Grieg Seafood ASA

GSF:OSL

ANNUAL REPORT 2017

PART 1 - OUR JOURNEY

Letter from the CEO
Key Figures
Vision and Values
The Board
The Organization
Our history

5
8
10
14
16
19

PART 2 - CREATING VALUES

Operational value creation
GSF Rogaland AS
GSF Finnmark AS
GSF BC LTD
GSF Shetland Ltd
Ocean Quality
The Grieg Seafood share
Analytical information 
APM

22
23
25
27
29
31
33
38
43

PART 3 - ANNUAL ACCOUNTS

Board of director's report 
Corporate Governance
GSF Group + notes
GSF Parent + notes
Auditor's report

46
58
68
135
167

FRONTPAGE PHOTO: TOMMY ELLINGSEN

PART 1 – OUR JOURNEY

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PHOTO: EILERT MUNCH LUND

PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.PART 1 - SUMMARY

25 YEARS OF OPERATIONS, BUT THE ADVENTURE HAS JUST BEGUN

In 2017, we celebrated our 25th anniversary. The celebration gave us a reason to look back, 
but more importantly, a reason to reflect on what we aim to accomplish going forward. The 
oceans must play a bigger role in providing food in the future. We intend to take a leading role in 
utilizing new technology and data to make better and more sustainable decisions.  

We believe that a healthy environment, good fish welfare and profitability, are not opposites, but 
must go hand in hand. Rooted in nature – we farm the ocean for a better future. 

Our adventure has just begun!

FARMING THE OCEAN FOR A BETTER FUTURE - A STRUCTURED 
APPROACH TO VALUE CREATION

During 2018, we will continue to operationalize our digitalization strategy GSF Precision 
Farming and implement our improvement program Grieg Seafood 2020. Our goal is to be at 
the forefront in the industry in utilizing new technology. We apply sensor technology which 
combined with artificial intelligence facilitates better and more sustainable operational and 
strategic decisions, safeguards our employees and accelerates operational improvements. 
Through GSF 2020, we systematize our operational drivers and connect them to financial 
indicators. Our goal is to ensure that employees understand how what they do contributes to 
strategic goal achievement. We will also continue to build our culture, as we believe there is an 
irrefutable causality between culture and performance – if culture comes first, performance will 
follow. Lead by a dedicated workforce we intend to deliver long-term value for many years to 
come.

PHOTO: HUNG NGO

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.LETTER FROM THE CEO

For 25 years, Grieg Seafood has produced delicious salmon 
for people all over the world. Now it is time to look forward to 
our next 25 years of adventure. The salmon farming industry 
faces challenges, and these we must contribute to solve. In 
my perspective, a healthy environment, good fish welfare and 
profitability are not opposites. Our job is to ensure that these 
considerations go hand in hand. That is how we can provide 
sustainable, healthy and tasty food to a growing population, and 
that is how we intend to deliver on our vision:

“Rooted in nature - farming the ocean for a better future”

In 2017, we celebrated our 25th anniversary. The celebration 
gave us a reason to look back and reflect on what we have 
accomplished, but more importantly, to reflect on what we aim 
to accomplish going forward.  

GROWTH AND IMPROVEMENT AMBITIONS

From an annual harvest of 62 600 tons, we on average exported 
approximately 800 000 meals of salmon to the rest of the world 
every day in 2017. Our ambitious growth target is to harvest 
100 000 tons in 2020, which converted to salmon meals equals 
approximately 1.3 million per day. We intend to reach our targets 
by working smarter, investing in new capacity and by utilizing 
our existing licenses better. On the cost side, our ambition is to 
be at or below industry average. We have a digitalization strategy 
and intend to be the first in the industry to test out new, digital 
tools that can challenge us and help us think differently. Our 
dedicated employees, willing to walk the extra mile every day, will 
be crucial to goal achievement.

CARING FOR THE ENVIRONMENT

The salmon farming industry faces challenges that we must 
contribute to solve. Although we aim for growth, we cannot 
grow at the expense of the environment. We support the "traffic 
light system" for production in Norway, understanding that a 
potential red light in Rogaland could mean reduced production 
for us going forward. We work hard to keep the sea lice levels 
low, and our most important initiative in Norway is large smolt. 
From 2017 to 2021, the average size of our smolt put to sea in 
Rogaland is expected to increase from less than 150 gram to 
almost 600 gram. A larger smolt is more robust and takes shorter 

ANDREAS KVAME 
CEO 

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time to grow to harvest size, which combined with use of wrasse and other non-medicinal lice 
treatment methods will have a positive effect on the environment. 

In Finnmark, we have seen positive results from extended fallowing. A few years back, we 
decided to fallow all sites in Øksfjorden beyond what is required by the authorities. In 2017, we 
began harvesting salmon from this area again. The harvested generation has not been subject to 
any bath treatments and medicinal treatment has been limited1. We believe this proves that our 
action had the intended effect. 

The sea lice situation is expected to remain challenging in 2018, but we believe it is possible 
to achieve production growth and care for the environment at the same time, and will not 
compromise long-term sustainable production for short-term profitability. 

OPEN, HONEST AND TRUSTWORTHY

As a food producer growing salmon in fjords that belong to us all, we have a responsibility to 
provide open and honest information about the food safety aspects of our product as well as 
environmental aspect of our operations. 

Salmon is a safe and healthy food product. Both the authorities and Grieg Seafood continuously 
test our products to document the facts and to ensure that fish sent to the market comply 
with the different market requirements globally. In February 2018, Ocean Quality AS, the 
sales company we own with Bremnes Seashore AS , unfortunately released salmon for sale 
to the Chinese market that did not comply with Chines requirements. The released fish was 
approved for all other markets globally, but not the Chinese. Failure to comply with the relevant 
regulations is unacceptable, and both Ocean Quality and Grieg Seafood have taken actions to 
prevent this from happening again. As a result of the incident, Ocean Quality AS is currently not 
allowed to service the Chinese market. 

We also have to deliver trust regarding the environmental impact of our operations, and aim to 
be open towards all stakeholder groups. We get to produce our salmon in areas that belong to 
the public, and in return, our stakeholders have a right to be informed about our production 
methods, our impact on the environment and how we work to solve environmental challenges. 
In British Columbia, our process of informing our neighbors about our operations is formalized. 
Here our staff meets with Chiefs and Councils of the Mowachaht Muchalat and Tlowitsis First 
Nations at least four times a year, to share information about our farms in their territories, and 
answer questions of importance to the Chiefs. Although not formalized to the same extent 
as in BC in other regions, our ambition is to be open and forthcoming and make all relevant 
information available to our neighbors. We continuously strive to improve our sustainability 
reporting and for 2017 we will provide climate accounts to the public for the first time. Going 
forward we will work systematically to deliver trust in the communities where we are present and 
towards all other stakeholder groups.

OUR RESULTS IN 2017

At NOK 7 017 million, our topline in 2017 was the highest ever in the history of the Group. The 
record performance was a result of increased activity in Ocean Quality and favorable prices. At 
62 598 tons, volume harvested was lower in 2017 than in the year before, as we decided to move 
3 000 tons from 2017 into 2018.  In Finnmark, a skewed harvest plan negatively affected revenue 
and profitability. We harvested 75% of our volumes from this region in the second half of the year 
when prices were significantly lower than in the first half, and therefore lost margin compared to 

1   Two sites were treated for the regular salmon lice in 2016 and two sites were treated for Caligus elongates - a lice type 
carried by wild species like herring and capelin and transferred to farmed salmon – in 2017. 

At NOK 7 017 
million, our 
topline in 2017 
was the highest 
ever in the 
history of the 
Group. 

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competitors with a more balanced harvest plan.  In addition, biological challenges contributed 
to increased costs compared to 2016, which resulted in further reduction in profitability. With 
reference to our cost ambition, our 2017 performance was not good enough. In order to achieve 
our cost target by 2020, we have therefore started a program to improve our performance 
going forward. The program is focused on actions affecting key drivers in our operations, most 
importantly good farming practices, survival and growth. Supported by new technology like 
sensors and an active management, I believe that significant improvement is achievable. We will 
provide more information about our improvement program, GSF 2020, in our 2018 reports.  

NEW VALUES

In November, we launched our new vision and values. Our new values are Open, Ambitious 
and Caring. The entire organization, from the smallest facilities 
in the outskirts of Finnmark, Rogaland, Shetland and British 
Columbia to the head office in Bergen, have provided input to 
what the values will mean for their everyday work-life and for the 
company. In other words, our values are not there as decoration, we 
want them to define our company both internally and externally, 
and in 2018, we will start to "live our new values" in full in our 
effort to achieve our strategic goals.

LOOKING AHEAD

The Board and management of Grieg Seafood are committed to 
two ambitious targets; to harvest 100 000 tons of salmon, and 
to achieve costs that are at or below industry average by 2020. 
Through utilization of new technology and effort from our 
dedicated staff, I truly believe that we can reach these targets. By 
developing a performance culture where everyone knows how his 
or her effort contributes to strategic goal achievement, I believe that 
our performance will improve in all aspects going forward. To me, 
a healthy environment, good fish welfare and profitability are not 
opposites. We have to ensure that these considerations go hand in 
hand, because only then can we provide sustainable, healthy and 
tasty food to a growing population in line with our vision: rooted 
in nature, farming the ocean for a better future.

Andreas Kvame
CEO 

SALMON FARMING HAS COME A 
LONG WAY SINCE 1973. THE IMAGE 
SHOWS SIGVALD EIKE OG JOHANNES 
SKARTVEIT IN FRONT OF THE FISH 
FARM SKJÆRSUND.

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KEY FIGURES

EBIT VS. PRICE (NOK)

HARVEST VOLUME

60

50

40

30

K
O
N

20

10

0

75 000

70 000

65 000

60 000

55 000

50 000

45 000

40 000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

EBIT per kilo GWT

Fish Pool

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Harvest volume (ton GWT)

2017

2016

2015

2014

2013

2012

2011

2010

7 017 456

6 545 187

4 608 667

4 099 543

2 404 215

2 050 065

2 047 000

2 446 800

NOK x 1 000

Revenue

EBITDA

EBIT

EBIT after fair value adjustment

812 937

1 683 486

Profit or loss for the year

600 899

1 222 331

708 877

552 821

953 113

254 852

Cash flow from operations

Gross investments

Total assets

NIBD according to covenants 
equirement

NIBD incl. Factoring 

Equity (incl. minority)

1 105 533

1 341 662

261 311

904 400

1 167 745

47 742

80 951

4 366

367 282

322 168

483 820

343 104

219 367

144 395

156 541

311 698

484 330

-29 818

348 293

-191 162

345 820

205 613

615 743

-93 099

-189 567

430 985

-147 188

-123 158

317 282

163 961

202 733

189 539

215 406

324 186

686 944

639 754

847 383

631 039

594 731

241 804

7 152 615

6 768 038

5 935 777

5 351 599

4 590 594

4 070 279

4 172 197

4 057 628

1 283 606

906 319

1 568 878

1 566 242

1 445 005

1 529 976

1 443 690

1 046 640

1 763 786

1 399 981

1 907 109

1 761 802

1 445 005

1 529 976

1 443 690

1 046 640

3 347 905

3 206 951

2 356 192

2 241 451

2 001 781

1 513 230

1 690 150

1 982 405

EBIT* per kg GWT**

2017

14.4

2016

18.0

2015

0.7

2014

5.3

2013

6.0

2012

-2.7

2011

3.4

2010

8.8

Harvest volume (1000 GWT**)

62 598

64 726

65 398

64 736

58 061

70 000

60 082

64 214

NIBD/EBITDA

Dividende* per share

Equity %

Earnings per share*

Number of employees (full-time 
equivalent)

Market price*** salmon

1.2

4.00

47%

5.02

707

60.71

0.7

1.50

47%

10.74

654

63.19

6.3

0.50

38%

-0.06

681

42.22

3.3

0.00

42%

1.26

686

40.51

3.0

0.00

43%

3.90

626

39.56

-51.3

0.00

37%

-1.33

640

26.57

4.2

1.50

41%

-1.11

589

31.86

1 .5

0.25

49%

5.65

578

37.21

*  
** 
***  

Norwegian kroner (NOK)
GWT = Gutted weight
NOK/KG average

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.HARVEST VOLUME TON GWT*

SALES REVENUE NOK x 1 000

12 056

18 111

745 934

1 150 166

9 600

GWT TONN 2017

580 293

2017 TNOK

22 831

1 265 156

Finnmark

Canada, BC

Shetland

Rogaland

Finnmark

Canada, BC

Shetland

120 162

Rogaland
28
26
24
22
20
18
16
14
12
10
8
6

n
n
o
t
0
0
0
1

EBIT**

68 657

393 064

2017 TNOK

8
7
351 935
0
0
0
0
2
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

Rogaland

Finnmark

Canada, BC

Shetland

Rogaland

Finnmark

Canada, BC

Shetland

EXPECTED HARVEST VOLUME IN 2018   
80 000 tons GWT

1.3M
1.2M
1.1M
1M
0.9M
0.8M
0.7M
0.6M
0.5M
0.4M
PRODUCTION CAPACITY 
0.3M
0.2M
Total capacity 100 000 tons GWT
0.1M

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

Rogaland
* GWT = Gutted Weight 
** EBIT before fair value adjustment of biological assets

Canada, BC

Finnmark

Shetland

HARVEST

500
450
400
350
300
250
200
150
100
50
0
TOTAL GSF

K
Tons GWT
O
N
Rogaland
0
0
0
1
Finnmark

Canada, BC

Shetland

2017

2016

2015

2014

2013

2012

2011

2010

2009

18 111

18 367

15 236

12 778

15 088

19 247

15 986

12 839

12 000

2008

6 733

22 831

22 104

19 481

26 470

23 076

20 080

16 143

20 705

14 218

14 834

9 600

10 715

14 311

6 257

6 739

13 576

13 236

13 682

10 134

16 326

2007

11 591

7 640

8 503

12 056

13 541

16 370

19 231

13 158

17 097

14 717

16 988

12 395

13 838

12 727

7
0
0
2

8
0
0
2

9
0
62 598
0
1
0
0
2
2

1
1
0
2

2
3
64 726
1
1
0
0
2
2

4
1
0
2

5
6
65 398
1
1
0
0
2
2

7
1
0
2

64 736

58 061

70 000

60 082

64 214

48 747

51 731

40 461

EBIT  

Rogaland

Finnmark

Canada, BC

Shetland

NOK x 1 000

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

Rogaland

Finnmark

Canada, BC

Shetland

TOTAL GSF

393 064

466 756

83 516

77 835

144 794

50 763

104 243

131 013

65 431

−15 972

27 814

351 935

447 131

124 004

205 934

216 778

−17 651

55 460

216 167

68 815

−188 292

−3 815

120 162

80 526

13 310

−47 810

-7 777

−75 167

37 988

69 150

36 626

55 877

38 171

68 657

176 558

−164 833

81 087

27 279

−132 228

5 894

178 612

−4 414

−16 474

55 418

904 400

1 167 745

47 742

340 857

348 293 −191 162

205 613

567 369

153 525 −172 853

120 570

EBIT  / KG GWT

Rogaland

Finnmark

Canada. BC

Shetland

TOTAL GSF

2017

2016

2015

2014

2013

2012

2011

2010

2009

21.7

15.4

12.5

5.7

14.4

25.4

20.2

7.5

13.0

18.0

5.5

6.4

0.9

−10.1

0.7

6.1

7.8

−7.6

4.2

5.3

9.6

9.4

−1.2

2.1

6.0

2.6

−0.9

−2.4

−7.7

−2.7

6.5

3.4

2.9

0.4

3.4

10.2

10.4

5.1

10.5

8.8

5.5

4.8

3.6

−0.4

3.2

2008

−2.4

−10.7

3.4

−1.2

−3.3

2007

2.4

−0.5

4.5

4.4

3.6

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P. 
 
ROOTED IN NATURE 
– FARMING THE OCEAN FOR A BETTER FUTURE

We have produced delicious salmon for people in all corners of 
the world for more than 25 years. Our focus is on sustainable 
utilization of natural resources, and our ambition goes beyond 
short-term operational profitability. We care about the footprints 
we leave as we go along, understanding that there is an 
interdependency between financial results and sustainability. 

Our vision "Rooted in nature – farming the ocean for a better 
future", describes how we intend to make a difference.    

GRIEG SEAFOOD - A VALUE BASED SALMON 
FARMING COMPANY

Covering 70 % of the globe, the oceans must play a bigger role in 
providing food in the future. Globally, we need to find a way to farm 
the ocean with sustainable seafood solutions. Balancing profitable 
growth and innovation with environmental sustainability is essential 
to what we regard as sustainable food production. We believe focused 
innovation and research in biology and technology will be prerequisites 
for maintaining healthy oceans and farm profitability going forward. 
Through our digitalization strategy GSF Precision farming we intend 
to take a leading role in utilizing new technology and data to make 
better and more sustainable decisions. 

We actively participate in industry led sustainability efforts like 
the Global Salmon Initiative (GSI) and the Norwegian Center of 
Expertise's Seafood project, Aqua Cloud. In the Aqua Cloud project, 
the goal is to predict sea lice exposure at least two weeks ahead, suggest 
best measures to reduce lice exposure, and advice on the most efficient 
treatment. We are also committed to the UN Global compact, and 
committed to uphold the UN Sustainable Development Goals (SDGs) 
and principles in how we operate. During 2018, we will incorporate 
the SDGs in a new sustainability strategy, linking our vision to targets 
and actions. To learn more about how we work with sustainability, 
please read the sustainability report.

In addition to our attention to sustainable food production, our 
majority owner's attention to sustainability in a wider perspective 
drives us beyond general market expectations in this area. Through 
Grieg Foundation's 25% ownership of the Grieg Group, profit from 
our company is allocated to philanthropic projects all over the world. 
In 2017, the Grieg Foundation contributed with NOK 32 million to 
such projects globally, of which a significant share was contribution 
from Grieg Seafood. 

WE ACTIVELY PROMOTE SUSTAINABLE 
SALMON FARMING. IMAGE FROM GRIEG 
SEAFOOD ROGALAND. 

FOTO: HUNG NGO

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.HOW WE INTEND TO MAKE A DIFFERENCE - OUR VISION 

We are sea farmers rooted in nature - we live by and for the ocean. Our vision, rooted in nature 
– farming the ocean for a better future, reflects how we intend to matter, what we as a company 
aim to create together and why our employees are proud to be working in Grieg Seafood. 

WHAT WE EXPECT FROM OUR EMPLOYEES - OUR VALUES

In 2017, we defined Open, Ambitious and Caring as our values. While our vision sets the 
direction for the culture we want our employees to embrace, our values describe the qualities we 
believe are required to deliver results. The values describe what we expect from each other and 
what others can expect from us. We have defined the content of our values through workshop 
discussions across all Regions to further develop our engaged culture. 

OPEN 
Our definition of Open states that "we are open with each other. We share knowledge, ideas 
and learn from each other. We meet new perspectives with an open mind. We are always honest 
– also in difficult situations. Our managers have an open door, and are always open for ways 
to improve. We are open and transparent towards society. That is the only way we can earn 
their trust. We proactively share honest information about our operations with the public, the 
authorities and the media – even before they ask. We invite the community to our facilities, 
participate in the public debate and engage in dialogue with other users of the fjords". 

In line with our value, we strive to be open towards all stakeholder groups and in BC, our staff 
meet at least four times a year with Chiefs and Councils of the Mowachaht Muchalat and 
Tlowitsis First Nations, to share information about Grieg’s farms in their territories, and answer 
questions of importance to the Chiefs. 

In Rogaland, we openly contribute when students and researchers ask for our participation in 
studies regarding our operations including how we work to comply with relevant environmental 
standards. We encourage transfer of best practice between sites and active sharing of 
information.  

WE INVITE THE 
COMMUNITY TO 
OUR FACILITIES, 
PARTICIPATE IN 
PUBLIC DEBATE AND 
ENGAGE IN DIALOG 
WITH OTHER USERS 
OF THE FJORDS.

PHOTO: EILERT 
MUNCH LUND

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.CARING 
Our definition of caring says that "we do not only treat each other with respect, we care. We care 
about our people, we let them flourish and develop their talents. We foster a caring environment 
– even in difficult situations and in times of hard decisions. We care about our fish and the 
nature we use to produce healthy salmon. We constantly work to control biology and reduce our 
impact on the environment. We will pass healthy fjords and salmon on to future generations. We 
care about our communities. We recognize that the fjords belong to the general public, and we 
take their concerns seriously. We create opportunities and lasting value for society.  We are good 
neighbors."

Our employees at Trosnavåg and seawater sites in Rogaland practice the value caring when 
they regularly participate in cleaning up plastic and other debris that wash ashore close to our 
locations, not because we are the cause of the littering, but because protecting the environment 
is important to us. 

CARING: WE DO NOT ONLY 
TREAT EACH OTHER WITH 
RESPECT, WE CARE.

PHOTO: HUNGO NGO

On a wider scale, caring is reflected in our ownership structure. 
Through the Grieg Foundation a significant part of our profit 
is allocated to philanthropic projects across the world. In 2017, 
one of the main beneficiaries of Foundation support was SOS 
Children's Villages worldwide. In their 2016 annual report 
SOS Children's Villages wrote the following: "Through Grieg`s 
collaboration with SOS Children's Villages Norway, we help 
build families for children in need. We help children shaping 
their own future and we take active part in the development of 
the SOS children's communities." 

AMBITIOUS 
Our definition of Ambitious states that "every day, we are 
dedicated to do our job the best possible way. We never settle 
for the average. We walk the extra mile. We always strive to 
improve. We think big and set ambitious goals for everything 

we do. We are not afraid of making bold decisions, even if they 
are tough and out of our comfort zone. We embrace change 
and innovation. We prioritize our commitments and carry them 
out. Our ambitious goals always aim to make Grieg Seafood 
more profitable. Only then can we develop the salmon farming 
industry further".

Our digital strategy, GSF Precision Farming, represents 
ambition. Our goal is to be at the forefront in the industry in 
utilizing new technology in our operations. We aim to identify 
operational areas where automatic data acquisition from 
sensor technology, combined with artificial intelligence can 
facilitate better and more sustainable operational and strategic 
decisions, safeguard our employees and accelerate operational 
improvements. 

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Our strategy is to create stakeholder value through sustainable production of Atlantic Salmon 
at the lowest possible cost. We measure our ability to create stakeholder value through return 
on capital employed – ROCE. By improving ROCE, we provide shareholder value, safeguard 
our ability to operate sustainably, provide job opportunities for current and new employees and 
generate means to support the development of a better world. 

ROCE in our operations is the result of past performance as the cost of our fish only is reflected 
in the profit and loss statement only when the fish is harvested. Therefore, our day-to-day focus 
is on operational drivers within biology, people and product. The biological drivers include, 
fish growth, fish health and welfare, survival, as well as sustainability in a broader perspective 
(CO2 footprint and preservation of biodiversity). Our people drivers include continuous 
development of sustainable and good farming practices, ensuring a safe and healthy working 
environment, safeguarding ethical employee behavior and continuous effort to develop our 
performance culture. Our product, farmed Atlantic salmon, is the means by which we generate 
value. In order to ensure that the demand for our product continues to grow, we need to assure 
consumers and customers that our products are tasty and appealing, as well as safe and healthy. 
These are out product drivers. 

Our
stakeholders

Grieg 
Seafood 
Vision

Grieg 
Seafood 
Values

Grieg 
Seafood 
Strategy

Rooted in nature
- Farming the ocean for a better future

Open - Ambitious - Caring 

We aim to create 
stakeholder value through 
sustainable production of 
Atlantic Salmon at the 
lowest possible cost. 

FROM VISION TO STAKEHOLDER 
VALUE CREATION - GSF 2020

We are currently in the process of adjusting 
the way we track our performance and 
follow up our operations.  During 2018, 
we will further align our operational follow 
up process to strategic drivers.  We will also 
continue to build our culture, as we believe 
there is an irrefutable causality between 
culture and performance – if culture comes 
first, performance will follow. Through our 
improvement program GSF 2020, we have 
started a project to look at how different 
drivers in our operations are connected 
to performance. The program is focused 
on actions affecting key drivers in our 
operations, most importantly good farming 
practices, survival and growth. Rooted in 
nature – we farm the ocean for a better 
future and lead by a dedicated workforce we 
intend to deliver long-term value for many 
years to come. 

Investors

Employees

Suppliers

Local 
communities

Non-

governmental 

organizations

Regulators

Customers

Operational 
drivers 

Biological 
drivers

Product 
drivers

People 
drivers

Stakeholder 
value creation

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THE BOARD OF GRIEG SEAFOOD ASA

PER GRIEG JR.
CHAIR

Per Grieg jr has been actively involved in leading positions in 
Grieg Seafood ASA since the foundation in 1992, and has 
played a major role in building the Grieg Seafood Group. He has 
previously acted as Chairman and CEO, and he is presently back 
as Chairman of the Board.  

He holds a MSc degree at The Norwegian University of Science 
and Technology (NTNU), Department of Marine Technology 
and a Master in Business and Economics from INSEAD, France. 
Grieg’s work experience includes Researcher at Marintek in 
Trondheim, Ship broker at EA Gibson and Joachim Grieg & Co, 
where he also was CEO in the 90’s and now holds the position as 
Chairman. 

Per Grieg jr has been involved in establishing numerous 
companies within several sectors, and has been or is board 
member in companies like Fjord Seafood ASA, Marine Farms 
ASA, Erfjord Stamfisk AS and AON Grieg – in addition to 
several companies in The Grieg Group. Grieg also owns and 
manages his own investment company.  He is a Norwegian 
citizen and resides in Bergen, Norway.

ASBJØRN REINKIND
DEPUTY CHAIR

Asbjørn Reinkind has a a Master in Business and Economics from the Norwegian School 
of Economics and Business Administration (NHH) in Bergen and has further education 
from IMD and Insead (AMP). He has extensive experience from experience from the food 
industry and branded products including 18 years employment in Rieber & Søn ASA, CEO 
of Denja, CEO of Toro and CEO of Rieber & Søn ASA. 

Reinkind also has experience from aquaculture and fish farming including CEO of Hydro 
Seafood Group from 1997 to 2000, former chairman of Pieters Group, Seafarm Invest and 
Sjøtroll Havbruk. He has previously been a board member in the marine sector, including 
Fiskeriforskning, Domstein ASA and Pronova Biocare. 

Reinkind is presently chairman of Grilstad AS, Isbjørnis AS, deputy chairman of Biomar 
Group, board member in Scandi Standard AB and senior advisor in two private equity 
companies. He is a Norwegian citizen and resides in Bergen, Norway.

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BOARD MEMBER

Ola Braanaas was born in Hamar. He is a fish farmer and agricultural college graduate, and has 
also studied, pedagogics, aquatic ecology, and fishery at the county colleges of Oppland and 
Nordland.

Braanaas established the company Firda Settefisk in 1986, and is currently the sole owner and 
chairman of the board in the Firda Eienedom AS Group, which is a fully integrated fish farming 
company based at Byrknesøy in the county of Sogn og Fjordane. During the mid 90’s Braanaas 
was involved in establishing the company GO-Fish which was involved in fish farming at the 
Faroe Islands and in the counties of Troms, Møre og Romsdal and Sogn og Fjordane.

Braanaas has held various board positions in Vestnorsk Havbrukslag, Norway Seafarms AS 
and Wergeland Holding AS. Braanaas is a Norwegian citizen residing at Svinøyna in the Gulen 
municipality.

WENCHE KJØLÅS
BOARD MEMBER

Wenche Kjølås  has a Master in Business and Economics from the Norwegian School of 
Economics and Business Administration (NHH) in Bergen. She had been Executive Director 
of Grieg Maturitas AS since 2009. Her previous position was CFO of Grieg Logistics AS from 
2006 to 2009.

Kjølås' past experience includes CFO of Kavli Holding AS, CEO of O. Kavli AS, CFO of Kavli 
Holding AS, business manager of Hakon Group AS in Bergen and manager and management 
consultant in Deloitte. 

Kjølås has been board member of Cermaq ASA, Selvaag Bolig ASA, PGS ASA and DOF 
ASA. She was Chairman of Flytoget until 2017, and she has also been a member of the general 
assembly of Sparebankstiftelsen DNB. 

Kjølås is now member of the board of Innovasjon Norge and Chairman of Keolis Norge. She 
has been the chairman of Grieg Seafood’s audit committee since 2009. Kjølås is a Norwegian 
citizen and resides in Bergen, Norway.  

KARIN BING ORGLAND
BOARD MEMBER

Karin Bing Orgland has a Master in Business and Economics from the Norwegian School of 
Economics and Business Administration (NHH) in Bergen. She is a professional board member 
with extensive experience from the financial sector. 

Orgland has a long career as manager and board member in DNB companies, the most recent 
being Group Director of DNB Retail until the first quarter of 2013. 

Orgland is Chairman of GIEK and Entur AS and board member of Storebrand ASA, KID 
ASA, Hav Eiendom and Grieg Seafood. She is also a member of Grieg Seafood’s audit 
committee.She is a Norwegian citizen and resides in Oslo.

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.THE ORGANIZATION

CEO

ANDREAS KVAME
Chief Executive Officer

CFO

ATLE HARALD SANDTORV
Chief Financial Officer

CHRO

KATHLEEN MATHISEN
Chief Human Resources Officer

KNUT UTHEIM
Chief Operating Officer

COO

GSFSH

GSFF

GRANT CUMMING
Regional director
Grieg Seafood Shetland Ltd.

GSFBC

GSFR

ROY TORE RICHARDSEN
Regional director
Grieg Seafood Finnmark AS

MARVIN D. BOSCHMAN
Regional director
Grieg Seafood BC Ltd.

ALEXANDER KNUDSEN
Regional director
Grieg Seafood Rogaland AS

Organization

The internal management structure in Grieg Seafood ASA reflects 
the company structure. The organization is split into functional areas 
and farming. Group management consists of the CEO, CFO, COO 
and CHRO. Farming is organized as one business area under the 
responsibility of the COO. Finance and HR are separate functional 
areas in the parent company. 

A new functional area, digitalization, has recently been set up to 
facilitate implementation of the Group's digitalization strategy. With 
effect from 1 January 2018, Trond Kathenes was appointed manager 
in charge for digitalization. To strengthen the commercial, growth 
and sustainability focus of the Group, a separate functional area for 
business development has also been established. Nina Willumsen 
Grieg is manager in charge of business development. Trond and Nina 
both report to the CEO. 
.

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.GROUP MANAGEMENT

ANDREAS KVAME
CEO

ATLE HARALD SANDTORV
CFO

Andreas Kvame was appointed 
CEO in Grieg Seafood ASA in 
2015.

Atle Harald Sandtorv was 
appointed CFO in Grieg Seafood 
ASA in 2009. 

Andreas came to Grieg Seafood 
from the CEO position in 
Scanbio. He has 17 years of 

experience from Marine Harvest Group where he was a member 
of the Group management team for many years and responsible 
for sales, logistics, processing and integration.

Andreas has international experience from change management 
and improvements in the aquaculture industry from a number 
of companies, including the integration of Stolt Seafarms, 
Panfish, Fjord Seafood and Marine Harvest. His educational 
background is from agriculture and aquaculture. Andreas is a 
Norwegian citizen residing in Hjelmeland.

Prior to joining Grieg Seafood, 
he was CFO in Bennex and Tide 
ASA. During his 13 years in the 
management of Tide ASA (former HSD and Gaia), Atle Harald 
was central in a time of strong growth and structural changes, 
mergers and acquisitions that formed what today is one of 
Norway’s leading transport companies. 

He has a Master in Business and Economics from the Norwegian 
School of Economics and Business Administration (NHH). Atle 
Harald is a Norwegian citizen residing in Bergen.

KNUT UTHEIM
COO FARMING

Knut Utheim was appointed 
COO Farming in Grieg Seafood 
ASA in 2014. 

He has been working in the 
salmon farming industry since 
1990, first in Stolt Sea farm 
(1990-2005) and later in Marine 
Harvest (2005-2014). 

Prior to joining Grieg Seafood, Knut was regional director 
in Marine Harvest Norway; Region Mid. He has a degree in 
aquaculture from the regional college in Sogn and Fjordande. 
Knut is a Norwegian citizen residing in Bergen.  

KATHLEEN O. MATHISEN
CHRO

Kathleen O. Mathisen was 
appointed CHRO in Grieg 
Seafood ASA in 2016. 

She has extensive experience from 
the international offshore oil and 
gas industry. She has worked in 
HR for more than 18 years.

Kathleen's core competencies include organizational 
development and transformation processes, and she has several 
years of experience with business driven HR activities with focus 
on the human capital in the organization. 

She has a number of management courses from the University of 
Bergen, the Norwegian School of Economics and the Norwegian 
School of Business and Administration. She is presently in the 
process of completing an MBA in Leadership and Sustainability 
at the University of Cumbria in UK. In December 2013, she 
was awarded “Sunnivaprisen”, named after Bergen’s patron St. 
Sunniva. Kathleen is a Norwegian citizen residing in Bergen.

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PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.REGIONAL MANAGEMENT

ROY-TORE RIKARDSEN
REGIONAL MANAGER 
FINNMARK

Roy-Tore Rikardsen took over 
as Managing Director for Grieg 
Seafood Finnmark AS in July 2014.

He has 15 years’ experience from 

the fishfarming industry.  The last 6 years he has worked as 
‘production manager seawater’ at Lerøy Aurora AS (25,000 
tons). 

Roy-Tore Rikardsen has also worked in the aquaculture 
technology industry (Akva Group), and the feed and nutrition 
industry (Ewos).  He holds an ‘environment and marine 
technology engineering’ degree from the University of Tromsø.

Roy-Tore Rikardsen is a Norwegian citizen and resides in 
Tromsø, Norway.

ALEXANDER KNUDSEN
REGIONAL MANAGER 
ROGALAND

Alexander Knudsen has been 
working in Grieg Seafood since 
1997.

Fisk AS which was bought by Grieg Seafood in 1997.

He previously worked in Øvrebø 

Alexander Knudsen had a degree in economy and administration 
from Molde Universtiy College.

He is a Norwegian citizen and resides in Rennesøy.

MARVIN D. “ROCKY” 
BOSCHMAN
REGIONAL MANAGER  BC

Rocky Boschman has been 
Managing Director of Grieg Seafood 
BC Ltd. since September 16, 2016.

He started as Saltwater Production 

GRANT CUMMING
REGIONAL MANAGER  
SHETLAND

Grant Cumming takes over as 
Managing Director of Grieg Seafood 
Shetland Ltd. on the 1st of December 
2016.

Director at the beginning of 2016 until filling the position 
vacated by Stewart Hawthorn.

He has worked in the company since 2005, where he has served 
as Production Manager.

Rocky Boschman has been working in BC’s salmon farming 
industry since 1986 and has held various management positions.

Grant has seventeen years of experience in salmon farming and 
five lecturing in aquaculture.

He holds a Bachelor of Science degree in Marine Biology 
from the University of Victoria and a Master in Business 
Administration from Royal Roads University.

Grant holds a degree in Zoology from the University of 
Aberdeen and a Master in Mariculture Science from the NAFC 
Marine Centre.

Rocky Boschman is a Canadian citizen living in BC, Canada.

He is a British citizen and lives in the Shetland Islands, UK.

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The beginning of the adventure. Establishment 
of Grieg Norwegian Salmon (trading company) and 

1992

Bioinvest (salmon farm investor)

Scandic Marine Ltd acquired - GSF BC 
established in British Columbia

2001

Merger with Volden Group in 
Finnmark. 

2006

2007

Grieg Seafood listed on the Oslo Stock Exchange in 
June 2007. Acquisition of Hjaltland Ltd in Shetland 
and Target Marine Ltd in Sechelt BC. Further 
acquisitions completed on Shetland in 2008-2011.

2010

Establishment of Ocean Quality AS in cooperation with 

Bremnes Seashore (GSF ownership 60%, Bremnes 40%). 
Ocean Quality Ltd established on Shetland in 2013, Ocean 

Quality North America, in Vancouver in 2014 and Ocean Quality 

USA agent office  in 2017. 

2011

First step of smolt 

self-sufficiency strategy 

completed with RAS I in 
Rogaland. Significant expansion 
of smolt facilities completed or in 
progress in all regions between 2011 

and 2018.  

2014

Allocated 4 green licenses in Finnmark. An 
important step for our ambition to sustainably 

farm the ocean. 

2017

 Grieg Seafood 25 years - New vision and values

The oceans must play a bigger role in providing food in the future, 

and we intend to take a leading role in utilizing new technology 
and data to make better and more sustainable decisions.  We believe 
that a healthy environment, good fish welfare and profitability, are not 
opposites, but must go hand in hand. It is this interaction that underlies our 

vision Rooted in nature - farming the ocean for a better future.

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25 years - Our adventure has just begun!

PART 1Letter from the CEOKey FiguresVision and ValuesThe BoardThe OrganizationOur history5810141619P.PART 2 – VALUE CREATION

PHOTO: TOMMY ELLINGSEN

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.PART 2 - SUMMARY

LARGE SMOLT INITIATIVE FOR SUSTAINABLE GROWTH

We work hard to keep the sea lice levels low, and an important initiative in this regard is large 
smolt. From 2017 to 2021, the average size of our smolt put to sea in Rogaland is expected to 
increase from less than 150 gram to almost 600 gram. The increase in size is a result of expansion 
of an existing smolt facility combined with the building of a new smolt facility in Tytlandsvik 
in cooperation with Bremnes Seashore and Vest Havbruk. A larger smolt is more robust 
and takes shorter time to grow to harvest size, which combined with use of wrasse and other 
non-medicinal lice treatment methods will have a positive effect on the environment. 

REVENUE AND COST DRIVERS – WHAT AFFECTS OUR RESULTS

We apply EBIT per kg as a measure of regional profitability. EBIT is driven by key factors 
affecting revenuees and costs. Our main product, whole gutted salmon, is a commodity. As a 
result, the prices we achieve for our products will reflect the commodity market price (reference 
price). How much we are able to harvest depends on the number of smolt put to sea 1-2 years 
prior to harvest, fish growth rates, survival and our harvest plan. We track our performance 
both internally and externally through the cost of harvested salmon per kg. More importantly 
however is our tracking of the cost drivers influencing the cost of salmon to be harvested in the 
future. Our cost drivers represents the operational factors we can influence in order to improve 
the future cost of our salmon. These drivers include smolt stocking, survival and growth. Our 
improvement program GSF 2020 (discussed in Part one of this report) focuses on driver-based 
improvement activities. 

THE GRIEG SEAFOOD SHARE IN 2017

The Grieg Seafood share price declined 12% in 2017. The closing price in 2017 was NOK 72.25 
compared to NOK 81.70 at year-end 2016. Our share price is sensitive to the development in 
salmon prices. The Fish Pool salmon price in NOK at year-end 2017 was 32% lower than at 
year-end 2016, and this is the main contributing factor to the observed share price decline. Our 
dividend yield was 5.5% in 2017.

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.OPERATIONAL VALUE CREATION

We farm salmon in four regions, Rogaland and Finnmark in 
Norway, on Shetland, UK and in British Columbia, Canada. Our 
operations span the entire value chain from egg to harvest and 
most of our fish is processed and packed at our own facilities. 
We also have our own brood activity in Erfjord in Rogaland. Our 
farming regions sells their fish to our sales company Ocean 
Quality, while Ocean Quality resells the salmon to third parties. 

In this part of the report we discuss operational achievements 
by region in 2017 as well as our thoughts about the road 
ahead. Towards the end we provide own and third party market 
reflections for 2017 and 2018, under our discussion of Ocean 
Quality. 

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.GRIEG SEAFOOD ROGALAND

Grieg Seafood Rogaland AS (GSFR) farms salmon in Rogaland on the west coast of Norway. 
In this region, we have 191 seawater license equivalents and two licenses for land based 
production of smolt. We also have our own brood activity in Erfjord. All salmon harvested in 
the region, is processed and packed at our own facilities.

Production capacity is estimated to be approximately 25 000 tons gutted weight. The company 
is Global GAP certified. We have no ASC certified sites in this region. Our operations are 
located in six municipalities in Rogaland and they contribute significantly to local value 
creation. Read more about our community commitments in the Sustainability Report.

VOLUME 

Volume harvested in 2017 was 18 111 tons GWT, which was a slight decrease from 
18 367 tons GWT in 2016. The reduction was a result of accelerated harvesting to 
implement a common zone structure in the industry and our decision to transfer 1 
000 tons GWT to 2018. 

18 111 TONS GWT

19 SEA WATER 
LICENSES

2 SMOLT SITES

1 BROODSTOCK 
SITE

Production in sea was strong in the first half of 2017, but seawater 
temperatures below normal and biological challenges negatively 
affected growth in the second half of the year.

COSTS 

The 2017 cost per kg salmon harvested was higher than in 
2016. The increase was due to cost increases in general, PD 
related issues and accelerated harvest of some sites in order to 
implement the common industry zone structure. 

EBIT (BEFORE FAIR VALUE ADJUSTMENT TO 
BIOLOGICAL ASSETS) 

EBIT amounted to NOK 393.1 million in 2017, a decrease from 
NOK 466.8 million in 2016. EBIT per kg harvested amounted 
to NOK 21.7 in 2017 compared to NOK 25.4 in 2016. In the 
first half of 2017, good growth, favorable prices and low costs 
contributed to high EBIT per kg. In the second half of the year, 
low harvest volume and PD negatively affected profitability. 

GOING FORWARD

At year-end the biological situation was stable. Low harvest 
volume will affect cost per kg harvested in the first quarter of 
2018. Our sites in this region are located in a yellow area in the 
recently introduced "traffic-light" system. Sites in a yellow area 
cannot increase production and an escalation to red light could 

1. We have 18 license numbers, but one of our licenses is double which in 
practice means we have 19 licenses. In addition, we have a long-term rental agreement with Rogaland County for one 
license, which means that we in total make use of 20 license equivalents.

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reduce our production capacity going forward. The yellow light is a consequence of high sea lice 
density and a fear that this could negatively affect wild salmonid stocks. 

In 2017, we completed the expansion of our smolt capacity from 500 to 1 300 tons. The 
expansion is in line with our strategy to increase the size of smolt put to sea in this region in an 
effort to mitigate the sea lice challenge. Further to this strategy, we are in the process of building 
a new smolt facility in Tytlandsvik in cooperation with Bremnes Seashore and Vest Havbruk. 
From this site, smolt approaching 500 gram will be available for stocking by 2019. 

To improve our feeding efficiency, we have started to utilize sensor technology. Implementation 
of the Group's digitalization strategy is expected to contribute to further operational 
improvement in 2018.

GSF Rogaland

Harvest in tons GWT* 

2017

18 111

2016

18 367

2015

15 236

2014

12 778

2013

15 088

Sales revenue (NOK x 1 000) 

1 150 166

1 140 398

661 204

572 550

640 600

EBIT ** (NOK x 1 000)

EBIT / kg GWT **

393 064

466 756

83 516

77 835

144 794

21.7

25.4

5.5

6.1

9.6

EBIT ROGALAND

500
450
400
350
300
250
200
150
100
50
0
-50

K
O
N
0
0
0
1

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

* GWT = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets

Rogaland

OUR OPERATIONS 
ARE LOCATED IN 
SIX MUNICIPALITIES 
IN ROGALAND AND 
THEY CONTRIBUTE 
SIGNIFICANTLY TO 
LOCAL VALUE CREATION 

FOTO: EILERT MUNCH 
LUND 

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GRIEG SEAFOOD FINNMARK

Grieg Seafood Finnmark AS (GSFF) farms salmon in Finnmark, the northernmost county in 
Norway. In this region, we have 27 seawater licenses and one license for land based production 
of smolt. Four of the sea water licenses are "green licenses" and subject to stricter environmental 
measures. Salmon harvested in the region is in general processed and packed at our local 
facilities.

Production capacity is estimated to be approximately 38 000 tons gutted weight. The company 
is Global GAP certified. Two sites were ASC certified in this region in 2017. Our operations 
are located in five municipalities in Finnmark and they contribute significantly to local value 

creation. Read more about our community commitments 
in the Sustainability Report.

22 831 TONS GWT

27 SEA WATER 
LICENSES

1 SMOLT SITE

VOLUME

Volume harvested in 2017 was 22 831 tons GWT, an 
increase of 3% from 22 104 tons GWT in 2016. A decision 
to transfer 1 500 tons GWT to 2018 negatively affected 
volume harvested in 2017.  

Production in sea was stable, but seawater temperatures 
below normal negatively affected growth throughout the 
year. In line with our growth strategy, we put 10 million 
smolt to sea in this region in 2017, which is the highest 
number we have ever stocked. 

COSTS

The cost per kg salmon harvested was higher than in 
2016. The increase was due to low sea water temperatures 
resulting in lower growth and thus higher cost per kg 
harvested, combined with cost increases in general. 
Extended fallowing of Øksfjorden has contributed to 
reduced sea lice treatment and thus reduced health cost for 
salmon from this area. 

EBIT (BEFORE FAIR VALUE ADJUSTMENT TO 
BIOLOGICAL ASSETS) 

EBIT amounted to NOK 351.9 million in 2017, a decrease 
from NOK 447.1 million in 2016. EBIT per kg harvested 
amounted to NOK 15.4 and NOK 20.2 in 2017 and 2016 
respectively. Harvest volumes were highly skewed towards 
the second half of the year with 75% of the full year harvest 
taking place in the last six months of the year. This had a 
significant negative effect on profitability, as prices during 
this period were more than 20% lower than in the first half 
of the year. Increased costs contributed to further profit 
reduction compared to 2016.   

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P. 
GOING FORWARD

At year-end, the biological situation was stable. Low harvest volume will negatively affect cost 
per kg harvested in the first quarter of 2018. Our sites in Finnmark are located in a green area in 
the recently introduced "traffic-light" system. We have as a result been able to acquire additional 
production capacity in this region. The increase amounts to 470 tons MAB. With two new 
sites approved in 2017 and a record high number of smolt stocked, we are ready for growth in 
Finnmark. The new sites will help us optimize production and reduce costs going forward. 

Further to our growth strategy, we are investing substantially in smolt capacity. These 
investments will enable increased smolt production in both number and average weight. The 
expansion at our Adamselv facility will increase smolt capacity from 800 to 1 600 tons. The first 
smolt from the expanded facility will be put to sea in the first half of 2019.  

EBIT FINNMARK

To improve our feeding efficiency, we have started to utilize sensor technology. Implementation 
of the Group's digitalization strategy is expected to contribute to further operational 
improvement in 2018. 

500

400

300

200

100

0

-100

-200

K
O
N
0
0
0
1

GSF Finnmark

Harvest in tons GWT* 

2017

22 831

2016

22 104

Sales revenue (NOK x 1 000) 

1 265 156

1 244 255

EBIT ** (NOK x 1 000)

351 935

447 131

EBIT / kg GWT **

15.4

20.2

2015

19 481

797 872

124 004

6.4

2014

26 470

975 291

205 934

7.8

2013

23 076

870 100

216 778

9.4

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

* GWT = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets

Finnmark

FOUR OF THE SEA 
WATER LICENSES 
ARE "GREEN 
LICENSES" AND 
SUBJECT TO STRICTER 
ENVIRONMENTAL 
MEASURES. 

PHOTO: EILERT 
MUNCH LUND

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P. 
GRIEG SEAFOOD BC

Grieg Seafood BC Ltd (GSFBC) farms salmon on the east and west side of Vancouver Island 
as well as along the Sunshine Coast north of Vancouver. In this region, we have 20 seawater 
licenses and one license for land based production of smolt. We do not process our own salmon 
in this region. 

Production capacity is estimated to be approximately 20 000 tons gutted weight. The company 
was the first salmon farming company in North America to be BAP Certified. The company 
has also been audited and approved by the Aquarium of the Pacific’s "Seafood for the Future" 
program. We have no ASC certified sites in this region.  Some of our sites are located in First 
Nation Territories and our relationship with the Mowachaht Muchalat and Tlowitsis First 
Nations is good. Read more about our community commitments in the Sustainability Report.

VOLUME

9 600 TONS GWT

20 SEA WATER 
LICENSES

Volume harvested in 2017 was 9 600 tons GWT, a decrease of 10% from 10 715 tons GWT in 
2016. The reduction was a result of limited biomass available for harvest due to low 2015 and 
2016 smolt stocking, combined with losses during an algal bloom in 2016.

Production in sea was good throughout the year. Our effort to reduce biological risk in the 
region is starting to pay off. New monitoring equipment has contributed to improved feeding 
efficiency and thus better growth, and the introduction of plastic rings as opposed to steel pens 
has contributed to further improvement. 

1 SMOLT SITE

COSTS

The cost per kg salmon harvested 
was reduced compared to 2016 as 
a result of good seawater growth. 
Losses during lice treatment had a 
negative effect on cost in the fourth 
quarter. 

EBIT (BEFORE FAIR VALUE 
ADJUSTMENT TO BIOLOGICAL 
ASSETS)

EBIT amounted to NOK 120.2 million in 2017, 
an increase from NOK 80.5 million in 2016. EBIT 
per kg harvested amounted to NOK 12.5 in 2017 
compared to NOK 7.5 in 2016. Lower costs and higher 
achieved prices contributed to improved profitability 
compared to 2016.  

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.GOING FORWARD

At year-end the biological situation was good. There has been a significant build up of biomass 
during 2017 and we will therefore harvest significantly more salmon from this region in 2018. 
We expect the cost of harvested salmon to be further reduced going forward due to the actions 
taken to mitigate biological risk and optimize production. 

The introduction of sensor technology to monitor algal blooms enables us to determine at an 
early stage the type of algae and the appropriate feeding response. This has resulted in increased 
number of feeding days and thereby improved growth. We have also installed upwelling- and 
oxygen systems at our sites in BC to improve water quality and growth conditions. 

GSF BC

Harvest in tons GWT* 

Sales revenue (NOK x 1 000) 

EBIT ** (NOK x 1 000)

EBIT / kg GWT **

2017

9 600

580 293

120 162

     12.5

2016

10 715

2015

14 311

611 223

573 900

80 526

13 310

7.5

0.9

2014

6 257

277 757

-47 810

-7.6

2013

6 739

330 700

- 7 777

-1.2

EBIT BRITISH COLUMBIA

140
120
100
80
60
40
20
0
-20
-40
-60
-80

K
O
N
0
0
0
1

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

* GWT = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets

BC, Canada

THERE HAS BEEN A 
SIGNIFICANT BUILD UP 
OF BIOMASS DURING 
2017 AND WE WILL 
THEREFORE HARVEST 
SIGNIFICANTLY MORE 
SALMON FROM THIS 
REGION IN 2018. 

PHOTO: OLE-JØRN 
BORUM

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P. 
PART 2

Operational value creation
GSF Rogaland AS
GSF Finnmark AS
GSF BC LTD
GSF Shetland Ltd
Ocean Quality
The Grieg Seafood share
Analytical information 
APM

P.

22
23
25
27
29
31
33
38
43

GRIEG SEAFOOD SHETLAND

Grieg Seafood Shetland Ltd (GSFS) farms salmon on Shetland and the Isle of Skye. We are the 
largest salmon producer on Shetland. In this region, we have 17 active seawater sites (13 on 
Shetland and 4 on the Isle of Skye) and one freshwater site. Our operations span the entire value 
chain, fresh water, seawater and harvesting. 

Production capacity is estimated to be approximately 17 000 tons gutted weight. The company 
is Global GAP certified. We have no ASC certified sites in this region.  Our operations 
contribute significantly to local value creation. Read more about our community commitments 
in the Sustainability Report.

12 056 TONS GWT

17 ACTIVE 
SEAWATER SITES  

1 SMOLT SITE

VOLUME

Volume harvested in 2017 was 12 056 tons GWT, a decrease of 11% from 13 541 tons GWT 
in 2016. The decrease was a result of biological challenges due to sea lice and algal blooms. 
We continue to remove our worst performing sites from the operational footprint, which 
contributes to volume reduction compared to prior years.  

Sea lice and algal blooms affect production in this region and the first half of 2017 was 
challenging. Towards the end of the third quarter, the biological situation stabilized and it 
remained stable throughout the fourth quarter and into 2018. Sealice levels are currently at 
historically low levels.  

COSTS 

The cost per kg salmon harvested increased compared to 
2016 due to the sea lice and algal challenges. 

EBIT (BEFORE FAIR VALUE ADJUSTMENT 
TO BIOLOGICAL ASSETS) 

EBIT amounted to NOK 68.7 million in 2017, a 
reduction from NOK 176.6 million in 2016. EBIT per 
kg harvested amounted to NOK 5.7 in 2017 compared 
to NOK 13.0 in 2016. Higher costs and lower achieved 
prices due to reduced quality and low average harvest 
weight were the main drivers for the reduction in 
profitability compared to 2016.  

GOING FORWARD

At year-end the biological situation was stable with 
historically low levels of sea lice present. We work closely 
with other farmers in the region to mitigate biological 
challenges and our efforts include joint area fallowing for 
a period of 3 months and good operational procedures. 
Overall, we expect the cost of harvested salmon to fall in 
2018, but in the first quarter costs will be high due to low 
harvest volume. 

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To mitigate the biological challenges, all future inputs of salmon will be stocked with aeration 
systems, and cleanerfish to reduce the risk of algal and sea lice issues.  Where on-site currents 
permit, all salmon will also be protected with sea lice skirts.  

Algal monitoring is carried out in cooperation with our GSF BC operations with daily samples 
being analyzed from all sites using advanced image analysis techniques to correctly identify the 
species, prevalence and depth distribution of any algae present.  This information is expected to 
reduce the numbers of lost feeding days and increase seawater growth.  We have also instigated 
bi-weekly PCR gill sampling to identify gill pathogens at a pre-clinical stage.  This information 
should enable more rapid intervention to control the development of complex gill disease.  In 
addition, we now also have access to freshwater treatment capacity to improve both gill health 
and sea lice control.

GSF Shetland

Harvest in tons GWT* 

2017

12 056

2016

13 541

2015

16 370

2014

19 231

2013

13 158

Sales revenue (NOK x 1 000) 

745 934

859 815

773 526

852 455

567 400

EBIT ** (NOK x 1 000)

EBIT / kg GWT **

68 657

       5.7

176 558

-164 833

81 087

27 279

13.0

-10.1

4.2

2.1

EBIT SHETLAND

200

150

100

50

0

-50

-100

-150

-200

K
O
N
0
0
0
1

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

* GWT = Gutted Weight
** EBIT = EBIT before fair value adjustment of biological assets

Shetland

GRIEG SEAFOOD 
IS THE LARGEST 
SALMON PRODUCER 
ON SHETLAND

PHOTO: HUNG NGO

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P. 
Ocean Quality AS is the sales organization of Grieg Seafood (60%) and Bremnes Seashore (40%). 
The company was established in 2010 and is headquartered in Bergen. The Ocean Quality 
Group also has sales companies on Shetland and in North America for the purpose of selling the 
salmon harvested by Grieg Seafood in these regions.

Ocean Quality is committed to high standards in their service offering focusing on the following 
aspects:  

•  Reliable year round supply according to customer requirements.
• 
Fresh and healthy products.
•  Traceability and food safety.
•  Quality control and sustainability of raw materials.
Fish health and welfare and environmental care.
• 

VOLUME AND PRICE DEVELOPMENT

2017

Ocean Quality´s primary target is to be a preferred and reliable supplier for its global customer 
base. In 2017, the Grieg Seafood Group (including Ocean Quality) had a turnover of 
NOK 7 017 million, compared to NOK 6 545 million in 2016, corresponding to an increase 
of NOK 472 million (7.2%). Sales to different markets were distributed as indicated in the 
graph below. Continental Europe is by far the most important market, representing 51% of the 
turnover in 2017, down from 54% in 2016. The share of total sales directed to the Asian market 
was 18%, both in 2016 and 2017. Due to increased sales from Norway into the UK market, 
Canada 3%
this markets share of the total increased from 12% in 2016 to 16% in 2017. The value of sales 
to the United States was reduced by 3 percentage points to 9% of the total in 2017, following a 
EU 51%
significant reduction in harvest volumes in BC.

Russia/Eastern EU 4%

Asia 18%

2017

Supply shortage in the beginning of 2017, made it difficult to maintain stable consumption. 
Production and supply increased marginally in the second quarter, while the supply growth 
in the second half of the year was significant. From being in a position where orders had to be 
declined, the supply growth made it possible grow and develop the customer base. Volume sold 
in 2017 was 105 500 tons. This is equivalent to an increase of 7.3% from 98 323 tonses in 2016.

UK 16%

USA 9%

2017

2016

Russia/Eastern EU 4%

EU 51%

2017

Asia 18%

Canada 3%

USA 9%

UK 16%

Russia/Eastern EU 3%

Asia 18%

EU 54%

2016

Canada 1%

USA 12%

UK 12%

2016

2015

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Russia/Eastern EU 6%

Russia/Eastern EU 3%

Asia 15%

Canada 3%

USA 14%

UK 7%

Russia/Eastern EU 6%

Asia 11%

Canada 0%

USA 8%

UK 19%

EU 54%

2016

USA 12%

EU 55%

2015

2015

2014

EU 55%

2015

EU 56%

2014

Asia 18%

Canada 1%

UK 12%

Russia/Eastern EU 6%

Asia 15%

Canada 3%

USA 14%

UK 7%

Russia/Eastern EU 6%

Asia 11%

Canada 0%

USA 8%

UK 19%

2014

EU 56%

2014

PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P. 
GOING FORWARD

The Group expects the market to be strong in 2018. The year has started well, with significantly 
higher market activity than in prior months. This is especially evident for promotions and sales. 
As a result of high salmon prices and high contracts shares during the last couple of years, the 
retail sector encountered difficulties in maintaining their promotional activities. The market 
now seems to have returned to normal levels, both in terms of prices and frozen stock, and 
retailers as well as other customers are again eager to develop closer cooperation with the salmon 
producers. Expected sales volume in 2018 for the Grieg Seafood Group (including Ocean 
Quality) is 127 700 tonses, corresponding to an increase of 21% compared to 2017. The increase 
is mainly due to a higher harvest volumes in Grieg Seafood.

The Group has hedged approximately 22% of the 2018 volumes by entering into fixed price 
contracts. As of mid-March 2018, the average contract price is higher than the forward prices 
from FishPool. The market clearly trends towards increased demand for of certified and 
specialty products. Grieg Seafood works on a continuous basis to adapt to changing customer 
preferences. Our efforts include activities to increase the number of ASC certified sites. We are 
also committed to increase our sales of high quality products like Skuna Bay from Grieg Seafood 
BC and Kvitsøy Salmon from Grieg Seafood Rogaland.  The Skuna Bay fish is currently sold to 
gourmet restaurants in major American cities. The majority of the Kvitsøy fish is currently sold 
to the Italian and Spanish market. 

THE GLOBAL SALMON MARKETS

The following sections describe the general market trends in 2017, as well as expectations for 
2018. The volume figures have been prepared by Kontali Analyse.

Volume and price development in 2017

The global production of salmon increased in 2017. Global sales of farmed Atlantic salmon 
are estimated to 2 033 000 GWT, which is an increase of around 2% from 2016. In Europe the 
supply increase was 6-7% in the fourth quarter of 2017, compared to the same quarter in 2016. 
For the full year, the European market experienced a supply decrease of 2.5%.  

Spot prices for salmon were significantly higher in the first half of 2017 compared to the first 
half of 2016. The trend shifted in the second half of the year and the average price in 2017 ended 
below 2016. With higher contract prices than spot prices throughout the year, the situation 
was different than in 2016. This contributed to a different supply /demand dynamic with the 
outcome being declining prices. The reduction was stronger than anticipated due to higher 
contract shares, resulting in a more volatile spot market for salmon than i previous years.  

Market expectations to 2018

Global supply of salmon is expected to increase by 5% in 2018. The price level is expected to 
fall slightly below 2017 for the full year, taken into account the very high price level during the 
first half of 2017. Currently, contracts are in high demand, while spot prices indicate that the 
demand is stronger than previously anticipated. Prices are expected to remain favorable for the 
rest of the year. The expected supply growth for the year has been reduced and a major part of 
the growth has presumably already been realized during the first quarter.

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.THE GRIEG SEAFOOD SHARE

We aim to deliver attractive return to our shareholders and 
contribute to the correct pricing of our share. In our effort to 
achieve this, we share honest information about our operations 
– also in difficult situations. 

OUR SHARE AND SHAREHOLDERS

Grieg Seafood was listed on the Oslo stock exchange on 21 June 2007 under the ticker GSF. 
We have only one class of shares, and all shares carry the same rights. At 31 December 2017 
the Company had 110 412 000 shares outstanding at a nominal value of NOK 4.0 per share 
(excluding own shares).

As of 31 December 2017, we had 4 433 shareholders, with our 13 largest investors holding 
70.86% of our shares. Domestic based shareholders own the majority of the Company and Per 
Grieg jr and his immediate family controlled 52.8% of the shares outstanding as of 31 December 
2017. In June 2011, we purchased 1 250 000 of our own shares at a price of NOK 14.40 per 
share. These shares are still in our possession. For more information about our shareholders, 

please refer to Note 17 to the financial statements. 

RELATIVE SHARE DEVELOPMENT 2017

THE RETURN ON OUR SHARE

Grieg Seafood compared with OBX (stock index) and OBSFX 
(seafood index) in NOK

100

80

60

40

20

0

K
O
N

30.08.17
16.02.17
22.03.17
06.03.17
07.06.17
13.01.17
31.01.17
07.04.17
28.04.17
18.05.17
23.06.17
11.07.17
27.07.17
14.08.17
15.09.17
03.10.17
19.10.17
06.11.17
22.11.17
08.12.17
28.12.17
16.01.18

Period

GSF

Rel OBSFX

Rel OBX

The OBX og OBSFX lines starts at NOK 79,20 (opening price for 
the Grieg Seafood share in 2017) and is adjusted according to 
relative movement throughout the year.

Our ambition is to create shareholder value and deliver 
competitive return relative to comparable investment 
alternatives. The return on our share is a combination of 
dividend and share price appreciation.

The Grieg Seafood share price declined 12% in 2017. The 
closing price at 31 December 2017 was NOK 72.25 compared 
to NOK 81.70 at year-end 2016. Our share price is sensitive to 
the development in salmon prices. The Fish Pool salmon price 
in NOK at year-end 2017 was 32% lower than at year-end 2016, 
and this is the main contributing factor to the observed share 
price decline. Our dividend yield was 5.5% in 2017. Adjusted 
for dividend of NOK 4.00 per share, the total return on our 
share was negative 7%. 

The Oslo Stock Exchange Seafood Index (OBSFX) consists of 
the most liquid seafood companies worldwide. The OBSFX 
declined by 5% in 2017 driven by the reduction in salmon 
prices. Measured against the OBSFX and OBX, our share 
underperformed in 2017. We believe this is due to high cost 
of harvested fish in several of our regions (please see the graph 
Relative shareprice development 2017). 

Over the last 5 years, the Grieg Seafood share is among the 
shares on the Oslo Stock Exchange that have yielded the 
highest return. During this period, our share appreciated 483% 
compared to 72% for the OBX. 

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.The OBSFX was established late November 2013, and from inception to year-end 2017, 
the increase has been 239%. The corresponding increase for the Grieg Seafood share and the 
OBX has been 223% and 49% respectively. Our share has overall tracked the OBSFX, with a 
significantly stronger performance than the index in the last 2 years. The rebound of our share, 
coincides with Marine Harvest's realization of forward contracts and immediate sale of shares in 
2016 (please refer to the liquidity section below for further information).  

The graph below shows the relative performance of the GSF share compared to OBX and 
OBSFX as well as daily traded volume from 2 December 2013 to year-end 2017. 

THE LIQUIDITY OF OUR SHARE

In 2016 and 2017, the liquidity of our share increased significantly compared to prior years. The 
increase was a result of Marine Harvest ASA realizing a set of old forward contracts to acquire 
close to 29 million shares in Grieg Seafood ASA and immediately selling them in the market in 
May 2016. These transactions, in addition to being huge volume transactions in themselves, 
contributed to an increased number of shares available for active trading, and thus improved 
liquidity. In 2017, the bid/ask spread of our share declined compared to 2016, contributing to 
increased number of transactions. Despite the narrowing of the bid/ask spread, total volume 
traded declined from the year before, as 2016 was significantly affected by Marine Harvest's 
transactions. Excluding these transactions, traded volume was higher in 2017 than in 2016, 

RELATIVE SHARE PRICE DEVELOPMENT AND 
DAILY VOLUME TRADED LAST 4 YEARS

Grieg Seafood compared with OBX (stock index) and OBSFX (seafood index ) in NOK

90

80

70

60

50

40

30

20

10

0

K
O
N
e
c
i
r
P

5M

4.4M

3.9M

3.3M

2.8M

2.2M

1.7M

1.1M

0.6M

0

e
m
u
o
V

l

28.10.16
23.05.14
19.12.13
07.03.14
06.08.14
16.10.14
02.01.15
16.03.15
03.06.15
13.08.15
23.10.15
08.01.16
21.03.16
08.06.16
18.08.16
10.01.17
22.03.17
12.06.17
22.08.17
01.11.17
16.01.18

Volume

GSF

Rel OBSFX

Rel OBX

The OBX og OBSFX lines starts at NOK 22,40 (opening price for 
the Grieg Seafood share on 2 desember 2013) and is adjusted 
according to relative movement throughout the year.

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P. 
ending at 143.1 million shares. The median number of shares traded per day in 2017 was above 
586 000, compared to slightly above 171 000 shares in 2016. Our share was traded on 251 out of 
251 possible trading days in 2017, and the average turnover per trading day was approximately 
570 000 shares. We did not trade in our own shares in 2017. 

DIVIDEND AND DIVIDEND POLICY

Over time, Grieg Seafood should provide its shareholders with a competitive return on invested 
capital. Dividend is one of the factors driving return. 

Our dividend policy states that dividend payout will depend on future earnings, the Group's 
financial situation and cash flow. The Board is of the opinion that dividend payout should 
follow the development in the Group's results, but balanced against the desire to maintain a 
healthy equity and adequate financial resources to facilitate future growth and investment, as 
well as the desire to minimize the cost of capital. The Board believes that dividend over time 
should average 25%-35% of the Group's net profit after tax, adjusted for the impact of biomass 
adjustments. At the same time, the Group's net interest-bearing debt per kg harvested salmon 
should remain between NOK 15 and NOK 20. Dividends declared and paid may be adjusted to 
satisfy the targeted debt level. 

In 2017, NOK 4.0 per share was paid out as dividends, which corresponds to a pay out ratio of 
56%. The high payout ratio reflects a sound financial position and the opening provided in the 
dividend policy to increase dividend when the debt target is met. The 2018 Annual General 
Meeting will decide dividend for the fiscal year 2017. 

The below graph shows the dividend and earnings after tax, but before fair value per share in the 
period 2013 to 2017.

DIVIDEND AND EARNINGS (BEFORE FAIR VALUE) PER SHARE 2013-2017

8

7

6

5

4

3

2

1

0

-1

0
0
4

,

9
8
5

,

0
5
1

,

8
1
7

,

0
5
0

,

7
2
0
-

,

6
3
0

,

0

9
0
0 2

,

2017

2016

2015

2014

2013

Dividend

Earnings (before fair value)

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2017

2016

2015

2014

2013

Number of shares at year-end (incl own shares)

111 662 000

111 662 000

111 662 000

111 662 000

111 662 000

Number of shares traded

Number of shareholders 

Average total value of shares traded per day (NOK million)

Average number of shares traded per day

Median number of shares traded per day

Market value Equity

143 109 533

167 281 077

8 251 926

13 108 181

4 433

 40.68 

570 158

586 472

4 390

 31.64 

661 190

171 696

1 156

 0.94 

33 008

16 727

1 028

 1.34 

52 433

32 100

na

1 044

 na 

na

na

7 977 267

9 020 660

3 422 772

3 146 742

2 705 094

Share price 31.12 (NOK)

Average share price (NOK)

Lowest closing price (NOK)

Highest closing price (NOK)

Dividend per share

Earnings per share (before fair value adjustment)

Price/Earnings ratio

Price/Book ratio

Payout ratio (%)*

Dividend yield (%)

Return on Capital Employed (ROCE)

Enterprise value/EBIT before fair value (EV/EBIT)

Enterprise value/Capital Employed (EV/CE)

 72.25 

 71.49 

 58.00 

 85.10 

 4.00 

 5.89 

 12.27 

 2.38 

56 %

5.5 %

24 %

 10.24 

 2.45 

 81.70 

 52.69 

 26.70 

 84.45 

 1.50 

 7.18 

 31.00 

 28.24 

 23.10 

 33.60 

 0.50 

 -0.27 

 11.38 

 -116.18 

 2.81 

-562 %

1.8 %

33 %

 8.50 

 2.82 

 1.53 

137 %

1.6 %

1 %

 104.55 

 1.48 

 28.50 

 26.06 

 21.80 

 29.80 

 -   

 0.36 

 78.12 

 1.40 

0 %

0.0 %

10 %

 13.74 

 1.40 

 24.50 

 na 

 na 

 na 

 -   

 2.09 

 11.72 

 1.36 

0 %

0.0 %

11 %

 11.92 

 1.36 

* Payout ratio is calculated as the dividend paid out in a year divided by the earnings before fair value in the prior accounting year. 

For more information about key figures and trading statistics, 
please visit the Oslo Stock Exchange's web page 
www.oslobors.no – Grieg Seafood (GSF).   

RETURN ON CAPITAL EMPLOYED

Return on capital employed (ROCE) measures if capital 
invested in our company yields competitive return. Our long-
term ambition for ROCE is to achieve a result that is at or 
above industry average. Our ROCE target is a reflection of our 
ambition to be at or below industry average on cost by 2020. 
Operationally we break down our ROCE target to the relevant 
performance drivers and track our performance accordingly. For 
more information about how we calculate ROCE and track our 
performance, please refer to the analytical section of this report. 
Looking back on recent history, 2015 was a challenging year 
for us due to biological challenges and impairment losses when 
shutting down the smokehouse and filleting line on Shetland. 
These factors explains the low ROCE achieved in 2015. 

ENTERPRISE VALUES AND MULTIPLES

EV/CE: Enterprise value to capital employed measures the 
market value of Grieg Seafood based on expected future cash 
flows compared to the capital invested in our assets. The majority 
of our assets (i.e. the majority of our licenses and buildings) were 
assigned values at the time of acquisition. Since then, these assets 
have multiplied in value, but as they are not subject to fair value 
adjustment, the recognized values have remained unchanged and 
in the case of buildings been depreciated, which contributes to 
explain the increasing difference between capital employed and 
the enterprise value. 

EV/EBIT: Enterprise value to EBIT or EBIT before fair value, 
measures the markets valuation of Grieg Seafood based on 
expected future cash flows compared to the past year's EBIT. 
As EBIT includes the change in fair value of biological assets, 
we recommend using EBIT before fair value in the calculation. 
Looking back on recent history, 2015 was a challenging year for 
us (as described above), which explains the high EV/EBIT this 
year. 

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It is in the interest of Grieg Seafood that high-quality equity analysis are published on a regular 
basis, reflecting the information that is distributed to the stock market. The following analysts 
cover the Grieg Seafood share: 
•  Nordea Markets
•  DNB NOR Markets
•  Handelsbanken
Enskilda
• 
• 
Pareto Securities
•  Kepler Cheuvreux
•  Carnegie ASA
•  ABG Sundal Collier
•  Arctic Securities
Sparebank 1 Markets
• 
•  Danske Bank Markets

INVESTOR RELATIONS

Grieg Seafood provides information to, and communicates with the capital market participants, 
including shareholders, potential investors, analysts, portfolio managers, investment banks 
and others that are interested in our share. Investor relations activities are primarily aimed at 
giving the market a correct picture of our activities and future prospects. In connection with 
the release of our quarterly financial results, we arrange presentations to contribute to greater 
understanding of our operations. In addition, we hold meetings with existing and potential 
investors. The dates for our annual general meeting and quarterly presentations in 2018 are 
available on our web site www.griegseafood.com  

PHOTO: HUNG NGO

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and alternative performance measures

Our ambition is to be open and transparent towards all 
stakeholders. That is the only way we can earn their trust. 
Through sharing of honest and relevant information about 
our operations and the salmon farming industry, we aim to 
contribute to improved understanding and correct pricing of 
our share. 

VALUE CREATION 

For Grieg Seafood, as for any listed company, creating shareholder value is a prerequisite for 
company growth and survival. Return on Capital Employed (ROCE) is therefore our ultimate 
financial indicator. We believe there is an interdependency between financial results and 
sustainability. We need good financial results to develop our operations sustainably, but also 
sustainable operations to safeguard our long-term financial results. This interdependency lays 
the foundation for our strategy – to create stakeholder value through sustainable production of 
Atlantic salmon at the lowest possible cost. 

VALUE CREATION PER REGION

We farm salmon in four regions, Rogaland and Finnmark in Norway, on Shetland, UK and in 
British Columbia, Canada. By 2020, we aim to harvest 100 000 tons GWT Atlantic salmon at 
a cost that is at or below industry average. Our operations span the entire value chain from egg 
to harvest and most of our fish is processed and packed at our own facilities. We also have our 
own brood activity in Erfjord in Rogaland. Our farming regions sells their fish to Ocean Quality 

at prices quoted by Fish Pool or similar indexes. Ocean Quality resells our 
salmon to third parties for further processing or to other customers for 
consumption as is. 

We measure our overall value creation by Region through EBIT per kg 
salmon harvested. EBIT from Ocean Quality is allocated back to the 
Regions based on volume. Bremnes Seashore's 40% share of Ocean Quality 
is not included in the calculation of Grieg Seafood's EBIT per kg by Region.  

VALUE DRIVERS IN OUR INDUSTRY

With ROCE as the starting point, we break down our performance 
based on the profitability of our product (EBIT per kg before fair value 
adjustment) and the development in invested capital (fixed assets and 
working capital). Our EBIT is driven by key factors affecting revenue and 
costs. As producing a salmon takes 2-3 years from egg to harvest size, the 
costs of harvested fish represents historic events, some of them far back in 
time. Costs throughout the production cycle are accumulated in the balance 
sheet and generally do not hit the profit and loss statement before the fish 
is harvested and sold. Therefore, although EBIT per kg is an important 
external benchmark measure for our Regions, our operational focus is 
not on the cost of harvest fish, but on the development of the cost drivers 
affecting the cost of salmon to be harvested in the future.

EBIT VS. PRICE (NOK)

60

50

40

30

K
O
N

20

10

0

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

EBIT per kilo GWT

Fish Pool

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.REVENUE DRIVERS

We produce fresh, gutted salmon and sell it to retailers, hotels, restaurants, third party processors 
and distributors worldwide. Our main market is the EU. 
Our revenues are driven by volume harvested and the price we achieve. Our reported revenues 
include a substantial freight element as we ship our salmon over long distances and our 
customers generally pay for this freight. 

Volume

How much we are able to harvest depends on the number of smolt put to sea 1-2 years prior to 
harvest, fish growth rates, survival and our harvest plan. Our growth ambitions combined with 
our expectations for future demand determines the number of smolt we put to sea. At present, 
we aim for growth and in 2017, we put 26 million smolt to sea, the highest number in the 
history of our Group. 

Fish growth rates are affected by water temperatures, biological issues, farming practices and 
survival. For more information, please refer to "cost drivers – salmon growth and salmon 
survival" below. Our harvest plan also affects volumes harvested. Our harvest window is 
effectively limited by fish age (maturation), but we do have some ability to accelerate or delay 
harvest to optimize price achievement. Expectations of higher prices were the reason for our 
decision to move 3 000 tons GWT of harvest from the fourth quarter of 2017 to the first quarter 
of 2018.  

FOTO: EILERT MUNCH LUND

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.Prices

Our main product, whole gutted salmon, is a commodity. As a result, the prices we achieve for 
our products will reflect the commodity market price (reference price). However, our achieved 
prices will to some extent deviate from the market price based on the quality of our salmon, sales 
contracts and our ability to place our salmon effectively in the market. Our ambition is to sell 
our salmon at or above market prices and we measure our relative price achievement as achieved 
price divided by the relevant reference price. 

Reference prices for salmon

There are several reference prices for salmon available. In Norway, Fish Pool ASA provides 

historic price information as well as salmon derivative prices FCA 
Oslo. In the US, Urner Barry provides reference prices for North 
American salmon in Seattle and Chilean salmon in Miami. Market 
prices are correlated across regions. 

Salmon prices are subject to significant fluctuation as demand 
grows steadily, whereas supply fluctuates strongly depending on 
smolt stocking, growth and biological status. Salmon farmers are 
in general price takers as the salmon market primarily is a fresh 
market supplied by producers that have a short time window 
available for harvesting. In 2017, the European market price (Fish 
Pool, FCA Oslo) was NOK 60.71 per kg, a reduction from NOK 
63.19 in 2016. Prices were significantly higher in the first half of 
2017 than in the second half of the year due to increasing supply 
throughout the year. 

Quality 

Disease, sea lice, biological issues and stress may affect the 
quality of our products. Salmon quality categories are relatively 
standardized. "Superior" or "premium" quality salmon provides 
a positive overall impression (good meat quality and no exterior 
damage or fault). Downgraded salmon has from minor to 
significant external and/or internal faults or damages and is 
therefore lower priced. In Norway, downgraded salmon is priced 
according to standard rates of deductions. For salmon classified 
as "ordinary" the standard deduction is NOK 1.50 to NOK 2.00 
per kg GWT. For salmon classified as "production grade", the 
deduction is NOK 5.00 to NOK 15.00 per kg GWT, depending 
on the extent of faults and damages. In other regions, the price 
deductions compared to "superior" or "premium" salmon are less 
standardized, but the same principles apply. 

Contracts 

We enter into sales contracts to limit our exposure to fluctuations 
in the salmon price. Sales contracts generally have a duration of 
three to 12 months, but sometimes longer. Our contract share 

FOTO: HUNG NGO

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hedging policy, 20% of our turnover in a current year must be hedged through either physical 
contracts or salmon derivatives. In addition, up to 30% of our turnover could be hedged if this is 
supported by market analysis. Hedging beyond the current year is only entered into if supported 
by market evaluation. 

Contracts mitigate our exposure to fluctuations in salmon prices, but can also result in us selling 
our products at prices that are lower than the reference price. In 2016 and 2017 the contribution 
from contracts was negative due to high spot prices. 

Achieved prices

The average price achieved, measures our ability to sell our products at or above market prices. 
Our price achievement is primarily affected by the quality of our salmon, physical or derivative 
contracts and our ability to efficiently place our products in the market. In 2017 our achieved 
prices were above the reference prices driven by efficient sales performance.  

COST DRIVERS

The cost of producing a salmon from egg to harvest size drives the costs in our operations. 
The cost of processing our salmon and general administration must be added to arrive at the 
total operational cost. We track our performance both internally and externally through the 
cost of harvested salmon per kg. More importantly however is our tracking of the cost drivers 
influencing the cost of salmon to be harvested in the future. Our cost drivers represents the 
operational factors we can influence in order to improve the future cost of our salmon. These 
drivers include salmon survival and growth.

Salmon survival

A number of factors affect salmon survival rates for example, disease, algal blooms, predation 
and lice treatment. In recent years, approximately 20% of the smolt stocked have been lost during 
the seawater growth phase. The number of fish lost per generation fluctuates across sites and 
regions.  For salmon harvested in 2017, our survival rates showed wide variation with the best 
performing site harvested out with a survival rate of 93% for the generation (7% loss) measured 
in the number of harvested fish compared to smolt set in sea1. Our target is that at least 88% of 
the smolt we put to sea survives the grow out stage. Whether the fish we put to sea survive or 
die, makes a difference for our profitability. Accounting wise, we expense mortality exceeding a 
threshold level on a continuous basis. Costs associated with "normal" mortality is included in the 
value of the remaining inventory contributing to increased cost when the fish is harvested and 
sold. 

Salmon growth

How fast our salmon grows and how good it is at converting feed into fish meat influences our 
future profitability as both factors affects the cost of salmon to be harvested going forward. 
Water temperatures, biological issues, farming practices and survival are key drivers for salmon 
growth. As salmon is a cold-blooded animal, seawater temperature plays an important role for its 
growth rate. Higher seawater temperatures increases growth, but also increases biological risks in 
the form of disease and algal blooms. Diseases and blooms may again result in lost feeding days 

1 The calulation deviated from the GSI calculation in the sustainability report which shows 12 months rolling mortality.

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PART 2Operational value creationGSF Rogaland ASGSF Finnmark ASGSF BC LTDGSF Shetland LtdOcean QualityThe Grieg Seafood shareAnalytical information APM222325272931333843P.and reduced survival. Through introduction of sensor technology and the use of advanced image 
analysis techniques we are now better able to correctly identify the species, prevalence and depth 
distribution of any algae present. With this information, we can take more informed decisions 
concerning feeding and protective measures and thereby improve our farming practices and 
relative costs. 

Efficient feed conversion is crucial to achieve our future cost target. Feed accounted for more 
than 40% of our total cost per kg harvested in 2017. Strong and healthy fish, combined with 
high feed quality and good feeding practices improves salmon growth rates. We measure our 
ability to effectively grow our fish through feed conversion rates (the number of kg of fish feed 
needed to increase the salmons bodyweight by one kg) and relative growth indexes (achieved 
growth compared to own and/or feed supplier expectations). Our economic feed conversion rate 
is typically between 1.2 and 1.4, while our relative growth both can be above and below 100%. 
Salmon growth and thus the relative growth index may be affected by disease, as an outbreak 
of disease often coincides with or is followed by a subsequent period of reduced appetite and 
inability to effectively convert fish feed into salmon meat. Slow growth will ultimately translate 
into reduced revenues and increased cost per kg harvested fish. 

KEY PERFORMANCE INDICATORS AND ALTERNATIVE PERFORMANCE 
MEASURES (APM)

We believe that the figures in our financial statements only partially reflect the underlying 
performance of our operations. We therefore continuously work to develop key operational 
performance indicators and alternative performance measures that we believe better describe 
our performance. The APMs listed below have been consistently applied over time with one 
exception: The calculation of net interest bearing debt for covenant purposes. From the first 
quarter of 2016, we removed Bremnes Fryseri AS' share of bank in Ocean Quality AS from the 
calculation.

PHOTO: HUNG NGO

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 APM 

 DEFINITION AND CALCULATION 

EBIT before fair value
adjustment of biological
assets

Operating profit incl. amortization and depreciation, excl. fair value 
adjustment of biological assets

Unless otherwise specified, we shorten EBIT before fair value 
adjustment of biological assets to EBIT (earnings before interest and 
taxes) when we talk about our operations. This also applies to all key
figures where EBIT is a component, including:

 REASON FOR APPLYING APM 

EBIT before fair value adjustment 
provides a more informative result as it 
does not take into account future gains 
or losses on fish not yet sold. 

EBIT before fair value adjustment 
is generally considered the industry 
measure for profitability. 

EBIT margin (%)
EBIT/ kg GWT
ROCE
EV/EBIT

EBITDA before fair
value adjustment of
biological assets

Operating profit before amortization and depreciation, excl. fair value 
adjustment of biological assets

Unless otherwise specified, we shorten EBITDA before fair value 
adjustment of biological assets to EBITDA when we talk about our 
operations. This also applies to all key figures where EBITDA is a 
component, including:

EBITDA before fair value adjustment 
provides a more informative result as it 
does not take into account future gains 
or losses on fish not yet sold.  

Equity ratio excluding
Ocean Quality

NIBD 

EBITDA margin (%)
EBITDA margin – terminal value
NIBD/EBITDA

The equity ratio is calculated both with and without Ocean Quality. The 
bank syndicate equity covenant definition is exclusive Ocean Quality,  
solely considering Grieg Seafood companies, both with regards to 
equity and total liabilities.

Applied to measure the company´s 
solidity, according to the Group's 
covenant requirements.

NIBD/EBITDA is a measure of solidity 
and one of the covenants in the bank 
agreement. When calculating NIBD/
EBITDA NIBD is calculated according 
to method 2 and EBITDA is before fair 
value adjustment of biological assets.  

Net interest bearing debt (NIBD) comprises long-term and current debt 
to financial institutions, after deducting cash and cash equivalents. 
NIBD is calculated in two ways:

1) For external reporting purpose: Including all long-term and current 
debt to credit institutions
2) For covenant calculation as required by the bank syndicate: As 
in 1, but excluding the factoring debt. Furthermore, cash and cash 
equivalents are reduced with an amount corresponding to Bremnes 
Fryseri AS’ 40% share of Ocean Quality AS’ bank deposits. 

NIBD calculated according to method 2 above is used for calculation of 

NIBD/EBITDA
Capital Employed (CE)
Enterprise Value (EV)

ROCE

Return on capital employed is calculated using values before fair value 
adjustment of biological assets. The ROCE is calculated as follows: 

EBIT before fair value adjustment of biological assets divided by 
average annual NIBD plus average annual equity before fair value 
adjustment of biological assets. 

The average annual values for NIBD and equity are calculated as 
Opening Balance plus Ending balance divided by 2. 

NIBD is excluding Ocean Quality (refer to method 2 under NIBD above)

EPS adjusted for fair value 
of biomass

Adj EPS (Adjusted earnings per share) is calculated as net profit after 
taxes minus non-controlling interests plus/minus fair value adjustment 
of biomass net of tax effects divided by the number of shares.

We extract a share of OQ from interest 
bearing debt, as it is not interest 
bearing debt according to covenant
definitions. Fair value adjustment of 
biological assets is extracted as this 
reflects future gains or losses on fish 
not yet sold.

We extract the fair value adjustment 
of biological assets to avoid including 
future gains or losses on fish not yet 
sold. Adjusted earnings per share is 
used to calculate the dividend payout 
ratio (dividend paid per share relative to 
adjusted earnings per share) 

Enterprise value

Enterprise value is calculated as the sum of the market value of equity 
as of the last trading day of the year (last day price per share times 
number of shares outstanding), plus NIBD per year end

Enterprise value is used for 
calculations of share multiples like EV/
EBIT and EV/CE.

NIBD is excluding Ocean Quality (refer to method 2 under NIBD above)

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IS FISH THE NEW OIL?

Declining oil prices and prosperous times in the salmon farming has made the industry take 
a leading role in Norwegian export over the past few years. In the fall of 2016, salmon prices 
began to increase, an increase that escalated throughout the spring of 2017, contributing 
to record high profitability in the Norwegian salmon farming industry. In the second half 
of 2017, significant supply increase, resulted in price correction however, and entering into 
2018, market expectations were more cautious. Market activity in the first quarter of 2018 
was however stronger than expected and as of early April, market prices were back to the 2017 
level. Demand is strong in all markets, Asia, the US and Europe, and as such the future looks 
bright for the industry, if the biological challenges are solved. Treatment and stand-by costs 
related to treatment contribute to cost increases in the industry at present. Grieg Seafood 
focuses on sustainability throughout the value chain and aims to contribute to the continuous 
development of sustainable food production. To improve Group performance and facilitate cost 
target achievement by 2020, the improvement project GSF 2020 has been initiated. 

FOCUS ON GOOD CORPORATE GOVERNANCE

Internal control and risk is under continuous monitoring and improvement in Grieg Seafood. In 
order to reduce risk, it is important to ensure that internal procedures are complied with. This is 
highly prioritized. 

The Grieg Seafood Group complies with the prevailing recommendation issued by the 
Norwegian Code of Practice for Corporate Governance (NUES) and has updated existing rules 
and procedures as recommended by the Norwegian Corporate Governance Board in 2014.The 
Group's approach is the follow or explain principle. This implies that the Group will explain all 
areas where the NUES recommendations are not followed. 

In 2017, the Group complied with all NUES recommendations.

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GROUP ACTIVITIES AND LOCATION

The Grieg Seafood Group (GSF) is one the world's largest salmon farmers with a 2017 harvest 
volume of 62 600 tons gutted weight. The Group has 83 active licenses for seawater farming 
and five licenses for land based smolt production. Total production capacity is estimated to 100 
000 tons gutted weight. The Group was established 25 years ago, and has over the years grown 
to become a leading industry player through continuous focus on business development. The 
foundation for the Group's operational development is profitable growth, innovation and 
sustainable utilization of natural resources. The Group's vision "Rooted in Nature – farming 
the ocean for a better future", describes how the company intends to make a difference and what 
it aims to accomplish. The Group does not see a healthy environment, good fish welfare and 

profitability as opposites. The competencies of the 
Group's employees will be crucial going forward. 
Through the new digitalization strategy, the 
ambition is to take a leading role in the utilization 
of new technology to improve the Group's 
performance. 

The Group's activities relate to production and 
trading of sustainably farmed salmon, as well as 
related activities. Grieg Seafood ("The Company") 
is the parent company. The Group has operations 
in Finnmark and Rogaland in Norway, in British 
Columbia, Canada and on Shetland/Scotland, UK. 
The Group owns 60% of the sales company Ocean 
Quality AS. The head office is located in Bergen. 
The Company has been listed on the Oslo Stock 
exchange since June 2007. 

The Board in Grieg Seafood ASA. 
From the left: Wenche Kjølås, Ola 
Branaas, Andreas Kvame (CEO), 
Asbjørn Reinkind, Karin Bring 
Orgland and Per Grieg jr. (Chairman 
of the Board)

HIGHLIGHTS 2017

•  Highest turnover in the history of the Group, MNOK 7 017.
• 
Prices lower than the year before, but still favorable due to underlying demand growth.
•  Good profitability during the past two years supporting dividend payout of NOK 4.00 per 

• 
• 

share.
Low interest margin and good financial flexibility due to strong solidity and liquidity.
Partnership with Bremnes Seashore AS and Norway Royal Salmon ASA to invest in smolt 
production, an investment that will contribute to Group strategy realization.

•  Two new locations approved and two sites ASC certified in Finnmark.
• 
• 

In line with the growth strategy, 26 million smolt stocked in 2017, the highest number ever.
Satisfactory, but lower than normal seawater production in Norway due to low seawater 
temperatures. 
Production on Shetland affected by biological challenges throughout the year. At year-end 
the situation was stable. 
Implemented actions contributing to strong production growth in BC.
Initiation of smolt capacity expansion in Finnmark and completion of expansion project in 
Rogaland in 2017.

• 

• 
• 

•  The board will recommend to the General Meeting to approve a dividend of NOK 2.00 per 

share for 2017. 

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The consolidated financial statements are prepared in accordance with International Financial 
Reporting Standards (IFRS).

PERFORMANCE

The Group's turnover amounted to MNOK 7 017 in 2017, an increase of 7.2% compared to 
the year before. This is the highest turnover in the history of the Group. In total 62 598 tons 
gutted weight were harvested – a reduction of 3% (64 726 tons in 2016). EBIT before fair value 
adjustment to biological assets was MNOK 904 compared to MNOK 1 168 in 2016. EBIT per kg 
before fair value adjustment to biological assets ended at NOK 14.40 compared to NOK 18.00 in 
2016. The reduction in profitability is a result of lower salmon prices in the second half of the year 
and limited ability to change the harvest plan to take advantage of price fluctuations. Common 
fallowing and maturation makes it difficult to optimize the harvest plan with regards to harvest 
weight and price. Supply growth increased substantially in the second half of the year, and in the 
fourth quarter prices were significantly lower than in the first quarter. Contract prices were in 
general higher than spot prices during the year, which contributed to a downward price trend 
throughout the year. The Contract share was 21 % in 2017. Owing to an efficient Ocean Quality 
sales organization, the Group was able to achieve prices above spot even with a high share of spot 
sales. 

TURNOVER 
PER SEGMENT 
(ex Ocean Quality)

745 934

1 150 166

580 293

2017 TNOK

Preventive measures and lice treatment costs have increased over the years. 
Having access to equipment and measures to timely and effectively address 
biological challenges contributes to increased costs. A proactive approach is 
therefore required to minimize the consequences. 

In the first half of 2017, seawater production in Norway was satisfactory, 
but in the second half of the year, growth was slower due to low seawater 
temperatures. Actions taken in 2016 to improve growth in BC have been 
successful and seawater production was therefore very good throughout 
the year. On Shetland, seawater growth has been low due to biological 
challenges related to sea lice and algae. The industry is facing increased 
biological challenges in general, with sea lice being the most prevalent cause. 
This has made it difficult to increase production and harvest in recent years. 

Smolt production was good in all regions during the year. The Group 
continues to follow its growth strategy and put 26 million smolt to sea 
during 2017, an increase of 27% compared to 2016. This is the highest 
number of smolt stocked in the history of the Group. 

1 265 156

Good access to feed raw materials, contributed to declining feed prices in 
2017 compared to 2016. Increased use of custom made feed, contribute to 
increased cost of feed in some cases. Feed prices are sensitive to marine and 
vegetable raw material prices, seasonal variation, fish catch and production. 

Rogaland

Finnmark

Canada, BC

Shetland

1.3M
1.2M
1.1M
1M
0.9M
0.8M
0.7M
0.6M
0.5M
0.4M
0.3M
0.2M
0.1M

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

Rogaland

Finnmark

Canada, BC

Shetland

EBIT after fair value adjustment to biological assets were MNOK 813 
compared to MNOK 1 683 in 2016. Lower price expectations for 2018 
in combination with the planned harvest pattern negatively affected the 
value adjustment of biological assets compared to 2017. Net financial 
expenses amounted to MNOK 14 compared to MNOK 135 in 2016. 
Interest expenses were significantly lower in 2017 than in 2016 due to strong 
liquidity throughout the year and low interest margin. The reduction in net 
financial expenses were mainly a result of positive currency effects on short 
term lending in GBP and CAD. The Group had net currency effects of 
MNOK 21 in 2017 compared to a loss of MNOK 70 in 2016. 

Tax expenses for the year were MNOK 198 compared to MNOK 339 in 
2016. The effective tax rate was 24.7% in 2017 compared to 21.7% in 2016, 
due to different tax rates in the operating countries. The Group is in tax 
position and MNOK 157 was accrued at year-end for taxes payable (MNOK 
172 in 2016). The Group's profit after taxes was MNOK 601 compared to 
MNOK 1 222 in 2016. 

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Rogaland

EBIT before fair value adjustment to biological assets was MNOK 393, or NOK 21.70 per kg. 
Comparable figures for 2016 were MNOK 467 (NOK 25.40 per kg). Total harvest volume 
in 2017 was 18 111 tons, which was approximately the same as in 2016. The stand still in 
harvest volume is a result of early harvest to comply with common industry zone fallowing. 
In addition, 1 000 tons of harvest was transferred from 2017 to 2018. Rogaland harvested the 
majority of their fish in the first half of the year (67%), which has a positive effect on achieved 
prices compared to Finnmark. Seawater production was good in the first half of 2017, but 
increasing biological challenges due to PD (Pancreas disease) and low seawater temperatures 
contributed to reduced growth in the second half of the year. Escalating treatment costs and 
preventive measures to mitigate PD, AGD (amoebic gill disease), and other biological challenges 
contributed to increased harvest cost. Good results from use of cleaner fish to fight sea lice has 
contributed to reduction in the sea lice number. Heated seawater is also used to mitigate the 
sealice challenge. Significant effort is required to keep the lice levels low. The need for heated sea 
water (mechanical delizing) treatment has been reduced. Smolt production has been satisfactory 
throughout the year. The expansion of the smolt facility has increased production capacity from 
500 to 1 300 tons. This expansion of the facility combined with the investment in Tytlandsvik 
Aqua AS will make Rogaland self-supplied with big smolt going forward.  

EBIT PER SEGMENT

68 657

120 162

393 064

2017 TNOK

351 935

Rogaland

Finnmark

Canada, BC

Shetland

500
450
400
350
300
250
200
150
100
50
0

K
O
N
0
0
0
1

7
0
0
2

8
0
0
2

9
0
0
2

0
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

Rogaland

Finnmark

Canada, BC

Shetland

Finnmark

EBIT before fair value adjustment to biological assets was MNOK 352, 
or NOK 15.40 per kg, compared to MNOK 447 (NOK 20.20 per kg) 
in 2016. Volume harvested was 22 831 tons, 3% higher than in 2016 
despite the decision to move 1 500 tons of harvest from 2017 to 2018. 
Finnmark harvested the majority of their salmon in the second half 
of the year (75%). This contributed to lower achieved prices than the 
weighted average for the year due a price reduction of more than 20% 
compared to the year's first six months. The main reason for the low 
harvest volume in the first half of 2017, was a planned harvest stop to 
grow the fish. The difference in harvest pattern was the main reason for 
the weaker profitability in Finnmark compared to Rogaland. 

Smolt production was good in 2017, and in line with the growth 
strategy, 10 million smolt were put to sea during the year. Two now 
locations were approved in 2017, while two sites were ASC certified. 
This lays this foundation for growth going forward. 

Sea lice is a continuous challenge in Finnmark. Both treatment costs 
and costs related to preventive measures are increasing and contribute 
to increased cost of harvested fish. Lice treatment contributes to lost 
feeding days and lost growth. Low seawater temperatures throughout 
the year have contributed to reduced growth and higher costs. In 
December 2016, ISA (infectious salmon anemia) was diagnosed at one 
site in Hammerfest. All fish were taken out in the beginning of January 
2017. Related losses were recognized in 2016. No other sites in the area 
were diagnosed with ISA in 2017. 

BC

EBIT before fair value adjustment to biological assets was MNOK 
120 (NOK 12.50 per kg), compared to MNOK 81 (NOK 7.50 per 
kg) in 2016. The 2017 increase is mainly due to reduced cost of 
harvested fish and improved growth. The quality of harvested fish has 
improved due to fewer biological challenges, which again has resulted 
in higher achieved prices. Having production close to the US market 
is advantageous due to fast deliveries and shorter transport. Harvest 

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volume in 2017 was 9 600 tons compared to 10 716 tons in 2016, a reduction of 10%. The 
reduction in harvest volume was due to limited volume available for harvest as a result of low 
smolt stocking in 2015/2016 and lost fish due to an algal bloom in 2016. Owing to positive 
results from improvement actions initiated in 2016, seawater production in 2017 was very good. 
Through the use of sensor technology, it is possible to determine the type of alga a site is exposed 
to and thereby decide the proper feeding response. Investment in plastic rings as opposed to the 
regular steel pens has also contributed to improved performance. Work to seek approval for use 
of plastic rings on additional sites is ongoing. 

Smolt production was very good in 2017. Efforts put in place to safeguard inlet water has 
contributed to improved performance. 3.9 million own produced smolt were put to sea during 
2017, which is in line with the strategy for the region. BC has a back-up solution for smolt from 
third party suppliers to safeguard the smolt stocking. This contributes to increased smolt cost 
compared to own production. 

Shetland

EBIT before fair value adjustment to biological assets on Shetland was MNOK 69 or NOK 5.70 
per kg. Comparable figures for 2016 were MNOK 177 (NOK 13.00). The appreciation of the 
British pound towards the end of 2017 had a negative effect on prices. Poor quality fish, low 
harvest volume, high cost of harvested fish and high losses due to mortality are the reasons for 
the weak result. 

The 2017 harvest volume was 12 056 tons compared to 13 541 tons in 2016. The 11% reduction 
in harvest volume is a result of losses due to sea lice and algae. A change in the production cycle 
from 24 to 18 months in 2015 contributed to low standing biomass entering into 2017. 

Lice treatment contributes to periods without feeding and thus reduced growth. Lumpsuckers 
and heated sea water (mechanical delizing) has had a positive effect. Sea lice skirts have also been 
put to use. The actions taken during 2017 have had positive effect. At the end of 2017, the lice 
level was historically low. 

Effort to establish common fallowing in the industry is pursued in order to reduce the biological 
challenges. With advanced technology all algae present is analyzed to get access to information 
about type of algae and the proper mitigating response. Experience from BC is transferred to 
Shetland. Smolt production went according to plan in 2017. 

Sales – Ocean Quality (OQ)

All the Group's salmon is sold through OQ. OQ Norway also sells the fish from Bremnes 
Fryseri AS including fresh, processed and frozen salmon with the exception of the branded 
Salma products. All OQ profit is allocated back to production and is included in the EBIT of 
each operating segment. OC has during its seven years in operation, established good customer 
relations and is therefore able to deliver solid profitability back to the salmon producers. 
Compared to prior years, sales of branded products like Skuna Bay, Kvitsøy and Bømlo has 
increased, both in volume and margin. OQ takes care of marketing and sales distribution for the 
salmon producers. Through the establishment of sales companies in UK and Canada, synergies 
have been achieved from sales of salmon of different origins in the different markets. The salmon 
market was favorable in 2017, even if prices were lower than in the year before. 

Demand for high quality products and ASC certified products is increasing. The Group is 
currently working to achieve ASC certification at additional sites in Finnmark. OQ sells the fish 
to Asia, Europe, the USA and Canada. The main markets are Europe with 67% of total sales in 
2016 and 2017. Other markets were Asia, the USA and Canada. Volume sold by OQ in 2017 
was 105 500 tons compared to 98 323 tons in the year before. 

Espen Engevik took over as CEO of OQ in January 2018, replacing Arne Aarhus who has left 
the company. The Board wish to thank Arne Aarhus for his contribution to build the company 
from its' establishment in 2010. 

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The Group believes that innovation and research in biology and technology will be a 
prerequisite for maintaining healthy oceans and farm profitability going forward, and allocates 
and use resources for research and development every year. Through active participation in 
steering committees for national research projects and local test and trial projects in the regions 
the Group contributes to industry development. Active projects report on progress throughout 
the year. The project plan is reviewed annually, summarizing completed projects and prioritizing 
new. The Group's R&D focus is towards operational projects contributing to short and/or long-
term solutions to biological and technical challenges. This contributes to improved operational 
efficiency at the sites. The projects are numerous and broad, covering areas from fish health and 
fish welfare to effective use of large units, feeding control and optimization of smolt production 
in large recirculation units. The main project for the Group at present is approval of the R&D 
licenses. In 2016, the Group applied for R&D licenses in Rogaland, and in December 2017 
we were informed that the projects were within the requirements of the arrangement, but that 
additional information was required prior to final approval. The Group is currently working to 
collect the missing information and expects a final decision during 2018. 

BALANCE SHEET

The Group's recognized asset value as of 31 December 2017, was MNOK 7 153, compared 
to MNOK 6 768 at the end of 2016. Goodwill amounted to MNOK 109, while the value 
of licenses were MNOK 1 069. Investment in non-current tangible assets mainly relate to 
expansion of the smolt capacity in Rogaland. The expansion of smolt capacity in Finnmark 
was also initiated during the year. In addition, the Group has investments in equipment for 
prevention of biological challenges and production in order to utilize the "green" licenses in 
Finnmark. Fair value adjustment of biological assets was positive due to higher expected sales 
prices than accrued production costs. 

The equity of the Group amounted to MNOK 3 348 as of 31 December 2017, compared to 
MNOK 3 207 in 2016. The equity share at the end of the year was 47%, the same as at the end of 
2016. 

FINANCING AND FUNDING

The Group's net interest bearing debt was MNOK 1 764 at 
year end 2017. The amount includes factoring debt of MNOK 
501. In 2016 the comparable figure was MNOK 1 400, whereof 
factoring amounted to MNOK 503, an increase of MNOK 
364. Net interest bearing debt according to the bank covenants 
was MNOK 1 284 (MNOK 906 in 2016). The Bank syndicate 
consists of Nordea and DNB. Syndicated facilities amount to 
MNOK 1 685. At the end of the year the MNOK 300 of the 
revolver facility was in use. MNOK 90 of the term loan was 
repaid in 2017. The Group lease finances the majority of new 
feed barges and operational equipment. The loan agreement 
allows the Group to utilize up to MNOK 350 in leasing. At the 
end of 2017, leasing debt amounted to MNOK 260. According 
to the loan covenants, the equity share is calculated excluding 
Ocean Quality. According to this method, the equity share at 
year-end was 52%, the same as in 2016. For more information 
about the 2018 refinancing agreement, please refer to note 27 – 
Subsequent events. 

CASH FLOW

Net cash flow from operations was reduced from MNOK 953 
in 2016 to MNOK 709 in 2017, a reduction of MNOK 2 444. 
The increase in working capital is related to build up of biomass. 
Net cash flow from investment activities in 2017 amounted 

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intangible assets amounted to MNOK 553 compared to MNOK 255 in 2016. In line with the 
growth strategy, the Group has invested substantially in smolt production. Net cash flow from 
financing was MNOK -384 compared to MNOK -645 in 2016. The utilization of the credit 
facility increased in 2017, as mentioned in the Financing section. The reason for the increased 
utilization is build up of biomass and investments. Dividend in the amount of MNOK 474 was 
paid in 2017, whereof MNOK 33 is from OQ to minority interests. This contributes to the 
negative cash flow from financing. Net change in cash and cash equivalents was MNOK -231. 
Available cash at 31 December 2017 was MNOK 272. 

RISK AND RISK MANAGEMENT

The group is exposed to risks in numerous areas, such as biological production, change in 
salmon prices, the risk of political trade barriers, as well as financial risk such as changes in 
interest rates an exchange rates and liquidity. 

The Group’s internal control and risk exposure are subject to continuous observation and 
improvement, and the task to reduce risk in different areas has a high priority.

The management has set parameters for managing and eliminating most of the risks that could 
prevent the company from achieving its goals. For further information, we refer to the Principles 
of corporate governance for Grieg Seafood ASA.

Further discussion of important Group risks follows below. 

Financial risk 

The Group operates within an industry characterized by high volatility, which entails greater 
financial risk. 2017 provided a good financial market for the aquaculture industry, with good 
access to liquidity available in the market. Financial and contractual hedging is a matter of 
constant consideration, in combination with operational measures. The management draws 
up rolling liquidity forecasts extending over five years. These forecasts are based on conservative 
assumptions for salmon prices, and these assumptions are the basis for calculating the liquidity 
requirements. This forecast forms the basis of the financing needs. At the end of 2017, the 
Group had MNOK 672 in available liquidity. Of this MNOK 400 represent undrawn lines. At 
year-end the Groups financial position was good. The long-term financing agreement includes a 
revolving credit facility totaling MNOK 700. The revolving credit is flexible, as it can be drawn 
on within a month or for a longer period, depending on the Group´s need for liquidity. 

Currency risk

In converting the operating income and balance of foreign subsidiaries, the Group’s greatest 
exposure is to CAD and GBP. The main strategy is to reduce the currency risk by funding the 
business in their local currencies. All long-term loans from the parent company to subsidiaries 
are in the local currency. Such loans are regarded as a net investment, as they are not repayable to 
the parent company. The subsidiaries will always require long-term funding. The currency effect 
of the net investment is included in the consolidated statement of comprehensive income (OCI) 
for the Group.

Income for the Norwegian operation is denominated in NOK, and the translation risk is 
transferred to the sales company. The case is similar for Shetland and BC. BC sells in CAD to the 
sales company, which in turn hedges against currency volatility in relation to CAD/USD. Ocean 
Quality AS likewise hedges against currency volatility in relation to EUR/NOK, USD/ NOK 
and other currencies in demand. At year-end, contracts are concluded until the first quarter 
of 2019. Long-term foreign currency contracts are hedging instruments, where unrealized 
agio/disagio is recognized through other comprehensive income (OCI) in the statement. The 
currency situation is continuously assessed against the volatility of the currencies. The remaining 
net exposure is frequently monitored. For further information, please refer to Note 3.

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The Group is exposed to interest rate risk through its loan activities and to fluctuating interest 
rate levels in connection with financing of its activities in all regions. The Group's existing loans 
are based on floating rates, but separate fixed rate contracts have been entered into in order to 
reduce the interest rate risk. It is the Group´s policy to have a certain percentage of its interest-
bearing debt hedged through interest rate swap agreements. A given proportion shall be at a 
floating rate, while consideration will be given to entering and exiting hedge contracts for the 
remainder. The interest rate swap agreement changes with the 3 months NIBOR.

Liquidity risk

The Group´s equity ratio was 47% at year-end 2017, the same as at year-end 2016. Interest-
bearing debt has increased due to reduced earnings and build-up of biomass, as well as dividend 
payout. The Group has also invested substantial amounts during the year, which has resulted 
in increased borrowing. Ocean Quality has concluded agreements with factoring companies for 
Norway and UK, implying transfer of credit insured receivables to the factoring company. This 
enables early settlement of accounts receivables for the companies. The factoring agreement is 
a financial arrangement, as the factoring company does not take on credit risk. Management 
monitors the Group’s liquidity reserve, which comprises a loan facility and bank deposits, 
as well as cash equivalents based on expected cash flows. This is carried out at Group level in 
collaboration with the operating companies. The management and Board seek to maintain a 
high equity ratio in order to be well positioned to meet financial and operational challenges. 
Considering the dynamic nature of the industry, the Group aims to maintain flexibility of 
funding.

Operational risk

It is critical to manage the operational risk. Book value of live fish in the balance sheet at 
year-end was MNOK 2 698. In 2017, focus has been on training of employees in good internal 
procedures to reduce the operational risk related to biological issues. In BC implemented actions 
have contributed to increased growth and standing biomass. 2017 was however not free from 
biological incidents with negative effect on recognized values, as PD, sea lice and algae continues 
to challenge the industry. A digitalization process has been initiated across the Group in an effort 
to facilitate operational improvements. Through utilization of sensor technology, the ambition 
is to reduce the algae problems in BC and on Shetland. In BC, installation of pumps to bring 
cold water from deeper ground to the surface improves water circulation in areas where the sites 
are located. On Shetland, the transition to 18 months production cycle is one of the measures 
taken to reduce the sea lice and algae challenge, common industry fallowing is another measure 
taken.

There is an ongoing shift from medicinal to mechanical treatment of lice. Cleaner fish is another 
important remedy against lice, which has proven effective in Rogaland and on Shetland. 

SUSTAINABILITY REPORT 2017

The Group has adopted a zero tolerance policy for escapes. In 
2017, there were no escape incidents. 

For further information about financial risks (currency, interest 
rate, credit and liquidity), refer to note 3 to the consolidated 
financial statements.

SUSTAINABILITY REPORT

 The Group's focus is on sustainable utilization of the nature, 
and the Group's ambition goes beyond short term profitability. 
The vision "Rooted in nature – farming the ocean for a better 
future" describes how it intends to make a difference. The Group 
aims to contribute to the development of local communities, and 
works systematically to develop trust in the communities. The 
Group actively participates in industry led efforts to sustainably 

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Norwegian Center of Expertise's Aqua Cloud project. Grieg Seafood is committed to the UN 
Global Compact and will do the utmost to run the operations according to the UN principles 
and thereby contribute to achievement of the UN Sustainable Development Goals. During 
2018, the Group will incorporate the development goals in a new sustainability strategy that ties 
the vision to ambitions and actions. 

The Group conducted in 2013 an assessment in order to accentuate priority areas for 
sustainability, an assessment that has been further followed up in later years. Our priorities will 
ensure that our efforts respond to our main stakeholders´ expectations of us, as well as being 
resource efficient in terms of our strategy and long-term value creation. The priorities also take 
into account our long-term obligations through Global Salmon Initiative (GSI). Starting from 
2016 the sustainability report has been audited according to the GSI handbook in compliance 
with the ISAE 3000 standard. For 2017 the Group will produce climate accounts to map the 
CO2 emissions of the Group. 

EMPLOYEES

Of the Group's 781 employees at year-end 2017, 445 were in Norway, 186 on Shetland and 150 
in BC. The parent company had 21 employees located at the head office in Bergen at year-end. 
Group management consists of three men and one woman. 

The Group has a majority of male employees and managers. In total 619 men and 162 
women were employed in the Group. The employment policy facilitates the maintenance and 
recruitment of qualified employees of both genders. 

The fact that Grieg Seafood is an international Group is reflected in the 142 employees with 
a different nationality than the country they are working in. These employees come from 39 
different countries. The Group accepts no form of discrimination related to gender, religion, 
cultural or ethnic background, disability, or in any other way. Our aim is to conduct our 
activities on the basis of equality and respect. In terms of human rights and equal treatment, 
we are not exposed to significant risk. A focused effort is made to secure equal treatment and to 
avoid discrimination.

In 2017, the short-term sick leave in the Group was 1.51% while the long-term sick leave was 
1.71%. For the parent company the short-term sick leave was 0.80% and the long-term sick leave 
0.20%. 

For further information, please refer to the Sustainability report, in the section about employee 
health, safety and working environment.

Human resources are managed locally according to local rules and instructions, and in 
accordance with Group guidelines. The working environment in the Group is considered to 
be good, and the Group works actively to reduce sick leave and the number of HSE incidents. 
Work to strengthen global routines and guidelines for HR and HSE is high priority. A project to 
prepare the organization for GDPR (the General Data Protection Regulation), which will enter 
into force in May 2018 has been initiated. The Group is in process of developing policies and 
guidelines for data security and data protection for our employees. 

In 2017, the Group celebrated its' 25th anniversary. At the anniversary party the Group 
launched its' new vision and values. The Group's values are "Open, Ambitious and Caring", and 
describe the qualities the Group believes are required to deliver results. The values describe what 
employees expect from each other and what others can expect from Grieg Seafood. Prior to the 
anniversary party, all regions actively participated in the development of the meaning of the new 
values. All employees have participated in the journey to define the content of the values through 
workgroups discussions in all regions. Through this journey the employees have contributed to 
build a common performance culture. 

The Board wish to thank the employees for their effort in 2017. 

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GRIEG SEAFOOD ASA

The parent company’s financial statements are prepared according to Norwegian accounting 
principles (NGAAP). The parent company recorded an operating income of MNOK -45 in 
2017 (MNOK -52 in 2016). The improvement in operating income is mainly due to lower 
cost from exercising options compared to 2016. The company provides loans to subsidiaries in 
foreign currency. The appreciation of the GBP towards NOK in 2017 has resulted in a net agio 
of MNOK 22 compared to a disagio of MNOK 67 in 2016. Accrued dividend from OQ in the 
amount of MNOK 25 (MNOK 8) and Group contributions from subsidiaries in the amount 
of MNOK 535 (MNOK 725), contributed to a positive financial result. Interest expenses 
have been reduced compared to 2016, due to good liquidity and compliance with covenants 
throughout 2017, which had a positive effect on the interest margin. 

Dividend in the amount of MNOK 4.00 per share (MNOK 442) has been paid during the year, 
utilizing the authority from the General Meeting. Dividend was paid on the basis of the 2016 
earnings. The equity ratio by year-end was 41% (35% at year-end 2016).

The parent company´s net cash flow from operations in 2017 was MNOK -120, compared 
to MNOK -175 in 2016. The cash flow from investing activities was MNOK 610 (MNOK 
467).  The increase is due to increased deposits from subsidiaries in 2017. Net cash flow from 
financing activities was MNOK -715 (MNOK -124). In 2017, dividends were paid while loans 
to subsidiaries have been repaid. There was a net change in cash and cash equivalents of MNOK 
-226. Available cash at 31 December 2017 was MNOK 157.

Accounting results and allocations – Grieg Seafood ASA

The aim of the Group is to offer competitive return on invested capital to the shareholders 
through a combination of dividend and share price appreciation.

The Group´s dividend strategy is that the dividend over time should average 25%-35% of the 
Group's net profit after tax, adjusted for the impact of biomass adjustments. The Board of 
directors will recommend to the General Meeting to approve a dividend of NOK 2.00 per share 
for 2017 and at the same time seek approval for prolongation of the existing authority from 
2017.

The parent company, Grieg Seafood ASA, recorded a profit for 2017 of MNOK 421, which the 
Board proposes to the General Meeting to allocate as follows:

Provision for dividends 

Transfer to retained equity 

Total allocated

GOING CONCERN ASSUMPTION

 MNOK   221

 MNOK   200

 MNOK   421

Forecasts based on conservative salmon prices indicate a positive and good cash flow going 
forward.  Demand for salmon remains strong and low supply and capacity growth is expected in 
both Norway and Chile. Accordingly, a strong market is likely in the time ahead. There is a trend 
towards higher consumption of fish in both Europe, Asia and the USA, which is expected to 
contribute to positive cash flow. 

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good starting point for increased harvest in 2018. Costs in 2017 were higher than in prior years 
due to biological challenges, especially on Shetland, as well as higher costs related to preventive 
measures. It is expected that the cost of harvested biomass will be reduced throughout 2018. 

Several activities have been initiated to mitigate current biological challenges including a 
3-month common industry fallowing period on Shetland and in Rogaland. The use of new 
technology for algae surveillance, is important in order to enable more rapid intervention. In BC 
the use of oxygen equipment contributing to improved water circulation, and surveillance to 
improve feeding efficiency has contributed to improved performance. Experience for BC is in the 
process of being transferred to Shetland. 

In Rogaland, the expansion of the smolt facility has been completed and the new unit was put 
into operations in the beginning of 2018. The expansion doubles the capacity of the facility. The 
expansion of the smolt facility in Finnmark is ongoing. Targeted 
completion is the fall of 2018. 

Strong cash flow both in 2016 and in 2017 provides a good basis 
for down payment of debt. At the beginning of 2018, the Group 
completed a refinancing to align the Group's financing with its' 
growth ambitions. 

The Board is of the opinion that the financial statements give a 
true and fair presentation of the Group’s assets and liabilities, 
financial position and financial results. Based on the above 
account of the Group’s results and financial position, and in 
accordance with the Norwegian Accounting Act, the Board 
confirms that the annual financial statements have been prepared 
on a going concern basis, and that the requirements for so doing 
are met. 

POST BALANCE SHEET DEVELOPMENT

In line with the Group's growth strategy, the syndicated loan has 
been renegotiated prior to the original due date in 2019. The 
growth ambitions includes increased smolt stocking and new 
locations, something that will demand investment in working 
capital. The refinancing increases the Groups syndicated 
facilities from MNOK 1 685 to MNOK 1 700 plus MEUR 60. 
The revolving credit facility has increased from MNOK 700 to 
MNOK 1 000. In addition, the Group has an overdraft facility 
of MNOK 100. The agreement matures in 5 years. 

When it comes to feed prices, an increase is expected in 2018 due 
to lack of marine raw materials. In Norway the depreciation of 
the NOK magnifies the effect. Continued pressure in marine and 
vegetable raw materials contributes to expectations of further 
price increases throughout 2018. 

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prices are back at the record level from 2017. Increased supply of salmon was the main reason for 
the downward price trend in January. 

Cold weather in Europe has contributed to increased mortality during lice treatment. This is 
applicable both for Norway and Shetland. Low seawater temperatures have resulted in lower 
than normal growth thus far in 2018. 

On Shetland, 21 700 fish escaped in the beginning of 2018. Associated losses are expected to be 
MNOK 2. 

Harvest volume for the first quarter of 2018 will be low in order to allow further growth during 
the summer months. Low harvest volume will imply higher cost per kg. When harvesting 
out some sites in Rogaland, the quality has been lower than expected due to PD. This has 
contributed to lower prices and lower harvest volume than previously anticipated. 

In January, Ocean Quality AS received a decision from the Norwegian Food Safety Authority 
to stop all export of Norwegian Salmon to China. Individuals in the company may, contrary 
to company guidelines, have re-used prior authority declarations. A complete review of the 
routines and systems for export has been carried out to find out how this could happen. New 
controls and strengthened routines have been implemented. The Grieg Seafood Group has zero 
tolerance for such deviations. For further information please see note 27 to the Group financial 
statements. 

OUTLOOK

Profitability in the salmon farming industry is volatile, and there will always be uncertainty 
regarding the assessment of future prospects. Sales of Atlantic salmon are expected to increase 
globally in 2018, as the market activity already is significantly higher than a few months back. 
The frozen stock was high when entering 2018, but it is expected that the market will be able to 
absorb the supply increase. Low seawater temperatures in Norway during the winter, as well as 
an algal bloom in Chile will reduce the short-term supply. At the same time, demand is growing. 
Prices for 2018 are expected to be lower than in 2017. When entering the second quarter of 
2018, prices were at the 2017 level, which is higher than expected in the beginning of the year. 
Increased harvest volume in the fall will contribute to lower salmon prices in the second half of 
the year. The American and the Canadian dollars have depreciated compared to the Norwegian 
krone, but the EUR is still strong compared to the NOK. A growing population and a growing 
middle class willing to purchase food of high quality drives demand in Asia. This continent 
constitutes a significant market potential for salmon. The demand is also increasing in the US 
and in Europe as consumers favor heathy and sustainably produced food. 

In Norway, a new system for regulating future industry growth was implemented in 2018. The 
new system is referred to as "the traffic light system". The country is split into 13 production 
areas along the coast. Depending on the area's environmental sustainability, a growth of up 
to 6% is allowed. The effect of sea lice on wild salmonid stocks is defined as an environmental 
indicator. Growth in each area will be determined based on the indicator. Rogaland is in a yellow 
area, which means that production increase is not allowed. As a result, having sufficient number 
of big smolt becomes even more important in order to reduce the number of months and sea. 
The expansion of the smolt facility and the investment in Tytlandsvik Aqua AS will contribute 
to fulfill this requirement. 

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the Group was able to acquire additional production capacity at a cost of MNOK 57 in this 
region in the beginning of January 2018. The increase constitutes 470 tons. In order to secure 
sufficient number of smolt in Finnmark, an agreement has been entered into with Norway 
Royal Salmon and Bremnes Seashore AS. The ongoing expansion of the fresh water facility will 
be operational in the first half of 2019. Being self-supplied with smolt will result in lower cost 
per kg going forward. Bigger smolt are more robust and resilient, which ultimately will improve 
the seawater biology. 

Our cost target is to be at or below industry average. In this regard, we have initiated an 
improvement program to identify how different drivers in the operations are connected to 
profitability. Focus is on activities that affect our key drivers. The digitalization project in 
combination with artificial intelligence enables utilization of new technology and data capture 
to take better and more sustainable decisions. Both these projects are expected to contribute to 
operational improvements and reduced costs. 

The Group's strategy is to grow 20% per year between 2018 and 2020. The Group targets a 2018 
harvest volume of 80 000 tons based on current production plans. This constitutes an increase 
of 28% compared to 2017. The Group has been granted new locations, and in combination 
with increased access to smolt the new locations make it possible to utilize existing licenses 
better. Several good initiatives with promising preliminary results were initiated in 2017. 
Simultaneously, work continues to develop a common culture where all employees know how 
their effort contributes to strategic goal achievement based on the Group values. The Board has 
high expectations for the development of the Group going forward. 

STATEMENT FROM THE BOARD OF DIRECTORS AND CEO

We hereby confirm that the financial statements for the period from 1 January to 31 December 
2017 to the best of our knowledge have been prepared in accordance with applicable accounting 
standards and give a true and fair view of the Group and of the Group’s assets, liabilities, 
financial position and overall results. We also confirm that the Board of Directors’ Report gives 
a true and fair view of the development and performance of the business and the position of the 
Company and the Group, as well as a description of the principal risks and uncertainties facing 
the Company and the Group.

***

Bergen, 17. april 2018

The Board of Grieg Seafood ASA
(Translated version, not to be signed)

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CORPORATE GOVERNANCE

Adopted by the Company’s Board of Directors on 20 April 2007 
and updated on 22 January 2010, 4 April 2011, 22 March 2012, 
22 March 2013, 1 April 2014, 23 March 2015, 6 April 2016, and 
17 April 2018.

1. 

INTRODUCTION

PRESENTATION OF CORPORATE GOVERNANCE

1.1 
The responsibility for ensuring that the company has good corporate governance rests with the 
Board. The board and management review and annually evaluates the company's principles for 
corporate governance.

The Group’s Corporate Governance is based on the Norwegian Code of Practice for Corporate 
Governance (NUES) as recommended by the Norwegian Corporate Governance Board on 30 
October 2014. The Grieg Seafood Group follows the current recommendation from NUES, 
and has updated existing rules and defined values in accordance with changes in NUES 2014.

The company complies with these recommendations according to the follow or explain 
principle. This means that the company should explain all points where the recommendations 
are not followed.

The Annual Report offers a full report on the company's principles for corporate governance, 
which is available on www.griegseafood.com

2.  OPERATIONS

GRIEG SEAFOOD ASA

2.1 
The object of the Company is to engage in the production and sale of seafood and naturally 
related activities, including investment in companies engaged in the production and sale of 
seafood and other activities naturally related to similar companies.

The Company is established and registered in Norway and is required to comply with 
Norwegian law, including laws and regulations pertaining to companies and securities.

2.2 
GRIEG SEAFOOD ASA’S VISION AND OVERALL OBJECTIVES
The Group aims to comply with all relevant laws and regulations and with the Norwegian Code 
of Practice for Corporate Governance. This also to applies to all companies which are controlled 
by the Group. In as far as it goes, this document of principle therefore applies to all companies of 
the Group.

The Groups's vision is «Rooted in nature - farming the ocean for a better future». 
The Group’s core values are to be open, caring and ambitious. 

The Group shall be managed applying the following principles:

•  We shall be open and honest.
•  We shall become better day by day.
•  We do what we say.
•  We are positive and enthusiastic.
•  We care.

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The Group is committed to the sustainable use of natural resources and the development of the 
organisation based on high ethical standards. Targets and detailed plans have been adopted for 
the implementation of initiatives in these areas.

The fish farmer has overall responsibility for the wellbeing of the fish and for ensuring that 
at all times the fish can be kept in their natural surroundings under optimal conditions. The 
Group selects locations where the water is as deep as possible and with good currents, as well as 
equipment enabling optimized growing conditions for the salmon.

The Group has drawn up a designated production plans which stipulate how all production 
operations are to be performed. The fish shall be systematically and regularly examined by a 
veterinarian. The Group attaches great importance to preventive measures and a rapid reaction 
in the event of disease or local pollution. This is important not only to protect the environment 
and fish health, but also to safeguard the quality and profitability of production. The work shall 
be performed in accordance with the Group’s designated health plan. Strict procedures have 
been implemented to prevent the escape of farmed fish out of the cages. The Group has zero 
tolerance for escapes. The objective is to conduct the entire operation so that the environment is 
not subject to any lasting damage. 

As a user of natural resources such as clean water and feed from various natural resources, the 
Group has a responsibility which extends beyond its own operations. For instance, the Group 
requires its feed suppliers to ensure that the feed is based on sustainable sources of raw materials.

Starting with 2013, a separate sustainability report has been prepared. In GSF's updated 
sustainability report for 2017, five pillars have been defined as essential for sustainable food 
production. These five defined pillars for sustainable food production in the ocean will form the 
basis for GSF's work for concrete implementation of sustainability in the future. The priorities 
were decided upon after an internal process in the organization and coordinated in compliance 
with guidelines developed by GSI (Global Salmon Initiative). GSI has developed sector specific 
measurement indicators which Grieg Seafood utilises. Grieg Seafood is a member of GSI. As 
from 2015, Grieg Seafood has taken on the responsibility as Co-Chair in GSI.

MANAGEMENT OF THE GROUP 

2.3 
Control and management of the Company is divided between the shareholders, represented 
through the General Meeting, the Board of Directors and the Group CEO, and is exercised in 
accordance with prevailing company legislation.

Divergences from this Code of Practice: None. 

3.  GROUP EQUITY AND DIVIDEND POLICY

EQUITY 

3.1 
At any given time the Group shall have a level of equity which is appropriate in relation to the 
Group’s cyclical activities. The Board requires that equity consistently stay in accordance with 
current loan terms, as a minimum.

DIVIDEND

3.2 
The Group’s objective is to give the shareholders a competitive return on invested capital 
through dividend payments and value appreciation of the share, which is at least at the same 
level as other companies with comparable risk. The future dividend will depend on the Group’s 
future earnings, financial situation and cash flow. The Board believes that the dividend paid 
should develop in pace with the growth of the Group’s profits, while at the same time ensuring 
that equity is at a healthy and optimal level and that there are adequate financial resources to 
prepare the way for future growth and investment, and taking into account the wish to minimise 
capital costs. The Board believes it is natural that the average dividend, over a period of several 
years, should correspond to 25-35% profit after tax, adjusted for the accounting effect of fair 
value adjustment of biological assets.

Furthermore, it is reasonable that the company's net interest-bearing debt per harvested kg is 
between NOK 15 and 20. Based on this, the size of the dividend could be corrected both up and 
down according to the 25 - 35 % share of profit after tax.

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3.3 
The Board will request the AGM to grant a general mandate to pay out dividends in the period 
until the next AGM. The Board´s proposal must be justified. The dividend will be based on the 
Group's current policy in accordance with clause 3.2. Dividends should be awarded on the basis 
of the latest financial statements approved within the scope of the Public Companies Act. Upon 
granted authorisation, the Board determines from which date the shares are traded ex-dividend.

The Board has general authorisation to increase the Company’s share capital through share 
subscription for a total amount not exceeding NOK 44 664 800 divided into not more than 
11 162 200 shares of nominal value NOK 4 each. 

This authorisation remains in effect until 30 June 2018.

The Board has general authorisation to acquire the Company’s own shares in accordance with 
the provisions of chapter 9 of the Norwegian Public Limited Companies Act for an aggregate 
nominal amount not exceeding NOK 44 664 800. The Company shall pay not less than NOK 4 
per share and not more than NOK 100 per share when acquiring its own shares.

This authorisation remains in effect until the next AGM, but not later than 30 June 2018.

The Company will observe the Code of Practice in respect of new proposals to authorise the 
Board to implement capital increases and acquire the Company’s own shares.

Divergences from the Code of Practice: None. 

4.  EQUAL TREATMENT OF 
SHAREHOLDERS.  TRANSACTIONS WITH 
RELATED PARTIES 

4.1 

SHARE CLASS

The Company has only one class of shares, and all shares carry the same rights. At 31 December 
2017 the Company had 111 662 000 outstanding shares, including own shares.

OWN SHARES

4.2 
If the Company trades in its own shares, the Code of Practice shall be observed.

As at 31 December 2017, the Company owned 1 250 000 of its own shares. 

APPROVAL OF AGREEMENTS WITH SHAREHOLDERS AND OTHER 

4.3 
RELATED PARTIES
All transactions of no lesser significance between the Company and a shareholder, Board 
member or a senior employee (or their related parties) shall be subject to a value assessment by 
an independent third party. If the consideration exceeds one twentieth of the Company’s share 
capital, transactions of this kind shall be approved by the General Meeting, in so far as this is 
required under Section 3-8 of the Norwegian Public Limited Companies Act.

Board members and senior employees shall inform the Board if they have any significant interest 
in a transaction to which the Company is a party. For further information, please refer to Note 
22 «Related parties» in the GSF Group annual report for 2017.

Divergences from the Code of Practice: None. 

4.4 

CAPITAL INCREASES

In the event of a waiver of the shareholders’ preferential subscription right, the Code of Practice 

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5.  NEGOTIABILITY OF THE SHARES

The Company’s shares shall be freely negotiable. 

Divergences from the Code of Practice: None. 

6.  GENERAL MEETING

The shareholders represent the Company’s highest decision-making body through the General 
Meeting.

The Company’s AGM shall be held each year before the end of June. The AGM shall consider 
and, if thought fit, adopt the annual financial statements, the annual report and the dividend, as 
well as deciding on other matters which under current laws and regulations pertain to the AGM. 

The Board may convene an Extraordinary General Meeting (EGM) at whatever time it deems 
necessary or when such a meeting is required under current laws or regulations. The Company’s 
auditor and any shareholder or group of shareholders representing more than 5% of the 
Company’s share capital may require the Board to convene an EGM.

The Board calls General Meetings at least 21 days before the date of the meeting. During the 
same period, the notice of meeting and the documents pertaining to matters to be considered at 
the General Meeting shall be accessible on the Company’s homepage. The same applies to the 
nomination committee’s recommendation. When documents are made available in this manner 
the statutory requirements for distribution to shareholders do not apply. Still, a shareholder may 
claim to receive documents concerning matters to be considered at the General Meeting.

The deadline to register for the general meeting is set by the Board in the notice. Shareholders 
who are unable to attend may vote by proxy. An authorisation form containing a vote option 
for each issue will be enclosed with the notice of meeting, and it will also be possible to give 
authorisation to the chairman of the Board or the Group CEO.

The Company will publish the Minutes of the General Meetings in accordance with the stock 
exchange regulations in addition to making them available for inspection at the Company’s 
registered offices.

The chairman of the Board, member of the Nomination Committee and the Group CEO will 
be represented at the meeting. The chairman of the Board will normally preside at the meeting.

The Board shall not make contact with the Company’s shareholders outside the General 
Meeting in a manner which could be deemed to constitute differential treatment of shareholders 
or which could be in conflict with current laws or regulations.

The nomination committee proposes Board candidates to the Annual General Meeting.

Divergences from the Code of Practice: None. 

7.  NOMINATION COMMITTEE

On 13 February 2009 the AGM approved a resolution to establish a nomination committee. 
This is described in article 8 of the Article of Association. At the same time, the AGM adopted 
instructions for the nomination committee. According to the instructions, the election 
committee through its work should take care of the interests currently embodied in the 
Norwegian Code of Practice for Corporate Governance.

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Marianne Johnsen (chair), Helge Nielsen and Yngve Myhre, of whose Helge Nielsen is candidate 
for election in 2018. At least 2/3 of the members of the nominating committee shall be 
independent of the Board and may not be members of the Board. The Group CEO cannot be a 
member of the nomination committee. The nomination committee shall have meetings with the 
directors, Group CEO and relevant shareholders.

Details about the nomination committee members are available on the Company´s website.

The nomination committee´s recommendation to the General Assembly should be submitted 
in good time and follow the summons to the General Assembly, no later than 21 days before the 
meeting. The recommendation of the nomination committee must include information about 
the candidate´s impartiality, competence, age, education and professional experience. Upon 
proposal for re-election, the recommendation should include additional information about how 
long the candidate has been a board member, as well as details about participation in the board 
meetings.

When the recommendation comprises candidates to the nomination committee, it should 
include relevant information about these candidates.

Divergences from the Code of Practice: None.

8.  CORPORATE ASSEMBLY AND BOARD OF 
DIRECTORS, COMPOSITION

NUMBER OF BOARD MEMBERS

8.1 
The Company has no corporate assembly. 
Under the Articles of Association the Board shall have up to seven members.

ELECTION PERIOD

8.2 
Board members are elected by the AGM for a period of two years.

INDEPENDENT BOARD MEMBERS

8.3 
The Board members are presented in the Annual Report and on the Company’s homepage, 
showing the Board members’ competence, relationship to main shareholders. No overview of 
participation at Board meetings is included in the Annual Report. An overview of the Board 
members’ ownership of shares in the Company appears in the relevant note to the accounts 
in the Annual Report. The Company has no corporate assembly. The Company does not 
otherwise diverge from the Code of Practice. 

There is compliance with the required number of independent Board members contained in the 
Code of Practice. 

9.  BOARD OF DIRECTORS

DUTIES AND WORK PLAN

9.1 
The Board has overall responsibility for the management of the Group and for overseeing the 
daily management and business activities. The Company shall be managed by an effective Board 
of Directors (the Board) who has shared responsibility for the success of the Company. The 
Board represents and is accountable to the Company’s shareholders. 

Each year the Board shall draw up a work plan for its activities. 

The Board’s duties include drawing up the Group’s strategy and ensuring that the adopted 
strategy is implemented, effective supervision of the Group CEO, control and supervision of the 
Group’s financial situation, internal control, anti-corruption, and the Company’s responsibility 
to and communication with the shareholders.

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duties. The Board shall also initiate such investigation that is requested by one or more Board 
members. 

Divergences from the Code of Practice: None. 

INSTRUCTIONS

9.2 
The Board has drawn up instructions for its members and the Management, which contain a 
more detailed description of the Board’s duties, meetings, the Group CEO’s duties in relation to 
the Board, the meeting schedule for the Board, participation, separate entries in the Minutes and 
duty of confidentiality.

The respective roles of the Board and the Group CEO are separate, and there is a clear division 
of responsibility between the two. The Group CEO is responsible for the Company’s senior 
employees. The Board underlines that special care must be exercised in matters relating to 
financial reporting and remuneration to senior employees.

In matters of importance where the chairman of the Board is or has been actively involved, 
Board discussions shall be chaired by the vice chairman. 

The instructions for the Board and Management were last revised by the Board on 20 September 
2017.

ANNUAL ASSESSMENT

9.3 
Each year, in connection with the first Board meeting in the calendar year, the Board shall carry 
out an assessment of its work in the previous year.

AUDIT COMMITTEE

9.4 
The Board has set up a sub-committee (audit committee) comprising a minimum of two and 
a maximum of three members elected from among the Board’s members, and has drawn up a 
mandate for its work.

The committee assists the Board in the work of exercising its supervisory responsibility by 
monitoring and controlling the financial reporting process, systems for internal control and 
financial risk management, external audits and procedures for ensuring that the Company 
complies with laws and statutory provisions, and with the Company’s own guidelines.

REMUNERATION COMMITTEE

9.5 
The Board has set up a sub-committee (remuneration committee) comprising no less than 
3 members. The committee shall hold discussions with the Group CEO concerning his/her 
financial terms of employment. The committee shall submit a recommendation to the Board 
concerning all matters relating to the Group CEO’s financial terms of employment.

The committee shall also keep itself updated on and propose guidelines for the determination 
of remuneration to senior employees in the Group. The committee is also the advisory body for 
the Group CEO in relation to remuneration schemes which cover all employees to a significant 
extent, including the Group’s bonus system and pension scheme. Matters of an unusual nature 
relating to personnel policy or matters considered to entail an especially great or additional risk, 
should be put before the committee.

The composition of the committee is subject to assessment each year.

Divergences from the Code of Practice: None. 

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MANAGEMENT

The Board has a responsibility to ensure that the company has proper risk management and 
internal control adaptable to statutory provisions for the company. The Board conducts an 
annual evaluation of the most important risk areas and internal control.

Internal control means activities carried out by the Group to organise its business activities and 
procedures in order to safeguard its own values and those of its customers, and to realise adopted 
goals through appropriate operations. The achievement of these goals also requires systematic 
strategy work and planning, identification of risk, choice of risk profile, as well as establishing 
and implementing control measures to ensure that the goals are achieved.

The Group’s core values, external guidelines and social corporate responsibility constitute the 
external outer framework of internal control. The Group is decentralized and considerable 
responsibility and authority are therefore delegated to the regional operating units. Risk 
management and internal control are designed to take account of this.

Internal control is an on-going process that is initiated, implemented and monitored by the 
Company’s Board of Directors, management and other employees. Internal control is designed 
to provide reasonable assurance that the Company’s goals will be achieved in the following areas:

•  Targeted, efficient and appropriate operations.
•  Reliable internal and external reporting.
•  Compliance with laws and regulations, including internal guidelines.

The audit committee updates the Board after each meeting.

Each year the auditor carries out a review of internal control which is an element of financial 
reporting. The auditor’s review is submitted to the audit committee.

The Company has established framework procedures to manage and eliminate most of the risk 
that could prevent a goal from being achieved. This includes a description of the Company’s 
risk management policy as well as all financial control processes. There is an ongoing risk 
assessment of the main transaction processes. Descriptions of the transaction processes are 
currently in preparation for each region, with the aim of clarifying key controls and ensuring 
that these controls are in place. This means assessing all processes to determine the probability 
of divergences arising, and how serious the economic consequences would be of any such 
divergence. The establishment of controls in each region is aimed at reducing the likelihood of 
divergences arising with major economic consequences.

The biological development in course of producing smolt and farming in the sea poses the 
greatest risk in the Group. The Group therefore continuously and systematically works to 
develop processes that ensure animal welfare and reduce diseases and mortality, and so that "best 
practices" are being implemented at all levels. Control routines have been prepared, including 
conditions for the employees as well as safeguarding against escapes, animal welfare, pollution, 
water resources and food safety. Referring to the sustainability report prepared annually, 
objectives, internal controls and measures are described within the Company's main focus areas.

The Group’s activities entail various kinds of financial risk: Market risk (including foreign 
exchange risk, interest rate risk and price risk), contract risk, credit risk and liquidity risk. The 
Group’s overall risk management plan focuses on the unpredictability of the capital markets 
and seeks to minimise the potential negative effects on the Group’s financial results. To some 
extent, the Group uses financial derivatives to hedge against some risks. Risk management is 
drawn up at Group level and involves identifying, evaluating and hedging financial risk in close 
cooperation with the Group’s operational units. The Board has established written principles 
for risk management related to foreign exchange and interest rate risk, price risk, and the use of 
financial instruments.

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PART 3Board of director's report Corporate GovernanceGSF Group + notesGSF Parent + notesAuditor's report455868135167P.The Board has established procedures for reporting within the Group:

At the start of each year the Board adopts a budget for the year. Divergences from the budget are 
reported on a monthly basis.
Forecasts are drawn up for the next five years and they are updated every month.
Every month, each region submits a report containing given Key Performance Indicators (KPIs). 
The main KPIs are: EBIT/kg, feed factor, production, production cost, harvest volume, harvest 
cost and level of sea lice. Analyses are made and measured against budget figures and KPIs. 
Generational accounts for terminated generations will be updated on a monthly basis. The 
information form of the regions is summarized in a report submitted to the Board. 
Each quarter, the Group management holds meetings with the management of each region 
respectively. The aim of the meeting is to follow up the strategies and goals that have been set.

Each quarter, a risk assessment covering biology, feed, market, finance and Compliance is prepared, 
including activities related to the GSF 2020 improvement program.
These areas are considered to pose the greatest risks for the Company. This can be changed from 
the changed situation. The risk assessment is reviewed by the Audit Committee in connection with 
quarterly reporting.

Divergences from the Code of Practice: None. 

11.  BOARD REMUNERATION

Proposals concerning Board remuneration are submitted by the nomination committee. 
Remuneration to Board members is not linked to the Company’s results. None of the Board 
members have special duties in relation to the Company which are additional to those they have 
as Board members. Board remuneration shall be shown in the financial statements of both the 
Company and the Group.

Divergences from the Code of Practice: None.

12.  REMUNERATION TO SENIOR EMPLOYEES

12.1  SENIOR EMPLOYEES

The group management consists of Group CEO, the director of operations and the financial 
director, and HR director. 

The objective of the guidelines for determination of salary and other remuneration to senior 
employees within the Group is to attract people with the required competence and at the same 
time retain key personnel. The guidelines should also motivate the employees to work with a long-
term perspective to achieve the Group´s goals.

The determination of salary and other remuneration to the Group’s senior employees is therefore 
based on the following guidelines: 

Salary and other remuneration shall be competitive and motivating for each manager and for 
everyone in the senior management group.

Salary and other remuneration shall be linked to value creation generated by the Company for the 
shareholders.

The principles used to determine salary and other remuneration shall be simple and 
understandable to employees, shareholders and the public at large.

The principles used to determine salary and other remuneration shall also be sufficiently flexible 
to allow adjustments to be made on an individual basis in the light of the results achieved and the 
contribution made by the individual to the development of the Group.

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PART 3Board of director's report Corporate GovernanceGSF Group + notesGSF Parent + notesAuditor's report455868135167P.The salary paid to the members of the senior management group consists of a fixed and a variable 
element. Under the bonus scheme in force the variable salary under the scheme cannot exceed 
six times the monthly salary. Each year, information about the provisions of the bonus scheme 
is included in the Group declaration on the determination of salary to the senior management 
group, and appears in the financial statements for the Group, note 14. 

The Company´s Board approved the allocation of cash options based on the General Assembly´s 
resolution for the framework of the share and cash options programme. The last approval from 
the General Assembly was 7 June 2017. The Group CEO, the financial director, the operational 
director, HR director, and the four regional managers are included in the share options 
programme. The options agreements have been entered into within the scope of the resolution 
adopted by the General Assembly. Minutes of this General Assembly can be accessed from the 
Company’s homepage.

Remuneration to the Group CEO is determined at a meeting of the Board of Directors. The 
salary payable to the other members of the senior management group is determined by the 
Group CEO. The Group CEO shall discuss the remuneration which he/she proposes with the 
chairman of the Board before the amount of remuneration is determined. 

General schemes for the allocation of variable benefits, including bonus schemes and 
options programmes, are determined by the Board. Schemes which entail an allotment of 
shares, subscription rights, options and other forms of remuneration related to shares or the 
development of the Company’s share price, are determined by the General Assembly. The 
Board´s declaration of management remuneration is a separate agenda paper of the General 
Assembly. The General Assembly votes separately on guidelines to guide the Board and 
remuneration comprising the synthetic options programme.

The Company has no divergences from the Code of Practice.

12.2  SEVERANCE PAY
The Group CEO is entitled to 12 months’ severance pay after dismissal, and 12 months salary 
during illness. 

A severance pay agreement has also been established for the CFO and COO providing for 12 
months’ severance pay after dismissal.

Divergences from the Code of Practice: None. 

13.  INFORMATION AND COMMUNICATION

13.1  FINANCIAL INFORMATION
The Company shall at all times provide its shareholders, the Oslo Stock Exchange and the 
finance market in general (through the Oslo Stock Exchange information system) with timely 
and accurate information. The Board shall ensure that the quarterly reports from the Company 
give a correct and complete picture of the Group’s financial and commercial position, and 
whether the Group’s operational and strategic objectives are being reached. Financial reporting 
shall also contain the Group’s realistic expectations of its commercial and performance-related 
development. 

The Company publishes all information on its own homepage and through stock exchange/
press announcements. Quarterly reports, annual reports and stock exchange/press releases are 
presented on an ongoing basis on the Company’s homepage in accordance with the Company’s 
financial calendar. 

The Company shall have an open and active policy in relation to investor relations and shall hold 
regular presentations in connection with the annual and interim results. 

13.2  SHAREHOLDER INFORMATION
The Board shall ensure that information is provided on matters of importance for the 
shareholders and for the stock market’s assessment of the Company, its activities and results, 

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PART 3Board of director's report Corporate GovernanceGSF Group + notesGSF Parent + notesAuditor's report455868135167P.and that such information is made publicly available without undue delay. Publication shall take 
place in a reliable and comprehensive manner and by using information channels which ensure 
that everyone has equal access to the information.  

All information shall be provided in both Norwegian and English. The Company has 
procedures to ensure that this is done. The chairman of the Board shall ensure that the 
shareholders’ views are communicated to the entire Board. 

Divergences from the Code of Practice: None. 

14.  COMPANY TAKEOVER

14.1  CHANGE OF CONTROL AND TAKEOVERS 
The Company has no established mechanisms which can prevent or avert takeover bids, unless 
this has been resolved by the General Meeting by a majority of two thirds (of the votes cast and 
of the share capital represented). The Board will not use its authorisation to prevent a takeover 
bid without the approval of the General Meeting after the takeover bid has become known.  If 
a takeover bid is received, the management and the Board will ensure that all shareholders are 
treated equally. The Board will obtain a value assessment from a competent independent party 
and advise the shareholders whether to accept or reject the bid. The shareholders will be advised 
of any difference of views among the Board members in the Board’s statements on the takeover 
bid. 

The Board has in its Board meeting 13 October 2015 adopted some core principles for how the 
Board will act in the event of any persuasion offers. These core principles are in accordance with 
the recommendation of NUES.

Divergences from the Code of Practice: None. 

15.  AUDITOR

The Board through its audit committee seeks to have a close and open cooperation with the 
Company’s auditor. Each year the audit committee obtains confirmation that the auditor 
meets the requirements of the Act on auditing and auditors concerning the independence and 
objectivity of the auditor. 

The auditor’s schedule of audit work is submitted to the audit committee once a year. In 
particular, the audit committee considers whether, to a satisfactory extent, the auditor is 
performing a satisfactory control function. 

Both the Company management and the auditor comply with guidelines issued by the Financial 
Supervisory Authority of Norway concerning the extent to which the auditor can provide 
advisory services. 

The auditor attends Board meetings which deal with the annual financial statements. The audit 
committee has an additional meeting with the auditor at least once a year to review the auditor’s 
report on the auditor’s view of the Group’s accounting principles, risk areas and internal control 
procedures. Moreover, each year the Board has a meeting with auditor when neither the Group 
CEO nor anyone else from the management is present. 

The auditor also attends meetings of the audit committee to consider quarterly reports and 
other relevant matters. The auditor’s fee appears in the relevant note in the annual report 
showing the division of the fee between audit and other services. 

Divergences from the Code of Practice: None. 

***

Bergen, 17 April 2018

The Board of Grieg Seafood ASA
(Translated version, not to be signed)

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PART 3Board of director's report Corporate GovernanceGSF Group + notesGSF Parent + notesAuditor's report455868135167P.INCOME STATEMENT

Amounts in NOK x 1 000

Note

2017

2016

Sales revenue

Other income

Other gains and losses

Share of profit from associates

Cost of sales

Salaries and personnel expenses

Other operating expenses

EBITDA before Fair value adjustments of biological assets

Depreciation property, plant and equipment

Amortisation licences and other intangible assets

Reversals/impairment losses property, plant and equipment

EBIT before Fair value adjustments of biological assets

Fair value adjustment of biological assets

EBIT after Fair value adjustments of biological assets

Share of profit/loss from associates

Financial income

Financial expenses

Net financial loss

Profit before income tax

Income tax expense

Net profit for the year

Allocated to:

Controlling interests

Non-controlling interests

Profit available to shareholders in parent company

Earnings per share (NOK)

Earnings per share – diluted (NOK)

6

6

6

5

7

15/16

11/20/24

9

8

8/9

3/7

5

23

23

13

18

18

7 017 456

6 545 187

21 771

−1 514

−550

41 019

17 386

569

−3 724 200

−3 287 159

−482 827

−1 724 604

1 105 533

−196 237

−4 895

0

−483 473

−1 491 867

1 341 662

−175 352

−5 036

6 472

904 400

1 167 745

−91 463

812 937

515 741

1 683 486

0

12 083

42 333

−56 789

−14 457

20 479

−155 213

−134 733

798 480

1 560 836

−197 581

600 899

−338 505

1 222 331

570 537

30 362

1 186 032

36 299

5,17

5,17

  10,74 

  10,74 

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED COMPREHENSIVE 
INCOME STATEMENT

Amounts in NOK x 1 000

Net profit for the year

Items with no tax effect on realisation subsequently reversed in profit:

Currency translation differences, subsidiaries

Change in value of available-for-sale assets

Total

Items with tax effect on realisation subsequently reversed in profit:

Currency effect of net investments

Fair value adjustment of cash flow hedging

Tax effect

Net effect 

Comprehensive income after taxes

Total comprehensive income for the year

Allocated to:

Controlling interests

Non-controlling interests

3

3

2017

600 899

2016

1 222 331

16 729

−295

16 434

22 333

−24 821

409

−2 079

−10 389

19

−10 370

−90 228

6 052

20 203

−63 973

14 355

−74 343

615 254

1 147 988

595 332

19 922

1 109 138

38 850

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
BALANCE SHEET

Amounts in NOK x 1 000

ASSETS

Goodwill

Deferred tax

Licences

Other intangible assets

Property, plant and equipment

Investments in associates

Available-for-sale financial assets

Other non-current receivables

Total non-current assets

Inventories

Biological assets

Trade receivables

Other current receivables

Derivatives and other financial instruments

Cash and cash equivalents

Total current assets

Total assets

Note

31.12.2017

31.12.2016

8

13

8/10

8/10

9

5

7/10

7/10

3/10/20

21

3/12

3/19

109 038

3 574

1 068 552

18 384

1 871 804

9 450

1 150

167

108 595

0

1 060 622

17 598

1 510 379

0

1 445

4 167

3 082 121

2 702 804

92 262

2 698 352

761 407

198 527

48 232

271 715

89 164

2 459 625

800 591

163 246

48 994

503 613

4 070 494

4 065 234

7 152 615

6 768 038

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ANNUAL ACCOUNTS // GROUP 
 
 
 
EQUITY AND LIABILITIES

Note

31.12.2017

31.12.2016

Share capital 

Treasury shares

Other equity - not recognised

Retained earnings

Total controlling interests

Non-controlling interests

Total equity

Deferred tax liabilities

Cash-settled share options

Loan

Other long-term borrowings

Finance lease liabilities

Total non-current liabilities

Current portion of long-term borrowings

Current portion of finance lease liabilities

Factoring liabilities

Cash-settled share options

Trade payables

Tax payable

Accrued salary expense and public tax payable

Derivatives and other financial instruments

Other current liabilities

Total current liabilities

Total liabilities

Total equity and liabilities

17

17

13

16

10

10

10/11

10

10/11

3/10

16

3

13

3/12

25

446 648

−5 000

87 892

2 774 824

3 304 364

43 541

3 347 905

721 689

8 848

1 191 688

15 353

201 899

446 648

−5 000

63 098

2 645 935

3 150 681

56 270

3 206 951

674 684

11 360

979 874

15 963

250 452

2 139 476

1 932 333

98 873

58 353

500 976

6 746

585 378

157 244

16 486

28 462

212 717

98 490

67 116

502 535

0

493 534

172 057

48 819

23 990

222 213

1 665 233

1 628 754

3 804 710

3 561 087

7 152 615

6 768 038

Bergen, 17 April 2018

Grieg Seafood ASA

Translated version. Not to be signed.

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
CHANGE IN EQUITY

Amounts in NOK x 1 000

 Share 
capital 

 Treasury 
shares 

 Other 
equity – not 
recognised 

Retained 
equity

Non-controlling 
interests 

Total equity

Equity at 01.01.2016

446 648

−5 000

139 993

1 625 521

30 349

2 237 511

RESULT FOR 2016

1 186 032

36 299

1 222 331

Translation effect foreign currency

Net investment

Change in value in shares held for sale

Fair value change of cash flow hedging

Comprehensive income

Total comprehensive income 2016

Dividend paid

Dividend allocated minority from Ocean Quality 

Total equity attributable to shareholders 2016

Total change in equity 2016

−10 389

−68 573

19

2 048

−76 895

0

2 552

2 552

0

−10 389

−68 573

19

4 600

−74 343

−76 895

1 186 032

38 851

1 147 988

−165 618

0

−165 618

−12 929

−12 929

−165 618

−12 929

−178 547

−76 895

1 020 414

25 921

969 441

0

0

0

0

0

0

0

0

Equity at 31.12.2016

446 648

−5 000

63 098

2 645 935

56 270

3 206 951

RESULT FOR 2017

570 537

30 362

600 899

Foreign currency translation difference

Net investment

Change in value in shares held for sale

Fair value change of cash flow hedging

Comprehensive income

Total comprehensive income for 2017

Dividend paid

Dividend attributable to minority from Ocean Quality 

Total equity attributable to shareholders 2017

Total change in equity in 2017

16 729

16 973

−295

−8 613

24 794

16 729

16 973

−295

−19 052

14 355

−10 439

−10 439

0

24 794

570 537

19 922

615 254

−441 648

0

−441 648

−32 651

−32 651

−441 648

−32 651

−474 299

24 794

128 889

−12 729

140 955

0

0

0

0

0

0

0

0

Equity at 31.12.2017

446 648

−5 000

87 892

2 774 824

43 541

3 347 905

The recognised amount on the line “Treasury shares” equals the nominal value of the parent Company's holding of treasury shares.

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SPECIFICATION OF RETAINED EQUITY

Book value at 01.01.2016

Changes in 2016

Changes in 2017

 Effect of 
share-based 
remuneration 

 Purchase 
of treasury 
shares *) 

 Accumulated 
income excl. 
accumulated 
dividend 

Total

1 094

0

−13 036

1 637 463

1 625 521

0

1 020 414

1 020 414

128 889

128 889

Book value at 31.12.2017

1 094

−13 036

2 786 766

2 774 824

SPECIFICATION OF OTHER EQUITY, NOT 
RECOGNISED

 Shares held 
for sale 

 Net 
investment 

 Currency 
conversion 

 Change cash 
flow hedging 

Book value at 01.01.2016

Changes in 2016

Changes in 2017

768

19

−295

115 973

−68 573

16 973

23 252

−10 389

16 729

0

2 048

−8 613

Total

139 993

−76 895

24 794

Book value at 31.12.2017

492

64 373

29 592

−6 565

87 892

 *) The amount classified under “Purchase of treasury shares” equals the cost price in excess of nominal value. See also Note 1

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
   
   
   
   
 
   
   
 
CASH FLOW STATEMENT

Amounts in NOK x 1 000

Note

2017

2016

EBIT after Fair value adjustments of biological assets

Taxes paid for period

Fair value adjustment of biological assets

Depreciation/amortisation

Impairments property, plant and equipment, and intangible assets

(Gain)/loss on sale of property, plant and equipment

Share of results from companies applying equity method of accounting

Change in inventories and biological assets excl. fair value

Change in trade and other receivables

Change in trade payables

Change in other accruals

Change in net pension and option obligations

Net cash flow from operating activities

Receipts from sale of property, plant and equipment

Receipts from sale of shares and other equity instruments

Payments on purchase of property, plant and equipment

Payments on purchase of intangible assets

Change in other non-current receivables

Net cash flow from investing activities

Change in long-term interest-bearing debt

Lease proceeds

Repayment of long-term interest-bearing debt and leases

Other financial items

Dividend incl. allocation to non-controlling interests

Change in factoring

Interest expense

Net cash flow from financing activities

13

7

8/9

9

5

8/9

5

9

8

10

10

10

10

812 937

−165 464

91 463

201 133

0

669

550

−384 223

3 904

91 844

51 831

4 234

708 877

2 182

0

1 683 486

−41 653

−515 741

180 388

−6 472

1 202

−569

−16 799

−236 166

−159 549

59 374

5 612

953 113

17 199

39 592

−548 641

−247 783

−4 180

−5 705

−7 069

−1 519

−556 344

−199 580

300 000

9 600

−157 144

−7 597

−474 299

−1 559

−52 787

−383 787

-450 000

43 131

-137 455

−3 988

−178 547

169 221

−87 196

−644 834

Net change in cash and cash equivalents

−231 253

108 699

Cash and cash equivalents at 01.01

503 613

392 020

Currency conversion of cash and cash equivalents

−645

2 894

Cash and cash equivalents at 31.12

271 715

503 613

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTE 1
GENERAL INFORMATION

Grieg Seafood ASA is an integrated Norwegian seafood company engaged in salmon farming and processing. Grieg Seafood ASA is a public limited 
company registered in Norway. Its head office is located at C. Sundtsgt. 17/19, Bergen, The Company was listed on the Oslo Stock Exchange on 
21 June 2007 and has operations in Norway, the UK and Canada. The consolidated financial statements have been prepared in accordance with 
International Financial Reporting Standards (IFRSs) as adopted by EU, and were approved by the Board of Directors 3 April 2017. 

In the following, "Group" describes information relating to the Grieg Seafood Group, while "Company" refers to the parent company. 

The Group owns the company Ocean Quality AS together with Bremnes Fryseri AS on a 60%/40% basis. Grieg Seafood does not receive any of the 
profit from the sale of fish from Bremnes Fryseri AS, as earnings are based on a skewed distribution of profit based on the delivered volume from 
each shareholder. The share of profit and share of equity in Bremnes Fryseri AS are presented as non-controlling interests.

Grieg Seafood Group comprised the following entities as at 31 December 2017:

Grieg Seafood Hjaltland UK Ltd, including all subsidiaries, and Ocean Quality UK Ltd are domiciled in the UK. Grieg Seafood BC Ltd and Ocean 
Quality North America Ltd are domiciled in Canada. Ocean Quality USA Inc is domiciled in the USA. The rest of the companies are domiciled in 
Norway 

Grieg Seafood Hjaltland UK Ltd. and Grieg Seafood Canada AS are holding companies, which wholly own the production companies Grieg Seafood 
Shetland Ltd. and Grieg Seafood BC Ltd., respectively. Grieg Seafood ASA has a 60% stake in Ocean Quality AS and the other subsidiaries are wholly 
owned.
Ocean Quality AS wholly owns Ocean Quality UK Ltd and Ocean Quality North America Inc., while the latter wholly owns Ocean Quality USA Inc.

All amounts are stated in TNOK unless otherwise specified.

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ANNUAL ACCOUNTS // GROUPGROUP STRUCTURE

GSF ASA

60%

OCEAN QUALITY AS

OCEAN QUALITY 
UK LTD

OCEAN QUALITY 
NORTH AMERICA LTD

OCEAN QUALITY 
USA INC

100%

100%

100%

100%

GRIEG SEAFOOD 
ROGALAND AS

GRIEG SEAFOOD 
FINNMARK AS

GRIEG SEAFOOD 
HJALTLAND UK LTD

GRIEG SEAFOOD 
CANADA AS

GRIEG SEAFOOD
SHETLAND LTD

GRIEG SEAFOOD
BC LTD

GRIEG SEAFOOD ISLE 
OF SKYE LTD

COLLARFIRTH 
SALMON LTD

HJALTLAND 
HATCHERIES LTD

LERWICK FISH 
TRADERS LTD

FISH HOLM
LTD

SHETLAND
PRODUCT

SKELDA SALMON 
FARMS LIMITED

VIDLIN 
SEAFARMS LTD

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ANNUAL ACCOUNTS // GROUPSEGMENT STRUCTURE

GRIEG
SEAFOOD

NOR

NOR

UK

CAN

ROGALAND

FINNMARK

SHETLAND

BRITISH COLUMBIA

GRIEG SEAFOOD 
ROGALAND AS

GRIEG SEAFOOD 
FINNMARK AS

GRIEG SEAFOOD 
SHETLAND UK LTD

GRIEG SEAFOOD 
CANADA AS

OCEAN  
QUALITY AS

OCEAN  
QUALITY AS

OCEAN  
QUALITY UK LTD

OCEAN  
QUALITY NORTH 
AMERICA INC

OCEAN  
QUALITY USA INC

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ANNUAL ACCOUNTS // GROUPNOTE 2
ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these 
consolidated financial statements are set out below. These policies 
have been consistently applied to all the periods presented, unless 
otherwise indicated. 

BASIS OF PREPARATION

The consolidated financial statements have been prepared in 
accordance with International Financial Reporting Standards (IFRSs) 
as adopted by the EU.

The consolidated financial statements have been prepared under the 
historical cost convention, modified for biological assets, available-
for-sale financial assets, and financial assets/liabilities (including 
derivative instruments) at fair value through profit or loss.

The preparation of financial statements in conformity with IFRSs 
requires the use of estimates. It also requires management to 
exercise its judgement in the process of applying the Company’s 
accounting policies. Areas involving a higher degree of judgement or 
complexity, or areas where assumptions and estimates are material to 
the consolidated financial statements, are described in Note 4.

CONSOLIDATION PRINCIPLES

(A) SUBSIDIARIES
Subsidiaries are all entities (including special purpose entities) over 
which the Group has control. A situation where the Group controls 
another entity arises when the Group is exposed to variability in 
returns from the entity, and has the ability to influence these returns 
through its control of the entity. Subsidiaries are consolidated from 
the date when the Group can exercise control until the date when 
control of the subsidiary ceases. 

If the Company´s ownership exceeds 50% but is below 100% of the 
subsidiaries, the non-controlling interests’ share of profit after tax and 
share of equity are recognised on separate lines.

The purchase method of accounting is used for acquisitions. The 
cost of an acquisition is measured as the fair value of the assets 
and liabilities taken over, and equity instruments issued. The 
cost also includes the fair value of all assets and liabilities and 
contingent liabilities taken over by agreement. Identifiable assets, 
debt and contingent liabilities are recognised at fair value on the 
date of acquisition. Non-controlling interests in the acquired entity 
are measured from time to time either at fair value, or at their 
proportionate share of net assets of the acquired entity.

Costs relating to acquisitions are charged as they arise.

In the case of multi-stage acquisitions, the proportion of ownership 
from any earlier purchases is re-stated at fair value at the date of 
control with changes in value recognised through profit or loss. 

A contingent acquisition price is measured at fair value at the date 
of acquisition. Under IAS 39, subsequent changes in the contingent 
acquisition price are recognised through profit or loss or as a change 
in the comprehensive income statement, where the contingent 
price is classified as an asset or a liability. CThere is no new value 
measurement of a contingent acquisition price classified as equity, 
and the subsequent settlement is charged against equity.

Intra-group transactions, balances, and unrealised gains and losses 
between Group companies are eliminated. The financial statements of 
subsidiaries are re-stated where necessary to ensure consistency with 

the accounting policies adopted by the Group. 

(B) CHANGE IN OWNER INTERESTS IN SUBSIDIARIES 
WITHOUT LOSS OF CONTROL
Transactions with non-controlling interests of subsidiaries, which 
do not entail a loss of control, are regarded as equity transactions. 
On the purchase of further shares from non-controlling interests, 
the difference between the consideration paid and the shares’ 
proportionate share of the net assets in the financial statements of the 
subsidiary is recognised in the equity of the parent company’s owners. 
Similarly, any gain or loss on a sale to non-controlling interests is 
charged against equity.

C) DIVESTMENT OF SUBSIDARIES
In the event of loss of control, any remaining ownership interest is 
stated as fair value change through profit or loss. Thereafter, for 
accounting purposes, fair value is the acquisition cost either as an 
investment in an associated company or as a financial asset. Amounts 
previously recognised in comprehensive income statement related to 
this company, are dealt with as if the Group had disposed of underlying 
assets and liabilities. This allows for amounts previously recognised 
in comprehensive income statement, to be reclassified as part of the 
income statement.

(D) ASSOCIATED COMPANIES
Associated companies are entities over which the Group has 
significant influence, but not control. Significant influence normally 
occurs when the Group has between 20 % and 50 % of the voting 
rights. Investments in associates are recognised using the equity 
method. Investments in associates are initially recognised at 
acquisition cost, and the Group´s share of the results in subsequent 
periods is recognised through profit or loss. The amount recognised in 
the balance sheet includes any implicit goodwill identified at the date 
of purchase. 

Shares of profit or losses of associates that are closely linked to 
the Group´s operations and thus are included in the value chain of 
the Group, are classified on a separate line included in the Group’s 
operating result.

In the event of a reduction in the owner interest in an associated 
company where the Group retains significant influence, only a 
proportionate share of amounts previously recognised in the 
comprehensive income statement is reclassified through profit or 
loss.

The Group’s share of profits or losses of associated companies 
is recognised in the income statement and is added to the value 
of the investment in the balance sheet.  The Group’s share of the 
comprehensive results of the associated company is recognised in the 
consolidated statement of comprehensive income plus the amount 
of the investment in the balance sheet. The Group’s share of a loss is 
not recognised in the income statement if this means that the value of 
the investment in the balance sheet is negative (including the entity’s 
unsecured receivables), unless the Group has undertaken obligations 
or made payments on behalf of the associated company. The accounts 
of associated companies are re-stated when necessary to ensure 
consistency with the accounting policies adopted by the Group.

At the end of each accounting period, the Group determines if there 
is a need to write down the investment in the associated company. 
In such case, the amount of the write-down is calculated as the 
difference between the recoverable amount of the investment and 
its book value, and the difference is posted on a separate line along 

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ANNUAL ACCOUNTS // GROUP 
 
 
 
with«Share of results of associated companies». 

If a gain or a loss arises on transactions between the Group and its 
associated companies, only the proportionate amount related to 
shareholders outside the Group is recognised. Unrealised losses are 
eliminated unless there is a need to write down the asset that was 
the subject of the transaction. Accounting policies of associates are 
changed when necessary to ensure consistency with the accounting 
policies adopted by the Group. Gains and losses on dilution of assets 
of associated companies are recognised in the income statement. 

SEGMENT REPORTING

Operating segments are reported in a manner consistent with the 
internal reporting to the chief operating decision-maker. The chief 
operating decision-maker, who is responsible for allocating resources 
and assessing performance of the operating segments, has been 
identified as the Group management. 

FOREIGN CURRENCY TRANSLATION

The financial statements of each of the Group’s entities are generally 
measured using the currency of the economic area in which the entity 
operates («the functional currency»). The consolidated financial 
statement is presented in Norwegian Kroner (NOK), which is the 
parent company’s functional and presentation currency.

TRANSACTIONS AND BALANCE SHEET ITEMS

Foreign currency transactions are translated into the functional 
currency using the exchange rates. Foreign exchange gains resulting 
from the settlement of such transactions that are not denominated 
in the entity´s functional currency are recognised in income. 
Translations of monetary items (assets and liabilities) that are not 
denominated in the entity´s functional currency are recognised.

Improvements are included in the asset’s carrying amount or 
recognised as a separate asset when it is probable that future 
economic benefits associated with the improvement will flow to the 
Group and the cost of the item can be reliably measured. All other 
repairs and maintenance are charged to the income statement during 
the financial period in which they are incurred. 

Land and buildings comprise mainly factories and offices. Land is 
not depreciated. Depreciation on other assets is calculated using 
the straight-line method to allocate cost less residual value over 
estimated useful lives, as follows:

Buildings/real estate 10 – 50 years
Plants, barges, onshore power supply 5 – 30 years
Nets/cages/moorings 5 – 25 years
Other equipment 3 – 35 years

The assets’ useful lives and residual values are estimated at each 
balance sheet date and if necessary adjusted.

An asset’s carrying amount is written down to its recoverable amount 
if the carrying amount is greater than its estimated recoverable 
amount. Gains and losses on disposals are posted net in the income 
statement and correspond to the difference between the sale price 
and the carrying amount.

INTANGIBLE ASSETS

Intangible assets that arise internally within the Group are not 
recognised. Goodwill and licences with an indefinite economic life are 
subject to annual impairment tests. Impairment tests are performed 
more frequently if indications of impairment exist. Amortised licences 
are tested for impairment only if there are indications that future 
earnings do not justify the asset’s balance sheet value.

GROUP COMPANIES

GOODWILL

The income statements and balance sheets of the Group entities 
(none of which has the currency of a hyperinflationary economy) that 
have a functional currency different from the presentation currency 
are translated into the presentation currency as follows:

1. The balance sheet is translated into closing rate on the date of the 
balance sheet.
2. Income and expense items in the income statement are translated 
at average exchange rates for the period (if the average is not a 
reasonable estimate of the cumulative effects of using the transaction 
rate, the transaction rate is used).
3. Translation differences are recognised in comprehensive income 
and specified separately.

When a foreign operation is sold, the exchange difference, which 
in previous periods was recognised in consolidated income, is not 
accrued. The accumulated exchange difference on the sale of the 
foreign operation is hence reversed in the consolidated income. 
Gain/loss from the sale is recognised on a basis of zero exchange 
difference. Gain/loss is recorded in the ordinary net profit.

Goodwill and fair value adjustments of assets and liabilities on the 
acquisition of a foreign entity are treated as assets and liabilities of 
the foreign entity and are translated into closing rate on the date of 
the balance sheet.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at historical cost less 
depreciation and impairment. Historical cost includes expenditure 
that is directly attributable to the acquisition of the asset. Acquisition 
may also include gains or losses transferred from equity as a result of 
hedging the cash flow in foreign currency on the purchase of property, 
plant and equipment.

Goodwill represents the excess of the cost of an acquisition over the 
fair value of the Group’s share of the net identifiable assets of the 
acquired entity at the date of acquisition. Goodwill on acquisitions 
of subsidiaries is classified as an intangible asset. Goodwill on the 
purchase of a share in an associate is included in “investments in 
associates”. Goodwill is tested annually for impairment and carried 
at cost less accumulated impairment losses. Impairment losses on 
goodwill are not reversed. Gains and losses on the disposal of an 
entity include the carrying amount of goodwill relating to the entity 
sold. Goodwill is allocated to cash-generating units for the purpose of 
impairment testing. The allocation is made to those cash-generating 
units or groups of cash-generating units that are expected to benefit 
from the business combination in which the goodwill arose. 

LICENCES

Fish-farming licences that have an indefinite useful life are not 
amortised but reviewed for impairment annually, or more frequently 
if there are indications that the balance sheet value may have 
decreased.

The Group considers the following licences to have indefinite useful 
lives:
Licences granted with an indefinite useful life, where the company has 
no other contractual restrictions relating to the use of the licence.
Licences granted with a limited useful life, but where the licence 
holders can renew the licences without incurring considerable 
expenses.

Licences with a limited useful life are amortised over their useful 
lifetime. These relate to water licences for hatcheries and some 
specific seawater licences. The following sections provide a 
description of concessions relating to the Norway, UK (Shetland) and 
Canada (BC) segments. Please refer to Note 8 Intangible assets for an 
overview of the number and types of licences, as well as impairment 
testing.

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ANNUAL ACCOUNTS // GROUPNORWAY
The licensing regime for the production of salmon and trout in Norway 
is enacted by the Norwegian Parliament through the Aquaculture 
Act. The Ministry of Trade, Industry and Fisheries grants permits 
for aquaculture (licences). All aquaculture operations are subject to 
licensing and no body can produce salmon/ trout without permission 
from the authorities, see Aquaculture Act § 4. 

The aquaculture permit allows the production of salmon and trout 
in limited geographic areas (sites), within the current determined 
limitations of the permit scope. The Aquaculture Act is administered 
centrally by the Ministry of Trade, Industry and Fisheries, with the 
Directorate of Fisheries as the supervisory authority. Regionally, 
several industry authorities jointly manage full administrative 
and supervisory responsibility within the regulating range of the 
Aquaculture Act. The county is the regional administrative body, while 
the Directorate of Fisheries serves as appellate body in locality and 
licensing matters.

SEAWATER LICENCES
Each licence for salmon and trout in the sea is subject to a production 
limit in the form of “maximum allowed biomass” (MTB). MTB does 
not directly limit the number of tons of fish production within a 
year, but limits the amount of fish that can be kept in the sea at 
any time. Normally, a licence has a limit of 780 tons MTB, while 
in Troms and Finnmark counties, a standard licence has a limit 
of 900 tons MTB (provided all associated locations are situated in 
Troms and Finnmark), see the Salmon Allocation Regulation § 15 
(“laksetildelingsforskriften”). Such licences are limited in number 
and only subject to application, following politically decided licensing 
rounds.

HATCHERY LICENCES
Young salmon/trout are defined as eggs, juveniles, parr or smolts 
to be released in another locality, see Salmon Allocation Regulation 
§ 4 f. Such licences are not limited  and thus subject to continuous 
application for new licenses or changes to existing licenses***. 
In essence, it is not permitted to produce smolts over 250 grams; 
however, the regulations allow for applications to produce a certain 
percentage of fish up to 1 kg. GSF has authorisation up to 1 kg.

R&D AND BROODSTOCK LICENCES 
These licences are not limited in number. Permits are means-
tested, meaning that the applicant must demonstrate a need for 
the production of eggs, specific research projects or for educational 
purposes. Broodstock licences include both a land and sea phase, i.e. 
the broodfish and egg production are covered by the same licensing 
process.

Harvesting cage licences 
Licences utilised for cage-setting of live fish for harvesting. These 
relate to specific locations.

DURATION AND RENEWAL
The Ministry may in individual decisions or regulations specify further 
provisions on the content of aquaculture licences, including relating 
to scope, time limitations, etc., see the Aquaculture Act § 5, second 
paragraph. Nonetheless, the preparatory work for the Aquaculture 
Act specifies that licences are normally granted without a time limit. 
GSF’s general food fish licences and hatchery licences are not time-
limited under current regulations. After the reform in 2009, a number 
of licences were time-limited, mainly for 15 years. As no government 
practices have been established relating to the renewal of broodstock 
licences, the current understanding is that expiration of licences 
allows for application for renewal based on demand***. A licence 
for harvesting cages is valid for 10 years and must be renewed on 
expiration, provided that the licence is still connected to an approved 
harvesting facility.

DISPOSAL AND WITHDRAWAL 
All licences can be transferred and mortgaged in accordance with the 
Aquaculture Act § 19. Transfers and mortgages must be registered in 
a separate register (the Aquaculture Register). It is not permitted to 
rent out licences or licence capacity.

The Aquaculture Act § 9 reviews the basis for withdrawal of an 
aquaculture licence. This states that there must be significant 
breaches of the terms of an aquaculture licence before it can be 
revoked. 

UK
Grieg Seafood Shetland Ltd (GSF UK) has farms on both the west and 
east coasts of Shetland, as well as the west coast of Scotland. In order 
to operate farms in Scotland, the following five licences must be in 
place:
1. Water Environment (Controlled activities) “CAR” licence – issued by 
the Scottish Environment Protection Agency (SEPA)
2. Planning permission – issued by the local authorities (Town and 
Country Planning Act)
3. (iii) Crown Estate Lease/Permission (The Crown Estate Act 1961)
4. Aquaculture Production Business Licence (APB) – issued by Aqua 
Animal Health
5. Marine Licence (Navigation) – issued by the Scottish government

For restrictions regarding production quantity, see table in Note 8. 

DURATION AND RENEWAL
1. CAR licence – requires periodic inspection and monitoring. If a 
substantial negative impact on the environment can be proven as a 
consequence of the operation, the production volume can be reduced 
or, as in a worst-case scenario, revoked.
2. Planning Permission – indefinite duration; however, if the plant is 
left unused for three consecutive years, the licence may be withdrawn
3. Crown Estate Lease/Permission – 25 years’ duration. The normal 
procedure is to renew the licences on expiration.
4. APB – indefinite duration subject to compliance with the licence´s 
conditions.
5. Marine Licence – application for renewal required every six years. 
This is normally a formality.

BC
Grieg Seafood BC Ltd (GSF BC) has farms on both the west and 
east coasts of Vancouver Island. In order to operate farms in British 
Columbia, Canada, the following three licences must be in place:

1. Aquaculture licence – issued by the Department of Fisheries and 
Oceans
2. Licence of Occupation (Tenures) – issued by the Ministry of Forest, 
Lands and Natural Resource Operations
3. Navigation Water Permit – issued by Transport Canada (Canadian 
public authorities)

For restrictions regarding production quantity, see table in Note 8.

DURATION AND RENEWAL
1. Aquaculture licence – duration of one year, renewal each year is a 
formality.
2. Licence of Occupation – duration of 2-20 years. Renewal is applied 
for on expiration.
3. Navigation Water Permit – duration of five years, but possible to 
apply for renewal.

OTHER INTANGIBLE ASSETS

Acquired customer portfolios and computer software licences are 
capitalised at cost and amortised over their estimated useful lives. 
Customer portfolios are capitalised at historical cost at the date of 
purchase. Amortisation is calculated using the straight-line method 
over the estimated useful life, as follows:
• Customer portfolios 6 years
• Computer software 3-10 years

Impairment of non-financial assets

Assets that have an indefinite useful life are not amortised but 
are tested annually for impairment. Assets that are subject to 
amortisation are reviewed for impairment whenever there are 
indications that future earnings do not justify the carrying amount. 

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ANNUAL ACCOUNTS // GROUPAn impairment loss is recognised for the amount by which the asset’s 
carrying amount exceeds its recoverable amount. The recoverable 
amount is the higher of an asset’s fair value less costs to sell and 
value in use. For the purposes of assessing impairment, assets are 
grouped at the lowest levels for which there are separately identifiable 
cash flows (cash-generating units). Non-financial assets, other than 
goodwill, that have suffered an impairment are reviewed for indicators 
of possible reversal of the impairment at each reporting date.

FINANCIAL ASSETS/LIABILITIES

The Group classifies its financial assets in the following three 
categories:
• 
• 
• 

loans and receivables,
assets available for sale, and
at fair value through profit or loss

The classification depends on the purpose for which the assets are 
held. Management determines the classification of its financial assets 
on acquisition and re-evaluates this designation only in the event of 
material changes at each reporting date.

I) LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets with fixed 
or determinable payments that are not quoted in an active market. 
They are classified as current assets, except for maturities greater 
than 12 months after the balance sheet date. These are classified as 
non-current assets. Loans and receivables are classified as ‘other 
receivables’ in the balance sheet.
At each balance sheet date, the Group considers whether there is any 
objective evidence that the loans and receivables are impaired. Such 
objective evidence comprises, for instance:
- breach of contract, such as a default or delinquency in payments,
- the probability that the borrower will become insolvent or be subject 
to financial reorganisation.
Loans and receivables are carried at amortised cost using the 
effective interest method.

II) AVAILABLE-FOR-SALE FINANCIAL ASSETS
Available-for-sale financial assets are non-derivatives that are either 
designated in this category or not classified in any other category. 
These are included in non-current assets unless management intends 
to dispose of the investment within 12 months of the balance sheet 
date.

Available for-sale financial assets are stated at fair value. Changes in 
value are recognised in the statement of total comprehensive income.

When securities classified as available-for-sale are sold or impaired, 
the accumulated fair value adjustments recognised in equity are 
included in the income statement as ‘other financial income/losses 
from investment in securities ’.  Interest on available-for-sale 
securities calculated using the effective interest method is recognised 
in the income statement.  Dividends on shares classified as available-
for-sale are recognised in the income statement when the Group’s 
right to receive dividends is established.  The fair values of quoted 
investments are based on current bid prices.  If the market for a 
financial asset is not active (and for unlisted securities), the Group 
establishes fair value by using valuation techniques. These include 
recent transactions on market terms, reference to other instruments 
which are essentially the same and use of discounted cash flows and 
options models.

The techniques used make maximum use of market and avoid 
company-specific information as much as possible.

Investments are derecognised when the rights to receive cash flows 
from the investments have expired or have been transferred and 
the Group has transferred substantially all risks and rewards of 
ownership.

Regular purchases and sales of investments are recognised on the 
trade-date – the date on which the Group commits to purchase or sell 
the asset. All financial assets that are not stated at fair value through 

profit or loss are initially recognised at fair value plus transaction 
costs. 

At each balance sheet date the Group assesses whether there is 
objective evidence that a financial asset or a group of financial assets 
is impaired.  In the case of shares classified as available for sale, a 
significant or prolonged decline in the fair value of the security below 
its cost is considered as an indicator that the securities are impaired. 
If any such evidence exists for available-for-sale financial assets, the 
cumulative loss – measured as the difference between the acquisition 
cost and fair value, less any impairment loss on that financial asset 
previously recognised through profit or loss – is removed from 
equity and recognised in the income statement. Impairment losses 
recognised in the income statement on shares and corresponding 
equity instruments are not reversed through the income statement. 
Impairment testing of trade receivables is described below.

III) FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE IN-
CLUDED IN INCOME STATEMENT, INCLUDING DERIVATIVES 
AND HEDGING
Financial equity classified as available-for-sale is recorded at fair 
value, with changes in value included in income statement. 

The Group applies hedge accounting under IAS 39 for long-term 
foreign currency forward contracts entered into in connection with 
physical future delivery contracts of fish to customers. Changes in 
value of foreign currency forward contracts which meet the hedging 
criteria are recorded in comprehensive income.

Short-term foreign currency forward contracts relating to the spot 
market for fish are recognised at fair value through profit or loss. 
Derivatives are initially recognised at fair value on the date a derivative 
contract is entered into, and are subsequently stated at fair value on 
an ongoing basis. Changes in the fair value of derivatives entered into 
for hedging purposes against operating revenues are recognised in 
revenues. Other currency and interest derivatives are posted net in the 
income statement under “other financial income/ financial costs”.

With regard to financial price contracts relating to sale and purchase 
agreements on Fish Pool, changes in unrealised gains and losses are 
recognised as a value adjustment of biological assets, while the book 
value is reported as a derivative in the balance sheet, carrying gross 
value for purchase and sales contracts, respectively. 

Assets/liabilities in this category are classified as current assets/
short-term debt when they are intended to be disposed of within 12 
months, otherwise as non-current assets/liabilities. 

INVENTORIES

Inventories are stated at the lower of cost and net realisable value. 
Cost is determined using the first-in, first-out (FIFO) method. The net 
realisable value is the estimated selling price, less processing and 
selling expenses.

BIOLOGICAL ASSETS

The accounting treatment of live fish by companies applying IFRSs 
is regulated by IAS 41 Agriculture. IAS 41 comprises a hierarchy 
of methods for accounting measurement of biological assets. The 
basic principle is that such assets shall be measured at fair value. 
The model applied by the Group divides the fish into three weight 
categories and assumes the following:

i) Fish on land (smolt) are recorded at accumulated cost. The best 
estimate of fair value is considered to be the accumulated cost.
i) For fish in the sea up to 4.76 kg, a proportionate part of the 
estimated profit is included in the estimated fair value.
ii) For fish in the sea with an average weight over 4.76 kg (fish ready 
for harvesting), an estimated net sale price is established, assuming 
harvesting and sale at the balance sheet date. 

If the expected sale price is below the estimated cost, this will entail a 
negative value adjustment of biological assets, which is 100% accrued. 
The fair value of fish in the sea is estimated for individual localities. 

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ANNUAL ACCOUNTS // GROUPWhen estimating the actual accumulated cost at the respective 
seawater facility, direct costs (fish feed and similar) are allocated to 
the locality.  Indirect costs are distributed across localities through 
a norm of distribution.  In the event of an unusual mortality rate, the 
production cost is subject to write-down. This only applies when the 
mortality rate exceeds normal expectations. Financial costs are not 
included in the costs of production.

The sale price for fish in the sea with an average weight exceeding 
4.76 kg (fish ready for harvesting) is the forward price in Norway 
based on harvesting and selling the fish on the balance sheet date. 
The price of fish up to 4.76 kg is based on forward prices, adjusted for 
the remaining growth period until expected harvest. With regard to 
foreign countries, the most relevant price information available for the 
expected harvesting period is applied. For fish in the sea up to 4.76 
kg, the forward price in Norway is adjusted for historical differences in 
achieved prices between Norway and Canada/the UK. 

The price/net sales value is adjusted for quality differences (superior, 
ordinary and prod.), weight size, and for logistics expenses and 
sales commissions. Estimated harvesting expenses are deducted. 
The volume is adjusted for gutting waste, as the price is measured 
for gutted weight. Own, budgeted harvesting and freight costs are 
applied***. Foreign currency forward contracts associated with the 
date of harvesting are applied when translating the price into CAD and 
GBP.

The change in the fair value of biological assets is recognised in 
income. The value adjustment is presented on the separate line “Fair 
value adjustment of biological assets”.

For physical delivery contracts for shipment to customers, only 
losses on contracts are recorded. Values are calculated based on the 
forward price from Fish Pool, in the same way as the calculation of 
biological assets. For sales under contracts covering fish weighing 
more than 4.76 kg,  forward prices at the balance sheet date for the 
first quarter have been applied. For sales under contracts covering 
fish weighing less than 4.76 kg, a proportionate share is recognised, 
equal to the principle applied for Fair value calculation of biological 
assets. Forward prices from Fish Pool for the scheduled harvesting 
time are applied. Changes arising from physical delivery contracts are 
recognised as an adjusted to change of value adjustment of biological 
assets***. The liability in the balance sheet is posted under other 
current liabilities (see Note 7).

The Group applies an internal principle of impairment in the event 
of extraordinary mortality. Such impairments are recorded as they 
arise under costs of goods sold in the income statement. Information 
on recorded fair value for extraordinary mortality is based on the 
same principle as estimating value-adjusted biological assets. For 
specification of annual extraordinary mortality, see Note 7.

INDUSTRY GROUP FOR AQUACULTURE

In autumn 2014, the Financial Supervisory Authority of Norway 
(Finanstilsynet) initiated an evaluation project on specific areas of 
financial reporting for aquaculture companies listed on the Oslo 
Stock Exchange. The purpose of the project was to assess whether 
the aquaculture industry practises uniform and consistent reporting 
in accordance with IFRSs. Finanstilsynet published its final report on 
its website (www.finanstilsynet.no) on 17 November 2015. As a result 
of this review, the fish farming companies covered by the project 
established an industry group for financial reporting, as a venue for 
discussions and joint reporting improvements.

The Group has held several meetings, including in 2017, focusing in 
particular on:
i) identifying possible disclosure improvements and accounting policy 
applications to promote comparability, and
ii) developing a shared model for Fair value measurement of biomass.

In connection with the first item, the Group has identified some 
areas for improvement, and some adjustments of notes disclosures 
and presentation effective from fiscal year 2015. With regard to the 

second item, the industry group has agreed on the main policies 
for measuring fair value of biomass according to IAS 41, based on a 
present value model.

The industry group intends to continue discussions in 2018, with 
the aim of reaching additional agreements on various aspects of 
the estimation method. The Group has implemented the decisions 
previously made by the industry group.

The following companies participate in the industry group: Lerøy 
Seafood Group ASA, Grieg Seafood ASA, Salmar ASA, P/F Bakkafrost, 
NTS ASA, Cermaq Group AS, and Marine Harvest ASA.

TRADE RECEIVABLES

Trade payables are generated from trading of goods or services within 
the ordinary operating cycle, and under normal terms of payment 
are initially recognised at nominal value. Longer terms of payment 
imply a subsequent measurement of net present value/discounting 
of the trade payables. A provision for impairment of trade receivables 
is established when there is objective indication that the Group 
will not be able to collect all amounts due according to the original 
terms of trade. Significant financial difficulties affecting the debtor, 
the probability that the debtor will become insolvent or be subject 
to financial reorganisation, and default or delinquency in payments 
are considered indicators that the trade receivable is impaired. The 
provision is the difference between nominal and recoverable amount, 
which is the present value of estimated future cash flows, discounted 
at the original effective interest rate. The amount of the provision is 
recognised in the income statement under ‘other operating expenses’.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in hand, bank deposits, 
other short-term highly liquid investments with original maturities of 
three months or less. In the balance sheet, long-term credit facility is 
included in short-term borrowings.

SHARE CAPITAL

Ordinary shares are classified as equity. Costs directly attributable to 
the issue of new shares or options, net of tax, are shown in equity as a 
deduction, net of tax, from the proceeds.

BORROWINGS

Borrowings are recognised initially at fair value when the funds 
are received, net of transaction costs incurred. Borrowings are 
subsequently stated at amortised cost applying the effective interest 
method. Any difference between the proceeds (net of transaction 
costs) and the redemption value is recognised in the income 
statement over the period of the borrowings. Borrowings are 
classified as current liabilities unless the Group has an unconditional 
right to defer settlement of the liability for at least 12 months after the 
balance sheet date. 

DEFERRED TAX

Deferred tax is provided for in full at nominal values, using the 
liability method, on temporary differences arising between the value 
of assets and liabilities for tax and accounting purposes. Deferred 
tax is determined using tax rates and laws that have been enacted or 
substantially enacted by the balance sheet date and are expected to 
apply when the related deferred tax asset is realised or the deferred 
income liability is settled. Deferred tax assets are recognised to the 
extent that it is probable that future taxable income will be available, 
from which the temporary differences can be deducted. Deferred 
tax is calculated on temporary differences arising on investments in 
subsidiaries and associates, except where the timing of the reversal of 
the temporary difference is controlled by the Group and it is probable 
that the temporary difference will not be reversed in the foreseeable 
future.

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ANNUAL ACCOUNTS // GROUPEMPLOYEE BENEFITS

PENSION OBLIGATIONS
The Company has paid premium to local, defined contribution based 
schemes for all employees. The Company’s pension scheme is in 
accordance with rules and regulations for mandatory occupational 
pensions. The pension premium is charged through operations as 
it arises in the profit and loss account. Employer’s social security 
contributions are charged on the basis of the pension premium paid.

The Group companies Grieg Seafood Rogaland AS and Grieg Seafood 
Finnmark AS have a contractual early retirement pension scheme 
(AFP). The financial commitments associated with this scheme are 
included in the Group’s pension expenses. The AFP early retirement 
scheme follows the rules for public sector AFP, and both companies 
are members of the LO/NHO scheme. The pension payment 
calculations are based on standard assumptions relating to the 
development of mortality and disability as well as other factors such 
as age, years of service and remuneration. The premium is charged 
through operations as it arises in the profit and lossaccount.

SHARE-BASED REMUNERATION
The Group operates a share-based management remuneration plan 
with settlement in cash, where the individual employee is obliged 
to buy shares proportionate to annual salary. The fair value of the 
employee services received in exchange for the grant of the options 
is recognised as an expense. The total amount to be charged over 
the vesting period is calculated on the basis of the fair value of the 
options granted, excluding the impact of any non-market vesting 
conditions (for example, profitability and sales growth targets). 
Non-market vesting conditions are included in assumptions about the 
number of options that are expected to vest. At each balance sheet 
date, the company revises its estimates of the number of options 
that are expected to vest. It recognises the impact of the revision 
relative to original estimates, if any, in the income statement, with a 
corresponding adjustment to equity. The Black and Scholes option 
pricing model is used for valuation. The company´s obligations 
are posted under long-term commitments if the latest possible 
redemption date exceeds one year into the future.

TRANSACTIONS UNDER JOINT CONTROL
On the purchase of entities under joint control the Group has chosen 
to apply IFRS 3 as its accounting standard. The proceeds received 
net of any directly attributable transaction costs are credited to share 
capital (nominal value) and share premium when the options are 
exercised.

TERMINATION BENEFITS
Termination benefits are payable when employment is terminated 
by the Group before the normal retirement date, or whenever an 
employee accepts voluntary redundancy in exchange for these 
benefits. The Group recognises termination benefits when it is 
demonstrably committed to either terminating the employment of 
current employees according to a detailed formal plan without the 
possibility of withdrawal, or providing termination benefits as a result 
of an offer made to encourage voluntary redundancy.

PROFIT SHARING AND BONUS PLANS

The Group recognises a provision where it has a contractual obligation 
or where there is a past practice that has created a constructive 
obligation.

PROVISIONS

Provisions (e.g. environmental improvements, restructuring costs and 
legal claims) are recognised when:

- the Group has a present legal or constructive obligation as a result 
of past events;
- it is more likely than not that an outflow of resources will be required 
to settle the obligation;
- the amount of the obligation can be reliably estimated.

Restructuring provisions comprise lease termination penalties and 
employee termination payments. Provisions are not recognised for 
future operating losses.

Where there is a number of similar obligations, the likelihood that an 
outflow will be required in settlement is determined by considering 
the class of obligations as a whole. A provision is recognised even if 
the likelihood of an outflow with respect to any one item included in 
the same class of obligations may be small. Provisions are measured 
at the present value of the expenditures expected to be required to 
settle the obligation, using a pre-tax discount rate that reflects the 
current market situation and the risks specific to the obligation. 
The increase in the provision due to the change in value because of 
passage of time is posted as a financial expense.

REVENUE RECOGNITION

Revenue comprises the fair value of the consideration received or 
receivable for the sale of goods and services. Revenue is shown net of 
value-added tax, returns, rebates and discounts and after eliminating 
intra-group sales. Revenue is recognised when it is reliably measured 
and it is reasonably assured that the economical assets will be 
transferred to the company, that is when a Group entity has delivered 
products to the customer, the customer has accepted the products 
and collectability of the related receivables and when the risks and 
rewards have been transferred to the customer.

INTEREST INCOME

Interest income is recorded proportionately over time using the 
effective interest method. When a receivable is impaired, the Group 
reduces the carrying amount to its recoverable amount, being the 
estimated future cash flow discounted at the original effective interest 
rate. Interest income on impaired loans is recognised on the basis of 
the amortised cost and the original effective interest rate.

DIVIDEND INCOME

Dividend income from investments under the cost method or 
available-for-sale is recognised when the right to receive payment is 
established. Dividend income from entities under the equity method 
are not being recognised but recorded as a reduction in the carrying 
value of the investment.

LEASES

FINANCE LEASINGS

Leases, or other arrangements as described in IFRIC 4, relating to 
property, plant and equipment where the Group has substantially 
all the risks and control, are classified as finance leasings. Finance 
leasings are capitalised at the lease’s commencement at the lower 
of the fair value of the leased property and the present value of the 
aggregate minimum lease payments.

Each lease payment is allocated between an instalment element 
and an interest element so as to achieve a constant interest rate 
in the different periods on the outstanding lease obligation in the 
balance sheet. The lease obligation, less interest costs, is classified 
as other long-term debt. The interest expense is posted in the income 
statement as a financial expense over the lease period so as to 
achieve a constant interest expense on the outstanding obligation 
in each period. The property, plant and equipment acquired under 
finance leasings is depreciated over the shorter of the expected useful 
life of the asset or the lease period.

OPERATING LEASES
Leases, or other arrangements as described in IFRIC 4, in which a 
significant portion of the risks and rewards of ownership are retained 
by the lessor, are classified as operating leases. Payments made 
under operating leases (net of any financial incentives from the lessor) 
are charged to the income statement on a straight-line basis over the 
period of the lease.

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ANNUAL ACCOUNTS // GROUP 
DIVIDENDS

CASH FLOW STATEMENT

Dividends payable to the Company’s shareholders are recognised as 
a liability in the Group’s financial statements when the dividends are 
approved by the AGM.

BORROWING COSTS

Borrowing costs incurred during the construction of operating assets 
are capitalised during the period of time that is required to complete 
and prepare the asset for its intended use. Other borrowing costs are 
charged in the income statement.

CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities are defined as:
(i) possible obligations resulting from past events whose existence 
depends on future events;
(ii) obligations that are not recognised because it is not probable that 
they will lead to an outflow of resources entailing financial benefits out 
of the company
(iii) obligations that cannot be measured with sufficient reliability.

Contingent liabilities are not recognised in the annual financial 
statements apart from contingent liabilities which are acquired 
through the acquisition of an entity. Significant contingent liabilities 
are disclosed, with the exception of contingent liabilities where the 
probability of the liability occurring is remote.

Contingent liabilities acquired through the purchase of operations 
are recognised at fair value even if the liability is not probable. The 
assessment of probability and fair value is subject to constant review. 
Changes in the fair value are recognised in the income statement.

A contingent asset is not recognised in the financial statements, but is 
disclosed if it is likely that a benefit will accrue to the Group. 

The Group’s cash flow statement shows the overall cash flow broken 
down into operating, investing and financing activities by using the 
indirect method. The cash flow statement illustrates the effect of the 
various activities on cash and cash equivalents. Cash flows resulting 
from the disposal of operations are presented under investing activities.

According to IAS 7, the Disclosure Initiative, an overview of changes in 
the Group's liabilities has been prepared. This includes changes due to 
cash flow (eg. utilisation and repayments of loans) and changes without 
cash flow effect such as acquisitions, sales, calculated interest rate and 
unrealised currency translation differences.
Changes in financial assets are included in the disclosure information 
if cash flows were, or will be, included in cash flow from financing 
activities. This may be the case for instance for assets pledged as 
security for finance liabilities. Changes in financial assets shall be 
included in the disclosure information if cash flows were, or will be, 
included in cash flow from financing activities. This may, for example, 
be the case for assets pledged as security for finance liabilities.
Implementation has been completed starting with the income 
statement for 2017.

EARNINGS PER SHARES

Earnings per share are calculated by dividing the profit for the year 
allocated to the company’s shareholders by a weighted average of the 
number of issued ordinary shares during the year. Diluted earnings 
per share are calculated by adjusting the weighted average number 
of ordinary shares outstanding to assume conversion of all dilutive 
potential ordinary shares.

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ANNUAL ACCOUNTS // GROUPNOTE 3
FINANSIELL RISIKOSTYRING

CAPITAL MANAGEMENT 

The Group aims to ensure sufficient access to capital to enable the business to develop in accordance with adopted strategies and thus continue to 
be one of the leading players in the sector. Historically, the industry has always been vulnerable to price fluctuations in the market. For this reason, 
accounting results may fluctuate considerably from year to year. Consequently, the Group also strives to ensure that the business maintains an 
appropriate level of free liquidity.

The Group aims to provide a competitive return on invested capital to shareholders, by distributing dividends and increasing the share price. The 
Board aims to achieve an average long-term dividend corresponding to 25–30% of the Company's profit after tax, allowing for the effects of Fair 
value adjustments of biomass on profits. However, all dividends must be assessed in the light of what is deemed to be a healthy and optimal level of 
equity.

At 31. December 2017, the Group had interest-bearing debt including finance leases and factoring of MNOK 2 055, see Note 10. Funding mainly 
takes the form of bank loans. The level of debt and alternative forms of funding are subject to constant evaluation.

FINANCIAL RISK FACTORS

The Group is exposed to a number of financial risks; market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity 
risk. The Group’s overall risk management programme focuses on the volatility of the financial markets and seeks to minimise potential adverse 
effects on the Group’s financial performance. The Group uses financial derivatives to reduce certain risks.

The Group identifies, evaluates and hedges financial risks in close cooperation with the Group’s operational units. The Board has established 
written principles for the management of foreign exchange risk, interest rate risk and use of the Group´s financial instruments.

MARKET RISK

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk from various currency exposures, primarily CAD, USD, GBP and EUR. 
Foreign exchange risk arises from future commercial transactions, recognised assets, and liabilities and net investments in foreign operations. The 
Group enters into foreign currency forward contracts to manage this risk. 

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ANNUAL ACCOUNTS // GROUPAmounts in NOK x 1 000

Currency in NOK x 1 000

2017

NOK

USD

EUR

GBP

CAD

JPY

Annen 
valuta

Total

Trade receivables

Trade payables

  115 394 

  145 851 

  313 002 

  155 651 

  6 524 

  18 989 

  5 995 

  761 407 

  427 251 

  1 327 

  10 297 

  77 026 

  66 421 

  -   

  3 055 

  585 378 

Currency in NOK x 1 000

2016

NOK

USD

EUR

GBP

CAD

JPY

Other 
currency

Total

Trade receivables

Trade payables

  86 289 

  171 796 

  353 776 

  136 028 

  6 259 

  37 330 

  9 113 

  800 591 

  378 525 

  2 648 

  9 444 

  51 300 

  48 847 

  -   

  2 770 

  493 534 

Currency statement net
interest-bearing debt

Cash and cash equivalents

Long-term interest-bearing
debt*

2017

NOK

USD

EUR

GBP

CAD

JPY

Other 
currency

Total

  -259 213 

  -70 775 

  -6 325 

  401 404 

  201 645 

  1 451 

  3 528 

  271 715 

1 599 795 

  54 555 

  238 431 

  143 019 

  -   

  14 391 

  4 909 

2 055 100 

Net interest-bearing debt

1 859 008 

  125 329 

  244 756 

  -258 384 

  -201 645 

  12 940 

  1 381 

1 783 386 

*Overview of interest-bearing debt, see Note 10

Currency statement net
interest-bearing debt

Cash and cash equivalents

Long-term interest-bearing 
debt*

2016

NOK

USD

EUR

GBP

CAD

JPY

Other 
currency

Total

  3 459 

  -53 390 

  -2 140 

  352 771 

  203 226 

  -409 

  95 

  503 613 

1 408 282 

  58 222 

  273 907 

  133 493 

  -   

  22 188 

  7 501 

1 903 594 

Net interest-bearing debt

1 404 823 

  111 613 

  276 047 

  -219 277 

  -203 226 

  22 597 

  7 406 

1 399 981 

* Overview of interest-bearing debt, see Note 10

The Group has investments in foreign subsidiaries whose net assets are exposed to foreign currency translation risk. Currency exposure arising 
from the net assets of the Group’s foreign operations was previously primarily managed through borrowings denominated in the relevant foreign 
currencies.

The Group´s bank loans are denominated in NOK in order to protect financial frameworks from the effects of currency fluctuations due to the fact 
that all of the syndicated bank loans are measured in NOK.

The parent company extends short and long-term loans to the subsidiaries denominated in these companies’ functional currency. All long-term 
loans are considered to be equity in these companies, as they will not be repaid. The currency effect of loans is recognised under "currency effect of 
net investments" in consolidated comprehensive income. The numerical effects for 2017 and 2016 are presented below.

Amounts in NOK x 1 000

The currency effect of the net investments of subsidiaries is as follows:

Currency effect

Tax effect (24%)

Net effect recognised in equity

SENSITIVITY ANALYSIS

2017

22 333

−5 360

16 973

2016

−90 228

21 655

−68 573

A 10% appreciation of NOK against USD, CAD, GBP and EUR at the balance sheet date would be expected to have the following effects on net 
interest-bearing debt (in NOK x 1 000).

10% appreciation against

Net effect on net interest-bearing debt

A 10% depreciation in NOK would have the reverse effect.

10% appreciation against

Monetary items - net effect on profit after tax (24%)

A 10% depreciation in NOK would have the reverse effect

USD

EUR

−12 533

−24 476

GBP

25 838

CAD

20 165

USD

5 383

EUR

481

GBP

CAD

−30 507

−15 325

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ANNUAL ACCOUNTS // GROUP  
  
  
  
  
  
  
  
USD

USD

EUR

GBP

JPY

CHF

NOK

NOK

Total

USD

EUR

GBP

JPY

SEK

CHF

NOK

NOK

Total

FORWARD CURRENCY CONTRACTS

Hedge accounting has been applied to foreign currency forward contracts relating to long-term physical supply contracts. The effect on profit is 
recorded in comprehensive income. Short-term forward currency contracts are not subject to hedge accounting. Value changes in short-term 
forward contracts therefore affect profit or loss, as these contracts are recognised at fair value through profit or loss, see accounting policies 
(Note 2).

Forward currency contracts at fair value through profit or loss as at 31.12.2017:

Sold 

Amount

Bought

Amount

  4 625 

  5 613 

 CAD 

5 912

 NOK 

46 558

  13 084 

 NOK 

128 039

Weighted 
hedging rate

1.2782

  8.2942 

  9.7856 

  1 905 

 NOK 

20 429

  10.7251 

  157 323 

 NOK 

11 712

  13 

 NOK 

113

  61 580 

 DKK 

50 440

  0.0744 

  8.4105 

  1.2209 

  9 496 

 GBP 

852

  11.1410 

Market rate

Maturity interval *)

Market value in NOK 
x 1 000 at 31.12.2017

1.2543

  8.2050 

  9.8403 

  11.0910 

  0.0729 

  8.4091 

  1.3218 

  11.0910 

05.01.2018 - 02.02.2018

02.01.2018 - 01.02.2018

02.01.2018 - 02.02.2018

03.01.2018 - 12.01.2018

04.01.2018 - 02.02.2018

01.16.2018

31.01.2018 - 31.07.2018

03.01.2018 - 12.01.2018

  741 

  518 

  -758 

  -697 

  241 

  -0 

4 578

  -46 

4 577

*) Maturity specified as an interval for multiple contracts

Hedging contracts through comprehensive income at fair value as at 31.12.2017

Sold 

Amount

Bought

Amount

Weighted 
hedging rate

Market rate

Maturity interval *)

Market value in NOK 
x 1 000 at 31.12.2017

  1 794 

  4 317 

 NOK 

14 705

 NOK 

41 949

  8.1978 

  9.7172 

  40 281 

 NOK 

428 146

  10.6290 

  107 829 

  250 

  13 

  1 324 

  4 703 

 NOK 

 NOK 

 NOK 

 DKK 

 GBP 

8 143

249

113

1 000

437

  0.0755 

  0.9978 

  8.4016 

  1.3240 

  8.2050 

  9.8403 

  11.0910 

  0.0729 

  0.9996 

  8.4091 

  1.3218 

23.01.2018 - 09.02.2018

03.01.2018 - 09.02.2018

  -0 

  -376 

17.01.2018 - 09.01.2019

  -18 813 

19.01.2018 - 13.04.2018

01.03.2018

01.03.2018

01.03.2018

  275 

  -0 

  -0 

  -2 

  148 

−18 769

  10.7599 

  11.0910 

17.01.2018 - 27.09.2018

*) Maturity specified as an interval for multiple contracts.

Forward currency contracts at fair value through profit or loss as at 31.12.2016:

Sold 

Amount

Bought

Amount

Weighted 
hedging rate

Market rate

Maturity interval *)

Market value in NOK 
x 1 000 at 31.12.2016

  3 920 

  7 582 

CAD

  5 224 

NOK

  65 132 

  12 348 

NOK   113 333 

  1.3300 

  8.5908 

  9.1782 

  993 

262 435

564

11

NOK

NOK

NOK

NOK

  11 026 

  11.1078 

  19 658 

  523 

  96 

  0.0749 

  0.9272 

  8.4857 

  1.3400 

  8.6200 

  9.0863 

  10.6126 

  0.0736 

  0.9512 

  8.4610 

USD

USD

EUR

GBP

JPY

SEK

CHF

Total

04.01.17 - 27.01.17

03.01.17 - 27.01.17

02.01.17 - 30.01.17

04.01.17 - 20.01.17

04.01.17 - 27.01.17

05.01.17 - 09.01.17

06.01.17

  -288 

  -236 

  1 059 

  501 

  309 

  -14 

  0 

1 332

Hedging contracts through comprehensive income at fair value as at 31.12.2016

Sold 

Amount

Bought

Amount

Weighted 
hedging rate

Market rate

Maturity interval *)

Market value in NOK 
x 1 000 at 31.12.2016

  3 164 

NOK

  27 192 

  74 147 

NOK   687 093 

  8.5937 

  9.2666 

  55 415 

NOK   588 232 

  10.6150 

  459 896 

4

NOK

NOK

  36 094 

  36 

  0.0785 

  8.4644 

  8.6200 

  9.0863 

  10.6126 

  0.0736 

  8.4610 

03.01.17-10.01.18

17.01.17-06.02.17

11.01.17-12.01.18

18.01.17-03.02.17

11.01.2017

USD

EUR

GBP

JPY

CHF

Total

*) Maturity specified as interval for multiple contracts.

  -64 

  5 873 

  -1 736 

  1 980 

  -0 

6 052

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ANNUAL ACCOUNTS // GROUP(ii) Interest rate risk

Since the Group has no significant interest-bearing assets apart from bank deposits, its income and operating cash flows are largely independent 
of changes in market interest rates. The Group’s interest rate risk arises from borrowings. Borrowings at variable rates expose the Group to cash 
flow interest rate risk. Fixed-interest contracts are used to reduce this risk. The Group continuously monitors its interest rate exposure. The Group 
calculates the impact on profit and loss of a defined interest rate change. The same change in the interest rate is used for all currencies in each 
simulation. The scenarios are only run for liabilities that represent major interest-bearing positions.

Sensitivity calculations show the following expected values: If the interest rate had been 1% higher (lower) throughout the year, all other factors 
remaining unchanged, the pre-tax profit would have decreased (increased) by MNOK 15.9 in 2017 and MNOK 17.1 in 2016 due to the floating rate 
of interest on loans and deposits. The sensitivity analysis is based on average net interest-bearing debt during 2017 and 2016, irrespective of 
concluded interest rate swap agreements.

Amounts in NOK x 1 000

Effect on profit before income tax

Increase/reduction in interest 
rate points

-/+ 1%

2017

-/+ 15 934

2016

-/+ 17 126

INTEREST RATE SWAP AGREEMENTS

The purpose of the Group’s risk management activities is to establish an overview of the financial risk that exists at any given time and to provide 
more time to adapt to relevant developments. To this end, the Group has chosen to employ interest rate swap agreements to establish greater 
stability for the Group’s variable-rate loan interest expenses. The Group has decided that at any given time a certain percentage of its variable-
rate interest-bearing debt should be hedged using interest rate swap agreements. A given proportion will always be at a floating rate, while 
the remainder will be subject to potential hedging. This  situation is constantly reviewed in light of the market situation. The interest rate swap 
agreements have a horizon of four years. The Company constantly evaluates whether these periods should be rolled over.

2017

Agreement

Fixed rate paid - floating rate received

Fixed rate paid - floating rate received

Total

Principal

Fixed rate (%)

Basis of floating 
rate

400 000

260 000

1.69

1.28

Nibor 3 months

Nibor 3 months

Maturity

03.27.2019

10.20.2021

Market value 
(NOK x 1 000) 

−3 965

−106

  -4 071 

Interest rate swap contracts assessed at market value excl. accrued interest.

2016

Agreement

Principal

Fixed rate (%)

Basis of floating 
rate

Maturity

Market value 
(NOK x 1 000) 

Fixed rate paid - floating rate received

400 000

1.69

Nibor 3 months

03.27.2019

Total

Interest rate swap contracts are assessed at market value excl. accrued interest.

−5 268

−5 268

Hedge accounting under IAS 39 is not applied to interest rate swap agreements. Changes in value of interest rate swap agreements are recognised 
as fair value changes through profit or loss, see description in accounting policies (Note 2).

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
III) PRICE RISK

Financial salmon price contracts allow the buyer and seller to agree prices and volumes for future delivery. As of 2018, 21% of the estimated 
harvesting weight in Rogaland and Finnmark was hedged under fixed-price contracts. The corresponding proportion for 2017 was 22.4%. In the 
UK, 19% of the estimated harvesting volume was hedged under fixed-price contracts, compared with 7.9% in 2017. The financial contracts are 
presented gross in the balance sheet with changes in value recognised through profit/loss as part of the Fair value adjustment of biological assets. 
As biological assets are recognised at fair value, the expected costs to meet contract terms will be included in the Fair value adjustment. The Group 
entered into financial pricing contracts for 2017 totalling TNOK 42 914, of which sales contracts amounted to TNOK 42,683 and purchase contracts 
to TNOK 231.

In 2017, the Group had no financial price contracts or physical delivery contracts that would give a loss at year end.

FAIR VALUE, FINANCIAL ASSETS:

The carrying value of derivatives and other financial instruments as at 31. December is displayed below (NOK x 1 000). The carrying value equals 
fair value. Positive values are classified as an asset, while negative values are classified as a liability in the balance sheet.

Forward currency contracts at fair value through profit or loss

Forward currency hedging contracts at fair value through 
comprehensive income

Interest rate swap agreements

Financial salmon contracts - purchase contracts

Financial salmon contracts - sales contracts

Sum financial instruments at fair value

CREDIT RISK

2017

2016

 Assets 

5 319

0

0

231

42 683

48 232

 Short-term 
liabilities 

−742

−18 769

−4 071

0

0

−23 581

 Assets 

1 332

6 052

0

41 610

0

48 994

 Short-term 
liabilities 

0

0

−5 268

0

−18 723

−23 990

Credit risk is managed at Group level. Credit risk arises from transactions involving derivatives and deposits in banks and financial institutions, as 
well as from transactions with customers, including trade receivables and fixed contracts. The Group has procedures to ensure that products are 
only sold to customers with satisfactory creditworthiness. The Company normally sells to new customers solely against presentation of a letter 
of credit or against advance payment. Credit insurance is used when deemed necessary. For customers who have a reliable track record with the 
Group, sales up to certain previously agreed levels are permitted without any security. Factoring agreements have been concluded with Ocean 
Quality AS and Ocean Quality UK Ltd. regarding trade receivables. See further information in Note 10.

All fish produced in the Group is sold to Ocean Quality Group, which in turn sells to external customers. The Ocean Quality Group secures the bulk 
of its sales through credit insurance and bank guarantees.

The book value of financial assets represents the maximum credit exposure. The maximum credit risk exposure as at 31.12. was as follows: 

Amounts in NOK x 1 000

Trade receivables

Other receivables

Cash and cash equivalents

Total

Ageing profile of trade receivables

Not due

Due

- 0-3 months

- more than 3 months

- more than 1 year

Total nominal value of trade receivables

Change in provision for bad debts

01.01.

Change in provision  

31.12.

Note

20

21

19

2017

761 407

198 527

271 715

2016

800 591

163 246

503 612

1 231 648

1 467 448

2017

506 843

254 564

234 190

16 743

3 631

2016

508 688

291 902

288 529

1 645

1 729

761 407

800 591

2017

8 378

2 990

11 368

2016

4 979

3 399

8 378

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ANNUAL ACCOUNTS // GROUP 
 
P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

9
0

LIQUIDITY RISK

The Group adopts a prudent approach to liquidity risk management, which includes maintaining sufficient cash and marketable securities, securing funding through sufficient credit facilities and maintaining 
the ability to close market positions when considered appropriate. 

Due to the dynamic underlying nature of the business, the Group aims to secure flexibility through available credit lines. The Group maintains a financing agreement through a 50/50 syndicate with DNB 
and Nordea, which consists of a total credit framework of MNOK 1 685, including a long-term credit facility of MNOK 700. For further information about non-current liabilities, see Note 10, and Note 27 on 
renegotiation of the new credit framework.

Management monitors the Group’s liquidity reserve, which comprises credit facilities (see Note 10) and cash and cash equivalents (Note 19), based on expected cash flows. This is generally carried out at Group 
level in cooperation with the operating companies.

The following table shows a breakdown of the Group’s non-derivative financial liabilities, classified by maturity structure. The amounts in the table are undiscounted contractual cash flows. Note 10 shows the 
payment profile for the Group’s non-current liabilities.

31.12.2017

< 3 
months

3 months - 
1 year

1-2 years

2-3 years

3-4 years

4-5 years

5-6 years

6-7 years

7-8 years

8-9 years

9-10 years

Long-term loan instalments

  22 500 

  67 500 

  895 000 

Loan interest - floating

  5 348 

  15 432 

  8 277 

Long-term credit facility

  -   

  -   

  300 000 

Interest long-term credit facility

  1 403 

  4 287 

  2 853 

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

More than 
10 years

  -   

  -   

  -   

  -   

Total

  985 000 

  29 056 

  300 000 

  8 543 

Finance leases

  15 730 

  42 622 

  48 685 

  34 867 

  28 208 

  22 215 

  19 276 

  13 904 

  10 378 

  8 389 

  6 107 

  9 871 

  260 251 

Interest finance leases

  1 927 

  5 087 

  5 317 

  4 024 

  2 993 

  2 220 

  1 560 

  1 118 

  792 

  529 

  321 

  169 

  26 057 

Trade payables

Export credits

  585 378 

  -   

  -   

  8 873 

Factoring commitments

  500 976 

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  585 378 

  8 873 

  500 976 

Total commitments

  1 133 262 

  143 800 

  1 260 132 

  38 891 

  31 200 

  24 435 

  20 836 

  15 022 

  11 169 

  8 918 

  6 428 

  10 041 

  2 704 135 

31.12.2016

< 3 
months

3 months - 
1 year

1-2 years

2-3 years

3-4 years

4-5 years

5-6 years

6-7 years

7-8 years

8-9 years

9-10 years

Long-term loan instalments

  22 500 

  67 500 

  90 000 

  895 000 

Loan interest - floating

  6 593 

  19 357 

  23 869 

  8 447 

Long-term credit facility

Short-term loan interest - 
floating

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

More than 
10 years

  -   

  -   

  -   

  -   

Total

  1 075 000 

  58 267 

  -   

  -   

Finance leases

  17 471 

  50 230 

  57 071 

  47 427 

  33 929 

  27 264 

  21 267 

  18 305 

  12 908 

  9 355 

  7 344 

  14 996 

  317 568 

Interest finance leases

  2 489 

  6 603 

  7 060 

  5 375 

  4 086 

  3 050 

  2 266 

  1 606 

  1 165 

  848 

  610 

  752 

  35 911 

Trade payables

Export credits

  493 440 

  55 

  -   

  8 490 

Factoring commitments

  502 536 

  -   

  6 

  -   

  -   

  33 

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  493 534 

  8 490 

  502 536 

Total commitments

1 045 029

152 235

178 007

956 282

38 015

30 314

23 533

19 911

14 074

10 203

7 954

15 748

  2 491 305 

Available liquidity, available drawdowns on the credit facility, as well as positive cash flows from operations, are deemed to be sufficient to cover current and long-term liabilities. 

ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FAIR VALUE ESTIMATION 

(I) FINANCIAL INSTRUMENTS
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques (see Note 12). The Group 
uses different methods and makes assumptions based on market conditions at each balance sheet date. The fair value of forward foreign exchange 
contracts is determined using quoted forward exchange rates at the balance sheet date. The fair value of financial salmon contracts is determined 
using forward prices from Fish Pool.

(II) TRADE RECEIVABLE AND TRADE PAYABLES
The nominal value less write-downs for realised losses on trade receivables and trade payables is assumed to correspond to the fair value of these 
items. The fair value of financial liabilities is assumed to approximate to the book value, as virtually all these items are exposed to floating interest 
rates.

(III) BIOLOGICAL INVENTORIES
Fish in the sea are measured at estimated fair value. Consequently, the value of biological inventories is likely to vary more than the value of 
inventories based on cost. Fair value varies due to a number of reasons, including volatility in pricing of Atlantic salmon and factors relating to 
production, unpredictability of biological production, changes in harvesting schedules, and changes in the composition of inventories.

A sensitivity analysis of the impact of prices of salmon on the Group’s profit after tax as at 31 December 2017 and 31 December 2016  is shown 
below (NOK x 1 000).

31.12.2017

Price reduction per kg

Reduced profit after tax

Price increase per kg

Increased profit after tax

31.12.2016

Price reduction per kg

Reduced profit after tax

Price increase per kg

Increased profit after tax

NOK 1

−34 808

NOK 1

34 808

NOK 1

−21 838

NOK 1

21 838

NOK 2

−69 598

NOK 2

69 598

NOK 2

−43 694

NOK 2

43 694

A sensitivity analysis of the full volume of Atlantic salmon as at 31. December 2016 shows the following impact on profit after tax (NOK x 1000):

31.12.2017

INCREASED VOLUME IN KGS BIOMASS

Increased profit after tax

REDUCED VOLUME IN KGS BIOMASS

Reduced profit after tax

31.12.2016

INCREASED VOLUME IN KGS BIOMASS

Increased profit after tax

REDUCED VOLUME IN KGS BIOMASS

Reduced profit after tax

.

+ 10 %

  139 532 

- 10 %

  -93 899 

+ 10 %

151 681

- 10 %

−158 679

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   91

ANNUAL ACCOUNTS // GROUPNOTE 4
CRITICAL ACCOUNTING ESTIMATES 
AND JUDGEMENTS

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Management is required to make estimates and assumptions concerning the future, which affect which accounting policies are to be used and 
reported amounts for assets, liabilities and contingent liabilities in the balance sheet, as well as income and expenses for the accounting year. 
Estimates and underlying assumptions are continuously evaluated and are based on historical experience and other factors, including expectations 
of future events that are believed to be probable under the present circumstances. The final outcomes may deviate from these estimates. Changes 
in accounting estimates are recognised in the period in which the estimates are changed.

The Group is involved in claims and complaints related to the sale of goods on a continuous basis. As of year-end there were no material ongoing 
issues.

ESTIMATED IMPAIRMENT OF GOODWILL, LICENCES AND PROPERTY, PLANT AND EQUIPMENT

The Group tests whether goodwill and licences have suffered any impairment on an annual basis, in accordance with the accounting policy stated 
in Note 2. The recoverable amounts of cash-generating units are determined based on value-in-use calculations. These calculations require the 
use of estimates of future cash flows from the cash-generating unit, and the application of a discount rate in order to calculate the present value of 
future cash flows. Expectations of future cash flows will vary over time. Changes in market conditions and expected cash flows can result in losses 
due to future value decreases. The value of long-term growth in demand, changes in the competitive situation, the strength of the production stage 
in the value chain and thus also expectations of the long-term profit margin are also of significance. The different parameters could variously affect 
the value of the licences over time. Any change in these critical assumptions will entail related write-downs, or the reversal of write-downs of the 
value of licences in accordance with the accounting policies described in Note 2. Please also refer to Note 8 for further comments on tests relating 
to value impairment. 

BIOLOGICAL ASSETS

Estimation of the fair value of biological assets is exposed to several uncertainties, including relating to future prices, harvesting periods, gutted 
weight and remaining production costs. Salmon sale prices are extremely volatile. All these factors can impact the calculation of fair values. The 
sales price is based on forward prices and/or the most relevant pricing information available for the period in which the fish is expected to be 
harvested. Changes in price assumptions have the greatest impact on the estimate of fair value. Please refer to Note 3 for a a sensitivity analysis of 
the applied price assumptions. The planned point of harvesting is assumed to be 4.76 kgs; however, significant estimation uncertainty attaches to 
the estimated growth rate. Budgeted production costs include provisions for estimated feed prices, costs of treatment of lice and other emergency 
costs to prevent biological accidents. Here, estimations are affected by uncertainty regarding the number of lice treatments to be carried out, the 
sea temperature and other conditions affecting growth and costs. Please refer to Note 2 Accounting policies and Note 7 for further information on 
estimation and calculation of fish values.

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ANNUAL ACCOUNTS // GROUPNOTE 5
INVESTMENTS IN ASSOCIATES

Associates that are closely related to the Group's operations and included in the Group´s value chain are classified on a separate line in the EBIT 
when the relevant associates operate in the same position in the value chain as the Group. 

In 2017, the Group invested MNOK 10 in Tytlandsvik Aqua AS to acquire 16.67% of the company's shares. The remaining shareholdings are held 
by Bremnes Seashore AS (16.67%) and Vest Havbruk AS (66.67%). Tytlandsvik Aqua AS has a mandate to secure increased and improved access 
to post smolt for the Group. As at 31 December 2017, the facility had not been completed. During 2018, the Group and Bremnes Seashore AS plan 
to increase their shareholdings through a share issue to procure similar shareholdings for the three owners of Tytlandsvik Aqua AS. The parties 
have agreed to grant Grieg Seafood and Bremnes Seashore organisational rights similar to rights for holding one-third of the shares from the 
time of the first instalment of MNOK 10 in 2017, including the right to appoint board members as well as the right to vote at the AGM. As a result 
of this arrangement, the Group has included a proportion of profit in the statement of comprehensive income, even though the shareholding at 31 
December 2017 was still 16.67%. According to the agreement, the Group has a right and obligation to buy the remaining shares in 2018, split into 
three transactions of MNOK 10, totalling MNOK 30. The recognised share of profits corresponds to the nominal shareholding (16.67%) during the 
shareholding period of 2017. The investment in Tytlandsvik Aqua AS is classified on a separate line in the balance sheet, and the share of profit is 
included in EBIT.

In Q1 2016, all the Group's shares in Salten Stamfisk AS were sold. The profit on the sale is recognised on a separate line after EBIT. In December 
2016, the share capital of Finnmark Brønnbåtrederi AS was written down by the Group´s share and fully repaid. The share of profit/loss in 2016 
covers the period January to May, when the agreement to leave Finnmark Brønnbåtrederi AS was implemented. 

2017

Equity interest at 
31.12.2017

Book value at 
01.01.2017

Share of the 
result for the 
year

Changes in
period, repaid
capital

Book value at 
31.12.2017

ASSOCIATES CLASSIFIED AS OPERATIONS

Tytlandsvik Aqua AS

16.67%

Total associates classified as operations

  -   

  -   

  -550 

  -550 

  10 000 

  10 000 

  9 450 

  9 450 

The share issue and shareholder agreement were signed on 1 June 2017. Value added relating to the investment has been allocated to hatcheries 
under construction, based on provisional accounting figures from Tytlandsvik Aqua as at 31 December 2017.

Tytlandsvik Aqua AS

Time of 
investment

01.06.2017

Equity interest

Value added to 
project hatchery

16.67 %

7 050 

Value added will be written down when the facility is completed and commissioned.

ASSOCIATES CLASSIFIED ON A SEPARATE LINE AFTER EBIT

Total associates classified on a separate 
line after EBIT

Total investments in associates

  -   

  -   

  -   

  -   

  -   

  -550 

  10 000 

  9 450 

Tytlandsvik Aqua AS has the same financial year as the Group. The following table displays abridged, provisional financial information as at 31 
December 2017 (100%).

Per 31.12.2017

Tytlandsvik Aqua AS

Total assets

Total liabilities

Total equity

Operating 
income

Pre-tax profit/
loss

  20 730 

  4 893 

  15 837 

  90 

  -5 154 

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
   
2016

Equity
interest at
01.01.2016

Book value at 
01.01.2016

Share of the 
result for the 
year

Changes in
period, repaid
capital and
sale

Book value at 
31.12.2016

ASSOCIATES CLASSIFIED AS OPERATIONS

Finnmark Brønnbåtrederi AS

49.9 %

Total associates classified as operations

  15 024 

  15 024 

  569 

  569 

  -15 593 

  -15 593 

ASSOCIATES CLASSIFIED ON A SEPARATE LINE AFTER EBIT

Salten Stamfisk AS

34.0 %

  10 922 

  1 161 

  -12 083 

Total associates classified on a separate 
line after EBIT

  10 922 

  1 161 

  -12 083 

Total investments in associates

  25 947 

  1 730 

  -27 676 

  -   

  -   

  -   

  -   

  -   

Sale of shares/repaid share capital in 
associates

Repaid share capital

Proceeds net of expenses

Book value on sales date

Book profit

Finnmark 
Brønnbåtrederi 
AS

Salten Stamfisk 
AS

Total 2017

0

0

0

0

15 593

0

−15 593

0

0

24 000

−11 917

12 083

total 2016

15 593

24 000

−27 510

12 083

In 2016, the book profit for Salten Stamfisk was recognised under the item share of profit from associates.

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
   
NOTE 6
SEGMENT INFORMATION

The operating segments are identified on the basis of the reports which Group management (the chief decision-maker) uses to assess 
performance and profitability at a strategic level. Group management assesses business activities from a geographical perspective, based on the 
location of assets. 

The Group has only one production segment: Production of farmed salmon. Geographically, management assesses the results of production in 
Rogaland - Norway, Finnmark - Norway, BC - Canada and Shetland - UK.

Group management evaluates the results from the segments based on EBIT before value adjustments of biological assets. The method of 
measurement excludes the effect of non-recurring costs, such as restructuring costs, legal costs on acquisition and amortisation of goodwill and 
intangible assets when amortisation is attributable to an isolated event which is not expected to recur. The measurement method also excludes the 
effect of cash-settled share options, as well as unrealised gains and losses on financial instruments. 

The Group’s customers are divided into different geographical markets. All sales from Norway, the UK and Canada go through the sales company 
Ocean Quality AS, which is also partly owned by Bremnes Fryseri AS. Grieg Seafood ASA owns 60% of Ocean Quality AS (see Note 1 for further 
information). Norway therefore shows the aggregate figures for the Norwegian market. Ocean Quality is fully consolidated and is part of the 
associated segment. 

Geographical 
market

EU

UK

USA

Canada

Russia

Asia

UK

Norway

159 250

3 392 639

618 748

505 358

BC

0

0

61 880

2 583

546 586

0

0

132 227

76 795

0

0

21 789

1 191 298

43 234

Other markets

7 743

257 064

263

Total

869 410

  5 481 169 

666 878

Sales revenue 2017

Sales revenue 2016

3 551 889

1 124 107

611 049

209 022

0

1 256 321

265 069

7 017 456

51%

16%

9%

3%

0%

18%

4%

100%

  3 550 115 

  761 076 

  768 902 

  86 364 

  1 

  1 163 850 

  214 881 

54%

12%

12%

1%

0%

18%

3%

  6 545 187 

100%

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ANNUAL ACCOUNTS // GROUPSegment information reported to Group management for the reporting segments:

Geographical segments

Sales revenue

Other income **)

Other gains/losses **)

Share of results from associates

Norway

Rogaland

Norway

Finmark

Canada

BC

UK

Others/ eliminations *)

Grieg Seafood Group

Shetland

2017

2016

2017

2016

2017

2016

2017

2016

2017

2016

2017

2016

1 150 166

1 140 398

1 265 156

1 244 255

580 293

611 223

745 934

859 815

3 275 907

2 689 496

7 017 456

6 545 187

11 643

5 923

6 718

586

−550

0

21 791

262

0

22 797

1 477

14 636

0

−24

0

4 215

−356

0

3 431

2 308

0

8 571

2 685

0

−21

−487

−4 646

13 580

0

−35 858

21 771

−1 514

−550

41 019

17 386

569

Operating costs before depreciation and amortisation

−731 218

−668 302

−845 442

−771 718

−425 686

−511 319

−634 209

−646 899

−3 295 075

−2 664 261

−5 931 630

−5 262 499

EBITDA before Fair value adjustment biological assets 

430 627

499 810

426 694

511 447

154 583

103 763

117 464

224 172

−23 835

2 470

1 105 533

1 341 662

Depreciation, amortisation, and reversals

−37 563

−33 054

−74 758

−64 316

−34 421

−23 237

−48 808

−47 614

−5 583

−5 695

−201 133

−173 916

EBIT before Fair value adjustment of biological assets

393 064

466 756

351 935

447 131

120 162

80 526

68 657

176 558

−29 418

−3 225

904 400

1 167 745

Harvesting volume (ton GWT)

18 111

18 367

22 831

22 104

  21,7 

  25,4 

  15,4 

  20,2 

9 600

  12,5 

10 715

12 056

13 541

  7,5 

  5,7 

  13,0 

62 598

64 726

14,4

18,0

1 616 948

1 792 509

2 068 196

2 073 036

1 283 521

889 655

1 253 714

1 307 903

930 236

704 935

7 152 615

6 768 038

1 616 948

1 792 509

2 068 196

2 073 036

1 283 521

889 655

1 253 714

1 307 903

930 236

704 935

7 152 615

6 768 038

511 473

586 661

767 531

779 462

797 428

569 423

931 516

931 334

796 762

694 207

3 804 710

3 561 087

511 473

586 661

767 531

779 462

797 428

569 423

931 516

931 334

796 762

694 207

3 804 710

3 561 087

EBIT FOR THE GROUP

2017

2016

EBIT before Fair value adjustment of biological assets

Fair value adjustment of biological assets (Note 7)

EBIT after Fair value adjustment of biological assets

Share of result from associates (Note 5)

Net financial items (note 23)

Profit before tax

Estimated taxes

Profit of the year

904 400

−91 463

812 937

0

−14 457

798 480

−197 581

600 899

1 167 745

515 741

1 683 486

12 083

−134 734

1 560 836

−338 505

1 222 332

*) Others/ eliminations
A proportion of non-controlling interests (Bremnes Fryseri AS) is reported with ownership 
expenses and other posts as an elimination. A proportion of sales revenue and other operational 
expenses from non-controlling interests is eliminated on subordinated account lines in the 
column "Others/eliminations". Sales revenue from sales for Bremnes Fryseri AS amount to appr. 
MNOK 2 421, while other operational expenses including cost of goods sold amounts to appr 
MNOK 2 391.

Other items comprise the profit/loss from activities conducted by the parent company or other 
Group companies not geared for production. Internal transactions between the subsidiary and 
the parent company, as well as other posts relating to the parent company, are eliminated.

**) Other income/gains/losses
Other gains/losses include sales of shares and operating equipment, as well as foreign currency 
forward contracts recognised at fair value through profit or loss. Please refer to Note 5 for 
information on gains on sales of shares.

Other income mainly relates to the settlement of insurance and other services not directly 
related to production.

P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

9
6

EBIT/kg (NOK)

Assets

Total assets

Liabilities

Total liabilities

ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTE 7
BIOLOGICAL ASSETS AND OTHER 
INVENTORIES

Biological assets at 01.01. 

Currency translation differences

Increase due to production

Decrease due to extraordinary mortality/loss

Decrease due to sales

Fair value adjustment at 01.01

Fair value adjustment in connection with business acquisition 

Fair value adjustment at 31.12

Book value of biological assets at 31.12.

 Tons 

NOK x 1 000

2017

45 626

N/A

83 605

−4 348

2016

48 089

N/A

75 839

−5 787

2017

2016

2 459 625

1 929 117

24 095

−76 011

2 773 680

2 437 747

−132 425

−217 252

−70 206

−72 515

−2 284 225

−2 125 984

N/A

N/A

N/A

N/A

N/A

N/A

−824 487

−312 479

N/A

N/A

682 089

824 487

  54 677 

  45 626 

  2 698 352 

  2 459 625 

Recognised Fair value adjustment:

Change in Fair value adjustment of biological assets (1)

Foreign-currency adjustment of Fair value adjustment of biological assets

Change in physical supply contracts relating to Fair value adjustment of biological assets (2) (see Note 25)

Change in fair value of financial derivatives from salmon (Fish Pool contracts) (3)

Total recognised Fair value adjustment of biological assets

  -142 398 

  512 008 

  -6 169 

  37 078 

  20 026 

  17 923 

  -37 078 

  22 888 

  -91 463 

  515 741 

 Recognised value adjustments of biological assets include:
1.  Fair value adjustments of biological assets
2.  Fair value (liability) change in loss contracts
3.  Change in unrealised gains/losses from financial purchases/sales contracts (derivatives) from fish at Fish Pool 

Provisions allocated to future physical supply contracts that require Fair value adjustment are recorded as other current liabilities in the balance 
sheet.The contracts are calculated based on the same forward prices that apply to Fair value calculation of biological assets. Provisions allocated 
to physical contracts covering fish under 4.76 kgs (immature) are recognised as a proportionate share in accordance with the principle of Fair value 
calculation of biological assets. Value changes in financial derivatives from salmon are recorded in the balance sheet as derivatives and other 
financial instruments. Financial derivatives are calculated at market value, please refer to Note 3 for further information.

For further information on accounting principles for biological assets, please refer to Note 2.

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   97

ANNUAL ACCOUNTS // GROUPSTATUS OF BIOLOGICAL ASSETS AT 31.12.17

Biological assets onshore *)

Immature fish in sea, round weight < 4.76 kgs

Mature fish in sea, round weight > 4.76 kgs

Total

*) Smolt production

STATUS OF BIOLOGICAL ASSETS AT 31.12.16

Biological assets onshore *)

Biological assets with round weight < 1 kg 

Biological assets with round weight 1 - 4 kgs

Biological assets with round weight > 4 kgs

Total

*) Smolt production

BASIS FOR VALUES 31.12.17:

Weighted price per kg GWT

Source

 Number of fish 
(1 000) 

 Biological 
assets (tons) 

17 132

31 753

112

48 996

465

53 654

559

54 678

 Number of fish 
(1 000) 

 Biological 
assets (tons) 

20 089

10 540

12 536

1 921

45 086

544

4 289

31 973

8 820

45 626

Accrued
cost of
production  

118 789

1 878 465

19 005

2 016 259

Accrued
cost of
production  

115 448

266 703

1 006 667

246 320

1 635 138

Fair value 
adjustment

Book value 
(NOK x 1000) 

0

677 721

4 372

682 093

118 789

2 556 186

23 377

2 698 352

Fair value 
adjustment

Book value 
(NOK x 1000) 

0

0

566 269

258 217

824 488

115 448

266 703

1 572 936

504 538

2 459 625

BC

CAD 8.82

Fish Pool

Shetland

GBP 5.22

Fish Pool

Norway

NOK 52.05

Fish Pool

Forward prices from Fish Pool as stated above are adjusted for expected quality reductions and stated before logistics expenses. The standard 
deduction for quality reduction is considered. Forward prices are weighted in relation to the intended harvesting period. The price for BC is based 
on the forward price in Norway adjusted for historical differences in price levels between Norway and Canada. The same principle applies to 
Shetland. Self-budgeted harvesting and logistics expenses are assumed. Forward exchange rates are used to translate prices into CAD and GBP 
in relation to the harvesting period.

OTHER INVENTORIES

Raw materials (feed) at cost price

Roe

Other (frozen fish, supplementary products

Total inventories

Impairment of inventories recognised at year-end

PURCHASE COST OF THE YEAR

Inventories at 01.01 (inverted number)

Purchases for the year (incl. change in accrued cost of production)

Inventories at 31.12.

Purchase cost of the year

2017

62 122

8 682

21 458

92 262

5 743

2017

−89 164

2016

73 989

10 336

4 839

89 164

1 571

2016

−90 867

−3 727 298

−3 285 456

92 262

89 164

−3 724 200

−3 287 159

The purchase cost for the year mainly comprises feed, roe, recognition of extraordinary mortality, and external purchase of fish in the sales 
company Ocean Quality.

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   98

ANNUAL ACCOUNTS // GROUPThe Group applies an internal rule of impairment in cases of extraordinary loss/mortality. Such impairments are recognised on a straight-line basis 
as part of cost of goods sold in the income statement. Information about the recognised fair value of extraordinary loss/mortality is based on the 
same rules for calculating Fair value adjustments of biological assets.

Below is an overview of impairments relating to extraordinary loss/mortality (production cost), as well as the associated fair value of the fish written 
down to NOK 0.

Amounts in NOK x 1 000

2017

2016

Extraordinary loss/mortality

 Production cost 

 Fair value 

 Production cost  

 Fair value 

Rogaland

Finnmark

Shetland

British Columbia

Total

35 988

16 965

53 099

17 395

62 087

31 262

76 632

28 217

18 039

71 770

52 233

46 372

22 622

93 919

97 414

56 930

123 446

198 198

188 414

270 885

2017

Smolt/broodstock/biological assets round weight 
< 1 kg

Biological assets round weight 1 - 4 kgs

Biological assets round weight > 4 kgs

Total

2016

 Number of fish 
(1 000) 

 Biological 
assets (tons) 

205

1 617

242

2 064

113

3 157

1 078

4 348

 Number of fish 
(1 000) 

 Biological 
assets (tons) 

Smolt/broodstock/biological assets round weight 
< 1 kg

Biological assets round weight 1 - 4 kgs

Biological assets round weight > 4 kgs

Total

1 121

2 048

208

3 377

629

4 183

975

5 787

Accrued
cost of
production  

6 854

93 630

22 963

123 446

Accrued
cost of
production  

28 228

132 188

27 997

188 414

Fair value 
adjustment

Fair value 
(NOK x 1 000)

−1 012

61 233

14 530

74 751

5 842

154 863

37 493

198 198

Fair value 
adjustment

Fair value 
(NOK x 1 000)

0

66 827

15 644

82 471

28 228

199 015

43 642

270 885

In Rogaland the main cause of extraordinary loss/mortality was PD (Pancreas Disease), in addition to one incident of lice treatment. In the first half 
of 2016, mortality due to heart failure (CMS) was also registered. 

In Finnmark, the main causes of mortality/loss were IPN (Infectious Pancreatic Necrosis), Yersiniosis, Parvicapsula and heart failure. At year-end 
2016, ISA (Infectious Salmon Anaemia) was detected at one location, which required the location to be fallowed. 

In Shetland, sea lice, gill problems, planktonic algae, AGD (Amoebic Gill Disease) and seals caused mortality in both years. In 2017, lice treatment 
also caused some mortality/loss. A number of measures have been implemented to mitigate the biological challenges causing mortality. One of 
these measures involves changing the production cycle in the sea from 24 to 18 months. Technology has been applied to analyse algae and improve 
monitoring of the sea in order to retrieve data about risk of algal growth. This will be a key measure. At the end of 2017, the lice level was very low 
compared to historical levels. 

In BC, mortality has been caused by low levels of oxygen in the sea, as well as planktonic algae. In addition, accidents have occured during 
transport between sites. In 2016, Furunculosis caused mortality at the hatchery, necessitating the recognition of impairments.

There were zero occurrences of escapes in 2017. However, in 2016 there were three escapes, one in Finnmark and two in Shetland. All three 
occurrences were caused by routine failures at commissioned well-boats. Related expenses in Shetland were covered by the well-boat company. In 
Finnmark, the number of fish lost was low and connected costs were insignificant. For more information, refer to the sustainability report.

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   99

ANNUAL ACCOUNTS // GROUP   
   
   
NOTE 8
INTANGIBLE ASSETS

 Fish farming 
licences 
indefinite lives 

  Fish farming 
licences definite
lives 

 Other intangible 
assets 

2017

Book value at 01.01.

Currency translation differences

Additions

Disposals

Amortisation

Reclassification

Book value at 31.12.

As at 31.12.

Acquisition cost

Accumulated amortisation 

Accumulated impairments

Book value at 31.12.

 Goodwill 

108 595

443

0

0

0

0

1 035 881

8 905

0

0

0

0

109 038

1 044 786

198 641

1 044 799

0

−89 603

109 038

−13

0

1 044 786

Other intangible assets mainly comprise software.

2016

Book value at 01.01.

Currency translation differences

Additions

Disposals

Amortisation

 Goodwill 

110 647

−2 052

0

0

0

1 067 433

−34 338

2 786

0

0

Book value at 31.12.

108 595

1 035 881

As at 31.12.

Acquisition cost

Accumulated amortisation 

Accumulated impairments

Book value at 31.12.

198 198

1 035 894

0

−89 603

108 595

−13

0

1 035 881

24 742

386

0

0

−1 362

0

23 766

52 414

−28 648

0

23 766

17 598

−1

4 180

−36

−3 533

175

18 384

40 042

−21 658

0

18 384

25 905

190

0

0

−1 352

24 742

52 027

−27 285

0

24 742

16 993

4

4 283

0

−3 683

17 598

35 723

−18 126

0

17 598

Total  

1 186 815

9 733

4 180

−36

−4 895

175

1 195 975

1 335 895

−50 317

−89 603

1 195 975

Total  

1 220 977

−36 193

7 069

0

−5 036

1 186 815

1 321 842

−45 424

−89 603

1 186 815

 Fish farming 
licences 
indefinite lives 

  Fish farming 
licences definite
lives 

 Other intangible 
assets 

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   100

ANNUAL ACCOUNTS // GROUPLICENCES 

The tables below provide an overview of the Group's various licences. See Note 2 for further information on licences. 

UK

Farm/area

Bight of Foraness

Boatsroom Voe

Cole Deep

Coleness

Collafirth Delting Site 3

Corlarach

East of Langa

East of Papa Little

Easter Score Holm

Fish Holm

Geo of Valladale (Urafirth)

Gob na Hoe

Hamar Sound

Hamnavoe, Lunnaness

Laxfirth Voe East (Site 2)

Leinish Bay

Linga (South of Linga)

Muckle Roe East (Heights)

North Havra

North of Papa

North Voe

Olnafirth North (Site 2)

Olnafirth South (Site 1)

Papa, East Head of Scalloway

Punds Voe

Roe Sound

Setter Voe

Setterness North

Setterness South

Snizort

South Voe of Gletness

Spoose Holm (Oxna)

Swining Voe Site 3 (Collafirth Ness)

Taing of Railsborough

Wadbister Inshore

West of Burwick

Total

Capacity

NORWAY

Licence category

Total number

Total volume

Matfiskkonsesjoner

FoU-tillatelse

Stamfisk

Settefisk

Slaktemerd

41 stk

1 stk

3 stk

3 stk

2 stk

36 270 tn

780 tn

2 340 tn

27,5 mill stk

1 106 tn

CANADA

Farm/area

Ahlstrom

Atrevida

Barnes bay

Bennet Point

Conception

Culloden

Esperanza

Gore

Hecate

Kunechin

Muchalat N.

Muchalat S.

Newcomb

Salten

Site 13

Site 9

Streamer Point

Tsa-ya

Vantage

Williamson

Wa-kwa

Total

Capacity

(tons)

  1 100 

  3 300 

  3 000 

  4 400 

  4 100 

  1 500 

  3 600 

  4 100 

  4 000 

  1 500 

  4 100 

  3 900 

  1 000 

  1 500 

  900 

  1 500 

  3 600 

  3 000 

  1 500 

  3 900 

  2 500 

  58 000 

(tons)

  2 100 

  216 

  2 178 

  752 

  1 500 

  1 602 

  1 643 

  1 750 

  2 500 

  1 910 

  809 

  2 021 

  738 

  1 910 

  942 

  1 700 

  2 299 

  350 

  1 496 

  1 776 

  1 920 

  300 

  1 000 

  1 500 

  960 

  350 

  987 

  2 500 

  2 358 

  2 125 

  750 

  1 500 

  1 920 

  1 043 

  800 

  1 923 

  52 128 

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   101

ANNUAL ACCOUNTS // GROUP 
IMPAIRMENT TESTING OF GOODWILL AND LICENCES 

No impairments were recognised for goodwill or licences in 2016 or 2015. Goodwill and licences with indefinite economic lives are subject to an 
annual impairment test. Tests are performed more frequently where indications of impairment exist. Licences with definite useful lives are tested 
for impairment only if there are indications of a decline in value. The estimated value in use is used as a basis for calculating the recoverable 
amount. Impairment exists when the carrying value is higher than the recoverable amount. 

Amounts in NOK x 1 000

Cash-generating unit

BC - Canada

Finnmark

Shetland - UK

Rogaland

Total value

Location

Canada

Norge

UK

Norge

 Book value of related 
goodwill 

 Book value of licences 

10 218

0

78 358

20 463

109 038

  163 099 

  299 814 

  470 666 

  134 973 

1 068 552

 Total 

  173 317 

  299 814 

  549 024 

  155 436 

1 177 591

Goodwill relates to the acquisition of the subsidiaries and is allocated to the Group’s cash-generating units (CGUs), which are identified according 
to the operating segment. An annual impairment test is carried out for goodwill and licences. The recoverable amount of a CGU is determined 
based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets from the respective cash-
generating units over a three-year period. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below. 
The estimated growth rate corresponds to expected inflation. 

THE ASSUMPTIONS USED FOR VALUE-IN-USE CALCULATIONS ARE AS FOLLOWS:

Unit

Budget period

Increase in revenues in budget period 

EBITDA margin  1)

EBITDA margin in terminal period

Harvest growth - tons 2)

Required rate of return 3)

Growth rate 4)

BC - Canada

 Finnmark 

 Shetland -  UK 

 Rogaland 

3 years

121%

3 years

43%

24% -27%

29% - 32%

27%

138%

7.9 %

1.0 %

30%

62%

7.9 %

1.0 %

3 years

18%

9% -19%

19%

34%

7.9 %

1.0 %

3 years

5%

26% - 29%

28%

34%

7.9 %

1.0 %

As stated above, the budget period/explicit period is three years. Impairment tests are initially based on the Group´s rolling four-year projections, 
which are also used in connection with the Group's liquidity planning. Consequently, it is important to apply conservative assumptions. The 
estimated increase in revenue for the budget period thus comprises the estimated revenue increase for 2020 compared to revenue for 2017. The 
estimated future price level is calculated using Fish Pool projections for future prices, taking into account quality reductions and shipping. The 
prices for 2018 and 2019 are assumed to be lower than Fish Pool projections.

Other comments/explanations on assumptions applied in impairment testing are presented below.

1. Budgeted EBITDA margin. The margin increases during the budget period for BC - Canada and Shetland - UK and decreases slightly for 
Rogaland and Finnmark. Higher output is assumed in all regions in the budget period.
2. The growth rate in the harvested volume in the budget period (nominal growth rate) is measured against the 2017 volume. A corresponding 
increase in output is assumed over time.
3. Weighted required return on capital employed before tax. Cash flow forecasts are thus estimated before tax.
4. Weighted average growth rate used to extrapolate cash flows beyond the budget period. In the years after 2012, the annual reinvestment is 
assumed to be equal to annual depreciation. 

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
   
EBITDA MARGIN IN THE  BUDGET AND TERMINAL PERIOD

The budgeted EBITDA margin is based on past performance, expected cost of production and expected market developments. An increase in 
gutted weight output is assumed throughout the budget period. The increased harvest volume assumes an increase in utilisation of existing 
production capacity and licences, reflecting the Group's smolt strategy. The Group expanded its smolt hatchery in Rogaland in 2017 and has 
initiated measures in Finnmark to secure access to smolt. A higher number and larger average size of smolt will contribute to higher growth and 
higher harvesting volumes. Larger smolt will also reduce the production time in the sea, which in turn will reduce the biological risk level, including 
mortality. An increase in smolt numbers will also improve overall utilisation of locations and licences. Finnmark was granted two new locations 
in 2017, which will be important for growth. In BC - Canada, an increase in harvesting volumes is based on improved production of smolt, more 
efficient monitoring of algae, and recirculation of fresh water from the deeper sea. The significant increase in volume is also due to extremely low 
harvesting volumes over the past two years, and outbreaks of Furunculosis, which resulted in a total loss of production and subsequent losses 
of stocking fish. There were no outbreaks of Furunculosis in 2017. Measures to secure the intake water have been successful. The Company is 
constantly striving to increase utilisation of its favourable locations in Shetland in order to secure improved production. Measures being taken 
include delivering larger smolt with a lower number of days in the sea. Monitoring of algae, as well as recirculation of fresh water from the deeper 
sea, represent further important measures for Shetland. Overall, this will help to reduce the Company's cost per kilogram. Along with prolonged 
fallowing and utilisation of the best locations, modification of the production cycle in the sea from 24 to 18 months will reduce biological risk. 
Together, the combined measures will help to reduce the Company's cost as measured per kilogram.

The assumptions in the terminal year are based on the budget for 2020, but with some adjustments to reflect EBIT/kg in the benchmark and the 
Group’s own historical results. The applied discount rates are pre-tax and reflect specific risks relating to the relevant operating segments.

SENSITIVITY ANALYSIS

Value-in-use is sensitive to changes in the assumptions made, the most important of which are return and EBIT/kg requirements. 

A sensitivity analysis has been carried out based on these assumptions for all CGUs. An isolated requirement to increase the return rate by 1 
percentage point and reduce EBIT/kg by NOK 1 would result in a need to recognise impairments for the Shetland CGU of MNOK 60 and MNOK 55, 
respectively. Correspondingly, an isolated requirement to increase the return rate by 2 percentage points and to reduce EBIT/kg by NOK 2 would 
result in a need to recognised impairments of MNOK 251 and MNOK 319, respectively. The other CGUs are not sensitive to equivalent changes 
in the same assumptions. For the Finnmark CGU, an isolated change in the sales price of NOK 7.50 would result in a need to recognise an 
impairment of MNOK 73.  Similarly, an isolated increase in the WACC of 13% would result in a need to recognise an impairment of MNOK 31 in the 
BC CGU.  

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   103

ANNUAL ACCOUNTS // GROUPNOTE 9
PROPERTY, PLANT AND EQUIPMENT

2017

Book value at 01.01.

Currency translation differences

Reclassification of non-current assets

Additions *)

Disposals

Reversal of impairments

Depreciation

Book value at 31.12.

As at 31.12.

Acquisition cost

Accumulated depreciation

Accumulated impairments

Book value at 31.12.

Book value of finance leases included 
above

Depreciation of finance leases included 
above

 Buildings/
property 

 Prod.plants and 
barges 

 Nets, cages and 
moorings 

386 340

4 570

0

89 833

0

0

−21 125

459 618

682 758

−223 140

0

459 618

581 945

8 217

0

252 895

−5 848

0

−69 288

767 920

1 587 184

−779 373

−39 891

767 920

367 195

4 497

0

166 954

−628

0

−78 879

459 139

1 078 678

−619 539

0

459 139

 Other equipment 

 Total 

174 899

1 510 379

1 450

−253

38 958

−2 981

0

−26 946

185 127

356 630

−171 672

168

185 127

18 733

−253

548 640

−9 457

0

−196 237

1 871 804

3 705 251

−1 793 723

−39 723

1 871 804

1 414

128 113

68 720

108 462

306 709

−40

−14 447

−12 733

−10 137

−37 357

Of which book value of non-depreciable 
property

40 395

*) Investments in 2017 related to expansion of the hatcheries in Rogaland and Finnmark, new equipment such as optilicer systems, nets and 
cages, plus general maintenance.

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ANNUAL ACCOUNTS // GROUP2016

Book value at 01.01.

Currency translation differences

Reclassification of non-current assets

Additions *)

Disposals

Reversal of impairments **)

Depreciation

Book value at 31.12.

As at 31.12.

Acquisition cost

Accumulated depreciation

Accumulated impairments

Book value at 31.12.

Book value of finance leases included 
above

Depreciation of finance leases included 
above

 Buildings/
property 

 Prod.plants and 
barges 

 Nets, cages and 
moorings 

 Other equipment 

418 318

−30 860

−15 574

38 332

−1 353

0

−22 524

386 340

588 355

−202 015

0

386 340

634 414

−53 537

−18 805

76 275

−1 738

6 304

−60 969

581 945

1 331 920

−710 084

−39 891

581 945

350 242

−18 680

5 119

96 244

−14

0

−65 716

367 195

907 856

−540 661

0

367 195

131 795

3 983

29 260

36 932

−1 096

168

−26 143

174 899

319 457

−144 726

168

174 899

 Total 

1 534 770

−99 094

0

247 783

−4 200

6 472

−175 352

1 510 379

3 147 587

−1 597 486

−39 723

1 510 379

1 436

156 601

135 760

102 540

396 337

−50

−12 219

−22 085

−12 001

−46 356

Of which book value of non-depreciable 
property

24 873

*)  Investments mainly relate to maintenance, and measures to initiate production of green licences in Finnmark.

**)  Previously impaired equipment in Shetland was sold in 2016. The related impairments have been reversed through profit/loss.

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ANNUAL ACCOUNTS // GROUPNOTE 10
BORROWINGS AND FINANCE 
LEASES

The Group has a syndicated loan provided 50/50 by DNB and Nordea. The financing agreement comprises a total framework of MNOK 1 685 and 
includes a long-term credit facility of MNOK 700. At the year-end, the credit line was utilised in the amount of MNOK 300. 

The financing agreement includes covenants stipulating consolidated equity of 35% (excluding Ocean Quality), a revolving NIBD/EBITDA ratio of 
5.0 if the book equity ratio is higher than 40% and 4.5 if the book equity ratio is between 35% and 40%. As at 31 December 2017, the NIBD/ EBITDA 
for the Group, excluding Ocean Quality, was 1.2 and the equity ratio was 52%. Consequently, the Group fully complied with all covenants at the 
year-end.

Since the end of year, the Company has renegotiated the Group´s credit frameworks to cater for growth targets and subsequent investment needs. 
See Note 27 – Post-balance sheet events for more detailed information. 

A factoring agreement has been concluded with Ocean Quality AS in Norway and UK. Credit-insured receivables are transferred to the factoring 
companies. This ensures early settlement of receivables. The Group retains the risk relating to trade receivables. Funding received from the 
factoring company before the counterparty has paid is recognised as factoring debt, which is interest-bearing. The factoring agreement includes 
covenants stipulating minimum book equity in Ocean Quality AS of 12% of the appropriated financing limit. In 2018, Ocean Quality AS was granted 
a waiver regarding the covenants as at 31 December 2017, which implies that Ocean Quality AS' equity after the proposed dividend of MNOK 45 is 
acceptable to the factoring company.

NON-CURRENT LIABILITIES AND FINANCE LEASE OBLIGATIONS (INTEREST-BEARING DEBT)

Liabilities to credit institutions before amortisation effect 

Long-term credit facility

Finance lease liabilities

Total

NON-CURRENT LIABILITIES, NON-INTEREST BEARING

Subordinated loans

Total

Amortisation effect of loans

Total non-current loans and finance lease liabilities 

CURRENT INTEREST-BEARING LIABILITIES 

Current portion of long-term borrowings

Current portion of finance lease liabilities

Factoring debt

Export loans

Total current interest-bearing liabilities

NET INTEREST-BEARING DEBT

Total non-current interest-bearing liabilities (see above) 

Total current interest-bearing liabilities (see above)

Gross interest-bearing debt

Cash and cash equivalents 

Loans to associates

Net interest-bearing debt

Quote of factoring debt

Quote of Bremnes´ share of bank OQ AS (40%)

Net interest-bearing debt, according to covenants

2017

895 000

300 000

201 899

2016

985 000

0

250 452

1 396 899

1 235 452

15 353

15 353

15 963

15 963

−3 312

−5 126

1 408 939

1 246 289

2017

90 000

58 353

2016

90 000

67 116

500 976

502 535

8 873

8 490

658 202

668 141

2017

2016

1 396 899

1 235 452

658 202

668 141

2 055 100

1 903 593

271 715

503 612

19 600

0

1 763 786

1 399 981

500 976

−20 797

502 535

−8 873

1 283 606

906 319

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ANNUAL ACCOUNTS // GROUPPAYMENT PROFILE NON-CURRENT 
LIABILITIES

Long-term syndicated loan

Long-term credit facility

Subordinated loan

Finance leases

Total

LIABILITIES SECURED BY 
MORTGAGE/CHARGES ON 
ASSETS: 

2018

90 000

0

0

2019

895 000

300 000

0

58 352

48 685

148 352

1 243 685

Liabilities to credit institutions incl. finance leases

Assets pledged as security

Licences

Property, plant and equipment

Trade receivables

Inventories and biological assets

Total assets pledged as security

2020

2021

2022

Deretter

0

34 867

34 867

0

28 208

28 208

0

22 215

22 215

15 353

67 925

Sum

985 000

300 000

15 353

260 251

83 278

1 560 604

2017

2016

2 055 100

1 903 593

2017

2016

1 068 552

1 060 622

1 871 804

1 510 379

761 407

800 591

2 790 614

2 548 789

6 492 377

5 920 381

Pledges include shares in subsidiaries. The book value of these shares in the consolidated financial statements is NOK 0. 

Description of debt
Grieg Seafood ASA

 Currency 

 Fixed or 
floating 
interest rate 

 Effective 
interest rate 

 Final 
maturity 
(mth/year) 

 Current 
portion 

Non-current 
portion 

 Current 
portion 

Non-current 
portion 

2017

2016

 NOK 

  Floating  

 Price grid 

06/2019

90 000

891 688

90 000

979 874

 NOK 

 Floating 

 Price grid 

06/2019

0

300 000

0

Long-term syndicated 
loan

Syndicated loan - credit 
facility*)

Ocean Quality

Export loans

Factoring debt

 Flervaluta 

 Floating 

Liabilities finance leases

Subordinated loan

Total

 GBP 

5,50%

8 873

500 976

0

0

8 490

502 535

0

0

0

58 353

0

201 899

15 353

67 116

0

250 452

15 963

658 202

1 408 939

668 141

1 246 289

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ANNUAL ACCOUNTS // GROUP 
 
BOOK VALUE OF GROUP LOANS BY CURRENCY (NOK x 1 000)

31.12.2017

Long-term syndicated loan

Syndicated loan - credit facility

Export loans

Factoring *)

Finance leases

Subordinated loan

  981 688 

  300 000 

  8 873 

  500 976 

  260 251 

  15 353 

NOK

  981 688 

  300 000 

  73 151 

  241 641 

Total borrowings and finance leases

  2 067 141 

  1 596 480 

*) Other currency effects mainly comprise EUR, JYP and USD

GBP

Others

  8 873 

  115 536 

  18 610 

  15 353 

  158 372 

  312 289 

  312 289 

Average interest rate on loans and credit facility

2017

2,21%

2016

3,53%  

The effect of interest-rate swaps is not taken into account in calculating the average interest-rate on loans and credit facilities. 

BOOK VALUE AND FAIR VALUE OF BORROWINGS

                   Book value

                    Fair value

Loan (non-current and credit facility) 

Total

The book value of other loans closely approximates to the fair value.

2017

1 191 688

1 191 688

2016

979 874

979 874

2017

1 191 688

1 191 688

2016

979 874

979 874

Amounts in NOK x 1 000

 Liabilities arising from financing activities

 Change in liabilities arising from financing 
activities 

Finance leases 
<1 y

Finance leases 
maturity >1 y

Loans with 
maturity <1 y

Loans with 
maturity >1 y

Total

At 31.12.2016

Cash flow

Repayment long-term syndicated loan

Utilisation long-term credit facility

Utilisation finance leases

Foreign currency adjustments

At 31.12.2017

67 116

−10 116

0

0

930

423

250 452

−57 294

0

0

8670

70

58 353

201 899

601 025

−1 559

0

0

0

383

599 849

1 000 963

1 919 556

0

−90 000

300 000

0

−610

−68 969

−90 000

300 000

9 600

266

1 210 353

2 070 453

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ANNUAL ACCOUNTS // GROUP   
NOTE 11
LEASES

OPERATING LEASE COMMITMENTS – GROUP COMPANY AS LESSEE 

The Group leases offices, docks, berths, etc. with terms of 5–10 years. In 2017, the Group entered into several leases for various well-boat services, as well as contracts for delousing and cleaning of nets. The 
term of the contracts is 2–5 years, with a prolongation option. The Group also leases plant and machinery under cancellable finance leases. The Group must give written notification if it wishes to terminate 
these agreements.

The future aggregate minimum lease payments under operating leases are as follows:

OVERVIEW OF FUTURE MINIMUM 
OPERATING LEASES

 Within 1 
year 

 Within 2 
years 

 Within 3 
years 

 Within 4 
years 

 Within 5 
years 

 Within 6 
years 

 Within 7 
years 

 Within 8 
years 

 Within 9 
years 

 Within 10 
years 

 Later than 
10 years 

 Total 

Minimum lease amount

  171 008 

  131 680 

  112 639 

  52 592 

  42 591 

  33 546 

  30 744 

  1 883 

  1 883 

  1 883 

  24 842 

  605 291 

Present value of future minimum lease 
amount (5% discount rate)

  162 864 

  119 438 

  97 301 

  43 267 

  33 371 

  25 033 

  21 849 

  1 274 

  1 214 

  1 156 

  15 251 

  522 019 

 Lease amount charged in the year (see Note 26)

FINANCE LEASE COMMITMENTS – GROUP COMPANY AS LESSEE

2017

2016

  169 061 

  52 660 

The Group has signed finance leases for barges, well-boats, cage installations and other equipment. The lease term for equipment of this kind is normally 7–8 years.

The future aggregate minimum lease payments relating to finance leases are as follows:

OVERVIEW OF FUTURE MINIMUM 
OPERATING LEASES

 Within 1 
year 

 Within 2 
years 

 Within 3 
years 

 Within 4 
years 

 Within 5 
years 

 Within 6 
years 

 Within 7 
years 

 Within 8 
years 

 Within 9 
years 

 Within 10 
years 

 Later than 
10 years 

 Total 

Future minimum lease amount

  65 366 

  54 002 

  38 891 

  31 200 

  24 435 

  20 836 

  15 022 

  11 169 

  8 918 

  6 428 

  10 041 

  286 308 

Future financial expenses relating to 
finance leases

  7 014 

  5 317 

  4 024 

  2 993 

  2 220 

  1 560 

  1 118 

  792 

  529 

  321 

  169 

  26 057 

Present value of finance leases

  58 352 

  48 685 

  34 867 

  28 208 

  22 215 

  19 276 

  13 904 

  10 378 

  8 389 

  6 107 

  9 871 

  260 251 

 LEASED ASSETS RECOGNISED AS FINANCE LEASES

Book value of leased assets (equipment, vessels)

Book value of lease commitment

2017

306 077

260 251

2016

396 337

317 568

P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
0
9

ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTE 12
FINANCIAL INSTRUMENTS BY 
CATEGORY

Total

1 150

761 407

198 527

48 232

271 715

260 251

500 976

8 873

15 594

28 462

585 378

2 696 575

Total

1 445

800 591

167 413

48 994

503 613

Available-for-sale financial 
assets

Available-for-sale financial 
assets

Trade receivables

Other receivables

Derivatives

Cash and cash equivalents

Total 

Level

2/ 3

2

As at 31 December 2017

Level

Borrowings

Finance lease liabilities

Factoring debt

Export loan

Cash-settled options

Derivatives

Trade payables

Total

Loans and 
receivables

Assets at fair 
value through 
profit or loss

Derivatives used 
for hedging 
purposes

Available-for-sale 
financial assets

1 150

48 232

761 407

198 527

271 715

1 231 648

0

48 232

1 150

1 281 030

Liabilities at fair 
value through 
profit or loss

Derivatives used 
for hedging 
purposes

Other financial 
liabilities

Total

  1 297 041 

1 297 041

260 251

500 976

8 873

15 594

2

28 462

585 378

613 840

0

2 082 735

As at 31 December 2016

Level

Loans and 
receivables

Assets at fair 
value through 
profit or loss

Derivatives used 
for hedging 
purposes

Available-for-sale 
financial assets

1 445

48 994

Available-for-sale financial 
assets

Trade receivables

Other receivables

Derivatives

Cash and cash equivalents

Total

2/ 3

2

800 591

167 413

503 613

1 471 618

As at 31 December 2016

Level

0

48 994

1 445

1 522 057

Liabilities at fair 
value through 
profit or loss

Derivatives used 
for hedging 
purposes

Other financial 
liabilities

Total

1 085 837

1 085 837

317 568

502 535

8 490

11 360

2

23 990

493 534

517 524

0

1 925 790

317 568

502 535

8 490

11 360

23 990

493 534

2 443 314

Borrowings

Finance lease liabilities

Factoring debt

Export loan

Cash-settled options

Derivatives

Trade payables

Total

The purpose of the derivatives is to reduce the Group´s exposure to changes in floating interest rates and exchange rates. See notes 2-3
for further details.

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
FAIR VALUE ASSESSMENT 

The table above shows the fair value of financial instruments according to the valuation method used. The different levels are defined as
follows:

Level 1 - Fair value based on the quoted price in an active market for an identical asset or liability.
Level 2 - Fair value based on other observable factors than the quoted price (used in level 1) and entered directly (price) or indirectly
(derived from prices) for the asset or the liability.
Level 3 - Fair value based on factors not taken from observable markets (non-observable assumptions).

CREDITWORTHINESS OF FINANCIAL ASSETS 

Credit risk attaching to financial instruments that have not matured or have not been written down is shown in accordance with the internal 
classification of historical information on breaches of credit covenants. Further information about credit risk is provided in Note 3.

TRADE RECEIVABLES

Counterparties with no external credit rating

Group 1

Group 2

Group 3

Total trade receivables not written down

Bank deposits

AAA

AA

A

Total bank deposits

2017

39 689

641 737

79 981

761 407

2016

225 579

538 002

37 010

800 591

0

0

271 715

503 613

0

0

271 715

503 613

Group 1 - new customers/related parties (less than 6 months).
Group 2 - existing customers/related parties (more than 6 months) with no history of credit covenant breaches.
Group 3 - existing customers/related parties (more than 6 months) with a history of one or more credit covenant breaches. All amounts
due have been paid in full following the breaches.

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
NOTE 13
TAX

(Amounts in NOK x 1 000)

SPECIFICATION OF TAX EXPENSE

Tax payable Norway

Tax payable abroad

Tax payable not provided for last year

Change in deferred tax Norway

Change in deferred tax abroad

Taxes

TAX RECONCILIATION

Profit before tax

Tax calculated at nominal tax rates

Withholding tax

Changes in deferred tax liabilities due to change in tax rate

Use of carryforwards, not previously recognised

Tax loss carried forward, not recognised

Other permanent differences

Taxes

CHANGE IN BOOK VALUE OF DEFERRED TAX

Book value at 01.01.

Currency conversion

Tax effect of deferred tax liabilities

Tax effect of currency effect of net investments recognised in comprehensive income (see Note 3)

Other effects

Change in deferred tax recognised in income in period

Deferred tax liability at balance sheet date

Weighted average tax rate

2017

2016

  152 146 

  171 085 

  2 918 

  8 817 

  -18 308 

  52 008 

  972 

  3 816 

  91 398 

  71 235 

  197 581 

  338 506 

  798 480 

  1 560 835 

  200 019 

  366 200 

  1 226 

  2 954 

  -18 842 

  -18 401 

  560 

  6 597 

  8 021 

  -502 

  -9 976 

  -1 769 

  197 581 

  338 506 

  674 684 

  528 723 

  7 877 

  32 311 

  -4 317 

  6 135 

  4 999 

  -165 

  7 741 

  -20 142 

  -4 107 

  162 633 

  721 689 

  674 684 

24,74%

21,69%

The nominal tax rate in Norway is 24%. The nominal tax rate for 2017 in Canada was 26% and on Shetland 19%.

The considerable tax effect is attributable to a change in the tax rate and other permanent differences.

The following tables provide a breakdown of deferred tax. The tax effects of taxable and deductible temporary differences are shown separately. 
The Norwegian, Canadian and UK parts of the Group each have a net deferred tax position. Deferred tax liabilities and deferred tax assets within 
Norway, Canada and UK can be set off. 

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ANNUAL ACCOUNTS // GROUPDeferred tax liabilities

 Licences 

 Non-current 
assets 

 Biological assets 

 Receivables 

 Inventory 

 Deferred capital 
gain 

 Current 
liabilities 

 Total 

2016

Opening balance at 01.01

Recognised in income in period

Currency translation differences

Other effects

 As at 31.12.

2017

Recognised in income in period

Currency translation differences

Other effects

 As at 31.12.

 31.12.2017

  179 658 

  -5 779 

  -4 034 

  -   

  169 845 

  -3 781 

  1 181 

-

-

  41 244 

  5 

  -1 353 

  1 623 

  41 519 

  11 670 

  530 

-

-

  308 177 

  138 911 

  -1 531 

  2 635 

  448 192 

  38 170 

  3 265 

  -2 200 

-

  167 245 

  53 719 

  487 427 

  50 428 

  -30 408 

  0 

  -   

  2 548 

  1 382 

  14 

  96 

  20 020 

  4 041 

  10 727 

  1 043 

-

  31 790 

  -160 

  40 

-

-

  675 

  -150 

  -   

  -   

  525 

  -178 

-

-

-

  0 

  -   

  -   

  -   

  0 

-

-

-

-

  582 730 

  103 961 

  -6 904 

  4 354 

  684 143 

  56 448 

  5 016 

  -1 157 

  -   

  3 921 

  347 

  0 

  744 450 

Deferred tax assets

Loss carried 
forward

Non-current 
assets

Pensions

 Receivables  Lease obligations

Tax credits

 Other liabilities 

Total

2016

Opening balance at 01.01

Recognised in income in period

Currency translation differences

Other effects

Effect of business combination

 As at 31.12.

2017

  -47 694 

  53 947 

  6 755 

  -29 286 

  8 516 

  -7 761 

Recognised in income in period

  -18 975 

Currency translation differences

Other effects

Effect of business combination

 As at 31.12.

  -644 

  2 974 

  3 610 

  -20 796 

  -   

  -   

  -   

  -   

  -   

  -   

-

-

-

-

  -   

  -   

  -   

  0 

  -   

  -   

  0 

-

-

-

-

  -446 

  -1 116 

  -   

  -   

  -   

  -1 562 

  -563 

-

-

-

  -   

  -2 125 

  -   

  -   

  -0 

  -   

  -   

  -0 

-

  -0 

-

-

  -0 

  -   

  -   

  0 

  -   

  -   

  0 

  -1 338 

  -36 

-

-

  -5 866 

  5 842 

  -16 

  -94 

  -   

  -135 

  -1 873 

  -33 

-

-

  -54 006 

  58 672 

  6 739 

  -29 380 

  8 516 

  -9 458 

  -22 749 

  -713 

  2 974 

  3 610 

  -1 374 

  -2 041 

  -26 336 

P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
1
3

ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net deferred tax

Deferred tax classified as non-current assets

Deferred tax classified as non-current debt

Tax payable classified as current debt

NET CHANGE IN DEFERRED TAX RECOGNISED IN INCOME:

Changes in deferred tax, Norway

Changes in deferred tax, other countries

Net deferred tax recognised in income

Recognised in period for positions giving rise to deferred tax liabilities

Recognised in period for positions giving rise to deferred tax assets

Net deferred tax recognised in income

LOSS CARRIED FORWARD 

2017

  718 114 

  3 574 

  721 689 

  157 244 

2017

  -18 308 

  52 008 

  33 700 

  56 448 

  -22 749 

  33 700 

2016

674 684

  -   

  674 684 

  172 057 

2016

  91 398 

  71 235 

  162 633 

  103 962 

  58 672 

  162 633 

Deferred tax assets related to an allowable deficit are recognised in the balance sheet in so far as it is likely that 
these can be set against future taxable profits.

Deferred tax assets relating to a tax loss carried forward are divided 
among the following jurisdictions:

Norway

UK

Sum

2017

  -5 266 

  -15 530 

  -20 796 

2016

  -   

  -7 761 

  -7 761 

There is no time limit on the utilisation of tax losses carried forward in Norway or the UK. 

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
NOTE 14
DECLARATION ON THE 
DETERMINATION OF SALARY AND 
OTHER REMUNERATION PAID TO 
SENIOR EMPLOYEES

THE BOARD'S DECLARATION

The Board of Grieg Seafood ASA has appointed a dedicated Remuneration committee, whose remit is to advise the Board on all matters pertaining 
the Company's compensation to the CEO and other incentive schemes for managers.

The Board determines the salary and other remuneration paid to the CEO and approves remuneration schemes involving the granting of options to 
managers. The Board adopts guidelines and principles used to determine salaries and other remuneration paid to key personnel.

MAIN PRINCIPLES OF THE GROUP´S REMUNERATION POLICY

Grieg Seafood ASA’s performance is contingent on the Group´s ability to recruit and retain the highest qualified and most motivated employees. 
Grieg Seafood ASA´s remuneration policy is based on the principle that the Group shall offer its employees competitive compensation terms in 
accordance with local industry standards. Where appropriate, this may include incentive elements, where the basic salary shall reflect individual 
performance.

 The Group runs performance-related bonus schemes for its employees. The Remuneration committee determines the bonus basis each year.

PRINCIPLES FOR REMUNERATION 

FIXED BASIC SALARY

Remuneration for the management team must be competitive. The basic salary, which is determined by reference to job descriptions, competence 
levels, qualifications and seniority, comprises the main portion of management remuneration and consists of a fixed basic element and other fixed 
remuneration elements such as a fixed car allowance and similar benefits.

ADDITIONAL BENEFITS 

Bonus scheme

The Group has an annual bonus scheme based on a combination of earnings and personal performance targets. The bonus scheme incentivises 
employees to make continuous improvements in operations and the Group's profitability. The CEO has an annual maximum bonus of six times the 
monthly salary, while other Group managers can earn a bonus up to a maximum of five times salary.

The CEO received a special start-up cash bonus for 2015 and 2016 which assumed that the CEO was in position at the payment dates. The start-up 
bonus for 2015 was paid in 2016, and the bonus for 2016 was paid in 2017.

Pension schemes

All the Norwegian Group subsidiaries comply with the Act relating to mandatory occupational pensions. The Group only operates defined 
contribution pension schemes. Foreign subsidiaries comply with their respective jurisdictions pertaining to employee pension schemes. The Group 
managers are members of the Group´s collective defined contribution pension scheme. As well as participating in the Company’s ordinary defined 
contribution pension scheme, the CEO has a separate salary compensation agreement for pension benefits exceeding 12G.

Options

A synthetic option scheme (hereafter referred to as a "cash option") for the Company’s management group was established in 2009. The cash 
options scheme requires participants to directly own shares throughout the entire programme period. Employees who are entitled to the options are 
required to use 50% of the net gain under the scheme to purchase shares until the ownership corresponds to 100% of their fixed annual salary. The 
gain under the cash option scheme cannot exceed 12 times the monthly salary per participant per year. The exercise price is increased by 0.5% each 

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ANNUAL ACCOUNTS // GROUPmonth. An option must be exercised no later than 24 months after the initial exercise date. At the year-end, the cash option scheme corresponded 
to a total of 2 951 547 shares, after the awarding of 1 800 000 options in 2017. The final exercise date for options awarded in 2017 is 31 May 2021. 

Severance pay

The Group limits the payment of severance pay, though has paid such remuneration in specific cases. The CEO is entitled to a separate severance 
pay agreement in case of termination of employment comprising 12 months’ rolling severance pay calculated from the termination date. The 
termination date is deemed to be end of the notice period. The CEO has a period of notice of six months. The CFO and COO are entitled to 12 
months´ severance pay from the termination date or date of change of position/employment. For other employees, individual contracts of 
employment apply, essentially based on conditions in the Norwegian Working Environment Act. 

Benefits in kind

Managers are normally granted benefits in kind typical for similar positions, such as a free newspaper, telephone and internet connection.  

GUIDELINES FOR DETERMINATION OF REMUNERATION PAID 
TO THE GROUP MANAGEMENT

INTRODUCTION

For details about remuneration paid to individual employees, please refer to the notes to the financial statements.
For information about remuneration paid to Group management, see Note 15.
For more information about options, see Note 16.

DETERMINATION OF SALARY PAID TO THE CEO

Remuneration paid to the CEO is determined each year by the Remuneration committee on the mandate of the Board.

DETERMINATION OF SALARY PAID TO GROUP MANAGEMENT AND REGIONAL MANAGERS

Remuneration paid to other Group managers and regional managers are determined by the CEO in consultation with the Remuneration committee. 
The Board should be informed about the decision afterwards.

DETERMINATION OF INCENTIVE SCHEMES

The Remuneration committee evaluates the options scheme and the exercise allocation within the framework of the AGM.
Other incentive schemes, including bonus schemes, are determined by the Board. The Remuneration committee determines the minimum 
performance level for the bonus each year and informs the Board accordingly. The CEO awards incentive schemes and other benefits to Group 
management and regional managers within the framework of programs adopted by the Board.  

DETERMINATION OF REMUNERATION PAID TO MANAGERS IN OTHER GROUP COMPANIES

Subsidiaries of the Group must comply with the main principle of the Group´s management remuneration policy, as described under the main 
principles.

BOARD REMUNERATION

Compensation paid to Board members is not performance-related. The Board members have not been granted options. Compensation paid to the 
Board is determined by the Annual General Meeting.

Bergen, 17 April 2018
The Board of Grieg Seafood ASA

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ANNUAL ACCOUNTS // GROUPNOTE 15
PAYROLL, FEES, NUMBER OF 
EMPLOYEES ETC.

Salaries

Social security costs

Share options granted to directors and key employees (incl. social security costs)

16

Pension costs

Other personnel costs

Total

Average number of employees

Note

2017

2016

371 518

374 760

30 698

13 247

11 858

55 507

27 735

21 712

10 781

48 484

482 827

483 473

707

654

The Board´s guidelines and principles for determination of remuneration and other benefits paid to key personnel are described in Note 14.

As at 31 December 2017, no loans were extended to Group employees.

Accumulated costs for salaries, pension costs and other remuneration paid to the CEO, other senior officers and Board members in 2017 were 
as follows: 

Remuneration paid to senior officers in 2017 
(NOK x 1 000)

 Salary 

  Bonus  

 Retained, 
not yet paid 

 Options 
exercised 
during year 

 Other 
remuneration 

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO) 

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Total remuneration paid to senior officials

2 498

1 596

1 596

1 272

6 962

1 133

505

276

281

630

335

195

347

2 195

1 508

2 475

1 578

1 578

0

5 630

137

132

133

125

527

Recognition of synthetic options not declared throughout the year are not included in the above list.

Remuneration paid to Board members, 2017

Per Grieg jr. 1)

Wenche Kjølås 2)

Karin Bing Orgland 2)

Asbjørn Reinkind 1)

Ola Braanaas 1)

Total remuneration including social security costs

Recognised synthetic options not declared throughout the year are not included in the above list.

 Total 

6 873

4 145

3 778

2 025

16 821

434

280

280

302

245

  1 540 

1) Remuneration for work performed on the Remuneration Committee of NOK 17 115 is included in payments to Per Grieg jr., Asbjørn Reinkind 
and Ola Braanaas.

2) Remuneration for work performed on the Audit Committee of NOK 51 345 is included in payments to Wenche Kjølås and Karin Bing Orgland. 
The amounts include social security costs.

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ANNUAL ACCOUNTS // GROUP 
 
 
 
 
Accumulated costs relating to salaries, pension costs and other remuneration paid to the CEO, other senior officers and Board members in 2016 
were as follows:

Remuneration paid to senior officers in 2016 
(NOK x 1 000)

 Salary 

  Bonus  

 Retained, 
not yet paid 
*)  

 Options 
exercised 
during year 

 Other 
remuneration 

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO) 

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO fra 1. mai 2016)

Total remuneration paid to senior officers

2 348

1 683

1 659

810

6 501

0

0

0

0

0

732

505

276

286

1 799

2 400

2 387

2 288

0

7 075

Recognised synthetic options not declared throughout the year are not included in the above list.

Remuneration paid to Board members in 2016

Per Grieg jr. 1)

Wenche Kjølås 2)

Karin Bing Orgland

Asbjørn Reinkind 1)

Ola Braanaas 1)

Total remuneration including social security costs

Recognised synthetic options not declared throughout the year are not included in the above list.

24

45

39

15

 Total 

5 504

4 621

4 261

1 111

123

15 498

419

262

262

288

234

  1 466 

1) Remuneration for work performed on the Remuneration Committee of NOK 14 267 is included in payments to Per Grieg jr., Asbjørn Reinkind 
and Ola Braanaas.

2) Remuneration for work performed on the Audit Committee of NOK 42 788 is included in payments to Wenche Kjølås and Karin Bing Orgland.

These amounts include social security costs. 

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   118

ANNUAL ACCOUNTS // GROUPNOTE 16
CASH-BASED REMUNERATION (OPTIONS)

The Company has issued options to the management group and regional directors. The options’ strike price is the stock market price on the date of issue, rising by 0.5% per month until the 
exercise date. As at 31 December 2017, no equity options were available for vestment. Since 2009, an option scheme with settlement in cash has been established for the management and regional 
directors. The most recent allocation was in 2017, totalling 1,800,000 options. The final exercise date is 31 May 2021. The options have a term of two years, where 50% is vested each year.

Employees taken on after the initial allocation of options are allocated options on taking up employment.

The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to carry out the calculations.
The table below shows the movement in outstanding options during 2016 and 2017.

Overview 2017

Andreas Kvame (CEO)

Option category

Cash settlement

Atle Harald Sandtorv (CFO)

Cash settlement

Knut Utheim (COO)

Cash settlement

Kathleen O. Mathisen (CHRO)

Cash settlement

Others

Total

Cash settlement

Overview 2016

Andreas Kvame (CEO)

Option category

Cash settlement

Atle Harald Sandtorv (CFO)

Cash settlement

Knut Utheim (COO)

Cash settlement

Kathleen O. Mathisen (CHRO)

Cash settlement

Others

Total

Cash settlement

Outstanding 
options at 
31.12.2016

  314 009 

  146 801 

  187 893 

  100 000 

  592 379 

Granted options

  400 000 

  200 000 

  200 000 

  200 000 

  800 000 

  1 341 082 

  1 800 000 

Outstanding 
options at 
31.12.2015

  400 000 

  300 000 

  300 000 

  -   

  1 150 000 

  2 150 000 

Granted options

  -   

  -   

  -   

  100 000 

  200 000 

  300 000 

Exercised 
options

  55 737 

  35 527 

  35 527 

  -   

  62 745 

  189 535 

Exercised 
options

  85 991 

  153 199 

  112 107 

  -   

  402 492 

  753 789 

Cancelled 
options

 Expired options 

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

Outstanding 
options at 
31.12.2017

  658 272 

  311 274 

  352 366 

  300 000 

  1 329 634 

  2 951 547 

Of which cash-
settled

  658 272 

  311 274 

  352 366 

  300 000 

  1 329 634 

  2 951 547 

Cancelled 
options

 Expired options 

Outstanding 
options at 
31.12.2016

Of which cash-
settled

  -   

  -   

  -   

  -   

  355 129 

  355 129 

  -   

  -   

  -   

  -   

  -   

  -   

  314 009 

  146 801 

  187 893 

  100 000 

  592 379 

  314 009 

  146 801 

  187 893 

  100 000 

  592 379 

  1 341 082 

  1 341 082 

P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
1
9

ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
2
0

Expiry date: 
Year-month

Strike price NOK 
per share at 
31.12.2017

Strike price NOK 
per share at 
31.12.2016

2018 - 06

2019 - 06

2019 - 06

2020 - 05

2021 - 05

  29.76 

  29.76 

  84.12 

  83.62 

  83.62 

  27.90 

  27.90 

  79.22 

  -   

  -   

Allocation:  Year - month

2015 - 06 

2015 - 06

2016 - 12

2017 - 11

2017 - 11

Total

Cash-based options available for settlement

Weighted average outstanding contract period

             Options

2017

  251 547 

  600 000 

  300 000 

  900 000 

  900 000 

2016

  441 082 

  600 000 

  300 000 

  -   

  -   

  2 951 547 

  1 341 082 

2017

  1 151 547 

  43.94 

2016

  441 082 

  28.05 

2017

Option category

Listed price on 
allocation

Former employees with expired 
options

Equity option

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Other options allocated in 2015

Other options allocated in 2016

Other options allocated in 2017

Total

*) Amounts exclude social security costs

  Calculated 
value per 
option on 
allocation  

  Calculated 
total value on 
allocation*) 

  Total value of 
all options at 
01.01.2017 

Change in 
provision CB - 
OB *) 

Exercised 
options 2017

  Acc. cost 
charged against 
equity at 
31.12.2017 

 Book liability 
cash settlement 
at 31.12.2017 

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

  25,50 

  25,50 

  25,50 

  79,00 

  83,00 

  83,00 

  83,00 

  83,00 

  25,50 

  79,00 

  83,00 

  3,36 

  3,97 

  3,97 

  3,63 

  2,26 

  2,79 

  2,79 

  2,38 

  3,60 

  3,34 

  2,35 

  1 342 

  793 

  793 

  363 

  906 

  557 

  557 

  475 

  2 876 

  669 

  1 880 

  2 935 

  1 699 

  2 298 

  41 

  -   

  -   

  -   

  -   

  4 312 

  75 

  -   

  1 320 

  157 

  570 

  197 

  147 

  90 

  90 

  77 

  916 

  366 

  305 

  2 475 

  1 578 

  1 578 

  -   

  -   

  -   

  -   

  -   

  2 786 

  -   

  -   

  6 887 

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  4 255 

  1 857 

  2 868 

  237 

  147 

  90 

  90 

  77 

  5 227 

  441 

  305 

  11 212 

  11 360 

  4 234 

  8 416 

  6 887 

  15 594 

ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
2
1

2016

Option category

Listed price on 
allocation

Former employees with expired 
options

Equity option

  Calculated 
value per 
option on 
allocation 

  Calculated 
total value on 
allocation*) 

  Total value of 
all options at 
01.01.2016 

Change in 
provision CB - 
OB *) 

Exercised 
options 2016

  Acc. cost 
charged against 
equity at 
31.12.2016 

 Book liability 
cash settlement 
at 31.12.2016 

6 887

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Other options allocated in 2013

Other options allocated in 2014

Other options allocated in 2014

Other options allocated in 2015

Other options allocated in 2016

Total

*) Amounts exclude social security costs

Accrued costs break down as follows:

Change in provisions

Exercised options during year

Total cost excl. social security costs

Social security costs

Total cost incl. social security costs

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

  25,50 

  22,22 

  25,50 

  22,56 

  25,50 

  79,00 

  22,22 

  22,56 

  28,90 

  25,50 

  79,00 

  3,36 

  3,94 

  3,97 

  4,78 

  3,97 

  3,63 

  3,94 

  4,24 

  4,20 

  3,60 

  3,34 

1 342

394

793

478

793

363

1 181

424

420

2 876

669

9 734

579

639

353

662

353

0

1 250

315

206

1 282

0

5 639

2 356

−639

1 346

−662

1 945

41

−1 250

−315

−206

3 030

75

5 721

2 400

903

1 485

1 950

338

0

3 823

546

2 143

1 465

0

15 052

6 887

2 935

0

1 699

0

2 298

41

0

0

0

4 312

75

11 360

2017

  4 234 

  8 416 

  12 650 

  597 

  13 247 

2016 Classification in accounts

  5 721  Other provisions for liabilities

  15 052  Payroll & social security costs/ bank

  20 772 

  939  Public taxes payable

  21 712  Payroll and social security costs

Costs relating to cash-based remuneration in 2017 totalled TNOK 13 247. This is recognised in the income statement as a personnel cost. Social security contributions are provided for on an ongoing basis 
based on the fair value of the options.

As at 31 December 2017, outstanding options with the right to cash settlement were stated at TNOK 15 594, of which TNOK 8 848 were classified as non-current liabilities. Issued options are cancelled on 
termination of employment.

Estimates used to calculate allocation of options

Anticipated volatility (%)

Risk-free rate of interest (%)

Estimated qualification period (years) 

The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.  

In order to estimate volatility, management has applied historical volatility for comparable listed companies.

36.62%

0.67%

2.25

ANNUAL ACCOUNTS // GROUP 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
NOTE 17
SHARE CAPITAL AND SHAREHOLDER 
INFORMATION

Share capital: 

As at 31 December 2017, the Company had 111 662 000 shares with a nominal value of NOK 4 per share.
All shares issued by the company are fully paid-up. There is one class of shares and all shares confer the same rights.
In June 2011 the company purchased 1 250 000 treasury shares for NOK 14.40 per share.

Holdings of treasury shares 

31.12.2017

 Change in share 
capital (NOK x 1 
000) 

 Nominal value 
(NOK) 

 Total share 
capital (NOK x 1 
000) 

  4.00 

  4.00 

446 648

−5 000

441 648

 No. of ordinary 
shares 

  111 662 000 

  -1 250 000 

110 412 000

THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA

No. of shares

Shareholding

No. of shares

Shareholding

31.12.2017

31.12.2017

31.12.2016

31.12.2016

  55 801 409 

49.97%

  55 801 409 

49.97%

GRIEG HOLDINGS AS 

OM HOLDING AS 

FOLKETRYGDFONDET 

NYE YSTHOLMEN AS 

STATE STREET BANK AND TRUST CO. 

VERDIPAPIRFONDET PARETO INVESTMENT 

VERDIPAPIRFONDET ALFRED BERG GAMBA  

JPMORGAN CHASE BANK. N.A.. LONDON  

CLEARSTREAM BANKING S.A.  

GRIEG SEAFOOD ASA 

ARTIC FUNDS PLC 

MORGAN STANLEY AND CO INTL PLC 

THE BANK OF NEW YORK MELLON SA/NV 

Total - largest shareholders

Other shareholders with a shareholding of less than 1%

  5 164 379 

  2 949 137 

  2 928 197 

  2 602 761 

  1 915 000 

  1 700 796 

  1 477 767 

  1 286 414 

  1 250 000 

  926 000 

  598 815 

  518 635 

79 119 310

32 542 690

4.63%

2.64%

2.62%

2.33%

1.71%

1.52%

1.32%

1.15%

1.12%

0.83%

0.54%

0.46%

70.86%

29.14%

  3 105 000 

  3 390 000 

  2 928 197 

  1 814 836 

  1 711 000 

  986 273 

  448 816 

  1 017 577 

  1 250 000 

  1 397 000 

  2 067 749 

  1 241 277 

77 159 134

34 502 866

2.78%

3.04%

2.62%

1.63%

1.53%

0.88%

0.40%

0.91%

1.12%

1.25%

1.85%

1.11%

69.10%

30.90%

100.00%

Total shares

111 662 000

100.00%

111 662 000

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   122

ANNUAL ACCOUNTS // GROUPSHARES CONTROLLED BY BOARD MEMBERS AND GROUP 
MANAGEMENT:

Board of Directors:

Per Grieg jr. *)

Wenche Kjølås (Jawendel AS)

Asbjørn Reinkind (Reinkind AS)

Karin Bing Orgland

Ola Braanaas

Group management:

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

No. of shares

Shareholding

No. of shares

Shareholding

31.12.2017

31.12.2017

31.12.2016

31.12.2016

  58 961 996 

52.80%

  58 961 996 

52.80%

  7 000 

  120 000 

  -   

  -   

35 000

21 793

18 200

-

0.01%

0.11%

0.00%

0.00%

0.03%

0.02%

0.02%

0.00%

  7 000 

  120 000 

  -   

  -   

29 000

30 661

12 400

-

0.01%

0.11%

0.00%

0.00%

0.03%

0.03%

0.01%

0.00%

* The shares owned by the following companies are controlled by Per Grieg jr. and family.

Grieg Holdings AS

Grieg Shipping II AS

Nye Ystholmen AS

Grieg Ltd AS

Kvasshøgdi AS

Per Grieg jr. privately

Total shares

  55 801 409 

49.97%

  55 801 409 

49.97%

  -   

  2 928 197 

  217 390 

  -   

  15 000 

0.00%

2.62%

0.19%

0.00%

0.01%

  -   

  2 928 197 

  217 390 

  -   

  15 000 

0.00%

2.62%

0.19%

0.00%

0.01%

  58 961 996 

52.80%

  58 961 996 

52.80%

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ANNUAL ACCOUNTS // GROUPNOTE 18
EARNINGS PER SHARE AND 
DIVIDEND PER SHARE

BASIS FOR CALCULATION, EARNINGS PER SHARE

Profit for the year (majority share) (NOK x 1 000)

Number of shares at 1 January

Effect of treasury shares (see Note 17) (NOK x 1 000)

Average number of outstanding shares during the year

Adjustment for effect of share options

Diluted average number of outstanding shares during the year

Earnings per share (NOK)

Diluted earnings per share (NOK)

Proposed dividend per share (NOK)

2017

570 537

2016

1 186 032

111 662 000

111 662 000

−1 250 000

−1 250 000

110 412 000

110 412 000

0

0

110 412 000

110 412 000

5.17

5.17

2.00

10.74

10.74

3.00

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ANNUAL ACCOUNTS // GROUPNOTE 19
CASH AND CASH EQUIVALENTS

Amounts in NOK x 1 000

Restricted deposits relating to employee tax deductions

Restricted bank deposits relating to fixed-interest deposits with short maturities

Other cash and bank deposits 

Total

The Group's currency and interest rate exposure is described in Note 3.

2017

13 493

0

258 221

271 715

2016

10 017

160 000

333 597

503 613

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ANNUAL ACCOUNTS // GROUPNOTE 20
TRADE RECEIVABLES

Amounts in NOK x 1 000

Trade receivables at nominal value

Provision for bad debts

Trade receivables at 31.12.

2017

772 774

−11 368

761 407

For information on the ageing of trade receivables and the Group's exposure to credit risk on outstanding receivables, see Note 3.

Recognised bad debts

Change in provision for bad debts

Confirmed bad debts in year

Amounts received for previously written off bad debts

Recognised losses on receivables

2017

2 990

1 610

−272

4 328

Losses on receivables are classified as other operating expenses in the financial statements

2016

808 969

−8 378

800 591

2016

3 399

2 880

0

6 279

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ANNUAL ACCOUNTS // GROUPNOTE 21
OTHER CURRENT RECEIVABLES

Amounts in NOK x 1 000

VAT receivable etc.

Prepaid expenses

Insurance claims

Loan extended to Nordnorsk Smolt AS

Charges on volume deviations, fixed-price contracts

Short-term loans extended to non-controlling interests

Other current receivables

Other current receivables at 31.12.

2017

72 895

51 014

10 664

19 600

17 837

13 995

12 522

198 527

2016

97 789

24 031

35 909

1 000

0

0

4 517

163 246

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ANNUAL ACCOUNTS // GROUPNOTE 22
RELATED PARTIES

2017

Total - related parties as shareholders

Total - related parties as associates

Total

2016

Total - related parties as shareholders

Total - related parties as associates

Total

 Operating 
income 

 Operating 
expenses 

 Financial 
income 

 Financial 
expenses 

 Long-term 
balances 

Short-term 
balances

0

0

0

348 564

580

349 144

0

0

0

0

0

0

0

0

0

−74 989

0

−74 989

 Operating 
income 

 Operating 
expenses 

 Financial 
income 

 Financial 
expenses 

 Long-term 
balances 

Short-term 
balances

0

0

0

349 638

20 844

370 482

0

0

0

0

0

0

0

0

0

−68 876

0

−68 876

The Group purchases services from companies in the same group as its majority shareholder, Grieg Holdings AS.

These services include:
• 
• 
• 
• 
• 

ICT-related services and other functions such as catering, reception etc. are provided by Grieg Group Resources AS on an arm’s length basis. 
Grieg Seafood ASA rents its offices from Grieg Gaarden AS on an arm’s length basis.
The regions purchased cleansing fish from Ryfylke Rensefisk AS, a company owned by Grieg Holdings AS.
Purchase of roe and other operating services from SalmoBreed AS, which is a related party of a board member.
Purchase of feed relating to operations from Biomar Group, which is a related party of a board member. 

The Group also purchases services relating to operations from other related parties in associates.
The board and management are related parties. See Note 16 on share-based options and Note 17 on shares controlled by board members and 
management.

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ANNUAL ACCOUNTS // GROUPNOTE 23
 FINANCIAL INCOME AND FINANCIAL 
EXPENSES

Amounts in NOK x 1 000

Other interest income *)

Net change in fair value of derivatives

Net currency gains

Other financial income

Total financial income

Interest expense on bank borrowings and leases **)

Other interest expenses ***)

Net currency losses

Other financial expenses

Total financial expenses

2017

16 563

4 578

20 554

639

42 333

44 661

9 940

0

2 188

56 789

2016

11 129

9 287

0

63

20 479

74 873

8 976

69 926

1 438

155 213

*) The majority of other interest income comprises cash discounts from non-controlling interests, based on settlement of trade payables with 
shorter-than-normal credit terms.
**) Interest expenses on bank borrowings and leases includes recognised gains/losses from realised interest rate swaps.
***) Interest expenses relating to the factoring agreement at Ocean Quality are included in other interest expenses.

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ANNUAL ACCOUNTS // GROUPNOTE 24
 OTHER OPERATING EXPENSES

Amounts in NOK x 1 000

Transportation costs

Maintenance costs

Electricity and fuel

Lease expenses

Outsourced services ***)

Insurance

IT expenses

Marketing costs

Other operating expenses *)

Other production-related costs **)

Total other operating expenses

2017

497 734

232 597

71 369

108 303

51 857

41 119

20 408

8 613

127 070

565 535

1 724 604

2016

445 372

215 931

60 637

59 395

47 825

34 786

18 673

7 669

97 103

504 475

1 491 867

*) Includes equipment, telephony/postage, office supplies, fees, travel costs etc. 

**) Production-related costs comprise harvesting costs including expenses for well-boat services, packaging material, diving services, 
vaccination, de-lousing, oxygen, and analyses etc. 

***) Outsourced services include auditor´s fees. See more detailed information below.

SPECIFICATION OF AUDITOR'S FEE

Auditor's fees

Group auditor

Other auditors

Other certification services

Group auditor

Other auditors

Tax advice

Group auditor

Other auditors

Other services

Group auditor

Other auditors

Total Group auditor

Total other auditors

Total auditor's fees

2017

2 785

469

85

290

523

117

362

0

3 754

877

4 631

2016

2 399

513

157

0

373

148

264

0

3 193

661

3 854

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ANNUAL ACCOUNTS // GROUPNOTE 25
 OTHER CURRENT LIABILITIES

Specification of other current liabilities

Accrued expenses *)

Other current liabilities **)

Other current liabilities

2017

201 788

10 929

212 717

2016

175 042

47 170

222 213

*) Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, 
accrued salaries, and insurance.

 **) In 2016, provisions of MNOK 37 were recognised for bad debts relating to physical delivery contracts, see Note 7. 

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ANNUAL ACCOUNTS // GROUPNOTE 26
 NEW ACCOUNTING STANDARDS

CHANGES IN ACCOUNTING POLICIES AND 
DISCLOSURE OF NEW STANDARDS

IFRS 15 REVENUE FROM CONTRACTS WITH 
CUSTOMERS

A) NEW AND AMENDED STANDARDS ADOPTED IN 2017

In 2017, no new standards have been adopted, neither amendments of 
standards or interpretations, that substantially affect the consolidated 
financial statements.

B) NEW STANDARDS AND INTERPRETATIONS NOT YET AD-
OPTED

A number of new standards, amendments of standards and 
interpretations of existing standards are mandatory for future financial 
statements. Additionally, the application of some amendments is 
permitted prior to mandatory application. Among those amendments 
the Group has decided to implement in the future, and which are not 
mandatory for 2017, the essential are disclosed below.

IFRS 9 FINANCIAL INSTRUMENTS INCLUDING 
RELATED AMENDMENTS TO VARIOUS OTHER 
STANDARDS

IFRS 9 replaces the classification and measurement models of IAS 39 
with a single model, with essentially only two categories: amortised 
cost and fair value.

The classification of lending depends on the entity’s business model for 
managing its financial instruments and the characteristics of the cash 
flows of each instrument. A debt instrument is measured at amortised 
cost if; a) the business model is to hold the financial asset in order to 
receive the contractual cash flows, and b) the contractual cash flows 
solely represent payments of principal and interest.

All other debt and equity instruments, including investments in complex 
instruments, should be measured at fair value through profit/loss. 
There is an exception made for equity instruments not held for sale. 
Value changes in such positions should be recognised in comprehensive 
income, without subsequent reclassification to profit/loss. For financial 
liabilities that the entity has chosen to measure at fair value, the 
proportion of the change in value attributable to changes in inherent 
credit risk is recognised through other comprehensive income and not 
through profit/loss.

The new rules for hedge accounting means that hedge accounting 
better reflects normal practice for the risk management of enterprises. 
As a general rule, it will be easier to apply hedge accounting to come. 
The new standard also introduces expanded disclosure requirements 
and changes in the rules for the presentation of hedge accounting.

The standard is subject to mandatory application as from the fiscal year 
2018.

IASB has issued a new standard for revenue recognition. The standard 
replaces IAS 18, regarding a.o. sale of goods and services, and IAS 11, 
regarding construction contracts.
The new standard is based on the principle that revenue is recognised 
when control over a good or service is transferred to a customer, so that 
the principle of control substitutes the existing principle of transfer of 
risk and returns.

A new five-step model framework must be applied before revenue can 
be recognised:

• 
• 
• 
• 

• 

Identify the contract(s) with a customer
Identify all separate performance obligations in the contract
Determine the transaction price of the contract
Allocate the transaction price to the separate performance 
obligations in the contract, and
Recognise revenue when each performance obligation is satisfied.

Major changes from current practices include:

• 

• 

• 

• 

• 

Goods and/or services that are sold together, but which can be 
sold separately, must be recognised separately. Any discounts 
should normally be allocated to each individual element.
Revenues can be recognised earlier than permitted under current 
standards if the compensation varies (i.e. due to incentives, 
rebates, performance fees, royalties, the success of an outcome, 
etc.). The minimum amount should be recognised unless there is a 
significant risk of cancellation of the agreement.
The point of revenue recognition may shift: Some revenues 
that currently are recognised retrospectively, may need to be 
recognised over the contract term, and vice versa.
There are new specific rules on licences, warranties, 
nonrefundable advance payments, and commission sales, to 
mention a few.
As with any new standard, it implies increased disclosure 
requirements.

These changes in accounting policies may affect the Group´s business 
practices regarding systems, processes and controls, compensation 
and bonus schemes, contracts, tax planning and communication 
with the investors. The Group will be able to choose between full 
retrospective application, or prospective application with additional 
disclosures.

The standard is effective as from the annual reporting period beginning 
in 2018, but early adoption is permitted.

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ANNUAL ACCOUNTS // GROUP  
The Group has carried out an evaluation of the new standard, based 
on current revenue flows, and concluded that it will have no material 
impact on the financial statement. In the following, a brief summary 
of the Group's review of the five-step model, as discussed above, is 
disclosed: 

Step 1: The Group is covered by the standard, as the main sale each 
week is settled with the customer. Fixed delivery contracts is entered 
into with customers, specifying per-week volume. The cash flow is the 
sale of gutted salmon packed in boxes and dispatched to customers. 
The major part is fresh fish, while a proportion is filleted or frozen. The 
Group also sells roe, smolt and ensilage, together making up about 1 
% of the total sales. The Group furthermore offers harvesting services 
for other aquaculture companies in the case of surplus capacity. This is 
filed as other operating expenses, similar to insurance bills related to 
biomass. All categories of the Group´s revenue streams are recognised 
at the time of delivery. That also applies to the fulfillment of physical 
delivery contracts. 

Step 2: Furthermore, the standard requires identification of all separate 
performance obligations. The Group assesses that the contracts 
entered into with customers, essentially do not contain separate 
performance obligations, as they mainly are related to the delivery 
of fish, ref. Step 1. However, it may be agreed to deliver volumes at 
different points of time, but this has already been accounted for through 
the Group's accounting policies.

Step 3: Transaction prices are spot prices based on the Nasdaq prices 
including transport and margin. The price is per kilogram. The price 
varies according to the quality of the fish and size. The fish is sold 
Delivered Duty Paid (DDP) to customer.

Step 4: This step does not apply, as the Group has concluded that 
separate performance obligations as mentioned in Step 2, essentially 
do not exist.

Step 5: This step does not imply any substantial amendments to the 
current accounting treatment of revenue recognition, ref. Step 1. 

The Group will utilise a modified retrospective application upon 
transition to IFRS 15 from 01.01.2018.

IFRS 16 – LEASES

IFRS 16 was issued January 2016 and specifies accounting principles 
for leases. This will replace IAS 17 Leases, incl. related interpretations. 
IAS 17 has essentially designated two models for the recognition of 
leasing agreements – one for operating lease and one for finance 
leasing. The lessee has only been required to recognise leased assets 
classified as finance leasings in the balance sheet.  IFRS 16 no 
longer specifies this as a main rule. There is primarily one model for 
recognition, which implies that the lessee shall recognise most leased 
assets, with certain exceptions. 

This will materially impact the Group, which at 31 December 2017 
has several active operating lease contracts. The Group has initiated 
preparations for implementation of the new standard. This includes 
obtaining and systematising of all leases in the Group, as well as 
evaluating them in accordance with the new recognition rules. 
Surveying of the financial consequences is under way at 31 December 
2017. At year-end, the Group maintains obligations relating to operating 
leases at a total present value of MNOK 522. Preliminary calculations 
based on the operating leases of the Group at 31 December 2017 
indicates that the Group will recognise assets and related leasing 
obligations of at least MNOK 240 at 31 December 2019. This is subject 
to change due to any renewal options that may have to be included, 
discount rates and any other factors.

The standard will apply for accounting periods starting 1 Jan 2019 
or later, but early adoption is permitted upon application of IFRS 15. 
The Group will carry out a modified retrospective application upon the 
implementation of IFRS 16 for the fiscal year 2019.

SUMMARY 2017
There are no other standards or interpretations that still have not taken 
effect that are expected to materially impact the consolidated financial 
statements.

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ANNUAL ACCOUNTS // GROUPNOTE 27
 POST-BALANCE SHEET EVENTS

REFINANCING

ESCAPE ON SHETLAND

In February 2018, a hole was discovered in one of our cages on 
Shetland. An inventory count of the fish in the cage revealed a 
discrepancy of 21 700 fish. The impairments following the escape 
amounted to GBP 200 101 (equivalent to NOK 2 176 138 at the exchange 
rate as of 28 February 2018 from Norges Bank of 10.8752 NOK/GPB)

To cater for major investment requirements relating to the growth 
strategy for 2020, the Group has renegotiated the syndicated bank loan 
prior to its original maturity in 2019. The Group has set a number of 
growth targets, including increased smolt capacity and new locations, 
which have resulted in a need for increased working capital. The 
Group's total banking framework has expanded from MNOK 1 685 to 
MNOK 1 700 and MEUR 60, while the current revolving credit facility has 
expanded from MNOK 700 to MNOK 1 000, alongside granted overdraft 
facilities of MNOK 100. Repayments of MNOK 50 and MEUR 5 will be 
made for term loans of respectively MNOK 600 and MEUR 60 , split into 
half-yearly installments. The agreement has a validity period of five 
years and expires on 28 February 2023.

OCEAN QUALITY AS – HALT IN EXPORT OF 
NORWEGIAN SALMON TO CHINA

On 31 January 2018, Ocean Quality AS was instructed by the Norwegian 
Food Safety Authority to stop all exports of Norwegian salmon to China 
because the Authority had received incorrect documentation from the 
Company regarding the export of salmon shipments to China. From 
what Ocean Quality AS has learnt, individuals in the Company may have 
reused previous self-declarations, in violation of internal guidelines. 
Neither individual employees nor the Company gained anything from 
these alleged actions. Following the inspection by the Norwegian 
Food Safety Authority, Ocean Quality AS made a complete review of 
its procedures and systems for export, in order to establish how the 
incident could have taken place. New control actions and reinforced 
procedures have been implemented. The company has zero tolerance 
for such non-conformances.

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ANNUAL ACCOUNTS // GROUPGSF PARENT COMPANY

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ANNUAL ACCOUNTS // PARENT COMPANYINCOME STATEMENT

Amounts in NOK x 1 000

Other operating income

Total operating income

Salaries and personnel expenses

Depreciation

Other operating expenses

Total operating expenses

Operating loss

Financial income

Financial expenses

Net financial items

Profit before tax

Income tax expense

Net profit for the year

Appropriation of profit for the year

Proposed dividend

Transferred to other equity

Total appropriations

Note

2017

2016

2,17

3, 4

12, 13

6, 17

5,17

5,17

62 756

62 756

-49 799

-5 162

-52 564

-107 524

  -44 768 

635 125

-42 608

592 517

55 995

55 995

-55 791

-5 370

-46 990

-108 151

-52 156

789 106

-219 272

569 834

547 749

517 678

15

-126 460

421 289

-129 509

388 169

220 824

200 465

421 289

331 236

56 933

388 169

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ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
 
 
 
BALANCE SHEET

Amounts in NOK x 1 000

ASSETS

Software

Property, plant and equipment

Investments in subsidiaries

Loan to Group companies

Loan to associated companies

Investment in shares or units

Total non-current assets

Trade receivables

Trade receivables from Group companies

Other receivables from Group companies

Other current receivables

Bank deposits

Total current assets

Total assets

Note

31.12.2017

31.12.2016

12

13,18

10,18

17,18

11

6,17

17

17,18

7

8

18 196

5 478

17 419

5 972

1 226 980

1 226 980

623 365

601 032

167

666

167

656

1 874 851

1 852 225

156

41 450

19

37 520

1 151 052

1 240 578

19 655

157 460

4 025

383 281

1 369 773

1 665 424

3 244 624

3 517 650

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ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
 
 
 
 
 
EQUITY AND LIABILITIES

Note

31.12.2017

31.12.2016

Share capital

Treasury shares

Other reserves

Other retained earnings

Total equity

Deferred tax

Cash-settled share options

Total provisions

Long-term loan

Total non-current liabilities

Current portion of long-term loan

Cash-settled share options

Proposed dividends

Trade payables

Trade payables to subsidiaries

Current liabilities to Group companies

Public tax payable

Accrued public expense

Other current liabilities

Total current liabilities

Total liabilities

Total equity and liabilities

14

14

15

4

18

18

4

17

17

15

7, 9

446 648

-5 000

13 652

880 823

446 648

-5 000

13 652

790 759

1 336 123

1 246 059

16 632

8 848

25 480

1 191 688

1 191 688

90 000

6 746

220 824

6 986

35 881

178 801

122 802

2 246

27 047

14 201

11 360

25 561

979 874

979 874

90 000

0

331 236

6 668

34 201

633 576

146 024

2 031

22 420

691 333

1 266 155

1 908 501

2 271 591

3 244 624

3 517 650

Bergen, 17 April 2018

Grieg Seafood ASA

Translated, not to be signed

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ANNUAL ACCOUNTS // PARENT COMPANY   
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CHANGE OF EQUITY

Amounts in NOK x 1 000

Equity at 01.01.2016

PROFIT FOR THE YEAR 2016

Other gains recorded in equity

Proposed dividend, paid in 2017

Proposed additional dividend in 2016

Equity at 31.12.2016

PROFIT FOR THE YEAR 2017

Other gains/losses recorded in equity

Proposed dividend

Proposed additional dividend in 2017

Equity at 31.12.2017

 Share capital 

 Other paid-in 
equity 

Other equity

Total equity

441 648

13 652

441 648

13 652

441 648

13 652

899 424

388 169

19

-331 236

-165 618

790 759

421 289

10

-220 824

-110 412

880 823

1 354 725

388 169

19

-331 236

-165 618

1 246 059

421 289

10

-220 824

-110 412

1 336 123

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ANNUAL ACCOUNTS // PARENT COMPANY 
 
CASH FLOW STATEMENT

Amounts in NOK x 1 000

Note

2017

2016

Profit before income taxes

Tax paid

Depreciation and amortisation

Profit/loss on sale of assets

Impairment/reversal, non-current assets

Interest paid

Change in trade receivables

Change in trade payables

Change in other accruals

Recognised, not paid Group contributions

Dividend income

Net cash flow from operating activities

Proceeds from sale of tangible assets

Dividend income

Purchase of tangible assets

Purchase of intangible assets

Payments/proceeds on loans to/from subsidiaries

Payments on loans to associates

Net cash flow from investing activities

Drawdown/Payments on long-term interest bearing debt

Proceeds/payment on loans to/from Group companies

Proceeds on long-term debt

Interest paid

Dividend paid

Net cash flow from financing activities

Net change in cash and cash equivalents

Cash and cash equivalents at 01.01.

Cash and cash equivalents at 31.12

15

12,13

13

13

13

5

13

12

18

547 749

-146 025

5 162

0

0

517 678

-3 278

5 370

-2

-66

29 038

52 355

-137

319

3 507

-19

388

-25 568

-534 523

-713 301

-25 376

-8 071

-120 285

-174 516

0

25 376

-2 074

-4 144

603 867

-13 100

609 925

300 000

-454 775

-90 000

-29 038

-441 648

-715 461

74

8 071

-3 018

-4 284

466 295

0

467 138

-450 000

633 576

-90 000

-52 355

-165 618

-124 397

-225 822

168 224

383 281

215 057

157 460

383 281

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ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
NOTE 1
ACCOUNTING POLICIES

The annual financial statements have been prepared in 
accordance with the Norwegian Accounting Act and generally 
accepted accounting principles in Norway.

All amounts are in TNOK, unless stated otherwise. 

charged as they arise as operating expenses, while improvements 
and additions are added to the acquisition cost and depreciated 
along with the asset. The distinction between maintenance 
and improvements is made with regard to the asset’s relative 
condition at the original purchase date.

REVENUE RECOGNITION

SUBSIDIARIES

Revenue from sales of goods is recognised at the time of delivery. 
Revenue from the sales of services is recognised when the services 
are executed. The share of sales revenue associated with future 
service is recorded in the balance sheet as accrued sales revenue
and is recognised as revenue at the time of execution. 

CLASSIFICATION AND VALUATION OF BALANCE 
SHEET ITEMS

Assets intended for long-term ownership or use are classified 
as fixed assets. Assets related to the normal operating cycle, are 
classified as current assets. Receivables are classified as current 
assets if they are expected to be repaid within 12 months after the 
transaction date. Similar criteria apply to liabilities.

Current assets are valued at the lower of cost and fair value. Short 
term liabilities are recognised in the balance sheet at nominal 
value.

Fixed assets are carried at historical cost. Fixed assets whose value 
will deteriorate are depreciated on a straight line basis over the 
asset’s estimated useful life. Fixed assets are written down to 
fair value where this is required by accounting rules. Nominal 
amounts are discounted if the interest rate element is significant.

INTANGIBLE ASSETS

Expenditure on intangible assets is recognised to the extent that 
future economic benefits from the development of identifiable 
intangible assets and costs can be measured reliably. Otherwise, 
the costs are expensed as they arise. Capitalised development is 
amortised over the useful life.

FIXED ASSETS

Investments in subsidiaries are valued at cost in the company 
accounts. The investment is valued at the cost of acquiring the 
shares, providing a write-down has not been necessary.
Group contributions to subsidiaries, with tax deducted, are 
recognised as increases purchase cost of the shares.
Dividends and group contributions are recognised in the 
same year as they are recognised in the subsidiary accounts. 
If dividends/ group contributions materially exceed retained 
earnings after acquisition, the exceeding amount is regarded 
as reimbursement of invested capital and is deducted from 
the recorded acquisition value in the balance sheet. Group 
contributions received are recognised as other financial income.

IMPAIRMENT OF FIXED ASSETS

Impairment tests are performed upon indication that the 
carrying amount of a non-current asset exceeds the estimated fair 
value. The test is performed on the lowest level of fixed assets at 
which independent cash flows can be indentified. If the carrying 
amount is higher than both the fair value less selling costs and the 
recoverable amount (net present value of future use/ownership), 
the asset is written down to the higher of fair value less selling 
costs and the recoverable amount. Previous impairment charges 
are reversed at a later period if the prerequisites for impairment 
are no longer present (with the exception of impairment of 
goodwill).

TRADE AND OTHER RECEIVABLES

Trade and other receivables are recognised in the balance sheet at 
nominal value after deduction of provision for bad debts. The 
provision for bad debts is estimated on the basis of an individual 
assessment of each major receivable. An additional general 
provision is made for minor receivables based on estimated 
expected losses.

Fixed assets are recognised in the balance sheet and depreciated 
on a straight line basis over the estimated useful life, providing 
the asset has an expected useful life of more than 3 years and 
a cost price which exceeds TNOK 15. Maintenance costs are 

SHORT-TERM INVESTMENTS 

Short-term investments (shares and investments which are 

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ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
 
 
 
 
 
DERIVATIVES

FORWARD CURRENCY CONTRACTS
Realised gains are recorded in the income statement as financial 
income. The fair value of the contracts is stated on the basis of 
the exchange rate at balance sheet date for 2016.

INTEREST RATE SWAPS
Interest rate swap contracts are stated at the lowest value 
principle.

TAXES

The tax expense in the income statement consists of both taxes 
payable for the accounting period and changes in deferred tax. 
Deferred tax is calculated as a relevant rate of the temporary 
differences between the value of assets and liabilities for tax 
purposes and any allowable loss to be carried forward at year-end 
in the financial statements. Temporary differences, both positive 
and negative, are offset within the same period. Deferred tax 
assets are recorded in the balance sheet when it is more likely 
than not that the tax assets will be utilised. Deferred tax assets 
and deferred tax liabilities are presented net in the balance sheet.

Tax on paid group contributions booked as an increase in the 
purchase price of shares in other companies, and tax on received 
group contribution booked directly against equity, have been 
booked directly against tax items in the balance sheet (offset 
against tax payable if group contribution affects tax payable, and 
offset against deferred taxes if the group contribution affects 
deferred taxes).

CASH FLOW STATEMENT

The cash flow statement has been prepared according to the 
indirect method. Cash and cash equivalents include cash, bank 
deposits and other short-term highly liquid investments which 
entail no appreciable exchange rate risk and with maturities of 3 
months or less from the purchase date.

considered current assets) are carried at the lower of average 
purchase cost and net realisable value on the balance sheet date. 
Dividends and other distributions received are recognised as 
other financial income. 

PENSIONS

The company’s pension schemes meet the requirements of 
the mandatory Occupational Pensions Act. Selskapet har 
innskuddsbasert pensjonsordning for sine ansatte. The company 
has a defined contribution pensions scheme for the employees. 
The premium is paid through operations and is charged as 
it arises. Social security costs are charged on the basis of the 
pension premium paid.

GROUP BANK ACCOUNTS SYSTEM – DEPOSIT 
AND LOAN

Grieg Seafod ASA operates as an internal bank for the 
subsidiaries. Grieg Seafood ASA borrows funds under the 
agreement from the financial institutions and lends these funds 
onwards to the subsidiaries. The Company has set up a group 
account system (multi-accounts) in which Grieg Seafood ASA 
is the legal account holder towards the financial institution. 
Deposits and loans are recognised as intercompany transactions. 
All subsidiaries are jointly and severally responsible to the 
financial institutions for the whole amount of the commitment 
under the scheme.

FOREIGN CURRENCY

Functional and presentational currency is NOK. All foreign 
currency transaction are translated into NOK at the date of 
the transaction. Exchange rate and translational differences are 
posted under other financial income or expenses. All monetary 
items in foreign currency are translated at the balance sheet date. 
Derivatives are recognized at fair value and changes of value are 
accounted for in the income statement.

CASH-BASED REMUNERATION 

The Company has a share-based remuneration scheme with 
settlement in cash, where each employee is obliged to purchase 
shares relative to annual salary. The Company’s estimated 
liability is posted under current or non-current liabilities based 
on estimated settlement date. The cost for the year is charged in 
the income statement.

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ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
  
NOTE 2
OPERATING INCOME

Amounts in NOK x 1 000

OPERATING INCOME CONSISTS OF:

Administrative services - Group companies, see Note 17

Other operating income

Total other operating income, see Note 17

2017

62 756

0

62 756

2016

55 997

-2

55 995

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 3
PAYROLL, FEES, NO. OF
EMPLOYEES ETC.

Amounts in NOK x 1 000

Wages and salaries

Social security costs

Shares options for directors and key personnel

Pension costs - defined contribution scheme

Other personnel costs

Total

Average number of FTEs (full-time equivalents)

Note

4

2017

23 436

5 047

13 247

1 304

6 765

2016

24 639

4 503

21 712

1 308

3 629

49 799

55 791

21

19

The Company has a pension scheme covering all employees at 31. December 2017. The pension scheme is funded and managed through an
insurance company.

The board's guidelines and principles for the determination of salaries and other remuneration paid to the management group are included
in the consolidated financial statements.

The accumulated cost of salaries, pensions and other benefits paid to senior employees and board members in 2017 were as follows:

BENEFITS PAID TO SENIOR EMPLOYEES IN 2017 
(NOK X 1 000)

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO) 

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Total remuneration incl. social security costs

 Salary 

  Bonus  

 Accumu-
lated, not 
yet paid 

  Options 
exercised 
during year 

 Other 
benefits 

2 498

1 596

1 596

1 272

6 962

1 133

505

276

281

630

335

195

347

2 195

1 508

2 475

1 578

1 578

0

5 630

137

132

133

125

527

Recognition of expenses arising from synthetic options not declared throughout the year are not included in the above statement.

REMUNERATION PAID TO BOARD MEMBERS IN 2017 (NOK X 1000)

Per Grieg jr. 1)

Wenche Kjølås 2)

Karin Bing Orgland 2)

Asbjørn Reinkind 1)

Ola Braanaas 1)

Total remuneration incl. social security costs

 Total 

6 873

4 145

3 778

2 025

16 821

434

280

280

302

245

1 540

1) Payment for work performed on the Remuneration Committee of NOK 17 115 is included in the remuneration paid to Per Grieg jr., Asbjørn 
Reinkind, and Ola Braanaas.

2) Payment for work performed on the Audit Committee of NOK 51 345 is included in the remuneration paid to Wenche Kjølås and Karin Bing 
Orgland. 

 The amounts include social security costs.

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ANNUAL ACCOUNTS // PARENT COMPANYThe accumulated cost of salaries, pensions and other benefits paid to senior employees and board members in 2016 were as follows:

BENEFITS PAID TO SENIOR EMPLOYEES IN 2016 
(NOK X 1 000)

 Salary 

  Bonus  

 Accumu-
lated, not 
yet paid 

  Options 
exercised 
during year 

 Other 
benefits 

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO) 

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO from 1 May 2016)

Total remuneration paid to senior employees

2 348

1 683

1 659

810

6 501

0

0

0

0

0

732

505

276

286

1 799

2 400

2 387

2 288

0

7 075

REMUNERATION PAID TO BOARD MEMBERS 2016

Per Grieg jr. 1)

Wenche Kjølås 2)

Karin Bing Orgland 2)

Asbjørn Reinkind 1)

Ola Braanaas 1)

Total remuneration incl. social security costs

 Total 

5 504

4 621

4 261

1 111

24

45

39

15

123

15 498

419

262

262

288

234

1 466

1) Payment for work performed on the Remuneration Committee of NOK 14 267 is included in the remuneration paid to Per Grieg jr., Asbjørn 
Reinkind and Ola Braanaas.

2) Payment for work performed on the Audit Committee of NOK 42 788 is included in the remuneration paid to Wenche Kjølås and Karin Bing 
Orgland.The amounts include social security costs.

SPECIFICATION OF AUDITOR´S FEE

Statutory audit

Tax advisory fee

Other services

Total

2017

1 119

95

79

2016

958

99

6

1 293

1 062

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 4
SYNTHETIC OPTIONS 

(CASH-BASED REMUNERATION)

The Company operates a share-based options programme for the management group and regional directors. The options’ strike price is the stock market price on the date of issue, rising by 0.5% per month 
until the exercise date. As at 31 December 2016, there were no equity options outstanding for exercise. Since 2009, the Company has issued cash-based options to the management group and regional 
directors. The most recent allocation was in 2017, totalling 1 800 000 options. The final exercise date is 31 May 2021. The options have a term of two years, where 50% is vested each year.

 Employees taken on after the initial allocation of options are allocated options on taking up employment.

The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to carry out the calculations. The
table below shows the movement in outstanding options in 2016 and 2017.

OVERVIEW 2017

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Others

Total

Option category

Kontant

Kontant

Kontant

Kontant

Kontant

Outstanding 
options 
31.12.2016

  314 009 

  146 801 

  187 893 

  100 000 

  592 379 

Granted options

Exercised options Cancelled options

  Expired options 

  400 000 

  200 000 

  200 000 

  200 000 

  800 000 

  55 737 

  35 527 

  35 527 

  -   

  62 745 

  189 535 

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  1 341 082 

  1 800 000 

OVERVIEW 2016

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Others

Total

Option category

Kontant

Kontant

Kontant

Kontant

Kontant

Outstanding 
options 
31.12.2015

  400 000 

  300 000 

  300 000 

  -   

  1 150 000 

  2 150 000 

Granted options

Exercised options Cancelled options

  Expired options 

  -   

  -   

  -   

  100 000 

  200 000 

  300 000 

  85 991 

  153 199 

  112 107 

  -   

  402 492 

  753 789 

  -   

  -   

  -   

  -   

  355 129 

  355 129 

  -   

  -   

  -   

  -   

  -   

  -   

Outstanding 
options 
31.12.2017

  658 272 

  311 274 

  352 366 

  300 000 

  1 329 634 

  2 951 547 

Of which cash-
settled

  658 272 

  311 274 

  352 366 

  300 000 

  1 329 634 

  2 951 547 

Outstanding 
options 
31.12.2016

Of which cash-
settled

  314 009 

  146 801 

  187 893 

  100 000 

  592 379 

  314 009 

  146 801 

  187 893 

  100 000 

  592 379 

  1 341 082 

  1 341 082 

P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
4
6

ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
4
7

Allocation:  Year - Month

Expiry date: Year - 
Month

Strike price NOK 
per share as at 
31.12.2017

Strike price NOK 
per share as at 
31.12.2016

2015 - 06 

2015 - 06

2016 - 12

2017 - 11

2017 - 11

Total

2018 - 06

2019 - 06

2019 - 06

2020 - 05

2021 - 05

  29.76 

  29.76 

  84.12 

  83.62 

  83.62 

  27.90 

  27.90 

  79.22 

  -   

  -   

Cash-based options available for exercise

Weighted average outstanding contract period

Options

2017

  251 547 

  600 000 

  300 000 

  900 000 

  900 000 

2016

  441 082 

  600 000 

  300 000 

  -   

  -   

  2 951 547 

  1 341 082 

2017

  1 151 547 

  43.94 

2016

  441 082 

  28.05 

2017

Previous employees with expired 
option

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Other options allocated in 2015

Other options allocated in 2016

Other options allocated in 2017

Total

*) Amounts exclude social security costs

Option 
category

Equity

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Listed 
price on 
allocation

 Calculated 
value per 
option on 
allocation  

  Calculated 
total value on 
allocation *)  

  Total value of 
all options at 
01.01.2017 

Change in 
provision CB-OB 
*)

Exercised 
options 2017

  Accumulated 
cost charged 
against equity at 
31.12.2017 

 Book liability 
cash settlement 
at 31.12.2017 

  25.50 

  25.50 

  25.50 

  79.00 

  83.00 

  83.00 

  83.00 

  83.00 

  25.50 

  79.00 

  83.00 

  3.36 

  3.97 

  3.97 

  3.63 

  2.26 

  2.79 

  2.79 

  2.38 

  3.60 

  3.34 

  2.35 

  1 342 

  793 

  793 

  363 

  906 

  557 

  557 

  475 

  2 876 

  669 

  1 880 

  2 935 

  1 699 

  2 298 

  41 

  -   

  -   

  -   

  -   

  4 312 

  75 

  -   

  1 320 

  157 

  570 

  197 

  147 

  90 

  90 

  77 

  916 

  366 

  305 

  2 475 

  1 578 

  1 578 

  -   

  -   

  -   

  -   

  -   

  2 786 

  -   

  -   

  6 887 

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  -   

  4 255 

  1 857 

  2 868 

  237 

  147 

  90 

  90 

  77 

  5 227 

  441 

  305 

  11 212 

  11 360 

  4 234 

  8 416 

  6 887 

  15 594 

ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
4
8

2016

Previous employees with expired 
option

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

Other options allocated in 2013

Other options allocated in 2014

Other options allocated in 2014

Other options allocated in 2015

Other options allocated in 2016

Total

Option 
category

Equity

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

*) Amounts exclude social security costs

ACCRUED COSTS BREAK DOWN AS FOLLOWS:

Accrued cost cash settlement

Exercised options during the year

Total cost excl. employer's national insurance contributions

National insurance contributions

Total cost incl. employer's national insurance contributions

Listed 
price on 
allocation

 Calculated vale 
per option on 
allocation 

  Calculated 
total value on 
allocation *)  

  Total value of 
all options at 
01.01.2016 

Change in 
provision CB-OB 
*)

Exercised 
options 2016

  Accumulated 
cost charged 
against equity at 
31.12.2016 

 Book liability 
cash settlement 
at 31.12.2016 

6 887

  25.50 

  22.22 

  25.50 

  22.56 

  25.50 

  79.00 

  22.22 

  22.56 

  28.90 

  25.50 

  79.00 

  3.36 

  3.94 

  3.97 

  4.78 

  3.97 

  3.63 

  3.94 

  4.24 

  4.20 

  3.60 

  3.34 

1 342

394

793

478

793

363

1 181

424

420

2 876

669

9 734

579

639

353

662

353

0

1 250

315

206

1 282

0

5 639

2017

  4 234 

  8 416 

  12 650 

  597 

  13 247 

2 356

-639

1 346

-662

1 945

41

-1 250

-315

-206

3 030

75

5 721

2 400

903

1 485

1 950

338

0

3 823

546

2 143

1 465

0

15 052

6 887

2 935

0

1 699

0

2 298

41

0

0

0

4 312

75

11 360

2016  Classification in statement 

  5 721  Other provisions

  15 052  Salary and social security costs / bank

  20 772 

  939  Accrued public expense

  21 712  Salary and social security costs

Costs relating to cash-based remuneration in 2017 totalled TNOK 13 247. This is charged in the income statement as a personnel cost. National security contributions are provided for on an ongoing 
basis based on the fair value of the options. 

At 31 December 2017, outstanding options with the right to cash settlement were stated at TNOK 15,594, of which TNOK 8 848 were classified as non-current liabilities. Issued options are cancelled on 
termination of employment.

ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS

Anticipated volatility (%)

Risk-free rate of interest (%)

Estimated qualification period (years)

36.62%

0.67%

2.25

The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments. 
In order to estimate volatility, management has applied historical volatility for comparable listed companies.

ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
NOTE 5
FINANCIAL INCOME AND
FINANCIAL EXPENSES

Amounts in NOK x 1 000

Interest income from Group companies

Other interest income

Group contributions from subsidiaries

Group contribution previous year, recognised current year

Dividend

Unrealised value changes, derivatives, see Note 9

Unrealised currency change, long-term loans from Group

Net unrealised currency gains

Total financial income

Loan interest expenses

Other interest expenses

Unrealised currency change, long-term loans from Group

Other financial expenses

Net realised currency losses

Net unrealised currency losses

Total financial expenses

Net financial items

2017

26 699

344

534 522

0

25 384

1 197

22 333

24 646

635 125

30 478

10 757

0

1 216

157

0

42 608

592 517

2016

46 916

63

713 301

11 467

8 071

9 287

0

0

789 106

60 157

1 666

90 228

530

0

66 692

219 272

569 834

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 6
TRADE RECEIVABLES

Amounts in NOK x 1 000

Trade receivables at nominal value

Provision for bad debts

Book value of trade receivables at 31.12

Change in bad debt provision

Amounts received for previously written-off bad debts

Total loss on trade receivables recognised in the financial statements

2017

156

0

156

0

0

0

2016

19

0

19

0

0

0

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 7
OTHER RECEIVABLES/ OTHER 
CURRENT LIABILITIES

Amounts in NOK x 1 000

OTHER CURRENT RECEIVABLES

Prepaid expenses

VAT

Tax receivable from 2015

Loan to Nordnorsk Smolt AS *)

Other current receivables **)

Other current receivables at 31.12

2017

1 143

835

0

13 100

4 578

19 655

2016

1 215

2 138

502

0

171

4 025

*) GSF has entered into collaboration with Norway Royal Salmon in order to secure additional smolt capacity in Finnmark. NRS and GSF each 
own 50% of Nordnorsk Smolt AS. As at 31 December 2017, no formal transactions had been carried out; however, transactions are expected 
to take place during the first half of 2018. As part of the agreement, GSF has extended loans to Nordnorsk Smolt AS to cover operations, 
investments and accumulation of working capital in connection with development of the facility.

**) GSF ASA has entered into an FX-forward agreement in DKK on behalf of the subsidiary GSF Finnmark, in respect of GSF Finnmark´s 
agreement with a Danish contractor to develop the smolt facility in Adamselv. The purpose of the contract is to hedge payments in DKK. GSF 
ASA and GSF Finnmark have entered into a back-to-back agreement on the contract. As at 31 December 2017, the value of the contract was 
recognised under other current liabilities to subsidiaries in GSF ASA´s financial statements. Both realised and unrealised gains/losses are to be 
transferred to GSF Finnmark.

OTHER CURRENT LIABILITIES

Accrued interest

Other accrued expenses

Unrealised loss on interest rate swap contracts, see Note 9 

Unrealised loss on foreign currency contracts

Other current liabilities

Other current liabilities at 31.12

2017

1 212

14 658

4 071

4 880

2 227

27 047

2016

628

12 690

5 268

0

3 834

22 420

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 8
BANK DEPOSITS

Amounts in NOK x 1 000

Restricted deposits relating to employees' tax deductions

Fixed-interest rate deposit *)

Other bank deposits

Total

2017

3 938

0

153 522

157 460

2016

1 242

160 000

222 039

383 281

*) The fixed-interest rate deposit in 2016 was valid until January 2017. The contract was not renewed.

P A R T   3   -   A C C O U N T S   / /   G R I E G   S E A F O O D   A N N U A L   R E P O R T   2   0   1   7   / /   P A G E   152

ANNUAL ACCOUNTS // PARENT COMPANYNOTE 9
FINANCIAL INSTRUMENTS 
AT FAIR VALUE

Amounts in NOK x 1 000

2017

2016

 Assets 

Current 
liabilities 

 Assets  

 Current 
liabilities 

Interest rate swap contracts (two contracts for MNOK 400 and 
MNOK 260 maturing in 2019 and 2021, respectively *)

Foreign currency contract EUR/NOK (One contract comprising 52 
transactions maturing Dec 2018)

Total financial instruments at fair value

 0 

  -   

0

-4 071

-4 880

-8 951

*)  Amounts exclude accrued interest totalling NOK x 1 000 -247.4 (2016: NOK x 1 000 17.1)

Changes in fair value posted as financial items:

Unrealised gain/loss on interest rate swaps

Unrealised gain/loss on foreign currency contracts

Net unrealised gain/ (loss) on financial instruments

 0 

  -   

0

2017

1 197

-4 880

-3 683

-5 268

0

-5 268

2016

9 287

0

9 287

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 10 
INVESTMENTS IN SUBSIDIARIES

Amounts in NOK x 1 000

Subsidiary

Grieg Seafood Rogaland AS

Grieg Seafood Canada AS

Grieg Seafood Finnmark AS

Grieg Seafood Shetland Ltd

Ocean Quality AS

Total

 Registered 
office - country 

 Registered 
office - location 

Ownership/ 
voting share

Equity at 
31.12.2017

Profit/loss 2017

Book value

 Norge 

 Norge 

 Norge 

 UK 

 Norge 

 Bergen 

 Bergen 

 Bergen 

 Shetland 

 Bergen 

100%

100%

100%

100%

60%

  623 507 

  68 451 

  734 591 

  146 582 

  48 679 

  325 693 

  -42 

  255 508 

  28 343 

  55 639 

  223 497 

  138 252 

  400 481 

  458 750 

  6 000 

  1 621 808 

  665 140 

  1 226 980 

 Equity and profit/loss taken from provisional financial statements, which have been prepared in accordance with local accounting standards. 

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 11 
INVESTMENTS IN SHARES

Amounts in NOK x 1 000

INVESTMENTS IN SHARES

Finnøy Næringspark AS

DNB Global Allokering

CO2 AS

Norsk Villaksforvaltning

Fiskeriforum Vest

Book value of shares at 31.12

 Registered 
office - country 

 Registered 
office - 
location 

Ownership/
voting share

 Number of 
shares 

 Acquisition 
cost 

Book value

 Norge 

 Norge 

 Norge 

 Norge 

 Norge 

 Finnøy 

 Oslo 

 Lindås 

 Førde 

 Bergen 

7.14%

0.00%

10.00%

15.15%

20.00%

  100 

  3 038 

  2 

  5 

  20 

  103 

  630 

  20 

  50 

  16 

103 

477 

20 

50 

16 

666 

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 12 
INTANGIBLE ASSETS

Amounts in NOK x 1 000

2017

Book value at 01.01

Intangible assets acquired

Amortisation

Book value at 31.12

As at 31.12.

Acquisition cost

Accumulated amortisation

Book value at 31.12

Economic lifetime/amortisation schedule

2016

Book value at 01.01

Intangible assets acquired

Amortisation

Book value at 31.12

As at 31.12.

Acquisition cost

Accumulated amortisation

Book value at 31.12

Economic lifetime/amortisation schedule

SOFTWARE

17 419

4 144

-3 367

18 196

41 292

-23 096

18 196

 3 - 10 år 

SOFTWARE

16 651

4 284

-3 516

17 419

37 148

-19 729

17 419

 3 - 10 år 

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 13 
PROPERTY, PLANT 
AND EQUIPMENT

Amounts in NOK x 1 000

2017

Book value at 01.01

Additions

Disposals

Depreciation charge 

Depreciation on disposals (book value)

Book value at 31.12

As at 31.12.

Acquisition cost

Accumulated depreciation

Book value at 31.12

Economic lifetime/amortisation schedule

2016

Book value at 01.01

Additions

Disposals (book value)

Depreciation charge

Depreciation on disposals (book value)

Book value at 31.12

As at 31.12.

Acquisition cost

Accumulated depreciation

Book value at 31.12

Economic lifetime/amortisation schedule

PLANT, EQUIPMENT AND 
OTHER FIXTURES ETC.

5 972

2 074

-1 495

-1 794

721

5 478

16 555

-11 077

5 478

 3-5 år  

PLANT, EQUIPMENT AND 
OTHER FIXTURES ETC.

4 814

3 018

-72

-1 854

66

5 972

15 976

-10 004

5 972

 3-5 år  

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 14 
SHARE CAPITAL AND 
SHAREHOLDER INFORMATION

SHARE CAPITAL

As at 31 December 2017, the Company had 111,662,000 treasury shares with a nominal value of NOK 4 per share.
All shares issued by the Company are fully paid-up. There is one class of shares and all shares confer the same rights.
In June 2011 the company purchased 1,250,000 treasury shares at a value of NOK 14.40 per share.

Holdings of treasury shares 

31.12.2017

 Change in 
share capital 
(NOK x 1 000) 

 Nominal value 
(NOK) 

 Total share 
capital (NOK x 
1 000) 

 Number of 
ordinary shares 

  4.00 

  4.00 

446 648

  111 662 000 

-5 000

  -1 250 000 

441 648

110 412 000

THE LARGEST SHAREHOLDERS OF GRIEG SEAFOOD ASA

31.12.2017

31.12.2017

31.12.2016

31.12.2016

No. of shares

Shareholding

No. of shares

Shareholding

GRIEG HOLDINGS AS

OM HOLDING AS

FOLKETRYGDFONDET

NYE YSTHOLMEN AS

STATE STREET BANK AND TRUST CO.

VERDIPAPIRFONDET PARETO INVESTMENT

VERDIPAPIRFONDET ALFRED BERG GAMBA 

JPMORGAN CHASE BANK. N.A.. LONDON 

CLEARSTREAM BANKING S.A. 

GRIEG SEAFOOD ASA

ARTIC FUNDS PLC

MORGAN STANLEY AND CO INTL PLC

THE BANK OF NEW YORK MELLON SA/NV

Total - largest shareholders

Other shareholders with shareholding of less than 1%

  55 801 409 

49.97%

  55 801 409 

49.97%

  5 164 379 

  2 949 137 

  2 928 197 

  2 602 761 

  1 915 000 

  1 700 796 

  1 477 767 

  1 286 414 

  1 250 000 

  926 000 

  598 815 

  518 635 

79 119 310

32 542 690

4.63%

2.64%

2.62%

2.33%

1.71%

1.52%

1.32%

1.15%

1.12%

0.83%

0.54%

0.46%

70.86%

29.14%

  3 105 000 

  3 390 000 

  2 928 197 

  1 814 836 

  1 711 000 

  986 273 

  448 816 

  1 017 577 

  1 250 000 

  1 397 000 

  2 067 749 

  1 241 277 

77 159 134

34 502 866

2.78%

3.04%

2.62%

1.63%

1.53%

0.88%

0.40%

0.91%

1.12%

1.25%

1.85%

1.11%

69.10%

30.90%

Total shares

111 662 000

100.00%

111 662 000

100.00%

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ANNUAL ACCOUNTS // PARENT COMPANYSHARES CONTROLLED BY BOARD MEMBERS AND GROUP 
MANAGEMENT: 

No. of shares

Shareholding

No. of shares

Shareholding

31.12.2017

31.12.2017

31.12.2016

31.12.2016

Board of directors:

Per Grieg jr. *)

Wenche Kjølås (Jawendel AS)

Asbjørn Reinkind (Reinkind AS)

Karin Bing Orgland

Ola Braanaas

Group management:

Andreas Kvame (CEO)

Atle Harald Sandtorv (CFO)

Knut Utheim (COO)

Kathleen O. Mathisen (CHRO)

  58 961 996 

52.80%

  58 961 996 

52.80%

  7 000 

  120 000 

  -   

  -   

35 000

21 793

18 200

0

0.01%

0.11%

0.00%

0.00%

0.03%

0.02%

0.02%

0.00%

  7 000 

  120 000 

  -   

  -   

29 000

30 661

12 400

0

0.01%

0.11%

0.00%

0.00%

0.03%

0.03%

0.01%

0.00%

*) The shares owned by the following companies are controlled by Per Grieg jr. and family

Grieg Holdings AS

Grieg Shipping II AS

Nye Ystholmen AS

Grieg Ltd AS

Kvasshøgdi AS

Per Grieg jr. privat

Total shares

  55 801 409 

49.97%

  55 801 409 

49.97%

  -   

  2 928 197 

  217 390 

  -   

  15 000 

0.00%

2.62%

0.19%

0.00%

0.01%

  -   

  2 928 197 

  217 390 

  -   

  15 000 

0.00%

2.62%

0.19%

0.00%

0.01%

  58 961 996 

52.80%

  58 961 996 

52.80%

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 15 
TAXES

Amounts in NOK x 1 000

Basis for tax payable

Profit before tax

Dividends recognised in income

3% dividend tax

Net other permanent differences

Change in financial derivatives

Change in temporary differences

Adjustment of Group contribution 2016 

Group contribution received/provided

Taxable loss

Group contribution received

Basis for tax expense for the year

24% (25%) tax payable

SPECIFICATION OF DEFERRED TAX BASIS

Temporary differences:

Non-current assets

Profit and loss account

Cash-based options

Long-term debt/amortised cost

Revaluation account non-current liabilities

Net temporary differences

Financial instruments

Loss carryforward

Basis for deferred tax in balance sheet

23% (24%) deferred tax

Change in deferred tax assets due to change in tax rate 24% (25%)

Deferred tax assets/deferred tax liabilities in balance sheet

2017

547 749

-25 384

762

1 693

3 683

-16 827

0

-534 522

-22 846

534 522

511 676

122 802

2016

517 678

-8 071

0

-655

-10 314

96 927

-11 467

-713 301

-129 203

713 301

584 098

146 024

2017

5 280

1 241

2016

3 832

1 551

-17 793

-12 962

3 312

89 224

81 264

-8 951

0

72 314

17 355

-723

16 632

5 126

66 891

64 438

-5 268

0

59 170

14 792

-592

14 201

Change

1 449

-310

-4 831

-1 814

22 333

16 827

-3 683

0

13 144

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ANNUAL ACCOUNTS // PARENT COMPANYAmounts in NOK x 1 000

Specification of tax charge:

Tax payable

Change in deferred tax, previous rate 23% (24%)

Change in deferred tax due to change of rate

Tax effect of foreign tax not credited Norwegian tax

Correction of contributions for 2015, tax effect

Tax expense in income statement

Reconciliation of tax expense

Profit before tax

Estimated tax 24% (25%)

Tax expense in income statement

Difference

The difference consists of the following:

24% (25%) of permanent differences

Tax effect of foreign tax not credited Norwegian tax

Change in contribution previous years, tax effect

Change in tax/deferred tax due to change of rate

Total reconciled difference

2017

122 802

3 155

-723

1 226

0

2016

146 024

-21 653

-592

2 451

3 278

126 460

129 509

2017

547 749

-131 460

126 460

-5 000

2017

-5 503

1 226

0

-723

-5 000

2016

517 678

-129 419

129 509

90

2016

-5 048

2 451

3 099

-592

-90

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 16 
GUARANTEES

Grieg Seafood ASA acted as a guarantor for Ocean Quality UK Ltd and Ocean Quality North America Inc in connection with sales contracts with 
customers. The total guaranteed amounts are EUR 250,000 and USD 3,000,000.

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ANNUAL ACCOUNTS // PARENT COMPANYNOTE 17 
RELATED PARTIES

Amounts in i NOK x 1 000

2017

 Operating 
income 

 Operating 
expenses 

 Financial 
income 

 Financial 
expenses 

 Long-term 
receivables 

 Trade 
receivables 

 Current 
receivables 

 Trade 
payables 

Other current 
liabilities

Total related parties - Group companies

Total related parties - shareholders

62 756

0

0

7 698

28 440

0

-1 741

0

623 365

41 450

1 151 052

0

0

0

-35 881

-518

-178 801

0

Total

2016

62 756

7 698

28 440

-1 741

623 365

41 450

1 151 052

-36 399

-178 801

 Operating 
income 

 Operating 
expenses 

 Financial 
income 

 Financial 
expenses 

 Long-term 
receivables 

 Trade 
receivables 

 Current 
receivables 

 Trade 
payables 

Other current 
liabilities

Total related parties - Group companies

Total related parties - shareholders

55 997

0

0

7 356

46 916

0

Total

55 997

7 356

46 916

-6

0

-6

601 032

37 520

1 240 578

-34 201

-633 576

0

19

11

0

-283

601 032

37 539

1 240 589

-34 201

-633 859

The company carries out transactions with companies controlled by Grieg Seafood ASA's largest shareholder, Grieg Holdings AS.
The services provided include:

- ICT-related and other services such as catering, reception etc. are delivered by Grieg Group Resources AS. The services are provided on an arm's length basis.
- Grieg Seafood ASA rents its offices from Grieg Garden AS on an arm’s length basis.

The parent company provides a range of services to the subsidiaries. The services include administrative services and services relating to the provision of parent company non-current loans and short-term 
credit facilities to the subsidiaries. Interest is charged on an arm's length basis.

Ocean Quality AS has been classified as a subsidiary of Grieg Seafood ASA since 2015.

Grieg Seafood ASA enters into hedging contracts on behalf of Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS. The arrangement is intended to reduce these companies´ exposure to salmon 
prices. The agreements with the subsidiaries are priced on the basis of a “back-to-back” arrangement.

P

A

R

T

3

-

A

C

C

O

U

N

T

S

/

/

G

R

I

E

G

S

E

A

F

O

O

D

A

N

N

U

A

L

R

E

P

O

R

T

2

0

1

7

/

/

P

A

G

E

1
6
3

ANNUAL ACCOUNTS // PARENT COMPANY 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTE 18 
NET INTEREST-BEARING DEBT 
AND PLEDGES

The Company has a syndicated loan provided 50/50 by DNB and Nordea. The financing agreement comprises a total framework of MNOK 1,685 and 
includes a long-term credit facility of MNOK 700. At the year-end, the credit line was utilised in the amount of MNOK 300. 

The financing agreement includes covenants stipulating consolidated equity of 35% (in the Group, excluding Ocean Quality, a revolving NIBD/EBITDA 
ratio of 5.0 if the book equity ratio is higher than 40% and 4.5 if the book equity ratio is between 35% and 40%. As at 31 December 2017, the NIBD/ 
EBITDA for the Group excluding Ocean Quality was 1.2 and the equity ratio was 52%. Consequently, the Group fully complied with all covenants at 
the year-end.

Since the end of year, the Company has renegotiated the Group´s financing agreement in line with growth targets and subsequent needs for 
investment. See Note 19 - Post-balance sheet events, for further information.

Amounts in NOK x 1 000 

Non-current liabilities

Liabilities to credit institutions before amortisation effect

Long-term credit facility *)

Amortised cost

Total interest-bearing non-current liabilities

Short-term debt

Short-term credit facility *)

Share of current portion of long term 
borrowing

Total interest-bearing current liabilities

Gross interest-bearing liabilities

Bank deposits

Loans to subsidiaries

Loans to associates

Net interest-bearing liabilities

2017

895 000

300 000

-3 312

1 191 688

2017

0

90 000

90 000

2016

985 000

0

-5 126

979 874

2016

0

90 000

90 000

1 281 688

1 069 874

157 460

1 063 519

13 100

47 609

383 281

494 733

0

191 859

*) In 2017, the Company had a total long-term credit facility of MNOK 700, of which MNOK 400 was available for utilisation at the reporting 
date. 

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ANNUAL ACCOUNTS // PARENT COMPANYMATURITY PROFILE - NONCURRENT LIABILITIES

Long-term loan

Long-term credit facility

Total

Liabilities secured by mortgage

Liabilities to credit institutions

Total liabilities

Book value of assets pledged as security

Shares in subsidiaries

Operating assets

Trade receivables

Loans to subsidiaries

Total assets pledged as security 

2019

Subseq.

2018

  90 000 

0

895 000

300 000

90 000

1 195 000

Total

985 000

300 000

1 285 000

0

0

0

2017

2016

1 281 688

1 069 874

1 281 688

1 069 874

  1 226 980 

  1 226 980 

5 478 

156 

  5 972 

  19 

1 063 519 

  494 733 

2 296 133

1 727 705

Type of debt

Syndicated long-term loan

Syndicated loan revolving credit

Total

 Interest 
rate 

NOK  Floating 

NOK  Floating 

 Maturity 

06/2019

06/2019

2017

2016

 Current 
portion 

 Non-current 
portion 

 Current 
portion 

 Non-current 
portion 

90 000

0

891 688

300 000

90 000

979 874

0

0

90 000

1 191 688

90 000

979 874

Syndicated long-term loan

Syndicated loan revolving credit 
(non-current)

Total

Average interest rate

31.12.2017

NOK

CAD

GBP

USD

981 688

981 688

300 000

300 000

1 281 688

1 281 688

0

0

0

2017

2,21%

2016

3,53%

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ANNUAL ACCOUNTS // PARENT COMPANY 
NOTE 19 
POST-BALANCE SHEET EVENTS

REFINANCING

To cater for major investment needs relating to the Company's growth strategy in the period leading up to 2020, the Group has renegotiated its 
syndicated bank loan before its original maturity in 2019. The Group has set growth targets, including increased smolt capacity and new sites, 
which will entail an increased need for working capital. The Group's total credit framework has been increased from MNOK 1 685 to MNOK 1 700 
and MEUR 60. As a result of this, the current revolving credit facility will increase from MNOK 700 to MNOK 1 000, alongside overdraft facilities 
of MNOK 100. Repayments of MNOK 50 and MEUR 5 will be made for term loans of respectively MNOK 600 and MEUR 60, split into half-yearly 
instalments. The agreement has a term of five years and expires on 28 February 2023.

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ANNUAL ACCOUNTS // PARENT COMPANYTo the General Meeting of Grieg Seafood ASA

Independent Auditor’s Report

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Grieg Seafood ASA. The financial statements comprise:

•

•

The financial statements of the parent company, which comprise the balance sheet as at 31 
December 2017, and the income statement, statement of changes in equity and cash flow 
statement for the year then ended, and notes to the financial statements, including a summary 
of significant accounting policies, and

The financial statements of the group, which comprise the balance sheet as at 31 December 
2017, and income statement, statement of comprehensive income, statement of changes in 
equity, cash flow for the year then ended, and notes to the financial statements, including a 
summary of significant accounting policies.

In our opinion:

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The financial statements are prepared in accordance with the law and regulations.

The accompanying financial statements give a true and fair view of the financial position of the 
parent company as at 31 December 2017, and its financial performance and its cash flows for 
the year then ended in accordance with the Norwegian Accounting Act and accounting 
standards and practices generally accepted in Norway.

The accompanying financial statements give a true and fair view of the financial position of the 
group as at 31 December 2017, and its financial performance and its cash flows for the year 
then ended in accordance with International Financial Reporting Standards as adopted by the 
EU.

Basis for Opinion

We conducted our audit in accordance with laws, regulations, and auditing standards and practices 
generally accepted in Norway, included International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the 
Audit of the Financial Statements section of our report. We are independent of the Company as 
required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance 
with these requirements. We believe that the audit evidence we have obtained is sufficient and 
appropriate to provide a basis for our opinion.

Key Audit Matters 

Key audit matters are those matters that, in our professional judgment, were of most significance in 
our audit of the financial statements of the current period. These matters were addressed in the 
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we 
do not provide a separate opinion on these matters. 

The activities of the group has in general been unchanged compared to previous year. We have not 
identified any regulatory changes, transactions or other events that qualify as Key audit matter for the 
2017 audit. Consequently, our Key audit matters are the same as previous year.

PricewaterhouseCoopers AS, Sandviksbodene 2A, Postboks 3984 - Sandviken, NO-5835 Bergen
T: 02316, org.no.: 987 009 713 VAT, www.pwc.no
State authorised public accountants, members of The Norwegian Institute of Public Accountants, and authorised 
accounting firm

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Key Audit Matter

How our audit addressed the Key Audit Matter

Measuring of biological assets

As described in the accounting policies 
notes, Grieg Seafood ASA measures the 
Group’s biological assets at fair value in 
accordance with IAS 41. Biological assets 
include inventories of broodstock, smolt 
and live fish held for harvesting purposes.

The Group’s biomass system shows the number of fish, 
average weight and biomass per site. We have directed 
our effort at the movement in biological inventory (in 
numbers) in the period. The movement is the total of 
smolt stocked, loss of fish and harvested fish for the 
period.

For audits of significant inventories, the 
international audit standards require that 
the auditor participates at inventory 
count, provided that it is practicable. The
biological assets are by nature difficult to 
count, observe and measure due to lack of 
sufficiently accurate measuring 
techniques that at the same time does not 
affect fish health. Therefore, we have 
focused on measuring the inventory of 
biological assets (biomass), emphasizing 
live fish held for harvesting purposes, 
which constitute the major part of the 
Group’s biological assets. Biomass in the 
sea has direct influence on the valuation;
see more about this in the paragraph
«Valuation of biological assets at fair 
value» below.

See note 2 and 7 for further information 
about measuring of biological assets.

We reviewed the Group’s processes for controlling the 
number of fish stocked. To ensure accuracy of the 
number of fish registered in the biomass system, we 
tested, for a selection of stocking, the control by tracing
the number of fish at stocking back to underlying 
documentation. Underlying documentation are
vaccination documentation for internally produced 
smolt and e.g. invoices for purchase of external smolt.

The growth in the period is connected to the total feed 
consumption and is closely associated with purchase of 
feed. We reviewed the Group’s internal controls of 
reconciliation of feed inventory and obtained external 
confirmation from feed suppliers in order to verify 
purchased volume. We also assessed recorded 
accumulated feed factor for live fish held for harvesting 
purposes and obtained explanations from management 
and further documentation for sites with significantly 
either higher or lower feed factor than expected. Our
procedures substantiated that the growth for the year 
was reasonable.

In order to challenge the historical accuracy of 
management’s biomass estimates we reviewed the 
harvest deviation for the period. By harvest deviation,
we refer to the deviation between actual harvested 
biomass (in numbers and kilos) and the estimated 
biological inventory according to the group’s biomass 
system.  We found the accumulated deviations to be 
reasonable.

We satisfied ourselves that the disclosures in the notes 
about measuring of biological assets were reasonable 
and in accordance with the requirements in the 
accounting standards.

We challenged management’s model for calculation of 
fair value of biological assets by assessing the model 
against the criteria in IAS 41 and IFRS 13. We found 

Valuation of biological assets at fair value

The Group measures biological assets at 
fair value in accordance with IAS 41. 

The fluctuations in the fair value estimate 
that occur due to, for instance, changes in 

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Auditor's Report - Grieg Seafood ASA

the market price, may have significant 
impact on the period’s operating result. 
The Group therefore shows the effect of 
fair value adjustments for biological 
assets as a separate line item before 
operating result (EBIT). 

We focused on the valuation of biological 
assets at fair value due to the size of the 
amount, the complexity of the calculation,
because the estimate involves judgement 
and due to its significance on the financial 
result for the year.

As per 31.12.2017, the book value of 
biological assets is MNOK 2 698, of which 
MNOK 2 016 is historical cost and MNOK 
682 is value adjustment. Biological assets 
comprise about 1/3 of total assets.  

See note 2 and 7 for information about 
valuation of biological assets at fair value.

that the model includes the elements that the 
accounting standards require.  

We examined whether the biomass that formed the 
basis for the Group’s model corresponded with the 
Group’s biomass system and controlled that the model 
made the mathematical calculations as intended.  

After having assured that these fundamental elements 
were in place, we assessed whether the price 
assumptions that management used in the model were 
reasonable. We assessed the price assumptions against 
observable spot- and/or forward prices from FishPool 
and other observable markets. We found management’s 
price assumptions to be reasonable.   

We challenged management’s assumptions for future 
mortality and expected production cost by assessing
these factors against industry data and the Group’s 
historical results. We found the assumptions to be in 
line with industry data and historical results.  

We satisfied ourselves that the disclosures in notes 2 
and 7 to the financial statements referring to valuation 
of biological assets appropriately reflect the valuation 
method and that the disclosures are according to 
requirements in the accounting principles. 

Other information

Management is responsible for the other information. The other information comprises the Board of 
Directors’ report, principles of Corporate Governance and information in the Group’s Sustainability 
Report, but does not include the financial statements and our auditor's report thereon. 

Our opinion on the financial statements does not cover the other information and we do not express 
any form of assurance conclusion thereon. 

In connection with our audit of the financial statements, our responsibility is to read the other 
information and, in doing so, consider whether the other information is materially inconsistent with 
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially 
misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this 
other information, we are required to report that fact. We have nothing to report in this regard. 

Responsibilities of the Board of Directors and the Managing Director for the Financial Statements

The Board of Directors and the Managing Director (management) are responsible for the preparation 
and fair presentation of the financial statements of the parent company in accordance with the 
Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and 
for the preparation and fair presentation of the financial statements of the group in accordance with 
International Financial Reporting Standards as adopted by the EU, and for such internal control as 
management determines is necessary to enable the preparation of financial statements that are free 
from material misstatement, whether due to fraud or error. 

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In preparing the financial statements, management is responsible for assessing the Company’s and the 
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going 
concern. The financial statements of the parent company use the going concern basis of accounting 
insofar as it is not likely that the enterprise will cease operations. The financial statements of the group 
use the going concern basis of accounting unless management intends either to liquidate the Group or 
to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole 
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report 
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee 
that an audit conducted in accordance with laws, regulations, and auditing standards and practices 
generally accepted in Norway, including ISAs will always detect a material misstatement when it 
exists. Misstatements can arise from fraud or error and are considered material if, individually or in 
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the 
basis of these financial statements.

As part of an audit in accordance with laws, regulations, and auditing standards and practices 
generally accepted in Norway, included International Standards on Auditing (ISAs), we exercise 
professional judgement and maintain professional scepticism throughout the audit. We also:

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identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

obtain an understanding of internal control relevant to the audit 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.

evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.

evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.

obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.

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We communicate with the Audit Committee regarding, among other matters, the planned scope and 
timing of the audit and significant audit findings, including any significant deficiencies in internal 
control that we identify during our audit

We also provide the Audit Committee with a statement that we have complied with relevant ethical 
requirements regarding independence, and to communicate with them all relationships and other 
matters that may reasonably be thought to bear on our independence, and where applicable, related 
safeguards.

From the matters communicated with the Audit Committee, we determine those matters that were of 
most significance in the audit of the financial statements of the current period and are therefore the 
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes 
public disclosure about the matter or when, in extremely rare circumstances, we determine that a 
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Opinion on the Board of Directors’ report

Based on our audit of the financial statements as described above, it is our opinion that the 
information presented in the Board of Directors’ report and in the statements on Corporate 
Governance and Corporate Social Responsibility concerning the financial statements, the going 
concern assumption, and the proposal for the allocation of the profit is consistent with the financial 
statements and complies with the law and regulations.

Opinion on Registration and Documentation

Based on our audit of the financial statements as described above, and control procedures we have 
considered necessary in accordance with the International Standard on Assurance Engagements 
(ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial 
Information, it is our opinion that  management has fulfilled its duty to produce a proper and clearly 
set out registration and documentation of the company’s accounting information in accordance with 
the law and bookkeeping standards and practices generally accepted in Norway.

Bergen, 17 April 2018 

PricewaterhouseCoopers AS

Jon Haugervåg

State Authorised Public Accountant

Note: This translation from Norwegian has been prepared for information purposes only. 

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