A N N U A L R E P O R T 2 0 1 3

www.odfjell.com/movie

CONTENTs

2 FinancialCalendar 3 MissionStatement 6 HistoricTimeline 8 CEO’sReport 9 ACenturyofShippingandStoringAnythingLiquid 10 Highlights2013 12 KeyFigures/FinancialRatios 13 OdfjellManagementGroup 16 ChemicalTransportationandStorage 20 ChemicalTankers 22 LPG/Ethylene 23 ShipManagement 26 TankTerminals 32 SustainabilityReport 36 CorporateGovernance 44 ShareholderInformation 46 FinancialRiskManagementandSensitivities 48 OurWorldwideActivities 50 Directors’Report

AnnualAccounts2013

OdfjellGroup 61 StatementofComprehensiveIncome 62 StatementofFinancialPosition 63 StatementofCashFlow 63 StatementofChangesinEquity 64 NotestotheGroupFinancialStatements

OdfjellSE–ParentCompany 98 StatementofComprehensiveIncome 99 StatementofFinancialPosition100 StatementofCashFlow100 NotestotheGroupFinancialStatements

110 ResponsibilityStatement112 Auditor’sReport114 FleetandTerminalOverview116 Glossary118 OfficesandAddresses

FiNaNCialCalENdar2014

1stquarter2014report 8May20142ndquarter2014report 21August20143rdquarter2014report 13November20144thquarter2014report 12February2015TheAnnualGeneralMeetingisplannedfor7May2014.

Pleasenotethatthefinancialcalendarissubjecttochange.ChangeswillbereportedtotheOsloStockExchange.

Odfjellshallbealeading,preferredandprofitableglobalprovideroftransportationandstorageofbulkliquidchemicals,acids,

edibleoilsandotherspecialproducts.

Weshallbecapableofcombiningdifferentmodesoftransportationandstorage.

Weshallprovideourcustomerswithreliableandefficientservices.

Weshallconductourbusinesstohighquality,safetyandenvironmentalstandards.

Mission stateMent

5 4

www.odfjell.com/movie

5

Through100yearsWe’veunfoldedourstoryIneverycorneroftheworldShippingandstoringAnythingliquidEnablingmoderndaylife

ThisisourOdfjell

7 6

1890CaptainBerentDanielOlsenmovestoBergenwithhisfamilytobecomepartofmodernshipping:steamandsteel.

191417November:ThefirstjointOdfjellshipowningcompanyisformallyregistered,ASDSBirk.

1915TheOdfjellbrothers

incorporateASRederietOdfjell.

1921OdfjellmakesabriefentryintothetankertradewiththeSSVaarli,rebuiltasatanker.

1938Odfjellmakesasmallre-entryintothetankertradewiththenewbuildingMTLind.

1946BowisusedforthefirsttimeasthenameprefixonanOdfjellvessel.

1940WW2:TheOdfjellfleetissplit,threeshipsinhomewaters,fouronhighseas.Homefleetsuffersdevastatinglosses.

1940

1980CooperationwithWestfal-LarsenisstrengthenedthroughtheestablishmentofOWLTankers.

1983OpeningoftheBaytankterminalinHouston.

1986Storliislistedon

OsloStockExchange.

late1980sFilipinocrewstartsbeingemployedonourships.

1990NCCofSaudi-ArabiareplacesWestfal-Larsenasourmainchemicaltankerpartner.

1992AcquisitionofminorityshareintheVopakTerminalinNingbo.

1980 1990

2003OdfjellAcademytrainingcentreisestablishedinSubicBay,thePhilippines.

2004FleetAsiaisestablishedwithshipmanagmentofsomevesselsoutofSingapore.

2003-2007ThethirdPolandclass:deliveryofeight40,000dwtfullystainlesssteelchemicaltankers.

2005

2005OdfjellTerminals(Jiangjin)(China).

2007OiltankingOdfjell

Terminals(Oman).

2007AnnualgrossrevenuesexceedUSD1billionforthefirsttime.

2008OdfjellPhilippinesInc.isestablished.

1900

7

1950MostOdfjellshipsaredrycargolinervessels,butsmallspecialisedtankersbecomeincreasinglyimportant.

1960Odfjelltakesdeliveryoftheworld’sfirststainlesssteeltanker,MTLind.

1963DanOdfjellestablishesMindeChartering,Odfjell’sownmarketingorganisation.

1969OpeningofthefirstOdfjelltankterminal,TAGSAinBuenosAires.

1950 1960 1970

1973Thebusinessissplitintotwoparts:ASRederietOdfjellforshipping,andOdfjellDrillingforoffshoreoilexploration.

1973OpeningofthenewOdfjellheadquartersatMinde,Bergen.

1979TheCompany

issplitintotwoindependent

parts,oneforeachbranchof

thefamily.

1994EstablishmentofOdfjellTerminals(Dalian).

1998CompanynameischangedfromStorlitoOdfjell.Newgraphicallayoutandnewlogo.

1975Deliveryofthefirstof12

Polishbuiltchemicaltankers.

1999Ventureintotheiso-containerbusiness.

1994Deliveryofthefirstof16state-of-the-artstainlesssteelchemicaltankers,theKværnerclass.

1999ThesecondPolandclass:deliveryoffour6,000dwtfullystainlesssteelchemicaltankers.

2000TheBotlekTankTerminalinRotterdamisacquired,renamedOdfjellTerminals(Rotterdam).

2000OdfjellTankersmergeswithSeachem,thuscreatingthepremierdeep-seachemicaltankeroperatorintermsoftonnage.

2000

2001OdfjellTerminalsbecomespartnerinOiltankingOdfjellTerminal(Singapore).

2002OdfjellTerminalsbecomespartnerinOdfjellTerminals(Korea).

2010StartingconstructionofanewterminalinCharleston(USA).

2011PartnershipwithLindsayGoldbergisestablishedfortheterminalbusiness.

2011SigningupfortheUnitedNationsGlobalCompact.

2012Re-enteringthegassegment

throughtheestablishmentofOdfjellGasCarriers.

2010

2012NoordNatieOdfjellTerminals(Belgium)andOdfjellNangangTerminals(Tianjin)(China).

2013Deliveryoftheworld’s

largestchemicaltanker,BowPioneer.

2013OdfjellTerminals

Quanzhou(Fujian)(China).

2014Celebratingour

100yearanniversary.

2014

9 8

Contrary to expectations, 2013 did not provide a much needed recovery. the chemical tanker market showed signs of improvements during the first half of the year. From the middle of the summer however, this trend stopped to some degree, causing stagnation and lower earnings. adding to the negative trend, particularly towards the end of the year, were continued high fuel costs combined with port congestions and a lot of bad weather; causing delays and inefficient operations.

2013wasourfirst fullyearofoperations in theLPG/Ethylenemarket.Withonlytwo9,000cbmvessels,OdfjellGas'exposuretochangingmarketconditionshasturnedoutabiggerchallengethananticipatedattheoutset.Theeconomicresultsfortheyearasawholetherefore,endednegative.Ourorderingoffour17,000cbmshipswithethylenecapacityhasbroughtstrongerinterestinourventurebothbycustomers,investorsandpotentialpartners.Weremaincommittedtherefore,inourplanstodevelopOdfjellGasintoamajoroperatorinthehandy-sizesegmentoftheLPG/Ethylenemarket.

Despiteputting inmuchhardworkandconsiderableresources,manyofourlong-termchallengesatOdfjellTerminals(Rotterdam)(OTR)remainedunsolved.Intheinterimwecontinuesufferingsubstantiallossesatthis,ourbiggesttankterminal.Althoughhavingmadeconsiderableprogressandgraduallygettingtogripswiththesituation,wehavetoadmitthatithasbecomeextremelychallenging;primarilyduetomeasuresneededtocomplywithnewandstricterregulatoryrequirements,butalsobecauseofchangingmarketconditions.Bothrecentandcurrentactivitiesareineffectallaboutplanningandsettingthestageforanewfuturefortheterminal.Mostofourotherterminalshavebeenoperatingsatisfactorily,bothfromaQHSEandfinancialperspective.Weareparticularlypleasedwiththefactthattheconstructionofourtwonewterminals,inCharleston,USAandinNangang,nearTianjin,China,hasprogressedaccordingtobudgetsandschedules,andmost importantly,withoutanyinjurytopersonnelorcontractors.

When it comes to QHSE in general, 2013 took us intherightdirectionascomparedtopreviousyears.OurperformanceasmeasuredbyourmanyKPIs,remainedmixed,buttheoveralltrendwasclearlypositive.Thishascomeasaresultofstrongeffortsovermanyyearsandnotonlylastyear’sactivities,althoughsomeofthenewinitiativessuchastheintroductionofourRoadmaptoOperationalExcellence,ShipManagement’sLeadershipandFollowershipDevelopmentProgrammeaswellasourfirstcorporatewideannualSafetyDayallhavemadeapositiveimpactonourgeneralsafetyattitudeandawareness.

Irrespectiveofreason,weseemtobeontherighttrackandIamconfidenttherefore,thattheorganisationissetformakingfurtherimprovements.

Withnorecovery,2013willgointohistoryasthefifthyearinarowofloss-making.Duringthelastthreeyearswehavepredictedanupturnofthemarketsinwhichweoperate,andforthatreasonwehaveelectedtokeepourfleetandorganisationbasicallyintacttobewellpreparedforincreasedactivity.Currentsurpluscapacityintermsofavailabletonnagehowever,duetotheoverbuildingintheperiod2003to2010,isseeminglylargerthanearlieranticipated,notleastbecauseofunderutilisationoftheships.Theresulttherefore,isthatitwilltakelongerthananticipatedforthemarkettoreachasatisfactorybalance.

Inthemeantime,signingofcontractsforconstructionofnewshipsisintensifyingandhassofarbroughttheorderbookofchemicaltankerstomorethan10%oftheexistingfleetascomparedtolessthan7%onlyayearago.Weareconcernedthatmoneyseeminglysoeasilyfindsitswaytothebuildingofnewtonnage,particularlysoinviewofsuchcontractingofshipsbeingdoneonthebackofstilldepressedmarkets.Overalllong-termprospectshowever,remainfavourablewithanunderlyinggrowthindemandforourshippingservices,althoughnotassoonasweexpectedatthistimelastyear.

Ourterminalbusinesscontinuesdevelopinginapositivedirection,notleastwithourexcitingnewprojectsinChina.Althoughstillaconsiderableconcerntous,IamconfidentthatwewillbeabletobringOTR,ourRotterdamtankterminal,uptorequiredstandardwithinreasonabletime.Thiswillhaveaverypositiveimpactonouroveralltankterminalresults.However,alsowithintankterminalsweseeapotentialforfurtherimprovements.

Consequently,wehavetocontinuedevelopingandfurtherimprovingthewayweoperate,intermsofsafety,efficiency,qualityandcosts,inallaspectsofourbusiness;includingshipping,tankterminalsandstafffunctions,tomakesureweremainfullycompetitiveandthus,readyforthenext100yearsofourCompany'shistory.

sTiLL NO REcOvERy

Jan arthur haMMerPresident/CEO

9

odfjell se (odfjell or the Company) is a leading company in the global market for the transportation and storage of chemicals and other specialty bulk liquids. originally established in 1914, the Company pioneered the develop-ment of the chemical tanker trades in the mid-1950s and the tank storage business in the late 1960s. odfjell owns and operates chemical tankers and LPG/ethylene carriers in global and regional trades, as well as a joint venture network of tank terminals.

Odfjell’sbusinessisanimportantcontributortoindustrialandsocialdevelopmentaroundtheworld.Ourcorebusi-nessisthetransportationandstorageoforganicandinorganicbulkliquidchemicals,acids,animalfats,edibleoils,potablealcohols,LPG/Ethyleneandcleanpetroleumproducts.Theseimportantingredientsandrawmaterialsforeverydaylifecanbefoundinproductslikemedicines,medicalequipment,buildingmaterials,cosmetics,food,textiles,carsandplastics.

our strateGY

Odfjell’sstrategyistomaintainitspositionasaleadinglogisticsserviceproviderwithcustomersacrosstheworld,throughthesafeandefficientoperationofdeep-seaandregionalchemicaltankers,LPG/Ethylenecarriersandtankterminalsworldwide.

our CheMiCaL tanKers

Odfjellhasunprecedentedexperienceofdeep-seatrans-portationofchemicalsandotherliquids.Ouroperationsarefullyintegrated,within-housefunctionsforchartering,operationandshipmanagement.OurmajortradelanescovertheUS,Europe,Asia,India,theMiddleEastandSouthAmerica.Attheendof2013Odfjell’ssophisticatedfleet

consistedof81ships,includingowned,time-charteredandcommerciallymanagedvessels.TheCompanyalsohasfournewbuildingsonorder.Thetotalcapacityofthecurrentfleetisaround2.2milliondwt.ThechemicaltankerbusinesspostedagrossrevenueofUSD1,028millionin2013.

our LPG/ethYLene Carriers

In2012Odfjellre-enteredtheLPG/EthylenemarketandestablishedthecompanyOdfjellGasAS.ForthetimebeingitownsandoperatestwoLPG/Ethylenecarriersof9,000cbmeach.Thecompanyalsohasfournewbuildingsonorderaswellasoptionforuptoadditionalfourvessels.Odfjell’sstrongbrandnameandglobalnetworkofbranchofficesprovidearobustcompetitiveedgeforfurthergrowthwithinthissegment.

our tanK terMinaLs

Ourterminaloperationsyieldsynergieswithourtransporta-tionactivities,andimprovequalityandefficiencyacrosstheentiretransportationchain.ThetankterminalbusinesscontributesstablerevenuesfortheCompany’soverallresults.Ourtankterminaloperationsalsoofferopportuni-tiestodevelopnewmarketswheretheinfrastructureforspecialisedbulkliquidsislimited.Odfjellhasinvestmentsin11operationalpart-ownedtankterminalsintheNetherlands,Belgium,theUSA,Singapore,SouthKorea,Oman,ChinaandIran.InadditiontheOdfjellNangangTerminals(Tianjin),China,iscurrentlyunderconstruction,andisexpectedtobecomeoperationalinthefourthquarterof2014.TheCompanyhasalsoaprojectedterminalinFujian,China.TheCompanyalsocooperateswith11terminalsinSouthAmericaandoneinCanada.Thesetankterminalsarepartlyownedbyrelatedparties.TheterminalbusinessgeneratedagrossrevenueofUSD129millionin2013.

a CenturY oF shiPPinG anD storinG anYthinG LiQuiD

GROSSREVENUE/EDITDAPERyEARASSETS/EQUITyPERyEAR

TotalassetsEquity

GrossrevenueEBITDA

usdmilliON usdmilliON

0

200

400

600

800

1000

1200

1400

1600

04 05 06 07 08 09 10 11 12 130

500

1000

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04 05 06 07 08 09 10 11 12 13

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hiGhLiGhts 2013

FinanCiaL PerForManCe

•GrossrevenuesofUSD1,165million•EBITDAofUSD117million•Operatingloss(EBIT)USD75million•NetlossofUSD108million

asset DeVeLoPMent

InMarchwetookdeliveryofBowNangang,a9,000dwtstainlesssteeltanker,thethirdandfinalnewbuildingfromtheChongqingChuandongyardinChina.

InMaywepurchasedBowEngineer,a30,000dwtvesselwith28stainlesssteelcargotanks.Thevesselwasbuiltin2004andhasbeenontime-chartertoOdfjellsince2006.

InJunewetookdeliveryofBowPioneer,theworld’slargestchemicaltanker.Thevessel,whichwasdeliveredfromDaewooShipbuildingandMarineEngineeringinSouthKorea,is75,000dwt,andhas30coatedcargotankswithatotalcargocapacityof86,000cbm.

WitheffectfromJune,andaftermanyyearsofco-operation,OdfjellandNationalChemicalCarriers(NCC)agreedtodiscontinuetheirjointpoolof40,000to45,000dwtvessels.Thedecisionwaspromptedbydifferentstrategiesgoingforward.However,thepartnershipcontinueswithBowPioneer,a75,000dwtcoatedtanker,inajointpoolwithitssistervesselownedbyNCC.

InSeptemberOdfjellsignedshipbuildingcontractswithNantongSinopacificOffshore&EngineeringCo.,LtdfortheconstructionoffourLPG/Ethylenecarriersof17,000cbmeach.DeliveriesarescheduledbetweenOctober2015andMay2016.Wehavesecuredoptionsfordeliveryofuptofouradditionalgascarriers.Thisnewbuildingorderisanimportantstepinourstrategytogrowandbecomeasignificantoperatorinthegasmarket.

InNovemberOdfjell,togetherwithour50/50ChileanjointventurepartnerCSAV,purchasedBowAndino,renamedBowCondor(16,121dwt,built in2000),whichuntilthepurchasewasonalong-termtime-chartercontracttoOdfjell.InDecemberweacquiredBowSantos,a20,000dwtvesselwith22stainlesssteeltanksbuiltin2004.

Thefour46,000dwtcoatedchemicaltankers,currentlybeingbuiltatHyundaiMipoDockyardinSouthKorea,willbedeliveredin2014.

WitheffectfromJanuary2014,OdfjellandEuroceanicaagreedtodissolvetheirpoolofstainlesssteeltankerstrad-ingintheBaltic,NorthwestEuropeandtheMediterranean.Wewillcontinuetradingourvesselsinthisareaunderourformername‘OdfjellEuropeAS’.

Asapartofthefleetdevelopmentprogramme,Odfjellhassoldtwovesselsbuiltin1988forrecycling.ThevesselshaveGreenPassports,andthebuyersareresponsibleforensuringthattherecyclingyardsubmitsaworkingplaninaccordancewithIMOguidelinesforshiprecycling.Inaddition,twooldervesselsweresoldtothirdparties.

During2013weenteredintotime-charteragreementsfortenvessels,onecoatedandninestainlesssteel,withtermsrangingfromonetothreeyears.Atthebeginningof2014wealsoenteredintoatime-charteragreementforonestainlesssteeltankerandoneLPGcarrierof35,000cbm.

InJuneweconcludedthetransactionwithLindsayGoldbergtoexpandourexistingpartnershiptoincludepracticallyalltankterminalassets.Thenewglobalpartnershipallowsustopursueagrowthagendaforourterminalbusiness.

InJunewealsosignedanagreementtoenterintoa50/50jointventurewiththeFounderGroupChinaforthedevelop-mentofapetrochemicaltankterminalinQuanzhou,FujianProvince,China.OdfjellTerminalshasacquiredfromtheFounderGroup,a50%equityshareintheexistingFujianFangtongTerminalsCoLtd.Theobjectiveistoconstructanewtankterminalwhichwewillmanageandoperate.

TheterminalconstructionprojectatCharleston,USA,wascompletedinDecember,therebymakingtheinitial79,491cbmavailableforservice.WehavealsosignedaLetterofIntenttopurchaseChem-MarineCorporationwhichcontrols10.2hectareoflandadjacenttoourterminalinCharleston.

OurterminalprojectinTianjin,China,isprogressing,withconstructionplannedforcompletionbythefourthquarter2014.Constructionofafurther30,800cbmofstainlesssteeltanksatourterminalinHouston,USA,iswellunderway,andisexpectedtobecompletedbytheendofthesecondquarter2014.Thisexpansionwillbringtotalcapacityattheterminalto362,134cbm.

share inForMation

Attheendof2013theOdfjellAsharesweretradingatNOK41(USD6.74),up71%fromNOK24(USD4.29)atyear-end2012.TheOdfjellBsharesweretradingatNOK39.50(USD6.50)attheendof2013,up74%fromNOK22.70(USD4.06)atyear-end2012.

Bywayofcomparison,theOsloStockExchangebenchmarkindexincreasedby24%,themarineindexby61%andthetransportationindexby57%duringtheyear.Asof31December2013OdfjellhadamarketcapitalisationofaroundNOK3,905million(USD643million).

11

hiGhLiGhts 2013

13 12

KeY FiGures/FinanCiaL ratios

1.Operatingresultbeforedepreciation,amortisationandcapitalgain(loss)onnon-currentassets.2.Operatingresult.3.Netresultallocatedtoshareholders'equitybeforeextraordinaryitemsdividedbytheaveragenumberofshares.4.Netresultallocatedtoshareholders'equitydividedbytheaveragenumberofshares.5.Netresultplusinterestexpensesandextraordinaryitemsdividedbyaveragetotalassets.6.Netresultplusinterestexpensesdividedbyaveragetotalassets.7.Netresultplusextraordinaryitemsdividedbyaveragetotalequity.

8.Netresultdividedbyaveragetotalequity.9.Operatingresultdividedbyaveragetotalequityplusnetinterest-bearingdebt.10.Shareholders'equitydividedbynumberofsharesper31.12.11.Bankdepositsandsecuritiesincludescashandcashequivalentsandavailable-for-saleinvestments.12.Interest-bearingdebtlessbankdepositsandsecurities,dividedbycashflowbeforecapitalgain(loss)onnon-currentassets.13.Currentassetsdividedbycurrentliabilities.14.Totalequityaspercentageoftotalassets.

*)Extraordinaryitemsareretroactivetaxin2007,2008,2009and2010. FiguresfromprofitandlossstatementareaccordingtoInternationalFinancialReportingStandards(IFRS). Historicalfigurespersharehavebeenadjustedforpastbonusshareissuesandtheshare-splitsin2004and2005. Profitandlossfigureshavebeenadjustedfordiscontinuedoperationearlierthanyear2011. Balancesheet2012and2011havebeenadjustedforpensioncorridor.

oDFJeLL GrouP Figures in 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

FroM stateMent oF CoMPrehensiVe inCoMeGrossrevenue USDmillion 1165 1212 1154 1048 1058 1274 1083 958 932 828EBITDA1) USDmillion 117 93 113 94 99 209 255 196 212 152Depreciation/impairment USDmillion (207) (132) (122) (124) (119) (122) (119) (103) (92) (86)Capitalgain(loss)onnon-currentassets USDmillion 16 (4) 31 (6) 44 53 25 15 14 7EBIT2) USDmillion (75) (43) 21 (36) 11 140 159 125 148 88Netfinancialitems USDmillion (39) (68) (35) (30) (28) (43) (55) (38) (25) (6)Netresultfromdiscontinuedoperation USDmillion – – 288 33 30 34 27 20 16 16Netresultallocatedtoshareholders’equitybeforeextraordinaryitems*) USDmillion (108) (111) 269 (79) 11 131 130 116 127 94Netresultallocatedtoshareholders’equity USDmillion (108) (111) 269 (79) 121 163 (10) 116 127 94Netresult USDmillion (108) (111) 269 (79) 121 163 (10) 116 128 95Dividendpaid USDmillion – – 14 – 12 34 43 72 60 53

FroM stateMent oF FinanCiaL Position

Totalnon-currentassets USDmillion 2002 1993 2140 2195 2256 2226 2048 1815 1656 1568Currentassets USDmillion 357 576 388 385 442 359 331 374 300 260Shareholders’equity USDmillion 759 908 973 766 901 715 666 702 692 639Minorityinterests USDmillion – 7 6 6 5 6 6 6 – 4Totalnon-currentliabilities USDmillion 1298 1141 1244 1356 1475 1540 1362 1225 1008 951Currentliabilities USDmillion 302 514 305 451 318 324 343 256 255 244Totalassets USDmillion 2360 2569 2528 2580 2699 2585 2379 2189 1956 1872

ProFitabiLitYEarningspershare-basic/diluted-beforeextraordinaryitems3) USD (1.36) (1.37) 3.43 (0.46) 0.13 1.56 1.56 1.38 1.47 1.09Earningspershare-basic/diluted4) USD (1.36) (1.37) 3.43 (0.99) 1.42 1.95 (0.12) 1.38 1.47 1.09Returnontotalassets-beforeextraordinaryitemsa)5) % (2.3) (2.3) 12.4 0.4 2.3 8.2 8.5 8.2 8.6 6.9Returnontotalassets6) % (2.3) (2.3) 12.4 (1.2) 6.5 9.5 2.0 8.2 8.6 6.9Returnonequity-beforeextraordinaryitems*)7) % (12.9) (11.6) 30.6 (4.2) 1.4 18.6 19.0 16.6 19.2 15.4Returnonequity8) % (12.9) (11.6) 30.6 (9.4) 14.9 23.3 (1.5) 16.6 19.2 15.4Returnoncapitalemployed9) % (3.5) (2.0) 2.5 0.8 3.6 10.2 12.0 9.5 11.6 8.4

FinanCiaL ratiosAveragenumberofshares million 79.39 80.60 78.56 79.29 85.22 83.81 83.34 84.23 86.77 86.77Basic/dilutedequitypershare10) USD 9.67 10.46 12.71 9.75 11.00 8.24 8.00 8.41 7.98 7.36SharepriceperAshare USD 6.74 4.29 5.99 9.23 9.03 6.22 16.47 18.34 20.26 17.54Interest-bearingdebt USDmillion 1350 1221 1246 1527 1576 1500 1347 1293 1037 1000Bankdepositsandsecurities11) USDmillion 152 158 180 107 185 193 165 242 190 233Debtrepaymentcapability12) years 14.1 45.1 2.8 11.4 10.6 6.0 4.9 4.8 3.8 4.1Currentratio13) 1.2 1.1 1.3 0.9 1.4 1.1 1.0 1.5 1.2 1.1Equityratio14) % 32 36 39 30 34 28 28 32 35 34

otherUSD/NOKrateatyear-end 6.08 5.59 6.01 5.85 5.76 7.00 5.40 6.27 6.76 6.04Employeesatyear-end 3352 3540 3761 3796 3707 3690 3634 3487 3296 3416

13

oDFJeLL ManaGeMent GrouP

Morten nYstaDsenior Vice President, odfjell tankers as

MrNystadjoinedOdfjellin1980,andhasheldanumberofmanagerialpositionsintheCompany’scharteringdivisioninBergenandatotheroverseaslocations.In2010hebecameSVPOdfjellTankers.MrNystaddoesnotownanysharesoroptions.

heLGe oLsensenior Vice President, ship Management

MrOlsenjoinedOdfjellin2000.PriortothisheheldmanagementpositionsinOdfjell’sShipManagementdivisionsinBergenandSingapore,andalsoservedintheRoyalNorwegianNavy.In2006hebecameSVPShipManagement.MrOlsendoesnotownanysharesoroptions.

haraLD FotLanDsenior Vice President, Corporate services and support

MrFotlandjoinedOdfjellin2010,havingpreviouslybeenVicePresidentofthemarineinsurancecompanyGardAS.HehasalsoheldseveralpositionswithintheRoyalNorwegianNavy.MrFotlanddoesnotownanysharesoroptions.

Knut hoLsensenior Vice President, odfjell Gas Carriers as

MrHolsenhasbeenemployedbytheCompanysince1986,andhasheldvariouspositionswithinOdfjellTankers.HewasformerlyVPCharteringMiddleEast/India&AfricabeforebeingappointedSVPforthenewlyestablishedOdfjellGasCarriers.MrHolsendoesnotownanysharesoroptions.

terJe iVersensenior Vice President Finance/Chief Financial officer

MrIversenjoinedOdfjellin2011.HewaspreviouslyCFOofBergenGroup.HehasalsoheldvariousmanagerialpositionsatOdfjellDrillingandPwC.MrIversendoesnotownanysharesoroptions.

toraLF sØrenessenior Vice President, Quality, health, safety and environment

MrSøreneshasbeenemployedbytheCompanysince1987.AswellasservingasVPRiskManagementatOdfjell,healsohasextensiveexperienceasaCaptainintheOdfjellfleet.MrSørenesbecameSVPQHSEin2012.MrSørenesowns11,000Asharesandnooptions.

Jan arthur haMMerPresident/Chief executive officer

MrHammerhasworkedforOdfjellsince1985.HehasheldvariousmanagementpositionsintheCompany,bothincharteringandtankterminalactivities,beforebeingappointedPresidentandCEOin2009.MrHammerowns23,200Bsharesandnooptions.

tore JaKobsensenior Vice President, Corporate investments

MrJakobsenjoinedOdfjellin2005,havingformerlybeenPresidentandCEOofWestfal-Larsen&Co.MrJakobsendoesnotownanysharesoroptions.

DaVe eLLisPresident, odfjell terminals bV

MrEllishasbeenwiththeCompanysince1996whenhewasappointedCommercialManagerforOdfjellUSA.In2005,hewaspromotedtoVicePresident–CommercialforbothshippingandterminalsinHouston.In2007hewasappointedPresidentofOdfjellUSA,andin2013hewasappointedPresidentofOdfjellTerminalsBV.MrEllisdoesnotownanysharesoroptions.

Fromleft:KnutHolsen,HelgeOlsen,DaveEllis,ToreJakobsen,TerjeIversen,JanA.Hammer,MortenNystad,HaraldFotlandandToralfSørenes.

15 14

PURPOsEour

Ourbusinessisanimportantcontributortoindustrialandsocialdevelopmentaroundtheworld.Ourcorebusinessisthetransportationandstorageoforganicandinorganicbulkliquidchemicals,acids,animalfats,edibleoils,potablealcohols,LPG/Ethyleneandcleanpetroleumproducts.Theseimportant ingredientsandrawmaterialsforeverydaylifecanbefoundinproductslikemedicines,medicalequipment,buildingmaterials,cosmetics,food,textiles,carsandplastics.

15 14

15

EVERyyEAR

500ODFJELLCARRIESMORETHAN

VARIOUSPRODUCTS

ORDINARyTANKER

6W

6P

5W

5P 4P

4W

3P

2W

2P

1W

1P

3W

12WS

13WP

13C

13WS

12CS

12CP

12WP 11WP

11C

11WS 10WS

10CS

10CP

10WP 8WP

8C

8WS

6WP

6C

6WS

5WP

5C

5WS7WS

7CS

7CP

7WP

9WS

9CS

9CP

9WP 4WP

4C

4WS

2WP

2C

2WS

1CP

1CS3

WS

3CS

3CP

3WP

DT2P DT1P DT2P DT1P

DT2P DT1P DT2P DT1P

ODFJELL'SSOPHISTICATEDMULTI-CARGOTANKER

6.9%Odfjell6.5%Stolt-Nielsen4.8%FairfieldIino4.6%MilestoneTankers3.7%Navig8Chemicals2.3%MISC2.2%Eitzen13.0%Othermajors55.9%Others

ThEdEEp-sEaChEmiCalTaNkErFlEET

Source:Odfjell

54.3% Odfjellownedships7.8% Bare-boat1.5% Shipsonfloatingratetime-charterrate32.8% Shipsonfixedratetime-charterrate2.7% 3rdPartyPoolParticipant0.9% GasCarriers

ThEOdFjEllFlEETdisTribuTiON(CHEMICALTANKERS)

Source:Odfjell

15

17 16

Chemicals are an integral part of modern life, and most industries now depend on products derived from such com-modities. the sector has enjoyed solid growth worldwide for many years. Developing economies around the world are fuelling major increases in both consumption and production of chemicals.

Thelargestchemicalsegment,bothintermsoftotalvol-umesandproductdiversity,ispetrochemicals.Historically,productionofpetrochemicalswasbasedintheUSAandEurope.However,productioncapacityhasgraduallybeengrowingintheFarEast,SouthAmerica,SouthAfrica,andtheMiddleEastinparticular.Inrecentyears,Chinahasdevelopedintoamajorchemicalproducerandgraduallyalsoanexporter.Newplantsintheseregionsaremostlydesignedfortheproductionofbasechemicalsor‘buildingblocks’,whilsttheproductionofderivativesandspecialtychemicalsisstillmostlyconcentratedintheUSAandEurope.However,manufacturingcompaniesintheMiddleEastareinvestingindevelopingtheirbusinessfurtherdownstream.

Chemicalproductionfacilitieshavetraditionallybeenlocated in areas with easy access to raw materials.Historically,muchpetrochemicalproductionwascoal-based.Naphtha,aderivativefromcrudeoilrefining,isanotherrawmaterialthatiswidelyused,particularlyinAsiaandEurope.Ethyleneandpropylene,thetwomainbuildingblocksforthechemicalindustry,canbederivedbothfromnaphthaandfromnaturalgas.Newplantsarebeingbuiltinareaswherenaturalgasisreadilyavailable,whichexplainsthemassiveincreaseinproductioncapacityintheMiddleEastandinrecentyearsalsointheUSAasaresultoftheboomingshalegasindustry.

Thepetrochemicalindustryistrulyinternational,withbothproductionandconsumptioninallregionsoftheworld,andmanypetrochemicalcompanieshavebecomeglobalintheirmarketapproach.Asaresult,thepetrochemicalindustryhasaconstantdemandforlogisticsservicessuchastransportationandstorage.Mostshippingand

storagecompaniestodayoperatelocallyorwithinacertainregion,orspecialiseinoneparticulartypeofservice,e.g.bulkliquidstorage.Onlyafewhavetheabilitytoofferamultiplicityofdifferentservicesonaglobalbasis.

Odfjellisoneofthefewcompaniesofferingaworldwidenetwork of both bulk shipping and storage services.Operatingthroughofficesatcentrallocationsaroundtheworld,Odfjellisamajorplayerinthechemicaltankerseg-ment,operatingallthemajortradelanes.Whilechemicaltankersrepresentonlyasmallpercentageofthetotalworldfleetofocean-goingtankers,forwhichthemaincargoiscrudeoil,thereisneverthelessaconsiderableinterplaybetweenvarioustankersegments.Asfarasthechemicaltankermarketisconcerned,handysizeandmedium-rangeproducttankersof35,000–50,000dwtarefrequentlyemployedforthecarriageofcleanpetroleumproductssuchasnaphtha,gasoline,dieselandgasoil.

Chemicaltankersaregenerallydesignedandconstructedtohandleseveraldifferenttypesofcargosimultaneously,andthereforeusuallycombinedifferentcustomers’require-mentsoneachvoyage.Eachproductandeachcustomer’sconsignmentarealwayskeptsegregated.Mostchemicaltankersfallintooneoftwocategories:shipswithallorthemajorityofcargotanksmadeofstainlesssteel,andshipswithonlycoatedtanks,i.e.mildsteeltanksthathavebeenpaintedwithprotectivecoating,usuallybasedonepoxyorzinc.Therearealsochemicaltankerswithtanksprotectedbypolymer-basedcoatings.

Shipswithcoatedtankstypicallycarrycommodity-typechemicals,cleanpetroleumproducts,vegetableoilsandsimilarlessdemandingcargoes.Shipswithcargotanksmadeofstainlesssteelareoftenbuilttohandleahighernumberofdifferentproducts.Thesevesselsareusedforthemostspecialisedtypesofchemicalproducts,whichinadditiontorequiringstainlesssteeltransport,mayalsodemandspecialhandlingintermsoftemperatureandpressurecontrol.Stainlesssteelcargotanksarealsorequiredforcarriageofdifferenttypesofacids.

CheMiCaL transPortation anD storaGe

rawmaTErialsCoal

Gas

Crudeoil

basiCprOduCTsBTX

Ethylene

Propylene

Methanol

Butadiene

dErivaTivEsEDC

Styrene

Glycol

MTBE

Industrialalcohols

Polyester

ENdprOduCTsPaint

Fibres

Plastics

Detergents

Oiladditives

Rubber

ORGANICCHEMICALS

› › ›

17

THECOREDEEP-SEACHEMICALTANKERFLEETForaglobalandlong-termoperatorsuchasOdfjellitisanadvantagetopossessavariedandefficientmixofships,tobeabletoadaptrapidlytochangingmarketrequirements.

Odfjellcarriesseveralhundreddifferentproductseveryyear:organicchemicalssuchasalcohols,acrylatesandaromatics;cleanpetroleumproductssuchaslubricatingoils,vegetableoilsandanimalfats;andinorganicchemicalssuchassulphuricandphosphoricacidsandcausticsoda.

Withafrequentpresenceonallmajortradelanes,Odfjellcanofferuniqueandflexibleservices,allowingcustomerstoshipsmallparcelsof100-150tonnestofullcargoesofup to50,000 tonnes.Byentering intoContractsofAffreightment,thecustomercanplanregularshipmentsinordertomeetrequireddeliverytargets.However,asignificantpartofthecargoescarriedbychemicaltankersisfixedinthespotmarket,oftenbytradingcompaniestakingadvantageofarbitrageopportunitiescausedbycommoditypricefluctuations.

Odfjell’sstrategyinvolvesconsolidationofloadinganddischargingoperationsatcertainkeyhubsforchemicaldistribution.Ourinvestmentsinsmallshipsfortranship-mentpurposes,andintankterminalsatmajorportssuchasHouston,Rotterdam,SingaporeandOnsan,playanimportantroleinthisrespect.Tankterminalsareanintegralpartofthechemicallogisticschain,andtheirservicesconstituteanaturallinkbetweenourtraditionalshippingservicesandinlandtransportationbydifferentmodessuchasbarges,railcars,trucks,ISOcontainersandpipelines.Odfjell’stankterminalshandle,storeanddistributebulkliquidchemicalstoandfromalldifferentmodesoftransportation.

We define a core chemical tanker as:• IMOIIcapacity,fullyoratleastcentretanks• Averagetanksize≤3,000cbm• Commerciallycontrolledbycorechemicaloperator• Chemicalcarrierwith≥50%stainlesssteelcapacity

Source:Odfjell

13.2%12.7%

8.2%8.0%5.8%4.3%4.2%

17.2%26.4%

OdfjellStolt-NielsenFairfield/IinoMilestoneTankersNavig8ChemicalsEitzenMISCOthermajorsOthers

19 18

cHEMicAL TRADEour

19 18

Chemicalsareanintegralpartofmodernlife,andmostindustriesnowdependonproductsderivedfromsuchcommodities.Thelargestchemicalsegment,bothintermsoftotalvolumesandproductdiversity,ispetrochemicals.Thepetrochemicalindustryistrulyinternational,withbothproductionandconsumption inallregionsoftheworld.Weareoneofthefewcompaniesofferingaworldwidenetworkofbothbulkshippingandstorageservices.Operatingthroughofficesatcentrallocationsaroundtheworld,weareamajorplayerinthechemicaltankersegmenttradinginallthemajortradelanes.

19

14 16 18

Basischemicalsandplasticindex GDPindex

ChEmiCalaNdplasTiCmETalCOmmOdiTiEs

Source:IHSChemical

Forecast

08 10 12100

150

200

250

300

350

400

13 14

iNdusTrialmETalCOmmOdiTiEsiNdEx

09 10 11 120

50

100

150

200

250

300

350

COrEdEEp-sEaChEmiCalTaNkErFlEET

Deliveries ScrappedNetfleetgrowth(%)(righthandscale)

OrderbookTobephasedout

19

18,214,989shipped

in 2013

TONNEs

Source:OdfjellperApril2014

07 08 09 10 11 13 14 15 1612 17

0

400

800

1200

1600

2000

-1200

-800

-400

16%

14%

12%

10%

8%

6%

4%

2%

0%

21 20

CharterinG anD oPeration

at the end of 2013 the odfjell fleet consisted of 81 vessels. this includes owned, time-chartered and commercially managed vessels, as well as vessels managed on a pool basis. the deep-sea fleet, currently comprising 60 ves-sels, is operated by odfjell tankers as, a wholly owned subsidiary of odfjell se. odfjell tankers, headquartered in bergen, is represented through overseas offices in 15 countries. Many offices are multipurpose, with commercial, chartering, operational as well as agency duties. Many of the overseas offices are also co-located with, and enjoy close cooperation with, our local terminals.

Thefleetconsistsofavarietyofshiptypesintermsofsize,tankconfigurationandcoating,allofwhichprovidestheflexibilityrequiredbycustomers.Fleet-composition,schedulingandvesseloptimisationarecriticalsuccessfactors.Flexibilityandinterchangeabilityofshipsbetweengeographicalareasandtradelanesareanintegralpartofourbusinessmodel,facilitatedbyourlargeanddiversifiedfleet.

OdfjellTankers’shipstradeworldwide,callingatmajorportsinEurope,theUSA,theAsia/Pacificregion,Africa,theMiddleEastandSouthAmerica.Our14state-of-the-art37,500dwtKværner-builtstainlesssteelchemicaltankers,andoureightfullystainlesssteel40,000dwtchemicaltankersbuilt inPoland,areamongthemostadvancedandflexibleshipsinthemarket,andplayavitalpartintheCompany’sfocusonsafety,efficiencyandservice.Furthermore,wehaveaddedcapacityandflexibilitythroughlong-termtime-chartersofJapanese-built19,900dwtand30,000–33,000dwtstainlesssteelvessels.

Althoughstill ingoodtechnicalcondition,mostofouroldershipsarelessindemandfromcustomers,duetotheirage.Consequently,Odfjellhasdisposedofallcoated1980s-builtships.Areplacementprogrammeisinplace,withfour46,000dwtcoatedvesselsonorderfromHyundaiMipoDockyard,LtdinSouthKorea,allfordeliveryduring2014.Additionalcapacityisconstantlybeingevaluated,includinglonger-termtime-charteringofmoderncoatedtonnage.Odfjelltookdeliveryofits75,000dwtcoatedvesselfromDaewooShipbuildingandMarineEngineeringLtdin2013,thebiggestchemicaltankereverbuilt.Thevessel,BowPioneer,willbesailinginapoolmanagedbyNationalChemicalCarriers(NCC).

Odfjellhasbeenpromotinghighsafetyandenhancedefficiencystandardsonchemicaltankerssincetheinceptionoftheindustry,andthustakesaproactiveapproachtowardsinternationalregulatorybodiesandmajorcustomersinordertoenhancesafety.Inthiscontext,Odfjellcontinues

toaddresskeyissues,suchasthepracticeoftankinerting,andstressestheimportanceof implementingamorecost-efficientandtransparentregimeofshipinspectionandvettingprogrammesonthepartofcustomers.

Whileanincreasednavalescortpresenceandtheintroduc-tionofarmedguardshaveimprovedsecurityintheGulfofAden,shipsarestillsubjectedtoattacksbypirates.OdfjellTankersismonitoringthesituationclosely,andwetakeallnecessaryprecautionstominimiserisks.Thesafetyofcrew,shipandcargoisthefirstpriority.

Portcongestionandexcessivewaiting timeremainaconcernforthechemicaltankerindustry,andporttimestillmakesupadisproportionatepartofmanyvoyages.Ownersareonlypartlyabletocompensateforsuchinef-ficiencythroughthecollectionofdemurrage.Toimproveportefficiency, therebyalsominimisingunnecessaryemissionsfromships,infrastructureonshoremustbefurtherdeveloped.

Throughregionaloperations,OdfjellTankersprovidescus-tomerswithtimely,qualityandsafetranshipmentservicestoandfromportswithrestricteddraftordockfacilities.Consolidationofloadinganddischargingoperationsofourdeep-seashipsisyetanotherimportanttaskperformedbyourregionaloperations.Byreducingthenumberofportsandthustheriskofdelay,OdfjellTankersisabletoofferareliableandeconomicalservicetoitscustomers.

odfjell (uK)Odfjell’sUKofficehascommercialandoperationalrespon-sibilityforthree40,000dwtvessels.

odfjell asiaThefleetoperatedoutofourSingaporeofficeistradedwithinAsia,toandfromAustraliaandNewZealandaswellastoandfromtheMiddleEast/India.All11shipscurrentlyoperatedoutofSingaporearefullystainlesssteel.

odfjell europeOdfjellEuropeoffersregularsailingswithinEurope,includ-ingtheMediterranean.AllfourvesselscurrentlyinthefleetareownedbyOdfjell.

FlumarFlumar,ourfullyownedBrazilianshippingsubsidiaryoperatingoutofSãoPaulo,Brazil,offerstransportationofbulkliquidchemicalsalongtheBraziliancoastandwithintheMercosularea.Thecompanycurrentlyoper-atesfourchemicaltankersandone51,000dwtproducttanker.Together,OdfjellandFlumarprovidecustomerswithsuperiorservicecapabilitiesintheMercosularea.

CheMiCaL tanKers

21

Furthermore,theextensivenetworkoftankterminalsinBrazilandArgentina,partiallyownedbyrelatedpar-ties,addsvalueandbenefitstoitscustomers’logisticsrequirements.

odfjell y VaporesThe50/50jointventureOdfjellyVaporesoperatesoutofSantiago,Chile,withtwochemicaltankersofapproximately16,000dwt.Thevesselsareprimarilyengaged in thetransportationofsulphuricacidalongthePeruvianandChileancoast.

FREIGHTRATES3000MTSEASyGRADECHEMICALS(USD/TONNE)

Houston/RotterdamHouston/FarEast

FREIGHTRATES1000MTSSTAINLESSSTEELGRADECHEMICALS(USD/TONNE)

Houston/RotterdamHouston/FarEast

source: Quincannon Associates, inc source: Quincannon Associates, inc

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 20130

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013

CheMiCaL tanKers FiGures in 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Grossrevenue USDmillion 1028 1066 1056 999 1021 1247 1063 939 915 814

Operatingresultbeforedepreciationandgain(loss)onsaleoffixedassets(EBITDA) USDmillion 98 65 61 59 73 191 242 202 216 159

Operatingresult(EBIT) USDmillion 3 (35) (9) (58) (6) 129 150 106 138 85

Totalassets USDmillion 1625 1634 1439 1593 1398 1462 1504 1424 1321 1146

Volumeshipped 1000tonnes 18215 19546 18500 19303 19414 19622 19502 20658 22156 22614

Numberofshipsper31.12 81 96 98 86 95 93 92 92 93 95

Totaldeadweight 1000tonnes 2273 2684 2717 2352 2603 2460 2391 2362 2393 2447

23 22

LPG/ethYLene

odfjell re-entered the LPG/ethylene market in 2012 by purchasing two LPG/ethylene carriers, bow Guardian and bow Gallant. odfjell Gas as (odfjell Gas), a wholly owned subsidiary of odfjell se, is responsible for in-house commercial and technical management of the vessels.

In2013,OdfjellGascontinuedtoexpanditsgasbusinessbysigningnewbuildingcontractsforfour17,000cbmLPG/EthylenecarrierswithNantongSinopacificOffshore&EngineeringCo.Ltd.,China,fordeliveryin2015and2016.Inaddition,optionsforuptofouradditionalgascarriersofeither17,000cbmor22,000cbmweresecuredfordeliveryin2016-2017.

DeclaringtheoptionswillgiveOdfjellGasafleetoftenofthemostversatileLPG/Ethylenecarriersinthemarket.Thesevesselswillbenefit fromtheirability to loadacombinationofLPG,ammoniaandpetrochemicalgases,includingethylene.

OdfjellGasistargetingacriticalmassofbetween10-15vesselsintheLPG/Ethylenesegment,andthelatestorderwillsecureapositionasasignificantparticipantinthemarketintermsofcubicmetercapacity.

OdfjellGas’businessconceptistocapitaliseonOdfjell’sstrongbrandnameandglobalnetworkofmarketingoffices,aswellasitsuniquecross-overexperiencefromthe specialised chemicals market. The company willbeabletoleverageonOdfjell'sbroad,blue-chipclientportfolio,whichoverlapssubstantiallywithleadingLPGandpetrochemicalcharterers.

LPG38%Ammonia10%Ethylene18%Propylene15%Butadien12%VCM8%

ESTIMATEDDEMANDCOMPOSITIONFORSMALL

SIZEVESSELGROUP

Source:ViaMarAS

0–4years33%5–9years23%10–14years19%15–19years6%20–24years13%25–29years4%›=30years2%

ETHyLENEFLEET-AGEDISTRIBUTION

Source:ViaMarAS

23

shiP ManaGeMent

odfjell ship Management offers a fully integrated service, with fleet management, crewing, risk management and technology support. as ships account for a substantial part of our total fixed assets, it is imperative that the fleet is managed and operated efficiently, assets are protected and values maintained. odfjell ship Management manages or supervises all owned and bare-boat chartered vessels. at the end of 2013, odfjell managed or supervised a fleet of 50 vessels; 48 chemical tankers and two LPG/ethylene carriers.

OdfjellShipManagementemployspersonnelatofficesinBergen,Singapore,Manila,SubicBay,SãoPauloandHouston,whoprovidedirectsupporttoshipsoperatingregionaltradesandshipsinthedeep-seafleet,aswellasprofessionalcrewmanagement.In2013OdfjellShipManagementcontinuedtoreinforceitseffortstodevelopasafetyculturecapableoftakingHealth,Safety,SecurityandEnvironmentperformancetoasustainablyhigherlevel.ForthatpurposeaLeadershipandFollowershipDevelopmentProgrammeforallseafarerswaslaunchedinAugust2013.TheretrospectivetrainingformanagementlevelofficerswillbeconcludedearlyMarch2014afterwhichretrospectivetrainingforallotherrankscommenceswithaviewofhavingtheprogrammefullyimplementedbyMarch2015.

The ship maintenance programme secures safe andefficientoperation,alongusefulworkinglifeandhighsecond-hand values of the vessel. The maintenancestrategyisimplementedthroughourcomputerisedplannedmaintenancesystemsupportedbyanin-housespecialistteam.Awell-structuredtechnicalprojectmanagementteamensurescompliancewithrelevantrulesandregula-tionsaswellasvariousshipperformanceimprovements.

ThesafeoperationofchemicaltankersandLPG/Ethylenecarriersdependsonhighlyqualifiedofficersandcrew.Ourshipsaremainlyregistered inNorway (NIS)andSingapore,andareprimarilymannedbyNorwegianandFilipinomarinerswithextensiveexperience.TheFlumarfleet,whichtradesprimarilyalongtheBraziliancoast,ismannedbyBrazilianmariners.

Odfjellpaysconsiderableattentiontorecruitingqualifiedofficersandcrewmembers,andatanygiventime,morethan150Norwegian,BritishorFilipinomarinersarenormallyemployedastraineesorcadets.

OdfjellShipManagementactivelyappliesriskmanagementprocessestomaintainandimproveperformance.EveryyearOdfjellcarriesoutregularinternalauditsofships

andoffices.CustomersconductinspectionsthroughtheChemicalDistributionInstituteandtheOilCompaniesInternationalMarineForum.Periodicalsurveysarecar-riedoutbyvariousclassificationsocieties,flagstatesandportstates.From2013allShipManagementbranchofficeshavebeenincludedinourregimeofcomplianceaudits. Inaddition,DetNorskeVeritasperformsISMCodeinspectionsofourships’qualitysystems.Whenships or offices report critical situations, accidents,non-conformancesorpossible improvementsthroughoursafetyandimprovementreportingsystem,aproperresponseispreparedandcorrectiveandpreventiveactionsimplemented.During2013,wehaveincreasedthenumberofmanagementreviewsto improveidentificationandfollowupofneededimprovements.Weviewthissystemasaneffectivetoolinourworktoincreasesafetyandtopreventinjuries,pollution,damageandloss.

Thedefinedkeyperformanceindicators(KPIs)havebeenactivelypromoted,measuredand followedupduring2013.Odfjellhasalsoassumedprojectownershipforthe‘ManagingOperationalPerformanceinShipManagement’project.NineNorwegianshippingcompanies,MarintekandDeloittehavejoinedforcestofurtherdevelopandbenchmarkshipmanagementprocessesandsupportingKPIs.

25 24

TERMiNALsour

Ourtankterminalactivitiesarelocatedalongmajorshippinglanesandatimportantlocationsforpetrochemicals,refinedpetroleumproducts,bio-fuelsandvegetableoils.Wefocusnotonlyonlocationsinmaturemarkets,butalsoincreasinglyonportswhicharegrowinginimportanceinselectedrapidlydevelopingnations. Inadditiontobeingprofitableinvestmentsonastandalonebasis,ourtankterminalsalsooffercargo-consolidationprogrammesdesignedtoreducetimeandfuelconsumptioninportforourships.Commercially,thecombinationofshippingandtankterminalsputsOdfjellinauniquepositiontoofferourcustomersincreasedsafety,reliability,productstewardship,efficiencyandimprovedarrivalaccuracytoitscustomers.

25 24

25

5.4 MiLLion cbmstoragecapacity

1 ,451tanksof

storagecapacity

TANk TERMiNALs iN

23 ports25

0

500000

1000000

1500000

2000000

odfjell

term

inals(H

ouston)

odfjell

term

inals(C

harlesto

n)

odfjell

term

inals(Ji

angyin

)

odfjell

term

inals(D

alian

)

odfjell

term

inals(K

orea)

oiltanking o

dfjell

term

inals(S

ingapore

)

oiltanking o

dfjell

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inal(Om

an)

noord n

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dfjell

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TaNksTOragECapaCiTy(cbm)

27 26

odfjell has 11 operational part owned tank terminals at strategic locations around the world. in addition the Company has a terminal currently under construction, and a projected terminal, both in China. the Company also has a co-operation agreement covering 11 tank terminals in south america, plus one in Canada. these tank terminals are partly owned by related parties. in total, our tank terminal network has more than 1,000 employees and 5.4 million cbm of storage space in 1,451 tanks in 23 ports around the world. together with our shipping business, this makes the Company one of the world’s leaders for the transportation and storage of bulk liquids.

Wehaveastrategyofexpandingourtankterminalactivi-tiesalongmajorshippinglanesandatimportantlocationsforpetrochemicals,refinedpetroleumproducts,bio-fuelsandvegetableoils.Wefocusnotonlyonlocations inmaturemarkets,butalso increasinglyonportswhicharegrowinginimportanceinselectedrapidlydevelopingnations.Inadditiontobeingprofitableinvestmentsonastand-alonebasis,ourtankterminalsalsooffercargo-consolidationprogrammesdesignedtoreducetimeandfuelconsumptioninportforourships.Commercially,thecombinationofshippingandtankterminalsputsOdfjellinauniquepositiontoofferourcustomers increasedsafety,reliability,productstewardship,efficiencyandimprovedarrivalaccuracy.Weareexperiencingasteadyincreaseindemandforcargoconsolidationasaresultoftheindustry’songoingpursuitofefficiencyimprovementsalongtheentiresupplychain.

hiGhLiGhts – business DeVeLoPMents

The divestment of 49% of Odfjell’s interest in OdfjellTerminalsAS(OTAS),theholdingcompanyforpracticallyallofOdfjell'stankterminalsactivities,wascompletedinJune2013.OdfjellandLindsayGoldbergLLCnowhavejointcontrolovertheterminalactivitiesworldwidethroughtheirjointinvestmentinOdfjellTerminalsAS.

During2013,OdfjellcompletedconstructionofatankterminalinCharleston,USA.TheprojectinvolvedatotalinvestmentinexcessofUSD90milliontoestablishaninitialstoragecapacityof79,491cbm.

TheconstructionofournewterminalintheBohaiBayregionnearTianjin,China,(throughourjointventurewithTianjinEconomic-TechnologicalDevelopmentArea)startedin2012.Asattheendof2013,thejettyinfrastructurehasbeencompleted,andthreetankpitscomprising137,800cbmarenearingcompletion.

InDecember,OdfjellTerminalsfinalisedtheacquisition

ofa50%interest,fromtheFounderGroup,inanexistingcompanyholdinglandandanexistingjettyinQuanzhou,FujianProvince,China.It istheintentiontoconstructanewtankterminalofabout184,000cbm,whichwillbemanagedandoperatedbyOdfjellTerminals.Currently,feasibilitystudiesandengineeringareunderwaytoprepareforconstructiontostartduring2014.

InJuly,2013,OdfjellTerminalsandGrandPortMaritimeduHavresignedaSiteReservationProtocolforaplotoflandinthePortofLeHavre,France,todevelopabulkliquidterminal.Thefirstphasewillconsistof150,000cbmforstorageofpetrochemicalandpetroleum-relatedproducts.Uponsuccessfulcompletionofthebasicengineeringstageandafinalinvestmentdecision,constructionisexpectedtostart in2015.Theterminalisforecastedtoopeninsecondhalf2017.

InlinewithOdfjellTerminals’strategy,furtherterminalprojectsacrosstheworldareunderevaluation.

oDFJeLL terMinaLs (rotterDaM) bV, the netherLanDs (otr)

Locatedat theheartofRotterdamharbour, themostimportantchemicaldistributioncentreinEurope,OTRhasatotalgrossstoragecapacityofabout1,636,100cbmin281storagetanks.Thetankterminalstoresbothchemicalsandmineraloilproducts.

Inadditiontothestoragebusiness,theRotterdamtankterminalalsorenderstolldistillationservicesthroughitsfullyintegratedbusinessunitOdfjellPetrochemicalIndustrialDistillation(PID).PIDcontrolsalargeshareoftheindependentproductdistillationmarketinNorthwestEurope,andoperatesfourdistillationcolumnswithacombinedtotalannualdistillationcapacityof700,000tonnes,dependingonproductstreams.PIDdistilsbothpetrochemicalsandmineraloils.

TheOdfjellTerminalsMaritiemBV(OTM)siteislocatedalmost directly opposite OTR on the south bank ofRotterdam’s main shipping artery Nieuwe Waterweg,surroundedbytheport’slargestglobal-scalerefineries.

Overall,theRotterdamtankterminalenjoysanextensiveinfrastructure,withfiveberthsfordeep-seatankers,sevenpositionsforshort-seavesselsand14positionsforbarges.Theterminalalsohasextensivefacilitiesforhandlingtrucks,ISOcontainersandrailcars.Thesitehasitsownwastewatertreatmentplant,whichalsoservesthirdparties.

OTRisanimportantdestinationforOdfjellTankersinthe

tanK terMinaLs

27

Amsterdam-Rotterdam-Antwerparea,andourlong-termobjectiveistoconsolidatethetankterminalasoneoftheprimaryhubsforOdfjell’sshippingactivitiestoandfromEurope.

SincethesafetyshutdowninJuly2012,OTRhasbroughtasignificantamountoftankcapacitybackintooperation.Attheendof2013,730,000cbmwasavailableforcom-mercialservice,outofagrosscapacityapprovedforuseof1,040,000cbm.Thegrosstankcapacitythathasnotyetbeenapprovedforcommercialuseisawaitingthecompletionofengineeringworkbeforerecommissioningwillcommence.

In2013theDutchSafetyBoardissueditsreportonthesafetyperformanceoftheterminalintheperiod2000-2012.OTRhastakenonboarditsrecommendations,andinaccordancewithitscommitmenttoRotterdamMunicipality,anumberofimportantimprovementmeasureshavebeenimplemented.During2013,OTRhassubmittedanapplica-tionforarenewedenvironmentalpermit.

For2014,OTRwillcontinuetofocusonbringingtanksbackintooperationandalsotoimproveprocessesandsystemsinordertofurtherimproveoperationalandsafetyperformance.OTRcontinuestodevelopitslong-termbusi-nessplan.Thisplanwillreflecttheregulatoryenvironmentandaddressesfuturebusinessopportunitiesgiventhestrategiclocationoftheterminal.

noorD natie oDFJeLL terMinaLs nV, beLGiuM (nnot)

The Noord Natie Odfjell Terminals, in which OdfjellTerminalsacquireda25%sharein2012,offersauniquecombinationofstorageandrelatedvalue-addedservicesforseveraltypesofliquids.NNOTfocusesmainlyonbulkstorage,withadditionalactivitiessuchastheblending,drumming,packagingandstorageofpackedliquids,aswellasthestorageoftankcontainers.TheterminalhasastrategiclocationinthePortofAntwerpwitheasyaccesstothesea,inlandwaterways,roadsandrailways.

Theterminalboastsawealthofexperienceinthestorage,handlingandpackagingofcommoditiesaswellasnichemarketproducts.With235tanksandatotalcapacityof325,000cbm,NNOTprovidesstorageandrelatedactivitiesforchemicals,liquidsforhumanoranimalconsumption,mineraloils,baseoil,oleochemicalsandbiofuels.NNOToffersawidevarietyoftanks,ranginginsizefrom30cbmto8,300cbm,madeofdifferentmaterialsincludingmildsteel,coatedorstainlesssteel.Thefacilityalsooffersavarietyofdifferenttypesoftankequipment, includinginsulation,steamheating,electricalheatingorhotwaterheating,nitrogeninstallationandvapourreturnsystems.

During2013,NNOTcompleted25,000cbmofitsintotal50,000cbmexpansionofstoragecapacityforoneofitskeylong-termcustomers.Theremaining25,000cbmwillbeavailableforcommercialservicefromthesecondquarter2014.Furthermore,NNOTownsadditionallandadjacenttotheexistingterminalandhasplansforfurtherexpansionofupto105,000cbmoftankcapacity.

oDFJeLL terMinaLs (houston) inC, usa (oth)

HoustonisthemajorinternationalhubfortheimportandexportofchemicalstoandfromtheUSA.OTHisalsothehubforOdfjell’sglobalandregionaltradestoandfromtheUSGulf.TherealisationofsynergiesisalwaysapriorityandthetankterminalhasmultiplesharedcustomerswithOdfjellTankers,whichdemonstratesthebenefitofcargoconsolidationandexpeditedshipmentforallparties.

ThetankterminalinHoustonwascompletedbyOdfjellin1983,andsincethemid-1990shasundergoneaconsider-ableexpansion.Attheendof2013thetankterminalhad100tankswithatotalcapacityof331,334cbm.

Thetankterminalboastsoneofthelargeststainlesssteelstoragecapacitiesofanyindependenttankterminalintheworld,intotal82,033cbm.Thefacilities’unusedlandandexistinginfrastructurestillofferscopeforfurtherexpansion,withpotentialstoragecapacityofaround160,000cbmintheexistingarea.OTHhascommencedconstructionofanewbaycomprisingtenstainlesssteeltanks,withacombinedcapacityof30,800cbm,atitsexistingfacility.

oDFJeLL terMinaLs (DaLian) LtD, China (otD)

OTDstartedoperationin1998,butwasrelocatedfromitsoriginalsitetoDalianNewPortinXingangin2007.Incom-binationwiththerelocation,thetankterminalincreaseditscapacitytoover51tanks,bringingtotalcapacityto119,750cbm.Thestainlesssteelcapacityis18,350cbm.Inrecentyears,thetankterminalhasdeliveredastrongperformanceonthebackoftheexpansionofpetrochemicalactivitiesinNortheastChina.Thetankterminalhasfourberthsforsea-goingtankerswithupto50,000dwtcapacity.ThelocationiswellconnectedbyrailtothevasthinterlandofNortheastChina,andthetankterminalhandlesimpressivevolumesviaitsrailfacilities,whichcanmanageupto120railwagonsconcurrently.

OdfjellTerminalsholds50%ofthesharesinOdfjellTerminalsDalian,whileDalianPortCompanyLtd(PDA),acompanylistedinHongKong,istheothershareholderinthecompany.OdfjellandPDAhavealsojointlyestablishedatrainingacademyforterminaloperatorsforoperationsinChina.

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oDFJeLL terMinaLs (JianGYin) LtD, China (otJ)

OTJislocatedintheJiangyinEconomicDevelopmentZoneonthesouthbankoftheyangtzeRiver,approximately150kmwestofShanghaiand12hoursbyshipupriverfromtheestuary.The99,800cbmterminalbecameoperationalinlate2007andhasexcellentfacilitiesforhandlingawiderangeofpetrochemicalsfromships,bargesandtrucks.OTJcomprises22tanks.Thestainlesssteelcapacityis30,000cbm.TheterminalhasthelargestjettyontheyangtzeRiveratitsdisposal.Intotalthereareeightberthsforthehandlingofdeep-seatankers,coastersorbarges.OTJcanaccommodateupto50,000dwtships.

oDFJeLL terMinaLs (Korea) Co LtD, south Korea (otK)

OTKisstrategicallylocatedinOnsan,themostimportantpetrochemical distribution and transhipment hub inNortheastAsia.Odfjell isamajorcarrierofbulkliquidchemicalsintoandoutofKorea,withasignificantnumberofportcallsandtranshipmentoperationsintheregion.Thetankterminalenteredoperationin2002andhas85tanks,withatotalstoragecapacityof313,710cbm.Aftercompletingasignificantexpansionin2009,OTKfurtherexpandeditscapacityby63,120cbmin2011.

ThemostsophisticatedterminalinOnsan,OTKhasa15,860cbmstainlesssteelcapacity.Thetankterminalownsandoperatessixberthswithuserrightstoanothertwoberthsthatcanhandlevesselsofupto80,000dwt.OTKalsohasmoderndrummingfacilitiesforbreakbulkoperations.Thetankterminalhaslandforfutureexpansion.

OdfjellTerminalsholds50%oftheshares,whilelocalpartnerKoreaPetrochemicalInd.Co.Ltd(KPIC)owns43.6%.Theremaining6.4%shareholdingisheldbytwootherKoreancompanies.

oiLtanKinG oDFJeLL terMinaL sinGaPore Pte LtD, sinGaPore (oots)

Asoneofthebusiestportsintheworld,SingaporeplaysamajorroleinthedistributionofpetrochemicalsinSoutheastAsia.Singaporealsohasahighconcentrationofrefinerycapacity,aswellaslargeanddiversifiedchemicalproduc-tionfacilities.Furthergrowthissecuredthroughtheport’sprimelocation,goodinfrastructureandastableeconomyandbusinessclimate.OOTSislocatedonJurongIsland,wheremostofSingapore’sdevelopmentofpetrochemicalindustryisconcentrated.

Thetankterminalbecameoperationalin2001.Thetotalcurrentcapacityis365,051cbmin79tanks,varyingfrom800cbmto18,000cbm.Thestainlesssteelcapacityis13,520cbm.OOTShasthreedeep-seajetties.Theberthscanaccommodatedouble-bankingandboard-to-boardcargotransfersaswellasdeliveryofbunkerfuelsfromshoretanks.Thetankterminalalsoperformsoperationalmanagementandhasaccesstotwoadditionalberths.Theterminalhaslandavailableforfurtherexpansions.

Theflexiblestorageandtransferservicesofferedbythetankterminal,alongwithexcellentmarinefacilities,provideagoodplatformforOdfjelltofurtherdevelopahubforglobalandregionalshippingservicesinSoutheastAsia.Thetankterminalisa50/50jointventurebetweenOdfjellTerminalsandOiltanking.

oiLtanKinG oDFJeLL terMinaLs & Co LLC, oMan (ooto)

Sohar IndustrialPort is located inOman,outsidetheStraitofHormuz,andonlyafewhoursdrivefromthepetrochemicalindustryinUnitedArabEmiratesandSaudiArabia.Theportishometoarefineryandseveralglobal-scalepetrochemicalcomplexes.ThisdevelopmentisbeingdrivenbythedesireoftheSultanateofOmantoexploitthenation’sgasreservesandcreateastrong'value-addedprocesseconomy'asopposedtoanenergyexporteconomy.

OOTOhasexclusiverightstomanagesixliquidberthsandprovidesbulkliquidstoragewithinSoharIndustrialPort.BasedontherequirementsofthecaptiveindustryinSoharandagrowingregionalmarketforthestorageofchemicalsandmineraloils,OOTOhasexpandedoverthepastfiveyearsintoaterminalwith66tanksandoverallcapacityof1,294,780cbm.OdfjellTerminalsholdsa29.75%shareholdinginOOTO.ThecompanyisjointlymanagedbyOdfjellandOiltanking.

VoPaK terMinaL ninGbo, China (Vtn)

Thistankterminalstartedoperationin1994.LocatedclosetoShanghai,NingboisakeyportforimportingchemicalstothecentraleastcoastofChina.Theterminalservesships,barges,railcarsandtrucks,andcurrentlyhasacapacityof71,050cbm.Odfjellhasa12.5%shareholdinginthetankterminal.TheothershareholdersareVopak,HelmAGandthelocalportauthorities.

eXir CheMiCaL terMinaL (PJsCo), iran (eCt)

ExirChemicalTerminal(PJSCO)isajointventurebetweenOdfjell(35%),Oiltanking(35%)andNuian,aprivateIranianinvestor(30%),andisthefirstindependenttankterminalforbulkliquidchemicalsinIran.

ECTisstrategicallysituatedinthePetrochemicalSpecialEconomicZone(PETZONE)intheportofBandarImamKhomeini.TheterminalisconnectedbypipelinestojettiesinthePETZONE,andhasacapacityof45,000dwt.Theterminalconsistsof18tanks,intotal22,000cbm,andhasbeenoperationalsinceJanuary2010.

tanK terMinaLs PartLY oWneD bY reLateD Parties, south aMeriCa

ThetankterminalspartlyownedbyrelatedpartiesfirstbecameoperationalinBuenosAiresin1969.Today,theyconsistof11tankterminalsspreadalongthecoastsof

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Brazil,Argentina,ChileandPeru,withastrongmarketpositionforchemicalstorageintheregion.TheOdfjellfam-ilyownstheseterminalsprivatelyandhasitsoperationalheadquartersinSãoPaulo.

ThesixBraziliantankterminalsarelocatedinSantos,RioGrande,Triunfo,SãoLuis,TeresinaandCorumba.Argentinaishometotwotankterminals,oneinBuenosAiresandtheother,astate-of-the-artterminalinCampana,about80kmupriverfromBuenosAires.TheChileantankterminalsarelocatedinSanAntonioandMejillones,andthePeruvianterminalinCallao.

The tank terminalspartlyownedbyarelatedparties’networkinSouthAmericaarealsoexpanding.Projectsareunderwaytoincreasethecapacityatexistingterminals,aswellastheconstructionofnewterminals.

TheseextensivetankterminalactivitiesinSouthAmericaprovideanexcellentcomplementtoOdfjell’sfrequentandtraditionallystrongshippingactivitieswithintheregion.Wherepractical,shippingandstorageservicesaremarketedfromsharedoffices, facilitating logisticalsolutionsascomprehensiveasrequiredbyourcustomers.

tanK terMinaLs *) FiGures in 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Grossrevenue USDmillion 129 145 227 245 248 232 180 152 132 130

Operatingresultbeforedepreciationandgain(loss)onsaleoffixedassets(EBITDA) USDmillion 22 27 96 110 109 95 74 58 48 49

Operatingresult(EBIT) USDmillion (72) (8) 62 75 68 68 54 51 33 29

Totalassets USDmillion 685 833 1092 987 691 634 481 340 286 312

Totaltankcapacity 1000cbm. 4575 4551 4221 3732 3719 3100 2553 2256 2256 2256

*)Reflectionofactualownershipshare

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REsPONsiBiLiTiEsour

Weaimtoachievesustainabledevelopmentforourstakehol-derssuchasinvestors,customers,employeesandthelocalcommunitiesinwhichtheCompanyoperatesbybalancingfinancialresultsandcorporatesocialresponsibility.Safetyisparamountandweactivelypromoteasustainableandproac-tivequality,health,safetyandenvironmental(QHSE)culture.

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31

11,000trainingdaysformariners

9.2%CO2

REDUCTIONLASTFIVEyEARS

EEOiTrENdFOrThEOdFjEllFlEETGramCO2emittedpertonnecargotransported1nauticalmile

16,0

16,5

17,0

17,5

18,0

18,5

19,0

19,5

20,0

20,5

09 1110 12 13

673Cargoaircraft91Heavydutyvehicle38Freighttrain(diesel)10AverageOdfjellvessel

gramCO2pErTONNETraNspOrTEd1km(comparisonofaverageOdfjellvesselversustransportationmode)

Source:Odfjell

Source:Odfjell

31

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sustainabiLitY rePort

odfjell aims to achieve sustainable development for its stakeholders, such as investors, customers, employees and the local communities in which the Company operates, by balancing financial results and corporate social respon-sibility. safety is paramount and the Company actively promotes a sustainable and proactive quality, health, safety and environmental (Qhse) culture. several programmes and initiatives have been started in 2013, the most impor-tant being a roadmap to operational excellence and a Leadership and Followership Development Programme.

CorPorate soCiaL resPonsibiLitY – Csr

Csr CouncilIn2011OdfjellsigneduptotheUNGlobalCompactpro-gramme,andaCorporateSocialResponsibilityCouncilwasestablishedtofacilitateanimplementationoftheUnitedNations’tenprincipleswithintheareasofhumanrights,labourrights,environmentandanti-corruption.Besidesthemaincouncil,foursub-councilsrelatedtoeachoftheseareashavealsobeenestablished.

InMarch2012Odfjellsubmitteditsfirst‘CommunicationonProgress’report,whichisanannualsubmissionoutliningtheCompany’sworktoimplementthetenprinciplesandmakingthisinformationavailabletostakeholders.TheCommunicationonProgressreportscanbeviewedatwww.odfjell.com.

MaritiMe anti-CorruPtion netWorK (MaCn)

OdfjellbecameamemberoftheMaritimeAnti-CorruptionNetworkinAugust2013.TheMaritimeAnti-CorruptionNetworkisaglobalbusinessnetworkworkingtowardsamaritimeindustryfreeofcorruption,thusenablingfairtradeforthebenefitofsocietyatlarge.Establishedin2011andformalisedin2012,MACNcomprisesvessel-owningcompaniesandotherrelatedcompanies,includingcargoownersandmaritimeserviceproviders.

QuaLitY, heaLth, saFetY anD enVironMentaL ProteCtion (Qhse)

General Nofatalitieswererecordedin2013.TheLostTimeInjuryFrequency (LTIF) indicator forOdfjell-managedshipswas1.37,comparedwith1.21in2012.TheLTIFfortheterminalswas0.29,comparedwith1.33in2012,whichwasasignificantimprovement.

Severalmeasureswereintroducedin2013.TheseincludedLockOutTagOut(LOTO)forshipsmanagedbyOdfjell,apol-lutionprotectionplan,emergencyresponseteamtraining,

competenceimprovement,safedriving,eyeprotectionandfallprotectiontraining.

Intheshippingdivision,OdfjellinthePhilippinesarrangednearly11,000coursedaysformorethan4,100participants,includingnon-PhilippinesnationalswithintheCompany.About3,000course-dayswereperformedin-houseandroughly8,000externally.Outofthe3,000internalcoursedays,665coveredthenewlydevelopedLeadershipandFollowershipDevelopmentProgramme,whichwasattendedby138participantsin2013.Atotalofaround2,200trainingdayswerearrangedintheterminaldivision.

operational excellenceMaintainingahighQHSEperformanceisveryimportanttotheOdfjellGroup,andseveralactivitieshavebeenstartedandaddedtoourcurrentsystemsinsupportofthisaim.AkeyactivityisaninitiativenamedRoadmaptoOperationalExcellence,whosegoalistobringouroperationandQHSEperformancetoahigherlevel.

Weaimtobecomeamoreproactivecompanybymanagingrisks,sharinginformationandlearningfromourmistakes.Byfocusingondevelopingtherightcompetence,skillsandattitudes,andtherebyimprovingourpotentialtodotherightthingscorrectly,wecanmakeconsiderableprogresstowardsreachingoperationalexcellence.

odfjell safety DayOneoftheactivitiesintheoperationalexcellenceinitiativeistoarrangeanOdfjellSafetyDaytobeheldonthefirstWednesdayinNovembereachyear.ThefirstOdfjellSafetyDaywasheldon6November2013.Theprimaryfocusforthe2013SafetyDaywastheuseofpersonalprotectiveequipmentforon-siteworkersonterminalsandships,andgeneralsafetybehaviourforofficepersonnel.

odfjell’s corporate valuesThisinitiative,startedlatein2013andbasedonfeedbackfromourorganisation,wasinitiatedasoneofseveralactionpointsinour‘RoadmaptoOperationalExcellence’.Allemployeeswereinvitedtocontributeinestablishingthecorporatevalues,bycompletingaquestionnaire.

Corporate Qhse auditsCorporateQHSEconductssystemauditsonoperationalandstaffunitstoensurecompliancewithcorporateandmanagement-levelrequirementsandguidelines,promotearobustQHSEcultureandraisestandards.18auditswerecarriedoutin2013,while31areplannedforin2014.Inaddi-tiontothecorporateaudits,internal,externalandcustomerauditsareconductedintheoperativeunits.Theseadditionalauditsaremainlytriggeredbyregulatoryrequirementsor

33

requirementslinkedtocertificatesorcontracts.Noauditresultedinthewithdrawalorsuspensionofcertificatesorcontractualcancellationsin2013.

PiracyPiracyhasbecomeapermanentconcernforinternationalshipping,withNigeriaandSomaliaasthemainfocalareas.2013sawnosuccessfulhijackingsbySomali-basedpirates.SuspiciousapproachescontinuetobereportedintheGulfofAden,thesouthernRedSea,andofftheEastAfrican,yemeniandOmanicoastlines.Privatelycontractedsecuritypersonnelarethereforestillbeingusedduringtransitthroughtheseareas.

enVironMent

Carbon Disclosure Project (CDP)In2013Odfjell’sresponsetotheannualCDPcoveredtheshippingbusiness,CompanyheadquartersandtheterminalsinRotterdamandHouston.TheresultsofourinputtotheCarbonDisclosureProjectwerepublishedattheendof2013.Thesurveyisbasedon2012figures.For2013ourscoredecreasedfrom68to66-theaverageforourindustryis70.Themainreasonfortheslightlybelow-averageratingisthatourresponsewasnotverifiedbyathird-party.Theemissionlevelbasedon2013figuresrepresentsareductionof10%comparedto2012.Mostofthereductionisexplainedbyadecreaseinthefleetsize.

energy saving campaignTheenergysavingcampaignlaunched,firsttimeinSeptember2012,hasprovidedvaluableinputonhowfurtherenergyoptimisationcanbeachievedinourCompany.

environmental impact of the odfjell fleetIn2013theOdfjellfleetreduceditsconsumptionofmarinefueloilsby53,000tonnes(10%)comparedto2012.IntermsofCO2emissions,thisrepresentsareductionof165,000tonnes.Thefleetconsumed514,000tonnesoffuel,ofwhich21,000tonnesweredistillates.Althoughmostofthereductionfrom2012to2013canbeexplainedbyadecreaseinfleetsize,7,500tonnesisattributabletolowerdailyshipboardfuelconsumption.Basedontheconsumptionof95vessels,totalemissionsofCO2in2013amountedto1,580,696tonnes,a10%decreasecomparedtoshipping-relatedemissionsin2012.TotalemissionsofSOXdecreasedby19%to22,335tonnes,reflectingareductioninthefuel’ssulphurcontent.

AllfuelpurchasedbyOdfjellistestedbythird-partycom-panies.Testresultsofthefuelpurchasedin2013showanaverageweightedsulphurcontentof2.22%,comparedwith

2.44%in2012.Thegloballimitin2013was3.5%.

soX emissionsBasedonallconsumptionin2013(bothinportandatsea),Odfjell’svesselsemittedonaverage0.26gramspertonnecargotransportedonenauticalmile.Thisisslightlybelowthe2012level,whichwas0.27gramspertonne.

Co2 emissionsIn2009IMO'sMarineEnvironmentProtectionCommitteecirculated guidelines for voluntary use of an EnergyEfficiencyOperationalIndicator(EEOI),definedastheamountofCO2emittedperunitoftransportwork.Since2008OdfjellhascalculatedtheEEOIatshipandfleetlevel.ThecalculationsareperformedinaccordancewithIMOMEPCCircular684.Includingfuelconsumptionbothinportandatsea,theEEOIfortheOdfjellfleetwas18.34gramsofCO2pertonnecargotransportedonenauticalmile(g/tnm)in2013.

speed/consumption reduction schemeIn2013OdfjellTankersoperatedbetween40and50shipsinsloworultra-slowspeedmode.Thisgeneratedanetfuelsavingofabout78,000tonnes,correspondingtoemissionsavingsofapproximately243,000tonnesofCO2,and866tonnesofSOX.

external weather routingAdvancedweatherroutingserviceshavebeeninusesince2009,bothforourownedfleetandfortime-charteredships.825seavoyagesweresubjecttoexternalweatherroutingin2013.Followingtherouteoptimisationsforthesevoyagestheshipsreducedtheirtimeatseabyatotalofatleast65days.Thisequatestoafuelsavingofapproximately1,500tonnes,whichinturnisequivalenttoabout4,600tonnesofCO2.

intermediate hull cleaning and propeller polishingHullcleaningandpropellerpolishingarenormalpartsofordinarydry-dockingwork.However,Odfjellhasestab-lishedprocedurestoenableshipstoundergohullcleaningandpropellerpolishinginbetweenscheduleddry-dockingsaswell.AllOdfjelloperatedships,bothtime-charteredandowned,arebeingcloselymonitored,andbasedontheperformanceobserved,cleaningintervalshavebeenshortenedsignificantlyin2013.

ship energy efficiency Management Plan (seeMP)In2012Odfjell,inclosecooperationwithDNV,developedanSEEMPforitsownedfleet.Theship-specificSEEMPswererolledouttothevesselsduring2013,andincludeEEOIbenchmarkingforeachship,shipclassandwithintheentireOdfjellfleet.TheEEOIsectionalsoincludesvariablesthataffecttheEEOI.Monitoringofsuchvariablesmakesit

35 34

possibleforspecificcountermeasurestobeimplementedifanegativeenergyefficiencytrendisobserved.Thissectionisupdatedonaquarterlybasistoallvessels,includingthetime-charterfleet.

tank cleaning and chemical treatment OdfjellTankersiscontinuingtodevelopefficienttankclean-ingmethodsthatmeetthehighestindustrialstandards.Variouscleaningdetergentsandmethodshavebeentested.In2013wefocusedintentlyonmonitoringspecialcargohandlingandtankcleaningoperations,inordertoreduceamountofenergyusedforthispurpose.Wehavealsoconductedseveralcoursesforonshoreandsea-goingpersonnel,withspecialattentionontheuseofenergyincargohandlingandtankcleaningoperations.

Fleet Performance GroupOdfjellhasadedicatedFleetPerformanceGroup,whichsupervisesvoyageoptimisationandoceanrouting,tracksthefleet,collects,validatesandanalysesthevessels’speed,fuelconsumptionandemissionsonadailybasisthroughacomprehensiveperformancesystem.

oDFJeLL-ManaGeD shiPs

In2013Odfjellimplementedseveralmeasurestosecureasustainablesafetyperformance.TheLTIFindicatorforOdfjell-managedshipswas1.37in2013,comparedwith1.21in2012,whiletheTotalRecordableCaseFrequencywas3.82.Thetargetvaluesare1.2and4.0respectively.

OdfjellShipManagementholdsanISO14001certification,whichcovers43shipsunderownmanagement.Allrelevantenvironmentalconsiderationsareidentified,andkeyissuesarelistedandfollowedupinahealth,safety,securityandenvironmental(HSSE)programme.

Thefollowingtechnicalprojectsreduceenvironmentalimpactsbeyondtheminimumrequirementsstipulatedincurrentregulations:

bilge water treatment plants (oily water separators)Inordertoreducetheoilcontentinthebilgewater,25shipshavebeenupgradedwiththeinstallationofahighlyeffectiveoilywaterseparator.TheMARPOLrequirementsstipulatethatthewaterdischargedoverboardshouldnotcontainmorethan15ppm(partspermillion).Theunitswhichareinstalledintheshipsgivearesultofonlyfiveppm.Thisprogrammeiscontinuingin2014.

ship recycling – Green PassportsOdfjellrecycledfourshipsin2013.TosecureacontrolledprocesstheCompanyhasaprogrammeinplacewhichincludesobtainingGreenPassportsforshipswellaheadoftheirnormalretirementage.TheprogrammemeetstherequirementsofIMOResolutionsA962and179andiscertifiedbyLloyds.TheCompanyismakinggoodprogressinimplementingtheseIMOresolutionsandtheprogrammeiscontinuingwithfiveshipsinlinetoobtaincertification.AGreenPassportrequiresthemappingofmaterialsthat

couldimpacttheenvironment.Italsorequiresfollow-upfromtherecyclingyard.TheyardsusedareinspectedbyOdfjelltoensuretheyareISO30000certifiedandcom-plywithrelevantIMOguidelinesandOdfjell’sin-houserequirements.

Pollution protection planThemainpurposeoftheproject istoensurethatallvesselstakeactioninaccordancewiththeEnvironmentalManagementSystem(EMS),topreventanyunauthorisedconnectionanddischargebyby-passingoftheapprovedoilywaterdischargesystem.Thisistoavoidanyintentionalorunintentionaldischargeofpollutingsubstancesatsea.Theprojectstartedlate2013,andeightvesselswerecompleted.

newbuilding programmesDuring2013Odfjelltookdeliveryofthethirdnewchemicaltankersof9,000dwteach,andoneof75,000dwt.In2014Odfjellwilltakedeliveryoffourchemicaltankersof46,000dwteach.Moreover,Odfjellhascontractedfournew17,000cbmLPG/Ethylenecarrierswithoptionsforuptofouradditionalships.TheshipsthathavebeendeliveredandcontractedareallECO-designs,providingsignificantsav-ingsinbothfuelconsumptionandemissions.Furthermore,theshipsaredesignedwiththelatestavailabletechnologyandmodernequipment,includingballastwatertreatmentsystemstoavoiddistributionofmicroorganismstomarineenvironmentsaroundtheworld.

other important safety activities:Leadership and Followership Development ProgrammeIn2013ShipManagementhasfocusedontherolesandresponsibilities of both leaders and followers in thedevelopmentofasoundsafetyculture.TheLeadershipandFollowershipDevelopmentProgrammethereforeencompassesallOdfjellseafarers.

implementation of Loto systemDuring2013allOdfjell-managedvesselshavebeenequippedwithasystemforlockingandtaggingelectrical,high-power,rotating,hotorsimilarhazardousequipmentwhileworkisongoing.ThesystemiscalledLockOutTagOut(LOTO).Thesystemconsistsofprocedurestoensurethatprocessingfacilities,powersourcesorequipmentisproperlysecured,insulatedand/orputoutofoperationandnotrestarteduntilserviceormaintenanceworkhasbeencompleted.

tanK terMinaLs

Fortheterminals(operatedandmanagedbyOdfjell),theLTIFfor2013isdownto0.29,comparedwith1.33in2012.Thisisasignificantimprovement.Thecurrentprogrammefor‘lessonslearned’willbecontinuedin2014toshareinformationandenhanceexperiencetransfer.

Reportablespills(overfivelitres)outsidetheprimarycontainmentareafellby52%,from93in2012,to45in2013.Reportednearmissesandnon-conformancesroseslightly in2013comparedwith2012.Odfjellstrivesto

35

promoteagoodreportingculture,andthisalsoinvolvesencouragingmoreactiveuseofourexperiencefeedbacksystem.

During2013wehavecarriedoutcorporateQHSEauditsatouroperatedand/ormanagedterminalstoverifycompli-ancewithourcorporateinternalandexternalregulatoryrequirements.TheauditsarepartoftheeffortstobuildinagoodQHSEcultureandachieveoperationalexcellence.

Americas:NoLTIsoccurredatourterminalinHouston(OTH)during2013.Thenumberofspills(overfivelitres)wasreducedbyalmost16%comparedto2012.Thenumberofnearmissesandnon-conformancesfellby21%comparedwith2012.

Attheendof2013theconstructionofthenewterminalinCharleston(OTC)wascompletedandoperationsstarted.NoLTIsoccurredduringtheconstructionoftheterminal,whichisagreatachievement.

Europe:During2013therewerenoLTIs forOdfjellTerminals(Rotterdam)(OTR).Thenumberofspills(overfivelitres)fellby59%comparedto2012.

2013wasachallengingyearforOTR.Followingtheshut-downinJuly2012,OTRmanagementrecommissioned126outofatotalof281tanks.Thisrepresentsavolumeof1,040,000cbmavailableforoperation,comparedwithanameplatecapacityof1,636,100cbm.AlltanksweretestedandcertifiedforoperationbyRiskBasedInspectionaccordingtoEEMUA159requirement.Aroadmapforthecompleterecommissioningoftheterminaliscurrentlybeingdrawnup.InJune2013,theDutchSafetyBoardissueditsreportfollowingtheinvestigationofincidentsatOTRduringtheperiod2000-2012.Publicationofthereportresultedinsignificantmediaattention.Thereportrecommendedimprovingthesafetycultureandtheintegrityofthesafetysystemsatthesite.

To further improve OTR’s safety performance in theshortandlongerterm,themanagementhasofferedtheauthoritiesadditionalassurances.TheseincludeapledgethatOTRwillapplythebestavailabletechnologyinconnectionwithnewprojects.Additionalsafetyofficersandanindependentsafetyauditorhasbeenappointedtoensuresafeoperations.Themanagementteamalsoundertooktoissuearequestforrenewaloftheoperatingpermit.Furthermore,adedicatedoperationalexcellenceteamwasformedtoimprovethemanagementsystemsandworkprocesses.Allcommitmentsareinagreementwiththeauthorities.OTRmanagementfocusescontinuouslyonthedevelop-mentandmaintenanceofaprofessionalorganisationthatensuressafeandreliableoperations.Togetherwiththeentireworkforce,managementiseagertoachieve

improvedoperationsbasedonsystemintegrity,effectiveandefficientworkprocessesandsafetyleadership.

Asia:AttheChineseterminals,OdfjellTerminalsDalian(OTD)andOdfjellTerminalsJiangyin(OTJ),noLTIsoccurredin2013.Nospills(overfivelitres)werereportedattheseterminalsin2013.

AtOdfjellTerminalsKorea(OTK)oneLTIwasreportedin2013.Near-missandnon-conformancereportingattheAsianterminalsremainedconstantin2013.

InTianjinOdfjell isconstructinganewterminal(ONTT).Constructionstartedin2012,anditisexpectedthattheterminalwillgointooperationattheendof2014.Upuntilnownoincidentshaveoccurredduringtheconstructionofthisterminal.

MiddleEast:IntheMiddleEast,OdfjellhasaterminaltogetherwithOiltankinginOman(OOTO).TherewasoneLTIatOOTOin2013.DuringtheyearOOTOreported12spills(overfivelitres)and56nearmissesandnonconformances.

health, safety and environmental projectsAll the terminals have implemented various projectsdesignedtoimprovesafetyperformanceandreducetheirenvironmentalimpact.

trainingAlltheterminalsfocusedonenvironmentalandsafetytrainingduring2013.Atotalofaround2,200trainingdayswerearrangedintheterminaldivisionsin2013.Topicsincludedriskassessment,rootcauseanalysis,LOTO,thecorrectuseofpersonalprotectiveequipment,fire-fightingandemergencyresponse.

CertificatesOTRhasnotcompletedtheprocessofrenewingitsISOcertificates.Thishasbeenpostponedto2014.Theotherterminals,managedandoperated,havethenecessarycertificatesincludingISO9001,ISO14001,ResponsibleCare14001,OHSAS18001,CDI-TattestationandISPScode.

OTJwasrecertifiedtoISO14001,ISO9001andOHSAS18001.

OTHcarriedouttheannualsurveillanceofISO9001andtheRC14001/ISO14001recertificationaudits.

OTKwasCDI-TaccreditedandperformedsurveillanceauditsforISO9001and14001.

OOTOwasauditedagainstISO9001,14001and18001.

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CorPorate GoVernanCe

odfjell se, which is the parent company in the odfjell Group of companies (the Group), is established and registered in norway and is governed by norwegian law, including laws and regulations pertaining to companies and securities. the Group has the objective of complying with all relevant laws and regulations in all jurisdictions it operates in, as well as the Code of Practice for Corporate Governance issued by the norwegian Corporate Governance board (nues) on 23 october 2012 (the Code of Practice).

TheCompany’sBoardofDirectorshason12February2014approvedtheCorporateGovernancePolicyastheCompany’s policy for sound corporate governance inaccordancewiththeCodeofPractice.ThisstatementisincompliancewiththeCorporateGovernancePolicyapprovedbytheBoardofDirectors.

reGuLations

TheCompanyisaSEcompany(SocietasEuropaea)subjecttotheNorwegianActno.14of1April2005relatingtoEuropeancompanies.TheCompanyislistedontheOsloStockExchange,andisthussubjecttoNorwegiansecuritieslegislationandstockexchangeregulations.

Inconnectionwiththis,theCompanyissubjecttotherequirementsforgoodcorporategovernancewhichfol-lowfromthePublicLimitedCompaniesActof1997,theSecuritiesTradingActof2007andtheStockExchangeActof2007.

rePortinG on CorPorate GoVernanCe

TheframeworkforcorporategovernanceistheNorwegianCodeofPracticeforCorporateGovernanceof23October2012.TheCodeisbasedona‘complyorexplain’principle,whichmeansthatpossibledeviationsfromtheCodeshallbeexplained.

Odfjelliscommittedtoethicalbusinesspractices,honesty,fairdealingandcompliancewithalllawsandregulationsaffectingourbusiness.Thisincludesadherencetohighstandardsofcorporategovernance.Odfjell'scorporatesocialresponsibilitypolicyalsoencompassesastrongfocusonquality,health,safetyandcarefortheenvironmentaswellashumanrights,non-discriminationandanti-corruption.TheCompanyhasitsownCorporateCodeofConductthataddressesseveraloftheseissues.AllOdfjellemployeesareobligedtocomplywiththeCorporateCodeofConduct.

ThefollowingdescribesOdfjell'scomplianceproceduresinrespectofeachoftheelementsoftheNorwegianCodeof

PracticeforCorporateGovernance,includingexplanationofanydeviations.

the CoMPanY’s business aCtiVities

Article3ofOdfjell'sArticlesofAssociationstates:TheobjectoftheCompanyistoengageinshipping,shipagency,tankterminals,realestate,financeandtradingactivities,includingthetransportationoffreightintheCompany’sownvesselsorcharteredvessels,theconclusionoffreightcontracts,co-ownershipagreementsandcooperationagreements,ownershipandoperationoftankterminals,aswellasinvestmentandparticipationinotherenterpriseswithasimilarobjectandotheractivitiesrelatedthereto.

TheotherarticlesmaybefoundontheCompany’shome-page:www.odfjell.com.TheCompany'sMissionStatementandstrategycanbefoundonpage3and9ofthisAnnualReport.

eQuitY anD DiViDenDs

equityOdfjellshallmaintainanequitybasedeemedsufficienttosupporttheCompany'sobjectivesandstrategy,andtobeabletowithstandaprolongedperiodofadversemarketconditions.ThenormaltargetisthattheequityratiofortheGroupshallremainbetween30and35%oftotalassets.TheGrouphadbookequityofUSD759millionasof31December2013whichcorrespondstoanequityratioof32.2%.

subscription rightsTherearecurrentlynooutstandingsubscriptionrightsasof31December2013.

Dividend policy Odfjellaimstoprovidecompetitivelong-termreturnontheinvestmentsforitsshareholders.TheCompanyembracesaninvestor-friendlydividendpolicy.Thegoalistoprovidesemi-annualdividendpayments.

Mandates granted to the board of DirectorsAccordingtotheNorwegianCodeofPracticeforCorporateGovernancemandatesgrantedtotheBoardofDirectorstoincreasetheCompany’ssharecapitalshallberestrictedtodefinedpurposes.MandatesgrantedtotheBoardshallbelimitedintimetonolaterthanthedateofthenextAnnualGeneralMeeting.

Power of attorney to the board of Directors to increase the share capitalTheBoardhasnotbeenassignedauthoritytoissuenew

37

shares.AnysuchmandatemustbeapprovedbytheGeneralMeetingandshallbelimitedintimeuntilthenextAnnualGeneralMeeting.

Power of attorney to acquire own sharesTheExtraordinaryGeneralMeetingon2October2012authorisedtheBoardofDirectorstoacquiretreasuryshareswithatotalnominalvalueofNOK43,384,474.However,theCompanymaynotatanytimeownmorethan10%ownshares.TheminimumandmaximumpricethatispayableforthesharesisrespectivelyNOK2.50andNOK250.Thisauthorisationexpireson2April2014.

share option schemeNooptionschemehasbeenestablished.ShareoptionschemesshallbeapprovedbytheGeneralMeeting.

eQuaL treateMent oF sharehoLDers anD transaCtions With reLateD Parties

Class of sharesTheCompany’ssharecapitalisNOK216,922,370,dividedbetween65,690,244classAshareseachwithanominalvalueofNOK2.50,and21,078,704classBshareseachwithanominalvalueofNOK2.50.TheCompany’ssharesshallberegisteredwiththeNorwegianCentralSecuritiesDepository(VPS).

OnlyholdersofclassAsharesshallhavevotingrightsatAnnualandExtraordinaryGeneralMeetings,howeverincertaincircumstancesalsoBshareshavevotingrights.Inallotherrespects,thetwoclassesofsharesareequal,andhavethesamerightstodividends.Intheeventofbonusissues,holdersofclassAsharesshallbeentitledtonewclassAsharesandholdersofclassBsharesshallbeentitledtonewclassBsharesunlessotherwisedecidedbytheGeneralMeeting.

Theexistenceoftwoclassesofsharesisduetohistoricalreasons,butthisisnolongeraverycommonpracticeontheOsloStockExchange.AsaresulttheBoardhasinitiatedanevaluationofthelegalandregulatoryissuesrelatedtoconvertingintoonesingleclassofshares.Anychangeofsharestructurewouldrequiremajorityvoteinbothshareclasses.

transactions in own sharesAnytransactionscarriedoutbytheCompanyinownsharesshallbeconductedovertheOsloStockExchangeoratprevailingpricesifcarriedoutinanyotherway.SuchtransactionswillbereportedtotheOsloStockExchangeandtothewidermarketthroughstockexchangereleasesandpressreleases.

transactions with close associatesAnymaterialtransactionbetweentheCompanyandanyshareholder,BoardMember,memberofManagementoranyrelatedpartyoftheseshallbereviewedbyanexternalthirdpartybeforebeingconcluded.ThisdoesnotapplyforanyagreementapprovedbytheGeneralMeetingaccordingtotheNorwegianPublicLimitedLiabilityCompaniesAct.Independentvaluationsshallalsobeobtainedinrespectoftransactionsbetweencompaniesinthesamegroupwhereanyofthecompaniesinvolvedhaveminorityshareholders.

MembersoftheBoardofDirectorsandManagementshallinadvancenotifytheBoardiftheyhaveanymaterialdirectorindirectinterestinanytransactionenteredintobytheCompany.Inthiscasetheyarenoteligibletoparticipateinthediscussions.

TheBoardhasestablishedapolicyinrespectofsharetrading.ThepolicyisinlinewiththeGuidelinesforInsidersissuedbytheOsloStockExchangeandapplies toallemployeeswhoinconnectionwiththeirworkmaygainaccesstopricesensitivenon-publicinformation.

FreeLY neGotiabLe shares

TheCompany’ssharesarelistedontheOsloStockExchangeandarefreelynegotiable.Thereisnoformofrestrictiononnegotiability includedintheCompany’sArticlesofAssociation.TheBoardisnotawareofanyagreementsthatmaysecureanyshareholderbeneficialrightstoownortradesharesattheexpenseofothershareholders.ThesharesareregisteredintheNorwegianCentralSecuritiesDepository(VPS).

the GeneraL MeetinGs oF sharehoLDers

TheBoardisresponsibleforconveningbothAnnualandExtraordinaryGeneralMeetings.TheCompanyshallarrangefortheAnnualGeneralMeetingtobeheldwithinsixmonthsoftheendofeachfinancialyear.ExtraordinaryGeneralMeetingsmaybecalledinaccordancewiththeprovisionoftheNorwegianLimitedLiabilityCompaniesAct.

TheGeneralMeetingshallelectaChairmanoftheMeeting.TraditionallytheChairmanoftheBoardhasalsochairedtheGeneralMeetings.

TheChairmanoftheBoard,representativesoftheBoard,thenominationcommitteeandtheCompany'sauditorandrepresentativesfromtheManagementshallparticipateintheAnnualGeneralMeeting.

39 38

TheAnnualGeneralMeetingrepresentsanimportantvenuefortheBoardtomeetanddiscusswithshareholdersface-to-faceandtodecideonimportantissuessuchasdividendpayments,electionandre-electionofBoardMembersandtheappointmentoftheauditor.

ThenoticeconveningthemeetingandotherdocumentsregardingtheGeneralMeetingshallbeavailableontheCompany'swebsitenolaterthan21daysbeforethedateoftheGeneralMeeting.ThenoticeshallprovidesufficientinformationonallresolutionstobeconsideredbytheGeneralMeeting,votinginstructionsandopportunitiestovotebyproxy.

Whendocumentsconcerningmattersthataretobecon-sideredbythemeetinghavebeenmadeavailabletotheshareholdersontheCompany’swebsite,therequirementoftheNorwegianPublicLimitedLiabilityCompaniesActthatthedocumentsbesenttoshareholdersdoesnotapply.ThisalsoappliestodocumentsthatarerequiredbylawtobeincludedinorenclosedwiththenoticeoftheGeneralMeeting.AshareholdermaynonethelessasktohavedocumentssentthatconcernmatterstobeconsideredbytheGeneralMeeting.ShareholderswhowishtoattendtheGeneralMeetingmustnotifytheCompanynolaterthanfivedaysbeforetheGeneralMeeting.It ispossibletoregisterfortheAnnualGeneralMeetingbymail,e-mailorfax.

MattersdiscussedattheGeneralMeetingarerestrictedtothosesetforthintheagenda.

ThefollowingmattersshallbethebusinessoftheAnnualGeneralMeeting:

1. AdoptionoftheannualaccountsandtheBoardofDirectors’report

2. Applicationofanyprofitfortheyearorcoverageofanylossfortheyearinaccordancewiththeadoptedbalancesheet,andthedeclarationofdividend

3. ElectionofmembersoftheBoardofDirectors

4. AdoptionoftheremunerationoftheBoardofDirectors

5. AnyothermattersthatbylaworpursuanttotheCompany’sArticlesofAssociationorasstatedinthenoticeoftheAnnualGeneralMeeting.

TheBoardandthepersonthatchairstheGeneralMeetingshallorganizetheelectionofBoardMembersinsuchamannerthattheshareholderscanvoteoneachoftheproposedcandidatesseparately.

ProposalsthatshareholderswishtheGeneralMeetingtoconsidermustbesubmittedinwritingtotheBoardofDirectorsinsufficienttimetobeincludedinthenoticeoftheGeneralMeeting.

nomination committeeTheCompanyhasaNominationCommittee.TheGeneralMeetingshallelecttheCommitteeChairmanandmembers,determinetheirremunerationanddetermineguidelinesfordutiesoftheCommittee.

boarD oF DireCtors - CoMPosition anD inDePenDenCe

TheCompany’sManagementisorganisedinaccordancewithasingle-tiersystemanditshallhaveanadministrativebody(BoardofDirectors).

TheCompany’sBoardofDirectorsshallconsistofbetweenfiveandsevenmembers.

TheAnnualGeneralMeetingshallelecttheBoard.TheBoardelectstheChairmanoftheBoard.BoardMembersshallbeelectedfortwoyearsatatime.

TheCompanyhasnocorporateassembly.TheinterestsoftheemployeesareupheldthroughanagreementbetweentheemployeesandOdfjellconcerningtheinvolvementofemployees.Theemployeeshaveestablishedaper-manentEmployeeRepresentativeBody.TheEmployeeRepresentativeBodyconsistsofuptosixrepresentatives,partlyfromthetankterminalinRotterdam,themainofficeinBergenandtheOfficers'Council.

Employee involvementatcorporate leveland inmostsubsidiariesabroadisalsosecuredbyvariouscommit-teesandcouncils,inwhichManagementandemployeerepresentatives,bothonshorepersonnelandseafarers,meettodiscussrelevantissues.

TheBoardshallbecomposedsuchthatitcanactinde-pendentlyofspecialinterests.ThemajorityoftheBoardMembersshallbeindependentoftheManagementandimportant business connections and no member ofManagementshallbeaBoardMember.Inaddition,atleasttwooftheBoardMembersshallbeindependentoftheCompany’sprincipalshareholders,i.e.shareholdersthatownmorethan10%oftheCompany’ssharesorvotes.

Since6May2013theBoardhascomprisedLaurenceWardOdfjell(ExecutiveChairman),BerntDanielOdfjell,ChristineRødsæther,ÅkeGregertsen,IreneWaageBasiliandJannickeNilsson.TheChairman,LaurenceWardOdfjell,hasbeenassignedspecialtasksbytheBoard,andconsequentlyactsasExecutiveChairman.LaurenceWardOdfjell and relatedpartiescontrolasignificantshareholdinginOdfjellSE.ÅkeGregertsen,ChristineRødsæther,IreneWaageBasiliandJannickeNilssonareindependentBoardMembers.EventhoughÅkeGregertsendoesnotmeetalltherequirementsforindependenceintheNorwegianCorporateGovernanceBoard(NUES),heperformshisdutiesindependentlyasBoardMember.TheCompanybelievesthattheBoardiswellpositionedtoactindependentlyoftheCompany’sManagementandexercisepropersupervisionoftheManagementanditsoperations.TheannualreportcontainsapresentationoftheBoardof

39

DirectorsanddetailsoftheshareholdingsofallDirectors,aswellasinformationontheexpertiseandcapacityoftheBoardMembers.

FouroftheexistingBoardMembersareupforelectionat the2014AnnualGeneralMeeting.Theproportion-aterepresentationofgenderoftheBoardiswithinthelegislatedtarget.

the WorK oF the boarD oF DireCtors

TheBoardofDirectorsshallproduceanannualplanforitswork,withparticularemphasisonobjectives,strategyandimplementation.

TheCompanyshallbeledbyaneffectiveBoardwithcol-lectiveresponsibilityforthesuccessoftheCompany.TheBoardrepresentsandisresponsibletotheCompany’sshareholders.

TheBoard’sobligationsincludestrategicmanagementoftheCompany,effectivemonitoringoftheManagement,controlandmonitoringoftheCompany’sfinancialsituationandtheCompany’sresponsibilityto,andcommunicationwith,theshareholders.UltimatelytheBoardisresponsiblefordeterminingtheCompany'sobjectives,andforensuringthatnecessarymeansforachievingthemareinplace.TheBoardofDirectorsalsodeterminestheCompany’sstrategicdirectionanddecidesonmattersthatareofsignificantnatureinrelationtotheCompany'soverallactivities.Suchmattersincludeconfirmationofthestrategicguidelinesincludinganychangestothestrategicbusinessmodel,approvalofthebudgetsaswellasdecisionsonmajorinvestmentsanddivestments.Furthermore,theBoardensuresacorrectcapitalstructureanddefinesthedividendpolicy.TheBoardalsoappointsthePresident/CEOanddetermineshis/herremuneration.

TheBoardshallensurethattheCompanyiswellorganisedandthatitsactivitiesaremanagedinaccordancewiththerelevantlawsandregulations,theCompany’sobjectivespursuanttotheArticlesofAssociationandtheapplicableguidelinessetbytheshareholdersthroughtheGeneralMeeting.ItistheresponsibilityoftheBoardtoensurethattheCompany,itsmanagementandemployeesoperateinasafe,legal,ethicallyandsociallyresponsiblemanner.Toemphasisetheimportanceoftheseissues,acompanyspecificcorporatesocialresponsibilitypolicyandacodeofconductareinplaceandapplytoallthroughouttheorganisation.TheCodeofConductfocusesonaspectsofethicalbehaviourinday-to-daybusinessactivities.TheCompanyalsoadherestotheUNGlobalCompactandreportsitsCorporateSocialResponsibilityperformanceaccordingly.

TheBoardshallperformthereviewswhich itdeemsnecessarytoperformitstasks.TheBoardshallalsoperformreviewsthatarerequestedbyoneormoreBoardMembers.

MembersoftheBoardofDirectorsshallnotifytheBoardin

advanceiftheyhaveanydirectorindirectmaterialinterestinanytransactiontobeenteredintobytheCompany.Inthiscasetheyarenoteligibletoparticipateinthediscussions.AdeputyChairmanshallbeelectedtofunctionasChairmanoftheBoardwhentheChairmanoftheBoardcannotorshouldnotleadtheBoard’swork.

TheBoardshallplan itsworkaswellas theworkofManagementthroughtheintegratedmanagementcycle.TherolesoftheBoardandtheCEOareseparateandtheallocationofresponsibilitiesspecifiedinwritingthroughexistingchartofauthoritiesandjobdescriptions.

EachyeartheBoardshallevaluateitsperformanceoverthepreviousyear.TheBoardshallevaluateitsownefforts,theperformanceoftheCommitteesandtheindividualBoardMembers.Inorderfortheevaluationtobeeffective,theBoardshallsetobjectivesatbothcollectiveandindividuallevelswhichtheperformancesshallbemeasuredagainst.Theresultsfromtheevaluationwillnotbemadepublic,butshallbeavailabletotheNominationCommittee.

TheBoardhadeightordinarymeetingsandtenextraor-dinarymeetingsin2013,with93.5%Directorattendance.TheBoardhascarriedoutaself-assessmentofitswork.

audit Committee TheAuditCommitteeiselectedbytheBoardandconsistsofminimumtwoBoardMembers;currentlyÅkeGregertsenandJannickeNilsson.TheAuditCommitteereportsto,andactsasapreparatoryandadvisoryworkingcommitteefor,theBoard.

TheestablishmentoftheCommitteedoesnotaltertheBoard'slegalresponsibilitiesortasks.

risK ManaGeMent anD internaL ControL

TheBoardshallensure that theCompanyhassoundinternalcontrolandsystemsforriskmanagementthatareappropriateinrelationtotheextentandnatureoftheCompany’sactivities.InternalcontrolsandthesystemsshouldalsoencompasstheCompany’scorporatevaluesandethicalguidelines.

TheriskmanagementprocessandthesystemofinternalcontrolofOdfjellshallberobustenoughtoensuresafe,controlled,legalandethicalbusinessconductandopera-tionsinallitsactivitiesaroundtheworld.

BusinessstrategiesarepreparedatregionallevelandareapprovedbytheBoard.Inaddition,thereareannualbudgetingandstrategicplanningprocesses.Financialforecastsarepreparedeveryquarter.Actualperformanceiscomparedtobudget,latestforecastandprioryearonamonthlybasis.Significantvariancesareinvestigatedandexplainedthroughnormalmonthlyreportingchannels.

TheCompanyhasestablishedanorganisationstruc-turethatsupportsclearlinesofcommunicationand

41 40

accountability,anddelegationofauthorityrulesthatspecifyresponsibility.

TheCompanyfocusesstronglyonregularandrelevantmanagementreportingofbothoperationalandfinancialmatters,bothinordertoensureadequateinformationfordecision-makingandtorespondquicklytochangingconditions.Evaluationandapprovalproceduresformajorcapitalexpenditureandsignificanttreasurytransactionsareestablished.

TheBoardreceivesmonthlyreportsontheCompany’sfinancialperformanceandstatusreportsontheGroup’skeyindividualprojects.TheGroupalsoregularlyconductsinternalauditsofindividualunits’adherencetosystemsandprocedures.TheinternalauditdepartmentprovidesadditionalassurancetotheBoardandtheAuditCommitteethatkeycontrolsareoperatingasintended.

FinancialperformanceisalsoreportedonaquarterlybasistotheBoardandtotheOsloStockExchange.

Odfjell’sBoardiskeptupdatedonManagementandCompanyactivitiesthroughreportingsystems,includingthemonthlyreports.Asafety(QHSE)updateisnormallythefirstitemontheagendaofallordinarymeetingsoftheBoardofDirectors.

Odfjell’sComplianceOfficermonitorsthattheCompanyactsinaccordancewithapplicablelawsandregulations,theCompany'sCodeofConductandensuresthattheCompanyactsinanethicalandsociallyresponsibleway.Particularfocusshallbeappliedtocompetitionlawcompliance,envi-ronmentallicensestooperate,anti-corruptionmeasures,andregularupdatesonnewrulesandregulationsareissuedtoallrelevantpersonnelinordertoensurecontinuouscompliance.TheComplianceOfficerreportsdirectlytothePresident/CEO.

TheCompanyisalsosubjecttoexternalcontrolfunctionsincludingauditors,shipclassificationsocieties,customervettings,portandflagstate,andotherregulatorybodiesincludingtheIMO.

boarD MeMbers’ reMuneration

RemunerationtoBoardMembersshallbedeterminedbytheshareholdersattheGeneralMeeting.TheNominationCommitteeshallproviderecommendationstotheGeneralMeetingforannualremunerationtoallBoardMembers.BoardMembersareencouragedtoownsharesintheCompany,andcanbepaidpartoftheirremunerationinshares.

RemunerationoftheBoardMembersisdecidedbytheAnnualGeneralMeeting.MembersoftheBoarddonottakepartinanyincentiveorshareoptionprogrammes.TheremunerationoftheBoardofDirectorsisnotlinkedtotheCompany'sperformance.BoardMembersofthecompaniestheyrepresentarenotsupposedtotakeonassignmentsfortheCompany.

ManaGeMent reMuneration

Pursuant toSection6–16a)of theNorwegianPublicLimitedCompaniesAct,theBoardofDirectorshasissuedastatementregardingtheestablishmentofsalariesandotherremunerationfortheManagement.Thestatementisdisclosedinnote23totheannualaccountsandasaseparatedocumenttobepresentedtotheAnnualGeneralMeeting.

inForMation anD CoMMuniCation

ThroughitsCorporateGovernancePolicy,theBoardhasimplementedguidelinesfordisclosureofCompanyinforma-tion.Thereportingoffinancialandotherinformationwillbebasedonopennessandequaltreatmentofallparticipants.TheCompanyprovidesshareholdersandthemarketasawholewithinformationabouttheCompany.Suchinforma-tiontakestheformofannualreports,quarterlyreports,stockexchangebulletins,pressreleases,informationontheCompanywebsiteandinvestorpresentationswhenappropriate.TheCompanyseekstotreatallshareholdersequallyinlinewithapplicableregulations.InformationdistributedthroughtheOsloStockExchange,orotherwiseinpressreleases, ispublishedsimultaneouslyontheCompany’swebsite:www.odfjell.com.TheCompanyaimstohaveregularpresentations.ThefinancialcalendarisavailablethroughstockexchangeannouncementsandontheCompany’swebsite.

Openinvestorpresentationsareheldat leasttwiceayearinconnectionwithOdfjell'squarterlyreports.ThePresident/CEOreviewsandmakescommentsonresults,marketdevelopmentsandprospects.Odfjell'sSeniorVicePresidentFinance/CFOalsoparticipates inthesepresentations. The presentations of the annual andquarterlyreportsarepublishedviaOsloStockExchangeandpostedonthecorporatewebsiteatthesametimeastheyarepresented.Theannualandmid-yearresultsarepresentedinalivepresentation,whereasreportsfollowingpublicationoffirstandthirdquarterresultsaremadeavailablethroughwebcasts.Odfjellalsomaintainsanongoingdialoguewith,andmakepresentationstoselectedanalystsandinvestors.Careistakentosecureimpartialdistributionofinformationwhendealingwithshareholders,investorsandanalysts.

TheBoardshallensurethattheCompany’squarterlyandannualfinancialstatementsprovideacorrectandcompletepictureoftheGroup’sfinancialandbusinessposition,includingtheextenttowhichoperationalandstrategicgoalshavebeenachieved.

taKe-oVers

Duringthecourseofanytake-overprocess,theBoardandManagementshallusetheirbesteffortstoensurethatalltheshareholdersoftheCompanyaretreatedequally.TheBoardshallalsouseitsbesteffortstoensurethatsufficientinformationtoassessthetakeoverbidisprovidedtotheshareholders.

41

Intheeventofatake-overbidforthesharesintheCompany,theBoardshallnotseektopreventorobstructtake-overbidsfortheCompany’sactivitiesorshares,unlessthereareparticularreasonsforsuchactions.TheBoardshallnotexercisemandatesorpassanyresolutionswiththeintentionofobstructingthetake-overbidunlessthisisapprovedbytheGeneralMeetingfollowingannouncementofthebid.Inparticular,theBoardshallinsuchcircumstancesnotwithoutthepriorapprovaloftheGeneralMeeting(i)issuesharesoranyotherequityinstrumentsintheCompany,(ii)resolvetomergetheCompanywithanyotherentity,(iii)resolveonanytransactionthathasamaterialeffectontheCompany’sactivities,or(iv)purchaseorsellanysharesintheCompany.

IfanofferismadeforthesharesintheCompany,theBoardshallissueastatementevaluatingtheofferandmakearecommendationastowhethertheshareholdersshouldaccepttheoffer.IftheBoardfindsitselfunabletoprovidesucharecommendation,itshallexplainthebackground.TheBoard’sstatementonabidshallmakeclearwhethertheviewsexpressedareunanimous,andifthisisnotthecase,itshallexplainthebasisonwhichmembersoftheBoardhaveexcludedthemselvesfromtheBoard’sstatement.TheBoardshallconsiderwhethertoarrangeavaluationfromanindependentexpert.IfanymemberoftheBoardortheManagement,orcloseassociatesofsuchpersons,oranyonewhohasrecentlyheldsuchaposition,iseitherthebidderorhasasimilarparticularinterestinthebid,theBoardshallinanycasearrangeanindependentvaluation.Thisshallalsoapplyifthebidderisamajorshareholderinthe

Company.AnysuchvaluationshouldbeeitherattachedtotheBoard’sstatement,bereproducedinthestatementorbereferredtointhestatement.

auDitor

TheCompanyemphasisesonkeepingacloseandopenrelationshipwiththeCompany’sauditor.TheauditorparticipatesinBoardmeetingsforapprovaloftheannualaccounts.TheCompany’sauditorshallpresentanannualplanforitsauditworktotheAuditCommittee.Inaddi-tiontheauditorshallpresentareviewoftheCompany’sinternalcontrolprocedures, including identifiedweak-nessesandproposedimprovements.TheBoardshallatleastyearlyhaveameetingwiththeauditorwithouttheManagement’spresence.Theauditor’sfeesforauditingandotherservicesarepresentedtotheAnnualGeneralMeetingandare included inthenotesto theannualaccounts.TheBoardcontinuouslyevaluatestheneedforwrittenguidelinesconcerningtheOdfjellManagementGroup’semploymentoftheauditorforotherservicesthanaudit.TheBoardbelievesthattheauditor’sindependenceoftheCompany’sManagement isassured.Theauditorshallissueawrittenannualdeclarationconfirmingtheauditor’sindependence.

InordertosecureconsistencyincontrolandauditsoftheGroup,Odfjellgenerallyusesthesameauditfirmforallsubsidiariesworldwide,andcurrentlyengagesEyastheCompany'sindependentauditor.

43 42

FiNANciALsour

Ourfinancialstrategyshallbesufficientlyrobusttowithstandprolongedadverseconditions,includinglong-termdownturnsinourmarketsorchallengingconditionsinthefinancialmarkets.Weadoptanactiveapproachtomanagingriskinthefinancialmarkets.Ouraimistoprovideacompetitivelong-termreturnoninvestmentstoourshareholders.

43 42

43

1739Shipcrewinternational255ShipcrewNorwegian876Tankterminals226Headoffice256BranchofficesabroadTotal:3352

EmplOyEEs

Internationalshareholders(49.81%)Norwegianshareholders(50.19%)

sharEhOldErCiTizENship

dividENdpErsharE(NOKperyearofpayment)

Ordinarydividend

OdfjellAshare OdfjellBshare

04 05 06 07 08 09 10 11 12 130

1

2

3

4

5

6

NorchemA/S(32.71%)OdfjellSE(9.47%)SvenskaHandelsbankenAB(5.35%)JPMorganClearingCorp.(4.11%)RederietOdfjellAS(4.03%)Others(44.34%)

sharEhOldErsTruCTurE

Source:VPS

Source:VPS

Source:OsloStockExchange

43

dEvElOpmENTOdFjEllsharEs2013

20

30

40

50NOK

45 44

odfjell’s aim is to provide a competitive long-term return on the investments for its shareholders. the Company embraces an investor-friendly dividend policy. the goal is to provide semi-annual dividend payments. We comply with the code of practice for reporting and information advised by oslo børs.

share PerForManCe

Attheendof2013theCompany’sAsharesweretradingatNOK41(USD6.74),up71%fromNOK24(USD4.29)atyear-end2012.TheBsharesweretradingatNOK39.50(USD6.50)attheendof2013,up74%fromNOK22.70(USD4.06)12monthspreviously.

Bywayofcomparison,theOsloStockExchangebenchmarkindexincreasedby21%andthetransportationindexby52%duringtheyear.OdfjellhadamarketcapitalisationofNOK3,905million(USD642million)asat31December2013.Giventhepoor2013resultsandtheimportanceofmaintainingstrongliquiditygoingforward,theBoarddoesnotrecommendpaymentofanyordinarydividendfor2013.

traDinG VoLuMes

In2013about21.1millionOdfjellsharesweretraded,brokendownbetween13.2millionAsharesand7.9mil-lionBshares.Thisrepresentsabout24%oftheissuedandoutstandingshares.Atyear-end2013Odfjellhadoutstanding65.7millionAsharesand21.1millionBshares.

sharehoLDers

Attheendof2013therewere1,231holdersofOdfjellAsharesand571holdersofOdfjellBshares.Thetotalnumberofshareholderswas1,509,reflectingthatsomeshareholdersownsharesinbothclasses.

inVestor oWnershiP

53.7%oftheCompany’sAsharesand37.6%oftheBshareswereheldbyinternationalinvestorsattheendoftheyear,equivalentto49.8%ofthetotalsharecapital.

treasurY shares

Attheendof2013OdfjellSEowns5,891,166Asharesand2,322,482Bsharesastreasuryshares,whichis9.5%ofthetotaloutstandingshares.

TheExtraordinaryGeneralMeetingon2October2012author-isedtheBoardofDirectorstoacquiretreasurysharesofupto10%oftheCompany’soutstandingshares,ataminimumpriceofNOK2.50(parvalue)andamaximumpriceofNOK250pershare.Thisauthorisationexpireson2April2014.

inVestor reLations

Provisionofaccurateandtimelyinformationisofvitalimportanceinordertocreatecredibilityandconfidence.Ourpolicyistoprovidethemarketwithallrelevantinformationinlinewithstatutoryregulationsandtherecommendations

sharehoLDer inForMation

SHAREPRICEINDEXVERSUSOSEBX

OdfjellAshareOsloStockExchangeBenchmarkIndex

SHAREPRICEINDEXVERSUSTRANSPORTATIONINDEX

OdfjellAshareOsloStockExchangeTransportationIndex

09 10 11 12 13 1400

50

100

150

200

250

09 10 11 12 13 1400

50

100

150

200

250

Source:OsloStockExchange Source:OsloStockExchange

45

oftheOsloStockExchange.Weattachgreatimportancetoensuringthatshareholdersreceiveswift,relevantandcorrectinformationabouttheCompany.OuraimistoprovideagoodunderstandingoftheCompany’sactivitiesanditsprospectssothatshareholdersareinagoodpositiontoassesstheshare’stradingpriceandunderlyingvalue.Formoreinformation,pleaseseepage36underCorporateGovernance.

the FinanCiaL CaLenDar For 2014/2015 is as FoLLoWs:

1stquarter2014report 8May20142ndquarter2014report 21August20143rdquarter2014report 13November20144thquarter2014report 12February2015

TheAnnualGeneralMeetingisscheduledfor7May2014.

Pleasenotethatthefinancialcalendarissubjecttochange.ChangeswillbereportedtotheOsloStockExchange.

Supplementaryinformationmaybefoundonwww.odfjell.com

SHARECAPITALHISTORy

Year eVent aMount in noKshare CaPitaL

aFter eVent

1914 Established 517500 5175001969 Capitalisationbonusissue 382500 9000001969 MergerwithA/SOljetransport 900000 18000001981 Capitalisationbonusissue 1800000 36000001984 Capitalisationbonusissue 3600000 72000001985 MergerwithSkibsaksjeselskapetSelje 3320000 105200001985 MergerwithOdfjellTankers&TerminalsA/S 2000000 125200001985 Capitalisationbonusissue 6260000 187800001986 Publicoffering 9390000 281700001986 Capitalisationbonusissue 2817000 309870001988 Capitalisationbonusissue 6197400 371844001989 Capitalisationbonusissue 7436880 446212801989 Internationalprivateplacement 10000000 546212801990 Capitalisationbonusissue 54621280 1092425601994 Capitalisationbonusissue 109242560 2184851202000 Privateplacement 49267340 2677524602001 Redemptionoftreasuryshares (13657500) 2540949602002 Redemptionoftreasuryshares (25409490) 2286854702003 Redemptionoftreasuryshares (11763100) 2169223702004 Sharesplit2:1 0 2169223702005 Sharesplit2:1 0 2169223702006–2013 Noevents 0 216922370

EARNINGSPERSHARE

04 05 06 07 08 09 10 11 12 13-10

-5

0

5

10

15

20

25

NOk

47 46

With the global market as its arena, odfjell is exposed to a number of risk factors. our financial strategy shall be sufficiently robust to withstand prolonged adverse conditions, including long-term downturns in our markets or challenging conditions in the financial markets. odfjell adopts an active approach to managing risk in the financial markets. this is achieved through funding from diversified sources, maintaining high liquidity or credit reserves, and through systematic monitoring and management of financial risks related to currencies, interest rates and bunkers. hedging instruments are used to reduce the Company’s exposure to fluctuations in the above-mentioned financial risks. at the same time, it may limit odfjell’s upside potential from favourable movements in these risk factors. the Company also closely monitors the risk related to market valuation of the hedging instruments and the effect this has on the equity ratio.

earninGs

Earningswithinthechemicaltankermarketsarelessvolatilethaninmanyothershippingsegments,sincethesearenichemarketswithspecialisedtonnages.Thediversityoftradelanesandtheproductswetransportprovidesomenaturalhedgingagainstthenegativeimpactofageneralslowdown in demand. Our time-charter earnings areinfluencedbyexternalfactorssuchasglobaleconomicgrowth,thegeneralship-freightmarket,bunkerpricesandfactorsspecificallyrelatedtothechemicaltankertrade,suchascargotypeandcargovolume,tradingpatternrequiredbyourcustomers,contractandspotratesandouroperationalefficiency.Timeisoftheessence,andoptimalutilisationofthefleetandanexpedientcompositionofcargoes,withminimaltimeinport,isofvitalimportanceinordertomaximisetime-charterearnings.

Thelargestsinglecostcomponentaffectingtime-charterearningsisbunkers.In2013thisamountedtomorethan

USD282million(57.3%ofvoyagecosts).AchangeintheaveragebunkerpriceofUSD50pertonneequalsaboutUSD27millionperyear(orUSD916perday)changeintime-charterearningsforthoseshipswherewehaveadirecteconomicinterest.AcertainportionofourbunkerexposureishedgedthroughbunkeradjustmentclausesintheContractsofAffreightment.Asat31December2013,theCompanyhadhedgedabout20%ofits2014bunkerexposure,throughswapsandoptionsatanaveragepriceofaboutUSD547pertonne.

Sensitivityanalysesshowthatachangeintime-charterearningsofUSD1,000perdayforourchemicaltankers(aroughly5%changeinfreightratesaftervoyagescosts)will impactthepre-taxnetresultbyapproximatelyUSD24million.TheCompanyisnotcurrentlyengagedinthederivativemarketforForwardFreightAgreements.

Tankterminalactivitieshavehistoricallyshownmorestableearningsthanourshippingactivities.WiththeissuesfacingOdfjellTerminals(Rotterdam),2012and2013havebeenexceptionstothis.Odfjell’s51%ownershipshareinourtankterminalholdingcontributedanegativeEBIT(operatingresult)ofUSD71.9million,includingimpairmentofUSD81.3milliongross.Asubstantialpartofthetankterminalcostsarefixedcosts,andthemaindriversforearningswithinatankterminalaretheoccupancyrate,thevolumeofcargoeshandled throughandby the terminal,andoperationalefficiency.

TheOdfjellGassegmentwasestablishedintheautumnof2012.Start-upexpensesandasoftmarketresultedinanegativeEBITofUSD5.5millionin2013.

interest rates

Allinterest-bearingdebt,exceptdebtbornebytankter-minalsoutsidetheUSA,isdenominatedinUSD.Interest

FinanCiaL risK ManaGeMent anD sensitiVities

BUNKERS(3.5%BARGESROTTERDAM) INTERESTRATES(USD3MONTHLIBOR)

USD/TONNES

0

100

200

300

400

500

600

700

800

04 05 06 07 08 09 10 11 12 13 140%

1%

2%

3%

4%

5%

6%

7%

04 05 06 07 08 09 10 11 12 13 14

Source:Bloomberg Source:Bloomberg

47

ratesaregenerallybasedonUSDLIBORrates.Withourcurrentinterestratehedginginplace,about32%ofourloanswereatfixedinterestratesatyearend.Inordertoreducethevolatilityofthenetresultandcashflowderivingfromchangesinshort-terminterestrates,interestrateperiodsonfloatingratedebtandonliquidityareman-agedtobeconcurrent.Totalinterest-bearingdebtasat31December2013wasUSD1,350million,whileliquidassetsamountedtoUSD162million.

CurrenCY

TheGroup’srevenuesareprimarilydenominatedinUSD.TankterminalsoutsidetheUSAandourregionalEuropeanshippingtradegenerateincomeinnon-USDcurrencies.Ourcurrencyexposurerelatestothenetresultandcashflowfromvoyage-relatedexpenses,ship-operatingexpensesandgeneralandadministrativeexpensesdenominatedinnon-USDcurrencies,primarilytheNOKandEUR.Wehaveestimatedthata10%decreaseoftheUSDagainsttheNOKwouldreducethepre-tax2013resultbyaroundUSD10million,ignoringtheeffectofanycurrencyhedginginplace.

Ourcurrencyhedgingattheendof2013,underwhichtheCompanysoldUSDandpurchasedNOK,coversabout35%oftheCompany’s2014NOK-exposure.Futurehedgingperiodsmayvarydependingonchangesinmarketconditions.TheaverageUSD/NOKexchangerateforopenhedgingpositionsat31December2013for2014was6.3.

FinanCinG anD LiQuiDitY

Odfjellhasastabledebtstructure,andborrowsfrommajorinternationalshippingbankswithwhomtheCompanyenjoyslong-standingrelationships.TheCompanyhasadiversifieddebtportfoliocomprisingacombinationofsecuredloans,exportcreditfinance,financeleasesandunsecuredbonds.AlthoughourexperienceisthatfundingisavailabletoOdfjellfromvarioussources,includingthebanksandthebondmarket,thegeneraltrendinthefinancialmarketistowardsmedium-termloans,aslong-termfundingislessavailableandmoreexpensive.Asaconsequence,wepaycontinuousattentiontothetimelyrefinancingofmaturingdebt.TheaveragematurityoftheGroup’sinterest-bearingdebtisabout4.2years.

Odfjell’sstrategyistomaintainahighlevelofreadilyavail-ableliquidity.Thisliquidityisinvestedinbankdepositsandhigh-gradebondsandcertificateswithvariableinterestrates.

taX

TheOdfjellGroupoperateswithinanumberofjurisdictionsandtaxregimes,includingtheNorwegiantonnagetaxsystem,theApprovedInternationalShippingsysteminSingaporeandthetonnagetaxsystemsintheUK.InadditionweoperateunderlocaltaxsystemsinChile,BrazilandBermuda.Ourtankterminalactivitiesaregenerallysubjecttotheordinarycorporatetaxrateswithinthecountryinwhichtheactivityislocated.

USD/NOK

17%Othervoyagecosts24%Bunkers28%Capitalexpenses31%Operatingandgeneraladministrationcosts

COSTANALySIS

ThemajorcostcomponentsofatypicallargeOdfjellchemicaltanker

04 05 06 07 08 09 10 11 12 13 144

5

6

7

8

Source:Bloomberg

Bunkers,USD50pertonneincrease

Freightrates,5%decrease

Interestrates,1%increase

Currency,USD10%decreaseagainstNOK

USDMILLION

SENSITIVITy

-30

-25

-20

-15

-10

-5

0

49 48

WorLDWiDe aCtiVities

49

51 50

the DireCtors' rePort 2013

in 2013 the consolidated net result amounted to a loss of usD 108 million, compared to a loss of usD 111 million in 2012. in 2013 odfjell recognised an impairment of gross usD 81 million related to odfjell terminals (rotterdam), and usD 8.6 million in capital losses related to sale of ships and also capital gains related to terminal transactions of usD 24.5 million, whereas the 2012 result included usD 4.6 million in capital losses related to sale of ships. total assets by year-end amounted to usD 2,360 million down from usD 2,569 million at the end of 2012. the Company’s consolidated result before taxes in 2013 was a loss of usD 114 million, compared to a loss of usD 111 million in 2012. the board is disappointed with the results. however, given the Company’s relatively robust standing after five years of a poor chemical tanker market, we have demonstrated the resilience of our combined shipping and storage business model over time, and in a cyclical business, we have seen again the importance of continuous focus on maintaining sufficient liquidity reserves.

Odfjell’snetresultwasimpactedbycontinuedmateriallossesatOdfjellTerminals(Rotterdam),andstill lossmakingperformanceforourchemicaltankerbusiness.TheCompanyrealizedacapitalgainrelatedtotheLindsayGoldbergterminaltransactioncompletedinJune.Themajorityofthetankterminalscontinuedtodeliverstableandsatisfactoryresultswithgoodgrowthprospects.

Themarketforourchemicaltankerspickedupinthefirsthalfof2013,butonlywithsmallimprovementsinourtime-charterearnings.Therewereencouragingdevelop-mentsinsometrades,butastheproducttankermarketalsoremainedweakthroughmostoftheyear,wefacedincreasedcompetitionincertainsegmentsfromtheproducttankerfleet.Thebunkerexpensesincreasedslightlyin2013withannualaveragespotpricesatcontinuedhighlevels.Thiswasonlypartlyoffsetthroughbunkerhedgingandescalationclausesincontracts.ContractsofAffreightmentcontinuedtoberenewedathigherrates.Thecontractcoveragefortheyearhasonaveragebeenaround55%oftotalvolumeshipped.

Nettonnagegrowthduringtheyearforthechemicaltankerfleetasawholewas1.3%,whilethecorechemicaldeep-seafleetgrewbyabout1.6%.Thisconstitutesthemostmoderatefleetgrowthsincetheearly1990s.Theorderbookforthecorechemicaldeep-seafleetisatthetimeofwritingabout10%ofcurrentfleet,andslightlyhigherforthestainlesssteelsegmentatabout12.5%.Althoughincreasingslightly,thechemicaltankergrowthrateisexpectedtoremainrelativelylowalsothenextfewyears.Forecastnetcorechemicaldeep-seafleetgrowthfor2014and2015isnowonaverageabout2.8%peryear.

USshalegasandtightoilhaverevitalisedthecountry’schemicalindustry,withbothcheapfeedstockandenergyfuellingacompetitiveedge.Weexpectthistohaveapositiveimpactonoursegmentsinthemediumtolongterm,byboostingtheamountofcargoesinthemarket,sailingdistancesanddemandforstorage.Basedhereonandthestillfavourablesupply/demandpicture,weexpectaslowbutsteadyincreaseindemandforourservices.Thenumberofcontractsforconstructionofnewchemicaltankersispickingup,buttheorderbookforthecorechemicalsegmentremainsmoderate,althoughcashrichprivateequityhasstartedtoenterthisspace.

Ourfleetconsistedof83vesselsatthebeginningof2014, includingowned,time-chartered,commerciallymanagedunits,andshipsmanagedonapoolbasis.Aspartofourongoingfleetrenewalprogramme,twovesselsweresoldforrecyclingandadditionallytwoweresoldforcontinuedtrading.Afurtherseventime-chartervesselswereredeliveredtotheirrespectiveowners,inadditiontoredeliveryofthe13NCCvesselsfromthediscontinuedNOCTpool.

TheCompanytookdeliveryoftwonewbuildings,whilstweacquiredtwosecond-handchemicaltankersandtookonatotaloftenmodernshipsonshortertime-charters,partlytoreplacetheNOCTpoolships.

InSeptember2013wesignedshipbuildingcontractswithNantongSinopacificOffshore&EngineeringCo.,LtdforconstructionoffourLPG/Ethylenecarriersofeach17,000cbm.Wealsosecuredoptionsfordeliveryofuptofouradditionalshipsofsameorlargersize.TodayOdfjellGasisoperatingtwomodernLPG/Ethylenecarriersofeach9,000cbm.Thenewbuildingsonorderrepresentanimportantelementofourlong-termstrategytogrowandbecomeasignificantownerandoperatorinthegasmarket.Wearenowassessingvarioussourcesoffinancefortheorderofthefour17,000cbmLGP/Ethylenevessels,andarealsoevaluatingpotentialsourcesoffinancingtofundfurthergrowthofourLPG/Ethyleneactivities,includingpartnershipwithindustrialorfinancialstakeholders.

Thefour46,000dwtcoatedchemicaltankersonorderattheHyundaiMipoDockyardinSouthKoreawillbedeliveredintheperiodMarch-July2014.ThesevesselsrepresentanimportantelementofOdfjell’sfleetrenewalprogramme,andfeatureeco-friendlyandfuel-efficientdesign.

Ourtankterminalbusinesscontinuedtodeliverstableearn-ings,withtheexceptionofOdfjellTerminals(Rotterdam),which also in 2013 suffered big losses following thetemporaryshutdownoftheterminalinJuly2012.

51

Ourtankterminalprojects,includingdevelopmentofnewterminalsinCharleston,SouthCarolina,USA,andNangang,nearTianjin,Chinaprogressedwellandwithincontingencymarginsofscheduleandbudgets.ThenewterminalinCharlestonwastechnicallycompletedendof2013andfirstcontractscommencedinJanuary2014.

InMayweannouncedthesigningofthefinalagreementswithLindsayGoldbergLLCforexpansionofourexistingjointventuretoincludeessentiallyallofOdfjell’stankterminalbusiness.Thetransactionwillenableustojointlycontinueourambitiousandacceleratedgrowthstrategywithintheterminaldivision.

InDecember,OdfjellTerminalsacquiredfromtheFounderGroupa50%interestinanexistingcompanyholdinglandandanexistingjettyinQuanzhou,FujianProvince,China.Ourintentionistoconstructanewtankterminalofabout180,000cbm,whichwillbemanagedandoperatedbyOdfjellTerminals.

Since6May2013theBoardhascomprisedofLaurenceWardOdfjell(ExecutiveChairman),BerntDanielOdfjell,ChristineRødsæther,IreneWaageBasili,JannickeNilssonandÅkeGregertsen.TheAuditCommitteehasconsistedofBoardDirectorsÅkeGregertsen(chair)andJannickeNilsson,andtheNominationCommitteehassincethesamedateconsistedofArneSelvik(chair)andBoardDirectorsChristineRødsætherandLaurenceWardOdfjell.

CorPorate soCiaL resPonsibiLitY

A clear policy and commitment to Corporate SocialResponsibility (CSR) is becoming increasingly moreimportantforOdfjellandmanyofourstakeholders.AsamemberoftheUnitedNationsGlobalCompactprogramme,wehaveaclearcommitmentastoadoptingtheirprinciplesforethicallysustainableoperationswithregardtohumanrights,labourconditions,environmentalconcernandanti-corruption.WereportprogressandplanstotheUNGlobalCompactsecretariatonanannualbasis.OurCorporateCSRPolicyandCodeofConducthavebeenamendedaccordingly.InadditionwehaveintroducedanewCorporateSupplierConductPrinciplesforthirdpartieswhowanttodobusinesswithOdfjellandalsosignedupforamembershipinanindustryset-upnamedMaritimeAnti-CorruptionNetwork.ACouncilhasbeenestablishedtosetdirectionsandmonitorprogressinthisarea.

QuaLitY, heaLth, saFetY anD enVironMent (Qhse)

Wehavemaintainedourstrongfocusontheenvironmentwithimprovedfuelefficiencyandasubsequentreductionofemissionsasthekeyareas.ProgressismonitoredthroughourparticipationintheCarbonDisclosureProject(CDP).ThescopeofreportingforCDPencompassesshipping,theterminalsinRotterdamandHouston,andtheBergenoffice.Fromtheshippingactivitiestherewasa10%reductionofCO2emissionsin2013ascomparedto2012anda19%reductionofSOX.Anenergysavingcampaignhasalso

beenrunningin2013.Thebestofthemanyproposalsreceivedwillbeimplementedin2014.TheEnergyEfficiencyOperationalIndicator(EEOI),definedastheamountofCO2emittedperunitoftransportwork,fortheOdfjellfleetwas18.34gramsofCO2pertonnecargotransportedonenauticalmile(g/tnm)in2013,whichisaboutthesamelevelasin2012.In2013OdfjellTankersoperatedabouthalfofourfleetinslow-orultra-slowspeedmode.Thisgeneratedanetfuelsavingofabout78,000tonnes,correspondingtoemissionsavingsofapproximately243,000tonnesofCO2,and866tonnesofSOX.Useofadvancedweatherroutingisestimatedtohavecontributedtoemissionsavingsofabout4,600tonnesCO2.Further,in2013Odfjellcontinuedwithhullcleaningandpropellerpolishingbetweenscheduleddry-dockings.Wehaveenhancedmonitoringandintervalshavebeenshortened.This, togetherwith installationofpropellerductsonthreeadditionalshipsin2013,isexpectedtogivefurtherfuelreductionsandsubsequentlylowerCO2,NOXandSOXemissionsgoingforward.

Wehadin2013sadlyoneincidentcausingpermanentdisability.OuroverallQHSEperformancein2013showedimprovement.Asasignofahealthiersafetyculture,moreincidentswithsmallerconsequencesandnearmissesarenowregularlyreportedbothwithinourshippingandterminaldivisionsandwithenhancedattentiontofollowup.Manyoftheseincidentsareremindersoftheimportanceofhavingcompetentpersonnelandproperprocesses.Odfjellhasthereforefurtherincreasedfocusonriskawareness,pro-cesssafety,useofpreventivebarriersandenhancementofsafetycultureaspartofadriveforaproactiveQHSEculture.OdfjellShipManagementinitiatedaSafetyCultureprojectin2012andthishascontinuedthroughout2013.InadditionaSafetyDaywasorganizedforallOdfjellemployeesforthefirsttimein2013,LeadershipsandFollowershiptraininghasbeenintroducedanddeliveredforofficersandrelevantshorestaffandlastautumnthePresident/CEOlaunchedaRoadmaptoOperationalExcellenceinitiative.Intermsofpersonalsafetyindicators,ourshipping-relatedLost-TimeInjuryFrequency(LTIF)indicatorismarginallyupto1.37in2013from1.21in2012.OdfjellTerminals’LTIFimprovedsignificantlyto0.30in2013from1.30in2012.Theselevelsarehistoricallylow,butweareconfidentthatourmanyimprovementinitiativeswillfurtherreduceLTIF.

Piracyactivityremained lowwithnohijackingsbeingreportedin2013intheGulfofAdenandtheEastAfricaandyemen/Omanoffshoreareas.Butsuspiciousapproacheswere still reported and privately contracted securitypersonnelthereforeusedintheseareas.PiracyactivityalsocontinuesintheGulfofGuinea(WestAfrica)withviolentattacksonships,kidnappingofseniorofficersandtheftofcargo.BoardingandrobberiesonboardshipsinEastAsia,particularlyinIndonesiahavealsobecomeanincreasingconcern.

OdfjellCorporateQHSEconductssystemauditsonopera-tiveandstaffunitstoensurecompliancewithregulatoryandcorporaterequirementsandexpectations.Theauditprogrammesareimportantinstrumentswithregardto

53 52

ensuringthatinternalandexternalrequirementsarefol-lowed,andthatweproperlyadaptandarecomplianttotheever-increasingandchangingregulatorydemandsofourcomplexindustry.18auditswerecarriedoutin2013.Ourcorporateinternalauditprogrammeiswellimplementedandseveralstaffandoverseasofficeshavebeenaddedtothescopeofthe2014programme.Inadditiontothecorporateinternalauditprogramme,internalandexternalauditsarecarriedoutatmanagementandoperationallevels.

Odfjellsoldfourshipsforrecyclingin2013.ToensureacontrolledprocesswearefollowingrecognisedguidelinesandareobtainingGreenPassportsforshipswellinadvanceofthetimewhentheyareduetobephasedout.Thepro-grammemeetstherequirementsofIMOResolutionsA962and179ascertifiedbyLloyds.AGreenPassportrequiresmappingofmaterialsandpotentialhazardsonboardthatcanimpacttheenvironmentandworkingconditionsassociatedtotherecycling.Italsorequiresfollow-upwiththerecyclingyard.WeinspecttheyardstobeusedtoensuretheyareISO30000certifiedandcomplywiththeapplicableIMOguidelinesandourownparticularrequirementsastoQHSEstandards.

2013hasbeenanotherchallengingyearforOdfjellTerminals(Rotterdam)(OTR),andweexpectthesituationtoremainsointo2014.InJune2013theDutchSafetyBoardissuedareportfollowingtheirinvestigationintotheincidentsandactivitiesatOTRfortheperiod2000-2012.Thiscausedsignificantattentionfrommedia,politiciansandthepublic.InadditiontoOTR,thereportalsocontainedrecommenda-tionsfortherolesoftheauthoritiesandothercontrollingentities.Anumberofactivitiesincludingorganisationalrestructuringhavebeeninitiatedtomitigaterisk,improvecontrolandsignificantlyimprovethestandardofOTR.Theseactivitiesareallbeingmadeinco-operationwiththeauthorities.Keyissuestoasustainablysafeperformancearetheimplementationsofpreventivemaintenanceusingastateoftheartplatformandanindustrybestpracticesafetymanagementsystem.TheterminalhasalsoadoptedaRiskBasedInspectionsystemtovalidatemechanicalintegrityoftanksandisfurthermoreusingasystemforReliabilityBasedMechanicalIntegrityonothersystems.

CorPorate GoVernanCe

TheframeworkfortheCompany’sCorporateGovernanceistheNorwegianCodeofPracticeforCorporateGovernanceof23October2012.Odfjelliscommittedtoethicalbusinesspractice,honesty,fairdealingandcompliancewithalllawsaffectingourbusiness.Thisincludesadherencetohighstandardsofcorporategovernance.TheBoard’sstatementregardingcorporategovernanceisapartoftheGroup’sannualreport.Odfjell’sCorporateSocialResponsibilityPolicyalsoencompasseshighfocusonquality,health,safetyandcarefortheenvironmentaswellashumanrights,non-discriminationandanti-corruption.TheCompanyhasitsowncorporateCodeofConductthataddressesseveralofthesematters.AllOdfjellemployeesareobligedtocomply

withtheCodeofConduct.

business suMMarY

Weremaincommittedtoourlong-termstrategyofenhanc-ingOdfjell’spositionasaleadinglogisticserviceproviderofoceantransportationandstorageofbulkliquidsandgases.Byfocusingonsafeandefficientoperationofaversatileandflexiblefleetofglobalandregionalchemicaltankersandgascarriers,togetherwithcargoconsolidationatourexpandingtankterminalnetwork,weaimtofurtherenhanceproductstewardshipforourcustomers.Thefleetisoperatedincomplexandextensivetradingpatterns,whilstourcustomersdemandsafety,qualityandthehigheststandardsofservice.Criticalmassenablesefficienttradingpatternsandoptimalfleetutilisation.

Chemical tankersGross revenues from our chemical tanker activitiesamountedtoUSD1,028million.EBITDAcameinatUSD98million,negativelyimpactedbyhighbunkercosts,reducedutilisationandstillunsustainablefreightrates.EBITendedwitharesultofUSD3million,comparedtoalossofUSD35millionin2012.Totalshippingassetsatyear-endamountedtoUSD1,624million.Time-charterincomeexpressedinaverageUSDpershipperdayincreasedbyabout1.3%comparedto2012.

Operationofchemicaltankersisamongthemostcomplexinthemarineindustry.During2013ourshipstransportedmorethan500differentproductscomprisingsome4,100individualparcels.Unlikevessels inmanyothership-pingsegments,ourshipshavetocallatanumberofberthsdictatedbyourcustomers,evenwithinoneandthesameport.Callingmanyberthsistime-consuming,fuel-inefficientandcostlyandthus,negativelyimpactsourresults.Ouraimisthereforetoconsolidateandmakeload-inganddischargingmoretime-efficient.Webelievefuturesuccessfulconsolidationofcargoes,combinedwithmoretime-efficientportoperations,willbenefitourcustomers,ourselvesand,asanadditionalbenefit,theenvironment.

WespentatotalofUSD282milliononbunkersin2013andouraveragecostofbunkersin2013wasstillhighatUSD556pertonne(includingcompensationrelatedtobunkerescalationclausesandhedging),comparedtoUSD542pertonnetheprecedingyear.BunkerhedgingmitigatedthiscostincreasebycontributingUSD5.9milliontotheresultin2013.Dailyoperatingexpensesonacomparablefleetbasisremainedalmostunchangedcomparedto2012.

Byyear-end2013ourdeep-seachemicaltankerfleetconsistedof69shipsofmorethan12,000dwt,ofwhich30wereowned.TheCompanywasalsooperating12smallerships,tenofwhichwereowned.

Aspartofouron-goingfleetrenewalprogramme,twovesselsweresoldforrecyclingwhilstanadditionaltwoweresoldforcontinuedtrading.AllvesselssoldforrecyclinghadGreenPassports,withthebuyersbeingresponsible

53

toensurethattherecyclingyardsubmittedaworkingplaninaccordancewithIMOguidelinesforshiprecycling.Afurtherseventime-chartervesselswereredeliveredtotheirowners.TheCompanytookdeliveryoftwonewbuildings,whilstitacquiredtwosecond-handchemicaltankersandtookonatotaloftenmodernshipsonshortertime-charters,allbuttwowithstainlesssteeltanks.

Aftermanyyearsofco-operation,OdfjellTankersandNationalChemicalCarriers(NCC)ofSaudiArabiaagreed,effective1June2013,becauseofdifferenttradingstrategiesgoingforward,todiscontinuethejointpoolof40,000to45,000dwtcoatedchemicaltankers.However,wecontinuethejointpoolagreementconcerningourtwo75,000dwtvessels, i.e.Odfjell’sBowPioneerandhersistervessel,ownedbyourpartner.

InMarchthelastvesselinaseriesofthreestainlesssteelvesselsofeach9,000dwtwasdeliveredfromChongqingChuandongShipbuildingIndustry(CCSIC)inChina.

InJunewetookdeliveryofBowPioneer,theworld’slargestfullyIMOIIchemicaltanker.Thevessel,whichwasdeliveredfromDaewooShipbuildingandEngineeringinSouthKorea,is75,000dwtandhas30coatedcargotankswithatotalcargocapacityof86,000cbm.

Thefour46,000dwtcoatedchemicaltankersonorderattheHyundaiMipoDockyardinSouthKoreawillbedeliveredintheperiodMarch-July2014.ThesevesselsrepresentanimportantelementofOdfjell’sfleetrenewalprogramme,andfeatureeco-friendlyandfuel-efficientdesign.

Incombination,andasanextensionofourworldwidedeep-seaservice,ourregionalbusinessactivitiesencompassfourdistinctgeographicalregions.Ourlargestregionaloperation is inAsia,whichrepresentsastrategicallyimportantareaforourstorageandtransportationbusinesswithsignificantnewchemicalproductionexpectedtocomeonstreamintheyearstocome.Weoperateelevenshipsindifferenttradelanes,coveringtheSingapore–Japan/SouthKorea–Australia/NewZealandranges.

Effective1January2014,OdfjellandEuroceanicaagreedtodissolvethepooloficeclassstainlesssteeltankerstradingintheBaltic,NorthwestEuropeandtheMediterranean.OdfjellTankerswillcontinuetradingourvesselsinthisareaunderourformername‘OdfjellTankersEuropeAS’.

InSouthAmerica,twoBrazilianflaggedshipsareowned,managedandoperatedbyourwhollyownedBraziliancompanyFlumar.Theseshipsaresupplementedbyshipsandourdeep-seavesselstradinginSouthAmerica.

Finally,wealsohavea50/50jointventureinChilewithCSAVwithtwoshipsfortransportationofmostlysulphuricacidfortheminingindustryalongthewestcoastofSouthAmerica.

Odfjellhasbeenpromotinghighsafetyandenhancedefficiencystandardsconcerningchemicaltankerssince

theinceptionoftheindustryandthus,continuestotakeaproactiveapproachtowardsinternationalregulatorybodiesandmajorcustomersinordertofurtherenhancesafety.Inthiscontext,Odfjellcontinuestoaddresskeyissues,suchasthepracticeoftankinerting.ViaIntertanko,wearealsoengagedinpromotingimplementationofamorecost-efficientandtransparentregimeofcustomers’shipinspectionandvettingprogrammes,asthesehavenowgrownintooftenconflictingdemandsbycustomersforthesameshipandcrew.

In2013OdfjellShipManagementcontinuedtheeffortstodevelopasafetyculturecapableoftakingourHealth,Safety,SecurityandEnvironmentperformance(HSSE)toasustain-ablyhigherlevel.WeinitiatedaSafetyCultureProjectin2012andthishascontinuedthroughout2013.Inaddition,aSafetyDaywasarrangedforallOdfjellemployeesforthefirsttimein2013,LeadershipandFollowershiptraininghasbeencarriedoutandaRoadmaptoOperationalExcellenceinitiativestarted.

LPG/ethyleneGrossrevenuesfromourexpandingLPG/EthyleneactivitiescameinatUSD12million,whileEBITDAfor2013werenegativeUSD3million,downfromUSD1millionin2012.EBITfor2013amountedtonegativeUSD6million,com-paredtoazeroresultthepreviousyear.

In2012,Odfjellre-enteredtheLPG/EthylenemarketbytheestablishmentofOdfjellGasASandthesubsequentacquisitionofthemodernLPG/Ethylenecarriers;BowGuardianandBowGallant.BothvesselsarecurrentlytradingspotinAsiaandhavesofarperformedtechnicallyinaccordancewithourexpectations.Thefinancialresultshowever,havebeenweakerthanexpectedduetothemarketconditions.

September2013,OdfjellsignedshipbuildingcontractswithNantongSinopacificOffshore&EngineeringCo.,LtdforconstructionoffourLPG/Ethylenecarriersofeach17,000cbm.DeliveriesarescheduledbetweenOctober2015andMay2016.ThecontractpriceisintotalintheregionofUSD180million.Wehavesecuredoptionsfordeliveryofuptofouradditionalgascarriersofsameorlargersizes.Thisnewbuildingorderisanimportantstepinourlong-termstrategytogrowandbecomeasignificantownerandoperatorinthegasmarket.

Thepurposewiththere-entryintotheLPG/EthylenemarketistoestablishanadditionalbusinesssegmentforOdfjellinanexpandingmarketinwhichwehavealong-standingassociation,andtoleveragesynergieswiththeChemicalTankersandtheTankTerminals.Futuredemand,bothforLPGandpetrochemicalgases,showcontinuedgrowthpotential.

tank terminalsGrossrevenuesfromourexpandingtankterminalactivitiescameinatUSD129million,whileEBITDAfor2013wereUSD22million,downfromUSD27millionin2012.EBIT

55 54

for2013amountedtonegativeUSD72million,comparedtonegativeUSD8millionthepreviousyear.Includedinthe2013EBITisanimpairmentofgrossUSD81millionrecognisedrelatedtoOdfjellTerminals(Rotterdam)(OTR).

Atyear-end2013,thebookvalueofourtotaltankterminalassetswasUSD686million,downfromUSD1,062million,includingassetsheldforsaleattheendof2012.ThemainreasonsforthedecreaseofthetotalassetsarerelatedtothereducedownershipsharesinseveralterminalsfollowingthenewjointventurewithLindsayGoldbergLLC,aswellastheimpairmentrelatedtoOTR.

Odfjell’sexistingtankterminalsarelocatedinRotterdam,Antwerp,Houston,Charleston,Singapore,OnsaninKorea,SoharinOman,BIKinIran,andJiangyin,DalianandNingboinChina.Additionally,wehaveabeneficialco-operationagreementwitharelatedpartythatpartlyowns12tankterminalsinSouthAmericaandCanada.

ThetransactionforOdfjelltodivest49%interestinOdfjellTerminalsAS,theholdingcompanyforsubstantiallyallofOdfjell'stankterminalsactivitieswascompletedinNovember2013andOdfjellandLindsayGoldberghaveconsequentlyfromthenonjointcontrolovertheterminalactivitiesworldwidethroughourjointinvestmentinOdfjellTerminalsAS.OnlyOdfjell’ssmallinvestmentsinBIKandNingboarenotincludedinthejointventure.

Ourtankterminalbusinesscontinuedtodeliverstableearnings,withtheexceptionofOTR,whichalsoin2013endedwithsubstantiallossesfollowingthetemporaryshutdownoftheterminalinJuly2012.

EBITDAatOTRona100%basiswerenegativeUSD65.6millionin2013,comparedtonegativeUSD58.2millionin2012.

Inordertoreflectthecurrentandplannedactivitiesattheterminal, inlinewithcommitmentstotheregionalauthoritiesandRotterdammunicipality,OTRhasstartedtheprocessofrenewalofitsenvironmentaloperatingpermit.Thenewpermitwillreplaceanumberofexistinglicensesandcoverthenewregulatoryrequirementsandfutureactivitiesoftheterminal.Inordertomoreeffectivelyimple-menttheimprovementsattheterminal,wehavedecidedtoslowdownthepaceatwhichnewcapacityisbroughtonstream.Plannedmaintenanceinspectionswilltemporarilyreducethecommercialavailablecapacity.OccupancybyendofDecemberwas72%ofthecommerciallyavailablecapacityof730,000cbm,reflectingalsoasofterstoragemarketontheEuropeancontinent.

OTRreportedsubstantiallossesin2013duetoreducedcapacityandtheongoingchallengesattheterminaloverthelast18months.Whilethelong-termplansarebeingdeveloped,substantialeffortswillbemadetoimprovetheprofitabilityoftheterminalbybringingbackfurthertankcapacityinserviceandbyadjustingthecoststructuretotheplannedactivitylevelsforthecomingyears.Thisfirst

phasewillfocusonstabilisingthecurrentposition,bothoperationallyandfinancially.

InparallelOTRcontinuestodevelopalong-termbusinessplan.Thisplanwillreflectthenewregulatoryenvironmentandaddresseslong-termbusinessopportunitiesasaconsequenceoftheterminal’sstrategiclocation,includingaseriesofprojectswhicharecurrentlyunderevaluation.Inviewhereof,includingexpectedreducedavailablecapac-ityandthroughputlevelatOTRinthecomingyears,werecognisedinthefourthquarteranimpairmentofUSD76million(netoftaxincomeofUSD5million)inrespectofcertainassets,includingcustomerrelationsandgoodwill.

Triggeredbythelowerbusinessactivitylevels,OTRhasinitiatedaprocesstoreducetheworkforce,andhasinitiateddiscussionswiththetradeunionsandOTR’sWorksCouncilforthisgoal.Thereorganisationisprogressingtowardsaconclusionduring2ndquarter2014.

OTR’sresultsfor2014willheavilydependonachievingthegoalsassociatedtotherestartschedule,ongoingcostcuttinginitiatives,andtosecurenewcustomercontractsforthetankcapacitythatbecomesavailable.Totalinvestmentsattheterminalforthenextfouryearswilldependonthelong-termbusinessplanandtheprojectsbeingdeveloped.

During2013,OdfjellTerminalscompletedconstructionofthetankterminalandthemarineinfrastructure inCharleston,USA.Theprojectcomprisesofatotalinvest-mentexceedingUSD90milliontoestablishaninitialstor-agecapacityof79,491cbmandajettycapableofreceivingshipsupto80,000dwt.

TheexpansionprojectatOdfjellTerminals(Houston)ofadditionally30,800cbmstainlesssteeltanksisunderconstructionandexpectedtobecompletedbyendofsecondquarter2014.Whencompleted,theterminalwillhaveatotalcapacityof362,134cbm.

TheconstructionofthenewterminalintheBohaiBayregionnearTianjin,China,(throughajointventurewithTianjinEconomic-TechnologicalDevelopmentArea,‘TEDA’)startedin2012.Aspertheendof2013,thejettyinfrastructurewascompletedandthreetankpitscomprising137,800cbmareunderconstruction,scheduledtobecompletedfourthquarter2014.

InDecember,OdfjellTerminalsacquiredfromtheFounderGroupa50%interestinanexistingcompanyholdinglandandanexistingjettyinQuanzhou,FujianProvince,China.Itistheintentiontoconstructanewtankterminalofabout184,000cbm,whichwillbemanagedandoperatedbyOdfjellTerminals.Currently,feasibilitystudiesandengineeringareunderwaytoprepareforconstructiontostartinthecourseof2014.

During2013,NoordNatieOdfjellTerminalsinAntwerp,Belgium,completed25,000cbmofitsintotal50,000cbmexpansionofstoragecapacityforoneofitskeylong-term

55

customers.Theremaining25,000cbmwillbeavailableforcommercialservicefromsecondquarter2014andwillbringthetotalstoragecapacityoftheterminalupto350,000cbm.

OdfjellTerminals’strategyistocontinueitsgrowthalongthemajorshippinglanesandatimportantlocationsforpetrochemicals,refinedpetroleumproducts,bio-fuelsandvegetableoils.OdfjellTerminalsisalsoseekingtoidentifyinvestmentsinemergingmarkets,thusenhancingthedevelopmentofship/shoreinfrastructureforsafeandefficientoperationsinsuchregions.

ProFit & Loss For the Year - ConsoLiDateD

the Group’s accounts have been prepared in accordance with iFrs.

GrossrevenuesfortheOdfjellGroupcameinatUSD1,165million,down4%fromtheprecedingyear.Theconsolidatedresultbeforetaxesofcontinuedoperationin2013wasalossofUSD114million,comparedtoalossofUSD111millionin2012.Nettaxesin2013amountedtoanincomeofUSD7million,comparedtoUSD0millionin2012.

EBITDAfor2013totalledUSD117million,comparedtoUSD93milliontheprecedingyear.EBITcametoalossofUSD75million,comparedtoalossofUSD43millionin2012.Thenetresultfor2013amountedtoalossofUSD108million,comparedtoalossofUSD111millionin2012.In2013werecognisedanimpairmentofgrossUSD81millionrelatedtoOdfjellTerminals(Rotterdam),andUSD8.6millionincapitallossesrelatedtosaleofshipsandalsocapitalgainsrelatedtoterminaltransactionsofUSD24.5million,whereasthe2012resultincludedUSD4.6millionincapitallossesrelatedtosaleofships.

Netfinancialexpensesfor2013totalledUSD39million,comparedtoUSD68millionin2012.TheaverageUSD/NOKexchangeratein2013was5.89,comparedto5.83thepreviousyear.TheUSDappreciatedagainsttheNOKto6.08at31December2013from5.59atyear-end2012.

ThecashflowfromoperationswasUSD58millionin2013,comparedtoUSD31millionin2012.ThenetcashflowfrominvestmentswasnegativewithUSD145million.Thisismainlyrelatedtonewinvestmentsanddisposalofpartsoftheterminals.ThecashflowfromfinancingactivitieswaspositivewithUSD87million.

OdfjellSEpostedalossfortheyearofUSD44.6million.Thelosswillbecoveredbyatransferfromotherequity.Asof31December2013,totalretainedearningsamountedtoUSD693million.

TheAnnualGeneralMeetingwillbeheldon7May2014at16:00hoursattheCompany’sheadquarters.

Odfjellembracesan investor-friendlydividendpolicy.Thegoalistoprovidesemi-annualdividendpayments.However,giventhepoor2013resultsandtheimportance

ofmaintainingstrongliquiditygoingforward,theBoarddoesnotproposepaymentofadividendforthe2013results.

Accordingto§3.3oftheNorwegianAccountingActweconfirmthatthefinancialstatementshavebeenpreparedonthegoingconcernassumption.

shares anD sharehoLDers

TheCompanyisaSEcompany(SocietasEuropaea)subjecttoActNo14of1April2005relatingtoEuropeancompanies.TheCompany’sregisteredofficeisinthecityofBergen,Norway.

TheobjectoftheCompanyistoengageinshipping,shipagency,tankterminals,realestate,financeandtradingactivities, includingthetransportationoffreightintheCompany’sownvesselsorcharteredvessels,theconclu-sionoffreightcontracts,co-ownershipagreementsandcooperationagreements,ownershipandoperationoftankterminals,aswellasinvestmentandparticipationinotherenterpriseswithasimilarobjectandotheractivitiesrelatedthereto.

Attheendof2013theCompany’sAsharesweretradingatNOK41(USD6.74),up71%fromNOK24(USD4.29)atyear-end2012.TheBsharesweretradingatNOK39.50(USD6.50)attheendof2013,up74%fromNOK22.70(USD4.06)12monthspreviously.Bywayofcomparison,theOsloStockExchangebenchmarkindexincreasedby23%,themarineindexby61%andthetransportationindexby56%duringtheyear.Asof31December2013,Odfjell’smarketcapitalizationamountedtoaboutNOK3,200million.Per31December2013,OdfjellSEowns5,891,166treasuryAsharesand2,322,482treasuryBshares.

FinanCiaL risK anD strateGY

Our financial strategy is to be sufficiently robust towithstandprolongedadverseconditions,suchaslong-termdowncyclesofourmarketsorchallengingfinancialconditions.Odfjelladoptsanactiveapproachtomanagingriskinthefinancialmarkets.Thisisdonethroughfundingfromdiversifiedsources,maintaininghighliquidityorloanreserves,andbysystematicallymonitoringandmanagingfinancialrisksrelatingtocurrency,interestratesandthepriceofbunkers.However,theuseofhedginginstrumentstoreducetheCompany’sexposuretofluctuationsintheabove-mentionedaspectsalsolimitstheupsidepotentialfromfavourablemovementsinrespectofthesesameriskfactors.

Thesinglelargestcostcomponentaffectingourtime-charterearningsisbunkers.In2013thisitemamountedtomorethanUSD282million(57.3%ofvoyagecost).AvariationintheaveragebunkerpriceofUSD100pertonneequalsachangeofourmarinefuelcostsbyaboutUSD54million,theequivalentofaUSD1,832perdaychangeintime-charterearningsoftheshipsinwhichwehaveadirecteconomicinterest.Ourbunkerexposureispartly

57 56

hedgedthroughbunkeradjustmentclausesinmostofourContractsofAffreightment.Asof31December2013wehadenteredintoadditionalhedgingthroughswapsandoptionsforabout20%ofthe2014bunkerexposure.

Allinterest-bearingdebt,exceptdebtheldbytankterminalsoutsidetheUS,isdenominatedinUSDollars.Bondsissuedinnon-USDcurrenciesareswappedtoUSD.InterestratesaregenerallybasedonUSDLIBORrates.Aportionoftheinterestonourdebtisfixedthroughlong-terminterestrateswaps.Withourcurrentinterestratehedginginplace,about32%ofourloansareonafixedratebasisperyearend2013.Inordertoreducevolatilityofthenetresultandcashflowrelatedtochangesinshort-terminterestrates,interestrateperiodsonthefloatingratedebtandinterestperiodsofourliquidityaremanagedtobeconcurrent.

TheGroup’srevenuesareprimarilydenominatedinUSDollars.OnlytankterminalsoutsidetheUSandourregionalEuropeanshippingtradegenerateandreceiveincomeinnon-USDcurrencies.Ourcurrencyexposurerelatestothenetresultandcashflowfromvoyage-relatedexpenses,shipoperatingexpensesandgeneralandadministrativeexpensesdenominatedinnon-USDcurrencies,primarilyinNOKandEUR.Ourestimateisthata10%appreciationoftheUSDagainsttheNOKwouldimprovetheyearlypre-taxresultbyroughlyUSD10million,assumingnocurrencyhedgingisinplace.

Ourcurrencyhedgingattheendof2013,underwhichwesoldUSDandpurchasedNOK,coversabout35%ofour2014NOKexposurerespectively.Futurehedgingperiodsmayvarydependingonchangesinmarketconditions.

LiQuiDitY anD FinanCinG

Asof31December2013,cashandcashequivalentsandavailable-for-saleinvestmentsamountedtoUSD162mil-lion,comparedwithUSD170millionasof31December2012.Interest-bearingdebtincreasedtoUSD1,350millionasof31December2013fromUSD1,221millionatyear-end2012.Atthesamedatenetinterest-bearingdebtamountedtoUSD1,188million,theequityratiowas32.2%,andthecurrentratiowas1.2.

InOctober2013OdfjellTerminals(Rotterdam)securedtherefinancingoftheexistingloanattheterminal.TotalfacilityamountisEUR150millionandthefacilitymaturesin2018.During2013Odfjellenteredintosevennewloanandbondagreementsrelatedtotheshipping/corporatedivision,withatotalfacilityamountofaboutUSD250million.

KeY FiGures

Thereturnonequityfor2013wasnegative12.9%andthereturnontotalassetswasnegative2.3%.Thecorrespondingfiguresfor2012werenegative11.6%and2.3%,respectively.Thereturnoncapitalemployed(ROCE)wasnegative3.5%in2013.Earningspersharein2013amountedtoUSDnegative

1.36(NOKnegative8.21),comparedtoUSDnegative1.37(NOKnegative8.01)in2012.ThecashflowpersharewasUSD1.26(NOK7.6),comparedtoUSD0.26(NOK1.5)in2012.

Asof31December2013thePrice/Earnings(P/E)ratiowasnegative4.9andthePrice/Cashflowratiowas5.3.Basedonbookvalue,thecurrentEnterpriseValue(EV)/EBITDAmultiplewas16.6whiletheEV/EBITDAmultiplewas14.6basedonthemarketcapitalizationasper31December2013.Theinterestcoverageratio(EBITDA/netinterestexpenses)was2.6,comparedto1.8in2012.

orGanisation, WorKinG enVironMent anD Job oPPortunities

Odfjellaimsatbeingacompanyforwhichitshallbeattractivetowork,withaninspiringandinterestingworkenvironmentbothatseaandashore.

OdfjellmaintainsapolicyofprovidingemployeeswithequalopportunitiesfordevelopmentofskillsandofferingnewchallengeswithinourCompany.Allemployeesshallbetreatedequally,irrespectiveofethnicbackground,gender,religionorage–andtheyshallbeofferedequalopportuni-tiesfordevelopmentandpromotiontomanagerialpositions.

WecarryoutemployeesurveysattheheadquartersinBergenandatouroverseasoffices,andwedoergonomicsinquiries.Inadditionwehaveimplementedaprogrammeforimprovedhealthcareforseafarers,focusingonexerciseandahealthydiet.Theworkenvironmentonshoreandoffshoreisconsideredgood.

Discriminationisnotacceptedintermsofrecruitment,promotionorwagecompensation.Ofabout226employeesattheheadquartersinBergen,68.6%aremenand31.4%women,whilstthecorrespondingglobalfigures(about893employeesinourfullyownedonshoreoperations)are73.2%and26.8%respectively.ThreeofthesixDirectorsoftheBoardofOdfjellGroupSEarewomen.

Comparedtolastyeartherecordedabsencerateattheheadquartershasbeenreducedfrom2.67%to2.44%.FortheFilipinomarinerstheabsenceratewas1.06%andforEuropeans2.19%.

TheBoardtakesthisopportunitytothankallemployeesfortheircontributionstotheCompanyduring2013.

reMuneration oF the ManaGeMent GrouP

Salaryandotherremuneration to thePresident/CEOshallbedeterminedbytheBoard.AdescriptionoftheremunerationoftheManagementGroupandtheGroup’sremunerationpolicy, includingthescopeandorganisa-tionofbonusandshare-price-relatedprogrammes,isgivenintheBoardofDirectors’statementofguidelinesfortheremunerationofManagement.Aceilinghasbeensetforperformance-relatedremuneration.TheBoardofDirectors’statementofguidelinesisconsideredby

57

theGeneralMeetingandmadeavailabletoshareholderstogetherwiththenoticeoftheAnnualGeneralMeeting.SeeNote23totheOdfjellGroupaccountsfordetailsabouttheremunerationoftheManagementin2013.

MarKet DeVeLoPMent

Despitesomeoptimisticsignstowardstheendof2012theglobaleconomicgrowthweakenedfurtherfrom3.1%in2012toabout2.9%lastyear.FortheglobalGDPtheyearendedhowever,onamorepositivenotethan itstarted. IntheUS,despiteslowergrowthin2013,theeconomicfundamentalsare improving,theunemploy-mentrateisdecreasingandthepoliticalclimateseemsmorecooperative,thusenablingfuturegrowth.TheEUappearsfinallytohavereacheda‘rockbottom’,andthefinancialsituationintheworstaffectedeconomieshavestabilised.However,growthisstillveryweak,withhighunemploymentandlittleestablishmentofnewbusiness.SeveralAsianeconomiesmanagedtoreverseadownwarddevelopment,withstrongergrowthin2013thanin2012inJapan,inIndiaandinthenewlyindustrialisedeconomies.Chinadeliveredastillhighgrowthofabout7.7%,however,adeclinefrompreviousyears.Thiswasmainlycausedbyweakeningexportsduetotheworldfinancialcrisisandpoliticalmeasurestocurbthecreditgrowthtoavoidoverheatingtheeconomy.TheotherBRICeconomies,RussiaandBrazil,arefaringlesswell,andstrugglewithstagflation,structuralweaknessesandreducedcompetitiveness.Oilpriceshavebeenhighthroughouttheyear,withBrentBlendconsistentlyaboveUSD100perbarrel.Thishasledtomarinefuelspotpricesremainingataveryhighlevel,althoughslightlylessthanin2012.Oilfuturesarecurrentlybeingtradedatsomewhatlowerlevelsthanthespotmarket,indicatinganexpecteddropinenergypricesgoingforward,butgeopoliticalunrestmayreverseanysuchtrend.

Themainshippingsegmentsstillsufferfromratherslowfreightmarketscombinedwithhighfuelprices.Theconsid-erablenetfleetgrowthinrecentyearshaveledtogeneraloversupplyoftonnageinmostsectors,includingcrudeandproducttankers,dry-bulkcarriersandcontainer-ships,whichonlypartlyhasbeenabsorbedbyslowsteamingtosavefuel,portcongestionandotherfactorsreducingfleetefficiency.Highfuelpricescontinuetotriggerfuel-efficiencymeasures,andtheinterestincontractingshipswitheco-friendlyhullandenginedesignisincreasing.Despitethetonnagesurplusandmarginalearningsinmostrecentyears,andalthoughtraditionalbankfinancingremainstight,thenumberofnewordersisgrowingandmanyyardsarefillingtheircapacityforseveralyearsahead.Newcapitalseekinghigheryieldislookingtoshippingwithitscyclicalcharacterasapromisingalternativetootherinvestmentpossibilities.Investorsareenteringthemarketeitherbydirectinvestmentsinexistingshipsand/ornewbuildings,orthroughIPOsforexistingset-ups.Assuchinvestorsarepredominantlyfinancialintheirapproachandhavelimitedifanyknowledgeinoperatingships,meaningtheirtonnagewillhavetobeoperatedbythird-partyshippingcompanies.

Theemergenceofshalegasresources intheUShasmadealargeimpactontheworldchemical industry.Frombeingataconsiderablecostdisadvantageonlyafewyearsago,theUSfeedstockpricesarenowbecomingamongstthemostcompetitiveintheworld,secondonlytotheMiddleEast.ThisgivesatremendousboosttotheUSpetrochemicalindustry,andtheproductionofethylene,oneoftheprincipal feedstocksforthepetrochemicalindustry,isforecastedtoexpandbymorethan30%overthenextthreetofouryears.Asignificantshareofthiswillbeprocessedintoliquidpetrochemicals,andoverthenextyearsUSexportswillmostlikelyincreaseconsiderably,attheexpenseofnaphtha-basedproductioninEurope,NortheastAsiaandSouthAmerica.Atthesametime,ashiftfromnaphtha-basedtoshalegas-basedproductionmayalsoincreaseUSimportsofcommoditiesnormallyderivedfromnaphtha,suchaspropyleneandbutadiene.SomeoftheUSsurplusethanewillalsobeexported,asLNGorafterbeingcrackedintoethylene.Consequently,thiswillcreateshippingopportunitiesbothforchemicaltankersaswellasforethylenecarriers.TheMiddleEastcountriescontinuethedown-streamexpansion,aimingatproducingandexportingmoredownstreamproductsthemselves.Thefutureseemslessbrightforthechemicalindustryinotherareas,particularlyinEuropebutalsoparts of Northeast Asia, probably causing chemicalexportsfromtheseregionstodecline,whichmaylimitthepossibilitiesforcombiningcargoesandthus,toefficientlyutilisetheships.Theoveralltonne-miledemandeffectisthereforehighlyuncertain.

Chemicalspotfreightratesremainataboutthesamelevelsasin2012,whicharealsoequaltowhattheywerepriortothestartofthefinancialcrisisin2008/2009.However,obviouslythisdoesnotinanywayreflecttheconsiderablecostincreasessincethen,mainlyintermsoffuelandenergycostsbutalsoportandcanaldues,manningcosts,etc.Theprolongedcostdisadvantageshaveleftmanyownersinadifficultsituation,someeveninacriticalfinancialstate;butsofartheforecastedconsolidationonthesupplysidehasnottakenplace.Banksandotherinvestorshaveelectedtokeepdistressedshipownersafloat,waitingforthemarkettoimproveandthus,thevalueoftheassetstoincrease.Thishaspreventedanecessaryrestructuringoftheindustryandhascontributedtomaintainfreightratesatunsustainablelevelswithregardtowhatisrequiredforthelong-termdevelopmentoftheassets,competenceandorganisations.

Nettonnagegrowthduringtheyearforthechemicaltankerfleetasawholewas1.3%,whilstthecorechemicaldeep-seafleetgrewbyabout1.6%.Thisconstitutesthemostmoderatefleetgrowthsincetheearly1990s.Theorderbookforthecorechemicaldeep-seafleetisatthetimeofwritingabout10%ofcurrentfleet,andslightlyhigherforthestainlesssteelsegmentatabout12.5%.Althoughincreasingslightly,thechemicaltankernetgrowthratewillremainrelativelylowalsothenextfewyears.Forecastnetcorechemicaldeep-seafleetgrowthfor2014and2015isonaverageabout2.8%peryear.

59 58

Theglobaleconomyisexpectedtogrowby3–4%peryearoverthenextfewyears,whichtraditionallyshouldindicateanincreaseinthedemandforseabornechemicaltranspor-tationof4–5%peryear.Consequently,thesupply/demandbalanceshouldgraduallyturninfavourofstrongerchemicaltankermarkets,withhigherspotratesandimprovedtermsforContractsofAffreightment.However,thesubstantialmarketslackthroughslow-steaming,ballastingorpartloading,aswellasinefficientportoperations,needtoberecoveredbeforeweseeanysubstantivetighteningofthemarket.Withnewprivateequityenteringthemarketwehaveseenanimmenseincreaseinorderingofmediumrangeproductcarriers,andrecentmonthsalsoincreasedorderingofstandardstainlesssteeltonnage.Thismayverywelldampenthemuchawaitedrecovery.

CoMPanY strateGY anD ProsPeCts

Odfjellstrivestoprovidesafe,efficient,andcost-effectivechemicaltanker,LPG/Ethylenecarrierandtankterminalservicestoourcustomersworldwide.Inadditiontotheclearoperationalandcommercialbenefitsfromcloseco-operationbetweenourshippingactivitiesandourtankterminals,thetankterminalsthemselveshaveprovenastabilisingfactorintheCompany’soverallfinancialperformanceovertime,asearningsfromthisareaarelessvolatileascomparedtoearningsfromourshippingactivities.

Ontheshippingside,wearecontinuallystrivingtostaycompetitiveandflexiblewithamodernandversatilefleetofvesselsofhighstandards,adjustingtochangingtradepatternsthroughorganisationaldexterity.Disposalofolderunitsprovidesbetterutilisation,enhancingtheresultsoftherestofthefleet,inspiteofwhichoverallactivitylevelswereunsatisfactoryin2013.Freightratesstillhavesome

waytogotoreachsustainablelevels.

TheUSposteditsstrongestGDPgrowthforthelastthreeyearsonthebackofaccelerationinprivatesectordemandledbystrongerconsumerspendingandapickupinexports.TheEuropeaneconomyhascontinueditsgradualimprove-ment,withGermanyandtheUKleadingtheway.China’seconomicgrowthisdecelerating,withgrowthofstillhealthy7.7%inthefourthquarterof2013.Thetensepoliticalsitu-ationsurroundingtheUkraineandtheCrimeagivesreasonforconcernasitmayaffecttrade.

USshalegasandtightoilisbreathingnewlifeintotheUSchemicalindustry,withbothcheapfeedstockandenergyfuellingasignificantcompetitiveedge.Weexpectthistohaveapositiveimpactinalloursegmentsinthemediumtolongterm,byboostingthenumberofcargoesonthemarket,sailingdistancesanddemandforstorage.

BasedontheaboveweexpectaslowbutsteadyincreaseindemandforOdfjell’sservices.Ordersforchemicaltankersarepickingup,buttheorderbookwithinthecorechemicalsegmentstillremainsmoderate.

Ourmainconcernsrelatetochallengingmarketsalsoin2014,highfuelcostsandpotentialfurtherincreasedorderbookwithinourcoresegment.Partofour2014bunkerexposureisreducedthroughbunkerclausesinourcontractsandbypaperhedges.Onthetankterminalsidewehavewitnessedstableactivitiesandinquiriesforstorage,andwiththeexceptionofOTR,weexpectcontinuedstableandimprovingresults.

59

the boarD oF DireCtors

LaurenCe WarD oDFJeLL

ExecutiveChairmanoftheBoardsince4May2010.MrOdfjellwasaBoardMemberbetween2004and2007andformerPresidentofOdfjellTerminalsBV.Hecontrols25,966,492Asharesand2,578,994Bshares(incl.relatedparties)andnooptions.

irene WaaGe basiLi

BoardMembersince2December2008.MsWaageBasiliisCEOofGCRieberShipping.Shehas20yearsofexperiencewithinshippingandtheoilserviceindustry.MsWaageBasiliisanindependentBoardMember.Sheownsnosharesnoroptions.

bernt DanieL oDFJeLL

BoardMembersince2010andformerChairmanoftheBoard.MrOdfjellhasbeenwiththeCompanysince1963andhasheldvariousmanagementpositions.Heowns2,032Bshares(incl.relatedparties)andnooptions.

JanniCKe niLsson

BoardMembersince8May2012.MsNilssonholdsaMasterofScienceincyberneticsandprocessautomationfromStavangerUniversity,andhas25yearsofexperienceintheupstreamoilandgasindustry.SheiscurrentlySeniorVicePresidentOperationNorthSeaWest,DevelopmentandProductionNorwayforStatoilandStatoil'sLocationManagerinBergen.MsNilssonisanindependentBoardMember.Sheownsnosharesnoroptions.

ÅKe GreGertsen

BoardMembersince6May2013.MrGregertsenhasheldseveralpositionsatOdfjell,includingPresidentofOdfjellTerminals(Houston)from1996to2001andSeniorVicePresidentatOdfjellTerminalsfrom2001to2002.From2012–2013hewasInterimPresidentforOdfjellTerminalsBV.MrGregertsenisanindependentBoardMember.MrGregertsenowns3,000Asharesandnooptions.

Christine rØDsÆther

BoardMembersince4May2010.MsRødsætherisalawyerandpartnerinthelawfirmSimonsenVogtWiigAS.SheisaMasterofLaw(LLM)specialisinginfinancialregulations,maritimelawandtransportation,andhasexperiencewithinbanking,finance,corporate,shippingandoffshore.MsRødsætherisanindependentBoardMember.Sheownsnosharesnoroptions.

61 61 60

odfjell group

61 61

(usD 1 000) note 2013 2012

Grossrevenue 3 1165429 1211669Netincomefromassociates 36 1102 825Voyageexpenses 19 (491418) (532391)Time-charterexpenses 20 (165038) (173157)Operatingexpenses 21,23 (267611) (285278)

Gross result 242464 221668

Generalandadministrativeexpenses 22,23 (125363) (128576)

operating result before compensation, depreciation, amortisation

and capital gain (loss) on non-current assets (ebitDa) 117101

93092Depreciationandamortization 10 (126065) (131501)Impairmentofnon-currentassets 10,11,12 (81338) –Capitalgain(loss)onnon-currentassets 10 15515 (4433)

operating result (ebit) (74787) (42842)

Interestincome 18 5325 3230Interestexpenses 7 (50724) (53226)Otherfinancialitems 26 (1131) (15542)Currencygains(losses) 27 7156 (2502)

net financial items (39374) (68040)

result before taxes (114161) (110882)

Taxes 8 6640 38

net result (107521) (110844)

other CoMPrehensiVe inCoMe

items that may be subsequently reclassified to statement of comprehensive incomeCashflowhedgeschangesinfairvalue 5 5310 25776Cashflowhedgestransferredtostatementofcomprehensiveincome 5 (6800) (14595)Netunrealizedgain/(loss)onavailable-for-saleinvestments 28 1255Exchangeratedifferencesontranslatingforeignoperations (13933) 10983

items that will not be reclassified to statement of comprehensive income

Netactuarialgain/(lossondefinedbenefitplans) 27468 (10210)

other comprehensive income 12073 13209

total comprehensive income (95448) (97635)

Netresultallocatedto:Non-controllinginterests – 116Ownerofparent (107521) (110960)

Totalcomprehensiveincomeallocatedto:Non-controllinginterests – 78Ownerofparent (95448) (97713)

Earningspershare(USD)-basic/diluted 13 (1.36) (1.37)

STATEMENTOFCOMPREHENSIVEINCOME

FinanCiaL stateMentoDFJeLL GrouP

odfjell group

63 62

STATEMENTOFFINANCIALPOSITION

assets as per 31.12 (usD 1 000) note 2013 2012 01.01.2012

non-Current assetsIntangibleassets 11 43739 109819 115178Realestate 10 42189 33161 38587Ships 10 1255610 1190208 1171689Newbuildingcontracts 10 69200 102702 118555Tankterminals 10 492392 440714 591318Officeequipmentandcars 10 42964 44365 43454Investmentsinassociates 36 22877 23152 1718Non-currentreceivables 28 33299 48977 59488

total non-current assets 2002270 1993098 2139988

Current assetsCurrentreceivables 29 155171 139159 134781Bunkersandotherinventories 32 36560 36862 36243Derivativefinancialinstruments 5 3867 6610 11563Available-for-saleinvestments 17 9658 16734 25364Cashandcashequivalents 18 152124 153123 180067Assetsclassifiedasheldforsale 37 – 223741 –

total current assets 357381 576229 388017total assets 2359650 2569327 2528005

equity and liabilities as per 31.12 (usD 1 000) note 2013 2012 01.01.2012

eQuitYSharecapital 33 29425 29425 29425Treasuryshares 33 (2785) – (2785)Sharepremium 33 172388 53504 53504Otherequity 560456 824841 892428Non-controllinginterest - 6503 6309

total equity 759484 914274 978880

non-Current LiabiLitiesDeferredtaxliabilities 8 26693 53551 51554Pensionliabilities 9 35527 66678 51091Derivativefinancialinstruments 5 17043 15685 –Non-currentinterestbearingdebt 7 1216046 994911 1116941Othernon-currentliabilities 31 2546 10175 24537

total non-current liabilities 1297854 1141000 1244123

Current LiabiLitiesCurrentportionofinterestbearingdebt 7 133634 225930 127997Taxespayable 8 1970 21716 22765Employeetaxespayable 6464 7732 6995Derivativefinancialinstruments 5 9198 23744 47839Othercurrentliabilities 30 151048 106030 99405Liabilitiesclassifiedasheldforsale 38 – 128900 –

total current liabilities 302313 514052 305001total liabilities 1600167 1655053 1549124total equity and liabilities 2359650 2569327 2528005

Guarantees 16 101029 72928 –

the boarD oF DireCtors oF oDFJeLL se Bergen,18March2014

LaurenCe WarD oDFJeLL ExecutiveChairman

bernt DanieL oDFJeLL

irene WaaGe basiLi Christine rØDsÆther Jan arthur haMMerPresident/CEO

ÅKe GreGertsenJanniCKe niLsson

odfjell group

63

STATEMENTOFCASHFLOW

STATEMENTOFCHANGESINEQUITy

(usD 1 000) note 2013 2012

Cash FLoW FroM oPeratinG aCtiVitiesProfitbeforeincometaxes (114161) (110883)Taxespaidintheperiod (29232) 987Depreciationandimpairment 10 207459 131501Capital(gain)lossonnon-currentassets 10 (15515) 4433Changeininventory(increase)decrease 302 (619)Changeintradedebtors(increase)decrease (10847) 11891Changeintradecreditorsincrease(decrease) 45034 (5131)Differenceinpensioncostandpensionpremiumpaid (3497) 4215Effectofexchangefluctations (6933) 2502Othercurrentaccruals (14426) (8095)

net cash flow from operating activities 58184 30802

Cash FLoW FroM inVestinG aCtiVitiesSaleofnon-currentassets 21906 45355Investmentinnon-currentassets 10 (283711) (212341)Saleofsharesandinvestmentsinothercompanies 91800 –Investmentsinsharesandinothercompanies 275 (21434)Non-currentreceivables 17315 8630Available-for-saleinvestments 7077 11674

net cash flow from investing activities (145338) (168116)

Cash FLoW FroM FinanCinG aCtiVitiesNewinterestbearingdebt 473820 438793Paymentofinterestbearingdebt (344981) (361155)Repurchase/saleoftreasuryshares (42201) 33029

net cash flow from financing activities 86637 110668

Effectoncashbalancesfromcurrencyexchangeratefluctuations (481) (299)

net change in cash balances (998) (26945)Cashandcashequivalentsasper01.01 153122 180067

Cash and cash equivalents as per 31.12 152124 153122

Availablecreditfacilities – 93670

(usD 1 000)share

capitaltreasury

sharesshare

premium

exchange rate

differences

Cash flow hedge

reserve

available-for-sale reserve

Pension re-measu-

rementretained earnings

total other

equity

owner of parent equity

non-con-

trolling interest

total equity

Equityasat01.01.2012 29425 (2785) 53504 13189 (22905) (769) – 926335 915 850 995 994 6309 1 002 303 Changein

accountingprinciplea) – – – – –

– – (23423) (23 423) (23 423) – (23 423)Equityasat01.01.2012

adjustedforchanges 29425 (2785) 53504 13189 (22905) (769) – 902912 892 427 972 571 6309 978 880 Netresult – – – – – – – (110960) (110 960) (110 960) 116 (110 844)Comprehensiveincome – – – 10905 11181 1255 (10210) – 13 131 13 131 78 13 209 Sharesale/repurchasesb) – 2785 – – – – – 30244 30 244 33 029 – 33 029

equity as at 31.12.2012 29425 – 53504 24094 (11724) 486 (10210) 822196 824842 907772 6 503 914274

Equityasat01.01.2013 29425 – 53504 24094 (11724) 486 (10210) 822196 824 842 907 772 6503 914 274 Netresult – – – – – – – (107521) (107 521) (107 521) – (107 521)Comprehensiveincome – – – (13933) (1490) 28 27468 – 12 073 12 073 – 12 073 Otheradjustments – – – – 12446 – – (23084) (10 638) (10 638) – (10 638)Sharesale/repurchasesb) – (2785) – – – – – (39416) (39 416) (42 201) – (42 201)Demerger – – 118883 – – – – (118883) (118 883) – – – Disposalminority – – – – – – – – – – (6503) (6 503)

equity as at 31.12.2013 29425 (2785) 172388 10161 (768) 514 17258 533292 560455 759485 – 759484

a)IAS19isrevisedandtherevisedstandardismandatoryfortheGroupfrom1January2013.Theeffectofthechangehasbeenaccountedforretrospectively. AccordingtorevisedIAS19,unrecognisedactuarialgainsandlossescannolongerbedeferred,butinsteadrecognisedimmidiatelyinothercomprehensiveincome.TheGrouphavechangeditsaccountingprincipleat1January2012byrecognisinganacutariallossofUSD23.4millioninretainedearnings.In2012othercomprehensiveincomeischangedwithanegativeamountofUSD10.2million.ThetotaleffectofrevisedIAS19ontheequityatyearend2012isUSD33.6million.b)In2013OdfjellSEacquired5,891,166Asharesand2,322,482Bshares.ThetotalpurchasepricewasUSD42.2million.Considerationinexcessofnominalvalue(USD2.8million)ischargeddirectlytoretainedearnings(USD39.4million).In2012OdfjellreissuedthesimilarnumberofAandBshareswithatotalamountofUSD33.0million.

odfjell group

65 64

note 1 CorPorate inForMation

OdfjellSE,ConradMohrsv.29,Bergen,Norway,istheultimateparentcompanyoftheOdfjellGroup.OdfjellSEisapubliclimitedcompanytradedontheOsloStockExchangewiththetickersODFandODFB.TheconsolidatedfinancialstatementofOdfjell fortheyearended31December2013wasauthorisedforissueinaccordancewitharesolutionoftheBoardofDirectorson18March2014.TheOdfjellGroupincludesOdfjellSE,subsidiariesincorporatedinseveralcountries(seenote34foranoverviewofconsolidatedcompanies),andourshareofinvestmentsinjointventures(seenote35).

Odfjellisaleadingcompanyintheglobalmarket for transportationandstorageofchemicalsandotherspecialitybulkliquids,LPG/Ethyleneproductsaswellasaproviderofrelatedlogisticalservices.ThroughitsvarioussubsidiariesandjointventuresOdfjellownsandoperateschemicaltankers,LPG/Ethylenecarriersandtankterminals.TheprincipalactivitiesoftheGrouparedescribedinnote3.

Unlessotherwisespecifiedthe'Company','Group','Odfjell'and'we'refertoOdfjellSEanditsconsolidatedcompanies.

note 2 suMMarY oF siGniFiCant aCCountinG PrinCiPLes

2.1 basis for preparationThe Odfjell Group has prepared its con-solidatedfinancialstatementsaccordingtoInternationalFinancialReportingStandards(IFRS)approvedbytheEU.

The consolidated statements have beenpreparedunderthehistoricalcostconven-tion,exceptforthemeasurementoffairvalueoffinancial instrumentsandhedging(seenote2.13)andfinancialassetsclassifiedasavailableforsale(seenote2.14).

2.2 the use of estimates and assess-ment of accounting policies when preparing the annual accountsTheprincipalaccountingpoliciesappliedin thepreparationof theseconsolidatedfinancialstatementsaresetoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.

Thepreparationoffinancialstatementsincon-formitywithIFRSrequirestheuseofcertaincriticalaccountingestimates.ItalsorequirestheManagementtoexerciseitsjudgementintheprocessofapplyingtheGroup’saccountingpolicies.Theareasinvolvinghigherdegreeandjudgmentorcomplexity,orareaswhereassumptionsandestimatesaresignificanttotheconsolidatedfinancialstatementsare:

Voyage revenues and costsVoyagerevenuesandcostsarerecognisedinaccordancewiththepercentageofcompletionmethodwithoperatingrevenuesandexpensesrecognisedforeachvoyage.Thisrecognitionisbasedonestimatedvoyagesthatarereviewedandupdatedateachperiodend.

Revenuesandexpensesstillinprogressattheendofthereportingperiodareestimatedandproratedovertheperiodofthevoyagewithreferencetodaysbeforeandaftertheyearend.

Revenues and costs estimates and thedurationofthevoyagearebasedonupdatedinformationatyearend.

Managementdoesnotbelieve that therewouldbeamaterialchangeifthepercent-ageofcompletionmethodwasbaseduponothercriteriathanalreadyapplied.However,if actual results are not consistent withestimatesorassumptions,revenuesorcostsmaybeoverorunderstated.

impairment test chemical tanker vesselsThe chemical tanker fleet is reviewed forimpairment whenever events or changesin circumstances indicate the carryingamountofthefleetmaynotberecoverable.Management measures the recoverableamountofanassetoraCashGeneratingUnit(CGU)bycomparingitscarryingamounttothehigherofitsfairvaluelesscostofdisposalor future discounted cash flows that theassetorCGUisexpectedtogenerateoveritsremainingusefullife.

IfanassetorCGUisconsideredtobeimpaired,impairmentisrecognisedinanamountequaltotheexcessofthecarryingamountoftheassetorCGUoveritsrecoverableamount.

AstheOdfjellshipsareinterchangeableandtheregionalchemicaltankersareintegratedwiththedeep-seachemicaltankersthrough

a logistical system, all chemical tankersareseentogetherasaportfolioofships.Inadditionthepoolofofficersandcrewareusedthroughoutthefleet.Odfjellhasastrategyofatotalcrewcompositionandhowthecrewisdedicatedtotheindividualshipsvaries.ChangingthecrewbetweentwoshipscanchangethenetpresentvaluepershipwithoutanyeffectfortheGroup.Thisalsoisanargu-mentforevaluatingthefleettogether.Asaconsequence,shipswillonlybeimpairedifthetotalvalueoftheshipsbasedonfutureestimatedcashflowsislowerthanthetotalbookvalue.

Thechemicaltankfleetistestedforimpair-mentonaCGUbasis.

Inordertoassessimpairment,Managementmakesassumptionsregardingfuturecashinflowsandoutflowsbasedonexistingcon-tracts,historicalexperience,financialfore-casts,expectedgrowthinshipsupply,marketdemandanddiscountrate.Managementalsomakesassumptionsregardingresidualvaluesoftheships.

Ifactualresultsdifferfromestimatesandassumptionsusedinestimatingfuturecashflows,thentheGroupmaybeexposedtofuture impairment losses that could bematerial.

Animpairmenttesthavebeencarriedoutatyearend2013.Keyassumptionintheimpairment test is the gross result anddiscountrate.Anincreaseof1%intheweightedaveragecostofcapitalwouldresultinadecreaseinthepresentvaluebyapproximatelyUSD124million.Suchincreaseinthediscountratewouldnotresultinanimpairmentoftheships.

Adecreaseinrevenueof5%woulddecreasethenetpresentvaluebyUSD195million.Suchchangewouldnotresultinanimpairmentoftheships.

impairment test of LPG/ethylene carriersShips within the gas segment are testedfor impairment in similar manner as thechemicalfleet.

Duetofewshipsintheportfolio,eachshipisassessedasoneCGU.Inthisimpairment

notes to the FinanCiaL stateMent

odfjell group

65

assessment,theManagementmakesthesameassumptionsasfortheimpairmenttestofthechemicalfleet.

An increase in weighted average cost ofcapitalwith1%resultsinadecreaseinthenetpresentvaluebyUSD7.2million.Suchchangeinassumptionswouldnotresultinanyimpairmentloss.

impairment of goodwill, customer relation-ships and fixed assets related to odfjell terminals (rotterdam)TheOdfjellGroupholds51%ownershipinOdfjellTerminalsRotterdam(OTR)whichisregardedasoneCGU.

In2013OdfjellGroupmadeapre-taximpair-mentlossofUSDUSD81.3millionrelatedtotheinvestmentinOTR,distributedbetweengoodwillandcustomerrelationshipsofUSD63.8millionandfixedassetsofUSD17.5mil-lion.ValueinuseistherecoverableamountoftheCGU.

Themaincircumstanceswhichledtotheimpairmentlosswerecommercialcapacityoutofuseanddelayintherecoverycomparedtooriginallyplan.

WhenestimatingtherecoverableamounttheManagementhasmadeassumptionsregardingweightedaveragecostofcapital,recoveryofcommercialcapacity,operationalmargins(EBITDA), long-termgrowthandcapitalexpenditure.

Managementhasestimatedtwodiscountrates,oneforthefirsttenyearsandonedis-countrateforremainingperiod.Theaveragepre-taxdiscountthatreturnsthepre-taxcashflowstorecoverableamountis7.55%.

Iftheaveragepre-taxdiscountrateincreasesto8%,andadditionalpre-taximpairmentlossofUSD39millionwouldoccur.

IftheaverageEBITDAmarginisreducedby2%,anadditionalpre-taximpairmentlossofUSD24millionwouldoccur.

Theabovesensitivityanalysisisperformedkeepingallotherassumptionsunchanged.

Goodwill impairment testing related to other investments than otrGoodwill is tested for impairmentonanannualbasisupontheCGUforwhichthegoodwillisassigned.Inadditiontothegood-willassignedtoOTR,theGroup’sgoodwill

relatestoinvestmentinOdfjellTerminals(Houston)andOiltankingOdfjellTerminalSingaporePteLtd.

Whenperformingtheimpairmenttest,therecoverable amount is determined. Therecoverableamountisthehighestamountoffairvaluelesscostofdisposalandvalueinuse.Theimpairmenttestbyapplyingthevalueinuseshowssignificantheadroom.WehavethereforenotestimatedthefairvaluelesscostofdisposalfortheseCGUs.

Whencalculatingfuturecashflows,certainassumptions are required to be made inrespectofuncertainmattersdescribedintheprevioussection.

TheGrouphasappliedapprovedbudgetinthiscalculation.Forcashflowsbeyondthebudgetperiod,cashflowsareextrapolatedbyusingbudgetfiguresandlong-termgrowthrates.

Thecalculationofvalueinuseshowssig-nificantheadroom.Anyreasonablechangeintheassumptionsappliedwouldthereforenotresultinanyimpairmentofthegoodwillassessed.

Depreciation and residual value of shipsShipsarerecognisedathistoricalcostlessaccumulateddepreciationandanyimpair-mentcharges.Thecostoftheshipsincludesthecontractprice,expensesrelatedtositeteamandpre-deliveryborrowingsincurred.Thecostlessresidualvalueisdepreciatedonastraight-linebasisovertheshipsestimatedusefullife.

Thecostoftheshipsisdividedintoseparatecomponents for depreciation purposes.Estimated costof first time dry-dockingisdeductedfromthecostoftheshipanddepreciatedseparatelyoveraperioduntilthenextdry-docking.Theresidualvalueofthesecomponentsiszero.

Residual value is estimated based uponthe latest available steel-price and thelightweightoftheships.

Estimatedusefullifeoftheshipsisintherangeof25–30years.Estimatedcostofdry-dockingisdepreciatedoveranestimatedperiodof2.5years.

Ifactualuseoftheshipsdiffersfromestimatedusefullifeanimpairmentlosscouldoccur.

If residual value is incorrect, the future

depreciationwouldbeaffected,eitherasareductionifresidualvalueisunderstatedorasanincreaseindeprecationifresidualvalueisoverstated.

Pension obligationTheOdfjellGroupsponsorsdefinedbenefitpensionplans,earlyretirementplansandsupplementalexecutiveretirementplans.

Netpensioncostsandaccumulatedbenefitobligationiscalculatedusinganumberofassumptionsincludingdiscountrate,increaseinsalary,retirementageandmortalityrate.

Theseassumptionshaveasignificantimpactonthedefinedbenefitobligationrecognisedatyearend.

TheGroupusesexternalactuarytocalculatethenetpensioncostandaccumulatedbenefitobligation.Thekeyassumptionsappliedwhencalculatingthepensionobligationandtheassociated sensitivity analysis is furtherelaboratedinnote9.

odfjell group

67 66

2.3 revenue recognitionRevenueisrecognisedwhenit isprobablethata transactionwillgeneratea futureeconomic benefit thatwill accrue to theGroup,andthesizeoftheamountmaybereliablyestimated.Revenueismeasuredatthefairvalueoftheamounttobereceived,excludingdiscounts,salestaxesorduty.Totalrevenuesandvoyagerelatedexpensesinaperiodareaccountedforastheper-centage of completed voyages. Voyageaccountingconsistsofactualfiguresforcompleted voyages and estimates forvoyagesinprogress.Voyagesarenormallydischarge-to-discharge. Except for anyperiodaship isdeclaredoff-hireduetotechnicalorotherowner’smatters,ashipisalwaysallocatedtoavoyage.

Tankrentalincomeisrecognisedtotheextentthatitislikelythattheeconomicbenefitswillaccrueandtheamountmaybereliablymeas-ured.Distillationincomeandotherservicesarerecognisedinproportiontothestageoftherenderedperformanceasatthebalancesheetdate.Iftheincomefromrenderingofservicescannotbereliablymeasured,onlytheincomeuptotheleveloftheexpensestobeclaimedwillberecognised.

2.4 segmentsOperating segments are reported in themannerconsistentwiththeinternalfinancialreportingprovidedtothechiefoperatingdecision-maker.Thechiefoperatingdecision-maker,who isresponsible forallocatingresourcesandassessingperformanceoftheoperatingsegment,hasbeenidentifiedastheBoardandOdfjellManagementGroupwhichmakesthestrategicdecisions.

Ourshippingrevenueisallocatedonthebasisoftheareainwhichthecargoisloaded.Forthetankterminalstherevenueisallocatedtotheareawheretherespectivecompaniesarelocated.Totalassetsandcapitalexpenditureareallocatedtotheareawheretherespectiveassetsarelocatedwhileshipsandnewbuild-ingcontractsarenotallocatedtoacertainareaastheshipssailonaworldwidebasis.Financialinformationrelatingtosegmentsispresentedinnote3.

Transactionsbetweentheindividualbusinessareasarepricedatmarkettermsandareeliminatedintheconsolidatedaccounts.

2.5 non-current assetsNon-currentassetsaremeasuredathistorical

cost,whichincludespurchaseprice,capi-talisedinterestandotherexpensesdirectlyrelated to the assets. The carrying valueofthenon-currentassetsonthebalancesheetrepresentsthecostlessaccumulateddepreciationandanyimpairmentcharges.Newbuilding contracts include paymentsmadeunderthecontracts,capitalisedinterestandothercostsdirectlyassociatedwiththenewbuildingandarenotdepreciateduntiltheassetisavailableforuse.

Weestimateresidualvalueattheestimatedtimeofdisposalofassets,whichisgenerallyattheendoftheirusefullife.Toassesstheresidualvalueofshipsweusethecurrentestimatedrecyclingvalue.Forterminalsweuseabestestimate for thevalueoftankassetslessdismantlingexpenses.Theresidualvaluesaremeasuredatleastonayearlybasisandanychangeshaveaneffectonfuturedepreciations.

Eachcomponentofanon-currentassetthatissignificanttothetotalcostofthe itemaredepreciatedseparately.TheCompanyallocatestheamountinitiallyrecognisedinrespectofanitemofnon-currentassettoitssignificantcomponentsanddepreciatesseparatelyeachsuchcomponentovertheirusefullives.Thebookvalueofshipsissplitintotwocomponents,shipsandperiodicmaintenance.Day-to-dayrepairsandmaintenancecostsarechargedtothestatementofcomprehen-siveincomeduringthefinancialperiodinwhichtheyareincurred.Thecostofmajorrenovationsandperiodicmaintenanceisincludedintheasset’scarryingamount.Atthetimeofinvestinginashipaportionofthepurchaseprice isdefinedasperiodicmaintenance.Theinvestmentisdepreciatedovertheremainingusefullifeoftheassetandfortheperiodicmaintenancepartovertheperioduntilthenextperiodicmainte-nance.Forshipscharteredinonbare-boatterms,Odfjellisresponsibleforoperatingexpensesandperiodicmaintenance.Forsuchshipswemakeaccrualsforestimatedfutureperiodicmaintenance.Expectedusefullivesofnon-currentassetsarereviewedateachbalancesheetdate,andwheretheydiffersignificantlyfromprevi-ousestimates,depreciationsareadjustedaccordingly.Changesarevalidasfromthedatesofestimatechanges.

Depreciationoftheabovementionedassets

appearsasdepreciationinthestatementofcomprehensiveincome.

Capitalgainsandlossesondisposalsaredetermined by comparing the disposalproceedswith thecarryingamountandareincludedintheoperatingresult.Whenthecarryingamountofanon-currentassetwillberecoveredprincipallythroughasaletransactionratherthanthroughcontinuedusetheyarereportedatthelowerofthecarryingamountand the fairvalue lesssellingcosts.2.6 LeasesThedeterminationofwhetheranarrange-mentis,ormayrepresentalease,isbasedonthesubstanceofthearrangementatincep-tiondate.Anarrangementisaleaseifthefulfilmentofthearrangementisdependentontheuseofaspecificassetorassetsorthearrangementconveysarighttousetheasset.Afterinceptionreassessmentismadeonlyifoneofthefollowingaspectsoccurs:

1. thereisachangeincontractualterms,otherthanarenewalorextensionofthearrangement

2. arenewaloptionisexercisedoranexten-sionisgranted,withoutthetermoftherenewalorextensionhavingbeeninitiallyincludedintheleaseterm

3. thereisachangeinthedeterminationofwhetherfulfilmentisdependentonaspecifiedasset

4. thereisasubstantialchangetotheassetwhereareassessment ismade, leaseaccounting shall commence or ceasefromthedatewhenthechangeincir-cumstancesgaverisetothereassessmentforscenarios1,3or4andatthedateofrenewalorextensionperiodforscenario2.

Assetsfinancedunderfinancialleasesarecapitalisedatthecommencementof theleaseatthefairvalueoftheleasedasset,oriflower,atthenetpresentvalueofminimumleasepayments.Leasepaymentsconsistofacapitalelementandfinancialcost,therepaymentofthecapitalelementreducestheobligationtothelessorandthefinancialcostisexpensed.Capitalisedleasedassetsaredepreciatedovertheestimatedusefullifeinaccordancewithnote10.Leaseswhereasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.Paymentsmadeunderoperatingleasesarechargedtothestatementofcomprehensive

odfjell group

67

incomeonastraight-linebasisovertheleaseterm,seenote16andnote20.

2.7 GoodwillGoodwillarisesontheacquisitionofbusinessandrepresentstheexcessvaluesofthecon-siderationtransferredandthenetfairvalueofidentifiableassets,liabilitiesandcontingentconsiderationoftheacquiredbusiness.Inthecaseofinvestmentsinassociatesandjointventure,goodwillisincludedinthecarryingamountoftheinvestment.Goodwillisnotamortized,butgoodwillisallocatedtotherelevantCGUandanassessmentismadeeachyearastowhetherthecarryingamountcanbejustifiedbyfutureearnings,seenote2.8impairmentofassets.

2.8 impairment of assetsnon-financial assetsThecarryingamountoftheGroup’stangibleandintangibleassets isreviewedateachbalancesheetdatetodeterminewhetherthere isany indicationof impairment. Ifanysuchindicationexists,orwhenannualimpairmenttestingforanassetisrequiredtheasset’srecoverableamountisestimatedin order to determine the extent of anyimpairmentloss.Wheretheassetdoesnotgeneratecashflowsthatareindependentfromotherassets,theGroupestimatestherecoverableamountoftheCGUtowhichtheassetbelong.Therecoverableamount isthehighestofthefairmarketvalueoftheasset,lesscosttosell,andthenetpresentvalue(NPV)offutureestimatedcashflowfromtheemploymentoftheasset('valueinuse').TheNPVisbasedonaninterestrateaccordingtoaweightedaveragecostofcapital('WACC')reflectingtherequiredrateofreturn.Iftherecoverableamountislowerthanthebookvalue,impairmenthasoccurredandtheassetshallberevalued.Impairmentlossesarerecognisedinstate-mentofcomprehensiveincome.Assetsaregroupedatthelowestlevelwherethereareseparately identifiable independentcashflows.

Withtheexceptionofgoodwill,impairmentlossesrecognisedinthestatementofcom-prehensiveincomeforpreviousperiodsarereversedwhenthereisinformationthatthebasisforthe impairmentlossnolongerexists.Thisreversalisclassifiedinrevenueasanimpairmentreversal.Theincreasedcarryingamountofanassetattributabletoareversalofanimpairmentlossshallnotexceedthecarryingamountthatwouldhavebeendetermined(netofdepreciation)had

noimpairmentlossbeenrecognisedfortheassetinprioryears.

Financial assetsAteachreportingdatetheGroupassesseswhether a financial asset or a group offinancialassetsisimpaired.

(i) assets carried at amortised costIfthereisobjectiveevidencethatanimpair-mentlossonassetscarriedatamortisedcosthasoccurred,theamountofthelossismeasuredasthedifferencebetweentheassets’carryingamountandthepresentvalue of estimated future cash flowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.

(ii)available-for-sale-investmentsIf an available-for-sale-investment isimpaired,anamountcomprisingthedif-ferencebetweenitscostanditscurrentfairvalue,lessanyimpairmentlosspreviouslyrecognisedinthestatementofcomprehen-siveincome,istransferredfromequitytothestatementofcomprehensiveincome.Thisnormallyappliesinasituationwithchangesexceeding20%ofthevalueandexpectedtolastformorethansixmonths,bothbasedonoriginalcost.

2.9 ConsolidationThe consolidated statements consist ofOdfjell SE and its subsidiaries as at 31Decembereachyear(seenote34).Non-controlling interests are included as aseparateitemintheequity,andarerecordedasaseparateallocationofthenetresult.Thenon-controllinginterestsincludetheminor-ity’sshareoftheequityofthesubsidiary,includinganyshareofidentifiedexcessvalueonthedatewhenasubsidiarywasacquired.

Subsidiariesarefullyconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainedcontrol,andcontinuestobeconsolidateduntilthedatethatsuchcontrol ceases. Controlling influence isnormally gained when the Group owns,directlyorindirectly,morethan50%oftheshares inthecompanyandiscapableofexercisingactualcontroloverthecompany.Identifiedexcessvalueshavebeenallocatedtothoseassetsandliabilitiestowhichthevaluerelates.Fairvalueadjustmentstothecarryingamountsofassetsandliabilitiesarisingontheacquisitionaretreatedasassetsandliabilitiesoftheforeignopera-tionandtranslatedattheexchangerateatthebalancesheetdate.Excessvalues

aredepreciatedovertheestimatedusefullives,exceptforgoodwillthatistestedforimpairmentannuallyormorefrequentlyifeventsorchangesincircumstancesindicatethattheremaybeimpairment(seenote2.8).

Intercompanytransactions,balancesandunrealisedgainsontransactionsbetweengroup companies are eliminated. Whennecessaryamountsreportedbysubsidiar-ieshavebeenadjustedtoconformtotheGroup’saccountingpolicies.

2.10 investment in joint venturesJointventuresareentitiesfromwhichtheGrouphascontractuallyagreedtosharethepowertogovernthefinancialandoperatingpoliciesoftheentitywithanotherventurer(s).Ourshareofactivitiesunderjointcontrol(seenote35) is includedaccordingtotheproportionalconsolidationmethod.UnderthismethodtheGroup’sproportionateshareofrevenues,costs,assetsandliabilitiesarerecognisedwithsimilar itemsinthefinancialstatementsonaline-by-linebasis.ThefinancialstatementsofthejointventurearepreparedforthesamereportingyearasOdfjell.AdjustmentsaremadetoconformthejointventuresaccountingpoliciestotheGroup’saccountingpolicies.

2.11 investment in associatesAssociatedcompaniesareentitiesinwhichthe Group has significant influence andwhich isneitherasubsidiarynora jointventure.Associatedcompanies(seenote36)are includedaccordingtotheequitymethod.UnderthismethodtheGroup’sshareoftheassociatedcompany’snetresultfortheyearisrecognisedinthestatementof comprehensive income. The Group’sinterestinanassociatedcompanyiscarriedonthebalancesheetatanamountthatreflectsitsshareofthenetassetsoftheassociatedcompany.Thecarryingvalueofinvestmentinanassociatewillneverbenegative,unlesstheGrouphasincurredorguaranteedobligationsinrespectoftheassociatedcompany.Goodwillrelatingtoanassociateisincludedinthecarryingamountof the investmentand isnotamortized.ThereportingdatesoftheassociateandtheGroupare identical.AdjustmentsaremadetoconformtheassociatesaccountingpoliciestotheGroup’saccountingpolicies.

2.12 CurrencyTheconsolidatedfinancialstatementsarepresentedinUSDastheGroupoperatesinaninternationalmarketwherethefunctional

odfjell group

69 68

currencyismainlyUSD.Thefunctionalcur-rencyoftheparentcompanyisUSD.

Transactions in non-USD currency arerecordedattheexchangerateonthedateofthetransaction.Receivablesandliabilitiesinnon-USDcurrenciesaretranslatedattheexchangerateonthebalancesheetdate.Allexchangeratedifferencesaretakentothestatementofcomprehensiveincome.

Thebalancesheetofforeignsubsidiarieswith functionalcurrencyother thanUSDistranslatedattherateapplicableonthebalancesheetdate,whilethestatementofcomprehensiveincomeistranslatedusingthemonthlyaverageexchangeratefortheaccountingperiod.Exchangeratedifferencesthatariseasaresultofthisareincludedasexchangeratedifferencesinothercompre-hensiveincome.Whenaforeignsubsidiaryissold,theaccumulatedtranslationadjustmentrelatedtothatsubsidiaryistakentothestate-mentofcomprehensiveincome.

2.13 Derivative financialinstruments and hedgingDerivativefinancialinstrumentsarerecog-nisedonthebalancesheetatfairvalue.Themethodofrecognisingthegainorlossisdependentonthenatureoftheitembeinghedged.Onthedateaderivativecontractisentered,wedesignatecertainderivativesaseitherahedgeofthefairvalueofarecognisedassetorliability(fairvaluehedge),orahedgeofahighlyprobableforecastedtransaction(cashflowhedge).Changes in the fair value of derivativesthatqualifyasfairvaluehedgesandthatarehighlyeffectivebothprospectivelyandretrospectivelyarerecordedinthestatementofcomprehensiveincometogetherwithanychangesinthefairvalueofthehedgeditem-thatisattributabletothehedgedrisk.Changesinthefairvalueofderivativesthatqualifyascashflowhedgethatarehighlyeffectivebothprospectivelyandretrospec-tivelyarerecognisedinothercomprehensiveincome.Amountsdeferredinothercompre-hensiveincomearetransferredandclassifiedinthestatementofcomprehensiveincomewhentheunderlyinghedgeditemsimpactnetresultinamannerconsistentwiththeunderlyingnatureofthehedgedtransaction.Ifahedginginstrumentexpiresorissold,or when a hedge no longer meets thecriteriaforhedgeaccountingunderIAS39,

anycumulativegainorlossrecognisedinothercomprehensiveincomeatthattimeremainsinothercomprehensiveincomeandistransferredtostatementofcomprehensiveincomewhenthecommittedorforecastedtransactionultimatelyisrecognisedinthestatementofcomprehensiveincomeasafinanceitem.However, ifacommittedorforecastedtransactionisnolongerexpectedtooccur,thecumulativegainorlossthatwasrecognisedinothercomprehensiveincomeisimmediatelytransferredtothestatementofcomprehensiveincome.

Certain derivative transactions, whileprovidingeffectiveeconomichedgesundertheGroupriskmanagementpolicy,donotqualify for hedge accounting under thespecificrulesinIAS39.ChangesinthefairvalueofderivativeinstrumentsthatdonotqualifyforhedgeaccountingunderIAS39arerecognisedimmediatelyinthestatementofcomprehensiveincome.Thisalsoappliestoanyineffectivepartsofaderivativefinancialinstrumentthatqualifiesasahedge.

At the inception of the transaction,therelationshipbetweenthehedginginstru-mentsandthehedgeditems,aswellasitsrisk management objective and strategyforundertakingthehedgetransactions,isdocumented.Thisprocessincludeslinkingallderivativesdesignatedashedgestospecificassetsandliabilitiesortospecificfirmcom-mitmentsorforecastedtransactions.TheGroupalsodocumentsitsassessment,bothatthehedgeinceptionandonanongoingbasis,astowhetherthederivativesthatareusedinhedgingtransactions,arehighlyeffectiveinoffsettingchangesinfairvaluesorcashflowsofthehedgeditems.Thederivativeinstru-mentsusedbytheGrouparenotheldforspeculativearbitrageorinvestmentpurposes.Thefairvalueofderivativesthatareactivelytradedinorganisedfinancialmarketsaredeterminedbyreferencetoquotedmarketbidpricesatthecloseofbusinessonthebalancesheetdate.Forderivativeswherethereisnoactivemarket,fairvalueisdeterminedusingvaluationtechniques.Suchtechniquesincludeusingrecentarm’slengthmarkettransactions,referencetothecurrentmarketvalueofanothersubstantiallyequalinstru-ment,discountedcashflowanalysisorothervaluationmodels.

2.14 Financial instrumentsFinancialinvestmentshavebeenclassifiedas financial assets at fair value through

statementofcomprehensiveincome,loansandreceivablesoravailable-for-salecatego-ries.Whenfinancialassetsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseofinvestmentsnotatfairvaluethroughthestatementofcomprehensiveincome, directly attributable transactioncosts.Theclassification isdependentonthepurposeforwhichtheinvestmentswereacquired.Financialinvestmentswithlessthan12monthstomaturityoriftheyarebeingregularlytradedareclassifiedascurrentassets,otherwiseasnon-current.TheGroupdeterminestheclassificationofitsfinancialinvestmentsafter initial recognition,andwhereallowedandappropriate,thisdesigna-tionisre-evaluatedateachfinancialyearend.Purchasesandsalesoffinancialinvestmentsarerecognisedonthesettlementdate,whichisthedatethattheassetisdeliveredtoorbytheGroup.Whenfinancialinvestmentsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseofinvestmentsnotatfairvaluethroughthestatementofcomprehensiveincome,directlyattributabletransactioncost.

Fairvalueofinvestmentsthatareactivelytradedinorganisedfinancialmarketsaredeterminedbyreferencetoquotedmarketbidpricesatthecloseofbusinessonthebalancesheetdate.Forinvestmentswheretherearenoactivemarket,fairvalueisdeterminedusingvaluationtechniques.Suchtechniquesincludeusingrecentarm’slengthmarkettransactions,referencetothecurrentmarketvalueofanothersubstantiallysameinstru-ment,discountedcashflowanalysisorothervaluationmodels.Financial investments at fair value through the statement of comprehensive incomeThiscategoryincludesfinancialassetsheldfortradingandfinancialassetsdesignatedupon initial recognition as at fair valuethroughthestatementofcomprehensiveincome.Afinancialinvestmentisclassifiedinthiscategoryifacquiredprincipallyforthepurposeofregulartrading.Derivativesareinthiscategoryunlesstheyaredesignatedashedges.Assetsinthiscategoryareclassifiedascurrentassetsiftheyareexpectedtoberealisedwithin12monthsofthebalancesheetdate.

Loans and receivablesLoansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactive

odfjell group

69

market.Afterinitialmeasurementloanandreceivablesarecarriedatamortisedcostusingtheeffectiveinterestmethodlessanyallow-anceforimpairment.Gainsandlossesarerecognisedinprofitandlosswhentheloansandreceivablesarederecognisedorimpaired,aswellasthroughtheamortisationprocess.

available-for-sale investmentsAvailable-for-sale investmentsarenon-derivativesthatareeitherdesignated inthiscategoryornotclassifiedinanyothercategory.Theyareincludedinnon-currentassets unless Management intends todisposeoftheinvestmentwithin12monthsofthebalancesheetdate.Afterinitialrec-ognition,available-for-saleinvestmentsaremeasuredatfairvaluewithgainsandlossesbeingrecognisedinothercomprehensiveincomeuntiltheinvestmentisderecognised,oruntiltheinvestmentisdeterminedtobeimpaired,atwhichtimethecumulativelosspreviouslyreportedinothercomprehensiveincomeisincludedinstatementofcompre-hensiveincome.

2.15 trade receivablesTradereceivablesarerecognisedatfairvalueattimeofinitialmeasurement.Afterinitialrecognition,receivablesarecarriedatamor-tisedcostusingtheeffectiveinterestmethodlessanyallowanceforimpairment.Provisionsforimpairmentarebasedonestimatedhis-toricaldataandobjectiveindicatorsofafallinvalue.Objectiveindicatorsare,amongother:materialeconomicproblems,economicalrestructuring,bankruptcy,delayedrepaymentornon-payment.Provisionsforimpairmentarerecognisedtoreceivablesandchangesarechargedtothestatementofcomprehensiveincomeasreductioningrossrevenue.Anyreceiptofearlierwrittenoffreceivablesarerecognisedinthestatementofcomprehensiveincomeasgrossrevenue.

2.16 inventoriesBunkersandotherinventoriesareaccountedforatpurchaseprice,onafirst-in,first-outbasis.Inventoriesaremeasuredatthelowerofcostandnetrealisablevalue.If inventoryiswrittendowntonetrealisablevalue,thewritedownischargedtothestatementofcomprehensiveincome.

2.17 Cash and cash equivalentsThecashflowstatementispreparedusingtheindirectmethod.Cashandcashequivalentsincludecashinhandandinbank,deposits

heldatcallwithbanksandothershort-termhighlyliquidinvestmentswithmaturitiesofthreemonthsorlessfromthedateofacquisition.Theamountofcashandcashequivalentsinthecashflowstatementdoesnotincludeavailablecreditfacilities.2.18 equity Paid in equity (i) share capitalOrdinaryshares(AandBshares)areclassi-fiedasequity.Thepaidinequityequalsthenominalvaluepershare.

(ii) treasury sharesWhereanygroupcompanypurchasestheCompany’sequitysharecapital(treasuryshares),theconsiderationpaid, includinganydirectlyattributableincrementalcosts(netofincometaxes)isdeductedfromequityattributabletotheCompany’sequityholdersuntilthesharesarecancelledorreissued.

Whensuchsharesaresubsequentlyreissued,anyconsiderationreceived,netofanydirectlyattributableincrementaltransactioncostsandtherelatedincometaxeffects,isincludedinequityattributabletotheCompany’sequityholders.

(iii) share premiumTheexcessvalueofthetotalpaid-in-capitalnotreflectedinthenominalvalueoftheshares. Transaction costs of an equitytransactionareaccountedforasadeductioninsharepremium,netofanyrelatedincometaxbenefit.

other equity(i) exchange rate differencesExchange rate differences arise in con-nection with currency differences whenforeignentitiesareconsolidated.Whenaforeignoperationissold,theaccumulatedexchangedifferenceslinkedtotheentityarereversedandrecognisedinstatementofcomprehensiveincomeinthesameperiodasthegainorlossonthesaleisrecognised.(ii) Fair value and other reservesThefairvalueandotherreservesincludethetotalnetchangeinthefairvalueofthecashflowhedgeandfinancialinvestmentsavailableforsale.Whenthehedgedcashflowmaturesorisnolongerexpectedtooccur,thenetchangeinfairvalueistransferredtothestatementofcomprehensiveincome.Whenfinancialinvestmentsaresoldorimpaired,

the accumulated fair value adjustmentsinequityareincludedinthestatementofcomprehensiveincomeasgainsandlossesfromfinancialinvestment.(iii) retained earningsThenetresultattributabletoandavailablefordistributiontotheshareholders.

Dividendsarerecordedasadeductiontootherequityintheperiodinwhichtheyareapprovedbytheshareholders.

2.19 taxesTheshippingactivitiesareoperatedinseveralcountriesandunderdifferenttaxschemes,includingtheordinarytaxsysteminNorway,the Norwegian shipping tax system, theApprovedInternationalShippingsysteminSingaporeandthetonnagetaxsystemsintheUK.Inadditionweoperateunderlocaltaxsystems,mostimportantinChileandBrazil.

Ourtankterminalactivitiesaregenerallysubjecttotheordinarycorporatetaxrateswithinthecountryinwhichtheterminalislocated.

TheGroup’staxesincludetaxesofGroupcompaniesbasedontaxableprofitfortherelevantfinancialperiod,togetherwithtaxadjustmentsforpreviousperiodsandanychangeindeferredtaxes.Taxcreditsarisingfromsubsidiaries’distributionofdividendsaredeductedfromtaxexpenses.

Deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferences,except:

• wherethedeferredincometaxliabilityarises from the initial recognition ofgoodwillorofanassetor liability inatransactionthatisnotabusinesscombina-tionand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;and

• inrespectof taxable temporarydiffer-ences associated with investments insubsidiaries,associatesandinterestsinjointventures,wherethetimingof thereversalofthetemporarydifferencescanbecontrolledanditisprobablethatthetemporarydifferenceswillnotreverseintheforeseeablefuture.

Deferredtaxassetsarerecognisedtotheextentthatitisprobablethatfuturetaxableprofitwillbeavailabletooffsetthetem-porarydifferences.Werecogniseformerlyunrecogniseddeferredtaxassetstothe

odfjell group

71 70

extentthatithasbecomeprobablethatwecanutilisethedeferredtaxasset.Similarly,theCompanywillreduceitsdeferredtaxassetstotheextentthat itnolongercanutilisethese.

Deferredtaxanddeferredtaxassetsforthecurrentandpriorperiodsaremeasuredat theamountexpected tobepaid toorrecoveredfromtherelevanttaxauthorities,usingthetaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxanddeferredtaxassetsarerecognisedirrespec-tiveofwhenthedifferenceswillbereversed.Deferredtaxanddeferredtaxassetsarerecognisedattheirnominalvalueandareclassifiedasnon-currentliabilities(non-currentassets)inthebalancesheet.

Companiestaxedunderspecialshippingtaxsystemswillgenerallynotbetaxedonthebasisoftheirnetoperatingprofit.Aportionofnetfinancialincomeandothernon-shippingactivitiesarenormallytaxedattheordinaryapplicabletaxrate.Taxationundershippingtaxregimesrequirescompliancewithcertainrequirements,andbreachofsuchrequire-mentsmayleadtoaforcedexitoftheregime.Taxpayableanddeferredtaxesarerecog-niseddirectly inequitytotheextentthattheyrelatetofactorsthatarerecogniseddirectlyinequity.2.20 Government grantsGovernmentgrantsarerecognisedwhenthere is reasonable assurance that thegrantwillbereceivedandallassociatedconditions will be complied with. Whenthegrantrelatestoanexpenseitem,itisrecognisedasreductionoftheexpenseovertheperiodnecessarytomatchthegrantonasystematicbasistotheexpensethatit is intended to compensate. When thegrantrelatestoanasset,thefairvalueisreducedandthegrant is includedinthestatementofcomprehensive incomeovertheexpectedusefullifeoftherelevantassetonastraight-linebasis.Furtherdetailsaregiveninnote14.

2.21 Dismantling liabilitiesIfthereislegalorconstructiveobligationtodismantleatankterminalattheendofitsusefullife,liabilitiesforfuturedismantlingexpensesareaccruedatnetpresentvalue.Thedismantling liability iscapitalized intheassetvalue.Theliabilitiesareregularlyevaluated, and adjusted when there are

materialchangesininterestrates,inflationorinotherdismantlingexpenses.Changesindismantlingprovisionareadded toordeductedfromthecostoftherelatedasset.

Unwindingofthediscountischargedtothestatementofcomprehensiveincomeasafinancecostasitoccurs.

2.22 interest bearing debtInterestbearingdebtisclassifiedasnon-currentliabilitiesandinitiallyrecognisedattheamountofproceedsreceived,netoftransactioncostsincurred.Borrowingsaresubsequently carried at amortised cost,whereanydifferencebetweentheproceeds(netoftransactioncosts)andtheredemptionvalueisrecognisedintheincomestatementovertheperiodoftheborrowingsusingtheeffectiveinterestmethod.Interestbearingdebtisgenerallynon-currentliabilities,whileinstallmentswithinthenext12monthsareclassifiedascurrentliabilities.

2.23 ProvisionsProvisionsarerecognisedwhentheGrouphasapresentlegalorconstructiveobligationasaresultofpastevents,anditisprobablethatanoutflowofresourceswillberequiredtosettletheobligation.Provisionsarebasedonbestestimates.Provisionsarereviewedoneachbalancesheetdateandreflectthebestestimateoftheliability.Iftheeffectofthetimevalueofmoneyismaterial,normallymorethantwelvemonths,provisionsarediscountedusingacurrentpretaxratethatreflectstherisksspecifictotheliability.Wherediscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasafinancecost.2.24 Pension cost and liabilitiesTheGroupoperatesanumberofpensionplansinaccordancewiththelocalconditionsandpracticesinthecountriesinwhichitoper-ates.Suchpensionplansaredefinedbenefitplansorcontributionplansaccordingtothecustomarypensionplansprevailinginthecountryconcerned.

Definedbenefitpensionplansarepensionplanswithretirement,disabilityandtermina-tionincomebenefits.Theretirementincomebenefitsaregenerallyafunctionofyearsof employment and final salary with theCompany.Generallytheschemesarefundedthroughpaymentstoinsurancecompanies.The liability in respect of defined benefitpensionplans is thepresentvalueof the

accumulateddefinedbenefitobligationatthebalancesheetdatelessthefairvalueofplanassets.Thenetpensionliabilityiscalculatedbasedonassumptionswithregardstointerestrates,futuresalaryadjustmentsetc.Theseassumptionsarebasedonhistoricalexperi-enceandcurrentmarketconditions.Thecostofprovidingpensionsischargedtostatementofcomprehensiveincomesoastospreadtheregularcostoverthevestingperiodoftheemployees.Actuarialgainsandlossesarisingfromexperienceadjustmentsandchangesinactuarialassumptionsarechargedorcreditedtoequityinothercomprehensiveincome.

Fordefinedcontributionplans,contributionsarepaidtopensioninsuranceplans.Oncethecontributionshavebeenpaid,therearenofurtherpaymentobligations.Contributionstodefinedcontributionplansarechargedtothestatementofcomprehensiveincomeintheperiodtowhichthecontributionsrelate.

2.25 earnings per shareBasic earnings per share amounts arecalculatedbydividingnetprofitfortheyearattributabletoordinaryequityholdersoftheparentcompanybytheweightedaveragenumberofordinarysharesoutstandingduringtheyear.

Dilutedearningspershareamountsarecal-culatedbydividingthenetprofitattributabletoordinaryequityholdersoftheparent(afterdeductinginterestonanydilutiveinstru-ments)bytheweightedaveragenumberofordinarysharesoutstandingduringtheyearplustheweightedaveragenumberofordinarysharesthatwouldbe issuedontheconversionofallthedilutivepotentialordinarysharesintoordinaryshares.

2.26 ComparativesComparativefigureshavebeenreclassifiedtoconformtochangesinpresentationinthecurrentyearwhentherearechangesinaccountingprinciples,correctionsoferrorsoroperationsdefinedasdiscontinued.

2.27 events after the balance sheet dateEventsafter thebalancesheetdatethatdonotaffecttheCompany’spositionatthebalancesheetdate,butwhichwillmateriallyaffecttheCompany’spositioninthefuturearestated.

2.28 related partiesInthenormalcourseoftheconductofitsbusiness,theGroupentersintoanumberof transactionswithrelatedparties.The

odfjell group

71

Companyconsidersthesearrangementstobeonreasonablemarketterms.

2.29 Classification in thefinancial statementOdfjellhasusedaclassificationbasedonacombinationofnatureandfunctioninthestatementofcomprehensiveincome.

2.30 Changes in accountingpolicy and disclosures(i) new and amended standardsadopted by the GroupThefollowingstandardsandamendmentshavebeenadoptedbytheGroupforthefirsttimein2013andhavethefollowingimpactonthefinancialstatements:

amendments to ias 19 – employee benefitsTheseamendmentseliminatethecorridorapproachandcalculatethefinancecostonanetfundingbasis.

Theeffectsofthe implementationoftheamendmentsareshowninthestatementofchangeinequity.

amendments to ias 1 – financial statements Itemspresentedinothercomprehensiveincome(OCI)shallbeclassifiedonthebasisofwhethertheywillbereclassifiedthroughprofitorlossornot.

The amendments have no effect on therecognisedamounts.iFrs 13 Fair value measurementIFRS13aimstoimproveconsistencyandreducecomplexitybyprovidingaprecisedefinitionoffairvalue.Thestandarddoesnotextendtheuseoffairvalue.

IFRS 13 has no impact on recognisedamountsfortheGroup.

(ii) new standards and interpretations not yet adoptedAnumberofnewstandardsandamend-mentstostandardandinterpretationsareeffectiveforannualperiodsbeginningafter1January2013,andhavenotbeenappliedinpreparingtheseconsolidatedfinancialstatements.NoneoftheseisexpectedtohavesignificantimpactoftheGroup,exceptthefollowingsetoutbelow:

iFrs 11 Joint arrangementsThe standard focuses on the rights and

obligationsofthepartiestothearrangementratheritslegalform.Therearetwotypesofjointarrangements:jointoperationsandjointventures.Thejointoperationsarisewhentheinvestorshaverighttoassetsandobligationsfortheliabilitiesofanarrangement.

Ajointoperatoraccountsforitsshareoftheassets,liabilities,revenueandexpenses.

Jointventuresarisewheretheinvestorshaverightstothenetassetsofthearrangement.Jointventuresareaccountedforundertheequitymethod.Proportionalconsolidationisnolongerpermitted.

TheGroupiscurrentlyusingtheproportion-ateconsolidationmethod.ManagementhasevaluatedIFRS11andconcludedthattheGroup’sinvestmentinOdfjellTerminalsASisajointventure.Hencethisinvestmentwillbeaccountedforbyapplyingtheequitymethodfrom2014.

Innote37wehaveidentifiedtheeffectontheincomestatementfor2013andbalancesheetat31December2013iftheequitymethodwereadoptedin2013.

note 3 seGMent inForMation

The operating businesses are organisedandmanagedseparatelyaccordingtothenatureoftheproductsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffersdifferentproductsandservesdifferentmarkets.TheCompanyhasthreereportablebusinesssegments:ChemicalTankers,TankTerminalsandLPG/Ethylene.Thechemicaltankersinvolvearoundtheworldservice,servicingportsinEurope,NorthandSouthAmerica,theMiddleEastandAsia,AustraliaandAfrica.Ourfleetcompositionenablesustoofferbothglobalandregionaltransportation.

TankterminalsformsaseparatesegmentthroughourinvestmentinthejointventurecompanyOdjellTerminalsAS.Inaddition,thissegmentplaysanimportantoperationalroleinourcargo-consolidationprogrammesoastoreducethetimeourvesselsspendinports,reducetherebyemissioninport,andenableustobeoneoftheworld-leadersincombinedshippingandstorageservices.

Odfjellre-enteredintothegasmarketin2012byacquiringoftwomodernLPG/Ethylenecarriers, and ordered in 2013 four new

vesselsandhasalsooptionsfordeliveryofuptofouradditionalvessels.

Pricingofservicesandtransactionsbetweenbusinesssegmentsaresetonanarm’slengthbasisinamannersimilartotransactionswiththirdparties.Segmentrevenue,segmentexpensesandsegmentresultsincludetrans-actionsbetweenbusinesssegments.Thesetransactionsareeliminatedinconsolidation.

TheGroupprovidegeographicaldata forrevenueandtotalassets,asthereliabilitymeasurementcriteriacannotbemetforotheritems.TheGroup’sactivitiesaremainlydividedamongthefollowingregions:Europe,NorthandSouthAmerica,theMiddleEastandAsia,AustraliaandAfrica.Vesselsandnewbuildingcontractsarenotallocatedtospecificgeographicalareasastheygenerallytradeworldwide.

Thechiefoperatingdecision-maker,whoisresponsibleforallocatingresourcesandassessing performance of the operatingsegment,hasbeenidentifiedastheBoardandtheManagementGroupwhichmakesthestrategicdecisions.Seealsonote2.4Segments.

odfjell group

73 72

(usD 1 000)

Chemical tankers

2013

tank terminals

2013

LPG/ethylene

2013total

2013**)

Chemical tankers

2012

tank terminals

2012

LPG/ ethylene

2012total2012

stateMent oF CoMPrehensiVe inCoMeGrossrevenuefromexternalcustomers 1025808 128166 11456 1165429 1062350 143549 5770 1211669

Grossrevenuefrominternalcustomers 2320 1064 – – 3289 1246 – –

Gross revenue 1028128 129230 11456 1165429 1065639 144795 5770 1211669

Netincomefromassociates – 1102 - 1102 – 825 – 825

Operatingresultbeforedepreciation,amortisationand

capitalgain(loss)onnon-currentassets(EBITDA) 97979 21827 (2706) 117101 65318 27144 629 93092Depreciation (86827) (36443) (2795) (126065) (96098) (34657) (747) (131501)

Impairmentofnon-currentasset - (81338) – (81338) – – – –

Capitalgain(loss)onnon-currentassets (8582) 24098 – 15515 (4433) – – (4433)

operating result (ebit) 2569 (71856) (5500) (74787) (35213) (7513) (117) (42842)

Netfinancialitems (43324) 6797 (2740) (39374) (57722) (9690) (628) (68040)

Taxes (5192) 11832 – 6640 (4288) 4325 - 38

net result (45947) (53228) (8240) (107522) (97223) (12875) (747) (110844)

Non-controllinginterest – 15 – 15 – 116 – 116

baLanCe sheet

Investmentsinassociates – 22877 – 22877 – 23152 – 23152

Totalassets*) 1623939 685669 50042 2359650 1749388 1061772 102143 2569327

Totaldebt*) 1222557 318616 58994 1600167 1378215 453969 102855 1655053

Cash FLoW stateMent

Netcashflowfromoperatingactivities 71836 (6693) (6959) 58184 29711 1873 (782) 30802

Netcashflowfrominvestingactivities (149701) 22423 (18060) (145338) (22056) (83495) (62565) (168116)

Netcashflowfromfinancingactivities 62909 64634 (40906) 86637 80512 (6708) 36864 110668

Capitalexpenditure (192710) (72941) (18060) (283711) (87306) (62470) (62565) (212341)

BUSINESSSEGMENTDATA

*)Terminalfiguresareincludingassetsanddebtheldforsalein2012,seenote38formoreinformation.

**)Thedifferencebetweentotalofbusinessareaandtotalperyearisduetoeliminationsofinternaltransactionsbetweenthebusinesssegments.

Gross revenue assets

(usD 1 000) 2013 2012 2013 2012

NorthAmerica 287001 283154 126282 83155SouthAmerica 158649 153129 45324 46854Norway 9673 – 236244 285310Netherlands 100087 115954 322513 308258OtherEurope 126207 126716 5446 10037MiddleEastandAsia 399174 429014 297769 396217Africa 69689 90598 1262 2262Australasia 14950 13104 – –Unallocatedshipsandnewbuildingcontracts – – 1324810 1437234

total 1165429 1211669 2359650 2569327

GROSSREVENUEANDASSETSPERGEOGRAPHICALAREA

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73

note 4 FinanCiaL risK ManaGeMent

Odfjell’sresultsandcashflowareinfluencedbyanumberofvariablefactors.Ourpolicyistomanagetherisksweareexposedto,including,butnotlimitedtomarketrisk,credit risk, liquidity risk, currency riskand interestraterisk.Ourstrategy is tosystematicallymonitorandunderstandtheimpactofchangingmarketconditionsonourresultsandcashflowandto initiatemitigatingactionswhererequired.Financialriskmanagementiscarriedoutbyacentraltreasuryfunction.Variousfinancialinstrumentsareusedtoreducefluctuationsinresultsandcashflowcausedbyvolatilityinexchangerates,interestratesandbunkerprices.

ThebelowtableshowssensitivityontheGroup’spre-taxresultandequitydue tochangesinmajorcostcomponentsonyearlybasis(calculationbasedonbestestimates):

Credit riskMultiplecounterpartsareusedtohedgeourtotalrisk.Weprimarilyuseourlendingbanksascounterpartstoenterintohedg-ingderivatives.Fromtimetotimeothercounterpartiesmaybeselected.Wedeemalltobehighqualitycounterparts.Inaddition,theCompany’shedgingpolicyestablishesmaximumlimitsforeachcounterparty.TheGroupthereforeregardsitsmaximumriskexposure as being the carrying amountof trade receivables and other currentreceivables(seenote29).TheGrouphasissuedguaranteesforthirdparties’liabilitiesasshowninnote16.

Liquidity riskTheGroup’sstrategyistohaveenoughliquidassetsoravailablecreditlines,atanytime,tobesufficientlyrobusttowithstandprolongedadverseconditionsinthemarketswhereweoperate.Surplusliquidityismainlyinvested

inliquidityfundsorbondswithahighcreditrating.

Seealsonote5,7,29and30foraginganalysisandcurrencyexposure.

Currency riskTheGroupentersintocurrencycontractstoreducecurrencyriskincashflowsdenomi-natedinnon-USDcurrencies.Investmentsinassociatedcompaniesandsubsidiarieswithanon-USDcurrencyasfunctionalcurrencyaregenerallynothedged.Suchinvestmentsgenerateforeigncurrencytranslationdif-ferencesthatarebookeddirectlytoothercomprehensiveincome,seestatementofothercomprehensiveincome.

TheGrouphascertainassetsandliabilitiesdenominatedinNOKthatarenotfullyhedged.FluctuationsintheUSD/NOKexchangeratewillinfluencetheGroup’sresult.Themostmaterialitemispensionliabilities(seenote9Pensionliabilities)inNorway.

bunker riskThesinglelargestcostcomponentaffectingthetime-charterearningsisbunkers.Inaddi-tiontobunkeradjustmentclausesinContractsofAffreightment,theGroupentersintoseveraltypesofbunkerderivativestohedgeagainstfluctuationsintheresultsduetochangesinthebunkerprices.

interest rate risk The Group enters into several types ofinterestratederivativestohedgeagainstfluctuationsintheresultsduetochangesin interestrates.Typically, theCompanyentersintointerestrateswapsforhedgingofaportionofthemarketinterestrelatedtoourloansportfolio.

note 5 DeriVatiVes aCtiVities

TheGroupusesdifferenthedginginstru-mentstoreduceexposurestofluctuationsinfinancialrisks.

Cash FLoW heDGinGThe Group has highly probable futureexpensesthatmaybevariableduetochangesincurrencyexchangerates, interestratelevelsorbunkerprices.Thederivativesclas-sifiedascashflowhedgesareaccountedforatmarketvalue(fairvalue).Thechangeinmarketvaluepriortomaturityisaccountedfor under assets or liabilities and otherequity.Atmaturity,theresultofthehedging

transactionsisaccountedforintheaccounttotheunderlyingexposuree.g.voyage-,operat-ing-,generalandadministrativeexpensesorinterestexpensesinthenetresult.

CurrencyTheGroupestimates futureexpenses innon-USDcurrenciesbasedonprioryear’sactualamountsadjustedforanychangesandsecurespartofthisanticipatedexposurebyusingforwardcontractsandoptions.

Fromtimetotimeweenterintocurrencyoptionsthatdonotqualifyforhedgeaccount-ingasitisuncertainifwewillreceiveafuturedelivery,hencewemayenterintocurrencyderivativesonatradingbasis.

bunkersTheGroupestimatesfuturefueloilcon-sumptionbasedonthefleetemploymentplanandhistoricaldata.Platt’sfuelindex'3.5%FOBBargesRotterdam'istheindexpurchased when we hedge our bunkerexposure.Eachyearwetestthecorrelationofthisindexbothwiththeequivalentindexformajorbunkeringportsandtheactualpriceforthefuelwehavepurchasedintheseports.Per31December2013thesecorrela-tionsaresufficienttouseasthereferenceindextohedgeourfuturebunkerpurchasesintheseports.

Bunkerhedgingcontractsusedareswapsandoptions.

AContractofAffreightmententeredintowithacustomertypicallycontainsabunkeradjustmentclause.Thismeansthatbunkerpriceforthebunkerconsumptionrelatedtothatcontractisfixedoratleastdeterminedwithinparameters.Withabunkerpriceabovetriggerpointsourcustomerwillcompensateusfortheincreasedcost.Likewise,withalowerbunkerpricewehavetocompensatethecustomer.

interest ratesThe Group’s debt consists of mortgagelending,leasefinancing,unsecuredbondsandexportfinancing.Thedebtinterestrateisnormallyfloating.Fromtimetotimeweenterintoderivativestoswapthefloatinginterestratetofixedinterestrateforaperioduptotenyears.

Fromtimetotimewealsosellinterestrateoptionsthatmay,inthefuture,beturnedintoafixedrateswaps.Wemayalsoenterintointerestratederivativesonatradingbasis.

Cost component equity net result

Bunkers,USD50pertonneincrease 4.8mill. (27mill.)

Interestrates,1%increase 1.4mill. (13mill.)

Currency,USD10%decrease 2.3mill. (10mill.)

odfjell group

75 74

time to maturity - usD amountsCurrency sold bought avg. rate < 1 year 1 - 5 years > 5 years total

Cashflowhedging USD 24000 145272 6.05 24000 – – 24000

Nonhedge USD 17806 100000 5.62 17806 – – 17806

time to maturityinterest rates avg. rate < 1 year 1 - 5 years > 5 years total

Cashflowhedging USD 251815 4.35% 150000 50000 51815 251815

EUR 15300 4.23% 15300 – – 15300

SGD 62500 2.21% 13750 48750 – 62500

Nonhedge,IRS1) USD 27500 2.76% – 175000 100000 275000

Cross currency interest rate swaps

time to maturity - usD amounts

avg. Price < 1 year 1 - 5 years > 5 years total

Nonhedge USD273973 FromNOKtoUSD 6.10% 62489 122918 88566 273973

time to maturity – volume

bunker avg. Price < 1 year 1 - 5 years > 5 years total

Cashflowhedging 120000tonnes USD545.75 120000 – – 120000

time to maturity - usD amountsCurrency sold bought avg. rate < 1 year 1 - 5 years > 5 years total

Cashflowhedging USD 24000 NOK 149964 6.25 24000 – – 24000

Nonhedge1) USD 13000 NOK 83655 6.44 13000 – – 13000

1)Weeklyoptions,amountcanbebetween0andUSD26million.

time to maturityinterest rates avg. rate < 1 year 1 - 5 years > 5 years total

Cashflowhedging USD 78710 3.29% 3600 64400 10709 78710

EUR 25372 3.75% – 25372 – 25372

SGD 36848 2.10% 4590 22950 9308 36848

Nonhedge,IRS1) USD 275000 2.76% 75000 100000 100000 275000

time to maturity – volumebunker avg. Price < 1 year 1 - 5 years > 5 years total

Cashflowhedging 96000tonnes USD547.03 96000 – – 96000

the below overview reflects status of hedging and non-hedging exposure 31 December 2012 (figures 1 000):

Fair VaLue heDGinGFromtimetotimeweenterintoatransactionwherewewishtoswapaprincipaland/oraseriesofinterestpaymentsfromonecurrencytoanother,e.g.theNOKbondisswappedtoUSDinterestandprincipalpayments.Thederivativesclassifiedasfairvaluehedgesareevaluatedatmarketvalue,however,theeffectintheaccountsisnilastheunderlyingexposurehasanexactoppositechangeinmarketvalue.

non heDGinGForderivativesthatdonotqualifyforhedgeaccounting,anychangeofmarketvaluepriortothematurityandtheresultofthederivativetransactionatmaturityareaccountedforunder'Otherfinancialitems'inthenetresult.

the below overview reflects status of hedging and non-hedging exposure 31 December 2013 (figures 1 000):

1)AllnonhedgeIRS’areclassifiedascurrentassets

time to maturity - usD amountsCross currencyinterest rate swaps avg. rate < 1 year 1 - 5 years > 5 years total

Nonhedge USD 296230 FromNOKtoUSD 6.31% – 296230 – 296230

1)AllnonhedgeIRS’areclassifiedascurrentassets

odfjell group

75

hedging reserve recognised in statement of other comprehensive incomeThetablebelowshowsfluctuationsinthehedgingreserveinthestatementofothercomprehensiveincomefromcashflowhedges(seeStatementofothercomprehensiveincome)dividedbetweenthedifferenttypesofhedgingcontracts:

(usD 1 000)interest rate

swaps

Currency exchange contracts

bunker contracts

total hedging reserve

balance sheet as at 01.01.2012 (20761) 1160 (3305) (22906)Fluctuationsduringtheperiod:-Gains/lossesduetochangesinfairvalue 3612 2623 19542 25776-Transferstonetresult (157) (1885) (12553) (14595)

balance sheet as at 31.12.2012 (17306) 1898 3683 (11724)Fluctuationsduringtheperiod:-Gains/lossesduetochangesinfairvalue 1693 (781) 5379 6291-Transferstonetresult (233) (632) (5930) (6795)-Otheradjustments 11516 – – 11516

balance sheet as at 31.12.2013 (4330) 485 3131 (712)

Fair value of financial instrumentsThefairvalueofthefinancialassetsandliabilitiesareincludedattheamountatwhichtheinstrumentcouldbeexchangedinacurrenttransactionbetweenwillingparties,otherthaninaforcedorliquidationsale.Derivativefinancialinstrumentsandavailable-for-sale-investmentsarerecognisedinthebalancesheetatthefairvalueatthebalancesheetdate.Thefairvalueisobtainedfromactivemarketsorbasedonthirdpartyquotes.Forcashandcashequivalentsandcurrentliabilitiesthecarryingamountisconsideredtobethebestestimateoffairvalueoftheseinstrumentsduetotheshortmaturitydate.Receivablesaremeasuredatnominalvaluereducedbyanyimpairment.Carryingamountisconsideredtobebestestimateoffairvalueduetoshortmaturitydateandvalidterms.Fairvalueofbondsiscalculatedbasedonmarketvaluesonthebonds.

TheGroup’sfinancialstatementdoesnothaveanydifferencesbetweenfairvalueandcarryingamount.

Fair value hierarchyTheGroupclassifiesfairvaluemeasurementsusingafairvaluehierarchythatreflectsthesignificanceoftheinputsusedinmakingthemeasurement.ThemeasurementusedbyOdfjelliseitherlevel1or2,wherelevel1isquotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentityaccessatthemeasurementdate,andlevel2isinputotherthanquotedpricesthatareobservablefortheassetorliability,eitherdirectlyorindirectly.Forsomenon-derivativefinancialassetsandliabilitiesweconsidercarryingamounttobethebestestimateoffairvalueduetoshortmaturitydateandvalidterms,i.e.currentreceivablesandpayables.

Asat31DecemberAvailable-for-saleinvestmentwerevaluedatlevel1,allotherfinancialinstrumentswerevaluedatLevel2.

During2013therehavebeennotransfersbetweenlevelsofthefairvaluehierarchy.TheGroupaccountsfortransfersbetweenlevelsofthefairvaluehierarchyfromthedateoftheeventorchangeincircumstancesthatcausedthetransfer.

Derivative financial instruments recognised as assets/liabilities on the balance sheet:

(usD 1 000) 2013 2012

Bunkers 3133 3684Currency 734 2444Shares – 481Interestrates (26241) (39428)Heldforsale – (4381)

Derivative financial instruments (22374) (37201)

odfjell group

77 76

(usD 1 000)

Derivatives held as hedge

instrument

Derivatives held at fair value over the result

Loans and receivables

available for sale invest-ments

Liabilities recognised

at amortised cost

non- financial

assets/ liabilities

total 2013

assetsCashandcashequivalents – – 152124 – – – 152124Available-for-sale-investments – – – 9658 – – 9658Derivativefinancialinstruments 3618 249 – – – – 3867Currentreceivables – – 150003 – – 5168 155171Non-currentreceivables – – 33299 – – – 33299Othernon-financialassets – – – – – 2005530 2005530

total assets 3618 249 335427 9658 – 2010698 2359650

LiabiLitiesOthercurrentliabilities – – – – 159481 – 159481Derivativefinancialinstruments 5949 20292 – – – – 26241Interestbearingdebt – – – – 1349680 – 1349680Othernon-currentliabilities – – – – 2546 – 2546Othernon-financialliabilities – – – – – 62219 62219

total liabilities 5949 20292 – – 1511706 62219 1600167

AssetsandliabilitieswhicharemeasuredatfairvalueintheStatementofFinancialpositionandtheirlevelofthefairvaluehierarchyareasfollows:

Classification of financial assets and liabilities as at 31 December 2013:

Classification of financial assets and liabilities as at 31 December 2012:

(usD 1 000)held

for sale

Derivatives held as

hedge instrument

Derivatives held at fair value over the result

Loans and receivables

available for sale

invest-ments

Liabilities recognised

at amortised cost

non- financial

assets/ liabilities

total 2012

assetsCashandcashequivalents 17335 – – 153122 – – – 170457Available-for-sale-investments – – – – 16734 – – 16734Derivativefinancialinstruments – 6610 – – – – – 6610Currentreceivables 6281 – – 128585 – – 10574 145440Non-currentreceivables 9114 – – 50614 – – – 59728Othernon-financialassets 191011 – – – – – 1980983 2171994

total assets 223741 6610 – 332322 16734 – 1991557 2570965

LiabiLitiesOthercurrentliabilities 13018 – – – – 135478 – 148496Derivativefinancialinstruments 4381 7094 32336 – – – – 43811Interestbearingdebt 104615 – – – – 1220841 – 1325456Othernon-currentliabilities – – – – – 10175 – 10175Othernon-financialliabilities 6887 – – – – – 88235 95121

total liabilities 128900 7094 32336 – – 1366494 88235 1623058

note 6 CaPitaL ManaGeMent

TheprimaryobjectiveoftheGroup’scapitalmanagementpolicyistomaintainhealthycapitalratiosandholdliquidityavailabletotakeadvantageofinvestmentopportunitiesandgenerallysupportthebusiness.Atthesametimecapitalmanagementshouldbesuchthatthecapitalstructureissufficientlyrobusttowithstandprolongedadverseconditionsinsignificantriskfactors,suchaslong-termdown-cyclesinourmarketsandunfavourableconditionsinthefinancialmarkets.

TheGroupmanagesthecapitalstructureandmakesadjustmentstomaintainanoptimalstructureadaptedtocurrenteconomicconditions.Inordertomaintainoradjustthecapitalstructure,theCompanymayadjustdividendpayments,buytreasuryshares,redemptionofsharesorissuenewshares.Nochangesweremadeintheobjectivesorpoliciesduringtheyearsending31December2013and2012.

TheGroupmonitorsitscapitalusingthebookequityratioandavailableliquidity,beingthesumofcashandcashequivalents,available-for-saleinvestmentsandavailabledrawingfacilities,astheprimarymeasurements.TheGroup’spolicyistomaintainanequityratiobetween30%and35%andavailableliquidityofUSD150-200million.

odfjell group

77

(usD 1 000) 2013 2012

Equity 759 914Totalassets 2360 2345Assetsheldforsale – 224Equityratio 32.2% 35.6%Cashandcashequivalents 152 153Available-for-sale-investments 10 17Availabledrawingfacilities – 94

total available liquidity 162 264

note 7 interest bearinG Debt

Theinterestbearingdebtisacombinationofsecureddebtandunsecureddebt,financeleasesfrominternationalshippingbanksandbondsintheNorwegianbondmarket.InterestratesaregenerallybasedonfloatingLIBOR-rates.

Averageinterestrateistheweightedaverageofinterestrates,excludinghedges,asperendof2013.

Transactioncostsaredeferredandchargednetresultoverthelifeoftheunderlyingdebtusingtheeffectiveinterestratemethod.During2013USD3million(USD1.9millionin2012)hasbeenchargedtothestatementofcomprehensiveincome.

TheinterestbearingdebtdoesnotcontainanyrestrictionsontheCompany’sdividendpolicyorfinancingopportunities.Theinterestbearingdebtisgenerallysubjecttocertaincovenantswhichincludethatbookdebtratioshallatalltimesbelessthan75%(excludingdeferredtaxesfromdebt)andthattheliquidityshallalwaysbeminimumofUSD50million.Anyfreeliquidassetsincompaniesincluded100%intheconsolidatedaccountsofOdfjellSEcanalsobeincludedinthecalculationonapro-ratabasiscorrespondingtoOdfjell’sownership,providedtherearenorestrictionsonlendingordistributionsofanykindfromtherelevantcompanytoOdfjellSE.OnaconsolidatedbasisOdfjellSEshallatalltimesmaintainfreeliquidassetsofminimum6%ofinterestbearingdebt.

(usD 1 000)average

interest rate 2013 2012

Loansfromfinancialinstitutions–floatinginterestrates 2.66% 881804 764979Financeleases 0.78% 183368 190556Bonds 6.61% 293701 273973

subtotal interest bearing debt 3.26% 1358872 1229509Transactioncost (9192) (8668)

total interest bearing debt 1349680 1220841Currentportionofinterestbearingdebt (133634) (225930)

total non-current interest bearing debt 1216046 994911

(usD 1 000) 2014 2015 2016 2017 2018 2019+ total

Loansfromfinancialinstitutions–floatinginterestrates 128060 235242 89263 163723 157841 107675 881804Financeleases 5574 7249 6376 5053 156639 2476 183368Bonds – 102995 – 102139 88566 – 293701total interest bearing debt 133634 345487 95639 270915 403046 110152 1358872

Estimatedinterestpayable 42666 34424 26644 19854 8634 7468 139690total liabilities 176300 379911 122283 290769 411680 117619 1498562

(usD 1 000) 2013 2014 2015 2016 2017 2018+ total

Loansfromfinancialinstitutions–floatinginterestrates 139736 95289 205334 74973 88410 161238 764979Financeleases 23705 6648 792 1222 2544 155645 190556Bonds 62489 – 35199 – 87719 88566 273973total interest bearing debt 225930 101938 241325 76195 178673 405448 1229509

Estimatedinterestpayable 36557 28970 26735 19755 18026 10343 140387total liabilities 262486 130908 268060 95950 196699 415792 1369895

Maturity of interest bearing debt as at 31 December 2013:

Maturity of interest bearing debt as at 31 December 2012:

odfjell group

79 78

AveragematurityoftheGroup’sinterest-bearingdebtisabout4.1years(4.4yearsin2012).

ThenetcarryingamountofassetsunderfinanceleasesisUSD197.6millionasper31December2013(USD248millionasper31December2012).Theleaseperiodsvaryfromsixyearsto25yearsfrominception,andmayinvolvearightofrenewal.Inadditiontotherentalpayments,theGrouphasobligationsrelatingtothemaintenanceoftheassetsandinsuranceaswouldbeforalegalowner.AtanytimetheCompanyhastheoptiontoterminatethefinanceleasesonvesselsandbecomethelegalowneratdefinedterminationpayments.Thefinanceleasesgenerallydonotcontainprovisionsforpaymentofcontingentrents.ThefutureminimumleasepaymentsarebasedoncertainassumptionsregardingthetaxrulesintheUK,including,butnotlimitedto,taxratesandwritingdownallowances.Changesintheseassumptionsandthetimingofthemmayimpacttheminimumleasepayments.

(usD 1 000) 2013 2012

Bookvalueofinterestbearingdebtsecuredbymortgages 875894 764307Bookvalueofvesselsandterminalsmortgaged 1418645 1364795

Thetablebelowsummarizesinterestbearingdebtindifferentcurrencies:

*)BonddebtswappedtoUSD.Seenote5HedgingActivities

(usD 1 000) 2013 2012

USD 940215 842727EUR 71297 68835SGD 29149 30295NOK*) 293701 273973RMB 15455 3270WON 9056 10306Othercurrencies – 102

total interest bearing debt 1358872 1229509

note 8 taXes

(usD 1 000) 2013 2012

Taxespayable,Norway–ordinarytax 2143 (139)Taxespayable,otherjurisdictions 7453 8081Changeindeferredtax,otherjurisdictions (14909) –Changeindeferredtax,heldforsale (1327) (7904)

total taxes (6640) (38)

(usD 1 000) 2013 2012

Pre-tax profit (114161) (110882)Taxcalculatedatdomestictaxratesapplicabletoprofitsintherespectivecountries 31569 29004Taxeffectof:Incomeandexpensesnotsubjecttotax (10864) (29105)Nodeferredtaxassetrecognised (14550) –Associatedresultsreportednetoftax 285 139

tax income (expenses) 6440 38

effective tax rate 5.64% 0.03%

ThetaxreturnsoftheCompanyanditssubsidiaries'areroutinelyexaminedbyrelevanttaxauthorities.Fromtimetotime,intheordinarycourseofbusiness,certainitemsinthetaxreturnsarequestionedorchallenged.TheCompanybelievesthatadequatetaxprovisionshavebeenmadeforopenyears.

odfjell group

79

(usD 1 000) 2013 2012

Balancesheetobligationsfor:

Definedpensionbenefit–funded 17705 44460Definedpensionbenefit–unfunded 16481 20485

subtotal 34186 64945Others 1341 1731

total liability in the balance sheet 35527 66678

Incomestatementchargeincludedinoperatingprofitfor:

Defined pension benefits 11371 9903

Remeasurementsincludedinothercomprehensiveincomefor:

Defined pension benefits (27468) 10210

specification of deferred taxes (deferred tax assets):

(usD 1 000) 2013

Change in temporary

differences 2012

Revaluationofinvestmentsatfairvalue – (61) 61Pensions 24589 3019 21570Financialinstruments 23386 (3349) 26735Provisions 6582 13271 (6689)Unrealisedcurrencyrelatedtonon-currentreceivablesandliabilities – (1777) 1777Losscarriedforward 149868 54985 94883

total negative temporary differences 204425 66088 138338

Differencesrelatedtodepreciationofnon-currentassets 106869 (14777) 121646Differencesrelatedtocurrentassets – (34328) 34328Deferredgainrelatedtosaleofnon-currentassets 2461 (876) 3337Excessvaluerelatedtoinvestmentsofnon-currentassets 55738 (35259) 90997

total positive temporary differences 165068 (85240) 250308

Nettemporarydifferences (39357) (151328) 111971

Temporarydifferencesnotaccountedfor*) 114952 21670 93282

temporary differences – basis for calculation of deferred tax 75595 (129658) 205253

Deferred tax in statement of financial position 26693 – 53551Taxrate 12–35% – 12–35%

v*)Thisappliestotemporarydifferencesforcompanieswithlosseswheredeferredtaxassetsarenotrecognised.

TheGrouphasatotallosscarriedforwardofUSD150millionat31December2013(2012:USD95million),thatisavailableindefinitelytooffsetagainstfuturetaxableprofitsofthecompaniesinwhichthelossesarose.Taxgroupcontributionsarealsoavailablewithinthesamecountryandwithinthesametaxregime.ThedistributionofdividendtotheOdfjellSE’sshareholdersdoesnotaffecttheCompany’spayableordeferredtax.

note 9 Pension LiabiLities

TheGroupoperatesdefinedbenefitplansinNorway,USAandNetherlands.Alloftheplansarefinalsalarypensionplans,whichprovidebenefitstomembersintheformofaguaranteedlevelofpensionpayableforlife.Thelevelofbenefitdependsonmembers’lengthofserviceandtheirsalaryinthefinalyearsleadinguptoretirement.

TherearethreeplansinNorwaywhichareunfunded,wherethegroupmeetsthebenefitpaymentobligationasitfallsdue.Themostsignificantoftheseistheearlyretirementplan,wherethebenefitunderthisschemeislimitedtotheperiodattheageof65totheageof67.Planassetsaregovernedbyinsurancecompanyaccordingtolocalregulationsineachcountry.Theresponsibilityforgovernanceoftheplansincludinginvestmentsdecisionslieswiththeinsurancecompany.

OnefundedplaninNorwayincludesspouses,childrenanddisabilitycoverage.Theretirementisatage67(pensionpaymentforlife).Foroffshorepersonnelthegroupoperatesaseparatetariffratedpensionscheme.Thepensionbenefitunderthisschemeislimitedtotheperiodattheageof60totheageof67.

odfjell group

81 80

(usD 1 000) 2013 2012

Presentvalueoffundedobligations 114253 136514Fairvalueofplanassets (95206) (90321)

Deficit of funded plans 19047 46193Presentvalueofunfundedplans 16481 20485

total deficit of defined benefit pension plans (liability in the balance sheet) 35527 66678

(usD 1 000)Present value of

pension obligationFair value

of plan assets total

at 1 January 2012 123917 (72826) 51091Currentservicecost 8785 – 8785Interestexpense/(income) 3799 (2681) 1118

net pension cost 2012 12584 (2681) 9903

Remeasurements:

Returnonplanassets,excludingamountsincludedinnetinterestexpense – (5293) (5293)Gain/(loss)fromchangeindemographicassumptions (787) – (787)Gain/(loss)fromchangeinfinancialassumptions 15921 – 15921Experiencegain/(loss) 370 – 370

total remeasurements 15503 (5293) 10210

Contributions:

Fromemployer – (8553) (8553)Fromplan (2147) 1125 (1021)

total contributions (2147) (7428) (9575)

Exchangeratedifferences/currencygain/losses 7141 (2092) 5049

at 31 December 2012 156999 (90321) 66678

Currentservicecost 10011 – 10011Interestexpense/(income) 3977 (2617) 1360

net pension cost 2013 13988 (2617) 11371

Remeasurements:

Returnonplanassets,excludingamountsincludedinnetinterestexpense – (1261) (1261)Gain/(loss)fromchangeindemographicassumptions 5664 – 5664Gain/(loss)fromchangeinfinancialassumptions (28622) (584) (29206)Experiencegain/(loss) (2665) – (2665)

total remeasurements (25623) (1845) (27468)

Contributions:

Fromemployer – (7863) (7863)Fromplan (2190) 1179 (1011)

total contributions (2190) (6684) (8874)

Exchangeratedifferences/currencygain/losses (10440) 4259 (6180)

at 31 December 2013 132733 (97207) 35527

the amount recognised in the balance sheet is determined as follows:

the movements in the defined benefit obligation over the years are as follows:

the significant actuarial assumptions were as follows:

2013 2012

norway usathe

netherlands norway usathe

netherlands

Discountrate 4.1% 4.15% 3.6% 2.3% 4.40% 3.4%Salarygrowthrate 3.75% 2.80% 2.0% 3.5% 3.00% 2.0%Pensioninpayment–growthrate 0.6%-3.5% 2.40% 1.0% 0.2%-3.25% 2.40% 1.0%Mortalitytable K2013 IRSFunding

table

GBM/GBV

2012-2062

K2005 IRSFunding

table

GBM/GBV

2012-2062

odfjell group

81

impact on defined benefit obligation

Change in assumption

increase in assumption, the benefit obligation changes

Decrease in assumption, the benefit obligation changes

Discountrate 0.5% Decreaseinbenefitwith8.6% Increaseinbenefitwith9.9%Salarygrowth 0.5% Increaseinbenefitwith4.1% Decreaseinbenefitwith3.9%Pensiongrowthrate 0.5% Increaseinbenefitwith5.8% Decreaseinbenefitwith3.3%

the sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

Theabovesensitivityanalysesarebasedonachangeinanassumptionwhileholdingallotherassumptionsconstant.Inpractise,thisisunlikelytooccur,andchangesinsomeassumptionsmaybecorrelated.Discountrateatyearend2013istherateforcoveredbonds,inaccordancewithguidelinesreleasedbyNorwegianAccountingStandardBoard.

Defined contribution planSeveraloftheGroupcompanieshavedefinedcontributionplansinaccordancewithlocallegislation.Thedefinedcontributionplanscoverfull-timeemployees.

(usD 1 000) 2013 2012

Definedcontributioncost(USD1000) 3217 5635Numberofemployees 958 1261

SomeoftheGroup’sNorwegiansubsidiariesareboundtohavemandatoryoccupationalpensionschemepursuanttotheNorwegianlawofOccupationalpensionscheme.TheGroup'spensionschememeetstherequirementsofthisAct.

(usD 1 000) real estate

ships and newbuilding

contractsPeriodic

maintenancetank

terminals

office equipment

and cars total

Netcarryingamount01.01.2012 38588 1252925 37319 591318 43455 1963603Investment 926 107416 29250 64716 10033 212341Saleatbookvalue – (46297) – – (343) (46642)Depreciationandimpairment2012 (2492) (54748) (33595) (32693) (7973) (131501)Exchangeratedifferences (1056) 639 – 1731 (284) 1029net carrying amount 31.12.2012 35966 1259937 32973 625070 44886 1998832

Investment 9294 118044 23721 128113 4539 283711Saleatbookvalue – (26818) (997) (200595) (2938) (231348)Depreciationandimpairment2013 (2667) (56496) (25688) (52184) (6492) (143523)Exchangeratedifferences (404) 134 – (8012) 2969 (5317)net carrying amount 31.12.2013 42189 1294800 30009 492392 42964 1902355

Cost 58227 2008830 37319 865878 94472 3064727Accumulateddepreciation (19639) (755905) – (274561) (51017) (1101123)net carrying amount 01.01.2012 38588 1252925 37319 591318 43455 1963603

Cost 58097 2070590 32973 897514 103875 3163049Accumulateddepreciation (22131) (810653) – (272444) (58990) (1164218)net carrying amount 01.01.2013 35966 1259937 32973 625070 44885 1998832

Cost 66983 2161949 55697 817020 108445 3210094Accumulateddepreciation (24794) (867149) (25688) (307170) (65482) (1290283)

Impairment – – – (17458) – (17458)

net carrying amount 31.12.2013 42189 1294800 30009 492392 42963 1902355

note 10 non-Current assets

odfjell group

83 82

Capital gain (loss) on non-current assetsIn2013capitallossfromsaleofshipswasUSD8.6million(USD4.6millionongainin2012).

Depreciation periodsNon-currentassetsaredepreciatedonastraight-linebasisovertheirestimatedusefullivesasfollows(inyears):

–Realestate upto50–Ships 25–30–Periodicmaintenance 2.5–5–Maincomponentsoftankterminals 10–40–Officeequipmentandcars 3–15

Fully depreciated non-current assetsAssetswithatotalcostpriceofUSD3.9millionhavebeenfullydepreciatedasat31December2013,butarestillinuse.

assets financed under finance leases ThecarryingamountofshipsfinancedunderfinanceleaseswereUSD197.6millionandUSD248millionat31December2013and31December2012respectively.Seenote2.6.

Capitalised interest on newbuilding contracts Newbuildingcontractsincludecapitalisedinterestinconnectionwiththefinancingofthenewbuildingprogramme.ThecapitalisedinterestcarriedinthebalancesheetequalledUSD2.2millionin2013andUSD1.7millionin2012.

Change in residual valueTheresidualvaluesareevaluatedonaregularbasisandchangeshaveaneffectonfuturedepreciations.During2013themarketvaluefordemolitionofshipshasbeenchangedfromUSD420perlightweighttonneatthebeginningoftheyeartoUSD425perlightweighttonneattheendoftheyear.

Odfjellannounced18JunethatthetransactionwithLindsayGoldbergtoexpandthejointventuretoincludesubstantiallyalloftheOdfjell'stankterminalsbusinessgloballyhadbeenclosed.Aspartofthetransaction,LindsayGoldberghasacquireda49%interestinOdfjellTerminalsAS('OTAS'),theholdingcompanyforOdfjell'stankterminalsactivities.Inexchangefora49%shareinOTAS,LindsayGoldbergmadeacashinvestmentinOTAS,bywayofacapitalincreaseofUSD219.2million.OTASisnowowned51%byOdfjelland49%byLindsayGoldberg.OdfjellrealizedabookgainofUSD24.5millionrelatedtothetransaction.

(usD 1 000)odfjell terminals

(rotterdam) bV

oiltanking odfjell terminal

singapore Pte Ltdodfjell terminals

(houston) inc.odfjell terminals (Jiangyin) Co Ltd total

GooDWiLL:Bookvalue01.01.2012 34901 5443 35241 – 75584Exchangerateeffect 11 346 – – 357Heldforsale – (2837) – – (2837)book value 31.12.2012 34912 2952 35241 – 73105

Bookvalue01.01.2013 34912 2952 35241 – 73105Allocatedfairvalueassets – – – 744 744Impairment (36975) – – – (36975)Exchangerateeffect 2063 (115) – (12) 1936book value 31.12.2013 – 2837 35241 732 38810

note 11 intanGibLe assets

IntangibleassetsacquiredthroughbusinesscombinationshavebeenallocatedtofourindividualCGUsasfollows:

odfjell group

83

(usD 1 000)odfjell terminals

(rotterdam) bV

oiltanking odfjell terminal

singapore Pte Ltdodfjell terminals

(houston) inc.odfjell terminals (Jiangyin) Co Ltd total

CustoMer reLationshiP:Bookvalue01.01.2012 33925 – 5669 – 39594Depreciation (3504) – (588) – (4092)Exchangerateeffect 1212 – – – 1212book value 31.12.2012 31633 – 5081 – 36714

Bookvalue01.01.2013 31633 – 5081 – 36714Allocatedfairvalueassets – – – 440 440Depreciation (3509) – (584) (8) (4101)Impairment (26905) – – – (26905)Exchangerateeffect (1219) – – – (1219)book value 31.12.2013 – – 4497 432 4929

intangible assets 31.12.2013 – 2837 39738 1164 43739

Customerrelationshipsaredepreciatedonastraight-linebasisovertenyears.

In2013theexistingjointventurewithLinsayGoldbergLLCwasexpanded,andallocationoffairvalueassetsoccurredforOdfjellTerminals(Jiangyin)CoLtd.

note 12 iMPairMent oF non-Current assets anD intanGibLe assets

TheManagementhasevaluatedtheneedforpotentialimpairmentlossesinaccordancewiththeaccountingprinciplesinnote2.2foreachCGU.

Asat31December2013,themarketcapitalizationoftheGroupwasbelowthebookvalueofitsequity,indicatingapotentialimpairmentofintangibleassetsandofassetsoftheoperatingsegments.Inaddition,theon-goinguncertaintyinbusinessactivityandthereofweakearning,havealsoindicatedapotentialimpairment.GoodwillistestedforimpairmentonannualbasisasrequiredbyIFRS.

ThediscountrateforthedifferentCGUshasbeendeterminedtotheweightedaveragecostofcapital(WACC).

Chemical tankers and LPG/ethylene: ForOdfjell’sshippingactivitythenetpresentvalueoffuturecashflowshasbeencalculatedbasedonexpectedtime-charterearningsandestimatedlevelofoperatingexpensesforeachshipovertheremainingusefullifeoftheship.ThenetpresentvalueoffuturecashflowswasbasedonWACCof

2013 2012ChemicalTankers: 7.0% 6.0%LPG/Ethylene: 6.5% n/a

Shipowningcompaniesareallwithintaxregimeswheretaxratesareassumedtobe0%.

Inourassumptionswebelieveinabetterbalanceofsupplyanddemandfortonnageandthatwewillseeagrowthinthetime-charterearningintheyearstocome.Odfjellhasusedestimatesthatwillbringtime-charterearningbackto2007/08levelwithinacoupleofyears.

RegardingLPG/EthylenecarriersthisisanewestablishedbusinesssegmentwithinOdfjell.Bothshipswereboughtin2012.

Sensitivityfor2013isshowninsection2.2.

For2012,iftheWACCincreasedwith1%,thevalueinuseforownedshipswoulddecreasetherecoverableamountwithUSD110million.Suchchangewouldnotresultinanyimpairmentloss.TherecoverableamountwouldequalthecarryingamountiftheWACCwas8.9%andthetime-charterearningsaredecreasedwith8.3%.

odfjell group

85 84

tank terminals:

odfjell terminals (houston) and oiltanking odfjell terminal (singapore)Netpresentvalueiscalculatedbasedonprognosisrelatedtoearnings,expensesandcapitalexpenditureforthecomingyears.Afterfiveyearsanindefiniteterminalvalueisestimated,basedonGordons'Growthmodel.Growthinsteadystateissetto2%.ThenetpresentvaluewasbasedonaWACCof6.4%in2013and6%in2012.Whenestimatingvalueinusewehaveestimatedapost-taxcashflowanddiscountedthesewithapost-taxrate.Thepre-taxdiscountratein2013isapproximately8.8%.

EBITDAmarginusedwhentestingthecarryingamountofourinvestmentintheseterminals(includingfixedassets,customerrelationshipandgoodwill)is50%.

ForbothourpartlyownedterminalsinHoustonandSingaporewehaveseenstableearningsformanyyearsandwehavenoindicatorsthatthiswillchangegoingforward.

odfjell terminals (rotterdam) (otr)GoodwillandcustomerrelationshipassociatedwiththeinvestmentinOTRiswrittendowntozeroattheyearend.Inaddition,someofthefixedassetswerealsoimpaired.IntotalitwasrecognisedanimpairmentlossofUSD81.3million.

TheterminalisregardedasoneCGU.

Whencalculatingthevalueinuse,wehaveestimatedcashflowsfortheCGUinitscurrentuseovertheremainingusefullifeoftheassets.TheCGUconsistsofassetswithdifferentestimatedusefullives.Thelongestlivingassetshaveanestimatedusefullifethatendsin2062.Hence,theestimatedcashflowsareestimatedfortheperiod2014–2062.

Thepre-taxdiscountratethatreturnsthepre-taxcashflowstoitsrecoverableamount(valueinuse)isestimatedto7.55%.

Whenestimatingthevalueinuse,wehaveassumedthreescenarios;basecase,worstcaseandimprovedcase.Theestimatedrecoverableamountistheweightedoutcomeofthesethreescenarios.

Whencalculatingvalueinuse,theCGU’snormalisedEBITDAmarginisapproximately41%(basecase).

EstimatingvalueinusealsoinvolvesestimatinglevelofcapitalexpenditurenecessarytomaintaintheCGUoperationalduringthecashflowperiod(2014–2062).TheCGU’scurrentconditionsrequiresubstantialinvestments.Whenestimatingtheseinvestments,wehaveusedourbestestimateofwhatwouldbethemostlikelyoutcomeofrefurbishmentandornewbuildingoftank-pits.

In2012noimpairmentlosswasrecognised.Ifthediscountrateapplied(6%)waschangedto6.7%,therecoverableamountwouldequalthecarryingamount.

note 13 earninGs Per share

Thebasicearningspersharearecalculatedbydividingthenetprofitfortheyearattributabletoordinaryequityholdersoftheparentbyweightedaveragenumberofordinarysharesoutstandingduringtheyear.Basicanddilutedearningspersharearethesame,astheCompanyhasnoconvertiblebondloanorstockoptionplan.

(usD 1 000) 2013 2012

ProFit anD DiLuteD ProFit For the Year Due to hoLDers oF orDinarY shares

Profit/(Loss) and diluted profit for the year due to the holders of ordinary shares (107522) (110844)

aVeraGe nuMber oF shares outstanDinG (note 33)

Weightedaveragenumberofordinarysharesforbasicearnings

pershare*/dilutedaveragenumberofsharesoutstanding 79390 80603

basic/diluted earnings per share (1.36) (1.37)

*)Theweightedaveragenumberofsharestakesintoaccounttheweightedaverageeffectofchangesintreasurysharetransactionsduringtheyear.On1October2012OdfjellSEenteredintoaTotalReturnSwap(TRS)agreementwithDNBMarkets.TheTRScomprised5,891,166Asharesand2,322,482Bshareswithpreagreedstrikeprices.TheTRSwasterminated5February2013.

odfjell group

85

(usD 1 000) 2013 2012

Withinoneyear 180502 152838Afteroneyearbutnotmorethanfiveyears 424016 299714Afterfiveyears 185881 112413

total operating leases 790398 564965

Capital commitmentsOdfjellhasenteredintoagreementswithHyundaiMipoDockyardLtdinKoreaforconstructionoffour46,000dwtcoatedchemicaltankers.Twoofthevesselsarefinancedthroughalong-termsale/lease-backarrangementandthetworemainingvesselsarebeingfinancedthroughexportcreditfinancingincombinationwithacommercialtranche.DeliveryisbetweenMarchandJulyin2014.

InSeptember2013OdfjellsignedshipbuildingcontractswithNantongSinopacificOffshore&EngineeringCo.,LtdfortheconstructionoffourLPG/Ethylenecarriersof17,000cbm.DeliveriesarescheduledbetweenOctober2015andMay2016.Wehavesecuredoptionsfordeliveryofuptofouradditionalgascarriers.Weareindiscussionswithbanksregardingfinancingofthenewbuildings.

note 14 GoVernMent Grants

GovernmentgrantsfromtheNorwegianMaritimeDirectoraterelatedtothereimbursementsystemforNorwegianseafarersofUSD2.9millionin2013(USD3.2millionin2012)areenteredintotheaccountsasareductioninoperatingexpenses.

FlumarTransportesdeQuimicoseGasesLtdareceivedUSD3.4millionin2013(USD2.1millionin2012)inAFRMM(AdditionalFreightfortheMerchantMarineRenewal),whichisafreightcontributionforcargoesshippedbyBrazilianflagvesselsontheBraziliancoast.TheAFRMMarerecognisedwherethereisareasonableassurancethattheAFRMMwillbereceivedandallassociatedconditionswillbefulfilled.Whenthebenefitreferstoanexpenseitem,itisrecognisedasreductioninexpensesovertheperiodofbenefit,onasystematicbasisinrelationtocoststhebenefitaimstooffset.

note 16 CoMMitMents, Guarantees anD ContinGenCies

operating leasesTheGrouphasenteredintoseveraloperatingleasesforships.Theleaseshavefixedtime-chartercommitment.Thetime-charterrateisthecompensationtotheshipownercoveringthisfinancialexpensesandinsomecasesalsotheshipoperatingexpenses.InadditiontheGrouphasfloatingtime-charterarrangementswherepaymentsequaltheearningsgeneratedbytheships.Seenote20forthetime-charter/leaseexpenses.

TheGroupalsohasenteredintooperatingleasesforland,buildingsandcertainvehiclesanditemsofmachinery.Leasesforlandandbuildingsaregenerallynon-cancellableandlong-term.Leasesforcertainvehiclesanditemsofmachineryhaveanaverageperiodofbetweenthreeandfiveyearswithnorenewaloptioninthecontracts.

TheoperatingleasescontainnorestrictionsontheCompany’sdividendpolicyorfinancingopportunities.

the nominal value of future rents related to the operating lease fall due as follows:

note 15 transaCtions With reLateD Parties

TheGrouphascarriedoutvarioustransactionswithrelatedparties.Alltransactionshavebeencarriedoutaspartoftheordinaryoperations.

TheOdfjellGroupsharesofficesinBrazilwithalocalterminalcompanyrelatedtoDirectorsoftheBoard,LaurenceWardOdfjell(Chairman)andBerntDanielOdfjell(Director).TheDirectors'familyalsohasownershipinterestinacompany,whichactsasBrazilianportagentforOdfjell.Inadditiontoreimbursementofactualexpensesandexpendituresincurred,OdfjellTankersASandFlumarTransportesdeQuimicoseGasesLtdapaidthesecompaniesUSD1.6millioninagencyfeesin2013(USD1.5millionin2012),whileFlumarTransportesdeQuimicoseGasesLtdaandOdfjellBrasil–RepresentacoesLtdspaidUSD0.4millionforadministrativeservicesin2013(USD0.4millionin2012).

ASRederietOdfjell,jointlycontrolledbyLaurenceWardOdfjell(Chairman)andBerntDanielOdfjell(Director),rentsofficepremisesandbuyslimitedadministrativeservicesfromOdfjellManagementASinBergen,forwhichOdfjellManagementASreceivedUSD0.1millionin2013(sameasin2012).

Transactionswithrelatedpartiesaresettledonaregularbasisandthebalancesasper31.12.2013wereimmaterial.

odfjell group

87 86

TheOdfjellGrouphasissuedguaranteestothirdpartiesaspartofourday-to-daybusinesstoassumeresponsibilityforbunkerspurchases,portobligations,creditfacilities,charterpartyagreementsandoperatingleasecommitments.

OdfjellSEhasissuedaguaranteeonbehalfofOdfjellTerminals(Rotterdam)BVforanexistingloanwithtotalamountofUSD136million,ofwhichUSD66.8millionisincludedintableaboveasguaranteeforthirdparties.

ContingenciesTheCompanymaintainsinsurancecoverageforitsactivitiesconsistentwithindustrypractice.TheCompanyisinvolvedinclaimstypicaltothechemicaltanker,LPG/Ethyleneandtankterminalindustry,butnoneoftheseclaimshaveresultedinmateriallossesfortheCompanysincesuchclaimshavebeencoveredbyinsurance.

(usD 1 000) 2013 2012

Cashatbanksandinhand 139919 97136Short-termdeposits 12591 43936Otherliquidinvestments 96 29685Effectfromcurrencyexchangeratefluctuations (481) (299)Heldforsale – (17335)

total cash and cash equivalents 152124 153123Availablecreditfacilities – 93670

(usD 1 000) Currencyaverage interest

rate 2013book value

2013book value

2012

Bondsandcertificatesissuedbyfinancialinstitutions USD 0.77% 9658 11285Bondsandcertificatesissuedbyfinancialinstitutions NOK – 5449

total available-for-sale investments 9658 16734

Bookvalueequalsmarketvalue.Marketvalueofinvestmentsthatareactivelytradedinorganisedfinancialmarketsisdeterminedbyreferencetoquotedmarketbidpricesatthecloseofbusinessonthebalancesheetdate.In2013therewasnomaterialgain/lossrecogniseddirectlytostatementofothercomprehensiveincome(unrealisedgainofUSD1.2millionin2012).Bondsandcertificatesgenerallyhaveinterestrateadjustmentseverythreemonths.

note 18 Cash anD Cash eQuiVaLents

Cashatbanksearninterestatfloatingratesbasedonbanktimedepositrates.Short-termdepositsandotherliquidinvestmentsaremadeforvaryingperiodsofbetweenonedayandthreemonthsdependingontheimmediatecashrequirementsoftheGroupandearninterestattherespectiveshort-termrates.RestrictedcashofUSD2.7million(USD2.9millionin2012)consistoffundsforwithholdingtaxesrelatingtoemployeesinOdfjellManagementASandOdfjellMaritimeServicesAS.Thecashandcashequivalentsdonotincludeavailablecreditfacilities.

Guarantees

(usD 1 000) 2013 2012

total guarantees 101029 72928

remaining commitment

(usD MiLL) Contract price installment paid 2014 2015 2016

HyundaiMipo 158 48 110 – –NantongSinopacific 181 18 18 81 63

TheCompany’sshareofcapitalcommitmentsfromOdfellTerminalsASisUSD34.7million

note 17 aVaiLabLe-For-saLe inVestMents

odfjell group

87

(usD 1 000) 2013 2012

Salaryexpenses(note23) 82921 86650Otherexpenses 42695 43130Currencyhedging (253) (1204)

total general and administrative expenses 125363 128576

note 19 VoYaGe eXPenses

Voyageexpensesareexpensesdirectlyrelatedtotheshipvoyage.

(usD 1 000) 2013 2012

Portexpenses 92778 93159Canalexpenses 22376 23092Bunkersexpenses1) 281675 318361Transhipmentexpenses 20321 24197Commissionexpenses 23508 23342Othervoyagerelatedexpenses 50760 50240

total voyage expenses 491418 532391

note 20 tiMe-Charter eXPenses

Time-charterexpensesconsistofexpensesforoperatingleases,seenote16forfutureobligations.

Time-charterisanarrangementforhireofaship.Thesearrangementsvaryinformandwayofpaymentandperiodofhiremaydifferfromtimetotime.Bare-boatarrangementsarealsoincludedinthisnote.SeeGlossaryforadditionalcomments.

note 21 oPeratinG eXPenses

Operatingexpensesconsistofexpensesforoperatingshipsandterminals(forexamplewagesandremunerationsforcrewandoperationalpersonnel,andmaterialsandequipmentforshipsandterminals).

(usD 1 000) 2013 2012

Floatingtime-charterexpenses 46252 49136Othertime-charterexpenses 118786 124021

total time-charter expenses 165038 173157

(usD 1 000) 2013 2012

Salaryexpenses(note23) 113938 128296Costofoperationsterminals 51609 48716Costofoperationsships 96654 108485CostofoperationsLPG/Ethylene 6049 1916Tonnagetax 120 127Currencyhedging (758) (2262)

total operating expenses 267611 285278

note 22 GeneraL anD aDMinistratiVe eXPenses

Generalandadministrativeexpensesconsistofexpensesfromheadquarter’sactivitiesandactivitiesoutsideBergenforbrokerage,agencyandgeneraladministrationintankterminals.

Includingintheaboveisauditor’sremunerationfor:

Theincreasedamountsontaxadvisoryandnon-auditservicesarebasicallyduetoreorganisationsin2013.

(usD 1 000 exclusive Vat) 2013 2012

Statutoryauditing 942 798Otherassuranceservices 191 168Taxadvisoryservices 944 220Othernon-auditservices 495 306

Totalremuneration 2571 1492

1)Includesbunkershedging

odfjell group

89 88

note 23 saLarY eXPenses, nuMber oF eMPLoYees anD beneFits to boarD oF DireCtors anD ManaGeMent

Salaryexpensesareincludedinoperatingandgeneralandadministrativeexpensesaccordingtotheactivity.

(usD 1 000) 2013 2012

Salaries 157866 167901Socialexpenses 22814 29848Pensionexpensesdefinedbenefitplans(note9) 11371 9903Pensionexpensesdefinedcontributionplans(note9) 3217 5635Otherbenefits 1592 1659

total salary expenses 196859 214946

Formorespecification–seeOdfjellSEnote16.

Compensation and benefits to the Management Group:

the board of Directors declaration of determination of salary and other remuneration to the general manager and other management employees.

RegardingThePublicLimitedLiabilityCompaniesAct§6-16aTheBoardofDirectorsshallprepareaseparatedeclarationfordeterminationofsalaryandotherremunerationtothePresident/CEOandothermanagementemployees.AdditionallyisfollowedfromofThePublicLimitedLiabilityCompaniesAct§5-6(3)thattheordinaryGeneralMeetingshallalsodealwiththeBoard’sdeclarationregardingthedeterminationofsalaryandotherremunerationtomanagementemployees.AnadvisoryvoteistobeheldontheBoard’sguidelinesfordeterminingthemanagers’salariesforthecomingyear(See(2)).

TheguidelinesforsharebasedprogrammesandremunerationlinkedtosharesandotherdevelopmentsinthepriceoftheCompany'ssharesaretobeapprovedbytheGeneralMeeting.Ref.§6-16(subsection1no3.)

(usD 1 000) salary bonusPension

costother

benefits total

President/CEO,JanA.Hammer 605 67 97 27 795SeniorVicePresidentQHSE,ToralfSørenes 203 – 71 25 299SeniorVicePresident/CFO,TerjeIversen 305 67 42 27 440SeniorVicePresidentCorporateInvestments,ToreJakobsen 332 24 104 27 488SeniorVicePresidentCorporateServices&Support,HaraldFotland 311 45 45 25 425SeniorVicePresidentShipManagement,HelgeOlsen 285 – 107 27 420SeniorVicePresidentOdfjellTankers,MortenNystad 380 27 78 27 512SeniorVicePresidentGasCarriers,KnutH.Holsen 284 – 63 27 373InterimPresidentOdfjellTerminalsBV,ÅkeGregertsen** 459 – 5 – 464PresidentOdfjellTerminalsAS,,DaveEllis*** 212 150 4 10 376

total 3376 379 616 221 4592

Attheendof2013theBoardofDirectorsconsistsofsixmembers.CompensationandbenefitstotheBoardofDirectors:

average man-years of employees:

2013 2012

Europe 800 858NorthAmerica 167 164SoutheastAsia 1883 2020SouthAmerica 148 178Other 450 431

total average man-years of employees 3446 3651

(usD 1 000) 2013 2012

total remuneration 653 515

*)Thefiguresshowtotalcompensationandbenefitsforthewholeyear.**)InterimPresidentOdfjellTerminalsBVuntil31March,2013,consultantuntil31October,2013,memberoftheBoardofDirectorsfrom6May,2013.***)DaveEllisisthepresidentofthejointventureOdfjellTerminalsAS,andreceiveshisremunerationfromthiscompany.RemunerationtoDaveEllisisincludedwith100%.DaveEllisisincludedinseparateincentiveschemelinkedtotheperformanceofthejointventure.Noprovisionshavebeenmadeinthe2013accountsrelatedtothisscheme.

odfjell group

89

(1)Salaryandotherremunerationtomanagementemployeesarelistedinthetableabove.

(2)Guidelinesfordeterminingsalaryandotherremunerationformanagementemployees.

Whenitcomestoguidelinesfordeterminationofsalaryandotherremunerationforthecomingfiscalyear,theBoardwillpresentthefollowingguidelinesforadvisoryvoteattheGeneralMeeting2014:

ThePresident/CEOandmanagersreportingdirectlytohimisincludedintheCompany’sdefinedbenefitpensionplanordefinedcontributionplan,seenote9.FortheManagementtheCompanyhasanunfundedadditionalpensionschemecoveringsalaryover12G,cappedto18G.Thisimpliesthat66%ofthesalarybasisbetween12Gand18Giscoveredinthisadditionalscheme.

TheManagementshallbeofferedcompetitivetermsofemploymentinordertoensurecontinuityintheManagementandtoenabletheCompanytorecruitqualifiedpersonnel.TheremunerationshouldbecomposedsothatitpromotesthecreationofvaluesintheCompany.Theremunerationshallnotbeofsuchakind,orofsuchamagnitude,thatitmayimpairthepublicreputationoftheCompany.

Abasic,straightsalaryisthemaincomponentoftheremuneration.However,inadditiontoabasicsalarytheremayalsobeothersupplementarybenefits,hereunderbutnotlimitedtopaymentinkind,incentive/recognitionpay,terminationpaymentsandpensionandinsuranceschemes.

TheCompanydoesnotrunanyshareoptionschemes,norotherbenefitprogrammesasmentionedinthePublicLimitedCompaniesAct,section6-16subsection1no.3.AstheCompanyhasnosucharrangements,nospecificlimitsregulatingthedifferentcategoriesofbenefitsorthetotalremunerationofManagementhavebeendefined.

TheBoardhasimplementedaperformance-relatedincentiveschemewhichislinkedtotheCompany'searningsperformanceanddefinedoperationalgoalsovertimeandcontainsacapofmaximumsixmonths’salary.Iftheperformance-relatedincentiveschemedoesnotmeettriggerpointsforpayments,theBoardmayonadiscretionarybasisgrantrecognitionpaymentsforcertainemployeesincludingManagement.MembersofManagementhavenodefinedagreementwithregardstoseverancepayments.RemunerationtoManagementin2013wasincompliancewiththeaboveguidelines.

Managementemployeeloansaregenerallysecuredbycarmortgages.LoanstothemembersofManagementcarryaninterestof2.25%perannumandrepaymentperiodisfiveyears.MembersoftheManagementhaveloansfromtheCompanyasfollows:MortenNystad(USD0.07million)andHelgeOlsen(USD0.09million).

note 24 business CoMbinations

Nomaterialbusinesscombinationsoccurredin2013or2012.

note 25 subseQuent eVents

Nospecialissues.

note 26 other FinanCiaL iteMs

Thenegativenetresultonotherfinancialitemsin2013wasbasicallyinterestderivativestosecurealowinterestratethatisnotaccountedforashedging,andexpensesrelatedtonewloans.

Seenote5foroverviewofhedgingexposure.

(usD 1 000) 2013 2012

Realisedgain/lossesonavailable-for-sale-investments 418 469Financialassetsandliabilitiesatfairvaluethroughthestatementofcomprehensiveincome 7756 (6734)Otherfinancialincome 2650 1278Otherfinancialexpenses (11956) (10554)

total other financial items (1131) (15542)

odfjell group

91 90

Seenote5foroverviewofcurrencyhedgingexposure.

note 27 CurrenCY Gains (Losses)

note 28 non-Current reCeiVabLes

(usD 1 000) 2013 2012

Currencyhedgingcontracts (94) (3372)Non-currentreceivablesandliabilities 6317 3126Cashandcashequivalents 726 229Othercurrentassetsandcurrentliabilities 206 (2485)

total currency gains (losses) 7156 (2502)

(usD 1 000) 2013 2012

Loanstoemployees 842 974Prepaymentoflanduseright 18059 10453Prepaymentoflease – 21212Othernon-currentreceivables 14398 27090Heldforsale – (9114)Changeduetopension – (1637)

total non-current receivables 33299 48977

Thereisnothingmaterialpastdueorimpaired.

note 29 Current reCeiVabLes

Tradereceivablesarefromawiderangeofcustomerswithinourshippingandtankterminalbusiness.Creditsaregrantedtocustomersinthenormalcourseofbusiness.TheCompanyregularlyreviewsitsaccountsreceivableandmakesallowancesforuncollectibleamounts.Theamountsoftheallowancearebasedontheageoftheunpaidbalance,informationaboutthecurrentfinancialconditionofthecustomer,anydisputeditemsandotherrelevantinformation.

(usD 1 000) 2013 2012

Tradereceivables 106969 116505Otherreceivables 47961 22505Pre-paidcosts 5168 10574Provisionsforbaddebt (4927) (4144)Heldforsale – (6281)

total current receivables 155171 139159

Movement in provisions for bad debt:

(usD 1 000) totalnot past due nor impaired

Past due, but not impaired

<30 days 30–60 days 60–90 days >90 days

2013 154929 86720 21000 25345 3393 184712012 139010 76662 34935 8438 5027 13948

(usD 1 000) 2013 2012

Totalprovisionforbaddebt1January 4144 4657Thisyear’sexpenses 62 835Write-offthisyear 438 (1386)Reversedprovisions 267 38Currencydifferences 15 –

total provision for bad debt per 31 December 4927 4144

as at 31 December, the ageing analysis of trade receivables and other current receivables are as follows:

odfjell group

91

note 30 other Current LiabiLities

the table below summarizes total current receivables into different currencies:

the table below summarizes the maturity profile of the Group’s other current liabilities:

(usD 1 000) 2013 2012

USD 101678 96973EUR 41565 27107SGD 2138 3501RMB 1239 3953WON 1079 1853Other 7472 5773

total current receivables 155171 139159

(usD 1 000) 2013 2012

Tradepayables 42127 36644Estimatedvoyageexpenses 43659 40472Provisions 3322 1738Interestaccrual 4845 6552ShipManagementaccruals 4623 5014Accrualexpenses 12800 –Othercurrentliabilities 39672 28102Heldforsale – (12493)

total other current liabilities 151048 106030

(usD 1 000) total on demand <3 months 3-6 months 6-9 months > 9 months

2013 151048 94782 46135 8900 195 10372012 106030 97998 5531 1149 687 665

the table below summarizes other current liabilities into different currencies:

(usD 1 000) 2013 2012

USD 111640 63969EUR 16289 24688SGD 4337 3367RMB 7816 7688

WON 1907 1632Othercurrencies 9059 4685

total other current liabilities 151048 106030

note 31 other non-Current LiabiLities

(usD 1 000) 2013 2012

Provisionfordismantlingcost 2299 4590Provisionsforclaims 2115 5703Othernon-currentliabilities (1868) 3755Heldforsale – (3873)

total other non-current liabilities 2546 10175

odfjell group

93 92

number of shares (thousand)

share capital (usD 1 000)

share premium (usD 1 000)

2013 2012 2013 2012 2013 2012

Ashares 65690 65690 22277 22277 130511 40507Bshares 21079 21079 7148 7148 41877 12998

total 86 769 86 769 29 425 29 425 172 388 53 504

Thenumberofsharesareallauthorised,issuedandfullypaid.NominalvalueisNOK2.50,equivalenttoUSD0.41asat31.12.2013.AllshareshavethesamerightsintheCompany,exceptthatBshareshavenovotingrights.

shares owned/controlled by members of the board of Directors, President/Ceo and other members of the Management Group (including related parties):

note 33 share CaPitaL anD PreMiuM

2013 2012

a shares b shares a shares b shares

ExecutiveChairmanoftheBoardofDirectors,LaurenceWardOdfjell 25966492 2578994 25966492 1755076Director,BerntDanielOdfjell – 2032 – 2032Director,ÅkeGregertsen 3000 – 3000 –President/CEO,JanA.Hammer – 23200 – 23200SeniorVicePresident,CorporateInvestments,ToreJakobsen – – – 10000SeniorVicePresident,QHSE,ToralfSørenes 11000 – 10000 –

(usD 1 000) 2013 2012

Bunkers 32876 32913Otherinventories 3684 4441Heldforsale – (492)

total bunkers and other inventories 36 560 36 862

name a shares b shares totalPercent of

votesPercent of

shares

1 NorchemAS 25966492 2415094 28 381 586 43.42% 32.71%

2 OdfjellSE2) 5891166 2322482 8 213 648 – 9.47%

3 SvenskaHandelsbankenAB1) 2495105 2143110 4 638 215 4.17% 5.35%

4 JPMorganClearingCorp.1) 3564607 – 3 564 607 5.96% 4.11%

5 RederietOdfjellAS 3497472 – 3 497 472 5.85% 4.03%

6 OdfjellShippingBermudaLtd. 2750000 715760 3 465 760 4.60% 3.99%

7 ParetoAksjeNorge 2073898 1285370 3 359 268 3.47% 3.87%

8 SixSISAG1) 1071400 1600800 2 672 200 1.79% 3.08%

9 FondsfinansSpar 1980000 – 1 980 000 3.31% 2.28%

10 ParetoAktiv 875199 541323 1 416 522 1.46% 1.63%

11 SkagenVekst 1222521 – 1 222 521 2.04% 1.41%

12 TheNorthernTrustCo1) 86679 879400 966 079 0.14% 1.11%

13 KLPAksjeNorgeVPF 726450 223534 949 984 1.21% 1.09%

14 OdinMaritim – 900000 900 000 – 1.04%

15 SesAS 210000 690000 900 000 0.35% 1.04%

16 SixSISAG1) 550000 288500 838 500 0.92% 0.97%

17 ASSSMathilda 600000 150000 750 000 1.00% 0.86%

18 Berger 732400 – 732 400 1.22% 0.84%

19 FrankMohnAS – 700000 700 000 – 0.81%

20 ParetoVerdi 421445 261420 682 865 0.70% 0.79%

total 20 largest shareholders 54 714 834 15 116 793 69 831 627 81.65% 80.48%Othershareholders 10975410 5961911 16 937 321 18.35% 19.52%

total 65 690 244 21 078 704 86 768 948 100.00% 100.00%Internationalshareholders 35299017 7921265 43 220 282 59.03% 49.81%

20 largest shareholders as per 31 December 2013:

note 32 bunKers anD other inVentories

Nodividendpaidin2012andnofurtherdividendproposedfor2013.

1)Nomineeaccount2)Novotingrightsforownsharesref.PublicLimitedCompaniesAct§5-4

odfjell group

93

Alltreasuryshareswereboughtin2013andareheldbyOdfjellSEperendof2013.

TheExtraordinaryGeneralMeetingon2October2012authorisedtheBoardofDirectorstoacquireupto10%oftheCompany'ssharecapital.Thisauthorisationexpires2April2014.Thepurposeofpurchasingownsharesistoenhanceshareholders'value.TheBoardofDirectorsregularlyconsidersinvestmentsinownshareswhenitmaybebeneficialfortheCompany.

Company Country of registration ownership share Voting share

OdfjellArgentinaSA Argentina 100% 100%OdfjellAustraliaPtyLtd Australia 100% 100%OdfjellChemicalTankersLtd Bermuda 100% 100%FlumarTransportesdeQuimicoseGasesLtda Brazil 100% 100%OdfjellBrasilLtda Brazil 100% 100%OdfjellChileLtd Chile 100% 100%OdfjellChemicalTankers(Germany)GmbH Germany 100% 100%OdfjellJapanLtd Japan 100% 100%OdfjellKoreaLtd Korea 100% 100%OdfjellNetherlandsBV Netherlands 100% 100%NorfraShippingAS Norway 100% 100%OdfjellChemicalTankersAS Norway 100% 100%OdfjellChemicalTankersIIAS Norway 100% 100%OdfjellGasCarriersAS Norway 100% 100%OdfjellGasShipowningAS Norway 100% 100%OdfjellInsurance&PropertiesAS Norway 100% 100%OdfjellManagementAS Norway 100% 100%OdfjellMaritimeServicesAS Norway 100% 100%OdfjellProjectsAS Norway 100% 100%OdfjellTankersAS Norway 100% 100%OdfjellTankersEuropeAS Norway 100% 100%OdfjellTerminalsIIAS Norway 100% 100%OdfjellPeruS.A.C. Peru 100% 100%OdfjellShipManagementPhilippinesInc Philippines 100% 100%OdfjellAsiaIIPteLtd Singapore 100% 100%OdfjellSingaporePteLtd Singapore 100% 100%OdfjellDurbanSouthAfricaPtyLtd SouthAfrica 100% 100%OdfjellUKLtd UnitedKingdom 100% 100%OdfjellMiddleEastJLT UnitedArabEmirates 100% 100%OdfjellUSA(Houston)Inc UnitedStates 100% 100%

note 34 List oF subsiDiaries

the following subsidiaries are fully consolidated in the financial statements as per 31 December 2013:

odfjell group

95 94

note 35 inVestMents in Joint Ventures

the odfjell Group has the following investments in joint ventures, accounted for according to the proportional consolidation method as per 31 December 2013:

Joint Venture Country of registration business segment ownership share

CrystalPoolAS Norway ChemicalTankers 50.0%OVBermudaLtd Bermuda ChemicalTankers 50.0%Odfjell&VaporesLtd Bermuda ChemicalTankers 50.0%OdfjellyVaporesSA Chile ChemicalTankers 49.0%OdfjellAhrenkielEuropeGmbh Germany ChemicalTankers 50.0%OdfjellMakanaSA SouthAfrica ChemicalTankers 49.9%ThembaniShippingSA SouthAfrica ChemicalTankers 44.9%OdfjellTerminalsAS Norway TankTerminals 51.0%OdfjellHoldings(USA)Inc UnitedStates TankTerminals 51.0%OdfjellTerminalsManagement(US)Inc UnitedStates TankTerminals 51.0%OdfjellTerminals(Charleston)LLC UnitedStates TankTerminals 51.0%OdfjellTerminals(Houston)Inc UnitedStates TankTerminals 51.0%OdfjellUSAInc UnitedStates TankTerminals 51.0%OdfjellTerminalsChinaPteLtd China TankTerminals 51.0%OdfjellManagementConsultancy(Shanghai)CoLtd China TankTerminals 51.0%OdfjellTerminals(Jiangyin)CoLtd China TankTerminals 28.1%OdfjellTerminalsFujian(Quanzhou)CoLtd China TankTerminals 25.5%OdfjellTerminals(Dalian)CoLtd China TankTerminals 25.5%OdfjellNangangTerminals(Tianjin)CoLtd China TankTerminals 25.0%OdfjellTerminals(Korea)CoLtd SouthKorea TankTerminals 25.5%OdfjellTerminalsBV Netherlands TankTerminals 51.0%OdfjellTerminalsGeneralPartnerBV Netherlands TankTerminals 51.0%OdfjellTerminalsLindsayGoldbergCV Netherlands TankTerminals 51.0%OdfjellTerminalsManagementBV Netherlands TankTerminals 51.0%OdfjellTerminalsMaritiemBV Netherlands TankTerminals 51.0%OdfjellTerminalsUSABV Netherlands TankTerminals 51.0%OdfjellTerminals(Europe)BV Netherlands TankTerminals 51.0%OdfjellTerminals(Rotterdam)BV Netherlands TankTerminals 51.0%OdfjellTerminalsEMEABV Netherlands TankTerminals 51.0%OiltankingOdfjellTerminals(Oman)BV Netherlands TankTerminals 21.7%OiltankingOdfjellGmbh Germany TankTerminals 49.9%OdfjellTerminalsAsiaPteLtd Singapore TankTerminals 51.0%OdfjellTerminals(China)PteLtd Singapore TankTerminals 51.0%OiltankingOdfjellTerminalSingaporePteLtd Singapore TankTerminals 25.5%OdfjellAPPortHoldingPteLtd Singapore TankTerminals 25.5%OiltankingOdfjellTerminals&CoLLC Oman TankTerminals 15.2%ExirChemicalTerminal(PJSCo) Iran TankTerminals 35.0%

Theshareofresultandbalancesheetitemsforinvestmentsinjointventuresareincludedlinebylineintheaccounts.ThemainfiguresbelowareincludedforeachsegmentintheGroupaccounts:

2013 2012

(usD 1 000)Chemical

tankerstank

terminals totalChemical

tankerstank

terminals total

Grossrevenue 71526 126263 197789 165811 138390 304201

Operatingexpenses (1999) (76861) (78860) (2051) (80599) (82649)

Netfinancialitems 10 (6174) (6163) 20 (15136) (15116)

net result 862 (6048) (5186) 2652 (6308) (3656)

Non-currentassets 10210 501650 511860 7957 574844 582801

Currentassets 10752 77978 88730 27105 87172 114278

total assets 20962 579628 600589 35063 662017 697079

Equityopeningbalance 11206 275873 287081 10476 298362 308839

Netresult 862 (6048) (5186) 2652 (6308) (3656)

Equityadditions/adjustments 1250 685 1935 (2000) (25684) (27684)

Exchangeratedifferences (746) (15156) (15903) 78 9502 9579

total equity closing balance 12572 255354 267927 11206 275873 287079

odfjell group

95

In2012OdfjellSEenteredintoaletterofintenttoexpanditsexistingjointventurewithLindsayGoldbergLLCtoincludesubstantiallyallofOdfjell’stankterminalsbusiness.Thistransactionwasfinalisedin3rdquarterin2013withtheresultthatLindsayGoldbergLLCacquired49%interestinthesetankterminals.TheExirChemicalTerminal,andtheminorityinterestsintheterminalinNingbo,China,isnotincludedinthementionedtransaction.Inthefinancialstatementfor2012thistransactionwastreatedasheldforsale,andofthefiguresinthetableabovethisisamountedto:

Assetsheldforsale USD223.7millionLiabilitiesheldforsale USD128.9million

Seealsonote38Heldforsale.

Seealsonote10Non-currentassetsandnote11Intangibleassets.

note 36 inVestMents in assoCiates

AsOdfjellisinvolvedasaBoardMemberandhasinfluenceinthebelowmentionedcompanies,theyareaccountedforasassociatedcompanies.Sincebothcompaniesareunlisted,therearenoquotedpricesforafairvalueconsideration.

Asummaryoffinancialinformationforourshareoftheassociate:

entity (usD 1000) Country segmentownership

interestCarrying

amount

V.O.TankTerminalNingbo China TankTerminals 12.5%NoordNatieOdfjellTerminalNV Belgium TankTerminals 12.75%

Investmentinassociates01.01.2012 1718Investments 20950Exchangeratedifferencesontranslation (147)Dividend (194)Netincomefromassociates2012 825

investment in associates 31.12.2012 23152Exchangeratedifferencesontranslation (423)Dividendreceived (190)Netincomefromassociates2013 338

investment in associates 31.12.2013 22877

(usD 1 000) 2013 2012

Grossrevenue 5658 3334Netresult 1102 825

Assets 11825 10899Liabilities 5893 5489Equity 5938 5410

Excessvalues 16500 17737

2013 2012

(usD 1 000)Chemical

tankerstank

terminals totalChemical

tankerstank

terminals total

Non-currentliabilities 694 266291 266985 316 273545 273861

Currentliabilities 7713 57968 65682 23541 112598 136139

total liabilities 8407 324260 332667 23857 386144 410000

Netcashflowfromoperatingactivities 448 24575 25023 2881 74110 76992

Netcashflowfrominvestingactivities (4900) (23694) (28594) (2928) 6840 3912

Netcashflowfromfinancingactivities 2810 8067 10877 (2008) (97750) (99758)

Uncalledcommittedcapital – – – – – –

odfjell group

97 96

Logo blå:PANTONEPMS 295CMYK100/60/0/35

note 37 FiGures PresenteD baseD on eQuitY MethoD

ChangesinIFRS11willhavematerialeffectinhowOdfjellpresentsitsjointarrangement.Odfjellhasdecidedtowaituntil1January2014toimplementtheequitymethod.Belowarefigurespresentedbasedontheequitymethod.

(usD MiLLion) 2013 2012

stateMent oF CoMPrehensiVe inCoMe (eQuitY MethoD)Grossrevenue 1027 1066Netincomefromassociatesandjointventures (52) (10)Voyageexpenses (489) (530)Time-charterexpenses (164) (173)

Operatingexpenses (189) (202)

Gross result 134 150

Generalandadministrativeexpenses (93) (99)

operating result before depreciation, amortisation and capital gain (loss) on non-current assets (ebitDa) 41 50

Depreciation (89) (98)Capitalgain(loss)onnon-currentassets (9) (6)

operating result (ebit) (57) (54)

Interestincome – 2Interestexpenses (34) (40)Otherfinancialitems 1 (14)Currencygains(losses) (14) (2)

net financial items (46) (54)

result before taxes (103) (108)

Taxes (5) (3)

net result (108) (111)

stateMent oF FinanCiaL Position (eQuitY MethoD)Ships 1255 1185Newbuildingcontracts 64 103Tankterminals – –Othernon-currentassets 55 57Investmentsinassociatesandjointventures 375 332Loantoassociatesandjointventures – 29Non-currentreceivables 30 44

total non-current assets 1780 1750

Currentreceivables 126 107Bunkersandotherinventories 35 36Derivativefinancialinstruments 4 7Available-for-saleinvestments 10 17Cashandcashequivalents 84 122

total current assets 260 288Netassetsheldforsale – 95

total assets 2040 2133

Paidinequity 199 80Otherequity 560 824Non-controllinginterests – 7

total equity 759 914

Non-currentliabilities 28 49Derivativesfinancialinstruments 14 11Non-currentinterestbearingdebt 1000 860

total non-current liabilities 1043 920

Currentportionofinterestbearingdebt 124 183Derivativefinancialinstruments 9 24Currentliabilities 105 92

total current liabilities 237 299total equity and liabilities 2040 2133

odfjell group

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FinanCiaL ratios – eQuitY MethoD 2013 2012

Equityratio 37.2% 42.9%

(usD 1 000) 2012

assetsIntangibleassets 2837Realestate 2805Tankterminals 184356Officeequipmentandcars 521Non-currentreceivables 9114

total non-current assets 199632

Currentreceivables 6281Bunkersandotherinventories 492Cashandcashequivalents 17335

total current assets 24109total assets 223741

LiabiLities Deferredtaxliability 2976Pensionliability 38Non-currentinterestbearingdebt 94072Derivativesfinancialinstruments 4381Othernon-currentliabilities 3873

total non-current liabilities 105340

Companytaxespayable 525Currentportionofinterestbearingdebt 10543Currentliabilities 12493

total current liabilities 23561total liabilities 128900

UndertheequitymethodtheGroup’sshareofnetresultinassociatesandjointventuresfortheyearisincludedinnetresult.TheGroup’sinterestsinjointventuresandassociatesarecarriedonthebalancesheetatanamountthatreflectsitsshareofthenetassetsoftheCompany.Thecarryingvalueofinvestmentinajointventureorassociatewillneverbenegative,unlesstheGrouphasincurredorguaranteedobligationsinrespectoftheCompany.Goodwillisincludedinthecarryingamountoftheinvestmentandisnotamortized.

In2012OdfjellSEenteredintoaletterofintenttoexpanditsexistingjointventurewithLindsayGoldbergLLCtoincludesubstantiallyallofOdfjell’stankterminalsbusiness(OdfjellTerminals(Rotterdam)andOdfjellTerminals(Houston)wereincludedin2011).Thetransactionwasfinalisedin3rdquarter2013andLindsayGoldbergLLCacquired49%interestinthetankterminalssegment.

note 38 heLD For saLe

note 39 eXChanGe rates oF the GrouP’s MaJor CurrenCies aGainst usD

norwegian kroner (noK)

euro (eur)

renminbi (rMb)

singapore dollar (sGD)

Average year-end Average year-end Average year-end Average year-end

2013 5.89 6.08 0.75 0.73 6.08 5.99 1.25 1.262012 5.83 5.59 0.78 0.76 6.24 6.16 1.25 1.22

odfjell se

99 98

(usD 1 000) note 2013 2012

oPeratinG reVenue (eXPenses)Grossrevenue 2 6414 5650Generalandadministrativeexpenses 16 (17534) (11819)Depreciation 7 (1341) (1295)

operating result (ebit) (12462) (7464)

FinanCiaL inCoMe (eXPenses)Incomeoninvestmentinsubsidiaries 11 2463 247814Interestincome 11 24417 18616Interestexpenses 11 (33819) (42712)Otherfinancialitems 11 (3041) (15397)Currencygains(losses) 12 (20088) 2445

net financial items (30068) 210766

result before taxes (42530) 203302

Taxes 5 (2143) –

net result (44673) 203302

other CoMPrehensiVe inCoMeCashflowhedgeschangesinfairvalue 1632 4286Cashflowhedgestransferredtoprofitandlossstatement 1187 (626)Netgain/(loss)onavailable-for-saleinvestments (28) 1255

other comprehensive income 2791 4915

total comprehensive income (41882) 208217

stateMent oF CoMPrehensiVe inCoMe

FinanCiaL stateMentoDFJeLL se

odfjell se

99

stateMent oF FinanCiaL Position

assets as per 31.12 (usD 1 000) note 2013 2012

non-Current assetsRealestate 7 12147 12958Sharesinsubsidiaries 17 830740 674049Sharesinjointventures 17 255216 22153Loanstogroupcompaniesandjointventures 13,14 501896 606259Non-currentreceivables 14 – 16882

total non-current assets 1600000 1332301

Current assetsCurrentreceivables 10071 62Groupreceivables 4002 230712Derivativefinancialinstruments 3 258 6014Available-for-saleinvestments 15 9658 16732Cashandbankdeposits 18 186125 133356

total current assets 210114 386876total assets 1810113 1719177

equity and liabilities as per 31.12 (usD 1 000) note 2013 2012

eQuitYSharecapital 6,19 29425 29425Treasuryshares 6,19 (2785) –Sharepremium 6 172388 53504Cashflowhedgereserve 6 (2190) (4980)Otherequity 6 694586 778677

total shareholders' equity 891424 856626

non-Current LiabiLitiesDerivativefinancialinstruments 3 14420 10711Loansfromsubsidiaries 4 133741 223612Long-termdebt 4 615589 445355

total non-current liabilities 763750 679677

Current LiabiLitiesDerivativefinancialinstruments 3 9198 23744Currentportionoflong-termdebt 4 73199 135826Othercurrentliabilities 5276 6244Loansfromsubsidiaries 67267 17060

total current liabilities 154940 182874total liabilities 918689 862551total equity and liabilities 1810113 1719177

Guarantees 20 839716 664736

the boarD oF DireCtors oF oDFJeLL se Bergen,18March2014

LaurenCe WarD oDFJeLL ExecutiveChairman

bernt DanieL oDFJeLL

irene WaaGe basiLi Christine rØDsÆther Jan arthur haMMerPresident/CEO

ÅKe GreGertsenJanniCKe niLsson

odfjell se

101 100

stateMent oF Cash FLoW

note 1 aCCountinG PrinCiPLes

Theparent’sseparatefinancialstatementshavebeenpreparedinaccordancewiththesimplifiedIFRS,andarebasedonthesameaccountingprinciplesastheGroupstatementwiththefollowingexceptions:

a. Derivative financial instruments and hedging TheCompanyentersintoderivativefinancialinstrumentstoreducecurrencyandbunkersexposureinsubsidiaries.Theseinstrumentsdonotqualifyforhedgeaccounting.Changesinfairvalueofthesefinancialinstrumentsarechargedtotherespectivesubsidiaryandthereforenotrecognisedinnetresultorthebalancesheet.b. investments in subsidiaries and joint venturesSubsidiariesandinvestmentsinjointventuresarevaluedatcostintheCompanyaccounts.Theinvestmentisvaluedascostofthesharesinthesubsidiary,lessanyimpairmentlosses.Whentestingforimpairment,thecarryingamountoftheinvestmentistestedforimpairmentinaccordancewithIAS36asasingleasset,bycomparingitsrecoverableamount(higherofvalueinuseandfairvaluelesscosttosell)withthecarryingamountwheneverapplicationofIAS39indicatesthattheinvestmentmaybeimpaired.

C. Dividend and Group contribution ProposeddividendandgroupcontributionfortheparentCompany’sshareholdersareshownintheparentCompanyaccountsasaliabilityat31December.TheIAS10,12and13issetasidesothatdividendsandGroupcontributionsarerecordedtocorrespondwiththeNorwegianAccountingAct.

(usD 1 000) 2013 2012

Cash FLoW FroM oPeratinG aCtiVitiesNetresultbeforetaxes (42530) 203302Taxespaid (2143) –Depreciation 1341 1295Changesinthevalueoffinancialnon-currentassets – –Exchangeratefluctuations (6850) (2445)Dividendsand(gain)/lossfromsaleofsharesclassifiedasinvestingactivities – (22102)Othershort-termaccruals (9255) (208254)

net cash flow from operating activities (59436) (28203)

Cash FLoW FroM inVestinG aCtiVitiesSaleofnon-currentassets (530) –Investmentinnon-currentassets – (456)Investmentinsubsidiariesandothershares (205687) (38)Dividendreceived 2463 22102Changeinavailable-for-saleinvestments 7074 8632Changesinnon-currentreceivables 16882 1442Loansto/fromsubsidiaries 229435 (35949)

net cash flow from investing activities 49637 (4268)

Cash FLoW FroM FinanCinG aCtiVitiesNewinterestbearingdebt 406838 315415Repaymentofinterestbearingdebt (299025) (252166)Repurchasetreasuryshares (42201) (1819)

Saleoftreasuryshares – 33029

net cash flow from financing activities 65612 94460

Effectoncashbalancesfromcurrencyexchangeratefluctuations (3044) 1332

net change in cash balances 52769 63321Cashbalancesasper01.01 133356 70035

Cash balances as per 31.12 186125 133356

Availablecreditfacilities – 93670

odfjell se

101

time to maturity - usD amounts

Currency avg. rate < 1 year 1 - 5 years > 5 years total

Nonhedge USD 17806 NOK 100000 5.62 17806 – – 17806

time to maturity - usD amounts

interest rates avg. rate < 1 year 1 - 5 years > 5 years total

Cashflowhedging USD 200000 4.40% 150000 50000 – 200000Nonhedge,IRS1) USD 275000 2.76% – 175000 100000 275000

time to maturity - usD amounts

Cross currency interest rate swaps avg. rate < 1 year 1 - 5 years > 5 years total

Nonhedge USD 273973 FromNOKtoUSD 6.10% 62489 122918 88566 273973

note 2 Gross reVenue

GrossrevenueisrelatedtoservicesperformedforotherOdfjellGroupcompaniesandrentingofrealestate,andisrecognisedasrevenueintheperiodtheserviceisdeliveredandtheassetsrented.

note 3 DeriVatiVe FinanCiaL instruMents

TheCompanyusesvariousderivativefinancialinstrumentstoreducefluctuationsinearningsandcashflowcausedbyvolatilityinforeignexchangeratesandinterestrates.InadditiontheCompanyentersintoderivativefinancialinstrumentstoreducecurrencyandbunkersexposureinsubsidiaries.Derivativesareclassifiedascurrentasset/liabilityifpaymentsoccurwithin12monthsafterthebalancesheetdate.Derivativeswherepaymenttakesplacemorethan12monthsafterthebalancesheetdateareclassifiedasnon-current.

Seenote4intheGroupFinancialStatementsformoredetailsregardingriskmanagement.

below overview shows status of hedging exposure per 31 December 2013 (figures in 1 000):

time to maturity - usD amounts

Currency sold bought avg. rate < 1 year 1 - 5 years > 5 years total

Nonhedge1) USD 13000 NOK 83655 6.44 13000 – – 13000

time to maturity - usD amounts

interest rates avg. rate < 1 year 1 - 5 years > 5 years total

Cashflowhedging USD 50000 3.00% – 50000 – 50000Nonhedge,IRS¹) USD 275000 2.76% 75000 100000 100000 275000

time to maturity - usD amounts

Cross currency interest rate swaps avg. rate < 1 year 1 - 5 years > 5 years total

Nonhedge USD 296230 FromNOKtoUSD 6.31% – 296230 – 296230

below overview shows status of hedging exposure per 31 December 2012 (figures in 1 000):

1)AllnonhedgeIRS’areclassifiedascurrentassets

¹)Weeklyoptions,amountcanbebetween0andUSD26mill

¹)AllnonhedgeIRS’areclassifiedascurrentassets

odfjell se

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Fair value of financial instrumentsThefairvalueofthefinancialassetsandliabilitiesareincludedattheamountatwhichtheinstrumentcouldbeexchangedinacurrenttransactionbetweenwillingparties,otherthaninaforcedorliquidationsale.Derivativefinancialinstrumentsandavailable-for-sale-investmentsarerecordedinthebalancesheetatthefairvalueatthebalancesheetdate.Thefairvalueisobtainedfromactivemarketsorbasedonthirdpartyquotes.Forcashandcashequivalentsandcurrentliabilitiesthecarryingamountisconsideredtobethebestestimateoffairvalueoftheseinstrumentsduetotheshortmaturitydate.Receivablesarevaluedatnominalvaluereducedbyanyimpairment.Carryingamountisconsideredtobebestestimateoffairvalueduetoshortmaturitydateandvalidterms.Fordividendpayablethecarryingamountisconsideredtobebestestimateoffairvalueduetoshortmaturitydateandvalidterms.Fairvalueofbondsiscalculatedbasedonthemarketvaluesofthebonds.

TheCompany`sfinancialstatementdoesnothaveanymaterialdifferencesbetweenfairvalueandcarryingamount.

Fair value hierarchyOdfjellSEclassifiesfairvaluemeasurementsusingafairvaluehierarchythatreflectsthesignificanceoftheinputsusedinmakingthemeasurement.ThemeasurementusedbyOdfjelliseitherlevel1or2,wherelevel1isquotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentitycanaccessatthemeasurementdate,andlevel2areinputsotherthanquotedpricesthatareobservablefortheassetsorliabilities,eitherdirectlyorindirectly.Forsomenon-derivativefinancialassetsandliabilitiesweconsidercarryingamounttobethebestestimateoffairvalueduetoshortmaturitydateandvalidterms,i.e.currentreceivablesandpayables.

Asat31DecemberAvailableforsaleinvestmentwerevaluedatlevel1,allotherfinancialinstrumentswerevaluedatLevel2.

During2013therehavebeennotransfersbetweenlevelsofthefairvaluehierarchy.OdfjellSEaccountsfortransfersbetweenlevelsofthefairvaluehierarchyfromthedateoftheeventorchangeincircumstancesthatcausedthetransfer.

AssetsandliabilitieswhicharemeasuredatfairvalueintheBalanceSheetandtheirlevelofthefairvaluehierarchywereasfollows:

OdfjellSEheldinadditiontothederivativesabove,FXforwardsandbunkersswapsandoptionstoreduceexposureinsubsidiaries.ThesecontractsaretransferredtotherespectivesubsidiaryandthereforenotrecognisedinOdfjellSE’sseparatefinancialstatement.Fairvaluesofthesecontractsare:

(usD 1 000) 2013 2012

Bunkers 3133 3089Currency 485 1898

Derivative financial instruments 3618 4987

(usD 1 000)

Derivatives held as

hedge instrument

Derivatives held at fair value over the result

Loans and receivables

available for sale invest-

ments

Liabilities recognised

at amortised cost

non- financial

assets/ liabilities 2013

assetsCashandcashequivalents – – 186125 – – – 186125Available-for-sale-investments – – – 9658 – – 9658Derivativefinancialinstruments – 258 – – – – 258Currentreceivables – – 14073 – – – 14073LoantoGroupcompanies – – 501896 – – – 501896Othernon-financialassets – – – – – 1098103 1098103total assets – 258 702094 9658 – 1098103 1810113

LiabiLities

Othercurrentliabilities – – – – 5276 – 5276Loanfromsubsidiaries – – – – 201008 – 201008Derivativefinancialinstruments 3318 20300 – – – – 23618Interestbearingdebt – – – – 688788 – 688788total liabilities 3318 20300 – – 895072 – 918689

Classification of financial assets and liabilities as at 31 December 2013:

odfjell se

103

Classification of financial assets and liabilities as at 31 December 2012:

(usD 1 000)

Derivatives held as

hedge instrument

Derivatives held at fair value over the result

Loans and receivables

available for sale in-vestments

Liabilities recognised

at amortised cost

non- financial

assets/ liabilities 2012

assetsCashandcashequivalents – – 133356 – – – 133356Available-for-sale-investments – – - 16732 – – 16732Derivativefinancialinstruments 4987 1027 - – – – 6014Currentreceivables – – 230774 – – – 230774Non-currentreceivables – – 16882 – – – 16882LoantoGroupcompanies – – 606259 – – – 606259Othernon-financialassets – – - – – 709160 709160total assets 4987 1027 987271 16732 – 709160 1719177

LiabiLities

Othercurrentliabilities – – – – 6244 – 6244Loanfromsubsidiaries – – – – 240672 – 240672Derivativefinancialinstruments 6448 28007 – – – – 34455Interestbearingdebt – – – – 581181 – 581181total liabilities 6448 28007 – – 828097 – 862551

note 4 LonG – terM Debt

Maturity of interest bearing debt as per 31 December 2013:

Maturity of interest bearing debt as per 31 December 2012:

(usD 1 000)average

interest rate 2013 2012

Loansfromfinancialinstitutions–floatinginterestrate 2.52% 401495 314787Bonds 6.61% 293701 273973

subtotal interest bearing debt 4.25% 695195 588760

Transactioncost (6407) (7579)

total interest bearing debt 688788 581181Currentportionoftotaldebt (73199) (135826)

total non-current interest bearing debt 615589 445355

(usD 1 000) 2014 2015 2016 2017 2018 2019+ total

Loansfromfinancialinstitutions–floatinginterestrate 73199 195087 35012 24824 58462 14911 401495Bonds – 102995 – 102139 88566 – 293701total interest bearing debt 73199 298082 35012 126964 147028 14911 695195

Estimatedinterestpayable 28631 21840 15530 11398 4042 753 82194total liabilities 101830 319922 50542 138362 151070 15663 777389

(usD 1 000) 2013 2014 2015 2016 2017 2018+ total

Loansfromfinancialinstitutions–floatinginterestrate 73337 34587 161087 21612 11424 12741 314787Bonds 62489 – 35199 – 87719 88556 273973total interest bearing debt 135826 34587 196286 21612 99144 101307 588760

Estimatedinterestpayable 35098 19096 15560 12184 8961 3001 93901total liabilities 170924 53683 211846 33796 108104 104308 682661

odfjell se

105 104

Long-term loans from subsidiaries:

LoansfromGroupcompaniesgenerallyhavenofixedrepaymentschedule.Repaymentisbasedonavailableliquidity.TheaveragetermoftheCompany'soutstandinglong-terminterestbearingbankdebtasper31December2013was3.1years(3.9yearsin2012).TheaveragetermoftheCompany'soutstandingbonddebtasper31December2013was3.3years(3.3yearsin2012). Thelong-termdebtisacombinationofdebtguaranteedbysubsidiariesandbondsintheNorwegianbondmarket.InterestratesaregenerallybasedonfloatingLIBOR-ratesonlessthan12months.TheinterestbearingdebtdoesnotcontainanyrestrictionsontheCompany’sdividendpolicyorfinancingopportunities.Theinterestbearingdebtisgenerallysubjecttocertaincovenantswhichincludethat,intheOdfjellGroupaccounts,thebookdebtratioshallatalltimesbelessthan75%(excludingdeferredtaxesfromdebt)andthattheliquidityshallalwaysbeminimumofUSD50millionand6%ofinterestbearingdebt.TheCompanywasincompliancewiththecovenantsduring2013and2012.

(usD 1 000) Currencyaverage

interest rate 2013 2012

Loansfromsubsidiaries USD 3.56% 5875 5075EUR – – 218536NOK 3.72% 127866 –

total loans from subsidiaries 133741 223612

note 5 taXes

(usD 1 000) 2013 2012

Taxespayable 2143 –

total tax expenses 2143 –

Effectivetaxrate (4.46%) (0%)

taxes payable:

(usD 1 000) 2013 2012

Netresultbeforetaxes (42530) 203303Permanentdifferences 134467 (16382)Changestemporarydifferences 2022 7318Currencyadjustments1) – 4670

basis taxes payable 93959 198909Utilizationofcarriedforwardlosses (26566) –Groupcontributionwithnotaxeffect – (225712)Groupcontributionwithtaxeffect (67393) 237

basis taxes payable after Group contribution – (26566)

1)Contingenttaxliabilityisrelatedtobusinesstransferto100%ownedsubsidiariesOdfjellManagementASandOdfjellMaritimeServicesAS.Thegainisnon-taxablepursuanttoregulationsoftaxfreetransferbetweencompaniesinthesameGroup.

Deferredtaxassetisnotrecognisedduetouncertaintyoffutureutilizationoftemporarydifferences.

TemporarydifferencesaretranslatedtoUSDfromNOKatclosingrate.

specification of deferred taxes (deferred tax assets):

(usD 1 000) 2013 2012

Non-currentassets (5980) (5918)Otherlong-termtemporarydifferences 458 557Differencesrelatedtocurrentsassets – 486Financialinstruments (23386) (26735)Tax-losscarriedforward – (26566)Contingenttaxliabilityrelatedtonon-taxablegain1) 12576 13679

net temporary differences (16332) (44496)Taxrate 27% 28%

total deferred tax (deferred tax assets) (4409) (12459)

odfjell se

105

note 7 non-Current assets

(usD 1 000) Cost 01.01.2013 investment sale book value

accumulateddepreciation

prior yearsDepreciation

this yearbook value 31.12.2013

Land 408 17 – – – 426Officebuilding 23420 513 – (10871) (1341) 11721total 23829 530 – (10871) (1341) 12147

Depreciationperiods: Officebuilding:50years.Landisnotdepreciated.

note 8 reLateD Parties

Inthenormalcourseoftheconductofitsbusiness,Odfjellentersintoanumberoftransactionswithrelatedparties. ASRederietOdfjell,whereLaurenceWardOdfjellisChairmanoftheBoard,rentofficepremisesfromOdfjellSE(throughOdfjellManagementAS)inBergen,forwhichOdfjellreceivedUSD0.1millionin2013(USD0.1millionin2012).TheCompanyconsiderstheabovearrangementstobeoncommerciallyreasonablemarkettermsandtherewerenooutstandingbalancesasper31December2013.

OdfjellSEalsohasservicefeeagreementsandseveralfinancialtransactionswithGroupcompanies,allconsideredbeingatcommercialreasonablemarketterms,seenote2,11,13and14.note 9 CoMMitMents anD ContinGenCies

Capital expenditures Nomaterialfuturecommitmentsrelatedtocapitalexpenditure. Contingencies TheCompanymaintainsinsurancecoverageforitsactivitiesconsistentwithindustrypractice.

note 10 subseQuent eVent

Nospecialitems.

note 6 sharehoLDers’ eQuitY

(usD 1 000)share

capitaltreasury

sharesshare

premiumCash flow

hedge reserveretained

earningtotal

equity

shareholders’ equity as per 31 December 2011 29425 (2616) 53504 44893 491990 617197Reclassification* – – – (54789) 54789 –shareholders’ equity as per 1 January 2012 29425 (2616) 53504 (9896) 546778 617197Comprehensiveincome – – – 4915 203303 208218Sharerepurchases – (170) – – (1649) (1818)Saleoftreasuryshares – 2785 – – 30244 33029shareholders’ equity as per 31 December 2012 29425 – 53504 (4981) 778676 856626Comprehensiveincome – – – 2790 (44673) (41884)Sharerepurchases – (2785) – – (39416) (42201)Mergerofshares – – 118884 – – 118884shareholders’ equity as per 31 December 2013 29425 (2785) 172388 (2191) 694588 891424

*In2012thecolumnwasnamed'unrealizedprofit'.Currentyear,itemsnotassociatedwithcashflowhedgearereclassifiedtoretainedearnings.Closingbalanceat31December2013ofnegativeamountUSD2.2millionrelatestocashflowhedge.

TheparentcompanyhasrecognisedagroupcontributiontoawhollyownedsubsidiarywithatotalamountofUSD67.4million.Thegroupcontributionisrecognisedasaliabilitywithacorrespondingincreaseinsharesinsubsidiaries.

odfjell se

107 106

note 12 CurrenCY Gains (Losses)

(usD 1 000) 2013 2012

Currencyhedgingcontracts (510) 3372Non-currentreceivablesanddebt (3408) 8639Cashandcashequivalents (3044) 1332Othercurrentassetsandcurrentliabilities (13126) (10897)

total currency gains (losses) (20088) 2445

note 14 non – Current reCeiVabLes

non-current receivables:

(usD 1 000) 2013 2012

Loanstothirdparties – 16882

total non-current receivables – 16882

Maturity receivables as per 31 December 2012:

(usD 1 000) 2013 2014 2015 2016 2017 2018+ total

Loanstothirdparties 16441 441 – – – – 16882total non-current receivables 16441 441 – – – – 16882

note 13 Loans to GrouP CoMPanies anD Joint Ventures

(usD 1 000) Currency

Currency amount 1 000

2013 2013 2012

NorfraShippingAS NOK 163494 26884 29241

NorfraShippingAS USD 103673 103673 103673OdfjellAsiaIIPteLtd USD 310774 310774 345274OdfjellChemicalTankersAS USD 26000 26000 –OdfjellChemicalTankersIIAS USD 2750 2750 –OdfjellGasShipowningAS USD 25100 25100 62300

sum loans to Group companies 495181 540489OdfjellTerminal(Jiangyin)CoLtd USD 2630 2630 2630OdfjellTerminalsAS USD – – 63140OiltankingOdfjellGmbh USD 4085 4085 –

sum loans to joint ventures 6715 65770total loans to Group companies and joint ventures 501896 606259

(usD 1 000) 2013 2012

Dividend/Group contribution received from subsidiaries 2463 247814Intercompanyinterestincome 21569 16283Otherinterestincomebankdeposit 2848 2333

sum interest income 24417 18616

Intercompanyinterestexpenses (3693) (9171)Interestexpenses,loans (30126) (33541)

sum interest expenses (33819) (42712)

Otherfinancialincome 15636 6253Otherfinancialexpenses (19184) (15385)Financialassetsandliabilitiesatfairvaluethroughnetresult 506 6265

sum other financial income/expenses (3041) (15397)

Netcurrencygains(losses) (20088) 2445

net financial items (30068) 210766

note 11 FinanCiaL inCoMe anD eXPenses

Loanstothirdpartiesaresecuredby2ndprioritymortgages.

LoanstoGroupcompaniesgenerallyhavenofixedrepaymentschedule.Repaymentisbasedonavailableliquidity.

odfjell se

107

Bookvalueequalsmarketvalue.Marketvalueofinvestmentsthatareactivelytradedinorganisedfinancialmarketsisdeterminedbyreferencetoquotedmarketbidpricesatthecloseofbusinessonthebalancesheetdate.Bondsandcertificatesgenerallyhaveinterestrateadjustmentseverythreemonths.

note 16 saLaries, nuMber oF eMPLoYees, beneFits to boarD oF DireCtors, PresiDent/Ceo, other MeMbers oF the ManaGeMent GrouP anD auDitor’s reMuneration

For2013theCompanyhasnoemployeesandtheCompanyisnotboundtohavemandatoryoccupationalpensionschemepursuanttotheNorwegianlawofOccupationalpensionscheme.

Compensation and benefits to board of Directors in 2013:

auditor´s remuneration for:

(usD 1 000) Compensationother

benefits total

LaurenceWardOdfjell(Chairman)* 110 – 110BerntDanielOdfjell 42 – 42IreneWaageBasili 51 – 51TerjeStoreng(uptoMay6,2013) 51 – 51ChristineRødsæther 51 – 51JannickeNilsson 28 – 28ÅkeGregertsen(fromMay6,2013) – – –total 334 – 334

(usD 1 000 exclusive Vat) 2013 2012

Statutoryauditing 148 146Otherassuranceservices – –Taxadvisoryservices 809 2Non-auditservices 313 190

total remuneration 1270 338

(usD 1 000) Currencyaverage

interest ratebook value

2013book value

2012

Bondsandcertificatesissuedbyfinancialinstitutions USD 0.77% 9658 11283Bondsandcertificatesissuedbyfinancialinstitutions NOK – 5449

total 9658 16732

note 15 aVaiLabLe-For-saLe-inVestMents

*TheChairmanhasinadditionreceivedcompensationfromsubsidiarieswithatotalamountofUSD0.3million.TotalcompensationtotheBoardofDirectorsisthereforeUSD0.6million.

Theincreasedamountsontaxadvisoryandnon-auditservicesarebasicallyduetoreorganisationsin2013.

odfjell se

109 108

(usD 1 000) registered officeshare/

voting rights book value result 2013 equity 2013

NorfraShippingAS Norway 100% 150030 (3905) 110463Odfjell(UK)Ltd UnitedKingdom 100% 2166 (4390) 28381OdfjellArgentinaSA Argentina 100% 129 (63) 99OdfjellBrasil-RepresentacoesLtda Brazil 100% 983 8 1229OdfjellChemicalTankersLtd Bermuda 100% 441262 152 447079OdfjellChemicalTankers(Germany)GmbH Germany 100% 1557 – 1056OdfjellGasShipowningAS Norway 100% 16 (7144) (7580)OdfjellGasCarriersAS Norway 100% 16 (1096) (1372)OdfjellInsurance&PropertiesAS Norway 100% 843 (24) 768OdfjellKoreaLtd SouthKorea 100% 43 (2) 5OdfjellManagementAS Norway 100% 21858 6634 24251OdfjellMaritimeServicesAS Norway 100% 1929 365 (1063)OdfjellMiddleEastJLT UnitedArabEmirates,Dubai 100% 82 (371) 82OdfjellNetherlandsBV Netherlands 100% 1021 129 561OdfjellPeru Peru 100% 195 9 71OdfjellProjectsAS Norway 100% 13 (5) 12OdfjellShipManagement(Philippines)Inc Philippines 100% 200 (181) 500OdfjellSingaporePteLtd Singapore 100% 13 (40) 2558OdfjellTankersAS Norway 100% 9858 (625) 15312OdfjellTankersEuropeAS Norway 100% 1717 (8) 1294OdfjellTerminalsIIAS Norway 100% 196807 7807 139408OdfjellUSA(Houston)Inc USA 100% 0 287 1464

total 830740

ThecompanyOdfjellArgentinaSAisdirectlyandindirectly99%ownedbyOdfjellSE.

TheCompanyhastestedinvestmentsforimpairmentinaccordancewithrequirementsinIAS36.Theimpairmenttestdidnotresultinanyimpairmentloss.

shares in joint ventures

note 18 restriCteD Cash anD Cash eQuiVaLents

TheCompanyhasnorestrictedcashandcashequivalentsper31December2013.

1)Resultandequityon100%basis.

other shares registered officeshare/

voting rights book value result 20131) equity 20131)

OdfjellAhrenkielEuropeGmbH Germany 50.0% 289 – 724

Odfjell&VaporesLtd Bermuda 50.0% 4 (15) 34OdfjellyVaporesSA Chile 49.0% 506 1698 14473V.O.TankTerminalNingboLtd China 12.5% 1108 1228 13978OdfjellTerminalsAS Norway 51.0% 253299 18023 717330CrystalPoolAS Norway 50.0% 9 (113) (303)

total shares in joint ventures 255216

number of shares

nominal value (noK)

(noK 1 000)2013

(noK 1 000)2012

Ashares 65690244 2.50 164226 164226Bshares 21078704 2.50 52697 52697

total 86768948 216922 216922

AllshareshavethesamerightsintheCompany,exceptthatBshareshavenovotingrights.

note 19 share CaPitaL anD inForMation about sharehoLDers

note 17 shares

SubsidiariesandactivitiesunderjointcontrolareincludedintheparentcompanyaccountsbasedontheCostMethod.

subsidiaries

odfjell se

109

TheExtraordinaryGeneralMeetingon2October2012authorisedtheBoardofDirectorstoacquireupto10%oftheCompany'ssharecapital.Thisauthorisationexpireson2April2014.Thepurposeofpurchasingownsharesistoincreaseshareholders'value.TheBoardofDirectorsregularlyconsidersinvestmentsinownshareswhenitmaybebeneficialfortheCompany.

OdfjellSEhasissuedguaranteesonbehalfofsubsidiariesandjointventuresaspartofourday-to-daybusinesstoassumeresponsibilityforbunkerspurchases,creditfacilities,yardcommitments,charterpartyagreementsandoperatingleasecommitments.GuaranteestoandfromGroupcompaniesaregenerallyenteredintoonarms-lengthbasis.

note 20 Guarantees

2013 2012

a shares b shares a shares b shares

ChairmanoftheBoardofDirectors,LaurenceWardOdfjell 25966492 2578994 25966492 1755076Director,BerntDanielOdfjell – 2032 – 2032Director,ÅkeGregertsen 3000 – 3000 –

(usD 1 000) 2013 2012

100%ownedsubsidiaries 692409 525901Jointventures 147307 138835

total guarantees 839716 664736

20 largest shareholders as per 31 December 2013:

1)Nomineeaccount.2)Novotingrightsforownsharesref.PublicLimitedCompaniesAct§5–4.

name a shares b shares totalPercent of

votesPercent of

shares

1 NorchemAS 25966492 2415094 28381586 43.42% 32.71%

2 OdfjellSE2) 5891166 2322482 8213648 – 9.47%

3 SvenskaHandelsbankenAB1) 2495105 2143110 4638215 4.17% 5.35%

4 JPMorganClearingCorp.1) 3564607 – 3564607 5.96% 4.11%

5 RederietOdfjellAS 3497472 – 3497472 5.85% 4.03%

6 OdfjellShippingBermudaLtd. 2750000 715760 3465760 4.60% 3.99%

7 ParetoAksjeNorge 2073898 1285370 3359268 3.47% 3.87%

8 SixSISAG1) 1071400 1600800 2672200 1.79% 3.08%

9 FondsfinansSpar 1980000 – 1980000 3.31% 2.28%

10 ParetoAktiv 875199 541323 1416522 1.46% 1.63%

11 SkagenVekst 1222521 – 1222521 2.04% 1.41%

12 TheNorthernTrustCo1) 86679 879400 966079 0.14% 1.11%

13 KLPAksjeNorgeVPF 726450 223534 949984 1.21% 1.09%

14 OdinMaritim – 900000 900000 – 1.04%

15 SesAS 210000 690000 900000 0.35% 1.04%

16 SixSISAG1) 550000 288500 838500 0.92% 0.97%

17 ASSSMathilda 600000 150000 750000 1.00% 0.86%

18 Berger 732400 – 732400 1.22% 0.84%

19 FrankMohnAS – 700000 700000 – 0.81%

20 ParetoVerdi 421445 261420 682865 0.70% 0.79%

total 20 largest shareholders 54714834 15116793 69831627 81.65% 80.48%Othershareholders 10975410 5961911 16937321 18.35% 19.52%

total 65690244 21078704 86768948 100.00% 100.00%Internationalshareholders 35299017 7921265 43220282 59.03% 49.81%

Treasuryshares2) 5891166 2322482 8213648 – 9.47%

Costpricetreasuryshares(USD1000) 30268 11933 42201

shares owned by members of the board (including related parties):

111 110

Weconfirmthat,tothebestofourknowledge,thefinancialstatementsfortheperiod1Januaryto31December2013havebeenpreparedinaccordancewithcurrentapplicableaccountingstandards,andgiveatrueandfairviewoftheGroupandthecompany’sconsolidatedassets,liabilities,financialpositionandresultsofoperations,andthattheReportfromtheBoardofDirectorsprovidesatrueandfairviewofthedevelopmentandperformanceofthebusinessandthepositionoftheGroupandtheCompany,togetherwithadescriptionoftheprincipalrisksanduncertaintiesfacingthecompanyandtheGroup.

resPonsibiLitY stateMent

Jan arthur haMMerPresident/CEO

LaurenCe WarD oDFJeLL ExecutiveChairman

bernt DanieL oDFJeLLÅKe GreGertsen

irene WaaGe basiLi Christine rØDsÆtherJanniCKe niLsson

the boarD oF DireCtors oF oDFJeLL se Bergen,18March2014

111

113 112

auDitor's rePort

113

115 115 114

Chemical tankers

Year built DWt CbM

stainless steel, CbM

number of tanks

oWneD

BowPioneer 2013 75000 86000 – 30

BowNangang 2013 9156 10523 10523 14

BowDalian 2012 9156 10523 10523 14

BowFuling 2012 9156 10523 10523 14

BowLind 2011 46047 48698 – 29

BowElm 2011 46098 48698 – 29

FlumarBrasil 2010 51188 55452 – 14

BowSaga1) 2007 40085 52126 52126 40

BowSirius1) 2006 49539 52155 52155 40

BowSea 2006 49511 52107 52107 40

BowEngineer 2006 30086 36274 36274 28

FlumarMaceio 2006 19975 21713 21713 22

BowSummer 2005 49592 52128 52128 40

BowSpring 2004 39942 52127 52127 40

BowStar 2004 39832 52127 52127 40

BowSantos 2004 19997 21846 21846 22

BowSun 2003 39842 52127 52127 40

BowFirda 2003 37427 40645 40645 47

BowChain 2002 37518 40621 40621 47

BowAndes 2000 16020 17120 17120 22

BowCondor 2000 16121 17622 17622 30

BowFortune 1999 37395 40619 40619 47

BowMaster 1999 6046 7018 7018 14

BowPilot 1999 6008 7005 7005 14

BowSailor 1999 6008 7011 7011 14

BowCecil 1998 37369 40515 33236 47

BowFlora 1998 37369 40515 33236 47

BowBalearia 1998 5846 6075 6075 20

BowOceanic 1997 17460 19616 19616 24

BowBracaria 1997 5846 6071 6071 20

BowBrasilia 1997 5800 6067 6067 20

BowCardinal 1997 37446 41487 34208 52

BowFaith 1997 37479 41487 34208 52

BowAratu 1997 13843 15834 15834 29

BowQuerida 1996 10106 11181 11181 18

BowCedar 1996 37455 41488 41488 52

BowAtlantic 1995 17460 19588 19588 24

BowFagus 1995 37375 41608 34329 52

BowClipper 1995 37221 41596 34328 52

BowFlower 1994 37221 41492 34213 52

BowVictor 1986 33000 34500 21975 31

ship Year built DWt CbM

stainless steel, CbM

number of tanks

tiMe-ChartereD/PooL

UACCMarah 2013 45249 52565 – 22

UACCMasafi 2012 45352 52565 – 22

ChemroadHope 2011 33552 37161 37161 18

RTStar 2011 26199 27912 27912 18

SGPegasus 2011 13086 14523 14523 16

SouthernKoala 2010 21290 20008 20008 20

StreamLuna 2010 19998 22161 22161 20

BowTone 2009 33625 37974 37974 16

BowHector 2009 33694 37384 37384 16

SouthernIbis 2009 19905 22158 22158 20

SouthernJaguar 2009 19997 22157 22157 20

StreamMia 2008 19702 22094 22094 26

BowSagami 2008 33641 38000 38000 16

BowHarmony 2008 33619 38052 38052 16

BowKiso 2008 33641 37974 37974 16

BowHeron 2008 33707 37365 37365 16

CelsiusMayfair 2007 19999 21714 21714 20

BowFuji 2006 19805 22140 22140 22

CelsiusManhattan 2006 19807 22143 22143 22

Moyra 2005 19806 22838 22838 18

BowSky2) 2005 40005 52126 52126 40

BowArchitect 2005 30058 36290 36290 28

CelsiusMonaco 2005 19999 21851 21851 22

CelsiusMumbai 2005 19993 22186 22186 22

CelsiusMiami 2005 19991 22192 22192 22

ChembulkSydney 2005 14271 16571 16571 20

GoldenTop 2004 12705 13388 13388 22

ChembulkWellington 2004 14312 15591 15591 20

BowAsia2) 2004 9901 11088 11088 20

BowSingapore2) 2004 9888 11089 11089 20

BowAmericas 2004 19707 22735 22735 36

SGFriendship 2003 19773 21651 21651 26

BowJubail2) 1996 37499 41488 34209 52

BowMekka2) 1995 37272 41606 34257 52

BowRiyad2) 1995 37221 41492 34213 52

BowEagle 1988 24728 32347 19662 25

JBUSapphire3) 2009 19860 22144 22144 16

JBUOpal3) 2009 19865 22129 22129 16

JBUOnyx3) 2008 19865 21712 21712 16

CoMMerCiaL ManaGeMent

NorthernWolverine 2006 16000 18397 10056 35

NorthernLynx 2003 16533 18397 10056 35

number of ships 82 2200161 2477288 2018569 2300

asper1March2014

FLeet & terMinaL oVerVieW

1)Vesselbeneficiallyownedthroughfinanciallease.2)Vesselonbare-boatcharter.3)Vesselonvariabletime-charter/pool.

115 115

on orDer Yard Delivery DWt owner Comment

CheMiCaL tanKers

HyundaiMipoDockyard.,Ltd 2014 46000 Saltholmen

ShippingLtd

" 2014 46000 "

" 2014 46000 Odfjell

" 2014 46000 Odfjell

LPG/ethYLene Carriers

NantongSinopacificOffshore

&EngineeringCo.,Ltd

2015 17000 Odfjell Options2+2

" 2015 17000 Odfjell

" 2016 17000 Odfjell

" 2016 17000 Odfjell

number of newbuildings 8

LPG/ethylene carriers

Year built DWt CbM tYPe

number of tanks

oWneD

BowGallant 2008 10282 8922 LPG/Ethylene 2

BowGuardian 2008 10282 8922 LPG/Ethylene 2

tiMe-ChartereD

BerlianEkuator 2004 26776 35000 LPG/Ammonia 3

number of ships 3 47 340 52 844 7

tanK terMinaLs oWneD Location share CbM stainless steel, CbM number of tanks

OdfjellTerminals(Rotterdam)BV Rotterdam,NL 51% 1636100 32550 281

OdfjellTerminals(Houston)Inc Houston,USA 51% 331334 82033 100

OdfjellTerminals(Charleston)LLC Charleston,USA 51% 79491 – 9

OdfjellTerminals(Jiangyin)CoLtd Jiangyin,China 28.05% 99800 30000 22

OdfjellTerminals(Dalian)Ltd Dalian,China 25.5% 119750 18350 51

OdfjellTerminals(Korea)CoLtd Onsan,Korea 25.5% 313710 15860 85

OiltankingOdfjellTerminalSingaporeLtd Singapore 25.5% 365051 13520 79

OiltankingOdfjellTerminal&Co.LLC Sohar,Oman 15.17% 1294780 – 66

NoordNatieOdfjellTerminals Antwerp,Belgium 12.75% 325000 50800 235

ExirChemicalTerminalsPJSCO BIK,Iran 35% 22000 1000 18

VopakTerminalNingboLtd Ningbo,China 12.5% 71050 8000 39

total owned terminals 11terminals 4658066 252113 985

tanK terMinaLs PartLY oWneD bY reLateD Parties Location share CbM stainless steel, CbM number of tanks

DepositosQuimicosMinerosS.A. Callao,Peru 52980 1600 43

GranelQuimicaLtda SantosI,Brazil 97720 19880 99

GranelQuimicaLtda RioGrande,Brazil 61150 2900 32

GranelQuimicaLtda SãoLuis,Brazil 75710 – 35

GranelQuimicaLtda Ladario,Brazil 8060 – 6

GranelQuimicaLtda Triunfo,Brazil 12030 – 2

GranelQuimicaLtda Teresina,Brazil 7640 – 6

OdfjellTerminalsTagsaS.A. BuenosAires,Argentina 38826 530 56

OdfjellTerminalsTagsaS.A. Campana,Argentina 68580 10190 102

TerquimS.A. SanAntonio,Chile 32840 – 25

TerquimS.A. Mejillones,Chile 16870 – 7

IMTT-Quebec Quebec,Canada 293130 5500 53

total terminals partly owned by related parties *)

12terminals

765536

40600 466

ProJeCts anD eXPansions oWneD Location share CbM stainless steel, CbM estimated completion

OdfjellNangangTerminals(Tianjin)CoLtd Tianjin,China 24.99% 137800 7000 Q42014

NoordNatieOdfjellTerminals Antwerp,Belgium 12.5% 25000 – Q22014

OdfjellTerminals(Houston)Inc Houston,USA 51% 47970 30800 Q22014/2015

OiltankingOdfjellTerminalSingaporeLtd Singapore 25.5% 12000 – Q12015

OdfjellTerminalsQuanzhou(Fujian) Quanzhou,China 25.5% 184000 – Q12016

total expansion terminals 2newterminals 406770 37800

ProJeCts anD eXPansions tanK terMinaLs PartLY oWneD bY reLateD Parties*) Location share CbM stainless steel, CbM estimated completion

GranelQuimicaLtda Aracruz,Brazil 30000 – readyQ32015

GranelQuimicaLtda SantosII,Brazil 52000 – readyQ42015

GranelQuimicaLtda SãoLuisII,Brazil 52750 – readyQ32014

TerquimS.A. Mejillones,Chile 50000 – readyQ32015

GranelQuimicaLtda Palmas,Brazil 10000 – readyQ22014

total expansion tank terminals partly owned

by related parties *)

4newterminals

194750

Grand total (incl. related tank terminals partly

owned by related parties) *)

23existingterminals

5423602

292713

*)TankterminalsandprojectspartlyownedbyOdfjellfamily.

117 116 116

ballasTAmountofunpaidcargocarriedinordertoprovidesufficientweighttokeepashipstable.Fortankers,normallywater.ballasTlEgVoyagewithnocargoonboard,topositionashipforthenextloadportordry-docking.ballasTTaNkTankthatcanbefilledwithballast,toprovidestabilityforaship.barEbOaT-CharTEr(b/b)Anarrangementinvolvingthehiringofaship,underwhichthepartythathirestheshipcoverscrewcostsandallotheroperatingexpenses,includingdockingandmaintenance,inadditiontoallvoyage-relatedcosts.Onitsreturn,theshipshallbeinthesameconditionaswhendelivered,normalwearandtearexpected.bargiNgTransferofcargoto/fromashipfrom/toabarge.brOkErIntermediaryintheprocessofnegotiatingfreightcontractsbetweenownersandcharterers,thesaleandpurchaseofshipsandsimilartransactions.buNkErs/buNkEriNgEnginefuel,topoweraship’sengines.Bunkeringinvolvestakingbunkersonboard.CbmCubicmetre,volumemeasurement=1metrex1metrex1metre=1,000litre.CharTErparTy(C/p)Agreementbetweenashipownerandacharterer,outlining termsandconditions governing thetransaction.Theagreementmaybeforoneorseveralvoyages,orforacertainperiodoftime.CharTErErPartyhiringandpayingforshipsorshipspace.Thismaybethecargoowner,anintermediaryorthereceiverofthecargo.ClassiFiCaTiONsOCiETyIndependent,non-governmentalorganisation,e.g.DetNorskeVeritas,whichchecksandverifiesthatthetechnicalcondition,thesafetyandqualityofashipcomplieswiththeclassificationsociety'sownrules,aswellasthoseofnationalauthorities.COaTiNgPaintprotectingtheinsideofaship’stanks.Usuallyepoxy-orzinc-basedpaints.CONTraCTOFaFFrEighTmENT(COa)Agreementbetweenshipowner/operatorandchar-terer,settingthetermsfortransportationofgivenquantitiesofcargo,duringagivenperiodoftime.CO2

Carbondioxide;colourless,odourless,incombustiblegaspresentintheatmosphereandformedduringrespiration,combustionandorganicdecomposition.dEadwEighTTONNE(dwTOrTdw)Measureoftheweight-carryingcapacityoftheship.Thetotaldwtistheweightoftheshipandthecargotheshipmaycarryoverandabovebunkers,freshwater,sparepartsetc.dEEp-sEa(glObal)TradESea-bornetradealongintercontinentaltradelanes.dEmurragECompensationpaidbythecharterer,supplierorreceiverofthecargofortimespentduringportcallinexcessofthelay-timestipulatedintheCharterPartyforloading/dischargingoperations.dETErgENTsSubstancesusedfortankcleaning.

dOublEhullShipdesignwithan innerandanouterhull, toenhancesafetybyallowingleakagestobecontainedintheeventofpotentialgroundingsorcollisions.Thespacebetweentheinnerandouterhullmayalsobeusedasaballasttank.dry-dOCkPuttingashipintodry-dockforinspectionandrepairsofunderwaterparts,andpaintingoftheshipbottom.Usuallycarriedoutevery2½to5years.EEOi–ENErgyEFFiCiENCyOpEraTiONaliNdiCaTOrGramCO2emittedpertonnecargotransportedonenauticalmile.FrEighTraTEAgreedpricefortransportation,stipulatedeitherpermetrictonneofcargo,cubicmetreofcargoorasalumpsumforthetotalcargo.g/TNmGram/tonnenauticalmile.imOInternationalMaritimeOrganisation,theinternationalUNadvisorybodyontransportbysea.iNOrgaNiCChEmiCalsChemicalswhosemolecularstructurecontainsnocarbonatoms(otherthanaspartofacarbonategroup)andwhicharederivedfromsourcesotherthanhydrocarbons,suchassulphuricacid,phosphoricacidandcausticsoda.ismCInternationalSafetyManagementCode.ThefirstformalisedinitiativebyIMOtoprovideauniversalstandardforships’safetymanagementsystems.kNOTMeasureofvesselspeed.1knot=1nauticalmileperhour≈1.85km/h.libOrLondonInterbankOfferedRate.lTiFLost-TimeInjuryFrequency.Numberofwork-relatedinjuriesthatmakeemployeesunabletoworkthenextworkdaytimes1milliondividedbytotalnumberofworkinghours.marpOlTheInternationalConventionsgoverningMarinePollutionPrevention,partofIMO.m/TMotorTanker.mTMetrictonne.NisNorwegianInternationalShipRegister.NOx

Mono-nitrogen oxides. Nitrogen combined withoxygentoformavarietyofcompounds.OECdTheOrganisationforEconomicCo-operationandDevelopmentisaninternationalorganisationwhoseobjectiveistostimulateeconomicprogressandworldtrade.OFF-hirEThetimeashipispreventedfrombeinggainfullyemployedforitsownerorcharterer,e.g.timeusedforrepairs.OpEraTiNgExpENsEsExpensesforcrewaswellasallotherexpensesdirectlyconnectedwiththerunningoftheship,includingmaintenanceandinsurance.OpEraTOrApersoninashippingcompanywhosemaindutiesincludemanagingcontactbetweentheshipandthecharterer,givinginstructionstotheshipandtheportagentsconcerningstowage,loadinganddischargingofcargo,andarrangingpurchaseofbunkers,etc.

OrgaNiCChEmiCalsChemicalscontainingcarbon-basedmolecules.Oftenreferredtoaspetrochemicalswhenderivedfromhydrocarbonsourcessuchasoil,gasandcoal.pETrOChEmiCalsSeeorganicchemicals.pOOlCo-operationbetweenseveralownerssupplyingshipsforajointoperation,wherenetrevenuesarepooledanddividedaccordingtoapre-determineddistributionkey.ppmPartspermillion(1ppm=0.000001or1mg/kg).sEgrEgaTiONDivisionofaship’scargospacetoallowdifferentcargoesbeingkeptcompletelysegregatedduringtheentirevoyage,includingduringloadingandunloading.shipmaNagEmENTTechnicaladministrationofaship,includingservicessuchastechnicaloperation,maintenance,crewingandinsurance.shOrT-sEa(rEgiONal)TradESea-bornetradewithinaparticulartradingarea(i.e.notintercontinental).sOlvENTsLiquidsthatcandissolveothersubstances.sOx

SulphurOxides(SO),reactwithmoistureintheairtoformsulphuricacid.spOTraTECargo freight rate not governed by contract ofaffreightment,usuallybasedonthecurrentmarketlevel.sTCwInternationalconventiononstandardsoftraining,certificationandwatchkeepingofseafarers.TimE-CharTEr(T/C)Anarrangementforthehiringofashipcompletewithcrewagainstafee,payableasaspecificsumpertimeperiod.Thepartythathirestheshippaysforbunkers,portandcanalchargesandanyothervoyage-relatedcosts.TimE-CharTErEarNiNgsGrossfreightrevenuesminusvoyagecostsdividedbynumberoftradingdays,usuallyexpressedinUSDperday.TONNEGrossregisteredtonneisavolumeof100cubicfeet(2.83cubicmetres).Grossregisteredtonnageisbasicallythevolumeoftheship’sclosedareas,excludingthebridge,thegalleyandafewotherareas.Netregisteredtonnageisthegrosstonnagelessvolumesneededfortheoperationoftheship(deckstorageroom,engineroometc.),i.e.thevolumeavailableforcargo.TONNEOrmETriCTONNE1,000kg.TradEGeographicalareawhereashipmainlytrades.TradiNgdaysDaysashipisnotoff-hire.TraNshipmENTTransferofcargofromoneshiptoanother,e.g.fromashipwithinglobaltradetoacoasterorbargewithinregionaltradeboundforfinaldestination.vOyagECharTErAgreementforthetransportationofcargofromtheport(s)ofloadingtotheport(s)ofdischarge.Paymentisnormallypertonneofcargo,andtheshipownerpaysforbunkers,portandcanalchargesandothervoyage-relatedcosts.vOyagEExpENsEsExpensesdirectlyrelatingtothevoyage,suchasbunkers,portcharges,canaldues,etc.

GLossarY

our glossary explains some of the terms that we commonly use:

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oFFiCes anD aDDresses

Granel Quimica LtdaAv.Paulista460,18°andarCEP01310-000SãoPaulo,SPBRAZILTel: +551135495800Fax: +551135495832

tagsa s.aAv.AliciaMoreaudeJusto1960,piso4Of.4021107BuenosAires,ARGENTINATel: +541140019700Fax: +541140019701

terquim s.aMoloSurS/NP.O.Box148,SanAntonioCHILETel: +5635211050Fax: +5635211161

DQM s.aAv.EnriqueMeiggs,240Urb.Chacaritas,Callao,PERUTel: +5116140800Fax: +5116140801

odfjell singapore Pte Ltd6ShentonWay,#27-08/09OUEDowntown2SINGAPORE068809Tel: +6563491300Fax: +6562242285

Flumar transportes de Quimicos e Gases LtdaAv.Paulista460-18andarCEP01310-000SaoPauloSP,BRAZILTel: +551135495800Fax: +551135495807

odfjell tankers europe asConradMohrsveg29P.O.Box6101Postterminalen5892Bergen,NorwayTel:+4755270000Fax:+4755279070

odfjell terminals (houston) inc.12211PortRoadSeabrook,TX77586,USATel: +17138442200Fax: +17138442211

odfjell terminals (Charleston) LLC1003EastMontagueAvenueNorthCharlestonS.C29405,USATel:+18437146300Fax:+18437146350

odfjell terminals (rotterdam) bVOudeMaasweg6,P.O.Box5010HarbourNumber4040,3197KJRotterdam-BotlekTheNETHERLANDSTel: +31102953400Fax: +31104384679

noord natie odfjell terminals nVHaven227-241,BlauweWeg442030Antwerp-BelgiumTel:+32(0)35439900Fax:+32(0)35439938

oiltanking odfjell terminals & Co. LLC.P.O.Box369,FajalAlQubailPC322SULTANATEOFOMANTel: +96826700300Fax: +96826700306

oiltanking odfjell terminal singaporePte Ltd1SerayaAvenueSINGAPORE628208Tel: +6564731700Fax: +6564794500

odfjell terminals (Korea) Co, Ltd136,Cheoyong-RiOnsan-Eup,Ulju-Gun,Ulsan689-892,SOUTHKOREATel: +82522311600Fax: +82522376636

odfjell terminals (Dalian) LtdNewPort,Economy&TechnologyDevelopmentZone116601,DalianP.R.CHINATel: +8641187595500Fax: +8641187595549

odfjell terminals (Jiangyin) Co., Ltd1314WestBinjiangRoadShizhuang,NewHarbourCity,JiangyinJiangsu214446P.R.CHINATel: +8651086669111Fax: +8651086669110

odfjell nangang terminals (tianjin) Co., Ltd RoomD310,SectionDOfficeBuilding,ServicingArea,TEDA(Nan-GangIndustrialZone)300280Tianjin,PRCHINA

Vopak terminal ningbo Ltd.No.111ZhaobaoshanRoad,ZhenhaiDistrictNingbo,P.R.CHINATel: +8657427695638Fax: +8657486275931

odfjell terminals Quanzhou (Fujian) Co.,Ltd3rdFloor,XingtongShippingTower,6thPortStEast,QuangangDistrict,Quanzhou,362800FujianProvince,P.R.ChinaTel:+8659527728628Telefax:+8659527728680

iNTErNaTiONalOFFiCEs

odfjell usa (houston) inc.13100SpaceCenterBlvd.Suite600Houston,TX77059USATel: +17138442200Fax: +17138442211

odfjell singapore Pte Ltd6ShentonWay,#27-08/09OUEDowntown2SINGAPORE068809Tel: +6563491300Fax: +6562242285

odfjell Japan LtdOgawaBldg.8F2-2Uchikanda1-ChomeChiyoda-ku,Tokyo101-0047,JAPANTel: +81332598555Fax: +81332598558

odfjell netherlands bVOudeMaasweg6,P.O.Box50103197XCRotterdam-BotlekTheNETHERLANDSTel: +31102953666Fax: +31102953668

odfjell brasil LtdaAv.Paulista460-18andarCEP01310-000SaoPauloSP,BRAZILTel: +551135495800Fax: +551135495808

odfjell shanghaiSuiteB,13FHuaminEmpirePlaza728yanAnWestRoadChangningDistrictShanghai200050,P.R.CHINATel: +862152399469Fax: +862152399897

odfjell argentina saAliciaMoreaudeJusto1960Officeno.202-PuertoMadero1107BuenosAires,ARGENTINATel: +541143137837Fax: +541143134619

odfjell australia Pty LimitedSuite4,Level1443LittleCollinsStreetP.O.Box1279MelbourneVIC3001AUSTRALIATel: +61396422210Fax: +61396422214

odfjell india408AEverestGrandeMahakaliCavesRoad,Andheri(East)Mumbai400093,INDIATel: +912266954701Fax: +912266954707

odfjell Durban (Pty) Ltd61BulwerRoad,GlenwoodP.O.Box4045Durban4021,SOUTHAFRICATel.: +27312770880Fax: +27312770899

odfjell tankers as, Korea branchRoom1815,GwanghwamunOfficiaBldg.1631-GaShinmunno,Jongno-GuSeoul,110-999SOUTHKOREATel: +8227759760Fax: +8227759761

odfjell Korea Ltd.136,Cheoyong-Ri,Onsan-Eup,Ulju-GunUlsan689-892,SOUTHKOREATel: +82522275527Fax: +82522275567

odfjell Philippines inc.4thFlrAtlantisBeaconTower2315LeonGuintoSt.Malate,Manila1004PHILIPPINESTel: +6325280341Fax: +6325262256

odfjell (uK) LtdDorsetHouseRegentParkKingstonRoadLeatherheadKT227PLUNITEDKINGDOMTel: +441372824330

odfjell PeruAv.Enrique Meiggs,240Urb.Chacaritas,Callao,PERUTel: +5116140800Fax: +5116140801

odfjell ChileRosarioNorte100Office304LasCondesSantiagoCHILETel:+5622294700

odfjell Middle east JLt, Dubai Unitsno.2402-2404,PlatinumTowersJumeirahLakeTowerP.O.Box75450Dubai,UNITEDARABEMIRATESTel: +97144269700Fax: +97144269701

odfjell se - odfjell tankers as – odfjell Gas asConradMohrsveg.29,P.O.Box6101Postterminalen-5892Bergen,NORWAyTel: +4755270000Fax: +4755284741-Fax:+4755279070(Chartering/Operations)

odfjell terminals bVOudeMaasweg6,P.O.Box5010HarbourNumber4040-3197KJRotterdam-Botlek,THENETHERLANDSTel: +31102954700Fax: +31102954719

rEgiONalOFFiCEs

TErmiNals

TaNkTErmiNalsparTlyOwNEdbyrElaTEdparTiEs

maiNOFFiCEOdFjEll maiNOFFiCETErmiNals

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CrEdiTsDesign/Production:CoxAS-Photo:Phantomfilm,LineMøllerhaug-Print:BodoniAS

oDFJeLL se

conrad Mohrs veg 29,P.O. Box 6101 Postterminalen5892 Bergen, NorwayTel: +47 5527 0000Fax: +47 5528 4741E-mail: ir@odfjell.comOrg. no: 930 192 503

www.odfjell.com