Registration Document - Oslo Børs Holding · Registration Document, and may perform or seek to...

Color Group AS – 18.12.2014 Registration Document

Prepared according to Commission Regulation (EC) No 809/2004 - Annex IV

Registration Document

Color Group AS

18.12.2014


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Important notice

The Joint Lead Managers and/or affiliated companies and/or officers, directors and employees may be a market maker or hold a position in any instrument or related instrument discussed in this Registration Document, and may perform or seek to perform financial advisory or banking services related to such instruments. The Joint Lead Managers’ corporate finance department may act as manager or co-manager for this Issuer in private and/or public placement and/or resale not publicly available or commonly known.

Copies of this Registration Document are not being mailed or otherwise distributed or sent in or into or made available in the United States other than on the Issuer’s web page. Persons receiving this document (including custodians, nominees and trustees) must not distribute or send such documents or any related documents in or into the United States.

Other than in compliance with applicable United States securities laws, no solicitations are being made or will be made, directly or indirectly, in the United States. Securities will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The distribution of the Registration Document may be limited by law also in other jurisdictions, for example in Canada, Japan and in the United Kingdom. The Prospectus has been reviewed and

approved by the Norwegian FSA in accordance with sections 7-7 and 7-8, cf. section 7-3 of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information given in this Prospectus. The approval given by the Norwegian FSA only relates to the Issuer's descriptions pursuant to a pre-defined check list of requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described in or otherwise covered by this Prospectus.


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Table of Contents:

1. Risk factors .................................................................................................................... 4 2. Persons responsible ......................................................................................................... 5 3. Definitions ...................................................................................................................... 6 4. Selected Financial Information .......................................................................................... 7 5. Statutory auditors ........................................................................................................... 9 6. Information about the Issuer and the Guarantor ................................................................. 10 7. Business overview ......................................................................................................... 13 8. Administrative, management and supervisory bodies .......................................................... 20 9. Major shareholders ......................................................................................................... 22 10. Financial information concerning the Issuer's and the Guarantor’s assets and liabilities, financial position and profits and losses ............................................................................................. 23 11. Documents on display ................................................................................................... 25 12. Third part information ................................................................................................... 26 13. Cross reference list ....................................................................................................... 27 14. Attachments................................................................................................................. 29


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1. Risk factors FINANCIAL RISK The main financial risks in the Group foreign currency, interest rates and liquidity risk/refinancing risk. MARKET RISK

The Group’s market risk is mainly connected with changes in foreign exchange rates, interest rates and the cost of bunker. The Group has limited market risk exposure as its business is directed at a market comprising a large number of customers. CURRENCY RISK The Group is exposed to foreign exchange risk related to fluctuations in the value of the Norwegian

krone (NOK) against other currencies, particularly the USD, EUR and DKK. Currency risk arises when there are differences between income received and expenses paid in different currencies and in relation to investments/purchase of non-current assets and repayment of loans in foreign currency.

INTEREST RATE RISK The Group’s primary exposure to interest rate risk is through its loan portfolio. Changes in the

interest rate level over time can have a negative effect on profits. LIQUIDITY RISK Liquidity risk is the risk of the Group being unable to fulfil its financial liabilities as they come due. Surplus liquidity is placed primarily on the short-term money market. CREDIT RISK

The Group’s financial assets mainly consist of receivables from sales, other receivables, liquid resources and financial instruments. These receivables represent the Group’s maximum exposure and credit risk related to financial assets. Most of the Group’s trade receivables fall due for payment within 3 months. The credit risk related to financial derivatives is regarded as low, as the agreements on these assets have been concluded with highly creditworthy banks, thus reducing the risk that the counterparty will be unable to fulfil its liability.

OPERATIONAL RISK Bunker risk The bunker risk represents an operational risk as a consequence of fluctuations in the price of oil. Dependency upon the Norwegian and European Retail market/Freight market The Group will be subject to market conditions for the general decline in demand in both the

Norwegian and European travel market and general fluctuations in the freight market in line with the general macro-economic situation. Dependency on stable, equal and competitive framework conditions in Norway The Group will depend on stable, equal and competitive framework conditions from a Norwegian standpoint assuming continued operations out of Norway.

Risk of accident/technical issues etc The Group is exposed to potential casualty / technical issues (including ICT - booking systems), primarily due to the nature of business areas in which the company operates. Although the Group considers its insurances well covered, there may be losses associated with various technical

problems / casualty etc.

Seasonality/weather/cancellations The Group is exposed to large seasonal variations in the number of passengers and earnings. Service disruptions / market problems / bad weather could cause lower earnings in periods where the company has increased traffic.


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2. Persons responsible PERSONS RESPONSIBLE FOR THE INFORMATION Persons responsible for the information given in the Registration Document are as follows: Color Group AS Bryggegata 3

0250 Oslo Norway DECLARATION BY PERSONS RESPONSIBLE Color Group AS confirms that, having taken all reasonable care to ensure that such is the case, the

information contained in the Registration Document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import.

18.12.2014

Color Group AS


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3. Definitions Registration Document - This document dated 18.12.2014 The Parent / Issuer / The Company - Color Group AS reg.nr 958 815 018 (Norway)

The Group / Color Group - Color Group AS with subsidiaries Color Line - Color Line AS reg.nr 970 903 968 (Norway) Joint Lead Managers - Arctic Securities ASA, Haakon VII's gate 5, 0161 Oslo,

Norway

Nordea Markets a part of Nordea Bank Norge ASA, P.O. Box 1166 Sentrum, 0107 Oslo, Norway Pareto Securities AS, Dronning Mauds gt. 3, NO-0115 Oslo, Norway.

DIS - Danish International Ship Register

DKK - The official currency of Denmark, the Danish crown ECGS - Exhaust Gas Cleaning System EUR - The official currency of the European Union, the euro Guarantor - Color Line AS with reg.nr 970 903 968 (Norway)

IFRS - International Financial Reporting Standards MLC - Maritime Labour Convension NAS - Norwegian Accounting Standards

NHO - Confederation of Norwegian Enterprise NIS - Norwegian International Ship register NOK - The official currency of Norway, the Norwegian crown

NUES - Norwegian Corporate Government Board (“Norsk utvalg for eierstyring og selskapsledelse”)

Prospectus - This Registration Document together with the Securites

Note for the Bond Issue SEEMP - Ship Energy Efficiency Management Plan

Securities Note - Document describing the terms for the Bond Issue.

ISIN NO 001 069 916.8

UN - the United Nations

USD - The official currency of the United States of America, the American dollar

VPS - Verdipapirsentralen; Norwegian public limited company

authorised to register rights to financial instruments pursuant to the Securities Register Act.


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4. Selected Financial Information ISSUER Consolidated, IFRS

Annual reports Semi-annual reports

TRAFFIC 2013 2012 2014 2013

Passengers 4 018 082 4 120 110 1 760 640 1 800 659

Cars 974 249 1 001 613

Feright units1 171 385 174 098 83 621 89 895

PROFIT (NOK mill)

Operating revenues 4 552 4 512 2 036 2 010

Operating expences -3 780 -3 684 -1 865 -1 802

EBIT 249 384 -93 -52

Net financial items -223 -263 -66 -95

Pre-tax income 27 121 -159 -148

Tax expences 29 -33 44 47

Net profit/loss 56 88 -116 -102

BALANCE (NOK mill) Current assets 1 950 1 559 1 741 1 466

Non-current assets 6 341 6 771 6 224 6 696

Total assets 8 291 8 330 7 965 8 162

Current liabilities 1 285 987 1 404 1 095

Non-current liabilities 4 243 4 505 4 113 4 408

Deferred tax liabilities 888 988 Equity 1 875 1 850 1 630 1 765

Total liabilities and equity 8 291 8 330 7 965 8 162

LIQUIDITY Cash and cash equivalents2 1 306 1 257 1 090 1 087

Parent, NAS


PROFIT (NOK mill) 2013 2012 2014 2013

Operating revenues 135 134 60 60

Operating expences -8 -16 -5 -6

EBIT 106 95 44 43

Net financial items -53 195 -22 -5

Pre-tax income 52 290 22 38

Tax expences -13 -55 -6 -11

Net profit/loss 40 236 16 28

BALANCE (NOK mill) Current assets 1 313 1 158 1 173 865


Total assets 6 714 6 656 6 600 6 771

Current liabilities 51 45 29 42


Deferred tax liabilities 24 43 Equity 1 941 1 866 1 956 2 057


GUARANTOR

1 12m-equivalents 2 Including non-utilized credit facilities


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PROFIT (NOK mill) 2013 2012 2014 2013

Operating revenues 723 732 395 442

Operating expences -632 -639 -316 -334

EBIT 91 92 49 79

Net financial items 175 327 -25 -98

Pre-tax income 208 368 24 -19

Tax expences -54 -103 -10 5

Net profit/loss 154 265 13 -14

BALANCE (NOK mill) Current assets 142 161 6 004 6 726


Total assets 6 441 8 030 12 155 13 667

Current liabilities 289 254 425 393


Total provisions and liabilities 5 0 Equity 3 103 3 031 3 116 3 017



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5. Statutory auditors The Issuer’s and the Guarantor’s auditor for the period covered by the historical financial information in this Registration Document has been Deloitte AS. Deloitte AS contact information: Dronning Eufemias gate 14, 0191 Oslo, Norway. Post address: P.O. Box 221 Sentrum, 0103 Oslo, Norway. Phone: +47 23 27 90 00 Fax: +47 23 27 90 01

Deloitte AS is a member of the Norwegian Institute of Certified Public Accountants.


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6. Information about the Issuer and the Guarantor ISSUER Color Group AS is a Norwegian Limited Company incorporated on 05.06.1990 and regulated by the Norwegian Companies Act and supplementing Norwegian laws and regulations. The Company is registered in the Norwegian Companies Registry with registration number 958 815 018. The legal

name of the Issuer is Color Group AS, the commercial name is Color Group. The Issuer’s registered business address is Bryggegata 3, 0250 Oslo, Norway. Phone: +47 23 11 86 00. Fax: +47 23 11 86 01 Website: www.colorline.no Color Group AS is the parent company of Color Line AS, which is the operating company of the

Group. Color Group fulfills the Group President role and the Company is responsible for the financing of the Group. Color Line AS pays royalties to the parent company. Hence the Issuer is dependent on its subsidiaries. The Issuer has 3 employees.

According to §3 of the Company’s Articles of Association, the purpose of the company is to operate ferry services, transport and related activities, and to participate in other companies with similar purpose.

Color Group has today four bonds listed on Nordic ABM; a 5-year bond with ISIN NO 001 0591068 900 at par value MNOK 900, a 5-year bond with ISIN NO 001 0630155 at par value MNOK 500, a 7-year bond with ISIN NO 001 0657919 at par value MNOK 700 and a 4-year bond with ISIN NO 001 0699168 at par value MNOK 700. There will be an application for transferring the 4-year bond to Oslo Børs.

Organizational structure

GUARANTOR Color Line AS is a Norwegian Limited Liability Company incorporated on 05.04.1994 and regulated by the Norwegian Companies Act and supplementing Norwegian laws and regulations. The

Company is registered in the Norwegian Companies Registry with registration number 970 903 968. The legal name of the Guarantor is Color Line AS, the commercial name is Color Line. The Guarantor’s registered business address is Hjortnes, 0250 Oslo, Norway. Post address: P.O. Box 82, 4662 Kristiansand S. Phone: +47 08110.

http://www.colorline.no/


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Website: www.colorline.no

Color Line AS is a fully owned subsidiary of Color Group AS. The company has approximately 2400 man years. Color Line AS is dependent on its subsidiaries’ due to operational activities and the ability to create cash flows. According to §3 of the Company’s Articles of Association, the purpose of the company is to transport tourists and operate ferry services.

Since the outset in 1990, the company has shipped both passengers and freight. In recent years the company’s fleet has undergone an extensive process of efficiency enhancements and modernisation and now numbers six vessels. These operate on four ferry services sailing between seven ports in Norway, Germany, Denmark and Sweden. The ships offer conference facilities, hotel accommodation, restaurants, shops and entertainment. In addition, the company develops travel

and adventure tourism concepts in collaboration with the shore-based travel and tourism industry in Norway, Denmark, Germany and Sweden. Each year, Color Line carries some 600 000 tourists to Norway from abroad. To a great extent the ships all offer identical on-board concepts and facilities. On the service between Oslo and Kiel in Germany, Color Line offers a cruise experience of the

highest quality, while efficient transportation is the main priority on the shorter routes between Kristiansand – Hirtshals and Larvik – Hirtshals and on the service between Sandefjord and

Strømstad. Color Line’s vision is to be Europe’s best cruise and freight shipping company. Color Line’s strategy is to play a leading role in the development of new technology for marketing and booking integrated travel and tourism concepts, as well as rolling out new environmental technology such as shore-based power and other measures designed to reduce emissions to air and sea.

Legal structure of Color Line AS

The management of Color Line AS consists of the CEO as the commanding officer, and excecutive vice presidents for the departments of finance, HR, strategy and business development and communication and public affairs.

The marketing departments in Norway, Denmark and Germany are managed by sales and marketing managers on the ferry routs, which reports to the Executive Vice President of sales and marketing. HISTORY

Color Line’s parent company, Color Group ASA (formerly Color Line ASA), was established in 1990. However, the company’s roots in the ferry business go back over 100 years. In 2009 Color Group went from being a public limited company to a listed corporation, and their official name was

President and CEO

Trond Kleivdal

CIO

Marianne Gade Gørbitz

Sales and

Marketing

Frode Hansen

Technical Maritime

Operation

Jan Helge Pile

CFO

Mette Krabberød

Communication and public affairs

Helge Otto Mathisen

HR

Einar Monstad

Strategy and

business

development Boge Guldbrandsen

Commercial on

Board

Thomas Gudbjerg

Cargo

Øivind Næss

http://www.colorline.no/


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changed from Color Group ASA to Color Group AS.

There was a merger in 1990 of Jahre Line and Norway Line which led to the creation of Color Line. In that same year the company expanded its business appreciably when it took over the Fred. Olsen ferry operations. The first M/S Kronprins Harald, which was built for Jahre Line AS, embarked upon its maiden voyage from Oslo on 2 May 1961. Color Line was therefore able to celebrate its fortieth anniversary

on Oslo-Kiel service in May 2001. In October 1996 the company acquired Larvik Line, while Scandi Line joined the group in September 1998. The Color Hotel Skagen was also acquired in September 1998. In 1961 Jahre Line on the Oslo-Kiel service carried 53,000 passengers and 9,600 cars. Today Color

Line carries approximately an annual of 4 million passengers and over 900,000 cars and 170.000 freight units (12 m equivalent).


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7. Business overview Color Line AS is Norway's largest3 cruise and transport shipping companies in the field of short-sea shipping, Color Line is now the only Norwegian-registered shipping company headquartered in Norway and with Norwegian crews operating international freight and passenger ferry traffic to and from Norway. The company employs some 2 400 man-years in four countries.

After a strategic reorganization in 2008, the company deploys a total of six ships on four routes linking seven ports in four countries; Norway, Sweden, Denmark and Germany. Color Line’s four ferry services are operated by four line organizations based in Oslo, Sandefjord, Larvik and Kristiansand. In addition the company has departmental offices in Hirtshals, Kiel and Strömstad. Color Line operates in the fields of passengers and goods, conference, hotel management,

restaurants, retailing, entertainment and organized tour production. In addition, the company develops travel and adventure tourism concepts in collaboration with the shore-based travel and tourism industry in Norway, Denmark, Germany and Sweden.

SAFETY AND ENVIRONMENT Color Line places great emphasis on safety and environmental issues. The company’s goal is always to be among the international leaders in this field.

Safety Safety is vital to Color Line and the company works continuously to prevent situations that might have negative consequences for human life and health and the environment. The company continued this effort in 2013 by closely monitoring its electronic systems for safety management, incident management and risk assessment. In addition to root cause analyses and the performance of measures in the wake of routine deviations, near-accidents and improvement measures are also

handled via this system. Increased reporting of security breaches in 2013 has given the company improved insight into how to prevent unwanted incidents in the future. The company also conducted extensive safety training and safety courses for shipboard and shore personnel throughout the year. The results of this work are now starting to be seen in the form of fewer routine deviations, for example the number of observations in Port State Control inspections

are very low. Color Line is also registering positive results from both internal and external audits of

the company, such as audits conducted by classification companies and the maritime authorities. Color Line Marine AS continued its work on implementing electronic warning and crisis management tools for the company. All emergency preparedness groups underwent training. There is a major focus throughout the company on reducing the use of and removing products

harmful to health to increase safety for personnel and to comply with the regulations, inter alia through our ECOonline effort. The company was represented on a number of consultation committees during the course of the year, including the Norwegian adaptation of the Maritime Labour Convention (MLC) and the new Norwegian Ship Workers Act, which came into force in August 2013. This has now been implemented with full effect within the company.

Climate and Environment Climate gas emissions Color Line reports climate gas emissions by the ships in accordance with a UN standard for

reporting of this type. The goal of the company is to reduce emissions of climate gases by 10 % by 2015 (measured on the basis of 2009 figures).

Shore-based electricity The shore-based electricity facility for M/S Color Fantasy and M/S Color Magic in Oslo (Hjortnes) continued to attract a great deal of favourable attention in 2013. The facility was inspected by representatives of both the media and industry operators during the year. 2013 was the first full

3 Source: http://travelnews.no/2013/01/29/turoperator/over-fire-millioner-color-line-passasjerer/

http://travelnews.no/2013/01/29/turoperator/over-fire-millioner-color-line-passasjerer/


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year of operations for the facility, which performed as intended. Efficiency levels are in excess of 90

%. In December of 2013 the company adopted a decision to build a shorebased electricity system

for the M/S SuperSpeed1 in Kristiansand. (Due to be completed in June 2014). Energy efficiency In accordance with international requirements, a SEEMP (Ship Energy Efficiency Management Plan) was implemented and performed for all ships in January of 2013. This plan includes measures such as the increased use of shore-based power, the replacement of tungsten bulbs, frequency

management, time and temperature management of processes, reduced use of energy intensive systems as well as several other major and smaller measures. Sulphur oxides The requirements governing emissions of sulphur oxides by ships will be made significantly stricter in January of 2015. In order to satisfy the new requirements the company will install exhaust gas

cleaningsystems (ECGS) on its four largest ships. In the case of M/S Bohus and M/S Color Viking a fuel quality (MGO) that satisfies the new requirements will continue to be used in the future. For more information on investments, please see “Investments” further down in this chapter. Color Line Marine A/S is represented on national and international projects and bodies working on

safety and environmental issues.

Safety on board All the company’s ships carry highly visible information regarding safety routines on board. An overview of onboard safety procedures and routines is also available on our website. The information is available in both Norwegian and English. THE FLEET

Color Line has a modern and cost-effective fleet with a high degree of product standardization. Passenger numbers in 2013 totaled 4 018 082. The volume of freight carried (12m-equivalents) in 2013 totaled 171 385. Total passengers in the first six months 2014 totaled 1 760 640 and the volume of freight carried (12m-equivalents) was 83 621.

M/S Color Fantasy Cruise ship travelling Oslo – Kiel

In operation since: 2004 Built: Aker Yards, Rauma, Finland Home port: Oslo Tonnage: 74,500 GrT Length: 224 m

Width: 35 m Cruise speed: 22 knots Max capacity: 2,700 persons Passenger cars:750 Trailers: 1,270 lane meters

M/S Color Magic Cruise ship travelling Oslo – Kiel In operation since: 2007 Built: Aker Yards, Turku, Finland Home port: Oslo Tonnage: 75,100 GrT

Length: 224 m Width: 35 m Cruise speed: 22 knots Max capacity: 2,700 persons Passenger cars:550 Trailers: 1,270 lane meters


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M/S SuperSpeed 1

Speed ship travelling Kristiansand – Hirtshals

In operation since: 2008 Built: Aker Yards, Rauma, Finland Home port: Kristiansand Tonnage: 36,822 GrT Length: 211.3 m Width: 26 m

Cruise speed: 27 knots Max capacity: 2,315 persons Passenger cars:764 Trailers: 2,036 lane meters

M/S SuperSpeed 2 Speed ship travelling Larvik – Hirtshals In operation since: 2008 Built: Aker Yards, Rauma, Finland Home port: Larvik

Tonnage: 33,500 GrT Length: 211.3 m

Width: 26 m Cruise speed: 27 knots Max capacity: 1,929 persons Passenger cars:764 Trailers: 2,036 lane meters

M/S Color Viking Day ferry travelling Sandefjord – Strömstad In operation since: 1985 Built: Nakskov, Denmark Home port: Sandefjord Tonnage: 19,763 GrT

Length: 137 m Width: 24 m

Cruise speed: 18 knots Max capacity: 1,720 persons Passenger cars:370 Trailers: 490 lane meters

M/S Bohus Day ferry travelling Sandefjord – Strömstad In operation since: 1971 Built: Aalborg, Denmark Home port: Sandefjord Tonnage: 9,149 GrT

Length: 123.4 m Width: 19.2 m Cruise speed: 21 knots Max capacity: 1,165 persons Passenger cars:240 Trailers: 462 lane meters


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ROUTES

Four ferry services operate between seven ports in Norway, Germany, Denmark and Sweden. The routes are: Oslo-Kiel, Sandefjord-Strömstad, Larvik-Hirtshals and Kristiansand-Hirtshals. INVESTMENTS Color Line is preparing to meet the challenges of tomorrow by developing and implementing new technology today. In recent years the company has made substantial investments in ships,

infrastructure (port facilities) and environmental measures. In the area of environmental protection Color Line has invested substantial resources in technology such as shore-based power and

exhaust scrubbers to treat harmful emissions from the company’s ships. With its modern fleet and technological infrastructure Color Line is uniquely placed to meet the new environmental requirements which come into force on 1 January 2015. Contracts have been concluded with Wartsila Moss A/S for the summer and autumn of 2014 for the

construction and delivery of scrubbers, to reduce sulfur oxide emissions, for the main engines of M/S Color Fantasy, M/S Color Magic, M/S SuperSpeed 1 and M/S Superspeed 2. The delivery is for a total of 16 scrubbers and the associated treatment systems. This will be the largest environmental refit project that the company has ever undertaken. The scrubbers for M/S SuperSpeed2 were built in the autumn of 2013 and were put on board in the spring of 2014 to allow the technology to be tested well before the requirement comes into force and before the

remaining three vessels have their scrubbers installed in January-February 2015. There have been made some down payments for the remaining three vessels (Color Fantasy, Color Magic and SuperSpeed 1) since the last published financial statements. The size of the investment in total approximately NOK 220million for all the vessels, whereof one of the vessels have been fitted in March 2014. The remaining amount is to be paid during Q4 2014

and Q1 2015 for the three remaining vessels. The remaining scrubber investments will be financed

directly and indirectly by running cash-flow and available credit facilities. Significant investments have also been made in cost-effective IT solutions for communications and digital booking. These technological and organizational solutions are designed to ensure that distribution and administration is fully automated, enabling the best and most competitive travel and tourism packages to be offered in a cost-effective way. Tour operators, hotels, cultural operators and others will have access to integrated solutions that communicate with each other

and lift the overall experience for the traveller.


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STRATEGY

Color Line’s strategy is to play a leading role in the development of new technology for marketing and booking integrated travel and tourism concepts, as well as rolling out new environmental technology such as shore-based power and other measures designed to reduce emissions to air and sea. The company operates a clear strategy of differentiation: high-quality cruises on the service

between Norway and Germany and the efficient shipment of freight and passengers on the routes Norway, Denmark and Sweden SOCIAL RESPONSIBILITY Color Line makes an important contribution to the creation of value in the countries and port cities

in which the company operates. As a major operator within a wide range of industries Color Line is aware of the responsibility that accompanies every aspect of its business. Both what is done, and the way it is done are important to Color Line. Respect, a proactive stance and responsibility characterise all aspects of the business of the company.

For Color Line, it is not sufficient for the business simply to operate in accordance with the applicable laws and regulations: the company has far higher ambitions in a number of areas that

impact on society as a whole. Color Line’s vision is for the company to provide active support for Norwegian business clusters working within the areas of environment and innovation, as well as travel, tourism and culture, and to make an active contribution to the education and training of Norwegian maritime expertise. The results of this commitment can be seen in the form of a range of socially beneficial measures. On environmental issues too the company has high ambitions and it has signed up to the campaign

for zero emissions of harmful substances to the air and sea launched by the Norwegian Shipowners’ Association. As well as being an environmental bellwether, Color Line makes an important contribution to the travel and tourism industry in both Norway and abroad. The company plays an active part in the development of travel and tourism destinations and has forged innovative collaboration agreements

with leading cultural institutions such as the Norwegian National Opera and Ballet.

Color Line is serious about safety. For this reason the company conducts regular exercises together with the emergency services and other operators. These exercises confirm the high quality of the systems, organisation, expertise and skills that Color Line insists on in all its activities. The exercises are also important in securing the necessary interplay and coordination between Color Line and the public authorities in those countries and ports in which the company operates.

As an employer of personnel from diverse cultural backgrounds, Color Line works actively to promote non-discrimination and to protect fundamental human rights. Color Line’s aim as an employer is to provide a workplace in which there is full equality between women and men, and the company makes every effort to satisfy the objectives of the Anti-discrimination and Accessibility Act.

EXTERNAL INVOLVEMENT Externally, Color Line is an active contributor to the development of Norwegian travel, tourism and maritime expertise through its involvement in amongst other forums the Norwegian Shipowners’ Association’s Shortsea Group, the Foundation for Norwegian Maritime Expertise, Norwegian Maritime Forum, the Norwegian-German Chamber of Commerce, the Government’s Travel and Tourism Council, the Norwegian Travel Forum, NHO’s Travel and Tourism Council as well as a range

of local, national and international trade and industry organisations. THE MARKET Color Line operates in the fields of passengers and goods, conference, hotel management, restaurants, retailing, entertainment and organized tour production. In addition, the company develops travel and adventure tourism concepts in collaboration with the shore-based travel and tourism industry in Norway, Denmark, Germany and Sweden.

Areas of competition


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Color Line’s area of competition is relatively diversified and range from low-fare airlines, hotel

industry on shore, other ferry services, cruise lines etc.

The competition from low-fare airlines are in the field of tourism and short vacations. For instance can the airport Torp, close to Sandefjord, be a direct competitor with the company’s routes from Sandefjord and Larvik, while Gardermoen airport can attract customers that have the Oslo routes as a vacation option. Low fare airline competition will also affect the ticket-prices the company may offer to its customers.

The hotel industry is a direct competitor towards the company’s offer of conference facilities and hotel accommodation. Hotels can also offer guest similar services as they may experience on Color Line’s routs within restaurant services and entertainment. Other cruise lines can offer similar packages as Color Line; conference facilities, hotel

accommodation, restaurants, shops and entertainment. In addition, the company develops travel and adventure tourism concepts. Still it’s important to note that Color Line is the only Norwegian-registered shipping company headquartered in Norway and with Norwegian crews operating international freight and passenger ferry traffic to and from Norway, the competition is thereby globally based rather than local.

Some of the other companies offering ferry services are Stena Line, Costa Cruises, RCL, DFDS,

MSC etc. These are direct competitors with similar concepts as Color Line. The company still believes that their quality focus and upgraded fleet will work as a differentiation strategy towards this market, and make the company’s services more attractive than those of the competitors. Sustainable framework conditions Stable and internationally competitive framework conditions are a prerequisite for Color Line’s substantial investments in Norway in recent years. Over time, the refund scheme for seafarers

introduced in 2002 has been undermined by increases in prices and pay levels and no longer offers Norwegian commercial shipping operator’s framework conditions that are sufficiently competitive. Color Line is facing competition on its routes from competitors based in other Nordic countries and operating under framework conditions that are significantly more favourable than those prevailing in Norway.

An offensive Danish maritime policy exploiting the opportunities offered by the European Commission through the EU state subsidy guidelines has for example resulted in unequal

competition from operators registered in the Danish International Ship Register (DIS). Color Line continuously considers measures that might be implemented with a view to relieving the competitive disadvantage that this represents. The Norwegian International Ship Register and Net Salary Scheme in Norwegian

Ordinary Ship Register In March of 2014, the Norwegian Government set up a fast-track committee to consider changes to the restrictions on trade areas in the Norwegian International Ship Register (NIS) and the establishment of a net salary scheme for seafarers. The company is free to register its vessels in the DIS in the same way as the company’s competitors. Nevertheless, it is Color Line’s declared wish to bring about a positive change in the current terms and conditions to enable the company to continue to operate from a Norwegian base using Norwegian expertise and Norwegian seafarers. It

is essential that any new Norwegian scheme should be internationally competitive. Fartsområdeutvalget (a Norwegian government committee) was appointed by Minister Monica Mæland on March the 3rd 2014 to promote a significant and competitive fleet under the Norwegian flag, and to assure adequate supply of Norwegian maritime operational expertise.

The committee’s proposal was presented September 8th 2014, and they proposed a softening of the trade area for passenger ships in foreign trade that is in route with passengers between Norwegian ports and harbors outside the region, coupled with change in the net wage scheme that ensures competitiveness for Norwegian sailors. For Color Line, the committee’s proposal implies that the M/S Color Magic and M/S Color Fantasy routes between Oslo and Kiel should be NIS-registered, while the company’s four other ships operating between Denmark and Sweden should remain with a NOR-registration as today.

If the committee’s proposal is adopted by the government and gain a majority in the Parliament, the Norwegian Storting, it will provide Color Line the predictability, in a long-term perspective, that


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is necessary for the company to compete on equal terms as its international competitors. Color

Line will follow the process closely, and hope for a quick resolution in the Parliament.


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8. Administrative, management and supervisory bodies ISSUER BOARD OF DIRECTORS Chairman of the Board – Morten Garmann Board Member – Olav Nils Sunde

Board Member – Bjørn Petter Paulsen Board Member – Alexander Sunde MANAGEMENT Group President/CEO – Olav Nils Sunde CFO – Bjørn Paulsen

Finance Director – Christian Arndt AUDIT COMMITTEE The Audit Committee comprises two members elected by and from amongst the ranks of the

directors. The members of the Audit Committee are independent of the Company’s day-to-day management and key business associates. The Audit Committee’s members are Morten Garmann and Alexander Sunde.

The Company’s Audit Committee is responsible for implementing the Company’s internal control procedures and reports to the Board. The areas of focus of the Audit Committee are: – financial reporting – internal control procedures – risk management

All the members of the Issuer’s board, management and the audit committee can be reached at Bryggegata 3, 0250 Oslo, Norway. GUARANTOR

BOARD OF DIRECTORS Chairman of the Board – Olav Nils Sunde Board Member – Morten Garmann Board Member – Bjørn Petter Paulsen Board Member – Alexander Sunde

MANAGEMENT President & CEO – Trond Hans Kleivdal CFO – Mette Krabberød Executive Vice President Communication and Public Affairs – Helge Otto Mathisen Executive Vice President HR – Einar Monstad Executive Vice President Strategy and Business Development – Boge Guldbrandsen CIO – Marianne Gade Gørbitz

Executive Vice President Sales and Marketing – Frode Hansen Executive Vice President, Commercial on board, (F&B, retail, purchasing, logistics and distribution) – Thomas Gudbjerg Executive Vice President Cargo – Øivind Næss

Executive Vice President of Technical Maritime Operation – Jan Helge Pile

All the members of the Guarantor’s board can be reached at Bryggegata 3, 0250 Oslo, Norway The members of the Guarantor’s management can be reached at Hjortnes, 0250 Oslo, Norway. RELATED PARTY TRANSACTIONS Color Group AS is owned by ONS Invest II, a company owned 100 % by Olav Nils Sunde and his

family through the limited company O.N. Sunde AS. All the companies in the O.N. Sunde Group


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and its owners are related parties. The directors, Group President and CEOs of the various business

areas are also defined as related parties.

The Company purchases clothing for resale from Voice Norge AS, Regatta AS and Gresvig Norge AS on market terms. These companies are part of the O.N. Sunde Group. The Company purchases services from a law firm in which the Chairman of the Board, Morten Garman, is co-owner.

M/S SuperSpeed1 is owned by Kristiansand Line AS and M/S SuperSpeed2 is owned by Oslo Line AS. Both of these companies are owned by ONS Ship Finance AS and are part of the O.N. Sunde Group. The company charters the ships from Kristiansand Line AS and Oslo Line AS at annual rates based on commercial terms corresponding to the level that could be achieved on an external

market.

The external financing of all companies in the Group is mainly arranged by Color Group AS. The company then lends to other companies in the Group. Interest on intercompany accounts is calculated at a rate equivalent to the rate that Color Group AS pays for external loans.

There are no potential conflicts of interests between any duties to the issuing entity of the persons referred to above and their private interests or other duties.

CORPORATE GOVERNANCE The Issuer’s and the Guarantor’s corporate governance policy is based on the Norwegian Code of Practice for Corporate Governance: Color Group AS reports its policies and practice with regard to corporate governance in accordance with Section 3-3b third paragraph of the Accounting Act, and follow the recommendations from NUES.

RISK MANAGEMENT AND INTERNAL CONTROL PROCEDURES The Board ensures that the Company has satisfactory internal control procedures in place in accordance with the provisions applicable to the business. The Board conducts an annual review of the Company’s internal control procedures and monitors the main areas of risk on an on-going basis. Together with the management of the Company, the Board has focused on developing the internal control procedures applicable to the Company’s financial reporting, including:

– the control environment – risk assessment – control activities – information and communication

– follow-up


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9. Major shareholders ISSUER The Issuer’s share capital consists of 71 800 000 shares with nominal value of NOK 2 per share. Total share capital is NOK 143 600 000. There are only one class of shares. All shares have equal voting right; one share – one vote. The shares are registered in VPS. Change of control of shares is

limited; investor has to have the board’s approval. Color Group AS is owned by ONS Invest II, a company owned 100 % by Olav Nils Sunde and his family through the limited company O.N. Sunde AS. O.N. Sunde AS thereby indirectly owns 100 % of the Company’s 71 800 000 shares. O.N. Sunde AS is wholly owned by Director and Group President Olav Nils Sunde and his family.

There are no arrangements, known to the Issuer, the operation of which may at a subsequent date result in a change in control of the Issuer.

GUARANTOR

The Guarantor’s share capital consists of 24 870 000 shares with nominal value of NOK 2 per share. Total share capital is NOK 49 740 000. There are only one class of shares. All shares have equal voting right; one share – one vote. The shares are not registered. Color Line AS is a fully owned subsidiary of Color Group AS.


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10. Financial information concerning the Issuer's and the Guarantor’s assets and liabilities, financial position and profits and losses

The consolidated financial statements of Color Group AS are prepared with International Financial Reporting Standards, IFRS. The Parent, Color Group AS, and the Guarantor’s financial statements are prepared with Norwegian Accounting Standards, NAS. The annual financial information of Color Group AS, and the semi-annual reports for both Issuer and Guarantor is incorporated by reference. The annual reports of Color Line AS are attached to this Registration Document. Please see the cross reference list in section 13 in this Registration

Document:


2013 2012 2014 2013

Color Group AS - Parent

Income statement Page 13 Page 13 Page 1 Page 1

Balance sheet Page 14 Page 14 Page 2 Page 2

Cash flow statement Page 15 Page 15 Page 3 Page 3

Notes Page 17-37 Page 17-37

Color Group AS - Consolidated


Balance Sheet Page 14 Page 14 Page 2 Page 2



Accounting principles Page 17-21 Page 17-21

Auditor's report Page 40-41 Page 40-41 Unaudited Unaudited


Color Line AS 2013 2012 2014 2013


Balance Sheet Page 7-8 Page 6-7 Page 2 Page 2-3




Auditor's report Att. 3 Att. 6 Unaudited Unaudited

Annual report 2013 for Color Group AS:

http://www.newsweb.no/newsweb/search.do?messageId=351451 Annual report 2012 for Color Group AS: http://www.newsweb.no/newsweb/search.do?messageId=326385 Semi-annual report 2014 for both Issuer and Guarantor: http://www.newsweb.no/newsweb/search.do?messageId=359870 Semi-annual report 2013 for both Issuer and Guarantor:

http://www.newsweb.no/newsweb/search.do?messageId=334881

The annual reports for the Guarantor are attached to this Registration Document. The historical annual financial information for 2013 and 2012 for the Issuer and the Guarantor has been audited. The historical financial information for the semi-annual reports has not been audited. OTHER ISSUES

Legal In December of 2012, Color Line AS received a writ filed by Bastø Fosen AS claiming damages of up to NOK 991.5 million for loss of profits. The grounds for the claim are that Bastø Fosen failed in an attempt to launch a ferry route between Sandefjord and Strømstad in 1998 as a consequence of






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an alleged tortious breach of competition law on the part of Color Line AS. Color Line AS has

rejected the claim. Oslo District Court ruled that the question of time barring should be heard

separate proceedings. The District Court ruled in June 2013 that any claim would be time-barred and accordingly found for Color Line AS. Bastø Fosen appealed the judgment, and the appeal proceedings before Borgarting Court of Appeal resulted in a ruling, in September 2014, equal to the one in the District Court. Bastø Fosen then re-appealed this ruling to the Supreme Court on the 30th of October 2014.

In February 2014, Color Line AS and Color Group AS received the writ filed by Nye Kystlink AS with a claim for damages of up to approx. NOK 1 303.8 million. The writ follows up a conciliation complaint filed in December 2012. The grounds for the claim for damages are direct losses and loss of profits and returns relating to Nye Kystlink’s legal predecessors of a ferry business between the ports of Brevik and Hirtshals and Langesund and Strømstad in the period 2004-2008. Nye Kystlink AS claim that the losses were caused by alleged tortious breaches of competition law by Color Line

AS. It is contended that Color Group AS is jointly and severally liable for the claim by virtue of being the parent company of Color Line AS. Color Line AS and Color Group AS reject the claim. Other than the above mentioned, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer or Guarantor

is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on the Issuer and/or Group's financial position or profitability.

Financial There are no significant changes in the financial or trading position of the Group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published. And there has been no material adverse change in the prospects of the Issuer or Guarantor since the date of its last published audited financial statements.

There are no recent events particular to the Issuer or Guarantor which is to a material extent relevant to the evaluation of the Issuer’s or Guarantor’s solvency. There has been no material adverse change in the prospects of the Issuer or Guarantor since the date of its last published audited financial statements.

There are no known trends, uncertainties, demands, commitments or events that are reasonably

likely to have a material effect on the Issuer's or Guarantor’s prospects for at least the current financial year. There are no material contracts that are not entered into in the ordinary course of the Issuer's or Guarantor’s business, which could result in any group member being under an obligation or

entitlement that is material to the Issuer’s or Guarantor’s ability to meet its obligation to security holders in respect of the securities being issued.


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11. Documents on display For the life of the Registration Document the following documents (or copies thereof), where applicable, may be inspected:

a) the memorandum and articles of association of the Issuer and the Guarantor;

b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the Issuer's request any part of which is included or referred to in the registration document;

c) the historical financial information of the Issuer or, in the case of a group, the historical financial information of the Issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document.

The documents may be inspected at the Issuer’s head office; Bryggegata 3, 0250 Oslo, Norway.


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12. Third part information Color Group AS is the source of information in this Registration Document, if not otherwise indicated. Information which has been sourced from a third party has been accurately reproduced. As far as the Company is aware and able to ascertain from information published by such third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading.

Sources referred to in this Registration Document are as follows:

Source regarding the Company’s statement of competitive position in section 7;http://travelnews.no/2013/01/29/turoperator/over-fire-millioner-color-line-passasjerer/

http://travelnews.no/2013/01/29/turoperator/over-fire-millioner-color-line-passasjerer/


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13. Cross reference list In section 7 of this registration Document, information regarding the Issuer’s competitive position was incorporated with reference to the Issuer’s annual report 2013; page 3. In section 10 of this Registration Document, the financial information is incorporated by reference to the following:


2013 2012 2014 2013

Color Group AS - Parent


Balance sheet Page 14 Page 14 Page 2 Page 2



Color Group AS -

Consolidated


Balance Sheet Page 14 Page 14 Page 2 Page 2




Auditor's report Page 40-41 Page 40-41 Unaudited Unaudited

Information concerning the Issuer’s 2013 figures is incorporated by reference from the Issuer’s Annual Report 2013.

Information concerning the Issuer’s 2012 figures is incorporated by reference from the Issuer’s Annual Report 2012. Information concerning the Issuer’s 2014 semi-annual figures is incorporated by reference from the Issuer’s 2014 semi-annual report. Information concerning the Issuer’s 2013 semi-annual figures is incorporated by reference from the Issuer’s 2013 semi-annual report


Color Line AS 2013 2012 2014 2013

Income statement Att. 1 Att. 4 Page 1 Page 1

Balance Sheet Att. 1 Att. 4 Page 2 Page 2-3

Cash flow statement Att. 1 Att. 4 Page 3 Page 4

Notes Att. 2 Att. 5

Accounting principles Att. 2 Att. 5

Auditor's report Att. 3 Att. 6 Unaudited Unaudited

Information concerning the Guarantor’s 2013 figures is incorporated by reference from the

Guarantor’s Annual Report 2013. Please see attachment 1 and 2 in this Registration Document. Information concerning the Guarantor’s 2012 figures is incorporated by reference from the Guarantor’s Annual Report 2012. Please see attachment 3 and 4 in this Registration Document. Information concerning the Guarantor’s 2014 semi-annual figures is incorporated by reference from the Guarantor’s 2014 semi-annual report. Information concerning the Guarantor’s 2013 semi-annual figures is incorporated by reference the

Guarantor’s 2013 semi-annual report

The Issuer’s and the Guarantor’s financial reports are available at: Annual report 2013 for Color Group AS http://www.newsweb.no/newsweb/search.do?messageId=351451 Annual report 2012 for Color Group AS http://www.newsweb.no/newsweb/search.do?messageId=326385

Semi-annual report 2014 for both Issuer and Guarantor: http://www.newsweb.no/newsweb/search.do?messageId=359870





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Semi-annual report 2013 for both Issuer and Guarantor:


Annual report 2013 for Color Line AS, complete with notes and auditor’s report: Please see attachment 1, 2 and 3 in this Registration Document. Annual report 2012 for Color Line AS complete with notes and auditor’s report: Please see attachment 4, 5 and 6 in this Registration Document



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14. Attachments

1. Color Line AS – Annual Report 2013 2. Color Line AS – Notes to the annual report 2013 3. Color Line AS – Auditor’s report 2013 4. Color Line AS – Annual Report 2012 5. Color Line AS – Notes to the annual report 2012

6. Color Line AS – Auditor’s report 2012 7. Color Group AS – Articles of association 8. Color Line AS – Articles of association

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