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FALKLAND ISLANDS HOLDINGS

Results Year ended 31 March 2014 Results Year ended 31 March 2014

Continued growth Continued growth

Record Pre-Tax profits £3.65m ( 2013: £3.29m ) Benefits of diversified interests demonstrated

FIC: Quieter trading year , continued investment

Momart: Record trading performance

PHFC: Stable trading – new ferry under construction FOGL :Awaiting 2015 drilling campaign with 5 wells funded

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FKL : Overview

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FKL : Year ended 31 March 2014Trading Overview

• Group revenue up by 7.5% to £38.3m (2013: £35.6m)

— Momart : Record result – profits + 53% to £1.8m

— FIC : Quieter trading year – no rig activity – profits down £0.3m to £1.0m – further investment

— PHFC – Reduced decline in passenger numbers ( -1.6% vs -8.8% ) – profits up 8% to £0.8m

• Operating profit £3.9m (2013: £3.5m) +10%

• Underlying pre tax profits +11% to new record £3.65m (2013: £3.3m)

• Earnings per share on underlying profits 22.0p (2013: 21.3p)

• Proposed maintained full year dividend 11.5p per share (2013: 11.5p )

• Cash £5.7m ( 2013 : £11.4m )

• Bank borrowings reduced to £1.0m ( 2013: £2.0m)

• Holding of 12.8m shares in FOGL maintained : 1 for every FKL share in issue

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Year ended 31 March

2014£000

2013£000 Change +/-

Turnover – continuing operations 38,263 35,596 +7.5%

Underlying operating profit 3,852 3,502 +10.0%

Interest (net) incl. pensions costs (205) (211) -2.8%

Underlying pre tax profit 3,647 3,291 +10.8%

Non trading items 64 (96)

Amortisation of Intangibles (307) (398)

Reported Profit Before Tax 3,404 2,797 +21.7%

Diluted EPS on taxed underlying

PBT 22.0p 21.3p +3.3%

Weighted shares in issue 12,460,985 11,703,862 +6.5%

FKL : Year ended 31 March 2014Trading Overview

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31 March 2014

£000

31 March

2013

£000Change

£000

Bank Loans (1,019) (2,003) 984

Pontoon Finance Lease (4,886) (4,913) 27

Hire Purchase & Other borrowings (265) (372) 107

Total borrowings (6,170) (7,288) 1,118

Cash 5,715 11,416 (5,701)

Net Cash /(Borrowings) (455) 4,128 (4,583)

Margin on bank loans 1.5% +libor

FKL : Cash & Liquidity

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FIC : Further progress to First Oil

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• Premier Oil ( PMO ) progressing technical development of Sea Lion

• Engineering concept selected Jan 2014 - Tension Leg Platform

• Detailed engineering design being progressed

• FEED contracts to be awarded by mid 2014

• PMO seeking farm–in partner before final project sanction – in 2015

• PMO undertaking further exploration drilling in North Falklands basin – “ A proven but under explored oil province”

• Potentially find Sea Lion extensions and / or identify new prospects in basin

• Exploration drilling scheduled Q1/Q2 2015 – minimum 6 wells ( +up to 8 slots ) • Utilising 3D seismic surveys completed in 2013 • 2 wells in Southern basin ( Noble Energy / FOGL acreage ) • 4 in Northern ( Sea Lion extension )

• Temporary dock installed by Noble Energy in Stanley harbour to support offshore drilling.

FIC : Background to Oil – June 2014

Timeline for OilFalklands : Timeline for Oil

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Sea Lion Timeline Jun-14 2014 2015 2016 2017 2018 2019

Exploration Drilling 1 rig 6 wells - 2 in South - 4 Northern basin

Field Development ( Tension Leg Platform ) Prepare Develop Develop Construct Construct

TLP will mean less onshore activity

FIRST OIL

FIRST OIL Now estimated as Mid 2019 ( 4 yrs following Project Green Light )

Assumes Project Sanction & funding by end 2015 - on shore infrastructure work growing from 2017 onwards

FIC : Further progress to First Oil

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The Noble Energy temporary port facility

• Revenue ahead at £15.88million ( 2013: 15.22million ) + 4.3%

• Good growth in auto sales ( Falklands 4x4) + 42%

• Falkland Building Services – growth in house building ( + £0.64m )

• Stronger cruise ship visitors numbers up by 34% to 39,500 helped H2 sales .

• First contribution from SAtCO - Installing Noble Energy temporary dock from March 14

• BUT : retail , property rental and freight income hit by absence of oil rig

• Retail sales down £0.5m – 4.8% - margins squeezed with increased costs

• Property rental income -25% -£0.1m

• Stevedoring and freight income -£0.4m - 23.5%

• FIC profits down by £0.3m to £1.0m ( 2013 £1.3m )

FIC : Trading - Year ended 31 March 2014

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• Airport Road foundations • Hebe Street Houses

FIC : Further progress to First Oil

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FIC : Further progress to First Oil

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– FIC : Year ended 31 March 2014Revenue 2014

£ million 2013

£ millionChange

%

Retail 9.26 9.73 -4.8%Falklands 4x4 2.66 1.87 42.3%Freight and port services 1.26 1.65 -23.5%Support services 1.30 1.21 6.7%Property and construction 1.40 0.76 85.6%Total Revenue 15.88 15.22 4.3%

Operating profit 1.01 1.33 -23.5%

Net Interest 0.02 (0.03)Pre Tax profit 1.03 1.30 -21.0%

Operating profit margin 6.4% 8.7% -26.7%

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• Significant £2.7m capital investment during year.

• Continued investment in Falklands Building Services – 61 staff now employed

• Further work done to modernise Falklands 4x4’s Servicing facilities

• Growing WIP & Order book for commission building of kit homes

• 4 new houses built in central Stanley to add to rental portfolio

• Modernisation of FIC offices at Crozier Place on track, offering attractive office space for external rental and improved Head Office facilities for FIC

• Creation of new “Home Builder” Retail Warehouse in progress

• New chiller and warehouse / container facilities started at Airport Road

• New Property and Retail Directors recruited to strengthen local team

• Fitzroy Road apartments redesigned on more cost effective, flexible basis .

• FIG plans for Deep Water Port on hold pending green light on Sea Lion

FIC : Year ended 31 March 2014

Momart : Building on its Reputation

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FIC – Year ended 31Momart : Overview • Specialist Art Logistics company serving fine art market in the UK & overseas

• Market leading position with reputation for quality - high barriers to entry

• 3 business streams :

• Museum Exhibitions –planning, case making , packing, transport and installation

• Commercial Galleries –Logistics services for galleries , artists and auction houses

• Storage – 70,000 sq ft of secure warehousing for client storage in East London.

• 125 staff – 65 South Quay Canary Wharf , 60 in Leyton .

• Fleet of 17 specialist art transport vehicles

• Experienced and committed workforce - Royal Warrant holder

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Momart : Building on its reputation

Momart : Consistent Growth leading to an exceptional year

Y/e 31 March 2011 2012 2013 2014

Revenue 13,186 14,970 16,298 18,258

Operating Profit 532 964 1,193 1,826

Margin 4.0% 6.4% 7.3% 10.0%

Growth in Profit 81.2% 23.8% 53.1%

Momart: Trading year ended 31 March 2014

Revenue 2014£ million

2013£ million

Change%

Museums & Public Exhibitions 10.86 9.01 20.4% Gallery Services 5.57 5.50 1.3%Storage 1.83 1.79 2.6%Total Revenue 18.26 16.30 12.0%

Operating Profit 1.83 1.19 53.1%Interest (0.03) (0.03)Pre Tax Profit * 1.80 1.16 54.4%* Before amortisation of intangibles

Operating profit margin 10.0% 7.3% 36.6%

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Momart: Trading year ended 31 March 2014• Record result in an exceptional year

o Revenue up 12% to £18.3m ( 2013: £16.3m ) o Profits up 53% to £1.83m ( 2013: £1.16m )

• Record Exhibitions revenues + 20% to £10.9mo Wide range of UK and higher margin international shows

• Gallery Services – Revenue + 1.3% growth £5.57m

o Commercial art market still buoyant

o Improved asset utilisation and more selective contract selection lead to improved margins

• Storage revenues up 2.6% to £1.83m : facilities effectively full at +93% capacity.

• New Finance & Commercial Director recruited September 2013 to strengthen team.

• New ERP system leading to faster turnaround of estimates and more commercial pricing – more

to come in 2014 with full roll out.

• Notable exhibitions : Manet : Royal Academy , Ellen Gallagher : Tate Modern ,Reunion

( Walpole collection from Hermitage ) , David Bowie , Chinese Painting : V&A ,

Vikings : British Museum and Vienna : National Gallery. 19

mart: Building on its reputation

• Closer relationships with major auction houses

• Technically demanding, complex ,international exhibitions an increasing source of

business

• Working closely with high quality international partners

• New offices and introduction of ERP system set to increase productivity

• Substantial increase in storage capacity planned for 2015

Momart: Building on its reputation

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Portsmouth Harbour Ferry Company (PHFC) Overview

• Ferry service for foot, cycle & motor cycle passengers

• Operating since 1874

• Acquired by FIH in Dec. 2004 - £7.5m

• 5 minute journey across mouth of harbour from Gosport to Portsmouth (1/3 mile)

• Return fares are £3.10 (adult) and £2.10 (Child/Senior)

• Operates 364 days a year, 5.30am – Midnight: Reliability 99.7%

• 4 purpose built vessels (2 fully depreciated) 1 under construction

• 3.0 million passenger journeys p.a.

• Unregulated, with dominant local position

• Strong predictable cash flow

• New Vessel being commissioned – delivery early 2015 will complete fleet modernisation

Portsmouth Harbour Ferry Company Overview

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PHFC - Year ended 31 March 2013 Revenues 2014

£ million 2013

£ millionChange

%

Ferry fares 3.95 3.89 +1.5%

Other revenue 0.17 0.19 -5.4%Total Revenue 4.12 4.08 +1.2%

Operating Profit 1.01 0.98 2.9%

Pontoon lease finance interest (0.24) (0.26)Profit before tax 0.77 0.72 +6.1%

Net margin on revenue (%) 18.6% 17.7% +5.1%

Passenger journeys (000s) 2,986 3,033 -1.6%

PHFC : Trading year ended 31 March 2014

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P• Passenger journey decline slowed to -1.6% to c.2.99 million ( 2013: 8.9% )

• Fares increased 3-4 % June 2013 ( and June 2014 )

— Adult Return fares £2.80 > £2.90, Child / OAP unchanged £1.80> £1.90

— 10 Trip Ticket £13.00 > £13.50

• Ferry reliability maintained at >99%

• PBT £0.77m ( 2013 £ 0.72m ) + 6.1%

• New vessel due from Croatia Q1 2015 –cost £3.3million – 30 year life

• No further vessel investment for 15-20 years

• MoD agreement May 2014 to reimburse staff ferry expenses should mitigate impact BAE job losses

• Medium term outlook for Portsmouth positive – QE2 carriers - 2016-17

PHFC : Trading year ended 31 March 2014

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FO FOGL Licences: Location Map

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• FKL retains 12.8m FOGL shares (2.4%) – 1 FOGL share for each FKL share in issue

– Book cost 20p per share

– Partners : Noble Energy ( Mkt cap c $26bn) Edison International (Mkt cap EDF c $67bn )

• Combination with Desire gives FOGL exposure to North , East and South Basins including Sea Lion

• 3D seismic programme ( 12,000sq km ) has helped identify target prospects

• FOGL fully funded for its share of planned exploration through 2015

• 5 well drilling programme starting late Q1 /early Q2 2015 – 2 wells in the South and 3 in the North Falklands Basin

– High impact targets with > 1 bn bbls of gross prospects

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Falkland Oil and Gas (FOGL)

FOGL Interest S&E Falklands Basin Northern Basin Norther sector 40.00% PL4b ( Sea Lion ) 40.0%Southern 52.50% PL 3-5 57- 100%

FKL: Strategy

• FIC : Leverage property assets and support services to maximise long term returns

• Momart : Expand storage capacity and develop sales & marketing to capitalise on brand reputation.

• PHFC : Modernise fleet and maintain steady growth in profits

• FOGL : Maintain shareholding through next drilling campaign

• Group :Maintain/ grow dividend and maximise shareholder returns

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FKL: Strategy

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FKL : Outlook• FIC

– Falklands economy still quiet but set to pick up as drilling approaches. – Key growth trigger will be Farm-In to unlock Sea Lion development . – House building and new vehicle sales will help offset quieter retail environment – Continuing investment in property assets in readiness for oil

• PHFC – MoD reversal of ferry expenses embargo will mitigate effect of BAE closure in Portsmouth– Arrival of Harbour Spirit in Q1 2015 finishes modernisation of ferry fleet – Cyclical recovery & Dockyard expansion gives positive medium term view

• Momart– No immediate repetition of exceptional 2013-14 result – Commercial art market expected to remain buoyant – importance of London growing– New ERP system will boost efficiency in 2014-15 – Plans to expand storage business in 2015 to remove block to further growth

• Overall – Spread of trading interests underpins Group’s ability to maintain earnings – 2015 exploration drilling and Sea Lion gives significant upside potential

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Appendices

Additional Information on Falkland Islands Holdings

FKLFKL : Year ended 31 March 2014 Divisional Analysis by company

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FKL Group balance sheet31 March 2014

£00031 March 2013

£000Change

£000

Property, plant and equipment 16,609 13,725 2,884

Investment properties 3,396 2,786 610

Intangibles & goodwill 12,238 12,315 -77

Deferred tax assets & sundry other 1,602 862 740

Investment in FOGL at market value @ 25.5p (2013 26.5p ) 3,270 3,399 -129

Total fixed assets and investments 37,115 33,087 4,028

Working capital - Net 3,255 1,706 1,549

Cash 5,715 11,416 -5,701

Net operating assets 46,085 46,209 -124

Income tax payable (419) (364) -55

Bank loans, Finance Leases & HP (6,170) (7,288) 1,118

Pension provisions & Deferred tax (4,119) (4,278) 159

Net Assets / Shareholders funds 35,377 34,279 1,098

Net assets per share £2.85 £2.76 £0.11

FKL : Balance Sheet

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FKL Group cash flowYear ended 31 March 2014

£000

2013

£000

Underlying operating profit 3,852 3,502

Depreciation 1,233 1,204

Tax paid (780) (735)

Increase in working capital (1,676) (529)

Other 169 25

Net cash flow from operating activities 2,798 3,467

Capital expenditure (4,974) (2,415)

Dividends paid (1,423) (1,362)

Loan repayments & Interest (1,435) (1,220)

FOGL shares sold - 1,005

Loan to Joint Venture (529) -

Net Proceeds from the issue of shares - 9,269

Other (138) (79)

Net Cash Flow (5,701) 8,665

FKL : Cash Flow

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Plan

•Phased Development proposed for Sea Lion

•Phase 1 recovers 293 mm stb over 25 years from 32 wells•Initial development in the north•Phase 2 development plan will incorporate results from exploration

•$5.2bn project costs for Phase 1

•Premier seeking farm in partner to share costs

Source: Premier Oil website May 2014 32

Current Sea Lion Development Plans

•Tension Leg Platform (TLP) selected Jan 2014 •Minimal subsea infrastructure•Better economics than a new build FPSO scheme• Greater flexibility for infill drilling

•Award of FEED contracts imminent

•4 year project timeline

•First Oil targeted for 2019

• SAtCO Crane in Operation • Work starts behind Marmont Row

FIC : Further progress to First Oil

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FIC: Sites for development

Site Location & size Development Potential

1 Fitzroy Road 2 acres , Central Stanley 26 x 2 bed apartments . Work starts July 2013

2 Dairy Paddock Western Stanley 36 acres Planning for 350 houses / Work camp

3 YPF site Central Stanley, 2.25 acres Offices , high quality residential

4 East Jetty Waterfront Stanley , 3.0 acres FIC warehousing – prime site for re-development

5 “Coastel” Road FIPASS area, 7.5 acres

Warehousing & lay down areas with planning

6 Airport Road/FIPASS FIPASS ,11.0 acres Warehousing & lay down areas with planning

7 Fairy Cove North side of Stanley Harbour, 301 acres

Adjoins site for proposed new deep water port at Navy Point

FIC: Sites for development

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Map of FIC Development Sites

Map of FIC Development Sites

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Map of FIC Development Sites

Map of FIC Development Sites

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David Hudd, Chairman David joined the Board in March 2002. He is a Chartered Accountant and was a partner in Price Waterhouse until 1982. Since then, he has been Chairman or Chief Executive of a number of listed companies. He is currently also anon-executive Director of Falklands Oil and Gas Limited.

John Foster, Managing DirectorJohn joined the Board in January 2005. He is a Chartered Accountant and previously served as a Finance Director and Corporate Finance Director in a number of public companies and before that worked for nine years as a venture capitalist with a leading investment bank in the City.

Mike Killingley, Non Executive – Chairman of the Audit CommitteeMike was appointed to the board in July 2005. He is a chartered accountant and was a partner of KPMG (and predecessor firms) from 1984 to 1998.

Jeremy Brade, Non Executive Jeremy was appointed to the board in September 2009.He is a Director of Harwood Capital ( formerly J.O. Hambro Capital Management ) and a non-executive director of a number of quoted and unquoted companies.

Edmund Rowland, Non ExecutiveEdmund joined the Board in April 2013. He currently serves as a Director of Blackfish Capital Management, having gained experience in London and Hong Kong, as an analyst and investment manager with BNP Paribas and Blackfish.

Management Team

Management Team

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