C.W. OBEL A/S

Company Registration No. A/S 14,565

Vestergade 2

DK-1456 Copenhagen K

Telephone +45 3333 9797

Telefax +45 3333 9779

Abildager 2

DK-2605 Brøndby

Telephone +45 4322 1357

Telefax +45 4322 1358

Summary and key figures of the Group

C.W. Obel´s Core Business Areas 1

Shareholder Information 2

Supervisory Board and Management 3

C.W. Obel´s New Structure 4

Annual Report of the Supervisory

Board and the Management 6

Semco Companies 10

Semco International Companies 12

DGT-Volmatic Companies 13

SN System Companies 14

C.W. Obel Properties 16

Associated Companies 18

Signatures and Auditors´ Report 20

Accounting Policies 21

Consolidated Profit and Loss Account 25

Assets - Group 26

Liabilities - Group 27

Cash Flow Statement 28

Notes to the Consolidated Accounts 29

Profit and Loss Account

- Parent Company 33

Assets - Parent Company 34

Liabilities - Parent Company 35

Notes to the Parent Company´s

Annual Accounts 36

Group Subsidiaries 39

The History of C.W. Obel 40

Addresses in the C.W. Obel Group 42

List of Rental Properties 44

The Ordinary General Meeting will be heldat 14:00 on 12 May 1997,at Hotel Hvide Hus in Aalborg.

KEY FIGURES

CONTENTS

(DKK´000) 1996 1995 1994 1993 1992

Net turnover, excluding rental income 2,624,189 84,813 81,203 85,618 101,452 Rental income 81,087 80,899 71,976 61,021 46,173Depreciation (54,035) (19,483) (18,002) (17,757) (16,953)Operating profit 79,891 30,209 34,896 15,482 14,652 Financial items, net (13,591) 25,228 (27,218) 27,383 20,655 Profit on ordinary operations, excludingassociated companies 75,989 55,437 7,678 42,865 35,307 Share of profits,associated companies 274,888 174,086 205,625 198,882 153,310 Profit on ordinary operations 350,877 229,523 213,303 241,747 188,617 Extraordinary items, net 0 0 0 0 1,239 Consolidated profitbefore taxation and minority interests 350,877 229,523 213,303 241,747 189,856C.W. Obel´s share of profit for the year 245,851 133,902 144,105 150,935 101,120

Investments in tangible fixed assets 158,584 60,270 160,194 12,679 191,111

Fixed assets 1,864,415 1,277,944 1,234,456 1,034,618 982,866 Current assets 1,367,886 293,999 416,343 458,291 451,177Total assets 3,232,301 1,571,943 1,650,799 1,492,909 1,434,043

Consolidated capital and reserves 985,886 1,400,237 1,303,984 1,189,077 1,068,628

KEY FIGURES OF THE GROUP

Equity ratio % (A) 30.5 89.1 79.0 79.6 74.5Return on equity % (B) 20.6 9.9 11.6 13.4 9.6Earnings per share, DKK 100 (EPS)(C) 118.5 64.5 69.5 72.8 48.1Dividend per share, DKK 100 15 15 15 15 15Net asset value per share, DKK 100 (D) 475 675 629 573 515Average number of employees 4,850 109 109 135 144

SUMMARY OF THE GROUP

(A) Capital and reserves, year end * 100%

Total assets, year end

(B) Result adjusted for extraordinary items * 100%

Average capital and reserves

(C) Result adjusted for extraordinary items

Average number of shares adjusted for issues

(D) Capital and reserves, year end

Number of shares adjusted for issues

C.W. OBEL´S CORE BUSINESS AREAS

C.W. Obel will - with a

financial basis in its historical

activities within production

and sale of tobacco products

- carry on Danish and

international industrial

and engineering business

as well as property

and financial business.

AUDITORS

KPMG C.Jespersen, State Authorized Public Accountants

Verner Lynge JacobsenState Authorized Public Accountant

ORDINARY GENERAL MEETING

C.W. Obel‘s Ordinary General Meet-ing will be held on Monday 12 May1997, at 14:00 at Hotel Hvide Hus inAalborg.

OWNERSHIP

Pursuant to section 28a of the DanishCompanies Act, shareholders holdingshares with a face value of at least 5% ofthe share capital or shares with at least5% of the voting rights in any one com-pany are required to notify the companyand the Copenhagen Stock Exchange oftheir holdings. Such notification hasbeen made by:

Arbejdsmarkeds Tillægspension,(The Labour Market SupplementaryFund), Hillerød

Det Obelske Familiefond, Aalborg.

The company is included in the con-solidated accounts of Det ObelskeFamiliefond, Aalborg.

C.W. Obel A/S holds none of its ownshares in its portfolio, and no subsidi-aries own shares in C.W. Obel A/S.

ALLOCATION OF PROFIT

The Supervisory Board recommends adividend of 15%, similar to the divi-dend paid in 1995.

The allocation of profit can subse-quently be specified as follows:

(DKK million)15% Dividend 31.1Allocated to reserves 214.8

245.9

The proposed dividend has been incor-porated in the accounts, and the capi-tal and reserves at 31 December 1996 subsequently amount to DKK 985.9million.

C.W. Obel’s share capital is composedas follows:

A-shares nom. DKK 20,205,000B-shares nom. DKK 187,248,700

Total nom. DKK. 207,453,700

A-shares: 202,050 shares of DKK 100 eachB-shares: 1,872,487 shares of DKK 100 each

The voting proportion between A andB shares is 10:1.

SHAREHOLDER INFORMATION

SHARE CAPITAL

C.W. OBEL´S SHARE PRICE IN 1996

Jan. Feb. March April May June July Aug. Sep. Oct. Nov. Dec.

100

110

120

130

140

150C.W. Obel´s indexed share price

Industrial share index

Total share index

90

160

1 January 1996 is equivalent to index 100.

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SUPERVISORY BOARD/MANAGEMENT

SUPERVISORY BOARD:

MANAGEMENT:

HANS WERDELIN, CHAIRMAN(Member of the Supervisory Board since 1993.) Managing Director and member of theSupervisory Board of Sophus Berendsen A/S. Chairman of Danske Trælast A/S. DeputyChairman of the Supervisory Boards of Skandinavisk Holding A/S, Skandinavisk Industries A/Sand Skandinavisk Tobakskompagni A/S. Member of the Supervisory Boards of Novo Nordisk A/S, A/S Th. Wessel & Vett, Magasin du Nord and Wessel & Vett Holding A/S.

MORTEN BALLING (Member of the SupervisoryBoard since 1991.) Professor,Vice-chancellor of the AarhusSchool of Business. Member of the SupervisoryBoards of Uni-InvestManagement A/S and A/S Chr. Fabers Fabriker.

O.C. MELLENTIN(Member of the Supervisory Board since 1971.)

POVL HEEGAARD(Member of the Supervisory Board since 1971.) Chairman of the SupervisoryBoard of Tryg-Baltica, Skadesforsikring A/S. Vice Chairman of the Supervisory Board of Daloon A/S. Member of the Supervisory Boards ofDampskibselskabet af 1912 and Rederiet A.P. Møller A/S.

HENNING O. JENSENEXECUTIVEVICE PRESIDENTChairman of the Supervisory Board of EDB Gruppen A/S. Member of the Supervisory Board of Tulip International A/S.

FREDERIK CHR. OBEL, DEPUTY CHAIRMAN(Member of the Supervisory Board since 1991.) Chairman of the

Supervisory Board of Obelhus A/S. Deputy Chairman of the Supervisory Boards of Danske Obligationer A/S, Danske

Obligationer II A/S, A/S Forsikringsselskabet Codan, Torsana A/Sand Carli Gry International A/S. Member of the SupervisoryBoards of H.Hoffman & Sønner A/S, A/S Det Alm. Danske

Ejendoms Selskab and A/S Commodore Boligselskab.

MOGENS HUGO JØRGENSENMANAGING DIRECTOR

Chairman of the Supervisory Boards of A/S Motortramp and D/S “NORDEN” A/S.

Member of the Supervisory Boards of Skandinavisk Holding A/S,

Skandinavisk Tobakskompagni A/S, Skandinavisk Industries A/S,

A/S Phønix Contractors, GN Great Nordic Ltd and Unidanmark A/S.

N. O. LIISBERG (Member of the

Supervisory Board since 1971.)

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C.W. OBEL´S NEW STRUCTURE

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After having operated primarily as a realproperty and financing holding compa-ny for a number of years, C.W. Obelworked out a new industrial strategy inthe beginning of the nineties. Accordingto this strategy, the Company will nowfocus on three areas:

1. INDUSTRIAL AND ENGINEERINGACTIVITIES IN DENMARK AND ABROAD

In this area C.W. Obel will be an activeplayer on the market and develop theCompany through international growth.

The industrial and engineering activi-ties are divided into four business areas:

■ The Semco Companies are primarilyengaged in projecting, installation andservice within the areas of electricity,pipe installation and ventilation.

■ The Semco International Compa-nies, which work on an internationaldevelopment of Semco’s basic activi-ties, primarily on the near markets inScandinavia and Poland.

■ The SN System Companies, whichprimarily operate with energy andenvironmental activities within fluegas purification, technical insulationand process-technology plants.

■ The DGT-Volmatic Companies,which specialise in the productionand sale of technical equipment tocommercial market gardens.

2. PROPERTIES IN DENMARK

Within this area C.W. Obel will investin and manage high-quality properties,mainly for business purposes and pri-marily in Aalborg and Copenhagen.

3. ASSOCIATED COMPANIES

In this area C.W. Obel manages itsinvestment in Skandinavisk HoldingA/S, Skandinavisk TobakskompagniA/S, Skandinavisk Industries A/S andA/S Motortramp.

The following chart illustrates C.W. Obel´s organisation:

Semco Companies

Semco International Companies

SN System Companies

DGT-Volmatic Companies

Skandinavisk Holding A/S

Skandinavisk Tobakskompagni A/S

Skandinavisk Industries A/S

A/S Motortramp

D/S “NORDEN” A/S

Industrial and engineering activities Properties Associated companies

1996 - A SUCCESSFUL YEAR

1996 was a successful and exciting yearfor C.W. Obel. The ambition set out inthe strategy plan to acquire a majorDanish company was achieved whenthe Company took over SN HoldingA/S on 1 April 1996.

The Group’s figures were significant-ly affected by the consolidation of the ac-counts of SN Holding A/S from 1 April1996 into C.W. Obel’s figures. SN Hol-ding A/S is thus included in C.W. Obel’saccounts for a period of 9 months.

LN Entreprise A/S, which was soldon 18 December 1996, is not includedin the consolidated accounts. The resultof the company is recorded under“Profit in divested company”.

The annual accounts of SN HoldingA/S for 1996 were prepared accordingto C.W. Obel’s customary accountingprinciples.

The turnover of the C.W. ObelGroup increased from DKK 167.4m toDKK 2,705.3m. 63% of this turnovercome from the Danish market.

The Group’s profit on ordinary ope-rations increased in 1996 by 53% toDKK 350.9m compared to DKK229.5m in 1995.

The profit for the year was DKK245.9m, which is an increase of 84%over last year, when the profit was DKK133.9m.

The increased profit is attributable toimproved results in the Group’s existingactivities and to the result of SNHolding A/S.

Despite the fact that the profit in theSN Holding Group was lower thanexpected, the acquired company hashad a positive impact on the consoli-dated result due to favourable financingconditions with low interest rates.

The total assets of the Group amountto DKK 3,232.3m compared to DKK1,571.9m in 1995.

Capital and reserves amount to DKK985.9m, corresponding to an equity

the offer. The remaining shares havesubsequently been redeemed, and SNHolding A/S has been delisted from theCopenhagen Stock Exchange. At theend of 1996 SN Holding A/S conse-quently became a wholly owned sub-sidiary of C.W. Obel A/S.

In order to level out the organisa-tional structure it has been decided toinitiate a merger project, whereby SNHolding A/S with effect from 1 January1997 will be merged with C.W. ObelA/S.

It soon became evident that C.W.Obel was not the most suitable long-term owner of the building contractorLN Entreprise A/S (Larsen & Nielsen),which was owned by SN Holding A/S.The building contractor was thereforesold to Monberg & Thorsen A/S on 18December 1996. This sale contributesto the structural rationalisation whichcharacterises the Danish constructionindustry in these years.

C.W. Obel’s financial strength hasgiven the Semco and the SN Systemcompanies a stronger foundation for thestrategy which has been drawn up forthe companies’ growth and inter-nationalisation. In the course of 1996,

ratio of 30.5%. The capital and reserves,which totalled DKK 1,400.2m at thebeginning of the year, were affected bywritedowns of added values in connec-tion with the acquisition of companies.

CHANGE/ACQUISITIONS

In recent years C.W. Obel has had a veryhigh equity ratio. For this reason theCompany some years ago, as part of along-term strategy plan, decided to capi-talise the Group’s capital within industryand properties. The objective within theindustrial division was to become anactive industrial company in a new lineof business with wide growth potential.

C.W. Obel found this potential inSN Holding A/S, a company in whichthere is ample opportunity for in-creasing the internationalisation of theSemco and the SN System Companies.

After obtaining acceptance from theBoard and the major shareholders ofSN Holding, C.W. Obel issued a condi-tional purchase offer to the shareholdersof the listed company, SN Holding A/S.

This offer expired on 29 March1996, and C.W. Obel was pleased to seethat 96.8% of the shareholders accepted

ANNUAL REPORT OF THE SUPERVISORY

BOARD AND THE MANAGEMENT

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7 companies with an annual turnover of approx. DKK 800m were thus acquired. Subsequent to the year end,another 3 companies have been acquir-ed, constituting an annual turnover ofapprox. DKK 430m. Approximately80% of the turnover of these companiesis realised abroad, primarily in Swedenand in Germany and Norway.

STRATEGY/ORGANISATION

C.W. Obel will continue to develop theexisting business areas, focusing in par-ticular on the new area which is coveredby the Semco and the SN SystemCompanies. The strategy of these com-panies is based on controlled growthand increased earning capacity.

The growth should be realised throughorganic growth and through acquisi-tions, primarily on the near markets:Scandinavia, Germany, Poland and theBaltic Countries. The increased earningcapacity should be realised by increasingthe competitiveness of the acquiredcompanies by continuously developingthe organisation, by improving efficien-cy and increasing co-operation betweenthe subsidiaries.

The Group has initiated an organisa-tion project with two primary objec-tives. One objective of this project is toobtain closer corporate ties in theGroup, and another is to produce a neworganisational structure which ensures abetter exploitation of managementresources. This will help to improveboth the opportunities for growth andincreased earnings.

FINANCING

In the course of the year C.W. Obel’sliquidity was in the range betweenDKK 200-250m, which was primarilyinvested in a portfolio of Danish bondsand a minor portion in Danish shares.The historically low interest level inDenmark has had a positive effect onthe Group’s result as C.W. Obel hasrealised a large part of the capital gains

from the continued fall in interest rates. In 1996 C.W. Obel raised loans to-

talling DKK 800m for financing theacquisition of SN Holding A/S and asubsequent refinancing of certain partsof SN Holding. A large part of theGroup’s debt has subsequently beenrefinanced as fixed interest medium andlongterm loans.

MANAGEMENT/EMPLOYEES

At the Ordinary General Meeting in1996 the Supervisory Board electedHans Werdelin as chairman and Frederik Chr. Obel as deputy chairman.Jørgen Sillesen, who is the generalmanager of Kemp & Lauritzen A/S -one of Semco A/S’ competitors - left theSupervisory Board.

In connection with the merger be-tween SN Holding A/S and C.W. Obel,Henning O. Jensen from SN HoldingA/S entered the Management of C.W.Obel. Henning O. Jensen will be re-

sponsible for financial matters. The managing director of SN Holding A/S,Jørgen Møller-Rasmussen, decided toleave the Group in connection with themerger.

The average number of employeesrose from 109 in 1995 to 4,850 in1996.

The Supervisory Board and the Man-agement of C.W. Obel welcome themany new employees and look forwardto a fruitful co-operation.

BUSINESS AREAS

We refer to the description of the busi-ness areas on pages 10-19.

In order to be able to compare theinformation to prior years, 12-monthfigures have been applied also for theSemco and SN System companies, al-though only 9 months of the operationof these companies are included inC.W. Obel’s accounts. For these twoareas, there is thus no direct correlation

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One of Semco´s special areas is technical installations for

the offshore sector.

by extraordinary expenses for a compre-hensive reconstruction of Vinco, theGroup’s French subsidiary.

C.W. Obel’s share of profit in asso-ciated companies before taxation in-cludes a share of the profit in Skan-dinavisk Holding in the amount ofDKK 271.8m.

A/S MotortrampC.W. Obel A/S holds 27.2% of the sharecapital in A/S Motortramp. The compa-ny operates its main activity of shippingthrough D/S “NORDEN” A/S. Theturnover amounted to DKK 482m com-pared to DKK 497m in 1995.

The profit before taxation and afterminority interests was DKK 19m com-pared to DKK 28m in 1995.

The decline in profit was due to areduction in gains on vessels sold. Theshipping company has improved its cur-rent income compared to the previousyear.

C.W. Obel’s share of profit in asso-ciated companies before taxation inclu-des a share of the profit in A/S Motor-tramp of DKK 5.2m

PROSPECTS FOR 1997

C.W. Obel’s expectations for 1997 are aslightly better result within C.W. ObelProperties.

Within the industrial and engineer-ing division, C.W. Obel expects that theresult in the Semco Companies will bemore or less in line with the 1996 resultand that the result of the SN SystemCompanies will improve. As these com-panies do not normally yield high pro-fits in the first quarter of the year, thefact that they are included in the con-solidated accounts for the entire year isnot expected to have a significant effecton the 1997 result.

Within the associated companies,A/S Motortramp expects a slightly better result, subject however to its saleof vessels. Skandinavisk Holding A/Sexpects a result similar to the profit in-cluded in the 1996 accounts.

The C.W. Obel Group in aggregateexpects a result which is slightly betterthan in 1996.

between the figures stated in the infor-mation on the business areas and thefigures disclosed in the consolidated ac-counts.

C.W. OBEL PROPERTIES

C.W. Obel Properties experienced aminor increase in rental income fromDKK 80.9m to DKK 81.1m. The pro-fit before taxation increased from DKK1.1m to DKK 10.3m.

No new properties were added to theportfolio in 1996, but major conversionand refurbishment work was completedin connection with new leases. C.W.Obel aims at being a quality lessor andtherefore attaches great importance toregular refurbishments and improve-ments to the older part of the propertyportfolio.

INDUSTRIAL AND ENGINEERING ACTIVITIES

The Semco CompaniesThe turnover (for 9 months) amountedto DKK 1,948.6m, which yielded aprofit before taxation of DKK 45.0m.The Semco companies experiencedgrowth both in turnover in Denmarkand in connection with addition ofcompanies in Sweden and Germany.The overall result, however, was affectedby start-up difficulties in connectionwith the takeover of the German com-pany, Brockmeyer AG.

The activity level has been quite high,not least owing to the completion of thetechnical installations in the Great BeltTunnel, which is the company’s largestproject so far. The final delivery wasmade on 1 February 1997 as agreed withthe Danish State Railways.

The SN System CompaniesThe turnover (for 9 months) amountedto DKK 456.8m, which yielded a profitbefore taxation of DKK 3.0m.

The majority of SN System’s engi-neering and contracting businesses haveproduced results somewhat less than sa-tisfactory.

DGT Volmatic A/SThe turnover amounted to DKK 76.2mcompared to DKK 78.4m in 1995. Thedecline in turnover is due to a decreasein turnover in the first quarter of 1996which was a result of the severe winter.

The profit before taxation increasedto DKK 5.1m compared to DKK 3.9min 1995. The increased profit is attribu-table to improved efficiency and the fact that the problems in the German branch appear to have been solved.

ASSOCIATED COMPANIES

Skandinavisk Holding GroupC.W. Obel A/S owns 35% of the sharecapital in Skandinavisk Holding A/S.The company’s financial year runs from1 July to 30 June. It is the result of thisperiod which is included in C.W. Obel’saccounts, i.e. from 1 July 1995 to 30June 1996.

In the above-mentioned period, theSkandinavisk Holding Group realised aturnover of DKK 10,333m, which con-stituted an increase of DKK 186m over1995. The profit before taxation andminority interests was DKK 1,193mcompared to DKK 869m in the pre-vious period.

The Skandinavisk TobakskompagniGroup had a successful period with in-creasing turnover and profit.

The Skandinavisk Industries Groupproduced a small profit compared to aconsiderable loss in the previous period,when the result, however, was affected

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These expectations are based on theassumption that the economic condi-tions in Scandinavia remain stable andthat the low interest level is not changedsignificantly.

FINANCIAL REPORTING

The consolidated accounts and the an-nual accounts of the Parent Companyfor 1996 have been prepared in accor-dance with the Danish Company Ac-counts Act and the guidelines issued by the Copenhagen Stock Exchange on listed companies’ financial reporting.

The accounting policies are un-changed from last year, but followingC.W. Obel’s acquisition of the SN Hol-ding Group, the accounting policiesand the layout of the profit and lossaccount, the balance sheet, the cash flowstatement, and the notes have been sub-ject to minor adjustments.

The Group’s turnover increased from DKK 167.4m in 1995 to DKK2,705.3m in 1996. The increase inturnover is attributable to the owner-

ship of SN Holding A/S since 1 April1996.

The information on the Group’s business areas does not include infor-mation on other activities, such as theparent company SN Holding A/S, SNLeasing A/S, SN Ejendomsselskab ApS,Arcadian-Invest A/S and C.W. Obel Inc.

In 1996 SN Holding A/S made pro-visions for a planned restructuring ofthe SN Holding Group, including themerger with C.W. Obel A/S. Moreover,provisions were made for the continuedconsolidation and development of thecompanies which were acquired in1996. A total amount of DKK 10.8mhas been allocated for these purposes.

The profit on ordinary operationsexcluding associated companies in-creased from DKK 55.4m in 1995 toDKK 76.0m in 1996.

Compared to 1995 the share of pro-fit from associated companies increasedby DKK 100.8m, which comprises anincrease of DKK 105.4m from Skan-dinavisk Holding A/S, a decline ofDKK 2.5m from A/S Motortramp and

an adverse effect of DKK 2.1m fromthe Group’s other small associated com-panies.

The effective tax rate was reduced to30% in 1996 from 42% in 1995. Thisis because the 1995 figures was affectedby the fact that the share of profit fromthe associated company SkandinaviskHolding A/S would not entitle C.W.Obel to a tax deduction for the highrestructuring provisions in Skandina-visk Industries A/S until at a later date.Part of this tax deduction was granted in1996.

The profit of the C.W. Obel Groupafter taxation is subsequently DKK245.9m compared to DKK 133.9m in1995.

The balance sheet total is DKK3,232.3m compared to DKK 1,571.9min 1995. Fixed assets amount to 57.7%and the current assets amount to42.3%. In 1995 the fixed assetsamounted to 81.3% and the current as-sets amounted to 18.7% of the balancesheet total.

Capital and reserves amount to DKK985.9m, which produces an equity ratioof 30.5% compared to 89.1% in 1995.The decline in capital and reserves isprimarily attributable to writedowns onincrease in value upon acquisition ofsubsidiaries totalling DKK 626.3m inconnection with the Group’s acquisitionof companies.

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KEY FIGURES (DKK million) 1996* 1995 1994 1993

Turnover 2,502.3 1,946.6 1,507.1 1,385.5

Profit before taxation 61.7 75.7 50.4 60.7

Balance sheet total 978.2 755.3 589.4 593.6

Number of employees 3,633 2,886 2,530 2,344

* Includes the activities of Semco International for the period 1 January - 30 June 1996. Please note that the Semco Companies are only included in C.W. Obel´s consolidated accounts

from 1 April 1996.

SEMCO COMPANIES

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MANAGEMENT:

Børge Nordgaard Hansen,Managing DirectorHenning RasmussenJens Otto DaugaardCarsten Vindnæs

Semco was established in 1888 underthe name of Semler & Matthiassen,which sold cast iron and stoves. Laterthe company also sold cars and motor-cycles.

Today Semco is Denmark’s largestsupplier of technical installations re-lating to electricity and HVAC and ven-tilation - both plants and services. Thegroup also operates within more special-ised areas such as data/tele communi-cations, combined heat and power sta-tions, ship and offshore installations andniche production.

Semco’s organisation is based on adecentralised structure with result cen-tres in three geographical regions inDenmark and an energy, a marine and acontracting division. There are 45 localoffices in Denmark. In addition, thereare special organisations for particularproduct areas, four companies inDenmark and ten companies abroad.

The corporate structure is shown onpage 39.

SIGNIFICANT EVENTS IN 1996

On 1 January Semco took over DanskOlie-Måler Service A/S (DOMS),which is the market leader in Denmarkwithin solutions to the oil industry. On1 October Semco acquired one of theleading HVAC companies in the Aar-hus area, Svend Erik Laursen A/S. Thetwo new companies added 210 employ-ees and an expected turnover in 1997 ofDKK 150m to the Semco Group.

Semco completed the delivery of thetotal technical installations in the GreatBelt Tunnel as planned, on 1 February1997.

Semco won the technical contract for the station terminal in connectionwith the extension of the CopenhagenAirport in Kastrup. The activities relatedto the Øresund project are proceed-ing as planned. In 1996 this work main-ly comprised the planning stage.

In Norway Semco bought a part ofHolta & Håland’s offshore activities,and the company now has 200 employ-ees and an annual turnover of DKK200m.

In Germany Semco took over the in-stallation business Brockmeyer AG,which results in significantly increasedmarket opportunities for Semco. Thecompany has 550 employees and aturnover of DKK 400m.

In the last few months of 1996,approximately 1,200 employees wereprepared for the “Frontline Project” - amajor training activity, the object ofwhich is to educate the employees to abetter understanding of customer needsand service. The project will be imple-mented in the first half of 1997.

On 1 May the new Semco Con-tracting division was set up. Semco’sexpertise obtained from large projectssuch as the Great Belt and Øresund isgrouped in this division.

PROFIT FOR THE YEAR

In Denmark both the traditional instal-lation activities and the special and

service-related areas have fulfilled theexpectations. In aggregate, Semco’s mar-ket position in Denmark has beenstrengthened.

The growth is reflected in the conso-lidated turnover, which increased by30% to DKK 2,502.3m.

The turnover in foreign companiesincreased from DKK 398.7m to DKK756.0m in 1996. The profit before taxa-tion was DKK 61.7m compared toDKK 75.7m in 1995. The volume oforders at 31 December 1996 amountedto DKK 1,489.0m compared to DKK1,221.6m in 1995.

In 1996 the group had 3,633 em-ployees compared to 2,886 in 1995.

EXPECTATIONS FOR 1997

The international growth is expected tocontinue in 1997. The growth on the Danish market is expected to be inline with the previous years. Due to a change in the composition of ordersand a continued consolidation of acquired companies, the pre-tax profitfor 1997 is expected to be in line with1996.

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turnover of approx. DKK 100m. Thecompany operates within electricalinstallations and has special qualifica-tions within project management andsolutions to complex specialist contracts.

On 1 January 1997 Semco Interna-tional acquired Totalinstallatören AB inMalmö. The company has an annualturnover of DKK 150m and operateswithin installation of ventilation andrefrigeration equipment.

In 1996 Semco International also established a company in Poland, SemcoPrenad Polska S.A.

A number of projects have been ini-tiated for the administrative integrationof the acquired companies in SemcoInternational.

PROFIT FOR THE YEAR

Turnover amounted to DKK 151.0m,and the profit before taxation was DKK3.2m.

EXPECTATIONS FOR 1997

In particular the acquisition of Back-lunds Elservice AB and Totalinstalla-tören AB will contribute to a significantincrease in turnover in 1997.

SEMCO INTERNATIONAL COMPANIES

KEY FIGURES (DKK million) 1996

Turnover 151.0

Profit before taxation 3.2

Balance sheet total 91.0

Number of employees 188

The figures cover the period 1 July - 31 December 1996.

core activities, i.e. technical installationswithin electricity, HVAC and ventila-tion. The division is working accordingto a controlled growth strategy throughorganic growth and acquisitions andincreased earnings capacity in the acquired companies.

The activities are mainly carried outin Sweden. Activities have also beencommenced in Poland on a small scale.

The corporate structure is shown onpage 39.

SIGNIFICANT EVENTS IN 1996

The year was characterised by a numberof takeovers. Via the company PrenadAB in Malmö, Semco Internationaltook over three branches from AB NyaHallberg & Co. with a total turnover ofDKK 40m.

On 1 September Semco Interna-tional acquired Backlunds Elservice ABin Stockholm, which had an annual

MANAGEMENT:

Kim Lykkegaard, Division Manager

On 1 July 1996 Semco Internationalwas established as an independent divi-sion. The figures of these activities aretherefore included in the Semco divi-sion for the first six months and in thenew independent division for the se-cond half of 1996.

The figures described here thereforeonly cover the second half of the year.As the activities of the division are new-ly acquired activities, no comparativefigures are presented.

Semco International is responsiblefor the internationalisation of Semco’s

Underground emergency station inStockholm where Backlunds Elservice AB has made the electrical, and the telecom-munication and data installations.

12

Almost 70% of the turnover is generatedoutside Denmark.

The profit increased to DKK 5.1mfrom DKK 3.9m in the previous year.The high increase in profit generateddespite the fall in turnover is the resultof a tight control of the company whichentailed an improved efficiency, andalso the fact that the operation of theGerman branch improved significantly.

The company had 91 employees in1996 compared to 95 in 1995.

EXPECTATIONS FOR 1997

In 1997 DGT-Volmatic expects a mi-nor increase in turnover and an unchan-ged profit.

KEY FIGURES (DKK million) 1996 1995 1994 1993

Turnover 76.2 78.4 71.5 79.6

Profit before taxation 5.1 3.9 1.5 (11.0)

Balance sheet total 44.1 48.1 58.6 63.2

Number of employees 91 95 89 115

DGT-VOLMATIC COMPANIES

MANAGEMENT:

Lars Christiansen, Managing Director

DGT-Volmatic is a leading interna-tional supplier of products and servicesfor controlling vegetation within themarket gardening industry. The mainproducts are climate, watering and ferti-lisation plants.

The company is a result of a mergerbetween Dansk Gartneri-Teknik A/Sand Volmatic A/S in 1988.

SIGNIFICANT EVENTS IN 1996

In the summer of 1996, DGT-Volmaticopened its own representation office inthe US.

In the course of the year, the compa-ny established a cooperative agreementwith a Japanese dealer. There is a greatpotential on the Japanese market.

PROFIT FOR THE YEAR

DGT-Volmatic exports its products to alarge number of countries. The growthon the individual markets has changedsomewhat, but the turnover on theoverseas markets has shown very posi-tive tendencies. In spite of this, turnoverin 1996 fell to DKK 76.2m from DKK 78.4m in 1995, because of thelow turnover in the first quarter causedby the severe winter.

13

SN SYSTEM COMPANIES

KEY FIGURES (DKK million) 1996 1995 1994 1993

Turnover 558.0 482.5 455.8 357.4

Profit before taxation (6.4) 12.6 3.6 (16.1)

Balance sheet total 261.1 243.9 249.3 N/A

Number of employees 913 876 679 576

Please note that the SN System Companies are only included in C.W. Obel´s consolidated accounts from 1 April 1996.

14

MANAGEMENT:

Peter Tolstrup Nissen, Managing Director

SN System A/S is the parent companyof a number of engineering, construc-tion and service businesses in Denmark,Norway, Sweden and Poland within thefollowing main areas:

■ Industrial services - production,mounting and servicing of pipe andprocess technical plants and installa-tions.

■ Environmental services - installationand maintenance of flue gas purifica-tion plants.

■ Energy services - technical insulationof pipes, tanks and other processtechniques as well as acoustic adjust-ment.

The corporate structure is shown onpage 39.

The activities of the company orig-inate in ABV Industri a-s, which wasfounded in 1989 with the objective ofinvesting in business entities, particular-ly within the energy and environmentsector.

SIGNIFICANT EVENTS IN 1996

In order to exploit the synergy poten-tial within the energy services businessarea, a merger was carried out with effect from 1 January between Isole-rings Consortiet and the affiliatedcompany Norisol. Norisol became thecontinuing company with threeDanish regions.

At the beginning of the year Norisoltook over 60% of the share capital ofthe Norwegian insulation companyScan-Isolering AS in Porsgrunn.

At the beginning of 1997 SN Systemacquired two companies within indu-strial services. SN System acquired the

entire share capital of the NorwegianFjeldstad Group, which has an annualturnover of DKK 160m, and the ma-jority of the shares of the SwedishWIAB Group, which has an annualturnover of DKK 120m. The SNSystem Group has thus strengthened itsposition within industrial services onthe Scandinavian market.

RESULT FOR THE YEAR

The turnover amounted to DKK558.0m compared to DKK 482.5m last year. Turnover in foreign countriesamounted to DKK 225.5m comparedto DKK 188.7m in 1995.

The result for the year before taxa-tion was a loss of DKK 6.4m comparedto a profit of DKK 12.6m in 1995.

The majority of the companies achieved results which did not meet theexpectations, among other things due toa low activity level in the first quarter. In aggregate, the result of the SN Sy-stem companies was also affected by the

restructuring of Isolerings Consortiet.The volume of orders at 31 Decem-

ber 1996 was DKK 147.6m comparedto DKK 112.6m last year.

In 1996 the company had 913 em-ployees compared to 876 in 1995.

Subsequent to the balance sheet date,Skandinavisk Miljø Service A/S hasestablished a joint venture with theGerman group SHL, and the joint ven-ture has entered into a contract with theDolna Odra power plant in Poland forthe construction of a desulphurizationunit. The amount of the contract isDKK 330m, of which 1/3 goes toSkandinavisk Miljø Service A/S. Theproject is planned to be completed bythe end of 1999.

EXPECTATIONS FOR 1997

In 1997 SN System expects a significantincrease in turnover, which is primarilyattributable to the acquired companies.SN System also expects an improvedresult for 1997.

15

C.W. OBEL PROPERTIES

16

At Teglholmen in Copenhagen the divi-sion has converted and refurbished thebuilding on the corner of Teglholms-gade and Scandiagade. The large area atTeglholmen still has building potentialfor C.W. Obel.

In the properties at Christianshavn,additional areas have been convertedand improved for the existing lesseeswho wished to expand.

In 1996 C.W. Obel experiencedincreasing demand for high-quality leases, and the division’s vacancy ratehas developed satisfactorily. One excep-tion is one very large property in Co-penhagen which is still vacant after thelessee vacated the property in the sum-mer of 1996.

PROFIT FOR THE YEAR

Rental income and other operatingincome increased from DKK 82.4m in1995 to DKK 84.0m in 1996. The pro-fit before taxation increased from DKK

MANAGEMENT:

Søren Hofman Laursen,Division Manager

The Property Division primarily investsin properties situated in Aalborg and in Copenhagen and its vicinity. Theproperties are mainly leased out forcommercial purposes, particularly foroffice use.

At the end of 1996 the division controlled a total floorage of about162,607m2. At the end of 1996, theproperty portfolio of the division had abook value of DKK 717.9m.

SIGNIFICANT EVENTS IN 1996

In 1996 the division made a few largeinvestments in conversions and refur-bishments of its properties, particularlyin connection with the signing of new,long-term leases.

The refurbishment of the propertiesis in accordance with the objective ofthe Property Division of being a qualitylessor with well-functioning propertiesand leases.

In Aalborg the division has convertedand refurbished a part of the former“Tobacco Factory” at Badehusvej for theuse of the Ministry of Justice. A totalfloorage of 7,500m2 has been convertedinto courtrooms and administrationoffices for the courts in Aalborg.

The major conversion and refurbish-ment work carried out in the propertycalled “the Textile Factory” betweenKastetvej and Strandvejen was complet-ed in 1996. Today, the property appearsas an almost entirely refurbished build-ing.

In Rantzausgade, also in Aalborgnear the Mølleå shopping mall, the divi-sion has commenced the urban redevel-opment work of the properties atRantzausgade 1-7. The urban redevel-opment is performed in accordancewith the rules on public subsidies andwill be completed by the end of 1997.

1.1m to DKK 10.3m.A large part of the in-crease in profit is attri-butable to an exten-sion of the deprecia-tion period for the leasehold properties.

EXPECTATIONS FOR 1997

The Property Division will also in 1997 search for high-quality properties, primarily in the Copenhagen area.

The Property Division expects a smallincrease in rental income for 1997.

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ASSOCIATED COMPANIES

Associated Companies comprise C.W.Obel’s ownership of significant share-holdings of between 20-50% in severallarge companies.

These companies are grouped inSkandinavisk Holding A/S, in whichC.W. Obel holds 35% of the share capi-tal and A/S Motortramp, in whichC.W. Obel holds 27.2%.

SKANDINAVISK HOLDING A/S

- has two main activities, tobacco/con-venience goods and office furniture.

These activities are carried out by theSkandinavisk Tobakskompagni Groupand Skandinavisk Industries Group, re-spectively.

Thus Skandinavisk Tobakskompagnicontinues C.W. Obel’s original businessof producing tobacco goods.

The 1995/96 financial year was againhighly satisfactory for the SkandinaviskTobakskompagni Group. The consoli-dated profit before taxation and afterminority shareholders was DKK1,083m compared to DKK 1,009m inthe previous year.

The improvement is attributable tomore or less all companies within theSkandinavisk Tobakskompagni Group.House of Prince A/S, the cigarette com-pany, recorded major improvements,and thus the sale of factory-made ciga-rettes in Denmark increased by 1.7% to

a total of 6.5bn units. House of PrinceA/S retained its high market share of approximately 97%. Improvementswere also recorded within exports, andthe company has gained a strong foothold in Eastern Europe. At thebeginning of 1997, the Nobel Cigars

Company, which handles the produc-tion of cigars, cheroots and cigarillos,bought Henri Wintermans, a Dutchcompany. This acquisition entails thatSkandinavisk Tobakskompagni hasbecome one of the largest cigarmanufacturers in Europe.

The companies in SkandinaviskTobakskompagni had a total of 3,735employees.

The Skandinavisk Industries Groupis one of the leading groups within office and institutional furniture inEurope, with production and sales activities in a number of countries.

The European furniture market isnow stable after the steady decline thatstarted around 1991. However, there isstill excess capacity especially in Ger-many and France, where decliningdemand has resulted in increased pricecompetition.

The Skandinavisk Industries Grouprealised a turnover of DKK 1,514mcompared to DKK 1,620m in the pre-vious year. The group’s pre-tax profitwas DKK 22m compared to a loss ofDKK 187m last year. The previousfinancial year, however, was stronglyaffected by an extraordinary provisionfor restructuring of the French VincoGroup in the amount of DKK 147m.

The Arenson Group in the UK andthe Gispen Group in The Netherlandsshowed improved results compared to

18

the previous year. Similarly, the Danishcompanies Labofa and Fritz Hansenreported a good year with satisfactoryprofits.

A new management team has startedadapting the group to utilise coopera-tion among the individual companies toa greater extent.

The Skandinavisk Industries Grouphad a total of 2,092 employees.

In aggregate, C.W. Obel’s share ofprofit from Skandinavisk Holding A/Swas DKK 271.8m compared to DKK166.4m the year before.

Skandinavisk Holding expects thatthe result of the two sub-groups for thenext financial period will be in line withthe profit obtained in 1995/96.

THE A/S MOTORTRAMP GROUP

The main activity of the A/S Motor-tramp Group is shipping.

The vessels of the group are ownedby the subsidiary shipping line D/S“NORDEN” A/S, an operating com-pany in the group that carries on tramptrade on a worldwide basis both withindry cargo and tankers.

At the beginning of 1997 the ship-ping company had at its disposal 18units with a total of 1,020,000 tdw,broken down into 4 dry cargo vessels(approx. 400,000 tdw) and 14 tankers(approx. 620,000 tdw). Approximately650,000 tdw is thus wholly or partlyowned by “NORDEN”.

The group’s strategy is to own andoperate a modern fleet of vessels of ahigh standard. The average age of thegroup’s fleet is thus only approximately5 years.

During recent years the group hasaimed at improving the current operat-ing income, i.e. the result for the yearbefore proceeds from the sale of vessels.These efforts have now produced a re-sult, and the current operating incomewas therefore higher in 1996 than in theprevious year, although 1996 was char-acterised by poor freight rates withindry cargo, whereas the rates for tankerswere reasonably stable during the year.

As opposed to 1996 the group only

sold one vessel during 1996 - the pro-duct tanker “Nordholm”, in which“NORDEN” held 50%, which was sold.

The profit for the year before taxa-tion and after minority interests wasDKK 19.0m compared to DKK 27.4mthe year before.

During the year, the group had 158employees.

The share of the profit in A/SMotortramp declined from DKK 7.7mto DKK 5.2m in 1996 in C.W. Obel’saccounts.

A/S Motortramp expects to be able

to improve the result of the currentoperations in 1997, but the overallresult, however, is highly dependent onthe amount of vessels sold and theexchange rate developments.

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SIGNATURES

SIGNATURES AND AUDITORS´ REPORT

AUDITORS´ REPORT

We have audited the consolidated accounts and the group accounts for 1996 ofC.W. Obel A/S presented by the Management and the Supervisory Board.

BASIS OF OPINION

We have planned and conducted our audit in accordance with generally acceptedauditing standards to obtain reasonable assurance that the consolidated accountsand annual accounts are free of material misstatements. Based on an evaluation ofmateriality and risk, we have, during the audit, tested the basis and documentationfor the amounts and disclosures in the consolidated accounts and annual accounts.Our audit includes an assessment of the accounting policies applied and estimatesmade. In addition, we have evaluated the overall adequacy of the presentation inthe consolidated accounts and annual accounts.Our audit has not resulted in any qualifications.

OPINION

In our opinion, the consolidated accounts and group accounts have been preparedin accordance with the accounting provisions of Danish legislation and give a trueand fair view of the Group’s and the Parent Company’s assets and liabilities, finan-cial position and profit for the year.

COPENHAGEN, 1 APRIL 1997

KPMG C. Jespersen Verner Lynge Jacobsen

Arne NielsenState Authorised Public Accountant State Authorised Public Accountant

COPENHAGEN, 1 APRIL 1997

Management

Mogens Hugo Jørgensen Henning O. Jensen(Managing Director)

Supervisory Board

Hans Werdelin Frederik Chr. Obel(Chairman) (Deputy Chairman)

Morten Balling Povl Heegaard

N.O. Liisberg O.C. Mellentin

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ACCOUNTING POLICIES

GENERAL

The consolidated accounts and the an-nual accounts of the Parent Companyfor 1996 have been prepared in accor-dance with the Danish Company Ac-counts Act and the guidelines issued bythe Copenhagen Stock Exchange on thefinancial reporting of listed companies.

Following C.W. Obel A/S’ acquisitionof the SN Holding Group on 1 April1996, the accounting policies and thelayout of the cash flow statement, theprofit and loss account and the balancesheet have been subject to minor adjust-ments. The accounting policies appliedare unchanged from last year. TheGroup’s property portfolio has beendivided into industrial properties, i.e.properties used for own purposes, andleasing properties. The industrial pro-perties are still depreciated over a periodnot exceeding 50 years, whereas leasingproperties in future will be depreciatedover 100 years. The longer depreciationperiod for leasing properties is based onthe C.W. Obel Group’s policy of beinga quality lessor, which entails that allleasing properties due to the Group’smaintenance programmes have a usefullife of at least 100 years.

C.W. Obel’s capital and reserves havenot been adjusted in spite of the aboveadjustments. The adjustment to the de-preciation period has resulted in animproved profit in 1996 of DKK 6.2million compared to the depreciationperiod applied in previous years.

LN Entreprise A/S, which was awholly owned subsidiary of SN HoldingA/S, was sold at year end 1996. The LNEntreprise Group is not incorporated inthe consolidated accounts, but the resultin C.W. Obel’s ownership period hasbeen included in the item “Profit indivested company”.

CONSOLIDATION

The consolidated accounts comprisethe Parent Company C.W. Obel A/Sand all companies in which the parentcompany holds more than 50 per cent

of the share capital or in any other wayhas a controlling interest.

The consolidated accounts have beenprepared on the basis of the individualcompanies’ accounts by adding items ofa uniform nature and subsequently eliminating intercompany turnover,profits, interests, dividends, accountsand shareholdings.

Capital investments in associatedundertakings are stated at the propor-tionate share of the equity value of suchundertakings with a proportional de-duction of unrealised intercompanyprofits. Joint ventures which are com-parable to associated undertakings areproportionally consolidated.

Associated undertakings are under-takings in which the Group holds be-tween 20 and 50 per cent of the capitalwithout having a controlling interest.

Immaterial associated undertakingsare included in the consolidated ac-counts separately at historical costs.

Newly acquired undertakings areincluded in the consolidated accountsand the accounts of the Parent Com-pany from the date of acquisition.

Undertakings which have been soldor discontinued are included in the pro-fit and loss account up to the date of saleor discontinuation. Comparative figuresand key figures have not been adjustedfor newly acquired undertakings orundertakings which have been sold.

At the date of acquisition the dif-ference between acquisition price andequity value of the acquired undertakingis calculated after an adjustment of theindividual assets and liabilities to valueswhich reflect the values of both assetsand liabilities to C.W. Obel A/S.

In situations where the acquisitionprice exceeds the calculated net assetvalue at the date of acquisition, the difference will be written off againstreserves in the year of acquisition asgoodwill. Any negative difference (bad-will), which can be attributed to futureoperating losses, is recorded under pro-visions.

MINORITY INTERESTS

The calculation of the consolidated pro-

fit or loss and capital and reserves in-cludes a separate description of the pro-portionate share of the subsidiaries’ pro-fit or loss and capital and reserves whichis attributable to minority interests.

FOREIGN CURRENCY

Assets and liabilities expressed in foreigncurrencies are translated into Danishkroner (DKK) at the exchange ratesruling at the balance sheet date or at therate at which they have been hedged.Realised and unrealised exchange rategains are included in the profit and lossaccount except in the situations listedbelow.

The profit and loss accounts of foreign subsidiaries are translated intoDanish kroner at the exchange rate atthe transaction date, whereas the bal-ance sheet is translated at the ratesruling at the balance sheet date. Anyexchange adjustments of the net worthof the subsidiaries at the beginning ofthe year and long-term accounts withsubsidiaries are taken directly to capitaland reserves. Differences between thesubsidiaries’ net income at the exchangerate at the transaction date and thebalance sheet date are also taken directlyto capital and reserves.

Unrealised exchange gains on for-ward contracts which are entered intofor the purpose of hedging income andexpenses in the coming years are post-poned until the sale which the contractsare hedging is invoiced. Other exchangeadjustments are included in the profitand loss account.

21

ACCOUNTING POLICIES

PROFIT AND LOSS ACCOUNT

NET TURNOVER

The percentage-of-completion methodhas been applied for subsidiary under-takings which have entered into long-term contracts, and the value of the out-put of the year, including a prudentlycalculated profit, is thus recognised inthe profit and loss account as the workprogresses. Expected losses on unfinish-ed long-term contracts are charged tothe profit and loss account.

The stage of completion of long-term contracts is determined as the pro-portion of costs incurred to date ascompared to the total budgeted costsfor the completion of the contract.

Other income from the sale of goodsand services is recognised in the profitand loss account if delivery has beenmade before the end of the year.

RESULT OF HOLDINGS IN SUBSIDIARY/ASSOCIATED COMPANIES

The result of holdings in subsidiary/associated companies comprises the proportionate shares of the profits or losses before taxation in subsidiary/asso-ciated companies, cf. last year’s annualaccounts. The proportionate share of taxin subsidiary/associated companies isincluded in taxation in the profit andloss account.

INTEREST INCOME AND INTEREST EXPENSES

Dividends are recorded as income in theyear in which dividend is declared anddistributed. The interest income and in-terest expenses which relate to thefinancial year are included in the profitand loss account. Realised capital gainsand losses on securities are included inthe profit and loss account togetherwith unrealised losses in relation to thepurchase price. Unrealised gains on se-curities are posted to the revaluation

reserve under capital and reserves afterdeducting deferred taxation.

DEPRECIATION

Tangible fixed assets are depreciated overtheir estimated useful lives. Based on thepurchase prices, depreciation charges arepro-rated per month, as follows:

Industrial properties: Not exceeding 50 yearsLeasing properties: Not exceeding 100 yearsFixtures in buildings: 10 to 25 yearsLeasehold improvements Not exceeding 10 yearsTechnical plant and machinery: 5 yearsOther plant, operating equipment,furniture and fittings: 3 to 5 yearsMotorcars 7 yearsRental equipment 10 years

Assets with a cost of less than DKK8,600 per unit are charged to the profitand loss account in the year of acquisi-tion.

MAINTENANCE OF PROPERTIES

Costs paid in connection with main-taining the standard of the propertiesare charged to the profit and loss ac-count after the completion of themaintenance work. No provisions aremade for future maintenance costs.

TAXATION

Provisions for corporation tax payablein the following year are made on thebasis of the expected taxable income.

Furthermore, provisions for deferredtax liabilities are made to meet the taxthat may become payable as a result ofdifferences between the result accordingto the annual accounts and the taxableincome, and to meet any tax which mayaccrue in connection with the sale of

assets at their book value. However, noprovisions are made for deferred taxa-tion on industrial properties. Nor doprovisions for deferred tax liabilitiesinclude contingent tax on holdings insubsidiary and associated undertakings.Deferred tax is calculated in accordancewith the current tax rules, based on acorporate tax rate of 34%.

The Parent Company is taxed jointlywith its wholly owned Danish subsidi-aries. The net tax payable on the conso-lidated taxable income is allocated to thecompanies whose income is positive.

SALE/LEASE BACK

Profit on sale/lease back contracts enter-ed into is included as a provision in thebalance sheet and is taken to income asthe leasing instalments are received.

DEVELOPMENT COSTS

Development costs and expenses forlicense rights are charged to the profitand loss account in the year in whichthey are incurred.

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BALANCE SHEET

TANGIBLE FIXED ASSETS

Tangible fixed assets are stated at histori-cal cost less depreciation charges and, for specific properties, plus revaluationsmade in previous years.

Expenses paid for the purpose ofimproving the property compared tothe standard at the date of acquisitionare capitalised and amortised as addi-tions to the historical cost of the pro-perty. Similarly, expenses paid for sub-stantial improvement of large leaseholdpremises when signing new leasing con-tracts are capitalised and amortised

SUBSIDIARY/ASSOCIATED COMPANIES

Holdings in subsidiaries and associatedcompanies are valued according to the equity method, i.e. at a value cor-responding to the proportionate shareof such companies’ capital and reservesless unrealised intercompany profits.

Subsidiaries with a negative equityvalue are stated at DKK 0. In addition,amounts owed by such subsidiaries arewritten down by the Parent Company’sshare of the negative equity value. Anyremaining commitment is included inthe balance sheet under provisions.

OTHER FINANCIAL FIXED ASSETS

Listed bonds and shares included undercurrent assets are recorded at the official-ly quoted prices at the end of the year.However, convertible bonds boughtunder par value are included at pricesthat do not exceed par value.

STOCKS

Stocks are stated at the lower of histori-cal cost in accordance with the FIFOmethod and net realisable value.

The cost of work in progress andfinished goods includes direct costs of

materials and labour and a calculatedincrease in respect of production over-heads.

Obsolete or slow-moving items arewritten down.

Work in progress on behalf of thirdparties is stated at direct productioncosts plus the profit calculated for eachindividual job. Progress billings and pro-visions relating to potential losses are notincluded. Progress billings in excess ofthe completed share of the contracts arerecorded separately and stated as prepay-ments under short-term creditors.

DEBTORS

Debtors are stated at nominal value lessprovisions for bad debts. The provisionsare based on an individual evaluation ofthe debtors.

CASH FLOW STATEMENT

The consolidated cash flow statement is drawn up according to the indirectmethod of presentation. The cash flowis classified by the three activities, opera-ting, investing and financing activities,and it shows the group’s cash and cashequivalents at the beginning of the yearand at year end.

The consolidated cash flow state-ment is adjusted for additions anddisposals of assets and liabilities in con-nection with the acquisition and dispo-sal of undertakings.

CASH FLOWS FROM OPERATING ACTIVITIES

– are calculated on the basis of the pro-fit or loss before taxation and are ad-justed for non-cash items and changesin the operating capital. Adjustmentsare made for taxes paid.

CASH FLOWS FROM INVESTING ACTIVITIES

– comprise payments generated fromacquisition and sale of fixed assets andsecurities included in investing activi-ties. Cash flows from investing activitiesalso include dividends received fromassociated undertakings and net invest-ments in respect of acquisition ofundertakings.

CASH FLOWS FROM FINANCING ACTIVITIES

– comprise payments to and receiptsfrom shareholders and raising and re-payment of mortgage loans and otherlong-term loans.

CASH AND CASH EQUIVALENTS– include cash at bank and in hand andother items included in the group’sshort-term cash management, includinglisted securities and bank debt.

23

C.W. OBEL ANNUAL ACCOUNTS 1996

CONSOLIDATED PROFIT AND LOSS ACCOUNT

25

NOTE (DKK´000) 1996 1995

1 Net turnover 2,705,276 167,418Cost of sales (1,099,345) (31,800)

Gross profit 1,605,931 135,618

2 Staff costs (1,126,454) (37,219)Other external expenses (345,551) (48,707)

Profit before depreciation 133,926 49,692

14 Depreciation on fixed assets (54,035) (19,483)

Operating profit 79,891 30,209

Profit in divested company 9,689 03 Income from other financial fixed assets 7,590 2,5144 Financing income 58,485 49,5284 Financing expenses (79,666) (26,814)

Profit on ordinary operations (excluding associated companies) 75,989 55,437

5 Share of profits of associated companies 274,888 174,086

Profit on ordinary operations before taxation 350,877 229,523

6 Tax on profit for the year, group companies (19,902) (19,614)Tax on profit for the year, associated companies (84,426) (76,007)

Profit on ordinary operations after taxation, group companies 246,549 133,902

Extraordinary items 0 0

Consolidated profit 246,549 133,902

Attributable to minority interests (698) 0

Attributable to shareholders of C.W. Obel 245,851 133,902

ASSETS - GROUP

26

NOTE (DKK´000) 1996 1995

14 Fixed assets:Tangible fixed assets:Land and buildings 1,054,200 703,019Plant and machinery 12,492 1,422Other plant, operating equipment, fixtures and fittings 135,360 3,500Equipment for lease 23,775 0Assets in course of construction 9,364 11,048

1,235,191 718,989

14 Financial fixed assets:5 Holdings in associated companies 619,328 549,829

Other securities and holdings 9,896 9,126629,224 558,955

Total fixed assets 1,864,415 1,277,944

Current assets:Stocks etc.:

7 Stocks 141,301 17,1578 Work in progress on behalf of third parties 183,387 0

324,688 17,157

Debtors:Trade debtors 558,090 11,788

6 Corporation tax 446 0Other debtors 123,462 11,045

681,998 22,833

Securities and holdings:Bonds 196,216 225,348Shares 23,551 16,585

219,767 241,933

Cash at bank and in hand 141,433 12,076

Total current assets 1,367,886 293,999

Total assets 3,232,301 1.571,943

LIABILITIES - GROUP

27

NOTE (DKK´000) 1996 1995

9 Capital and reserves:Share capital 207,454 207,454Revaluation reserves 16,973 16,499Net revaluation according to the equity method 0 406,933Other reserves and retained profit 761,459 769,351

Total capital and reserves 985,886 1,400,237

Minority interests 3,914 0

Provisions:6 Deferred taxation 96,621 22,437

Guarantee obligations 30,738 80010 Other provisions 70,395 5,802

Total provisions 197,754 29,039

Creditors:Long-term creditors:

11 Mortgage debt 398,161 32,303Other long-term creditors 46,025 16,146

444,186 48,449

Short-term creditors:Short-term portion of long-term creditors 29,597 1,353Bank debt 810,431 17,457Prepayments from customers 118,634 377Trade creditors 224,159 7,008

6 Corporation tax 0 18,703Other short-term creditors 365,332 17,714Accruals and deferred income 21,290 488Dividend for the financial year 31,118 31,118

1,600,561 94,218

Total creditors 2,044,747 142,667

Total liabilities 3,232,301 1,571,943

12 Securities pledged13 Contingent liabilities

CASH FLOW STATEMENT

28

(DKK´000) 1996 1995

Cash flow from operating activities:Profit for the year before depreciation 133,926 49,692Financial items, net (17,913) 37,148Change in provisions 7,601 502Taxation paid (21,832) 0Cash inflow before change in operating capital 101,782 87,342

Change in stocks and work in progress (69,713) (724)Change in short-term debtors (218,992) 8,060Change in short-term creditors etc. 174,512 (23,694)Change in operating capital (114,193) (16,358)

Total cash outflow (inflow) from operating activities (12,411) 70,984

Cash flow from investing activities:Dividend from associated companies 127,166 70,962Acquisition and sale of companies (837,096) 0Acquisition and sale of tangible fixed assets (95,665) (53,901)Net investments in financial fixed assets 9,606 3,375Total cash outflow (inflow) from investing activities (795,989) 20,436

Cash flow from financing activities:Dividend paid to shareholders (31,118) (24,894)Raising of long-term loans 346,015 0Raising of loans for company acquisition 545,000 0Repayment of long-term loans (101,716) (106,272)Total cash inflow (outflow) from financing activities 758,181 (131,166)

Total decrease in cash and cash equivalents (50,219) (39,746)

Cash and cash equivalents at the beginning of the year 236,552 276,298Cash and cash equivalents from acquired companies (90,565) 0Cash and cash equivalents at year end 95,768 236,552

comprising:Cash 141,433 12,076Listed securities 219,767 241,933Bank debt for financing of operations (265,432) (17,457)Total 95,768 236,552

NOTES TO THE CONSOLIDATED ACCOUNTS

29

(DKK´000)Note 1 Net turnover 1996 1995

Market value of completed contracts 2,553,067Market value of work in progress, year end 1,750,862Market value of work in progress, beginning of year (1,681,376)Exchange rate adjustments (2,367)Market value of work in progress, acquisition (110,907)

Turnover in respect of contracts 2,509,279

Other turnover 195,997 167,418

Total net turnover 2,705,276 167,418

Net turnover broken down by markets:Denmark 1,703,246 111,267Abroad 1,002,030 56,151

2,705,276 167,418

Note 2 Staff costs

Wages and salaries (1,050,917) (34,212)Pensions and pension contributions (29,776) (2,571)Social security costs (45,761) (436)

(1,126,454) (37,219)

Total remuneration in the group of:The Supervisory Board of the parent company (563) (638)The Management of the parent company (2,000) (1,500)

Average number of full-time employees 4,850 109

Note 3 Income from other financial fixed assets

Interest received 6,945 1,292Capital gains 645 1,222

7,590 2,514

Note 4 Financing income and expenses

Interest received 42,784 30,857Capital gains 15,158 16,414Share dividends 543 2,257

58,485 49,528

Interest paid (73,521) (24,194)Capital losses and writedowns (6,145) (2,620)

(79,666) (26,814)

NOTES TO THE CONSOLIDATED ACCOUNTS

30

(DKK´000) Profit for the year BookNote 5 Associated companies Ownership before taxation value

Skandinavisk Holding A/S, Søllerød 35.0% 271,810 525,882A/S Motortramp, Stensved 27.2% 5,153 85,968Other associated companies (2,075) 7,478

274,888 619,328

Note 6 Taxation 1996 1995

In the profit and loss account income tax is expensed as follows:Provisions for accrued tax 10,589 17,761Provisions for deferred tax 9,313 1,853

19,902 19,614

Provisions for deferred tax in the balance sheet:Balance, beginning of year 22,437 17,081Additions from acquisition of companies 67,739Transferred from capital and reserves (2,868) 3,503Transferred from the profit and loss account 9,313 1,853

96,621 22,437

Corporation tax recorded as creditor/debtor:Balance, beginning of year 18,703 942Additions from acquisition of companies (7,906)Tax paid in 1996 (21,832)Transferred from the profit and loss account 10,589 17,761

(446) 18,703

Note 7 Stocks

Raw materials and consumables 134,809 11,206Finished goods and goods for resale 6,492 5,951

141,301 17,157

Note 8 Work in progress on behalf of third parties

Cost of materials and payroll costs 1,424,182Share of expected profit 327,375On account invoicing to customers (1,568,170)

183,387

NOTES TO THE CONSOLIDATED ACCOUNTS

31

(DKK´000)Note 9 Capital and reserves 1996 1995

Capital and reserves at 1 January 1996 1,400,237 1,303,984Exchange rate adjustments concerning foreign companies 602 (275)Price adjustment of securities (2,719) 11,920Deferred tax on price adjustment of securities 2,868 (3,503)Other adjustments (172)Increase in value upon acquisition of subsidiaries (626,314)Adjustment of holdings in associated companies (3,350) (14,672)Retained profit for the year 214,734 102,783

Capital and reserves at 31 December 1996 985,886 1,400,237

Note 10 Other provisions

Allocated gain from sale/lease back 20,932 Pension obligations 12,924 5,802Other provisions 36,539

70,395 5,802

Note 11 Mortgage debt

maturing more than 5 years after the balance sheet date amounts to 306,425.

Note 12 Securities pledged

consist of:Owner’s mortgages on real property provided as security for bank debt 5,065 2,574 Technical plant and machinery have been provided as guarantee in the amount of 1,200

The assets pledged were recorded at 15,243 at 31 December 1996.

As security for mortgage debts amounting to 412,770, properties with a book value of 652,909, have been mortgaged.

Note 13 Contingent liabilities

The group companies have undertaken contractual obligations customary to the line of business. These obligations have been partially covered by guarantees from credit insurance companies etc.

Guarantees for work performed usually cover a period from 1 to 5 years.

Leasing obligations:Leasing instalments for payment 1997-2002 84,303

Participation in joint venture with joint and several liability:Debt 29,000

NOTES TO THE CONSOLIDATED ACCOUNTS

32

(DKK´000)Note 14 Fixed assets

Other plant,operating Holdings Other

Plant equipment, Assets in in securitiesLand and and fixtures and Equipment course of associated and capitalbuildings machinery fittings for lease construction companies holdings

Cost at 1 January 1996 796,432 5,719 14,256 11,048 68,983 10,635

Exchange rate adjustment 670 1 484 223 Additions from acquisition of companies 383,406 51,760 258,275 33,705 6,173 5,275Additions during the year 53,823 2,731 53,606 4,762 9,364 3,495 2,972Disposals during the year (5,682) (5,313) (30,949) (11,048) (5,956) (5,656)

Cost at 31 December 1996 1,228,649 54,898 295,672 38,690 9,364 72,695 13,226

Revaluations at 1 January 1996 22,245 480,846

Additions from acquisition of companies 3,765Revaluations for the year 62,022

Revaluations at 31 December 1996 22,245 546,633

Depreciation at 1 January 1996 115,658 4,297 10,756 1,509

Exchange rate adjustment 21 7 321 80 Additions from acquisition of companies 64,430 38,707 141,530 11,266 2,639Depreciation for the year 19,101 4,092 26,428 3,569 338Reversed depreciation etc. (2,516) (4,697) (18,723) (1,156)

Depreciation at 31 December 1996 196,694 42,406 160,312 14,915 3,330

Net book value at 31 December 1996 1,054,200 12,492 135,360 23,775 9,364 619,328 9,896

The cash-based value of the real property according to the public valuation as at 1 January 1996 amounts to 744,224, to which should be added a book value of 188,323 regarding land and buildings that have not been valued by the Danish public authorities.

PROFIT AND LOSS ACCOUNT - PARENT COMPANY

33

NOTE (DKK´000) 1996 1995

Income:1 Profit before tax in subsidiaries 65,756 12,2231 Profit before tax in associated companies 276,963 174,086

Rental income, properties 37,533 41,1122 Yield on bonds and shares 29,522 37,182

Other operating income 1,211 5,288

Total income 410,985 269,891

Operating expenses concerning properties (21,251) (18,613)3 Staff costs (11,037) (10,122)4 Other external expenses (5,206) (4,827)

Profit before depreciation 373,491 236,329

7 Depreciation on fixed assets (4,696) (9,269)

Operating profit 368,795 227,060

5 Financing income 8,984 15,305 5 Financing expenses (27,600) (12,842)

Profit on ordinary operations before taxation 350,179 229,523

6 Provisions for tax, group companies (19,902) (19,614)Provisions for tax, associated companies (84,426) (76,007)

Profit for the year 245,851 133,902

ASSETS - PARENT COMPANY

34

NOTE (DKK´000) 1996 1995

7 Fixed assets:Tangible fixed assets:Land and buildings 316,493 301,121Other plant, operating equipment, fixtures and fittings 1,383 1,169Prepayments and assets in course of construction 6,055 3,763

323,931 306,053

Financial fixed assets:8 Holdings in subsidiaries 423,118 171,2649 Holdings in associated companies 611,851 549,829

1,034,969 721,093

Total fixed assets 1,358,900 1.027,146

Current assets:Debtors:Amounts owed by subsidiaries 196,590 297,513Other debtors 5,786 5,918

202,376 303,431

Securities and holdings:Bonds 165,359 190,756Shares 19,289 14,086

184,648 204,842

Cash at bank and in hand 9,283 1,812

Total current assets 396,307 510,085

Total assets 1,755,207 1.537,231

LIABILITIES - PARENT COMPANY

35

NOTE (DKK´000) 1996 1995

10 Capital and reserves:Share capital 207,454 207,454Revaluation reserves 8,642 8,841Net revaluation according to the equity method 0 445,058 Retained profit 769,790 738,884

Total capital and reserves 985,886 1,400,237

Provisions:Provisions for pension commitments 5,850 5,802

6 Provisions for deferred taxation 15,971 22,437

Total provisions 21,821 28,239

Creditors:Long-term creditors:

11 Mortgage debt 84,032 14,798Deposits 5,639 8,560

89,671 23,358

Short-term creditors:Short-term portion of long-term creditors 7,609 577Bank debt 553,353 331Trade creditors 2,239 2,869Amounts owed to subsidiaries 54,989 31,595

6 Corporation tax 2,956 16,029Other short-term creditors 4,869 2,582Accruals and deferred income 696 296Dividend for the financial year 31,118 31,118

657,829 85,397

Total creditors 747,500 108,755

Total liabilities 1,755,207 1,537,231

12 Securities pledged13 Contingent liabilities

NOTES TO THE PARENT COMPANY´S ANNUAL ACCOUNTS

36

(DKK´000)Note 1 Share of profits (losses) from subsidiaries and associated companies includes 1996 1995

Subsidiaries:Profits 65,759 14,689Losses (3) (2,466)

65,756 12,223

Associated companies: Profits 276,963 174,086We also refer to notes 8 and 9.

Note 2 Yield on bonds and shares

Interest income 18,020 22,313Realised gains and losses 10,628 12,873Dividends 500 2,224Adjustment of unrealised losses on bonds and shares 374 (228)

29,522 37,182Note 3 Staff costs

Wages, salaries and fees (9,057) (7,993)Pension contributions (1,178) (924)Other social security costs (40) (30)Benefits to retired employees and adjustment of pension commitments (762) (1,175)

11,037) (10,122)This amount includes:Remuneration of Supervisory Board (563) (638)Remuneration of Management (2,000) (1,500)

Average number of full-time employees 22 22

Note 4 Fees to the auditors elected at the General Meeting

Fee for statutory audit:KPMG C.Jespersen 200 190Verner Lynge Jacobsen 70 70

270 260

Services other than audit: KPMG C.Jespersen 445 95

Note 5 Financing income and expenses include interest

from subsidiaries in the amount of 8,647 14,793to subsidiaries in the amount of (1,576) (1,942)

Note 6 Corporation tax

The Company and its wholly-owned Danish subsidiaries are jointly taxed.

Provisions for tax:Provisions for accrued tax, subsidiaries 21,713 2,674Provisions for accrued tax 1,787 16,029Provisions for deferred tax (3,598) 911

19,902 19,614Provisions for deferred tax in the balance sheet:Balance at 1 January 1996 22,437 15,404Contribution of joint taxation received 2,619Provisions for revaluation of bonds (2,868) 3,503Transfer from the profit and loss account (3,598) 911

15,971 22,437Corporation tax recorded as debt:Balance at 1 January 1996 16,029 0Tax paid (14,860)Transfer from the profit and loss account 1,787 16,029

2,956 16,029

NOTES TO THE PARENT COMPANY´S ANNUAL ACCOUNTS

37

Other plant, Other assetsoperating in course of

(DKK´000) Land and equipment, fixtures constructionNote 7 Tangible fixed assets buildings and fittings etc.

Cost at 1 January 1996 362,350 3,749 3,763Additions during the year 21,140 822 6,055Disposals during the year (1,657) (258) (3,763)

Cost at 31 December 1996 381,833 4,313 6,055

Revaluations, previous year(s) 12,590

Depreciation at 1 January 1996 73,820 2,580Depreciation for the year 4,219 477Reversed depreciation etc. (109) (127)

Depreciation at 31 December 1996 77,930 2,930

Net book value at 31 December 1996 316,493 1,383 6,055

The cash-based value of the real property according tothe public valuation as at 1 January 1996 amounts to 355,626.

Note 8 Financial fixed assets 1996

Cost at 1 January 1996 175,934Additions during the year 833,348Cost at 31 December 1996 1,009,282

Revaluations at 1 January 1996 38,126Adjustment for the year 15,144Revaluations at 31 December 1996 53,270

Writedowns at 1 January 1996 42,796Adjustment for the year 596,638Writedowns at 31 December 1996 639,434

Net book value at 31 December 1996 423,118

The subsidiaries include: Nominal capital Ownership share

Ejendomsaktieselskabet af 2. januar 1990, Copenhagen 11,000 100%Algade 19 ApS, Copenhagen 5,000 100%ApS Kbil15 nr. 1216, Copenhagen 125 100%Arcadian-Invest A/S, Copenhagen 25,000 100%C.W. Obel Inc., Connecticut, USA (USD´000) 400 100%Danmarksgade 27 B-D ApS, Copenhagen 500 100%DGT-Volmatic A/S, Vallensbæk Strand 5,000 100%Gl. Mønt 8 ApS, Copenhagen 5,000 100%Knabrostræde 30 ApS, Copenhagen 1,000 100%Overgaden neden Vandet 7 ApS, Copenhagen 10,000 100%Overgaden neden Vandet 9 A-C ApS, Copenhagen 10,000 100%SN Holding A/S, Brøndby 90,795 100%Strandgade 4-4C ApS, Copenhagen 10,000 100%

NOTES TO THE PARENT COMPANY´S ANNUAL ACCOUNTS

38

(DKK´000)Note 9 Holdings in associated companies

Cost at 1 January 1996 68,983Acquisitions 0

Cost at 31 December 1996 68,983

Revaluations at 1 January 1996 480,846Revaluations for the year 62,022

Revaluations at 31 December 1996 542,868

Net book value 611,851

Shares in associated companies include:Listed price at

Balance Capital and C.W. Obel´s 31 December(DKK million) sheet date Profit reserves book value 1996

Nom. 106,046 (35%)in Skandinavisk Holding A/S (Søllerød) 30/06/1996 535.6 1,502.5 525.9

Nom. 6,477 (27.2%) in A/S Motortramp (Stensved) 31/12/1996 18.7 316.0 86.0 61.5

Note 10 Statement of capital and reserves

Net revaluation acc.

Share Revaluation to the equity Retainedcapital reserves method profit Total

Capital and reserves at 1 January 1996 207,454 8,841 445,058 738,884 1,400,237

Adjustment of securities (3,067) (3,067)Deferred tax on adjustment of bonds 2,868 2,868Adjustment of subsidiaries (80,804) (80,804)Adjustment of associated companies (3,351) (3,351)Goodwill upon acquisition of subsidiaries (445,058) (99,673) (544,731)Retained profit for the year 214,734 214,734

Capital and reserves at 31 December 1996 207,454 8,642 0 769,790 985,886

The share capital breaks down as follows:A-shares (unlisted): 202,050 shares of 100 each 20,205.0B-shares: 1,872,487 shares of 100 each 187,248.7

Total share capital 207,453.7

Note 11 Mortgage debt

maturing more than 5 years after the balance sheet date amounts to 51,823.

Note 12 Securities pledged

As security for mortgage debts amounting to 91,641, properties with a book value of 90,972 have been mortgaged.

Note 13 Contingent liabilities

The Parent Company has provided security of 76,154 vís-a-vís the subsidiaries.Of this amount, 11,377 has been used.

The Parent Company is jointly and severally liable with the other jointly taxed companies for taxation of the consolidated income.

GROUP SUBSIDIARIES

SUBSIDIARIES OWNERSHIP LOCATION

C.W. Obel A/S (Parent Company) Copenhagen■ Algade 19 ApS Copenhagen■ Arcadian-Invest A/S Copenhagen■ C.W. Obel Inc. Connecticut, USA■ Danmarksgade 27 B-D ApS Copenhagen■ Ejendomsaktieselskabet af 2. januar 1990 Copenhagen■ Gl. Mønt 8 ApS Copenhagen■ Knabrostræde 30 ApS Copenhagen■ Overgaden neden Vandet 7 ApS Copenhagen■ Overgaden neden Vandet 9 A-C ApS Copenhagen■ Strandgade 4-4C ApS Copenhagen■ DGT-Volmatic A/S Vallensbæk■ ■ DGT-Volmatic France, S.A.R.L Quatremare, France■ SN Holding A/S Brøndby■ ■ Semco A/S Brøndby■ ■ ■ A/S Brdr. Jeppesen VVS-Entreprise Gentofte■ ■ ■ Brockmeyer AG Duisburg, Germany■ ■ ■ ■ Brockmeyer Anlagen GmbH Duisburg, Germany■ ■ ■ ■ Brockmeyer Nachrichtentechnik GmbH Duisburg, Germany■ ■ ■ ■ Brockmeyer Service GmbH Duisburg, Germany■ ■ ■ ■ EFA GmbH Schwerin, Germany■ ■ ■ ■ Elektro Brockmeyer Frohburg GmbH Frohburg, Germany■ ■ ■ ■ Prenad GmbH Berlin, Germany■ ■ ■ ■ REAC GmbH Erfurt, Germany■ ■ ■ Dansk Olie-Måler Service A/S Glostrup■ ■ ■ El-Marin Service AB Gothenburg, Sweden■ ■ ■ Semco Marine Inc. Florida, USA■ ■ ■ Semco Norge AS Stavanger, Norway■ ■ ■ ■ Norse Electronics AS Stavanger, Norway■ ■ ■ ■ Norse Electronics Kristiansund AS Kristiansund, Norway■ ■ ■ ■ Semco Industri AS Stavanger, Norway■ ■ ■ ■ Semco Teknologi AS Stavanger, Norway■ ■ ■ Semco Prenad Polska S.A. Warsaw, Poland■ ■ ■ Semco South Carolina Inc. South Carolina, USA■ ■ ■ SSB Storebælt I/S (65%) Odense■ ■ ■ SSB Øresund I/S (65%) Brøndby■ ■ ■ Svend Erik Laursen A/S Århus■ ■ ■ Unit Industri A/S Hørsholm■ ■ Semco International (division) Brøndby■ ■ ■ Backlunds Elservice AB Stockholm, Sweden■ ■ ■ Prenad AB Malmö, Sweden■ ■ ■ Prenad International AB Stockholm, Sweden■ ■ ■ Totalinstallatören AB (acquired in 1997) Malmö, Sweden■ ■ SN Ejendomsselskab ApS Brøndby■ ■ SN Leasing A/S Brøndby■ ■ SN System A/S Brøndby■ ■ ■ GEMA AB (acquired in 1997) (75%) Lysekil, Sweden■ ■ ■ ■ NVI Entreprenad AB (75%) Lysekil, Sweden■ ■ ■ ■ ■ Widholms Industri AB (75%) Lysekil, Sweden■ ■ ■ ■ ■ Hallmek AB (75%) Lysekil, Sweden■ ■ ■ Norisol A/S Skælskør■ ■ ■ ■ A/S IKAS Teknisk Isolering Herlev■ ■ ■ ■ Norisol Norge AS Kristiansand, Norway■ ■ ■ ■ Pifab Skandinavien AB Stenungsund, Sweden■ ■ ■ ■ Scan-Isolering AS Porsgrunn, Norway■ ■ ■ Makeda AB (acquired in 1997) Melsomvik, Norway■ ■ ■ ■ Fjeldstad AS Melsomvik, Norway■ ■ ■ ■ ■ Nopicon AS (51%) Tønsberg, Norway■ ■ ■ ■ ■ Stillassentret AS Melsomvik, Norway■ ■ ■ ■ ■ Norstell AS (70%) Stavanger, Norway■ ■ ■ ■ ■ ■ Normek AS Stavanger, Norway■ ■ ■ SGD-Bera A/S Aalborg■ ■ ■ ■ Isopol Sp.z.o.o Katowice, Poland■ ■ ■ ■ Skandinavisk Bygg-Industriservice AS Oslo, Norway■ ■ ■ Skandinavisk Industriservice A/S Ringsted■ ■ ■ Skandinavisk Miljø Service A/S Tåstrup■ ■ ■ ■ SMS Polska Sp.z.o.o Warsaw, Poland

39

(The subsidiaries are wholly ownedunless otherwise stated)

THE HISTORY OF C.W. OBEL

C.W. Obel was founded 210 years ago.It started its operations in 1787 as a to-bacco factory.

Today C.W. Obel is still involved inthe tobacco industry but only as a sha-reholder in Skandinavisk Holding A/S.The company’s main activities todayinclude Danish and international indu-strial and engineering business as well asproperty investment.

The story of C.W. Obel is both thestory of a company and a family whoduring six generations was in charge ofthe company. It is also the story of twowomen who have had an importantinfluence on C.W. Obel’s development.

The founder of the tobacco businesswas a young trade officer, ChristenWinther, who at the beginning of 1787was granted a royal charter to establish acomplete tobacco factory in the town ofAalborg.

On 26 June of the same year the

production was commenced in a mer-chant’s house at the site in Aalborgwhich is today called C.W. Obels Plads(C.W. Obel’s Square).

THE DILIGENT WIDOW

Christen Winther died about ten yearslater, and his wife, Anne MargretheBerlin, who was the daughter of a suc-cessful merchant in Aalborg, was leftwith the business. She later marriedanother trade officer, Frederik ChristianObel, and when the couple had a son,he was named Christen Winther Obelafter his mother’s first husband - thefounder of the tobacco factory.

Anne Margrethe Berlin was againwidowed - and for the third time shemarried a trade officer, Christian CæsarWinding, who continued the operationof the factory. At this time, the factoryemployed one master, three craftsmen,15 women and 30 children.

Anne Margrethe Berlin died in 1827- after more than 40 years of managingthe company, which was now takenover by the son, Christen WintherObel, and the name of the companywas changed to C.W. Obel as we knowit today.

After a couple of fires in the factory,the management decided in 1897 tobuild a new 14,000 m2 factory in thewestern suburbs of Aalborg. Already in1904 the first extension was built, fol-lowed by a new warehouse in 1920, atwhich point the company had 22,000m2 at its disposal.

After World War I, C.W. Obel estab-lished production facilities in Copen-hagen where the company moved intopremises at Pile Allé in 1919. Two yearslater the company moved into a newly

built factory at Halfdansgade onAmager.

ANOTHER STRONG LADY

At the start of this century a “new”C.W. Obel was leading the company,and when he died in 1921, another ofthe family’s strong ladies appeared, hiswidow, Asta Obel, who would have avery central position in the company foralmost 40 years.

During the first 16 years she acted assole owner, and after the company wasconverted into a public limited compa-ny in 1937, she acted as chairman of theboard. Her sons, Frederik Obel andFrode Obel, who were fifth-generationObels, took care of the day-to-daymanagement, and in 1959 the sixthgeneration entered the company, whenFrederik Christian Obel became amember of the Supervisory Board.

The occupation was very hard on thecompany’s activities, not least due tolack of supplies of raw tobacco, andonly a narrow cooperation, includingthe introduction of voluntary rationing,brought the Danish tobacco industrysafely through the war years.

STRUCTURAL RATIONALISATION

The experience gained from the coope-ration during the occupation slowlylead the company to consider a struc-tural rationalization of the industry.This first lead to the foundation ofNordisk Tobaks Kompagni in 1957with Chr. Augustinus Fabrikker, and in1961 it lead to the establishment ofSkandinavisk Tobakskompagni, inwhich also R. Færch from Holstebrobecame a partner. The objective was to

C.W. Obel´s original tobacco factory in Aalborg.

be able to compete with foreign manu-facturers and maintain an independentDanish tobacco industry.

A large part of the honour for thisstructural change is ascribed to AstaObel, who had quite a visionary mind,and who continued as chairman of theboard until 1959, when she left the postto her elder son, Frederik Obel.

The new company took over theentire tobacco production, whereas thethree old companies continued asowners of properties and machinery,which were let to Skandinavisk Tobaks-kompagni for a number of years.

History has shown that the mergerwas performed at the right time. Thedevelopment in Skandinavisk Tobaks-kompagni has increased the value ofC.W. Obel’s share in the company fromDKK 14.6m in 1961 to more thanDKK 500m today – with a market valuewhich is far higher than that amount.

SOCIAL COMMITMENT

In addition to establishing herself as anextraordinarily visionary business wo-man, Asta Obel was also the personwho emphasized the Obel family’s tra-dition for social commitment on a moreofficial level.

Over the years, many institutionsand individuals, particularly in and around Aalborg, have benefitted fromthe family’s pleasure in giving gifts, andin 1956 Asta Obel, who was then 84years old, established the foundationnamed Det Obelske Familiefond, basedon the viewpoint that society shouldalso benefit from the money which thefamily had earned on the production oftobacco goods. The idea was to investthe money in the future.

Some of the most visible results of theactivities of Det Obelske Familiefondand C.W. Obel are the two student resi-dence halls in Aalborg, C.W. Obel Kol-legiet and Det Obelske Jubilæumskol-legium and the famous sculpture “Gåse-pigen” situated at one of the city’s mainstreets, Vesterbro.

Each year the foundation distributesa significant amount of funds to variousresearch, educational, cultural and non-profit purposes in the northern part ofJutland.

A NEW ERA - NEW PEOPLE

In 1969 Frode Obel succeeded his brother as chairman of C.W. Obel – aposition he kept until 1978 when PovlHeegaard took over the post. He actedas chairman until 1996 when he wassucceeded by Hans Werdelin.

In 1971 Frode Obel left the day-to-daymanagement of the company to his son,Frederik Christian Obel. During thenext 20 years, C.W. Obel operated bothas a property and an investment compa-ny within finance and industry.

When Frederik Christian Obel reached the age of 60 in 1991 he retiredfrom the day-to-day management, andin his capacity as chairman of DetObelske Familiefond he took up a posi-tion on the Supervisory Board of C.W.Obel.

This entailed something quite new forC.W. Obel, as Mogens Hugo Jørgensenbecame the first non-family member totake up the position as managing direc-tor of the Company.

The development of C.W. Obel tooka new course and upon the purchase in1996 of SN Holding and the affiliatedindustrial companies, C.W. Obel hasnow taken up a far more active positionin the Danish business society.

Asta Obel

ADDRESSES IN THE C.W. OBEL GROUP

SEMCO EAST

Office EastSemco CopenhagenPark Allé 373DK-2605 BrøndbyTelephone +45 43 22 11 00Telefax +45 43 22 11 01

Dansk Olie-Måler Service A/SFormervangen 28DK-2600 GlostrupTelephone +45 43 96 50 55Telefax +45 43 43 10 12

SEMCO SOUTH

Office SouthSemco OdenseSvendborgvej 226DK-5260 Odense STelephone +45 65 68 33 00Telefax +45 65 95 73 75

SEMCO NORTH

Office NorthSemco AarhusFinlandsgade 33DK-8200 Aarhus NTelephone +45 89 30 22 33Telefax +45 89 30 22 99

Svend Erik Laursen A/SChr. X´s Vej 106DK-8260 Viby J.Telephone +45 86 14 85 33Telefax +45 86 14 84 04

SEMCO ENERGY

Semco EnergyBrolæggervej 1DK-6710 Esbjerg VTelephone +45 79 16 66 66Telefax +45 75 15 65 80

Semco Norway ASFabrikkveien 25N-4033 ForusTelephone +47 51 80 23 00Telefax +47 51 80 25 11

SEMCO MARINE

Semco MarineSvendborgvej 226DK-5260 Odense STelephone +45 65 68 33 00Telefax +45 65 95 73 76

El-Marin Service ABSwedenLundbyhamnen 122S-40271 GothenburgTelephone +46 31 51 30 10Telefax +46 31 22 56 57

Semco Marine Inc.USASuite 2104001SW 47th AvenueFt. Lauderdale, FloridaUSATelephone +1 305 792 96 66Telefax +1 305 321 65 17

SEMCO CONTRACTING

Semco ContractingMidtager 29DK-2605 BrøndbyTelephone +45 43 27 00 60Telefax +45 43 27 00 61

SSB-Storebælt I/SStorebæltsvej 8DK-4220 KorsørTelephone +45 58 35 19 55Telefax +45 58 35 18 55

SSB-Øresund I/SAmager Strandvej 60-64DK-2300 Copenhagen STelephone +45 32 84 19 55Telefax +45 32 84 18 55

SEMCO GERMANY

Brockmeyer AGDeutschlandTheodor-Heuss-Str. 48-50D-47167 DuisburgTelephone +49 203 99 56 217Telefax +49 203 99 56 219

SEMCO INTERNATIONAL

Semco InternationalPark Alle 373DK-2605 BrøndbyTelephone +45 43 22 11 00Telefax +45 43 22 14 85

Backlunds Elservice ABHantverkshusetEnebybergsvägen 14S-182 36 DanderydTelephone +46 8 755 12 91Telefax +46 8 753 05 96

Prenad ABIndustrigatan 33Box 16005S-200 25 MalmöTelephone +46 40 671 71 00Telefax +46 40 671 71 01

Prenad International ABOrrvägen 26BS-191 08 SollentunaTelephone +46 8 92 93 02Telefax +46 8 92 07 90

Totalinstallatören ABStenyxegatan 25AS-200 39 MalmöTelephone +46 40 671 80 00 Telefax +46 40 671 80 01

SN SYSTEM

SN System A/SAbildager 2DK-2605 BrøndbyTelephone +45 43 22 12 34Telefax +45 43 22 12 35

Skandinavisk Industriservice A/SOdinsvej 33-35DK-4100 RingstedTelephone +45 53 61 40 11Telefax +45 53 61 95 05

Skandinavisk Miljø Service A/SSelsmosevej 2DK-2630 TåstrupTelephone +45 43 71 13 22Telefax +45 43 71 14 22

Norisol A/SIndustrivej 33DK-4230 SkælskørTelephone +45 53 59 50 50Telefax +45 53 59 60 60

A/S IKAS Teknisk IsoleringHørkær 30DK-2730 HerlevTelephone +45 44 92 77 44Telefax +45 44 92 74 00

Norisol Norge ASLumberveien 29 DN-4621 KristiansandTelephone +47 38 01 41 11Telefax +47 38 01 41 88

Scan-Isolering ASElvegata 17LahelleN-3901 PorsgrunnTelephone +47 35 55 25 99Telefax +47 35 55 42 61

Pifab Skandinavien ABHantverkaregatan 14S-444 32 StenungsundTelephone +46 30 36 92 50Telefax +46 30 38 47 70

Widholms Industri ABVerkstadsgatan 4S-453 23 LysekilTelephone +46 52 31 99 90Telefax +46 52 31 99 99

Fjeldstad ASMelsomvikN-3160 StokkeTelephone +47 33 33 69 88Telefax +47 33 33 60 20

SGD-Bera A/SKnapholm 5DK-2730 HerlevTelephone +45 44 92 13 00Telefax +45 44 92 14 22

SBI ASSandakerveien 109-111N-0483 OsloTelephone +47 22 22 23 80Telefax +47 22 22 23 40

Isopol Sp.z.o.oul. Konduktorska 42PL-40-155 KatowiceTelephone +48 32 15 37 202Telefax +48 32 15 37 202

Sem-Consult Energiledelses-konsulenter A/SPark Allé 373DK-2605 BrøndbyTelephone +45 43 22 11 22Telefax +45 43 22 11 23

OTHERS

DGT-Volmatic A/SVejlesvinget 2-4DK-2665 Vallensbæk StrandTelephone +45 43 73 11 00Telefax +45 43 73 01 10

SN Leasing A/SAbildager 2DK-2605 BrøndbyTelephone +45 43 22 13 57Telefax +45 43 22 13 58

Arcadian-Invest A/SVestergade 2DK-1456 Copenhagen KTelephone +45 33 33 97 97Telefax +45 33 33 97 79

PROPERTIES

C.W. Obel PropertiesDivision CopenhagenVestergade 2DK-1456 Copenhagen KTelephone +45 33 33 94 94Telefax +45 33 33 94 11

C.W. Obel PropertiesDivision AalborgBadehusvej 5DK-9000 AalborgTelephone +45 98 13 44 99Telefax +45 98 13 72 33

SN Ejendomsselskab ApSAbildager 2DK-2605 BrøndbyTelephone +45 43 22 13 57Telefax +45 43 22 13 58

GROUP MANAGEMENT

– see cover

43

ADDRESS FLOORAGE M2 TYPE

Teglholmsgade 2, Copenhagen SV 18,586 CommercialSydhavnsgade 15, Copenhagen SV 5,765 CommercialVestergade 1, Copenhagen K 907 Commercial and ResidentialVestergade 2, Copenhagen K 4,911 CommercialPilestræde 40 and■ Sværtegade 1, Copenhagen K 1,183 Commercial and ResidentialKnabrostræde 30, Copenhagen K 1,095 CommercialGl. Mønt 8,■ Chr. IX’s Gade 2-6,■ Store Regnegade 1-5 and■ Ny Østergade 21-25, Copenhagen K 10,777 Commercial and ResidentialVordingborggade 18-22,■ Korsørgade 1-3 and■ Randersgade 60, Copenhagen Ø 10,463 Commercial and ResidentialStrandgade 4-4 C, Copenhagen K 9,099 Commercial and ResidentialOvergaden neden Vandet 7, Copenhagen K 6,770 CommercialOvergaden neden Vandet 9 A-C and■ Wildersgade 10 B, Copenhagen K 7,330 CommercialHalfdansgade 8, Copenhagen S 4,280 CommercialØverødvej 5, Holte 2,020 CommercialRugmarken 35, Farum 4,284 CommercialBadehusvej 5, Aalborg 30,360 CommercialBadehusvej 10, Aalborg 336 ResidentialBadehusvej 16, Aalborg 1,761 CommercialBadehusvej 18, Aalborg 2,196 CommercialKastetvej 2, Aalborg 704 CommercialKastetvej 4, Aalborg 1,151 CommercialKastetvej 26, Aalborg 20,853 CommercialKastetvej 28-30, Aalborg 1,449 ResidentialMøllegade 19/Rantzausgade 1 A, Aalborg 747 Commercial and ResidentialRantzausgade 1 B, Aalborg 426 Commercial and ResidentialRantzausgade 3-5, Aalborg 606 Commercial and ResidentialRantzausgade 7, Aalborg 309 Commercial and ResidentialDanmarksgade 25, Aalborg 864 Commercial and ResidentialDanmarksgade 27 B, Aalborg 1,278 Commercial and ResidentialMølleå-Arkaden ■ Møllegade 13-17,■ Mølleå 1-7 and 2-16, Aalborg 8,063 Commercial and ResidentialAlgade 19,■ Møllegade 4 and 6 A-B, Aalborg 3,679 Commercial and ResidentialNørregade 24, Aalborg 355 Commercial and Residential

Total 162,607

LIST OF RENTAL PROPERTIES

Design and Production: Lemon Design

Photo: Steen Vedel Fotografi, Søren Madsen

Litho: Lindholm Repro A/S

Printing: Print 2000 A/S

C.W. OBEL A/S

Company Registration No. A/S 14,565

Vestergade 2

DK-1456 Copenhagen K

Telephone +45 3333 9797

Telefax +45 3333 9779

Abildager 2

DK-2605 Brøndby

Telephone +45 4322 1357

Telefax +45 4322 1358

Table of ContentsOverv iewSummar y 1996Key figuresRepor t of the Board of DirectorsIncome St atementBalance SheetCash Flow Analys i sNotesShareholders Pol icy

ANNUAL ACCOUNTS 1996

@Hugin 1998. All rights reserved.

9696C.W. ObelC.W. Obel

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