Blue Vision A/S. Annual report CVR no

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2 Contents Statement by the Board of Directors and the Executive Board 2 Independent auditors' report 3 Management commentary 5 Company details 5 Highlights 7 Business and strategy 9 The year in outline 10 Group chart 13 Financial highlights for the Group 14 Operating review 15 Corporate governance 18 Corporate social responsibility 18 Statement on going concern 18 Shareholder information 19 Operating and financial review 28 Consolidated financial statements for the period 1 January 31 December 30 Income statement 30 Statement of comprehensive income 31 Balance sheet 32 Cash flow statement 34 Statement of changes in equity 35 Summary of notes to the consolidated financial statements 36 Notes 37 Financial statements for the period 1 January 31 December 67 Income statement 67 Statement of comprehensive income 67 Balance sheet 68 Cash flow statement 70 Statement of changes in equity 71 Summary of notes to the parent company financial statements 72 Notes 73 Financial ratios 83 1

3 Statement by the Board of Directors and the Executive Board Today, the Board of Directors and the Executive Board have discussed and approved the annual report of for The annual report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed companies. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the Company's financial position at 31 December 2012 and of the results of the Group's and the Company's operations and cash flows for the financial year 1 January 31 December In our opinion, the Management commentary includes a fair review of the development in the parent company's and the Group's operations and financial conditions, results for the year, cash flows and financial position and a description of the more significant risks and uncertainty factors that the Group and the parent company face. We recommend that the annual report be approved at the annual general meeting. Vedbæk, 27 March 2013 Executive Board: Vilhelm Boas Director Board of Directors: Frederik Westenholz Chairman Jørgen Glistrup Henrik Andersen Lars Fogh Martin Blædel 2

4 Independent auditors' report To the shareholders of Independent auditors' report on the consolidated financial statements and the parent company financial statements We have audited the consolidated financial statements and the parent company financial statements of Blue Vision A/S for the financial year 1 January 31 December The consolidated financial statements and the parent company financial statements comprise income statement, statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes, including a summary of significant accounting policies for the Group as well as for the parent company. The consolidated financial statements and the parent company financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and additional disclosure requirements in the Danish Financial Statements Act. Management's responsibility for the consolidated financial statements and the parent company financial statements Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and additional disclosure requirements in the Danish Financial Statements Act. Management is also responsible for such internal control that Management determines is necessary to enable the preparation of consolidated financial statements and parent company financial statements that are free from material misstatement, whether due to fraud or error. Auditors' responsibility Our responsibility is to express an opinion on the consolidated financial statements and the parent company financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the consolidated financial statements and the parent company financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and the parent company financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the consolidated financial statements and the parent company financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company's preparation of consolidated financial statements and parent company financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the consolidated financial statements and the parent company financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit has not resulted in any qualification. Conclusion In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the Company's financial position at 31 December 2012 and of the results of the Group's and the Company's operations and cash flows for the financial year 1 January 31 December 2012 in accordance with International Financial Reporting Standards as adopted by the EU and additional disclosure requirements in the Danish Financial Statements Act. 3

5 Annual report 2011 Independent auditors' report Statement on the Management commentary Pursuant to the Danish Financial Statements Act, we have read the Management commentary. We have not performed any further procedures in addition to the audit of the consolidated financial statements and the parent company financial statements. On this basis, it is our opinion that the information provided in the Management commentary is consistent with the consolidated financial statements and the parent company financial statements. Copenhagen, 27 March 2013 KPMG Statsautoriseret Revisionspartnerselskab Niels Erik Borgbo State Authorised Public Accountant Søren Christiansen State Authorised Public Accountant 4

6 Management commentary Company details Vedbæk Strandvej 341, 1st floor 2950 Vedbæk Denmark Telephone: Fax: Website: CVR no.: Established: 20 September 2002 Financial year: 1 January 31 December Registered office: Rudersdal Board of Directors Frederik Westenholz (chairman) Jørgen Glistrup Henrik Andersen Lars Fogh Martin Blædel Executive Board Vilhelm Boas Auditors KPMG Statsautoriseret Revisionspartnerselskab Osvald Helmuths Vej 4 DK-2000 Frederiksberg Annual general meeting The annual general meeting is to be held on 30 April 2013 at 9:00, c/o Rønne & Lundgren, Tuborg Havnevej 19, 2900 Hellerup, Denmark. 5

7 Management commentary Strandpromenaden 33, Copenhagen Mikkelborg Park, Hørsholm. Roret, Snekkersten 6

8 Management commentary Highlights On 30 March 2012, raised a subordinate loan of DKK 60 million. The raising of the subordinate loan meant that the financing of the Group's activities in 2012 was secured. The subordinate loan is subject to a limitation on the right of disposal so that the proceeds are to be used for among other things securing the financing of operations in accordance with the prepared budget. The proceeds deposited in the account at any time are provided as collateral to the lender who must approve the use of the proceeds on an ongoing basis in accordance with the above-mentioned limitation in the utilisation of the loan. At the board meeting on 30 March 2012, the Board of Directors of decided to exercise the authority granted to the Board in the Company's articles of association to carry out a capital increase of DKK million by issuing B shares, see the section "Resolutions made by the Board of Directors" below. The capital increase that was originally scheduled to take place in June 2012 has been postponed and is to take place in On 6 July 2012, Strandpromenaden A/S entered into an agreement with Freja Ejendomme A/S on a change of the terms of repayment for the outstanding debt raised in connection with the acquisition of Strandpromenaden Subsequently, DKK 20,037,500 of the debt fell due for payment on 9 July 2012, and the remaining part of the original principal of DKK 23,177,600 plus added interest fell due on 15 October At 17 October 2012, the subsidiary Strandpromenaden A/S raised a loan of DKK 45 million from Doxa Investments A/S for final financing of the repayment of the outstanding debt to Freja Ejendomme A/S. As collateral for Strandpromenaden A/S' liabilities in accordance with the loan agreement, the company and have provided the usual collateral to Doxa Investments A/S. Moreover, it has been agreed that, as additional repayment of the loan, the lender will obtain a right to 50% of the proceeds from a possible sale of Strandpromenaden A/S and that the proceeds are to be determined as the sum of the net asset value of the shares less the amount paid for the property by the Group to Freja Ejendomme A/S. The Seaside Holding Group was notified of an increase in the administrative fee on the Group's mortgage credit financing from 1% to 2.5%. The increase took effect as of 1 October 2012 and entailed an increase in the administrative fee for Q of DKK 0.6 million. As collateral for the negative fair value of interest rate swaps entered into in order to hedge the interest rate risk on the mortgage credit financing, Seaside Holding A/S deposited DKK 6.0 million in a collateral account. The amount equalled the proceeds from an additional loan in Nykredit Bank A/S secured on the properties in the Seaside Holding Group. The loan fell due on 31 December

9 Management commentary Highlight On 18 December 2012, Nykredit Bank A/S terminated the framework agreement on facilities entered into between the bank and Seaside Holding A/S and subsidiaries to expire on 2 January The facilities comprised interest rate swap agreements for hedging the Seaside Holding Group's interest rate risks on the mortgage credit financing of the Group's investment properties. The negative fair value of the interest rate swap agreements at 31 December 2012 amounted to DKK 12.4 million. The interest rate swap agreements were settled in February 2013 by the payment of DKK 10.7 million. On 18 January 2013, was informed that the assumptions for additional drawings on the loan proceeds from the subordinate loan from Doxa Investments A/S of originally DKK 60 million are currently considered not to have been met. On 18 February 2013, the Blue Vision Group entered into an agreement with the Nykredit Group on terminating the framework agreement, and in this connection, Blue Vision A/S decided to enter into a loan agreement with Ejby Industrivej, Glostrup ApS regarding a loan facility of up to DKK 16.5 million. Ejby Industrivej, Glostrup ApS is a wholly-owned subsidiary of the Company's shareholder ALMC hf. The new loan facility is to be used to (i) repay the negative fair value, etc., of the framework agreement terminated by Nykredit Bank (DKK 10.7 million) and (ii) in respect of DKK 5.0 million, to temporarily safeguard the Group against the challenges in terms of liquidity resulting from the fact that it is temporarily not possible for the Company to use the proceeds from the subordinate loan from Doxa Investments A/S. Subsequently, the Group has the necessary liquidity to ensure its continued operations; however, drawings under item (ii) of the loan facility presuppose the lender's prior acceptance. Earnings expectations for 2013 are not expected to meet the general goal for the Group as a consequence of the continued slow development in the real estate market. Apart from optimisation of earnings from the existing activities, the focus in 2013 will be on ensuring the Group an appropriate and solid capital structure to be able to increase the Group's activity level, earnings and volume in the coming years. For 2013, the Group expects results before financing and value adjustments from all existing activities of approx. DKK 0, excl. the profit from the expected disposal of properties during the year. 8

10 Management commentary Business and strategy Business concept The Blue Vision Group's business concept is to invest in and develop real property for the purpose of creating added value. The Group primarily focuses on the following objects: Residential properties in Denmark and southern Sweden. Residential properties with positive operating cash flows. Properties with the potential for optimisation. Other investment properties. Long-term objective The Blue Vision Group's long-term objective is to increase the market value by means of acquisitions in primarily the Danish and Southern Swedish real estate markets for the purpose of creating a competitive return on the shareholders' invested capital. It is the Group's objective to become a significant player on the Danish real estate market within investment in residential and office buildings of high quality. Financial objective The Blue Vision Group's financial objective for the coming years is still to: ensure an annual growth rate in book value per share of at least 15% ensure an equity ratio of the Group's equity of at least 20% of the balance sheet total ensure a natural flow of projects with a high potential for value increases. The negative development in the real estate market and the financial markets in 2012 is expected to change in 2013 seeing an improvement of the situation. The development will be decisive as to whether the Group can commence the sales and investment activities necessary to fulfil the goal in the short term. 9

11 Management commentary The year in outline Operations In 2012, the Blue Vision Group recorded a loss of DKK 43.3 million (2011: loss of DKK 17.0 million). Results for the year were negatively affected by fair value adjustments of investment properties of DKK 4.7 million, fair value adjustments of financial liabilities of DKK 1.8 million and fair value adjustments of interest rate swaps of DKK 1.8 million. Moreover, results for the year were negatively affected by adjustments of deferred tax of DKK 13.7 million as it was uncertain at the balance sheet date whether the losses may be offset in positive income within a foreseeable future. Operating loss for the year amounted to DKK 58 thousand compared to an expected break-even at the publication of the interim report for the period 1 January 30 September At 31 December 2012, the Group's equity amounted to DKK 36.4 million (31 December 2011: DKK 79.7 million). The Group's finance costs in 2012 of DKK 24.8 million are primarily attributable to loan financing in, interest on the financing of Strandpromenaden and interest paid to credit institutions relating to mortgage debt regarding the Group's investment properties. The year was characterised by a continued low level of activity in the Danish real estate market and hesitant behaviour in the financial markets. The original expectations for 2012 assumed this development with an expected improvement in the market during the year. However, this improvement in the real estate market and the financial markets did not occur in Under the given circumstances, the results for 2012 are still not satisfactory. Financing In 2012, the Blue Vision Group financed its operations and the costs for the further development of Strandpromenaden by drawing on the Group's cash deposits in Kiwi Deposits Building Society which stem from the loan proceeds from Doxa Investments A/S in March 2012 of originally DKK 60 million. The Blue Vision Group's activities in the Seaside Holding Group are primarily financed by long-term mortgage credit financing with hedging of the interest rate level in connection with interest rate swaps. However, these interest rate swaps have been terminated; see "Events after the balance sheet date". The operation of the properties provides positive cash flows to the Group. Investments Apart from project investments in Strandpromenaden A/S, the Blue Vision Group did not make any investments in

12 Management commentary The year in outline Investment properties In the consolidated financial statements for 2012, the properties have been measured at fair value at 31 December 2012, which has been determined as follows: For the properties Roret and Mikkelborg Park, the fair value was determined based on the average selling price per sqm. for similar flats in the buildings which had been sold within the past 12 months prior to the balance sheet date. The market for sale of flats in the mentioned areas was characterised by a low level of activity in 2012, and consequently, there is no adequate and valid data for the period that warrants an adjustment of the carrying amounts of the properties. The taxable value of the property Mikkelborg Park remains unchanged compared to 31 December A minor negative value adjustment of the property Roret in Snekkersten has been made. Strandpromenaden is measured at original cost plus development costs incurred. In future, the Group will consider whether the building project at the area is to be carried out by the Group or be disposed of. Special risks apart from any generally occurring risks in the industry As a player in the real estate market, the Blue Vision Group is subject to the general development of this market, which is dependent on interest rate and economic developments. These risks are generally occurring risks in the industry. In connection with the termination and settlement of the Group's interest rate swap agreements in 2013, the Group has not entered into new interest rate swap agreements to hedge the interest rate risk on the Group's mortgage debt with Nykredit. Consequently, in the future, these loans will carry interest solely based on the development in CIBOR 6 months. Events in 2012 At 1 February 2012, the Group's property at Skovgårdsvej 21 in Charlottenlund was transferred to a new owner. Moreover, at 1 March 2012, the Group's property at Ole Suhrs Gade in Copenhagen was transferred to a new owner. On 30 March 2012, raised a subordinate loan of DKK 60 million. The raising of the subordinate loan meant that the financing of the Group's activities in 2012 was secured. At the board meeting on 30 March 2012, the Board of Directors of decided to exercise the authority granted to the Board in the Company's articles of association to carry out a capital increase of DKK million by issuing B shares, see the section "Resolutions made by the Board of Directors" below. Subsequently, the Board of Directors has decided to postpone the above-mentioned rights issue, which originally was to take place in June 2012, so that it will be carried out in

13 Management commentary The year in outline On 30 April 2012, held its annual general meeting. Notice of the general meeting was distributed on 30 March 2012, and a correction to the notice was distributed on 3 April At the general meeting, the present Board of Directors was re-elected and expanded by a new member, Martin Blædel. On 6 July 2012, Strandpromenaden A/S entered into an agreement with Freja Ejendomme A/S on a change of the terms of repayment for the outstanding debt raised in connection with the acquisition of Strandpromenaden Subsequently, DKK 20,037,500 of the debt fell due for payment on 9 July 2012 and the remaining part of the original principal of DKK 23,177,600 plus added interest fell due on 15 October At 17 October 2012, the subsidiary Strandpromenaden A/S raised a loan of DKK 45 million from Doxa Investments A/S for final financing of the repayment of the outstanding debt to Freja Ejendomme A/S. As collateral for Strandpromenaden A/S' liabilities in accordance with the loan agreement, the company and have provided the usual collateral to Doxa Investments A/S. Moreover, it has been agreed that as additional repayment of the loan the lender will obtain a right to 50% of the proceeds from a possible sale of Strandpromenaden A/S and that the proceeds are to be determined as the sum of the net asset value of the shares less the amount paid for the property by the Group to Freja Ejendomme A/S. The Seaside Holding Group, which is a wholly-owned subgroup in the Blue Vision Group, was notified of an increase in the administrative fee on the Group's mortgage credit financing from 1% to 2.5%. The increase took effect as of 1 October 2012 and entailed an increase in the administrative fee for Q of DKK 0.6 million. As collateral for the negative fair value of interest rate swaps entered into in order to hedge the interest rate risk on the mortgage credit financing, Seaside Holding A/S deposited DKK 6.0 million in a collateral account. The amount equalled the proceeds from an additional loan in Nykredit Bank A/S secured on the properties in the Seaside Holding Group. The loan fell due on 31 December On 18 December 2012, Nykredit Bank A/S terminated the framework agreement on facilities entered into between the bank and Seaside Holding A/S and subsidiaries to expire on 2 January The facilities comprised interest rate swap agreements for hedging the Seaside Holding Group's interest rates on the mortgage credit financing of the Group's investment properties. The negative fair value of the interest rate swap agreements at 31 December 2012 amounted to DKK 12.4 million. The interest rate swap agreements were settled in February 2013 by the payment of DKK 10.7 million; see "Events after the balance sheet date". 12

14 Management commentary Group chart All companies are wholly-owned subsidiaries in the Blue Vision Group at 31 December

15 Management commentary Financial highlights for the Group Income statement (DKK'000) Revenue 13,252 15, Administrative expenses -6,782-6,891-5, Operating profit/loss -58 1,493-5, Fair value adjustment of investment properties and financial liabilities -6,516 3,960 8, Loss from finance income and costs -22,997-27,842-5, Loss from continuing operations before tax -29,571-22,389-1, Tax on loss from continuing operations -13,708 5, Loss from continuing operations -43,279-16,978-1, Loss from discontinued operations ,297-92,669 Loss for the year -43,279-16,978-1,415-12,036-92,669 Balance sheet (DKK'000) Investment properties 296, , , Investment properties under construction 100, ,062 95, Project portfolio 35,000 35,000 35,000 52,712 0 Share capital 75,784 75,784 45, , ,863 Equity 36,387 79,666 53,064 53,468 56,253 Assets 503, , ,261 75, ,672 Financial ratios Loss before tax calculated as a percentage of average equity Loss after tax calculated as a percentage of average equity Loss after tax per number of shares, end of year (DKK) Loss after tax per average number of shares ex. treasury shares (DKK) Solvency ratio Earnings per share (EPS basic), DKK Earnings per share diluted (EPS diluted), DKK Number of shares Outstanding number of shares, end of year 757, , ,000 1,308,625 1,308,625 Outstanding number of shares ex. treasury shares, end 757, , ,897 of year 1,308,625 1,225,076 Average number of outstanding shares ex. treasury 757, ,342 1,285,098 shares 1,235,520 1,225,076 Per share of nom. DKK 100 (stated in DKK) Net asset value (as submitted to OMX Nordic Exchange Copenhagen, end of year) N/A N/A N/A N/A Book value per share (BVPS) Market price (most recent trading) * Market price/net asset value (*Most recent market price 37 before reduction of share capital) Earnings per share and diluted earnings per share have been calculated in accordance with IAS 33. Other financial ratios are calculated in accordance with the Danish Society of Financial Analysts' guidelines on the calculation of financial ratios "Recommendations and Financial Ratios 2010". For financial ratio definitions, please see page

16 Management commentary Operating review Results for the year and equity In 2012, the Blue Vision Group recorded a loss of DKK 43.3 million (2011: loss of DKK 17.0 million). Results for the year were negatively affected by fair value adjustments of investment properties of DKK 4.7 million, fair value adjustments of financial liabilities of DKK 1.8 million and fair value adjustments of interest rate swaps of DKK 1.8 million. Moreover, results for the year were negatively affected by adjustments of deferred tax of DKK 13.7 million as it was uncertain at the balance sheet date whether the losses may be offset in positive income within a foreseeable future. Operating loss for the year amounted to DKK 58 thousand compared to an expected break-even at the publication of the interim report for the period 1 January 30 September At 31 December 2012, the Group's equity amounted to DKK 36.4 million (31 December 2011: DKK 79.7 million). Outlook for the Group for will still be influenced by a general focus on optimisation and consolidation of the Group's existing activities. Depending on the development in the real estate market and the financial markets, initial expansion in the Group's investment activities in new investment properties is expected in The financing hereof will be based on an appropriate distribution between first mortgage credit financing and own financing provided among other things by the capital increase in 2013 approved by the Board of Directors in. The Blue Vision Group expects revenue from the existing activities in the form of rental income of DKK million in The results from these renting activities are expected to amount to DKK 3-4 million for the same period. In 2013, Strandpromenaden A/S will still be affected by the further development of the building project and will contribute a loss of approx. DKK 2 million before financing to the results for Based on the considerations to further limit the Blue Vision Group's business activities, a possible sale of this company and the project activities will be assessed regularly. For 2013, the Group expects results before financing and value adjustments from all existing activities of approx. DKK 0, excl. the profit from the expected disposal of assets during the year. Earnings expectations for 2013 are expected not to meet the general goal for the Group as a consequence of the continued slow real estate market. Apart from optimisation of earnings from the existing activities, the focus in 2013 will be on ensuring the Group an appropriate and solid capital structure to be able to increase the Group's activity level, earnings and volume in the coming years. Consequently, the Group's equity ratio is expected to amount to at least 20% of the Group's balance sheet total at year end

17 Management commentary Operating review Line of business The Blue Vision Group focuses on investment properties in the Danish and Southern Swedish real estate markets primarily within residential housing buildings. In 2012, the development in the real estate market within the Group's focus area was still characterised by a low level of activity, and the prolonged financial crisis mean that it is still difficult to obtain attractive financing for investments in real property. An increasing relaxation in the financial markets and thus an increase in the number of transactions in the real estate market in 2013 are expected. Thus, the objective will still be to further develop the Group's portfolio by investing in new investment properties. Financial risks Interest rate risks In 2012, the Group hedged interest rate risks on mortgage loans in the Seaside Holding Group by means of interest rate swap agreements. The interest rate swap agreements were settled in February 2013, and subsequently, the interest rate on the mortgage loans is determined at CIBOR 6 months on an ongoing basis. In addition, the Group has fixed-rate financial liabilities towards a related party. The Group's bank deposits are placed in current accounts. Liquidity risks The Group's liquidity reserve at 31 December 2012 consists of cash at bank and in hand. In March 2012, the Group raised a subordinate loan of DKK 60 million, of which the remaining proceeds of DKK 45.7 million are deposited in an account at Kiwi Deposit Building Society in New Zealand. In 2012, the Group used proceeds from this loan to finance operations and project development. The use of the proceeds from the subordinate loan is subject to a number of limitations on the right of disposal, and the remaining proceeds have been provided as collateral to the lender, Doxa Investments A/S. On 18 January 2013, the lender informed the Company that the assumptions for additional drawings on the loan proceeds were currently considered not to have been met; see "Events after the balance sheet date". Cash at bank and in hand in the Seaside Holding Group totalling DKK 7.8 million at 31 December 2012 cannot be used to the benefit of other consolidated enterprises. Intellectual capital By virtue of the Company's Board of Directors and Executive Board and a number of leading shareholders, has wide experience and know-how within investment in real property and general financing of acquisition and sale of real property. 16

18 Management commentary Operating review Incentive programmes The Blue Vision Group has no incentive programmes. Events after the balance sheet date On 18 January 2013, was informed that the assumptions for additional drawings on the loan proceeds were currently considered not to have been met. Thus, to further use the proceeds, it is assumed that (i) the Company's subsidiary Seaside Holding A/S' negotiations regarding the increase of borrowing costs and termination of the facilities with Nykredit, which are apparently related to the major shareholder ALMC's problematic relationship with Nykredit, are successful and (ii) the terms of the major shareholder ALMC's vendor notes are renegotiated. On 18 February 2013, the Blue Vision Group entered into an agreement with the Nykredit Group on terminating the framework agreement, and in this connection, decided to enter into a loan agreement with Ejby Industrivej, Glostrup APS regarding a loan facility of up to DKK 16.5 million. Ejby Industrivej, Glostrup ApS is a wholly-owned subsidiary of the Company's shareholder ALMC hf. The new loan facility is to be used to (i) repay the negative fair value, etc., of the framework agreement terminated by Nykredit Bank (DKK 10.7 million) and (ii) in respect of DKK 5.0 million, to temporarily hedge the Group against the challenges in terms of liquidity resulting from the fact that it is temporarily not possible for the Company to use the proceeds from the subordinate loan from Doxa Investments A/S. Subsequently, the Group has the necessary liquidity to ensure its continued operations; however, drawings under item (ii) of the loan facility presuppose the lender's prior acceptance. The loan facility with Ejby Industrivej, Glostrup ApS was established by providing collateral, including most significantly (i) power of attorney to effect sales regarding the Company's shares in Seaside Holding A/S and Strandpromenaden A/S, (ii) collateral in the Company's shares in Seaside Holding A/S and Strandpromenaden A/S, (iii) a general agreement on covenants against encumbrances regarding the Company's subsidiary assets and (iv) assignment of intra-group balances. The Group's mortgage credit financing in Nykredit Realkredit A/S remains unchanged for the time being. Apart from the above, no events have occurred after the balance sheet date which are significant to the consolidated financial statements for

19 Management commentary Corporate governance ' Board of Directors and Executive Board always aim at ensuring that the Group's management structure and control systems are appropriate and function satisfactorily. A number of internal policies and procedures have been developed and are maintained on an ongoing basis for the purpose of ensuring active, secure and profitable management of the Group. has prepared a statutory corporate governance statement; see section 107b of the Danish Financial Statements Act, for the financial year The statement has been published on the Group's website The statutory statement is divided into three sections: A statement regarding ' work with the Recommendations for corporate governance. In August 2011, the Committee on Corporate Governance published updated Recommendations for corporate governance based on the "comply or explain" principle. It is the Board of Directors' opinion that ' Management in all material respects complies with the Recommendations for corporate governance considering the Group's size and level of activity. A description of the key elements of ' internal control and risk management system in connection with the financial reporting. A description of the composition of ' governing bodies, their committees and the committees' functions. Apart from the above description and in accordance with the Recommendation for corporate governance, the Company has described on its website how it meets the individual requirements of the Recommendations. Corporate social responsibility Due to the Group's modest size, the Blue Vision Group has yet to adopt actual policies and prepare a statement on the Group's corporate responsibility. Statement on going concern In connection with the financial reporting, the Board of Directors and the Executive Board assessed whether it is well-founded that the annual report is presented under the going concern assumption. The Board of Directors and the Executive Board concluded that no factors exist at the balance sheet date raising doubt about the Group's and the parent company's ability to continue as a going concern until the end of 2013 at least. The conclusion was based on knowledge of the Group and the parent company, the estimated outlook and the identified uncertainties and risks in this respect (described in the Management commentary and note 1) as well as an examination of budgets, including the expected development in liquidity, capital base, etc. 18

20 Management commentary Shareholder information Share capital ' share capital amounts to nom. DKK 75,783,500, corresponding to 757,835 shares of nom. DKK 100. The shares are listed on NASDAQ OMX Copenhagen under ID code DK All shares rank equally. There are no restrictions on the transferability and no restrictions on voting rights. has lost more than 50% of the share capital. At the annual general meeting, the Board of Directors will announce that the share capital is expected to be restored by means of a capital increase in the autumn In 2012, the Company saw limited trading in its shares. The Company's articles of association may be amended if the decision is passed by at least 2/3 of both the votes cast and the voting shares represented at the general meeting. In accordance with articles 4 of the articles of association, the Company's Board of Directors is authorised increase the Company's share capital once or several times up to nom. DKK 250,000,000 until 1 October The increase may take place by means of cash payment, conversion of debt or payment in other values than cash, including contribution of an existing enterprise. The increase may be made without pre-emption rights for the Company's existing shareholders if the increase is made at market price. The new shares must be of the same share class and otherwise in all respects be equal to the existing shares in the Company. Moreover, the new shares must be negotiable instruments and bearer shares but may be registered in the Company's register of shareholders. The right to receive dividend and other rights in the Company attached to the new shares take effect from the date prescribed by the Board of Directors; however, no earlier than from the first financial year after the year when the capital increase is registered. Moreover, until 1 October 2014, the Board of Directors is authorised to let the Company issue warrants once or several times. As a maximum, the warrants must grant the right to subscribe for shares of nom. DKK 250,000,000 in the Company; however, as a maximum 50% of the share capital at the date when the decision to issue the warrants is made. The issue may be made without pre-emption rights for the Company's existing shareholders if the issue is made on an arm's length basis. At the same time, the Board of Directors is authorised to increase capital in the Company once or several times in connection with the subsequent exercise of the above-mentioned warrants. The increase may be made without pre-emption rights for the Company's existing shareholders. The new shares must be of the same share class and otherwise in all respects be equal to the existing shares in the Company. Moreover, the new shares must be negotiable instruments and bearer shares but may be registered in the Company's register of shareholders. The right to receive dividend and other rights in the Company attached to the new shares take effect from the date prescribed by the Board of Directors; however, no earlier than from the first financial year after the year when the capital increase is registered. Moreover, until 1 October 2014, the Board of Directors is authorised to, once or several times, let the Company raise loans against bonds or other debt instruments with a right for the lender to convert his claim to shares in the Company (convertible loans). The convertible loan must not exceed DKK 250,000,000; however, as a maximum 50% of the share capital at 19

21 Management commentary Shareholder information the date when the decision to raise the loan is made. The convertible loan may be raised without pre-emption rights for the Company's existing shareholders if the borrowing is made on an arm's length basis. At the same time, the Board of Directors is authorised to increase capital in the Company once or several times in connection with a subsequent conversion of the above-mentioned loan. The increase may be made without pre-emption rights for the Company's existing shareholders. The new shares must be of the same share class and otherwise in all respects be equal to the existing shares in the Company. Moreover, the new shares must be negotiable instruments and bearer shares but may be registered in the Company's register of shareholders. The right to receive dividend and other rights in the Company attached to the new shares take effect from the date prescribed by the Board of Directors; however, no earlier than from the first financial year after the year when the capital increase is registered. As part of the Company's acquisition of the share capital in Seaside Holding A/S, CVR no , and for the purpose of meeting the Company's obligation to issue convertible debt instruments to ALMC hf., Iceland, company no , of DKK 20,000,000 and DKK 15,000,000, respectively, in accordance with the Share Sale and Purchase Agreement dated 17 November 2010 including Addendum I dated 14 December 2010 and also for the purpose of replacing the Company's subordinate loan, amounting to DKK 28,359,000 including added interest at 30 September 2010, with Kiwi Deposit Holdings A/S, CVR no , with a convertible debt instrument, the Board of Directors decided on 20 December 2010 to exercise its authority granted in the former article 4.4 of the Company's articles of association regarding the issue of convertible bonds. The convertible debt instruments were issued at the following identical terms: 1. The convertible bonds give the right to convert to share capital nom. DKK 39,701,590 distributed on 397,016 shares of DKK 100 per share in the Company; 2. As to the convertible debt instrument of DKK 20,000,000, the right of conversion must be exercised no later than 31 March 2011, while the right of conversion for the other convertible debt instruments of DKK 15,000,000 and DKK 28,359,000 must be exercised no later than 20 December The conversion must take place no later than 30 days after a written notice of the exercise of the right of conversion has been sent to the Company; 3. The new shares must be of the same share class and otherwise in all respects be equal to the existing shares in the Company. The new shares must be negotiable instruments and bearer shares but may be registered in the Company's register of shareholders, see article 3 of the articles of association; 4. The convertible bonds are issued without pre-emption rights for the Company's existing shareholders, and the capital increase in connection with the exercise of the right of conversion in accordance with the issued convertible debt instruments is made without pre-emption rights for the existing shareholders; 5. The right to receive dividend and other rights in the Company attached to the new shares take effect from the date of the conversion; 20

22 Management commentary Shareholder information 6. The debt to ALMC hf. of DKK 20,000,000 and DKK 15,000,000 arose on closing of the Company's acquisition of Seaside Holding A/S on 20 December 2010, while the debt to Kiwi Deposit Holdings A/S of DKK 28,359,000 is attributable to a subordinate loan from 13 November The convertible debt instruments of DKK 20,000,000 and DKK 15,000,000 to ALMC hf. grant the right to subscribe for 125,044 shares and 93,784 shares, respectively, of DKK 100, while the convertible debt instrument to Kiwi Deposit Holdings A/S grants the right to subscribe for 178,188 shares of DKK 100 in the Company. In accordance with the convertible debt instruments, the conversion price of all the shares amounts to ; 8. Increase or reduction of the share capital, issue of new warrants, issue of additional convertible debt instruments, merger or demerger taking place up until the exercise of the right of conversion do not change the rights that will accrue to the holder of the convertible bonds; and 9. If the Company is dissolved by liquidation or bankruptcy, the convertible bonds lose their value. As part of the Company's issue of convertible debt instruments on 20 December 2010 to ALMC hf., Iceland, company no , of DKK 20,000,000 and DKK 15,000,000, respectively, and for the purpose of replacing the Company's subordinate loan amounting to DKK 28,359,000 including added interest at 30 September 2010 with Kiwi Deposit Holdings A/S, CVR no , with a convertible debt instrument, the Board of Directors decided on 25 February 2011 to exercise its authority granted in article 4.3 of the articles of association regarding the issue of three additional convertible debt instruments to cover the interest added to the three above-mentioned debt instruments in the period from the issue to the exercise hereof so that also the interest amount is matched by debt convertible to shares in the Company equally with the principal amount. The three convertible debt instruments issued include: Convertible debt instrument of DKK 338, to ALMC hf. corresponding to the added interest to the original convertible debt instrument issued to ALMC hf. of DKK 20,000,000 in the period 20 December 2010 to 14 March 2011 when the conversion of the debt instrument of DKK 20,000,000 into shares took place. Convertible debt instrument of DKK 4,849, to ALMC hf. corresponding to the added interest to the original convertible debt instrument issued to ALMC hf. of DKK 15,000,000 in the period 20 December 2010 to 20 December 2014 when the conversion is to take place at the latest. Convertible debt instrument of DKK 537, to Kiwi Deposit Holdings A/S corresponding to the added interest to the original convertible debt instrument issued to Kiwi Deposit Holdings A/S of DKK 28,359,000 in the period 1 October 2010 to 14 March 2011 when the conversion of the debt instrument of DKK 28,359,000 into shares took place. 21

23 Management commentary Shareholder information The convertible debt instruments were issued at identical terms: Pursuant to section 169(2) of the Danish Companies Act, the following was disclosed: 10. The convertible debt instruments grant the right to convert to share capital of no more than DKK 3,579,800; 11. As to the convertible debt instrument of DKK 338, to ALMC hf., the right of conversion must be exercised no later than on 31 March 2011, while the right of conversion for the other convertible debt instruments of DKK 4,849, and DKK 537, must be exercised no later than on 20 December The conversion must take place no later than 30 days after a written notice of the exercise of the right of conversion has been sent to the Company; 12. The new shares must be of the same share class and otherwise in all respects be equal to the existing shares in the Company. The new shares must be negotiable instruments and bearer shares but may be registered in the Company's register of shareholders, see article 3 of the articles of association; 13. The convertible debt instruments are issued without pre-emption rights for the Company's existing shareholders, and the capital increase in connection with the exercise of the right of conversion in accordance with the issued convertible debt instruments is made without pre-emption rights for the existing shareholders; 14. The right to receive dividend and other rights in the Company attached to the new shares take effect from the date of the conversion; 15. The debt to ALMC hf. of DKK 338, and DKK 4,849, comprises added interest to convertible debt instruments issued on 20 December 2010 on the closing of the Company's acquisition of Seaside Holding A/S, while the debt to Kiwi Deposit Holdings A/S of DKK 537, comprises interest added to a subordinate loan granted on 13 November 2009 to the Company of originally DKK 27,387, replaced by a convertible debt instruments on 20 December 2010; 16. The convertible debt instruments of DKK 338, and DKK 4,849, to ALMC hf. grant the right to subscribe for 2,119 shares and 30,319 shares, respectively, of nom. DKK 100, while the convertible debt instrument of DKK 537, to Kiwi Deposit Holdings A/S grants the right to subscribe for 3,360 shares of DKK 100 in the Company. In accordance with the convertible debt instruments, the conversion price of all the shares amounts to ; 17. Increase or reduction of the share capital, issue of new warrants, issue of additional convertible debt instruments, merger or demerger taking place up until the exercise of the right of conversion do not change the rights that will accrue to the holder of the convertible bonds; and 18. If the Company is dissolved by liquidation or bankruptcy, the convertible bonds lose their value. 22

24 Management commentary Shareholder information In connection with the completion of the share capital increase in from DKK 45,000,000 to DKK 75,783,500 in March 2011, ALMC hf. converted the debt instrument of DKK 20.0 million and the debt instrument of DKK 338,984.69, and Kiwi Deposit Holdings A/S converted the debt instrument of DKK 28.4 million and the debt instrument of DKK 537, into new shares in the Company. Until 3 November 2016, the Company's Board of Directors is authorised, on one or more occasions, to increase the Company's share capital by up to nom. DKK 250,000,000 by issuing new not fully paid B shares at market price or a favourable price by cash payment with pre-emption right for the Company's existing shareholders. The new B shares are to be issued as not fully-paid shares in a new independent share class. The B shares must be non-negotiable instruments registered in the name of the holder and be registered as such in the Company's register of shareholders. The B shares will not be issued in dematerialised form through VP SECURITIES A/S. The B shares must confer on the holders a right to receive dividends and other rights in the Company from the date of registration of the capital increase with the Danish Business Authority. The Board of Directors may demand that unpaid share capital regarding B shares be paid on demand. Four weeks must be allowed for payment. Any claims against subscribers and subsequent acquirers of B shares may be executed in accordance with section 478(1)(v) of the Danish Administration of Justice Act. The new B shares will not be admitted for trading and public listing at NASDAQ OMX Copenhagen. According to the Company's articles of association, the Board of Directors is authorised to determine the detailed terms of the capital increases in accordance with the above-mentioned authority and to amend the Company's articles of association as necessary due to the Board of Directors' exercise of the above-mentioned authority. At the board meeting on 30 March 2012, the Board of Directors decided to exercise part of the authority to issue B shares for the purpose of carrying out a capital increase of up to DKK million by issuing B shares in the ration 1:2. It is Management's assessment that the Company's capital and share structure is appropriately prepared and that the Company's Board of Directors by use of e.g. the abovementioned authority may ensure that the capital and share structure is adapted to the shareholders' and ' interests on an ongoing basis. Dividends has not established an actual dividend policy. It is expected that the Company's shareholders in the coming years will obtain a return on their investment in the form of increases in the price of the Company' shares. In the future, distribution of dividends will be made in consideration of necessary consolidation of equity as the basis for the Group's continued expansion. The Board of Directors proposes no dividends for 2012 to the Company's general meeting. 23