products. With effectform 1 January 1996 A/S EDBmerged with LandbruksDataAS, a company sellingcomputer operations andconsultancy services, as well asits own software packages.

Norsk Vekst has investedNOK 37.5 million in A/S EDB,giving an interest of 45.6% inthe merged company.

ResultsA/S EDB reported a profitbefore tax of NOK 11.8 millionin 1996 as against NOK 4.0million in 1995. A comparisonwith the combined figures forthe two companies' 1995 resultsshows turnover and profitincreasing by NOK 16 millionand NOK 9 millionrespectively.

Business descriptionThroughout 1996 theNorwegian IT market has beencharacterised by much activityand a strong demand forproducts and services. This hasbeen particularly true ofexpertise for the developmentand operation of client/serversystems, as well as for commu-nications and network systemskills. The structural changeswhich have been seen in thesector over recent years havecontinued in 1996. Large ITcompanies continue to growthrough acquisition and merger,whilst a sub-strata of smalleroperations is growing up.

1996 was a year of growth forall the main areas of A/S EDB’sactivities.The concentration on con-sultancy services in chosenareas of technical competenceproduced significant marketsuccess in this area. The com-pany won a number of largeconsultancy assignments inaddition to continuing systemsand advisory work for a rangeof established customers. Thecompany has achieved its goalfor increasing the number oflarge projects with total projectresponsibility in preference toonly supplying resources forcustomer led projects.

The company’s Operationsdivision was strengthenedconsiderably by the merger in1996. New mainframe assign-ments have been taken on andcontract extensions agreed for anumber of existing assignments.At the end of the year an invest-ment was made in the latestmainframe technology, whichwill increase the range of serviceand operations available to thecompany’s customers. TheOperations division has alsoconcentrated heavily on theOperations Partner concept for

other equipment platforms, anda number of new assignmentshave been taken on.

The Operations Division isone of the country’s largestsuppliers of EDI (ElectronicDocument Interchange) productsand services.

In the field of software therehas been a significantstrengthening of the expertisemade available for the SAPactivity, and three contracts weresigned in 1996 with majorindustrial companies forextensive SAP implementationprojects which will be carriedout in part during 1997. Inaddition A/S EDB’s own logis-tics system for the food productsindustry, NOVA, has increasedits installed base, particularly inthe fish farming sector.

A/S EDB’s network division,which sells servers and workstation computers for networks,was recognised in March asSystem Partner of the Year byCompaq, at the same time as thedivision was making very goodprogress with sales of IBM’SUnix servers. The division’straining activities have alsoprogressed well in 1996 andhave reinforced A/S EDB’sposition as one of the country’sleading centres for PC courses.

The strong demand currentlyexperienced for IT services andrelated expertise is expected tocontinue in the foreseeablefuture.

The company has started1997 with a focus on continuedgrowth and new businessopportunities. The areas oftechnical expertise within thecompany are ready to expandtheir staff numbers, as are salesand marketing. The Boardexpects a positive developmentin profitability in 1997.

A/S EDB is planning a StockExchange listing in 1997.

24


A/S EDB

(NOK mill) 1996 1995* 1994*

Sales 414 302 245Depreciation 6 4 4 Operating profit 12 4 0Profit before tax 12 4 0Profit after tax 8 3 0 Total assets 164 115 106Book equity 75 49 48


Managing Director Eivind KinckNorsk Vekst's representative on the Board: Jarle Gundersen (Chairman)

* Before the merger

Main Figures A/S EDB

Training is a part of A/S EDB's

extensive product range.

KHLT develops, produces andmarkets large lift trucks, loghandling trucks (Scandlog) andshovels for mechanical diggers.Prior to 31 December 1996KHLT produced trucks forMitsubishi Caterpillar Forklifts(MCF). From 1 January 1997KHLT has taken over all therights to these products, andwill itself be responsible forselling these machines directlyto customers through theCaterpillar dealer network.

Norsk Vekst's investmentin KHLT amounted to NOK31.5 million at 31 December1996 (first investment 1991).The company is wholly ownedby Norsk Vekst.

ResultsThe company recorded a profitbefore tax of NOK 0.7 millionin 1996 as against a loss beforetax of NOK 8.5 million in 1995.Operating revenues fell fromNOK 157.6 million in 1995 toNOK 141.0 million in 1996.Cost reductions and anincreased focus on operationalefficiency succeeded inreversing the negative resulttrend in the second half of1996. This positive trend isexpected to continue in 1997.

Business descriptionAn agreement was reached inJune of last year with MCFwhich secures the company'srights to produce and marketthe heavy lift trucks whichMCF previously sold on theinternational market. MCFwanted to exit this segment ofthe truck market, and KHLTwill market these productsthrough the same network ofCaterpillar dealers as MCFused.

The market for Scandlogwas weaker in 1996 than in theprevious year. KHLTconsolidated its position in themarket and is today the marketleader for operator comfort andsafety, and for cost efficientmachines.

It has been decided toconcentrate the company'sactivities in the Kaldnes area.A new, modern productionfacility will be ready in May1997. The manufacture of partsand components will be movedto this facility, together withassembly of finished products.This will contribute to moreefficient operations and furtherreductions in costs.

The measuresimplemented in 1996and the furtherchanges whichwill take placein 1997 serveto strengthenthe company'scompetitive-ness. No significantchanges are expected in marketconditions in 1997, but theintroduction of direct marketingand sale of heavy lift trucks willrepresent a significantchallenge. Turnover in 1997 isexpected to be somewhat lowerthan in 1996, but with animprovement in profitability.

Kaldnes Heavy Lift Trucks AS (KHLT)

25


(NOK mill) 1996 1995 1994

Sales 141 158 120Depreciation 1 1 1Operating profit 2 (6) (2)Profit before tax 1 (9) (4)Profit after tax 1 (9) (4)Total assets 53 58 71Book equity 18 6 15


Managing Director Leif E. NilsenNorsk Vekst's representative on the Board: Trond Bjørnøy (Chairman)

Main Figures Kaldnes Heavy Lift Trucks AS

A lift truck

developed by KHLT.

ELVA-FDF a.s is the holdingcompany in the EFD groupwhich consists of Elva Induksjona.s. in Skien and Induktions-erwärmung Fritz DüsseldorfGmbH (FDF) in Freiburg,Germany, together withsubsidiaries in six Europeancountries, in America and inIndia. ELVA and FDF cametogether to form the new groupwith effect from 1 January 1996following several years of closeco-operation on products andmarkets. ELVA is a marketleader in the business ofdevelopment, production andsales of semiconductor-basedfrequency converters forinduction heating, whilst FDF isEurope’s leading producer ofinduction based hardeningmachines.

Norsk Vekst has invested

NOK 31.5 million in AS Elva(first investment in 1994) andhas a 35.0% interest in thecompany.

ResultsThe group recorded a profitbefore tax of NOK 16.6 millionin 1996. The aggregated profitsof ELVA and FDF in 1995amounted to NOK 11.9 million.Operating revenues for the com-panies combined were NOK 328million in 1995, but the newgroup’s operating revenuesincreased to NOK 363 million in1996. Of 1996 turnover 70%came from Europe, 22% fromthe USA and 7% from Asia.Germany was the largest singlemarket (40%), whilst Norwegiansales accounted for 3% of thetotal. Deliveries of equipmentfor hardening of glues andaluminium bonding for the carindustry increased markedlyduring 1996. Growth wasparticularly strong in the USA,but improved demand forsupplies to the car industry,particularly hardening machines,was also seen in Europe. Themarket for pipe welding easedsomewhat during 1996.

Business descriptionInduction heating is an energy-saving and environmentallyfriendly heating method which isbeing used in an increasingrange of industrial applications.EFD is the market leader ininduction hardening of coatings,pipe welding and brazing. Theproduct range includesmachinery for coatingshardening, and frequencyconverters for brazing and pipewelding and heat treatment ofmaterials among otherapplications. In addition toselling complete installations thecompany itself offers inductionprocesses in its home markets.

ELVA and FDF haveworked in close co-operationfor a number of years. Theyhave complementary productsand markets, and the currentstrategy is to commit significantresources to research andproduct development. Thetechnology is developing veryrapidly and product renewalswill take place faster thanpreviously. The sector is fullyinternational with EFD beingthe only Norwegian company inthe sector.

At the end of 1996 the grouphad 378 employees, of which100 were in Norway and 224 inGermany. The merged companyhas production facilities inNorway, Germany and India, aswell as subsidiaries providingsales and service in sixEuropean countries as well asthe USA. EFD’s most importantcustomers are to be found inpipe production, electro-technical industries and carmanufacture.

The merged company’s firstyear of operation wascharacterised by re-organisationand co-ordination of itsactivities. The accounts areaffected by the closure costsarising from a productionsubsidiary in Austria which wasowned by FDF. The activity ofthis operation has been trans-ferred to Germany. In Indiaagreement has been reachedwith the local partner to acquirethe entire interest in ELVAInduction India Ltd. Supplies offrequency converters andhardening machines to theIndian market started in 1996.

The company expectsincreased sales and profits in1997.

26


(NOK mill) 1996* 1995 1994

Sales 363 157 125Depreciation 10 5 4Operating profit 23 17 11Profit before tax 17 13 8Profit after tax 12 9 6Total assets 274 133 108Book equity 78 43 28


Chairman Manfred DüsseldorfManaging Director Truls Svein Erik LarsenNorsk Vekst's representative on the Board: Øyvind Aasbø* Post merger

Main Figures ELVA EFD Group

ELVA-FDF a.s

Induction heating of a steel bolt.

AS Aalesundfisk is an integratedfishery company active in fishfarming, fish processing andtrading. The group comprisescompanies involved in the pro-duction of fresh salmon and whitefish, smoked salmon, stock fish,preserved and dried fish. Aalesundfisk is a significant fishexporter, and is well known ininternational markets. The com-pany regards Europe as its mostimportant market, but is alsoactive in the USA, South Americaand the Far East.

Norsk Vekst has invested NOK30.4 million in the company,giving it a 33.3% interest.

ResultsThe group reported profit beforetax of NOK 2.5 million in 1996,as against NOK 4.4 million in1995. Operating revenues fellfrom NOK 463.4 million in 1995to NOK 383.6 million in 1996.The group’s total profit for 1996was lower than expected, withincome falling in the second halfof the year after a good first sixmonths. This was due principallyto sales of salmon being weakerthan normal. In addition the com-pany was implementing extensiveorganisational and administrativechanges in this period which tooktime from other activities. How-ever the effects of these changesare expected to contribute toincreased income in 1997.

Business descriptionThe business area Fish Farming isa long term strategic investmentintended to secure the company’ssupply of raw material. Farmedsalmon produced by the companyis either used in the company’sown processing plants or is soldin the market through thebusiness area Purchase/Sales.This business area undertakes thetrading of the small or largequantities of fish which represent

Aalesundfisk’s main activity. Thedivision provides those involvedin all stage of the fish productionchain with purchases and sales ofa wide variety of fish products,and is accordingly trading bothown produced products and thoseproduced elsewhere. The businessarea Production is responsible forfurther processing of fish suppliedfrom the group’s own fish farmsas well as of fish purchased on theopen market by thePurchase/Sales activity.

The business area Productioncomprises four productionfacilities: Aalesund Kleivane,Stokfish (100%), Roger (47%)and A-Fish Skagen (100%). Thegroup’s head office (ASAalesundfisk) is located at theAalesund Kleivane facility, whichprocesses and freezes fresh whitefish. This company had a turnoverof NOK 401.9 million in 1996 asagainst NOK 437.6 million in1995. Profit before tax was NOK3.8 million in 1996 as againstNOK 8.3 million in the previousyear. Roger AS produces driedcod (klippfisk) from bulk frozencod, ling, saithe and torsk whichare purchased in the spot marketby the business area Purchase/-Sales. This company had turnoverof NOK 71.9 million in 1996 asagainst NOK 63.6 million in1995. The result before tax was aloss of NOK 3.8 million in 1996as compared to a loss of NOK 1.9million in the previous year. Stok-fish Norway AS is a productionfacility for processing cod andling for the production of a pro-cessed Norwegian specialityknown as lutefisk. The companyhad turnover of NOK 31.6million in 1996 as against NOK34.5 million in 1995. Profit beforetax was NOK 0.5 million in 1996as against a loss of NOK 1.1million in the previous year. A-Fish Skagen AS operates fromSkagen in Denmark. The com-

pany is involved in filleting,cutting, smoking andpacking salmon.Historically thecompany has pro-duced cold smokedsalmon, but iscurrently working on a promisingproject for hot smoked portionpacked salmon. This newlydeveloped product has been wellreceived in the market, includingmajor supermarket chains inGermany and France, andpotential sales volumes are signifi-cant. The company’s turnover in1996 was NOK 105.8 million asagainst NOK 60.8 million in1995. The result before tax was aloss of NOK 1.8 million in 1996as against a profit of NOK 0.8million in the previous year.

In order to increase its controlover a greater span of the chain ofvalue added, Aalesundfisk islooking to increase the degree ofprocessing carried out by thegroup. The establishment of anintegrated unit in Norway whichundertook both production anddistribution of fish productsdirectly into the market wouldeliminate a number of expensivestages in the chain. AS Aalesund-fisk intends to participate in thefuture restructuring of the fishindustry and the company expectsincreased turnover and profit in1997.

27


AS Aalesundfisk

(NOK mill) 1996* 1995 1994



Managing director Ivar E. WartdalNorsk Vekst's representative on the Board: Trond Bjørnøy (Chairman)

* Provisional figures

Main Figures AS Aalesundfisk Group

AS Aalesundfisk is an integrated

fishery company active in fish farming,

and trading.

Framnæs Engineering is anengineering and consultancycompany operating in offshore,shipping and land-based industry.The company is also able to takeon complete responsibility forprojects by using sub-contractorsfor manufacture and installation.Framnæs Engineering acquired40% of Framnæs Installasjon ASduring 1996, with accountingeffect from 1 January 1996.

Norsk Vekst has investedNOK 28.0 million in FramnæsEngineering and owns 100% ofthe company.

ResultsThe group showed a profit beforetax of NOK 5.8 million in 1996,as against NOK 2.9 million in1995. The group had operatingrevenues in 1996 of NOK 66.4million against NOK 44.4 millionin 1995, an increase of around50%. The group's share ofFramnæs Installasjon's post taxprofit of NOK 3.1 million isconsolidated in the accounts forthe year.

Business descriptionIn the offshore market thecompany has concentrated ondeliveries targeted at themaritime sector of the marketsuch as drilling and productionrigs, oil storage and productionvessels and turrets (anchoringposition system for vessels) aswell as smaller supplies.Activities directed towardsshipping are particularly relatedto ferry operators, whilst theindustrial market activities aredirected principally at processindustries in Telemark andVestfold.

Framnæs Engineering'sactivities in the market for rigsand floating production platformsshowed considerable growth in1996. The company's rig andFPSO/FSO design attractedinterest in the market which hasled to an increase in the customerbase compared to the situation ayear ago. Against the backgroundof its own designs for floatingproduction vessels, oil storageships and turrets, the companyhas attracted interestingassignments and studies for oilcompanies during the year. In theautumn of 1996 the companypurchased the rights to two rigdesigns which it has developedfurther to be «state of the art»designs for both current andfuture markets. The marketing ofthese rig designs started at theend of 1996 and they have beenwell received by the market.

There has been a markedgrowth in the number ofassignments for the rebuilding ofexisting rigs and tank boats asdeep water drilling rigs,production rigs, storage ships andfloating production and storageships. Framnæs Engineering hasexperience and referencecontracts in this area which are ofgreat importance when customerschose an operator. The

customers are both national andinternational owners.

Engineering supplies toindustry proved to be an area ofhigh activity in 1996. A contractwas signed with Norsk Hydro in1995 for the project planning of anew PVC factory. The mainproject was completed during1996, with some follow up tasksin 1997. The project is likely tobe of importance to the companyas a reference project and asexperience in the execution oflarge projects.

Activity in the shippingmarket has been at a stable levelwith ferry companies as the mostimportant customers. FramnæsEngineering produces its ownship designs for a variety ofspecial purposes, but this has yetto result in business of any greatvolume. During 1996 the com-pany developed a new conceptfor the strengthening of doors oncar decks in connection with theintroduction of new regulations.The product was well received bythe market and towards the endof the year contracts were signedfor sales to three ferries. From1995 Framnæs Engineering hasoffered itself as a total supplier ofproducts where a significantdegree of engineering skills isinvolved. This produced earlyresults in 1996 and the companywill increase its emphasis onenvironmental products andsupplies to the offshore andshipping markets.

A considerable number ofindustrial expansion assignmentswill be carried out in the geo-graphic area local to the companyduring 1997, and the company iswell placed to win such newcontracts. The company expectsincreases in sales and profits in1997.

(NOK mill) 1996 1995 1994

Sales 66 44 35Depreciation 1 1 1 Operating profit 5 3 (1)Profit before tax 6 3 (1)Profit after tax 5 3 (1)Total assets 22 17 16Book equity 11 7 4


Managing Director Arnfinn ThomassenNorsk Vekst's representatives on the Board: Trond Bjørnøy (Chairman) and Jarle Gundersen

28


Framnæs Engineering AS

Main Figures Framnæs Engineering Group

FE-P007-2S: A new rig

design from Framnæs Engineering AS.

Pan Fish is a company engagedin salmon farming. Thecompany is based in Norwayand has activities in Norway,Scotland and Canada. Pan Fishis active in all parts of the valuechain, from smolt production tothe marketing and sale offinished products. Thecompany's facilities are close tothe main markets for the sale ofsalmon: Europe, Asia and NorthAmerica.

Norsk Vekst has investedNOK 24.4 million in Pan Fishand has an interest of 21.4%.

ResultsThe group reported a lossbefore tax of NOK 2.0 millionin 1996, as against a profitbefore tax of NOK 15.4 millionin 1995. Operating revenues for1996 were NOK 300.0 millionagainst NOK 116.2 million inthe previous year. Thecompany’s results for 1996were strongly affected byproduction restrictions nNorway and lower Europeanprices for salmon throughoutthe year.The increase in operatingrevenues is a result of thecompany starting a sales andtrading activity at the beginningof the year.

Business descriptionThe main business of Pan Fishis located in Canada, where thecompany has two facilities forthe production of fry, two smoltfacilities, eight facilities forproducing finished fish productsand a slaughter facility. InNorway the company owns aconcession for fry production,six concessions for producingfinished fish products and aslaughter facility. During 1996Pan Fish purchased Lighthouseof Scotland Ltd., a fullyintegrated fish farming

operation which consists of twofacilities for the production offry, six facilities for fishcultivation and a slaughterfacility.

In order to ensure an optimalspread of market risk the salesdivision of Pan Fish hasresponsibility for all the group’smarketing and trading of freshand frozen salmon in Europe,USA and the Far East. In orderto co-ordinate sales of thecompany’s own production,sales offices have beenestablished in each countrywhere the group has production.The company has in additionset up T.C. Trading inVancouver with particularresponsibility for the FarEastern markets.

The main objective of PanFish’s activities is to control allstages of an integratedproduction of Atlantic salmonfrom hatching the spawn to thesale of finished products readyfor the consumer. It is thecompany’s view that salmonsales will increasingly take theform of pre-packed consumerproducts. In view of this PanFish is evaluating thepossibility of engaging in thefurther processing of salmon,either alone or in some form ofco-operation with others.

Total production of salmonin 1996 was 11,100 tons, ofwhich 7,800 tons were sold,whilst total production on 1995was 5,200 tons. The level ofactivity in Canada increasedmarkedly through the year, and1996 production was 4,700tons. The composition of thecompany’s stocks a thebeginning of 1997 indicates thatproduction and sale of some13,000 tons can be expected in1997, which represents the fullproduction capacity of thecompany, after allowing for

production restrictions inNorway.

Total market production ofAtlantic salmon in 1996 wassome 550,000 tons, an increaseof 100,000 tons from 1995. Ofthis total some 53% isproduced in Norway, and110,000 tons elsewhere inEurope. It was necessary tosee prices fall by 15%compared to 1995 in order toattract purchasers for thisquantity.

The biggest risk factors insalmon farming are priceconditions, fish diseases,government regulations and EUtrade restrictions. The greatestrisk at present appears to be inthe development of salmonprices and the industry's abilityto adjust/regulate production sothat it is possible to avoidexcessive pressure on prices orthe introduction of penalty tollsor quota arrangements. Pan Fishis less exposed to EU rulesbecause the company produceshalf its volume in Canada andScotland.

Pan Fish expects increasedturnover in 1997 and asignificant improvement inprofitability.

(NOK mill) 1996* 1995 1994

Sales 300 121 129Depreciation 15 8 7Operating profit 5 24 17Profit before tax (2) 18 5Profit after tax (2) 17 7Total assets ** 159 140Book equity ** 70 14


Chairman Erik RammManaging Director Arne NoreNorsk Vekst's representative on the Board: Øyvind Aasbø * Provisional figures at 26 February 1997 ** Figures not available

29

Pan Fish AS

Main Figures Pan Fish AS


Pan Fish is a fish farming company

producing salmon.

SRG is a major distributor ofwomen’s and menswear inNorway. The companyundertakes its own wholesaleoperations and sells its productsthrough an integrated franchiseand self-owned chain of profiledstores (240 stores in total). Thebusiness is based on a high levelof service and efficiency inmarketing, purchasing anddistribution. SRG has a wellestablished concept with well-known brands such as Voice ofEurope, Va Vite, HenryChoice, Boys of Europe, UltraSport and Jean Paul.

Norsk Vekst has investedNOK 23.8 million in Voice ofEurope (first investment 1995)which gives it a holding of7.7%. Norsk Vekst is contractedto purchase a further 60,000shares for a total considerationof NOK 8.7 million.

ResultsThe group showed a profitbefore tax of NOK 3.8 millionin 1996 as against a loss beforetax of NOK 4.5 million in 1995.Operating revenues increasedfrom NOK 580.3 million in1995 to NOK 941.6 million in1996. The Norwegian whole-sale business reported turnoverof NOK 425 million in 1996 asagainst NOK 364 million in1995. This activity produced aprofit before tax of NOK 12.3million in 1996 as against NOK21.9 million in the previousyear. SRG’s retail sales wereNOK 361.8 million in 1996 asagainst NOK 295.5 million in1995. The loss before tax fromretail activities was NOK 4.4million, as compared to a lossbefore tax of NOK 16.3 millionin the previous year.

Business DescriptionThe results from wholesalingcan be attributed to a weakyouth market and pressure onmargins, particularly formenswear. The company plansto increase earnings byintegrating a number of thecompany owned shops. Thecompany’s philosophy for thewholesale operation is to createproduct concepts aimed atparticular target customergroups which creates identity,visibility and total experience.

The company-owned storesaccount for an increasinglylarge part of the wholesalebusiness and contributed toincreased earnings at this stage.A process of rationalisation forsmaller and less profitableshops, as well as a newcomputer system are expectedto contribute to better control ofgross earnings. SRG now has240 shops in total, and the retailphilosophy is to offer thecustomer a shopping experience

of products and service with«value for money».

Voice of Europe AS mergedwith the purchasing chainKvalitex at the start of 1996.The new corporate structure isnow well established and Voiceof Europe AS, as the acquiringcompany, has changed its nameto Scandinavian Retail GroupASA. The Kvalitex chain had88 shops with retail sales ofNOK 680 million and awholesale business turnover inexcess of NOK 260 million.The chain of VIC shops aloneproduces turnover today ofNOK 360 million, which isexpected to be increased byopening new shops.

SRG has entered into an inprinciple agreement for amerger with the clothing chainSamtex which trades under theshop name Match amongstothers. Samtex has 140 shopswith annual retail sales of NOK650 million and a wholesaleturnover of approximately NOK330 million. SRG has alreadypurchased 20 Match shops fromthis chain and these account forretail sales of approximatelyNOK 60 million.

SRG is seeking toconcentrate its future salesaround a single identity in eachof the main sectors of women’sclothing, menswear and jeans.Product identities which eachattract considerable salesvolume give increasedmarketing presence. The retailshops are currently being re-organised to arrange thelocation of the new productidentities and increase theproduct range.

SRG expects increased salesand better results in 1997.

30


Scandinavian Retail Group ASA (SRG)

(NOK mill) 1996 1995 1994

Sales 942 580 440 Depreciation 17 12 8 Operating profit 12 4 28 Profit before tax 4 (4) 18 Profit after tax 2 (4) 16 Total assets 345 214 190 Book equity 117 77 57

No. of employees (inc. part time staff) 458 447 -Norsk Vekst's interest (%) 7.7Amount invested 23.8

Chairman Bjørn G. ReedManaging Director Kristoffer OlsenNorsk Vekst's representative on the Board: Lars A. Grinde

Main Figures Scandinavian Retail Group ASA

The VIC shopping concept.

MaXware develops and marketssoftware for electronicmessaging and databasesystems. The company deliverscomplete systems ofapplications and systems for theelectronic exchange ofinformation on the Internet, X400 and other open standards.MaXware was merged intoKvatro-Notis AS with effectfrom 1 January 1996, and thenew company operates underthe name MaXware AS.

Norsk Vekst has investedNOK 17.5 million (firstinvestment September 1995),representing an interest of46.4% in the company.

ResultsMaXware recorded a profitbefore tax of NOK 1.9 millionin 1996 and operating revenuestotalled NOK 60.4 million.

Business DescriptionThe Nordic countries are thecompany’s principal market,but efforts are also beingdevoted to cultivating partnersfor international sales.MaXware has leading technicalskills in its product areas. Thecompany’s products are usedthroughout the world by postoffices and telecommunicationscompanies among others.MaXware’s customers areprincipally large publicorganisations and companieswhich need professionalcommunications systems. Thehead office of MaXware is inTrondheim, with branches inOslo, Tønsberg, Stockholm,San Francisco and WashingtonDC.

Developments in 1996,including a re-focusing of theactivities, product developmentand the creation of a network ofinternational partners, havepaved the way for long-term

growth and profitability. Thecompany sold its archivingactivity and the ON-file productto Telenor Allianse with effectfrom 1 September 1996.

Much has been done toposition the company as asupplier of complete systemsbased on a broader range ofproducts and services within thearea of electronic messageexchange. The company hasentered into strategic allianceswith a number of internationalplayers for this reason.MaXware will now co-operatewith the American companyIsocor on product developmentand marketing, as well asworking with the Dutchcompany Ediport which offersaccess to leading EDI(Electronic Data Interchange)products and the mostimportant markets in Europe. Inaddition Digital EquipmentCorp. is to use MaXware’sexpertise and products at itsEuropean head quarters, and theDutch company Getronics is tosell MaXware systemsinternationally.

MaXware has strengthenedits position on the company’sNordic home market. Asubsidiary, MaXware AB, hasbeen established in Stockholm,and the development of a sales,support and projectorganisation is underway.Important reference customers,such as the Swedish Post Officeand Statskontoret have beensigned up. As of 1 December1996 the company acquiredDialogue Systems AS inTønsberg. The acquisitionbrings importantcomplementary products andexpertise to MaXware’s mainareas of concentration andfurther strengthens its positionin the Norwegian market.

Further development of the

company’s databaseproduct Techra hastaken place, creatingnew opportunitiesnationally andinternationally. Thisproduct is soldworld wide bySchlumberger, andcustomers includeIBM in Texas who useTechra for processing seismicdata.

Growth continues in themarket for the company’sproducts and services. Mostorganisations have nowinstalled e-mail systems, butthere is an increasing need forvalue added systems such asdirectory services (X.500),gateways, improved security,EDI and electronic exchange.With its in-house product andservice developments, theincreased product range fromits international partners andnew marketing outlets thecompany is well positioned totake a share of this growth inthe market. The companyexpects increased turnover andprofits in 1997.

31

P O R T F O L I O

MaXware AS

(NOK mill) 1996 1995* 1994*



Managing Director Ottar G. KristiansenNorsk Vekst's representative on the Board: Jarle Gundersen (Chairman)

*Figures for Kvatro-Notis before the merger

Main Figures MaXware AS

MaXware’s e-mail product MailmaX.400

was used on the 1996-97 Antarctic

expedition from Sør-Rondane

CorrOcean is a hightechnology companyestablished in 1982with its origins in theUniversity

environment located inTrondheim. The activities

involve consultancy andengineering services incorrosion, strength of materialsand instrumentation for themonitoring and inspection ofpipelines and process plants.CorrOcean was established witha basis in the oil and gas busi-ness in the North Sea, but hasgradually expanded into othermarkets. The company hassubsidiaries in Great Britain,Italy and the USA.

Norsk Vekst has investedNOK 15 million in CorrOcean(first investment 1994) and has a33.8% interest in the company.

ResultsThe group recorded a profitbefore extraordinary items andtax of NOK 9.4 million in 1996as against a loss of NOK 3.2million in 1995. Net extra-ordinary items booked in 1996amount to a loss of NOK 2.8million, which represents thedifference between write off ofcapitalised development costs(tax motivated) and partialwrite-off of a risk loan.

Operating revenues increasedfrom NOK 50 million in 1995to NOK 77 million in 1996.CorrOcean was able todemonstrate growth in theproduct area of Field SignatureMethod (FSM) during 1996 andthe order book for this productis significantly better than wasthe case a year earlier. Sales ofthe Sandmonitoring (SM)system have increased well overthe last 2 - 3 years and increasedefforts are being devoted tofurther expansion in newoffshore locations such as theUSA and South East Asia.CorrOcean’s engineering andconsultancy activities doubledtheir turnover in 1996.

Business descriptionCorrOcean’s activities includethe development, productionand sale of instruments, soft-ware and other equipmentneeded for monitoring the con-dition and rate of corrosion ofpipes and process equipment inindustry.

The Field Signature Method(FSM) developed by CorrOceanis an advanced technologythrough which, by recordingchanges in electrical fields, it ispossible to measure materialdeterioration in pipes and othersteel and metal constructions.The method can also be used todetect and monitoring crackingin a variety of installations.FSM can be installed on steeland other metal structures,piping systems and ships of allsizes. The method represents aneffective technique for checkingareas which are difficult toaccess. FSM is a patentedmethod. FSM saves costs forusers through a reduction inexpensive inspection (pigging),choice of cheaper steel qualitiesor thinner materials and throughoptimal dosing of corrosion

inhibitors.The Sandmonitoring (SM)

system was also an in-housedevelopment. This method usessensors to monitor gas or fluidflows. The sensors recordparticles such as sand in oil, gasand water. The equipment hasproved to be very precise andreliable in single and multi-phasecurrent systems. The monitoringequipment is used in productionplatforms offshore, on land andunder water, and has made itpossible for oil companies tooptimise their production of oiland gas whilst at the same timeavoiding abrasion wear toproduction piping.

CorrOcean’s third area ofactivity is engineering consult-ancy, where the company offersservices in the evaluation ofmaterials and coatings, cathodicprotection and maintenanceplanning. The increased level ofactivity reflects growth in all theareas of corrosion relatedservices in which the companyhas expertise, as well as majorcontracts for inspection andmaintenance planning.

In addition the company,working in co-operation withSINTEF, has developed a newproduct which solves problemswhich the oil industryexperiences in the use ofstainless steel pipes in seawaterapplications on platforms andthe like. The large market forfloating production installationsand vessels is expected toprovide a sound base for growthin turnover from this product inthe future. CorrOcean expectsincreased turnover andimproved profitability in 1997.

CorrOcean is planning aStock Exchange listing in thecourse of the first half of 1997.

32


CorrOcean AS

(NOK mill) 1996 1995 1994

Sales 77 50 64Depreciation 2 1 2Operating profit 8 (3) 6Profit before tax and extraordinary items 9 (3) 6Profit after tax 5 (3) 4Total assets 51 44 47Book equity 31 24 20


Managing Director Roe D. StrømmenNorsk Vekst's representatives on the Board: Øyvind Aasbø (Chairman) and Trond Bjørnøy

Main Figures CorrOcean Group

RCP anode

installed on a seawater

pump

Powel Data was incorporatedon 1 July 1996 as the result ofEnergiforsyningens Forsknings-institutt AS (EFI) hiving off itssoftware activities. Thecompany develops softwareintended for electricityproducers and distributors. Inaddition to developing andselling software, Powel Dataalso supplies related servicesand support.

Norsk Vekst has investedNOK 9.9 million in Powel DataAS and has a 40.6% interest inthe company.

ResultsThe company recorded a lossbefore tax of NOK 2.5 millionin 1996, and had operatingrevenues of NOK 15.1 million.

The results were affected byone-off costs and are notrepresentative of a full year'soperation. All start up costs,and the costs arising from theagreement with EFI have beencharged to the accounts.

Business descriptionFrom its central position inNorwegian energy supply andpower generation, EFI hasdeveloped as a national andinternational centre ofexpertise. EFI’s activities as asupplier of software hadbecome such that it wasdesirable to create a clearerdelineation between thisactivity and the continuingresearch activity. The productssupplied have considerablecommercial potential which canbe realised by a focusedcommercial initiative which isdifferent in character to theactivities normally associatedwith a research institution. Inorder to realise this potential itwas necessary to introduce adifferent organisationalstructure.

Powel Data AS is to be aprofessional supplier ofsoftware for the electricitysupply sector in Norway andabroad, taking as its startingpoint the customers’ need forcomputer tools in theirplanning, operation andmaintenance of electrical powergeneration plants and systems.By developing software in-house and integrating othersuppliers' products Powel DataAS will build on its technicalskills and R&D achievementsto offer products and services tocontribute to the efficientplanning and operation ofcustomers’ energy supplysystems.

The company's products fallinto two main categories.Netbas is a calculation anddocumentation system forpower generation plants.IDSystem is an integratedconcept offering modulesappropriate to a number oftasks relevant to producers ,distributors and other players inthe energy market.

In Norway Netbas is by farthe dominant product in itsmarket, and has been sold tothe majority of electric powerplants in Norway over a certainsize. New modules are in thecourse of development whichwill contribute significant salesrevenues in future years.Outside of Norway, Netbas isinstalled in electric powerplants in Denmark, Sweden,Iceland as well as Gaza. Themarket share in Denmark is80%, but only around 20% inSweden.

ID-System is arelatively newsystem (completed in1996) which wasdeveloped in co-operation withthe industry.The system hasproved asuccess to date,and is alreadyinstalled in some 25 largerelectric power stations. Theproduct has considerablepotential in export markets, andthe company will concentrateon Sweden in 1997.

The company anticipatesincreased turnover and betterprofitability in 1997.

33


Powel Data AS

(NOK mill) 1996*

Sales 15Depreciation 0Operating profit (3)Profit before tax (3)Profit after tax (3)Total assets 15Book equity 5

No. of employees 41Norsk Vekst's interest (%) 40,6Amount invested 9,9

Managing Director Jon E. VærnesNorsk Vekst's representative on the Board: Jarle Gundersen (Chairman)

* Incorporated 1 July 1996

Main Figures Powel Data AS

Powel Data develops software

for electricity producers

and distributors.

The company produces dairyproducts including a range ofhard and soft Norwegiancheeses. The origins of thecompany date back to the1920’s, when Synnøve Findenproduced pultost, a softNorwegian cheese.

Norsk Vekst has investedNOK 8.0 million in SynnøveFinden Meierier giving a 41.3%interest in the company. Inaddition Norsk Vekst has madea convertible loan available tothe company of approximatelyNOK 4.8 million which would,if converted, increase NorskVekst’s interest to 49.9%.

ResultsThe company reported a lossbefore tax of NOK 10.0 millionin 1996 as against a loss beforetax of NOK 0.5 million in 1995.The loss for the year is to allpractical intent a result of startup costs at the new facility inAlvdal. Operating revenuesincreased from NOK 11.6million in 1995 to NOK 43.0

million in 1996 as a result ofthe launch of a new cheese,Synnøve Gulost, in the autumnof 1996.

Business descriptionThe company operates todayfrom a modern industrialfacility in Enebakk where itproduces a range of Norwegiancheeses from partly processedingredients. This was thecompany’s only facility untilthe second half of 1995, whenthe company purchased a dairyfacility in Alvdal from A/LØstlandsmeieriet which hadbeen closed down in theprevious year.

Synnøve Finden Meierierhas invested significant amountsin equipment and modernisationand the Alvdal facility is now amodern plant with an annualcapacity of 30 million litres. Thenew dairy started operations inJune 1996, with the productionof a cheese sold as SynnøveGulost. The marketing of thenew cheese started in Septemberand it was very well received byboth consumers and the grocerychains. Synnøve Finden Alvdallaunched a second cheese,Synnøve Brunost, in January1997.

Synnøve Finden Meierierproduces for the moment pro-cessed products such as cheeseand butter. The company’sobjective is to take a 20%market share for the principalNorwegian cheese varietiesbrunost and gulost. As a resultof the high level of demand forits products the company isplanning to extend the Alvdaldairy facility, increasing pro-duction capacity to 60 millionlitres annually. The extensionwork is expected to be finishedby August 1997, and the cost isto be met by a private placingof shares. Synnøve Finden

Meierier is also considering theproduction of liquid dairyproducts.

The government’s annualagriculture agreement in 1995gave a clear political signal forcompetition in the dairy industry.This has been a monopoly withNorske Meierier as the soleoperator, but a number ofcompetitors were established inthe course of 1995. As well asSynnøve Finden Meierier otherdairy companies such asGårdsmeieriene AS from Totenhave started operation. There arenew marketing arrangements formilk from 1 July 1997 and newarrangements for price controlsand the payment of subsidies toproducers.

Synnøve Finden Meierierlooks forward to a neutralsystem whereby all participantsin the processing chain willreceive the same treatment. Italso expects the new marketingarrangements to make it easierfor players in the market otherthan Norske Meierier to act ondifferent price structures fordifferent production uses ofmilk.

Synnøve Finden representsthe first significant company tochallenge Norske Meierier’sposition and has received muchfavourable media attention. Thechallenge for the future is tomaintain this positive attitudetowards the company and itsproducts. Increased capacitywill permit a significant growthin sales in 1997 and thecompany expects to seeimprovements in profitability.

Synnøve Finden Meierier isplanning a capital raisingexercise which will bring inNOK 30 million. Norsk Vekstwill participate in the new issueand maintain its currentpercentage interest in thecompany.

(NOK mill) 1996 1995*

Sales 43 12Depreciation 2 0Operating profit (6) 0Profit before tax (10) 0Profit after tax (10) 0Total assets 61 17Book equity 2 1

No. of employees 60 8Norsk Vekst's interest (%) 41,3Amount invested 8,0

Managing Director Dag SwanstrømNorsk Vekst's representative on the Board: Jarle Gundersen (Chairman)

*AS Synnøve Finden Meierier and Synnøve Finden AS

34


Synnøve Finden Meierier AS

Main Figures Synnøve Finden Meierier Group

Synnøve Finden Meierier

launched a new “Brunost” in

January 1997

Ulstein Miljøenergi AS wasestablished in 1993 in order toinvest in power generationplants using the enginetechnology developed byUlstein Bergen AS. In 1995 thecompany changed its name toCogen AS.

Cogen's business is theproduction and sale of electricaland thermogenic energy, whichit does by investing in small-and medium-sized power andheat plants. In addition toinvesting its own funds, Cogencan arrange external financing.As well as arranging thefinancing of projects, Cogencan take on the role of totalsupplier, including design,construction and operation ofthe plants.

Norsk Vekst has investedNOK 7.1 million in Cogen (firstinvestment 1993) and has aninterest of 60%.In addition Norsk Vekst iscommitted to invest a furtherNOK 7.5 million, and will havean interest of 42.8% when theshare capital is fully paid-in.

ResultsThe company recorded a lossbefore tax of NOK 1.9million in 1996, as against aloss of NOK 1.0 million in1995. Operating revenueincreased from nil in 1995 toNOK 0.7 million in 1996.

Business descriptionThe company has established ajoint venture agreement withUlstein Bergen AS which willprovide access to investmentprojects and follow up ofinvestments made. The Boardof Cogen appointed a managingdirector to the company in July1995 in order to increase theresources committed to thepreparation and implementationof new projects.

The company entered into acontract in March 1996 for thesupply of the first turn-key gaspowered power station to bebased on the Ulstein Bergentechnology. The plant is underconstruction in southern Italyand will supply power to thestate owned power companyENEL. The plant will have acapacity of 5.25 MW and isexpected to be ready to go on-line in February 1997. Thecompany is currently workingon specific projects in severalother countries.

In today's world, attention isfocused on energy sourceswhich are environmentallyfriendly and efficient.

Gas is the fastest growingenergy source in world energyproduction. The world's naturalgas resources are enormous andthe infrastructure to produceand transport gas is developingrapidly. In addition there isconsiderable potential forutilisation of biogas with theresource-saving advantages thatthis represents.Ulstein's «Lean burn» motorsfuelled by gas have proved tobe very competitive with regardto energy and electricityefficiency, emission levels,operational reliability andexpected lifetime. Thedischarge of pollutant fumes ismuch lower per kilowatt hourproduced.

Cogen’s business isan attractive one, seen from theperspectives of both marketdemand and profitability. Thecompany’s main market is verylarge, and is growing. Howeverthe attractions of marketdemand and profitability areexpected to attract increasingand more knowledgeableprofessional competition in thefuture. Cogen will concentrateits activities on a small numberof selected European marketsduring 1997 and expects toinvest in 2 - 3 new projectsduring the year.

35


Cogen AS

(NOK mill) 1996 1995 1994

Sales 1 0 0Depreciation 0 0 0Operating profit (2) (2) (1)Profit before tax (2) (1) (1)Profit after tax (2) (1) (1)Total assets 9 11 11Book equity 8 10 11


Managing Director Bjørn BergesenNorsk Vekst's representative on the Board: Trond Bjørnøy (Chairman)

Main Figures Cogen AS

Cogen’s first investment is in

a 5.2 MW power station at Grumen

to Nova in Italy. The plant commences

generation in February 1997

Norsk Vekst made its firstinvestments in the companiesIntraMedia AS and MultimediaNorge AS during 1996. NOK10 million was invested inIntraMedia in December, givinga 17.5% interest, whilst NOK0.5 million was invested inMultimedia Norge in July togive a 40% interest in thatcompany. It was decided in1997 that Multimedia Norgewould merge with EdutainmentSoftware Systems (ESS), and inconnection with the mergerNorsk Vekst has granted aNOK 11.5 million convertibleloan to the merged company.Conversion would give NorskVekst a 36% interest.

Intra Media ASIntra Media’s business idea isthe development, operation andmarketing of software andservices for the digital com-munication of advertisementsand graphic products betweencompanies in the mediamarkets. The company’sactivities include the creationand operation of an electronicinfrastructure for distributingadvertisements and one of thecountry's largest digital imagedatabases. A range of differentservices based on digitaltechnology will be offered tocustomers who connect to theinfrastructure being developed.

From 1 January 1997 thereis freedom of competition in themarket for transmission of com-puter data in Norway. Thiscompetitive environment willbring about a significantlybetter choice of products forhigh speed transmission atmuch lower prices than are seentoday. Because of the largevolume of data used by mediacompanies, and their need for ahigh level of quality in itsprocessing, it is expected that

the end of the telephonecompany’s monopoly will leadto structural changes in themedia industry.

Electronic distribution willrequire efficient organisation ofthe logistics function if qualityis to be maintained in the highspeed transmission ofinformation. High levels ofexpertise in programdevelopment, image processing,office organisation,communications and mediatechnology will be required todevelop and operate such asystem. IntraMedia hassignificant competence in allthe areas involved.

IntraMedia has developedthe database necessary tointerface digitally storedadvertisements with the printedmedia. The company has alsodeveloped software fortransmitting and receivingadvertisements. The company'scustomers are expected to beboth Norwegian advertisingagencies and the printed mediawhich receive advertisementson a nationwide basis.

Multimedia Norge AS (MMN)The company issues, produces,markets and distributes its ownrange of Norwegian CD-ROMproducts. It also has directagreements with producers ofCD-ROM products in Englishfor which it acts as a distributor.The company has agreementswith leading CD-ROM produ-cers in Europe and the USA.

The company intends tobuild a reputation in the marketas a distributor of up to datequality CD-ROM products atthe right price. Since its start in1995 the company hasestablished its position as adistributor, and has at the sametime entered into agreementswith foreign producers for the

reworking of their titles intoNorwegian. MMN has alsoacquired exclusive distributionrights in Norway for someEnglish language productions.

The market for CD-ROMsis increasing and covers theentire country. The vastmajority of new PCs are nowsupplied with CD-ROMplayers, which is important ifthe customer is to be able to useMMN’s products without anyadditional hardware expense.Falling software prices make itlikely that new channels forsales will open up, and thatexisting channels such as bookshops will increasinglyconcentrate on multimediaproducts. These developmentswill all increase the availabilityof MMN’s products.

It was decided in January1997 to merge MMN withEdutainment Software SystemsAS (ESS). ESS is a producer ofnon-violent computer gamesand educational software onCD-ROM for children andyoung people. The mergedcompany will be one of thecountry’s leading contenders inthe market for interactivegames, books and educationalsoftware on CD-ROM. Inaddition the company iscommitting resources to theNordic markets, where ESSalready has sales activities inSweden, Denmark and Finland.

The company’s progresssince it was established hasbeen in accordance withexpectations. MMN had aturnover of NOK 5.5 million in1995, and ESS a turnover ofNOK 8.5 million. The mergedcompany expects growth inboth turnover and profitabilityin 1997.

Kvatro Telecom Kvatro Telecom develops soft-

ware and undertakes develop-ment projects directed towardsthe telecommunications market.The company has a number ofinternational customers such asAlcatel, ETRI in Korea andNippon Telegraph and Tele-phone, as well as a variety ofresearch institutions anduniversities in Europe and inAsia. The company is 100%owned by MaXware AS, and ithas been decided to carrythrough a demerger so thatNorsk Vekst has a direct 46.4%interest in the company. KvatroTelecom reported a profitbefore tax of NOK 1 million onsales of NOK 11.5 million in1996.

36


Other Norsk Vekst investments

§ 1The name of the company isNorsk Vekst ASA.

§ 2Norsk Vekst ASA is to carry onbusiness based on commercialprinciples through providingequity and expertise for thedevelopment of preferably smalland medium-sized companieswith a potential for growth andprofitability, including bothnewly established andestablished companies. NorskVekst ASA will invest in land-based industry and servicesindustries which compete inforeign and domestic markets.The investments will, to theextent necessary for thedevelopment of the projects,have a long-term perspective.Norsk Vekst ASA will notinvest in companies whosepurpose is to carry on real estatedevelopment, own ships oroffshore units or undertakebanking or insurance activities.The company may investtogether with other venturecompanies in its business area.

§ 3The company's registered officeis in Oslo.

§ 4The company's share capital isNOK 600,000,030 divided into6,666,667 shares of NOK 90,fully paid and registered in theNorwegian Registry ofSecurities.

§ 5The company's Board ofDirectors shall consist of 5-8persons, as decided by theGeneral Meeting. The GeneralMeeting is to elect the Chairmanof the Board from among themembers of the Board ofDirectors.

The period of service formembers of the Board ofDirectors and the Chairman ofthe Board of Directors is to beup to two years at a time and notless than half of the members ofthe Board of Directors are to beelected at the annual generalmeeting of Norsk Vekst ASA.A quorum of the Board ofDirectors exists when more thanhalf the members of the Boardare present. Decisions are to betaken by the Board of Directorsbased on a simple majority ofthose attending. In the event of avote being tied the Chairmanwill have the casting vote. Thosevoting in favour of a resolutionmust always amount to morethan one third of all members ofthe Board of Directors.

§ 6The Annual General Meeting isto be held by the end of Juneeach year. ExtraordinaryGeneral Meetings are to be heldwhen decided by the Board orwhen required in writing by theauditor of the company or one ormore shareholders who togetherrepresent at least one tenth of theshare capital.

The General Meeting is to beconvened by the Board on atleast one week's notice. Thenotice is to be placed in twodaily newspapers and writtennotice is also to be sent toshareholders with knownaddresses. The General Meetingis to be chaired by the Chairman

of the Board of Directors. Eachshare carries one vote at generalmeetings. All decisions are to bemade by a simple majority ofvotes cast unless the CompaniesAct provides otherwise.

§ 7The company's GeneralMeetings are to be held in Oslounless on special grounds it isnecessary to hold the GeneralMeeting elsewhere.

The Annual General Meetingwill:1. adopt the profit and loss

account and balance sheet forthe previous financial yearended 31.12 and audited,

2. pass resolutions on theapplication of the availableprofit or covering of the loss.in accordance with thebalance sheet adopted and onthe distribution of dividends,

3. adopt any consolidated profitand loss account andconsolidated balance sheet,

4. elect members of the Boardof Directors, auditor andmembers of the electioncommittee.

5. determine the remunerationof Board members andapprove the auditor's fees,

6. consider other mattersspecified in the notice ofmeeting.

§ 8The election committee is toconsist of three members. Themembers will be shareholders orrepresentatives of shareholders.The election committee willelect its own Chairman. Theelection committee will presentproposals on candidates forelection as members of theBoard of Directors.

A R T I C L E S O F A S S O C I A T I O N O F N O R S K V E K S T A S A

Changes in the portfolia..................................................1Main figures....................................................................2This is Norsk Vekst ........................................................4Report of the Board of Directors ....................................5Profit and Loss Account 1996 ........................................8Balance Sheet at 31.12.1996...........................................9Cash Flow Analysis ......................................................10Accounting Principles...................................................11Notes to the Accounts...................................................12Auditor’s Report ...........................................................17Financial Key Figures...................................................18Shareholder Matters......................................................19Management and Board of Directors............................21Portfolio Details............................................................22Articles of Association of Norsk Vekst ........................37

C O N T E N T S

F I N A N C I A L C A L E N D A R

Thursday March 20 Annual General MeetingWednesday April 9 Payment of dividendWednesday May 7 Announcement of result for 1st quarterThursday August 21 Announcement of result for 2nd quarterFriday November 7 Announcement of result for 3rd quarter

NORSK VEKST Annual Report 1996

NORSK VEKST ASA

Haakon VIIs gt. 20161 OsloPostbox 1223 VikaN-0110 OsloNorway Telephone +47 22 01 04 00Telefax +47 22 01 04 04

DESIGN:AUDIO GRAFISK AS • PRINT:CICERO GRAFISK AS

http://hugin.sol.no

industryBank /insurance Industry Shipping

Table of Contents

Overview

Summary 1996

Key figures

Report of the Board of Directors

Income Statement

Balance Sheet

Cash Flow Analysis

Notes

Shareholders Policy

Norsk VekstNORSK VEKST

Annual Report 1996

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