Consafe Offshore AB (publ) - Netfonds

Consafe Offshore AB (publ) 2556604-4771Table of ContentsSidaAdministration Report .............................................................................................................. 3Operations ______________________________________________________________ 3Background ...................................................................................................................................................3Information concerning the operations..........................................................................................................3Group structure..............................................................................................................................................3Parent Company ............................................................................................................................................4Subsidiaries ...................................................................................................................................................4Significant events during the financial year ___________________________________ 5The Group’s revenues and results ___________________________________________ 5Operating revenues........................................................................................................................................5Operating expenses........................................................................................................................................6Income and financial position .......................................................................................................................6Taxes .............................................................................................................................................................6Earnings per share .........................................................................................................................................6The Group’s financial position and liquidity ___________________________________ 6Investments and depreciation ........................................................................................................................6Liquid funds ..................................................................................................................................................6Financing.......................................................................................................................................................6Equity/assets ratio and debt/equity ratio........................................................................................................7Share capital ..................................................................................................................................................7The share _______________________________________________________________ 8Trading ..........................................................................................................................................................8Operating revenues........................................................................................................................................8Price trends....................................................................................................................................................8Ownership structure ......................................................................................................................................9Dividend........................................................................................................................................................9Risk management ..........................................................................................................................................9International Financial Reporting Standards (IFRS)............................................................ 9The Group’s management__________________________________________________ 9General Meetings of Shareholders ................................................................................................................9The Board and its work ...............................................................................................................................10Auditors.......................................................................................................................................................11Policies ________________________________________________________________ 11Dividend policy ...........................................................................................................................................11Information policy.......................................................................................................................................12Environmental policy ..................................................................................................................................12Significant events after the end of the financial year ___________________________ 13Time frame for financial information _______________________________________ 14Proposed appropriation of profits ___________________________________________ 15Future development______________________________________________________ 15Income statement.................................................................................................................... 17Balance sheet .......................................................................................................................... 19Change in Equity - Group...................................................................................................... 22Change in Equity - Parent Company..................................................................................... 23Cash Flow Statements ............................................................................................................ 24Notes for Parent Company and Group .................................................................................. 26

Consafe Offshore AB (publ) 3556604-4771Administration ReportOperationsBackgroundThe Company was founded in 2000 and the current Group operates offshore business with afleet comprised of four accommodation service vessels providing clients with added value inthe form of more secure, efficient and reliable offshore activities in conjunction with thedevelopment of new offshore fields and the maintenance of existing offshore installations.The Company offers its services on a global basis to companies within the oil and gasindustries where there is a requirement for assistance with various types of support services.Within the Company there is a long history of experience in these markets, and in theoffshore services sector in particular. This experience provides the foundation for operationsconcerning the marketing and management of accommodation service vessels.Information concerning the operationsThe core of the Company’s operations is the provision of competitive services to companiesworking within the offshore, oil and gas markets. The offshore services offered by theCompany cover the entire life cycle of an offshore oil and gas field, from development todecommissioning.The Group’s fleet of accommodation vessels is comprised of three half-submerged, so-called“semi-submersibles”, Safe Astoria, Safe Bristolia, and Safe Concordia, and a so-called “jackup”,Safe Esbjerg. All units are owned 100 % except for Safe Concordia, which is 15 %owned. Safe Esbjerg, previously Atlantic Esbjerg, is the most recent addition to the fleet. TheCompany entered into an agreement after the end of the financial year to acquire theremaining 85 % share of Safe Concordia, and the transaction is expected to be completed bythe end of September 2005. The Company markets the entire fleet and administers, in part,the operations and staffing of the fleet.The market for the Company’s products is global and consists of the provision ofaccommodation and construction vessels within the offshore industry with accommodationareas for personnel, large working areas and workshops, as well as a gangway for connectingto permanent offshore installations. In addition the vessels are equipped with hoisting cranesand communications centres in order to administer large offshore projects. Furthermore, thepersonnel accommodation areas are adapted to provide meals, entertainment and sportsfacilities to achieve the best possible living conditions for the personnel.Group structureThe Group is comprised of the Parent Company, Consafe Offshore AB (publ), with itswholly -owned subsidiaries, Safe Astoria Ltd, Safe Bristolia Ltd, Safe Concordia Ltd. andSafe Esbjerg Ltd. The Company also owns, via Safe Concordia Ltd., a 15 % stake in JoyVenture Investments Ltd. Safe Concordia Ltd. has entered into an agreement with WideluckEnterprises Ltd. to acquire the remaining 85 % of the shares in Joy Venture Investments Ltd.

Consafe Offshore AB (publ) 4556604-4771During the year the Company also sold its 60 % holding in the subsidiary BurntislandFabrications Ltd. to JCE Group AB at book value.Parent CompanyThe Parent Company attends to all administration for the Group, which, amongst otherthings, includes financing operations of the subsidiaries and administering the Group’semployees, including consultants/contractors working within the Group. The ParentCompany also has management responsibility for the Group’s accommodation servicevessels, which primarily implies marketing and administration of the leasing of theaccommodation service vessels. The Parent Company’s management duties also include atechnical responsibility for the accommodation service vessels under conversion.SubsidiariesSafe Astoria Ltd.Safe Astoria Ltd. was founded on 2 August 2004 in Bermuda by the JCE Group and all of theshares were transferred to the Company in February 2005. In conjunction with thereorganisation in March 2005, JCE Group AB sold the accommodation service vessel SafeAstoria to Safe Astoria Ltd. for MSEK 237.3. During the year, Safe Astoria has beenundergoing conversion at the KeppelFELS shipyard in Singapore. Conversion is expected tobe completed in October 2005 due to further renovation and upgrading, as requested by theclient.Safe Bristolia Ltd.Safe Bristolia Ltd. was founded on 2 August 2004 in Bermuda by the JCE Group and all ofthe shares were transferred to the Company in February 2005. In conjunction with thereorganisation in March 2005, JCE Group AB sold the accommodation service vessel SafeBristolia to Safe Bristolia Ltd. for MSEK 194.0. During the year Safe Bristolia has beenundergoing conversion at the Yantai Raffles shipyard in China. Safe Bristolia has received acontract for the Sakhalin field for 2006 with the option to extend into 2007, which is thereason certain modifications will be executed according to the client’s specifications.Conversion and modification is expected to be completed in February 2006.Safe Concordia Ltd.Safe Concordia Ltd. was founded on 2 August 2004 in Bermuda by the JCE Group and all ofthe shares were transferred to the Company in February 2005. Safe Concordia is the world’sfirst new-build accommodation service vessel in more than 20 years. Safe Concordia Ltd.owns15 % of Safe Concordia via Joy Venture Investment Ltd. and has entered into an agreementfor the acquisition of the remaining 85 % prior to the end of September 2005.Safe Esbjerg Ltd.Safe Esbjerg Ltd. was founded on 26 May 2005 in Bermuda. During the financial year inquestion the Company made an offer for the accommodation service vessel Atlantic Esbjergfor MUSD 74. The acquisition was completed on 15 July.

Consafe Offshore AB (publ) 6556604-4771Operating expensesOperating expenses before depreciation amounted to MSEK 94.2 (1.4) and are mainlycomprised of expenses related to the operation of the accommodation service vessels as wellas expenses that have been re-invoiced to clients. Furthermore, the Group has had expenses inconnection with the reorganisation and other establishment expenses which have arisenduring the entire financial year. These expenses have, explicably, impacted operatingprofit/loss in a disproportionate manner in comparison to operating revenues, which areprimarily attributable to the last quarter of the financial year.Income and financial positionOperating revenues before depreciation amounted to MSEK 13.3 (-1.4). Profit/loss afterfinancial items amounted to MSEK 84.4 (-2.1). A financial net of MSEK 71.1 (-0.7) isincluded in this amountNet interest income/expenses consists mainly of unrealised exchange rate gains ofMSEK 76.0 (-). The exchange rate gains are primarily attributable to the American dollar andthe Norwegian krone’s strong price trend. Assets in these currencies in relation to theSwedish krona have had a significant positive effect on results.TaxesTotal tax expenses for the period amounted to MSEK –22.7 (0.6).Earnings per shareEarnings per share amounted to SEK 2.79.The Group’s financial position and liquidityInvestments and depreciationThe Group’s investments in accommodation service vessels totalled MSEK 475.7, and duringthe conversions in progress a total of MSEK 201.6 has been capitalised. Investments inmachinery and equipment have amounted to MSEK 0.2. Total depreciation according to planamounted to TSEK 65 (-). The small amount of depreciation is explained by the fact thatnone of the wholly-owned accommodation service vessels are in operation.Liquid fundsThe Group’s cash and bank balances amounted to MSEK 263.6 (1.8) at the end of thefinancial year. There were no short-term investments.FinancingAt the end of the financial year, the Group had interest-bearing liabilities equivalent toMSEK 123.5 in the form of a long-term loan from Skandinaviska Enskilda Banken.Furthermore, the Group had a long-term loan from JCE Group AB equivalent to MSEK 93.8.All loans are in USD. The Group is preparing an introduction on the Oslo Stock Exchange

Consafe Offshore AB (publ) 7556604-4771during the autumn of 2005 and plans to raise capital via a public share issue. On 21 June, anew loan agreement equivalent to MSEK 982.9 was made with a banking syndicate under themanagement of Skandinaviska Enskilda Banken. The credit had not been used at the end ofthe financial year.Equity/assets ratio and debt/equity ratioAt the end of the operational year, the Group’s equity/assets ratio amounted to 75.7 % (0.2).The debt/equity ratio, i.e. interest-bearing liabilities as a percentage of the equity, amountedto 24.0 %.Share capitalAt the beginning of the financial year, the Company was a wholly-owned subsidiary of JCEGroup AB, Corporate Identity Number 556240-1553.Date Change in share capital Change in sharecapital (SEK)Nominal value pershare (SEK)Total registeredshare capital(SEK)Number of outstandingsharesDecember 2000 The formation of the 100,000 100 100,000 A 1,000CompanyJanuary 2005 New share issue 9,900,000 100 10,000,000 A 100,000March 2005 Split 1 10,000,000 A 10,000,000March 2005 New share issue 10,000,000 1 20,000,000 A 10,000,000B 10,000,000May 2005Class B sharechanged to Class Ashare1 20,000,000 20,000,000June 2005 New share issue 4,278,083 1 24,278,083 24,278,083July 2005 New share issue 121,917 1 24,400,000 24,400,000In accordance with the decision at the Extraordinary General Meeting 24 January 2005, sharecapital was increased by a new share issue of 9,900,000 shares. After the new share issue wasexecuted on 17 February 2005, share capital amounted to SEK 10,000,000.In accordance with the decision at the Extraordinary General Meeting on 2 March 2005,share capital was increased by a new share issue with deviation from the shareholders’preferential rights by SEK 10,000,000. After the new share issue was executed on 10 March2005, share capital amounted to SEK 20,000,000.In accordance with the decision by the Board on 18 May 2005 and subsequent approval bythe Extraordinary General Meeting on 8 June 2005, share capital was increased bySEK 4,278,083 from SEK 20,000,000 to SEK 24,278,083. On the basis of the share issue on13 June 2005, a total of 4,278,083 shares were offered at a nominal value of SEK 1 per shareand with a subscription price of NOK 60 per share.At the Extraordinary General Meeting on 8 June 2005, it was decided to further increaseshare capital by SEK 121,917 from SEK 24,278,083 to SEK 24,400,000. This was achievedthrough a directed share issue whereby a total of 121,917 shares with at a nominal value of

Consafe Offshore AB (publ) 8556604-4771SEK 1 per share and a subscription price of NOK 60 per share were offered. A total of108,186 shares were subscribed and were registered by the Swedish Companies RegistrationOffice on 11 July.The shareTradingThe Company’s share is traded on the OTC market in Norway. The Company’s news andshare development can be seen on the website of Fondsmeglernes Informasjonstjeneste AS(Norwegian Stockbrokers Information Services), which administers the information systemfor unlisted shares in the OTC system. The share is traded under the ticker symbol “SAFE”.Operating revenuesSince the share was listed in the OTC system on 17 March 2005 up until the end of thefinancial year, approximately 4.4 million of the Company’s shares have been traded. Theaverage number traded per day amounted to approximately 76,000 shares.Price trendsThe Company’s value in the OTC system amounted, as per 30 June, to approximatelyNOK 2 billion. Since the listing on 17 March, the price of the shares increased from NOK 60to NOK 85, an increase of 42 %. The lowest price paid during the year, NOK 58, was notedon 4 May, and the highest price paid, NOK 85, on 30 June. The share price on 3 August wasNOK 105. The share diagram below shows the share’s price trend during the financial year.Share price908580Closingpri75706560555004/0511/05 200503/05 200525/0518/05 200518/04 200525/04 200520/04 200512/04 200505/04 200511/04 200531/05 200506/06 200522/06 200516/06 200514/06 200527/06 200530/032005Date

Consafe Offshore AB (publ) 9556604-4771Ownership structureForeign ownership (owners registered outside Sweden) made up, as per 30 June,approximately 45 % of share capital and Nordic ownership about 73 % of share capital.Swedish ownership comprised 55 % of share capital and the largest single owner was JCEGroup AB with just under 50 % of the share capital. The ten largest owners combined holdapproximately 77 % of the share capital.The following owner had, as per 30 June, more than 10 % of the number of shares or votes:Shareholder Number of shares Capital and votes in %JCE Group AB 11 800 000 48.6 %DividendNo dividends have been paid on shares during the financial year.Risk managementA great deal of offshore operations involves risk management. Practically every project isunique. Location, contract length, season, environment – the majority of these factors vary ineach new contract. In contracts spanning longer periods of time, a regular follow-up of therisk assessment takes place. The following risks shall primarily be considered with regard tooperations: operational risk, financial risk and insurance risk. Company management carriesout regular reviews of these risk factors in connection with on-going reporting and periodicproject briefings. For more information regarding the Company’s financial risks, see Note 28.International Financial Reporting Standards (IFRS)As from 1 July 2005, the Company’s accounting principles will follow the InternationalFinancial Reporting Standards (IFRS), adopted by the European Commission. A summarisedeffect of the transition to IFRS is presented in Note 36. The Group will use USD as thepresentation currency.The Group’s managementThe Group’s management and development is affected by decisions in a number of executiveand shareholder functions of the Company. At the Annual General Meetings of shareholders,the shareholders exercise their right to vote in order to, according to Swedish corporate lawand the Company’s articles of association, make decisions concerning the composition of theBoard and other vital issues. The Board handles, amongst others things, issues concerningmajor investments, contracts and matters regarding the Group’s strategic direction andfinancing.General Meetings of ShareholdersThe General Meeting of shareholders is the Company’s ultimate decision-making body. Atthe Annual General Meeting of Shareholders, held within six months of the end of the

Consafe Offshore AB (publ) 10556604-4771financial year, income statement and balance sheets are adopted, the appropriation of profitsis determined, a Board is elected, and, in appropriate cases, auditors and their fees aredecided upon, as well as treatment of other prescribed issues.According to the Swedish Companies Act, shareholders have the right to have an issue dealtwith at a Annual General Meeting of shareholders if reported on time. Furthermore, theshareholder has the opportunity to ask questions at the Annual General Meeting. Besides theAnnual General Meeting, three Extraordinary General Meetings were held during thefinancial year, mainly to decide upon new share issues.The Board and its workThe Company’s Board of Directors is currently comprised of three Members. The Chairmanis J Christer Ericsson. The other Members, who are independent in relation to the Companyand its largest shareholder, are John Smith and Ola Lorentzon. All Members are competentwithin the market segments affecting the Company offshore, shipping, oil, gas as well aswithin the finance and strategy areas. Other officials in the Company take part when neededin the Board’s meetings as reporters.The Board held 17 meetings during the year. IR Manager, Hampus Ericsson served asCompany Secretary. In addition to being responsible for the Company’s organisation andmanagement, the Board’s most important responsibility is to make decisions, on a global,analytical basis, as regards strategic issues. Generally, the Board handles issues of significantimportance to the Group such as:· determination of the formal work plan· strategy plans· determination of policies· major investments· business and profit goals· financing issuesThere is no division of responsibilities and duties in the Board and currently no committees.Compensation to the Board and Management.Compensation for the Company’s Members of the Board is decided upon annually at theAnnual General Meeting. The Members of the Board are also compensated for expensesincurred such as travel, accommodation and other expenses in connection with participationin meetings between the Board Members and the Company’s operations. A Board Memberwho has been assigned a special assignment can receive extra compensation for theassignment in accordance the amount deemed reasonable by the Board. The totalcompensation to the Members of the Board amounts to SEK 400,000 per year, excluding outof pocket expenses. Compensation to the CEO is determined by the Board whilecompensation to other individuals in the management group is determined by the CEO.The Chairman’s role

Consafe Offshore AB (publ) 11556604-4771Besides leading the work of the Board, the Chairman follows the Group’s currentdevelopment through on-going contact with the CEO regarding strategic issues, as well asrepresenting the Company in issues concerning ownership structure.CEOCEO Peter Jacobsson, Master of Science in Naval Architecture and Marine Engineering fromChalmers University of Technology in Gothenburg, has 20 years experience from theoffshore market. Peter Jacobsson has previously worked as the Marketing Director inScandinavia for Haliburton Subsea 7, Rockwater and Consafe, as well as for Safe Service.The CEO is responsible for the on-going administration of the Company. The CEO’sdecision rights concerning investments, purchases and sales of shares, as well as financingissues are regulated by the Board. These regulations state that decisions concerning majorinvestments and other major agreements are to be submitted to the Board.Besides the CEO, the Company’s management group consists of the Finance Manager,Operations Manager and the HSEQ Manager.Active ownershipThe founder, as well as the Chairman of the Board, J Christer Ericsson exercises theCompany’s active ownership role based on his extensive experience of the service industrywithin offshore oil and gas. The Chairman of the Board has more than 30 years experiencefrom the offshore industry and has been involved in companies such as Consafe, Safe Serviceand Prosafe. The Chairman’s experience includes new constructions, conversions andupgrades of accommodation service vessels.AuditorsAt the Annual General Meeting of shareholders in 2002, ÖhrlingsPricewaterhouseCoopers AB was appointed as auditors of the Company until the end of theAnnual General Meeting in 2006. The Auditor in Charge since financial year 2004/2005 isAuthorised Public Accountant, Håkan Jarkvist.PoliciesDividend policyThe Company’s ambition is, in the long-term, to be an attractive investment alternative incomparison to similar companies. The intention of the Company is to be able to offer theshareholders a competitive return in the form of dividends, as well as a favourable share pricedevelopment over time.The Company intends to pay out dividends when its operations have achieved a critical mass,and at which time cash flows permit such dividends to be paid, with consideration of theCompany’s investment requirements, financing and willingness to take risks.

Consafe Offshore AB (publ) 12556604-4771Information policyThe Company’s basic principle is the equal treatment of all shareholders and to ensure that allparties, such as shareholders and analysts, receive the information necessary in order to havea good understanding of the Company and its operations. The Board wishes to point out thatit wishes to be restrictive regarding the announcement of the value of established, individualcontracts. The Company is active in a niche industry in which it has a strong position. Forthis reason, such detailed information can be disadvantageous to the Company.The Company shall work towards issuing reports, news reports and investment presentationswithin the prescribed time limits according to the agenda prepared by management.Furthermore, the Company strives to have an updated homepage in order that the necessaryinformation can be accessible to all interested parties.The Company has the ambition to be listed on the Oslo Stock Exchange which is the reasonan information policy and the Corporate Governance regulation are to permeate the entireorganisation. The Company’s philosophy is to have a correct, quick and effective informationpolicy well anchored within the business so that the Company’s true value can be reflected inits share price.Environmental policyThe Company is currently a global operator within the oil and gas industry with focus on theleasing of accommodation service vessels. Utilising the concept once implemented in theNorth Sea to minimise transport to and from oil rigs, the Company has now set its sights onthe global market. On the basis of this, all clients have been provided with the possibility tolive on sight in the oil fields, whereby the effect on the environment during travel back andforth between the mainland and the oil fields has been minimised.The Company’s goal is to minimise the negative effect on the environment by working withidentifying environmental aspects within its own ranks, as well as in co-operation withvarious partners. Furthermore, the Company sets comprehensive environmental goals whichlie within the frame of client demands as well as international environmental rules within themaritime and offshore industries (MARPOL, among others).

Consafe Offshore AB (publ) 14556604-4771assignment on the Yolla field in Bass Strait with Safe Concordia. This is a short-termassignment but came advantageously before the rig was to be taken into the yard beforeassignment on the Sakhalin field.A Letter of Intent has been signed for 2006 with a client stipulating complete confidentiality,regarding Safe Astoria. Contracts are to be signed at latest on 15 September 2005.Time frame for financial informationThe financial statements and interim financial statements, including a time plan, will bepublished on the Company’s website www.consafeoffshore.com The annual report is automatically sent to shareholderswho have registered for this information.The reports are both in Swedish and English and can be ordered from:Consafe Offshore AB (publ)Information departmentP O. Box 53203SE-400 16 GothenburgSwedenTel: +46 (0) 31 759 55 15Fax: +46 (0) 31 759 55 20www.consafeoffshore.com This annual report has been prepared in both Swedish and English. In the event of anydiscrepancy between the contents of the Swedish and English texts, the Swedish text shallprevail.

Consafe Offshore AB (publ) 16556604-4771demand on the Company’s services during 2006 and 2007.With a good order portfolio for 2006, the Company will focus during the forthcoming year onthe marketing of the fleet and its services to international offshore oil and gas companies forfuture contracts.Considering the current relatively high oil prices as one of several forces behind the need forour services, a global analysis of the potential demand of accommodation service vesselsindicates a positive outlook, on the premise of continued positive market forces within theindustry.For information concerning the Company and the Group’s reported results for the financialyear, financial position as per the end of the accounting period as well as financing andcapital utilisation during the year, refer to the income statements, balance sheets and cashflow statements, with accompanying notes. All amounts are in thousands of SEK unlessotherwise stated.

Consafe Offshore AB (publ) 17556604-4771Income statementGroupNote 1 July 2004-30 June20051 July 2003-30 June2004Parent Company1 July 2004-30 June20051 July 2003-30 June2004Operating revenues 2 63,032 - 63,032 -Other operating revenues 2, 3 44,473 - 41,002 -Total operating revenues 107,505 0 104,034 0Operating expensesOther external expenses 3, 4 -89,827 -264 -89,827 -264Personnel expenses 5, 6 -4,338 -1,125 -4,338 -1,125Depreciation of tangibleassets -65 - -65 -Total operating expenses -94,230 -1,389 -94,230 -1,389Operating profit/loss 13,275 -1,389 9,804 -1,389Result from financialinvestmentsOther interest income and 7similar profit/loss items2,653 8 5,243 8Interest expenses and 8similar profit/loss items-7,563 -741 -2,807 -741Other financial items 9 76,014 - 55,928 -Total result fromfinancial investments 71,104 -733 58,364 -733Profit/loss after financialitems 84,379 -2,122 68,168 -2,122Appropriations 10 - - -8,816 -Tax on net profit for theyear11, 12-22,680 594 -20,212 594Net profit/loss for theyear 61,699 -1,528 39,140 -1,528Earnings per share(SEK) 2,79 - - -

Consafe Offshore AB (publ) 18556604-4771Income statementGroupNote 1 July 2004-30 June20051 July 2003-30 June2004Parent Company1 July 2004-30 June20051 July 2003-30 June2004Earnings per share afterdilution (SEK) 2,79 - - -Number of remainingshares at the end of thefinancial year 24,278,083 - - -Average number ofremaining shares 22,139,041 - - -

Consafe Offshore AB (publ) 19556604-4771Balance sheetNoteGroup30 June200530 June2004Parent Company30 June 30 June2005 2004AssetsFixed assetsTangible assets 13Accommodation service 14vessels475,692 - - -Conversions in progress 15 201,610 29,262 201,610 29,262Equipment, tool, fixturesand fittings16131 - 131 -677,433 29,262 201,741 29,262Financial assets 17Participations in1, 18subsidiaries- 14,811 4,181 14,811Receivables from Group 19, 20companies- - 635,577 -Participations in associated 21companies8,449 - - -Receivables from 20, 22associated companies112,531 - - -120,980 14,811 639,758 14,811Total fixed assets 798,413 44,073 841,499 44,073Current assetsCurrent receivablesAccounts receivable - trade 46,181 - 46,181 -Receivables from Parent 20Company- 2,108 - 2,108Current income taxesrecoverable - 5 - 5Other current receivables 67,802 203 9,941 203Prepaid expenses andaccrued income2322,062 - 22,062 -136,045 2,316 78,184 2,316Cash and bank balances 263,576 1,813 261,910 1,813

Consafe Offshore AB (publ) 20556604-4771Balance sheetNoteGroup30 June200530 June2004Parent Company30 June 30 June2005 2004Total current assets 399,621 4,129 340,094 4,129Total assets 1,198,034 48,202 1,181,593 48,202Equity and liabilitiesEquity 24Restricted equityShare capital 24,278 100 24,278 100Share premium reserve 820,353 - 820,353 -Other restricted reserves 10,658 - - -855,289 100 844,631 100Non-restricted equityProfit or loss broughtforward -10,439 1,524 -5 1,524Net profit/loss for the year 61,699 -1,528 39,140 -1,52851,260 -4 39,135 -4Total equity 906,549 96 883,766 96Untaxed reserves 25 - - 8,816 -0 0 8,816 0ProvisionsProvisions for taxes 26 6,039 - 3,571 -Long-term liabilities 27Other liabilities to creditinstitutions 123,540 - 123,540 -Liabilities to Parent 20Company- 46,066 - 46,066Other long-term liabilities 20 93,828 - 93,828 -Total long-term liabilities 217,368 46,066 217,368 46,066Current liabilities 27Accounts payable - trade 31,862 1,115 31,862 1,115Current income taxliabilities 7,400 - 7,400 -Other current liabilities 185 95 179 95

Consafe Offshore AB (publ) 21556604-4771Balance sheetNoteGroup30 June200530 June2004Parent Company30 June 30 June2005 2004Accrued expenses and 29deferred income28,631 830 28,631 830Total current liabilities 68,078 2,040 68,072 2,040Total equity andliabilities 1,198,034 48,202 1,181,593 48,202Pledged assets 30 167,839 None 44,299 NoneContingent liabilities 31 None None None None

Consafe Offshore AB (publ) 22556604-4771Change in Equity - GroupNoteSharecapitalRestrictedreservesNonrestrictedequityTotalequityEquity, 30 June 2003 100 - -5 95Group contribution received - - 2,122 2,122Tax effect of Group contribution - - -594 -594Total changes in equity not reportedin the income statement 100 0 1,523 1,623Net profit/loss for the year - - -1,528 -1,528Equity, 30 June 2004 100 0 -5 95Exchange rate differences attributableto translation of foreign operations 24 - - 224 224Total changes in equity not reportedin the income statement 0 0 224 224Net profit/loss for the year - - 61,699 61,699Transfer between restricted and nonrestrictedequity - 10,658 -10,658 -New share issue 24,178 836,353 - 860,531Less, expenses for new share issue - -32,986 - -32,986Tax effect of expenses for new shareissue - 9,236 - 9,236New share issue in progress - 7,750 - 7,750Equity, 30 June 2005 24 24,278 831,011 51,260 906,549

Consafe Offshore AB (publ) 23556604-4771Change in Equity - Parent CompanyNote SharecapitalSharepremiumreserveRevaluati Statutoryon reservereserveNonrestrictedequityTotalequityEquity, 30 June 2003 100 - - - -5 95Group contributionreceived - - - - 2,122 2,122Tax effect of Groupcontribution - - - - -594 -594Total changes in equitynot reported in theincome statement 100 0 0 0 1,523 1,623Net profit/loss for theyear - - - - -1,528 -1,528Equity, 30 June 2004 100 0 0 0 -5 95Net profit/loss for theyear - - - - 39,140 39,140New share issue 24,178 836,353 - - - 860,531Deduction for new shareissue expenses - -32,986 - - - -32,986Tax effect of new shareissue expenses - 9,236 - - - 9,236New share issue inprogress - 7,750 - - - 7,750Equity, 30 June 2005 24 24,278 820,353 0 0 39,135 883,766

Consafe Offshore AB (publ) 24556604-4771Cash Flow StatementsNote 1 July 2004-30 June2005Group1 July 2003-30 June 2004Parent Company1 July 2004-30 June20051 July 2003-30 June 2004Operating revenues 13,275 -1,389 9,804 -1,389Operating activitiesAdjustments for non-cash 32items, etc.-3,406 - 65 -Interest received 119 8 2,709 8Interest paid -7,563 -1,058 -2,807 -1,0582,425 -2,439 9,771 -2,439Increase/decrease in accountsreceivable -46,181 - -46,181 -Increase/decrease in othercurrent receivables -85,004 - -27,144 -Increase/decrease in accountspayable 30,747 - 30,747 -Increase/decrease in othercurrent operating liabilities 27,881 2,282 27,876 2,282Cash flow from operatingactivities -70,132 -157 -4,931 -157Investing activitiesInvestments in tangible assets 33 -648,012 -28,955 -172,544 -28,955Investments in subsidiaries 34 - - -4,181 -Sold subsidiaries 14,811 - 14,811 -Investments in associatedcompanies -4,978 - - -Investments in other financialassets -112,531 - -635,577 -Increase/decrease in currentinvestments 76,014 - 55,928 -Cash flow from investingactivities -674,696 -28,955 -741,563 -28,955Financing activitiesNew share issue 835,295 - 835,295 -Borrowings 171,296 30,066 171,296 30,066Cash flow from financingactivities 1,006,591 30,066 1,006,591 30,066

Consafe Offshore AB (publ) 25556604-4771Cash Flow StatementsNote 1 July 2004-30 June2005Group1 July 2003-30 June 2004Parent Company1 July 2004-30 June20051 July 2003-30 June 2004Cash flow for the year 261,763 954 260,097 954Cash and cash equivalents atbeginning of the year 1,813 859 1,813 859Cash and cash equivalents at 35the end of the year263,576 1,813 261,910 1,813

Consafe Offshore AB (publ) 26556604-4771Notes for Parent Company and GroupNote 1Accounting and valuation principlesThe Company’s annual report has been prepared in accordance with the Swedish AnnualAccounts Act and the recommendations and provisions of the Swedish Financial AccountingStandards Council. This implies changes compared to previous years when the general adviceand guidelines of the Swedish Accounting Standards Board were applied. As the Company’soperations have, in previous years, been limited, the change of accounting norms has impliedonly marginal differences and the accounting principles are, on the whole, unchangedcompared with the previous year. The exception is the reporting of interest expenses, forwhich the alternative principle in RR 21 Borrowing Costs is applied as from this year.The Company intends to present its consolidated accounts in accordance with IFRS from theforthcoming financial year. Additional information regarding the effects of this transition ispresented in Note 36.The change in accounting principles has resulted in an effect of TSEK 3,737 on net profit forthe year.Consolidated accountsThe consolidated accounts include subsidiaries in which the Parent Company, either directlyor indirectly, holds more than 50 % of the votes or in any other manner holds a significantinfluence. Refer also to the comments below regarding the subsidiary sold during the year.The Group’s annual accounts have been prepared according to the purchase method, whichmeans that the equity of subsidiaries at the date of acquisition, defined as the differencebetween the fair value of the assets and liabilities, is eliminated in its entirety. Accordingly,only that portion of the equity in the subsidiary that has accrued after acquisition is includedin consolidated equity.Companies acquired during the year are included in the consolidated accounts with theamounts that have accrued after acquisition.All of the Company’s foreign subsidiaries are classified as independent subsidiaries, which isthe reason that the current method has been applied to the translation of their annual accounts.This implies that the assets and liabilities of the foreign subsidiaries are translated at theclosing rate of exchange. All items included in the income statement are translated at theaverage exchange rate for the year. Translation differences are charged directly to theGroup’s equity.Inter-company gains are eliminated in their entirety.The Company has not prepared consolidated accounts in previous years with respect to thestipulations of Chapter 7, Section 2 of the Swedish Annual Accounts Act as the Companyand its subsidiaries were included in the consolidated accounts presented by the former

Consafe Offshore AB (publ) 27556604-4771Parent Company, JCE Group AB. In conjunction with the change in ownership of theCompany during the year, the former subsidiary, Burntisland Fabrications Ltd., with itsregistered offices in Scotland, was sold to the former Parent Company at book value. Theformer subsidiary, in which the Company had a 60 % holding, was held on behalf of JCEGroup AB and no revenue were received from this subsidiary during the holding period or inconjunction with the sale of the subsidiary. The JCE Group AB was responsible for themanagement of the subsidiary and consequently, no controlling influence was exercised bythe Company. For these reasons, the Company has chosen to report this holding in theconsolidated accounts until the point in time of the sale according to the cost method, on thebasis of the application of the regulations stipulated in Chapter 7, Section 5 of the SwedishAnnual Accounts.Accounting for associated companiesAssociated companies are defined as those companies which are not subsidiaries but in whichthe Company, directly or indirectly, holds at least 20 % of votes for all participations, or insome other manner exercises a significant influence. This implies that the indirect holding inJoy Venture Investments Ltd. is reported as an associated company.Participations in associated companies are reported in the consolidated accounts according tothe equity method. The equity method entails that participations in a company are reported atthe acquisition cost at the date of acquisition and, subsequently, adjusted with an amountcorresponding to the Group’s participation in the change in the associated company’s netassets. The Group’s participations in the earnings of associated companies are included in theconsolidated income statement. Undistributed accumulated profit shares, deriving fromassociated companies, are reported in the consolidated balance sheet as equity methodreserves, under restricted equity. Unrealised intra-group gains are eliminated in an amountcorresponding to the share of the gain accruing to the Group.Participations in associated companies are reported in the annual accounts at acquisition costwith deductions for any possible write-downs. Only those dividends received from profitsaccruing after the acquisition of an associated company are reported as income fromassociated companies.Foreign currenciesAssets and liabilities in foreign currency are valued at the closing rate of exchange. Wherehedging instruments have been used, for example forward cover, the forward rate is applied.Transactions in foreign currencies are translated at the spot rate on transaction date.RevenuesRental income attributable to time-charter contracts and bareboat-charter contracts is reportedaccording to the straight-line method during the period of the contracts, based on the numberof days covered by the contract before and after balance sheet date. Expenses related toleasing are expensed in the same period as rental income is reported.Other earned revenues is recognised as revenue as follows:

Consafe Offshore AB (publ) 28556604-4771Sales of goods have been reported in conjunction with the delivery of the product to thecustomer in accordance with the terms of sale. Sales are reported at net value after VAT,discounts and exchange rate differences when sales are made in foreign currencies. Intra-Group sales are eliminated in the consolidated accounts.Royalties and similar: in accordance with the financial implications of the specific agreementInterest income: in accordance with effective yieldDividends received: when the right to receive dividends is deemed to be certain.Rendering of services/Construction contractsFor service assignments performed, the revenues and expenses attributable to the assignmentare reported as revenues and expenses, respectively, in proportion to the degree of completionof the assignment as per balance sheet date (in accordance with the percentage of completionmethod). The degree of completion of an assignment is determined by comparing theexpenses incurred on balance sheet date with the estimated total expenditure. In those casesin which the outcome of a service assignment cannot be estimated in a reliable manner,revenues are reported only to the extent to which it corresponds to expenses incurred for theassignment and to which it is likely that the Company will be reimbursed by the client. Anyanticipated losses on an assignment are reported as costs on an on-going basis.Service assignments and contract work are reported in the Parent Company in accordancewith the provisions of the Swedish Income Tax Act. Revenues and expenses fromtransactions/contracts at a fixed price are reported during the term of the transaction/contractas work in progress in the balance sheet and are first reported in the income statement whenthe assignment has been completed.Income taxReported income tax includes tax, which is to be paid or received, regarding the current year,and adjustments concerning the previous years’ current taxes and shares of associatedcompanies’ taxes.All income tax liabilities and receivables are valued at their nominal amount according to thetax regulations and tax rates that have been decided or that have been announced and arelikely to be adopted.In the case of items reported in the income statement, related tax effects are also reported inthe income statement. The tax effects of items that are accounted for directly against equityare also reported directly against equity.Deferred income tax is calculated according to the balance sheet method on all temporarydifferences arising between the reported value and the tax value of the assets and liabilities.Deferred tax assets regarding losses carried forward or other future tax deductions arereported to the extent that it is probable that the deduction can be settled against a surpluswhen taxed in the future. Deferred income tax liabilities attributable to temporary differences,which refer to investments in subsidiaries, foreign branches, associated companies and

Consafe Offshore AB (publ) 29556604-4771participations in joint ventures are not reported in the Group’s consolidated accounts as theParent Company may, in all cases, determine the point in time for the reversal of thetemporary differences, and it is not considered probable that a reversal will be made in theforeseeable future.Due to tax regulations, the Parent Company reports deferred tax liabilities on untaxedreserves as untaxed reserves.Tangible assetsTangible assets are reported at acquisition cost reduced by the amount of depreciation.Expenses for improving the performance of the assets beyond their original level ofperformance increase the asset’s reported value. Expenses for repairs and maintenance arereported as costs.Expenses for periodically recurring maintenance of accommodation service vessels arecapitalised as assets and depreciated during the period until the point in time when the nextperiodic maintenance is expected to take place.Interest on capital that has been borrowed to finance the manufacture of an asset is includedin the acquisition cost to the extent that the interest refers to the manufacturing period. Otherborrowing costs are reported as expenses.Tangible assets are depreciated systematically over their estimated useful lifetimes. Ifapplicable, the residual value of the assets is taken into consideration when determining theamount of depreciation of the assets.The straight-line method of depreciation is utilised for all types of tangible assets. Thefollowing periods of depreciation are applied:Accommodation service vesselsPeriodic maintenance ofaccommodation service vesselsEquipment, tool, fixtures and fittings30 years5 years3-5 yearsUnder certain circumstances, equipment specially-adapted for customers is depreciated overthe tenure of the contract.Write-downsWhen there is an indication that the value of an asset or a group of assets has declined, anassessment is made of the reported value(s). In those cases in which the reported valueexceeds the estimated recoverable amount, the reported value is immediately written down tothe recoverable value. If goodwill refers to a group of assets for which a write-downrequirement has been determined, the amount of write-down is first allocated to goodwilland, thereafter, to the other assets in proportion to their reported values.

Consafe Offshore AB (publ) 30556604-4771A previous write-down of an asset is reversed when there is a change in the assumptionswhich formed the basis of determining the recoverable amount at the time of the write-down.The reversed amount increases the asset’s reported value, but at a maximum of the value theassets would have had (after deductions for standard depreciation) if no write-down had takenplace.Lease agreementsLeases in which the Group, as lessee, transfers a significant portion of the risks and rewardsincidental to ownership are classified as a financial lease, and the leased object is accountedfor as a fixed asset in the consolidated balance sheet. The corresponding commitment to payleasing fees in the future is reported as a liability. At the commencement of a lease term, theasset is accounted for at the lowest of the leased object’s fair value and the present value ofminimum leasing charges.Lease agreements in which the risks and rewards incidental to ownership substantially remainwith the lessor are classified as an operating lease. Payments made according these contractsare expensed according to the straight-line method over the lease term.Leases in which a significant portion of the risks and rewards of ownership are retained bythe lessor are classified as operating leases. Payments made under operating leases arecharged to the income statement on a straight-line basis over the period of the lease.All lease agreements, regardless of whether they are financial or operating leases, arereported in the Parent Company as lease contracts (operating leasing agreements). Leasingfees are expensed on a straight-line basis over the period of the lease.Financial assetsFinancial assets which are intended to be held over a long period of time are reported atacquisition cost. If a financial asset has, on balance sheet date, a value lower than its bookvalue, the value of the asset is written down to a lower value if it can be assumed that suchreduction in value is permanent.Financial instrumentsFinancial instruments reported in the balance sheet include securities, other financialreceivables, accounts receivable, accounts payable, lease liabilities and borrowing. Themarket values of financial instruments are calculated based on the current quotation as perbalance sheet date. Market interest rates and an estimate of the Company’s risk premiumsform the basis of the calculations of the market values of long-term loans. For other financialinstruments, primarily short-term loans and investments for which the market values are notlisted, the market value is deemed to be equivalent to book value.Accounts receivable - tradeAccounts receivable are reported as current assets at the amounts expected to be receivedafter deductions for individually-assessed bad debts.

Consafe Offshore AB (publ) 31556604-4771Securities and financial receivablesSecurities and financial receivables acquired with the intention of holding such securities andreceivables over a long period of time are reported at acquisition cost after deductions foraccumulated write-downs if an established decrease in value is deemed to be permanent.Receivables acquired with a term exceeding 12 months are reported at net present value andthe periodic unwinding is reported as interest income in the income statement.Securities acquired with the intention of holding such securities on a short-term basis arereported in accordance with the lowest value principle at the lowest of either acquisition costor market value. In valuing securities, this principle is applied to the share portfolio in itsentirety or to the interest portfolio in its entirety, implying that unrealised losses are settledagainst unrealised gains within the respective portfolio. However, any derivatives arereported in gross amounts.All transactions with securities are reported on settlement date.BorrowingsBorrowings are initially reported at the amount received after deductions for transactioncosts. If the reported amount is different from the amount to be repaid on due date, thedifference is allocated as interest expenses or interest income over the term of the loan. In thismanner, the reported amount and the amount to be repaid will be equal on due date.A financial liability first ceases to be reported when it has been settled on the basis ofrepayments or if it has been waived.All transactions are reported on settlement date.Set-off of financial receivables and financial liabilities.A financial asset and a financial liability are set off and reported at a net amount in thebalance sheet only when a legal right of set-off exists and when a payment in a net amount isintended to take place or when the simultaneous sale of the asset and payment of the liabilityis intended to take place.ProvisionsProvisions are reported when the Company has a legal or informal duty to do so as a result ofevents that have arisen, when it is more probable that an outflow of resources is required tosettle the obligation than would have been required if payment were not made, and when ithas been possible to calculate the amount in a reliable manner.Cash flow statementThe cash flow statement has been prepared using the indirect method. The reported cash flowincludes only those transactions that have resulted in receipts or payments.For the purposes of the cash flow statement, cash and cash equivalents comprise, in additionto cash and bank balances, short-term investments, which are exposed to an insignificant riskof fluctuation in value and which:

Consafe Offshore AB (publ) 32556604-4771- are traded on an open market at known amounts or- have a shorter remaining term than three months from the acquisition date.Earnings per shareEarnings per share are calculated in accordance with RR 18, based on a weighted averagenumber of outstanding shares during the year. The calculation of the average number ofshares has been adjusted for the share spit executed during the year. In addition, it has beentaken into account that the operations were primarily conducted, and a new share issue wereexecuted, only in the final quarter of the financial year.Definitions of key ratiosMarginsEBITDA margin Operating profit/loss before depreciation as a percentage of operatingprofit/loss for the year.EBIT margin Operating profit/loss as a percentage of operating profit/loss for the year.Profit margin Revenues after financial items as a percentage of operating profit/loss for theyear.YieldReturn on total assets. Revenues after financial items as a percentage of balance sheet total.Return on equity. Revenues after financial items as a percentage of equity.Capital structureEquity/assets ratio. Equity as a percentage of total assetsDebt/equity ratio Interest-bearing liabilities as a percentage of equity.Interest coverage ratio Operating profit/loss and financial income plus depreciation as apercentage of net interest income.

Consafe Offshore AB (publ) 33556604-4771Note 2Classification of incomeGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Operating revenues includerevenues from:Charter leases 49,585 - 49,585 -Management fees 10,281 - 10,281 -Catering 2,555 - 2,555 -Mobilisation fees 611 - 611 -Total 63,032 0 63,032 0Other revenues include revenuesfromRe-invoiced expenses 19,788 - 19,788 -Exchange gains 7,800 - 7,800 -Other 13,414 - 13,414 -Revenue from associatedcompanies 3,471 - - -Total 44,473 0 41,002 0A large portion of the annual operating revenues refers to invoicing to Australia.Note 3Exchange rate differencesOperating revenues includes exchange rate differences on operating receivables and operatingliabilities as follows:GroupParent Company1 July 2004- 1 July 2003- 1 July 2004- 1 July 2003-30 June 2005 30 June 2004 30 June 2005 30 June 2004Other operating revenues 7,800 - 7,800 -Other external expenses -6,078 - -6,078 -1,722 0 1,722 0

Consafe Offshore AB (publ) 34556604-4771Note 4Remuneration to auditorsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Audit assignment ÖhrlingsPricewaterhouseCoopers 177 8 177 8Other assignments 239 - 239 -416 8 416 8Note 5Salaries and other remuneration classified according to country1 July 2004-30 June 20051 July 2003-30 June 2004Salaries and other remuneration classified according tocountry amount toParent CompanySweden- The Board of Directors and CEO 1,021 701- Other employees 2,020 160Total for Parent Company 3,041 861GroupTotal for subsidiaries 0 0Group Total 3,041 861Note 6Average number of employees, salaries, other remuneration and socialsecurity contributionsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Average number of employeesWomen 1 - 1 -Men 4 1 4 1Total 5 1 5 1Salaries and other remunerationamount to:

Consafe Offshore AB (publ) 35556604-4771Group1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004The Board and CEO 1,021 701 1,021 701Other employees 2,020 160 2,020 160Total salaries and remuneration 3,041 861 3,041 861Statutory and contractual socialsecurity contributions 960 264 960 264Pension expenses (of whichTSEK 113 (TSEK 0) for the Boardand CEO) 361 - 361 -Total salaries, remuneration, socialsecurity contributions and pensionexpenses. 4,362 1,125 4,362 1,125There is a mutual 6 month period of notice of termination of employment with the CEO.Note 7Other interest income and similar profit/loss itemsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Interest income 2,653 8 5,243 8Total 2,653 8 5,243 8of which attributable to Groupcompanies - - 2,590 -

Consafe Offshore AB (publ) 36556604-4771Note 8Interest expenses and similar profit/loss itemsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Interest expenses -7,563 -741 -2,807 -741Total -7,563 -741 -2,807 -741of which attributable to Groupcompanies - -738 - -738Note 9Other financial itemsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Exchange gains 97,873 - 77,787 -Exchange losses -21,859 - -21,859 -Total 76,014 0 55,928 0Note 10 Appropriations1 July 2004-30 June 20051 July 2003-30 June 2004Transfer to tax allocation reserve -8,816 -Total -8,816 0Note 11 Tax on net profit for the yearGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Current tax for the year -16,641 - -16,641 -Deferred tax (specified in Note 12) -6,039 594 -3,571 594Total -22,680 594 -20,212 594

Consafe Offshore AB (publ) 37556604-4771Note 12 Deferred taxGroup1 July 2004-30 June2005Group1 July 2003-30 June2004ParentCompany1 July 2004-30 June 2005ParentCompany1 July 2003-30 June 2004Deferred tax expenses/assets forthe yearDeferred tax assets regarding lossescarried forward - 594 - 594Deferred tax expenses attributableto accelerated depreciation insubsidiaries -3,571 - -3,571 -Deferred tax expenses attributableto transfer to tax allocation reserve -2,468 - - -Deferred tax in income statement -6,039 594 -3,571 594Difference between reported taxexpenses and tax expenses basedon current tax ratesReported profit before taxes 84,379 -2,122 59,352 -2,122Tax according to current tax rates -23,629 594 -16,622 594Tax effect of non-deductibleexpenses -23 - -23 -Tax effect of non-taxable revenuesfrom associated companies 972 - - -Tax effect attributable to taxablerevenues in subsidiaries inaccordance with CFC regulation - - -3,567 -- - - -Total -22,680 594 -20,212 594Tax ratesThe current tax rate is the tax rate for income tax in the Parent Company. The tax rate is28 % (28).No income tax is paid by the associated companies. Deferred income tax liabilitiesattributable to temporary differences, which refer to investments in subsidiaries, foreignbranches, associated companies and participations in joint ventures are not reported in theGroup’s consolidated accounts as the Parent Company may, in all cases, determine thepoint in time for the reversal of the temporary differences, and it is not considered probablethat a reversal will be made in the foreseeable future.In accordance with the so-called CFC regulations, revenue in the subsidiaries is taxed in theParent Company in Sweden. However, this income is netted against accelerateddepreciation in the Parent Company’s income tax return. Deferred income tax liabilitieshave been calculated with consideration of this accelerated depreciation

Consafe Offshore AB (publ) 38556604-4771Note 13 Capitalised interest attributable to tangible assetsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004The accumulated acquisition cost oftangible assets includes capitalisedinterest as follows:Conversions in progress 3,737 - 3,737 -Total 3,737 0 3,737 0Borrowing costs included in theacquisition cost of tangible assetsduring the period 3,737 - 3,737 -Interest rate in conjunction withdetermination of amount ofborrowing costs that have beencapitalised (%) 5 - 5 -Note 14 Accommodation service vesselsGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Purchases 475,468 - - -Translation differences 224 - - -Closing accumulated acquisitioncost 475,692 0 0 0Closing accumulated depreciation 0 0 0 0Closing residual value accordingto plan 475,692 0 0 0

Consafe Offshore AB (publ) 39556604-4771Note 15 Conversions in progressGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Opening acquisition cost 29,262 - 29,262 -Purchases 172,348 29,262 172,348 29,262Closing accumulated acquisitioncost 201,610 29,262 201,610 29,262Closing accumulated depreciation 0 0 0 0Closing residual value accordingto plan 201,610 29,262 201,610 29,262Reconstruction of the accommodation service vessels which have been acquired by thesubsidiaries is accounted for in the Parent Company. In the Group, these conversion compriseinvestments in the Company’s own accommodation service vessels and are reported as fixedassets. After completion of the conversions, the work will be taken over by the respectivesubsidiaries on the basis of accrued expenses. The rebuilt vessels will, thereafter, be leased bysubsidiaries to the Parent Company. Due to this, accrued expenses are also reported in theParent Company as conversions in progress amongst fixed assets.Note 16 Equipment, tools, fixtures and fittingsGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Purchases 196 - 196 -Sales and disposals -5 - -5 -Closing accumulated acquisitioncost 191 0 191 0Sales and disposals 5 - 5 -Depreciation for the year -65 - -65 -Closing accumulated depreciation -60 0 -60 0Closing residual value accordingto plan 131 0 131 0

Consafe Offshore AB (publ) 40556604-4771Note 17 Financial assetsAll of the long-term receivables fall due for payment within five years.The Group’s collective credit risks attributable to long-term receivables amounted toTSEK 112,531 (0).The weighted average effective interest rates of receivables amounted to:GroupParent Company1 July 2004- 1 July 2003- 1 July 2004- 1 July 2003-30 June 2005 30 June 2004 30 June 2005 30 June 2004Receivables from Group companiesand associated companies 5 % 0 % 4 % 0 %The reported and fair values of financial assets were as follows:GroupParent CompanyBook value 30 June 2005 30 June 2004 30 June 2005 30 June 2004Loans to subsidiaries 0 0 635,577 0Loans to associated companies 112,531 0 0 0112,531 0 635,577 0Fair valueLoans to subsidiaries 0 0 635,577 0Loans to associated companies 112,531 0 0 0112,531 0 635,577 0The fair values of loans are based on the discounted cash flow, by applying a discount ratethat is based on the interest rate deemed available to a borrower on balance sheet date.For other receivables, the reported value has been deemed to be a sound approximation of fairvalue.Note 18 Participations in subsidiariesGroup Corporate Registered ShareIdentity offices capitalNumber (%)Safe Astoria Ltd. EC35621 Bermuda 100Safe Bristolia Ltd. EC35620 Bermuda 100Safe Concordia Ltd. EC35622 Bermuda 100Safe Esbjerg Ltd. EC36881 Bermuda 100

Consafe Offshore AB (publ) 41556604-4771Parent CompanyShare ofequity, %Share ofvotingpower, %Numberof sharesBookvalueSafe Astoria Ltd. 100 100 12,000 94Safe Bristolia Ltd. 100 100 12,000 94Safe Concordia Ltd. 100 100 12,000 3,899Safe Esbjerg Ltd. 100 100 12,000 94Total 4,181GroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Opening acquisition cost 14,811 14,811 14,811 14,811Purchases of participations - - 4,081 -Sale of participations -14,811 - -14,811 -Closing accumulated acquisitioncost 0 14,811 4,081 14,811Closing book value 0 14,811 4,081 14,811Note 19 Receivables from Group companiesGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Additional receivables - - 635,577 -Closing accumulated acquisitioncost 0 0 635,577 0Closing book value 0 0 635,577 0Note 20 Transactions with related parties1 July 2004-30 June 20051 July 2003-30 June 2004Information regarding Parent CompanyUntil March 2005, the Company was a wholly-owned subsidiary of JCE Group AB,Corporate Identity Number 556240-1553, with its registered offices in Gothenburg. Afterthe new shares issue carried out in the spring of 2005, the Company is approximately 48 %owned by its former Parent Company, i.e. JCE Group AB, and is consequently anassociated company of JCE Group AB.

Consafe Offshore AB (publ) 42556604-47711 July 2004-30 June 20051 July 2003-30 June 2004Purchases and sales between Group companiesThe percentages of purchases and sales regarding Group companies are listed below.Purchases, (%) 31 -Sales, (%) 20 -For the Parent Company, 0 (0) percentage points of the purchases for the year and 0 (0)percentage points of sales for the year are attributable to the Company’s own subsidiaries.The same principles as for pricing as transactions between external parties are applied topurchases and sales between Group companies.Purchases of goods and services from related partiesPurchases of goods:JCE Group AB 76 -Joy Venture Investments Ltd. - -Total 76 0Purchases of services:JCE Group AB 645 -Joy Venture Investments Ltd. 32,616 -Total 33,261 0Sales of goods and services to related partiesSales of goods:JCE Group AB 1 -Joy Venture Investments Ltd. 12,660 -Total 12,661 0Sales of servicesJCE Group AB - -Joy Venture Investments Ltd. 6,918 -Total 6,918 0Besides purchases and sales of goods and services, the following transactions with JCEGroup AB have been made during the financial year:- Sale of the former subsidiary, Burntisland Fabrications Ltd., at book value.- Purchase of Safe Astoria and Safe Bristolia accommodation service vessels at theacquisition cost paid by JCE Group AB, plus commission.- Purchase of the newly formed subsidiaries Safe Astoria Ltd., Safe Bristolia Ltd. and SafeConcordia Ltd.Operating receivables/liabilities attributable to related partiesReceivables/liabilities from sales/purchases of goods/services are stated below.

Consafe Offshore AB (publ) 43556604-47711 July 2004-30 June 20051 July 2003-30 June 2004Receivables from related partiesJCE Group AB 25 2.108Total 25 2.108Liabilities to related parties:JCE Group AB 93,828 46.066Total 93,828 46.066Loans from the related parties - -Loans from JCE Group AB:Opening balance 46,066 16.000Loans received 47,762 30.066Closing balance 93,828 46.066The loan from JCE Group AB bears an interest of 6 %.Loans to related parties other than senior managementLoans to Joy Venture Investments Ltd:Loans paid 112,531 -Closing balance 112,531 0The loan to the associated company has been raised on the basis of commercial terms andbears interest of LIBOR + 2 %.OtherThere are disclosures in separate notes concerning- salaries, etc. to the Board and CEO- participations in Group companies and associated companiesNote 21 Participations in associated companiesGroup Corporate Registered ParticipationsIdentity Number offices (%)Joy Venture Investments Ltd. 596126 BritishVirgin Islands 15%

Consafe Offshore AB (publ) 44556604-4771Share ofequity, %Share ofvotingpower, %Number ofparticipationsBook valuein the GroupIndirectly ownedJoy Venture Investments Ltd. 15 15 150,000 8,449Total 8,449The difference between book value in the Group and the Group’s share of the associatedcompany’s equity amounts to TSEK 3,760.30 June 2005 30 June 2004GroupPurchases of participations 4,978 -Share in income 3,471 -Closing book value 8,449 0Note 22 Receivables from associated companiesGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Additional receivables 112,531 - - -Closing accumulated acquisitioncost 112,531 0 0 0Closing residual value accordingto plan 112,531 0 0 0Note 23 Prepaid expenses and accrued incomeGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Expenses for re-invoicing 18,865 - 18,865 -Accrued fees 274 - 274 -Accrued interest income 2,534 - 2,534 -Other 389 - 389 -Total 22,062 0 22,062 0

Consafe Offshore AB (publ) 45556604-4771Note 24 EquitySpecification concerning changes in equity can be found in the Change in Equity reports,which follow the balance sheets.SharesNumber of sharesTotalSharesNumber 1 July 2003 1,000Number 30 June 2004 1,000New share issue, January 2005 99,000Share split 9,900,000New share issue, March 2005 10,000,000New share issue, May 2005 4,278,083Number 30 June 2005 24,278,083The nominal value at the beginning of the year was SEK 100 per share but changed after theshare split to SEK 1 per share. All shares have been fully paid.Exchange rate differences in equity Group Parent Company1 July 2004- 1 July 2003- 1 July 2004- 1 July 2003-30 June 2005 30 June 2004 30 June 200530 June 2004Opening balance - - - -Change at the annual recalculationof existing subsidiaries 224 - - -Closing balance 224 - - -Note 25Untaxed reserves30 June 2005 30 June 2004Tax allocation reserves 8,816 -Total 8,816 0

Consafe Offshore AB (publ) 46556604-4771Note 26 Provision for taxesGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Deferred tax attributable toaccelerated depreciation (seeNote 12) 3,571 - 3,571 -Deferred tax attributable to taxallocation reserves 2,468 - - -6,039 0 3,571 0Note 27 BorrowingGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Interest-bearing liabilitiesLong-term liabilitiesLiabilities to credit institutions 123,540 - 123,540 -Liabilities to Parent Company - 46,066 - 46,066Other liabilities 93,828 - 93,828 -Total 217,368 46,066 217,368 46,066Current liabilitiesTotal 0 0 0 0Total interest-bearing liabilities 217,368 46,066 217,368 46,066No portion of long-term liabilities falls due for payment later than five years after balancesheet dateA total of TSEK 15,443 (TSEK 0), which is due for payment within twelve months, isincluded in the Group’s liabilities to credit institutions but is classified as long-term liabilitiesas the loan falls due on 31 December 2007.InterestThe Company’s borrowing is exposed to interest renegotiations and maturity dates accordingto the following:

Consafe Offshore AB (publ) 47556604-4771Less 1-5 More than Totalthan 1 year years 5 yearsGroupPer 30 June 2005Total borrowing 123,540 - - 123,540Effect of interest swaps -123,540 123,540 - -- 123,540 - 123,540Per 30 June 2004Total borrowing - - - -Effect of interest swaps - - - -- - - -Parent CompanyPer 30 June 2005Total borrowing 123,540 - - 123,540Effect of interest swaps -123,540 123,540 - -- 123,540 - 123,540Per 30 June 2004Total borrowing - - - -Effect of interest swaps - - - -- - - -Weighted average effective interest rates per loan amounted to:GroupParent Company1 July 2004- 1 July 2003- 1 July 2004- 1 July 2003-30 June 2005 30 June 2004 30 June 2005 30 June 2004Long-term liabilities 5.0 % - 5.0 % -to bank credit institutionsLiabilities to Parent Company 5.0 % - 5.0 %Other liabilities 5.0 % - 5.0 % -Disclosure regarding fair valueFair values of the Company’s interest-bearing liabilities correspond to the book values.Fair value of the Company’s interest swap agreements amounted to TSEK 1,125 on balancesheet date.For other liabilities, the reported value has been deemed to be a sound approximation of fairvalue.

Consafe Offshore AB (publ) 48556604-4771CurrenciesGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Interest-bearing liabilitiesper exchange rateUSD 217,368 566 217,368 566SEK - 45,500 - 45,500Total 217,368 46,066 217,368 46,066Note 28 Financial risksThe Group is exposed to various financial risks, including the effects of changes in prices onthe loan and capital markets, foreign exchange rates and interest rates, on the basis of itsoperations. The Group’s overall risk management programme focuses on the unpredictabilityof the financial markets and aims to minimise potential adverse effects on the Group’sfinancial results. The Group utilises derivative instruments, such as forward exchangeagreements and interest swaps to hedge a certain portion of its exposure.The Board of Directors prepares written principles for both the overall risk management andfor specific areas, such as exchange rate risks, interest rate risks, credit risks, utilisation ofderivative instruments and investments of excess liquidity. The policy is subject to continualreview, at least once per year. The Group’s financial risks are documented and compiled onan on-going basis, and followed up in order to ensure compliance with the Finance Policy.Foreign currency risksForeign currency risk for the Group is defined as the risk that arises in connection with theoperations and investments in foreign currencies. As all Group companies have USD as theirfunctional currency, foreign currency risks arise when the cash flows and balance sheet itemsare denominated in a currency other than USD. The Company shall strive towardsminimising currency exposure. Essential current cash flow and balance sheet exposures thatcannot be matched against cash flows and balance sheet items, shall, in accordance with thepolicy, be minimised on the basis of financial instruments.Interest rate risksThe Group’s revenues and cash flow from operations are, in all material respects,independent of changes in market interest rate levels. At year-end, 100 % of the Group’sborrowing was at fixed interest rates. The Group sometimes raises loans at variable interestrates and utilises interest swaps as cash flow hedges of future interest payments, which hasthe financial effect of converting loans from variable to fixed interest rates. Interest swapsallow the Group to raise long-term loans at variable interest rates and convert these loans tofixed interest rates that are at a lower rate than if the borrowing had taken place directly at afixed interest rate. In the case of an interest swap, the Group reaches an agreement with otherparties to exchange, at stipulated intervals (usually once per quarter), the difference betweenamounts according to contract at fixed interest rates and variable interest amounts, calculatedwith respect to the nominal amount agreed.

Consafe Offshore AB (publ) 49556604-4771Credit risksThe Group has a limited number of clients due to the nature of its operations. Therefore, theGroup has established guidelines in order to ensure that leasing and the sale of services isavailable to clients with a suitable credit record. Counterparties in derivative contracts andcash transactions are limited to financial institutions with high credit worthiness.Liquidity risksLiquidity risk management takes place with caution. This implies that the Group maintainssufficient liquid funds and available financing through adequate, established credit facilitiesin order to be able to fulfil future cash payment obligations.Note 29 Accrued expenses and deferred incomeGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Accrued charter leases 16,811 - 16,811 -Accrued consultancy fees 7,119 - 7,119 -Accrued holiday pay 265 36 265 36Accrued social securitycontributions 293 75 293 75Other items 4,143 719 4,143 719Total 28,631 830 28,631 830Note 30 Pledged assetsGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004For the Company’s ownprovisions and liabilitiesRelating to liabilities to creditinstitutionsMortgage in accommodationservice vessels 123,540 - - -Shares in subsidiaries 94 - 94 -Total regarding own liabilities andprovisions 123,634 0 94 0For the Company’s owncontingent liabilitiesattributable to performance

Consafe Offshore AB (publ) 50556604-4771GroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004guaranteesBank balances 44,205 - 44,205 -Total pledged assets 167,839 0 44,299 0Note 31 Contingent liabilitiesGroupParent Company30 June 2005 30 June 2004 30 June 2005 30 June 2004Total contingent liabilities 0 0 0 0Note 32 Adjustments for non-cash items, etcGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Depreciation 65 - 65 -Share of associated companies’income -3,471 - - -Total -3,406 0 65 0Note 33 Investments in tangible assetsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Investments for the year 644,275 28,955 168,807 28,955capitalised interest 3,737 - 3,737 -Total 648,012 28,955 172,544 28,955Note 34 Investments in subsidiariesThe following subsidiaries have been acquired during the year:Company Operations Date of Share of Share ofacquisition equity, % votingpower, %Safe Astoria Ltd. Dormant company 4 February 2005 100 100Safe Bristolia Ltd. Dormant company 4 February 2005 100 100Safe Concordia Ltd. Dormant company 4 February 2005 100 100

Consafe Offshore AB (publ) 51556604-4771Safe Esbjerg Ltd. Dormant company 26 May 2005 100 100All acquired subsidiaries are reported in the Group’s financial statement in accordance withthe purchase method.For all of the companies acquired during the year, the total value of the acquired assets andliabilities, purchases prices and effect on the Group’s liquid funds was as follows:Other current assets 4,181Total cash flow attributable to investments in subsidiaries 4,181Note 35 Liquid fundsGroup1 July 2004- 1 July 2003-30 June 2005 30 June 2004Parent Company1 July 2004- 1 July 2003-30 June 2005 30 June 2004Cash and bank balances 263,576 1,813 261,910 1,813Liquid funds 263,576 1,813 261,910 1,813Note 36 Transition to International Financial Reporting Standards, IFRSAs from 1 July 2005, the Group’s accounting principles will follow InternationalFinancial Reporting Standards, IFRS, adopted by the European Commission.Comparative information will be restated as from 1 July 2004 as the Group publishesfinancial information with a comparative year in its annual report.A brief summary of the effects of the transition to IFRS on the Group’s equity as per1 July 2004-, on net profit for the financial year 1 July 2004 – 30 June 2005 and on theGroup’s equity as per 1 July 2005 is presented below. This information is preliminaryand may be change during the period until the point in time of the presentation of thefirst annual report prepared in accordance with IFRS.The reporting of foreign currencies (IAS 21) is the only area in which there aresignificant differences for the Group between the current accounting principles and IFRSaccounting principles. For all of the Group’s companies, the USD has been identified asthe functional currency. The Board of Directors has also decided that the Group will usethe USD as its presentation currency. The differences arising compared to reporting inaccordance with Swedish accounting principles refer to non-monetary fixed assets,whereby historical acquisition costs in USD will differ from historical acquisition costswhich were originally translated to SEK and which, in the financial reports, weretranslated to USD at the current exchange rate.In accordance with IAS 39, certain financial instruments, including derivativeinstruments, shall be reported at fair value in the balance sheet. The Group will apply the

Consafe Offshore AB (publ) 52556604-4771exemption allowed by IFRS 1, entailing that comparative information to financialinstruments is reported in accordance with previous accounting principles. Therefore, theGroup’s interest swap agreements will first be reported at fair value as per1 July 2005.Reconciliation of equity SEK USDEquity according to Swedish accounting principles, 1 July 2004- 95 13Adjustment to IAS 21, functional currency -5,409 -717Equity according to IFRS, 1 July 2004- -5,314 -704Equity according to Swedish accounting principles, 30 June 2005 906,549 115,942Adjustment to IAS 21, functional currency 11,314 1,456Equity according to IFRS, 30 June 2005 917,863 117,398Adjustment to IAS 39, fair value of derivative instruments 104Equity according to IFRS, 1 July 2005 917,863 117,502The effects on equity in conjunction with the transition to IFRS on 1 July 2004 refer toconstructions in progress, on the vessels, translated at the historical USD exchange rate andthe holding in Burntisland Fabrications Ltd., which has also been translated at the historicalUSD exchange rate.The effects on equity as per 30 June 2005 refer, in their entirety to the construction of thevessels, translated at the historical USD exchange rate.Reconciliation of the Group’s net profit SEK USDNet profit 1 July 2004 – 30 June 2005 according to Swedishaccounting principles 61,699 8,029Adjustment to functional currency 16,625 2,173Net profit 1 July 2004 – 30 June 2005 according to IFRS 78,324 10,202The effects in the income statement are explained by the gains attributable to the sale ofBurntisland Fabrications Ltd. according to agreement in SEK, and also explained by thetranslation of constructions in progress to the historical USD exchange rate.

Consafe Offshore AB (publ) 53556604-4771The income statements and balance sheets will be presented for adoption at the AnnualGeneral Meeting of shareholders.Gothenburg, 5 August 2005_____________________J. Christer EricssonChairman_________________John Smith____________________Ola Lorentzon_____________________Peter JacobssonCEOOur audit report was presented on 5 August 2005._____________________Håkan JarkvistAuthorised Public Accountant

Consafe Offshore AB (publ) 54556604-4771Audit reportTo the general meeting of the shareholders ofConsafe Offshore AB (publ)Corporate Identity Number 556604-4771We have audited the annual accounts, the consolidated accounts, the accounting records and theadministration of the Board of Directors and the CEO of Consafe Offshore AB (publ) for the financialyear 1 July 2004 – 30 June 2005. These accounts and the administration of the company and theapplication of the Annual Accounts Act when preparing the annual accounts and the consolidatedaccounts are the responsibility of the Board of Directors and the CEO. Our responsibility is to expressan opinion on the annual accounts, the consolidated accounts and the administration based on ouraudit.We conducted our audit in accordance with generally accepted auditing standards in Sweden. Thosestandards require that we plan and perform the audit to obtain reasonable assurance that the annualaccounts and the consolidated accounts are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An auditalso includes assessing the accounting principles used and their application by the Board of Directorsand the CEO and significant estimates made by the Board of Directors and the CEO when preparingthe annual accounts and consolidated accounts as well as evaluating the overall presentation ofinformation in the annual accounts and the consolidated accounts. As a basis for our opinionconcerning discharge from liability, we examined significant decisions, actions taken andcircumstances of the Company in order to be able to determine the liability, if any, to the Company ofany Board member or the CEO. We also examined whether any Board member or the CEO has, inany other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articlesof Association. We believe that our audit provides a reasonable basis for our opinion set out below.The annual accounts and the consolidated accounts have been prepared in accordance with the AnnualAccounts Act and, thereby, give a true and fair view of the Company’s and the Group’s financialposition and results of operations in accordance with generally accepted accounting principles inSweden. The statutory administration report is consistent with the other parts of the annual accountsand the consolidated accounts.We recommend to the general meeting of shareholders that the income statements and balance sheetsof the Parent Company and the Group be adopted, that the profit for the Parent Company be dealt within accordance with the proposal in the administration report and that the members of the Board ofDirectors and the CEO be discharged from liability for the financial year.Gothenburg, 5 August 2005Öhrlings PricewaterhouseCoopers ABHåkan JarkvistAuthorised Public Accountant