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4 Scana Industrier ASAOBJECTIVESScana is organized into three business areas, namely Steel, Marine and Oil & Gas. Most of Scana’scompanies serve one or more of four market segments: marine, energy, oil and gas, and steel andmachinery. Scana possesses market-leading knowledge in these areas, and in the future the companywill sell a greater proportion of finished products and solutions.Business conceptThe objectives of the company are to own and managemanufacturing and commercial activities and related activities.The objectives of the company also include investing in othercompanies that can promote the company’s primary activities.Scana shall be a market-driven industrial group with nicheproducts in growing markets.VisionScana creates progress.By this we mean that:Scana Industrier shall be a profitable industrial group. Thehead office shall be in Scandinavia, with industrial bases andcentres for technology and market expertise in Europe andAsia. The group shall have customers throughout the world.Scana shall have a reputation for excellent customer response,strong competition, robust quality and delivery reliability, and bean attractive and challenging workplace. Scana’s finances shallbe sufficient to develop the group industrially and commercially.Main aims and strategyThe main aim of the group is to increase the shareholders’values.The following primary strategies have been determined onthis basis;1. Continued organic growth in all business areas.2. Maintain a good operating margin and effective financialmanagement.3. Strengthen the group’s strategic position through acquisitions• in order to strengthen the market position• in order to increase capacity• in order to supplement the product range or value chain.4. Develop the repair and service concept within theMarine and Oil & Gas areas.

Scana Industrier ASA5GROUP MANAGEMENT and Board of DirectorsScana has a decentralized organization in which a large part of the group’s technical andcommercial expertise is located in the companies. Scana’s group management team andfinance and accounts function are based at the head office in Stavanger, Norway.The group management comprises:Rolf Roverud, Group Chief Executive Officer CEORolf Roverud (born 1958) took up theappointment of Group chief executive in ScanaIndustrier on 1 January 2008. He came fromthe position of Vice chief executive in NSB AS,and has previously held a number of leadingpositions in Saga Petroleum. Mr Roverud is aneconomics graduate and holds a master’sdegree in strategy and management.Christian Rugland,Group Director and CFOChristian Rugland (born 1965) has a master’sdegree in economics from the NorwegianSchool of Management. Mr Rugland tookup his post in January 2007, before whichhe worked in Petoro AS and BP NorwayUA. He has been a city councilor with theMunicipality of Stavanger since 2003.Per Ravnestad,Group Director Oil and GasPer Ravnestad (born 1952) has more than 30years experience in the Petroleum industries.Mr Ravnestad came to Scana from theposition of Managing Director in IOS TubularManagement where he still is the Chairmanof the Board. Mr Ravestad is a major shareholderin Scana.The board of directors comprise of:Frode Alhaug, Chairman of the BoardFrode Alhaug (born 1949) was elected asthe chairman of the board in Scana IndustrierASA in 2008. We worked as the groupsCEO from 2005-2007 and chairman/memberof the board since 2000-2005.Previously Mr Alhaug was the CEO inMoelven Industrier. Mr Alhaug is Scana’s thirdlargest shareholder.Bjørn DahleBjørn Dahle (born 1947) has worked inthe offshore industry since 1966 and as aindependent investor and entrepreneursince 1971. Mr Dahle is among Scana’slargest shareholders.Kristin MalonæsKristin Malonæs (born 1970) has a highereducational degree within Master ofBusiness Administration. She works asdirector for Innovasjon Norge (Hedmark).Mari SkjærstadMari Skjærstad (born 1969) has a lawdegree and is a partner in the law firmJohnsrud, Sanderud & Skjærstad AS. Sheas worked as legal counsel since 1995.Mrs Skjærstad is also a board member in anumber of other companies including Mesta,Flytoget, Norfund and Forsvarsbygg.John Arild ErtvaagJohn Arild Ertvaag (born 1955) runs his owninvestment business through his companyCamar AS. The investments are primarilywithin oil and gas, industry, and commerce.He possesses a number of board positionsin both listed and non-listed companies.Camar AS is the second largest investor inScana Industrier ASA.

6 Scana Industrier ASAGroup chief executive’s commentsand hydropower developments and to marine and oil and gasactivities throughout the world.We have strengthened our position as a world leader in theproduction of large arms for forklift trucks and we supply rolls tothe state-owned Chinese companies that produce railway tracksand other products related to the major initiatives in new infrastructurein China. Scana has extensive expertise in steel and wehave found interesting niches where we can be a market leader.An important collaborating partner within the oil and gas areafiled for a bankruptcy petition early in 2009. Consequently, Scanahad to make a larger provision for loss in the 2008 accounts.We expect a new owner to take over the ship and that ourequipment will be put to use at some point. We aim to expandthe customer base and product range within the Oil and Gasbusiness area. This will increase our robustness and put us in abetter position to achieve the profit performance we aim for.Our marine companies have implemented extensive adaptationmeasures in the recent years. The transition to more advancedsystems combined with a greater focus on service and after saleshas led to a good improvement in profits. Through the acquisitionof ABB’s marine activity in Poland (Scana Zamech) we have amore extensive product range, which increases the marketpotential. We are expecting a good year in 2009 but 2010 and2011 are expected to be more demanding due to fewer contractson new ships. However, we have strengthened our competitiveposition and aim to make use of this in the coming years.In 2008, Scana had a record high turnover and operating result.Leading customers that set stringent requirements for us have,together with a good product composition and hard work in allsubsidiaries, led to continued growth and high added value.However, also for Scana, the consequences of the financial crisisare manifesting themselves in a reduced order intake. We aretherefore adapting the operations via changes in the productcomposition and efficiency measures. We have also reducedthe number of employees in some of the businesses in orderto adjust the workforce to the current level of activity. This ischallenging for the involved, but necessary. I am certain that thesemeasures are strengthening the group and will put us in an evenbetter position when the market turns.We secured a number of strategically important contracts in thesteel area in 2008. This confirms that Scana is one of the worldleaders within steel and steel components in our marketsegment. We supply advanced products for both wind powerIn 2008, the decision was made to invest in a number of projectsaimed at making the group more robust. We established ScanaOffshore Services Inc. in Houston through an acquisition.This provides a foothold in a strategically important market andfor a further development in the oil and gas market segment.The acquisition of Scana Zamech in Poland, which was carriedout in 2009, gives the group access to important expertise withinthe development and design of propulsion systems. We haveinvested NOK 100 million in the Swedish steel companies inorder to increase capacity and reduce risk and costs, in additionwe are involved in the expansion of Jørpeland Kraft, which is anattractive investment both in financial and operational terms.Combined with other investments in our business areas, this willprovide an exciting foundation for Scana in the years ahead.I am completely committed in delivering precision and quality.Scana has made vast improvements since the unsatisfactorydelivery precision at the end of 2006. We supply quality productsthroughout the world. However, we will continue to improveand thereby increase our competitive power. In order to ensureeffective operations, we have managers who are closely involved

Scana Industrier ASA7in their respective business areas, who are passionate about theproduction, and who interacts with the customers in order tounderstand their needs and contribute actively to meet theirchallenges. Scana needs managers who cultivate cooperation andbusiness opportunities both with customers and internally in theScana group. I believe we are on the right track to achieve this.Scana is a green company and produces some of the cleaneststeel that is available, which is used in our own products and byour customers. The company aims to have minimal impact on theenvironment in its production, regardless of where in the worldwe are.I believe Scana is well equipped to meet the challenges and notleast the opportunities that lies ahead. Competent and adaptableemployees, effective management in the operations and quickdecision-making all ensures that Scana will continue to yieldresults that satisfy the owners, customers and employees alike.We don’t sit there and wait, we roll up our sleeves and makethings happen so that we are ahead of the situation.I want to thank all the employees for their considerable effortsin 2008, and especially for how you meet the new challenges.Absence due to illness of only 3 per cent illustrates that we havededicated employees and a good working environment in Scana.This is very important, also in the future.Scana expects a weak international market in 2009, and that2010 will be a challenging year for industrial companies all overthe world. We expect a reduced operating result in 2009 and2010 compared with 2008. Through the efforts we do in relationto the market, organization and production we believe we willreduce the negative consequences of a weakened market. It alsopositions us to meet an exiting future when the market turns.Rolf RoverudGroup chief executiveChinese railway workers dodge a hurtling China Railway High-speed train at the construction site of a new railway line in China’s Shandong province.China will invest 2,000 billion Yuan (about 231 billion Euros) in its overburdened rail system as a stimulus measure aimed at reducing the impact of the global financial crisis.About 3,800 km new railroad lines will be build in the Shandong province, in addition to four new railroad lines in western China in the coming three years.Scana’s subsidiary in China, Scana Leshan, is a leading producer of rolls for the manufacturing of train tracks for such development.

Scana Industrier ASA91656Permission is granted to build a forge hammer at the Vismes estuary. This forms the basis for Björneborg’s growth and development.Scana Booforge was established four years earlier in Karlskoga.1987Scana Industrier is founded through a merger between ScanArmatur AS and ScanPaint AS.1989The actuator and valve control system manufacturer Scana Skarpenord AS is taken over by Scana Industrier.1991Scana Industrier buys Stavanger Staal AS, now Scana Steel Stavanger AS.1993Scana Industrier buys Björneborgs Järnverk AB, now Scana Steel Björneborg AB, one of the oldest ironworks in the world.1994Scana Industrier buys a company steeped in forging traditions; Booforge AB, now Scana Steel Booforge AB.Production started in 1646 and was previously run by Alfred Nobels Bofors.1995Scana Industrier is listed on the Oslo Stock Exchange.1996Scana Steel Stavanger AS secures its own power supply through the licence allocation to Jørpeland Kraft AS, a third of which is owned by Scana.1997Scana establishes itself in China through the joint venture company Leshan Scana Machinery Company Ltd.1998Scana buys Volda Mekaniske Verksted AS, now Scana Volda AS.1999Scana signs an agreement with Caterpillar, making Scana Volda a preferred supplier of propellers, reduction gears and control systemsfor Caterpillar’s diesel engines.2000The Board of Directors in Scana Industrier appoints Odd Torland as Group chief executive. Frode Alhaug joins the Scana Board.Scana Korea Hydraulic Ltd’s first complete year of operation. By collaborating with Scana Skarpenord AS and this company,Scana increases its market share considerably in one of the world’s largest shipbuilding nations.2001Scana increases its capital, which gives the company NOK 106 million in new share capital.2002Scana Volda enters a strategic collaboration with a Czech supplier of small and medium-sized gears. The agreement entails major costsavings for Scana and thereby increased competitive edge in a tough market.2003Leshan Scana Machinery Co. Ltd. achieve their first year with a positive net profit after struggling with poor results since 1997.The investment company Stålinvest AS (owned by Scana management) buys Smedvig’s majority shareholding in Scana.Frode Alhaug succeeds Peter Smedvig as the new Chairman of the board in Scana.2004Scana Korea Hydraulic becomes one of five subcontractors to be given the prestigious “Quality Gold Mark” by Samsung HeavyIndustries, one of the world’s largest shipyards.2005Scana establishes the offshore service company Scana Offshore Technology AS in collaboration with International Oilfield Services AS.The new company aims to further develop the group’s activities, and to ensure growth within the international petroleum industry.2006Scana acquires the companies Brødrene Johnsen AS and AMT AS, now Scana Offshore Vestby AS and Scana AMT AS respectively,in collaboration with International Oilfield Services AS. The acquisitions confirm the company’s express objectives for growth andthe further development of the group’s activities within the international petroleum industry.2007Scana’s turnover increases by 29 per cent and the group achieves operating margins in line with targets.Productivity in the group’s most important subsidiaries is very high.2008Scana’s turnover reaches almost 2.9 billion after a high level of activity in all of the groups key areas. Scana Offshore Services isestablished after an acquisition of business in Houston. The company strengthens Scana’s position in the USA and Singapore.

10 Scana Industrier ASABUSINESS AREASScana is organized into three business areas; Steel, Marine and Oil & Gas, with a decentralizedorganization in which the production units are separate legal entities.Scana consists of operational companies in Sweden, Norway, China, Poland, South-Korea,USA and Singapore with customers all over the world.SteelScana Steel Björneborg AB, SwedenForged special componentsMotala Verksted AB, SwedenHighly advanced machining workshop of long components.Scana owns 38 per centScana Steel Booforge AB, SwedenArms for forklift trucks and specialised forging and heattreatmentScana Steel Söderfors AB, SwedenRolled special profiles and rolled/forged rods and billets,mainly in special steelScana Steel Stavanger AS, NorwayHigh-alloy castings and forgings, and wear-resistant steelJørpeland Kraft AS, NorwayHydro energy plant supplying electric power toScana Steel StavangerLeshan Scana Machinery Company Ltd., ChinaSteel rolls and castingsMarineScana Volda AS, NorwayGears, propellers and propulsion systemsScana Zamech, PolandGears and propeller systemsScana Mar-El AS, NorwayElectronic remote control systems for the propulsionand navigation of vesselsScana Skarpenord AS, NorwayHydraulic actuators and valve control systemsScana Korea Hydraulics Ltd, South KoreaHydraulic actuators and valve control systemsScana Skarpenord Shangai Service StationHydraulic actuators and valve control systemsOil & GasScana Offshore Vestby AS, NorwayEngineering, design and production of specialequipment for the oil and gas industryScana Offshore Technology AS, NorwayRepair, maintenance and recertification ofequipment for the oil industryScana Offshore Services Inc, HoustonEngineering, design and production of subseaequipment for the oil and gas industryScana Singapore PTE LTD, SingaporeMarketing and service of subsea equipmentfor the oil and gas industryScana Wikov AS, NorwaySale and maintenance of gearsScana Materials Technology Centre AS, NorwayMetallurgy and laboratory services

Scana Industrier ASA11Gjøa is located about 60 kilometres north of the Troll field. The sea depth in the area is 360metres. Statoil is operator for the development phase, while GdF Suez will take over theoperatorship when the field goes on stream in 2010.Scana Steel Stavanger AS has manufactured integrals for the semi submersible production andprocessing facility.Scana Steel Björneborg, Motala and Scana Offshore Vestby have manufactured telescopic joint forconnecting the installation with the five subsea templates. The joints were produced in accordancewith strict specifications of tolerance and durability.The joints were forged at Björneborg, machined at Motala and thermically coated at Vestby.This project illustrates Scana’s ability to realise synergy effects by applying skills and technologiesacross companies in the Scana Group.

12 Scana Industrier ASAbusiness areaSteelThe steel area has a several hundred year long tradition inthe Swedish steel industry with the companies Scana SteelBjörneborg, Scana Steel Booforge and Scana Steel Söderfors.This business area also includes the Norwegian company ScanaSteel Stavanger, and Leshan Scana Machinery Company in China.The companies each have an independent and long history, andspecialise in different production areas. The business area suppliescomplete products to all of Scana’s customer segments; marine,energy, steel and machinery and oil and gas. Production takesplace at Scana’s own production facilities, which include meltingplants, forges, rolling mills, foundries, and heat treatment andmachining units. Production is of a high standard, and complieswith ISO-certified quality assurance systems. The business ischaracterised by high levels of metallurgical expertise and strongmarket positions in the respective product areas.Strategic positionScana maintains a high standard with regard to its production aswell as a broad product range. Getting a foothold in this industryis difficult since both production facilities and infrastructurerepresent major investments, and because it is also extremelychallenging to acquire sufficient levels of metallurgic and technicalexpertise.Scana is one of few players in its area with integrated productionfacilities that include both melting/production of steel, heattreatment and machining of components. Few of Scana’scompetitors have their own steelworks and have to buy billetsand semi-finished goods in order to be able to offer finishedsteel products. This gives Scana a clear competitive advantage,which the group will further develop.In recent years, considerable resources have been invested inincreased capacity and productivity, in addition to administrativesystems. Scana has decided to invest up to NOK 100 million inSwedish steel companies in 2008 and 2009. These investmentswill increase our capacity and delivery precision, and reduce risksand production costs.ProductsScana is a leading supplier of special products in steel, andcustomises solutions for various uses. Close collaboration withthe customer and high quality are key elements in this work.Scana’s technological expertise is pivotal to the production andalso in connection with the development of new, customisedproducts. Scana’s production capacity in terms of steel producedin-house is around 150,000 tonnes of melted material.Scana offers a broad range of products weighing from 50 kg to45 tonnes, in lengths up to 24 metres. Scana is a market leaderin the upper weight and length range, particularly with regard tocylindrical products.Customers and marketsWith regard to the business area’s special products, customersare international players in industries such as marine, oil/gas andenergy. Scana offers optimum design and material alternatives,which combined with short delivery times and good logisticsprovide the customer with a competitive total solution. Specialsteel customers are primarily from other steel companies, majorwholesalers and end users. Long-term collaboration agreementshave been a goal, and Scana has entered into several suchagreements with a number of key customers. This provides agood basis for further developing the business concept.The development is heading in the direction of customersrequesting supplies of finished products delivered directly totheir own facilities. High quality and technical expertise combinedwith precise deliveries have all helped Scana to capture a strongposition in the market.Financial performanceTurnover in 2008 increased to NOK 1,987 million, up 15 percent compared to 2007. The operating profit totalled NOK316 million, which represents an operating margin of 16 percent. Operating profits and margins of this magnitude are verysatisfactory and confirm that this business area has a strongcompetitive force. Capacity utilisation and product mix has alsobeen good.The order intake for 2008 totalled NOK 1,886 million. The orderreserve was NOK 1,252 million, up 12 per cent from 2007. Thedemand has been high in all market segments.The prices of scrap steel and electric power fell considerablytowards the end of 2008 from the record quotations earlier in2008. The steel companies use a market based and contractualhedging in order to neutralise any effects of cost fluctuations forraw materials.In order to be able to work in the extremely high temperatures you need specialprotective clothing coated with aluminium.

Scana Industrier ASA13Vacuum melting makes the steel more homogenuous. This is at Scana Steel Björneborg.

14 Scana Industrier ASAManaging director: Ingvar WinboEmployees: 333Turnover: NOK 875 millionSCANA STEEL BJÖRNEBORGScana Steel Björneborg refines steel in an integrated chain that includes its own steelworks, heat treatment,forge with a 4,500 tonne press and several well-equipped machining units. The company’s customers aredominant players in their market areas, who have stringent requirements for specifications and quality.Scana Steel Björneborg was founded more than 350 years ago,which makes it one of the group’s most venerable companies –not to mention one of the oldest ironworks in the world. Thecompany is located in Björneborg, east of Karlstad in Sweden.The company became part of the Scana group in 1993 and hassince developed and expanded its activities through considerableinvestments and development of new products.As at 31st December 2008, the company had 333 employeeswith a turnover of SEK 1024 million, which is an increase of21 percent from 2007.Market and customersScana Steel Björneborg exports 70 per cent of its turnover.Europe is the largest market, but exports also go to the USA andother parts of the world.The energy market segment will be particularly important in 2009.High demand in this segment will offset the reduced demand inother segments following the slowdown that started in 2008. Thecompany has implemented a series of efforts to increase sales andreduce costs that should take effect in 2009 and 2010.ProductsThe company’s main products are forged, rotation symmetrical,long and thin components with a high technical content. Italso supplies raw forged and semi-finished billets. Scana SteelBjörneborg supplies products to market segments such asmarine, offshore, energy, machinery and steel. The company’smain products are shafts, rotors, risers and joints, as well asforged steel for tool manufacturers.The company’s products are often key components for thecustomers. Scana Steel Björneborg supplies components withdifferent degrees of completion, depending on the customers’requirements. The company emphasizes research anddevelopment to further strengthen quality of its products andhas an ongoing cooperation with Kungliga Techniska Høgskolanin Stockholm.The company has several ongoing investments, where theexpansion of the steelworks and a new manipulator for the forgeare among the larger ones. In the first phase, completed duringJune 2009, the steelworks is expanded by 900 square metres andthe production capacity enlarged from 75,000 to 95,000 tonnes.In phase two, the capacity will be expanded to 115,000 tonnes.The new manipulator will commence operation in August 2009.These investments in new equipment will provide for an evenmore reliable production, and the option to produce in highervolumes.STEELWORKElectric Arc Furmace Ladle furmaceTransformerOptical analysis1550° Chemical analysis ReductionLiquidus +70°Scrap, raw materialOxygene lanceHeat Size/50tonTap to tap/3hVacuumEmission filtersArgonSlag inclusions

Scana Industrier ASA15Shell has completed the installation of the drilling and production platform at its Perdido development field in the Gulf of Mexico. Production at Perdido isscheduled to begin around 2010. The project will be capable of producing 130,000 barrels of oil equivalent a day when it commences production in 2010.Scana has provided forged and machined specialty joints for the installation, which will be moored in about 8,000 feet of water with rugged seafloor terrain.The Perdido Host requires cutting-edge planning and technology. The contract is therefore a confirmation of the fact that Scana delivers world-class quality steel.

16 Scana Industrier ASAManaging director: Rolf PolblattScana´s ownership: 37.50 per centMOTALA VERKSTADMotala Verstad constructs, prepares and installs complex mechanical systems for customers within marinetransport, industry, infrastructure, electrical, energy and the processing industry.Motala Verkstad was founded in 1822 by Baltzar von Platen inorder to bring about a large amount of iron parts, tools, sluicegates and bridges for the construction of Göta Kanal – leadingfrom the east coast of Sweden to the west coast. When thechannel was completed in the 1840’s, the company took a newdirection under new leadership.Motala Verkstad gained international fame under Otto EdvardCarlsund from 1843-1870, won several awards, also at theWorld Expo, and was praised as the world’s most competentproduction company. The famous writer Jules Verne alsoesteemed the company in his classic “Twenty Thousand LeaguesUnder the Sea”, as the prow of the fictitious submarine“Nautilus” was supposed to have been built at Motala.Products and servicesFrom the outset, the attitude has always been to stay in thetechnological forefront and make the impossible possible.Activities are divided into the following areas: contractproduction, component manufacture, shafts, as well as bridgesand industrial service. The single product the company has had inits portfolio since the beginning is drawbridges, to which we nowmostly do service and maintenance.Well-working collaboration between motala and scana groupToday, Scana is one of Motala Verkstad’s most importantprospective customers. The company is in every way affected byScana’s actions, through their ownership, as a large customer andalso a large supplier to Motala. Since the cooperation betweenthe companies is wide, both parties can offer a large array ofproducts. Scana and Motala Verkstad deliver complete systemsthat render Motala Verkstad a large competitive edge. To offercomplete systems boosts the competitive power and increasesthe degree of processing and manufacturing value. This, again,creates more opportunities and increases profitability for bothcompanies.Motala Verkstad’s collaboration with Scana is of long standing.Today Motala Verkstad works above all with Scana SteelBjörneborg AB, but a number of Scana companies also utilisesMotala Verkstad’s services. The owners at Motala Verkstadhave always appreciated Scana’s involvement in the company’sdevelopment and strategies. The companies give each othermutual encouragement and constructive criticism, thus creatinga positive development for both parties.AB Motala Verkstad is one of the oldest engineering companies in Sweden. The company was founded in 1822 during the construction of Göta Canal. Motala Verkstad has built around400 ships, 800 bridges (among others Västerbron, Skeppsholmsbron, Bergsnäsbron and the Ashwas bridge in Iran), railway equipment and 1,300 locomotives.Now the company manufactures, maintains, improves, and upgrades high quality complete mechanical products and components like marine shafts, medical equipment, movable bridges,lead covering for cables and pumps.

Scana Industrier ASA17Managing director: Christian StåhlbergEmployees: 90Turnover: NOK 178 millionScana Steel BooforgeScana Steel Booforge is now a world leader in the production of large arms for forklift trucks– arms that can lift in excess of 10 tonnes. With our expertise in forging, we can compose largeforks according to any specification or customer requirement.The venerable Scana Steel Booforge was founded more than350 years ago, just like its sister company Björneborg. Productionstarted way back in 1646 in Karlskoga, which makes BooforgeScana’s oldest company – and easily one of the oldest ironworksin the world. Alfred Nobel’s Bofors later ran the company. Since1994, the company has been a part of the Scana group.As at 31st December 2008, the company had 90 employees anda turnover of SEK 207 million.Market and customersThe company is mainly aimed at forklift truck and machinemanufacturers, as well as other steelworks. The customers areprimarily located in the Nordic region, and in other parts ofEurope. Scana Steel Booforge exports approximately 15 per centof its production. The company’s largest customers include SSAB,Kalmar Industries, Alfa Laval and Scana Steel Björneborg. Theimproved financial situation from 2007 is attributed to a strongmarket for heat treatment. We worked at full capacity fromSeptember 2007, throughout the entire 2008.In the short-to-medium term the company expects reducedproduction following the finance crisis. The market for forkliftarms was reduced by more than 50 per cent during fall 2008.The company has implemented a series of efforts to mitigate thesituation and maintain a profitable operation, however with lessemployees and a lower cost base than in 2008.ProductsScana Steel Booforge’s main products are:• Forged arms for forklift trucks• Heat treatment of larger goods• Forged componentsScana produce forks to a large portion of the global market fortrucks in excess of 8 tonnes.During the fall of 2008 and spring 2009 we will invest in a newproduction line for our lifting arms for forklift trucks. This willenable us to produce complicated forged arms according tovery specific requirements, as well as standardised arms. Thisproduction line will allow us to increase our production of liftingarms several times. Thus, we are well prepared to meet themarket requirements in the following years.Scana Steel Booforge aim to produce lifting complete systems forthe large forklifts, including the mast and carriages. In March 2009,the company acquired most of the bankrupt company LjungbyMekan AB. This strengthen Scana Steel Booforge position as aleading producer of lifting systems for the heavy fork-lift industry.Scana Steel Booforge mainly aims its deliveries at forklift truck and machine manufacturers, as well as other steelworks.The company is now a world leader in the production of large arms for forklift trucks that can lift in excess of 10 tonnes.

18 Scana Industrier ASAManaging director: Per JarbeliusEmployees: 164Turnover: NOK 281 millionSCANA STEEL SÖDERFORSThe hot forming and treatment of steel has a long tradition in Söderfors. Since 1676 skilled blacksmithshas made Söderfors renowned for its high quality products. Today Scana Steel Söderfors AB is specializedin high performing, high purity and high alloy steel for demanding applications. The company has longexperience in forging, rolling, heat treatment and machining.Scana Steel Söderfors is located at Söderfors, north ofStockholm, Sweden and close to other major steel producers.Since 1995 the company has been a part of the Scana group.As at 31st December 2008, the company had 164 employeesand a turnover of SEK 329 million.Market and customersScana Steel Söderfors exports 50 per cent of its turnover.Europe is the largest market, but also China, Japan and USA areimportant markets. Scana Steel Söderfors works in five differentmarket segments: steel, machine, energy, marine and oil & gas.The customers are typical steel makers, machine builders, systemsuppliers, component suppliers and wholesalers. In 2008 thecompany experienced a record-breaking order inflow. Howevertowards the end of the year the market downturn also affectedScana Steel Söderfors. The company has reduced costs andstrengthened market and sales activities to adapt to the currentmarket conditions.ProductsScana Steel Söderfors supplies niche products and the mainproducts are forged or rolled bars and components. The focuson open die forgings with a high degree of technical contentis continuing. Typical products here are shafts, rotors, platesand connectors. Also a high degree of semi-finished billets areproduced and typical here are products in ball bearing steel.Rolled products are found in high alloy steel products suchas round and flat profiles. Typical are bars in different stainlessgrades with emphasis on duplex and super duplex grades. Fora long time an important product has been also high-alloy toolsteels and PM steels in the form of bars, round and flat profiles.During the year, investment decisions were taken to strengthenthe company’s aim to increase the amount of value addedproducts but also to meet the demands from strategiccustomers. The steel mill at Scana Steel Björneborg willincrease its production capacity to be able to supply ScanaSteel Söderfors with billets. A new furnace will be in place atScana Steel Söderfors to increase heating capacity for the forge.The company’s machining capacity will also be increased. Thusthe company is well positioned to increase production andprofitability when the market recovers.Scana Steel Söderfors supplies steel profiles to reputable tool manufacturers and is one of the leaders within the production of equipment to the forest industry.The company specialises in niche products such as billets and sections of high-alloy special steel.

Scana Industrier ASA21Managing director: Leif NæssEmployees: 776Turnover: NOK 245 millionScana steel LeshanLeshan produces rolls for the steel industry and special cast products for the steel, energy, offshore,construction and shipping industries. Leshan Scana is a recognized supplier in the Chinese marketand is among the largest producers in terms of volume in the roll manufacturing industry.Leshan Scana is a Norwegian-Chinese joint venture in whichScana owns 80 per cent and Leshan Municipal State OwnedAsset Business owns 20 per cent. The company is located in thevicinity of Leshan in the Sichuan province of South West China.Leshan Scana is a leading company with regard to theenvironment and has implemented an environmental programmewith other industrial firms in the region to reduce emissions toair. As at 31st December 2008, the company had 776 employeesand a turnover of RMB 308 million.Market and customersThe company mainly delivers to customers in China, and has anumber of the country’s largest steelworks as customers. Thecompany was experiencing an economic boom during the firstthree quarters of 2008 and had our highest ever productionlevel during this period. At the end of 2008, Leshan Scana alsohad one of its largest ever order reserves.In 2008, the company continued to achieve a number of largeorders as reflected in the current order reserve. In recent years,China has evolved as a net exporter of steel. Leshan Scana exportsproducts to Canada, India, Pakistan, Korea, Turkey and Germany.Leshan Scana has experienced only minor effects of the financecrisis. The demand for the company’s core products is expectedto remain high as the Chinese government increase thedevelopment of infrastructure projects in 2009 and 2010.ProductsLeshan Scana produces and delivers cast steel rolls and steelcastings up to 10 tonnes. Roller products include both staticand centrifugally forged rollers and sleeves. Specialised castingsdelivered include nodes and intersections for the constructionindustry, chain wheels for ships, spare parts and castings forturbines, blow out preventors for the oil and gas industry, andcrush plates for the mining and quarrying industry.Scana was a key supplier of among other things, cast fixingdevices to Birdnest Stadium in Beijing, which was the main arenafor the Olympic games in 2008.Leshan Scana will further develop the operation by introducingimproved and new grades in the product mix in order to meetthe requirements for modern, Chinese steelworks. Our productsshall tolerate increased heat, thicker billet rolling and moreextreme conditions.Beijing National Stadium, also known as the Birdnest stadium due to the special nature of its architecture, was built for the Olympic Games in Beijing 2008. Scana’s subsidiary inChina, Leshan Scana, manufactured cast steel construction nodes for the stadium.

22 Scana Industrier ASAbusiness areaMarineThe Marine business area consists of companies that supplyequipment and services for the navigation, automation andpropulsion of ships. The main market of the business area is inthe shipping industry, where shipyards, shipping companies andagencies are all key customers. The business area also suppliesproducts such as valve control systems, which are also suppliedto the oil and gas industries.Strategic positionThe business area is an important market player that can supplycomplete and technical leading solutions, and Scana has a presencein the most central markets. The acquisition of Scana Zamech (2009)is following the group’s strategy for the development of the Marinebusiness area. As a result, we achieve a more complete propulsionarea and also synergy effects within sales, service and purchases. Also,this will lead to increased sales for our steel companies.ProductsScana develops, produces and supplies controllable-pitch propellers,reduction gears, rudders, hydraulic actuators, and manoeuvring andcontrol systems for both new and existing vessels.The newest addition to the business area is, Scana Zamech, whichdesigns, produce and install tunnel thrusters, shafts and bothfixed and manoeuvrable propellers for ships from approximately1,000 tonnes and up to the largest types of ships. Scana Zamech’sproducts are complementary to an already wide variety ofproducts, and enables Scana to deliver manoeuvring systems forall ship sizes. The acquisition makes a good foundation for furtherdevelopment of the propulsion area within Scana. Together withthe existing gear- and propulsion technology from Scana Voldaand remote control systems from Scana Mar-El Scana is now inthe possession of a technological platform which gives a goodfoundation for further development, in line with tomorrowsenvironmental- and marketing demands. The acquisition alsoincreases the level of activity within Scana’s service portfolio.Scana has so far suffered to a limited extent from cancellations inNorway or in the world at large after the financial crisis impact in2008. Scana has few deliveries to the bulk market, the part of themarket that has been influenced most severely. The main part ofScana’s deliveries goes to shipyards in China and Korea that hasa large state ownership. The shipyards are strong and we expectcontinuing positive activity within our market segments.The high level of activity in the Gulf of Mexico and along theBrazilian coast will also affect Scana’s delivery programme. Thehigh level of building activity helps new countries such as Indiaand Vietnam to gradually capture a greater market share.A reduced number of contracts for new ships are expected toturn into a weaker market, which will influence the demand forproducts also from Scana towards the end of 2010 and 2011.But a potential downturn is expected to be temporary. Scanais well positioned to meet the development which is expectedfrom 2012. Scana’s increased efforts within the service and repairarea will decrease the effect of a temporary reduced number ofnew contracts for ships.Financial performanceThe market situation has been good and the companies sawincreased sales and operation profits compared to 2007. Theturnover totalled NOK 636 million; an increase that represents30 per cent, while the operating result of NOK 74 million equalsa 12 per cent operational margin.The financial performance reflects improved margins withinmanufacture of the new and a higher share of service jobs witha higher earnings.At the beginning of 2008, the business area’s order reservesare NOK 783 million, distributed through 2009, 2010 and 2011.The order reserve is regarded as robust against cancellations orpostponements.Customers and marketsThe business area operates primarily in the global shipbuildingand ship repair markets. Customers are shipyards, shippingcompanies, consultancy firms and other system suppliers. Scanahas its own sales offices in Germany, Singapore, Shanghai andKorea. The establishing of a representation office in Shanghai forthe sale and service of gears and propulsion systems has provento be a strategic success, whereby Scana’s position in the Asianmarket is now strengthened both commercially and technically.Through its own facilities and an extensive agent and distributornetwork, the business area has developed a worldwide networkof representation.There has been a high level of activity within ship constructionin both Europe and Asia. Suppliers of propulsion systems haveextensive delivery periods and new contracts have been enteredfor deliveries into 2011.

Scana Industrier ASA23Managing director: Hans Olav KilenEmployees: 26Turnover: NOK 40 millionSCANA MAR-ELScana Mar-El is one of Europe’s leading manufacturers of maritime control systems for propulsionand manoeuvring of ships, and control systems for special applications. The systems are suppliedfor most types of vessel, from fast ferries and yachts to fishing boats, ferries and supply vessels.Scana Mar-El was founded as Mar-El (Maritime Electronics) in1974 at Dalen in Telemark, Norway, where the company is stillsituated and is a major company. Mar-El was taken over in itsentirety by Scana Industrier in the summer of 1996, and changedits name to Scana Mar-El.Since the start in 1974, about 2800 systems have been delivered.Today’s products use the latest technology, and are developedbased on extensive experience with safety and user friendlinessin focus. As at 31st December 2008, the company had 26employees and a turnover of NOK 40 million.Market and customersScana Mar-El operates with its specialist expertise in the globalmarket, where we have observed that packaged solutions arebecoming more and more sought after. Scana Mar-El catersto this demand through strategic collaborations with relevantpartners. Among them is the sister company Scana Volda, whichsupplies gear and propeller equipment, and together with usprovides a complete propulsion system.Our key customers are engine suppliers, gear and propellermanufacturers, as well as shipyards and shipping companies.The systems are supplied to vessels throughout the world,many via Norwegian and European engine, gear and propellermanufacturers. The company holds a significant market position.For instance, we have a market share of about 70 per cent forpropulsion control systems and steering gears for fast ferries withcontrollable pitch propellers, where strategic partners suppliesgear and propeller equipment.ProductsThe company’s main products are:• Maritime control systems for the propulsion and manoeuvringof ships: propulsion systems, rudder control systems and smallersteering gears, thruster control systems and joystick-systems.• Agency: positioning sensors, joysticks/MMI and instrumentation.Scana Mar-El frequently launce new products. For instance, in2008 we launched a new overarching control system with positionhold; a system previously reserved for large ships. Much ofour activity relates to product development, and we are interestedin development projects being carried out in collaborationwith other parties, often customers and users. We currently offercontrol systems for the most common propulsion and manoeuvringunits/systems. In the market for high-tech solutions thatwe are in, further development, and particularly developmentaccording to customer specifications, is essential. Our ongoingproduct development and upgrading is therefore an integralpart of our work. At any time, at least 15 per cent of the staff isdedicated to product development.Neptune Compact Double Panel is the best choicefor fast ferries, like M/S Tidecruise.Brødrene Aa AS of Hyen delivered the passengercatamaran M/S “TIDECRUISE” to Tide Sjø AS in 2008.Tide Sjø is owned by Tide ASA, where the majorowner is Det Stavangerske Dampskibsselskap AS.Scana Mar-El is a leading manufacturer of electroniccontrol systems for propulsion and manoeuvring ofmost types of vessels.

24 Scana Industrier ASAManaging director: Kristian SætreEmployees: 151Turnover: NOK 472 millionScana voldaFrom being a supplier of propulsion systems to shipyards and ship owners in Norway, the companyhas developed into a reputable international player. Within the company’s two business areas, serviceand new sales, 90 per cent of the new sales are exports.Volda Mekaniske Verksted was founded in 1913 in Volda, Norway,and was taken over by the Scana group in 1998. As a result, thecompany changed its name to Scana Volda. Volda MekaniskeVerksted started as an engine factory and later developed toinclude shipbuilding and production of propellers and gears.At the end of the 1980s, the last hull was delivered and theshipyard was removed in 1997. Since 1996, gears and propulsionsystems have been the most important products.Scana Volda has been a Consortial Partner to Caterpillar (MaK)since 1996. Together with Caterpillar and Scana Mar-El, ScanaVolda contributes to a complete propulsion package for ships,consisting of engines, gears, propellers and remote control systems.Market and customersScana Volda has agents, offices and strategic partners in Iceland,the Netherlands, Spain, Singapore, India, China, Korea, the USA,Brazil and Chile. Scana propulsion systems are included indifferent ship designs, and marketed worldwide. Product andconcept development is often done together with designers,where Scana Volda contributes as a consultant.2008 turned out to be a year out of the ordinary in the shippingindustry, with restricted numbers of newbuilds and a seriesof cancellations worldwide. Scana Volda is not untouched bythis situation. However due to a large amount of projects forthe offshore segment, the company avoided the big share ofcancellations within the bulk and cargo segment.The company expects high activity and adequate profits also in2009. Increased share of service and repairs will mitigate some ofthe reductions that are expected within newbuilds towards 2010.ProductsScana Volda develops, designs, produces and sells gear andpropeller equipment for all types of ships, up to sizes of approximately20,000 kW engine output. In recent years, Scana Voldahas produced and assembled the smallest gear sizes in the CzechRepublic. This has given the company the needed productioncapacity and competitive edge as one of the leading suppliers ofgear- and cp-propeller systems. As part of a complete propulsionsystem, the gear and propeller equipment is supplied togetherwith the remote control system to Scana Mar-El.The sales and marketing of services are mainly focussed on thecompany’s own products in the form of start-up, maintenance, replacementsand breakdowns, as well as a concentration on the saleof special services such as alignment, measurements and inspection.In 2008 Scana Marine Service was established – an extendedservice organisation with focus on worldwide sales of servicesand after-sales support. This has contributed to an increasedturnover in 2008.The construction vessel Far Samson is built for Farstad Shippingat STC Norway Offshore’s shipyard at Langsten.The vessel’s main task is to plough pipelines into the seabed.This operation demands immense tractive power, because the vesselshould be able to make 2,5 metre deep ditches in 1,000 metres ofwater. During the test run, the vessel set a tractive power recordwith a constant 423 tonne tractive power. This makes Far Samsonthe most powerful offshore vessel throughout time.Scana Volda has supplied two gears of the TS1400 type toFar Samson. These gears are the largest and most advanced gearsdeveloped at Scana Volda. They transfer a total motor output of26,400 kW.

Scana Industrier ASA25Managing director: Jacek PabianEmployees: 60Turnover: NOK 120 millionScana ZamechScana Zamech is active in the marine propulsion business and designs and manufacturesControllable Pitch Propellers, Fixed Pitch Propellers, Tunnel Thrusters, Shaft Line Systemsand Rudder Arrangements.The history dates back to 1837 when Ferdinand Gotlob Schichauopened a machine workshop “Schichau Werke” in Elblag, Poland.The workshop manufactured elements for steam engines,equipment for sugar factories, oil mills and lumber mills as well ashydraulic presses and rollers. From “Schichau Werke” a few yearslater the first seagoing ship with a steel hull and a propeller waslaunched in 1855.After some changes on the owner side through the years, ScanaIndustrier ASA took over the company through the acquisitionof ABB’s marine businesses in Poland. The product portfolio wasextended and propulsion activities reached large, new customergroups.Market and customersThe company is based in Poland where its 60 employeesperform business activities from four locations in the Gdanskand Elblag. The activities cover a complete customer-orientedprocess, which includes design, manufacturing, installation andcommissioning of products as well as after-sales service. Thecompany’s key customers comprise the main European andAsian shipyards, engine manufacturers, as well as ship ownersfrom all over the world.ProductsThe business scope includes conceptual consultation, projectmanagement, system engineering, equipment delivery, installation,supervision, commissioning and after-sales service for thefollowing products:• Controllable Pitch Propeller systems up to 22,000 kW• Fixed Pitch Propeller systems with a weight up to 150 tonnes• Complete Shaft Line systems including single shafts of amaximum length of 22 meters• Tunnel Thrusters (of controllable and fixed pitch propellertype) up to 3,000 kW• Rudder Arrangements including rudder blades, rudder stocks,rudder pintles• Hydraulically Mounted Couplings• Shaft BearingsService and customer support are an integral part of thecompany’s offer and includes:• Planned repair and dry-docking• On-call services• Spare parts• Training, consulting & monitoringA newly acquired technological platform combined with existinggear and propeller technology from Scana Volda and remotecontrol systems from Scana Mar-El, will allow the company todevelop further in relation to tomorrow’s environmental andmarket related requirements.Shaft line at Maersk DiademaMaersk Diadema is a fully cellular container ship ofdeadweight tonnage 52,701. Her current ship name isMSC SIENA, owned by Hermann Wulff in Germanyand operated by MSC Mediterranean Shipping Co.Stocznia Gdynia in Poland built the vessel in 2006.Scana Zamech has delivered FP propellers, shaft lineand bearings, tunnel thruster with drive and rudderelements (stock, pintle).

26 Scana Industrier ASAManaging director: Ragnar ØhrnEmployees: 65Turnover: NOK 132 millionSCANA skarpenordScana Skarpenord was originally established as a subsidiary of Norsk Hydro, Rjukan Fabrikker inTelemark, Norway in the late 60’s. The company has been on the market with its current productionrange since the middle of the 70’s, and is among the leading suppliers of hydraulic valve systems forthe ship and offshore industry. Scana Industrier took control of the company in 1989.Today, Scana Skarpenord emerges as a modern, effective business,highly competitive also compared to production in Asia. Thecompany is the largest industrial firm in Rjukan.Market and customersThe company’s key customers are shipyards constructing largeships, like tankers, dry cargo ships and larger offshore vessels, likeFPSO (production ships), rigs, and so on.The main market is in Asia, especially China and Korea. Thecompany also supplies equipment to customers in Germany, Spain,Croatia, Russia and North America. The market in Korea is handledby our subsidiary, Scana Korea Hydraulic. Scana Skarpenordsupplies key components and technical solutions, while ScanaKorea Hydraulic in Pusan does sales, engineering and assembly ofthe systems. Aside from the shipyards, the shipping companies areviewed as highly important, because they in many ways affect theshipyards’ and other contractors’ choice of sub suppliers. ScanaSkarpenord will maintain high activity level also in 2009.Products and servicesThe company develops, produces and supplies hydraulic actuatorsand complete control systems for remote control of valvesin cargo, ballast and other systems for ships, offshore vessels andpermanent offshore installations. There are no other concepts ortechnologies that can replace the company’s products today, andthey will remain highly relevant for the market in the foreseeablefuture.The company continually develops and improves the production.The volume of unmanned, automatic production has beenincreased, and our competence within tool alternatives andcutting data is developed continuously.Throughout 2008, the company has invested in three newmachines. These machines have increased our production, andmade it possible to manufacture parts round the clock withseveral unmanned shifts; a purely automatic production.Scana Skarpenord will continue as an important player in themarket. This will first and foremost be achieved by continuallyimproving the production processes and develop good, futureorientedand cost-effective products.Global networkScana has departments in China, Korea and Singapore.Partners in Turkey, Croatia and America also perform service.Our network of agents today covers most of the world’sshipping companies and shipyard nations.Scana Skarpenord is a world leader withindevelopment and production of hydraulicactuators and remote control systems forvalves in ships, offshore vessels and offshoreinstallations.

Scana Industrier ASA27Managing director: mr. H B NohEmployees: 46Turnover: NOK 88 millionSCANA KOREA HYDRAULIC LTD.Scana Korea was established as a joint venture company in 1998. The company was at the time a minorsupplier of Valve Remote Control Systems in Korea. Today, the market share in Korea has alreadyreached approximately 25 per cent. This means that the company has become the 2nd largest localsupplier in Korea.The company has been awarded the SAMSUNG-Q GOLDMARK by Samsung Geoje shipyard, chosen for vendor qualityamong 400 different sub-suppliers. The company’s order intakein 2008 is NOK 300 million, and the order reserve is NOK380 million. As at 31st December 2008, the company had46 employees and a turnover of NOK 88 million, which is animpressive increase of about 40 per cent from 2007.Market and customersScana Korea’s key customers are shipyards that build larger types ofships such as tankers, LNG carriers, LPG carriers, bulk carriers andlarge offshore vessels such as FPSOs (production ships), rigs etc.The main market is currently the shipyards of Hyundai, Samsung,Daewoo, STX, Hyundai-Mipo, Hyundai-Samho, SPP and othermedium and small sized shipyards in Korea. The company expectsthat the activity and outlooks remain firm also in 2009.Products and servicesThe company develops, manufactures and supplies systems forthe remote control of valves in cargo, ballast and other systemsfor ships, offshore vessels and fixed offshore installations. Noother products or technologies can currently be substituted forthe company’s products. They will generate a high level of interestin the foreseeable future.The company has successfully supplied products to several drillships built at Daewoo and to AKPO FPSO built at Hyundaiduring the last couple of years. Thus, the company has receivedtwo huge FPSO projects (Pazflor and Usan) from Daewoo andHyundai respectively. The equipment will be delivered to bothshipyards during 2009. The FPSO projects will be delivered to theowner (TOTAL in France) during 2010.The vessel was delivered to the owner Total in 2008 and operates at the Akpo oil and gas field off the coast of Nigeria. The FPSO is permanently moored in1,325m of water in the Akpo field.The FPSO is 310m long, 61m wide and has facilities to accommodate 240 crewmembers. The hull was launched at Hyundai Samho Heavy Industries inJanuary 2007. The FPSO is now operational and it has a capacity to produce 225,000 barrels of oil equivalent per day.Scana Korea has supplied a sophisticated valve remote control system to the AKPO FPSO.

28 Scana Industrier ASABusiness areaOil & GasThe Oil & Gas activities in Scana were established as a separatebusiness area in 2006. The activities in the business area covera large scope - from design, engineering, consultancy andlaboratory services to production, assembly and testing ofequipment and products, components and parts developedin-house, as well as the maintenance and repair of mechanicalcomponents for the oil and gas industries.Strategic positionThe trend in recent years has been that customers want fewersuppliers who are capable of taking an overall responsibility fora number of disciplines and who also have clear a responsibilityfor quality and timely deliveries through one point of contact.This has led to the consolidation and merging of players in thesupplier industry.Through its own companies, Scana Oil and Gas has establishedan environment that is embedded in the entire value chain.This broad spectrum of expertise and overall focus on the lifecycle of products; from design to operation and maintenance,will strengthen Scana’s competitive position.In 2008, Scana established Scana Offshore Services in Houston.The company is a leading supplier of engineering services,purchases and construction in addition to project managementof blowout preventer systems (BOP). The company deliverssystems to several of the world’s largest drilling contractors, andis a niche-supplier with substantial development potential.During 2009 Scana will establish a business in Brazil, and will thenbe present in all the important oil and gas areas in the world.Through the presence in Brazil, Scana can serve customers in allthe market segments the group operates in (steel and machine,oil and gas, energy and marine).ProductsThe main products for the business area are design andproduction of equipment, testing and laboratory services,marketing and sales, in addition to the maintenance and repairof equipment and steel components.facilities. The customers’ head offices and production facilities arein both USA and Europe, and are served by Scana’s sales andservice offices locally.It is Scana’s goal to increase the activity level towards thesecustomers and to establish a contractual relationship to newcustomers in order to decrease the vulnerability and to increasethe creation of value within the business area.The existence of Scana Offshore Services has given Scana anoperative pierhead in the important petroleum market in theMexican Gulf. Scana Offshore Services has established an officein Singapore to serve the important construction and repairmarket in South- East Asia.Financial performanceThe business area had a turnover of NOK 300 million, where theoperating profit encompasses a larger loss-allocation at ScanaVestby after the bankruptcy of FPSOcean.The other companies in the business area still show growth andgenerate operating margins of about 15 per cent. This is in linewith our goals.During 2008, the companies in the business area also securedseveral strategically important contracts within service, maintenanceand development. The order intake in 2008 was NOK 203million, while the order reserve at the end of the year was NOK61 million. The development in the oil price during 2009 will bedecisive for activity level in the industry. Scana expects somereduced activity levels in the short term, but sees interestingbusiness opportunities in the long term.Offshore loading turret for ”Deep Producer 1”Scana’s materials technology expertise in this business area is alsopivotal to production and product development. The businessarea can easily access large volumes of engineering resources thatare central to Scana’s focus on developing and delivering specialdesigns for the industry.Customers and marketsScana ambition is to achieve a strong market position within thesupply of special solutions to the oil and gas industries.The majority of Scana’s customers are global players in design,production and/or operators of production facilities, drillingand production equipment, as well as manufacturers of subsea

Scana Industrier ASA29Managing director: Ørnulf MyrvollEmployees: 66Turnover: NOK 205 millionScana OffShore vestbyScana Offshore Vestby has for years enjoyed a solid reputation for supporting clients within the targetmarkets of offshore, energy and manufacturing. Based on unique skills in design, engineering, materials,and fabrication, we have developed and delivered components and systems to machine builders,service contractors and operators.Scana Offshore Vestby traces its roots back to 1953. As at 31stDecember 2008, a decision has been made to merge the two100 per cent Scana-owned companies located at Vestby – ScanaOffshore Vestby AS and Scana AMT AS.Scana Offshore Vestby is operated as one unit with competenciesin design, engineering, production and installation for the offshoreindustry. The company also services select customers within theenergy and manufacturing industries.Market and customersScana Offshore Vestby develops advanced products and systemsfor the oil and gas industry. Activity level has been high duringrecent years, however a downturn is expected in 2009. Followingthe bankruptcy petition of a major client in January 2009, thecompany has not managed to replace this activity. Through majorchanges to organisation and increased sales efforts, the companyis competitive and well positioned to take new contracts whenthe market recovers.Products and servicesThe company is particularly strong with regard to advancedmaterials, heavy items, inventive design and engineering solutions,and large and complex products and systems. Scana OffshoreVestby assembles, tests and installs loading and offloading systemsfor offshore production units.In 2008 the service and product portfolio was extended intothe riser segment building on our world-class thermal coatingexpertise. The integration of the engineering and manufacturingenvironments of Scana Offshore Vestby AS will help developthe product and service portfolio towards complete systemsdeliveries.The company also provides a range of mechanical services withingeneral manufacturing, ranging from repair work and overhaulingof machinery to major modifications to mechanical equipment.The company also offers services for hydroelectric turbineswithin the renewable energy sector.The company’s main products and services are:• Hose reels for offloading oil for floating production andstorage units• Linear anchor winches for chains and chain/wire mooringsystems• Turret solutions with pre-machined bearing arrangements• Gas-tight swivels for loading and unloading systems, as wellas for production• Advanced thermal spraying of corrosion protection andwear-resistant materials• Riser repair and refurbishment, and preparation of newitems and components• Long-life deployment machines for USBL transceiversThe FPSO Sevan Hummingbird has an oil storage capacityof 270,000 bbls. The unit has an oil processing capacity of30,000 bbls/day at the Chestnut field in the central North Sea,in a water depth of 120 m.Together with Sevan Marine, Scana has developed themooring systems an the offloading system of oil ontotankers for the installation.

30 Scana Industrier ASAManaging director: Inge KvalvikEmployees: 25Turnover: NOK 41 millionSCANA OFFSHORE TECHNOLOGYScana Offshore Technology primarily carry out maintenance and repairs of equipment for the oiland gas industries, and manufacture tools and equipment for such work. In addition, the companyshall coordinate Scana’s marketing efforts aimed at the international oil and gas industries for products,components and special steel.Scana Offshore Technology was established in December 2005.Scana is now the sole owner. The company shares premises withScana Materials Technology Centre and Scana Wikov at Jørpeland,near Stavanger, where Scana Steel Stavanger also is situated.As at 31st December 2008, the company had 25 employees anda turnover of NOK 41 million.Market and customersThe company’s customers are oil companies, equipmentmanufacturers and drilling companies in the petroleum industry.Scana Offshore Technology had an increase in turnover of 27per cent compared to 2007. This is mainly due to a high level ofactivity and good prices in the market. The company has kept upwith the demand by investing in both new machinery and weldingequipment, employment of mechanical personnel and new toolsand equipment in a new 800 square metres mechanical workshop.ProductsScana Offshore Technology organises its activities in three main areas:• Maintenance and repair of mechanical and hydraulic equipment• Manufacture of components and equipment• Machining and weldingScana Offshore Technology shall primarily maintainand repair equipment for the oil and gas industries.When the company was founded, the intention was to collaborateactively with the other Scana companies – and the mostimportant area is oil & gas. The company coordinates ScanaForum, which is a forum for the exchange of information andstrategies within oil and gas. We create potential through this andhave also increased the level of activity.Scana has a strong market position within the manufacture ofcomponents for the petroleum industry, and will also attain thesame position within maintenance and repair work in close collaborationwith equipment manufacturers. This is a market area withshort delivery deadlines, and the company shall grow in line withits customers and increase the capacity of machinery and personnelaccordingly. Our largest customers, National Oilwell Varcoand the drilling contractor Seadrill, are experiencing an increasingworkload and a major increase in their sales. This in turn means amajor increase for us in the planned upgrades and recertifications.We will be starting to look at new product areas and servicesthat are compatible with the portfolio within heavy drilling andprocessing equipment. One of the areas we are investigatingis the potential for developing various hydraulic tools that willenable oil companies to repair subsea equipment themselves. Inaddition, Scana Offshore Technology has a strong focus on repairsof compensating equipment and marine risers.

Scana Industrier ASA31Managing director: Werner KiefEmployees: 13Turnover: NOK 43 millionSCANA OFFSHORE SERVICESThe company designs lifting and protection equipment for subsea drilling and production systems.In addition, SOS markets Scana’s products in the USA with special attention to steel products.Scana Offshore Services was formed in June 2008 when Scanaacquired BOP Stacking, Inc. Scana Industrier ASA today owns 70per cent of SOS.Market and customersSOS primarily works for international drilling contractors, serviceand engineering companies that are developing systems suchas blowout preventer stacks, used in subsea drilling applications.The company designs special handling equipment that provideslifting and protection of this equipment while subsea. SOSsupports customers worldwide from its locations in Houstonand Singapore.In 2008, we opened up an office in Singapore to further expandinto the worldwide markets. We concentrate on engineeringdesign and fabrication for drilling contractors. We expectexpansion and growth in our Singapore subsidiary for yearsto come.We have expanded our marketing team to promote ScanaIndustries companies in the USA and the global market.Thus the company has identified new global customers andbusiness opportunities for the Scana group worldwide.Products and servicesSOS provides system engineering for the design andmanufacture of equipment for offshore lifting applications.This includes motion compensated lift frames for coil tubing,subsea intervention systems, ROV interfaces, hydraulic hoseassembly (tagging, cut, crimp, test, and installation), emergencyrecovery systems and running tools used in drilling andproduction applications. The company also brokers used subseaequipment and provides refurbishment, testing, and installationservices.Scana Offshore Services was formed in June2008 when Scana acquired BOP Stacking,Inc, Houston The company designs lifting andprotection equipment for subsea drilling andproduction systems.

32 Scana Industrier ASAManaging director: Inge KvalvikEmployees: 2Turnover: NOK 4 millionSCANA WIKOVScana Wikov is one of Norway’s leading suppliers of gears, gear systems, and sells gears either in standardcomponents or as special solutions. Scana Wikov is located at Jørpeland, near Stavanger, together with ScanaMTC and Scana Steel Stavanger. Scana Wikov was founded in 2006. Scana Offshore Technology and WikovIndustry AS (Czech Republic) own 50 per cent each of the company. Scana Wikov is the agent to WikovIndustry for the oil & gas market.Market and customersScana Wikov works within the petroleum, manufacturing andshipbuilding markets. Our main customers are Norwegian andinternational manufacturers of process and drilling equipment. Inaddition, the wind and tidal power industry are important customers.Our major customers are the large winch manufacturer I.P. Huseand Aker Solutions Pusnes, a large winch manufacturer for anchorhandling and mooring winches. The company has entered into aframework agreement with I. P. Huse, which has subsequently beenextended. Scana Wikov has also established a customer/supplierrelationship with several other equipment manufacturers in Norway.Products and servicesScana Wikov mainly sells gears, gear systems and gear parts fordrilling rigs, supply vessels and related ships on a commissionbasis. Scana Offshore Technology carries out service andmaintenance of the gears.Despite our relatively brief existence, Scana Wikov has been wellreceived in Norway. We are now working actively internationally,particularly with customers in the USA. We use Scana’s Oil &Gas offices in Houston to further develop the market there.Scana Wikov carries out the maintenance of gears for clients in the the oil and gas industry.

Scana Industrier ASA33Managing director: Erik ØdegårdEmployees: 17Turnover: NOK 14 millionSCANA MATERIALS TECHNOLOGY CENTREScana Materials Technology Centre is a company with a specialised expertise that stems from themetallurgical laboratory environment at Scana Steel Stavanger AS at Jørpeland. This environmentpossessed a substantial expertise within materials technology at the outset, and by establishingMTC (Materials Technology Centre) it has been strengthened and further developed, thus enablinga significantly increased attention to external customers. The company was founded in 2007.The target of the company is growth and further developmentof the entire Scana group’s activities within oil and gas.The company provides services within metallurgy, NDE(non-destructive examinations), testing of materials, weldingtechniques, corrosion, damage assessments and general materialsadvice. The company has expertise in testing and reclassifyingmaterials both for the onshore and offshore sectors.As at 31 December 2008, the company had 17 employeesand a turnover of NOK 14 million.In 2008, the company has invested in up-to-date analysisequipment, new chemical analysis equipment and SEM (ScanningElectron Microscope). Also, in 2009, further investments willimprove the range of services offered by Scana MTC.Scana MTC has a project-based collaboration with University ofStavanger, NTNU and Sintef to develop new types of materialsand develop the products further. In Sweden, Scana MTChas a collaboration with the Swedish environment through“Jernkontoret”, the Swedish steel producers’ association.Market and customersScana MTC is primarily in contact with customers within theoil and gas sector outside the Scana group. The company offersanalysis, materials control, damage assessments, consultancyservices, NDE services and heat treatment for steel materials.Products and servicesThe company’s main products are:Metallurgy services, NDE (non-destructive examinations),materials testing, welding techniques, corrosion, damageassessment, general materials advice, reclassification and heattreatment.Within its segment, Scana MTC holds a unique position inNorway, not least due to our close relations with the steelmanufacturer Scana Steel Stavanger. This gives Scana MTCa better overview and understanding for the materials. Weexperience an increasing need for our expertise in the market.Some larger companies do not possess the necessary expertisein-house, or they have outsourced it. In many ways, the marketis therefore already there – and all we need to do is improveand increase the understanding that materials technology isimportant.Scana MTC has in 2008 increased the number of employees, andour aim is to grow even more in 2009. Our largest customers in2008 have been, among others, Fabricom, Aker Solutions and theNational Institute of Technology in Stavanger.Scana Materials Technology (MTC) is a specialist company in metallurgy,materials testing and consultancy.

34 Scana Industrier ASAEnvironmental impactScana Industries manufacture and work among other thingswith steel and other alloys. We realise that as a player in thismarket, we contribute both considerably to recycling – andhave discharges to the outer environment. It is a fact that theworld needs steel, and we see it as our task to supply as cleanlya manufactured product as possible, thus securing the smallestnegative impact on the environment as possible. Our presencein China is an example of how we exceed local regulations andhelp set standards high. Our environmental initiative in China isat a European level, and could have been transferred to Norwayfrom day one. This is something we are proud of.STEELSteel production is essence a recycling industry, where a lot of scrapmetal is recycled. On the other hand, energy is spent to recycle.BjörneborgScana Steel Björneborg meets the goals of the Scana group tohave as small an impact on the environment as possible. As aconcrete measure, scrap steel is recycled, and steel for recyclingis chiefly collected from local suppliers, at a distance of maximum150 km. The company is ISO 9001 certified.StavangerThe company is ISO 9001 and ISO 14001 certified. One of ourmain suppliers, FOSECO, has named us the most environmentalfriendly foundry in Europe. This claim is built upon our productionchoices of forming sand, binding agents and hardeners. Thecompany continually employs new routines to reduce negativeimpact on the environment, be it waste management, filteringand reductions. In 2006 the company published an environmentalreport that is being adopted. Measurements as to its successare done regularly by West-lab according to internationalstandards. The company is licenced to manufacture by Statensforurensningstilsyn, and the regulations on emissions to air andland deposits become more and more strict.Jørpeland KraftIn connection with the licencing award, the Norwegian Oiland Energy Department stated in their press release that thedevelopment takes care of the many different interests inJørpelandsvassdraget in a good way: “The development willincrease access to renewable energy, and is a good contributionto better the power situation without any new [environmental]interventions”. The chosen development alternative secures agood flow of water in the river, ensuring important environmentalvalues connected to fishing, bathing and outdoor life.SöderforsThe production itself at Söderfors has no negative discharges.The waste from the production is scrap steel/metal, and this issold on as scrap metal; something that is both environmentallysound and also provides income. A cleaning plant for coolingagents are installed, and measurements show that the waterthat is discharged is cleaner than the water influx. The companyuses electrical power for the production and oil heating forheating the ovens. The company’s waste management adheres toNorwegian laws and regulations.BooforgeBooforge is a company with long traditions, but worksdeterminedly towards modernising and reducing any negativeimpact on the environment. In the recent years, the companyhas made rather large environmental changes that has benefitedthe entire local community, and also changed routines regardingproduction. We also make changes to lessen energy consumption.LeshanLeshan Scana is situated within a Chinese town of about 200,000people. The company was earlier an old state driven businessthat was the reason for a great deal of pollution, mainly becauseeverything was coal based. Around the turn of millenniumthe company converted to electrical and gas power, and bythe end of 2007, a dust collection system was installed for theentire company. Leshan Scana is today a pioneer regardingenvironmental questions, and initiated an environmentalprogramme also for other industrial businesses in the regionto lessen emissions to air. The company now runs entirely onhydropower generated from a nearby river. The Sichuan provinceis also a large producer of natural gas.MARINEScana’s marine business areas works for the most part withinhigh-technological manufacture, which has no or little negativeimpact on the environment.VoldaScana Volda’s production yields products that are contributingto the protection and safeguard of the environment, crew andload. Among the products, we find emergency electromotorsfor chemical tankers and flexible solutions to make engines runmore environmentally friendly. Optimisation of engine usage is acontinuing ambition for the company.Mar-ElScana Mar-El does not have any activity that pollutes, and allwaste management adheres to Norwegian laws and regulations.SkarpenordThe production of hydraulic actuators and systems atSkarpenord yields no negative discharges. The waste from theproduction is scrap iron / metal and is sold as scrap metal. This isboth environmentally friendly and provides income. The companymainly uses electrical power for the production, but also somediesel fuel is used for heating the production halls.ZamechA newly acquired technological platform combined with existinggear and propeller technology from Scana Volda and remotecontrol systems from Scana Mar-El, will allow the company to

Scana Industrier ASA35Leshan Scana meets the highest international HSE standards and maintains a zero emission environmental policy.develop further in relation to tomorrow’s environmental andmarket related requirements.OIL AND GASOffshore TechnologyScana Offshore Technology is in the centre of the recyclingbusiness: we repair equipment. The company is ISO 9001certified. We regard our activity as having no or very littlenegative impact on the outer environment, but we continuallymonitor and prepare new measurable standards to how ouractivity may have an impact on the environment.Materials Technology CentreScana MTC has only a small impact on the outer environment.This happens through our non-destructive testing (NDT). Inthis process, chemicals are used in a controlled environmentto measure the surface of steel constructions. After use, thechemicals are handled and returned as toxic waste. We have aconstant focus on control of chemicals.WikovScana Wikov supplies on commission basis, and thus hasno environmentally negative production. We neverthelesswork to influence our supplier to continually have a focus onenvironmental measures where possible.Offshore VestbyThe company was established in 1953, but has moved to modernproduction halls. This allows for a concisely controlled productionenvironment, and the company has today no negative dischargesor emissions to the environment. The engineering and designbranch has no negative impact on the outer environment.Health, environment and safety (HES)The group consists of companies that affect the outerenvironment through noise and discharges/emissions. The groupis licenced for its activities and the impact on the environmentis not regarded as exceeding the discharge permissions. Thegroup works continually to reduce discharges/emissions, wasteto deposits and other negative environmental impacts. Residuefrom the production is waste managed and handled according toregulations, in addition to being recycled where applicable. Thecompanies within the steel business area buys large quantities ofscrap for remelting, and is thereby also in the recycling industry.

36 Scana Industrier ASAACCOUNTS 2008Directors’ report 2008About the businessScana Industrier ASA (Scana) is a Nordic industrial groupoperating in three business areas: Steel, Marine and Oil & Gas.The main products in the Steel area are the production ofcustomised steel forgings and castings for the oil and gas, energy,marine, machine and tool industries. The Marine area developsand manufactures gears, propulsion systems and valve controlsystems for ships and offshore vessels, in addition to offeringservice and after sales services. The main products in the Oil &Gas area are design and production of components and systems,laboratory services and the maintenance and repairof equipment in the oil and gas industry.The companies in the three business areas provide products andsystem solutions in four market segments, namely marine, oil andgas, energy and steel and machinery.Scana’s technology, unique expertise in engineering materialsand extensive production experience form the basis of ourcompetitive power. Our aim is to be the preferred supplierfor leading companies within our market segments.The group’s head office is in Stavanger. The group has operativecompanies in Sweden, Norway, China, Poland, South Korea, theUSA and Singapore. Scana is also represented with its own salesand service companies in a number of countries.2008 was a record year for the group’s turnover and operatingprofit. This confirms that the industrial choices made bythe company in recent years have been right. However, theinternational financial crisis is affecting Scana’s order reserve.The total order intake of NOK 2 477 million is a decline of 23per cent compared with 2007. The order reserve at the end of2008 was NOK 2 096 million, which is a decline of 9 per centcompared to 2007.The group is implementing a number of measures to addressthe challenges and opportunities as a result of the financialcrisis. This includes stepping up the marketing and sales efforts,manpower reductions and cost-cutting, restructuringof businesses and acquisitions/strategic collaborations.Scana’s main products are well diversified, niche-oriented marketleaders within their segments. The group is therefore wellequipped for the future. Despite this, the international financialcrisis is expected to reduce activity somewhat, although theeffect for 2009 will be limited since much of the productionhas already been sold.AccountsGoing concernIn accordance with section 3-3 of the Accounting Act (Norway),we confirm that the accounts have been prepared on the basisof the going concern assumption, and that this assumption isvalid.IFRSInternational Financial Reporting Standards (IFRS) are used as theprevailing accounting principles for the consolidated accounts.The standards are approved by the EU.Financial performanceThe group continued its positive development throughout 2008,and achieved the the highest turnover and operating result in thegroups history. Turnover was NOK 2 896 million compared withNOK 2 469 million in 2007, which is an increase of 17 per cent.The groups profit before depreciation and amortization wasNOK 350 million and operating profit was NOK 277 million.This is an improvement of respectively NOK 24 million andNOK 11 million.The improved result and growth in turnover are largely relatedto a high utilisation of capacity internally and a good productcomposition. The turnover growth is evenly distributed betweenmarket growth and price increases.A key customer in the Oil & Gas area went bankrupt and asa result the group made a larger provision for potential lossesin 2008. The operating margin was subsequently 10 per cent,compared with 11 per cent in 2007. Without this provision forloss, the operating result would have been more than 11 percent.The group had net interest expenses of NOK 23 million. Scanahedges all major contracts in foreign currency. Towards yearend 2008 the Norwegian kroner were considerably weakenedcompared to foreign currency. This led to a temporary change inthe value of the group’s currency contracts amounting to minusNOK 150 million. This change in value is by year end unrealizedbut should be expensed according to IFRS, despite it has no casheffect. By a strengthening of the Norwegian kroner compared toforeign currency the change in the value of currency contractswould have led to a positive effect in the finance result.The result before taxes was NOK 75 million. This year’s

Scana Industrier ASA37expensed taxes were NOK 15 million which is 20 per cent ofthe result before tax. The tax expense consist of NOK 57 millionin tax payable for the group’s Swedish and Chinese operationsadjusted downwards for changes in deferred tax of minus NOK42 million. The group still has a loss carry-forward of NOK 189million linked to the Norwegian operations.The group’s total net profit was NOK 60 million, of which NOK45 million is assigned to the owners of Scana and NOK 15million to minority interests. This constitutes earnings per share ofNOK 0.27, compared with NOK 1.11 in 2007. Earnings per sharebefore adjustment for temporary changes in value of currencycontracts would have been NOK 0,91. As at 31 December2008, there were 167 333 750 shares issued.Balance sheetThe balance sheet totalled at 31 December 2008 NOK 2 248million, which is an increase of NOK 344 million compared with31 December 2007. The change is due to increased investmentsand a generally higher level of activity in the group.At the end of 2008 the group’s reported interest-bearing debtnet of cash and cash equivalents were NOK 472 million. Bookvalue of the gross interest-bearing debt at the end of 2008was NOK 611 million which is an increase of NOK 116 millioncompared with 31 December 2007. Loans and short-term creditfacilities were reduced by NOK 45 million. The board believesthat the capital structure provides good flexibility for furthergrowth through acquisitions and investments. The increase inthe short and long term debt after adjusting for the temporarychange in value of the currency contracts were respectively NOK96 million and NOK 48 million.The book value of shareholders’ equity as at 31 December 2008was NOK 723 million, which equates to an equity ratio of 32per cent. Excluding the temporary change in value of the groupscurrency contracts, the book value of the equity amounts toNOK 4.96 per share and an the equity ratio would have been38 per cent. At the end of 2007, book value of the equity wereNOK 724 million and the equity ratio was 38 per cent.Financial instruments are valued at fair value. If the change in fairvalue satisfies the IFRS requirements for hedge accounting, thechange in value is recorded against equity. The equity was reducedby NOK 22 million in 2008 as a result of such changes in valueand the recognised equity from such changes totalled minusNOK 7 million at the end of the year. Translation differences andexchange effects increased the equity in 2008 by NOK 56 million.Intangible assets as at 31 December 2008 were recorded atNOK 132 million, of which goodwill amounted to NOK 83million. The increase in 2008 of NOK 53 million is mainly linkedto the acquisition of Scana Offshore Services Inc. and recogniseddevelopment costs.Cash flowThe operating profit in 2008 was NOK 277 million afterdepreciation and amortizations which totalled NOK 74 million.Net cash flow from operations was NOK 147 million. The groupworks actively to reduce the working capital.Capitalized expenses and investments in fixed assets totalledNOK 170 million, of which investment in the Swedish steelcompanies is the most important item. The group purchasedScana Offshore Services in Houston, and the cash effect of thepurchase were minus NOK 30 million. The net cash flow frominvesting activities totalled at minus NOK 199 million.The net cash flow from financing activities was NOK 5 million,and the group’s net cash flow in 2008 was minus NOK 46million. The group’s cash and cash equivalents totalled NOK 139million at the end of the year.Capital structureThe group made a large withdrawal on the available creditfacilities towards the end of 2008 in order to strengthenthe operational flexibility and to finance parts of an ongoingextensive investment program.No increase in capital was carried out in 2008. A share optionprogramme of up to NOK 1.5 million shares is aimed at senioremployees. A net total of 300,000 of the share options wereissued in 2008 and 900,000 were issued in 2007. The optionscan be exercised in 2010. Otherwise, there have been no othercircumstances that affect the company’s capital structure in 2008.Change of accounting principleUntil 2007 the group classified exchange gains/losses resultingfrom operations as operating items. From the first quarter of2008 the exchange gains/losses are classified as financial items.The corresponding numbers for 2007 and 2006 have forcomparison reasons been subject to change. Scana decidedearly in 2008 to reclassify these items from operating items tofinance items in order to reduce fluctuations to the operatingresult. In 2008 the financial items have a considerable effecton the accounts, and the effect consists mainly of a unrealizedtemporary change in the value of the groups currency contracts.Steel areaThe steel area companies all specialise in different processes andproducts. Production takes place at Scana’s own productionfacilities, which include melting plants, forges, rolling mills,foundries, and heat treatment and machining units. Productionis of a high standard, and complies with ISO-certified qualityassurance systems.Turnover in 2008 was good, and totalled NOK 1 987 million, up15 per cent compared with 2007. The operating profit was NOK317 million, which equates to an operating margin of 16 per cent.Operating profits and operating margins of this magnitude are

38 Scana Industrier ASAvery satisfactory and show that the business area is competitiveand has succeeded in the efforts of creating the right productmix and the efforts to increased the capacity utilisation.The prices of scrap steel and electric power fell considerablytowards the end of 2008 from the record quotations earlierin 2008. The prices of precious alloys experience a smallerreduction compared with the record quotations early in 2008.The order intake for 2008 totalled at NOK 1 886 million, down9 per cent from 2007. The order reserve at the end of 2008 wasNOK 1 252 million; an increase of NOK 73 million comparedto 2007. The international financial crisis affects the steel andmachinery market segment and a downturn is expected forScana in Europe. However, Scana’s activity in China is expectedto continue at a satisfactory level since Scana’s products areproving successful in relation to the infrastructure expansionsinitiated by the Chinese state. Only a minor reduction in activityfor Scana’s steel companies is expected for the marine segment.The oil and gas segment is expected to be reduced somewhatfrom the second quarter of 2009 as a result of lower oil pricesand time lags in projects. The demand and level of activity withinthe energy area are expected to be extremely good, and energyis therefore regarded as a key market for Scana in the years tocome.Overall, a poorer order intake and reduced profit margins areexpected for Scana’s steelworks in 2009 and 2010 as a result ofthe international financial crisis. Investments in Scana’s Swedishsteel companies will streamline production, reduce risk andincrease capacity in the long term with respect to strategicallyimportant customers. High demand within the energy segmentwill offset some of the reduction in other segments.Marine areaThe companies within the marine area develop and manufacturegears, propulsion systems and valve control systems for shipsand offshore vessels, in addition to offering service and aftersales services. Customers are shipyards, shipping companies,engine suppliers and other system suppliers. The business area isparticularly well represented in Asia for sales and service with itsown offices and agents, and is also represented in other parts ofthe world.Turnover was NOK 636 million in 2008, which is 30 per centhigher than in 2007. The operating profit totalled NOK 74 millioncompared with NOK 34 million in 2007. The increase is partlydue to increased margins on new constructions and a highershare of revenues from service and maintenance. The operatingprofit is also positively affected by a strengthening of the EURand USD against the NOK since the majority of contracts aredenominated in these currencies.The market situation has been good throughout the year.However, the financial crisis has also led to cancellations anddelays in the global marine industry. However, Scana’s operationshave only been affected by cancellations to a limited extent.The part of the market that is most influenced by the marketsituation is the bulk market, where the group has very littleactivity. The biggest deliveries are to shipyards in China and Koreawith a large degree of state ownership. These shipyards are solidand the group expects the high level of activity to continue. Theorder reserve fell in 2008, but is still considered to be good.Large parts of Scana’s capacity within the business area has beensold for 2009. For 2010,,the group has orders which utilize halfthe production capacityAt the end of 2008, the order reserve was NOK 783 million,which is a reduction of 24 per cent compared with 2007. Theorder intake in 2008 was NOK 389 million, down 53 per centcompared with 2008. The reduced order intake was anticipatedand is related to the reduction in the number of contractsglobally. Scana expects the low level of activity on the supplyside to continue in the first half of 2009. A certain recovery isexpected in Scana’s order reserve in the second half of 2009,which will utilize the group’s production capacity in 2010. Theacquisition of Scana Zamech will enable Scana to offer design,production and installation of tunnel thrusters, shafts and bothfixed and manoeuvrable propellers for ships from approximately1,000 tonnes and up to the largest types of ships. In the longterm, this will constitute a positive contribution to Scana’scompetitive power.Oil & Gas areaThe main products for the Oil & Gas area are design andproduction of components and systems, laboratory servicesand the maintenance and repair of equipment for the oil andgas industry. In the second quarter of 2008, Scana acquired theHouston-based BOP Stacking Inc., now known as Scana OffshoreServices Inc. The company has extensive expertise withindesign and project management related to blow out systems,and supplies systems to rig owners and drilling contractors. Thecompany has established an office in Singapore, which givesScana direct contact with customers in the world’s largest marketfor oil and gas.The business area had a turnover of NOK 300 million in 2008compared with NOK 281 million in 2007. The operating resultwas minus NOK 85 million compared with positive NOK39 million in 2007. The negative development is due to thedevelopment, production and installation of the loading buoysystem for FPSOcean’s “Deep Producer 1”. The project istechnologically innovative but also complex.At the end of 2008 Scana entered into an agreement involvinga final settlement for development expenses and outstandingreceivables relating to the work on “Deep producer 1”. But earlyin 2009 FPSOcean filed a bankruptcy petition after lacking thefinancing for the final completion of the ship. Scana consequently

40 Scana Industrier ASAAt the end of 2008, Scana reduced manning levels in some of thegroup companies in Sweden and Norway by approximately 150.This was due to the change in the level of activity. The workingenvironment and collaboration with the employee organisationsare considered to be good.Women representation were 40 per cent in Scana’s executiveboard. Women are also represented in the management teamsof the group’s subsidiaries. However, Scana consists largely ofproduction units, where there have traditionally been a largeproportion of men. Women account for around 25 per cent ofthe white collar staff in the subsidiaries.Health, safety and environment (HSE)The number of lost-time injuries in 2008 was 47 (of wich twoin China), compared with 39 in 2007. Actual working hourstotalled 3 635 242 in 2008, compared with 3 652 864 in 2007.There were no isolated serious industrial accidents at the group’sfacilities. The board is satisfied that the company has not hadany serious industrial accidents and that HSE measures aresystematically undertaken in all of the group’s activities.Absence due to illness was 3.0 per cent in 2008 compared with3.3 per cent in 2007. The absence in the operative subsidiariesvaried between 2.1 and 8.4 per cent.The group has obtained the necessary licences for its activitiesand does not affect the external environment beyond thedischarge permits granted by the authorities. The group iscontinuously working on limiting discharges to the environment,waste to landfills and other negative environmental effects. Theremainder of the waste from the production are sorted andhandled in accordance with regulations, in addition to some of itbeing recycled. Companies in the steel area buy large quantitiesof scrap for remelting. Scana is therefore also a significantrecycling company.Research and developmentScana spends up to 3-5 per cent of its turnover on research anddevelopment. The work is related to product development inoil and gas, marine and steel, and in HSE in order to reduce thecompany’s impact on the external environment.OutlookThe main aim of the group is to increase the shareholders’ value.The following primary strategies have been determined on thisbasis:1. Continued organic growth in all business areas2. Maintain a good operating margin and effective financialmanagement3. Strengthen the group’s strategic position through acquisitions- in order to strengthen the market position- in order to increase capacity- in order to supplement the product range or value chain4. Develop the repair and service concept within the marine areaand to the oil and gas industriesThe board believes that the achievement of targets is good inrelation to the main strategies. With regard to 2009, the boardplaces special emphasis on ensuring effective sales work, effectiveoperations and financial management in light of the challengesdue to the financial crisis. The company expects the strong resultsin 2008 to be somewhat reduced in 2009 and 2010 due to theglobal financial turbulence, but also anticipates that the strategywill lead to a positive profit performance once the financialunrest diminishes.Market developmentFor Scana, the demand was higher in 2008 than in previous years.On the other hand the financial turbulence in the global markethas from the end of 2008 led to a lower level of activity withinsome of Scana’s market areas.With regard to the marine area a reduced number of contractsis expected, which will lead to a reduced level of activitycompared to the recent years very high level of activity. In2009 Scana expects a temporary reduction in the demand formarine products from the groups steel companies. For Scana’smarine companies it is expected a continued high level of activitythroughout 2009, but with a decline in the rate of activity fornew contracts from mid-2010. Scana’s increased efforts towardsservice and maintenance works may compensate for some ofthe reduction in new contracts. Through the acquisition of ABB’sbusiness in Poland (Scana Zamech) early in 2009, Scana increasedits market potential for propulsion systems by being able to offercomplete systems and installations for considerably larger shipsthan before.Within the oil and gas area Scana has in the recent yearsdeveloped several advanced products and systems which havecreated interest in the marked. Multidisciplinary experience andconsiderable knowledge within materials technology and theopportunity for in-house production of special components giveconsiderable future possibilities for both already developed nicheproducts and for products under development. Scana expects asomewhat lower level of activity in the market area oil and gasin 2009 compared to recent years, but expects increased orderintake, especially to the steel companies from the second half of2009. The level of activity for maintenance is expected to be inline with 2008.Within the business area energy Scana anticipate increasedlevel of activity in 2009. Especially it is expected increaseddemand for shafts for large windmills. Scana unti one of veryfew manufacturers in the world with the production capacityto supply shafts for such windmills. The company also hasconsiderable competitive power as a suppler of generators andproducts within power production from a number of energysources.

Scana Industrier ASA41Within products for steel and machinery, Scana has concentratedthe production on wear-resistant parts, rolls, castings, roadclearance equipment, blocks, tool steel, stainless steel and armsfor forklift trucks. The financial crisis has led to a considerablylower level of activity within a number of these areas, and thegroup expects this situation to remain throughout 2009. Forsome of the products the rate of activity is unchanged. Roadclearance equipment and rolls to Chinese steel companies areexamples of products which so far has not been influencednegatively by the current market situation.Scana enters 2009 with a still high order backlog and the ordersituation for the group’s main products is overall satisfactory for2009. The differences between the groups subsidiaries are onthe other hand increasing and it is expected that the financialcrisis will lead to lower order intake which throughout 2009 willgradually result in lower turnover and a lower operating resultin 2009. The measurements which the group implements inthe different subsidiaries will on the other hand ensure that thegroup delivers satisfactory results in 2009. The group is also wellpositioned to meet a future increase in activity.Appropriation of earningsThe net profit assigned to the owners of the parent companywas NOK 45 million, giving earnings per share of NOK 0.27. Theresult per share after adjusting for the temporary change in valueof currency contracts were NOK 0.91. The parent company,Scana Industrier ASA, achieved a net profit of NOK 155 million.The board will propose to the Annual General Meeting to pay adividend of NOK 0.30 per share; a total of NOK 50.2 million, inaddition to the allocation of 3 164 931 own shares. Further it isproposed that NOK 104.5 million is transferred to other equity.Stavanger, 1 April 2009frode AlhaugChairman of the boardJohn Arild ErtvaagBoard memberMari Skjærstad Kristin Malonæs Bjørn Dahle Rolf RoverudBoard member Board member Board member CEO and Group chief executive

42 Scana Industrier ASAScana group Profit & Loss AccountPeriod 1 January - 31 December (thousand NOK) Note IFRS 2008 IFRS 2007 IFRS 2006Revenue:Turnover 3/13 2 874 526 2 447 073 1 894 114Other operating income 5 21 517 17 301 19 392Gain on disposal of fixed assets 9 75 4 665 1 289Total revenue 2 896 118 2 469 039 1 914 796Operating costs:Raw materials and consumables 12 1 323 586 1 103 546 863 292Change in inventory of FG and WIP 12 -18 929 -14 920 -71 726Employment costs 10/11 647 925 553 309 460 999Depreciation and amortisation 8/9 73 739 56 298 47 841Other operating costs 5/13/21 593 123 504 934 406 239Total operating costs 2 619 444 2 203 167 1 706 645Operating profit / loss ( - ) 276 674 265 872 208 151Financial income and expenses 17/23Income from interests in associated companies 4 809 2 510 687Interest income 17 062 13 398 7 107Interest expense 17 -39 832 -32 113 -22 844Currency gain / loss ( - ) -178 511 -4 206 13 196Other financial income / expenses ( - ) 5 -1 406 -6 553 1 977Net financial income / expenses ( - ) -201 878 -26 964 124Profit / loss ( - ) before tax 74 796 238 908 208 275Taxation 6 15 026 42 225 20 020Profit / loss ( - ) 59 770 196 683 188 255Attributable to:Equity holders of the parent 45 078 185 239 174 075Minority interests 14 692 11 444 14 180Net profit / loss ( - ) 59 770 196 683 188 255Earnings per share 7 0.27 1.11 1.04Diluted earnings per share 7 0.27 1.11 1.04Earnings per share excl. financial instruments 0.91 1.08 1.04

Scana Industrier ASA43Scana group Balance sheet(thousand NOK) Note IFRS 31.12.08 IFRS 31.12.07 IFRS 31.12.06Fixed assets:Intangible assets 8 131 799 78 688 53 460Property, plant and equipment 9 695 951 561 836 510 841Deferred tax assets 6 38 619 0 0Shares in associated companies 4 12 251 10 435 9 517Other shares 4 240 142 204Total fixed assets 878 860 651 101 574 022Current assets:Inventory 12 483 156 391 633 343 704Trade debtors 13 670 850 552 590 466 796Financial instruments 14 6 647 39 869 20 350Other current assets 14 69 503 62 730 64 557Cash and cash equivalents 15 138 884 205 576 89 704Total current assets 1 369 040 1 252 398 985 111Total assets 2 247 900 1 903 499 1 559 133Equity:Paid-in capital 16 325 775 327 588 326 242Retained earnings 355 389 378 993 253 122Equity before minority interests 681 164 706 581 579 364Minority interests 41 778 17 182 37 249Total equity 722 942 723 763 616 613Non-current liabilities:Interest-bearing loans and borrowings 17/21/23 499 389 404 848 270 221Pension obligations 11 19 502 15 922 18 127Deferred tax liability 6 51 555 62 685 40 116Financial instruments 19 47 548 2 082 0Other non-current liabilities 19 398 609 912Total non-current liabilities 618 392 486 146 329 376Current liabilities:Interest-bearing loans and borrowings 17/21/23 111 909 90 238 143 607Trade payables 20 277 329 242 765 218 808Advances from customers 13 113 900 136 155 57 765Taxes payable 6 40 062 19 402 15 204Financial instruments 18 112 124 11 363 15 625Other current liabilities 18 251 242 193 667 162 135Total current liabilities 906 566 693 590 613 144Total equity and liabilities 2 247 900 1 903 499 1 559 133Key figures:Equity ratio 32 % 38 % 40 %Equity ratio excl. financial instruments 40 % 37 % 39 %Gross interest-bearing debt 611 298 495 086 413 828Net interest-bearing debt 472 415 289 511 324 125Gearing / debt on equity 0.8 0.7 0.7

44 Scana Industrier ASAScana group Cash flow STATEMENT(thousand NOK) IFRS 2008 IFRS 2007 IFRS 2006Cash flow from operating activities:Profit / (loss) before taxes 74 796 238 908 208 275Tax paid -32 976 -22 407 0Gain (-) / loss on sale of fixed assets 150 -3 665 -1 289Currency exchange differences 152 668 -16 019 -15 534Depreciation and amortisation 73 739 56 298 47 841Change in trade debtors -140 515 -7 405 -121 294Change in inventory -91 523 -47 929 -77 064Change in trade payables 34 564 23 957 61 740Change in other current liabilities and accruals 75 991 59 964 23 433Net cash flow from operating activities 146 894 281 702 126 108Cash flow from investing activities:Proceeds from sale of property, plant and equipment 2 400 7 502 11 525Purchase of property, plant and equipment -169 703 -136 274 -93 156Sales of business 0 323 0Investments in business -31 272 -13 300 -41 958Net cash flow used in investing activities -198 575 -141 749 -123 589Cash flow from financing activities:Proceeds from long-term borrowings 140 000 430 537 35 786Repayment of long-term borrowings -45 459 -295 911 -61 803Dividend -83 667 -55 220 -26 774Buyback of own shares -27 119 -53 995 0Net increase / (decrease) in short-term borrowings 21 671 -53 370 20 599Net cash flow from / (used in) financing activities 5 426 -27 959 -32 192Net cash flow -46 255 111 994 -29 673Cash and cash equivalents at 1 January 205 576 89 704 119 097Net foreign exchange difference 20 437 -3 878 -280Cash and cash equivalents at 31 December 138 884 205 576 89 704Change in cash and cash equivalents -46 255 111 994 -29 673Unused credit facilities are not included in the amount of cash and cash equivalents.The cash flow statement has been prepared using the indirect method.

Scana Industrier ASA45Scana group Change in equityReductionofsharepremium Currency Reservesaccount Other trans- forIssued Own Share not paid-in Retained lation change Minority Totalcapital shares premium registered capital earnings reserves in value Total interest equityAt 31 December 2006 IFRS 209 167 0 117 075 -117 075 117 075 241 711 6 199 5 212 579 364 37 249 616 613Profit for the year 185 239 185 239 11 444 196 683Reduction of share premiumaccount, not registered -117 075 117 075 0 0Share option programme 850 850 850Buyback of own shares -3 945 -50 050 -53 995 -53 995Sale of own shares 3 865 576 49 059 53 500 53 500Minority interest acquisitions 0 -31 511 -31 511Currency effects on netinvestment in foreign subsidiaries 14 587 14 587 14 587Foreign currency translation -27 730 -27 730 -27 730Change in market valueof cash flow hedges 9 986 9 986 9 986Dividend -55 220 -55 220 -55 220Equity at 31 December 2007 209 167 -80 0 0 118 501 370 739 -6 944 15 198 706 581 17 182 723 763Reductionofsharepremium Currency Reservesaccount Other trans- forIssued Own Share not paid-in Retained lation change Minority Totalcapital shares premium registered capital earnings reserves in value Total interest equityAt 31 December 2007 IFRS 209 167 -80 0 0 118 501 370 739 -6 944 15 198 706 581 17 182 723 763Profit for the year 45 078 45 078 14 692 59 770Share option programme 2 063 2 063 2 063Minority interest acquisitions 0 9 904 9 904Buyback of own shares -3 876 -23 243 -27 119 -27 119Currency effects on netinvestment in foreign subsidiaries -24 133 -24 133 -24 133Foreign currency translation 84 338 84 338 84 338Change in market valueof cash flow hedges -21 977 -21 977 -21 977Dividend -83 667 -83 667 -83 667Equity at 31 December 2008 209 167 -3 956 0 0 120 564 308 907 53 262 -6 779 681 164 41 778 722 942

48 Scana Industrier ASAResearch and development costsResearch and development costs are expensed as incurred. An intangible assetthat results from development expenditure in an individual project is capitalisedwhen the following can be demonstrated: the technical feasibility of completingthe development of the intangible asset so that it will be available for use orsale, its performance potential and its potential to use or sell the asset, how theasset will generate future economic benefits, that it has the resources neededto complete the development of assets and to reliably measure the developmentcosts. Capitalised development costs are entered in the balance sheet atacquisition cost minus accumulated depreciation and write-downs. Capitaliseddevelopment costs are depreciated on a linear basis over the asset’s estimateduseful life. Any expenditure capitalised is amortised over the period ofexpected future sales from the related project.The book value of development costs is reviewed for impairment annually ormore frequently when an indication of impairment arises during the reportingyear. Gains or losses arising from the disposal of an intangible asset are calculatedas the difference between the net disposal proceeds and the book value,and are recognised in the profit and loss account.Write-down of assetsFinancial instrumentsFinancial instruments that are not booked at fair value are reviewed at eachbalance sheet date in order to identify any decrease in value.Other fixed assetsAn assessment of write-downs on other fixed assets is made when there areindications of a reduction in value. If an asset’s book value is higher than theasset’s recoverable amount, the asset will be written down via the profit andloss account. The recoverable amount is the higher of the fair value less salescosts and the utility value (the discounted cash flow from continued use).The fair value less sales costs is the amount that can be obtained from a saleto an independent third party minus the sales costs. The recoverable amountis determined separately for all assets but where this is not possible it is determinedtogether with the cash-generating unit to which the assets belong.With the exception of the write-down of goodwill, write-downs recognisedin the profit and loss accounts for previous periods are reversed when thereis information that the need for the write-down no longer exists. The reversalis recognised in the profit and loss account. However, no reversal takes placeif the reversal leads to the book value exceeding what the book value wouldhave been if normal depreciation had been applied.Income taxTaxes in the profit and loss account are the sum of tax payable and changes indeferred tax.Current tax assets and liabilities for the current period and prior periods arevalued at the amount that is expected to be paid from or to the tax authorities.The tax rates and tax laws used to estimate the amount are those that are inforce or substantively in force on the balance sheet date.Deferred tax/tax assets in the balance sheet are carried at nominal value andcalculated based on temporary differences between values for assets and debtfor tax and accounting purposes on the balance sheet date, adjusted for losscarried forward for tax purposes.Deferred tax assets are recognised when it is probable that the group will havesufficient tax-related profit in subsequent periods to utilise the tax advantage.The companies recognise previously non-recognised deferred income tax assetsto the extent it has become probable that they will be utilised. Similarly, thecompanies will reduce deferred income tax assets recognised in the balancesheet if it is no longer considered probable that they will be utilised.Current and deferred income taxes are recognised directly in equity to theextent they are related to equity transactions.ProvisionsProvisions are recognised when the group has an obligation (legal or selfimposed)as a result of a past event, it is probable that an obligation must beredeemed through economic benefits and when a reliable estimate can bemade of the amount of the obligation. Where the group expects some or allof a provision to be reimbursed, for example under an insurance contract, thereimbursement is recognised as a separate asset but only when the reimbursementis virtually certain. The expense relating to any provision is presented inthe profit and loss account net of any reimbursement. If the effect of the timevalue of money is material, provisions are discounted using a current pre-taxrate that reflects the risks that are specific to the relevant liability. Wherediscounting is used, the increase in the provision due to the passage of time isrecognised as a financial expense.A guarantee provision is recognised when the underlying products are sold. Theprovision is based on historical information about guarantees and a weightingof possible outcomes against their probability of occurring.Interest-bearing loans and borrowing costsLoans are recognised at the original amount received, less directly attributabletransaction costs. After initial recognition, interest-bearing loans and borrowingsare subsequently measured at amortised cost using the effective interestmethod. Gains and losses are recognised in net profit or loss when the liabilitiesare derecognised as well as through the amortisation process.Cash and cash equivalentsCash and short-term deposits in the balance sheet comprise cash in banks andin hand and short-term deposits with an original maturity of three months orless. For the purpose of the consolidated cash flow statement, cash and cashequivalents consist of cash and cash equivalents as defined above. The cash flowstatement has been prepared using the indirect method.LeasingThe group has entered into leases as a lessee. Leases are classified as eitherfinancial or operational leases on the basis of a specific assessment of eachagreement.For financial leases, an amount equal to the lower of fair value and the presentvalue of the minimum lease is recognised in the balance sheet.The depreciation period is consistent for equivalent assets that are owned bythe group. If it is not certain that the company will take over the asset whenthe lease expires, the asset is depreciated over the term of the lease or thedepreciation period for equivalent assets owned by the group, whichever is theshorter.Operational leases are expensed on a linear basis over the period of the lease.Foreign currency translationTransactions in foreign currencies are accounted for at the exchange rate onthe date of the transaction. Monetary assets and liabilities in foreign currenciesare translated at the exchange rate on the balance sheet date. Any exchangedifferences are entered in the profit and loss account under financial items.Balance sheet items relating to foreign subsidiaries are translated into NOKusing the exchange rate as at 31 December. All items in the profit and loss accountare translated into NOK at weighted average exchange rates. Consolidationgives rise to translation differences, which are taken directly to shareholders’equity in the group balance sheet. Translation differences relating to debtin foreign currency that for accounting purposes are considered to be hedgingof investments in foreign subsidiaries and the currency effects related to cashitems that represent a proportion of the net investment in foreign subsidiaries,are also charged against shareholders’ equity until the subsidiary is divested.Investments and other financial instrumentsFinancial assets in the scope of IAS 39 are classified as either financialinstruments at fair value through the profit and loss account, or as loans orreceivables. When financial assets are recognised initially, they are measured atfair value, plus, in the case of investments not at fair value through profit or loss,directly attributable transaction costs. The group determines the classification ofits financial assets after initial recognition and, where allowed and appropriate,re-evaluates this designation at the end of each financial year.Loans and receivables are non-derivative financial assets with fixed or variablecash flows that are not quoted in an active market. Such assets are carriedat amortised cost using the effective interest method. Gains and losses arerecognised in the profit and loss account when the loans and receivables aretransferred or regarded as lost, as well as through amortisation.Other investments in companies that are neither subsidiaries nor associatedcompanies are entered in the balance sheet at fair value with gains or lossesbeing recognised in the profit and loss account.Financial instruments and hedgingThe group uses financial instruments such as forward currency contracts, interestrate swaps and electricity derivatives to hedge its risks associated with

Scana Industrier ASA49interest rate, foreign currency and electricity price fluctuations. Such financialinstruments are initially recognised at fair value on the date on which a derivativecontract is entered into and are subsequently reassessed at fair value.Derivatives are carried as assets when the fair value is positive and as liabilitieswhen the fair value is negative.The group’s criteria for classifying a derivative or other financial instrument as ahedging instrument are as follows: (1) the hedge is expected to be effective inthat it counteracts changes in the fair value of or cash flows from an identifiedasset - a hedging efficiency within the range of 80-125 per cent is expected, (2)the effectiveness of the hedging can be reliably measured, (3) there is adequatedocumentation when the hedge is entered into, (4) for cash flow hedges, thepending transaction must be probable, and (5) the hedge is evaluated on anongoing basis and has proven to be effective.When entering into a hedging arrangement, the group documents which assets,debt or future transactions the group wishes to apply hedge accounting to, andthe associated risk management target and strategy. The documentation includesidentification of the hedging instrument, the hedged item or transaction,the nature of the risk being hedged and how the entity will assess the hedginginstrument’s effectiveness in offsetting the exposure to changes in the hedgeditem’s fair value or cash flows attributable to the hedged risk. The hedges areexpected to be highly effective in achieving offsetting changes in fair value orcash flows and are assessed on an ongoing basis to determine that they haveactually been highly effective throughout the financial reporting periods forwhich they were designated.The group utilises hedge accounting for cash flow hedges related to hedgingfuture electricity prices and hedging of future interest payments on externalloans through interest rate swaps. In addition, the group uses hedge accountingfor hedging the currency effects of net investments in its Swedish subsidiaries.Foreign exchange gains and losses on loans that are hedging instruments in thehedging of net investments are booked directly against equity.The fair value of forward currency contracts is calculated according to currentforward exchange rates for contracts with similar maturity profiles. The fairvalue of interest rate swap contracts and electricity derivatives is determined byreference to market values for similar instruments.Changes in the value of financial instruments that qualify for cash flow hedging,are booked directly against equity. Any ineffective part of the hedging is recognisedin the profit and loss account.Any gains or losses arising from changes in fair value of derivatives that do notqualify for hedge accounting are expensed as they occur.Change of accounting principleUntil 2007, the group has classified agio items related to operations as operatingitems. As of the first quarter of 2008, these agio items have been reclassifiedas financial items. The figures for 2007 and 2006 have been revised in order tomake them comparable with 2008. Scana decided early in 2008 to reclassifyagio items from operating items to financial items in order to reduce fluctuationsin the operating result. In 2008 the financial items has a significant effecton the accounts connected to unrealized loss on currency contracts.The following schedule is connected to agio items, accounts, receivables,accounts payables and currency contracts.Effect of change of accounting principle 2008 2007 2006Change in operating result +171 502 -4 619 -2 632All foreign exchange gains or losses related to trade receivables, creditors,foreign exchange contracts and other assets and liabilities, are classified asfinancial items.Derecognition of financial assets and liabilitiesA financial asset (or where applicable a part of a financial asset or part of agroup of similar financial assets) is deducted from the balance sheet where:• the rights to receive cash flows from the asset have expired,• the group retains the right to receive cash flows from the asset, but hasassumed an obligation to pay them in full without material delay to a thirdparty under a ‘pass-through’ arrangement, or• the group has transferred its rights to receive cash flows from the assetand either (a) has transferred almost all risks and potential gains associatedwith the asset, or (b) has neither transferred nor retained the majority ofrisks and potential gains associated with the asset, but has transferredcontrol of the asset.A financial liability is derecognised when the obligation is settled, cancelled orexpires. Where an existing financial liability is replaced by another from thesame lender on substantially different terms, or the terms of an existing liabilityare substantially modified, such an exchange or modification is treated in sucha way that the original liability is removed from the balance sheet and a newliability is recorded in the balance sheet. The difference in the respective bookamounts is entered in the profit and loss account.PensionsSome group employees are covered by pension plans funded through insurancecompanies or directly by the company.Pension obligations are valued at the present value of future pension entitlementsaccrued on the balance sheet date based on a linear accrual methodand anticipated final salary. Pension plans are valued at their anticipated marketvalue. Net pension obligations (pension obligations less plan assets) arereported in the balance sheet as long-term liabilities after adjustments for netaccumulated deviations from estimates. The net liability in the balance sheetincludes employers’ national insurance contributions.The net pension costs for the period (gross pension costs less estimated returnon plan assets) are included in staff costs. The gross pension costs consist of thepresent value of the pension entitlements accrued during the period, intereston pension obligations, and the amortised effects of changes in the benefit planand estimate deviations in the pension scheme.Changes in pension obligations due to changes in economic or actuarial assumptionsare amortised and recognised in the profit and loss account overthe expected remaining average vesting period, if the deviations at the beginningof the year exceed 10 per cent of the greatest of gross pension liabilitiesand gross pension assets.Introduction of a new defined-benefit plan or an improvement of the currentplan will lead to changes in the pension liability. This will be expensed on a linearbasis until the effect of the change is earned. The introduction of new plans orchanges in existing plans that are carried out retrospectively such that the employeesimmediately have earned a paid-up policy (or a change in the paid-uppolicy) is immediately entered in the profit and loss account.For pension plans where agreed payments are made by the group and wherethe plan assets are administered separately (defined-contribution pensionschemes), the yearly contributions are included in staff costs.The pension plans for the group’s Swedish employees are considered to bedefined-benefit plans organised as multi-employer plans. These plans are treatedas defined-contribution plans in the accounts because the necessary informationfor treating the plans as defined-benefit plans has not been made availableby the life insurer with whom the plans are financed. When the necessaryinformation is available and the plans are recognised as defined-benefit plans inaccordance with IAS 19, this can have a significant effect on the group accounts.Share-based remunerationSenior employees in the group are allocated options to buy shares in theparent company. The options are valued based on their fair value on the datethe option plan was adopted. The options are valued in line with the Blackand Scholes model. The cost of the option is distributed over the period theemployees earn the right to receive the options.Note 2. Estimate uncertaintyEstimates and rough calculations are evaluated on an ongoing basis and arebased on historical experience and other factors, including forecasts of futureevents that are regarded as being probable under the present circumstances.The group draws up estimates and makes assumptions/forecasts linked to thefuture. The accounting estimates that result from this will per definition rarelybe completely in agreement with the final result. The group’s most importantaccounting estimates are linked to the following items:Write-down valuation of goodwillThe group carries out annual tests of goodwill items. A write-down valuationis carried out for the cash flow-generating units that have capitalised goodwillitems. This is done based on future cash flows and discount rate. Errors in theseassumptions and estimates can lead to a write-down, which is entered in theprofit and loss account. Where there are indications of a reduction in value, thebook value is assessed against the recoverable amount.

50 Scana Industrier ASADevelopment costsThe company capitalize development costs used in developing its products inaccordance with the criteria for capitalization in IAS 38. The net present valueof the estimated cash flow is based on budgets and business plans. The groupdoes not expect the product to have a limited lifetime and bases the estimateson a 5-year perspective. Errors in these assumptions and estimates can leadto a write-down, which is entered in the profit and loss account. Where thereare indications of a reduction in value, the book value is assessed against therecoverable amount.Deferred tax assetThe deferred tax asset is capitalised when it is probable that there will befuture taxable income and that the temporary differences or loss-carryforwardscan be deducted in this income. Parts of loss-carry-forwards fall dueat the end of 2013 (cf. note 6). Amendments in assumptions and estimates canlead to a different valuation of deferred tax assets. The company has carriedout a test in connection with capitalised deferred tax assets.Manufacturing contractsWhen reporting manufacturing contracts, assumptions are made regardingestimated costs and earnings as well as the definition and measurement ofdegree of completion. Errors in these estimates may mean that reporting ofincome and earnings deviates from the underlying value created, relative to theproject’s overall income and earnings. Thus, earnings can be reported too earlyor too late in the project.Guarantee provisionsThe management estimate the provision for future guarantee obligations basedon information on historical guarantee requirements, together with otherinformation to calculate future guarantee obligations. Factors that can affectestimated obligations include unknown errors in completed deliveries. However,the company believes the uncertainty is limited. For further information on theguarantee provision, see note18.Note 3. Segment informationBusiness AreasScana is a Nordic industrial group operating in three business areas: Steel,Marine and Oil & Gas. The main products for the steel area are customisedsteel forgings and castings for the oil and gas, energy, marine, machine and toolindustries. For the marine area, the products include gears, propellers, propulsionsystems, hydraulic actuators and valve control systems. The companiesin the oil and gas area provide design and production, laboratory services, inaddition to the maintenance and repair of equipment and steel components forthe oil and gas industries.Internal costs in the parent company that are not owner costs are divided betweenthe business areas and their subsidiaries. Revenues from sales to externalcustomers and transactions with other segments are reported in each of thebusiness areas. Internal deliveries are booked at estimated market value. Salesbetween the business areas only occur to a limited scope. “Other/eliminations”mainly applies to eliminations between the business areas and costs/revenuesrelated to group management and its associated staff and administration. Assetsand debt included in “Other/eliminations” mainly apply to the parent company.

Scana Industrier ASA51Other/2008 (NOK million) Steel Marine Oil & Gas eliminations TotalOperating revenue 1 987.1 635.8 300.3 -27.1 2 896.1Operating costs 1 623.3 552.0 367.5 2.9 2 545.7Depreciation and amortisation 47.0 9.4 17.3 0.0 73.7Operating profit 316.8 74.4 -84.5 -30.0 276.7Balance sheet figures:Assets 1 497.0 471.6 326.9 -47.6 2 247.9Long-term debt 308.6 16.9 113.1 179.8 618.4Current liabilities 702.9 374.3 98.5 -269.1 906.6Other segment information:Intangible assets 16.4 8.6 108.2 37.3 170.4Tangible fixed assets 549.8 93.3 52.8 0.1 696.0Cash flow:Operating activities 198.4 -4.0 -30.5 -17 146.9Investments in tangible fixed assets -115.0 -18.2 -34.9 -1.6 -169.7Other investment activities -37.0 0.0 -66.8 66.8 -28.9Financing activities 29.5 -1.2 137.2 -160.1 5.42007 (NOK million)Operating revenue 1 723.3 488.1 280.7 -23.1 2 469.0Operating costs 1 473.3 444.6 234.6 -5.7 2 146.8Depreciation and amortisation 39.5 9.2 7.5 0.1 56.3Operating profit 210.5 34.3 38.6 -17.5 265.9Balance sheet figures:Assets 1 221.7 384.7 243.3 53.7 1 903.5Long-term debt 254.5 27.5 46.5 157.6 486.1Current liabilities 544.3 247.6 66.0 -164.4 693.6Other segment informationIntangible assets 11.5 8.4 58.8 0.0 78.7Tangible fixed assets 432.4 84.7 44.6 0.1 561.8Cash flow:Operating activities 234.9 47.1 115.0 -115.2 281.7Investments in tangible fixed assets -89.3 -24.4 -16.0 -6.6 -136.3Other investment activities -37.0 0.0 -66.8 98.3 -5.5Financing activities -93.9 -5.3 -25.3 152.4 28.02006 (NOK million)Operating revenue 1 419.9 387.9 111.7 -4.7 1 914.8Operating costs 1 219.4 353.0 78.1 8.2 1 658.8Depreciation and amortisation 32.2 8.2 7.3 0.2 47.8Operating profit 168.3 26.7 26.3 -13.2 208.2Balance sheet figures:Assets 1 148.0 268.9 158.7 -16.7 1 559.1Long-term debt 298.3 23.7 30.7 -23.4 329.4Current liabilities 476.8 160.5 37.4 -61.5 613.1Other segment informationIntangible assets 9.9 7.6 35.9 0.0 53.5Tangible fixed assets 405.1 70.2 35.3 0.2 510.8Cash flow:Operating activities 59.7 18.3 31.9 16.3 126.1Investment activities -58.0 -14.5 -13.9 -37.2 -123.6Financing activities 18.1 0.7 17.9 -68.9 -32.2

52 Scana Industrier ASAGEOGRAPHIC AREAThe locations of the group companies are distributed into the following countries; Norway, Sweden and China.Other/2008 (NOK million) Norway Sweden China eliminations TotalOperating revenue 1 364.3 1 267.7 244.5 19.6 2 896.1Operating costs 1 352.9 966.9 215.6 10.3 2 545.7Depreciation and amortisation 31.7 36.2 5.1 0.7 73.7Operating profit -20.3 264.6 23.8 8.6 276.7Balance sheet figures:Assets 1 541.3 775.2 281.6 --350.2 2 247.9Long-term debt 471.3 111.2 96.5 -60.6 618.4Current liabilities 629.1 509.8 81.1 -313.4 906.6Other segment information:Intangible assets 116.4 1.6 14.8 37.6 170.4Tangible fixed assets 265.2 315.0 114.2 1.6 696.0Investments in assets -80.6 -62.0 -27.1 0.0 -169.72007 (NOK million)Operating revenue 1 222.0 1 059.5 204.6 -17.0 2 469.0Operating costs 1 101.8 885.7 175.2 -15.8 2 146.9Depreciation and amortisation 21.5 30.3 4.5 0.0 56.3Operating profit 98.7 143.5 24.9 -1.2 265.9Balance sheet figures:Assets 1 376.5 583.9 157.1 -214.0 1 903.5Long-term debt 373.4 119.1 63.5 -69.9 486.1Current liabilities 435.7 347.6 54.3 -144.0 693.6Other segment information:Intangible assets 67.2 1.6 10.0 0.0 78.7Tangible fixed assets 228.5 269.6 63.7 0.0 561.8Investments in assets -83.7 -55.1 -13.6 16.1 -136.32006 (NOK million)Operating revenue 908.7 844.9 171.3 -10.2 1 914.8Operating costs 796.1 731.5 142.3 -11.1 1 658.8Depreciation and amortisation 18.7 25.6 3.5 0.0 47.8Operating profit 93.9 87.8 25.5 -1.0 208.2Balance sheet figures:Assets 1 128.8 564.9 172.8 -307.5 1 559.1Long-term debt 288.5 168.4 101.9 -229.4 329.4Current liabilities 373.3 272.1 45.7 -78.0 613.1Other segment information:Intangible assets 43.5 1.6 8.4 0.0 53.5Tangible fixed assets 180.6 267.2 62.9 0.1 510.8Investments in assets -43.3 -35.1 -14.7 0.0 -93.2

Scana Industrier ASA53Operating revenues by countryThe specification of operating revenues is based on the location of the customer.(NOK million) 2008 2007 2006Denmark 44.7 32.5 32.0Finland 54.5 58.0 68.1France 39.6 40.0 51.9Germany 493.7 421.4 276.5Italy 30.9 20.3 11.2Poland 48.6 14.5 12.0Spain 12.6 13.0 22.7Sweden 506.8 474.1 410.0Netherlands 108.5 99.2 65.8UK 230.3 222.7 173.9Other EU countries 16.1 6.3 10.9Total EU 1 586.3 1 402.0 1 135.0Norway 570.3 590.3 345.2Russia 3.8 15.3 0.1Other European countries 12.1 13.8 31.5Total Rest of Europe: 586.2 619.4 376.8South America 15.6 16.5 9.7North America 192.0 80.9 85.0Total America 207.6 97.4 94.7China 283.1 218.0 183.0Japan 23.5 5.5 7.5Singapore 86.4 35.6 28.0Other Asian countries 99.0 69.0 67.1Total Asia 492.0 328.1 285.6Africa and Oceania 2.4 0.2 2.0Total 2 874.5 2 447.1 1 894.1Note 4. Investments in associated and other companiesScana Korea Hydraulic Ltd.:The group has a 49 per cent holding in Scana Korea Ltd, which is involvedin the sale and part production of hydraulic valve control systems. Thecompany is located in Busan in South Korea. Scana has 33.33 per centvoting rights. Accounting figures that are specified below are for the period01.07.07-30.06.08. Submission of the result deviates by more than threemonths. The share of the result is not affected to any great extent by asubsequent submission of the accounts.Jørpeland Kraft AS:The group owns 33.33 per cent of Jørpeland Kraft AS; a power companylocated at Jørpeland in Norway with associated waterfall rights in Jørpelandsheia.Scana has voting rights of 33.33 per cent. Jørpeland Kraft was granteda licence in December 2006 to build Jøssang power plant and Dalen I powerplant. The final decision on the expansion of the Jørpeland watercourse wastaken in August 2008. The expansion will provide 102 GWh of power and isestimated to cost in the region of NOK 400 million. The expansion will becompleted and will start operating in 2011. When the expansion is finished,Lyse Produksjon will take over the operational liability for the power plants.Motala Verkstad ABThrough Scana Steel Björneborg, the group owns 37.5 per cent of MotalaVerkstad AB. The company’s business areas include railway carriages, axlemachining, bridges and steel knives. The group has included the share ofprofit/loss for the ownership period in 2008.Scana Wikov ASThe company was established in 2006. Scana Wikov AS sells and carries outthe maintenance of gears in Norway. The group’s holding is 50 per cent.Advanced Surface Technology AS (AST AS)The group owns 50 per cent of AST AS, which has activity linked to thermalspraying of slide blocks for railway tracks.

54 Scana Industrier ASAAssociated companies; financial information 2008Total Scana Wikov,(group share): Scana Korea Ltd Jørpeland Kraft AS Motala Verkstad AB AST and SingaporeOperating revenue 38 322 2 733 71 865 3 013Net profit/loss 223 0 -320 963Fixed assets 4 576 33 651 14 826 675Current assets 7 712 4 790 26 444 2 467Long-term debt -413 -20 692 -6 871 -21Current liabilities -8 950 -17 079 -27 575 -1 289Shareholders' equity 2 925 670 6 824 1 832Associated companies; financial information 2007(group share):Operating revenue 31 990 2 266 55 971 2 739Net profit/loss -770 0 642 940Fixed assets 6 451 6 637 11 696 1 350Current assets 7 713 2 598 19 125 1 376Long-term debt -654 -6 814 -11 422 -171Current liabilities -10 330 -1 751 -13 655 -1 071Shareholders' equity 3 179 670 5 744 1 485Associated companies; financial information 2006(group share):Operating revenue 31 446 2 342 62 441Net profit/loss 1 420 0 642Fixed assets 6 785 2 010 13 508Current assets 9 407 2 969 24 033Long-term debt -430 -2 766 -14 699Current liabilities -13 029 -1 071 -17 200Shareholders' equity 2 733 1 142 5 641Book value associated companies: 2008 2007 2006As of 01.01. 10 435 9 517 1 283Additions and deposits 1 385 200 7 600Disposals -200 -183 0Share of profit/loss for the year 809 2 510 687Share of profit/loss not included in previous years/agio effects -178 -1 609 -53Total book value shares in associated companies 12 251 10 435 9 517Book share of profit/loss relates to Scana Korea Hydraulic Ltd.,Jørpeland Kraft AS, Motala Verkstad AB and AST ASOther shares: 2008 2007 2006Book value other shares 240 142 204

Scana Industrier ASA55Note 5. Specification of other revenues and other costs2008 2007 2006Other operating revenues:Rental income 12 394 11 842 10 531Service income 1 856 1 474 1 847Other revenues 7 267 3 986 7 014Total 21 517 17 301 19 392Other operating costs: 2008 2007 2006Operating and maintenance 154 086 132 716 114 581Contract services 133 677 154 848 106 679Rental costs 22 207 19 453 12 897Fees and consultancy services 41 416 30 766 23 281Travel and marketing costs 38 170 33 010 30 399Office and administration costs 27 228 24 656 21 594Bad debts 55 738 560 805Grants and subsidies -1 883 -2 088 -1 683Energy costs 3 429 3 394 4 449Losses on disposal of tangible fixed assets 225 1 000 0Other operating costs 118 830 106 618 93 236Total 593 123 504 934 406 239Auditor fees: *) 2008 2007 2006Statutory audit Ernst & Young 2 593 2 275 1 657Statutory audit Deloitte 0 0 288Other certification services 17 0 0Other services excluding auditing 2 366 1 035 758Tax advice 146 251 417Total 5 122 3 561 3 120*) Figures are exclusive of VAT.Other financial income/expenses (-): 2008 2007 2006Interest rate swaps 3 115 1 404 -570Amortisation of recognised loan costs -6 064 -5 188 4 396Commission and charges -1 218 -3 097 -751Other 2 761 328 -1 098Total -1 406 -6 553 1 977Note 6. Tax2008 2007 2006The year’s tax cost has been calculated as follows:Tax payable 57 221 25 417 15 022Change in deferred tax in balance sheet -49 749 22 569 11 033Deferred tax related to business acquisitions 0 0 1 610Deferred tax related to added value of business acquisitions 0 0 -11 289Tax booked against equity 12 152 -9 438 2 936Translation differences, foreign tax -4 598 3 678 707Year’s taxes 15 026 42 225 20 020Of which, outside Norway 59 921 35 267 23 719Year’s tax payable 57 221 25 417 15 022Too much/little paid previous year 0 0 182Advance tax paid -17 159 -6 015 0Total tax payable 40 062 19 402 15 204

56 Scana Industrier ASA2008 2007 2006Reconciliation of taxes against ordinary profit/loss before tax:Profit before tax 74 796 238 907 208 27528 per cent of profit/loss before tax 20 943 66 894 58 317This year’s taxes 15 026 42 225 20 020Difference; due to 5 917 24 669 38 297Change in unrecognised deferred tax asset/previously recognised tax asset charged against profit 0 19 008 28 584Permanent differences and other effects*) 5 182 -5 033 7 447Effect of foreign activity due to different tax level 7 492 5 128 7 064Tax related to net investment -6 757 5 567 -4 798Total 5 917 24 669 38 297Breakdown of basis for deferred tax asset: 2008 2007 2006Current assets 29 189 0 0Pension obligations 19 502 15 922 16 217Tax loss carry forwards 189 256 179 642 222 843Total basis for deferred tax asset 237 948 195 564 239 060Breakdown of basis for deferred tax obligation:Fixed assets 275 638 221 497 222 385Current assets 0 151 051 89 633Liability 39 971 42 026 2 427Total basis for deferred tax obligation 315 609 414 574 314 444Net deferred tax asset Norway 28 per cent 37 315 0 0Net deferred tax asset China 12.5 per cent 1 304 1 096 0Total net deferred tax asset 38 619 1 096 0Net deferred tax Norway 28 per cent 0 14 120 1 711Net deferred tax Sweden 26.3 per cent **) 51 457 49 661 38 405Net deferred tax USA 35 per cent 98 0 0Total net deferred tax 51 555 63 781 40 116Unrecognised deferred tax asset 0 0 19 0082008 2007 2006Tax booked against equity:IAS 39 effect 0 0 0Currency contracts and interest swaps 0 42 1 862Hedge accounting net investment -6 757 5 567 -4 798Electricity derivatives -5 395 3 829 168Total tax booked against equity -12 152 9 438 -2 767The right to carry forward uncovered losses expires as follows:No deadline 156 064 146 450 189 651Carry forward of amounts falling due 2013 33 193 33 193 33 193*) Includes: non-deductible costs and non-taxable revenues.**) The tax rate in Sweden changed with effect from 1 January 2009 to 26.3 per cent (from 28 per cent).Tax carry forwards is related to Norwegian companies. In 2008, the tax loss has increased. The main reason for this is fiscal defict in the subsidiaries in Vestby.The Group´s opinion is that the loss is caused by special circumstanses that will not affect future earnings. The total benefits has therefore been capitalised.Conveying benefits that falls due in 2013, can only be used as deduction in tax payable, after loss carry forwards have been utilised.

Scana Industrier ASA57Note 7. Earnings per shareOrdinary earnings per share are calculated as the ratio between the financialresult for the year that is allocated to the shareholders and the weighted averageof outstanding shares. When calculating the diluted earnings per share,the result that is allocated to the shareholders and the number of weightedaverage outstanding shares is adjusted for all dilution effects related to shareoptions. The “denominator” includes all share options that are “in-the-money”and can be exercised. A total of 900,000 share options were allocated tosenior employees on 15 and 17 August 2007. In 2008, 400 000 share optionswere allocated. All of these options can be exercised in 2010.2008 2007 2006Net profit/loss 45 078 185 239 174 075Weighted average no. of shares 167 333 750 167 333 750 167 333 750Effect of dilution:Options/subscription rights 1 200 000 262 500 0Weighted average no. of shares adjusted for effect of dilution 168 533 750 167 596 250 167 333 750Earnings per share 0.27 1.11 1.04Earnings per diluted share 0.27 1.11 1.04Note 8. Intangible assetsPatents Development Customers/Intangible assets 31.12.08 and licences Goodwill costs ordre reserve TotalAcquisition costAccumulated 01.01 14 667 69 158 14 563 21 499 119 887Additions 122 0 25 258 0 25 380Acquisition of business 0 21 727 0 5 117 26 844Translation differences 3 833 9 423 8 1 882 15 146Transfers 131 0 -131 0 0Disposals 0 0 0 0 0Accumulated 31.12 18 753 100 308 39 698 28 498 187 257Amortisation and write-downsAccumulated 01.01 2 160 17 624 12 224 9 191 41 199This year’s amortisation and write-downs 207 0 6 245 6 794 13 246Translation differences 896 121 -4 0 1 013Disposals 0 0 0 0 0Accumulated 31.12 3 263 17 745 18 465 15 985 55 458Book value 31.12 15 490 82 563 21 233 12 513 131 799Amortisation period in no. of years 10-50 No amortisation 5 5The straight-line depreciation method has been used.Intangible assets 31.12.07Acquisition costAccumulated 01.01 15 384 40 290 13 038 21 499 90 211Additions 79 0 1 521 0 1 600Acquisition of business 0 25 489 0 0 25 489Translation differences -796 -81 0 0 -877Transfers 0 3 460 0 0 3 460Disposals 0 0 4 0 4Accumulated 31.12 14 667 69 158 14 563 21 499 119 887

58 Scana Industrier ASAPatents Development Customers/and licences Goodwill costs ordre reserve TotalAmortisation and write-downsAccumulated 01.01 2 053 17 705 11 474 5 520 36 752This year’s amortisation and write-downs 273 0 747 3 671 4 691Translation differences -166 -81 0 0 -247Disposals 0 0 3 0 3Accumulated 31.12 2 160 17 624 12 224 9 191 41 199Book value 31.12 12 507 51 534 2 339 12 308 78 688Amortisation period in no. of years 10-50 No amortisation 5 5The straight-line amortisation method has been used.Intangible assets 31.12.06Acquisition costAccumulated 01.01 15 279 20 271 13 659 0 49 210Additions 573 0 379 0 952Acquisition of business 0 19 944 0 21 499 41 443Translation differences -468 74 71 0 -322Disposals 0 0 -1 072 0 -1 072Accumulated 31.12 15 384 40 290 13 038 21 499 90 211Amortisation and write-downsAccumulated 01.01 1 861 17 450 11 823 0 31 134This year’s amortisation and write-downs 273 191 651 5 520 6 636Translation differences -81 63 71 0 54Disposals 0 0 -1 072 0 -1 072Accumulated 31.12 2 053 17 705 11 473 5 520 36 751Book value 31.12 13 331 22 585 1 565 15 979 53 460Amortisation period in no. of years 10-50 No amortisation 5 5The straight-line depreciation method has been used.Patents and licences in Scana Mar-El are amortised over 10 years and have abook value as at 31 December 2008 of NOK 5 102. Patents and licences alsoinclude ownership rights/rights of use of an area of land in China.This right of use is amortised over the lease period of 50 years and hasa book value as at 31 December 2008 NOK 10 301.The value of customer relations at the start of 2008 is linked to theacquisition of Scana Offshore Vestby in 2006.The addition of development costs relates to the development of the loadingbuoy produced by Scana Offshore Vestby. These costs are amortisedaccording to the number of products sold.The addition of customer relations is linked to the acquisition of business inthe USA and is amortised over five years. See also note 27.2008 2007 2006Reported goodwill is broken down into the following companies:Scana Mar-El AS 1 076 1 076 1 076Scana Steel Björneborg AB 1 565 1 565 1 565Leshan Scana Ltd 2 437 2 437 0Scana Offshore Technology AS 3 053 3 053 0Scana Offshore Vestby AS and Scana AMT AS 43 431 43 403 19 944Scana Offshore Serives Inc. 31 001 0 0Total 82 563 51 534 22 585Goodwill broken down into cash-flow generating units:Steel business area 4 002 4 002 1 565Marine business area 1 076 1 076 1 076Oil & Gas business area 77 485 46 456 19 944

Scana Industrier ASA59Write-down assessments are being made annually, more often if there areany indications of decrease in value. A write-down valuation is carried out forcash flow-generating units which include capitalized goodwill items. Capitalizedgoodwill is being evaluated against recoverable amount.Recoverable amount is the highest of net sales- and utility value. The Grouphas tested goodwill for write-down by estimating utility value. The valuation isbased on cash flow expectations, experience, budgets and business plans forthe period 2009-2013 and a constant rate of growth in subsequent periods.There are no indications for writing down goodwill in 2008.Key assumptions for goodwill testing at Scana Offshore Vestby AS andScana AMT AS:• Operating margin - based on achieved margin and expected growth(average operating margin of 10 per cent)• Discounting rate - 11 per cent before tax• Price trends - it is expected that changes in prices of purchased componentsin the forthcoming period are being reflected in the market prices of soldgoods and will not therefore affect the operating margin considerably.• Market share – the estimates are based on assumptions that the marketshare will not change significantly• Growth rate – an annual growth of 2 per cent after the third year.Key assumptions for goodwill testing at Scana Offshore Services Inc arebasically based on the same assumptions with the exception of the discountrate which is 11,4 per cent before tax.Sensitivity analysisGenerally, there is a significant difference between calculated recoverableamount and recognized value.For Scana Offshore Vestby AS and Scana AMT AS, however, a moderatechange in key assumptions could cause a write-down of capitalized value.If the company does not achieve expected turnover, a reduction in valuemay occur. Isolated, both a discounting rate of more than 14 per cent beforetax and an average operating margin lower than 6.5 per cent before tax willcause a write down.Note 9. Tangible fixed assetsMachinery,BuildingsTangible fixed assets 31.12.08 equipment etc. and property Land TotalAcquisition costAccumulated 01.01 877 211 284 881 27 463 1 189 555Additions 116 254 20 916 7 152 144 322Acquisition of business 1 292 0 0 1 292Translation differences 71 279 17 224 970 89 473Disposals -40 160 -753 -1 -40 914Accumulated 31.12 1 025 876 322 268 35 584 1 383 728DepreciationAccumulated 01.01 519 672 107 706 342 627 720This year’s depreciation and write-downs 52 875 7 560 58 60 493Translation differences 31 533 6 372 24 37 929Disposals -37 820 -545 0 -38 365Accumulated 31.12 566 260 121 093 424 687 777Book value 31.12 459 616 201 175 35 160 695 951Depreciation period in no. of years 5 - 40 40 - 50The straight-line depreciation method has been used.Tangible fixed assets 31.12.07Acquisition costAccumulated 01.01 852 719 283 482 28 819 1 165 019Additions 118 477 16 192 5 134 674Translation differences -37 892 -12 965 -1 089 -51 945Transfers -3 460 0 0 -3 460Disposals -52 633 -1 827 -272 -54 733Accumulated 31.12 877 211 284 881 27 463 1 189 555DepreciationAccumulated 01.01 547 037 106 839 302 654 178This year’s depreciation and write-downs 44 573 6 976 58 51 606Translation differences -22 200 -4 950 -19 -27 169Disposals -49 738 -1 159 1 -50 896Accumulated 31.12 519 672 107 706 342 627 719Book value 31.12 357 539 177 176 27 121 561 836Depreciation period in no. of years 5 - 40 40 - 50The straight-line depreciation method has been used.

60 Scana Industrier ASAMachinery,BuildingsTangible fixed assets 31.12.06 equipment etc. and property Land TotalAcquisition costAccumulated 01.01 719 887 259 537 31 367 1 010 791Additions 77 243 14 680 282 92 204Acquisition of business 61 909 866 0 62 775Translation differences 24 508 10 243 731 35 483Disposals -30 828 -1 844 -3 561 -36 233Accumulated 31.12 852 719 283 482 28 819 1 165 019DepreciationAccumulated 01.01 487 289 95 687 309 583 285Acc. depr. acquisitions 33 945 830 0 34 775This year’s depreciation 34 168 6 969 68 41 205Translation differences 16 912 3 874 10 20 796Disposals -25 277 -521 -85 -25 883Accumulated 31.12 547 037 106 839 302 654 178Book value 31.12 305 682 176 643 28 516 510 841Depreciation period in no. of years 5 - 40 40 - 50The straight-line depreciation method has been used.Depreciation period, machinery, equipment etc.:5-10 years for office equipment, tools, vehicles and forklift trucks15-20 years for laboratory and test equipment, as well as small production equipment20-40 years for larger production machinery, electrical installations and transformersThere are no indicators for writing down tangible fixed assets. The present value of future cash flows is higher than the value of property, plant and equipment.Tangible fixed assets are pledged to the group’s main bankers whereby there are restrictions on disposals. This does not apply to the subsidiary Scana LeshanMachinery Co Ltd and Scana Offshore Services Inc.Book value of pledged assets is NOK 574,329 as at 31 December 2008.The group capitalises major periodic maintenance work and depreciates it over the result in accordance with the maintenance interval.Tangible fixed assets that are leased amount to NOK 31.3 million at 31 December 2008. This applies to machinery.Note 10. Staff costs2008 2007 2006Staff costs:Salary expenses 481 238 406 836 335 736Employer’s NI contributions 111 632 96 972 85 578Pension costs 27 858 23 803 19 080Insurance 9 125 9 905 10 455Other staffing costs 18 072 15 793 10 151Total salary expenses 647 925 553 309 460 999Average no. of FTEsNorway 563 519 444Sweden 599 561 527China 781 800 811Other 5 3 3Total average no. of FTEs 1 948 1 883 1 785The number of full-time equivalents increased from 2007 to 2008 due to the increased activity in Norway and Sweden.

62 Scana Industrier ASAIn addition to the basic salary, other remuneration may be paid to senior employees,including payments that relate to shares and remuneration schemesbased on share values. The board can offer share schemes to the managementteam. Options may be allocated to parties that the board regards ascentral in relation to the company’s value development.Pension plans shall in principle be the same for managers as those generallydetermined for employees in the business.Bonus schemes for the management team shall be partly linked to the company’sprofits, and partly to the judgements of the board. The judgementsof the board shall take into account, among other things, the quality of theHSE work in the company and the results according to the company’s HSEstatistics.Early retirement plans can be entered into with senior employees, with amutual entitlement to demand retirement that entails a retirement pensionon the employee’s 62nd birthday.Termination payment plans that are established upon departure from thecompany will be viewed in conjunction withconfidentiality clauses and clauses that restrict competition in the individual’scontract of employment, whereby they only compensate for such limitationsin the individual’s right to take up new employment. Termination paymentplans shall in principle have deductions for income earned elsewhere.Options:In the Board meeting held on 14 August 2007, the Board of Scana IndustrierASA decided to allocate options to group management and the managingdirectors of the operational companies in Scandinavia. This is in accordancewith the authorisation granted by the general meeting on 3 May 2007.The options were allocated on 14 and 17 August 2007 at a rate of 16.60,which was the share price on the date of allocation. In 2008, 400 000 shareoptions were allocated on various dates, ref. the table of options below. Oneof the employees that was included in the programme has decided to leave.This reduces the number of options by 100 000. The options can only beredeemed after the presentation of the second quarter of 2010 and over thefollowing two quarters.At the end of 2008, the share price was NOK 8.20. Provisions of NOK 2,063were made in 2008 in relation to the share option programme in accordancewith the earnings period.The share option programme is valued in line with the Black and Scholesmodel. Risk-free interest is in accordance with Norges Bank’s interest rate onthe date of allocation. The risk-free interest is interpolated over the earningsperiod. The volatility is based on share trading in the past three years, whichis 50 per cent. It is a condition that no one who is allocated options leavesduring the earnings period and that everyone redeems the options after thethird quarter of 2010. No account has been made for sharing.Name Position Company Date Issue rate No. of optionsRolf Roverud CEO and Group Chief Executive Scana Industrier ASA 03.01.2008 17.60 200 000Christian Rugland Group director Scana Industrier ASA 14.08.2007 16.60 100 000Per Ravnestad Group director Scana Industrier ASA 14.08.2007 16.60 100 000Christian Ståhlberg Managing director Scana Steel Booforge AB 14.08.2007 16.60 100 000Ingvar Winbo Managing director Scana Steel Björneborg AB 14.08.2007 16.60 100 000Ørnulf Myrvold Managing director Scana Offshore Vestby AS 14.08.2007 16.60 100 000Ragnar Øhrn Managing director Scana Skarpenord AS 17.08.2007 16.60 50 000Kristian Sætre Managing director Scana Volda AS 17.08.2007 16.60 50 000Hans Olav Kilen Managing director Scana Mar-El AS 17.08.2007 16.60 50 000Erik Ødegård Managing director Scana MTC AS 17.08.2007 16.60 50 000Inge Kvalvik Managing director Scana Offshore Technology AS 17.08.2007 16.60 100 000Jan Øyvind Jørgensen Managing director Scana Steel Stavanger AS 30.05.2008 14.50 100 000Per Jarbelius Managing director Scana Steel Söderfors AB 22.09.2008 12.80 100 000Total 1 200 000Board fees:Fees totalling NOK 820 were paid to the board in Scana Industrier ASA. Fees are listed below.Kjetil M. Stuland Chairman of the board 280Mari Sjærstad Board member 180Kristin Malonæs Board member 180Bjørn Dahle Board member 180Note 11. Pensions and other long-term employee benefitsIn accordance with the Accounting Act § 7-30a), the companies in Norwayare obligated to have a company pension plan in line with the Act relating tooccupational pensions, the companies have a pension plan that meets theserequirements.Defined-benefit planThe group’s Norwegian companies are covered by a contractual pensionscheme. This scheme covers 436 persons as at 31 December 2008.The obligation is calculated using a linear accrual method. Changes inpension obligations due to changes in economic or actuarial assumptionsare amortised and recognised in the profit and loss account over theexpected remaining average vesting period, if the deviations at the beginningof the year exceed 10 per cent of the greatest of gross pension liabilities andgross pension assets.In 2007, Scana Volda discontinued hedged schemes for all employees with theexception of the scheme for the managing director. The group has no otherhedged pension schemes. The scheme covers only 1 person as at 31.12.2008.The table below is therefore a presentation of hedged and unhedgedschemes. As at 31 December 2008, the unhedged schemes amounted toNOK 20,348 of the pension obligation. The pension assets are placed inStorebrand Livsforsikring.The withdrawal disposition is assessed individually in the subsidiaries. It is setat between 20 per cent and 75 per cent. The average withdrawal dispositionin 2008 was 65 per cent.Estimated incoming payments linked to defined-benefit plans is NOK 1.7million in 2010.

Scana Industrier ASA632008 2007 2006Economic and actuarial assumptions:Discount rate 5.0 % 4.6 % 4.3 %Return on plan assets 4.4 % 4.3 % 5.3 %Salary increases 6.0 % 5.6 % 4.0 %Pension adjustments 2.3 % 2.3 % 1.6 %Inflation rate 2.0 % 2.0 % 2.5 %Voluntary retirement 4.0 % 4.0 % 4.0 %Withdrawal disposition 65 % 65 % 70 %Mortality table K05 K05 K63Net pension costs are calculated as follows:Present value of net pension entitlement 1 593 1 169 2 221Interest cost of accrued pension obligations 963 1 269 996Estimated return on plan assets -177 -543 -540Recognised actuarial gains/losses 2 197 1 755 91Recognised effect of plan changes 0 -1 331 575Total 4 576 2 319 3 343Pension obligations and assets:Present value of accrued hedged obligations 23 660 21 121 34 533Fair value of pension assets -4 130 -4 182 -12 000Unrecognised actuarial gains/losses -28 -1 017 -4 406Net recognised pension obligation 31.12 19 502 15 922 18 127Changes in gross obligation:Obligation 01.01 21 121 34 533 27 305Present value of net pension entitlement 1 593 1 169 2 775Interest cost 963 1 269 996Premiums paid -1 775 -1 429 -1 890Actuarially calculated loss/gain on obligation 1 757 -1 774 5 170Final settlement 0 -12 647 0Translation differences 0 0 177Gross pension obligation 31.12 23 660 21 121 34 533Changes in gross pension assets:Pension assets 01.01 4 182 12 000 11 167Actual return 176 543 540Premium deposits 54 3 406 842Payments made 0 -299 -319Actuarially calculated loss/gain on pension assets 3 -238 -230Final settlement -285 -11 230 0Gross pension assets 31.12 4 130 4 182 12 000Changes in net pension obligation:Net recognised pension obligation 01.01 15 922 18 127 16 845Recognised pension costs 4 576 2 318 3 343Premium deposits 785 -3 406 -842Premium payments made, unhedged schemes -1 781 -1 117 -1 396Translation differences 0 0 177Net recognised pension obligation 31.12 19 502 15 922 18 127Defined-contribution plan in NorwayCompanies in Norway have defined-contribution plans. The defined-contribution plans only cover full-time employees and constitute 2 per cent of annualsalaries. The pension assets are invested in funds and administered by an insurance company. At 31 December 2008, the plan had 463 members.2008 2007 2006Expensed pension costs related todefined-contribution plans in Norway: 7 589 5 281 4 982

64 Scana Industrier ASADefined-contribution plan in ChinaIn China, the group’s employees have a pension plan that is regarded as a defined-contribution plan. The company pays directly to the authorities, who are subsequentlyresponsible for the pension programme. At 31 December 2008, the plan had 777 members.2008 2007 2006Expensed pension costs related todefined-contribution plans in China: 4 063 3 072 2 721Pension schemes in SwedenThe pension plans for the group’s Swedish employees are considered to be defined-benefit plans organised jointly for a number of employers (multi-employerplans). These plans are recorded as defined-contribution plans, as the information needed to report the plans as defined-benefit plans has so far not beenavailable from the life insurance company where the schemes are financed. When the necessary information is available and the schemes are reported asdefined-benefit plans in accordance with IAS 19, this could have a material effect on the group accounts. At 31 December 2008, the schemes had 596 members.2008 2007 2006Expensed pension costs related tosuch multi-employer plans: 11 630 13 130 8 034Total pension costs 27 858 23 802 19 080Note 12. Inventory2008 2007 2006Raw materials 185 248 132 087 88 609Semi-finished goods and work in progress 239 318 212 893 210 789Finished goods 58 590 46 653 44 306Total 483 156 391 633 343 704Provision for dead inventory as at 31.12 28 747 22 052 21 217Net write-down included in the P&L account item “raw materials” 6 104 1 075 1 477An ongoing evaluation is made of specific dead inventory. Inventory are provided as security for interest-bearing loans.Total pledged inventory as at 31.12.08 is NOK 417.113.Note 13. Trade debtors2008 2007 2006Nominal value of trade debtors 450 014 362 458 340 556Earned, non-invoiced revenues 271 533 189 020 125 001Trade receivables associated companies 13 655 8 908 8 758Provisions for bad debts -64 352 -7 796 -7 519Total 670 850 552 590 466 796Bad debt written off 818 999 1 319Bad debt recognised, including change in provision 55 738 560 805Distribution of time periods:Non-overdue receivables 237 390 255 645 228 2120-30 days 108 038 57 330 79 83631-60 days 30 157 28 901 18 94461-90 days 16 871 9 269 5 227over 90 days *) 71 213 20 221 17 095Trade receivables 463 669 371 366 349 314*) The increase in overdue trade receivables is linked to a customer within the Oil & Gas business area.In connection with the bankruptcy of FPSOcean the group made a provision for loss on receivables related to FPSOcean amounting to NOK 47 million, see note5. In addition certain values in the inventory have been reclassified from receivables as the group expects that it is possible to realize the values of the equipment.See note 12.

Scana Industrier ASA65The table below shows accrued revenues and costs relating to manufacturing costs that are included in the profit and loss account for the accounting period.2008 2007 2006Revenues linked to manufacturing contracts in the financial year 735 249 686 275 459 848Costs linked to manufacturing contracts in the financial year 632 515 551 499 327 189Gross margin in NOK 102 734 134 776 132 659Gross margin as a per cent 14 % 20 % 29 %The table below shows accrued revenues and costs relating to manufacturing costs that are not completed and delivered on the balance sheet date.A number of the contracts have a manufacturing time of more than a year..Revenues linked to manufacturing contracts in progress 1 103 918 668 035 345 538Costs linked to manufacturing contracts in progress 885 667 531 001 253 733Gross margin in NOK 218 251 137 034 91 805Gross margin as a per cent 20 % 21 % 27 %The margin in manufacturing contracts in progress is 20 per cent in 2008. Excluding the manufacturing contracts with FPSOcean, the margin is 26 per cent.Advance revenues on manufacturing contracts 316 740 331 959 61 532Advances from customers 113 900 136 155 57 765Note 14. Other short-term receivables2008 2007 2006Prepaid costs 11 057 7 771 10 365Employee loans 419 346 308Financial instruments 6 647 39 869 20 350Advances to suppliers 31 323 25 589 15 578Other short-term receivables 26 704 29 024 38 306Total 76 150 102 599 84 907Financial instruments consist of el-derivates, interest swap agreements and currency derivates ref. note 18 and 24.The financial instruments are reproted according to the gross method.Note 15. Bank deposits2008 2007 2006Bank depositsOrdinary bank deposits 115 878 186 359 71 815Restricted funds 9 774 8 880 9 299Tax deduction reserves 13 232 10 337 8 590Total 138 884 205 576 89 704The group’s unused short-term credit facilities totalled NOK 130 million as at 31.12.08, compared with NOK 100 million as at 31.12.07.The liquid reserves of NOK 73.8 million in China and Singapore are not a part for the group’s cash pool.Restricted funds are liquid funds from advances received from bankruptcies that are placed in a blocked account as security for the group’s net interest-bearing debt.2008 2007 2006Liquid reserves including overdraft facilities:Bank deposits 138 884 205 576 89 704Bank overdraft -4 167 0 -26 306Total 134 717 205 576 63 398

66 Scana Industrier ASANote 16. Share capital and premiumsNumber of shares:Number of outstanding ordinary shares as at 31.12.07 167 333 750The share capital was unchanged in 2008.Number of outstanding ordinary shares as at 31.12.08 167 333 750Each share has a nominal value of NOK 1.25. There is one class of shares, with all shares carrying equal voting rights.Share capitalShare premiumShare capital and premiums:As at 31.12.08 209 167 0Note 17. Interest-bearing debt2008: Nominal interest Current Long-term MaturityFinancial leasing obligations 1.00 % - 7.50 % 5 873 25 446Bank overdraft NIBOR + 0.75 % 4 167 0Factoring STIBOR + 1.25 % 54 536 0Syndicate loan SEK STIBOR + 0.55 % - 2.3 % 38 242 333 673 24-10-12Syndicate loan EUR EURBOR + 2.3 % 8 424 40 901 24-10-12Bank loan Handelsbanken NIBOR + 0.75 % 667 7 333 01-10-20Bank loan Leshan USD LIBOR + 1.00 % 0 92 036 06-07-12Total 111 909 499 3892007:Financial leasing obligations 1.00 % - 7.50 % 4 694 21 237Bank overdraft NIBOR + 0.75 % 0 0 24-10-08Factoring STIBOR + 1.25 % 51 117 0Syndicate loan SEK STIBOR + 0.75 % 30 000 313 477 24-10-12Bank loan Volda Ørsta Sparebank NIBOR + 1.00 % 3 260 0 18-09-08Bank loan SND 4.05 % 500 1 750 10-02-12Bank loan Handelsbanken NIBOR + 0.75 % 667 8 000 01-10-20Bank loan Leshan USD LIBOR + 1.00% 0 60 384Total 90 238 404 8482006:Financial leasing obligations 1.00 % - 7.50 % 3 679 12 236Bank overdraft NIBOR + 0.75 % 26 308 0 29-08-08Factoring STIBOR +1.25 % 61 534 0Syndicate loan SEK STIBOR + 0.75 % 50 000 243 808 29-08-08Bank loan Volda Ørsta Sparebank NIBOR + 1.00 % 919 3 261 18-09-08Bank loan SND 4.05 % 500 2 250 10-02-12Bank loan Handelsbanken NIBOR + 0.75 % 667 8 666 01-10-20Total 143 607 270 221Syndicate loanThe loan was taken out on 24 October 2007 and consists of a long-term, rollingcredit facility of NOK 120 million, and two repayment loans of MNOK 250 andMNOK 140 respectively. The latter was drawn up in 2008. The repayment loanshave a half-yearly instalment profile of MNOK 23.4, starting on 24 April 2008.The loans are secured with a first priority pledge in the group’s assets, and aredrawn in SEK and Euro.Bank loan Sparebanken Volda ØrstaThe loan was repaid in 2008.Bank loan SNDThe loan was repaid in 2008.Bank loan HandelsbankenThe loan is secured with a pledge in Scana Offshore Vestby’s stocks andreceivables. Instalments are paid four times a year in the sum of NOK 167per instalment.Loan LeshanThe loan was taken out on 31 May 2007. It has a half-yearly instalmentprofile and will be repaid in 6 equal instalments starting in January 2010.Scana Industrier ASA has issued a guarantee as security. In 2008, MUSD 2was drawn on the loan.FactoringThe group has no counter claim rights on factoring since the criteria forexclusion have not been met. As a result of this, factoring is recorded in thebalance sheet as a gross amount.

Scana Industrier ASA67Note 18. Other current liabilities2008 2007 2006Guarantee provision 23 173 17 938 15 051Salaries payable, vacation pay, VAT etc. 111 044 94 061 83 791Accrued non-invoiced expenses 67 955 62 466 35 907Accrued interest costs 3 718 1 309 1 295Financial instruments 112 124 11 362 15 625Other short-term debt 45 352 17 894 26 091Total 363 366 205 030 177 760Financial instruments consist of electric derivates, interest rate swaps and currency derivates, ref. notes 14 and 24.The financial instruments are reported in accordance with the gross method.Note 19. Other non-current liabilities2008 2007 2006Government subsidies 293 609 912Market value long-term currency contracts 47 548 2 082 0Other 105 0 0Total 47 946 2 691 912Financial instruments consist of electric derivates, interest rate swaps and currency derivates, ref. notes 14 and 24.The financial instruments are reported in accordance with the gross method.Note 20. Trade payables2008 2007 2006Trade payables 269 022 236 517 212 220Associated companies 8 307 6 248 6 588Total 277 329 242 765 218 808Distribution of time periods:Non-overdue trade payables 154 127 181 631 139 8810-30 days 63 702 53 173 68 46931-60 days 21 089 3 017 4 42861-90 days 16 019 1 324 2 599over 90 days 22 392 3 620 3 431Total trade payables 277 329 242 765 218 808Note 21. Leasing obligationsThe group as lessee – operational lease agreements:The group has entered into a number of different operational lease agreements for machinery, offices and other facilities.The agreements do not entail restrictions on the company’s dividend policy or financing possibilities. None of the assets that are leased under non-cancellableoperational lease agreements are sub-let. The leasing cost in 2008 was NOK 8.2 million.The group has agreements for the leasing of machinery and transportation that is not recognised when the lease agreements are not regarded as financial leasing.As at 31 December 2008, the group has agreements on the leasing of premises, machinery, inventory and cars with a lease period of 1-6 years. In order to bereleased from the larger lease agreements a one time fee of NOK 27.2 million has to be paid.The figures apply to future minimum leases.2008 2007 2006Operational leasing:Within a year 5 287 5 588 7 240More than 1 year and less than 5 years 16 592 17 035 20 895More than 5 years 1 439 0 2 510Total 23 318 22 622 30 645

68 Scana Industrier ASAThe group’s assets under financial leasing agreements include machinery and equipment. In addition to the lease payments, the group has obligations for maintenanceand insurance of the assets. The lease period varies from 3-10 years. None of the assets that are leased under non-cancellable financial lease agreements are sub-let.The agreements do not entail restrictions on the company’s dividend policy or financing possibilities.2008 2007 2006Book Minimum Present val- Book Minimum Present val- Book Minimum Present valvaluepayment* ue of lease value payment* ue of lease value payment* ue of leaseFinancial leasing:Within 1 year 5 873 7 981 5 873 4 694 5 933 4 694 3 679 3 978 3 679After 1 year but not more than 5 years 19 677 19 688 19 677 17 193 17 263 17 193 11 138 11 717 11 138More than 5 years 5 769 6 081 5 769 4 044 4 047 4 044 1 097 1 049 1 097Book value of leasing 31 319 33 750 31 319 25 931 27 243 25 931 15 915 16 743 15 915*) Minimum payment is instalment and interest in accordance with the respective lease agreements. Financial leasing mainly relate to assets classified as machinery in note 9.Note 22. Related-party transactionsCompanies with significant influence: Sale Purchase Receivables LiabilityFrode Alhaug AS 2008 0 5 133 0 8752007 0 4 167 0 6252006 0 3 571 0 1 233Panda AS *) 2008 0 1 249 0 2442007 0 900 0 1192006 0 720 0 75Associated companies: Sale Purchase Receivables LiabilityScana Korea Hydraulic Ltd 2008 43 495 424 11 875 182007 33 642 306 8 350 02006 31 756 69 8 509 0Jørpeland Kraft AS 2008 2 427 7 381 164 1 0822007 2 226 6 087 239 1 2022006 1 861 6 316 249 1 202Motala Verkstad AB 2008 8 129 37 806 1 523 7 2072007 585 33 628 0 4 7902006 1 585 36 039 0 5 386Scana Wikov AS 2008 156 2 542 3 02007 1 260 169 319 1132006 0 0 0 0AST AS 2008 0 0 90 02007 0 1 171 0 1432006 0 0 0 0Related-party transactions are carried out at the assumed market price. Outstanding receivables and liabilities are unsecured short-term interest-free items. Settlementsare in cash. The group has not issued any guarantees to its related parties. No provisions have been made for unsecured receivables as at 31 December 2008.*) Panda AS is owned by Per Ravnestad.For further information relating to subsidiaries and associated companies reference is made to note 2 in the annual report of the parent company.Note 23. Financial riskCentralised risk managementScana has a centralised finance function. The most important task is to securethe group’s room to manoeuvre in the short and long term. Hedging ofcurrency, interest and electricity price exposure is carried out in accordancewith the group’s policy and routines. This is done centrally by the FinanceDepartment on the basis of the needs reported by the operational units.Financial risk:The group’s activities are exposed to financial market risk, which mainlyaffects exchange rate risk, interest rate risk and fluctuations in the price ofelectricity. Furthermore, the group (primarily the steel area) is also exposedto development in other raw material prices such as scrap steel and alloys.Scana aims to reduce the risk linked to currency, interest and electricity

Scana Industrier ASA69prices by means of derivatives. The group has chosen not to hedge against anyfluctuations in other raw material prices, since Scana believes that any increasesin these prices can mainly be offset by increased sale prices, although with acertain time lag.Currency risk:The group is exposed to exchange rate fluctuations since large parts of theproduction, purchasing and sales take place abroad and/or in foreign currency.The group’s internal banking function continuously monitors and reports thegroup’s currency positions. The currency risk is estimated for each foreigncurrency and takes account of assets, debts and probable purchases and sales inthe relevant currency. The company tries to reduce the currency risk by meansof forward contracts, deposits and/or borrowings in the relevant currencies.The main risks linked to currency in the group are related to future salespayments and the group’s assets in foreign subsidiaries.Interest risk:The group’s interest rate risk is mainly linked to the group’s debt portfolio.The risk is managed at group level. The group aims to offset major effectslinked to changes in the market rate. Scana has therefore tied parts of the debtportfolio to fixed interest rates in order to curb short-term fluctuations in themarket rate. The group’s strategy is for at least 40 per cent of the company’sinterest-bearing debt to be secured with fixed interest rates. Scana’s greatestexposure is to interest rate fluctuations linked to STIBOR.Price risk on electricityThe group has major electricity costs in relation to the production of its goods,mainly in the steel segment. Scana protects itself from fluctuations in electricityprices by buying el-derivatives for Swedish subsidiaries. The group has an agreementwith Vattenfall Power Management AB to administer Scana’s el-derivativeswith the aim of hedging the future electricity prices that need to be paid inSweden. The estimated electricity consumption is hedged by up to 100 percent for the coming months, while the hedged share of estimated consumptiongradually becomes lower for periods further into the future. The Norwegiansteelworks has an agreement to buy electricity at full cost from the partlyownedpower plant Jørpeland power.Liquidity risk:Securing good financial room to manoeuvre is an important aim for thegroup. As a result of the international financial crisis, a number of measureshave been implemented to reduce the financial risk, particularly throughcloser follow-up of liquidity projections and programmes linked to reducingthe working capital. The group monitors the liquidity situation in the shortand long term through active dialogue with its subsidiaries. At the end of2008, the group had sufficient liquidity reserves and credit lines, and were incompliance with the terms of the loan agreements. Unused credit facilitiesare described in note 15. The company considers the liquidity risk to belimited.Credit risk:The group has guidelines for ensuring that orders are not entered into withcustomers who have had major payment problems and where outstandingamounts do not exceed defined credit limits. The maximum risk exposure isrepresented by the capitalised value of the financial assets, including derivates,in the balance sheet. The customer in derivative dealings is DnBNor andNordea, as well as Vattenfall Power Management AB, and is subject to inspectionby finance inspectors in Sweden. The credit risk linked to derivatesis regarded as low. The group regards its greatest risk exposure to be thecapitalised value of accounts receivable (see note 13) and other receivables(see note 14).Scana has only been affected by cancellations to a limited extent. Within theMarine area, the biggest deliveries are to financially robust shipyards in Chinaand Korea with a large degree of state ownership. Within the Oil & Gasarea, service and after sales services are carried out for international leadingplayers. No major reduction is expected in the level of activity in this marketsegment, and the credit risk is considered to be limited. Reduced activity isexpected within new projects and expansions. The company has made aprovision for loss in trade receivables in relation to FPSOcean.Sensitivity analysisIn accordance with IFRS 7, a sensitivity analysis shall be carried out for all financialinstruments that are held on the balance sheet date. In the table below,the sensitivity analysis shows material effects linked to financial instruments.Currency riskThe financial instruments that have currency effects are currency contracts, syndicate loans, accounts receivable, creditors and bank deposits. The table showsthe effects of changes in foreign currency against the NOK. If foreign currency increases by 5 per cent against the NOK, this has a negative effect on the resultlinked to net assets of NOK 63,182 million. Correspondingly, if the NOK is strengthened against foreign currency, the effect on the result is positive.Change in NOK Effect result before tax Effect on equity2008 5 % -63 182 0-5 % 63 182 02007 5 % -29 322 0-5 % 29 322 02006 5 % -24 638 0-5 % 24 638 0Price risk on electricityThe table below shows the effects linked to changes in electricity prices based on the portfolio of electric derivatives that the group has on the balance sheetdate. An increase in electricity prices will mean a positive change in value on the result and equity.Change in elec. price Effect result before tax Effect on equity2008 40 NOK per Mwh 1 400 8 021-40 NOK per Mwh -1 400 -8 0212007 40 NOK per Mwh 644 6 935-40 NOK per Mwh -644 -6 9352006 40 NOK per Mwh 13 7 773-40 NOK per Mwh -13 -7 773

Scana Industrier ASA71Hedging of interest rate risk:Floating interest-bearing liabilities are hedged against changes in the interestrate level by entering into interest swaps. As at 31 December 2008, 42 per centof the group’s loans have a fixed interest rate. In 2005, the group entered intotwo interest swaps, where Scana receives floating rates of interest and paysfixed rates. Changes in the fair value of these agreements are recognised againstequity in line with IAS 39’s rules on hedge accounting. The maturity profile oninterest swaps is five years, while the interest-bearing liabilities mature afterthree years. Any inefficiencies are recognised in the profit and loss account.For 2008, the hedge ratio is considered to be effective, and the entire changein value linked to the interest rate swaps is consequently recognised againstequity. As at 31 December 2008, the group has two interest swaps totallingSEK 175 million, where the group pays a fixed interest rate and receives afloating rate.Currency Amount Fixed rate Maturity Fair valueSEK 100 000 2.79 % 26-07-10 -785SEK 75 000 2.75 % 16-09-10 -642The floating interest rate is set each quarter based on the 3-month STIBOR interest rate. Interest rate swaps used as hedging instruments in cash flow hedging asat 31 December 2008 totalled NOK -1.4 million before tax booked against equity in 2008.Hedging of fluctuations in electricity pricesThe group has major electricity costs in relation to the production of its goods.Scana protects itself from fluctuations in electricity prices by buying el-derivativesfor Swedish subsidiaries. The group has an agreement with Vattenfall PowerManagement AB to administer Scana’s el-derivatives with the aim of hedging thefuture electricity prices that need to be paid in Sweden. The estimated electricityconsumption is hedged by up to 100 per cent for the coming months, while thehedged share of estimated consumption gradually becomes lower for periodsfurther into the future. As at 31 December 2008, electricity hedging is carriedout for up to three years in the future. The value of el-derivatives is calculatedbased on the difference between the agreed future electricity price and themarket’s forward prices on the valuation date multiplied by the hedgedvolume. The change in the fair value of el-derivatives is carried against equityto the degree it satisfies the performance requirements for hedge accountingin accordance with IAS 39. The ineffective share of the changes in value isrecognised in the profit and loss account.For the settlement of el-derivatives, Scana receives a statement from Vattenfallbased on the difference between the agreed price in accordance with theel-contracts and the price Scana has paid for its ongoing electricity consumption.This amount is recognised as other operating costs in such a way thatthe expensed electricity consumption is at all times based on the hedgedelectricity prices.The table below shows an overview of the book value linked to financial instruments distributed by maturity period:2008 2007Fair value -7 942 14 228Booked against equity -4 253 14 278Hedging instruments removed from equity 9 427 200The table below gives an overview of book values connected to financial instruments distributed according to due date.2009 2010 2011 2012 2013 2014As at 31.12.08 Remaining years < 1 1 - 2 2 - 3 3 - 4 4 - 5 > 5 TotalFixed rateInterest rate swaps -1 427 -1 427FloatingBank deposits 138 884 138 884Bank overdraft -4 167 -4 167Financial leasing -5 873 -8 510 -5 775 -3 505 -1 887 -5 769 -31 319Factoring -54 536 -54 536Syndicate loan -46 667 -46 667 -46 667 -236 029 -376 030Long-term credit facilities -45 210 -45 210Interest-bearing loans Leshan Scana -92 036 -92 036Handelsbanken -667 -667 -667 -667 -667 -4 667 -8 000Currency contracts -96 109 -45 377 -2 171 -143 657

72 Scana Industrier ASA2008 2009 2010 2011 2012 2013As at 31.12.07 Remaining years < 1 1 - 2 2 - 3 3 - 4 4 - 5 > 5 TotalFixed rateInterest rate swaps 6 823 6 823FloatingBank deposits 205 576 205 576Bank overdraft 0 0Financial leasing -4 694 -5 792 -5 755 -3 959 -1 687 -4 044 -25 931Factoring -51 117 -51 117Syndicate loan -30 000 -30 000 -30 000 -30 000 -126 245 -246 245Long-term credit facilities -97 233 -97 233Interest-bearing loans Leshan Scana -60 384 -60 384Sparebanken Volda Ørsta -3 260 -3 260SND -500 -500 -500 -500 -250 -2 250Handelsbanken -667 -667 -667 -667 -667 -5 334 -8 667Currency contracts 4 837 1 688 -1 153 5 372Setting of fair value:The fair value of currency contracts is calculated according to the closing rate onthe balance sheet date adjusted for an interest addition or deduction based onthe interest rate difference between the respective currencies. For interest rateswap contracts and electric derivatives, the basis is the present value of the cashflow. The fair value of cash, bank overdrafts and other interest-bearing debt is regardto be almost equal to the capitalised value, since these have a short maturityperiod and thereby give floating interest rates that are adjusted in line withchanges in the general interest rate level. Likewise, the fair value of accountsreceivable and account payables are considered to be equal to the book value,since both items have a short maturity period and were entered into undernormal conditions.The fair value of interest rate swaps is calculated using the estimateddiscounted cash flow based on the market’s forward interest rates on thevaluation date, with an addition to reflect the bank’s profit margins.Below table gives an overview of the book value and fair value of the group’s financial instruments.Book value/fair valuenote 2008 2007 2006Financial assetsBank deposits 15 138 884 205 576 89 704Trade receivables 13 670 912 552 590 466 796Other financial assets 14 69 503 62 730 64 557Electricity derivatives 14 5 560 20 246 7 867Interest rate swaps 14 -1 427 6 823 6 672Forward currency contracts 14 2 514 12 800 5 810Total 885 946 860 765 641 407Financial liabilitiesCreditors 20 277 329 242 765 218 808Advances from customers 13 113 900 136 155 57 765Bank overdraft 15 4 167 0 26 306Financial leasing 21 31 319 25 931 15 915Interest-bearing loans* 575 812 469 156 371 607Currency contracts 18/19 146 170 7 427 7 469Electricity derivatives 18 13 502 6 018 8 156Total 1 162 199 887 452 706 026* Booked value and fair value are congruent, except from interest-bearing debt in 2008. Fair value on interest-bearing debt is MNOK 551 in 2008.The table below shows how the various financial instruments are categorised, cf. IFRS 7 as at 31.12.08At fair value Investments held Lending and Available At amortisedover result until maturity receivables for sale cost TotalFinancial assetsBank deposits 138 884 138 884Trade receivables 670 912 670 912Other financial assets 69 503 69 503El-derivatives 5 560 5 560Interest rate swaps -1 427 -1 427Currency contracts 2 514 2 514Total 6 647 0 879 299 0 0 885 946

Scana Industrier ASA73At fair value Investments held Lending and Available At amortisedover result until maturity receivables for sale cost TotalFinancial liabilitiesCreditors 277 329 277 329Bank overdraft 4 167 4 167Financial leasing 31 319 31 319Interest-bearing loans 575 812 575 812Currency contracts 146 170 146 170El-derivatives 13 502 13 502Total 159 672 0 0 0 1 002 527 1 162 199Capital structure and equityThe main purpose of the group’s composition and management of liabilities andequity is to ensure commercial room to manoeuvre in both the short and longterm. The group also aims for the best possible credit rating, and thereby competitiveloan terms, with lenders for Scana’s activity. Through effective asset managementin relation to liabilities and debt, the group will support the commercial activity, andthereby contribute to increasing the values for the shareholders.The group aims to have liquid funds and credit facilities to finance operationalactivities. This is achieved by maintaining high targets for continued operations andfinancial management. The group manages the capital structure and makes thenecessary changes based on an ongoing assessment of the market and financialrisk and the financial outlook for both the short and medium term. See note 17.Note 25. Shares and shareholdersScana Industrier ASA had 1 940 shareholders as at 31.12.08. Foreign shareholders held shares that in total made up 7.19 per cent of the share capital.No. of shares held by board members and senior personnel:Frode Alhaug * 12 451 044Bjørn Dahle 2 078 000John Arild Ertvaag ** 17 497 528Rolf Roverud 75 000Per Ravnestad *** 1 879 062*Through the company Fama Invest AS ** Through the company Camar A/S.*** Through ownership in the companies International Oilfield Services AS and Panda AS.In addition, the company holds 3 164 931 own shares.The 20 largest shareholders as at 31.12.08:VERKET FINANS AS 18 046 000CAMAR A/S 17 497 528FAMA INVEST AS 12 451 044PARETO AKSJE NORGE 8 505 100VERDIPAPIRFOND ODIN NORGE 7 939 550BEST INVEST AS 6 300 000MP PENSJON 5 409 000PARETO AKTIV 4 896 300SOCIETE GENERALE BANK & TRUST LUX. 4 000 000INTERNATIONAL OILFIELD SERVICES AS 3 356 363TVETERAAS HOLDING AS 3 210 000SCANA INDUSTRIER ASA 3 164 931ODIN EUROPA SMB 2 837 000SPECTATIO AS 2 650 000BJØRN DAHLE 2 078 000LEIF INGE SLETHEI AS 2 000 000BERGTOR AS 1 808 104HANDELSBANKEN MARKETS 1 800 000CLEARSTREAM BANKING S.A. 1 720 418AMCAR VERKSTED AS 1 632 000Total holding for 20 largest shareholders 111 301 338Total number of shares 167 333 750Dividend:The general meeting proposes a dividend for 2008 of NOK 0.30 per share, totalling NOK 50.2 million, in addition to the distribution of 3 164 931 own shares.In 2008, a dividend of NOK 83.7 million was paid, which equated to NOK 0.50 per share.

74 Scana Industrier ASANote 26. Pledged assets and guarantees2008 2007 2006Pledged assets:Of the group’s book debt, the following was secured by pledges 611 298 495 086 413 829Total pledged assets 611 298 495 086 413 829Book value of pledged objects:Trade receivables 346 429 325 110 293 790Inventory 417 113 332 045 296 631Machinery, equipment 358 443 297 316 246 571Buildings, land 215 886 191 536 190 695Total 1 337 871 1 146 007 1 027 686Guarantee obligations:Guarantees 162 317 140 003 179 788Note 27. Acquisition of businessThe following business acquisition was carried out in 2008:Business:Scana Offshore Services Inc. was established on 1 June 2008. The purpose ofestablishing this company was to transfer and continue the activity in the companyBOP Stacking Inc. Scana Offshore Services Inc. is a leading supplier of engineeringservices, procurement and construction (known as EPC contracts), as well asproject management linked to the delivery of new or modified blow out systems(BOP systems). The company supplies systems to a number of the world’s largestdrilling contractors, which the company also has framework agreements with.The acquisition was carried out on the date of foundation, whereby ScanaOffshore Services Inc. bought the activity in BOP Stacking Inc. for USD 10million. Scana’s share; USD 7 million, was paid in cash, while the previousowner’s share was USD 3 million linked to a non-pecuniary contribution.Tax equivalent to USD 0.5 million was also paid. Subsequent to thetransaction, Scana Industrier ASA now has a 70 per cent holding. Theremaining 30 per cent is owned by shareholders in BOP Stacking Inc. ScanaIndustrier ASA has an option to purchase the minority shares in 2010.Added value allocation 01.06.08 Fair value Book valueIntangible assets 5 117 0Tangible fixed assets 1 292 0Financial assets 358 358Inventory 1 627 1 627Receivables 7 514 7 514Current assets 9 656 9 656Bank 9 487 9 487Total assets 35 051 28 642Creditors 3 177 3 177Other short-term debt 6 154 6 154Total debt 9 331 9 331Net assets 25 720 19 311Goodwill 25 453Total remuneration 51 173Goodwill 100 % 25 453Transaction costs 3 910Minority share of goodwill (25 453 * 30%) -7 636Majority share of goodwill 21 727Cash flow upon acquisition:Net cash from acquired business 9 487Purchase amount paid cash -35 821Transaction costs -3 910Total net cash flow upon acquisition -30 244Acquisition costPurchase amount 35 821Transaction costs 3 910Total acquisition cost 39 731

Scana Industrier ASA75Fair value on the acquisition date relates to book values in Scana OffshoreServices Inc. Goodwill is also recognised in the company accounts. Book valueshows recognised values in BOP Stacking Inc. on the acquisition date.GoodwillThe total purchase price minus added value gives a residual value that cannotbe allocated to a specific asset or obligation. The residual value is entered inthe company accounts as goodwill. Goodwill mainly consists of the followingcomponents:• The employees’ high level of technical expertise and knowledge within designand construction. The engineering team has long and extensive experience.Investing in the establishing of a similar engineering team will be extremelyexpensive. The employee’s knowledge does not satisfy the control criteriain IAS 38 for recognising intangible assets and is therefore part of goodwill.• The acquisition gives Scana direct contact with customers in the largestservice market for oil and gas.• The group expects synergies within the Oil & Gas area, which will give thegroup a stronger market position.Share of profit/loss from the acquired unit in 2008Since takeover on 1 June 2008, Scana Offshore Services has contributed witha turnover of NOK 43 million and a net profit for the year of NOK 6.5 million.Note 28. Own sharesIn accordance with § 7-27 of the Norwegian Accounting Act, the purchase anddisposal of own shares must be reported. In accordance with the authority topurchase the company’s own shares, which was approved at the ordinarygeneral meeting held on 29 April 2008, the board of Scana Industrier ASAdecided on 17 October 2008 to initiate a buy back programme of the company’sown shares. Shares purchased under this programme can be used forfuture share capital reductions or dividend payouts, or for the acquisition ofbusiness.Number of sharesAmountHolding of own shares as at 31.12.07 63 731 1 071Purchase of own shares 3 101 200 27 119Sale of own shares 0 0Holding of own shares as at 31.12.08 3 164 931 28 190Note 29. Events after balance sheet date1. FPSOcean bankruptFPSOcean filed a bankruptcy petition on 19 February 2009. On this basis, Scanahas allocated NOK 47 million to losses relating to the loading buoy project inthe fourth quarter of 2008. The remaining value of inventory represents theestimated minimum value of the equipment in the event of realisation by athird party. Scana’s remaining works and risk in connection with the project arelimited. Scana’s assessment is that the ship will be completed by a new owner.2. Acquisition of business in PolandScana Industrier ASA has entered into an agreement for the purchase of ABB’smarine activity in Poland (Scana Zamech). The company designs, manufacturesand installs tunnel thrusters, shafts and fixed and manoeuvrable propellers forships ranging from approximately 1,000 tonnes and upwards to the largest typesof ships.In 2008, the company had 60 employees and a turnover of NOK 140 million.Its customers include a number of shipyards in Europe and the Far East. Salesof thrusters, propellers and shafts represent 80 per cent of turnover, with theremaining 20 per cent coming from servicing and sales of spare parts. Theacquisition forms a solid basis for further developing Scana’s propulsion activities.The acquisition also increases the activity within Scana’s service portfolio, whichis important to profitability.3. Change in actual value of currency contractsScana secures all major sales and purchasing contracts in foreign currencies.At the end of 2008, the NOK was weakened against the EUR, GBP and USD.The change in value must be directly entered in the profit and loss accountin accordance with the IFRS, but has no liquidity effect. As of 24 March 2009,the negative value of the contracts was reduced to NOK -47 million after astrengthening of the NOK. This change had a positive effect on the key figures.4. Order Back logScana’s main products are well diversified, niche oriented and are leadingproducts within their market segments. After a number of years of growth,the financial crisis and the following downturn in the market economy, is expectedto reduce the level of activity. The market uncertainty for the group’sproducts and services is however limited in 2009, since a significant portionof the production capacity has already been sold. In the first months of 2009the group has registered a lower order inflow compared to 2008.A number of measurements have been done in order to meet the reducedlevel of activity in the subsidiaries, among others increased focus on marketand sales efforts, increased focus on the working capital and adjustments ofthe capacity in accordance with the new level of activity.

76 Scana Industrier ASAparent company profit and loss ACCOUNTNote 2008 2007Total revenue 7 38 651 22 730Operating costs and expensesWages, social security and pension costs 8 11 588 5 204Depreciation 3 66 115Other operating expenses 7/8 34 467 20 137Total operating costs and expenses 46 121 25 456Operating income -7 470 -2 726Financial income and expensesIncome from investments in subsidiaries 197 916 92 863Interest income intra-group 7 18 642 14 838Interest income 15 668 10 681Other financial income 3 115 1 414Interest expense 28 939 24 080Interest expense intra-group 7 5 758 3 154Other financial expenses 35 805 13 693Net finance 164 839 78 869Income before tax 157 369 76 143Tax 4 2 691 -14 753Net income after tax 154 678 90 896Allocations and transfersDividend 50 200 83 667Retained earnings 104 478 7 229Total 154 678 90 896

Scana Industrier ASA77parent company Balance sheetNote 2008 2007Non current assetsIntangible assets:Deferred tax assets 4 40 147 36 081Tangible assets:Property, plant and equipment 3 100 96Financial assets:Shares in subsidiaries 2 483 317 419 425Other shares 100 100Intercompany long-term receivables 238 158 120 510Total non current assets 761 822 576 212Current assetsDebtors:Intercompany short-term receivables 10 405 689 196 538Prepaid expenses and other short-term receivables 10 661 25 792Total debtors 416 350 222 330Cash and cash equivalents 11 50 570 102 349Total current assets 466 920 324 679Total assets 1 228 742 900 891Shareholders’ equityShare capital 9 209 167 209 167Own shares -3 956 -80Other paid-in capital 118 837 117 845Total paid-in capital 324 048 326 932Retained earnings:Retained earnings/uncovered losses 111 598 31 455Total retained earnings 111 598 31 455Total shareholders' equity 5 435 646 358 387LiabilitiesLong-term liabilities:Long-term interest bearing debt 13 374 574 313 477Other long-term liabilities 47 548 2 082Total long-term liabilities 422 122 315 559Current liabilities:Interst bearing short-term debt 12 46 667 30 000Accounts payable 1 315 1 603Intercompany short-term debt 164 293 99 468Dividend 50 200 83 667Other accrued expenses and liabilities 108 499 12 207Total current liabilities 370 974 226 945Total liabilities & shareholder’s equity 1 228 742 900 891

78 Scana Industrier ASAparent company cash flow statement2008 2007Operating activitiesIncome before taxes 157 369 76 143Income from investments in subsidiaries -197 916 -92 863Depreciation 66 115Change in other current assets -88 967 31 368Change in accounts payable -288 -1 908Change in other current liabilities and accruals 175 593 37 534Net cash provided by (used in) operating activities 45 857 50 389Investing activitiesChange in long-term receivables -117 648 119 265Investments in fixed assets -70 -42Investments in business -39 759 -50 263Net cash used in investing activities -157 477 68 960Net cash before financing activities -111 620 119 349Financing activitiesProceeds from long-term borrowings 140 000 366 614Repayment of long-term interest bearing debt -78 903 -296 945Change in short-term interest-bearing debt 16 667 -43 796Dividend -83 667 -55 220Received dividend 92 863 48 791Buyback own shares -27 119 -53 995Net cash provided by financing activities 59 841 -34 551Net cash flows -51 779 84 798Cash and cash equivalents at beginning of year 102 349 17 551Cash and cash equivalents at end of year 50 570 102 349Change in cash and cash equivalents -51 779 84 798

Scana Industrier ASA79parent company Notes to the accountNote 1. Accounting principlesThe company’s annual accounts are prepared in accordance with theprovisions of the Norwegian Accounting Act and good accounting practice.Continued operation is assumed in preparing the accounts and in determiningthe value of the company’s assets. The annual accounts consist of a profit andloss account, balance sheet, cash flow statement and notes. These elementsof the annual accounts constitute an integrated total. All figures in the annualaccounts are in NOK 1 000 unless otherwise stated.Some of the note information is shown in the notes to the consolidated groupaccounts.Revenues and costsRevenues are entered in the books as they accrue. Costs are registered inthe same period as the associated revenues. Direct transaction costs inconnection with new loans are distributed over the loan period in accordancewith the amortised cost method.Short term claims and short term liabilitiesClaims and debt are classified as current assets if they mature within one (1)year of their transaction date.Assets and liabilities in foreign currencyTransactions in foreign currency are entered at the exchange rates applicableat the time of transaction. The company’s cash balances, bank deposits,receivables and liabilities in foreign currency are converted at the currencyratios on the balance sheet date.Customer receivablesCustomer receivables are entered in the balance sheet after deduction ofknown losses and allocation of reserves for coverage of anticipated losses.Shares in subsidiariesInvestments in subsidiaries are valued in accordance with the cost method. Ifthere are applicable criteria for write-downs, such write-downs will be chargedagainst the result. Distribution from subsidiaries representing earned incomeis booked against the result. Distribution done as compansation for acqusitionof assets is considered as repayment of invested capital and booked asa reduction of the investment.Fixed assets and depreciationFixed assets are entered in the balance sheet at historical acquisition costs lessdepreciation and write-downs. Depreciation is linear based on acquisitioncost. When fixed assets are sold, net proceeds are entered as operatingincome and losses are entered as operating costs. Anticipated future cashflows discounted to present values are used as criteria for write-downs.LeasingLeasing agreements are classified as either financial or operational leasingbased on a concrete assessment of each individual agreement. The companyonly has assets that are classified as operational leases.TaxesTax cost in the profit and loss statement is the sum of taxes payable anddeferred tax associated with the year’s accounting result, plus changes indeferred tax advantage or liability resulting from changes in tax rates.Deferred tax in the balance sheet is tax calculated on the basis of nettax-increasing temporary differences between accounting-related and taxrelatedbalance sheet values, after reconciliation of tax-reducing temporarydifferences and losses carried forward. Full provisions are allocated accordingto the liability method without discounting.Deferred tax advantage is entered in the balance sheet on the assumptionthat the company will be able to show future earnings or tax-relateddispositions that justify the balance sheet value.Pensions and pension liabilitiesThe employees are insured through a pension scheme with an agreedemployer contribution (contribution scheme), which is included in the itemWages and social costs.Financial instrumentsThe company uses a number of financial instruments to manage the group’sexposure to currency and interest risks. The accounting-related treatmentfollows up the intent behind the creation of these contracts.Currency futures contracts are entered in the balance sheet at real value.Unrealised gains or losses associated with these contracts are entered asincome as they accrue.The company uses hedge accounting for interest rate swaps where thecriteria for hedge accounting are met.Hedging of net investment is treated as hedge accounting. Unrealisedcurrency gains or losses on loans that are used as hedging instruments insecuring the net investment in Swedish subsidiaries, are initially entered inthe balance sheet as part of investments in subsidiaries, and will only betaken to income when the investment is sold.Cash flow statementThe cash flow statement is prepared in accordance with the indirectmethod. Liquid flows include means of payment (cash and bank deposits)and short-term investments in securities (not equity shares) with a maturityof less than three (3) months counted from the time of acquisition.Note 2. SharesBook valueAcquired Holding Voting right No. of shares NOK at 31.12.08Shares in subsidiaries:Scana Steel Björneborg AB, Björneborg Sweden 1993 100 % 100 % 80 000 32 610Scana Peak Ltd., Leshan China 1997 100 % 100 % N/A 3 514Leshan Scana Machinery Co. Ltd 1997 80 % 80 % N/A 51 005Scana Trading AS, Stavanger Norway 1987 100 % 100 % 115 000 29 993Scana Mar-El AS, Dalen Norway 1996 100 % 100 % 150 000 10 452Scana Steel AB (underkonsern), Karlskoga Sweden 1995 100 % 100 % 69 305 73 410Scana Skarpenord AS, Rjukan Norway 1989 100 % 100 % 7 000 11 363Scana Steel Stavanger AS, Jørpeland Norway 1990 100 % 100 % 10 000 25 000Scana Offshore Technology AS, Jørpeland Norway 2005 100 % 100 % 100 % 10 501

80 Scana Industrier ASABook valueAcquired Holding Voting right No. of shares NOK at 31.12.08Shares in subsidiaries:Scana Volda AS, Volda Norway 1997 100 % 100 % 94 426 66 010Scana Offshore Vestby AS 2006 100 % 100 % 1 800 79 444Scana AMT AS 2006 50 % 50 % 50 20 163Scana Oil & Gas Inc. 2006 100 % 100 % 1 000 0Scana Offshore Services 2008 70 % 70 % 39 731Elimination of currency effects on net investment in subsidiaries 30 121Total shares in subsidiaries 483 317Acquired Holding Voting right No. of sharesShares held by subsidiaries:Scana Steel Ltd, Sheffield England 1999 100 % 100 % 10 000Scana Steel Booforge AB, Karlskoga Sweden 1994 100 % 100 % 100 000Scana Steel Söderfors AB, Söderfors Sweden 1995 100 % 100 % 259 000Scana Steel OY, Helsingfors Finland 1997 100 % 100 % 50Scana Singapore Pte Ltd, Singapore 1994 100 % 100 % 205 000Scana MTC AS 2007 100 % 100 % 100Scana AMT AS 1997 50 % 50 % 50Note 3. Tangible fixed assetsProperty, plant and equipmentAquisition costAccumulated aquisition costs at 01.01.08 1 793Additions 70Disposals 0Accumulated aquisition cost at 31.12.08 1 863DepreciationAccumulated depreciation at 01.01.08 1 697This year's depreciation 66Disposals 0Accumulated depreciation at 31.12.08 1 763Book value 31.12.08 100Depreciation period in number of years 3 - 5Annual lease of office premises (not included in balance sheet) in 2008 was NOK 1 138.Note 4. Tax2008 2007Basis for tax payable:Profit/loss before tax 157 369 76 143Permanent/other differences -171 892 -40 916Change in temporary differences 11 424 4 649Used loss to be carried forward 3 098 -39 876Basis for tax payable 0 0This year's taxesTax payable 0 0Change in deffered tax -4 066 -9 144Tax booked against equity 6 757 -5 609This year's taxes 2 691 -14 753

Scana Industrier ASA812008 2007Reconciliation of taxes against ordinary profit/loss before tax:This year's taxes 2 691 -14 75328 per cent of profit/loss before tax 44 064 21 320Difference owed; -41 373 -36 073Permanent/other differences -48 130 -11 456Change in unrecognixed/reversed deferred tax asset 0 -19 008Tax booked directly against equity 6 757 -5 609Breakdown of basis for deffered tax:Fixed assets -240 -307Receivables -2 000 -2 000Derivatives -13 896 2 404Gain and loss account -245 -307Tax liablilities dividend Sweden 4 747 0Tax loss/credit carry forwards -131 749 -128 652Total temporary differences -143 383 -128 86128 per cent deffered tax 40 147 -36 081Deferred tax with the above basis are recognised as:Deferred tax assets 40 147 36 081Recognised deferred tax assets are based on estimates of future earnings in NorwayThe right to carry forward uncovered losses expires as follows:No limit 98 556 95 459Limits linked to dividend payments to carry forward that fall due in 2013 33 193 33 193Tax booked directly against equity:Derivates 0 -42Net investment 6 757 -5 567Total 6 757 -5 609Note 5. Shareholders’ equityShare premiumShare premium/ Share premium non-registred Share holders’Share capital own shares in capital in capital equityShareholders' equity at 31 December 2007 209 167 -80 117 845 31 455 358 387Profit/loss for the year 0 154 678 154 678Share option programme 992 0 992Buyback of shares -3 876 0 -23 243 -27 119Change in market value on cash flow hedges 0 -8 249 -8 249Deferred tax interest rate swap 0 400 400Net investment 0 6 757 6 757Proposed dividend 0 -50 200 -50 200Shareholders' equity at 31 December 2008 209 167 -3 956 118 837 111 598 435 646In addition to dividend it is proposed to distribute 3 164 931 own shares.Note 6. Guarantees2008 2007Parent company guarantees 162 317 140 003

Scana Industrier ASA83Note 13. Long-term interest-bearing debtLoans in Loans in NOK Loans in NOK Average interestlocal currency at rate 31.12.08 at rate 31.12.07 rate at 31.12.08Syndicated loans in SEK 359 709 325 249 313 477 5.85 %Syndicated loans in EUR 5 000 49 325 0 3.84 %Total 374 574 313 4772009 2010 2011 2012Sinking fund long-term interest-bearing debt: 0 46 667 46 667 281 240Note 14. Pledged assets2008 2007Interest-bearing debt secured by pledge 421 241 345 790Book value of pledge objectsShares 483 317 419 425Property, plant and equipment 100 96Total 483 417 419 521Note 15. Financial instrumentsCurrency contracts:Below is a summary of all open currency contracts as at 31.12.08.UnrealisedCurrency Net Nominal value Maturity profit/lossGBP Sale 25 921 2009 1 844SEK Sale 96 2009 -85USD Sale 106 316 2009 -10 772EUR Sale 732 223 2009 -85 924JPY Sale 3 368 2009 -1 172USD Sale 39 214 2010 -10 130EUR Sale 220 618 2010 -35 247USD Sale 1 186 2011 -356EUR Sale 9 475 2011 -1 815Total -143 657The forward contracts form part of the group’s currency risk management.Interest rate swaps:The group believes that having parts of its debt at fixed interest rates minimises the risk in the long term. Interest rate swaps are therefore used to swap floatinginterest rates with fixed rates. When the fixed rate is lower than the floating rate, Scana receives and recognises the difference as income. The income is accrued overthe relevant interes periode. As at 31 December 2008, the company has two interest swaps totalling SEK 175 millin, where the company pays a fixed interest rateand receives a floating rate. The floating rate is set each quarter based on the 3-month STIBOR interest rate.Currency Amount Fixed rate Maturity Fair valueSEK 100 000 2.79 % 26-07-10 -785SEK 75 000 2.75 % 16-09-10 -642

84 Scana Industrier ASADeclaration by the Board of Directors and the President & CEOThe Board and the President & CEO have to day considered and approvedthe Scana Industrier ASA annual report and financial statements for the ScanaIndustrier group and its parent company for the 2008 calendar year end as of31 December 2008.The consolidated financial statements have been prepared and presented inaccordance with the requirements of IFRS as adopted by the EU and associatedinterpretations, and with Norwegian disclosure requirements that werein force as of 31 December 2008. The annual report for the group and parentcompany meets the requirements of the Norwegian Accounting Act andNorwegian Accounting Standard 16 in force as of 31 December 2008.To the best of our knowledge:• the 2008 financial statements for the group and parent company havebeen prepared in accordance with applicable accounting standards• the information provided in the financial statements gives a true and fairportrayal of the group and parent company’s assets, liabilities, financialposition, and profit as a whole as of 31 December 2008.• the annual report provides a true and fair overview of:- developments, profit, and the financial position of the group and theparent company- the most significant risks and uncertainties facing the group and theparent companyStavanger, 1 April 2009frode AlhaugChairman of the boardJohn Arild ErtvaagBoard memberMari Skjærstad Kristin Malonæs Bjørn Dahle Rolf RoverudBoard member Board member Board member CEO and Group chief executive

Scana Industrier ASA85Auditors´ report 2008To the Annual Shareholders’ Meeting ofScana Industrier ASAStatsautoriserte revisorerErnst & Young ASVassbotnen 11 Forus, NO-4313 SandnesPostboks 8015, NO-4068 StavangerForetaksregisteret: NO 976 389 387 MVATlf.: + 47 51 70 66 00Fax: + 47 51 70 66 01www.ey.noMedlemmer av Den norske RevisorforeningAuditor's report for 2008We have audited the annual financial statements of Scana Industrier ASA as of 31 December 2008,showing a profit of NOK 154 678 000 for the Parent Company and a profit of NOK 59 770 000 for theGroup. We have also audited the information in the Directors' report concerning the financial statements,the going concern assumption, and the proposal for the allocation of the profit. The financial statementscomprise the financial statements for the Parent Company and the Group. The financial statements of theParent Company comprise the balance sheet, the statements of income, cash flows, and the accompanyingnotes. The financial statements of the Group comprise the balance sheet, the statements of income andcash flows, the statement of changes in equity and the accompanying notes. The regulations of theNorwegian Accounting Act and accounting standards, principles and practices generally accepted inNorway have been applied in the preparation of the financial statements of the Parent Company. IFRSs asadopted by the EU have been applied in the preparation of the financial statements of the Group. Thesefinancial statements and the Directors’ report are the responsibility of the Company’s Board of Directors andChief Executive Officer. Our responsibility is to express an opinion on these financial statements and onother information according to the requirements of the Norwegian Act on Auditing and Auditors.We conducted our audit in accordance with laws, regulations and auditing standards and practicesgenerally accepted in Norway, including the auditing standards adopted by the Norwegian Institute of PublicAccountants. These auditing standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. To the extent required bylaw and auditing standards, an audit also comprises a review of the management of the Company’sfinancial affairs and its accounting and internal control systems. We believe that our audit provides areasonable basis for our opinion.In our opinion,• the financial statements of the Parent Company are prepared in accordance with laws and regulationsand present fairly, in all material respects the financial position of the Company as of 31 December2008, and the results of its operations and its cash flows for the year then ended, in accordance withaccounting standards, principles and practices generally accepted in Norway• the financial statements of the Group are prepared in accordance with laws and regulations and presentfairly, in all material respects, the financial position of the Group as of 31 December 2008, and theresults of its operations and its cash flows and the changes in equity for the year then ended, inaccordance with IFRSs as adopted by the EU• the Company's management has fulfilled its duty to properly record and document the Company’saccounting information as required by law and bookkeeping practice generally accepted in Norway• the information in the Directors' report concerning the financial statements, the going concernassumption, and the proposal for the allocation of the profit is consistent with the financial statementsand complies with law and regulations.Stavanger, 3 April 2009ERNST & YOUNG ASJan KvalvikState Authorised Public Accountant (Norway)(sign)Note: The translation to English has been prepared for information purposes only.A member firm of Ernst & Young Global Limited

86 Scana Industrier ASAScanas head office is locatedin Stavanger, Norway.

88 Scana Industrier ASAconfirm to the annual general meeting that the group andparent company’s annual accounts have been submitted inaccordance with current legislation and regulations. The auditoralso attends board meetings that deal with the annualaccounts. Meetings may be arranged between the board andauditor without the presence of the general manager. In linewith requirements for the independence of the auditor, Scanawill only use the appointed external auditor for work otherthan the statutory financial audit to a limited extent. Scanadoes not have its own internal auditing department, but usesresources from an external audit firm if the need for suchaudits arises.With regard to shares held by board members and senioremployees, reference is made to note 24 of the groupaccounts.Reporting calendarScana Industrier ASA publishes interim reports in Norwegianand English, as well as a comprehensive annual report.The quarterly interim reports are crucial in relation to thecommunication with the market. The following dates havebeen set for the company’s financial reporting in 2009:1st quarter 29 April 20092nd quarter 13 August 20093rd quarter 21 October 20094th quarter 18 February 2010The company reserves the right to change these dates.Annual general meetingThe ordinary annual general meeting of Scana IndustrierASA will be held at Radisson SAS Atlantic Hotel, Olav V’s gt,Stavanger, on Wednesday 29th April at 5.30 pm.Shareholders who wish to attend the meeting are requestedto notify the company of their intention to do so by Monday27th April 2009. Shareholders may be represented by proxy,subject to written authorisation.DividendThe board of directors proposes a dividend of NOK 0.30per share for 2008, in addition to distribution of stock of 3.2million shares among the shareholders.Shareholders registered with the Norwegian Central SecuritiesDepository (VPS) on 29th April 2009 will be entitled to receivethe dividend, which will be paid in May 2009. The shares will belisted excluding dividend on the Oslo Stock Exchange the dayafter the annual general meeting, i.e. 30th April 2009.Scana on the InternetInformation on the company is also available on thecompany’s website at www.scana.no.Change of addressShareholders registered with the Norwegian CentralSecurities Depository (VPS) must notify any change ofaddress to their registrar and not directly to the company.The Scana shareStructureScana has one class of share, with each share carrying onevote and a nominal value of NOK 1.25. The Scana share islisted on the Oslo Stock Exchange (ticker code SCI).The number of outstanding shares throughout 2008 has been167,333,750. At the end of the year, the company’s own stockof shares were 3 164 931.Performance in 2008At the start of 2008, Scana’s share price was NOK 8.70,which corresponds to a market capitalisation of NOK 1,456billion. The share price at the start of the year was NOK18.90. The drop is slightly less than Oslo Stock Exchange’smain index (OSEBX). The number of shares traded on theOslo Stock Exchange during the year was 33 million, whichgives a turnover rate of 0.20.

Scana Industrier ASA89Articles of Association§ 1 The company’s name is Scana Industrier ASA. The company is a Norwegian public limited company.§ 2 The company’s objects are the ownership and management of industrial and commercial activities and any relatedbusiness, and the ownership and management of properties. The company’s objects also include investmentin other companies to further the company’s operations.§ 3 The company’s head office is to be in Stavanger.§ 4 The company’s share capital is NOK 209 167 187.50 divided into 167 333 750 shares each with a par value ofNOK 1.25.§ 5 The company’s shares are to be registered with the Norwegian Central Securities Depository (VPS).§ 6 The company’s board is to have between three and five members elected by the general meeting for a term oftwo years at a time. The upper age limit for board members is 68 years. Members are to step down at the firstannual general meeting after reaching the age of 68.§ 7 The chairman of the board or the general manager together with a member of the board may sign on behalf ofthe company.§ 8 General meetings are to be chaired by the chairman of the board.§ 9 The following topics are to be considered and resolved at the annual general meeting:a) Adoption of the profit and loss account and balance sheet, including the distribution of the profit for the year orcovering of the loss for the year and the distribution of dividends.b) Adoption of the group profit and loss account and group balance sheet.c) Election of the members and chairman of the board on the expiry of their term of office.d) Emoluments payable to the board.e) Election of an auditor where a proposal for such has been made.f) Approval of the auditor’s fees.g) Any other business required to be transacted at the meeting in accordance with the law or the articles ofassociation.h) The company is to have an election committee consisting of at least 3 members elected by the general meeting.The election committee is to prepare the election of board members for the general meeting, proposecandidates to board duties and recommend the size of emoluments payable to the board. The general meetingmay give directives as to how the election committee should work.§ 10 In all other respects, reference is made to applicable company law.(Last amended 29 April 2008)

Scana Industrier ASA91Design and production: Printers asFront page picture: Sevan Marine AS, Page 5: Sten Anderson, Page 6:Kjetil Alsvik, Page 7: Scanpix, Page 8: Scana Industrier ASA, Page 11: StatoilHydro (illustration), Page 15: Shell,Page 16: Motala Verkstad AB, Page 17: Kalmar (small picture), Page 18: Iggesund Tools, Page 19: Seadrill; Page 21: Scanpix, Page 23: Tide Sjø AS, Page 24: Farstad Shipping,Page 26: Kjetil Alsvik, Page 29: Sevan Marine ASA, Page 32: Kjetil Alsvik, Page 34: Kjetil Alsvik, Page 35: Kjetil Alsvik, Page 37: Scanpix, Page 53: Kjetil Alsvik, Page 93: Kjetil AlsvikThanks to: Camilla Eriksson and Kjell Inge Torgersen

Scana Industrier ASAStrandkaien 2, P.O. Box 878, N-4004 Stavanger, NorwayTelephone +47 51 86 94 00, fax +47 51 91 99 80industrier@scana.no • www.scana.noScana Industrier ASAStrandkaien 2. P.o.box 878N-4004 Stavanger, NorwayTel: +47 51 86 94 00Scana Mar-El ASStorvegen 48N-3880 Dalen, NorwayTel: +47 35 07 58 00Scana Skarpenord ASSåheimsveien 2N-3660 Rjukan, NorwayTel: +47 35 09 32 00Scana Volda ASHamnegaten 24. P.o.box 205N-6101 Volda, NorwayTel: +47 70 05 90 00Scana Zamech sp. z o.o.ul. Stoczniowa 282-300 Elblag, PolandTel: +48 55 2364820Scana Steel Stavanger ASN-4100 Jørpeland, NorwayTel: +47 51 74 34 00Jørpeland Kraft ASDir. Poulsens gate 1N-4100 Jørpeland, NorwayTel: +47 51 74 35 00Scana Offshore Technology ASDir. Poulsens gate 1N-4100 Jørpeland, NorwayTel: +47 51 74 35 00Scana Materials Technology Centre ASDir. Poulsens gate 1N-4100 Jørpeland, NorwayTel: +47 51 74 35 00Scana Wikov ASDir. Poulsonsgate 1N-4100 Jørpeland, NorwayTel: +47 51 74 35 00Scana Offshore Vestby ASTverrveien 4. P.o.box 24N-1541 Vestby, NorwayTel: +47 64 95 65 00Scana Steel ABP.o.box 55SE-691 21 Karlskoga, SwedenTel: +46 586 815 81Scana Steel Björneborg ABKristinehamnsvägen 2SE-680 71 Björneborg, SwedenTel: +46 550 251 00Scana Steel Booforge ABP.o.box 55SE-691 21 Karlskoga, SwedenTel: +46 586 820 00Scana Steel Söderfors ABP.o.box 104SE-81 504 Söderfors, SwedenTel: +46 29 31 77 00Scana Offshore Services8901 Jameel, Suite 110Houston, Texas 77040, USATel: +1713 460 0295Scana Shanghai Rep. Office (Volda)8B Crystal Century Tower567 WeiHai RoadShanghai 200041, ChinaTel: +86 21 6288 8881Scana Skarpenord Shanghai Service Station10 Heng Shan RoadShanghai (200031), ChinaTel: +86 21 64 33 08 18Leshan Scana Machinery Co. Ltd.Guan’e Street. Shawan DistrictLeshan City. Sichuan ProvinceChina 614900Tel: +86 833 3445725Scana Singapore Pte. Ltd.51 Bukit Batok Crescent. #06-02 Unity CentreSingapore 658077Tel: +65 68722702Scana Korea Hydraulic Ltd.976 Songhyon-ri. Jillye-myeon. GimhaeGyongnam 621-882. KoreaTel: +82 55 343 9007